A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years. As such, the Zacks rating upgrade for Vincerx Pharma is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price. The change in a company's future earnings potential, as reflected in earnings estimate revisions ...

Table of Contents 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, 2024 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 001-39244 Vincerx Pharma, Inc. (Exact name of Registrant as Specified in Its Charter) Delaware 83-3197402 (State o ...

Exhibit 99.1 Vincerx Pharma Reports First Quarter 2024 Financial Results and Provides Corporate Update Vincerx continued to progress Phase 1 dose-escalation studies for VIP943, a potentially best-in-class anti- CD123 antibody-drug conjugate (ADC), and VIP236, a first-in-class small molecule-drug conjugate (SMDC) The National Institutes of Health (NIH) and Vincerx announced positive results from enitociclib Phase 1 combination study, reporting a fourth partial response (PR) in a patient with peripheral T-cel ...

Exhibit 99.1 VersAptx™ Platform Vincerx Pharma Reports Fourth Quarter and Full Year 2023 Financial Results and Corporate Update VIP236, first-in-class small molecule-drug conjugate (SMDC), preliminary Phase 1 data and update on pipeline progress will be presented by management at a virtual investor event on April 8 at 2:00 PM PT Phase 1 trial ongoing for VIP943, a best-in-class anti-CD123 antibody-drug conjugate (ADC); preliminary data anticipated on or around the 2024 European Hematology Association (EHA) ...

Table of Contents 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 001-39244 Vincerx Pharma, Inc. (Exact name of Registrant as Specified in Its Charter) Delaware 83-3197402 (State or Oth ...

Part I - Financial Information [Financial Statements](index=7&type=section&id=ITEM%201.%20Financial%20Statements) The company reported significant net losses and a substantial decrease in total assets, raising substantial doubt about its ability to continue as a going concern [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets significantly decreased to **$26.3 million** from **$59.3 million**, primarily due to reduced cash and marketable securities, leading to a sharp decline in stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 (Unaudited) | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $15,078 | $11,663 | | Short-term marketable securities | $5,724 | $40,796 | | Total current assets | $22,818 | $55,964 | | **Total assets** | **$26,276** | **$59,286** | | **Liabilities & Equity** | | | | Total current liabilities | $8,846 | $9,156 | | **Total liabilities** | **$10,535** | **$11,618** | | **Total stockholders' equity** | **$15,741** | **$47,668** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported a **net loss of $9.7 million** for Q3 2023 and **$35.2 million** for the nine months, primarily driven by reduced operating expenses Statement of Operations Highlights (in thousands, except per share amounts) | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $6,800 | $11,066 | $25,260 | $40,779 | | General and administrative | $3,517 | $4,525 | $11,816 | $14,903 | | Total operating expenses | $10,317 | $16,901 | $37,076 | $58,151 | | **Net loss** | **($9,715)** | **($16,879)** | **($35,207)** | **($51,724)** | | Net loss per share | ($0.46) | ($0.80) | ($1.66) | ($2.46) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities decreased to **$32.4 million**, while investing activities provided **$35.8 million**, resulting in a **$3.4 million** increase in cash and equivalents Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(32,434) | $(45,787) | | Net cash provided by (used in) investing activities | $35,750 | $(20,195) | | Net cash provided by financing activities | $96 | $242 | | **Net increase (decrease) in cash** | **$3,415** | **$(65,696)** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes highlight the company's dependence on Bayer-licensed cancer therapies, significant accounting policies, and substantial doubt about its ability to continue as a going concern due to future capital needs and potential **$1.0 billion** milestone payments - The company concluded there is **substantial doubt** about its ability to continue as a going concern for one year, requiring additional capital before the financial statement issuance anniversary[40](index=40&type=chunk) - Under the Bayer License Agreement, the company may incur aggregate milestone payments exceeding **$1.0 billion** upon successful commercialization of at least five licensed products, in addition to royalties[54](index=54&type=chunk) - As of September 30, 2023, the company held approximately **$20.8 million** in cash, cash equivalents, and marketable securities, projected to fund operations into late 2024[38](index=38&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=20&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's Bayer-licensed pipeline, highlighting decreased operating expenses, sufficient cash to fund operations into late 2024, and substantial doubt about its going concern ability without additional capital [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Operating expenses significantly decreased for both the three and nine months ended September 30, 2023, primarily due to reductions in research and development and general and administrative costs Change in Operating Expenses (in thousands) | Expense Category | YTD 2023 | YTD 2022 | Change | | :--- | :--- | :--- | :--- | | Research and development | $25,260 | $40,779 | $(15,519) | | General and administrative | $11,816 | $14,903 | $(3,087) | | **Total operating expenses** | **$37,076** | **$58,151** | **$(21,075)** | - The **$15.5 million** decrease in R&D expenses for the nine months ended September 30, 2023, was primarily driven by reduced manufacturing services, stock-based compensation, clinical services, and payroll costs[95](index=95&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) The company's **$20.8 million** in cash is expected to fund operations into late 2024, but recurring losses and future capital needs create substantial doubt about its ability to continue as a going concern - The company's existing cash of approximately **$20.8 million** is expected to fund operations and capital requirements into late 2024[104](index=104&type=chunk) - Management concluded there is **substantial doubt** about the company's ability to continue as a going concern for one year from the financial statement issuance due to the need for additional capital[109](index=109&type=chunk) - Future obligations include significant milestone payments to Bayer, potentially exceeding **$1.0 billion** in aggregate if at least five licensed products are successfully commercialized[103](index=103&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rate and foreign currency fluctuations, but due to short-term investments and USD-denominated operations, a 10% change would not materially impact financial statements - The company does not anticipate material risks from interest rate changes due to the short-term nature of its investments[121](index=121&type=chunk) - Future operating results are not expected to be significantly affected by foreign currency transaction risk as operations are principally denominated in U.S. dollars[122](index=122&type=chunk) [Controls and Procedures](index=26&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting during the third quarter - The CEO and CFO concluded that as of September 30, 2023, the company's disclosure controls and procedures were **effective** at the reasonable assurance level[125](index=125&type=chunk) - There were no material changes in internal control over financial reporting during the three months ended September 30, 2023[126](index=126&type=chunk) Part II - Other Information [Legal Proceedings](index=28&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings and is unaware of any pending or threatened actions that could adversely affect its operations - As of the report date, the company is not involved in any **material legal proceedings**[128](index=128&type=chunk) [Risk Factors](index=28&type=section&id=ITEM%201A.%20Risk%20Factors) The company faces extensive risks, including substantial dependence on the Bayer License Agreement, recurring net losses, significant capital needs, going concern doubts, early-stage product development, regulatory hurdles, competition, intellectual property issues, and potential Nasdaq delisting - The company's entire product pipeline is licensed from Bayer, creating high dependence on the Bayer License Agreement, with potential termination if obligations are not met[129](index=129&type=chunk)[130](index=130&type=chunk) - The company has incurred **net losses** since inception and faces **substantial doubt** about its ability to continue as a going concern without raising additional capital[176](index=176&type=chunk)[182](index=182&type=chunk) - On September 14, 2023, the company received a Nasdaq notice for failing to meet the **$1.00 minimum bid price** requirement, potentially leading to delisting[285](index=285&type=chunk) [Exhibits](index=58&type=section&id=ITEM%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents and certifications from the CEO and CFO as required by the Sarbanes-Oxley Act - Exhibits filed include corporate governance documents and certifications by the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act of 2002[304](index=304&type=chunk)

Table of Contents 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 001-39244 Vincerx Pharma, Inc. (Exact name of Registrant as Specified in Its Charter) Delaware 83-3197402 (State or ...

