FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the transition period from _________________ to _________________ Commission File Number: 001-39311 CEREVEL THERAPEUTICS HOLDINGS, INC. (Exact name of Registrant as specified in its Cha ...

Tavapadon met the primary endpoint in the pivotal Phase 3 TEMPO-3 adjunctive trial, demonstrating a statistically significant increase in total "on" time without troublesome dyskinesia compared with placebo over 27 weeks Results demonstrate tavapadon's potential to provide the right balance of motor control, safety and tolerability for people living with Parkinson's disease Additional data from the trial will be presented at a future medical meeting; results from the tavapadon Phase 3 monotherapy trials (T ...

10.16# Employment Agreement, dated November 23, 2018, by and between Cerevel Therapeutics, LLC and N. Anthony Coles, and amendments thereto (incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K filed by the registrant on November 2, 2020). 10.21# Employment Agreement, dated November 26, 2018, by and between Cerevel Therapeutics, LLC and Ramiro Sanchez, and amendment thereto (incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K filed by the registrant on Novemb ...

Financial Data and Key Metrics Changes - The company raised $499 million in capital, enhancing its balance sheet and extending its cash runway into 2026, with approximately $758 million in cash, cash equivalents, and marketable securities at the end of Q3 2023 [7][97][118] - Operating expenses for Q3 2023 were approximately $111 million, consisting of $85 million in research and development and $26 million in general and administrative expenses [26] Business Line Data and Key Metrics Changes - The EMPOWER-1 and EMPOWER-2 trials for emraclidine are progressing well, with expectations for data readouts in the second half of 2024 [21][120] - The darigabat program is anticipated to yield results from the Phase II realized trial in focal epilepsy by mid-2024, with a focus on both anti-epileptic and anxiolytic activity [23][119] Market Data and Key Metrics Changes - The company is actively exploring lifecycle opportunities for its lead programs, including emraclidine and tavapadon, with plans for potential NDA filings in 2025 [3][4] - The ongoing Phase I PET receptor occupancy trial aims to clarify selectivity across kappa and Mu receptors, which is crucial for the development of the KORA program [24][122] Company Strategy and Development Direction - Cerevel is focused on executing its clinical trials and maximizing the value of its pipeline, with a disciplined approach to resource allocation [26][118] - The company aims to transform treatment options in neuroscience, particularly for conditions like schizophrenia and Parkinson's disease, through innovative therapies [4][120] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress of ongoing clinical trials and the potential for emraclidine and tavapadon to address significant unmet needs in their respective markets [3][4][21] - The company is optimistic about the upcoming data readouts and the potential impact of its therapies on patient care [27][120] Other Important Information - The company is preparing for two potential NDA filings in parallel, which reflects its commitment to advancing its lead assets [27][118] - The management team emphasized the importance of maintaining data quality while mitigating placebo response risks in clinical trials [120] Q&A Session Summary Question: Concerns about emraclidine's timeline and enrollment - Management addressed concerns about enrollment challenges by highlighting their proactive measures to ensure quality data and site selection [10][29] Question: Insights on epilepsy studies and placebo response - The team discussed strategies to mitigate placebo response in epilepsy trials, including rigorous patient selection and monitoring [30][62] Question: Importance of emraclidine as adjunctive therapy - Management acknowledged the potential of emraclidine as a best-in-class muscarinic agent and its role in adjunctive treatment [73] Question: Filing strategy for tavapadon - The company plans to file for tavapadon based on data from multiple trials, ensuring a comprehensive submission package [84] Question: Challenges in patient identification for dementia-related apathy - Management noted the difficulties in identifying the right patient profile for the apathy program and emphasized ongoing efforts to address this [114]

