Eledon Pharmaceuticals, Inc. (NASDAQ:ELDN) Q1 2023 Results Conference Call May 11, 2023 4:30 PM ET Company Participants Paul Little - Chief Financial Officer David-Alexandre Gros - Chief Executive Officer Steve Perrin - President and Chief Scientific Officer Conference Call Participants Pete Stavropoulos - Cantor Fitzgerald Thomas Smith - SVB Securities Rami Katkhuda - LifeSci Capital Vernon Bernardino - H.C. Wainwright Raymond Wu - Ladenburg Thalmann Operator Good afternoon, ladies and gentlemen and welcom ...

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Eledon Pharmaceuticals, Inc.'s unaudited condensed consolidated financial statements and management's discussion for Q1 2023, including financial position, operations, cash flows, and critical accounting policies [Item 1. Condensed Consolidated Financial Statements - Unaudited](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20-%20Unaudited) Presents Eledon Pharmaceuticals, Inc.'s unaudited condensed consolidated financial statements and detailed notes for the periods ended March 31, 2023, and December 31, 2022 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20March%2031%2C%202023%20and%20December%2031%2C%202022) Provides a snapshot of the company's financial position, including assets, liabilities, and equity, as of March 31, 2023, and December 31, 2022 Condensed Consolidated Balance Sheets (In thousands) | Item | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $46,485 | $56,409 | | Total current assets | $48,904 | $59,518 | | Total assets | $82,306 | $92,793 | | Total current liabilities | $5,478 | $6,475 | | Total liabilities | $7,514 | $8,610 | | Total stockholders' equity | $74,792 | $84,183 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202023%20and%202022) Details the company's revenues, expenses, and net loss for the three months ended March 31, 2023, and 2022 Condensed Consolidated Statements of Operations and Comprehensive Loss (In thousands, except per share data) | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Research and development | $8,113 | $6,635 | | General and administrative | $2,997 | $3,224 | | Total operating expenses | $11,110 | $9,859 | | Loss from operations | $(11,110) | $(9,859) | | Other income (expense), net | $338 | $(5) | | Net loss and comprehensive loss | $(10,772) | $(9,864) | | Net loss per share, basic and diluted | $(0.75) | $(0.69) | | Weighted-average common shares outstanding | 14,285,905 | 14,330,693 | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202023%20and%202022) Outlines changes in the company's stockholders' equity, including additional paid-in capital and accumulated deficit, for the three months ended March 31, 2023, and 2022 Changes in Stockholders' Equity (In thousands) | Item | Balance as of Dec 31, 2022 | Stock-based Compensation | Net Loss | Balance as of Mar 31, 2023 | | :------------------------- | :------------------------- | :----------------------- | :--------- | :------------------------- | | Additional Paid-In Capital | $287,034 | $1,381 | — | $288,415 | | Accumulated Deficit | $(202,865) | — | $(10,772) | $(213,637) | | Total Stockholders' Equity | $84,183 | $1,381 | $(10,772) | $74,792 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202023%20and%202022) Presents the cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2023, and 2022 Condensed Consolidated Statements of Cash Flows (In thousands) | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(9,924) | $(8,156) | | Net change in cash and cash equivalents | $(9,924) | $(8,156) | | Cash and cash equivalents at beginning of period | $56,409 | $84,833 | | Cash and cash equivalents at end of period | $46,485 | $76,677 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering business description, accounting policies, and specific financial items [Note 1. Description of Business](index=10&type=section&id=Note%201.%20Description%20of%20Business) Describes Eledon Pharmaceuticals, Inc.'s core business as a clinical-stage biotechnology company focused on developing therapies targeting the CD40 Ligand pathway - Eledon Pharmaceuticals, Inc. is a clinical-stage biotechnology company focused on developing therapies by targeting the CD40 Ligand (CD40L) pathway, with its lead compound, tegoprubart, being an IgG1, anti-CD40L antibody with broad therapeutic potential[28](index=28&type=chunk) - The company acquired Anelixis Therapeutics, Inc. on September 14, 2020, which brought the next-generation anti-CD40L antibody into its pipeline[29](index=29&type=chunk) [Note 2. Going Concern and Management's Plans](index=10&type=section&id=Note%202.%20Going%20Concern%20and%20Management's%20Plans) Addresses the company's going concern status due to recurring losses and outlines management's plans to secure additional financing - The company incurred a net loss of **$10.8 million** for the three months ended March 31, 2023, and has an accumulated deficit of **$213.6 million**, raising substantial doubt about its ability to continue as a going concern[31](index=31&type=chunk)[33](index=33&type=chunk) - On May 5, 2023, the company received **$35.0 million** from an initial closing of a private placement, issuing common stock and pre-funded warrants, with potential for up to an additional **$105.0 million** in tranche financing and **$45.5 million** from warrant exercises, subject to clinical milestones and market conditions[32](index=32&type=chunk) - Management believes additional capital resources are required to fund operations, and if unable to secure capital on acceptable terms, the company may be forced to alter its business strategy, curtail operations, or cease altogether[32](index=32&type=chunk)[33](index=33&type=chunk) [Note 3. Summary of Significant Accounting Policies](index=11&type=section&id=Note%203.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines the key accounting principles and methods used in preparing the condensed consolidated financial statements - The financial statements are prepared in accordance with GAAP and SEC requirements for interim financial information, reflecting normal and recurring adjustments[34](index=34&type=chunk) - Eledon consolidates its wholly-owned subsidiaries, Anelixis Therapeutics, LLC, and Otic Pharma, Ltd., with all significant intercompany accounts and transactions eliminated[36](index=36&type=chunk)[38](index=38&type=chunk) - Research and development expenses, including personnel, contracted services, manufacturing, and stock-based compensation, are expensed as incurred[46](index=46&type=chunk) - Basic and diluted net loss per share were the same due to the company's net loss position, with anti-dilutive securities excluded from the diluted EPS calculation[48](index=48&type=chunk)[50](index=50&type=chunk) [Note 4. Prepaid Expenses and Other Current Assets](index=14&type=section&id=Note%204.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) Details the composition of prepaid expenses and other current assets as of March 31, 2023, and December 31, 2022 Prepaid Expenses and Other Current Assets (In thousands) | Item | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Prepaid insurance | $534 | $823 | | Prepaid clinical | $1,580 | $2,115 | | Prepaid other | $258 | $143 | | Other current assets | $47 | $28 | | Total prepaid expenses and other current assets | $2,419 | $3,109 | [Note 5. Accrued Expenses and Other Liabilities](index=14&type=section&id=Note%205.%20Accrued%20Expenses%20and%20Other%20Liabilities) Provides a breakdown of accrued expenses and other liabilities as of March 31, 2023, and December 31, 2022 Accrued Expenses and Other Liabilities (In thousands) | Item | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Accrued compensation and related expenses | $845 | $1,909 | | Accrued clinical | $1,141 | $1,826 | | Accrued professional services | $206 | $65 | | Accrued other | $50 | $112 | | Total accrued expenses and other liabilities | $2,242 | $3,912 | [Note 6. Commitments and Contingencies](index=14&type=section&id=Note%206.