Part I - Financial Information [Financial Statements](index=8&type=page&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the three months ended March 31, 2023, including the balance sheet showing total assets of $47.4 million, the statement of operations reporting a net loss of $14.3 million, and cash, cash equivalents, and marketable securities totaling $39.8 million [Note 1: Nature of Business](index=12&type=section&id=NOTE%201.%20NATURE%20OF%20BUSINESS) Vincerx Pharma is a clinical-stage biopharmaceutical company focused on developing new cancer therapies, with its pipeline exclusively licensed from Bayer - The company is a clinical-stage biopharmaceutical firm focused on cancer treatments[39](index=39&type=chunk) - The entire current product pipeline is licensed exclusively from Bayer, including a clinical-stage small molecule program and a preclinical bioconjugation platform (ADCs and SMDCs)[39](index=39&type=chunk) [Note 3: Bayer License](index=14&type=section&id=NOTE%203.%20BAYER%20LICENSE) The company entered an exclusive, worldwide license agreement with Bayer, involving an upfront fee, a milestone payment for VIP236, and potential future milestone payments exceeding $1.0 billion plus royalties - The company paid a $5.0 million upfront license fee to Bayer in January 2021[56](index=56&type=chunk) - A $1.0 million development milestone payable to Bayer was recorded in connection with the IND filing for VIP236[56](index=56&type=chunk) - Future milestone payments could range from $110.0 million to $318.0 million per product and could exceed $1.0 billion in aggregate for five licensed products, plus ongoing royalties[57](index=57&type=chunk) [Note 6: Commitments and Contingencies](index=16&type=section&id=NOTE%206.%20COMMITMENTS%20AND%20CONTINGENCIES) As of March 31, 2023, the company had operating lease liabilities of approximately $3.3 million and right-of-use assets of $2.9 million, with a portion of its headquarters subleased - As of March 31, 2023, the company had operating lease liabilities of $3.3 million and right-of-use assets of $2.9 million[67](index=67&type=chunk) - The company subleased unused office space, receiving $150,000 in payments during the three months ended March 31, 2023, which offset rent expense[68](index=68&type=chunk) Condensed Consolidated Balance Sheet (Unaudited) | | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | **Current Assets** | | | | Cash and cash equivalents | $4,489 | $11,663 | | Short-term marketable securities | $35,279 | $40,796 | | Total current assets | $44,007 | $55,964 | | **Total Assets** | **$47,448** | **$59,286** | | **Current Liabilities** | | | | Accounts payable | $6,173 | $4,065 | | Total current liabilities | $10,712 | $9,156 | | **Total Liabilities** | **$12,982** | **$11,618** | | **Total Stockholders' Equity** | **$34,466** | **$47,668** | Condensed Consolidated Statement of Operations (Unaudited) | | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | General and administrative | $4,512 | $5,656 | | Research and development | $10,587 | $15,971 | | **Total operating expenses** | **$15,099** | **$21,627** | | Loss from operations | ($15,099) | ($21,627) | | **Net loss** | **($14,341)** | **($16,424)** | | Net loss per common share, basic and diluted | ($0.68) | ($0.79) | Condensed Consolidated Statement of Cash Flows (Unaudited) | | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($13,092) | ($15,028) | | Net cash provided by investing activities | $5,885 | $0 | | Net cash provided by financing activities | $3 | $0 | | **Net decrease in cash, cash equivalents, and restricted cash** | **($7,174)** | **($15,011)** | | Cash, cash equivalents, and restricted cash at end of period | $4,559 | $96,553 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=page&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's Q1 2023 financial performance, noting decreased operating expenses and a net loss of $14.3 million, with $39.8 million in cash expected to fund operations into late 2024, though substantial additional funding is anticipated [Results of Operations](index=23&type=section&id=Results%20of%20Operations) For the three months ended March 31, 2023, total operating expenses decreased to $15.1 million from $21.6 million, narrowing the net loss to $14.3 million, driven by reductions in R&D and G&A costs Comparison of Operating Results (in thousands) | | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change | | :--- | :--- | :--- | :--- | | General and administrative | $4,512 | $5,656 | ($1,144) | | Research and development | $10,587 | $15,971 | ($5,384) | | **Total operating expenses** | **$15,099** | **$21,627** | **($6,528)** | | **Net loss** | **($14,341)** | **($16,424)** | **$2,083** | - R&D expenses decreased by **$5.4 million**, primarily due to a **$3.1 million** decline in stock-based compensation and a **$1.4 million** drop in payroll costs from a June 2022 headcount reduction[101](index=101&type=chunk) - General and administrative expenses decreased by **$1.1 million**, mainly due to a **$1.1 million** decline in stock-based compensation expense[102](index=102&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) The company, having generated no revenue, expects increased expenses from R&D and clinical trials, with $39.8 million in cash projected to fund operations into late 2024, but substantial additional funding will be required - As of March 31, 2023, the company had approximately **$39.8 million** in cash, cash equivalents, and marketable securities[109](index=109&type=chunk) - Existing cash is expected to fund operating expenses and capital requirements into late 2024, based on current plans and a **33%** workforce reduction implemented in June 2022[109](index=109&type=chunk) - The company anticipates needing substantial additional funding to continue operations, given the costs of clinical trials and significant future milestone payments to Bayer, which could exceed **$1.0 billion**[108](index=108&type=chunk)[109](index=109&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=26&type=page&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from interest rate changes and foreign currency fluctuations, but management does not anticipate these risks to be material due to short-term investments and U.S. dollar-denominated operations - The company does not anticipate being exposed to material risks from changes in interest rates due to the short-term nature of its investments[123](index=123&type=chunk) - Foreign currency risk is not expected to be significant as operations are principally denominated in U.S. dollars[124](index=124&type=chunk) [Controls and Procedures](index=26&type=page&id=ITEM%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that as of March 31, 2023, the company's disclosure controls and procedures were effective at the reasonable assurance level[127](index=127&type=chunk) - There were no changes in internal control over financial reporting during the three months ended March 31, 2023, that materially affected, or are reasonably likely to materially affect, internal controls[128](index=128&type=chunk) Part II - Other Information [Legal Proceedings](index=28&type=page&id=ITEM%201.%20Legal%20Proceedings) The company reports that it is not currently a party to any material legal proceedings and is unaware of any pending or threatened legal actions that would materially adversely affect its business - Vincerx is not currently a party to any material legal proceedings[131](index=131&type=chunk) [Risk Factors](index=28&type=page&id=ITEM%201A.%20Risk%20Factors) This section details significant risks that could adversely affect the company's business, including substantial dependence on the Bayer License Agreement, reliance on lead product candidates, the need for additional capital, and uncertainties of clinical development and regulatory approval [Risks Related to Discovery, Development, and Commercialization](index=28&type=section&id=Risks%20Related%20to%20the%20Discovery%2C%20Development%20and%20Commercialization%20of%20Our%20Product%20Candidates) The company's success is highly dependent on its early-stage lead product candidates (VIP236, VIP943, and enitociclib), facing risks of clinical trial failure, manufacturing challenges, and intense competition - The company is substantially dependent on the success of its lead product candidates: VIP236, VIP943, and enitociclib[140](index=140&type=chunk) - The company is at an early stage of development, and its product candidates may not be successfully developed, manufactured, or commercialized[143](index=143&type=chunk) - The company faces significant competition from other pharmaceutical and biotechnology companies with greater financial and technical resources[156](index=156&type=chunk) [Risks Related to Financial Position and Capital Needs](index=36&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) Vincerx has a limited operating history, has incurred net losses since inception, and expects to continue incurring significant losses, requiring substantial additional capital to finance operations and meet milestone