Financial Status - Cerevel had $758 million in cash, cash equivalents, and marketable securities as of September 30, 2023[9] - Cerevel raised $499 million net proceeds from a public offering of common stock in October 2023[3] - Cerevel expects its cash resources to support operations into 2026 due to disciplined spending[11] Pipeline Progress - Tavapadon - Phase 3 TEMPO-3 trial data for adjunctive therapy in Parkinson's is expected in the first half of 2024[23] - Phase 3 TEMPO-1 and TEMPO-2 trial data for monotherapy in Parkinson's is expected in the second half of 2024[23] - In a Phase 2 trial, Tavapadon demonstrated a 4.8 point improvement vs placebo at week 15 (p=0.04) when measuring MDS-UPDRS III[62] - In the same Phase 2 trial, Tavapadon demonstrated a 5.8-point improvement over placebo at week 15 (p=0.02) when measuring MDS-UPDRS Part II + III[62] Pipeline Progress - Emraclidine - Data from two Phase 2 EMPOWER trials in schizophrenia is expected in the second half of 2024[7] - A Phase 1 healthy elderly volunteer trial to support development in Alzheimer's disease psychosis (ADP) is ongoing[21] Pipeline Progress - Darigabat - Data from the Phase 2 REALIZE trial in focal epilepsy is expected mid-year 2024[8] - The Phase 2 ADAPT trial in panic disorder is ongoing[8] - Darigabat 7.5 mg BID showed a 3.9-point improvement versus placebo (p=0.036), and Darigabat 25 mg BID showed a 4.5-point improvement versus placebo (p=0.008) in a Phase 1 acute anxiety trial[66]

Additional laws and regulations governing international operations could negatively impact or restrict our operations. 72 We are subject to certain U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions and other trade laws and regulations. We can face serious consequences for violations. Among other matters, U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions and other trade laws and regulations, which are collectively referred to as Trade Laws, pr ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents Cerevel Therapeutics' unaudited condensed consolidated financial statements, detailing a net loss and significant cash position [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Reports total assets decreased to **$894.4 million** and total liabilities increased to **$543.9 million** as of June 30, 2023 Condensed Consolidated Balance Sheet Data (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $175,763 | $136,521 | | Marketable securities (current & non-current) | $649,300 | $813,635 | | **Total Assets** | **$894,353** | **$1,017,822** | | **Liabilities** | | | | Total current liabilities | $65,560 | $72,564 | | Financing liability (related party & other) | $112,310 | $57,348 | | 2027 convertible senior notes, net | $336,446 | $335,482 | | **Total Liabilities** | **$543,853** | **$496,584** | | **Total Stockholders' Equity** | **$350,500** | **$521,238** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Reports a net loss of **$203.8 million** for the six months ended June 30, 2023, driven by increased R&D and G&A expenses Statement of Operations Highlights (in thousands, except per share data) | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Research and development | $152,262 | $127,562 | | General and administrative | $44,132 | $37,974 | | **Loss from operations** | **($196,394)** | **($165,536)** | | Other income (expense), net | ($20,855) | $5,809 | | **Net loss** | **($203,821)** | **($158,765)** | | **Net loss per share, basic and diluted** | **($1.30)** | **($1.07)** | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Details net cash used in operating activities of **$172.3 million** and a net increase in cash of **$39.3 million** for the six months ended June 30, 2023 Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net cash flows used in operating activities | ($172,250) | ($125,304) | | Net cash flows provided by investing activities | $172,536 | $25,752 | | Net cash flows provided by financing activities | $39,049 | $42,419 | | **Net increase (decrease) in cash** | **$39,335** | **($57,133)** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed disclosures on the company's operations, funding sufficiency, Pfizer license, financing liabilities, and convertible senior notes - The company is a **clinical-stage biopharmaceutical firm** focused on therapies for **neuroscience diseases** like schizophrenia, Alzheimer's, epilepsy, and Parkinson's disease[35](index=35&type=chunk) - Management believes that available cash, cash equivalents, and marketable securities as of June 30, 2023, are **sufficient to fund operating expenses and capital requirements for at least the next 12 months**[40](index=40&type=chunk) - The company has financing agreements with NovaQuest and Bain to receive up to a combined **$125.0 million** to support tavapadon development, with potential milestone and royalty payments totaling up to **$531.3 million**[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - In August 2022, the company issued **$345.0 million** of 2.50% Convertible Senior Notes due 2027, with net proceeds of approximately **$334.8 million**[58](index=58&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's pipeline progress, financial results, and liquidity, highlighting increased expenses and sufficient capital for the next 12 months [Our Pipeline](index=26&type=section&id=Our%20Pipeline) Details the company's neuroscience pipeline, including key programs like tavapadon, emraclidine, and darigabat, with updated clinical trial timelines - Data for the two Phase 2 EMPOWER trials of emraclidine in schizophrenia are now expected in the **second half of 2024** due to slower-than-expected U.S. enrollment and delays at ex-U.S. sites[118](index=118&type=chunk) - Data from the TEMPO-3 trial of tavapadon in late-stage Parkinson's is expected in **H1 2024**, with data from the TEMPO-1 and TEMPO-2 trials in early-stage Parkinson's expected in **H2 2024**[121](index=121&type=chunk) - A Phase 2 proof-of-concept trial of darigabat in panic disorder (ADAPT) was initiated in **July 2023**[119](index=119&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Analyzes operating results, showing a **19% increase** in total operating expenses to **$196.4 million** for the first six months of 2023 Research and Development Expense by Program (in thousands) | Program | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Tavapadon | $29,440 | $26,556 | | Emraclidine | $37,802 | $31,391 | | Darigabat | $13,352 | $10,820 | | Other R&D Programs | $7,284 | $12,004 | | Personnel & Equity-based Comp. | $50,336 | $35,342 | | **Total R&D** | **$152,262** | **$127,562** | - General and administrative expenses increased by **16%** for the six months ended June 30, 2023, compared to 2022, primarily due to higher personnel costs, including equity-based compensation[156](index=156&type=chunk) - Other expense of **$20.9 million** for the first six months of 2023 was primarily due to net losses on the fair value remeasurement of financing liabilities, compared to a gain of **$5.8 million** in the same period of 2022[160](index=160&type=chunk)[161](index=161&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's liquidity, with **$825.1 million** in cash and marketable securities, and its strategy for funding future operations - The company's cash, cash equivalents, and marketable securities totaled **$825.1 million** as of June 30, 2023[164](index=164&type=chunk) - The company has raised significant capital through multiple public offerings and a **$345.0 million** convertible notes offering in August 2022[168](index=168&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk) - Under its Funding Agreements for tavapadon, the company received **$31.3 million** in April 2023 and expects to receive a final tranche of **$25.0 million** in April 2024, subject to customary conditions[167](index=167&type=chunk) - Working capital decreased from **$833.1 million** at year-end 2022 to **$686.1 million** at June 30, 2023, primarily due to cash used in operating activities[177](index=177&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Identifies primary market risks as interest rate sensitivity on marketable securities and equity price risk on convertible notes - The company is exposed to interest rate risk on its portfolio of marketable securities; a hypothetical **100 basis point** adverse change would result in a loss of approximately **$3.1 million** in fair value as of June 30, 2023[209](index=209&type=chunk) - The fair value of the 2027 Convertible Senior Notes is exposed to equity price risk, as it is dependent on the price and volatility of the company's common stock[211](index=211&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** at the reasonable assurance level as of June 30, 2023[215](index=215&type=chunk) - No material changes to the internal control over financial reporting were identified during the quarter ended June 30, 2023[216](index=216&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) Reports no material legal proceedings were pending or threatened as of June 30, 2023 - As of June 30, 2023, the company was not subject to any **material legal proceedings**[101](index=101&type=chunk)[218](index=218&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) Details numerous risks, including high development uncertainty, financial losses, funding needs, and reliance on product candidate success and third parties [Risks Related to Our Business](index=43&type=section&id=Risks%20Related%20to%20Our%20Business) Outlines inherent business risks for a clinical-stage biopharmaceutical company, including development uncertainty, financial losses, and funding needs - The