|
|
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
|
02472
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading
Symbol
|
Name of each exchange
on which registered
|
||
|
|
|
Item 1.01. |
Entry into a Material Definitive Agreement.
|
• |
Shelf registration rights. No later than 45 calendar days
following the completion of the Merger, the Company is required to file with the U.S. Securities and Exchange Commission (the “SEC”), a shelf
registration statement registering the resale of the Registrable Securities, and use its commercially reasonable efforts to have such registration statement declared effective by the SEC as promptly as possible.
|
• |
Expenses and indemnification. The fees, costs and expenses of
registrations pursuant to the registration rights granted to the Disc Investors under the Registration Rights Agreement will be borne by the Company. The Registration Rights Agreement contains customary cross-indemnification provisions,
under which the Company is obligated to indemnify holders of Registrable Securities in the event of material misstatements or omissions in the registration statement attributable to the Company, and holders of Registrable Securities are
obligated to indemnify the Company for material misstatements or omissions attributable to them.
|
Item 2.01. |
Completion of Acquisition or Disposition of Assets.
|
Item 3.02. |
Unregistered Sales of Equity Securities.
|
Item 3.03. |
Material Modification to Rights of Security Holders.
|
Item 5.01. |
Changes in Control of Registrant.
|
Item 5.02. |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
Item 5.03. |
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
|
Item 5.05. |
Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.
|
Item 7.01. |
Regulation FD Disclosure.
|
Item 8.01. |
Other Events.
|
Item 9.01. |
Financial Statements and Exhibits.
|
Exhibit
No.
|
Description
|
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated December 28, 2022
|
||
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated December 29, 2022
|
||
Form of Registration Rights Agreement
|
||
Form of Contingent Value Rights Agreement
|
||
Form of Indemnification Agreement for Directors of Disc Medicine, Inc.
|
||
Form of Indemnification Agreement for Officers of Disc Medicine, Inc.
|
||
10.5* |
Common Stock Issuance Agreement, dated as of December 29, 2022, by and between Disc Medicine Opco, Inc., F. Hoffmann-La Roche Ltd. and Hoffmann-La Roche Inc.
|
|
Employment Agreement, dated as of December 29, 2022, by and between Disc Medicine, Inc. and John Quisel, J.D. Ph.D.
|
||
Employment Agreement, dated as of December 29, 2022, by and between Disc Medicine, Inc. and Joanne Bryce
|
||
Employment Agreement, dated as of December 29, 2022, by and between Disc Medicine, Inc. and William Savage, MD, Ph.D.
|
2017 Stock Option and Grant Plan of Disc Medicine, Inc., and form of award agreements thereunder.
|
||
Notice of Termination, Separation Agreement and Release, dated as of December 29, 2022, by and between Gemini Therapeutics, Inc. and Brian Piekos.
|
||
Code of Business Conduct and Ethics of Disc Medicine, Inc.
|
||
Consent of Ernst & Young LLP, independent registered public accounting firm of Disc Medicine, Inc.
|
||
Press release issued on December 29, 2022
|
||
Risk Factors of Disc Medicine, Inc.
|
||
Business Section of Disc Medicine, Inc.
|
||
Disc Medicine, Inc.’s Management’s Discussion and Analysis of Financial Condition and Results of Operations as of September 30, 2022 and for the nine month period ended September
30, 2022 and 2021, and for the years ended December 31, 2022 and 2021
|
||
Audited financial statements of Disc Medicine Opco, Inc. (formerly Disc Medicine, Inc.) for the years ended December 31, 2021 and 2020
|
||
Unaudited condensed consolidated financial statements of Disc Medicine Opco, Inc. (formerly Disc Medicine, Inc.) as of September 30, 2022 and for each of the nine months ended
September 30, 2022 and 2021
|
||
Selected historical and unaudited pro forma condensed combined financial information as of September 20, 2022 and for the nine months ended September 30, 2022 and the year ended
December 31, 2021
|
||
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document).
|
* |
Filed herewith
|
DISC MEDICINE, INC.
|
|
Date: December 29, 2022
|
By:
|
/s/ John Quisel
|
Name:
|
John Quisel, J.D. Ph.D.
|
|
Title:
|
Chief Executive Officer
|
/s/ Georges Gemayel
|
|
Georges Gemayel
|
|
Interim President and Chief Executive Officer
|
/s/ Georges Gemayel
|
|
Georges Gemayel
|
|
Interim President and Chief Executive Officer
|
1. |
Definitions.
|
2.
|
Shelf Registration.
|
a. |
First, the Company shall reduce or eliminate any securities to be included other than Registrable Securities;
|
b. |
Second, the Company shall reduce Registrable Securities represented by Shares other than the Purchase Agreement Shares (applied, in the case that some of such Shares may be
registered, to the Holders on a pro rata basis based on the total number of such unregistered Shares held by such Holders); and
|
c. |
Third, the Company shall reduce Registrable Securities represented by the Purchase Agreement Shares (applied, in the case that some Purchase Agreement Shares may be registered,
to the Holders on a pro rata basis based on the total number of unregistered Purchase Agreement Shares held by such Holders)
|
3. |
Registration Procedures.
|
5. |
Indemnification.
|
6.
|
Miscellaneous.
|
DISC MEDICINE OPCO, INC.
|
||
By:
|
||
Name:
|
||
Title:
|
Name of Holder:
|
||
Signature of Authorized Signatory of Holder:
|
||
Name of Authorized Signatory:
|
||
Title of Authorized Signatory:
|
● |
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
|
● |
block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the
transaction;
|
● |
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
|
● |
an exchange distribution in accordance with the rules of the applicable exchange;
|
● |
privately negotiated transactions;
|
● |
settlement of short sales;
|
● |
in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;
|
● |
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
|
● |
a combination of any such methods of sale; or
|
● |
any other method permitted pursuant to applicable law.
|
Name of Selling Stockholder
|
Number of shares
of Common Stock
Owned Prior to
Offering
|
Maximum Number
of shares of
Common Stock to
be Sold Pursuant to
this Prospectus
|
Number of shares
of Common Stock
Owned After
Offering
|
1.
|
Name.
|
|
(a)
|
Full Legal Name of Selling Stockholder
|
|
(b)
|
Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held:
|
|
(c)
|
Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the
securities covered by this Questionnaire):
|
|
Telephone:
|
|
Fax:
|
Contact Person:
|
(a)
|
Are you a broker-dealer?
|
|
Yes ☐ No ☐ | ||
(b)
|
If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?
|
|
Yes ☐ No ☐ | ||
Note:
|
If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
|
|
(c)
|
Are you an affiliate of a broker-dealer?
|
|
Yes ☐ No ☐
|
||
(d)
|
If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the
time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?
|
|
Yes ☐ No ☐
|
||
Note:
|
If “no” to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
|
(a)
|
Type and Amount of other Company securities owned by the Selling Stockholder (including beneficially owned, as applicable):
|
|
Date:
|
Beneficial
Owner:
|
|||
By:
|
||
Name:
|
||
Title:
|
1. |
The Shares are owned of record and beneficially by Holder.
|
2. |
Holder agrees that, if the Shares are not eligible to be sold pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended (the “Securities
Act”), any offer, sale or transfer of, or other transaction involving, the Shares will only be made (i) pursuant to the Company’s Registration Statement (the “Registration
Statement”) filed pursuant to the Securities Act, in a transaction contemplated in the “Plan of Distribution” section of the prospectus included in the Registration Statement and in accordance with the terms and conditions
set forth in the Registration Rights Agreement, dated December 28, 2022, by and among Disc Medicine, Inc. and Purchasers (the “RRA”), including, but not limited to, the
restrictions upon sales that may be imposed as set forth in the RRA or (ii) to an exemption from the registration requirements of the Securities Act subject to receipt of a legal opinion from Goodwin Procter LLP or other counsel acceptable
to the Company that such offer, sale or transfer is exempt from the registration requirements of the Securities Act;
|
3. |
Holder agrees, for the benefit of the Company and Goodwin Procter LLP, that it will (i) not offer and sell, or cause or permit to be offered or sold, any Shares in violation of federal and state
securities laws, including, without limitation, prospectus delivery requirements of the Securities Act and (ii) immediately stop selling or transferring Shares pursuant to the Registration Statement upon receipt of written notice from the
Company that the Registration Statement may not be used to effect offers, sales or other transfers of the Shares;
|
4. |
Holder (or, in the case of individuals, Holder’s employer) has in place internal policies and procedures to monitor and ensure that no offer, sale or transfer of, or other transaction involving,
the Shares is made in violation of the foregoing restrictions, and Holder will monitor all transactions involving the Shares for the purpose of ensuring that they comply with all federal and state securities laws;
|
5. |
Holder agrees that, in the event the Company in the future reasonably determines that the Shares should be evidenced by a certificate bearing appropriate restrictive transfer legends (and/or a
book-entry including a notation of restricted security status) because the Registration Statement is not available for the resale of the Shares and the Shares are not eligible to be sold pursuant to Rule 144 promulgated under the Securities
Act, the undersigned will take all reasonable action to cause all Shares it then owns or controls to be delivered promptly to the Company’s transfer agent in exchange for one or more stock certificates or warrant certificates bearing
restrictive legends (and/or book-entries including a notation of restricted security status) deemed appropriate by the Company;
|
6. |
Holder acknowledges that the Shares shall remain “restricted securities” as that term is defined for purposes of the Securities Act notwithstanding the removal of their federal securities law
restrictive legend, and Holder agrees that it will inform its brokers of the fact that such securities are “restricted securities” before any offer, sale or transfer of, or other transaction involving, the Shares. In addition, Holder shall
notify the Company of all brokers in whose name, or on whose behalf, any of the Shares are being held on behalf of Holder; and
|
7. |
Holder is familiar with the requirements for effecting resales or transfers of, or other transactions involving, the Shares in compliance with federal and state securities laws and acknowledges and
agrees that the Company and Goodwin Procter LLP (together, the “Indemnified Parties”) are relying on Holder’s representations and agreements in this letter. Holder will indemnify
and hold harmless the Indemnified Parties against any and all loss, damage, claim, liability and expense arising out of or resulting from the breach of any such representation or agreement.
|
Very truly yours,
|
|||
[HOLDER]
|
|||
By:
|
|||
Name:
|
|||
Title:
|
Gemini Therapeutics, Inc.
|
|
By:
|
|
Name:
|
|
Title:
|
|
Continental Stock Transfer and Trust Company
|
|
By:
|
|
Name:
|
|
Title:
|
DISC MEDICINE, INC.
|
||
By:
|
||
Name:
|
||
Title:
|
||
[Name of Indemnitee]
|
DISC MEDICINE, INC.
|
||
By:
|
||
Name:
|
||
Title:
|
||
[Name of Indemnitee]
|
COMPANY:
|
||
DISC MEDICINE, INC.
|
||
By:
|
/s/John Quisel
|
|
Name:
|
John Quisel
|
|
Title:
|
President & CEO
|
|
F. HOFFMANN-LA ROCHE LTD
|
||
By:
|
/s/Vikas Kabra
|
|
Name:
|
Vikas Kabra
|
|
Title:
|
Authorized Signatory
|
|
By:
|
/s/Barbara Schroeder de Castro Lopes
|
|
Name:
|
Barbara Schroeder de Castro Lopes
|
|
Title:
|
Authorized Signatory
|
|
HOFFMANN-LA ROCHE INC.
|
||
By:
|
/s/Gerald Bohm
|
|
Name:
|
Gerald Bohm
|
|
Title:
|
Authorized Signatory
|
|
Address: F. Hoffmann-La Roche Ltd
|
||
Grenzacherstrasse 124
|
||
4070 Basel
|
||
Switzerland
|
||
Attn: Legal Department
|
||
E-mail: and
|
||
and
|
||
Hoffmann-La Roche Inc.
|
||
150 Clove Road, Suite 8
|
||
Little Falls
|
||
New Jersey 07424, U.S.A.
|
||
Attn: Corporate Secretary
|
||
E-mail:
|
DISC MEDICINE, INC.
|
||
By:
|
/s/Donald Nicholson, Ph.D.
|
|
Its:
|
Executive Chairman
|
EXECUTIVE
|
|
/s/John D. Quisel, J.D., Ph.D.
|
|
John D. Quisel, J.D., Ph.D.
|
DISC MEDICINE, INC.
|
||
By:
|
/s/John D. Quisel, J.D., Ph.D.
|
|
Its:
|
Chief Executive Officer
|
EXECUTIVE
|
|
/s/Joanne Bryce, CPA
|
|
Joanne Bryce, CPA
|
DISC MEDICINE, INC.
|
||
By:
|
/s/John D. Quisel, J.D., Ph.D.
|
|
Its:
|
Chief Executive Officer
|
EXECUTIVE
|
|
/s/William Savage, MD, Ph.D.
|
|
William Savage, MD, Ph.D.
|
DATE ADOPTED BY THE BOARD OF DIRECTORS:
|
November 15, 2017
|
DATE APPROVED BY THE STOCKHOLDERS:
|
November 27, 2017
|
ADOPTED BY BOARD OF DIRECTORS:
|
April 30, 2019
|
ADOPTED BY STOCKHOLDERS:
|
April 30, 2019
|
ADOPTED BY BOARD OF DIRECTORS:
|
September 12, 2019
|
ADOPTED BY STOCKHOLDERS:
|
September 12, 2019
|
ADOPTED BY BOARD OF DIRECTORS:
|
October 23, 2020
|
ADOPTED BY STOCKHOLDERS:
|
October 26, 2020
|
ADOPTED BY BOARD OF DIRECTORS:
|
July 21, 2022
|
ADOPTED BY STOCKHOLDERS:
|
July 23, 2022
|
Name of Optionee:
|
__________________ (the “Optionee”)
|
No. of Shares:
|
__________ Shares of Common Stock
|
Grant Date:
|
__________________
|
Vesting Commencement Date:
|
__________________ (the “Vesting Commencement Date”)
|
Expiration Date:
|
__________________ (the “Expiration Date”)
|
Option Exercise Price/Share:
|
$_________________ (the “Option Exercise Price”)
|
Vesting Schedule:
|
[25] percent of the Shares shall vest and become exercisable on the first anniversary of the Vesting Commencement Date; provided that the Optionee continues to have a Service Relationship with the Company at such time. Thereafter,
the remaining [75] percent of the Shares shall vest and become exercisable in [36] equal monthly installments following the first anniversary of the Vesting Commencement Date, provided the Optionee continues to have a Service Relationship
with the Company on each vesting date. Notwithstanding anything in the Agreement to the contrary, in the case of a Sale Event, this Stock Option and the Shares shall be treated as provided in Section 3(c) of the Plan[ provided; however INSERT ANY ACCELERATED VESTING PROVISION HERE].
|
DISC MEDICINE, INC.
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|||
Address:
|
|||
OPTIONEE:
|
|
Name:
|
|
Address:
|
|
[SPOUSE’S CONSENT1
I acknowledge that I have read the
foregoing Incentive Stock Option Agreement
and understand the contents thereof.
]
|
DESIGNATED BENEFICIARY:
|
|
Beneficiary’s Address:
|
|
[ ] | 3. | Other (as referenced in the Agreement and described in the Plan (please describe)) ________________________________. |
Sincerely yours,
|
||
Name:
|
||
Address:
|
||
Date:
|
Name of Optionee:
|
__________________ (the “Optionee”)
|
No. of Shares:
|
__________ Shares of Common Stock
|
Grant Date:
|
__________________
|
Vesting Commencement Date:
|
__________________ (the “Vesting Commencement Date”)
|
Expiration Date:
|
__________________ (the “Expiration Date”)
|
Option Exercise Price/Share:
|
$_________________ (the “Option Exercise Price”)
|
Vesting Schedule:
|
[25] percent of the Shares shall vest and become exercisable on the first anniversary of the Vesting Commencement Date; provided that the Optionee continues to have a Service Relationship with the Company at such time. Thereafter,
the remaining [75] percent of the Shares shall vest and become exercisable in [36] equal monthly installments following the first anniversary of the Vesting Commencement Date, provided the Optionee continues to have a Service Relationship
with the Company on each vesting date. Notwithstanding anything in the Agreement to the contrary, in the case of a Sale Event, this Stock Option and the Shares shall be treated as provided in Section 3(c) of the Plan[ provided; however INSERT ANY ACCELERATED VESTING PROVISION HERE].
|
DISC MEDICINE, INC.