payments to Bayer - The company has incurred net losses since inception and expects to continue incurring significant losses for the foreseeable future[178](index=178&type=chunk) - Substantial additional capital is required to finance operations; failure to raise capital could force delays, reductions, or elimination of research and development programs[180](index=180&type=chunk) - The Bayer License Agreement obligates the company to make significant milestone and royalty payments, some of which are due before any potential commercialization[184](index=184&type=chunk) [Risks Related to Regulatory Approval and Legal Compliance](index=38&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20and%20Other%20Legal%20Compliance%20Matters) The company's product candidates are subject to extensive and lengthy government regulation and may never obtain necessary U.S. or foreign regulatory approvals, facing risks of adverse side effects, failure to obtain accelerated approval, and post-marketing requirements - The company may be unable to obtain U.S. or foreign regulatory approvals, which is a costly, time-consuming, and uncertain process[188](index=188&type=chunk) - Product candidates may cause adverse events or undesirable side effects that could inhibit regulatory approval or prevent market acceptance[193](index=193&type=chunk) - Even if approved, products will be subject to significant post-marketing regulatory requirements, oversight, and potential sanctions for non-compliance[198](index=198&type=chunk) [Risks Related to Dependence on Third Parties](index=43&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) Vincerx relies heavily on third-party manufacturers for all clinical and potential commercial supply and on contract research organizations (CROs) to conduct clinical trials, introducing significant risks to its development programs - The company has no manufacturing capabilities and relies on third-party manufacturers for the development, clinical trials, and commercialization of its product candidates[216](index=216&type=chunk) - The company relies on contract research organizations (CROs) and other third parties to conduct clinical trials, and is therefore unable to directly control the timing and conduct of these trials[224](index=224&type=chunk) [Risks Related to Intellectual Property](index=45&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company's success depends on obtaining and maintaining patent and trade secret protection for its licensed product candidates, facing risks of patent challenges, invalidation, and expensive lawsuits to protect or defend against infringement claims - Failure to comply with obligations under the Bayer License Agreement could result in the loss of essential intellectual property rights for all current product candidates[225](index=225&type=chunk) - The company's ability to protect its product candidates is uncertain, as patent applications may not be issued, and issued patents may be found invalid or unenforceable[229](index=229&type=chunk)[230](index=230&type=chunk) - The company may be involved in lawsuits to protect its patents or defend against claims of infringement, which are expensive, time-consuming, and have uncertain outcomes[239](index=239&type=chunk) [General Risk Factors](index=53&type=section&id=General%20Risk%20Factors) This section outlines general business and investment risks, including volatile stock price, concentrated ownership among executive officers and directors, and increased burdens as an emerging growth public company with limited management experience - The company's stock price has been volatile and thinly traded, which can lead to wide price fluctuations[275](index=275&type=chunk) - Ownership is concentrated among executive officers and directors, allowing them to exercise significant influence on matters requiring stockholder approval[291](index=291&type=chunk) - The company is an "emerging growth company" and faces increased expenses and administrative burdens as a public company, with management having limited experience in this area[286](index=286&type=chunk)[294](index=294&type=chunk) [Exhibits](index=58&type=page&id=ITEM%206.%20Exhibits) This section lists the exhibits filed as part of the quarterly report, including corporate governance documents and certifications pursuant to the Sarbanes-Oxley Act List of Exhibits | Exhibit No. | Description | | :--- | :--- | | 3.1 | Second Amended and Restated Certificate of Incorporation | | 3.2 | Amended and Restated Bylaws | | 31.1 | Principal Executive Officer's Certification (SOX 302) | | 31.2 | Principal Financial Officer's Certification (SOX 302) | | 32.1, 32.2 | Certifications Pursuant to 18 U.S.C. § 1350 (SOX 906) | | 101 Series | Inline XBRL Documents |

Revenue Generation - The company has not recognized any revenue to date and does not expect to generate revenue in the foreseeable future[428]. Expenses - Research and development expenses increased by $12.1 million in 2022, primarily due to manufacturing services ($9.1 million) and third-party research ($7.0 million)[437]. - General and administrative expenses decreased by approximately $3.6 million in 2022, mainly due to a decline in stock-based compensation[439]. - The total operating expenses for 2022 were $73.6 million, an increase of $10.9 million compared to 2021[436]. - The company anticipates significant increases in expenses related to ongoing preclinical and clinical development activities[447]. - The company incurred a net loss of approximately $65.4 million for the year ended December 31, 2022, which included approximately $12.4 million related to stock-based compensation[461]. - Net cash used in operating activities was approximately $59.6 million for the year ended December 31, 2022, compared to $33.4 million for the year ended December 31, 2021, indicating a significant increase in operational expenses[461]. - Cash used in investing activities was approximately $40.6 million for the year ended December 31, 2022, primarily due to purchases of marketable securities totaling $43.0 million[462]. - Net cash provided by financing activities was $0.3 million for the year ended December 31, 2022, a substantial decrease from $88.5 million in the previous year[463]. Net Loss - The net loss for the year ended December 31, 2022, was $65.4 million, compared to a net loss of $39.3 million in 2021, reflecting an increase of $26.1 million[436]. Cash Position - As of December 31, 2022, the company had approximately $52.5 million in cash, cash equivalents, and marketable securities[449]. - The company expects cash used in operating activities to increase as it continues and expands clinical trials and seeks marketing approval for its product candidates[460]. - The company has cash equivalents and short-term marketable securities as of December 31, 2022, which are not significantly impacted by interest rate changes[484]. Strategic Decisions - A strategic plan was approved in June 2022, resulting in a 33% workforce reduction to streamline resources and extend cash runway[440]. - The company has consolidated its leased office space and subleased unused space for a term of 18 months at a base rent of $50,000 per month[458]. Obligations and Future Funding - The company paid Bayer a $5.0 million upfront license fee and will be responsible for future milestone payments ranging from $110.0 million to $318.0 million per licensed product, potentially exceeding $1.0 billion in total[448]. - The company is obligated to pay a $1.0 million development milestone to Bayer under the Bayer License Agreement following the successful filing of its IND for VIP236 in December 2022[470]. - The company’s future funding requirements will depend on various factors, including the development and commercialization of product candidates and technologies[451]. Valuation and Tax Assets - The company has recorded a full valuation allowance to reduce its net deferred income tax assets to zero, indicating uncertainty regarding the realization of these assets[472]. Impact of External Factors - The company’s business operations have been adversely affected by health pandemics and economic events, which may continue to impact its financial position and results of operations[455]. Financial Reporting - The company is classified as an "emerging growth company" and plans to utilize the extended transition period for new financial accounting standards until the end of the 2025 fiscal year[481]. Interest Rate and Currency Risk - A hypothetical 10% change in interest rates would not have a material impact on the company's consolidated financial statements[485]. - The company's operations are primarily denominated in U.S. dollars, minimizing exposure to foreign currency transaction risk[486]. - A hypothetical 10% change in foreign exchange rates would not have a material impact on the company's consolidated financial statements[486]. Warrant Liabilities - The change in fair value of warrant liabilities decreased from $23.4 million in 2021 to $6.3 million in 2022, primarily due to a drop in the stock price from $10.19 to $1.02[442].