%20Commitments%20and%20Contingencies) Discloses the company's contractual obligations, including lease agreements, license agreements, and potential grant repayments - The company leases office space in Irvine, California (extended through December 31, 2024) and Burlington, Massachusetts (expires November 20, 2024), with total rent expense of **$0.1 million** for both three-month periods ended March 31, 2023 and 2022[59](index=59&type=chunk)[60](index=60&type=chunk)[66](index=66&type=chunk) Future Operating Lease Payments (In thousands) | Year | Amount | | :---------------- | :----- | | 2023 (remainder) | $295 | | 2024 | $388 | | Total minimum lease payments | $683 | | Less imputed interest | $(15) | | Present value of lease liabilities | $668 | | Less current portion | $(384) | | Non-current operating lease liabilities | $284 | - The company has license agreements with ALS Therapy Development Foundation, Inc. (milestone payments up to **$6.0 million** for first product, **$2.5 million** for second, plus annual maintenance fees and low single-digit royalties on net sales) and Lonza Sales AG Inc. (low single-digit royalties on net sales of tegoprubart)[67](index=67&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) - A collaborative research agreement with eGenesis, Inc. grants eGenesis access to tegoprubart for preclinical xenotransplant studies, with eGenesis paying for supplies based on study days per animal[73](index=73&type=chunk) - The company received approximately **$0.5 million** in grants from the Israeli Innovation Authority (2012-2015), repayable from royalties on product sales, with no liability recorded as of March 31, 2023, due to no sales generated[74](index=74&type=chunk) [Note 7. Stockholders' Equity](index=17&type=section&id=Note%207.%20Stockholders%27%20Equity) Details changes in stockholders' equity, including common stock, warrants, and stock-based compensation, for the reporting periods - As of March 31, 2023, the company was permitted to sell up to **$13.2 million** of common stock under its ATM Program due to SEC 'baby shelf rules,' but no shares have been sold, and sales are restricted until at least August 28, 2023, or 90 days post-registration statement effectiveness from the Private Placement[78](index=78&type=chunk)[130](index=130&type=chunk) Warrant Activity (Shares) | Type | Balance as of Dec 31, 2022 | Balance as of Mar 31, 2023 | | :-------------------------------- | :------------------------- | :------------------------- | | Common Stock Warrants | 1,145,631 | 1,145,631 | | Preferred Stock Warrants (convertible to common) | 50,207.419 (2,789,301 common) | 50,207.419 (2,789,301 common) | Stock-Based Compensation Expense (In thousands) | Category | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :------------------------- | :-------------------------------- | :-------------------------------- | | Research and development | $397 | $880 | | General and administrative | $984 | $1,306 | | Total stock-based compensation | $1,381 | $2,186 | [Note 8. Subsequent Events](index=19&type=section&id=Note%208.%20Subsequent%20Events) Reports significant events occurring after the balance sheet date, specifically a private placement financing agreement - On April 28, 2023, the company entered into a Securities Purchase Agreement for a private placement, with the initial closing on May 5, 2023, generating **$35.0 million** by issuing 8,730,168 shares of common stock and pre-funded warrants for 6,421,350 shares[85](index=85&type=chunk)[86](index=86&type=chunk) - The private placement includes potential for an additional **$105.0 million** in tranche financing (second and third closings) and **$45.5 million** from the exercise of common warrants, all subject to specific clinical development milestones and market conditions[85](index=85&type=chunk)[86](index=86&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's perspective on the company's financial condition, operational results, liquidity, capital resources, and risks for the three months ended March 31, 2023 [ABOUT ELEDON PHARMACEUTICALS](index=20&type=section&id=ABOUT%20ELEDON%20PHARMACEUTICALS) Provides an overview of Eledon Pharmaceuticals, its strategic focus, lead product candidate, and development pipeline [Overview](index=20&type=section&id=Overview) Introduces Eledon Pharmaceuticals as a clinical-stage biotechnology company focused on the CD40 Ligand pathway and its lead compound, tegoprubart - Eledon Pharmaceuticals is a clinical-stage biotechnology company focused on the CD40 Ligand (CD40L) pathway to develop therapies for transplanted organ protection, rejection prevention, and Amyotrophic Lateral Sclerosis (ALS)[89](index=89&type=chunk) - The lead compound, tegoprubart, is an IgG1, anti-CD40L antibody designed for improved safety and pharmacokinetic advantages, inhibiting both CD40 and CD11 costimulatory signaling pathways[89](index=89&type=chunk)[91](index=91&type=chunk) - The company's strategy prioritizes kidney transplantation programs, discontinues islet cell transplantation, and deprioritizes the IgA Nephropathy (IgAN) program, with ALS clinical development requiring additional financing[93](index=93&type=chunk) [Kidney transplantation: prevention of allograft rejection](index=20&type=section&id=Kidney%20transplantation:%20prevention%20of%20allograft%20rejection) Details the development of tegoprubart for preventing kidney transplant rejection, including clinical trial results and future plans - Tegoprubart aims to prevent acute and chronic kidney transplant rejection without calcineurin inhibitors (CNIs), which are associated with significant side effects like nephrotoxicity and cardiotoxicity[95](index=95&type=chunk)[96](index=96&type=chunk) - The company reported safety and efficacy results from a Phase 1b clinical trial in March 2023, where tegoprubart replaced tacrolimus in de novo kidney transplantation patients[97](index=97&type=chunk) - An IND application for a Phase 2 trial of tegoprubart for kidney transplant rejection prevention was cleared by the FDA in July 2022, with patient enrollment planned for Q3 2023, enrolling approximately 120 participants[98](index=98&type=chunk) [Amyotrophic Lateral Sclerosis](index=21&type=section&id=Amyotrophic%20Lateral%20Sclerosis) Discusses the company's efforts to develop tegoprubart for Amyotrophic Lateral Sclerosis (ALS), including preclinical and clinical study outcomes and financing needs - ALS is a progressive paralytic disorder with an estimated **30,000 cases** in the U.S., characterized by motor neuron degeneration and neuroinflammation[99](index=99&type=chunk)[100](index=100&type=chunk) - Tegoprubart is designed to block CD40L binding to CD40, potentially inhibiting neuroinflammatory pathways in ALS, with preclinical studies showing prolonged survival and delayed disease progression in mouse models[101](index=101&type=chunk) - A Phase 2a study in adult ALS subjects completed in May 2022 met primary endpoints of safety and tolerability, with no drug-related serious adverse events and dose-dependent target engagement and reduction in pro-inflammatory biomarkers[104](index=104&type=chunk) - Continued clinical development for ALS requires additional financing, which the company cannot assure will be obtained on acceptable terms[105](index=105&type=chunk) [IgA Nephropathy](index=22&type=section&id=IgA%20Nephropathy) Provides an update on the deprioritized IgA Nephropathy (IgAN) program, including disease prevalence and study status - The IgAN program has been deprioritized; IgAN is a leading cause of chronic glomerulonephritis, affecting approximately **150,000 persons** in the U.S., with **30-40%** progressing to end-stage renal disease[106](index=106&type=chunk) - An IND for tegoprubart in IgAN was cleared in August 2022, and a global Phase 2a study was initiated, with safety data from the high-dose cohort reported in March 2023, but the low-dose cohort will not be initiated[108](index=108&type=chunk) [Collaboration Agreement with eGenesis for Xenotransplantation