Financial Performance - The company had a net loss of $23,386,000 for the three months ended March 31, 2022, compared to a net loss of $20,375,000 for the same period in 2021, representing an increase in loss of approximately 15%[20]. - The Company reported a net loss of $23,386,000 for the three months ended March 31, 2022, compared to a net loss of $20,375,000 for the same period in 2021, representing an increase in loss of approximately 14.8%[53]. - Revenue for the three months ended March 31, 2022 was $0, a decrease of $4.7 million compared to $4.7 million for the same period in 2021, attributed to the conclusion of revenue recognition from the Astellas Agreement[181]. - Total operating expenses for the three months ended March 31, 2022 were $23.3 million, a decrease of $1.6 million from $24.9 million in the same period in 2021[180]. - Net loss for the three months ended March 31, 2022 was $23.4 million, compared to a net loss of $20.4 million for the same period in 2021, reflecting an increase in losses of $3 million[180]. - Research and development expenses totaled $13.8 million for the three months ended March 31, 2022, down from $15.1 million in the same period in 2021, a decrease of $1.3 million[183]. Assets and Liabilities - As of March 31, 2022, Frequency Therapeutics reported total assets of $164,939,000, a decrease of 11% from $185,358,000 as of December 31, 2021[18]. - Cash and cash equivalents decreased to $49,830,000 as of March 31, 2022, down 37% from $79,635,000 at the end of 2021[18]. - The accumulated deficit increased to $203,471,000 as of March 31, 2022, compared to $180,085,000 at the end of 2021[18]. - The company had total liabilities of $52,269,000 as of March 31, 2022, a slight decrease from $54,534,000 at the end of 2021[18]. - Cash, cash equivalents, and marketable securities totaled $124.8 million as of March 31, 2022, expected to fund operations into 2024[196]. Stock and Shares - The weighted-average shares of common stock outstanding increased to 34,810,676 in Q1 2022 from 34,115,682 in Q1 2021, reflecting an increase of approximately 2%[20]. - The weighted-average shares of common stock outstanding increased to 34,810,676 as of March 31, 2022, from 34,115,682 in the prior year, reflecting a growth of about 2.0%[53]. - The Company has authorized 200,000,000 shares of common stock, with 34,976,409 shares issued and outstanding as of March 31, 2022, up from 34,611,213 shares as of December 31, 2021[57]. - The Company sold 12,767 shares of common stock under its ATM program for net proceeds of approximately $50,000 during the three months ended March 31, 2022[59]. - The total grant date fair value of options vested during the three months ended March 31, 2022, was $5,097,000, compared to $4,284,000 for the same period in 2021, an increase of approximately 18.9%[64]. Operating Activities - The company had a net cash used in operating activities of $17,343,000 for Q1 2022, a decrease from $25,474,000 in Q1 2021[29]. - Net cash used in operating activities for the three months ended March 31, 2022 was $17.3 million, a decrease from $25.5 million in the same period in 2021[201]. - The company incurred $12.7 million in net cash used in investing activities for the three months ended March 31, 2022, primarily due to $20.8 million in purchases of marketable securities[203]. - Net cash used in investing activities for Q1 2021 was $26.2 million, primarily from the purchase of marketable securities totaling $25.7 million[207]. - Net cash provided by financing activities for Q1 2021 was $0.6 million from the exercise of stock options[208]. Future Outlook and Funding - The company expects to continue generating operating losses for the foreseeable future, with future viability dependent on raising additional capital[33]. - Anticipated operating expenses are expected to increase substantially due to the expansion of product development programs, necessitating additional financing[143][144]. - Future funding requirements will depend on the progress and costs associated with clinical development of FX-322 and other product candidates, as well as regulatory requirements[211]. - The company may finance cash needs through public or private equity or debt financings, which could dilute ownership interests[212]. - Existing cash, cash equivalents, and marketable securities are projected to fund operating expenses and capital requirements into 2024, although this estimate is subject to change[210]. Clinical Trials and Product Development - FX-322, the lead product candidate, showed a statistically significant improvement in word recognition scores in a Phase 1b trial, with 34% of subjects achieving a 10% or greater absolute improvement[133]. - The Phase 2a trial of FX-322 did not demonstrate improvements in hearing measures compared to placebo, attributed to uncontrolled bias and limitations in baseline measures[132]. - The company plans to file an investigational new drug application for FX-345 in the second half of 2022, aiming to expand treatment opportunities for different types of sensorineural hearing loss[137]. - The company is focused on advancing its progenitor cell activation approach to potentially treat multiple sclerosis, with a preclinical compound FREQ-162 showing promising results in remyelination[138]. - The company is actively engaged in clinical trials, including a Phase 2b study of FX-322, with the primary endpoint being speech perception in subjects with noise-induced or sudden sensorineural hearing loss[136]. Collaborations and Agreements - Astellas paid the company an upfront payment of $80,000, with potential development milestone payments up to $230,000 and commercialization milestones of up to $315,000 under the collaboration agreement[81]. - The collaboration with Astellas is governed by a joint steering committee, with both parties responsible for development and commercialization activities in their respective territories[80]. - The company has a license agreement with MIT, which includes potential milestone payments up to $2,900 for each Licensed Product or Licensed Process[94]. - The Company is required to make milestone payments up to $26,000 for each Category of CALIBR Licensed Products, with a $1,000 initial license fee payment[101]. - The Company has entered into a license agreement with CALIBR for exclusive rights to certain patent rights for the treatment of multiple sclerosis[99]. Workforce and Operational Changes - Approximately 30% of the workforce was reduced to better align with business needs and focus capital resources on research and development programs, with estimated future cash outlays of $1.2 million related to severance costs[127][139]. - The company announced a reduction in force of approximately 30% of its workforce, with estimated future cash outlays of $1.2 million related to severance costs[200]. Accounting and Compliance - The company is classified as an emerging growth company, allowing it to take advantage of an extended transition period for compliance with new accounting standards[216]. - There were no material changes to critical accounting policies during the three months ended March 31, 2022, compared to the previous annual report[214].
Korro Bio(KRRO) - 2022 Q1 - Quarterly Report