company is a clinical-stage entity with a history of **significant financial losses** and anticipates continued losses for the foreseeable future[226](index=226&type=chunk)[227](index=227&type=chunk) - The company will require **substantial additional funding** and could be forced to delay or terminate programs if unable to raise capital[232](index=232&type=chunk) - The business is highly dependent on the successful clinical development, regulatory approval, and commercialization of its product candidates[243](index=243&type=chunk) - Enrollment difficulties have already impacted timelines for key trials, including the Phase 3 TEMPO program for tavapadon, the Phase 2 REALIZE trial for darigabat, and the Phase 2 EMPOWER trials for emraclidine[274](index=274&type=chunk) [Risks Related to Our Dependence on Third Parties](index=66&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) Highlights risks from heavy reliance on third-party CROs and CMOs for clinical trials and manufacturing, including quality control and funding conditions - The company relies on third-party CROs to conduct its clinical trials and is responsible for ensuring their compliance with GCPs[339](index=339&type=chunk) - All manufacturing is outsourced to third-party CMOs, creating risks related to supply, quality, regulatory compliance (cGMP), and cost[354](index=354&type=chunk) - Future payments under the Funding Agreements are subject to customary funding conditions, and the Funding Investors can suspend payments under certain circumstances, such as a material adverse event related to tavapadon[346](index=346&type=chunk) [Risks Related to Our Intellectual Property](index=80&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Addresses intellectual property risks, primarily dependence on Pfizer-licensed IP, potential patent expiration, and infringement claims - The company is dependent on an exclusive license from Pfizer for substantially all of its current product portfolio; failure to comply with the license obligations could lead to its termination[421](index=421&type=chunk) - Composition of matter patents licensed from Pfizer are expected to expire between **2033 and 2039**, not including any potential extensions, which may limit the commercial exclusivity period[428](index=428&type=chunk) - The company may face litigation from third parties claiming infringement of their intellectual property rights, which could be expensive and time-consuming[439](index=439&type=chunk) [Risks Related to Our Common Stock and Convertible Senior Notes](index=88&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock%20and%20Convertible%20Senior%20Notes) Covers risks related to stock price volatility, potential dilution from convertible notes, and significant indebtedness of **$543.9 million** - The conversion of some or all of the 2027 Notes will dilute the ownership interests of existing stockholders and could adversely affect the stock price[468](index=468&type=chunk) - As of June 30, 2023, the company had **$543.9 million** of liabilities, including secured financing liabilities and the 2027 Notes, which could limit cash flow for operations[471](index=471&type=chunk) - The company has no current plans to pay cash dividends, so return on investment depends on stock price appreciation[470](index=470&type=chunk) [Item 5. Other Information](index=93&type=section&id=Item%205.%20Other%20Information) Reports a director's adoption of a Rule 10b5-1 trading plan for the potential sale of up to **28,540 shares** of common stock - A director, Marijn Dekkers, adopted a Rule 10b5-1 trading plan on **May 11, 2023**, for the sale of up to **28,540 shares** of common stock[494](index=494&type=chunk)

© Cerevel Therapeutics Holdings, Inc. 1 Cerevel: Becoming the premier neuroscience company © Cerevel Therapeutics Holdings, Inc. 4 Unraveling the Mysteries of the Brain to Treat Neuroscience Diseases May 2023 1Q 2023 Financial Results & Business Update Forward-Looking Statements This presentation contains forward-looking statements that are based on management's beliefs and assumptions and on information currently available to management. In some cases, you can identify forward-looking statements by the fol ...

Interest Income (Expense), Net | --- | --- | --- | --- | --- | |-----------------------------------------------------|-------|-----------------------|-------|---------------------| | ASSETS | | As \nMarch 31, 2023 | of | December 31, 2022 | | Current assets: | | | | | | Cash and cash equivalents | $ | 153,816 | $ | 136,521 | | Marketable securities | | 673,171 | | 755,509 | | Prepaid expenses and other current assets | | 13,795 | | 13,621 | | Total current assets | | 840,782 | | 905,651 | | Marketable secur ...