Forward-Looking Statements This section outlines uncertainties and risks regarding future financial and business performance, product development, and external factors - This report contains forward-looking statements regarding future financial and business performance, strategic plans, product development, clinical trials, intellectual property, capital requirements, and the impact of external factors like the COVID-19 pandemic. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk) Frequently Used Terms This section defines key terminology and abbreviations used throughout the report for clarity and consistency - The report defines key terms and abbreviations used throughout the document, including company references (Vincerx, LSAC), drug development terms (ADC, AML, BLA, IND, KSPi, SMDC), and regulatory/legal terms (Affordable Care Act, BPCIA, Exchange Act, FDA, JOBS Act, Securities Act, USPTO)[13](index=13&type=chunk)[14](index=14&type=chunk)[18](index=18&type=chunk) Summary Risk Factors This section provides a high-level overview of the principal risks impacting the company's business, operations, and financial condition - The company's business is subject to numerous risks, including reliance on the Bayer License Agreement, adverse effects from epidemics like COVID-19, dependence on the success of lead product candidate enitociclib, early-stage development challenges, lack of FDA approval for its drug classes, and reliance on unverified preclinical/clinical data from Bayer[17](index=17&type=chunk)[19](index=19&type=chunk)[21](index=21&type=chunk) - Additional risks include potential failure of new product candidates, unreliability of early-stage clinical trial results, market acceptance issues, intense competition, inefficient resource allocation, product liability, unfavorable reimbursement practices, high costs and delays in clinical trials, limited operating history, and significant net losses requiring substantial future capital[17](index=17&type=chunk)[19](index=19&type=chunk)[21](index=21&type=chunk) Part I This part presents the company's unaudited condensed consolidated financial statements, MD&A, market risk, and controls and procedures [ITEM 1. Financial Statements](index=8&type=section&id=ITEM%201.%20Financial%20Statements) This section presents Vincerx Pharma, Inc.'s unaudited condensed consolidated financial statements and notes for the specified periods [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2022 (Unaudited) | December 31, 2021 | | :--------------------------------- | :-------------------------- | :------------------ | | Cash | $80,857 | $111,459 | | Total current assets | $82,386 | $111,841 | | Total assets | $87,744 | $117,676 | | Common stock warrant liabilities | $34 | $6,447 | | Total current liabilities | $10,451 | $13,919 | | Total liabilities | $13,381 | $17,355 | | Total stockholders' equity | $74,363 | $100,321 | | Accumulated deficit | $(90,816) | $(55,971) | - Cash decreased by **$30.6 million** from December 31, 2021, to June 30, 2022, reflecting significant cash usage. Total assets decreased by approximately **$29.9 million**, and total stockholders' equity decreased by approximately **$25.9 million** over the same period[24](index=24&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Condensed Consolidated Statements of Operations and Comprehensive Loss Highlights (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | General and administrative | $4,722 | $6,695 | $10,378 | $11,486 | | Research and development | $13,742 | $10,698 | $29,713 | $15,532 | | Restructuring | $1,159 | $— | $1,159 | $— | | Total operating expenses | $19,623 | $17,393 | $41,250 | $27,018 | | Loss from operations | $(19,623) | $(17,393) | $(41,250) | $(27,018) | | Change in fair value of warrant liabilities | $1,202 | $15,359 | $6,413 | $18,708 | | Net loss | $(18,421) | $(2,034) | $(34,845) | $(8,310) | | Net loss per common share, basic and diluted | $(0.88) | $(0.12) | $(1.66) | $(0.55) | - Net loss significantly increased for both the three and six months ended June 30, 2022, primarily due to higher research and development expenses and the recognition of restructuring costs, partially offset by a favorable change in the fair value of warrant liabilities[27](index=27&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Changes in Stockholders' Equity (in thousands) | Metric | Balance as of Jan 1, 2022 | Issuance of common stock from employee stock plans | Stock-based compensation | Cumulative translation adjustment | Net loss | Balance as of Jun 30, 2022 | | :-------------------------- | :------------------------ | :----------------------------------------------- | :---------------------- | :------------------------------ | :------- | :------------------------ | | Common Stock (Shares) | 21,057 | 132 | — | — | — | 21,189 | | Common Stock (Amount) | $2 | $— | $— | $— | $— | $2 | | Additional Paid-in Capital | $156,311 | $242 | $8,620 | $— | $— | $165,173 | | Accumulated Other Comprehensive Income (Loss) | $(21) | — | — | $25 | — | $4 | | Accumulated Deficit | $(55,971) | — | — | — | $(34,845) | $(90,816) | | Total Stockholders' Equity | $100,321 | $242 | $8,620 | $25 | $(34,845) | $74,363 | - Stockholders' equity decreased from **$100.3 million** at January 1, 2022, to **$74.4 million** at June 30, 2022, primarily due to a net loss of **$34.8 million**, partially offset by stock-based compensation and common stock issuance from employee plans[30](index=30&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(30,915) | $(11,612) | | Net cash used in investing activities | $— | $(5,228) | | Net cash provided by financing activities | $242 | $40,671 | | Net increase (decrease) in cash and restricted cash | $(30,644) | $23,831 | | Cash and restricted cash at end of the period | $80,920 | $85,623 | - Net cash used in operating activities significantly increased to **$30.9 million** for the six months ended June 30, 2022, compared to **$11.6 million** in the prior year, reflecting increased operational expenses. Financing activities provided substantially less cash in 2022 (**$0.2 million**) compared to 2021 (**$40.7 million**) due to warrant exercises in the prior year[33](index=33&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the condensed consolidated financial statements, covering business, accounting, and specific financial items [NOTE 1. Nature of Business](index=12&type=section&id=NOTE%201.%20NATURE%20OF%20BUSINESS) This note describes the company's core business as a clinical-stage biopharmaceutical entity and the impact of external factors - Vincerx Pharma, Inc. is a clinical-stage biopharmaceutical company focused on developing new cancer therapies, with its pipeline derived entirely from the Bayer License Agreement. The company's operations, and those of its third-party partners, have been and may continue to be adversely affected by the ongoing COVID-19 pandemic[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) [NOTE 2. Summary of Significant Accounting Policies](index=12&type=section&id=NOTE%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and policies applied in preparing the condensed consolidated financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information. The company adopted **ASU 2020-06** and **ASU 2021-04** on January 1, 2022, without material impact on its financial statements[39](index=39&type=chunk)[40](index=40&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) [NOTE 3. Bayer License](index=13&type=section&id=NOTE%203.%20BAYER%20LICENSE) This note details the terms, upfront fees, and future milestone and royalty obligations of the exclusive license agreement with Bayer - Vincerx Pharma holds an exclusive, worldwide, royalty-bearing license from Bayer for a clinical-stage small molecule drug program (PTEFb inhibitor) and a preclinical bioconjugation platform (ADCs and SMDCs)[45](index=45&type=chunk) - The company paid a **$5.0 million** upfront license fee to Bayer in January 2021. Future obligations include milestone payments ranging from **$110.0 million** to **$318.0 million** per licensed product, potentially exceeding **$1 billion** for five products, plus **single-digit to low double-digit percentage royalties** on net commercial sales[46](index=46&type=chunk)[47](index=47&type=chunk) - As of June 30, 2022, no development or commercial sales milestones under the Bayer License Agreement have been met[47](index=47&type=chunk) [NOTE 4. Restructuring](index=13&type=section&id=NOTE%204.