Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR o 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: 001-41696 | --- | --- | --- | |----------------------------------------------------|------------- ...

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The Phase 2b/3 clinical trial (NCT05623345) is a global, multi center, randomized double-blind, placebo- controlled trial evaluating the safety and efficacy of izokibep dosed subcutaneously 160 mg every week (QW) or every two weeks (Q2W) and 80 mg every four weeks (Q4W) versus placebo. 351 adult patients with active PsA were enrolled across 71 sites in the United States and Europe and randomized across the four arms. For more information about the Phase 2b/3 PsA clinical trial, please visit www.clinicaltria ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR o 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: 001-41696 ACELYRIN, INC. (Exact name of registrant as specified in its charter) (Registrant's telepho ...

Exhibit 10.2 SEPARATION AGREEMENT AND MUTUAL RELEASE WHEREAS, Employee was employed by the Company as Chief People Officer; WHEREAS, Employee signed a Proprietary Information and Inventions Assignment Agreement with the Company (the "Confidentiality Agreement"); WHEREAS, the Company has granted to Employee the stock options listed on Exhibit A (the "Employee Options") and the restricted stock units listed on Exhibit A (the "Employee RSUs") pursuant to the terms and conditions of the Company's 2020 Stock Opt ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________ FORM 10-K ________________________________________ (Mark One) x 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 ...

[ACELYRIN, INC. Full Year 2023 Financial Results and Recent Highlights](index=1&type=section&id=ACELYRIN_FY2023_Report) [Executive Summary and Strategic Vision](index=1&type=section&id=Executive_Summary_Strategic_Vision) The company reported positive clinical data for lonigutamab and izokibep while advancing its autoimmune portfolio, supported by a strong cash position - Reported positive Phase 1/2 proof-of-concept data for **lonigutamab**, demonstrating clinical responses in thyroid eye disease patients[1](index=1&type=chunk) - Achieved primary endpoint with **high statistical significance** in a global Phase 2b/3 clinical trial of izokibep in psoriatic arthritis[1](index=1&type=chunk) - The ongoing Phase 3 trial for izokibep in hidradenitis suppurativa is **enrolling faster than expected**, with topline data now anticipated in H2 2024[1](index=1&type=chunk) - ACELYRIN's goal is to advance programs across multiple autoimmune and inflammatory diseases to deliver transformative medicines for patients[2](index=2&type=chunk) [Full Year 2023 Financial Highlights](index=1&type=section&id=FY2023_Financial_Highlights) The company ended 2023 with a strong cash position of $721.3 million, despite increased R&D and G&A expenses driving a higher net loss Key Financial Highlights (YoY Comparison) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (YoY) | | :----- | :------------------ | :------------------ | :----------- | | Cash, cash equivalents and short-term marketable securities | $721,326 | $314,620 | +129.2% | | R&D Expenses | $355,886 | $55,632 | +540.0% | | G&A Expenses | $66,178 | $13,547 | +388.5% | | Net Loss | $(381,641) | $(64,772) | +489.2% | - R&D expense increase primarily resulted from izokibep program expansion and a **one-time $123.1 million in-process research and development (IPR&D) expense** related to the ValenzaBio acquisition[4](index=4&type=chunk) - G&A expense increase was primarily a result of expanding organizational capability to support the development of its broad portfolio[5](index=5&type=chunk) [Pipeline Updates and Milestones](index=2&type=section&id=Pipeline_Updates_Milestones) ACELYRIN is advancing its late-stage programs with key trial initiations and data readouts anticipated for izokibep and lonigutamab in 2024 - The **izokibep and lonigutamab programs** are at the forefront of development as next-generation approaches for psoriatic arthritis, hidradenitis suppurativa, and thyroid eye disease[6](index=6&type=chunk) [Upcoming Milestones](index=2&type=section&id=Upcoming_Milestones) - A Phase 2b/3 trial for lonigutamab in Thyroid Eye Disease, designed as the first of two registrational trials, is planned for initiation in H2 2024[10](index=10&type=chunk) - A confirmatory Phase 3 trial for izokibep in Psoriatic Arthritis is targeted for initiation by year-end 2024[10](index=10&type=chunk) - Topline data for the ongoing Phase 3 trial of izokibep in Hidradenitis Suppurativa are now expected in H2 2024[10](index=10&type=chunk) - Topline data for the ongoing Phase 2b/3 trial of izokibep in Noninfectious Uveitis are anticipated in H2 2024[10](index=10&type=chunk) [Recent Pipeline Highlights](index=2&type=section&id=Recent_Pipeline_Highlights) - Lonigutamab demonstrated **rapid improvements in proptosis and clinical activity score (CAS)** within three weeks in its Phase 1/2 TED trial[10](index=10&type=chunk) - Izokibep's Phase 2b/3 PsA trial **met the primary endpoint of ACR50 at 16 weeks** with high statistical significance and showed significant responses for high hurdles like ACR70 and PASI100[10](index=10&type=chunk) - Izokibep in HS showed **rapid, dose-ordered improvement** across multiple disease manifestations, with HiSCR100 consistently achieved in