PART I [Business](index=6&type=section&id=Item%201.%20Business) Cerevel Therapeutics is a clinical-stage biopharmaceutical company focused on developing new therapies for neuroscience diseases, with a pipeline largely in-licensed from Pfizer - Cerevel's core strategy combines a targeted approach to neuroscience with advanced chemistry to design therapies for diseases like schizophrenia, Parkinson's, and epilepsy[12](index=12&type=chunk) - The company's scientific approach is built on three pillars: targeting specific neurocircuitry, achieving receptor subtype selectivity to minimize off-target effects, and using differentiated pharmacology (e.g., partial agonists, allosteric modulators) to fine-tune neural network activity[12](index=12&type=chunk)[30](index=30&type=chunk) - Substantially all of the company's current asset portfolio was in-licensed from Pfizer in **August 2018**, under an agreement that includes future milestone and royalty payment obligations[63](index=63&type=chunk) [Our Pipeline](index=8&type=section&id=Our%20Pipeline) Cerevel Therapeutics Clinical Pipeline Summary | Compound | Disease Area | Phase | Upcoming Milestone | Mechanism | | :--- | :--- | :--- | :--- | :--- | | **Lead Programs** | | | | | | Emraclidine | Schizophrenia | Phase 2 | Data 1H 2024 | M4 PAM | | Emraclidine | Alzheimer's Disease Psychosis | Phase 1 | Ph. 1 Data | M4 PAM | | Darigabat | Epilepsy | Phase 2 | Data Under Review | GABA α2/3/5 PAM | | Darigabat | Panic Disorder | Phase 2 | Initiation Q2 2023 | GABA α2/3/5 PAM | | Tavapadon | Parkinson's (Monotherapy) | Phase 3 | Data 2H 2024 | D1/D5 Partial Agonist | | Tavapadon | Parkinson's (Adjunctive) | Phase 3 | Data Mid-Year 2024 | D1/D5 Partial Agonist | | CVL-871 | Dementia-Related Apathy | Phase 2a | Data 2H 2024 | D1/D5 Partial Agonist | | **Other Programs** | | | | | | CVL-354 | MDD / Substance Use Disorder | Phase 1 | Ph. 1 Data | KOR Antagonist | | PDE4 Inhibitor | Psychiatric, Neuroinflammatory & Other | Phase 1 | Ph. 1 Data | PDE4 Inhibitor | | M4 Agonist | Psychiatric & Neurological | Preclinical | Candidate Selection | M4 Agonist | [Our Lead Programs](index=9&type=section&id=Our%20Lead%20Programs) - The company's lead programs are emraclidine for schizophrenia, darigabat for epilepsy and panic disorder, and tavapadon for Parkinson's disease. These programs are positioned to potentially become backbone therapies in their respective indications[29](index=29&type=chunk) - **Emraclidine (Schizophrenia & Alzheimer's Psychosis):** An M4-selective Positive Allosteric Modulator (PAM). Phase 1b results showed statistically significant improvement in PANSS total score. Two Phase 2 trials are ongoing with data expected in **1H 2024**. It also received FDA Fast Track Designation for Alzheimer's disease psychosis[2](index=2&type=chunk)[34](index=34&type=chunk) - **Darigabat (Epilepsy & Panic Disorder):** A GABAA receptor PAM selective for alpha-2/3/5 subunits, designed to minimize sedation. A Phase 2 trial in focal epilepsy (REALIZE) is ongoing, with readout delayed beyond **2023**. A Phase 2 trial in panic disorder is planned for **Q2 2023** following positive Phase 1 results[2](index=2&type=chunk)[35](index=35&type=chunk)[60](index=60&type=chunk) - **Tavapadon (Parkinson's Disease):** A selective D1/D5 receptor partial agonist. A Phase 3 program (TEMPO-1, -2, -3, -4) is underway for both early-stage (monotherapy) and late-stage (adjunctive) Parkinson's. Data readouts are expected in **mid-2024** and **2H 2024**[20](index=20&type=chunk)[29](index=29&type=chunk) [Our Other Programs](index=47&type=section&id=Our%20Other%20Programs) - **CVL-871 (Dementia-Related Apathy):** A selective D1/D5 partial agonist with a lower level of agonism than tavapadon, designed for cognitive and behavioral symptoms. It has received FDA Fast Track Designation. Data from the Phase 2a trial is now expected in **2H 2024** due to slower-than-expected enrollment[29](index=29&type=chunk)[36](index=36&type=chunk) - The early-stage pipeline includes CVL-354 (KORA for MDD), a selective PDE4 inhibitor program, and an M4 agonist program for psychiatric and neurological indications[38](index=38&type=chunk)[55](index=55&type=chunk) [Intellectual Property](index=54&type=section&id=Intellectual%20Property) - The company's intellectual property portfolio was primarily acquired through an exclusive worldwide license from Pfizer. The company relies on patents, trade secrets, and know-how to protect its technology[153](index=153&type=chunk)[768](index=768&type=chunk) - Key patent families for lead candidates have statutory expiration dates, excluding