%20RESTRUCTURING) This note provides details on the strategic restructuring plan, including workforce reductions and associated severance expenses - On June 4, 2022, the Board approved a strategic plan to prioritize enitociclib clinical studies and the bioconjugation platform, including a **33% reduction** in full-time employees and other cost reduction measures[48](index=48&type=chunk) - The company expects to incur **up to approximately $2.5 million** in severance and related expenses during 2022, with **approximately $1.2 million** incurred through June 30, 2022[50](index=50&type=chunk) Restructuring Accrued Balance Activity (in thousands) | Metric | Restructuring liabilities at Dec 31, 2021 | Charges | Cash payments | Restructuring liabilities at Jun 30, 2022 | | :------------------ | :-------------------------------------- | :-------- | :------------ | :-------------------------------------- | | Workforce reduction | $— | $1,159 | $(528) | $631 | [NOTE 5. Fair Value Measurement](index=14&type=section&id=NOTE%205.%20FAIR%20VALUE%20MEASUREMENT) This note explains the methodologies and inputs used to determine the fair value of financial instruments, particularly warrant liabilities Common Stock Warrant Liabilities Fair Value (in thousands) | Metric | June 30, 2022 (Level 3) | December 31, 2021 (Level 3) | | :-------------------------- | :---------------------- | :-------------------------- | | Common stock warrant liabilities | $34 | $6,447 | | Total fair value | $34 | $6,447 | - The fair value of common stock warrant liabilities decreased significantly from **$6.4 million** at December 31, 2021, to **$34 thousand** at June 30, 2022, primarily due to a decrease in the common stock closing price from **$10.19** to **$1.32**[52](index=52&type=chunk)[55](index=55&type=chunk)[57](index=57&type=chunk) [NOTE 6. Commitments and Contingencies](index=15&type=section&id=NOTE%206.%20COMMITMENTS%20AND%20CONTINGENCIES) This note discloses the company's contractual obligations and potential liabilities, including operating lease commitments - As of June 30, 2022, the company had operating lease liabilities of **approximately $3.9 million** and right-of-use assets of **approximately $3.5 million**, stemming from a **5-year lease agreement** commenced in January 2021[58](index=58&type=chunk)[59](index=59&type=chunk) Future Minimum Lease Payments (in thousands) | Period | Amount | | :--------------------------------- | :------- | | Remaining period ended Dec 31, 2022 | $608 | | Year ended Dec 31, 2023 | $1,261 | | Year ended Dec 31, 2024 | $1,284 | | Year ended Dec 31, 2025 | $1,336 | | Total | $4,489 | | Less present value discount | $(591) | | Operating lease liabilities at Jun 30, 2022 | $3,898 | [NOTE 7. Stockholders' Equity](index=16&type=section&id=NOTE%207.%20STOCKHOLDERS'%20EQUITY) This note provides details on the components of stockholders' equity, including common stock, warrants, and restricted stock activity - As of June 30, 2022, there were **21,189,769 shares** of common stock outstanding and no preferred stock. The company had **3,295,000 private warrants** outstanding, with no public warrants remaining[61](index=61&type=chunk)[63](index=63&type=chunk) Restricted Stock Activity (Nonvested Shares) | Metric | Number of Shares (Jan 1, 2022) | Vested (Q1 2022) | Nonvested (Mar 31, 2022) | Vested (Q2 2022) | Nonvested (Jun 30, 2022) | | :-------------------------- | :----------------------------- | :--------------- | :----------------------- | :--------------- | :----------------------- | | Nonvested Shares | 182,686 | (33,203) | 149,483 | (27,493) | 121,990 | | Weighted Average Grant Date Fair Value per Share | $0.045 | — | $0.049 | — | $0.052 | - Unrecognized stock-based compensation related to restricted stock was approximately **$6.6 million** as of June 30, 2022, to be amortized over **2.0 years**[62](index=62&type=chunk) [NOTE 8. Equity Incentive Plans](index=16&type=section&id=NOTE%208.%20EQUITY%20INCENTIVE%20PLANS) This note describes the company's equity compensation plans, including stock options and stock-based compensation expense - As of June 30, 2022, **4,542,924 shares** were reserved for issuance under the **2020 Stock Incentive Plan**, with **599,546 options** available to grant[67](index=67&type=chunk) Stock Option Activity (in thousands, except per share amounts) | Metric | Outstanding at Jan 1, 2022 | Options granted | Options cancelled | Outstanding at Jun 30, 2022 | | :-------------------------- | :------------------------- | :-------------- | :---------------- | :-------------------------- | | Stock Options | 3,408 | 1,166 | (631) | 3,943 | | Weighted Average Exercise Price | $18.74 | $5.62 | $15.58 | $15.37 | | Weighted Average Remaining Contractual Life (years) | 9.2 | 10.0 | — | 8.5 | | Aggregate Intrinsic Value | $3 | $— | $— | $— | Total Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $2,200 | $4,401 | $5,684 | $7,078 | | General and administrative | $1,162 | $2,236 | $2,936 | $4,274 | | Total | $3,362 | $6,637 | $8,620 | $11,352 | [NOTE 9. Net Loss Per Share Applicable to Common Stockholders](index=17&type=section&id=NOTE%209.%20NET%20LOSS%20PER%20SHARE%20APPLICABLE%20TO%20COMMON%20STOCKHOLDERS) This note presents the calculation of basic and diluted net loss per common share for the reporting periods Net Loss Per Common Share (in thousands, except per share number) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(18,421) | $(2,034) | $(34,845) | $(8,310) | | Weighted average common shares outstanding, basic and diluted | 20,995 | 16,350 | 20,946 | 15,050 | | Net loss per common share, basic and diluted | $(0.88) | $(0.12) | $(1.66) | $(0.55) | - Diluted net loss per common share increased significantly to **$(0.88)** for **Q2 2022** and **$(1.66)** for the six months ended June 30, 2022, compared to **$(0.12)** and **$(0.55)** for the respective prior periods, reflecting the increased net loss[73](index=73&type=chunk) [NOTE 10. Subsequent Event](index=18&type=section&id=NOTE%2010.%20SUBSEQUENT%20EVENT) This note discloses significant events that occurred after the balance sheet date but before the financial statements were issued - Effective **July 8, 2022**, the company subleased substantially all of its remaining unused office space for **18 months** at a base rent of **$50,000 per month**, following its strategic plan and workforce reduction[74](index=74&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Vincerx Pharma's financial condition, operations, and liquidity, focusing on R&D, restructuring, and the Bayer License [Overview](index=18&type=section&id=Overview) This section introduces the company's business, product pipeline, and strategic focus as a clinical-stage biopharmaceutical entity - Vincerx Pharma is a clinical-stage biopharmaceutical company focused on developing new cancer therapies, with its entire pipeline licensed from Bayer. Key product candidates include enitociclib (PTEFb/CDK9 inhibitor), VIP943 and VIP924 (next-generation ADCs), and VIP236 (SMDC for solid tumors)[76](index=76&type=chunk)[77](index=77&type=chunk) [License Agreement with Bayer](index=18&type=section&id=License%20Agreement%20with%20Bayer) This section outlines the terms and financial obligations of the exclusive Bayer license agreement, forming the basis of the company's product pipeline - The company paid a **$5.0 million** upfront license fee to Bayer and is responsible for significant future development and commercial milestone payments, as well as ongoing royalties on commercial sales[78](index=78&type=chunk) [Basis of Presentation](index=18&type=section&id=Basis%20of%20Presentation) This section describes the fundamental accounting principles and operational structure used in preparing the company's financial statements - Vincerx operates as a single operating segment and is a pre-revenue company with no commercial operations, primarily conducting activities in the United States[78](index=78&type=chunk) [Components of Results of Operations](index=19&type=section&id=Components%20of%20Results%20of%20Operations) This section details the individual revenue and expense categories that constitute the company's overall financial performance [Revenue](index=19&type=section&id=Revenue) This section discusses the company's current revenue generation status and future expectations given its pre-commercial stage - The company has not recognized any revenue from product sales to date and does not expect to generate revenue in the foreseeable future, pending successful development and regulatory approval of its product candidates[80](index=80&type=chunk) [Research and Development Expense](index=19&type=section&id=Research%20and%20Development%20Expense) This section details the nature and expected trends of expenses for product development, clinical trials, and regulatory activities - R&D expenses include preclinical development, manufacturing, clinical trials, and regulatory activities. These