Company Overview - Upstream Bio, Inc. is a clinical-stage biotechnology company focused on developing treatments for inflammatory diseases, particularly severe respiratory disorders [2] - The company is advancing verekitug, a monoclonal antibody targeting the receptor for thymic stromal lymphopoietin, which is involved in inflammatory responses [2] - Verekitug is currently in separate Phase 2 trials for severe asthma and chronic rhinosinusitis with nasal polyps, with plans to initiate development for chronic obstructive pulmonary disease [2] Upcoming Events - Rand Sutherland, MD, MPH, the CEO of Upstream Bio, will present at the 43rd Annual J.P. Morgan Healthcare Conference on January 13, 2025, at 2:15 p.m. PT [1] - A live webcast of the presentation will be available on the company's website, with a replay posted afterward [1]

Core Insights - Upstream Bio, Inc. has appointed Allison Ambrose as General Counsel, bringing over 15 years of legal experience in corporate governance, securities law, and compliance [1][2] - The company is focused on developing verekitug, a treatment for severe respiratory disorders, and aims to address unmet medical needs in this area [3] Company Overview - Upstream Bio is a clinical-stage biotechnology company specializing in treatments for inflammatory diseases, particularly severe respiratory disorders [3] - The company is advancing verekitug, a monoclonal antibody targeting the receptor for thymic stromal lymphopoietin, currently in Phase 2 trials for severe asthma and chronic rhinosinusitis with nasal polyps [3] - Plans are in place to initiate development for chronic obstructive pulmonary disease [3] Leadership and Strategy - Allison Ambrose's role will be crucial in providing legal and strategic counsel as the company optimizes its operations to focus on developing verekitug [2] - The CEO, Rand Sutherland, emphasized the importance of Ambrose's experience in guiding growth-stage companies towards their business objectives [2]

Company Overview - Upstream Bio, Inc. (NASDAQ: UPB) completed its IPO in October 2024, raising approximately $293 million [2] Investment Positioning - The company is leveraging a unique approach in the biotech sector, positioning itself favorably for future success [2]

Company Overview - Upstream Bio, Inc. is a clinical-stage biotechnology company focused on developing treatments for inflammatory diseases, particularly severe respiratory disorders [4] - The company is advancing a monoclonal antibody named verekitug, which targets the receptor for thymic stromal lymphopoietin, a key cytokine involved in inflammatory responses [4] - Verekitug is currently in separate Phase 2 trials for severe asthma and chronic rhinosinusitis with nasal polyps, with plans to initiate development for chronic obstructive pulmonary disease [4] Industry Context - Upstream Bio will be added to the Russell 2000® index effective December 23, 2024, which is significant for its visibility and potential investment interest [1] - The Russell 2000® Index represents approximately 10% of the total market capitalization of the Russell 3000® Index and includes around 2,000 of the smallest securities based on market cap [3] - As of December 2023, approximately $10.5 trillion in assets are benchmarked against the Russell US indexes, indicating the importance of these indexes for investment managers and institutional investors [2]

Financial Performance - As of September 30, 2024, the company reported net losses of $16.0 million for the three months ended September 30, 2024, compared to $3.1 million for the same period in 2023, and net losses of $41.6 million for the nine months ended September 30, 2024, compared to $8.7 million for the same period in 2023[150]. - The company recorded a net loss of $15.99 million for the three months ended September 30, 2024, compared to a net loss of $3.1 million for the same period in 2023, reflecting an increase in losses of $12.89 million[178]. - Net loss for the nine months ended September 30, 2024, was $41.6 million, compared to a net loss of $8.7 million in the same period of 2023, an increase of $32.9 million[187]. Cash and Investments - The company has accumulated a deficit of $169.5 million as of September 30, 2024, with cash, cash equivalents, and short-term investments totaling $220.7 million[150]. - Cash, cash equivalents, and short-term investments totaled $220.7 million as of September 30, 2024, following gross proceeds of $400.0 million from sales of Preferred Stock[197]. - Net cash used in operating activities was $39.6 million for the nine months ended September 30, 2024, compared to $21.8 million in 2023, an increase of $17.8 million[199]. - Net cash used in investing activities was $101.4 million for the nine months ended September 30, 2024, compared to $77.6 million in 2023[203]. Revenue and Collaborations - The company has not generated any revenue from product sales since inception and does not expect to do so until regulatory approval and commercialization of its product candidates[154]. - Collaboration revenue from related parties remained stable at $0.6 million for both the three months ended September 30, 2024, and 2023[179]. - Collaboration revenue decreased to $1.8 million for the nine months ended September 30, 2024, down from $1.9 million in the same period of 2023, primarily related to clinical trials for severe asthma[188]. Expenses - Total operating expenses increased to $53.2 million for the nine months ended September 30, 2024, compared to $27.7 million in 2023, reflecting a rise of $25.5 million[187]. - Research and development expenses increased to $15.4 million for the three months ended September 30, 2024, compared to $7.8 million for the same period in 2023, representing a $7.6 million increase[180]. - Research and development expenses rose significantly to $41.2 million for the nine months ended September 30, 2024, up from $20.2 million in 2023, an increase of $21.0 million[189]. - General and administrative expenses rose to $4.1 million for the three months ended September 30, 2024, up from $2.2 million in the same period in 2023, marking an increase of $1.8 million[184]. - General and administrative expenses increased to $12.0 million for the nine months ended September 30, 2024, compared to $7.5 million in 2023, marking a rise of $4.5 million[194]. Future Outlook - The company expects to incur significant net operating losses for the foreseeable future, with anticipated increases in expenses related to ongoing clinical trials and regulatory approvals[151]. - The company expects research and development expenses to increase in the future as it advances verekitug through clinical trials[168]. - The company expects increased research and development and general administrative expenses as it advances clinical trials for verekitug and other potential product candidates[207]. - The company anticipates needing additional financing to support ongoing operations and may rely on equity offerings or debt financings to meet cash requirements[154]. - The company expects to finance operations through equity offerings, debt financings, collaborations, and licensing arrangements until substantial product revenue is generated[210]. IPO and Financing - The company completed its initial public offering (IPO) in October 2024, issuing 17,250,000 shares at a public price of $17.00 per share, resulting in approximately $268.7 million in net proceeds after deducting underwriting discounts and offering costs[150]. - The company has received total gross proceeds of $400.0 million from the issuance and sale of its Series A and Series B redeemable convertible preferred stock as of September 30, 2024[149]. Tax and Royalties - The company has federal net operating losses carryforwards of $25.0 million and state net operating losses of $27.6 million as of December 31, 2023[177]. - The company recorded a full valuation allowance of its deferred tax asset position, indicating uncertainty in utilizing deferred tax assets[176]. - The company is required to pay Regeneron mid-single-digit percentage royalties on aggregate worldwide net sales of a Royalty Product during the royalty term[213]. - The company has not made any royalty payments to Lonza under the Lonza License Agreement to date[217]. - The company has not made any royalty payments to Regeneron under the Regeneron Letter Agreement to date[214]. Operational Matters - The company entered into a three-year lease agreement for office space with an initial base rent of approximately $0.7 million for the first year, increasing to approximately $0.8 million for the second and third years[218]. - The company is classified as a smaller reporting company, with a market value of common stock held by non-affiliates less than $700 million and annual revenue below $100 million[226]. - There have been no material changes in the company's internal control over financial reporting during the quarter ended September 30, 2024[228]. - The company maintains effective disclosure controls and procedures as of the end of the reporting period[227]. - The increase in research and development expenses was primarily driven by a $4.6 million rise in expenses related to the verekitug program and $3.0 million in unallocated expenses[180]. - Personnel expenses within general and administrative functions increased by $1.5 million, largely due to headcount growth[184]. - Interest income for the three months ended September 30, 2024, was $2.9 million, an increase of $1.4 million compared to $1.5 million for the same period in 2023[186]. - Interest income increased to $7.0 million for the nine months ended September 30, 2024, up from $2.6 million in 2023, representing an increase of $4.4 million[196].

