Rain Oncology (RAIN) - 2023 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) This section presents Rain Oncology Inc.'s unaudited condensed consolidated financial statements, covering financial position, operations, equity, cash flows, and notes Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position at specific dates, detailing assets, liabilities, and stockholders' equity | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | Change (in thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Cash and cash equivalents | $37,312 | $61,955 | $(24,643) | | Short-term investments | $40,008 | $68,499 | $(28,491) | | Total current assets | $80,816 | $133,628 | $(52,812) | | Total assets | $82,060 | $135,180 | $(53,120) | | Total current liabilities | $14,477 | $21,966 | $(7,489) | | Total liabilities | $14,541 | $22,144 | $(7,603) | | Total stockholders' equity | $67,519 | $113,036 | $(45,517) | Condensed Consolidated Statements of Operations and Comprehensive Loss This section outlines the company's revenues, expenses, and net loss over specific periods, reflecting operational performance | Metric | 3 Months Ended Sep 30, 2023 (in thousands) | 3 Months Ended Sep 30, 2022 (in thousands) | Change (in thousands) | 9 Months Ended Sep 30, 2023 (in thousands) | 9 Months Ended Sep 30, 2022 (in thousands) | Change (in thousands) | | :---------------------------------- | :----------------------------------------- | :----------------------------------------- | :-------------------- | :----------------------------------------- | :----------------------------------------- | :-------------------- | | Research and development | $3,965 | $14,510 | $(10,545) | $35,622 | $42,322 | $(6,700) | | General and administrative | $4,113 | $3,901 | $212 | $14,593 | $11,257 | $3,336 | | Restructuring charges | $— | $— | $— | $2,837 | $— | $2,837 | | Total operating expenses | $8,078 | $18,411 | $(10,333) | $53,052 | $53,579 | $(527) | | Loss from operations | $(8,078) | $(18,411) | $10,333 | $(53,052) | $(53,579) | $527 | | Interest income | $1,044 | $370 | $674 | $3,470 | $533 | $2,937 | | Net loss | $(7,034) | $(18,041) | $11,007 | $(49,582) | $(53,046) | $3,464 | | Net loss per share, basic and diluted | $(0.19) | $(0.68) | $0.49 | $(1.36) | $(2.00) | $0.64 | - Net loss per share (basic and diluted) improved significantly: from $(0.68) to $(0.19) for the three months ended September 30, 2023, and from $(2.00) to $(1.36) for the nine months ended September 30, 2023[10] Condensed Consolidated Statements of Stockholders' Equity This section details changes in the company's equity accounts, including accumulated deficit and additional paid-in capital, over specific periods | Metric | Dec 31, 2022 (in thousands) | Sep 30, 2023 (in thousands) | Change (in thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Total Stockholders' Equity | $113,036 | $67,519 | $(45,517) | | Accumulated Deficit | $(165,688) | $(215,270) | $(49,582) | | Additional Paid-in Capital | $278,853 | $282,816 | $3,963 | - Net loss for the nine months ended September 30, 2023, was $(20,484) thousand for Q1, $(22,064) thousand for Q2, and $(7,034) thousand for Q3, contributing to the accumulated deficit[12] - Additional paid-in capital increased by $3,963 thousand, driven by stock option exercises, employee stock purchase plan issuances, equity financings, and stock-based compensation expense[12] Condensed Consolidated Statements of Cash Flows This section reports the cash generated and used by the company across operating, investing, and financing activities over specific periods | Activity | 9 Months Ended Sep 30, 2023 (in thousands) | 9 Months Ended Sep 30, 2022 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------------------- | :----------------------------------------- | :-------------------- | | Net cash used in operating activities | $(52,462) | $(49,905) | $(2,557) | | Net cash provided by investing activities | $27,341 | $64,386 | $(37,045) | | Net cash provided by financing activities | $478 | $573 | $(95) | | Net (decrease) increase in cash and cash equivalents | $(24,643) | $15,054 | $(39,697) | | Cash and cash equivalents at end of period | $37,312 | $39,834 | $(2,522) | - Investing activities in 2023 included $69.7 million from maturities of short-term investments and $39.6 million in purchases, along with a $2.0 million milestone payment to Daiichi[160] - Financing activities in 2023 included $0.3 million of net proceeds from the ATM Facility and $0.2 million from equity incentive plans and employee stock purchase plan (ESPP) purchases[162] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and additional information supporting the condensed consolidated financial statements Note 1 – Organization and Nature of Operations This note describes the company's formation, business segment, primary product candidate, and ongoing financial viability - Rain Oncology Inc. (formerly Rain Therapeutics Inc.) was incorporated in Delaware in April 2017 and operates in one business segment, headquartered in Newark, California[15] - The