extensions, in **2037** for emraclidine, **2033** for darigabat, and **2034** for tavapadon and CVL-871[746](index=746&type=chunk)[769](index=769&type=chunk) [Government Regulation](index=55&type=section&id=Government%20Regulation) - The company is subject to extensive regulation by the FDA in the United States and comparable authorities in foreign jurisdictions, covering all stages from research and development to post-approval marketing[771](index=771&type=chunk)[797](index=797&type=chunk) - The FDA drug approval process involves preclinical testing, submitting an Investigational New Drug (IND) application, conducting Phase 1, 2, and 3 clinical trials under Good Clinical Practices (GCP), and submitting a New Drug Application (NDA) for review[747](index=747&type=chunk)[800](index=800&type=chunk) - The FDA offers programs to expedite development and review, such as Fast Track, Breakthrough Therapy, and Priority Review, for drugs addressing serious conditions with unmet medical needs. The company has received Fast Track Designation for emraclidine and CVL-871[69](index=69&type=chunk)[159](index=159&type=chunk) - In the European Union, marketing authorization is obtained through centralized, decentralized, or mutual recognition procedures administered by the EMA and national authorities[167](index=167&type=chunk)[807](index=807&type=chunk) [Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks inherent to a clinical-stage biopharmaceutical firm, including drug development uncertainty, financial losses, funding needs, and reliance on product candidate success and third parties - The company is a clinical-stage entity with a limited operating history, has incurred significant financial losses since its **2018** inception (**$351.5 million** in **2022**), and expects to continue incurring losses for the foreseeable future[9](index=9&type=chunk)[177](index=177&type=chunk) - Cerevel's business is highly dependent on the successful clinical development, regulatory approval, and commercialization of its lead product candidates. Failure or significant delays in any of these programs would materially harm the business[9](index=9&type=chunk)[793](index=793&type=chunk) - The company has experienced clinical trial delays. Enrollment for the Phase 3 TEMPO program (tavapadon) and the Phase 2 REALIZE trial (darigabat) has been negatively impacted by post-COVID environmental factors, pushing expected data readouts[187](index=187&type=chunk) - The company relies on third parties for manufacturing and conducting clinical trials. Any failure by these partners to perform satisfactorily could delay or prevent regulatory approval and commercialization[9](index=9&type=chunk)[219](index=219&type=chunk) - Major shareholders Bain Investor and Pfizer collectively own approximately **56.2%** of the company's common stock, giving them significant influence over corporate actions[839](index=839&type=chunk) [Properties](index=118&type=section&id=Item%202.%20Properties) The company's principal executive offices and laboratory space are located in **61,000** square feet of leased space in Cambridge, Massachusetts - Cerevel's headquarters and lab facilities are located in a **61,000 sq. ft.** leased space in Cambridge, MA, with the lease running until **2030**[297](index=297&type=chunk) [Legal Proceedings](index=118&type=section&id=Item%203.%20Legal%20Proceedings) Cerevel Therapeutics is not currently a party to any material legal proceedings, nor is management aware of any pending or threatened - The company is not currently a party to any material legal proceedings[271](index=271&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=119&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under "CERE", with no history or future plans for cash dividends, retaining earnings for growth - The company's common stock trades on NASDAQ under the symbol **"CERE"**[301](index=301&type=chunk) - Cerevel has never paid cash dividends and does not plan to in the foreseeable future, intending to retain earnings for business development[325](index=325&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=120&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) As a clinical-stage biopharmaceutical company, Cerevel has incurred significant operating losses, funded by equity and debt, with cash reserves expected to cover operations for at least **12** months [Results of Operations](index=126&type=section&id=Results%20of%20Operations) Comparison of Operating Results (in thousands) | Line Item | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Research and development | $280,259 | $161,855 | $103,303 | | General and administrative | $87,589 | $58,243 | $45,813 | | **Total operating expenses** | **$367,848** | **$220,098** | **$149,116** | | Loss from operations | ($367,848) | ($220,098) | ($149,116) | | **Net loss** | **($351,511)** | **($225,334)** | **($152,142)** | - The **73%** increase in R&D expense from **2021** to **2022** was driven by the continued advancement of the tavapadon, emraclidine, and darigabat programs, increased investment in preclinical research, and growth in workforce[361](index=361&type=chunk) - The **50%** increase in G&A expense from **2021** to **2022** was primarily due to higher personnel costs and other costs to support organizational growth, including market research and development activities[342](index=342&type=chunk) Research and Development Expenses by Program (in thousands) | Program | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Tavapadon | $57,953 | $48,858 | $31,678 | | Emraclidine | $74,331 | $15,472 | $16,360 | | Darigabat | $22,388 | $19,461 | $10,984 | | CVL-871 | $3,904 | $4,773 | $1,003 | | Other R&D programs | $21,999 | $15,973 | $8,414 | | Unallocated & Personnel | $99,684 | $57,318 | $34,864 | | **Total R&D** | **$280,259** | **$161,855** | **$103,303** | [Liquidity and Capital Resources](index=128&type=section&id=Liquidity%20and%20Capital%20Resources) - As of **December 31, 2022**, the company had cash, cash equivalents, and marketable securities totaling **$950.2 million** and an accumulated deficit of **$967.8 million**[321](index=321&type=chunk) - Major financing activities in **2022** included a follow-on public offering raising net proceeds of **$238.3 million** and an offering of **2.50%** Convertible Senior Notes due **2027** raising net proceeds of **$334.8 million**[346](index=346&type=chunk) - The company has funding agreements with NovaQuest and Bain to provide up to **$125.0 million** to support tavapadon development, of which **$37.5 million** was received in **April 2022**[346](index=346&type=chunk) Summary of Cash Flows (in thousands) | Cash Flow Activity | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | ($293,187) | ($178,546) | ($117,802) | | Net cash used in investing activities | ($388,834) | ($435,661) | ($18,892) | | Net cash provided by financing activities | $623,191 | $423,602 | $440,835 | [Quantitative and Qualitative Disclosures About Market Risk](index=135&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks include interest rate sensitivity on marketable securities and equity price risk from convertible notes, with minimal foreign currency exposure - The company's primary market risks are interest rate risk on its marketable securities portfolio and equity price risk related to its **2027** Convertible Senior Notes[406](index=406&type=chunk) - A hypothetical **100 basis point** adverse movement in interest rates would result in an estimated loss in fair value of approximately **$3.6 million** to its interest rate-sensitive instruments as of **December 31, 2022**[407](index=407&type=chunk) [Financial Statements and Supplementary Data](index=135&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the full consolidated financial statements and related notes appended to the Annual Report - The full financial statements are appended to the report, as referenced in Item 15[410](index=410&type=chunk) [Controls and Procedures](index=136&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective, affirmed by an unqualified auditor's opinion - Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of **December 31, 2022**[412](index=412&type=chunk)[428](index=428&type=chunk) - The independent auditor, Ernst & Young LLP, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting[415](index=415&type=chunk) PART III [Directors, Executive Officers, Corporate Governance, Compensation, and Shareholder Matters](index=139&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) Information on directors, executive compensation, and corporate governance is incorporated by reference from the forthcoming **2023** proxy statement - Information regarding directors, executive compensation, and corporate governance is incorporated by reference from the forthcoming **2023** proxy statement[398](index=398&type=chunk)[399](index=399&type=chunk)[420](index=420&type=chunk) PART IV [Exhibit and Financial Statement Schedules](index=140&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Annual Report on Form **10-K** - This section provides an index of all financial statements and exhibits filed with the Form **10-K**[236](index=236&type=chunk)[237](index=237&type=chunk)