Werewolf Therapeutics(HOWL) - 2024 Q3 - Quarterly Report

Revenue and Collaboration Agreements - For the nine months ended September 30, 2024, the company recognized $1.9 million in revenue from the Collaboration Agreement with Jazz, with no revenue recognized in the three months ended September 30, 2024[79][90]. - Revenue for the nine months ended September 30, 2024, was$1.9 million, a significant decrease from $18.4 million in the same period of 2023, due to the execution of the Transfer Agreement with Jazz[99]. - The company has received$20.0 million from Jazz under the Collaboration Agreement and is eligible for up to an additional $1.255 billion in milestone payments[113]. Expenses - Research and development expenses for the three months ended September 30, 2024, increased to$12.5 million, up from $10.8 million in the same period in 2023, reflecting a rise of approximately 15.6$17.1 million, compared to $15.1 million in the same period in 2023, representing an increase of$1.98 million or 13.1%[89]. - General and administrative expenses for the three months ended September 30, 2024, were $4.6 million, up from$4.3 million in the same period of 2023, primarily due to a $0.3 million increase in professional services fees[93]. - Research and development expenses for the nine months ended September 30, 2024, were$40.7 million, compared to $32.1 million in the same period of 2023, reflecting an increase of$8.6 million[101]. - General and administrative expenses for the nine months ended September 30, 2024, were $14.4 million, up from$13.9 million in the same period of 2023, primarily due to increased professional services costs[102]. - The company anticipates that general and administrative expenses will increase in the future as personnel headcount grows to support expanding research and development activities[83]. Net Loss and Financial Position - The company reported a net loss of $16.7 million for the three months ended September 30, 2024, compared to a net loss of$8.3 million in the same period in 2023, indicating an increase in loss of approximately 101.2%[89]. - The net loss for the three months ended September 30, 2024, was $16.7 million, compared to$8.3 million for the same period in 2023, resulting in an accumulated deficit of $394.2 million as of September 30, 2024[107]. - The company expects to incur substantial and increasing expenses and net losses for the foreseeable future as it advances product candidates through clinical development[107]. - The company anticipates needing substantial additional funding to support operations and pursue growth strategies, with potential reliance on public or private equity offerings and debt financings[109]. Cash Flow and Financing Activities - Cash and cash equivalents as of September 30, 2024, were$122.8 million, with an additional $1.2 million in restricted cash, expected to fund operational expenses through at least the second quarter of 2026[114]. - Net cash used in operating activities for the nine months ended September 30, 2024, was$41.9 million, an increase of $13.9 million from$28.0 million in the same period of 2023, primarily due to decreased revenue and increased R&D expenses[118]. - Net cash provided by financing activities for the nine months ended September 30, 2024, was $10.5 million, down from$49.4 million in the prior year[120]. - Cash provided by financing activities in 2024 included net proceeds from the ATM Offering of $21.1 million and a drawdown of$30.0 million from the K2HV Loan Agreement, offset by a $40.0 million repayment of the previous PWB term loan[120]. - The K2HV Loan Agreement provides up to$60.0 million in term loans, with $30.0 million received at closing and additional tranches available based on certain milestones[110]. - The company incurred debt issuance costs of$0.7 million in connection with the term loans, which are being amortized over the term of the K2HV Loan Agreement[111]. Clinical Development and Trials - The company is currently evaluating WTX-124 in a Phase 1/1b clinical trial, with initial efficacy data expected to be reported in the first half of 2025[76]. - WTX-330 is being evaluated in a Phase 1 clinical trial for immunotherapy-resistant advanced or metastatic solid tumors, with initial data reported in June 2024[76]. - The company has received alignment from the FDA on the comparability path for WTX-330, which is expected to be integrated into the clinical development program[76]. - The company continues to develop preclinical candidates WTX-518 and WTX-712, with promising preclinical data presented in April 2024[76]. Interest Income and Expense - Interest income decreased to $1.6 million for the three months ended September 30, 2024, compared to$2.0 million in the same period of 2023, due to lower cash equivalents held[94]. - Interest expense increased to $1.2 million for the three months ended September 30, 2024, from$1.0 million in the same period of 2023, primarily due to higher effective interest rates under the K2HV Loan Agreement[95]. - Interest expense for the nine months ended September 30, 2024, was $3.4 million, compared to$2.1 million in the same period of 2023, driven by higher effective interest rates[105]. - The company recognized interest expense of $1.3 million related to the PWB Loan Agreement during the nine months ended September 30, 2024[109]. Other Financial Information - The extinguishment of the PWB term loan resulted in a one-time loss of$0.6 million for the nine months ended September 30, 2024[106]. - Net cash used in investing activities for the nine months ended September 30, 2024, was $0.1 million, a decrease from$0.6 million for the same period in 2023[120]. - Total estimated base rent payments for the office and laboratory lease expiring in May 2030 are approximately $13.9 million[122]. - There were no material changes to critical accounting policies during the three and nine months ended September 30, 2024[123].