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|||
Address:
|
|||
OPTIONEE:
|
||
Name:
|
||
Address:
|
||
[SPOUSE’S CONSENT2
I acknowledge that I have read the
foregoing Non-Qualified Stock Option Agreement
and understand the contents thereof.
]
|
DESIGNATED BENEFICIARY:
|
|
Beneficiary’s Address:
|
|
[ ] | 3. | Other (as referenced in the Agreement and described in the Plan (please describe)) _____________________________________________________. |
Sincerely yours,
|
||
Name:
|
||
Address:
|
||
Date:
|
Name of Grantee:
|
_________________ (the “Grantee”)
|
No. of Shares:
|
_________ Shares of Common Stock (the “Shares”)
|
Grant Date:
|
____________ __, ____
|
Date of Purchase of Shares:
|
____________ __, ____
|
Vesting Commencement Date:
|
____________ __, ____ (the “Vesting Commencement Date”)
|
Per Share Purchase Price:
|
$________ (the “Per Share Purchase Price”)
|
Vesting Schedule:
|
[25] percent of the Shares shall vest on the [first] anniversary of the Vesting Commencement Date; provided that the Grantee continues to have a Service Relationship with the Company at such time. Thereafter, the remaining [75]
percent of the Shares shall vest in [36] equal monthly installments following the first anniversary of the Vesting Commencement Date, provided the Grantee continues to have a Service Relationship with the Company at such time.
Notwithstanding anything in the Agreement to the contrary in the case of a Sale Event, the Shares of Restricted Stock shall be treated as provided in Section 3(c) of the Plan [provided; however INSERT ANY ACCELERATED VESTING PROVISION HERE].
|
DISC MEDICINE, INC.
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|||
Address:
|
|||
GRANTEE:
|
||
Name:
|
||
Address:
|
||
[SPOUSE’S CONSENT3
I acknowledge that I have read the
foregoing Restricted Stock Agreement
and understand the contents thereof.
] |
Company:
|
||
DISC MEDICINE, INC.
|
||
By:
|
||
Name:
|
||
Title:
|
||
Grantee:
|
||
Name:
|
• |
The Company will pay your salary and any accrued but unused vacation days to which you are entitled through the Separation Date.
|
• |
You will be able to continue group healthcare insurance coverage after the Separation Date under the law known as “COBRA,” subject to eligibility requirements. Any COBRA continuation will be at your own cost, except as otherwise set forth
herein if this Agreement becomes effective.
|
• |
Your eligibility to participate in any other employee benefit plans and programs of the Company will cease on or after the Separation Date in accordance with applicable benefit plan or program terms and practices.
|
• |
The Company will reimburse you for any outstanding, reasonable business expenses you have incurred on the Company’s behalf through the Separation Date in accordance with the Company’s expense reimbursement policy, after the Company’s
timely receipt of appropriate documentation pursuant to such policy.
|
• |
You will cease vesting in all of your stock options and other stock-based awards subject to vesting (the “Equity Awards”) as of your Separation Date in accordance with the terms of the Equity Documents (as defined below), and you
may exercise any vested portion of your options in accordance with the time limits and subject to the terms of the applicable Equity Award agreement and equity plan (the “Equity Documents”) unless otherwise set forth herein if this
Agreement becomes effective.
|
• |
In accordance with Section 15 of the Employment Agreement, your obligations set forth in Sections 8 and 9 in the Employment Agreement will continue after the Separation Date, except as otherwise set forth herein if this Agreement becomes
effective.
|
• |
In accordance with Section 30 of the Employment Agreement, your obligations with respect to confidentiality and assignment of inventions, as set forth in the agreement you signed when your employment began relating to such matters (the “Original
Confidentiality Agreement”), will continue after the Separation Date.
|
• |
relating to your employment by the Company and the end of your employment with the Company;
|
• |
of wrongful discharge or violation of public policy;
|
• |
of breach of contract;
|
• |
of defamation or other torts;
|
• |
of retaliation or discrimination under federal, state, or local law (including, without limitation, Claims of discrimination or retaliation under the Age Discrimination in Employment Act; the Americans with Disabilities Act; Title VII of
the Civil Rights Act of 1964; and the Massachusetts Fair Employment Practices Act);
|
• |
under the Massachusetts Civil Rights Act, the Massachusetts Equal Rights Act, the Massachusetts Labor and Industries Act, the Massachusetts Payment of Wages Act, the Massachusetts Privacy Act, the Massachusetts Parental Leave Act, the
Massachusetts Domestic Violence Leave Act, the Massachusetts Sick Leave Act, and the Massachusetts Paid Family and Medical Leave Act;
|
• |
under any other federal or state statute (including, without limitation, Claims under the Fair Labor Standards Act);
|
• |
for wages, bonuses, incentive compensation, stock, stock options, vacation pay, or any other compensation or benefits, either under the Massachusetts Wage Act, Mass. Gen. Laws ch. 149, §§ 148-150C, or otherwise; and
|
• |
for damages or other remedies of any sort, including, without limitation, compensatory damages, punitive damages, injunctive relief and attorney’s fees.
|
By:
|
/s/ Georges Gemaye
|
December 29, 2022
|
||
Name:
|
Georges Gemayel, Ph.D.
|
Date
|
||
Title:
|
Executive Chair
|
/s/ Brian Piekos
|
December 29, 2022
|
||
Brian Piekos
|
Date
|
I. |
Purpose and Scope
|
II. |
Standards of Conduct
|
A. |
Compliance with Laws, Rules and Regulations
|
B. |
Conflicts of Interest
|
C. |
Insider Trading
|
D. |
Confidentiality
|
E. |
Honest and Ethical Conduct and Fair Dealing
|
F. |
Protection and Proper Use of Corporate Assets
|
G. |
Corporate Opportunities
|
H. |
Political Contributions
|
I. |
Gifts
|
• |
they do not violate applicable law or the Company’s policies;
|
• |
they do not constitute a bribe, kickback, or other improper payment;
|
• |
they have a valid business purpose;
|
• |
they are appropriate as to time, place, value (modest; not lavish or extravagant);
|
• |
they are infrequent; and
|
• |
they do not influence or appear to influence the behavior of the recipient.
|
J. |
Bribes, Kickbacks and Other Improper Payments
|
K. |
International Trade Controls
|
L. |
Accuracy of Records
|
M. |
Quality of Public Disclosures
|
III. |
Compliance Procedures
|
A. |
Communication of Code
|
B. |
Monitoring Compliance and Disciplinary Action
|
C. |
Communication Channels
|
D. |
Anonymity
|
E. |
No Retaliation
|
IV. |
Waivers and Amendments
|
•
|
The combined company will operate as Disc Medicine and will trade on the Nasdaq Global Market under the ticker symbol “IRON”
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Approximately $175 million of cash and cash equivalents to provide operating runway into 2025
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The ongoing phase 2 BEACON and AURORA clinical trials of bitopertin, an investigational, orally administered inhibitor of glycine transporter 1 (GlyT1) that
modulates heme biosynthesis, in patients with erythropoietic protoporphyria (EPP)
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The ongoing phase 1b/2 clinical trial of DISC-0974, a monoclonal antibody designed to suppress hepcidin by inhibiting the hemojuvelin (HJV) co-receptor, in
myelofibrosis patients with anemia
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A planned phase 1b/2 clinical trial of DISC-0974 in patients with anemia of chronic kidney disease (CKD) who are non-dialysis dependent
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Preclinical studies of bitopertin and DISC-0974 to additional indications of interest and advancing several preclinical-stage programs in development designed to
address hematologic diseases
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Disc’s limited operating history may make it difficult for you to evaluate the success of Disc’s business to date and to assess Disc’s future viability;
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Disc has no products approved for commercial sale and has not generated any revenue from product sales;
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Disc has only successfully completed one Phase 1 clinical trial, and may be unable to successfully complete any additional clinical trials for any product candidates it develops. Certain of Disc’s programs are
still in preclinical development and may never advance to clinical development;
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Disc’s programs are focused on the development of therapeutics for patients with hematologic diseases, which is a rapidly evolving area of science, and the approach Disc is taking to discover and develop product
candidates is novel and may never lead to approved or marketable products;
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Disc may incur additional costs or experience delays in initiating or completing, or ultimately be unable to complete, the development and commercialization of its product candidates;
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Disc faces substantial competition, which may result in others discovering, developing, or commercializing products before or more successfully than Disc does;
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Disc relies on third parties to conduct its current clinical trials and expects to continue to rely on third parties. If these third parties do not successfully carry out their contractual duties, comply with
regulatory requirements, or meet expected deadlines, Disc may not be able to obtain regulatory approval for or commercialize its product candidates and its business could be substantially harmed;
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If Disc is unable to obtain and maintain patent and other intellectual property protection for its technology and product candidates, its competitors could develop and commercialize technology and drugs similar to
Disc’s, and Disc may not be able to compete effectively in its market; and
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Obtaining and maintaining regulatory approval of Disc’s product candidates in one jurisdiction does not mean that it will be successful in obtaining regulatory approval of its product candidates in other
jurisdictions.
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The market price of Disc’s common stock is expected to be volatile, and the market price of the common stock may drop following the merger;
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Disc may need to raise additional capital in the future, and such funds may not be available on attractive terms, or at all;
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If the assets subject to the CVR Agreement are not disposed of in a timely manner, Disc may have to incur time and resources to wind down or dispose of such assets;
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Once Disc is no longer an emerging growth company, a smaller reporting company or otherwise no longer qualifies for applicable exemptions, Disc will be subject to additional laws and regulations affecting public
companies that will increase Disc’s costs and the demands on management and could harm Disc’s operating results;
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Provisions in Disc’s charter documents and under Delaware law could make an acquisition of Disc more difficult and may discourage any takeover attempts which stockholders may consider favorable, and may lead to
entrenchment of management;
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An active trading market for Disc’s common stock may not develop and its stockholders may not be able to resell their shares of common stock for a profit, if at all;
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After completion of the merger, Disc’s executive officers, directors and principal stockholders will have the ability to control or significantly influence all matters submitted to Disc’s stockholders for
approval; and
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Disc will have broad discretion in the use of the cash and cash equivalents of Disc and the proceeds from the Disc pre-closing financing and may invest or spend the proceeds in ways with which you do not agree and
in ways that may not increase the value of your investment.
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the timing and success or failure of preclinical studies and clinical trials for its product candidates or competing product candidates, or any other change in the competitive landscape of its industry, including
consolidation among its competitors or partners;
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Disc’s ability to successfully open clinical trial sites and recruit and retain subjects for clinical trials, and any delays caused by difficulties in such efforts;
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Disc’s ability to obtain regulatory approval for its product candidates, and the timing and scope of any such approvals Disc may receive;
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the timing and cost of, and level of investment in, research and development activities relating to Disc’s product candidates, which may change from time to time;
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the cost of manufacturing Disc’s product candidates and products, should they receive regulatory approval, which may vary depending on the quantity of production and the terms of its agreements with manufacturers;
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Disc’s ability to attract, hire and retain qualified personnel;
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expenditures that Disc will or may incur to develop additional product candidates;
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the level of demand for Disc’s products should they receive regulatory approval, which may vary significantly;
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the risk/benefit profile, cost and reimbursement policies with respect to Disc’s product candidates, if approved, and existing and potential future therapeutics that compete with Disc’s product candidates;
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the changing and volatile U.S. and global economic environments, including as a result of the ongoing COVID-19 pandemic; and
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future accounting pronouncements or changes in Disc’s accounting policies.
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successfully complete its ongoing and planned preclinical studies for its current and future product candidates;
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timely file and receive acceptance of its INDs in order to commence its planned clinical trials or future clinical trials;
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successfully enroll subjects in, and complete, its ongoing and planned clinical trials;
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initiate and successfully complete all safety and efficacy studies necessary to obtain U.S. and foreign regulatory approval for its product candidates;
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successfully address the prevalence, duration and severity of potential side effects or other safety issues experienced with its product candidates, if any;
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timely file New Drug Applications, or NDAs, and Biologic License Applications, or BLAs, and receive regulatory approvals for its product candidates from the U.S. Food and Drug Administration, or the FDA, and
comparable foreign regulatory authorities;
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establish and maintain clinical and commercial manufacturing capabilities or make arrangements with third-party manufacturers for clinical supply and commercial manufacturing;
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obtain and maintain patent and trade secret protection or regulatory exclusivity for its product candidates;
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launch commercial sales of its products, if and when approved, whether alone or in collaboration with others;
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obtain and maintain acceptance of the products, if and when approved, by patients, the medical community and third-party payors;
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position its product candidates to effectively compete with other therapies;
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obtain and maintain healthcare coverage and adequate reimbursement;
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enforce and defend intellectual property rights and claims;
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implement measures to help minimize the risk of COVID-19 to its employees as well as patients and subjects enrolled in its clinical trials; and
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maintain a continued acceptable safety profile of its products following approval.
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the timing and progress of preclinical and clinical development activities;
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the number and scope of preclinical and clinical programs Disc decides to pursue;
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Disc’s ability to raise additional funds necessary to complete clinical development of and commercialize its product candidates;
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Disc’s ability to establish new licensing or collaboration arrangements and the progress of the development efforts of third parties with whom Disc may enter into such arrangements;
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Disc’s ability to maintain its current research and development programs and to establish new programs;
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the successful initiation, enrollment and completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority;
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the receipt and related terms of regulatory approvals from applicable regulatory authorities for any product candidates;
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the availability of raw materials for use in production of its product candidates;
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establishing agreements with third-party manufacturers for supply of product candidate components for its clinical trials;
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Disc’s ability to obtain and maintain patents, trade secret protection and regulatory exclusivity, both in the United States and internationally;
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Disc’s ability to protect its other rights in its intellectual property portfolio;
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commercializing product candidates, if and when approved, whether alone or in collaboration with others;
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obtaining and maintaining third-party insurance coverage and adequate reimbursement for any approved products; and
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the potential additional expenses attributable to adjusting Disc’s development plans (including any supply related matters) to the ongoing COVID-19 pandemic.
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the potential diversion of healthcare resources away from the conduct of clinical trials to focus on pandemic concerns, including the attention of physicians serving as Disc’s clinical trial investigators,
hospitals serving as Disc’s clinical trial sites and hospital staff supporting the conduct of Disc’s prospective clinical trials;
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limitations on travel that could interrupt key trial and business activities, such as clinical trial site initiations and monitoring, domestic and international travel by employees, contractors or patients to
clinical trial sites, including any government-imposed travel restrictions or quarantines that will impact the ability or willingness of patients, employees or contractors to travel to Disc’s clinical trial sites or secure visas or entry
permissions, a loss of face-to-face meetings and other interactions with potential partners, any of which could delay or adversely impact the conduct or progress of Disc’s prospective clinical trials;
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the potential negative affect on the operations of Disc’s third-party manufacturers;
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interruption in global shipping affecting the transport of clinical trial materials, such as patient samples, investigational drug product and other supplies used in Disc’s clinical trials;
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business disruptions caused by potential workplace, laboratory and office closures and an increased reliance on employees working from home, disruptions to or delays in ongoing laboratory experiments;
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operations, staffing shortages, travel limitations or mass transit disruptions, any of which could adversely impact Disc’s business operations or delay necessary interactions with local regulators, ethics
committees and other important agencies and contractors;
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changes in local regulations as part of a response to the COVID-19 pandemic, which may require Disc to change the ways in which its clinical trials are conducted, which may result in unexpected costs, or to
discontinue such clinical trials altogether; and
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interruption or delays in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines.
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be delayed in obtaining regulatory approval for its product candidates;
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not obtain regulatory approval at all;
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obtain regulatory approval for indications or patient populations that are not as broad as intended or desired;
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continue to be subject to post-marketing testing requirements; or
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experience having the product removed from the market after obtaining regulatory approval.
