Financial Performance - As of September 30, 2024, the company reported net losses of $16.0 million for the three months ended September 30, 2024, compared to $3.1 million for the same period in 2023, and net losses of $41.6 million for the nine months ended September 30, 2024, compared to $8.7 million for the same period in 2023[150]. - The company recorded a net loss of $15.99 million for the three months ended September 30, 2024, compared to a net loss of $3.1 million for the same period in 2023, reflecting an increase in losses of $12.89 million[178]. - Net loss for the nine months ended September 30, 2024, was $41.6 million, compared to a net loss of $8.7 million in the same period of 2023, an increase of $32.9 million[187]. Cash and Investments - The company has accumulated a deficit of $169.5 million as of September 30, 2024, with cash, cash equivalents, and short-term investments totaling $220.7 million[150]. - Cash, cash equivalents, and short-term investments totaled $220.7 million as of September 30, 2024, following gross proceeds of $400.0 million from sales of Preferred Stock[197]. - Net cash used in operating activities was $39.6 million for the nine months ended September 30, 2024, compared to $21.8 million in 2023, an increase of $17.8 million[199]. - Net cash used in investing activities was $101.4 million for the nine months ended September 30, 2024, compared to $77.6 million in 2023[203]. Revenue and Collaborations - The company has not generated any revenue from product sales since inception and does not expect to do so until regulatory approval and commercialization of its product candidates[154]. - Collaboration revenue from related parties remained stable at $0.6 million for both the three months ended September 30, 2024, and 2023[179]. - Collaboration revenue decreased to $1.8 million for the nine months ended September 30, 2024, down from $1.9 million in the same period of 2023, primarily related to clinical trials for severe asthma[188]. Expenses - Total operating expenses increased to $53.2 million for the nine months ended September 30, 2024, compared to $27.7 million in 2023, reflecting a rise of $25.5 million[187]. - Research and development expenses increased to $15.4 million for the three months ended September 30, 2024, compared to $7.8 million for the same period in 2023, representing a $7.6 million increase[180]. - Research and development expenses rose significantly to $41.2 million for the nine months ended September 30, 2024, up from $20.2 million in 2023, an increase of $21.0 million[189]. - General and administrative expenses rose to $4.1 million for the three months ended September 30, 2024, up from $2.2 million in the same period in 2023, marking an increase of $1.8 million[184]. - General and administrative expenses increased to $12.0 million for the nine months ended September 30, 2024, compared to $7.5 million in 2023, marking a rise of $4.5 million[194]. Future Outlook - The company expects to incur significant net operating losses for the foreseeable future, with anticipated increases in expenses related to ongoing clinical trials and regulatory approvals[151]. - The company expects research and development expenses to increase in the future as it advances verekitug through clinical trials[168]. - The company expects increased research and development and general administrative expenses as it advances clinical trials for verekitug and other potential product candidates[207]. - The company anticipates needing additional financing to support ongoing operations and may rely on equity offerings or debt financings to meet cash requirements[154]. - The company expects to finance operations through equity offerings, debt financings, collaborations, and licensing arrangements until substantial product revenue is generated[210]. IPO and Financing - The company completed its initial public offering (IPO) in October 2024, issuing 17,250,000 shares at a public price of $17.00 per share, resulting in approximately $268.7 million in net proceeds after deducting underwriting discounts and offering costs[150]. - The company has received total gross proceeds of $400.0 million from the issuance and sale of its Series A and Series B redeemable convertible preferred stock as of September 30, 2024[149]. Tax and Royalties - The company has federal net operating losses carryforwards of $25.0 million and state net operating losses of $27.6 million as of December 31, 2023[177]. - The company recorded a full valuation allowance of its deferred tax asset position, indicating uncertainty in utilizing deferred tax assets[176]. - The company is required to pay Regeneron mid-single-digit percentage royalties on aggregate worldwide net sales of a Royalty Product during the royalty term[213]. - The company has not made any royalty payments to Lonza under the Lonza License Agreement to date[217]. - The company has not made any royalty payments to Regeneron under the Regeneron Letter Agreement to date[214]. Operational Matters - The company entered into a three-year lease agreement for office space with an initial base rent of approximately $0.7 million for the first year, increasing to approximately $0.8 million for the second and third years[218]. - The company is classified as a smaller reporting company, with a market value of common stock held by non-affiliates less than $700 million and annual revenue below $100 million[226]. - There have been no material changes in the company's internal control over financial reporting during the quarter ended September 30, 2024[228]. - The company maintains effective disclosure controls and procedures as of the end of the reporting period[227]. - The increase in research and development expenses was primarily driven by a $4.6 million rise in expenses related to the verekitug program and $3.0 million in unallocated expenses[180]. - Personnel expenses within general and administrative functions increased by $1.5 million, largely due to headcount growth[184]. - Interest income for the three months ended September 30, 2024, was $2.9 million, an increase of $1.4 million compared to $1.5 million for the same period in 2023[186]. - Interest income increased to $7.0 million for the nine months ended September 30, 2024, up from $2.6 million in 2023, representing an increase of $4.4 million[196].
Upstream Bio, Inc.(UPB) - 2024 Q3 - Quarterly Report