approximately one-third of patients on the 160 mg QW dose[10](index=10&type=chunk) - Izokibep's HS results demonstrated consistent improvement in resolution of abscesses, nodules, and draining tunnels, with **HiSCR100 achieved earlier than other IL-17A agents**[10](index=10&type=chunk)[11](index=11&type=chunk) [Corporate Information](index=3&type=section&id=Corporate_Information) The company announced key leadership appointments and provided detailed descriptions of its primary product candidates, Izokibep and Lonigutamab - Agnes Lee was recently appointed as **Senior Vice President, Investor Relations and Corporate Communications** and a member of the company's Senior Leadership Team[12](index=12&type=chunk) - Lynn Tetrault was appointed to **ACELYRIN's Board of Directors** in December 2023[13](index=13&type=chunk) [Leadership Updates](index=3&type=section&id=Leadership_Updates) - Agnes Lee was recently appointed as **Senior Vice President, Investor Relations and Corporate Communications** and a member of the company's Senior Leadership Team[12](index=12&type=chunk) - Lynn Tetrault was appointed to **ACELYRIN's Board of Directors** in December 2023[13](index=13&type=chunk) [Product Descriptions](index=3&type=section&id=Product_Descriptions) - Izokibep is a small protein therapeutic designed to inhibit IL-17A with **high potency and robust tissue penetration** due to its small molecular size[14](index=14&type=chunk) - Lonigutamab is a humanized IgG1 monoclonal antibody targeting the IGF-1 receptor, delivered subcutaneously, with **75-fold greater potency** in preclinical assays[15](index=15&type=chunk) [About ACELYRIN, INC.](index=3&type=section&id=About%20ACELYRIN%2C%20INC.) - ACELYRIN, INC is a late-stage clinical biopharma company focused on accelerating the development and commercialization of transformative medicines in immunology[16](index=16&type=chunk) - The company has two programs in late-stage clinical development: **Izokibep (IL-17A inhibitor)** and **Lonigutamab (anti-IGF-1R)**[16](index=16&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward_Looking_Statements) - This press release contains forward-looking statements related to the advancement of ACELYRIN's programs and anticipated development activities[18](index=18&type=chunk) - These statements are based on current plans and are subject to risks and uncertainties that may cause actual results to materially differ[18](index=18&type=chunk) [Financial Statements](index=5&type=section&id=Financial_Statements) The company's 2023 financials detail a significant increase in net loss, driven by higher operating expenses, alongside substantial growth in total assets - Net loss for the full year ended December 31, 2023, was **$381.6 million**, a significant increase from $64.8 million for 2022[5](index=5&type=chunk)[21](index=21&type=chunk) - Total assets increased to **$742.7 million** at December 31, 2023, from $319.9 million at December 31, 2022[23](index=23&type=chunk) [Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Consolidated_Statements_Operations_Comprehensive_Loss) Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Operating Expenses | 2023 | 2022 | 2021 | | :-------------------------------- | :--- | :--- | :--- | | Research and development | $355,886 | $55,632 | $38,230 | | General and administrative | $66,178 | $13,547 | $3,564 | | Total operating expenses | $422,064 | $69,179 | $41,794 | | Loss from operations | $(422,064) | $(69,179) | $(41,794) | | Change in fair value of derivative tranche liability | $10,291 | $487 | $- | | Interest income | $30,555 | $4,052 | $- | | Other expense, net | $(423) | $(132) | $(45) | | Net loss | $(381,641) | $(64,772) | $(41,839) | | Unrealized gain (loss) on short-term marketable securities, net | $248 | $(86) | $- | | Net loss per share attributable to common stockholders, basic and diluted | $(5.43) | $(41.59) | $(60.87) | | Weighted-average common shares outstanding, basic and diluted | 70,249,580 | 1,557,534 | 687,398 | [Selected Consolidated Balance Sheet Data](index=5&type=section&id=Selected_Consolidated_Balance_Sheet_Data) Selected Consolidated Balance Sheet Data (in thousands) | Balance Sheet Item | December 31, 2023 | December 31, 2022 | Change (YoY) | | :----------------- | :---------------- | :---------------- | :----------- | | Cash and cash equivalents | $218,097 | $267,110 | -18.3% | | Short-term marketable securities | $503,229 | $47,510 | +960.2% | | Total assets | $742,690 | $319,923 | +132.2% | | Total liabilities | $86,353 | $26,192 | +229.7% | | Accumulated deficit | $(488,719) | $(107,078) | +356.4% | [Company Contacts](index=5&type=section&id=Company_Contacts) This section provides contact information for investor relations and media inquiries for ACELYRIN, INC - Investor relations contact: investors@acelyrin.com[24](index=24&type=chunk) - Media contact: media@acelyrin.com[24](index=24&type=chunk)

Acelyrin Inc. (NASDAQ:SLRN) Q3 2023 Earnings Conference Call November 7, 2023 4:30 PM ET Company Participants Tyler Marciniak - Vice President, Investor Relations, Communications, Corporate Operations Shao-Lee Lin - Founder, Chief Executive Officer and Director Gil Labrucherie - Chief Financial Officer Conference Call Participants Yasmeen Rahimi - Analyst, Piper Sandler Emily Bodnar - Analyst, H.C. Wainwright and Company Akash Tewari - Analyst, Jefferies Tyler Van Buren - TD Cowen Vikram Purohit - Morgan St ...