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Disc may receive feedback from regulatory authorities that requires Disc to modify the design or implementation of its preclinical studies or clinical trials or to delay or terminate a clinical trial;
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regulators or IRBs or ethics committees may delay or may not authorize Disc or its investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;
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Disc may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective clinical research organizations, or CROs, the terms of which can be subject to
extensive negotiation and may vary significantly among different CROs and trial sites;
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preclinical studies or clinical trials of Disc’s product candidates may fail to show safety or efficacy or otherwise produce negative or inconclusive results, and Disc may decide, or regulators may require Disc,
to conduct additional preclinical studies or clinical trials, or Disc may decide to abandon product research or development programs;
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preclinical studies or clinical trials of Disc’s product candidates may not produce differentiated or clinically significant results across indications;
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the number of patients required for clinical trials of Disc’s product candidates may be larger than anticipated, enrollment in these clinical trials may be slower than anticipated or participants may drop out of
these clinical trials or fail to return for post-treatment follow-up at a higher rate than anticipated;
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Disc’s third-party contractors may fail to comply with regulatory requirements, fail to maintain adequate quality controls, be unable to provide Disc with sufficient product supply to conduct or complete
preclinical studies or clinical trials, fail to meet their contractual obligations to Disc in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that Disc adds new
clinical trial sites or investigators;
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Disc may elect to, or regulators or IRBs or ethics committees may require Disc or its investigators to, suspend or terminate clinical research for various reasons, including noncompliance with regulatory
requirements or a finding that the participants in Disc’s clinical trials are being exposed to unacceptable health risks;
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the cost of clinical trials of Disc’s product candidates may be greater than anticipated;
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clinical trials of Disc’s product candidates may be delayed due to complications associated with the ongoing COVID-19 pandemic;
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the supply or quality of Disc’s product candidates or other materials necessary to conduct clinical trials of its product candidates may be insufficient or inadequate, and any transfer of manufacturing activities
may require unforeseen manufacturing or formulation changes;
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Disc’s product candidates may have undesirable side effects or other unexpected characteristics, causing Disc, regulators or IRBs or ethics committees to suspend or terminate the trials, or reports may arise from
preclinical or clinical testing of other hematologic disease therapies that raise safety or efficacy concerns about Disc’s product candidates;
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any future collaborators may conduct clinical trials in ways they view as advantageous to them but that are suboptimal for Disc; and
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regulators may revise the requirements for approving Disc’s product candidates, or such requirements may not be as anticipated.
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the severity of the disease under investigation;
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the efforts to obtain and maintain patient consents and facilitate timely enrollment in clinical trials;
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the ability to monitor patients adequately during and after treatment;
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the risk that patients enrolled in clinical trials will drop out of the clinical trials before clinical trial completion;
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the ability to recruit clinical trial investigators with the appropriate competencies and experience;
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reporting of the preliminary results of any of Disc’s clinical trials; and
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factors Disc may not be able to control, including the impacts of the COVID-19 pandemic, that may limit patients, principal investigators or staff or clinical site availability.
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the research methodology used may not be successful in identifying potential indications and/or product candidates;
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potential product candidates may, after further study, be shown to have harmful adverse effects or other characteristics that indicate they are unlikely to be effective products; or
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it may take greater human and financial resources than Disc will possess to identify additional therapeutic opportunities for Disc’s product candidates or to develop suitable potential product candidates through
internal research programs, thereby limiting Disc’s ability to develop, diversify and expand its product portfolio.
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the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of Disc’s clinical trials;
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Disc may not be able to enroll a sufficient number of patients in its clinical trials;
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Disc may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication;
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the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;
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Disc may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;
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the FDA or comparable foreign regulatory authorities may disagree with Disc’s interpretation of data from preclinical studies or clinical trials;
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the data collected from clinical trials of Disc’s product candidates may not be sufficient to support the submission of an NDA, BLA or other submission or to obtain regulatory approval in the United States or
elsewhere;
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the FDA or comparable foreign regulatory authorities may find deficiencies with or fail to approve the manufacturing processes or facilities of third-party manufacturers with which Disc contracts for clinical and
commercial supplies; and
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the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change such that Disc’s clinical data are insufficient for approval.
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the efficacy of its current product candidates and any future product candidates;
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the prevalence and severity of adverse events associated with its current product candidates and any future product candidates;
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the clinical indications for which its product candidates are approved and the approved claims that Disc may make for the products;
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limitations or warnings contained in the product’s FDA-approved labeling or those of comparable foreign regulatory authorities, including potential limitations or warnings for its current product candidates and
any future product candidates that may be more restrictive than other competitive products;
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changes in the standard of care for the targeted indications for its current product candidates and any future product candidates, which could reduce the marketing impact of any claims that Disc could make
following FDA approval or approval by comparable foreign regulatory authorities, if obtained;
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the relative convenience and ease of administration of its current product candidates and any future product candidates;
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the cost of treatment compared with the economic and clinical benefit of alternative treatments or therapies;
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the availability of adequate coverage or reimbursement by third-party payors, including government healthcare programs such as Medicare and Medicaid and other healthcare payors;
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the price concessions required by third-party payors to obtain coverage;
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the willingness of patients to pay out-of-pocket in the absence of adequate coverage and reimbursement;
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the extent and strength of Disc’s marketing and distribution of its current product candidates and any future product candidates;
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the safety, efficacy, and other potential advantages over, and availability of, alternative treatments already used or that may later be approved;
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distribution and use restrictions imposed by the FDA or comparable foreign regulatory authorities with respect to its current product candidates and any future product candidates or to which Disc agrees as part of
a Risk Evaluation and Mitigation Strategy, or REMS, or voluntary risk management plan;
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the timing of market introduction of its current product candidates and any future product candidates, as well as competitive products;
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its ability to offer its current product candidates and any future product candidates for sale at competitive prices;
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the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;
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the extent and strength of its third-party manufacturer and supplier support;
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the approval of other new products;
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adverse publicity about its current product candidates and any future product candidates, or favorable publicity about competitive products; and
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potential product liability claims.
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restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls;
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manufacturing delays and supply disruptions where regulatory inspections identify observations of noncompliance requiring remediation;
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revisions to the labeling, including limitation on approved uses or the addition of additional warnings, contraindications or other safety information, including boxed warnings;
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imposition of a REMS which may include distribution or use restrictions;
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requirements to conduct additional post-market clinical trials to assess the safety of the product;
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clinical trial holds;
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fines, warning letters or other regulatory enforcement action;
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refusal by the FDA to approve pending applications or supplements to approved applications filed by Disc or suspension or revocation of approvals;
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product seizure or detention, or refusal to permit the import or export of products; and
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injunctions or the imposition of civil or criminal penalties.
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have staffing difficulties;
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fail to comply with contractual obligations;
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experience regulatory compliance issues;
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undergo changes in priorities or become financially distressed; or
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form relationships with other entities, some of which may be Disc’s competitors.
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collaborators may have significant control or discretion in determining the efforts and resources that they will apply to a collaboration, and might not commit sufficient efforts and resources or might misapply
those efforts and resources;
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Disc may have limited influence or control over the approaches to research, development and/or commercialization of product candidates in the territories in which its collaboration partners lead research,
development and/or commercialization;
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collaborators might not pursue research, development and/or commercialization of collaboration product candidates or might elect not to continue or renew research, development and/or commercialization programs
based on preclinical studies and/or clinical trial results, changes in their strategic focus, availability of funding or other factors, such as a business combination that diverts resources or creates competing priorities;
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collaborators might delay, provide insufficient resources to, or modify or stop research or clinical development for collaboration product candidates or require a new formulation of a product candidate for
clinical testing;
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collaborators with sales, marketing and distribution rights to one or more product candidates might not commit sufficient resources to sales, marketing and distribution or might otherwise fail to successfully
commercialize those product candidates;
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collaborators might not properly maintain or defend Disc’s intellectual property rights or might use its intellectual property improperly or in a way that jeopardizes its intellectual property or exposes it to
potential liability;
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collaboration activities might result in the collaborator having intellectual property covering Disc’s activities or product candidates, which could limit Disc’s rights or ability to research, develop and/or
commercialize its product candidates;
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collaborators might not be in compliance with laws applicable to their activities under the collaboration, which could impact the collaboration and Disc;
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disputes might arise between a collaborator and Disc that could cause a delay or termination of the collaboration or result in costly litigation that diverts management attention and resources; and
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collaborations might be terminated, which could result in a need for additional capital to pursue further research, development and/or commercialization of Disc’s product candidates.
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reliance on the third party for regulatory compliance and quality assurance;
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the possible breach of the manufacturing agreement by the third party;
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the possible misappropriation of Disc’s proprietary information, including its trade secrets and know-how; and
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the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for Disc.
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infringement, misappropriation and other intellectual property claims which, regardless of merit, may be expensive and time-consuming to litigate and may divert Disc’s management’s attention from its core business
and may impact its reputation;
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substantial damages for infringement, misappropriation or other violations, which Disc may have to pay if a court decides that the product candidate or technology at issue infringes, misappropriates or violates
the third party’s rights, and, if the court finds that the infringement was willful, Disc could be ordered to pay treble damages and the patent owner’s attorneys’ fees;
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a court prohibiting Disc from developing, manufacturing, marketing or selling its current product candidates, including bitopertin and DISC-0974, or future product candidates, or from using its proprietary
technologies, unless the third-party licenses its product rights to it, which it is not required to do, on commercially reasonable terms or at all;
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if a license is available from a third party, Disc may have to pay substantial royalties, upfront fees and other amounts, and/or grant cross-licenses to intellectual property rights for its products, or the
license to it may be non-exclusive, which would permit third parties to use the same intellectual property to compete with it;
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redesigning Disc’s current or future product candidates or processes so they do not infringe, misappropriate or violate third-party intellectual property rights, which may not be possible or may require
substantial monetary expenditures and time; and
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there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and, if securities analysts or investors perceive these results to be negative, it could have a
substantial adverse effect on the price of Disc’s common stock.
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the scope of rights granted under the license agreement and other interpretation-related issues;
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whether and the extent to which Disc’s technology and processes infringe, misappropriate or otherwise violate intellectual property rights of the licensor that is not subject to the licensing agreement;
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Disc’s right to sublicense patent and other rights to third parties under collaborative development relationships;
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Disc’s diligence obligations with respect to the use of the licensed technology in relation to its development and commercialization of its current or future product candidates, and what activities satisfy those
diligence obligations;
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the priority of invention of any patented technology; and
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the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by Disc’s current or future licensors and it and its partners.
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patent applications that Disc owns or may in-license may not lead to issued patents;
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patents, should they issue, that Disc may own or in-license, may not provide it with any competitive advantages, may be narrowed in scope, or may be challenged and held invalid or unenforceable;
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others may be able to develop and/or practice technology, including compounds that are similar to the chemical compositions of Disc’s current or future product candidates, that is similar to its technology or
aspects of its technology but that is not covered by the claims of any patents it may own or in-license, should any patents issue;
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third parties may compete with Disc in jurisdictions where it does not pursue and obtain patent protection;
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Disc, or its current or future licensors or collaborators, might not have been the first to make the inventions covered by a patent application that it owns or may in-license;
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Disc, or its current or future licensors or collaborators, might not have been the first to file patent applications covering a particular invention;
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others may independently develop similar or alternative technologies without infringing, misappropriating or otherwise violating Disc’s intellectual property rights;
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Disc’s competitors might conduct research and development activities in the U.S. and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as
well as in countries where it does not have patent rights, and may then use the information learned from such activities to develop competitive products for sale in its major commercial markets;
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Disc may not be able to obtain and/or maintain necessary licenses on reasonable terms or at all;
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third parties may assert an ownership interest in Disc’s intellectual property and, if successful, such disputes may preclude it from exercising exclusive rights, or any rights at all, over that intellectual
property;
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Disc may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third-party may subsequently file a patent covering such trade secrets or know-how;
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Disc may not be able to maintain the confidentiality of its trade secrets or other proprietary information;
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Disc may not develop or in-license additional proprietary technologies that are patentable; and
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the patents of others may have an adverse effect on Disc’s business.
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On August 2, 2011, the U.S. Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers of 2% per fiscal year. These reductions went into effect on April 1, 2013
and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022 due to the COVID-19 pandemic. Following the suspension, a
1% payment reduction began April 1, 2022 and continued through June 30, 2022, and the 2% payment reduction resumed on July 1, 2022.
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On January 2, 2013, the U.S. American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers.
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On April 13, 2017, CMS published a final rule that gives states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the
essential health benefits required under the ACA for plans sold through such marketplaces.
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On May 30, 2018, the Right to Try Act, was signed into law. The law, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a
Phase 1 clinical trial and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA
expanded access program. There is no obligation for a pharmaceutical manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act.
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On May 23, 2019, CMS published a final rule to allow Medicare Advantage Plans the option of using step therapy for Part B drugs beginning January 1, 2020.
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• |
On December 20, 2019, former President Trump signed into law the Further Consolidated Appropriations Act (H.R. 1865), which repealed the Cadillac tax, the health insurance provider tax, and the medical device
excise tax. It is impossible to determine whether similar taxes could be instated in the future.
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the demand for Disc’s current or future product candidates, if it obtains regulatory approval;
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Disc’s ability to set a price that it believes is fair for its products;
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Disc’s ability to obtain coverage and reimbursement approval for a product;
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Disc’s ability to generate revenue and achieve or maintain profitability;
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the level of taxes that Disc is required to pay; and
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the availability of capital.
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the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in
kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid. A
person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. Violations are subject to civil and criminal fines and penalties for each violation, plus up to
three times the remuneration involved, imprisonment of up to ten years, and exclusion from government healthcare programs. In addition, the government may assert that a claim including items or services resulting from a violation of the
federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act or federal civil money penalties. The Anti-Kickback Statute has been interpreted to apply to arrangements between
pharmaceutical manufacturers, on the one hand, and prescribers, purchasers and formulary managers, on the other. The HHS, Office of Inspector General, or OIG, heavily scrutinizes relationships between pharmaceutical companies and persons in
a position to generate referrals for or the purchase of their products, such as physicians, other healthcare providers, and pharmacy benefit managers, among others. However, there are a number of statutory exceptions and regulatory safe
harbors protecting some common activities from prosecution;
|
• |
the federal civil and criminal false claims and civil monetary penalties laws, including the federal False Claims Act, or FCA, which imposes criminal and civil penalties, including through civil whistleblower or
qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an
obligation to pay money to the federal government. Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims.