Studies](index=22&type=section&id=Collaboration%20Agreement%20with%20eGenesis%20for%20Xenotransplantation%20Studies) Describes the collaborative research agreement with eGenesis, Inc. for preclinical xenotransplantation studies using tegoprubart - In January 2023, Eledon entered a collaborative research agreement with eGenesis, Inc., providing access to tegoprubart for preclinical xenotransplantation studies in kidney, heart, and islet cell programs[109](index=109&type=chunk) [Financing Activities](index=23&type=section&id=Financing%20Activities) Summarizes recent and potential future financing activities, including a private placement and contingent funding - On April 28, 2023, the company entered a Securities Purchase Agreement for a private placement, with the initial closing on May 5, 2023, yielding **$35.0 million** from the sale of 8,730,168 common shares and pre-funded warrants for 6,421,350 shares[111](index=111&type=chunk)[112](index=112&type=chunk) - Potential additional funding of **$105.0 million** from second and third closings and **$45.5 million** from common warrant exercises is contingent on achieving specified clinical development milestones and market conditions[111](index=111&type=chunk)[112](index=112&type=chunk) [Market Trends and Uncertainties](index=23&type=section&id=Market%20Trends%20and%20Uncertainties) Discusses the impact of macroeconomic trends, the COVID-19 pandemic, and financing contingencies on the company's operations and development - The company faces risks from the COVID-19 pandemic and broader macroeconomic trends, including extreme volatility in financial markets, diminished liquidity, inflation, and rising interest rates, which could delay product development or impact financing[113](index=113&type=chunk) - The second and third closings of the Securities Purchase Agreement are subject to clinical development milestones and market conditions, with no assurance of satisfaction, potentially forcing the company to alter strategy or cease operations if capital is not raised[114](index=114&type=chunk) [CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES](index=23&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20SIGNIFICANT%20JUDGMENTS%20AND%20ESTIMATES) Confirms no material changes in critical accounting policies or significant judgments and estimates during the three months ended March 31, 2023 - There have been no significant and material changes in the company's critical accounting policies and significant judgments and estimates during the three months ended March 31, 2023, compared to those disclosed in the 2022 Annual Report on Form 10-K[117](index=117&type=chunk) [RESULTS OF OPERATIONS](index=24&type=section&id=RESULTS%20OF%20OPERATIONS) Analyzes the company's financial performance, including changes in operating expenses and net loss, for the three months ended March 31, 2023, compared to 2022 [Comparison of the Three Months Ended March 31, 2023 and 2022](index=24&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20March%2031%2C%202023%20and%202022) Provides a comparative overview of key operating results for the three months ended March 31, 2023, and 2022 Operating Results Comparison (In thousands) | Item | 2023 | 2022 | $ Variance | | :-------------------------- | :----- | :----- | :--------- | | Research and development | $8,113 | $6,635 | $1,478 | | General and administrative | $2,997 | $3,224 | $(227) | | Total operating expenses | $11,110 | $9,859 | $1,251 | | Loss from operations | $(11,110) | $(9,859) | $(1,251) | | Other income (expense), net | $338 | $(5) | $343 | | Net loss | $(10,772) | $(9,864) | $(908) | [Research and Development Expenses](index=24&type=section&id=Research%20and%20Development%20Expenses) Explains the increase in research and development expenses for Q1 2023, primarily driven by clinical development and personnel costs - Research and development expenses increased by **$1.5 million** to **$8.1 million** for Q1 2023, primarily due to higher clinical development expenses (**$2.1 million**) and increased personnel costs (**$0.4 million**)[119](index=119&type=chunk) - This increase was partially offset by decreases in stock-based compensation (**$0.5 million**), manufacturing costs (**$0.3 million**), and consulting expenses (**$0.2 million**)[119](index=119&type=chunk) [General and Administrative Expenses](index=24&type=section&id=General%20and%20Administrative%20Expenses) Details the decrease in general and administrative expenses for Q1 2023, mainly due to lower stock-based compensation - General and administrative expenses decreased by **$0.2 million** to **$3.0 million** for Q1 2023, mainly due to lower stock-based compensation costs (**$0.3 million**), partially offset by a **$0.1 million** increase in personnel expenses[120](index=120&type=chunk) [Other Income (expense), Net](index=24&type=section&id=Other%20Income%20%28expense%29%2C%20Net) Attributes the change in other income (expense), net, to increased interest income from higher interest rates on cash and cash equivalents - The change in other income (expense), net, was primarily driven by an increase in interest income due to higher interest rates on cash and cash equivalents for Q1 2023[121](index=121&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=24&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Assesses the company's cash position, funding needs, and ability to meet future material cash requirements [Sources of Liquidity](index=24&type=section&id=Sources%20of%20Liquidity) Identifies the company's cash and cash equivalents and highlights the ongoing need for additional capital due to recurring losses - As of March 31, 2023, the company had **$46.5 million** in cash and cash equivalents, excluding the **$35.0 million** from the initial private placement funding received in May 2023[122](index=122&type=chunk)[124](index=124&type=chunk) - The company has incurred significant net losses since inception and expects continued losses, leading to substantial doubt about its ability to continue as a going concern without additional capital[123](index=123&type=chunk)[124](index=124&type=chunk) - Future tranche financing and warrant exercises from the private placement are contingent on clinical milestones and market conditions, with no assurance of realization[124](index=124&type=chunk) [Material Cash Requirements](index=25&type=section&id=Material%20Cash%20Requirements) Outlines the primary uses of cash for operating expenses and the factors influencing future funding needs - Primary cash use is for operating expenses, including clinical R&D, manufacturing, legal, compensation, and general overhead, with no material changes in contractual obligations as of March 31, 2023[125](index=125&type=chunk) - Expenses are expected to increase with the expansion of the tegoprubart clinical program and potential commercialization, necessitating additional financing through equity, debt, or collaborations[126](index=126&type=chunk)[127](index=127&type=chunk) - Factors influencing funding needs include clinical trial progress, macroeconomic conditions, scope of indications, manufacturing costs, regulatory review, intellectual property, and commercialization expenses[128](index=128&type=chunk)[131](index=131&type=chunk) [Cash Flows](index=27&type=section&id=Cash%20Flows) Analyzes the net cash used in operating activities for Q1 2023 and notes the absence of investing or financing cash flows Net Cash Flow Activity (In thousands) | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(9,924) | $(8,156) | | Net change in cash and cash equivalents | $(9,924) | $(8,156) | - Net cash used in operating activities for Q1 2023 was **$9.9 million**, primarily due to a net loss of **$10.8 million**, partially offset by non-cash items like stock-based compensation and amortization[133](index=133&type=chunk) - There were no cash flows from investing or financing activities for the three months ended March 31, 2023 and 2022[135](index=135&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) States that Eledon Pharmaceuticals, Inc., as a Smaller Reporting Company, is exempt from providing quantitative and qualitative market risk disclosures - The company is designated as a Smaller Reporting Company and is therefore not required to provide disclosures about market risk[137](index=137&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of the company's disclosure controls and procedures as of March 31, 2023, with no material changes in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2023[138](index=138&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2023[139](index=139&type=chunk) [PART II. OTHER INFORMATION](index=29&type=section&id=PART%20II.