[Part I. Financial Information](index=5&type=section&id=Part%20I.%20Financial%20Information) This section presents the unaudited consolidated financial statements and management's discussion for Reneo Pharmaceuticals, Inc. [Item 1. Reneo Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Reneo%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents OnKure Therapeutics' unaudited consolidated financial statements, covering balance sheets, operations, equity, cash flows, and related notes. [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This section details the Company's financial position, including assets, liabilities, and equity, as of September 30, 2024 Financial Position (in thousands) | Metric | Sep 30, 2024 | Dec 31, 2023 | Change (2024 vs 2023) | | :--------------------------- | :----------- | :----------- | :-------------------- | | Cash and cash equivalents | $60,689 | $27,632 | +$33,057 | | Short-term investments | $15,979 | $75,331 | -$59,352 | | Total current assets | $76,999 | $106,622 | -$29,623 | | Total assets | $77,645 | $107,436 | -$29,791 | | Total current liabilities | $3,248 | $18,177 | -$14,929 | | Total liabilities | $3,627 | $18,826 | -$15,199 | | Total stockholders' equity | $74,018 | $88,610 | -$14,592 | | Accumulated deficit | $(235,953) | $(218,474) | -$17,479 | [Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section presents the Company's operating results, including expenses and net loss, for the periods ended September 30, 2024 Operating Results (in thousands) | Metric | 3 Months Sep 30, 2024 | 3 Months Sep 30, 2023 | Change (YoY) | 9 Months Sep 30, 2024 | 9 Months Sep 30, 2023 | Change (YoY) | | :------------------------------------------ | :-------------------- | :-------------------- | :----------- | :-------------------- | :-------------------- | :----------- | | Research and development | $904 | $13,622 | -$12,718 | $6,436 | $39,009 | -$32,573 | | General and administrative | $3,760 | $7,266 | -$3,506 | $14,155 | $19,038 | -$4,883 | | Total operating expenses | $4,664 | $20,888 | -$16,224 | $20,591 | $58,047 | -$37,456 | | Loss from operations | $(4,664) | $(20,888) | +$16,224 | $(20,591) | $(58,047) | +$37,456 | | Other income | $972 | $1,692 | -$720 | $3,112 | $4,213 | -$1,101 | | Net loss | $(3,692) | $(19,196) | +$15,504 | $(17,479) | $(53,834) | +$36,355 | | Net loss per share, basic and diluted | $(1.10) | $(5.68) | +$4.58 | $(5.23) | $(18.11) | +$12.88 | [Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section outlines changes in stockholders' equity, including additional paid-in capital and accumulated deficit, across reporting periods Stockholders' Equity Changes (in thousands) | Metric | Dec 31, 2023 | Mar 31, 2024 | Jun 30, 2024 | Sep 30, 2024 | | :--------------------------- | :----------- | :----------- | :----------- | :----------- | | Additional Paid-In Capital | $307,076 | $308,154 | $309,143 | $309,969 | | Accumulated Deficit | $(218,474) | $(226,900) | $(232,261) | $(235,953) | | Total Stockholders' Equity | $88,610 | $81,242 | $76,869 | $74,018 | - Key activities impacting equity for the nine months ended September 30, 2024, include **$2.893 million** in stock-based compensation and a net loss of **$(17.479) million**[14](index=14&type=chunk)[55](index=55&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the Company's cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary (in thousands) | Activity | 9 Months Sep 30, 2024 | 9 Months Sep 30, 2023 | Change (YoY) | | :------------------------------------------ | :-------------------- | :-------------------- | :----------- | | Net cash used in operating activities | $(30,102) | $(43,929) | +$13,827 | | Net cash provided by (used in) investing activities | $61,248 | $(29,254) | +$90,502 | | Net cash provided by financing activities | $1,911 | $64,993 | -$63,082 | | Net increase (decrease) in cash and cash equivalents | $33,057 | $(8,190) | +$41,247 | | Cash and cash equivalents, end of period | $60,689 | $11,737 | +$48,952 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the Company's accounting policies, significant transactions, and other financial disclosures [1. Organization and Business](index=10&type=section&id=1.%20Organization%20and%20Business) This note describes the Company's corporate structure, recent merger, and strategic focus as a clinical-stage biopharmaceutical entity - Reneo Pharmaceuticals, Inc. completed a merger with OnKure, Inc. on October 4, 2024, becoming OnKure Therapeutics, Inc. and effecting a **1:10 reverse stock split**[3](index=3&type=chunk)[22](index=22&type=chunk) - A concurrent private placement raised approximately **$65.0 million** through the sale of **2,839,005 shares** of Class A Common Stock[22](index=22&type=chunk) - Post-Merger, Legacy OnKure stockholders own **~53.6%**, pre-Merger Reneo stockholders **~25.1%**, and PIPE Investors **~21.3%** of the Combined Company's outstanding common stock[22](index=22&type=chunk) - OnKure Therapeutics, Inc. is now a clinical-stage biopharmaceutical company focused on precision medicines for cancer, with lead product candidate OKI-219 in a Phase 1 trial, anticipating early clinical data in Q4 2024[22](index=22&type=chunk) [Liquidity](index=11&type=section&id=Liquidity) This note discusses the Company's cash position, historical losses, and management's assessment of future funding sufficiency - Reneo has incurred significant losses and negative cash flows from operations since its inception in 2014[25](index=25&type=chunk) - As of September 30, 2024, Reneo had **$76.7 million** in cash, cash equivalents, and short-term investments[25](index=25&type=chunk) - Management believes the Company's cash resources, post-Merger, will be sufficient to fund its operating plan for at least the next 12 months[25](index=25&type=chunk) [2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the consolidated financial statements - The unaudited consolidated financial statements are prepared in accordance with GAAP, with certain information condensed or omitted[26](index=26&type=chunk) - All share and per share amounts are retroactively adjusted for the Reverse Stock Split, excluding authorized shares and par value[26](index=26&type=chunk) - No recently issued accounting standards or interpretations are expected to have a material impact on Reneo's financial position, operations, or cash flows[28](index=28&type=chunk) [3. Net Loss Per Share](index=11&type=section&id=3.%20Net%20Loss%20Per%20Share) This note explains the calculation of basic and diluted net loss per share and identifies anti-dilutive securities - Basic loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding[29](index=29&type=chunk) - Diluted net loss per share excludes anti-dilutive common stock equivalents, such as stock options and unvested restricted stock units, from the calculation[30](index=30&type=chunk) Anti-Dilutive Securities (as of Sep 30, 2024) | Category | Amount | | :--------------------------- | :----- | | Common stock options outstanding | 467,129 | | Unvested restricted stock units | 29,658 | | **Total** | **496,787** | [4. Fair Value Measurements](index=12&type=section&id=4.%20Fair%20Value%20Measurements) This note details the fair value hierarchy and measurement of financial assets and liabilities - Reneo categorizes financial assets and liabilities measured at fair value into a three-tier hierarchy: Level 1 (quoted prices in active markets), Level 2 (significant other observable inputs), and Level 3 (significant unobservable inputs)[32](index=32&type=chunk) Assets Measured at Fair Value (Sep 30, 2024, in thousands) | Asset | Level 1 | Level 2 | Level 3 | Total | | :------------------------- | :------ | :------ | :------ | :------- | | Money market investments | $57,629 | — | — | $57,629 | | U.S. treasury securities | — | $15,979 | — | $15,979 | | **Total Assets** | **$57,629** | **$15,979** | **—** | **$73,608** | - The Performance Award liability, measured using Level 3 inputs, was reduced from **$7 thousand** at January 1, 2024, to **$0** at September 30, 2024, as its conditions were not probable of being achieved[32](index=32&type=chunk)[35](index=35&type=chunk) [5. Marketable Debt Securities](index=13&type=section&id=5.%20Marketable%20Debt%20Securities) This note describes the Company's available-for-sale debt securities and their fair market value - Reneo's debt securities are classified as current assets available-for-sale and are carried at fair value[36](index=36&type=chunk) Available-for-Sale Securities (Sep 30, 2024, in thousands) | Metric | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Market Value | | :--------------------- | :------------- | :--------------------- | :---------------------- | :---------------- | | U.S. treasury securities | $15,976 | $2 | — | $15,978 | | **Total** | **$15,976** | **$2** | **—** | **$15,978** | - Unrealized losses in the investment portfolio were considered temporary as of September 30, 2024, with no realized gains or losses for the three and nine months ended September 30, 2024 and 2023[38](index=38&type=chunk) [6. Accrued Expenses](index=14&type=section&id=6.%20Accrued%20Expenses) This note provides a breakdown of accrued expenses, including clinical, manufacturing, and compensation costs Accrued Expenses (in thousands) | Accrued Expense | Sep 30, 2024 | Dec 31, 2023 | Change (2024 vs 2023) | | :-------------------------------- | :----------- | :----------- | :-------------------- | | Accrued clinical and regulatory | — | $3,661 | -$3,661 | | Accrued contract manufacturing cost | — | $1,100 | -$1,100 | | Accrued compensation | $361 | $3,948 | -$3,587 | | Accrued other | $364 | $420 | -$56 | | **Total accrued expenses** | **$725** | **$9,129** | **-$8,404** | [7. Leases](index=14&type=section&id=7.%20Leases) This note details the Company's operating lease commitments and related financial information - Reneo leases office space in Irvine, California (expires November 2026) and previously in Sandwich, United Kingdom, which was terminated early in January 2024[40](index=40&type=chunk) Operating Lease Information (as of Sep 30, 2024) | Metric | Value | | :------------------------------------------------------------------------------------------ | :---- | | Weighted incremental borrowing rate | 5% | | Weighted average remaining lease term (in years) | 2.1 | | Cash paid for amounts included in the measurement of lease liabilities (in thousands) | $291 | | Lease expense (in thousands) | $214 | Maturities of Lease Liabilities (in thousands) | Fiscal Year | Amount (Sep 30, 2024) | | :------------------------- | :-------------------- | | 2024 (remaining three months) | $98 | | 2025 | $371 | | 2026 | $285 | | **Total lease payments** | **$754** | | Less: Imputed interest | $(89) | | **Present value of lease liabilities** | **$665** | [8. Stock-Based Compensation](index=15&type=section&id=8.%20Stock-Based%20Compensation) This note outlines the Company's stock-based compensation plans, reserved shares, and related expenses Shares Reserved for Future Issuance (as of Sep 30, 2024) | Category | Shares Reserved | | :-------------------------------------------------------------------------- | :-------------- | | Common stock options outstanding | 467,129 | | Unvested restricted stock units | 29,658 | | Available for future grants under the 2021 Equity Incentive Plan | 442,366 | | Available for future grants under the 2021 Employee Stock Purchase Plan | 78,009 | | **Total shares of common stock reserved** | **1,017,162** | - Upon the close of the Merger, all shares available for issuance under the 2021 Plan and 2021 ESPP were cancelled, and new equity plans (2024 Plan and 2024 ESPP Plan) were adopted[45](index=45&type=chunk)[58](index=58&type=chunk) Stock-Based Compensation Expense (in thousands) | Expense Category | 3 Months Sep 30, 2024 | 3 Months Sep 30, 2023 | 9 Months Sep 30, 2024 | 9 Months Sep 30, 2023 | | :------------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Research and development | $245 | $537 | $742 | $1,504 | | General and administrative | $581 | $892 | $2,151 | $2,289 | | **Total** | **$826** | **$1,429** | **$2,893** | **$3,793** | [9. License Agreement](index=18&type=section&id=9.%20License%20Agreement) This note describes the Company's license agreement with vTv Therapeutics and its recent termination - Reneo entered into a License Agreement with vTv Therapeutics in December 2017 for PPARδ agonists, including mavodelpar, but has suspended all development activity related to mavodelpar[56](index=56&type=chunk) - On October 30, 2023, Reneo repurchased **576,443 shares** of its common stock from vTv Therapeutics for approximately **$4.4 million**[56](index=56&type=chunk) - The Company provided notice on October 22, 2024, to terminate the vTv License Agreement, effective 90 days from the notice date[56](index=56&type=chunk) [10. Subsequent Events](index=18&type=section&id=10.