In addition, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false of fraudulent claim for purposes of the False Claims Act. The federal False
Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the federal False Claims Act and to share in any monetary recovery;
|
• |
the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program (e.g. public or
private), or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; similar to the
federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
|
• |
the federal physician payment transparency requirements, sometimes referred to as the “Sunshine Act” under the ACA, which require manufacturers of drugs, devices, biologics and medical supplies that are
reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report to HHS information related to transfers of value made to physicians, nurse practitioners, certified nurse anesthetists, physician assistants,
clinical nurse specialists, and certified nurse midwives as well as teaching hospitals. Manufacturers are also required to disclose ownership and investment interests held by physicians and their immediate family members;
|
• |
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and its implementing regulations, which impose obligations on certain covered entity healthcare
providers, health plans, and healthcare clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual
terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties
directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated
with pursuing federal civil actions. In addition, there may be additional federal, state and non-U.S. laws which govern the privacy and security of health and other personal information in certain circumstances, many of which differ from
each other in significant ways and may not have the same effect, thus complicating compliance efforts;
|
• |
federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and
|
• |
federal price reporting laws, which require manufacturers to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or
discounts on approved products.
|
• |
results of clinical trials and preclinical studies of Disc’s product candidates, or those of Disc’s competitors or Disc’s existing or future collaborators;
|
• |
failure to meet or exceed financial and development projections Disc may provide to the public;
|
• |
failure to meet or exceed the financial and development projections of the investment community;
|
• |
if Disc does not achieve the perceived benefits of the merger as rapidly or to the extent anticipated by financial or industry analysts;
|
• |
announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by Disc or its competitors;
|
• |
actions taken by regulatory agencies with respect to Disc’s product candidates, clinical studies, manufacturing process or sales and marketing terms;
|
• |
disputes or other developments relating to proprietary rights, including patents, litigation matters, and Disc’s ability to obtain patent protection for its technologies;
|
• |
additions or departures of key personnel;
|
• |
significant lawsuits, including patent or stockholder litigation;
|
• |
if securities or industry analysts do not publish research or reports about Disc’s business, or if they issue adverse or misleading opinions regarding its business and stock;
|
• |
changes in the market valuations of similar companies;
|
• |
general market or macroeconomic conditions or market conditions in the pharmaceutical and biotechnology sectors;
|
• |
sales of securities by Disc or its securityholders in the future;
|
• |
if Disc fails to raise an adequate amount of capital to fund its operations and continued development of its product candidates;
|
• |
trading volume of Disc’s common stock;
|
• |
announcements by competitors of new commercial products, clinical progress or lack thereof, significant contracts, commercial relationships or capital commitments;
|
• |
adverse publicity relating to precision medicine product candidates, including with respect to other products in such markets;
|
• |
the introduction of technological innovations or new therapies that compete with the products and services of Disc; and
|
• |
period-to-period fluctuations in Disc’s financial results.
|
• |
the inability to successfully combine the businesses of Gemini and Disc in a manner that permits Disc to achieve the anticipated benefits from the merger, which would result in the anticipated benefits of the
merger not being realized partly or wholly in the time frame currently anticipated or at all;
|
• |
creation of uniform standards, controls, procedures, policies and information systems; and
|
• |
potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the merger.
|
• |
a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time;
|
• |
no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
|
• |
a prohibition on stockholder action by written consent, which means that all stockholder action must be taken at an annual or special meeting of the stockholders;
|
• |
a requirement that special meetings of stockholders be called only by the chairman of the board of directors, the Chief Executive Officer or by a majority of the total number of authorized directors;
|
• |
advance notice requirements for stockholder proposals and nominations for election to the board of directors;
|
• |
a requirement that no member of the board of directors may be removed from office by stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds
of all outstanding shares of voting stock then entitled to vote in the election of directors;
|
• |
a requirement of approval of not less than two-thirds of all outstanding shares of voting stock to amend any bylaws by stockholder action or to amend specific provisions of the certificate of incorporation; and
|
• |
the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of
the holders of common stock.
|
• |
DISC-0998: a separate, preclinical anti-HJV monoclonal antibody, which is also designed to target hepcidin suppression and was in-licensed from AbbVie. DISC-0998 is designed to increase serum iron levels and has
an extended serum half-life as compared to DISC-0974. Disc believes this profile may be desirable in certain subsets of patients with anemia associated with inflammatory diseases.
|
• |
Matriptase-2 (TMPRSS6) inhibitors: a preclinical program designed to induce hepcidin production and reduce serum iron levels. Disc has generated selective, small molecule inhibitors that have been shown in
preclinical studies to increase hepcidin and restrict iron. Disc is in the process of identifying and optimizing a development candidate for further study.
|
• |
Advance the clinical development of bitopertin for the treatment of patients with EPP and XLP and expand into other diseases characterized by dysregulation of the heme biosynthesis
pathway. In multiple clinical trials conducted by Roche in other indications, bitopertin was observed to be a regulator of heme biosynthesis. Disc is initially developing bitopertin for the treatment
of patients with EPP and XLP, which are part of a group of severe diseases, known as porphyrias, caused by defects in the heme biosynthesis pathway that cause an accumulation of toxic metabolites referred to as porphyrins. Based on the
clinical data generated by Roche in multiple clinical trials in other indications and the compelling preclinical data Disc has generated, Disc believes bitopertin has the potential to be a disease-modifying treatment for these patients.
In July 2022, Disc initiated BEACON, a Phase 2 open-label, parallel-dose clinical trial of bitopertin in EPP and XLP patients that is being conducted at sites in Australia. Interim data are expected in the first half of 2023. Separately,
Disc has initiated AURORA, a Phase 2, randomized, double-blind, placebo-controlled clinical trial of bitopertin in EPP patients that is being conducted at sites in the United States. In July 2022, Disc received IND clearance from the FDA
and initiated AURORA in October 2022. Disc also plans to explore the potential of bitopertin to treat other hematologic diseases, including a rare, inherited disorder called Diamond-Blackfan Anemia (DBA).
|
• |
Advance the clinical development of DISC-0974 for the treatment of anemia associated with myelofibrosis, chronic kidney disease and other inflammatory diseases. Disc is initially developing its lead hepcidin-suppressing program, DISC-0974, for the treatment of anemia associated with MF and CKD. Disc has completed a Phase 1, placebo-controlled, single-ascending dose clinical trial of
DISC-0974 in healthy volunteers. Data from the Phase 1 clinical trial showed evidence of target engagement and iron mobilization and erythropoiesis. Disc initiated a Phase 1b/2 open-label clinical trial in patients with anemia of MF in
July 2022 and expects to initiate a separate Phase 1b/2 placebo controlled, multiple ascending dose clinical trial in patients with anemia associated with CKD by the end of 2022. Disc expects interim data from these two trials in 2023.
Disc also plans to further expand the development of DISC-0974 into anemias associated with other inflammatory diseases, such as inflammatory bowel disease.
|
• |
Design and develop a selective, orally available Matriptase-2 inhibitor for the treatment of PV and expand into other diseases associated with excess iron availability. Through Disc’s internal drug discovery and development efforts, Disc is in the process of identifying and optimizing a development candidate for its Matriptase-2 inhibitor program, which is the second program in
its iron homeostasis portfolio and is focused on hepcidin induction. The inhibition of Matriptase-2 has been shown in non-clinical and clinical studies to increase hepcidin levels and thereby restrict iron availability and the formation
of new red blood cells. In clinical trials conducted by third parties, iron restriction through a hepcidin mechanism resulted in disease control in patients with PV, which is Disc’s initial indication of focus for this program. Disc has
designed molecules that have demonstrated rapid increases in hepcidin levels in preclinical models. If Disc’s drug discovery efforts are successful, Disc expects to designate a lead clinical candidate and initiate IND-enabling studies.
|
• |
Continue to build Disc’s pipeline through internal research or business development. Though Disc has yet to generate clinical data for its product
candidates, other than Phase 1 data for DISC-0974, Disc believes that all of its current product candidates, if approved, could have pipeline-in-a-product potential, and for each product candidate, Disc plans to explore its potential
across multiple hematologic diseases. In addition, Disc plans to leverage its expertise in hematology to further grow its pipeline through both internal discovery and development of new therapeutic candidates and in-licensing of external
assets. This approach includes developing both next-generation programs to support Disc’s existing heme biosynthesis and iron homeostasis portfolios as well as molecules that target other pathways associated with red blood cells that may
be of strategic and biological interest. For example, Disc is developing DISC-0998, a preclinical monoclonal antibody as a next generation product candidate against HJV, the same target as DISC-0974. Disc believes DISC-0998 has improved
pharmacokinetic and pharmacodynamic properties that may benefit certain subsets of patients with anemia associated with inflammatory diseases.
|
• |
Opportunistically evaluate strategic collaborations to maximize the value of Disc’s product candidates and preclinical programs. Disc has obtained
exclusive, worldwide licenses for the development and commercialization of bitopertin, DISC-0974, and DISC-0998, and Disc owns worldwide rights to its internally developed Matriptase-2 inhibitor program. As Disc advances the development
of its product candidates and preclinical programs across multiple indications and continues to generate additional data, Disc intends to continuously evaluate its options for maximizing the value of its overall portfolio. For example, in
certain geographies, Disc may opportunistically enter into strategic collaborations to accelerate the development and maximize the commercial potential of any or all of its product candidates or preclinical programs. For each product
candidate, preclinical program, indication, and geographic region, Disc’s goal is to find the best path forward for the development of Disc’s product candidates and preclinical programs in order to treat patients in need of new therapies,
while also maximizing value for Disc’s stockholders.
|
• |
Modulating the heme biosynthesis pathway, which is anticipated to be useful in diseases caused by excesses in toxic heme pathway metabolites, e.g. erythropoietic porphyrias;
|
• |
Increasing iron availability to red blood cell precursors, which is anticipated to have direct effects on increasing red blood cell production to correct anemia in diseases of iron restriction, e.g. anemia
associated with inflammatory diseases; and
|
• |
Decreasing iron availability, which is anticipated to lower red blood cell production in diseases of excessive red cell production, e.g. polycythemia vera.
|
• |
Phase 1b (Dose-Escalation): Ascending, monthly doses of DISC-0974 administered for six months to MF patients with anemia, (Hb levels < 10 g/dL,), where a dose level will be selected based on optimal increases
in hemoglobin and serum iron;
|
• |
Phase 2 (Expansion Stage): Multiple, doses of DISC-0974 administered once-a-month at the dose level selected from the Phase 1b portion of the study to MF patients with anemia who are transfusion dependent (TD)
according to International Working Group-Myeloproliferative Neoplasms Research and Treatment, or IWG-MRT, criteria, defined as receiving >6 units of RBC in a 12-week period.
|
• |
identified a library of selective compounds that have been shown to inhibit Matriptase-2;
|
• |
demonstrated dose-dependent induction of endogenous hepcidin production in rodent and NHP studies; and
|
• |
demonstrated consequent reduction in serum iron levels and TSAT in rodent and NHP studies.
|
Family
No.
|
Owned/
In-Licensed
|
Type of Protection
|
Expiration
Date if
Granted
|
Application
Type
|
Jurisdiction of Pending
Applications or Issued
Patents
|
|||||
1
|
Disc Medicine
owned
|
Claims to methods of treating EPP, XLP, and CEP with bitopertin and related compounds
|
2041
|
PCT
|
U.S., Australia,
Canada, China,
Europe (regional
application), Japan,
and Korea
|
|||||
2
|
Disc
Medicine
owned
|
Claims to methods of treating EPP, XLP, and CEP with solid forms of bitopertin
|
2042
|
PCT
|
International PCT application pending1
|
|||||
3
|
Disc
Medicine
owned
|
Claims to methods of treating polycythemias, including PV, with bitopertin and related compounds
|
2042
|
PCT
|
International PCT application pending1
|
|||||
4
|
Disc Medicine
owned
|
Claims to methods of treating anemia associated with a ribosomal disorder (e.g., DBA) with bitopertin and related compounds
|
2042
|
PCT
|
International PCT application pending1
|
|||||
5
|
Disc Medicine
owned
|
Claims to methods of treating hepatic porphyria with bitopertin and related compounds
|
2043
|
Provisional
|
U.S. provisional application pending2
|
|||||
6
|
Disc Medicine
owned
|
Claims to methods of treating EPP, XLP, and CEP with additional GlyT1 inhibitors
|
2042
|
PCT
|
International PCT application pending1
|
1 |
Pending Patent Cooperation Treaty (PCT) application is eligible for prosecution and patent issuance in all PCT contracting states.
|
2 |
Pending U.S. provisional application is eligible for filing as PCT application.
|
Family
No.
|
Owned/
In-Licensed
|
Type of Protection
|
Expiration
Date if
Granted
|
Application
Type
|
Jurisdiction of Pending Applications or Issued Patents
|
|||||
1
|
In-Licensed from F. Hoffmann-La Roche
|
Claims to composition of matter of bitopertin and processes of preparation
|
2024
|
PCT
|
U.S. and the following jurisdictions: Algeria, Australia, Austria, Belarus, Belgium, Brazil, Bulgaria, Canada, Chile, China, Colombia, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Ecuador, Egypt, Estonia,
Eurasian Patent Convention, European Patent Convention, Finland, France, Germany, Great Britain, Greece, Gulf Cooperation Council, Hong Kong, Hungary, India, Indonesia, Ireland, Israel, Italy, Japan, Kazakhstan, Kosovo, Latvia, Lithuania,
Luxembourg, Malaysia, Mexico, Monaco, Montenegro, Morocco, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Republic of Korea, Republic of Serbia, Romania, Russian Federation, Singapore, Slovak Republic, Slovenia, South
Africa, Spain, Sweden, Switzerland, Taiwan, Turkey, Ukraine, and Vietnam
|
|||||
2
|
In-Licensed from F. Hoffmann-La Roche
|
Claims to processes of preparation of bitopertin
|
2028
|
PCT
|
U.S. and the following jurisdictions: Australia, Austria, Belgium, Brazil, Canada, China, European Patent Convention, Finland, France, Germany, Great Britain, Hungary, Ireland, Israel, Italy, Japan, Mexico,
Netherlands, Republic of Korea, Spain, Sweden, and Switzerland
|
|||||
3
|
In-Licensed from F. Hoffmann-La Roche
|
Claims to synthetic processes for synthetic intermediates
|
2026
|
PCT
|
U.S. and the following jurisdictions: China, European Patent Convention, France, Germany, Great Britain, Japan, and Switzerland
|
|||||
4
|
In-Licensed from F. Hoffmann-La Roche
|
Claims to synthetic processes for synthetic intermediates
|
2027
|
PCT
|
U.S. and the following jurisdictions: China, European Patent Convention, France, Germany, Great Britain, Japan, and Switzerland
|
|||||
5
|
In-Licensed from F. Hoffmann-La Roche
|
Claims to methods of treating hematological disorders characterized by elevated cellular hemoglobin levels with bitopertin
|
2035
|
PCT
|
U.S. and the following jurisdictions: Algeria, China, Croatia, Cyprus, European Patent Convention, France, Germany, Great Britain, Greece, Hong Kong, Indonesia, Italy, Japan, Malaysia, Morocco, Portugal, Republic
of Korea, Republic of Serbia, Slovenia, South Africa, Spain, Switzerland, and Turkey
|
Family
No.
|
Owned/
In-Licensed
|
Type of Protection
|
Expiration
Date if
Granted
|
Application
Type
|
Jurisdiction of Pending Applications or Issued Patents
|
|||||
6
|
In-Licensed from F. Hoffmann- La Roche
|
Claims to composition of matter of additional GlyT1 inhibitors
|
2026
|
PCT
|
U.S. and the following jurisdictions: China, European Patent Convention, France, Germany, Great Britain, Hong Kong, Japan, and Switzerland
|
|||||
7
|
In-Licensed from F. Hoffmann- La Roche
|
Claims to composition of matter of crystalline forms of bitopertin
|
2027
|
PCT
|
Australia, Austria, Belgium, Brazil, Bulgaria, Chile, Croatia, Cyprus, Czech Republic, Denmark, Estonia, European Patent Convention, Finland, France, Germany, Great Britain, Greece, Gulf Cooperation Council,
Hungary, Indonesia, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Malaysia, Malta, Mexico, Monaco, Morocco, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Republic of Korea, Republic of Serbia, Romania, Russian
Federation, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Switzerland, Taiwan, Turkey, Ukraine, and Vietnam
|
Family
No.
|
Owned/
In-Licensed
|
Type of Protection
|
Expiration
Date
|
Application
Type
|
Jurisdiction of Pending Applications or Issued Patents
|
|||||
1
|
Disc Medicine owned
|
Claims to methods of treating myelofibrosis and related conditions with anti-hemojuvelin (HJV) antagonists
|
2040
|
PCT
|
United States, Australia, Canada, China, Europe (regional application), Israel, Japan, and Korea
|
|||||
2
|
Disc Medicine owned
|
Claims to methods of treating anemia of chronic disease with anti-HJV antagonists
|
2040
|
PCT
|
United States and Europe
|
|||||
3
|
Disc Medicine owned
|
Claims to compositions of anti-HJV antibodies for treating anemia of chronic disease
|
2041
|
PCT
|
International PCT application pending1
|
|||||
4
|
Disc Medicine owned
|
Claims to compositions of anti-HJV antibodies for treating myelofibrosis
|
2041
|
PCT
|
International PCT application pending1
|
|||||
5
|
Disc Medicine owned
|
Claims to methods of treating anemia of kidney disease with anti-HJV antagonists
|
2042
|
Provisional
|
U.S. provisional applications pending2
|
|||||
6
|
In-Licensed
|
Claims to compositions and methods for the diagnosis and treatment of iron-related disorders with anti-hemojuvelin (HJV) antagonists
|
2032
|
PCT
|
United States3, Australia, China, the United Kingdom, Germany, Mexico, Brazil, Canada, Mexico, Europe (regional application), and Japan
|
1 |
Pending Patent Cooperation Treaty (PCT) application is eligible for prosecution and patent issuance in all PCT contracting states.
|
2 |
Pending U.S. provisional applications are eligible for filing as PCT application.
|
3 |
Note that one U.S. patent has PTA that extends the term to 2035.
|
Family
No.