%20OTHER%20INFORMATION) Provides additional information beyond the financial statements, including legal proceedings, risk factors, and other required disclosures [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) States that Eledon Pharmaceuticals, Inc. is not currently involved in any material legal proceedings expected to significantly impact its operations or financial condition - Neither the company nor its subsidiaries are party to any material legal proceedings expected to significantly impact results of operations, financial condition, or cash flows[141](index=141&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) Outlines significant risks that could adversely affect Eledon Pharmaceuticals, Inc.'s business, financial condition, results of operations, and growth prospects [Risks Related to Our Operations](index=29&type=section&id=Risks%20Related%20to%20Our%20Operations) Discusses operational risks, including the company's limited operating history, going concern doubts, need for funding, and early-stage product development - The company's short operating history and the Anelixis acquisition make it difficult to evaluate future viability, as it has not yet demonstrated commercial-scale manufacturing, pivotal clinical trial execution, or successful sales and marketing[144](index=144&type=chunk)[145](index=145&type=chunk) - Substantial doubt exists about the company's ability to continue as a going concern due to recurring losses and the need for additional capital, with no assurance that contingent private placement funds or other funding will be secured[146](index=146&type=chunk)[147](index=147&type=chunk) - The company has incurred significant operating losses since inception (**$10.8 million** net loss for Q1 2023, **$213.6 million** accumulated deficit) and expects continued losses, requiring substantial additional funding to complete drug development and achieve profitability[148](index=148&type=chunk)[149](index=149&type=chunk)[151](index=151&type=chunk) - Issuances of common stock, including those from the recent private placement and outstanding warrants, could result in significant dilution for existing stockholders and downward pressure on the stock price[153](index=153&type=chunk)[154](index=154&type=chunk) - Product candidates are in early clinical development, and there is a high risk of failure, with no guarantee of successful development, regulatory approval, or commercialization, which would materially harm the business[155](index=155&type=chunk)[156](index=156&type=chunk) - The COVID-19 pandemic and other public health crises, as well as unfavorable global economic conditions (e.g., inflation, rising interest rates), could adversely affect business operations, delay development, and impact the ability to obtain financing[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) - Adverse conditions in financial markets, including bank failures (e.g., Silicon Valley Bank), could impact liquidity and financial performance, as the company maintains deposits exceeding FDIC insurance limits[163](index=163&type=chunk) - Drug development is a lengthy, expensive, and uncertain process, with risks of delays, additional studies, or failure to demonstrate safety and efficacy, which could prevent marketing approval and increase costs[164](index=164&type=chunk)[165](index=165&type=chunk)[167](index=167&type=chunk) - Delays or difficulties in patient enrollment for clinical trials, influenced by factors like eligibility criteria, perceived risks/benefits, and competition, could delay regulatory approvals and increase development expenses[168](index=168&type=chunk)[169](index=169&type=chunk) - Conducting clinical trials outside the U.S. is subject to unique risks, including regulatory differences, compliance burdens, and geopolitical instability (e.g., Ukraine/Russia conflict), which could cause disruptions or delays[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) - Identification of serious adverse events or unacceptable side effects during development could force the company to abandon or limit product candidate development, significantly harming its business and prospects[174](index=174&type=chunk)[175](index=175&type=chunk) - Future success depends on retaining executives and key employees and attracting qualified personnel, with recent program deprioritizations and financial uncertainties potentially increasing employee turnover risk[176](index=176&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk) [Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters](index=38&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20of%20Our%20Product%20Candidates%20and%20Other%20Legal%20Compliance%20Matters) Addresses risks associated with obtaining regulatory approvals, post-marketing compliance, healthcare legislation, data security, and environmental regulations - Failure or delays in obtaining required regulatory approvals (FDA, international) for product candidates, or approvals for narrow indications, could materially impair the ability to commercialize products and generate revenue[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk) - Approved products will be subject to extensive post-marketing regulatory requirements, and non-compliance or later discovery of adverse events could lead to restrictions, withdrawal from the market, or penalties[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - Legislation regulating the pharmaceutical and healthcare industries, such as the Inflation Reduction Act of 2022, could increase development costs, delay approvals, and reduce product prices and reimbursement, negatively impacting profitability[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - Business operations and relationships with healthcare providers are subject to anti-kickback, fraud and abuse, and other healthcare laws (e.g., FCA, Anti-Kickback Statute, HIPAA), with potential for significant civil/criminal penalties, program exclusion, and reputational harm for non-compliance[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) - Reliance on information technology systems and third-party collaborators exposes the company to risks of security breaches, disruptions, or incidents, which could lead to data loss, compromise sensitive information, and materially harm reputation, business, and financial condition[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) - European data collection is governed by restrictive regulations like GDPR, imposing significant responsibilities and potential fines for non-compliance, which could materially adversely affect business and financial results[201](index=201&type=chunk)[202](index=202&type=chunk) - Failure to comply with environmental, health, and safety laws and regulations could result in substantial fines, penalties, or costs, impairing development or production efforts[203](index=203&type=chunk) [Risks Related to the Commercialization of Our Product Candidates](index=42&type=section&id=Risks%20Related%20to%20the%20Commercialization%20of%20Our%20Product%20Candidates) Covers challenges in achieving market acceptance, potential post-approval issues, lack of sales infrastructure, competitive landscape, and reimbursement uncertainties - Even with marketing approval, product candidates may fail to achieve sufficient market acceptance by physicians, patients, and third-party payers, impacting revenue generation