%20Subsequent%20Events) This note discloses significant events occurring after the balance sheet date, including the merger and new equity plans - On October 4, 2024, Reneo completed its merger, changed its name to OnKure Therapeutics, Inc., and reclassified its common stock as Class A Common Stock[57](index=57&type=chunk) - Post-Merger, approximately **12,652,811 shares** of Class A Common Stock and **686,527 shares** of Class B Common Stock were outstanding[58](index=58&type=chunk) - The Company adopted the 2024 Equity Incentive Plan (**2,480,000 shares** reserved) and 2024 Employee Stock Purchase Plan (**137,500 shares** reserved)[58](index=58&type=chunk) - Class A Common Stock began trading on the Nasdaq Global Market under the symbol "OKUR" on October 7, 2024[58](index=58&type=chunk) - The Company paid approximately **$4.3 million** in severance and retention bonuses and recognized **$3.0 million** in stock-based compensation due to vesting acceleration post-Merger[58](index=58&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses OnKure Therapeutics' financial condition and results, focusing on the merger's impact, cessation of Reneo's business, and new biopharmaceutical focus [Forward-Looking Statements](index=20&type=section&id=Forward-Looking%20Statements) This section cautions that the discussion contains forward-looking statements subject to substantial risks and uncertainties - This discussion contains forward-looking statements based on current expectations, involving substantial risks and uncertainties[61](index=61&type=chunk) - Actual results could differ materially from those anticipated, and investors are cautioned not to unduly rely on these statements[61](index=61&type=chunk) - Various factors, including those in the "Risk Factors" section, could cause actual results to differ[61](index=61&type=chunk) [Merger](index=20&type=section&id=Merger) This section details the consummation of the merger, name change, reverse stock split, and concurrent private placement - Reneo consummated its merger with Legacy OnKure on October 4, 2024, changing its name to OnKure Therapeutics, Inc., effecting a reverse stock split, and reclassifying common stock to Class A[62](index=62&type=chunk) - A concurrent private placement raised approximately **$65.0 million** through the sale of **2,839,005 shares** of Class A Common Stock[62](index=62&type=chunk) - Post-Merger, Legacy OnKure stockholders own **~53.6%**, pre-Merger Reneo stockholders **~25.1%**, and PIPE Investors **~21.3%** of the Combined Company's outstanding common stock[63](index=63&type=chunk) - The Class A Common Stock began trading on the Nasdaq Global Market under the symbol "OKUR" on October 7, 2024[63](index=63&type=chunk) [Post-Merger Business](index=21&type=section&id=Post-Merger%20Business) This section describes the Company's new focus as a clinical-stage biopharmaceutical entity and its lead product candidate - Reneo's historic business operations ceased following the Merger, and the Company's go-forward operations are now those of Legacy OnKure[64](index=64&type=chunk) - The Company is a clinical-stage biopharmaceutical company focused on discovering and developing precision medicines for cancer[64](index=64&type=chunk) - Its lead product candidate, OKI-219, a highly selective PI3Kα inhibitor, is currently in a first-in-human Phase 1 trial, with early clinical data anticipated in Q4 2024[64](index=64&type=chunk) [License Agreement](index=21&type=section&id=License%20Agreement) This section discusses the termination of Reneo's vTv License Agreement related to mavodelpar development - Reneo's vTv License Agreement, related to mavodelpar, was terminated on October 22, 2024, following the suspension of all mavodelpar development activities[65](index=65&type=chunk) - Reneo had previously repurchased **576,443 shares** of its common stock from vTv Therapeutics for approximately **$4.4 million** on October 30, 2023[65](index=65&type=chunk) [Components of Reneo's Results of Operations](index=22&type=section&id=Components%20of%20Reneo's%20Results%20of%20Operations) This section explains the primary drivers of Reneo's research and development, general and administrative expenses, and other income - Research and Development expenses primarily related to preclinical and clinical development of mavodelpar, including personnel, CROs, manufacturing, and regulatory activities[67](index=67&type=chunk) - General and Administrative expenses consisted mainly of costs related to the Merger, personnel, professional fees (accounting, legal, commercial development), insurance, and corporate facility costs[68](index=68&type=chunk) - Other income was derived from interest income on Reneo's cash, cash equivalents, and short-term investments[69](index=69&type=chunk) [Reneo's Results of Operations](index=23&type=section&id=Reneo's%20Results%20of%20Operations) This section analyzes Reneo's operating results, including expenses and net loss, for the periods ended September 30, 2024 [Comparison of Three Months Ended September 30, 2024 and 2023](index=23&type=section&id=Comparison%20of%20Three%20Months%20Ended%20September%2030%2C%202024%20and%202023) This section compares Reneo's operating results for the three months ended September 30, 2024, and 2023 Operating Results (in thousands) | Metric | 3 Months Sep 30, 2024 | 3 Months Sep 30, 2023 | Change (YoY) | | :--------------------------- | :-------------------- | :-------------------- | :----------- | | Research and development | $904 | $13,622 | $(12,718) | | General and administrative | $3,760 | $7,266 | $(3,506) | | Total operating expenses | $4,664 | $20,888 | $(16,224) | | Loss from operations | $(4,664) | $(20,888) | $16,224 | | Other income | $972 | $1,692 | $(720) | | Net loss | $(3,692) | $(19,196) | $15,504 | - The decrease in R&D expenses was primarily due to the suspension of mavodelpar development activities and workforce reductions[72](index=72&type=chunk) - The decrease in G&A expenses was mainly due to reduced commercial development and consulting costs, and lower facility and personnel-related costs from workforce reductions[73](index=73&type=chunk) [Comparison of Nine Months Ended September 30, 2024 and 2023](index=24&type=section&id=Comparison%20of%20Nine%20Months%20Ended%20September%2030%2C%202024%20and%202023) This section compares Reneo's operating results for the nine months ended September 30, 2024, and 2023 Operating Results (in thousands) | Metric | 9 Months Sep 30, 2024 | 9 Months Sep 30, 2023 | Change (YoY) | | :--------------------------- | :-------------------- | :-------------------- | :----------- | | Research and development | $6,436 | $39,009 | $(32,573) | | General and administrative | $14,155 | $19,038 | $(4,883) | | Total operating expenses | $20,591 | $58,047 | $(37,456) | | Loss from operations | $(20,591) | $(58,047) | $37,456 | | Other income | $3,112 | $4,213 | $(1,101) | | Net loss | $(17,479) | $(53,834) | $36,355 | - The **$32.6 million** decrease in R&D expenses was primarily due to the suspension of mavodelpar development and workforce reductions[76](index=76&type=chunk) - The **$4.9 million** decrease in G&A expenses was driven by reduced commercial development/consulting costs and facility/personnel costs, partially offset by a **$2.1 million** increase in legal and advisory fees related to the Merger[77](index=77&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Reneo's historical losses, current cash position, and future capital requirements for operations - Reneo has incurred significant losses and negative cash flows since inception, financing operations primarily through equity sales[79](index=79&type=chunk) - As of September 30, 2024, the Company had **$76.7 million** in cash, cash equivalents, and short-term investments[79](index=79&type=chunk) - Post-Merger, the Company expects to incur significant expenses for clinical development and will require additional capital, but believes current resources are sufficient for at least the next 12 months[79](index=79&type=chunk)[80](index=80&type=chunk) - Future funding requirements depend on the scope, timing, and costs of R&D, clinical trials, regulatory review, commercialization, manufacturing, intellectual property, and public company operations[81](index=81&type=chunk)[82](index=82&type=chunk) [Reneo's Cash Flows](index=26&type=section&id=Reneo's%20Cash%20Flows) This section analyzes Reneo's cash flows from operating, investing, and financing activities for the nine months ended September 30, 2024 Cash Flow Summary (in thousands) | Activity | 9 Months Sep 30, 2024 | 9 Months Sep 30, 2023 | Change (YoY) | | :------------------------------------------ | :-------------------- | :-------------------- | :----------- | | Net cash used in operating activities | $(30,102) | $(43,929) | +$13,827 | | Net cash provided by (used in) investing activities | $61,248 | $(29,254) | +$90,502 | | Net cash provided by financing activities | $1,911 | $64,993 | -$63,082 | | Net increase (decrease) in cash and cash equivalents | $33,057 | $(8,190) | +$41,247 | - Net cash used in operating activities decreased to **$30.1 million** in 2024, primarily due to a lower net loss and changes in operating assets and liabilities[85](index=85&type=chunk) - Net cash provided by investing activities significantly increased to **$61.2 million** in 2024, mainly from maturities of available-for-sale short-term investments[86](index=86&type=chunk) - Net cash provided by financing activities decreased to **$1.9 million** in 2024, primarily from private placement deposits, compared to **$65.0 million** in 2023 from public and private offerings[87](index=87&type=chunk) [Reneo's Material Cash Requirements](index=27&type=section&id=Reneo's%20Material%20Cash%20Requirements) This section outlines the Company's significant future cash obligations, including lease payments and potential license agreement payments - Material cash requirements include future operating lease minimum payments (detailed in Note 7) and potential milestone/royalty payments under the vTv License Agreement, which was terminated in October 2024 (detailed in Note 9)[88](index=88&type=chunk) [Critical Accounting Policies and Estimates](index=27&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the key accounting policies and estimates that require significant management judgment - Reneo's financial statements rely on estimates and judgments, but no material changes to critical accounting policies occurred during the nine months ended September 30, 2024, compared to the 2023 Annual Report on Form 10-K[89](index=89&type=chunk) [Recent Accounting Pronouncements](index=27&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to disclosures regarding recently issued accounting standards and their expected impact - Refer to Note 2 of the Consolidated Financial Statements for a description of recent accounting pronouncements applicable to Reneo's consolidated financial statements[90](index=90&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) This section is not required for smaller reporting companies, and therefore no disclosures about market risk are provided - This item is not required for smaller reporting companies[91](index=91&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures as of September 30, 2024, and states that there were no material changes in internal control over financial reporting during the quarter [Evaluation of Disclosure Controls and Procedures](index=28&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms management's conclusion on the effectiveness of the Company's disclosure controls and procedures - Management concluded that the Company's disclosure controls and procedures were effective as of September 30, 2024[92](index=92&type=chunk) - These controls provide reasonable assurance that required information is recorded, processed, summarized, and reported within specified time periods[92](index=92&type=chunk) [Changes in Internal Control over Financial Reporting](index=28&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes in the Company's internal control over financial reporting during the quarter - There were no changes in internal control over financial reporting during the three months ended September 30, 2024, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[93](index=93&type=chunk) [Part II. Other Information](index=29&type=section&id=Part%20II.