|
Owned/
In-Licensed
|
Type of Protection
|
Expiration
Date
|
Application
Type
|
Jurisdiction of Pending Applications or Issued
Patents
|
|||||
1
|
Disc Medicine owned
|
Claims to composition of matter of matriptase-2 inhibitors and methods of using the same
|
2039
|
PCT
|
United States, Australia, Canada, China, Europe (regional application), Japan, and India
|
|||||
2
|
Disc Medicine owned
|
Claims to composition of matter of matriptase-2 inhibitors and methods of using the same
|
2041
|
PCT
|
International PCT application pending1
|
1 |
Pending Patent Cooperation Treaty (PCT) application is eligible for prosecution and patent issuance in all PCT contracting states.
|
• |
completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with good laboratory practice, or GLP, requirements;
|
• |
completion of the manufacture, under current Good Manufacturing Practices, or cGMP, conditions, of the drug substance and drug product that the sponsor intends to use in human clinical trials along with required
analytical and stability testing;
|
• |
submission to the FDA of an IND which must become effective before clinical trials may begin and must be updated annually and when certain changes are made;
|
• |
approval by an institutional review board, or IRB, or independent ethics committee at each clinical trial site before each trial may be initiated;
|
• |
performance of adequate and well-controlled clinical trials in accordance with applicable IND regulations, good clinical practice, or GCP, requirements and other clinical trial-related regulations to establish the
safety and efficacy of the investigational product for each proposed indication;
|
• |
preparation and submission to the FDA of an NDA or BLA;
|
• |
a determination by the FDA within 60 days of its receipt of an NDA or BLA to file the application for review;
|
• |
satisfactory completion of one or more FDA pre-approval or pre-license inspections of the manufacturing facility or facilities where the drug will be produced to assess compliance with cGMP requirements to assure
that the facilities, methods and controls are adequate to preserve the drug or biological product’s identity, strength, quality and purity;
|
• |
satisfactory completion of FDA audit of the clinical trial sites that generated the data in support of the NDA or BLA;
|
• |
payment of user fees for FDA review of the NDA or BLA; and
|
• |
FDA review and approval of the NDA or BLA, including, where applicable, consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug in the United States.
|
• |
Phase 1 – Phase 1 clinical trials involve initial introduction of the investigational product in a limited population of healthy human volunteers or
patients with the target disease or condition. These studies are typically designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, excretion the side effects
associated with increasing doses, and, if possible, to gain early evidence of effectiveness.
|
• |
Phase 2 – Phase 2 clinical trials typically involve administration of the investigational product to a limited patient population with a specified
disease or condition to evaluate the drug’s potential efficacy, to determine the optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks.
|
• |
Phase 3 – Phase 3 clinical trials typically involve administration of the investigational product to an expanded patient population to further
evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites. These clinical trials are intended to establish the
overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval and physician labeling. Generally, two adequate and well-controlled Phase 3 trials are required by the FDA for approval of an
NDA or BLA.
|
• |
restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;
|
• |
the issuance of safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product;
|
• |
fines, warning letters or holds on post-approval clinical trials;
|
• |
refusal of the FDA to approve applications or supplements to approved applications, or suspension or revocation of product approvals;
|
• |
product seizure or detention, or refusal to permit the import or export of products;
|
• |
injunctions or the imposition of civil or criminal penalties;
|
• |
consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; and
|
• |
mandated modification of promotional materials and labeling and issuance of corrective information.
|
• |
employee-related expenses, including salaries, benefits, and stock-based compensation expense, for personnel engaged in research and development functions;
|
• |
expenses incurred in connection with Disc’s research and development activities, including under agreements with third parties such as consultants, contractors and CROs;
|
• |
costs related to contract development and manufacturing organizations, or CDMOs, that are primarily engaged to provide drug substance and product for Disc’s preclinical studies, clinical trials and research and
development programs, as well as investigative sites and consultants that conduct Disc’s clinical trials, preclinical studies and other scientific development services;
|
• |
the costs of acquiring and manufacturing preclinical study and clinical trial materials, including manufacturing registration and validation batches;
|
• |
costs related to compliance with quality and regulatory requirements; and
|
• |
payments made under third-party licensing agreements.
|
• |
the timing and progress of preclinical and clinical development activities;
|
• |
the number and scope of preclinical and clinical programs Disc decides to pursue;
|
• |
the ability to raise additional funds necessary to complete clinical development of and commercialize Disc’s product candidates;
|
• |
Disc’s ability to establish new licensing or collaboration arrangements and the progress of the development efforts of third parties with whom Disc may enter into such arrangements;
|
• |
Disc’s ability to maintain its current research and development programs and to establish new programs;
|
• |
the successful initiation, enrollment and completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority;
|
• |
the receipt and related terms of regulatory approvals from applicable regulatory authorities for any product candidates;
|
• |
the availability of raw materials for use in production of Disc’s product candidates;
|
• |
establishing agreements with third-party manufacturers for supply of product candidate components for Disc’s clinical trials;
|
• |
Disc’s ability to obtain and maintain patents, trade secret protection and regulatory exclusivity, both in the United States and internationally;
|
• |
Disc’s ability to protect its other rights in its intellectual property portfolio;
|
• |
commercializing product candidates, if and when approved, whether alone or in collaboration with others; and
|
• |
obtaining and maintaining third-party insurance coverage and adequate reimbursement for any approved products.
|
|
YEAR ENDED DECEMBER 31,
|
|||||||||||
|
2020
|
2021
|
CHANGE
|
|||||||||
Operating expenses:
|
||||||||||||
Research and development
|
$
|
18,020
|
$
|
25,170
|
$
|
7,150
|
||||||
General and administrative
|
2,956
|
5,763
|
2,807
|
|||||||||
Total operating expenses
|
20,976
|
30,933
|
9,957
|
|||||||||
Loss from operations
|
(20,976
|
)
|
(30,933
|
)
|
(9,957
|
)
|
||||||
Other income (expense), net:
|
||||||||||||
Interest income
|
40
|
14
|
(26
|
)
|
||||||||
Change in fair value of derivative liability
|
—
|
(5,050
|
)
|
(5,050
|
)
|
|||||||
Total other income (expense), net
|
40
|
(5,036
|
)
|
(5,076
|
)
|
|||||||
Net loss
|
$
|
(20,936
|
)
|
$
|
(35,969
|
)
|
$
|
(15,033
|
)
|
|
YEAR ENDED DECEMBER 31,
|
|||||||||||
|
2020
|
2021
|
CHANGE
|
|||||||||
Bitopertin
|
$
|
—
|
$
|
8,354
|
$
|
8,354
|
||||||
DISC-0974
|
8,538
|
7,019
|
(1,519
|
)
|
||||||||
Other research programs and expenses
|
6,345
|
5,088
|
(1,257
|
)
|
||||||||
Personnel-related (including equity-based compensation)
|
3,137
|
4,709
|
1,572
|
|||||||||
Total research and development expenses
|
$
|
18,020
|
$
|
25,170
|
$
|
7,150
|
|
YEAR ENDED DECEMBER 31,
|
|||||||||||
|
2020
|
2021
|
CHANGE
|
|||||||||
Legal, consulting and professional fees
|
$
|
1,581
|
$
|
2,661
|
$
|
1,080
|
||||||
Personnel-related (including equity-based compensation)
|
1,187
|
2,692
|
1,505
|
|||||||||
Other expenses
|
188
|
410
|
222
|
|||||||||
Total general and administrative expenses
|
$
|
2,956
|
$
|
5,763
|
$
|
2,807
|
|
NINE MONTHS ENDED
SEPTEMBER 30,
|
|||||||||||
|
2021
|
2022
|
CHANGE
|
|||||||||
Operating expenses:
|
||||||||||||
Research and development
|
$
|
19,511
|
$
|
23,421
|
$
|
3,910
|
||||||
General and administrative
|
4,012
|
9,033
|
5,021
|
|||||||||
Total operating expenses
|
23,523
|
32,454
|
8,931
|
|||||||||
Loss from operations
|
(23,523
|
)
|
(32,454
|
)
|
(8,931
|
)
|
||||||
Other income (expense), net:
|
||||||||||||
Interest income
|
5
|
321
|
316
|
|||||||||
Change in fair value of derivative liability
|
(3,600
|
)
|
(3,450
|
)
|
150
|
|||||||
Total other income (expense), net
|
(3,595
|
)
|
(3,129
|
)
|
466
|
|||||||
Net loss
|
$
|
(27,118
|
)
|
$
|
(35,583
|
)
|
$
|
(8,465
|
)
|
|
NINE MONTHS ENDED
SEPTEMBER 30,
|
|||||||||||
|
2021
|
2022
|
CHANGE
|
|||||||||
Bitopertin
|
$
|
6,748
|
$
|
6,224
|
$
|
(524
|
)
|
|||||
DISC-0974
|
5,447
|
6,875
|
1,428
|
|||||||||
Other research programs and expenses
|
3,620
|
3,804
|
184
|
|||||||||
Personnel-related (including equity-based compensation)
|
3,696
|
6,518
|
2,822
|
|||||||||
Total research and development expenses
|
$
|
19,511
|
$
|
23,421
|
$
|
3,910
|
|
NINE MONTHS ENDED
SEPTEMBER 30,
|
|||||||||||
|
2021
|
2022
|
CHANGE
|
|||||||||
Legal, consulting and professional fees
|
$
|
2,034
|
$
|
4,631
|
$
|
2,597
|
||||||
Personnel-related (including equity-based compensation)
|
1,759
|
3,622
|
1,863
|
|||||||||
Other expenses
|
219
|
780
|
561
|
|||||||||
Total general and administrative expenses
|
$
|
4,012
|
$
|
9,033
|
$
|
5,021
|
|
YEAR ENDED
DECEMBER 31,
|
NINE MONTHS ENDED
SEPTEMBER 30,
|
||||||||||||||
|
2020
|
2021
|
2021
|
2022
|
||||||||||||
Net cash provided by (used in):
|
||||||||||||||||
Operating activities
|
$
|
(19,966
|
)
|
$
|
(27,534
|
)
|
$
|
(21,130
|
)
|
$
|
(32,587
|
)
|
||||
Investing activities
|
(77
|
)
|
(68
|
)
|
(5
|
)
|
(139
|
)
|
||||||||
Financing activities
|
34,980
|
89,929
|
89,933
|
163
|
||||||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
$
|
14,937
|
$
|
62,327
|
$
|
68,798
|
$
|
(32,563
|
)
|
• |
the initiation, progress, timing, costs and results of preclinical studies and clinical trials for Disc’s product candidates or any future product candidates Disc may develop;
|
• |
the costs, timing and outcome of regulatory review of Disc’s product candidates;
|
• |
changes in laws or regulations applicable to any product candidates Disc may develop, including but not limited to clinical trial requirements for approvals;
|
• |
the cost and timing of obtaining materials to produce adequate product supply for any preclinical or clinical development of any product candidate Disc may develop;
|
• |
the effect of competing technological and market developments;
|
• |
Disc’s ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of such arrangements;
|
• |
the payment or receipt of milestones, royalties and other collaboration-based revenues, if any;
|
• |
the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any product candidate Disc may develop for which Disc obtains marketing
approval;
|
• |
the amount and timing of revenue, if any, received from commercial sales of Disc’s product candidates for which Disc receives marketing approval; and
|
• |
the legal costs involved in prosecuting patent applications and enforcing patent claims and other intellectual property claims.
|
|
Payments Due by Period
|
|||||||||||||||||||
|
Total
|
Less Than
1 Year
|
1 to 3
Years
|
3 to 5
Years
|
More Than
5 Years
|
|||||||||||||||
Operating lease commitments(1)
|
$
|
1,577
|
$
|
371
|
$
|
770
|
$
|
436
|
$
|
—
|
||||||||||
Total
|
$
|
1,577
|
$
|
371
|
$
|
770
|
$
|
436
|
$
|
—
|
(1) |
Amounts reflect payments due for Disc’s leased office space in Watertown, Massachusetts as of September 30, 2022. The lease term began in November 2021 and will end in November 2026.
|
• |
vendors in connection with preclinical development activities;
|
• |
CROs and investigative sites in connection with preclinical studies and clinical trials; and
|
• |
CDMOs in connection with the production of preclinical study and clinical trial materials.
|
Grant Date
|
Number of
Shares Subject
to Option
|
Per Share
Exercise Price
of Options
|
Per Share Fair
Value of
Common
Stock on
Grant Date
|
Per Share
Estimated Fair
Value of
Options
on Grant
Date(1)
|
||||||||||||
March 11, 2020
|
2,868,382
|
$
|
0.11
|
$
|
0.11
|
$
|
0.06
|
|||||||||
August 11, 2020
|
989,097
|
$
|
0.29
|
$
|
0.29
|
$
|
0.16
|
|||||||||
September 15, 2020
|
123,637
|
$
|
0.29
|
$
|
0.29
|
$
|
0.16
|
|||||||||
October 23, 2020
|
1,692,775
|
$
|
0.29
|
$
|
0.29
|
$
|
0.16
|
|||||||||
November 27, 2020
|
256,468
|
$
|
0.29
|
$
|
0.29
|
$
|
0.16
|
|||||||||
February 12, 2021
|
705,287
|
$
|
0.29
|
$
|
0.29
|
$
|
0.16
|
|||||||||
March 18, 2021
|
89,000
|
$
|
0.29
|
$
|
0.29
|
$
|
0.16
|
|||||||||
April 26, 2021
|
192,350
|
$
|
0.29
|
$
|
0.29
|
$
|
0.16
|
|||||||||
September 10, 2021
|
1,003,926
|
$
|
1.08
|
$
|
1.08
|
$
|
0.62
|
|||||||||
September 14, 2021
|
4,112,590
|
$
|
1.08
|
$
|
1.08
|
$
|
0.62
|
|||||||||
December 1, 2021
|
665,000
|
$
|
1.58
|
$
|
1.58
|
$
|
0.89
|
|||||||||
February 7, 2022
|
1,356,149
|
$
|
1.61
|
$
|
1.61
|
$
|
0.86
|
|||||||||
April 6, 2022
|
335,000
|
$
|
1.61
|
$
|
1.61
|
$
|
0.87
|
|||||||||
July 11, 2022
|
518,200
|
$
|
1.00
|
$
|
1.00
|
$
|
0.54
|
|||||||||
November 4, 2022
|
640,000
|
$
|
2.19
|
$
|
2.19
|
$
|
1.24
|
(1) |
The per share estimated fair value of options reflects the fair value of options as estimated at the date of grant using the Black-Scholes option-pricing model.