and profitability[204](index=204&type=chunk)[206](index=206&type=chunk) - If approved products are later found to be less effective or cause undesirable side effects, marketing ability could be compromised, leading to regulatory actions, decreased demand, and significant financial and reputational harm[207](index=207&type=chunk)[208](index=208&type=chunk) - The company currently lacks a marketing and sales force; failure to establish effective capabilities or secure third-party agreements could prevent successful commercialization and revenue generation[209](index=209&type=chunk) - The drug development and commercialization market is highly competitive, with larger pharmaceutical and biotechnology companies possessing greater resources, potentially leading to competitors developing and commercializing products more successfully[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk) - Uncertainty regarding insurance coverage and reimbursement for newly approved products, both domestically and internationally, could limit market access and decrease the ability to generate revenue, especially with increasing cost-containment initiatives[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk) - Product liability lawsuits related to clinical trials or commercial sales could result in substantial liabilities, decreased demand, reputational damage, and significant costs, potentially exceeding current insurance coverage[224](index=224&type=chunk)[225](index=225&type=chunk) [Risks Related to Our Dependence on Third Parties](index=45&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) Highlights risks stemming from reliance on third parties for manufacturing, clinical testing, and other critical development activities - Reliance on third parties for manufacturing product candidates for clinical trials and commercialization increases the risk of insufficient quantities, unacceptable cost/quality, and delays, as the company lacks internal manufacturing facilities[226](index=226&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk) - Third-party manufacturers are subject to regulatory review, and their non-compliance with cGMP or performance failures could lead to sanctions, delays, and adverse impacts on product supply[231](index=231&type=chunk) - Dependence on Contract Research Organizations (CROs) and other third parties for nonclinical and clinical testing means outcomes are partially beyond the company's direct control, and their inadequate or untimely performance could significantly delay development and commercialization[235](index=235&type=chunk) [Risks Related to Our Intellectual Property](index=47&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Addresses challenges in obtaining and maintaining intellectual property protection, potential litigation, licensing needs, and trade secret confidentiality - Inability to obtain and maintain broad intellectual property protection (patents, trade secrets) for technology and products could allow competitors to commercialize similar products, impairing the company's ability to compete[236](index=236&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk) - The company may become involved in expensive, time-consuming, and potentially unsuccessful lawsuits to protect or enforce its patents or other intellectual property, risking invalidation of patents or liability for infringement[244](index=244&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk) - The company may need to license intellectual property from third parties, and if such licenses are unavailable or not on commercially reasonable terms, its business could be materially harmed[248](index=248&type=chunk) - Failure to protect the confidentiality of trade secrets, including through breaches of non-disclosure agreements or independent development by competitors, would harm the company's business and competitive position[249](index=249&type=chunk) - The company may be subject to claims of misappropriation of trade secrets from former employers of its personnel, leading to costly litigation, potential loss of intellectual property rights, or distraction of management[250](index=250&type=chunk) [Risks Related to Our Common Stock](index=49&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) Discusses factors influencing stock price volatility, internal control deficiencies, anti-takeover provisions, and the company's dividend policy - The company's stock price is expected to be volatile due to factors such as financial condition uncertainties, regulatory approval delays, clinical trial results, competition, and macroeconomic conditions, potentially leading to unexpected drops[251](index=251&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk) - Failure to establish and maintain proper internal control over financial reporting could adversely affect financial reporting accuracy and timing, stock price, and compliance with listing requirements, incurring substantial costs and management distraction[255](index=255&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk) - Provisions in the corporate charter and Delaware law could make an acquisition of the company more difficult and may prevent stockholders from replacing or removing current management, potentially limiting stockholder value[258](index=258&type=chunk)[264](index=264&type=chunk) - The company does not expect to pay cash dividends in the foreseeable future, meaning capital appreciation will be the sole source of gain for stockholders[259](index=259&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) States that this item is not applicable to the company for the reporting period - This item is not applicable[260](index=260&type=chunk) [Item 3. Defaults Upon Senior Securities](index=51&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Reports no defaults upon senior securities for the reporting period - There are no defaults upon senior securities[261](index=261&type=chunk) [Item 4. Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that this item is not applicable to the company for the reporting period - This item is not applicable[262](index=262&type=chunk) [Item 5. Other Information](index=51&type=section&id=Item%205.%20Other%20Information) Reports no other information required for this item - There is no other information to report[263](index=263&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed as part of the Form 10-Q, including key agreements, corporate documents, and certifications - Key exhibits include the Agreement and Plan of Merger (2.1), Restated Certificate of Incorporation (3.1), various Certificates of Amendment (3.2-3.5), Certificates of Designations for Preferred Stock (3.6-3.7), Amended and Restated Bylaws (3.8), Form of Pre-Funded Warrant (4.1), Form of Tranche A Warrant (4.2), Securities Purchase Agreement (10.1), Registration Rights Agreement (10.2), Letter Agreements (10.3-10.4), and Officer Certifications (31.1, 31.2, 32.1, 32.2)[265](index=265&type=chunk)[266](index=266&type=chunk) [Signatures](index=54&type=section&id=Signatures) Confirms the official signing of the report by the Chief Executive Officer and Chief Financial Officer on May 11, 2023 - The report is duly signed on May 11, 2023, by David-Alexandre C. Gros, M.D., Chief Executive Officer and Director, and Paul Little, Chief Financial Officer[268](index=268&type=chunk)[270](index=270&type=chunk)

Eledon Pharmaceuticals, Inc. (NASDAQ:ELDN) Q4 2022 Earnings Conference Call March 30, 2023 4:30 PM ET Company Participants Paul Little - Chief Financial Officer David-Alexandre Gros - Chief Executive Officer Steven Perrin - President and Chief Scientific Officer Conference Call Participants Pete Stavropoulos - Cantor Fitzgerald Thomas Smith - SVB Leerink Securities Matt Kaplan - Ladenburg Thalmann Rami Katkhuda - LifeSci Capital Operator Greetings, and welcome to the Eledon Pharmaceuticals Fourth Quarter an ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-36620 ELEDON PHARMACEUTICALS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporati ...