company's product candidate, milademetan, is a small molecule, oral inhibitor of the MDM2-p53 complex that reactivates p53[15] - From inception through September 30, 2023, the Company has incurred net losses and negative cash flows from operating activities, funding operations through IPO proceeds, common stock sales, convertible promissory notes, and preferred stock[18] - Management believes current cash, cash equivalents, and short-term investments will provide sufficient funds to meet obligations for at least twelve months from the filing date[19] Note 2 – Summary of Significant Accounting Policies This note outlines the key accounting principles and estimates used in preparing the financial statements - The most significant estimate in the financial statements relates to clinical trial expense accruals[20] - Cash equivalents include highly liquid investments with an original maturity of three months or less[21] - Available-for-sale (AFS) securities are carried at fair value, with unrealized gains and losses reported as a separate component of accumulated other comprehensive loss[23] - Research and development costs are expensed as incurred[26] - The company adopted ASU 2016-13 (Financial Instruments—Credit Losses) on January 1, 2023, which did not have a significant impact on the financial statements[37] Note 3 – Fair Value Measurements This note explains the methodology and hierarchy used to determine the fair value of financial instruments - The fair value hierarchy categorizes inputs into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[39][41] | Asset Type | Level 1 | Level 2 | Level 3 | Total | | :------------------------------------ | :------ | :------ | :------ | :------ | | Money market funds | $8,669 | $— | $— | $8,669 | | Commercial paper | $— | $22,968 | $— | $22,968 | | U.S. government securities | $18,578 | $— | $— | $18,578 | | U.S. agency bonds | $— | $26,568 | $— | $26,568 | | Total cash equivalents and short-term investments | $27,247 | $49,536 | $— | $76,783 | - No transfers between levels of the fair value hierarchy occurred during the three and nine months ended September 30, 2023[46] Note 4 – Investments This note details the company's investment portfolio, including types, amortized cost, and fair value | Type | Amortized Cost (Sep 30, 2023) | Fair Value (Sep 30, 2023) | Amortized Cost (Dec 31, 2022) | Fair Value (Dec 31, 2022) | | :-------------------------- | :---------------------------- | :-------------------------- | :---------------------------- | :-------------------------- | | Money market funds | $8,669 | $8,669 | $8,528 | $8,528 | | Commercial paper | $22,979 | $22,968 | $83,479 | $83,423 | | U.S. government securities | $18,588 | $18,578 | $10,910 | $10,837 | | U.S. agency bonds | $26,611 | $26,568 | $22,175 | $22,143 | | Corporate debt securities | $— | $— | $1,002 | $997 | | Total | $76,847 | $76,783 | $126,094 | $125,928 | - As of September 30, 2023, $44.9 million of marketable securities were in gross unrealized loss positions, none for greater than 12 months, and $22.5 million will mature within three months[51] - Unrealized losses are primarily due to changes in interest rates and not due to increased credit risks associated with specific securities[52] Note 5 - Condensed Consolidated Balance Sheet Details This note provides a breakdown of specific line items within the condensed consolidated balance sheets | Item | Sep 30, 2023 | Dec 31, 2022 | | :------------------------ | :----------- | :----------- | | Prepaid insurance | $1,226 | $913 | | Prepaid research and development | $991 | $1,103 | | FICA tax credit receivable | $531 | $571 | | Prepaid other | $448 | $416 | | Other current assets | $281 | $152 | | Deposits | $19 | $19 | | Total | $3,496 | $3,174 | - Property and equipment, net, increased from $93 thousand at December 31, 2022, to $628 thousand at September 30, 2023, primarily due to leasehold improvements[55] - Other accrued liabilities decreased from $6,424 thousand at December 31, 2022, to $2,190 thousand at September 30, 2023, mainly due to lower accrued bonus and other accrued items[57] Note 6 – Stockholders' Equity This note elaborates on changes in stockholders' equity, including stock option plans and stock-based compensation - The 2021 Equity Incentive Plan automatically increases shares reserved for issuance each January 1st by 4.0% of outstanding common stock, resulting in an increase of 1,451,611 shares on January 1, 2023[61] - Stock options outstanding increased from 2,593,761 at December 31, 2022, to 3,960,030 at September 30, 2023, with a weighted-average exercise price of $6.12[63] - Restricted Stock Units (RSUs) outstanding increased from 8,945 at December 31, 2022, to 41,485 at September 30, 2023[64] - Stock-based compensation expense for the nine months ended September 30, 2023, was $3,633 thousand, compared to $3,591 thousand in the prior year[66] Note 7 – License Agreements This note describes the company's key licensing arrangements and their associated financial obligations and terminations - The company licensed