%20Other%20Information) This section covers legal proceedings, risk factors, equity sales, and other miscellaneous disclosures [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) This section details legal proceedings related to the merger, including complaints alleging misrepresentation, which the Company intends to defend [Merger Proceedings](index=29&type=section&id=Merger%20Proceedings) This section describes the legal complaints filed concerning alleged misrepresentations in the merger's Proxy Statement/Prospectus - Two complaints were filed in New York (Thomas v. Reneo Pharmaceuticals, Inc., et al., and Kent v. Reneo Pharmaceuticals, Inc., et al.) on September 5-6, 2024, related to the Merger[95](index=95&type=chunk) - Allegations include misrepresentation and/or omission of material information in the Proxy Statement/Prospectus concerning financial projections, the fairness opinion, and potential conflicts of interest[95](index=95&type=chunk) - The Company and individual defendants intend to vigorously defend against these complaints[95](index=95&type=chunk) [Other Proceedings](index=29&type=section&id=Other%20Proceedings) This section confirms the absence of other material adverse legal proceedings affecting the Company - The Company is not currently a party to or aware of any other legal proceedings that are expected to have a material adverse effect on its business, financial condition, or results of operations[96](index=96&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks for OnKure Therapeutics, covering its early development, financial needs, product commercialization, intellectual property, and stock ownership [Summary of Risk Factors](index=29&type=section&id=Summary%20of%20Risk%20Factors) This section provides an overview of the Company's key risks, including its early development stage, financial needs, and product development challenges - The Company is in early development, has no approved products, and has incurred significant net losses, requiring substantial additional funding[98](index=98&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - Success is highly dependent on OKI-219, facing risks in clinical development, regulatory approval, and commercialization, including intense competition and market acceptance challenges[99](index=99&type=chunk)[107](index=107&type=chunk)[127](index=127&type=chunk)[129](index=129&type=chunk) - Intellectual property protection is critical but uncertain, with risks of infringement claims and challenges to patent validity[99](index=99&type=chunk)[137](index=137&type=chunk)[148](index=148&type=chunk) - Reliance on third parties for clinical trials and manufacturing, ongoing regulatory obligations, and the volatile market price of Class A Common Stock are also significant risks[99](index=99&type=chunk)[172](index=172&type=chunk)[186](index=186&type=chunk)[197](index=197&type=chunk) [Risks Related to Our Operating History, Financial Position and Need for Additional Capital](index=31&type=section&id=Risks%20Related%20to%20Our%20Operating%20History%2C%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) This section details risks associated with the Company's historical losses, lack of revenue, and ongoing need for substantial additional funding - The Company is an early-stage biopharmaceutical company with no products approved for commercial sale and has never generated revenue[101](index=101&type=chunk)[103](index=103&type=chunk) - It has incurred significant net losses since inception (Legacy OnKure: **$35.3 million** in 2023, **$29.5 million** in 2022) and expects to continue incurring losses for the foreseeable future[102](index=102&type=chunk) - Substantial additional funding will be required to complete product development, with current cash expected to fund operations into Q4 2026[105](index=105&type=chunk) - Raising additional capital through equity could lead to significant stockholder dilution, while debt financing may involve restrictive covenants[105](index=105&type=chunk) [Risks Related to Our Development and Commercialization of Our Product Candidates](index=34&type=section&id=Risks%20Related%20to%20Our%20Development%20and%20Commercialization%20of%20Our%20Product%20Candidates) This section outlines risks concerning clinical trial success, regulatory approval, market acceptance, and competition for product candidates - The Company is substantially dependent on OKI-219, currently in a Phase 1 clinical trial, and its ability to obtain regulatory approval and commercialize it[107](index=107&type=chunk) - Clinical trials may fail to demonstrate safety and efficacy, leading to additional costs, delays, or inability to complete development[109](index=109&type=chunk) - The regulatory approval processes are lengthy, time-consuming, and unpredictable, with no guarantee of approval or broad indication[111](index=111&type=chunk) - Difficulties in patient enrollment or retention in clinical trials could delay or prevent necessary regulatory approvals[115](index=115&type=chunk) - The Company faces substantial competition from companies with greater resources and established market presence, potentially leading to competitors developing products more successfully or earlier[127](index=127&type=chunk) - Even if approved, product candidates may fail to achieve market acceptance among physicians, patients, and third-party payors due to various factors including efficacy, price, and side effects[129](index=129&type=chunk) [Risks Related to Our Intellectual Property](index=46&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section addresses risks in obtaining, maintaining, and defending intellectual property rights, including patent challenges and infringement claims - The Company relies on patents, trademarks, and trade secrets, but faces risks in obtaining and maintaining sufficient patent protection, as patents may be challenged, invalidated, or have inadequate terms[137](index=137&type=chunk)[138](index=138&type=chunk)[142](index=142&type=chunk) - There is a significant risk of becoming involved in third-party claims of intellectual property infringement, which could delay development, lead to substantial damages, or require costly licenses[148](index=148&type=chunk) - Changes in U.S. or foreign patent laws and the inability to protect intellectual property rights globally could diminish the value of patents and impair the business[154](index=154&type=chunk)[156](index=156&type=chunk) - Failure to protect the confidentiality of trade secrets or claims that employees used confidential information of former employers could harm the Company's competitive position[157](index=157&type=chunk)[159](index=159&type=chunk) - Future collaboration or license agreements may not be successful, or non-compliance could lead to termination and loss of critical intellectual property rights[166](index=166&type=chunk)[168](index=168&type=chunk) [Risks Related to Our Regulatory Approval and Other Legal Compliance Matters](index=61&type=section&id=Risks%20Related%20to%20Our%20Regulatory%20Approval%20and%20Other%20Legal%20Compliance%20Matters) This section covers risks related to ongoing regulatory obligations, healthcare legislation, and compliance with anti-kickback and privacy laws - Even with regulatory approval, the Company will be subject to ongoing, costly regulatory obligations and oversight, with potential for significant penalties for non-compliance[172](index=172&type=chunk)[174](index=174&type=chunk) - Disruptions at regulatory agencies (e.g., FDA, SEC) due to funding shortages or global health concerns could hinder product development and approval timelines[175](index=175&type=chunk)[177](index=177&type=chunk) - Healthcare legislative measures, such as the Inflation Reduction Act of 2022, and state-level regulations aimed at reducing healthcare costs, could adversely affect pricing and revenue prospects[178](index=178&type=chunk)[179](index=179&type=chunk) - The Company is subject to federal and state anti-kickback, false claims, and privacy laws (HIPAA), with risks of significant civil, criminal, and administrative penalties for violations[180](index=180&type=chunk)[182](index=182&type=chunk) - Misconduct by employees, contractors, or other third parties, as well as compliance with environmental, health, and safety laws, pose additional risks[183](index=183&type=chunk) [Risks Related to Our Reliance on Third Parties](index=68&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) This section highlights risks associated with dependence on third parties for clinical trials, manufacturing, and supply chain management - The Company relies heavily on third parties, including independent clinical investigators and CROs, to conduct preclinical studies and clinical trials, increasing risks of delays, non-compliance, and compromised data[186](index=186&type=chunk) - Reliance on single-source third-party manufacturers for drug substance and drug product increases the risk of supply disruptions, cost increases, and failure to comply with cGMP regulations[188](index=188&type=chunk)[189](index=189&type=chunk) - Manufacturing drugs is complex, and difficulties in production by third-party manufacturers could delay or prevent the adequate supply of product candidates for clinical trials or commercialization[190](index=190&type=chunk) [Risks Related to Our Business Operations](index=70&type=section&id=Risks%20Related%20to%20Our%20Business%20Operations) This section discusses risks concerning talent retention, future acquisitions, and vulnerabilities in computer systems and data security - The Company's success is highly dependent on its ability to attract and retain highly skilled executive officers and employees, facing intense competition for talent[191](index=191&type=chunk)[193](index=193&type=chunk) - Future acquisitions, in-licensing, or strategic partnerships may increase capital requirements, dilute stockholders, incur debt, and divert management attention[194](index=194&type=chunk) - The Company's computer systems and those of its contractors are vulnerable to damage from cyberattacks, natural disasters, and other system failures, potentially disrupting operations and compromising data[195](index=195&type=chunk)[196](index=196&type=chunk) [Risks Related to Ownership of Our Class A Common Stock](index=72&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Class%20A%20Common%20Stock) This section addresses risks related to stock price volatility, SEC reporting requirements, potential dilution, and concentrated ownership - The market price of the Company's Class A Common Stock is expected to be volatile due to various factors, including clinical trial results, regulatory actions, competition, and general market conditions[197](index=197&type=chunk)[198](index=198&type=chunk) - The Company is subject to stringent SEC requirements applicable to reporting shell company business combinations, which will increase costs, limit capital raising, and restrict resale of securities[215](index=215&type=chunk)[216](index=216&type=chunk) - Future sales of shares by existing stockholders, particularly after lock-up agreements expire, could cause the Class A Common Stock price to decline[217](index=217&type=chunk) - Concentrated ownership by executive officers, directors, and principal stockholders (approximately **49.8%**) gives them significant influence over matters submitted to stockholders for approval[218](index=218&type=chunk) - The Company's ability to use net operating loss carryforwards and other tax attributes may be limited due to ownership changes, including those resulting from the Merger, under Sections 382 and 383 of the Code[222](index=222&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=82&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms no unregistered equity sales and details the use of proceeds from Reneo's 2021 IPO, with most funds utilized [Unregistered Sales of Equity Securities](index=82&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities) This section confirms that there were no unregistered sales of equity securities during the reporting period - There were no unregistered sales of equity securities[227](index=227&type=chunk) [Use of Proceeds](index=82&type=section&id=Use%20of%20Proceeds) This section details the allocation and remaining balance of net proceeds from the Company's initial public offering - Reneo completed its IPO in April 2021, generating **$84.6 million** in net proceeds from the sale of **6,250,000 shares** at **$15.00 per share**[228](index=228&type=chunk) - As of September 30, 2024, approximately **$83.5 million** of the net IPO proceeds have been used[229](index=229&type=chunk) - The remaining net proceeds are invested in highly liquid money market funds and short-term investments to fund operations[229](index=229&type=chunk) [Item 3. Defaults Upon Senior Securities](index=82&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that there were no defaults upon senior securities - There were no defaults upon senior securities[230](index=230&type=chunk) [Item 4. Mine Safety Disclosures](index=82&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that no mine safety disclosures are applicable to the Company - No mine safety disclosures are applicable[230](index=230&type=chunk) [Item 5. Other Information](index=82&type=section&id=Item%205.