Eledon Pharmaceuticals, Inc. (NASDAQ:ELDN) Q3 2022 Earnings Conference Call November 14, 2022 4:30 PM ET Company Participants Paul Little – Chief Financial Officer David-Alexandre Gros – Chief Executive Officer Steve Perrin – President and Chief Scientific Officer Jeff Bornstein – Chief Medical Officer Conference Call Participants Pete Stavropoulos – Cantor Fitzgerald Matt Kaplan – Ladenburg Thalmann Thomas Smith – SVB Securities Rami Katkhuda – LifeSci Capital Operator Good day and welcome to the Eledon Ph ...

Financial Performance - Net loss for the nine months ended September 30, 2022, was $29,582,000, compared to a net loss of $25,700,000 for the same period in 2021, indicating an increase in loss of approximately 15.1%[23] - The company reported a net loss of $29.6 million for the nine months ended September 30, 2022, compared to a net loss of $25.7 million for the same period in 2021, representing a 11.4% increase in losses[27] - For the three months ended September 30, 2022, the company reported a net loss of $10.471 million, compared to a net loss of $9.817 million for the same period in 2021[23] - Basic net loss per share for the nine months ended September 30, 2022, was $2.07, compared to $1.73 for the same period in 2021, indicating a 19.7% increase in loss per share[55] - Basic and diluted net loss per share was $(0.73) for the three months ended September 30, 2022, compared to $(0.66) for the same period in 2021, indicating a worsening of approximately 10.6%[55] Assets and Liabilities - Total current assets decreased from $88,346,000 as of December 31, 2021, to $67,565,000 as of September 30, 2022, a decline of approximately 23.5%[21] - Cash and cash equivalents decreased from $84,833,000 as of December 31, 2021, to $65,889,000 as of September 30, 2022, a reduction of about 22.4%[21] - Total liabilities increased from $6,553,000 as of December 31, 2021, to $8,493,000 as of September 30, 2022, an increase of approximately 29.6%[21] - The accumulated deficit increased from $114,899,000 as of December 31, 2021, to $144,481,000 as of September 30, 2022, reflecting a rise of about 26.0%[21] - Total stockholders' equity decreased from $163,995,000 as of December 31, 2021, to $141,093,000 as of September 30, 2022, a decline of about 13.2%[21] - As of September 30, 2022, total assets were $149.586 million, down from $170.548 million as of December 31, 2021[21] Operating Expenses - Operating expenses for the three months ended September 30, 2022, were $10,598,000, compared to $10,506,000 for the same period in 2021, representing an increase of 0.9%[23] - Total operating expenses for the nine months ended September 30, 2022, were $29.740 million, compared to $27.482 million for the same period in 2021[23] - General and administrative expenses for the three months ended September 30, 2022, were $3,146,000, compared to $2,848,000 for the same period in 2021, an increase of approximately 10.5%[23] - Research and development expenses for the nine months ended September 30, 2022, were $19,830,000, compared to $17,553,000 for the same period in 2021, an increase of approximately 12.9%[23] - Stock-based compensation for the nine months ended September 30, 2022, was $6.7 million, an increase from $5.9 million in the same period of 2021[27] Future Outlook and Funding - The company expects to continue incurring net losses in the foreseeable future due to ongoing research and development activities[39] - The company will need to raise additional funds through public or private debt and equity financings to support its ongoing activities[39] - The company is obligated to pay ALS TDI a total of $6.0 million in remaining milestone payments for a first licensed product, with additional payments of up to $2.5 million for a second licensed product[78] - The Company has not recorded any liabilities related to grants received as it has not yet generated sales from the associated R&D programs[82] Research and Development - Research and development expenses are a significant part of the company's operations, with costs incurred as they arise, reflecting ongoing investment in product development[50] - The lead compound in development is tegoprubart, an anti-CD40L antibody, which is aimed at treating autoimmune diseases and other conditions[31] - Eledon Pharmaceuticals acquired Anelixis Therapeutics, Inc. in September 2020, enhancing its product development capabilities in the biopharmaceutical sector[32] - Research and development expenses include costs related to clinical trials, which are expensed as incurred, with no material adjustments to prior-period accrued estimates reported[50][51] Cash Flow and Investments - The company experienced a net cash used in operating activities of $18.9 million for the nine months ended September 30, 2022[27] - Cash and cash equivalents at the end of the period were $65.9 million, down from $94.0 million at the end of September 30, 2021, indicating a decrease of 29.8% year-over-year[27] - The Company received approximately $0.5 million in grants from the Israeli Innovation Authority for R&D investments, with repayment contingent on future sales[82] - The Company has not recorded any amounts associated with indemnifications to date, but may incur charges in the future[87] Lease Obligations - The Company has an operating lease liability of $839,000 as of September 30, 2022, with future minimum lease payments totaling $864,000[74] - The Company’s operating lease cost for the nine months ended September 30, 2022, was $0.3 million, compared to $0.2 million for the same period in 2021[65] - The remaining lease term for operating leases increased from 1.25 years in 2021 to 2.20 years in 2022[74] - Total minimum lease payments for 2023 are projected to be $378,000, with total minimum lease payments for 2024 at $389,000, leading to a total of $864,000[74]

Eledon Pharmaceuticals, Inc. (NASDAQ:ELDN) Q2 2022 Earnings Conference Call August 11, 2022 4:30 PM ET Company Participants Paul Little - CFO David-Alexandre Gros - CEO Steve Perrin - President and Chief Scientific Officer Jeff Bornstein - Chief Medical Officer Conference Call Participants Thomas Smith - SVB Securities Rami Katkhuda - LifeSci Capital Operator Greetings, and welcome to Eledon Pharmaceuticals Second Quarter Financial Results Conference Call. At this time all participants are in a listen-only ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Emerging growth company ☐ 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 June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36620 ELEDON PHARMACEUTICALS, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 20-10 ...

