Financial Performance - Net loss for the three months ended June 30, 2023, was $10,796 thousand, compared to a net loss of $21,285 thousand for the same period in 2022, representing a 49.1% improvement[17]. - The company reported a comprehensive loss of $10,738 thousand for the three months ended June 30, 2023, compared to a comprehensive loss of $21,381 thousand for the same period in 2022, a reduction of 49.8%[20]. - Net loss for the six months ended June 30, 2023, was $30.3 million, a reduction of $14.3 million (32.1%) from a net loss of $44.7 million in the prior year[132]. - The basic and diluted net loss per share for the six months ended June 30, 2023, was $(0.85), down from $(1.28) for the same period in 2022[48]. - The net losses for the three and six months ended June 30, 2023, were $10.8 million and $30.3 million, respectively, with an accumulated deficit of $292.0 million as of June 30, 2023[105]. Assets and Liabilities - Total current assets decreased by 44.5% from $87,493 thousand on December 31, 2022, to $48,379 thousand on June 30, 2023[14]. - Cash and cash equivalents decreased from $51,954 thousand on December 31, 2022, to $39,712 thousand on June 30, 2023, a decline of 23.4%[14]. - Total liabilities decreased by 34.8% from $52,043 thousand on December 31, 2022, to $33,975 thousand on June 30, 2023[14]. - Total stockholders' equity decreased from $69,195 thousand on December 31, 2022, to $45,408 thousand on June 30, 2023, a decline of 34.4%[14]. - The company had cash, cash equivalents, and restricted cash of $41,672 thousand at the end of the period, down from $44,072 thousand at the same time last year[26]. Operating Expenses - Total operating expenses for the three months ended June 30, 2023, were $11.8 million, a decrease of $9.4 million compared to $21.3 million for the same period in 2022[121]. - Research and development expenses for the three months ended June 30, 2023, were $4.6 million, down from $13.3 million in the same period in 2022, reflecting a decrease of $8.7 million[121]. - General and administrative expenses for the three months ended June 30, 2023, were $7.2 million, a decrease of $0.8 million from $8.0 million in the same period in 2022[127]. - Total operating expenses for the six months ended June 30, 2023, were $32.3 million, a decrease of $12.2 million (27.4%) compared to $44.5 million in the same period of 2022[132]. - Research and development expenses totaled $15.9 million for the six months ended June 30, 2023, down $11.1 million (41.1%) from $27.1 million in 2022[133]. Cash Flow - Net cash used in operating activities for the six months ended June 30, 2023, was $22,556 thousand, compared to $30,821 thousand for the same period in 2022, a decrease of 26.9%[26]. - Cash, cash equivalents, and marketable securities totaled $46.5 million as of June 30, 2023[145]. - Interest income for the three months ended June 30, 2023, was $0.3 million, compared to $0.4 million for the same period in 2022[128]. - There was no interest expense for the three months ended June 30, 2023, compared to $0.2 million for the same period in 2022, due to loan prepayment[129]. - Interest income increased to $0.9 million for the six months ended June 30, 2023, compared to $0.5 million in the same period of 2022, reflecting changes in investment balances[140]. Workforce and Restructuring - The Company underwent a restructuring in February and May 2023, resulting in a personnel reduction of approximately 55%[28]. - The Company announced a reduction in force of approximately 55% of its workforce following the failure of the FX-322 Phase 2b study to achieve its primary efficacy endpoint[94]. - The company announced a reduction in force of approximately 55% of its workforce in February 2023, with total restructuring costs of approximately $4.3 million[149]. - The Company incurred $4,329 in restructuring-related expenses in the six months ended June 30, 2023, including $3,840 in severance and other benefit-related costs[95]. Strategic Initiatives - The Company expects to continue generating operating losses for the foreseeable future, relying on its ability to raise additional capital[29]. - The Company plans to focus on developing a product candidate for remyelination in multiple sclerosis following the discontinuation of the FX-322 and FX-345 programs[102]. - The company is focusing on pursuing strategic alternatives for its MS Program and expects research and development expenses to relate to this initiative for the remainder of 2023[112]. - The Company entered into a Merger Agreement with Korro Bio on July 14, 2023, with Korro Bio becoming a wholly owned subsidiary[98]. - Following the merger agreement on July 14, 2023, the company does not expect any further development of its product candidates or programs[151]. Terminations and Agreements - The company terminated the Astellas Agreement on April 14, 2023, with no payments or costs incurred as a result of this termination[71]. - The Company terminated the CALIBR License Agreement in April 2023 without any associated payments or costs[76]. - The Company also terminated the MEE License Agreement in April 2023, incurring no payments or costs as a result[78]. - The company terminated several license agreements, including the Astellas Agreement and the MIT License, with no associated payments or costs due to these terminations[107][108]. Market and Risk Factors - The company has not experienced any material changes to its critical accounting policies during the six months ended June 30, 2023, compared to the previous year[164]. - The company has incorporated risk factors from its Registration Statement on Form S-4 filed with the SEC on July 27, 2023[174]. - The company is classified as a smaller reporting company and is not required to provide certain disclosures under Regulation S-K[179]. - The company has not disclosed any quantitative and qualitative disclosures about market risk as it is considered a small reporting company[168].
Korro Bio(KRRO) - 2023 Q2 - Quarterly Report