worldwide exclusive rights to milademetan from Daiichi Sankyo in September 2020[74][76] - Aggregate future milestone payments to Daiichi Sankyo could reach up to $223.5 million, contingent on development, regulatory, and sales milestones[77] - The company terminated its preclinical RAD52 program with Drexel University in February 2023 to focus on milademetan[82] - The clinical supply agreement with Roche for atezolizumab was terminated in May 2023, discontinuing plans for the MANTRA-4 clinical trial[83][125] Note 8 – Commitments and Contingencies This note outlines the company's contractual obligations, operating leases, and ongoing legal proceedings - The operating lease for corporate headquarters in Newark, California, expires in September 2024[84][87] | Item | As of September 30, 2023 (in thousands) | | :-------------------------- | :-------------------------------------- | | 2023 - remainder | $119 | | 2024 | $358 | | Total minimum lease payments | $477 | - A securities class action lawsuit was filed on July 17, 2023, alleging violations of Sections 10(b) and 20(a) of the Exchange Act regarding the Phase 3 MANTRA trial[92] - A shareholder derivative lawsuit was filed on September 27, 2023, alleging violations of Section 14(a) of the Exchange Act and breaches of fiduciary duties[94] - The company cannot estimate the possible cost or range of loss from these lawsuits due to their early stage and inherent uncertainties[96] Note 9 – Employee Benefits This note details the company's contributions to employee benefit plans, such as the 401(k) plan - Company matching contributions to the 401(k) plan were $54 thousand for the three months ended September 30, 2023 (down from $164 thousand in 2022), and $630 thousand for the nine months ended September 30, 2023 (up from $320 thousand in 2022)[97] Note 10 – Restructuring Charges This note explains the nature and financial impact of workforce reduction and related restructuring activities - Restructuring charges of $2.8 million were recorded in Q2 2023 due to a workforce reduction, comprising $2.8 million in cash severance and related benefits, and $37 thousand in stock-based compensation expense[98] - As of September 30, 2023, all cash severance, employee transition, and related employee benefits and taxes have been paid in full[98] Note 11 – Net Loss Per Share This note details the calculation of basic and diluted net loss per share and the treatment of potentially dilutive securities | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :------------------------------------------------ | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Net loss | $(7,034) | $(18,041) | $(49,582) | $(53,046) | | Weighted-average shares outstanding (basic & diluted) | 36,375,671 | 26,564,615 | 36,359,744 | 26,535,474 | | Net loss per share (basic & diluted) | $(0.19) | $(0.68) | $(1.36) | $(2.00) | - Potentially dilutive securities (stock options, RSUs, ESPP shares) were excluded from diluted EPS calculation as their inclusion would be anti-dilutive due to the company's net loss position[99] Note 12 – Subsequent Event This note discloses significant events that occurred after the reporting period but before the financial statements were issued - In October 2023, Concentra Biosciences LLC proposed to acquire all outstanding common stock for $1.25 per share in cash, plus a contingent value right for 80% of net proceeds from any program license/disposition[101] - The Board of Directors is currently reviewing and evaluating the unsolicited acquisition proposal[101] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Rain Oncology Inc.'s financial condition and results for Q3 2023, covering business, clinical setbacks, expenses, liquidity, and accounting Overview This section provides a high-level summary of the company's business, financial status, and funding history - Rain Oncology is a precision oncology company developing milademetan, an oral MDM2-p53 complex inhibitor, in-licensed from Daiichi Sankyo in September 2020[103] - As of September 30, 2023, the company had an accumulated deficit of $215.3 million and net losses of $7.0 million (Q3 2023) and $49.6 million (YTD Q3 2023)[104] - The company's operations have been funded primarily through convertible promissory notes ($9.9 million), convertible preferred stock ($81.9 million), and common stock sales, including a November 2022 offering that yielded $52.9 million net proceeds[104] - Cash, cash equivalents, and short-term investments totaled $77.3 million as of September 30, 2023, believed to be sufficient for at least the next twelve months, but additional capital will be required[104][150] Recent Developments This section highlights key updates regarding the company's clinical trials and strategic direction - The Phase 3 MANTRA trial for milademetan in dedifferentiated liposarcoma (DDLPS) did not meet its primary endpoint of progression-free survival (PFS) by blinded independent central review[109][120] - Median PFS for milademetan was 3.6 months versus 2.2 months for trabectedin, with a hazard ratio of 