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Upstream Bio, Inc.(UPB) - 2024 Q4 - Annual Report
UPBUpstream Bio, Inc.(UPB)2025-03-12 11:10

Financial Performance - The company reported net losses of 62.8millionand62.8 million and 20.5 million for the years ended December 31, 2024 and 2023, respectively, with an accumulated deficit of 190.8millionasofDecember31,2024[587].ThenetlossfortheyearendedDecember31,2024was190.8 million as of December 31, 2024[587]. - The net loss for the year ended December 31, 2024 was 62.8 million, compared to a net loss of 20.5millionin2023,reflectinganincreaseof20.5 million in 2023, reflecting an increase of 42.3 million[615]. - The company expects to continue incurring significant net operating losses for the foreseeable future, depending on the timing of expenditures on research and development activities[588]. - The company has incurred significant net operating losses and negative cash flows since inception, indicating a need for additional financing to support ongoing operations[590]. Cash and Investments - The company has cash, cash equivalents, and short-term investments totaling 470.5million,whichareexpectedtofundoperationsthrough2027[587].AsofDecember31,2024,thecompanyhadcash,cashequivalents,andshortterminvestmentstotaling470.5 million, which are expected to fund operations through 2027[587]. - As of December 31, 2024, the company had cash, cash equivalents, and short-term investments totaling 470.5 million[626]. - The company believes its existing cash, cash equivalents, and short-term investments will fund operating expenses through 2027[638]. Initial Public Offering (IPO) - The company completed its IPO in October 2024, issuing 17,250,000 shares at a public price of 17.00pershare,resultinginnetproceedsof17.00 per share, resulting in net proceeds of 268.8 million after deducting underwriting discounts and commissions[586]. Research and Development - The company is developing verekitug, currently in Phase 2 trials for severe asthma and chronic rhinosinusitis with nasal polyps, with top-line data expected in the second half of 2025 and 2026, respectively[585]. - Research and development expenses are expected to increase as the company advances verekitug through clinical trials, with higher costs anticipated in later stages of development[603]. - Research and development expenses increased to 63.0millionin2024from63.0 million in 2024 from 31.8 million in 2023, driven by a 23.8millionincreaseinexpensesfortheverekitugprogram[617].Thecompanyexpectsincreasedresearchanddevelopmentandgeneraladministrativeexpensesasitadvancesitsproductcandidatesthroughclinicaltrials[635].Thecompanyincurredapproximately23.8 million increase in expenses for the verekitug program[617]. - The company expects increased research and development and general administrative expenses as it advances its product candidates through clinical trials[635]. - The company incurred approximately 51.0 million in direct external expenses for the development of verekitug for severe asthma since its nomination[621]. Revenue and Collaboration - The company has not generated any revenue from product sales and does not expect to do so in the foreseeable future, relying on collaboration revenue from the Maruho License Agreement[601]. - Collaboration revenue from related parties was 2.4millionforbothyearsendedDecember31,2024and2023,primarilyrelatedtoclinicaltrialsforsevereasthma[616].OperatingExpensesThetotaloperatingexpensesfor2024were2.4 million for both years ended December 31, 2024 and 2023, primarily related to clinical trials for severe asthma[616]. Operating Expenses - The total operating expenses for 2024 were 80.1 million, up from 42.5millionin2023,markinganincreaseof42.5 million in 2023, marking an increase of 37.6 million[615]. - General and administrative expenses rose to 17.2millionin2024from17.2 million in 2024 from 10.7 million in 2023, with personnel expenses increasing by 4.5millionduetohigherheadcount[622].Thecompanyexpectsgeneralandadministrativeexpensestoincreaseinthefutureasitexpandsitsinfrastructureandheadcounttosupportongoingresearchanddevelopment[609].FinancingActivitiesThecompanyhasreceivedtotalgrossproceedsof4.5 million due to higher headcount[622]. - The company expects general and administrative expenses to increase in the future as it expands its infrastructure and headcount to support ongoing research and development[609]. Financing Activities - The company has received total gross proceeds of 400.0 million from the issuance of Series A and Series B redeemable convertible preferred stock[586]. - The company anticipates financing operations through equity offerings, debt financings, and collaborations until substantial product revenue is generated[639]. - The company provided 129.6millioninnetcashfromfinancingactivitiesduringtheyearendedDecember31,2023,including129.6 million in net cash from financing activities during the year ended December 31, 2023, including 80.0 million from the issuance of Series A Preferred Stock[634]. Lease and Payments - The company entered into a three-year lease agreement for office space with an initial base rent of approximately 0.7millionforthefirstyear[648].ThecompanyhasmadeannualpaymentstoLonzaof0.7 million for the first year[648]. - The company has made annual payments to Lonza of 0.5 million and 0.4millionfortheyearsendedDecember31,2024and2023,respectively,relatedtotheLonzaLicenseAgreement[600].AnnualpaymentstoLonzaundertheLonzaLicenseAgreementwere0.4 million for the years ended December 31, 2024 and 2023, respectively, related to the Lonza License Agreement[600]. - Annual payments to Lonza under the Lonza License Agreement were 0.4 million for the year ended December 31, 2023[647]. Stock and Valuation - The company issued stock option awards with performance-based vesting conditions to key executives, with stock-based compensation recognized upon achievement of performance conditions in February 2023 and April 2024[657]. - Prior to the IPO in October 2024, the estimated fair value of the company's common stock was determined by the board of directors, considering third-party valuations and other relevant factors[658]. - The company classified Series A and Series B preferred stock tranche rights as liabilities, initially recorded at fair value upon issuance[659]. - Changes in the fair value of preferred stock tranche right liabilities were recognized as a component of other income in the consolidated statements of operations until settled[660]. - The fair value of Series A preferred stock tranche right liability was determined using a probability-weighted expected return method, with significant assumptions impacting valuation[663]. - The fair value of Series B preferred stock tranche right liability was determined using an option pricing model, with the fair value of Series B Preferred Stock as a key assumption[664]. Regulatory and Reporting Status - The company is classified as a "smaller reporting company," with a market value of common stock held by non-affiliates less than 700millionandannualrevenuebelow700 million and annual revenue below 100 million[668]. - The company has elected not to "opt out" of the extended transition period for new accounting standards, which may affect comparability with other public companies[667]. - The company may continue to rely on exemptions from certain disclosure requirements as a smaller reporting company, including reduced obligations regarding executive compensation[668]. - The company is not required to provide quantitative and qualitative disclosures about market risk due to its status as a smaller reporting company[669].