|
Audited Consolidated Financial Statements
|
|
Report of Independent Registered Public Accounting Firm
|
2
|
Consolidated Balance Sheets
|
3
|
Consolidated Statements of Operations and Comprehensive Loss
|
4
|
Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit
|
5
|
Consolidated Statements of Cash Flows
|
6
|
Notes to Consolidated Financial Statements
|
7
|
December 31,
|
||||||||
2020
|
2021
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
25,825
|
$
|
88,036
|
||||
Prepaid expenses and other current assets
|
365
|
2,448
|
||||||
Total current assets
|
26,190
|
90,484
|
||||||
Property and equipment, net
|
70
|
106
|
||||||
Right-of-use assets, operating leases
|
1,056
|
1,641
|
||||||
Other assets
|
61
|
180
|
||||||
Total assets
|
$
|
27,377
|
$
|
92,411
|
||||
Liabilities, Convertible Preferred Stock and Stockholders’ Deficit
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
588
|
$
|
2,559
|
||||
Accrued expenses
|
2,437
|
4,096
|
||||||
Derivative liability
|
—
|
6,450
|
||||||
Operating lease liabilities, current
|
199
|
319
|
||||||
Total current liabilities
|
3,224
|
13,424
|
||||||
Operating lease liabilities, non-current
|
850
|
1,334
|
||||||
Total liabilities
|
4,074
|
14,758
|
||||||
Commitments and contingencies (Note 13)
|
||||||||
Series Seed convertible preferred stock, $0.0001 par value; 5,000,000 shares authorized, issued and outstanding as of December 31, 2020 and 2021 (liquidation preference of
$5,000 as of December 31, 2020 and 2021)
|
2,350
|
2,350
|
||||||
Series A convertible preferred stock, $0.0001 par value; 41,666,666 shares authorized, issued and outstanding as of December 31, 2020 and 2021 (liquidation preference of
$50,000 as of December 31, 2020 and 2021)
|
49,762
|
49,762
|
||||||
Series B convertible preferred stock, $0.0001 par value; no shares authorized, issued or outstanding, as of December 31, 2020; 37,499,999 shares authorized, issued and
outstanding as of December 31, 2021 (liquidation preference of $90,000 as of December 31, 2021)
|
—
|
89,744
|
||||||
Stockholders’ deficit:
|
||||||||
Common stock, $0.0001 par value; 70,000,000 and 108,108,833 shares authorized as of December 31, 2020 and 2021, respectively; 7,924,528 and 8,390,438 shares issued December
31, 2020 and 2021, respectively; and 7,696,947 and 8,297,664 shares outstanding as of December 31, 2020 and 2021, respectively
|
1
|
1
|
||||||
Additional paid-in capital
|
610
|
1,185
|
||||||
Accumulated deficit
|
(29,420
|
)
|
(65,389
|
)
|
||||
Total stockholders’ deficit
|
(28,809
|
)
|
(64,203
|
)
|
||||
Total liabilities, convertible preferred stock and stockholders’ deficit
|
$
|
27,377
|
$
|
92,411
|
Year Ended December 31,
|
||||||||
2020
|
2021
|
|||||||
Operating expenses:
|
||||||||
Research and development
|
$
|
18,020
|
$
|
25,170
|
||||
General and administrative
|
2,956
|
5,763
|
||||||
Total operating expenses
|
20,976
|
30,933
|
||||||
Loss from operations
|
(20,976
|
)
|
(30,933
|
)
|
||||
Other income (expense), net:
|
||||||||
Interest income
|
40
|
14
|
||||||
Change in fair value of derivative liability
|
—
|
(5,050
|
)
|
|||||
Total other income (expense), net
|
40
|
(5,036
|
)
|
|||||
Net loss and comprehensive loss
|
$
|
(20,936
|
)
|
$
|
(35,969
|
)
|
||
Net loss attributable to common stockholders—basic and diluted
|
$
|
(20,936
|
)
|
$
|
(35,969
|
)
|
||
Weighted-average common shares outstanding—basic and diluted
|
6,930,451
|
8,014,679
|
||||||
Net loss per share attributable to common stockholders—basic and diluted
|
$
|
(3.02
|
)
|
$
|
(4.49
|
)
|
Convertible Preferred Stock
|
||||||||||||||||||||||||||||||||||||||||||||
Series Seed
$0.0001 Par
Value
|
Series A
$0.0001 Par
Value
|
Series B
$0.0001 Par
Value
|
Common Stock
$0.0001 Par
Value
|
Additional
Paid-In
Capital
|
Accumulated
Deficit
|
Total
Stockholders’
Deficit
|
||||||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019
|
5,000,000
|
$
|
2,350
|
12,499,999
|
$
|
14,783
|
—
|
$
|
—
|
5,499,137
|
$
|
1
|
$
|
262
|
$
|
(8,484
|
)
|
$
|
(8,221
|
)
|
||||||||||||||||||||||||
Issuance of Series A convertible preferred stock, net of issuance costs of $21
|
—
|
—
|
29,166,667
|
34,979
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||||||||
Vesting of common stock issued to AbbVie (Note 7)
|
—
|
—
|
—
|
—
|
—
|
—
|
2,041,667
|
—
|
224
|
—
|
224
|
|||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options
|
—
|
—
|
—
|
—
|
—
|
—
|
12,295
|
—
|
1
|
—
|
1
|
|||||||||||||||||||||||||||||||||
Vesting of restricted common stock
|
—
|
—
|
—
|
—
|
—
|
—
|
143,848
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||||||||
Stock-based compensation expense
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
123
|
—
|
123
|
|||||||||||||||||||||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(20,936
|
)
|
(20,936
|
)
|
|||||||||||||||||||||||||||||||
Balance at December 31, 2020
|
5,000,000
|
$
|
2,350
|
41,666,666
|
$
|
49,762
|
—
|
$
|
—
|
7,696,947
|
$
|
1
|
$
|
610
|
$
|
(29,420
|
)
|
$
|
(28,809
|
)
|
||||||||||||||||||||||||
Issuance of Series B convertible preferred stock, net of issuance costs of $256
|
—
|
—
|
—
|
—
|
37,499,999
|
89,744
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options
|
—
|
—
|
—
|
—
|
—
|
—
|
465,910
|
—
|
68
|
—
|
68
|
|||||||||||||||||||||||||||||||||
Vesting of restricted common stock
|
—
|
—
|
—
|
—
|
—
|
—
|
134,807
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||||||||
Stock-based compensation expense
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
507
|
—
|
507
|
|||||||||||||||||||||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(35,969
|
)
|
(35,969
|
)
|
|||||||||||||||||||||||||||||||
Balance at December 31, 2021
|
5,000,000
|
$
|
2,350
|
41,666,666
|
$
|
49,762
|
37,499,999
|
$
|
89,744
|
8,297,664
|
$
|
1
|
$
|
1,185
|
$
|
(65,389
|
)
|
$
|
(64,203
|
)
|
Year Ended
December 31,
|
||||||||
2020
|
2021
|
|||||||
Cash flows from operating activities
|
||||||||
Net loss
|
$
|
(20,936
|
)
|
$
|
(35,969
|
)
|
||
Adjustments to reconcile net loss to net cash used in operations:
|
||||||||
Depreciation and amortization
|
20
|
32
|
||||||
Stock-based compensation
|
123
|
507
|
||||||
Change in fair value of derivative liability
|
—
|
5,050
|
||||||
Noncash license expense
|
224
|
1,400
|
||||||
Noncash lease expense
|
100
|
160
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses and other current assets
|
(261
|
)
|
(1,366
|
)
|
||||
Other assets
|
—
|
(64
|
)
|
|||||
Accounts payable
|
(510
|
)
|
1,315
|
|||||
Accrued expenses
|
1,365
|
1,542
|
||||||
Operating lease liabilities
|
(91
|
)
|
(141
|
)
|
||||
Net cash used in operating activities
|
(19,966
|
)
|
(27,534
|
)
|
||||
Cash flow from investing activities
|
||||||||
Purchases of property and equipment
|
(77
|
)
|
(68
|
)
|
||||
Net cash used in investing activities
|
(77
|
)
|
(68
|
)
|
||||
Cash flow from financing activities
|
||||||||
Proceeds from issuance of convertible preferred stock, net of issuance costs
|
34,979
|
89,861
|
||||||
Proceeds from stock option exercises
|
1
|
68
|
||||||
Net cash provided by financing activities
|
34,980
|
89,929
|
||||||
Net increase in cash, cash equivalents and restricted cash
|
14,937
|
62,327
|
||||||
Cash, cash equivalents and restricted cash, beginning of period
|
10,949
|
25,886
|
||||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
25,886
|
$
|
88,213
|
||||
Supplemental cash flow information
|
||||||||
Cash paid for income taxes
|
$
|
—
|
$
|
—
|
||||
Supplemental disclosure of non-cash activities
|
||||||||
Purchases of property and equipment included in accounts payable and accrued expenses
|
$
|
—
|
$
|
10
|
||||
Right-of-use assets obtained in exchange for new operating lease liabilities
|
$
|
1,156
|
$
|
1,670
|
||||
Decrease in right-of-use assets related to lease modification
|
$
|
—
|
$
|
896
|
||||
Decrease in operating lease liabilities due to lease modification
|
$
|
—
|
$
|
896
|
||||
Deferred issuance costs on Series B convertible preferred stock in accounts payable and accruals
|
$
|
—
|
$
|
117
|
||||
Deferred offering costs included in accounts payable and accruals at end of period
|
$
|
27
|
$
|
656
|
• |
Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities;
|
• |
Level 2—Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and
|
• |
Level 3—Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.
|
Estimated Useful Life
|
|
Computer equipment
|
3.0 years
|
Furniture and fixtures
|
3.0 years
|
December 31, 2020
|
||||||||||||
Level 1
|
Level 2
|
Level 3
|
||||||||||
Assets
|
||||||||||||
Money market fund in cash and cash equivalents
|
$
|
216
|
$
|
—
|
$
|
—
|
||||||
Total
|
$
|
216
|
$
|
—
|
$
|
—
|
December 31, 2021
|
||||||||||||
Level 1
|
Level 2
|
Level 3
|
||||||||||
Assets
|
||||||||||||
Money market funds in cash and cash equivalents
|
$
|
86,119
|
$
|
—
|
$
|
—
|
||||||
Total
|
$
|
86,119
|
$
|
—
|
$
|
—
|
||||||
Liabilities
|
||||||||||||
Derivative liability
|
$
|
—
|
$
|
—
|
$
|
6,450
|
||||||
Total
|
$
|
—
|
$
|
—
|
$
|
6,450
|
Level 3
Rollforward
|
||||
Balance at December 31, 2020
|
$
|
—
|
||
Fair value recognized upon execution of Roche license agreement
|
1,400
|
|||
Change in fair value of derivative liability
|
5,050
|
|||
Balance at December 31, 2021
|
$
|
6,450
|
December 31,
|
||||||||
2020
|
2021
|
|||||||
Cash and cash equivalents
|
$
|
25,825
|
$
|
88,036
|
||||
Restricted cash
|
61
|
177
|
||||||
Total cash, cash equivalents and restricted cash as shown on the consolidated statements of cash flows
|
$
|
25,886
|
$
|
88,213
|
December 31,
|
||||||||
2020
|
2021
|
|||||||
Computer equipment
|
$
|
42
|
$
|
69
|
||||
Furniture and fixtures
|
52
|
93
|
||||||
Less: Accumulated depreciation
|
(24
|
)
|
(56
|
)
|
||||
Property and equipment, net
|
$
|
70
|
$
|
106
|
December 31,
|
||||||||
2020
|
2021
|
|||||||
Accrued research and development
|
$
|
1,269
|
$
|
2,297
|
||||
Accrued employee-related expenses
|
727
|
1,177
|
||||||
Accrued professional fees
|
415
|
601
|
||||||
Accrued other
|
26
|
21
|
||||||
Total accrued expenses
|
$
|
2,437
|
$
|
4,096
|
December 31, 2020
|
||||||||||||||||||||
Preferred
Stock
Authorized
|
Preferred
Stock Issued
and
Outstanding
|
Carrying
Value
|
Liquidation
Value
|
Common
Stock
Issuable Upon
Conversion
|
||||||||||||||||
Series Seed
|
5,000,000
|
5,000,000
|
$
|
2,350
|
$
|
5,000
|
5,000,000
|
|||||||||||||
Series A
|
41,666,666
|
41,666,666
|
49,762
|
50,000
|
41,666,666
|
|||||||||||||||
Total
|
46,666,666
|
46,666,666
|
$
|
52,112
|
$
|
55,000
|
46,666,666
|
December 31, 2021
|
||||||||||||||||||||
Preferred
Stock
Authorized
|
Preferred
Stock Issued
and
Outstanding
|
Carrying
Value
|
Liquidation
Value
|
Common
Stock
Issuable Upon
Conversion
|
||||||||||||||||
Series Seed
|
5,000,000
|
5,000,000
|
$
|
2,350
|
$
|
5,000
|
5,000,000
|
|||||||||||||
Series A
|
41,666,666
|
41,666,666
|
49,762
|
50,000
|
41,666,666
|
|||||||||||||||
Series B
|
37,499,999
|
37,499,999
|
89,744
|
90,000
|
37,499,999
|
|||||||||||||||
Total
|
84,166,665
|
84,166,665
|
$
|
141,856
|
$
|
145,000
|
84,166,665
|
December 31,
|
||||||||
2020
|
2021
|
|||||||
Series Seed convertible preferred stock
|
5,000,000
|
5,000,000
|
||||||
Series A convertible preferred stock
|
41,666,666
|
41,666,666
|
||||||
Series B convertible preferred stock
|
—
|
37,499,999
|
||||||
Stock options
|
8,405,025
|
13,289,901
|
||||||
Total
|
55,071,691
|
97,456,566
|
Number of
Options
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Remaining
Contractual
Term (In Years)
|
Aggregate
Intrinsic
Value
(In Thousands)
|
|||||||||||||
Outstanding at December 31, 2020
|
8,405,025
|
$
|
0.18
|
9.30
|
$
|
962
|
||||||||||
Granted
|
6,768,153
|
$
|
1.01
|
|||||||||||||
Exercised
|
(465,910
|
)
|
$
|
0.15
|
||||||||||||
Forfeited
|
(1,355,706
|
)
|
$
|
0.21
|
||||||||||||
Expired
|
(61,661
|
)
|
$
|
0.27
|
||||||||||||
Outstanding at December 31, 2021
|
13,289,901
|
$
|
0.60
|
8.98
|
$
|
13,027
|
||||||||||
Exercisable at December 31, 2021
|
3,167,571
|
$
|
0.24
|
8.35
|
$
|
4,260
|
Year Ended December 31,
|
||||||||
2020
|
2021
|
|||||||
Risk-free interest rate
|
0.58
|
%
|
0.95
|
%
|
||||
Expected term (in years)
|
6.00
|
6.00
|
||||||
Expected volatility
|
62
|
%
|
59
|
%
|
||||
Expected dividend yield
|
0
|
%
|
0
|
%
|
||||
Fair value per share of common stock
|
$
|
0.20
|
$
|
1.01
|
Year Ended December 31,
|
||||||||
2020
|
2021
|
|||||||
Unvested at the beginning of the year
|
371,429
|
227,581
|
||||||
Vested
|
(143,848
|
)
|
(134,807
|
)
|
||||
Unvested at the end of the year
|
227,581
|
92,774
|
Year Ended December 31,
|
||||||||
2020
|
2021
|
|||||||
Research and development
|
$
|
62
|
$
|
223
|
||||
General and administrative
|
61
|
284
|
||||||
Total stock-based compensation expense
|
$
|
123
|
$
|
507
|
Year Ended December 31,
|
||||||||
2020
|
2021
|
|||||||
Federal statutory income tax rate
|
21.0
|
%
|
21.0
|
%
|
||||
State income taxes, net of federal benefit
|
6.8
|
7.3
|
||||||
Federal and state research and development tax credits
|
2.4
|
1.3
|
||||||
Other
|
(0.1
|
)
|
(0.3
|
)
|
||||
Change in deferred tax asset valuation allowance
|
(30.1
|
)
|
(29.3
|
)
|
||||
Effective income tax rate
|
0
|
%
|
0
|
%
|
December 31,
|
||||||||
2020
|
2021
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss carryforwards
|
$
|
8,407
|
$
|
15,128
|
||||
Capitalized licenses
|
283
|
3,214
|
||||||
Tax credits
|
763
|
1,639
|
||||||
Operating lease liabilities
|
287
|
452
|
||||||
Stock-based compensation
|
11
|
34
|
||||||
Total deferred tax assets
|
9,751
|
20,467
|
||||||
Valuation allowance
|
(9,448
|
)
|
(19,997
|
)
|
||||
Total deferred tax assets, net of valuation allowance
|
303
|
470
|
||||||
Deferred tax liabilities:
|
||||||||
Operating right-of-use assets
|
(288
|
)
|
(448
|
)
|
||||
Depreciation
|
(15
|
)
|
(22
|
)
|
||||
Total deferred tax liabilities
|
(303
|
)
|
(470
|
)
|
||||
Net deferred tax assets
|
$
|
—
|
$
|
—
|
Year Ended December 31,
|
||||||||
2020
|
2021
|
|||||||
Numerator:
|
||||||||
Net loss attributable to common stockholders—basic and diluted
|
$
|
(20,936
|
)
|
$
|
(35,969
|
)
|
||
Denominator:
|
||||||||
Weighted-average common shares outstanding—basic and diluted
|
6,930,451
|
8,014,679
|
||||||
Net loss per share attributable to common stockholders—basic and diluted
|
$
|
(3.02
|
)
|
$
|
(4.49
|
)
|
December 31,
|
||||||||
2020
|
2021
|
|||||||
Series Seed convertible preferred stock
|
5,000,000
|
5,000,000
|
||||||
Series A convertible preferred stock
|
41,666,666
|
41,666,666
|
||||||
Series B convertible preferred stock
|
—
|
37,499,999
|
||||||
Unvested restricted common stock
|
227,581
|
92,774
|
||||||
Options to purchase common stock
|
8,405,025
|
13,289,901
|
Year Ended December 31,
|
||||||||
2020
|
2021
|
|||||||
Operating lease costs
|
$
|
138
|
$
|
187
|
||||
Short-term lease costs
|
25
|
—
|
||||||
Variable lease costs
|
2
|
42
|
||||||
Total lease expense
|
$
|
165
|
$
|
229
|
Year Ended December 31,
|
||||||||
2020
|
2021
|
|||||||
Weighted average remaining lease term
|
4.48 years
|
4.91 years
|
||||||