0.89, p=0.53[110] - Enrollment in the Phase 2 MANTRA-2 trial was suspended in July 2023 and the study was terminated in October 2023[111][123] - Plans for the Phase 1/2 MANTRA-4 clinical trial were terminated in May 2023[126] Our Development Pipeline This section describes the company's primary product candidate and its ongoing development status - The company retains global development and commercialization rights to its product candidate, milademetan[112] - Milademetan is a small molecule, oral inhibitor of MDM2 and is being developed in patients with MDM2-dependent cancers[113] - Milademetan reactivates p53 by inhibiting MDM2, preventing the formation of the MDM2-p53 complex[116][117] Our Product Candidate, Milademetan This section introduces milademetan, its mechanism of action, and its role in treating MDM2-dependent cancers Clinical Development Plan This section outlines the status and outcomes of the company's clinical trials for milademetan - The Phase 3 MANTRA trial for DDLPS patients completed enrollment in August 2022 but did not meet its primary endpoint of PFS[120] - The Phase 2 MANTRA-2 trial, evaluating milademetan in MDM2-amplified advanced solid tumors, was terminated in October 2023 after enrollment suspension in July 2023[123] - Six patients in MANTRA-2 experienced a partial response across different tumor histologies (lung, sarcoma, pancreatic, urothelial and gastric cancers)[111] - Plans for the MANTRA-4 clinical trial, combining milademetan with atezolizumab, were terminated in May 2023[126] Collaboration and License Agreements This section summarizes the company's agreements for in-licensed product candidates and development programs - The company is party to license agreements for its in-licensed product candidates and development programs, as detailed in Note 7 to the Condensed Consolidated Financial Statements[127] Components of Our Results of Operations This section breaks down the various revenue and expense categories that contribute to the company's financial performance Revenue This section discusses the company's current and expected revenue generation from product sales, licenses, or collaborations - The company has not generated any revenue from product sales, licenses, or collaborations to date and does not expect to in the foreseeable future[128] Operating Expenses This section describes the primary categories of costs incurred in the company's operations, including R&D and G&A - Operating expenses since inception have consisted solely of research and development costs (including acquisition of in-process research and development) and general and administrative costs[129] Research and Development Expenses This section details the costs associated with the company's R&D activities, including clinical trials and personnel | Category | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Change (3 Months) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Change (9 Months) | | :------------------------------------ | :---------------------------- | :---------------------------- | :---------------- | :---------------------------- | :---------------------------- | :---------------- | | Milademetan | $1,244 | $7,639 | $(6,395) | $16,743 | $23,766 | $(7,023) | | Other research and clinical candidates | $216 | $158 | $58 | $419 | $569 | $(150) | | Unallocated internal R&D costs | $2,505 | $6,713 | $(4,208) | $18,460 | $17,987 | $473 | | Total R&D expenses | $3,965 | $14,510 | $(10,545) | $35,622 | $42,322 | $(6,700) | - R&D expenses decreased primarily due to the winding down of the MANTRA and MANTRA-2 clinical trials for milademetan, and lower payroll-related costs for R&D personnel due to a workforce reduction[138][139] - R&D costs are expected to decrease for the remainder of 2023 as clinical trials continue to wind down and the clinical strategy is reprioritized[140] General and Administrative Expenses This section outlines the costs related to the company's overall management and administrative functions - G&A expenses increased by $0.2 million for the three months and $3.3 million for the nine months ended September 30, 2023, primarily due to higher professional services, legal costs, and payroll-related costs[137][141][142] - G&A expenses are expected to continue to decrease for the remainder of 2023 as the company implements its reprioritized business strategy[142] Interest Income This section reports income earned from the company's cash, cash equivalents, and short-term investments - Interest income increased by $0.67 million for the three months and $2.94 million for the nine months ended September 30, 2023, reflecting higher interest on money market or short-term investments[137][144] Results of Operations This section provides a comprehensive analysis of the company's financial performance over specific reporting periods Comparison of Three and Nine Months Ended September 30, 2023 and 2022 This section compares the company's financial results for the current and prior periods, highlighting key changes | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Change (3 