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Werewolf Therapeutics(HOWL) - 2024 Q2 - Quarterly Report
HOWLWerewolf Therapeutics(HOWL)2024-08-08 11:12

Revenue and Collaboration Agreements - For the six months ended June 30, 2024, the company recognized 1.9millioninrevenuefromtheCollaborationAgreementwithJazzPharmaceuticals[77]−CollaborationrevenueforthesixmonthsendedJune30,2024,was1.9 million in revenue from the Collaboration Agreement with Jazz Pharmaceuticals[77] - Collaboration revenue for the six months ended June 30, 2024, was 1.9 million, down 10.7millionfrom10.7 million from 12.5 million in 2023[99] - The company anticipates fluctuations in future revenue based on the achievement of development and regulatory milestones[77] Research and Development Expenses - Research and development expenses are expected to increase substantially as the company progresses its clinical trials for WTX-124 and WTX-330[80] - Research and development expenses increased to 15.3millionforthethreemonthsendedJune30,2024,comparedto15.3 million for the three months ended June 30, 2024, compared to 9.6 million in 2023, reflecting a rise of 5.7million[90]−Researchanddevelopmentexpensesincreasedby5.7 million[90] - Research and development expenses increased by 5.7 million, driven by ongoing development efforts of product candidates[118] Operating Loss and Financial Performance - The operating loss for the three months ended June 30, 2024, was (18.96)million,comparedto(18.96) million, compared to (6.07) million in the same period of 2023, an increase of 12.89million[87]−ThenetlossforthethreemonthsendedJune30,2024,was12.89 million[87] - The net loss for the three months ended June 30, 2024, was (17.25) million, compared to (5.10)millionin2023,anincreaseof(5.10) million in 2023, an increase of 12.15 million[87] - The company reported a net loss of 17.2millionforthethreemonthsendedJune30,2024,comparedtoanetlossof17.2 million for the three months ended June 30, 2024, compared to a net loss of 5.1 million for the same period in 2023, with an accumulated deficit of 377.5millionasofJune30,2024[106]ExternalDevelopmentCosts−ExternaldevelopmentcostsforWTX−330amountedto377.5 million as of June 30, 2024[106] External Development Costs - External development costs for WTX-330 amounted to 7.9 million for the six months ended June 30, 2024, compared to 1.2millionforthesameperiodin2023[80]−Thecompanyreportedtotalexternaldevelopmentcostsof1.2 million for the same period in 2023[80] - The company reported total external development costs of 15.9 million for the six months ended June 30, 2024, up from 9.4millioninthesameperiodof2023[80]CashFlowandFinancingActivities−NetcashusedinoperatingactivitiesforthesixmonthsendedJune30,2024,was9.4 million in the same period of 2023[80] Cash Flow and Financing Activities - Net cash used in operating activities for the six months ended June 30, 2024, was 29.5 million, an increase of 8.7millioncomparedto8.7 million compared to 20.8 million for the same period in 2023, primarily due to a decrease in revenue from collaboration agreements[118] - Net cash provided by financing activities for the six months ended June 30, 2024, was 10.5million,significantlylowerthan10.5 million, significantly lower than 49.3 million for the same period in 2023[119] - The company expects to require additional funding to complete the development of WTX-124, WTX-330, and other product candidates[116] Interest Income and Expense - Interest income for the three months ended June 30, 2024, was 1.8million,adecreaseof1.8 million, a decrease of 0.1 million from 1.9millionin2023[93]−Interestincomeroseto1.9 million in 2023[93] - Interest income rose to 3.8 million for the six months ended June 30, 2024, compared to 3.5millionforthesameperiodin2023,drivenbyhigheryieldsoncashequivalents[103]−Interestexpenseincreasedto3.5 million for the same period in 2023, driven by higher yields on cash equivalents[103] - Interest expense increased to 1.1 million for the three months ended June 30, 2024, compared to 1.0millionin2023,reflectingariseof1.0 million in 2023, reflecting a rise of 0.1 million[94] - Interest