Eledon Pharmaceuticals, Inc. (NASDAQ:ELDN) Q1 2022 Earnings Conference Call May 12, 2022 4:30 PM ET Company Participants Paul Little – Chief Financial Officer David-Alexandre Gros – Chief Executive Officer Steve Perrin – President and Chief Scientific Officer Jeff Bornstein – Chief Medical Officer Conference Call Participants Pete Stavropoulos – Cantor Fitzgerald Nat Charoensook – SVB Matt Kaplan – Ladenburg Thalmann Operator Greetings, and welcome to Eledon Pharmaceuticals First Quarter Financial Results C ...

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%2E%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements](index=6&type=section&id=Item%201.%2E%20Condensed%20Consolidated%20Financial%20Statements) For the first quarter of 2022, Eledon Pharmaceuticals reported a net loss of $9.9 million and ended the period with $76.7 million in cash and cash equivalents [Condensed Consolidated Balance Sheets](index=6&type=page&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2022, total assets were $161.4 million, a decrease from $170.5 million at year-end 2021, mainly due to reduced cash and cash equivalents Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $76,677 | $84,833 | | Total current assets | $79,325 | $88,346 | | Goodwill | $48,648 | $48,648 | | In-process research and development | $32,386 | $32,386 | | **Total assets** | **$161,378** | **$170,548** | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | $2,958 | $4,401 | | Total liabilities | $5,060 | $6,553 | | Accumulated deficit | $(124,763) | $(114,899) | | **Total stockholders' equity** | **$156,318** | **$163,995** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=page&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended March 31, 2022, the company reported a net loss of $9.9 million, or $0.69 per share, primarily due to higher research and development expenses Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Research and development | $6,635 | $5,653 | | General and administrative | $3,224 | $3,352 | | **Total operating expenses** | **$9,859** | **$9,005** | | Loss from operations | $(9,859) | $(9,005) | | **Net loss and comprehensive loss** | **$(9,864)** | **$(8,499)** | | Net loss per share, basic and diluted | $(0.69) | $(0.57) | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=page&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity decreased from $164.0 million at year-end 2021 to $156.3 million as of March 31, 2022, mainly due to the net loss, partially offset by stock-based compensation Changes in Stockholders' Equity for Q1 2022 (in thousands) | Description | Amount | | :--- | :--- | | Balance as of December 31, 2021 | $163,995 | | Stock-based compensation | $2,186 | | Net loss and other comprehensive loss | $(9,864) | | **Balance as of March 31, 2022** | **$156,318** | [Condensed Consolidated Statements of Cash Flows](index=9&type=page&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $8.2 million for Q1 2022, an increase from the prior-year period, with no financing or investing activities Summary of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(8,156) | $(5,166) | | Net cash used in financing activities | — | $(450) | | **Net change in cash and cash equivalents** | **$(8,156)** | **$(5,616)** | | Cash and cash equivalents at end of period | $76,677 | $108,579 | [Notes to Condensed Consolidated Financial Statements](index=10&type=page&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's business focus on tegoprubart, confirm sufficient cash for 12 months, and outline key commitments and equity programs - The company is a clinical-stage biopharmaceutical firm focused on developing its lead compound, **tegoprubart**, an anti-CD40L antibody, for autoimmune diseases, organ/cell transplants, and ALS[31](index=31&type=chunk) - Management concluded that the company's cash and cash equivalents of **$76.7 million** as of March 31, 2022, are sufficient to meet anticipated cash needs for at least the next **12 months**[38](index=38&type=chunk)[39](index=39&type=chunk) - The company has an agreement with ALS TDI requiring up to **$6.0 million** in remaining milestone payments for the first licensed product and potential future royalties[76](index=76&type=chunk)[77](index=77&type=chunk) - The company has an "at the market" (ATM) equity program to sell up to **$75 million** in common stock, but is currently limited to selling up to **$16.4 million** under SEC "baby shelf rules"[87](index=87&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's focus on advancing its lead compound, tegoprubart, through clinical trials for four indications, reporting a net loss of $9.9 million for Q1 2022 [Overview of Business and Clinical Pipeline](index=20&type=page&id=Overview%20of%20Business%20and%20Clinical%20Pipeline) Eledon is a clinical-stage biopharmaceutical company developing tegoprubart for multiple indications, having completed enrollment in its Phase 2a ALS trial and received clearances for other trials - The company's lead compound is **tegoprubart**, an anti-CD40L antibody being developed for up to four indications: ALS, kidney allograft rejection, islet cell allograft rejection, and IgA Nephropathy (IgAN)[99](index=99&type=chunk)[103](index=103&type=chunk) - As of March 31, 2022, all **54 subjects** in the Phase 2a ALS study were enrolled and had completed participation in the trial[108](index=108&type=chunk) - The company has received regulatory clearances to initiate clinical trials for its other pipeline indications, including a Phase 1b in kidney transplant, a Phase 2a in islet cell transplant, and a Phase 2a in IgAN across various international jurisdictions[103](index=103&type=chunk)[111](index=111&type=chunk)[115](index=115&type=chunk)[119](index=119&type=chunk) [Results of Operations](index=24&type=page&id=Results%20of%20Operations) Comparing Q1 2022 to Q1 2021, the net loss increased by $1.4 million to $9.9 million, driven by a $1.0 million rise in research and development expenses Comparison of Operating Results (in thousands) | Line Item | Q1 2022 | Q1 2021 | $ Variance | | :--- | :--- | :--- | :--- | | Research and development | $6,635 | $5,653 | $982 | | General and administrative | $3,224 | $3,352 | $(128) | | **Total operating expenses** | **$9,859** | **$9,005** | **$854** | | **Net loss** | **$(9,864)** | **$(8,499)** | **$(1,365)** | - The **$1.0 million** increase in R&D expenses was mainly due to higher clinical development costs with external CROs as the tegoprubart program advanced[124](index=124&type=chunk) [Liquidity and Capital Resources](index=24&type=page&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2022, the company had $76.7 million in cash, sufficient for 12 months, but anticipates needing additional capital for future development and operations - The company had cash and cash equivalents of **$76.7 million** as of March 31, 2022, which is believed to be sufficient to meet projected operating requirements for at least the next **12 months**[128](index=128&type=chunk)[130](index=130&type=chunk) - The company will require additional financing to advance its drug products through clinical development, obtain regulatory approval, and fund operations for the foreseeable future[132](index=132&type=chunk) Net Cash Flow Activity (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(8,156) | $(5,166) | | Net cash used in financing activities | — | $(450) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a Smaller Reporting Company, Eledon Pharmaceuticals is not required to provide the disclosures for this item - The Company is designated a Smaller Reporting Company and is not required to provide the disclosure required by this Item[140](index=140&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%2E%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2022, with no material changes in internal control over financial reporting - Based on an evaluation as of March 31, 2022, management concluded that the company's disclosure controls and procedures were effective[142](index=142&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2022, that have materially affected, or are reasonably likely to materially affect, internal controls[143](index=143&type=chunk) [PART II. OTHER INFORMATION](index=28&type=section&id=PART%20II.