expenses are recognized as incurred and are expected to increase as product candidates advance through clinical development[81](index=81&type=chunk)[82](index=82&type=chunk) - Future R&D expenses are highly unpredictable, influenced by factors such as preclinical study costs, per-patient clinical trial costs, patient enrollment rates, number of trials, and regulatory requirements[82](index=82&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) [General and Administrative Expenses](index=20&type=section&id=General%20and%20Administrative%20Expenses) This section outlines the administrative and operational costs supporting the company's overall business functions - G&A expenses primarily consist of salaries, stock-based compensation, travel, recruiting, and professional fees. These expenses are anticipated to increase with expanded operations, preclinical studies, clinical trials, and public company compliance costs[86](index=86&type=chunk)[87](index=87&type=chunk) [Change in Fair Value of Warrant Liabilities](index=20&type=section&id=Change%20in%20Fair%20Value%20of%20Warrant%20Liabilities) This section explains the accounting treatment and fluctuations in the fair value of warrant liabilities - This item reflects the change in fair value of certain private warrants classified as liabilities under **ASC 815-40**[88](index=88&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, focusing on operating expenses and changes in warrant liabilities across reporting periods [Research and Development](index=21&type=section&id=Research%20and%20Development) This section analyzes the period-over-period changes in research and development expenses and their underlying drivers - R&D expenses increased by **$3.0 million** for **Q2 2022** and **$14.2 million** for the six months ended June 30, 2022, compared to the prior year. This was driven by increases in manufacturing services (**$5.5 million**, including ADC program initiation), new employee salaries (**$2.4 million**), third-party research (**$4.6 million**), and clinical services (**$3.1 million**), partially offset by a **$1.4 million** decline in stock-based compensation[90](index=90&type=chunk) [General and Administrative](index=21&type=section&id=General%20and%20Administrative) This section analyzes the period-over-period changes in general and administrative expenses and their underlying drivers - G&A expenses decreased by **$2.0 million** for **Q2 2022** and **$1.1 million** for the six months ended June 30, 2022, primarily due to declines in stock-based compensation expense of **$1.1 million** and **$1.3 million**, respectively[91](index=91&type=chunk) [Restructuring](index=21&type=section&id=Restructuring) This section details the costs and impact of the company's strategic restructuring plan, including workforce reductions - The company incurred **approximately $1.2 million** in severance and related expenses through June 30, 2022, as part of a strategic plan approved on June 4, 2022, which included a **33% workforce reduction**[92](index=92&type=chunk)[93](index=93&type=chunk) [Change in Fair Value of Warrant Liabilities](index=22&type=section&id=Change%20in%20Fair%20Value%20of%20Warrant%20Liabilities) This section analyzes the period-over-period changes in the fair value of warrant liabilities and their causes - The change in fair value of warrant liabilities was primarily driven by a decrease in the common stock closing price from **$10.19** at December 31, 2021, to **$1.32** at June 30, 2022[94](index=94&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet financial obligations, including cash position and future funding needs - Vincerx has not generated revenue and expects expenses to increase with ongoing R&D, preclinical studies, clinical trials, and potential commercialization. Significant future payments are due to Bayer under the license agreement, including milestones up to **$318.0 million** per product and royalties[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) - As of June 30, 2022, the company had **$80.9 million** in cash, projected to fund operations and capital requirements into **late 2024**. A strategic plan approved in June 2022, including a **33% workforce reduction**, is expected to fund operations and capital requirements into **late 2024**[98](index=98&type=chunk) - The company anticipates needing substantial additional funding through equity offerings, debt financings, or collaborations, as market volatility and the unpredictable nature of drug development pose significant risks to its capital access and ability to pursue its business strategy[98](index=98&type=chunk)[99](index=99&type=chunk)[102](index=102&type=chunk) [Cash Flows](index=23&type=section&id=Cash%20Flows) This section analyzes the sources and uses of cash from operating, investing, and financing activities over the reporting periods Summary of Cash Flow Data (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(30,915) | $(11,612) | | Net cash used in investing activities | $— | $(5,228) | | Net cash provided by financing activities | $242 | $40,671 | - Net cash used in operating activities increased to **$30.9 million** for the six months ended June 30, 2022, primarily due to payments for clinical and manufacturing services, payroll, and professional services. This includes a net loss of **$34.8 million**, partially offset by non-cash items like stock-based compensation and changes in warrant liabilities[105](index=105&type=chunk)[106](index=106&type=chunk) [Off-Balance Sheet Arrangements](index=24&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses any material off-balance sheet transactions or obligations that could impact the company's financial position - The company is not a party to any off-balance sheet arrangements as defined under SEC rules[107](index=107&type=chunk) [Critical Accounting Policies and Estimates](index=24&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights accounting policies and estimates requiring significant judgment that could materially affect financial statements - The company's financial statements rely on estimates and judgments, particularly for derivative liabilities, accrued expenses, and stock-based compensation. These estimates are based on historical experience and assumptions, with actual results potentially differing materially, especially given current economic uncertainties[108](index=108&type=chunk)[109](index=109&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses Vincerx Pharma's exposure to interest rate and foreign currency risks, concluding no material financial impact is expected [Interest Rate Risk](index=24&type=section&id=Interest%20Rate%20Risk) This section evaluates the company's exposure to fluctuations in interest rates and their potential impact on financial results - The company's cash and restricted cash are held in depository accounts, and a hypothetical **10%** change in interest rates would not materially impact its condensed consolidated financial statements[111](index=111&type=chunk) [Foreign Currency Risk](index=24&type=section&id=Foreign%20Currency%20Risk) This section assesses the company's exposure to foreign currency exchange rate fluctuations and their potential financial impact - Operations are primarily denominated in U.S. dollars, and a hypothetical **10%** change in foreign exchange rates would not have a material impact on the condensed consolidated financial statements[112](index=112&type=chunk) [ITEM 4. Controls and Procedures](index=24&type=section&id=ITEM%204.%20Controls%20and%20Procedures) This section assesses the effectiveness of Vincerx Pharma's disclosure controls and reports on changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=24&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls for timely and accurate financial information - As of June 30, 2022, the CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level, designed to ensure timely and accurate reporting[113](index=113&type=chunk)[114](index=114&type=chunk) [Changes in Internal Control over Financial Reporting](index=25&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes to the company's internal control over financial reporting during the period - There were no changes in internal control over financial reporting during the three months ended June 30, 2022, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[115](index=115&type=chunk) Part II This part covers legal proceedings, comprehensive risk factors, other information, and a list of exhibits filed with the report [ITEM 1. Legal Proceedings](index=26&type=section&id=ITEM%201.