%20Other%20Information) This section indicates that no other information is reported - No other information is reported in this section[230](index=230&type=chunk) [Item 6. Exhibits](index=83&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including merger agreements and executive officer certifications - Key exhibits include the Agreement and Plan of Merger (2.1), Amended and Restated Certificate of Incorporation (3.1), Amended and Restated Bylaws (3.2), and Certifications of Principal Executive and Financial Officers (31.1, 31.2, 32.1)[233](index=233&type=chunk) [Signatures](index=84&type=section&id=Signatures) The report is officially signed by the President, CEO, and CFO of Reneo Pharmaceuticals, Inc. on November 7, 2024 - The report was signed by Nicholas A. Saccomano, Ph.D., President and Chief Executive Officer, and Jason Leverone, Chief Financial Officer[235](index=235&type=chunk) - The signing date for the report was November 7, 2024[235](index=235&type=chunk)

Core Points - Reneo Pharmaceuticals and OnKure, Inc. are merging, with the combined company to be named OnKure Therapeutics, Inc. and trading under the ticker "OKUR" on Nasdaq [2] - The merger is expected to close on or around October 4, 2024, and will focus on advancing OnKure's pipeline targeting oncogenic mutations in PI3Kα [2] - Reneo will implement a 1-for-10 reverse stock split prior to the merger, affecting the common stock of the combined company [3][4] Company Overview - Reneo Pharmaceuticals specializes in therapies for rare genetic mitochondrial diseases [9] - OnKure, Inc. is a clinical-stage biopharmaceutical company focused on precision medicines targeting cancer drivers, with its lead program OKI-219 currently in Phase 1 clinical trials [8]

About Monteverde & Associates PC NEW YORK, June 21, 2024 (GLOBE NEWSWIRE) -- Monteverde & Associates PC (the "M&A Class Action Firm"), has recovered money for shareholders and is recognized as a Top 50 Firm in the 2018-2022 ISS Securities Class Action Services Report. We are headquartered at the Empire State Building in New York City and is investigating Reneo Pharmaceuticals, Inc. (Nasdaq: RPHM), relating to its proposed merger with OnKure, Inc. Under the terms of the agreement, Reneo stockholders are expe ...

```markdown PART I — FINANCIAL INFORMATION This section presents the unaudited consolidated financial statements and related disclosures for the company [Item 1. Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) Net loss reduced due to decreased R&D after mavodelpar suspension, maintaining stable liquidity Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2024 | December 31, 2023 | Change | | :-------------------------------- | :------------- | :---------------- | :----- | | Cash and cash equivalents | $20,375 | $27,632 | $(7,257) | | Short-term investments | $62,460 | $75,331 | $(12,871) | | Total current assets | $83,927 | $106,622 | $(22,695) | | Total assets | $84,639 | $107,436 | $(22,797) | | Total current liabilities | $2,814 | $18,177 | $(15,363) | | Total liabilities | $3,397 | $18,826 | $(15,429) | | Total stockholders' equity | $81,242 | $88,610 | $(7,368) | | Accumulated deficit | $(226,900) | $(218,474) | $(8,426) | Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share data) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | :----- | | Research and development expenses | $4,942 | $10,991 | $(6,049) | | General and administrative expenses | $4,622 | $5,132 | $(510) | | Total operating expenses | $9,564 | $16,123 | $(6,559) | | Loss from operations | $(9,564) | $(16,123) | $6,559 | | Other income | $1,138 | $1,016 | $122 | | Net loss | $(8,426) | $(15,107) | $6,681 | | Comprehensive loss | $(8,446) | $(15,052) | $6,606 | | Net loss per share, basic and diluted | $(0.25) | $(0.60) | $0.35 | | Weighted-average shares outstanding | 33,420,808 | 25,036,410 | 8,384,398 | Consolidated Statements of Cash Flows (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :----- | | Net cash used in operating activities | $(21,014) | $(9,048) | $(11,966) | | Net cash provided by investing activities | $13,757 | $18,507 | $(4,750) | | Net cash provided by financing activities | $0 | $1,009 | $(1,009) | | Net (decrease) increase in cash and cash equivalents | $(7,257) | $10,468 | $(17,725) | | Cash and cash equivalents, end of period | $20,375 | $30,395 | $(10,020) | - The Company has **suspended all development activities** for its only product candidate, mavodelpar, after its pivotal STRIDE study failed to meet primary or secondary efficacy endpoints on December 14, 2023, leading to **workforce reductions** and **approximately $4.1 million in severance and benefit expenses**[24](index=24&type=chunk)[122](index=122&type=chunk) - As of March 31, 2024, the Company had **$82.8 million in cash, cash equivalents, and short-term investments**, which management believes will be **sufficient to fund operations for at least one year**[26](index=26&type=chunk)[91](index=91&type=chunk)[94](index=94&type=chunk) Accrued Expenses (in thousands) | Category | March 31, 2024 | December 31, 2023 | Change | | :-------------------------- | :------------- | :---------------- | :----- | | Accrued clinical and regulatory | $190 | $3,661 | $(3,471) | | Accrued contract manufacturing cost | $1 | $1,100 | $(1,099) | | Accrued compensation | $1,170 | $3,948 | $(2,778) | | Total accrued expenses | $1,807 | $9,129 | $(7,322) | - The Company exercised an **early termination option** for its Sandwich, United Kingdom office lease in January 2024[46](index=46&type=chunk) Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :----- | | Research and development | $253 | $473 | $(220) | | General and administrative | $825 | $684 | $141 | | Total | $1,078 | $1,157 | $(79) | - The Company **repurchased all 576,443 shares** of its common stock previously issued to vTv Therapeutics under the vTv License Agreement for **approximately $4.4 million** in October 2023, and **No milestone payments were achieved or recorded** for the three months ended March 31, 2024 and 2023[68](index=68&type=chunk)[69](index=69&type=chunk) [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific points in time [Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This statement details the company's revenues, expenses, and net loss over specific reporting periods [Consolidated Statements of Changes in Stockholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement outlines the changes in the company's equity accounts, including common stock and accumulated deficit, over time [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement categorizes cash inflows and outflows from operating, investing, and financing activities for specific periods [Notes to Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes provide additional detailed information and explanations essential for understanding the company's financial statements [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Strategic shift after mavodelpar failure led to reduced R&D expenses and workforce, with sufficient liquidity for 12 months - Reneo Pharmaceuticals, Inc. has **suspended all development activities** for its only product candidate, mavodelpar, following the **failure of its pivotal STRIDE study** in December 2023[74](index=74&type=chunk) - The Board of Directors initiated a formal process in January 2024 to **evaluate potential strategic alternatives**, including **merger, sale, or other business combinations**, to maximize stockholder value, with **dissolution and liquidation** potentially pursued if no strategic alternative is consummated[75](index=75&type=chunk)[120](index=120&type=chunk) Operating Expenses (in thousands) | Expense Category | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :----- | | Research and development | $4,942 | $10,991 | $(6,049) | | General and administrative | $4,622 | $5,132 | $(510) | | Total operating expenses | $9,564 | $16,123 | $(6,559) | - **Research and development expenses decreased by $6.0 million**, primarily due to the **suspension of mavodelpar development** and **workforce reductions**[88](index=88&type=chunk) - **General and administrative expenses decreased by $0.5 million**, mainly due to **workforce reductions**[89](index=89&type=chunk) - **Other income increased by $0.1 million**, driven by higher interest rates in 2024[90](index=90&type=chunk) - As of March 31, 2024, the company had an **accumulated deficit of $226.9 million** and a **net loss of $8.4 million** for the quarter[93](index=93&type=chunk) - The company **terminated its at-the-market equity offering sales agreement** (2023 ATM Facility) with Leerink Partners LLC on April 8, 2024, under which **no shares were sold**[92](index=92&type=chunk) - **Material cash requirements** include future operating lease payments, a **special performance award for the CEO (up to $7.5 million)**, and **potential milestone/royalty payments** under the vTv License Agreement, in addition to **costs for evaluating strategic alternatives**[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) [Overview](index=18&type=section&id=Overview) This section provides a high-level introduction to the company's financial condition and operational results, emphasizing recent strategic shifts [History of Mavodelpar Clinical Trials Overview](index=19&type=section&id=History%20of%20Mavodelpar%20Clinical%20Trials%20Overview) This section summarizes the development and clinical trial history of the company's lead product candidate, mavodelpar [License Agreement](index=19&type=section&id=License%20Agreement) This section details the terms and financial implications of the company's licensing agreements, particularly concerning its product candidates [Components of Our Results of Operations](index=20&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section explains the key revenue and expense categories that constitute the company's financial performance [Results of Operations](index=21&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's financial performance, comparing current and prior period operating results [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet its short-term and long-term financial obligations and its sources of funding [Cash Flows](index=23&type=section&id=Cash%20Flows) This section analyzes the sources and uses of cash across operating, investing, and financing activities [Material Cash Requirements](index=23&type=section&id=Material%20Cash%20Requirements) This section outlines the company's significant future contractual obligations and other cash commitments [Critical Accounting Policies and Estimates](index=24&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section describes the accounting policies and estimates that require significant judgment and can materially impact financial reporting [Recent Accounting Pronouncements](index=24&type=section&id=Recent%20Accounting%20Pronouncements) This section discusses the impact of recently issued accounting standards on the company's financial statements [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Reneo Pharmaceuticals, Inc. is not required to provide market risk disclosures [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of March 31, 2024, with no material changes in internal control over financial reporting - **Disclosure controls and procedures were effective as of March 31, 2024**[107](index=107&type=chunk) - **No material changes in internal control over financial reporting occurred during the three months ended March 31, 2024**[109](index=109&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=24&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section provides an overview of Evaluation of Disclosure Controls and Procedures [Changes in Internal Control over Financial Reporting](index=25&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section provides an overview of Changes in Internal Control over Financial Reporting PART II — OTHER INFORMATION This section provides additional information including legal proceedings, risk factors, and equity disclosures [Item 1. Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, but acknowledges potential future litigation - The company is **not currently a party to any material legal proceedings**[112](index=112&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) Significant ongoing net losses, strategic alternative uncertainties, and employee retention challenges pose substantial risks to the company - The company has **incurred significant net losses** since its inception in 2014, with an **accumulated deficit of $226.9 million** as of March 31, 2024, and **expects to continue incurring losses**[117](index=117&type=chunk)[118](index=118&type=chunk) - There is **no assurance** that the evaluation of strategic alternatives will result in a definitive transaction or enhance stockholder value, and a **dissolution and liquidation could lead to a total loss of investment**[119](index=119&type=chunk)[121](index=121&type=chunk) - The company's recent **workforce reductions** (December 2023 and February 2024) may lead to a **loss of key employees**, **impacting the ability to pursue strategic alternatives**[123](index=123&type=chunk) - Future development of any product candidates would require **substantial additional capital**, which may not be available on acceptable terms, potentially forcing **delays or elimination of programs**[124](index=124&type=chunk)[126](index=126&type=chunk) - The regulatory approval process is **lengthy, expensive, and uncertain**, with **no guarantee of success**, and any approved products may face **challenges in market acceptance and reimbursement**[136](index=136&type=chunk)[160](index=160&type=chunk) - The company relies on third parties for clinical trials and manufacturing, and their **failure to meet contractual duties or regulatory requirements could delay or prevent product development**[211](index=211&type=chunk)[218](index=218&type=chunk) - Obtaining and maintaining intellectual property protection is **critical but uncertain**, with **risks of patent invalidation, infringement claims, and challenges in global enforcement**[222](index=222&type=chunk)[233](index=233&type=chunk)[286](index=286&type=chunk) - The company's **common stock price is highly volatile**, influenced by clinical trial results, regulatory decisions, and general market factors, and could **decline due to substantial sales or future dilution**[328](index=328&type=chunk)[344](index=344&type=chunk)[347](index=347&type=chunk) - The company is subject to various U.S. and foreign laws, including anti-corruption, data privacy, and cybersecurity regulations, with non-compliance potentially leading to **significant penalties and business disruptions**[187](index=187&type=chunk)[357](index=357&type=chunk)[359](index=359&type=chunk) [Risks Related to Our Business and Industry](index=26&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) This section details the specific challenges and uncertainties inherent in the company's operations and the pharmaceutical industry [Risks Related to Our Reliance on Third Parties](index=47&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) This section highlights the potential risks arising from the company's dependence on external partners for key functions like manufacturing and clinical trials [Risks Related to Our Intellectual Property](index=50&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section addresses the challenges and uncertainties associated with protecting and enforcing the company's intellectual property rights [Risks Related to Ownership of Our Common Stock](index=72&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) This section outlines the factors that could negatively impact the value and liquidity of the company's common stock for investors [General Risk Factors](index=80&type=section&id=General%20Risk%20Factors) This section covers broad, overarching risks that could affect the company's overall business, financial condition, and future prospects [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=82&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity sales occurred; IPO proceeds primarily funded operations, with remaining funds in liquid assets - **No unregistered sales of equity securities occurred during the period**[375](index=375&type=chunk) - The company **completed its IPO in April 2021, generating net proceeds of $84.6 million**. As of March 31, 2024, **approximately $66.6 million of these proceeds have been used to fund operations**, with the remaining invested in **highly liquid money market funds and short-term investments**[376](index=376&type=chunk)[377](index=377&type=chunk) [Unregistered Sales of Equity Securities](index=83&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities) This section discloses any sales of equity securities that were not registered under the Securities Act of 1933 [Use of Proceeds](index=83&type=section&id=Use%20of%20Proceeds) This section details how the net proceeds from the company's public offerings, such as its IPO, have been utilized [Item 3. Defaults Upon Senior Securities](index=82&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Reneo Pharmaceuticals, Inc. reported no defaults upon senior securities - **There were no defaults upon senior securities**[378](index=378&type=chunk) [Item 4. Mine Safety Disclosures](index=82&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Reneo Pharmaceuticals, Inc. reported no mine safety disclosures - **There were no mine safety disclosures**[378](index=378&type=chunk) [Item 5. Other Information](index=82&type=section&id=Item%205.%20Other%20Information) Reneo Pharmaceuticals, Inc. reported no other information required to be disclosed under this item - **No other information was reported**[379](index=379&type=chunk) [Item 6. Exhibits](index=83&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including certifications and data files - The report includes **certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1) and Inline XBRL Instance Document (Exhibit 101.INS)**[382](index=382&type=chunk) [Signatures](index=84&type=section&id=Signatures) The report is duly signed by the President and CEO, and SVP of Finance and Administration, as of May 7, 2024 - The report was **signed by Gregory J. Flesher, President and Chief Executive Officer, and Jennifer P. Lam, Senior Vice President, Finance and Administration, on May 7, 2024**[386](index=386&type=chunk) ```

[1. First Quarter and Recent Highlights](index=1&type=section&id=1.%20First%20Quarter%20and%20Recent%20Highlights) Reneo Pharmaceuticals reported a reduced Q1 2024 net loss of $8.4 million, primarily due to significant R&D and G&A expense reductions following mavodelpar development suspension Q1 2024 Financial Performance Highlights | Metric | Q1 2024 (USD) | Q1 2023 (USD) | Change (YoY) | | :-------------------------------- | :------------ | :------------ | :----------- | | Net Loss | $(8.4) million | $(15.1) million | $(6.7) million | | Net Loss Per Share | $(0.25) | $(0.60) | $(0.35) | | R&D Expenses | $4.9 million | $11.0 million | $(6.1) million | | G&A Expenses | $4.6 million | $5.1 million | $(0.5) million | | Cash, Cash Equivalents, and Short-term Investments (as of March 31, 2024) | $82.8 million | N/A | N/A | - The decrease in **Research and development expenses** was primarily due to the suspension of development activities for **mavodelpar** and cash preservation activities, including **workforce reductions** in December 2023 and February 2024[4](index=4&type=chunk) - The decrease in **General and administrative expenses** was primarily due to **workforce reductions** in December 2023 and February 2024[5](index=5&type=chunk) - The pivotal **STRIDE study** of **mavodelpar** in adult patients with **primary mitochondrial myopathies** **did not meet its primary or secondary efficacy endpoints** in December 2023[7](index=7&type=chunk) - The Company implemented **cost savings initiatives**, including the **suspension of all mavodelpar development activities** and a total **workforce reduction of approximately 90%**[7](index=7&type=chunk) - Reneo retained an **independent financial advisor** to initiate a formal process to **evaluate potential strategic alternatives**[7](index=7&type=chunk) [2. About Reneo Pharmaceuticals](index=1&type=section&id=2.%20About%20Reneo%20Pharmaceuticals) Reneo Pharmaceuticals historically focused on developing therapies for rare genetic mitochondrial diseases - Reneo Pharmaceuticals historically focused on developing and commercializing therapies for patients with **rare genetic mitochondrial diseases**, characterized by the **inability of mitochondria to produce adenosine triphosphate**[6](index=6&type=chunk) [3. Consolidated Financial Statements](index=3&type=section&id=3.%20Consolidated%20Financial%20Statements) This section details Reneo Pharmaceuticals' Q1 2024 financial position, operational performance, and cash flow activities [3.1. Consolidated Balance Sheets](index=3&type=section&id=3.1.%20Consolidated%20Balance%20Sheets) This section presents Reneo Pharmaceuticals' consolidated balance sheet data as of March 31, 2024, detailing assets, liabilities, and equity Consolidated Balance Sheet Data (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $20,375 | $27,632 | | Short-term investments | $62,460 | $75,331 | | Total current assets | $83,927 | $106,622 | | Total assets | $84,639 | $107,436 | | Total current liabilities | $2,814 | $18,177 | | Total liabilities | $3,397 | $18,826 | | Total stockholders' equity | $81,242 | $88,610 | [3.2. Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=3.2.%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section presents Reneo Pharmaceuticals' consolidated statements of operations for Q1 2024 and 2023, detailing operating expenses and net loss Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Research and development | $4,942 | $10,991 | | General and administrative | $4,622 | $5,132 | | Total operating expenses | $9,564 | $16,123 | | Loss from operations | $(9,564) | $(16,123) | | Other income | $1,138 | $1,016 | | Net loss | $(8,426) | $(15,107) | | Net loss per share, basic and diluted | $(0.25) | $(0.60) | | Weighted-average shares used in computing net loss per share, basic and diluted | 33,420,808 | 25,036,410 | [3.3. Consolidated Statements of Cash Flows](index=5&type=section&id=3.3.%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines Reneo Pharmaceuticals' consolidated statements of cash flows for Q1 2024 and 2023, detailing cash movements Consolidated Statements of Cash Flows (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(21,014) | $(9,048) | | Net cash provided by investing activities | $13,757 | $18,507 | | Net cash provided by financing activities | $0 | $1,009 | | Net (decrease) increase in cash and cash equivalents | $(7,257) | $10,468 | | Cash and cash equivalents, end of period | $20,375 | $30,395 | [4. Forward-Looking Statements](index=2&type=section&id=4.%20Forward-Looking%20Statements) This section contains cautionary language regarding forward-looking statements, noting that future results may differ due to risks and uncertainties - Statements regarding matters that are not historical facts are '**forward-looking statements**' within the meaning of the **Private Securities Litigation Reform Act of 1995**[8](index=8&type=chunk) - Such statements are subject to **risks and uncertainties**, and **actual results may differ materially** from those expressed or implied[8](index=8&type=chunk) - Reneo undertakes **no obligation to update** such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law[8](index=8&type=chunk) [5. Contact Information](index=6&type=section&id=5.%20Contact%20Information) Provides the contact details for investor relations at Reneo Pharmaceuticals, Inc - Investor Relations contact: **Danielle Spangler**, **dspangler@reneopharma.com**[14](index=14&type=chunk)

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, 2023 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: 001-40315 RENEO PHARMACEUTICALS, INC. (Exact name of registrant as specified in its charter) Delaware 47-2309515 (State or other jurisdi ...