Weighted average discount rate
|
6.8
|
%
|
5.5
|
%
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
||||||||
Operating cash flows used in operating leases
|
$
|
129
|
$
|
250
|
Year Ending December 31,
|
Operating Leases
|
|||
2022
|
$
|
401
|
||
2023
|
373
|
|||
2024
|
382
|
|||
2025
|
394
|
|||
2026
|
336
|
|||
Total minimum lease payments
|
1,886
|
|||
Less imputed interest
|
(233
|
)
|
||
Present value of lease liabilities
|
$
|
1,653
|
Periods ended September 30, 2022 and 2021
|
|
Condensed Consolidated Balance Sheets
|
2
|
Condensed Consolidated Statements of Operations and Comprehensive Loss
|
3
|
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit
|
4
|
Condensed Consolidated Statements of Cash Flows
|
5
|
Notes to Condensed Consolidated Financial Statements
|
6
|
DECEMBER 31,
2021
|
SEPTEMBER 30,
2022
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
88,036
|
$
|
55,473
|
||||
Prepaid expenses and other current assets
|
2,448
|
4,425
|
||||||
Total current assets
|
90,484
|
59,898
|
||||||
Property and equipment, net
|
106
|
181
|
||||||
Right-of-use assets, operating leases
|
1,641
|
1,512
|
||||||
Other assets
|
180
|
116
|
||||||
Total assets
|
$
|
92,411
|
$
|
61,707
|
||||
Liabilities, Convertible Preferred Stock and Stockholders’ Deficit
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
2,559
|
$
|
3,397
|
||||
Accrued expenses
|
4,096
|
3,674
|
||||||
Derivative liability
|
6,450
|
9,900
|
||||||
Operating lease liabilities, current
|
319
|
301
|
||||||
Total current liabilities
|
13,424
|
17,272
|
||||||
Operating lease liabilities, non-current
|
1,334
|
1,106
|
||||||
Total liabilities
|
14,758
|
18,378
|
||||||
Commitments and contingencies (Note 13)
|
||||||||
Series Seed convertible preferred stock, $0.0001 par value; 5,000,000 shares authorized, issued and outstanding as of December 31, 2021 and September 30, 2022 (liquidation
preference of $5,000 as of December 31, 2021 and September 30, 2022)
|
2,350
|
2,350
|
||||||
Series A convertible preferred stock, $0.0001 par value; 41,666,666 shares authorized, issued and outstanding as of December 31, 2021 and September 30, 2022 (liquidation
preference of $50,000 as of December 31, 2021 and September 30, 2022)
|
49,762
|
49,762
|
||||||
Series B convertible preferred stock, $0.0001 par value; 37,499,999 shares authorized, issued and outstanding as of December 31, 2021 and September 30, 2022 (liquidation
preference of $90,000 as of December 31, 2021 and September 30, 2022)
|
89,744
|
89,744
|
||||||
Stockholders’ deficit:
|
||||||||
Common stock, $0.0001 par value; 108,108,833 and 109,395,840 shares authorized as of December 31, 2021 and September 30, 2022, respectively; 8,390,438 and 8,835,359 shares
issued December 31, 2021 and September 30, 2022, respectively; and 8,297,664 and 8,805,096 shares outstanding as of December 31, 2021 and September 30, 2022, respectively
|
1
|
1
|
||||||
Additional paid-in capital
|
1,185
|
2,444
|
||||||
Accumulated deficit
|
(65,389
|
)
|
(100,972
|
)
|
||||
Total stockholders’ deficit
|
(64,203
|
)
|
(98,527
|
)
|
||||
Total liabilities, convertible preferred stock and stockholders’ deficit
|
$
|
92,411
|
$
|
61,707
|
NINE MONTHS ENDED
SEPTEMBER 30,
|
||||||||
2021
|
2022
|
|||||||
Operating expenses:
|
||||||||
Research and development
|
$
|
19,511
|
$
|
23,421
|
||||
General and administrative
|
4,012
|
9,033
|
||||||
Total operating expenses
|
23,523
|
32,454
|
||||||
Loss from operations
|
(23,523
|
)
|
(32,454
|
)
|
||||
Other income (expense), net:
|
||||||||
Interest income
|
5
|
321
|
||||||
Change in fair value of derivative liability
|
(3,600
|
)
|
(3,450
|
)
|
||||
Total other income (expense), net
|
(3,595
|
)
|
(3,129
|
)
|
||||
Net loss and comprehensive loss
|
$
|
(27,118
|
)
|
$
|
(35,583
|
)
|
||
Net loss attributable to common stockholders—basic and diluted
|
$
|
(27,118
|
)
|
$
|
(35,583
|
)
|
||
Weighted-average common shares outstanding—basic and diluted
|
7,947,355
|
8,604,591
|
||||||
Net loss per share attributable to common stockholders—basic and diluted
|
$
|
(3.41
|
)
|
$
|
(4.14
|
)
|
CONVERTIBLE PREFERRED STOCK
|
||||||||||||||||||||||||||||||||||||||||||||
SERIES SEED
$0.0001 PAR
VALUE
|
SERIES A
$0.0001 PAR
VALUE
|
SERIES B
$0.0001 PAR
VALUE
|
COMMON STOCK
$0.0001 PAR VALUE
|
ADDITIONAL
PAID-IN
CAPITAL
|
ACCUMULATED
DEFICIT
|
TOTAL
STOCKHOLDERS’
DEFICIT
|
||||||||||||||||||||||||||||||||||||||
SHARES
|
AMOUNT
|
SHARES
|
AMOUNT
|
SHARES
|
AMOUNT
|
SHARES
|
AMOUNT
|
|||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020
|
5,000,000
|
$
|
2,350
|
41,666,666
|
$
|
49,762
|
—
|
$
|
—
|
7,696,947
|
$
|
1
|
$
|
610
|
$
|
(29,420
|
)
|
$
|
(28,809
|
)
|
||||||||||||||||||||||||
Issuance of Series B convertible preferred stock, net of issuance costs of $256
|
—
|
—
|
—
|
—
|
37,499,999
|
89,744
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options
|
—
|
—
|
—
|
—
|
—
|
—
|
353,465
|
—
|
49
|
—
|
49
|
|||||||||||||||||||||||||||||||||
Vesting of restricted common stock
|
—
|
—
|
—
|
—
|
—
|
—
|
107,885
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||||||||
Stock-based compensation expense
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
237
|
—
|
237
|
|||||||||||||||||||||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(27,118
|
)
|
(27,118
|
)
|
|||||||||||||||||||||||||||||||
Balance at September 30, 2021
|
5,000,000
|
$
|
2,350
|
41,666,666
|
$
|
49,762
|
37,499,999
|
$
|
89,744
|
8,158,297
|
$
|
1
|
$
|
896
|
$
|
(56,538
|
)
|
$
|
(55,641
|
)
|
||||||||||||||||||||||||
Balance at December 31, 2021
|
5,000,000
|
$
|
2,350
|
41,666,666
|
$
|
49,762
|
37,499,999
|
$
|
89,744
|
8,297,664
|
$
|
1
|
$
|
1,185
|
$
|
(65,389
|
)
|
$
|
(64,203
|
)
|
||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options
|
—
|
—
|
—
|
—
|
—
|
—
|
444,921
|
—
|
163
|
—
|
163
|
|||||||||||||||||||||||||||||||||
Vesting of restricted common stock
|
—
|
—
|
—
|
—
|
—
|
—
|
62,511
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||||||||
Stock-based compensation expense
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
1,096
|
—
|
1,096
|
|||||||||||||||||||||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(35,583
|
)
|
(35,583
|
)
|
|||||||||||||||||||||||||||||||
Balance at September 30, 2022
|
5,000,000
|
$
|
2,350
|
41,666,666
|
$
|
49,762
|
37,499,999
|
$
|
89,744
|
8,805,096
|
$
|
1
|
$
|
2,444
|
$
|
(100,972
|
)
|
$
|
(98,527
|
)
|
NINE MONTHS ENDED
SEPTEMBER 30,
|
||||||||
2021
|
2022
|
|||||||
Cash flows from operating activities
|
||||||||
Net loss
|
$
|
(27,118
|
)
|
$
|
(35,583
|
)
|
||
Adjustments to reconcile net loss to net cash used in operations:
|
||||||||
Depreciation and amortization
|
23
|
64
|
||||||
Stock-based compensation
|
237
|
1,096
|
||||||
Change in fair value of derivative liability
|
3,600
|
3,450
|
||||||
Noncash license expense
|
1,400
|
—
|
||||||
Noncash lease expense
|
155
|
129
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses and other current assets
|
(591
|
)
|
(1,689
|
)
|
||||
Other assets
|
—
|
64
|
||||||
Accounts payable
|
976
|
600
|
||||||
Accrued expenses
|
336
|
(472
|
)
|
|||||
Operating lease liabilities
|
(148
|
)
|
(246
|
)
|
||||
Net cash used in operating activities
|
(21,130
|
)
|
(32,587
|
)
|
||||
Cash flow from investing activities
|
||||||||
Purchases of property and equipment
|
(5
|
)
|
(139
|
)
|
||||
Net cash used in investing activities
|
(5
|
)
|
(139
|
)
|
||||
Cash flow from financing activities
|
||||||||
Proceeds from issuance of convertible preferred stock, net of issuance costs
|
89,884
|
—
|
||||||
Proceeds from stock option exercises
|
49
|
163
|
||||||
Net cash provided by financing activities
|
89,933
|
163
|
||||||
Net decrease in cash, cash equivalents and restricted cash
|
68,798
|
(32,563
|
)
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
25,886
|
88,213
|
||||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
94,684
|
$
|
55,650
|
||||
Supplemental cash flow information
|
||||||||
Cash paid for income taxes
|
$
|
—
|
$
|
—
|
||||
Supplemental disclosure of non-cash activities
|
||||||||
Decrease in right-of-use assets related to lease modification
|
$
|
896
|
$
|
—
|
||||
Decrease in operating lease liabilities due to lease modification
|
$
|
896
|
$
|
—
|
||||
Deferred issuance costs on Series B convertible preferred stock in accounts payable and accruals
|
$
|
157
|
$
|
—
|
||||
Deferred offering costs included in accounts payable and accruals at end of period
|
$
|
255
|
$
|
288
|
• |
Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities;
|
• |
Level 2—Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and
|
• |
Level 3—Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.
|
ESTIMATED USEFUL
LIFE
|
|
Computer equipment
|
3.0 years
|
Furniture and fixtures
|
3.0 years
|
Internally developed software
|
3.0 years
|
DECEMBER 31, 2021
|
||||||||||||
Level 1
|
Level 2
|
Level 3
|
||||||||||
Assets
|
||||||||||||
Money market funds in cash and cash equivalents
|
$
|
86,119
|
$
|
—
|
$
|
—
|
||||||
Total
|
$
|
86,119
|
$
|
—
|
$
|
—
|
||||||
Liabilities
|
||||||||||||
Derivative liability
|
$
|
—
|
$
|
—
|
$
|
6,450
|
||||||
Total
|
$
|
—
|
$
|
—
|
$
|
6,450
|
SEPTEMBER 30, 2022
|
||||||||||||
Level 1
|
Level 2
|
Level 3
|
||||||||||
Assets
|
||||||||||||
Money market funds in cash and cash equivalents
|
$
|
25,453
|
$
|
—
|
$
|
—
|
||||||
Total
|
$
|
25,453
|
$
|
—
|
$
|
—
|
||||||
Liabilities
|
||||||||||||
Derivative liability
|
$
|
—
|
$
|
—
|
$
|
9,900
|
||||||
Total
|
$
|
—
|
$
|
—
|
$
|
9,900
|
LEVEL 3
ROLLFORWARD
|
||||
Balance at December 31, 2021
|
$
|
6,450
|
||
Change in fair value of derivative liability
|
3,450
|
|||
Balance at September 30, 2022
|
$
|
9,900
|
DECEMBER 31,
2021
|
SEPTEMBER 30,
2022
|
|||||||
Cash and cash equivalents
|
$
|
88,036
|
$
|
55,473
|
||||
Restricted cash
|
177
|
177
|
||||||
Total cash, cash equivalents and restricted cash as shown on the condensed consolidated statements of cash flows
|
$
|
88,213
|
$
|
55,650
|
DECEMBER 31,
2021
|
SEPTEMBER 30,
2022
|
|||||||
Furniture and fixtures
|
$
|
93
|
$
|
143
|
||||
Computer equipment
|
69
|
106
|
||||||
Internally developed software
|
—
|
52
|
||||||
Less: Accumulated depreciation
|
(56
|
)
|
(120
|
)
|
||||
Property and equipment, net
|
$
|
106
|
$
|
181
|
DECEMBER 31,
2021
|
SEPTEMBER 30,
2022
|
|||||||
Accrued employee-related expenses
|
$
|
1,177
|
$
|
1,670
|
||||
Accrued research and development
|
2,297
|
1,620
|
||||||
Accrued professional fees
|
601
|
364
|
||||||
Accrued other
|
21
|
20
|
||||||
Total accrued expenses
|
$
|
4,096
|
$
|
3,674
|
PREFERRED
STOCK
AUTHORIZED
|
PREFERRED
STOCK ISSUED
AND OUTSTANDING
|
CARRYING
VALUE
|
LIQUIDATION
VALUE
|
COMMON STOCK
ISSUABLE UPON
CONVERSION
|
||||||||||||||||
Series Seed
|
5,000,000
|
5,000,000
|
$
|
2,350
|
$
|
5,000
|
5,000,000
|
|||||||||||||
Series A
|
41,666,666
|
41,666,666
|
49,762
|
50,000
|
41,666,666
|
|||||||||||||||
Series B
|
37,499,999
|
37,499,999
|
89,744
|
90,000
|
37,499,999
|
|||||||||||||||
Total
|
84,166,665
|
84,166,665
|
$
|
141,856
|
$
|
145,000
|
84,166,665
|
DECEMBER 31,
2021
|
SEPTEMBER 30,
2022
|
|||||||
Series Seed convertible preferred stock
|
5,000,000
|
5,000,000
|
||||||
Series A convertible preferred stock
|
41,666,666
|
41,666,666
|
||||||
Series B convertible preferred stock
|
37,499,999
|
37,499,999
|
||||||
Stock options
|
13,289,901
|
14,661,655
|
||||||
Total
|
97,456,566
|
98,828,320
|
NUMBER OF
OPTIONS
|
WEIGHTED-
AVERAGE
EXERCISE
PRICE
|
WEIGHTED-
AVERAGE
REMAINING
CONTRACTUAL
TERM
(IN YEARS)
|
AGGREGATE
INTRINSIC
VALUE
(IN THOUSANDS)
|
|||||||||||||
Outstanding at December 31, 2021
|
13,289,901
|
$
|
0.60
|
8.98
|
$
|
13,027
|
||||||||||
Granted
|
2,209,349
|
$
|
1.47
|
|||||||||||||
Exercised
|
(444,921
|
)
|
$
|
0.37
|
||||||||||||
Forfeited
|
(392,674
|
)
|
$
|
0.93
|
||||||||||||
Outstanding at September 30, 2022
|
14,661,655
|
$
|
0.73
|
8.42
|
$
|
21,424
|
||||||||||
Exercisable at September 30, 2022
|
5,282,179
|
$
|
0.38
|
7.89
|
$
|
9,552
|
NINE MONTHS ENDED SEPTEMBER 30,
|
||||||||
2021
|
2022
|
|||||||
Risk-free interest rate
|
0.91
|
%
|
2.24
|
%
|
||||
Expected term (in years)
|
6.00
|
6.00
|
||||||
Expected volatility
|
63
|
%
|
55
|
%
|
||||
Expected dividend yield
|
0
|
%
|
0
|
%
|
||||
Fair value per share of common stock
|
$
|
0.95
|
$
|
1.47
|
NINE MONTHS ENDED SEPTEMBER 30,
|
||||||||
2021
|
2022
|
|||||||
Unvested at the beginning of the period
|
227,581
|
92,774
|
||||||
Vested
|
(107,885
|
)
|
(62,511
|
)
|
||||
Unvested at the end of the period
|
119,696
|
30,263
|
NINE MONTHS ENDED SEPTEMBER 30,
|
||||||||
2021
|
2022
|
|||||||
Research and development
|
$
|
102
|
$
|
422
|
||||
General and administrative
|
135
|
674
|
||||||
Total stock-based compensation expense
|
$
|
237
|
$
|
1,096
|
SEPTEMBER 30,
|
||||||||
2021
|
2022
|
|||||||
Series Seed convertible preferred stock
|
5,000,000
|
5,000,000
|
||||||
Series A convertible preferred stock
|
41,666,666
|
41,666,666
|
||||||
Series B convertible preferred stock
|
37,499,999
|
37,499,999
|
||||||
Unvested restricted common stock
|
119,696
|
30,263
|
||||||
Options to purchase common stock
|
12,899,387
|
14,661,655
|
Year Ended
December 31,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2021
|
2021
|
2022
|
|||||||||||||
(in thousands, except share and per share data)
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
$
|
28,170
|
$
|
48,717
|
$
|
36,083
|
$
|
12,822
|
||||||||
General and administrative
|
5,870
|
20,285
|
15,177
|
13,326
|
||||||||||||
Total operating expenses
|
34,040
|
69,002
|
51,260
|
26,148
|
||||||||||||
Loss from operations
|
(34,040
|
)
|
(69,002
|
)
|
(51,260
|
)
|
(26,148
|
)
|
||||||||
Other income (expense):
|
||||||||||||||||
Interest expense
|
(6,826
|
)
|
(2,158
|
)
|
(2,073
|
)
|
(155
|
)
|
||||||||
Interest income
|
37
|
15
|
11
|
657
|
||||||||||||
Loss on conversion of convertible notes
|
—
|
(711
|
)
|
(711
|
)
|
—
|
||||||||||
Change in fair value of warrant liability
|
(8
|
)
|
—
|
—
|
—
|
|||||||||||
Other income (expense)
|
—
|
(13
|
)
|
(13
|
)
|
48
|
||||||||||
Net loss and comprehensive loss
|
$
|
(40,837
|
)
|
$
|
(71,869
|
)
|
$
|
(54,046
|
)
|
$
|
(25,598
|
)
|
||||
Net loss per share, basic and diluted
|
$
|
(2.70
|
)
|
$
|
(1.78
|
)
|
$
|
(1.37
|
)
|
$
|
(0.59
|
)
|
||||
Weighted average common shares outstanding, basic and diluted
|
15,115,129
|
40,362,303
|
39,427,476
|
43,236,171
|
As of December 31,
|
As of September 30,
|
|||||||||||
2020
|
2021
|
2022
|
||||||||||
(in thousands)
|
||||||||||||
Consolidated Balance Sheet Data:
|
||||||||||||
Cash and cash equivalents
|
$
|
4,503
|
$
|
136,627
|
$
|
101,737
|
||||||
Working capital (1)
|
(19,811
|
)
|
125,266
|
103,200
|
||||||||
Total assets
|
8,319
|
140,437
|
106,031
|
|||||||||
Total liabilities
|
30,180
|
15,596
|
1,464
|
|||||||||
Accumulated deficit
|
(112,821
|
)
|
(184,690
|
)
|
(210,288
|
)
|
||||||
Total stockholders’ equity (deficit)
|
(21,861
|
)
|
124,841
|
104,567
|
(1) |
Working capital is defined as current assets less current liabilities.