%20Legal%20Proceedings) This section confirms Vincerx Pharma is not involved in material legal proceedings and is unaware of significant pending or threatened actions - Vincerx Pharma is not a party to any current legal proceedings and is unaware of any pending or threatened legal proceedings that could have a material adverse effect on its business, operating results, or financial condition[118](index=118&type=chunk) [ITEM 1A. Risk Factors](index=26&type=page&id=ITEM%201A.%20Risk%20Factors) This section details significant risks impacting Vincerx Pharma's business, covering development, financial, regulatory, third-party, intellectual property, and market factors [Risks Related to the Discovery, Development and Commercialization of Our Product Candidates](index=26&type=section&id=Risks%20Related%20to%20the%20Discovery%2C%20Development%20and%20Commercialization%20of%20Our%20Product%20Candidates) - The company's core intellectual property for all current product candidates is derived from the Bayer License Agreement, which imposes significant payment and other obligations. Termination or loss of rights under this agreement would severely impact development and commercialization[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) - Preclinical development, clinical trials, manufacturing, and supply chains are adversely affected by epidemics, including the ongoing COVID-19 pandemic, leading to potential delays, staffing shortages, and disruptions[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) - Future success heavily depends on the timely completion of clinical trials, regulatory approval, and commercialization of enitociclib, the lead product candidate, which is currently in **Phase 1 trials**. Early-stage development for all candidates (enitociclib, VIP943, VIP924, VIP236) means therapeutic benefits are unproven, and there are no FDA-approved drugs in their respective classes (CDK9 inhibitor, KSPi warhead ADC, optimized CPT payload SMDC)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - Reliance on preclinical and clinical data provided by Bayer, which has not been independently verified, poses a risk if results cannot be replicated. The company's long-term prospects also depend on discovering and developing additional product candidates, which may fail or be delayed[134](index=134&type=chunk)[135](index=135&type=chunk) - Interim clinical trial data may change, and even if approved, product candidates may not achieve adequate market acceptance due to competition, pricing, or safety concerns. The market opportunity for product candidates may be smaller than anticipated, and significant competition from other companies developing cancer therapies could negatively impact commercial opportunities[136](index=136&type=chunk)[137](index=137&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) - Limited resources may lead to focusing on less profitable or less successful product candidates. The business also faces significant product liability risks, and any approved products may be subject to unfavorable third-party coverage, reimbursement practices, and pricing regulations[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) - Clinical trials are expensive, time-consuming, and subject to delays, potentially requiring funding beyond available resources. Unforeseen events, safety issues, and difficulties in patient enrollment or investigator compliance could delay or terminate development. The use of unvalidated biomarkers may lead to inefficient resource allocation[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) - Transitioning from a discovery and development company to one involved in commercialization presents management challenges. The recent **33% workforce reduction** and other cost-cutting measures, while intended to extend cash runway, may adversely affect business operations and the ability to attract and retain skilled personnel[158](index=158&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) - Natural disasters, health epidemics, and other incidents, including climate change, could disrupt operations. Computer system failures, cyberattacks, or data breaches could lead to loss of confidential information, delays in drug development, and non-compliance with data privacy laws[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) [Risks Related to Our Financial Position and Need for Additional Capital](index=35&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) - As an early-stage company with limited operating history, evaluating future success is difficult. The company has incurred net losses since inception and expects significant losses to continue as it advances product candidates through development and seeks regulatory approval[168](index=168&type=chunk)[169](index=169&type=chunk) - Substantial additional capital is required to finance operations, including preclinical studies, clinical trials, marketing approval, and commercialization. Expenses are expected to increase, particularly with milestone payments under the Bayer License Agreement, which may be due before revenue generation[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk) - As of June 30, 2022, the company had **$80.9 million** in cash, projected to fund operations and capital requirements into **late 2024**. Future funding will be necessary through equity, debt, or collaborations, which may dilute stockholders or restrict operations, and may not be available on favorable terms[173](index=173&type=chunk)[174](index=174&type=chunk) - The Bayer License Agreement obligates significant milestone and royalty payments, some triggered prior to commercialization, posing a risk if funds are insufficient. The company may never achieve or sustain profitability due to the numerous risks and uncertainties in biotechnology product development and commercialization[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk) [Risks Related to Regulatory Approval and Other Legal Compliance Matters](index=37&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20and%20Other%20Legal%20Compliance%20Matters) - Obtaining U.S. or foreign regulatory approvals for product candidates is costly, time-consuming, and uncertain. The company lacks experience in managing large-scale clinical trials and regulatory processes, and changing FDA standards (e.g., **Project Optimus**) or new EU/UK regulations could cause delays and increased costs[181](index=181&type=chunk)[182](index=182&type=chunk) - Any regulatory approval may come with significant limitations on use, warnings, or post-approval study requirements (e.g., REMS), which could limit market size and affect reimbursement. Adverse events, toxicities, or undesirable side effects from product candidates, alone or in combination, could inhibit regulatory approval, prevent market acceptance, or lead to significant negative consequences, including trial abandonment or product withdrawal[183](index=183&type=chunk)[184](index=184&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk) - Regulatory approval in one jurisdiction does not guarantee approval in others, and foreign regulatory processes vary, potentially requiring additional trials or differing reimbursement approvals. Post-marketing, approved products remain subject to extensive regulatory requirements and oversight, with non-compliance leading to sanctions or withdrawal[190](index=190&type=chunk)[191](index=191&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) - Pursuing accelerated approval pathways carries risks; failure to obtain or maintain such approval could increase development costs and delay commercialization. Data from international clinical trials may not be accepted by the FDA or other foreign authorities without additional conditions or trials[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) - Brexit introduces new regulatory costs and challenges for market approval in the EU and UK. The company is subject to healthcare fraud and abuse laws (e.g., false claims, anti-kickback statutes) and anti-bribery laws (e.g., FCPA), with potential for significant penalties, investigations, and reputational damage if non-compliance occurs[202](index=202&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk) [Risks Related to Our Dependence on Third Parties](index=42&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) - Regulatory approval could be delayed or denied due to problems with preclinical or clinical studies conducted by Bayer or other third parties prior to Vincerx in-licensing the product candidates, as the company had no control over these initial development efforts[212](index=212&type=chunk) - The company has no manufacturing capability and relies entirely on third-party manufacturers for development, clinical trials, and commercialization. Any inability to retain suitable manufacturers, performance