Exhibit 99.1 Reneo Pharmaceuticals Reports Fourth Quarter And Full Year 2023 Financial Results And Business Update IRVINE, Calif., March 28, 2024 (GLOBE NEWSWIRE) -- Reneo Pharmaceuticals, Inc. (Nasdaq: RPHM), a pharmaceutical company historically focused on the development and commercialization of therapies for patients with rare genetic mitochondrial diseases, today reported financial results for the fourth quarter and year ended December 31, 2023 and provided a business update. Fourth Quarter and Recent ...

Part I — Financial Information [Item 1. Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) The unaudited consolidated financial statements detail the company's financial position, operations, and cash flows [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Assets and Liabilities (in thousands) | Assets and Liabilities | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets:** | | | | Cash and cash equivalents | $11,737 | $19,927 | | Short-term investments | $113,877 | $81,246 | | Prepaid expenses and other current assets | $3,158 | $5,180 | | Total current assets | $128,772 | $106,353 | | Property and equipment, net | $529 | $453 | | Right-of-use assets | $1,006 | $1,292 | | Other non-current assets | $81 | $84 | | **Total assets** | **$130,388** | **$108,182** | | **Liabilities:** | | | | Accounts payable | $2,473 | $1,893 | | Accrued expenses | $10,765 | $4,827 | | Operating lease liabilities, current portion | $325 | $404 | | Total current liabilities | $13,563 | $7,124 | | Operating lease liabilities, less current portion | $812 | $1,059 | | Performance award | $1,069 | $29 | | **Total liabilities** | **$15,444** | **$8,212** | | **Stockholders' equity:** | | | | Common stock | $3 | $3 | | Additional paid-in capital | $305,479 | $236,693 | | Accumulated deficit | $(190,517) | $(136,683) | | Accumulated other comprehensive loss | $(21) | $(43) | | **Total stockholders' equity** | **$114,944** | **$99,970** | | **Total liabilities and stockholders' equity** | **$130,388** | **$108,182** | [Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Operating Expenses and Loss (in thousands, except per share data) | Operating Expenses and Loss | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $13,622 | $9,938 | $39,009 | $27,348 | | General and administrative | $7,266 | $3,902 | $19,038 | $11,938 | | Total operating expenses | $20,888 | $13,840 | $58,047 | $39,286 | | Loss from operations | $(20,888) | $(13,840) | $(58,047) | $(39,286) | | Other income | $1,692 | $833 | $4,213 | $931 | | Net loss | $(19,196) | $(13,007) | $(53,834) | $(38,355) | | Unrealized gain (loss) on short-term investments | $10 | $(194) | $22 | $(60) | | Comprehensive loss | $(19,186) | $(13,201) | $(53,812) | $(38,415) | | Net loss per share, basic and diluted | $(0.57) | $(0.53) | $(1.81) | $(1.57) | | Weighted-average shares used in computing net loss per share, basic and diluted | 33,807,945 | 24,496,313 | 29,718,689 | 24,472,974 | [Consolidated Statements of Changes in Stockholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' Equity (in thousands, except share data) | Stockholders' Equity | Dec 31, 2022 | Mar 31, 2023 | Jun 30, 2023 | Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Common Stock (Shares) | 24,699,553 | 25,107,430 | 33,800,788 | 33,872,166 | | Common Stock (Amount) | $3 | $3 | $3 | $3 | | Additional Paid-In Capital | $236,693 | $238,859 | $303,877 | $305,479 | | Accumulated Other Comprehensive Income (Loss) | $(43) | $12 | $(31) | $(21) | | Accumulated Deficit | $(136,683) | $(151,790) | $(171,321) | $(190,517) | | Total Stockholders' Equity | $99,970 | $87,084 | $132,528 | $114,944 | - Issuance of common stock in public offering, net of offering costs: **$58,862 thousand (7,906,250 shares)** in Q2 2023[17](index=17&type=chunk)[48](index=48&type=chunk) - Issuance of common stock in private placement, net of offering costs: **$4,667 thousand (625,000 shares)** in Q2 2023[17](index=17&type=chunk)[49](index=49&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash Flows (in thousands) | Cash Flows | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(43,929) | $(31,749) | | Net cash used in investing activities | $(29,254) | $(30,925) | | Net cash provided by financing activities | $64,993 | $146 | | Net decrease in cash and cash equivalents | $(8,190) | $(62,528) | | Cash and cash equivalents, beginning of period | $19,927 | $124,660 | | Cash and cash equivalents, end of period | $11,737 | $62,132 | [Notes to Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) [1. Organization and Business](index=8&type=section&id=1.%20Organization%20and%20Business) The company is a clinical-stage pharmaceutical firm facing substantial doubt about its ability to continue as a going concern - Reneo Pharmaceuticals, Inc. is a clinical-stage pharmaceutical company focused on developing therapies for rare genetic mitochondrial diseases, with **mavodelpar (REN001)** as its lead product candidate[25](index=25&type=chunk) - The company incurred a **net loss of $53.8 million** for the nine months ended September 30, 2023, with an **accumulated deficit of $190.5 million**[26](index=26&type=chunk) - Management has concluded that **substantial doubt exists about the company's ability to continue as a going concern** for more than one year from the filing date[28](index=28&type=chunk) - Plans to alleviate going concern risk include **raising additional capital** through equity or debt financings and the ability to defer certain commercial development activities[28](index=28&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) The financial statements are prepared under GAAP, consistent with prior annual reports, with recent accounting standard updates noted - The unaudited consolidated financial statements are prepared in accordance with GAAP and include accounts of the Company and its wholly-owned subsidiaries[30](index=30&type=chunk)[32](index=32&type=chunk) - The Company adopted ASU 2016-13 (Financial Instruments - Credit Losses) as of January 1, 2023, with **no material impact** on its financial statements[34](index=34&type=chunk) - The Company is currently evaluating the impact of ASU 2022-03 (Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions)[35](index=35&type=chunk) [3. Net Loss Per Share](index=10&type=section&id=3.%20Net%20Loss%20Per%20Share) Basic loss per share is presented, while diluted loss per share excludes anti-dilutive common stock equivalents - Basic loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding[37](index=37&type=chunk) - Diluted net loss per share **excludes common stock equivalents** (stock options and restricted stock units) because their inclusion would be anti-dilutive[37](index=37&type=chunk) Anti-Dilutive Securities | Anti-Dilutive Securities | As of September 30, 2023 | As of September 30, 2022 | | :--- | :--- | :--- | | Common stock options outstanding | 6,095,807 | 4,470,120 | | Unvested restricted stock units | 441,500 | 309,500 | | Total | 6,537,307 | 4,779,620 | [4. Fair Value Measurements](index=10&type=section&id=4.%20Fair%20Value%20Measurements) Financial instruments are classified using a three-tier hierarchy, with a significant Level 3 liability for a performance award - The company categorizes its money market funds as **Level 1** and commercial paper and U.S. treasury securities as **Level 2**[41](index=41&type=chunk) - The CEO's special performance award is a **Level 3 liability**, measured at fair value using a Monte Carlo simulation[42](index=42&type=chunk) Fair Value Measurements (in thousands) | Fair Value Measurements | Level 1 (Sep 30, 2023) | Level 2 (Sep 30, 2023) | Level 3 (Sep 30, 2023) | Total (Sep 30, 2023) | | :--- | :--- | :--- | :--- | :--- | | **Assets:** | | | | | | Money market investments | $4,946 | — | — | $4,946 | | U.S. treasury securities | — | $113,877 | — | $113,877 | | **Total Assets** | **$4,946** | **$113,877** | **—** | **$118,823** | | **Liabilities:** | | | | | | Performance award | — | — | $1,069 | $1,069 | | **Total Liabilities** | **—** | **—** | **$1,069** | **$1,069** | | Fair Value Measurements | Level 1 (Dec 31, 2022) | Level 2 (Dec 31, 2022) | Level 3 (Dec 31, 2022) | Total (Dec 31, 2022) | | :--- | :--- | :--- | :--- | :--- | | **Assets:** | | | | | | Money market investments | $9,365 | — | — | $9,365 | | Commercial paper | — | $4,978 | — | $4,978 | | U.S. treasury securities | — | $76,253 | — | $76,253 | | Commercial paper | — | $4,993 | — | $4,993 | | **Total Assets** | **$9,365** | **$86,224** | **—** | **$95,589** | | **Liabilities:** | | | | | | Performance award | — | — | $29 | $29 | | **Total Liabilities** | **—** | **—** | **$29** | **$29** | Performance Award (in thousands) | Performance Award | Amount | | :--- | :--- | | Balance as of January 1, 2023 | $29 | | Change in fair value | $1,040 | | Balance as of September 30, 2023 | $1,069 | [5. Marketable Debt Securities](index=12&type=section&id=5.%20Marketable%20Debt%20Securities) The company's available-for-sale debt securities, primarily U.S. treasuries, are carried at fair value with minor unrealized losses - Investments in debt securities are classified as **current assets available-for-sale** and are carried at fair value[45](index=45&type=chunk) Available-for-sale securities (in thousands) | Available-for-sale securities | Amortized Cost (Sep 30, 2023) | Gross Unrealized Gains (Sep 30, 2023) | Gross Unrealized Losses (Sep 30, 2023) | Fair Market Value (Sep 30, 2023) | | :--- | :--- | :--- | :--- | :--- | | U.S. treasury securities | $113,898 | $1 | $(22) | $113,877 | | Total | $113,898 | $1 | $(22) | $113,877 | | Available-for-sale securities | Amortized Cost (Dec 31, 2022) | Gross Unrealized Gains (Dec 31, 2022) | Gross Unrealized Losses (Dec 31, 2022) | Fair Market Value (Dec 31, 2022) | | :--- | :--- | :--- | :--- | :--- | | U.S. treasury securities | $76,297 | $2 | $(46) | $76,253 | | Commercial paper | $4,993 | — | — | $4,993 | | Total | $81,290 | $2 | $(46) | $81,246 | [6. Accrued Expenses](index=12&type=section&id=6.