expense increased significantly to 2.1millionforthesixmonthsendedJune30,2024,from2.1 million for the six months ended June 30, 2024, from 1.1 million in the same period of 2023, primarily due to the timing of term loan drawdowns[103] Share Issuance and Cash Position - The company sold 4,342,320 shares of common stock at an average price of 5.11pershareduringthesixmonthsendedJune30,2024,generatingnetproceedsof5.11 per share during the six months ended June 30, 2024, generating net proceeds of 21.1 million[112] - As of June 30, 2024, the company had cash and cash equivalents of 135.3millionandrestrictedcashof135.3 million and restricted cash of 1.2 million, expected to fund operations through at least Q1 2026[114] - The company reported a net decrease in cash, cash equivalents, and restricted cash of 19.1millionforthesixmonthsendedJune30,2024[117]LoanAgreementsandObligations−TheK2HVLoanAgreementprovidesupto19.1 million for the six months ended June 30, 2024[117] Loan Agreements and Obligations - The K2HV Loan Agreement provides up to 60.0 million in term loans, with 30.0millionreceivedatclosingandadditionaltranchesavailablebasedoncertainmilestones[109]−TheextinguishmentofthePWBtermloanresultedinaone−timelossof30.0 million received at closing and additional tranches available based on certain milestones[109] - The extinguishment of the PWB term loan resulted in a one-time loss of 0.6 million for the three months ended June 30, 2024[96] - The extinguishment of the PWB term loan resulted in a one-time loss of 0.6millionforthesixmonthsendedJune30,2024[105]ClinicalTrialsandProductDevelopment−ThecompanyiscurrentlyevaluatingWTX−124inaPhase1/1bclinicaltrial,withpreliminarydatafrom16patientsindicatingproofofmechanismandproofofconceptfortheINDUKINEdesign[74]−ThecompanyexecutedaTransferAgreementinJune2024,completingallmaterialperformanceobligationsundertheCollaborationAgreementwithJazz[77]−ThecompanyreportedinitialdatafromthePhase1clinicaltrialofWTX−330inJune2024,withpatientdosinginitiatedinFebruary2023[74]−ThecompanyhasnoremainingmaterialperformanceobligationsundertheCollaborationAgreementasofJune2024[77]FutureFinancialConsiderations−Thecompanymayneedtoraiseadditionalfundsthroughequityordebtfinancing,whichcouldleadtodilutionforexistingshareholders[116]−Thecompanyisactivelyconsideringcollaborationarrangementsforclinicaldevelopmentandcommercializationtosupportitsfinancialneeds[116]−ThecompanyanticipatesthatthecostsofobtainingmarketingapprovalforWTX−124andWTX−330willsignificantlyimpactfuturecashflows[116]GeneralandAdministrativeExpenses−Generalandadministrativeexpensesincreasedto0.6 million for the six months ended June 30, 2024[105] Clinical Trials and Product Development - The company is currently evaluating WTX-124 in a Phase 1/1b clinical trial, with preliminary data from 16 patients indicating proof of mechanism and proof of concept for the INDUKINE design[74] - The company executed a Transfer Agreement in June 2024, completing all material performance obligations under the Collaboration Agreement with Jazz[77] - The company reported initial data from the Phase 1 clinical trial of WTX-330 in June 2024, with patient dosing initiated in February 2023[74] - The company has no remaining material performance obligations under the Collaboration Agreement as of June 2024[77] Future Financial Considerations - The company may need to raise additional funds through equity or debt financing, which could lead to dilution for existing shareholders[116] - The company is actively considering collaboration arrangements for clinical development and commercialization to support its financial needs[116] - The company anticipates that the costs of obtaining marketing approval for WTX-124 and WTX-330 will significantly impact future cash flows[116] General and Administrative Expenses - General and administrative expenses increased to 9.8 million for the six months ended June 30, 2024, from 9.5millioninthesameperiodof2023,primarilyduetoa9.5 million in the same period of 2023, primarily due to a 0.3 million increase in personnel costs and a $0.4 million increase in professional services costs[102]