failures, or supply chain disruptions could delay development, regulatory approval, and commercialization[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) - Changes in manufacturing methods or formulation during development may lead to additional costs, delays, or require further testing and regulatory approval. Reliance on contract research organizations (CROs) and other third parties for clinical trials means the company has limited direct control over timing, conduct, and expenses, and their failures could cause significant delays[217](index=217&type=chunk)[218](index=218&type=chunk) - Failure to enter into and maintain successful collaborative arrangements or strategic alliances could force the company to reduce or delay product development or increase expenditures. Such collaborations also carry risks, including loss of control, financial difficulties of partners, relinquishing rights, and potential competition from collaborators[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk) [Risks Related to Our Intellectual Property](index=44&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) - Failure to comply with obligations under the Bayer License Agreement or other agreements could result in damages or loss of essential intellectual property rights. Disputes over license terms, scope of rights, or inventorship could adversely affect the business[222](index=222&type=chunk)[223](index=223&type=chunk) - Commercial success depends on protecting intellectual property (patents, trade secrets) and operating without infringing others' rights. Patent applications may not result in issued patents, and issued patents may be challenged, invalidated, or circumvented, offering limited protection against competitors[224](index=224&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk) - The validity and enforceability of patents covering biologics (like VIP943 and VIP924) can be challenged by third parties, potentially leading to invalidation or non-infringement findings. Patent litigation is expensive, time-consuming, and may divert management attention, with unpredictable outcomes that could reduce patent scope or invalidate rights[235](index=235&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk) - Derivation proceedings may be necessary to determine invention priority, and unfavorable outcomes could force the company to cease using technology or license rights. Patent reform legislation (e.g., Leahy-Smith America Invents Act) and changes in patent law could increase uncertainties and costs, diminishing patent value[245](index=245&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk)[250](index=250&type=chunk) - Patent terms may be inadequate to protect competitive positions, as patents might expire before or shortly after commercialization. Claims challenging inventorship or ownership of patents could lead to loss of valuable IP rights or personnel[251](index=251&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk) - Protecting IP rights globally is expensive and challenging, as foreign laws may offer less protection. Geopolitical actions (e.g., Russia-Ukraine conflict) could further complicate patent prosecution and enforcement. Compulsory licensing laws in some countries could impair competitive position[254](index=254&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk) - Compliance with procedural and fee requirements for patent maintenance is critical; non-compliance could lead to loss of patent rights. Inadequate protection of trademarks and trade names could hinder brand recognition. Failure to protect trade secrets would harm competitive position[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk) - The company may face claims of wrongful use or disclosure of confidential information or trade secrets by employees or third parties, leading to litigation costs and potential loss of IP. It may also need to license third-party intellectual property, which may not be available or on commercially reasonable terms[262](index=262&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk)[267](index=267&type=chunk) - Operating without infringing third-party patents is crucial. Claims of infringement could result in costly litigation, development delays, significant liability, or the need for unfavorable licensing agreements. Intellectual property rights have limitations and may not adequately protect the business or maintain its competitive advantage[268](index=268&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk)[276](index=276&type=chunk)[277](index=277&type=chunk)[278](index=278&type=chunk) [General Risk Factors](index=53&type=section&id=General%20Risk%20Factors) - The company's stock price has been volatile and thinly traded, making it susceptible to significant fluctuations. Numerous factors, including financial results, competitor success, regulatory changes, and general economic conditions, can influence stock price volatility[279](index=279&type=chunk)[280](index=280&type=chunk)[281](index=281&type=chunk) - Stock price volatility could lead to securities class action litigation, resulting in substantial costs and diversion of management attention. Potential conflicts of interest exist due to significant ownership and board designation rights held by executive officers and their affiliates[282](index=282&type=chunk)[283](index=283&type=chunk) - Failure to comply with Nasdaq listing standards could lead to delisting, harming investor confidence and stock price. Lack of analyst coverage or negative reports could also depress stock price and trading volume. Future sales of common stock, including from private warrants and Earnout Shares, may depress the market price[284](index=284&type=chunk)[285](index=285&type=chunk)[286](index=286&type=chunk)[287](index=287&type=chunk)[288](index=288&type=chunk) - As a public company, Vincerx faces increased expenses and administrative burdens related to compliance with regulations like Sarbanes-Oxley. As an 'emerging growth company,' it benefits from reduced reporting requirements, but this may make its stock less attractive to some investors[289](index=289&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk)[293](index=293&type=chunk) - The Certificate of Incorporation designates Delaware courts as the exclusive forum for certain stockholder litigation, potentially limiting stockholders' choice of forum. Concentration of ownership among executive officers, directors, and affiliates may prevent other stockholders from influencing significant corporate decisions[294](index=294&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk) - Failure to timely and effectively implement internal controls required by Sarbanes-Oxley **Section 404(a)** could adversely affect the business. Management has limited experience operating a public company, which could lead to challenges. The company has never paid dividends and does not anticipate doing so in the foreseeable future[298](index=298&type=chunk)[299](index=299&type=chunk)[300](index=300&type=chunk) - Although a material weakness in internal control over financial reporting was remediated in 2021, any future weaknesses could adversely affect financial reporting accuracy and timeliness, potentially leading to regulatory investigations, penalties, and negative impact on business and stock price[301](index=301&type=chunk)[302](index=302&type=chunk) [ITEM 5. Other Information](index=54&type=section&id=ITEM%205.%20Other%20Information) This section discloses a recent consulting agreement entered into by Vincerx Pharma - On **August 10, 2022**, Vincerx Pharma entered into a consulting agreement with LifeSci Consulting LLC for research, licensing, and collaboration services, involving a **$10,000 monthly retainer** and a customary success fee. A company director, Andrew McDonald, is affiliated with LifeSci Consulting[303](index=303&type=chunk) [ITEM 6. Exhibits](index=55&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed as part of the 10-Q report, including organizational documents, certifications, and XBRL documents - Exhibits include the Second Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, Principal Executive and Financial Officer's Certifications (**Sections 302 and 906** of Sarbanes-Oxley Act), and Inline XBRL documents[305](index=305&type=chunk) SIGNATURES This section formally attests to the accuracy and completeness of the report by authorized executive officers - The report was signed on August 11, 2022, by Dr. Ahmed M. Hamdy, Chief Executive Officer, and Alexander A. Seelenberger, Chief Financial Officer, pursuant to the requirements of the Securities Exchange Act of 1934[308](index=308&type=chunk)[309](index=309&type=chunk)[310](index=310&type=chunk)