Financial Performance - Revenue for the three months ended June 30, 2022, was $0, compared to $9,417,000 for the same period in 2021, indicating a 100% decrease[19]. - The company had no revenue for the six months ended June 30, 2022, compared to $14,068,000 for the same period in 2021, indicating a 100% decrease[19]. - Net loss for the six months ended June 30, 2022, was $44,671,000, compared to a net loss of $38,031,000 for the same period in 2021, reflecting an increase in loss of approximately 17.5%[23]. - The net loss for the three months ended June 30, 2022, was $21,285, compared to a net loss of $17,656 for the same period in 2021, reflecting a year-over-year increase of approximately 9.2%[50]. - For the six months ended June 30, 2022, the net loss was $44,671, up from $38,031 in the same period of 2021, representing an increase of about 17.4%[50]. Assets and Cash Flow - Total assets decreased from $185,358,000 on December 31, 2021, to $149,658,000 on June 30, 2022, representing a decline of approximately 19.2%[17]. - Cash and cash equivalents decreased from $79,635,000 on December 31, 2021, to $42,373,000 on June 30, 2022, a reduction of about 46.8%[17]. - The company reported a net cash used in operating activities of $30,821,000 for the six months ended June 30, 2022, compared to $43,148,000 for the same period in 2021, a reduction of about 28.5%[29]. - Cash, cash equivalents, and marketable securities totaled $111.0 million as of June 30, 2022, expected to fund operations into 2024[209]. Operating Expenses - Total operating expenses for the three months ended June 30, 2022, were $21,273,000, down from $26,900,000 in the same period of 2021, a decrease of approximately 21.1%[19]. - Total operating expenses decreased to $44.5 million for the six months ended June 30, 2022, down from $51.8 million in 2021, representing a reduction of $7.2 million[193]. - Research and development expenses totaled $27.1 million for the six months ended June 30, 2022, a decrease of $5.5 million from $32.5 million in 2021[196]. - General and administrative expenses were $17.5 million for the six months ended June 30, 2022, down $1.8 million from $19.3 million in 2021[200]. Stockholder Equity and Shares - Stockholders' equity decreased from $130,824,000 on December 31, 2021, to $95,853,000 on June 30, 2022, a decline of approximately 26.7%[17]. - The weighted-average shares of common stock outstanding increased from 34,238,394 for the three months ended June 30, 2021, to 34,976,409 for the same period in 2022, an increase of approximately 2.2%[19]. - The company has authorized 200,000,000 shares of common stock, with 34,976,409 shares issued and outstanding as of June 30, 2022[54]. Research and Development - The company is focused on developing FX-322 to treat sensorineural hearing loss (SNHL), with a goal to help millions of people[127]. - In the Phase 1/2 clinical trial (FX-322-201), 23 subjects showed a statistically significant improvement in word recognition scores, with 34% achieving a 10% or greater absolute improvement[128][130]. - The Phase 2a clinical trial (FX-322-202) did not demonstrate improvements in hearing measures compared to placebo, raising concerns about the reliability of baseline scores[129]. - The company expects research and development expenses to continue to increase substantially as it conducts ongoing clinical trials and develops additional product candidates[162]. Financing and Capital Needs - The company expects to continue generating operating losses for the foreseeable future, emphasizing the need for additional capital to finance operations[32]. - Additional financing will be necessary to support ongoing operations, as the company does not expect to generate significant revenue from product sales in the foreseeable future[141]. - The company has raised approximately $378.3 million to date, including from grants and option exercises[209]. Legal and Compliance - The company intends to vigorously defend against ongoing class action lawsuits alleging violations of securities laws, with no accruals recorded as of June 30, 2022[119][123]. - The company has recorded a valuation allowance against its deferred tax assets due to uncertainty around utilizing these tax attributes[175]. Workforce and Operational Changes - The company announced a reduction in force of approximately 30% of its workforce to align with near-term business needs and focus on research and development for its lead candidates FX-322 and FX-345[137]. - The company announced a reduction in force of approximately 30% of its workforce to better align resources with business needs, with estimated costs of $1.2 million related to severance[212].
Korro Bio(KRRO) - 2022 Q2 - Quarterly Report