Financial Highlights - Cash, cash equivalents, and short-term marketable securities totaled $788.4 million as of September 30, 2023[7] - Research and development expenses were $74.6 million for the third quarter of 2023, compared to $12.5 million for the same period in 2022[8] - General and administrative expenses were $19.9 million for the third quarter of 2023, compared to $2.9 million for the same period in 2022[8] - Net loss totaled $83.9 million for the third quarter of 2023, or $0.87 per share, compared to $14.4 million, or $8.17 per share, for the third quarter of 2022[8] - Total assets were $800.489 million as of September 30, 2023, compared to $319.923 million as of December 31, 2022[6] Clinical Program Updates - Top-line data from the global Phase 2b/3 trial for izokibep in PsA and proof-of-concept data for lonigutamab in thyroid eye disease are expected in the first quarter of 2024[7] - 46-week results from a Phase 2 trial of izokibep in PsA showed >75% achievement of ACR50, >50% achievement of ACR70, >70% achievement of PASI100, >80% resolution of enthesitis, and >50% achievement of Minimal Disease Activity (MDA)[7] - Approximately 25% of patients achieved HiSCR100 responses within 12 weeks in hidradenitis suppurativa trial[7] Leadership and Corporate Updates - Patricia Turney joined as Chief Technical Operations Officer[2] - Shephard (Shep) Mpofu joined as Senior Vice President of Development[7]

PART I FINANCIAL INFORMATION This section details the company's unaudited financial statements, management's analysis, market risks, and internal control effectiveness [Item 1. Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) This section presents ACELYRIN, INC.'s unaudited condensed consolidated financial statements, showing increased assets and a wider net loss Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $381,738 | $267,110 | | Short-term marketable securities | $406,693 | $47,510 | | **Total Assets** | **$800,489** | **$319,923** | | **Liabilities & Equity** | | | | Total Liabilities | $68,113 | $26,192 | | Total stockholders' equity (deficit) | $732,376 | $(102,862) | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | 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 | $74,562 | $12,509 | $272,512 | $38,222 | | General and administrative | $19,861 | $2,887 | $44,440 | $8,145 | | **Loss from operations** | **$(94,423)** | **$(15,396)** | **$(316,952)** | **$(46,367)** | | **Net loss** | **$(83,940)** | **$(14,406)** | **$(286,429)** | **$(44,965)** | | Net loss per share | $(0.87) | $(8.17) | $(4.68) | $(31.66) | - The company completed its Initial Public Offering (IPO) on May 9, 2023, issuing **34.5 million shares** of common stock and receiving net proceeds of approximately **$573.6 million**[30](index=30&type=chunk) - On January 4, 2023, the company acquired ValenzaBio, Inc., adding lonigutamab and SLRN-517 to its portfolio, with the transaction accounted for as an asset acquisition[28](index=28&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the financial statements, covering significant accounting policies, acquisitions, and commitments - The acquisition of ValenzaBio was accounted for as an asset acquisition with a total purchase consideration of **$130.0 million**, expensing in-process research and development (IPR&D) assets valued at **$123.1 million** immediately[50](index=50&type=chunk)[54](index=54&type=chunk)[56](index=56&type=chunk) - The company has significant licensing agreements with potential future milestone payments, including up to **$280.0 million** to Affibody for izokibep, up to **$489.5 million** to Pierre Fabre for lonigutamab, and up to **$726.3 million** to Novelty Nobility for SLRN-517[80](index=80&type=chunk)[87](index=87&type=chunk)[91](index=91&type=chunk) - Stock-based compensation expense increased significantly to **$31.0 million** for the nine months ended September 30, 2023, up from **$2.5 million** in the same period of 2022, driven by new option grants, RSU vesting, and acquisition-related expenses[138](index=138&type=chunk) - As of September 30, 2023, the company had cash, cash equivalents, and short-term marketable securities totaling **$788.4 million**, expected to fund the operating plan for at least the next 12 months[33](index=33&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses business strategy, financial performance, and liquidity, highlighting increased expenses and a strong post-IPO cash position [Results of Operations](index=41&type=section&id=Results%20of%20Operations) This section analyzes the company's operating expenses, detailing significant increases in R&D and G&A costs Comparison of Operating Expenses (in thousands) | Expense Category | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and Development | $272,512 | $38,222 | $234,290 | 613% | | General and Administrative | $44,440 | $8,145 | $36,295 | 446% | | **Total Operating Expenses** | **$316,952** | **$46,367** | **$270,585** | **584%** | - The **$234.3 million** increase in R&D expenses for the nine months ended Sep 30, 2023, was primarily driven by a one-time charge of **$133.1 million** for acquired IPR&D and license fees related to the ValenzaBio acquisition, and a **$77.2 million** increase in CRO and CMO expenses for advancing clinical