%20Accrued%20Expenses) Accrued expenses more than doubled, driven by increased clinical, regulatory, and compensation-related costs Accrued Expenses (in thousands) | Accrued Expenses | As of Sep 30, 2023 | As of Dec 31, 2022 | | :--- | :--- | :--- | | Accrued clinical and regulatory | $5,176 | $1,872 | | Accrued contract manufacturing cost | $1,005 | $1,583 | | Accrued compensation | $3,830 | $807 | | Accrued other | $754 | $565 | | Total accrued expenses | $10,765 | $4,827 | [7. Leases](index=13&type=section&id=7.%20Leases) The company holds operating leases for office space in the U.S. and U.K. with a weighted-average remaining term of 3.4 years - The Company leases office space in Irvine, California (through November 30, 2026) and Sandwich, United Kingdom (through October 23, 2027)[47](index=47&type=chunk) Lease Information | Lease Information | As of Sep 30, 2023 | As of Sep 30, 2022 | | :--- | :--- | :--- | | Weighted incremental borrowing rate | 5% | 5% | | Weighted average remaining lease term (in years) | 3.4 | 3.8 | | Cash paid for amounts included in the measurement of lease liabilities (in thousands) | $430 | $397 | | Lease expense (in thousands) | $354 | $338 | Maturities of Lease Liabilities (in thousands) | Maturities of Lease Liabilities | As of Sep 30, 2023 | | :--- | :--- | | 2023 (remaining three months) | $94 | | 2024 | $381 | | 2025 | $381 | | 2026 | $343 | | 2027 | $34 | | Total lease payments | $1,233 | | Less: Imputed interest | $(96) | | Present value of lease liabilities | $1,137 | [8. Stockholders' Equity](index=13&type=section&id=8.%20Stockholders'%20Equity) The company raised approximately $63.6 million in net proceeds through a public offering and a concurrent private placement in May 2023 - On May 8, 2023, the Company completed a public offering, selling 7,906,250 shares of common stock at $8.00 per share, generating approximately **$58.9 million in net proceeds**[48](index=48&type=chunk) - On May 9, 2023, the Company completed a concurrent private placement, selling 625,000 shares of common stock to Abingworth Bioventures 8 L.P. at $8.00 per share, generating approximately **$4.7 million in net proceeds**[49](index=49&type=chunk) [9. Stock-Based Compensation](index=14&type=section&id=9.%20Stock-Based%20Compensation) Stock-based compensation expense increased, driven by awards under the 2021 Equity Incentive Plan and a CEO performance award Shares Reserved for Future Issuance (as of Sep 30, 2023) | Shares Reserved for Future Issuance | Shares | | :--- | :--- | | Common stock options outstanding | 6,095,807 | | Unvested restricted stock units | 441,500 | | Available for future grants under the 2021 Equity Incentive Plan | 1,300,869 | | Available for future grants under the 2021 Employee Stock Purchase Plan | 546,341 | | Total shares of common stock reserved | 8,384,517 | Stock Option Activity (nine months ended Sep 30, 2023) | Stock Option Activity | Options Outstanding | Weighted Average Exercise Price | | :--- | :--- | :--- | | Outstanding at December 31, 2022 | 5,877,745 | $4.47 | | Granted | 548,915 | $6.88 | | Exercised | (149,190) | $2.15 | | Forfeited/Expired | (181,663) | $5.60 | | Outstanding at September 30, 2023 | 6,095,807 | $4.71 | | Vested at September 30, 2023 | 2,946,079 | $4.94 | | Exercisable at September 30, 2023 | 3,416,089 | $4.52 | - Unrecognized stock-based compensation expense at September 30, 2023, was **$9.5 million**, expected to be recognized over a weighted-average vesting term of 2.4 years[56](index=56&type=chunk) - The CEO's **$7.5 million Performance Award** resulted in **$1.0 million in compensation expense** for the nine months ended September 30, 2023, recognized in general and administrative expense[64](index=64&type=chunk)[65](index=65&type=chunk) Stock-Based Compensation Expense (in thousands) | Stock-Based Compensation Expense | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $537 | $411 | $1,504 | $1,184 | | General and administrative | $892 | $579 | $2,289 | $1,919 | | Total | $1,429 | $990 | $3,793 | $3,103 | [10. License Agreement](index=17&type=section&id=10.%20License%20Agreement) The company holds an exclusive worldwide license for mavodelpar from vTv Therapeutics, involving milestone and royalty payment obligations - In December 2017, the Company in-licensed mavodelpar (REN001) from vTv Therapeutics LLC, obtaining an **exclusive, worldwide license** for PPARδ agonists[25](index=25&type=chunk)[69](index=69&type=chunk) - The license agreement included an initial upfront fee of **$3.0 million** and the issuance of **576,443 shares** of common stock to vTv Therapeutics[69](index=69&type=chunk) - The Company is obligated to pay up to **$64.5 million in development and regulatory milestones** and up to **$30.0 million in sales-based milestones**, plus tiered royalty payments[70](index=70&type=chunk) [11. Subsequent Events](index=17&type=section&id=11.%20Subsequent%20Events) Post-quarter end, the company repurchased shares from vTv Therapeutics and established a new $100.0 million ATM equity offering facility - On October 30, 2023, the Company **repurchased 576,443 shares** of its common stock from vTv Therapeutics for approximately **$4.4 million** and subsequently retired them[71](index=71&type=chunk) - On November 13, 2023, the Company entered into a new At-The-Market (ATM) equity offering sales agreement to sell up to **$100.0 million** in common stock[72](index=72&type=chunk) - Concurrently, the 2022 ATM Facility with Leerink, under which **$1.2 million** in shares had been sold, was terminated[72](index=72&type=chunk)[73](index=73&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, highlighting increased net losses driven by higher R&D and G&A expenses, and addresses liquidity risks [Overview](index=19&type=section&id=Overview) - Reneo Pharmaceuticals is a clinical-stage company developing mavodelpar, a PPARδ agonist, for rare genetic mitochondrial diseases[77](index=77&type=chunk)[80](index=80&type=chunk) - Mavodelpar has received **orphan drug and Fast Track designations** in the U.S. and Europe for various indications[82](index=82&type=chunk) - The pivotal Phase 2b STRIDE study for PMM completed enrollment in March 2023, with **topline data expected in December 2023**[84](index=84&type=chunk)[87](index=87&type=chunk) [Components of Our Results of Operations](index=21&type=section&id=Components%20of%20Our%20Results%20of%20Operations) - **Research and development expenses are expected to increase substantially** due to advancing product candidates through clinical trials and regulatory processes[98](index=98&type=chunk) - **General and administrative expenses are expected to increase** to support corporate infrastructure growth and commercial development activities[102](index=102&type=chunk) Research and Development Expenses (in thousands) | Research and Development Expenses | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Clinical and regulatory | $7,373 | $5,555 | $20,408 | $14,143 | | Contract manufacturing cost | $2,609 | $2,469 | $7,761 | $6,802 | | Nonclinical | $632 | $577 | $3,719 | $3,060 | | Medical affairs | $2,217 | $193 | $4,883 | $409 | | Research and development-other expense | $791 | $1,144 | $2,238 | $2,934 | | Total | $13,622 | $9,938 | $39,009 | $27,348 | [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Comparison of Three Months Ended September 30, 2023 and 2022 | (in thousands) | Sep 30, 2023 | Sep 30, 2022 | Change | | :--- | :--- | :--- | :--- | | Research and development | $13,622 | $9,938 | $3,684 | | General and administrative | $7,266 | $3,902 | $3,364 | | Total operating expenses | $20,888 | $13,840 | $7,048 | | Loss from operations | $(20,888) | $(13,840) | $(7,048) | | Other income | $1,692 | $833 | $859 | | Net loss | $(19,196) | $(13,007) | $(6,189) | - **Research and development expenses increased by $3.7 million** for the three months ended September 30, 2023, due to increased clinical development and medical affairs costs[105](index=105&type=chunk) - **General and administrative expenses increased by $3.4 million** for the three months ended September 30, 2023, due to commercial development and personnel costs[107](index=107&type=chunk) Comparison of Nine Months Ended September 30, 2023 and 2022 | (in thousands) | Sep 30, 2023 | Sep 30, 2022 | Change | | :--- | :--- | :--- | :--- | | Research and development | $39,009 | $27,348 | $11,661 | | General and administrative | $19,038 | $11,938 | $7,100 | | Total operating expenses | $58,047 | $39,286 | $18,761 | | Loss from operations | $(58,047) | $(39,286) | $(18,761) | | Other income | $4,213 | $931 | $3,282 | | Net loss | $(53,834) | $(38,355) | $(15,479) | - **Research and development expenses increased by $11.7 million** for the nine months ended September 30, 2023, driven by clinical development and medical affairs costs[110](index=110&type=chunk) - **General and administrative expenses increased by $7.1 million** for the nine months ended September 30, 2023, due to commercial development and personnel costs[111](index=111&type=chunk) - **Other income increased** for both periods due to higher interest rates and increased short-term investment balances[108](index=108&type=chunk)[112](index=112&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) - As of September 30, 2023, the company had **$125.6 million in cash, cash equivalents, and short-term investments**[113](index=113&type=chunk) - Current funds are not sufficient for more than one year, raising **substantial doubt about its ability to continue as a going concern**[121](index=121&type=chunk)[122](index=122&type=chunk) - Financing activities provided **$65.0 million in cash** for the nine months ended September 30, 2023, primarily from a public offering and private placement[128](index=128&type=chunk) Cash Flows (in thousands) | Cash Flows | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(43,929) | $(31,749) | | Net cash used in investing activities | $(29,254) | $(30,925) | | Net cash provided by financing activities | $64,993 | $146 | | Net decrease in cash and cash equivalents | $(8,190) | $(62,528) | [Critical Accounting Policies and Estimates](index=27&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - The company's critical accounting policies and estimates remain **consistent with those in its 2022 Annual Report**, with no material changes[134](index=134&type=chunk) [Recent Accounting Pronouncements](index=28&type=section&id=Recent%20Accounting%20Pronouncements) - Refer to Note 2 of the Notes to Consolidated