Sagimet Biosciences(SGMT) - 2024 Q3 - Quarterly Report

Financial Performance - License revenue for the three months ended September 30, 2024 was $0, a decrease of 100$2.0 million in the same period of 2023[104] - License revenue for the nine months ended September 30, 2024 was $0, a decrease of$2.0 million or 100% compared to the same period in 2023[109] - Net loss for the three months ended September 30, 2024 was $14.6 million, an increase of 130$6.4 million in the same period of 2023[104] - Other income increased by $5.3 million for the nine months ended September 30, 2024, primarily from increased interest income related to cash proceeds from the IPO and follow-on offering[112] Operating Expenses - Total operating expenses for the three months ended September 30, 2024 were$16.9 million, an increase of 79% compared to $9.5 million in the same period of 2023[104] - Research and development expenses increased by$7.7 million, or 155%, for the three months ended September 30, 2024, primarily due to clinical trial expenses related to the Phase 3 program of denifanstat[105] - General and administrative expenses decreased by $0.2 million, or 5$10.1 million, or 72%, for the nine months ended September 30, 2024, primarily due to increased manufacturing and clinical trial costs[110] - General and administrative expenses rose by $2.9 million, or 31$31.4 million for the nine months ended September 30, 2024, compared to $16.7 million for the same period in 2023[126] - Net cash used in investing activities was$71.5 million for the nine months ended September 30, 2024, primarily for purchases of marketable securities[129] - Net cash provided by financing activities was $104.8 million for the nine months ended September 30, 2024, mainly from the sale of Series A common stock in the January 2024 follow-on offering[130] - As of September 30, 2024, the company had cash, cash equivalents, and marketable securities totaling$170.0 million[117] Future Expectations - The company expects research and development expenses to increase substantially as it advances drug candidates through clinical trials and regulatory approval[99] - The company anticipates significant expenses in the foreseeable future as it advances drug candidates through clinical trials and expands corporate infrastructure[117] - The company expects to finance future cash needs through public or private equity or debt financings, collaborations, and strategic alliances[118] Clinical Development - Denifanstat achieved a primary endpoint of ≥2-point reduction in NAS (NAFLD Activity Score) without worsening of fibrosis in 52% of patients compared to 20% in the placebo group, with a p-value of 0.0003[82] - The Phase 3 program for denifanstat is expected to comprise a minimum of 1,800 patients and is anticipated to initiate by the end of 2024[93] - The FDA granted Breakthrough Therapy designation to denifanstat for the treatment of non-cirrhotic MASH with moderate to advanced liver fibrosis in October 2024[90] - Denifanstat showed a statistically significant increase in beneficial polyunsaturated triglycerides of +42% compared to -4% in the placebo group at the end of 52 weeks of treatment[89] Company Classification - The company is classified as a "smaller reporting company" with a market value of stock held by non-affiliates below $700 million and annual revenue under$100 million[137] - The company may continue to qualify as a smaller reporting company if the market value of stock held by non-affiliates remains below $250 million or if annual revenue stays under$100 million while the market value is below $700 million[137] - As a smaller reporting company, the company can present only the two most recent fiscal years of audited financial statements in its Annual Report on Form 10-K[137] - The company has reduced disclosure obligations regarding executive compensation due to its smaller reporting company status[137] - The company is not required to provide quantitative and qualitative disclosures about market risk as defined by Rule 12b-2 of the Securities Exchange Act of 1934[138]