Financial Performance - The net loss for Q3 2024 was $16.0 million, compared to a net loss of $3.1 million for the same period in 2023, representing an increase of 416.1%[8]. - Loss from operations for Q3 2024 was $(18,893,000), compared to $(9,386,000) in Q3 2023, indicating a 101.3% increase in losses[14]. - Net loss for Q3 2024 was $(15,992,000), significantly higher than $(3,102,000) in Q3 2023, reflecting a 415.5% increase in net losses[14]. - Collaboration revenue for Q3 2024 was $607,000, a decrease of 2.3% from $621,000 in Q3 2023[14]. - For the nine months ended September 30, 2024, collaboration revenue was $1,757,000, down from $1,930,000 in the same period of 2023, a decrease of 8.9%[14]. - Total operating expenses for Q3 2024 were $19,500,000, up 95.0% from $10,007,000 in Q3 2023[14]. - Interest income for Q3 2024 was $2,904,000, an increase from $1,527,000 in Q3 2023, marking an increase of 90.0%[14]. - Total other income, net for Q3 2024 was $2,901,000, down from $6,284,000 in Q3 2023, a decrease of 53.8%[14]. - The company reported a change in fair value of preferred stock tranche right liabilities of $4,773,000 in Q3 2023, which was not present in Q3 2024[14]. Cash and Assets - As of September 30, 2024, Upstream Bio had cash, cash equivalents, and short-term investments of $220.7 million, up from $109.8 million as of December 31, 2023[5]. - Upstream Bio's total assets increased to $232.7 million as of September 30, 2024, compared to $117.2 million as of December 31, 2023[13]. - Upstream Bio completed an upsized IPO, raising approximately $293 million in gross proceeds, extending its runway through 2027[3]. Research and Development - Research and development expenses for Q3 2024 were $15.4 million, a 97.4% increase from $7.8 million in Q3 2023, primarily due to increased clinical and manufacturing expenses related to the verekitug program[6]. - Research and development expenses increased to $15,433,000 in Q3 2024, compared to $7,788,000 in Q3 2023, representing a 97.0% increase[14]. - Upstream Bio expects to report top-line data from ongoing Phase 2 clinical trials in severe asthma and CRSwNP in the second half of 2026 and 2025, respectively[1]. - The company anticipates dosing its first patient in a Phase 2 clinical trial for COPD in the second half of 2025[1]. - Verekitug demonstrated a 54% reduction in fractional exhaled nitric oxide (FeNO) and a 65% reduction in blood eosinophils at 12 weeks in Phase 1b trials[3]. General and Administrative Expenses - General and administrative expenses for Q3 2024 were $4.1 million, up from $2.2 million in Q3 2023, reflecting a 86.4% increase driven by higher personnel expenses[7]. - General and administrative expenses rose to $4,067,000 in Q3 2024, up 83.4% from $2,219,000 in Q3 2023[14]. Leadership Changes - The company appointed Daniella Beckman to its Board of Directors, bringing over 20 years of financial and operational leadership experience in the biotechnology industry[4].