Acrivon Therapeutics(ACRV) - 2023 Q3 - Quarterly Report

Financial Performance - Acrivon incurred net losses of $41.1 million and $22.2 million for the nine months ended September 30, 2023, and 2022, respectively, with an accumulated deficit of $97.2 million as of September 30, 2023[107]. - The company has not generated any revenue from drug sales and does not expect to do so in the foreseeable future[113]. - Net loss for the three months ended September 30, 2023, was $14.5 million, compared to a net loss of $9.2 million for the same period in 2022, an increase of $5.3 million[125]. - For the nine months ended September 30, 2023, research and development expenses totaled $30.5 million, up from $18.1 million in the same period of 2022, a $12.5 million increase[135]. - General and administrative expenses for the nine months ended September 30, 2023, were $15.5 million, compared to $4.6 million for the same period in 2022, an increase of $10.9 million[137]. - Total operating expenses for the three months ended September 30, 2023, were $16.1 million, compared to $9.6 million for the same period in 2022, reflecting a $6.6 million increase[125]. - The company anticipates incurring significant expenses and operating losses as it advances drug candidates through clinical development and seeks regulatory approval[149]. Cash and Investments - As of September 30, 2023, Acrivon had cash, cash equivalents, and investments totaling $142.1 million, expected to fund operations into the second half of 2025[110]. - The company expects to fund its operating expenses and capital expenditure requirements into the second half of 2025 with existing cash and investments[140]. - Net cash used in operating activities was $30.3 million for the nine months ended September 30, 2023, compared to $20.8 million for the same period in 2022, reflecting an increase of $9.5 million primarily due to a net loss increase of $18.9 million[144]. - Net cash provided by investing activities was $30.2 million for the nine months ended September 30, 2023, resulting from $70.3 million in proceeds from maturities of short-term investments, offset by $39.9 million in purchases of investments[145]. Research and Development - The company has incurred significant research and development expenses, primarily related to ACR-368 and the ACR-368 OncoSignature[114]. - Research and development expenses increased to $10.3 million for the three months ended September 30, 2023, compared to $7.9 million for the same period in 2022, representing a $2.3 million increase[125]. - The increase in research and development expenses was primarily due to a $1.9 million rise in personnel-related costs, including $0.5 million of stock-based compensation[128]. - The company plans to substantially increase research and development expenses as it continues the development of ACR-368 and ACR-2316[116]. Regulatory and Clinical Developments - The ongoing Phase 2 trial for ACR-368 is based on OncoSignature-predicted sensitivity in patients with platinum-resistant ovarian cancer and other tumor types[100]. - Acrivon has received two Fast Track designations from the FDA for ACR-368 for patients with OncoSignature-positive platinum-resistant ovarian cancer and endometrial cancer[102]. Agreements and Obligations - Acrivon has entered into a companion diagnostic agreement with Akoya Biosciences, with a total potential payment of up to $10.3 million upon achieving specified milestones[112]. - The company is obligated to pay up to $168.0 million in milestone payments under its license agreement with Lilly, with $5.0 million due prior to NDA[156]. - Under the companion diagnostic agreement with Akoya, the company is obligated to pay up to $10.3 million upon achieving specified development milestones, with $3.8 million already paid[157]. - Future minimum commitments under operating leases are $5.3 million as of September 30, 2023, with $1.1 million due within the next 12 months[155]. Funding and Growth Strategy - Acrivon expects to require substantial additional funding to support ongoing operations and growth strategy, with potential impacts from global economic conditions[109]. - The company expects to finance cash needs through equity offerings, debt financings, and collaborations, which may dilute existing stockholder interests[152]. Internal Controls and Company Classification - The company identified material weaknesses in internal control over financial reporting, which could affect the accuracy and timeliness of financial reporting[161]. - The company remains classified as an "emerging growth company" and a "smaller reporting company," allowing it to take advantage of certain exemptions from disclosure requirements[163][165].