Financial Statements for a description of recent accounting pronouncements[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) This section is not required for smaller reporting companies, and thus no disclosures about market risk are provided - Quantitative and Qualitative Disclosures about Market Risk are **not required for smaller reporting companies**[136](index=136&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2023 [Evaluation of Disclosure Controls and Procedures](index=28&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management concluded that **disclosure controls and procedures were effective** as of September 30, 2023[137](index=137&type=chunk) [Changes in Internal Control over Financial Reporting](index=28&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were **no material changes** in internal control over financial reporting during the quarter ended September 30, 2023[138](index=138&type=chunk) Part II — Other Information [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - The Company is **not currently a party to any material legal proceedings**[140](index=140&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) The company faces numerous risks including ongoing losses, going concern doubt, and dependence on its sole product candidate, mavodelpar [Risks Related to Our Business and Industry](index=29&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) - The company has incurred **significant net losses** since inception and anticipates continued losses, raising **substantial doubt about its ability to continue as a going concern**[150](index=150&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) - **Substantial additional capital is required** to develop and commercialize mavodelpar; failure to secure financing may force delays[154](index=154&type=chunk)[157](index=157&type=chunk)[163](index=163&type=chunk) - The company is **entirely dependent on the success of mavodelpar**, its only product candidate[164](index=164&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) - **Clinical trials may fail** to adequately demonstrate mavodelpar's safety and efficacy, potentially preventing or delaying regulatory approval[168](index=168&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk) - The **regulatory approval process is lengthy, expensive, and uncertain**, and denial or delay would adversely impact revenue generation[188](index=188&type=chunk)[190](index=190&type=chunk)[193](index=193&type=chunk) - The **COVID-19 pandemic** has adversely affected and could continue to affect operations and clinical trials[195](index=195&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) - Mavodelpar **may not gain market acceptance** among physicians, patients, and healthcare payors, even if approved[222](index=222&type=chunk)[225](index=225&type=chunk) - The company faces **significant competition** from other biotechnology and pharmaceutical companies with greater resources[248](index=248&type=chunk)[250](index=250&type=chunk)[253](index=253&type=chunk) [Risks Related to Our Reliance on Third Parties](index=62&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) - The company's business is **dependent on the vTv License Agreement**; its termination would result in the loss of significant rights[305](index=305&type=chunk)[307](index=307&type=chunk) - **Reliance on third-party Contract Research Organizations (CROs)** for clinical trials poses risks if they fail to meet contractual duties[308](index=308&type=chunk)[309](index=309&type=chunk)[310](index=310&type=chunk) - **Complete reliance on third parties for manufacturing** carries risks of failure to obtain regulatory approval for facilities or insufficient quantities[313](index=313&type=chunk)[314](index=314&type=chunk)[315](index=315&type=chunk)[316](index=316&type=chunk) [Risks Related to Our Intellectual Property](index=65&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) - Commercial success depends on **obtaining and maintaining sufficient intellectual property protection** for mavodelpar[319](index=319&type=chunk)[320](index=320&type=chunk)[321](index=321&type=chunk)[322](index=322&type=chunk) - **Patent applications may not result in issued patents**, and existing patents may be challenged, invalidated, or rendered unenforceable[324](index=324&type=chunk)[325](index=325&type=chunk)[326](index=326&type=chunk) - **Patent terms may be inadequate** to protect product candidates for a sufficient time, leading to earlier competition from generic products[331](index=331&type=chunk)[333](index=333&type=chunk)[335](index=335&type=chunk) - **Protecting intellectual property rights globally is challenging** due to differing laws and enforcement[363](index=363&type=chunk)[364](index=364&type=chunk)[365](index=365&type=chunk)[366](index=366&type=chunk) - **Third-party claims alleging intellectual property infringement** could prevent or delay drug development and incur substantial damages[396](index=396&type=chunk)[397](index=397&type=chunk)[399](index=399&type=chunk)[401](index=401&type=chunk)[410](index=410&type=chunk)[412](index=412&type=chunk) - **Inability to protect the confidentiality of trade secrets** would harm the business and competitive position[425](index=425&type=chunk)[427](index=427&type=chunk)[428](index=428&type=chunk) [Risks Related to Ownership of Our Common Stock](index=89&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) - The **trading price of the common stock is likely to be highly volatile**, and investors could lose all or part of their investment[439](index=439&type=chunk)[441](index=441&type=chunk) - **Principal stockholders and management own a significant percentage** of the stock, enabling them to exert substantial control[444](index=444&type=chunk) - **Future sales and issuances of common stock** could result in additional dilution for existing stockholders and cause the stock price to fall[445](index=445&type=chunk)[459](index=459&type=chunk)[460](index=460&type=chunk) - As an emerging growth company, **reduced reporting requirements may make the common stock less attractive** to investors[446](index=446&type=chunk)[449](index=449&type=chunk) [General Risk Factors](index=96&type=section&id=General%20Risk%20Factors) - The company is subject to U.S. and foreign **export/import controls, sanctions, and anti-corruption laws**[470](index=470&type=chunk)[471](index=471&type=chunk) - **Business disruptions** from natural disasters, epidemics, or man-made events could seriously harm future revenues[472](index=472&type=chunk)[473](index=473&type=chunk) - **Compromised information technology systems** due to cyberattacks could lead to regulatory actions, litigation, and reputational harm[474](index=474&type=chunk)[476](index=476&type=chunk)[477](index=477&type=chunk)[478](index=478&type=chunk)[481](index=481&type=chunk)[482](index=482&type=chunk)[486](index=486&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=99&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased shares from vTv Therapeutics and details the use of proceeds from its 2021 IPO [Unregistered Sales of Equity Securities](index=99&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities) - There were **no unregistered sales of equity securities** during the period[491](index=491&type=chunk) [Issuer Purchases of Equity Securities](index=99&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) - On October 30, 2023, the Company **repurchased 576,443 shares** of its common stock from vTv Therapeutics for approximately **$4.4 million**[492](index=492&type=chunk) [Use of Proceeds](index=99&type=section&id=Use%20of%20Proceeds) - The company received **net proceeds of $84.6 million** from its April 2021 IPO[493](index=493&type=chunk) - As of September 30, 2023, approximately **$23.8 million of the IPO net proceeds have been used**[494](index=494&type=chunk) - Remaining IPO proceeds are allocated to fund **continued research and development of mavodelpar** and for general purposes[495](index=495&type=chunk) [Item 3. Defaults Upon Senior Securities](index=100&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - There were **no defaults upon senior securities**[496](index=496&type=chunk) [Item 4. Mine Safety Disclosures](index=100&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures - There were **no mine safety disclosures**[497](index=497&type=chunk) [Item 5. Other Information](index=100&type=section&id=Item%205.%20Other%20Information) The company established a new $100.0 million At-The-Market equity offering facility and terminated a prior agreement [Entry into New Sales Agreement](index=100&type=section&id=Entry%20into%20New%20Sales%20Agreement) - On November 13, 2023, the Company entered into a new At-The-Market (ATM) equity offering sales agreement, allowing it to sell up to **$100.0 million** in common stock[498](index=498&type=chunk) [Termination of Prior Sales Agreement](index=100&type=section&id=Termination%20of%20Prior%20Sales%20Agreement) - On November 13, 2023, the prior 2022 ATM Facility, under which **$1.2 million** in shares had been sold, was terminated[500](index=500&type=chunk) [Item 6. Exhibits](index=101&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q - The exhibit index includes corporate documents, legal opinions, sales agreements, and **Sarbanes-Oxley Act certifications**[502](index=502&type=chunk) [Signatures](index=102&type=section&id=Signatures) The report is duly signed by the principal executive and financial officers on November 13, 2023 - The report is signed by Gregory J. Flesher, President and Chief Executive Officer, and Jennifer P. Lam, Senior Vice President, Finance and Administration[506](index=506&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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, 2023 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: 001-40315 Reneo Pharmaceuticals, Inc. (Exact name of registrant as specified in its charter) Delaware 47-2309515 (State or other jur ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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, 2023 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: 001-40315 Reneo Pharmaceuticals, Inc. (Exact name of registrant as specified in its charter) Delaware 47-2309515 (State or other ju ...