trials[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) - General and administrative expenses for the nine months ended Sep 30, 2023, increased by **$36.3 million**, mainly due to a **$17.9 million** increase in stock-based compensation (including **$5.5 million** for RSUs vested at IPO), higher personnel costs, and increased professional services costs associated with being a public company[196](index=196&type=chunk)[197](index=197&type=chunk) - In September 2023, the company announced that the primary endpoint in Part B of the Phase 2b/3 trial of izokibep in Hidradenitis Suppurativa (HS) did not meet statistical significance, potentially extending development timelines and increasing costs for the HS indication[171](index=171&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's cash position and cash flow activities, emphasizing post-IPO capital strength - As of September 30, 2023, the company had **$788.4 million** in cash, cash equivalents, and short-term marketable securities, deemed sufficient to fund operations and capital expenditures for at least the next 12 months[203](index=203&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(96,074) | $(43,428) | | Net cash used in investing activities | $(355,138) | $(109,487) | | Net cash provided by financing activities | $565,840 | $274,613 | - Net cash from financing activities of **$565.8 million** in the first nine months of 2023 was primarily due to **$574.1 million** in net proceeds from the IPO[216](index=216&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risks include interest rate changes and foreign currency fluctuations, neither deemed materially impactful - The company is exposed to interest rate risk on its cash equivalents and short-term investments, but a hypothetical **10%** change in rates is not expected to have a material effect[226](index=226&type=chunk) - Operations are subject to foreign currency exchange risk as some R&D services are sourced from vendors outside the U.S., though these gains and losses have not been material to date[227](index=227&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to material weaknesses in internal financial reporting controls - The CEO and CFO concluded that disclosure controls and procedures were not effective as of September 30, 2023, due to material weaknesses in internal control over financial reporting[230](index=230&type=chunk) - Identified material weaknesses include a lack of sufficient professionals, an ineffective risk assessment process, and inadequate segregation of duties related to journal entries and account reconciliations[232](index=232&type=chunk) - The company is actively remediating these weaknesses by hiring additional accounting personnel, including a VP Controller and Director of Technical Accounting, and engaging a third-party firm for support[235](index=235&type=chunk)[236](index=236&type=chunk) PART II OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and other material information for the company [Item 1. Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect - As of the reporting date, there are no pending legal proceedings that are expected to materially impact the company[240](index=240&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks including clinical trial success, capital needs, competition, third-party reliance, and internal control weaknesses - The company's business is entirely dependent on the success of its clinical-stage product candidates, which face a lengthy, expensive, and uncertain development process, as highlighted by the failure of izokibep to meet its primary endpoint in the Part B HS trial[243](index=243&type=chunk)[251](index=251&type=chunk)[294](index=294&type=chunk) - The company has identified material weaknesses in its internal control over financial reporting, which could result in a material misstatement of financial statements and adversely affect investor confidence[247](index=247&type=chunk)[339](index=339&type=chunk) - The company will require substantial additional financing and faces risks that future clinical trial outcomes, such as the negative HS trial results, could hinder its ability to raise capital on acceptable terms[259](index=259&type=chunk)[260](index=260&type=chunk) - The company relies heavily on third-party licenses (e.g., from Affibody and Pierre Fabre) and third-party organizations for manufacturing (CMOs) and clinical trials (CROs), where failure to perform could significantly delay development programs[360](index=360&type=chunk)[457](index=457&type=chunk)[465](index=465&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=108&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) No material change in the planned use of IPO proceeds has occurred since the Final Prospectus disclosure - The planned use of proceeds from the company's IPO has not materially changed from what was disclosed in the Final Prospectus[509](index=509&type=chunk) [Item 5. Other Information](index=109&type=section&id=Item%205.%20Other%20Information) Several directors and officers adopted Rule 10b5-1 trading plans for future sales of company securities - During the quarter, several executives, including the CEO, COO, and CLO, adopted Rule 10b5-1 trading plans for the sale of company stock[512](index=512&type=chunk)[513](index=513&type=chunk)