Months) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Change (9 Months) | | :-------------------------- | :---------------------------- | :---------------------------- | :---------------- | :---------------------------- | :---------------------------- | :---------------- | | Research and development | $3,965 | $14,510 | $(10,545) | $35,622 | $42,322 | $(6,700) | | General and administrative | $4,113 | $3,901 | $212 | $14,593 | $11,257 | $3,336 | | Restructuring charges | $— | $— | $— | $2,837 | $— | $2,837 | | Total operating expenses | $8,078 | $18,411 | $(10,333) | $53,052 | $53,579 | $(527) | | Loss from operations | $(8,078) | $(18,411) | $10,333 | $(53,052) | $(53,579) | $527 | | Interest income | $1,044 | $370 | $674 | $3,470 | $533 | $2,937 | | Net loss | $(7,034) | $(18,041) | $11,007 | $(49,582) | $(53,046) | $3,464 | Research and Development Expenses This section analyzes the changes and drivers of the company's research and development expenditures - R&D expenses decreased by $10.5 million for the three months and $6.7 million for the nine months ended September 30, 2023, primarily due to the winding down of clinical trials and lower payroll costs from a workforce reduction[138][139] General and Administrative Expenses This section examines the changes and factors influencing the company's general and administrative costs - G&A expenses increased by $0.2 million for the three months and $3.3 million for the nine months ended September 30, 2023, driven by higher professional services, legal costs, and payroll-related costs[141][142] Restructuring Charges This section discusses the financial impact of the company's restructuring activities, including workforce reductions - The company recorded $2.8 million in restructuring charges in the second quarter of 2023 due to a workforce reduction[143] Other Income This section details other non-operating income sources, primarily interest income, and their trends - Interest income increased significantly for both periods due to higher interest rates on money market or short-term investments[144] Liquidity and Capital Resources This section assesses the company's ability to meet its short-term and long-term financial obligations and fund operations - The company has incurred significant operating losses since inception and expects to continue incurring losses, requiring additional capital for future R&D and operations[145] - As of September 30, 2023, cash, cash equivalents, and short-term investments totaled $77.3 million, expected to be sufficient for at least the next twelve months[150] - Funding sources include convertible promissory notes ($9.9 million), convertible preferred stock ($81.9 million), and common stock sales, including $0.3 million from an ATM facility in YTD 2023 and $52.9 million net from a November 2022 offering[146][147][148] Future Funding Requirements This section outlines the company's anticipated capital needs and potential strategies for securing additional funding - Future expenses are expected to increase substantially with ongoing development activities for milademetan and other candidates, and public company operating costs[151] - Key factors influencing future capital requirements include clinical trial costs, regulatory review, commercialization activities, intellectual property, and potential acquisitions[151][156] - The company expects to finance cash needs through public/private equity offerings (including ATM Facility), debt financings, or strategic collaborations/licensing arrangements[156] - Raising additional capital through equity or convertible debt may dilute stockholder ownership and include liquidation or other preferences[156] Cash Flows This section analyzes the sources and uses of cash from operating, investing, and financing activities | Activity | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Change (in thousands) | | :-------------------------------- | :---------------------------- | :---------------------------- | :-------------------- | | Operating activities | $(52,462) | $(49,905) | $(2,557) | | Investing activities | $27,341 | $64,386 | $(37,045) | | Financing activities | $478 | $573 | $(95) | | Net (decrease) increase in cash and cash equivalents | $(24,643) | $15,054 | $(39,697) | - Net cash used in operating activities for YTD 2023 was $52.5 million, primarily due to net loss and changes in operating assets/liabilities[158] - Net cash provided by investing activities for YTD 2023 was $27.3 million, mainly from maturities of short-term investments offset by purchases and a milestone payment[160] - Net cash provided by financing activities for YTD 2023 was $0.5 million, from ATM facility proceeds and equity incentive plans[162] Obligations and other Commitments This section describes the company's contractual obligations, including license payments and accrued R&D - License agreements may require future milestone and royalty payments, but these are not estimable and the agreements are cancelable by the company[164] - Accrued research and development obligations were $2.9 million