Inozyme Pharma(INZY) - 2022 Q4 - Annual Report

Financial Performance - The company reported net losses of $67.1 million and $56.6 million for the years ended December 31, 2022, and 2021, respectively, with an accumulated deficit of $214.8 million as of December 31, 2022[581]. - Total operating expenses were $68.7 million for the year ended December 31, 2022, compared to $56.6 million for 2021, with expectations of continued significant expenses due to ongoing clinical trials[582]. - The company has not yet generated any revenue from product sales and does not expect to do so in the foreseeable future[593]. - Net cash used in operating activities was $57.8 million for the year ended December 31, 2022, compared to $48.2 million in 2021, reflecting an increase in net loss adjusted for non-cash items[618]. - The company has incurred significant operating losses and negative cash flows since inception, primarily funded through sales of convertible preferred stock and common stock[610]. Research and Development - INZ-701 has received orphan drug designation from the FDA and EMA for the treatment of ENPP1 and ABCC6 Deficiencies, with fast track designation also granted by the FDA[574]. - The Phase 2 clinical trial of INZ-701 for ENPP1 Deficiency is ongoing with plans to report interim data in Q3 2023[575]. - A Phase 1b clinical trial (ENERGY-1) for INZ-701 in infants with ENPP1 Deficiency is planned to be initiated in Q2 2023[576]. - Research and development costs for INZ-701 have totaled $142.1 million from inception through December 31, 2022, with expectations for substantial increases in the foreseeable future[596]. - Research and development expenses rose by $10.1 million to $47.8 million for the year ended December 31, 2022, compared to $37.7 million in 2021, primarily due to increased clinical trial costs[605]. - The company expects to continue increasing research and development expenses as it conducts clinical trials for INZ-701 and prepares for additional product candidates[606]. Financial Position and Funding - The company had cash, cash equivalents, and short-term investments of approximately $127.9 million as of December 31, 2022, and expects to fund operations into Q4 2024[590]. - The company entered into a loan agreement providing up to $70 million in term loans, with a first tranche commitment of $25 million[587]. - Net cash provided by financing activities was $72.8 million for the year ended December 31, 2022, primarily from the issuance of common stock and pre-funded warrants[620]. - As of December 31, 2022, the company had cash, cash equivalents, and short-term investments totaling approximately $127.9 million, up from $111.8 million in 2021[615]. - The company drew down an additional $20.0 million from the Loan Agreement in February 2023, which is expected to fund cash flow requirements into the fourth quarter of 2024[622]. - The company expects to finance cash needs through equity offerings, debt financings, collaborations, and licensing arrangements, but does not have any committed external sources of funds beyond the Loan Agreement[625]. Expenses and Cost Management - The company anticipates significant increases in expenses as it conducts ongoing and planned clinical trials and prepares for potential commercialization[591]. - General and administrative expenses increased by $1.9 million to $20.8 million for the year ended December 31, 2022, from $18.9 million in 2021, mainly due to higher personnel costs[607]. - The company anticipates substantial increases in expenses related to ongoing Phase 1/2 clinical trials of INZ-701 for ENPP1 Deficiency and ABCC6 Deficiency, as well as future commercialization efforts[621]. Market Risks and Economic Factors - The company is exposed to market risks related to interest rate changes, with an immediate change of 100 basis points not expected to materially affect its financial position[638]. - Inflation has generally increased the company's labor and clinical trial costs, but it did not have a material effect on the company's financial condition during the years ended December 31, 2022, and 2021[641]. - The company may need to obtain substantial additional financing to achieve its business objectives, which may not be available on acceptable terms due to various economic factors[623].