%2E%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%2E%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - The company is not currently a party to any material legal proceedings[84](index=84&type=chunk)[145](index=145&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%2E%20Risk%20Factors) The company outlines significant risks to its business, including those related to operations, regulatory hurdles, commercialization challenges, dependence on third parties, intellectual property, and stock volatility [Risks Related to Our Operations](index=28&type=page&id=Risks%20Related%20to%20Our%20Operations) Operational risks include the company's short operating history, significant recurring net losses, the early and high-risk stage of clinical candidates, and the need for substantial additional funding - The company has a short operating history and has incurred significant operating losses since inception, with a net loss of **$9.9 million** for Q1 2022 and an accumulated deficit of **$124.8 million**[148](index=148&type=chunk)[151](index=151&type=chunk) - Product candidates are in early stages of clinical development, a lengthy and expensive process with an uncertain outcome and a high risk of failure[155](index=155&type=chunk)[167](index=167&type=chunk) - The company will require additional funding to complete the development of its lead drug candidate and may be forced to alter its business strategy or cease operations if unable to raise capital[183](index=183&type=chunk) [Risks Related to Regulatory Approval and Legal Compliance](index=35&type=page&id=Risks%20Related%20to%20Regulatory%20Approval%20and%20Legal%20Compliance) The company faces risks of not obtaining or experiencing delays in regulatory approvals, extensive post-marketing regulations, and potential security breaches of its IT systems - Failure to obtain marketing approval for a product candidate from the FDA and other global regulatory authorities will prevent commercialization[188](index=188&type=chunk) - Approved products will be subject to extensive post-marketing requirements, and failure to comply can result in restrictions, withdrawal from the market, or penalties[193](index=193&type=chunk) - Internal computer systems are vulnerable to security breaches, which could disrupt development programs and compromise sensitive data, leading to significant financial and legal harm[207](index=207&type=chunk) [Risks Related to the Commercialization of Our Product Candidates](index=39&type=page&id=Risks%20Related%20to%20the%20Commercialization%20of%20Our%20Product%20Candidates) Even if approved, product candidates may fail to achieve market acceptance, face substantial competition, and require securing adequate insurance coverage and reimbursement - There is a risk of failing to achieve market acceptance from physicians, patients, and payers, which is necessary for commercial success[214](index=214&type=chunk) - The company faces substantial competition from major pharmaceutical and biotechnology companies developing similar or alternative therapies, including **Novartis**, **Boehringer Ingelheim**, **AbbVie**, and **Sanofi**[221](index=221&type=chunk)[222](index=222&type=chunk) - The availability and extent of reimbursement from government and private payers are uncertain and could limit the ability to market products profitably[229](index=229&type=chunk) [Risks Related to Our Dependence on Third Parties](index=42&type=page&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) The company relies heavily on third-party contract manufacturing organizations (CMOs) for supply and contract research organizations (CROs) for clinical trials, creating risks related to control and supply chain - The company relies on third parties to manufacture, package, and distribute clinical supplies and does not have its own manufacturing facilities, increasing risks of supply disruption and cost issues[237](index=237&type=chunk)[238](index=238&type=chunk) - Success is partially dependent on the performance of CROs and other contractors for research, development, and clinical testing activities, which are not fully within the company's control[247](index=247&type=chunk) [Risks Related to Our Intellectual Property](index=44&type=page&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company's success depends on obtaining and maintaining patent protection, which is uncertain and may involve expensive litigation, and relies on license agreements and trade secrets - The company's success depends on its ability to obtain and maintain patent protection, but the patent process is expensive, time-consuming, and highly uncertain[248](index=248&type=chunk)[249](index=249&type=chunk) - The company may become involved in lawsuits to protect its patents or defend against infringement claims from third parties, which could be costly and unsuccessful[256](index=256&type=chunk)[257](index=257&type=chunk) - The company relies on trade secrets and confidentiality agreements, which may be breached, and protecting them can be difficult and expensive[263](index=263&type=chunk) [Risks Related to Our Common Stock](index=46&type=page&id=Risks%20Related%20to%20Our%20Common%20Stock) The company's stock price is expected to be volatile, it does not anticipate paying dividends, and corporate provisions may discourage acquisitions - The market price of the company's common stock is expected to be volatile and subject to significant fluctuations[265](index=265&type=chunk) - The company does not expect to pay any cash dividends in the foreseeable future, so capital appreciation will be the sole source of gain for stockholders[276](index=276&type=chunk) - Provisions in the company's charter and bylaws may discourage or prevent a merger or acquisition, potentially limiting the price investors might pay for shares[273](index=273&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%2E%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Not applicable for this reporting period - Not applicable[277](index=277&type=chunk) [Item 3. Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%2E%20Defaults%20Upon%20Senior%20Securities) None - None[278](index=278&type=chunk) [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%2E%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[279](index=279&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%2E%20Other%20Information) None - None[279](index=279&type=chunk) [Item 6. Exhibits](index=48&type=section&id=Item%206.%2E%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer - The Exhibit Index lists all documents filed or furnished as part of the Form 10-Q, including officer certifications pursuant to the Sarbanes-Oxley Act[279](index=279&type=chunk)[281](index=281&type=chunk)