as of September 30, 2023, down from $8.2 million at December 31, 2022[166] Critical Accounting Policies and Use of Estimates This section discusses the accounting policies that require significant judgment and estimates by management Accrued Research and Development This section explains the company's methodology for estimating and accruing expenses related to R&D activities - The company estimates expenses for preclinical and clinical trial obligations under contracts with vendors, consultants, CROs, and clinical sites[168] - Accrued R&D balances were $2.9 million as of September 30, 2023, and $8.2 million as of December 31, 2022[169] Stock-Based Compensation This section details the accounting treatment and estimation methods for stock-based compensation expenses - Stock-based compensation expense is measured at grant date fair value and recognized over the requisite service period (generally the vesting period) on a straight-line basis[170][172] - The fair value of stock options is estimated using the Black-Scholes option pricing model, while RSUs are based on the company's closing stock price on the grant date[171] - Total unrecognized compensation cost was $10.5 million as of September 30, 2023, expected to be recognized as expense over approximately 1.9 years[66] Recent Accounting Pronouncements This section provides information on newly issued accounting standards and their potential impact on the company - A description of recent accounting pronouncements that may potentially impact the company's financial position, results of operations, or cash flows is disclosed in Note 2[175] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Rain Oncology Inc. is not required to provide quantitative and qualitative disclosures about market risk - Rain Oncology Inc. is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[176] Item 4. Controls and Procedures Management evaluated disclosure controls and procedures as effective as of September 30, 2023, with no material changes in internal control - The company's disclosure controls and procedures were evaluated as effective at the reasonable assurance level as of September 30, 2023[178] - No changes in internal control over financial reporting occurred during the quarter ended September 30, 2023, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[179] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company faces securities class action and shareholder derivative lawsuits related to the Phase 3 MANTRA trial, with losses inestimable - A securities class action lawsuit was filed on July 17, 2023, alleging violations of Sections 10(b) and 20(a) of the Exchange Act regarding the Phase 3 MANTRA trial[92] - A shareholder derivative lawsuit was filed on September 27, 2023, alleging violations of Section 14(a) of the Exchange Act and breaches of fiduciary duties[94] - The company cannot estimate the ultimate outcome or possible loss from these lawsuits due to their early stage and inherent uncertainties[96] Item 1A. Risk Factors The company faces various business risks, including new concerns about activist stockholders and an unsolicited acquisition proposal - The company's business faces various risks, including those described in its Annual Report on Form 10-K and prior Quarterly Report on Form 10-Q[183] - A new risk factor highlights potential adverse consequences from activist stockholders, citing an unsolicited acquisition proposal received in October 2023[184] - Responding to activist activities can be costly, time-consuming, disruptive, and may affect stock price and the ability to attract qualified personnel or collaborators[184] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities and use of proceeds to report[185] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities to report for the period - No defaults upon senior securities to report[186] Item 4. Mine Safety Disclosures There were no mine safety disclosures to report for the period - No mine safety disclosures to report[187] Item 5. Other Information There was no other information to report for the period - No other information to report[188] Item 6. Exhibits This section lists the exhibits filed or furnished as part of the Quarterly Report on Form 10-Q, including corporate organizational documents, agreements, certifications from executive officers, and XBRL financial data files - Includes Amended and Restated Certificate of Incorporation, Bylaws, Common Stock Certificate, and Investors' Rights Agreement[190] - Lists certifications from the principal executive and financial officers pursuant to Rules 13a-14(a) and 18 U.S.C. Section 1350[190] - Includes Inline XBRL Instance Document and Taxonomy Extension Documents for interactive data filing[190] Signatures The report is signed by Avanish Vellanki, Chairman and Chief Executive Officer, and Josephine Bruce, Director of Accounting, on November 9, 2023, certifying its submission - The report is signed by Avanish Vellanki (Chairman and Chief Executive Officer) and Josephine Bruce (Director of Accounting) on November 9, 2023[194]