|
Year Ended
December 31,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2021
|
2021
|
2022
|
|||||||||||||
(in thousands, except share and per share data)
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
$
|
18,020
|
$
|
25,170
|
$
|
19,511
|
$
|
23,421
|
||||||||
General and administrative
|
2,956
|
5,763
|
4,012
|
9,033
|
||||||||||||
Total operating expenses
|
20,976
|
30,933
|
23,523
|
32,454
|
||||||||||||
Loss from operations
|
(20,976
|
)
|
(30,933
|
)
|
(23,523
|
)
|
(32,454
|
)
|
||||||||
Other income (expense), net:
|
||||||||||||||||
Interest income
|
40
|
14
|
5
|
321
|
||||||||||||
Change in fair value of derivative liability
|
—
|
(5,050
|
)
|
(3,600
|
)
|
(3,450
|
)
|
|||||||||
Total other income (expense), net
|
40
|
(5,036
|
)
|
(3,595
|
)
|
(3,129
|
)
|
|||||||||
Net loss and comprehensive loss
|
$
|
(20,936
|
)
|
$
|
(35,969
|
)
|
$
|
(27,118
|
)
|
$
|
(35,583
|
)
|
||||
Net loss attributable to common stockholders—basic and diluted
|
$
|
(20,936
|
)
|
$
|
(35,969
|
)
|
$
|
(27,118
|
)
|
$
|
(35,583
|
)
|
||||
Weighted-average common shares outstanding—basic and diluted
|
6,930,451
|
8,014,679
|
7,947,355
|
8,604,591
|
||||||||||||
Net loss per share attributable to common stockholders—basic and diluted
|
$
|
(3.02
|
)
|
$
|
(4.49
|
)
|
$
|
(3.41
|
)
|
$
|
(4.14
|
)
|
As of December 31,
|
As of September 30,
|
|||||||||||
2020
|
2021
|
2022
|
||||||||||
(in thousands)
|
||||||||||||
Consolidated Balance Sheet Data:
|
||||||||||||
Cash and cash equivalents
|
$
|
25,825
|
$
|
88,036
|
$
|
55,473
|
||||||
Working capital (1)
|
22,966
|
77,060
|
42,626
|
|||||||||
Total assets
|
27,377
|
92,411
|
61,707
|
|||||||||
Total liabilities
|
4,074
|
14,758
|
18,378
|
|||||||||
Convertible preferred stock
|
52,112
|
141,856
|
141,856
|
|||||||||
Accumulated deficit
|
(29,420
|
)
|
(65,389
|
)
|
(100,972
|
)
|
||||||
Total stockholders’ deficit
|
(28,809
|
)
|
(64,203
|
)
|
(98,527
|
)
|
(1) |
Working capital is defined as current assets less current liabilities.
|
Year Ended
December 31,
|
Nine Months Ended
September 30,
|
|||||||
2021
|
2022
|
|||||||
(in thousands, except share and per share data)
|
||||||||
Research and development expense
|
$
|
73,887
|
$
|
36,243
|
||||
General and administrative expense
|
37,052
|
22,359
|
||||||
Loss from operations
|
(110,939
|
)
|
(58,602
|
)
|
||||
Net loss attributable to common stockholders—basic and diluted
|
(113,344
|
)
|
(57,576
|
)
|
||||
Net loss per share attributable to common stockholders—basic and diluted
|
$
|
(6.66
|
)
|
$
|
(3.32
|
)
|
As of September 30,
|
||||
2022
|
||||
(in thousands)
|
||||
Consolidated Balance Sheet Data:
|
||||
Cash and cash equivalents
|
$
|
210,710
|
||
Working capital, net
|
192,079
|
|||
Total assets
|
218,907
|
|||
Total liabilities
|
24,758
|
|||
Accumulated deficit
|
(103,485
|
)
|
||
Total stockholders’ equity (deficit)
|
194,149
|
Disc
Medicine
|
Gemini
Therapeutics
|
Disc Pre-
closing
Financing
Adjustments
|
Pro Forma
Merger
Adjustments
|
Notes
|
Pro Forma
Combined
|
||||||||||||||||||
Assets
|
|||||||||||||||||||||||
Current assets:
|
|||||||||||||||||||||||
Cash and cash equivalents
|
$
|
55,473
|
$
|
101,737
|
$
|
53,500
|
$
|
—
|
B |
|
$
|
210,710
|
|||||||||||
Prepaid expenses and other current assets
|
4,425
|
2,927
|
—
|
(2,331
|
)
|
D, E
|
|
5,021
|
|||||||||||||||
Total current assets
|
59,898
|
104,664
|
53,500
|
(2,331
|
)
|
215,731
|
|||||||||||||||||
Property and equipment, net
|
181
|
—
|
—
|
—
|
181
|
||||||||||||||||||
Right-of-use assets, operating leases
|
1,512
|
—
|
—
|
—
|
1,512
|
||||||||||||||||||
Other assets
|
116
|
1,367
|
—
|
—
|
1,483
|
||||||||||||||||||
Total assets
|
$
|
61,707
|
$
|
106,031
|
$
|
53,500
|
$
|
(2,331
|
)
|
$
|
218,907
|
||||||||||||
Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit)
|
|||||||||||||||||||||||
Current liabilities:
|
|||||||||||||||||||||||
Accounts payable
|
$
|
3,397
|
$
|
1,139
|
$
|
—
|
$
|
—
|
$
|
4,536
|
|||||||||||||
Accrued expenses
|
3,674
|
325
|
—
|
14,816
|
D, E, F, G
|
|
18,815
|
||||||||||||||||
Derivative liability
|
9,900
|
—
|
—
|
(9,900
|
)
|
J |
|
—
|
|||||||||||||||
Operating lease liabilities, current
|
301
|
—
|
—
|
—
|
301
|
||||||||||||||||||
Total current liabilities
|
17,272
|
1,464
|
—
|
4,916
|
23,652
|
||||||||||||||||||
Operating lease liabilities, non-current
|
1,106
|
—
|
—
|
—
|
1,106
|
||||||||||||||||||
Total liabilities
|
18,378
|
1,464
|
—
|
4,916
|
24,758
|
||||||||||||||||||
Series Seed convertible preferred stock
|
2,350
|
—
|
—
|
(2,350
|
)
|
C |
|
—
|
|||||||||||||||
Series A convertible preferred stock
|
49,762
|
—
|
—
|
(49,762
|
)
|
C |
|
—
|
|||||||||||||||
Series B convertible preferred stock
|
89,744
|
—
|
—
|
(89,744
|
)
|
C |
|
—
|
|||||||||||||||
Stockholders’ deficit:
|
|||||||||||||||||||||||
Common stock
|
1
|
4
|
2
|
(5
|
)
|
I |
|
2
|
|||||||||||||||
Additional paid-in capital
|
2,444
|
314,851
|
53,498
|
(73,161
|
)
|
I |
|
297,632
|
|||||||||||||||
Accumulated deficit
|
(100,972
|
)
|
(210,288
|
)
|
—
|
207,775
|
I |
|
(103,485
|
)
|
|||||||||||||
Total stockholders’ equity (deficit)
|
(98,527
|
)
|
104,567
|
53,500
|
134,609
|
194,149
|
|||||||||||||||||
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)
|
$
|
61,707
|
$
|
106,031
|
$
|
53,500
|
$
|
(2,331
|
)
|
$
|
218,907
|
Disc
Medicine
|
Gemini
Therapeutics
|
Pro Forma
Merger
Adjustments
|
Notes
|
Pro Forma
Combined
|
|||||||||||||||
Operating expenses:
|
|||||||||||||||||||
Research and development
|
$
|
23,421
|
$
|
12,822
|
$
|
—
|
$
|
36,243
|
|||||||||||
General and administrative
|
9,033
|
13,326
|
—
|
22,359
|
|||||||||||||||
Total operating expenses
|
32,454
|
26,148
|
—
|
58,602
|
|||||||||||||||
Loss from operations
|
(32,454
|
)
|
(26,148
|
)
|
—
|
(58,602
|
)
|
||||||||||||
Other income (expense), net:
|
|||||||||||||||||||
Interest expense
|
—
|
(155
|
)
|
155
|
A |
|
—
|
||||||||||||
Interest income
|
321
|
657
|
—
|
978
|
|||||||||||||||
Loss on conversion of convertible notes
|
—
|
—
|
—
|
—
|
|||||||||||||||
Change in fair value of derivative liability
|
(3,450
|
)
|
—
|
3,450
|
J |
|
—
|
||||||||||||
Other income
|
—
|
48
|
—
|
48
|
|||||||||||||||
Total other income (expense), net
|
(3,129
|
)
|
550
|
3,605
|
1,026
|
||||||||||||||
Net loss and comprehensive loss
|
$
|
(35,583
|
)
|
$
|
(25,598
|
)
|
$
|
3,605
|
$
|
(57,576
|
)
|
||||||||
Net loss attributable to common stockholders—basic and diluted
|
$
|
(35,583
|
)
|
$
|
(25,598
|
)
|
$
|
3,605
|
$
|
(57,576
|
)
|
||||||||
Weighted-average common shares outstanding—basic and diluted
|
8,604,591
|
43,236,171
|
(34,474,350
|
)
|
K |
|
17,366,412
|
||||||||||||
Net loss per share attributable to common stockholders—basic and diluted
|
$
|
(4.14
|
)
|
$
|
(0.59
|
)
|
$
|
—
|
$
|
(3.32
|
)
|
Disc
Medicine
|
Gemini
Therapeutics
|
Pro Forma
Merger
Adjustments
|
Notes
|
Pro Forma
Combined
|
|||||||||||||||
Operating expenses:
|
|||||||||||||||||||
Research and development
|
$
|
25,170
|
$
|
48,717
|
$
|
—
|
$
|
73,887
|
|||||||||||
General and administrative
|
5,763
|
20,285
|
11,004
|
D, F, G, H
|
|
37,052
|
|||||||||||||
Total operating expenses
|
30,933
|
69,002
|
11,004
|
110,939
|
|||||||||||||||
Loss from operations
|
(30,933
|
)
|
(69,002
|
)
|
(11,004
|
)
|
(110,939
|
)
|
|||||||||||
Other income (expense), net:
|
|||||||||||||||||||
Interest expense
|
—
|
(2,158
|
)
|
448
|
A |
|
(1,710
|
)
|
|||||||||||
Interest income
|
14
|
15
|
—
|
29
|
|||||||||||||||
Loss on conversion of convertible notes
|
—
|
(711
|
)
|
—
|
(711
|
)
|
|||||||||||||
Change in fair value of derivative liability
|
(5,050
|
)
|
—
|
5,050
|
J |
|
—
|
||||||||||||
Other expense
|
—
|
(13
|
)
|
—
|
(13
|
)
|
|||||||||||||
Total other income (expense), net
|
(5,036
|
)
|
(2,867
|
)
|
5,498
|
(2,405
|
)
|
||||||||||||
Net loss and comprehensive loss
|
$
|
(35,969
|
)
|
$
|
(71,869
|
)
|
$
|
(5,506
|
)
|
$
|
(113,344
|
)
|
|||||||
Net loss attributable to common stockholders—basic and diluted
|
$
|
(35,969
|
)
|
$
|
(71,869
|
)
|
$
|
(5,506
|
)
|
$
|
(113,344
|
)
|
|||||||
Weighted-average common shares outstanding—basic and diluted
|
8,014,679
|
40,362,303
|
(31,362,611
|
)
|
K |
|
17,014,371
|
||||||||||||
Net loss per share attributable to common stockholders—basic and diluted
|
$
|
(4.49
|
)
|
$
|
(1.78
|
)
|
$
|
—
|
$
|
(6.66
|
)
|
Estimated number of shares of the combined company to be owned by Gemini stockholders(i)
|
4,376,848
|
|||
Multiplied by the assumed price per share of Gemini common stock(ii)
|
$
|
15.50
|
||
Total
|
$
|
67,841
|
||
Estimated fair value of assumed Gemini equity awards based on precombination service(iii)
|
38 | |||
Total estimated purchase price
|
$
|
67,879
|
i. |
Reflects the number of shares of common stock of the combined company that Gemini equity holders would own as of the closing pursuant to the Merger Agreement. This amount is calculated, for purposes of this
unaudited pro forma condensed combined financial information, based on shares of Gemini common stock outstanding as of December 23, 2022. The estimated number of shares reflects the impact of the anticipated Gemini 1:10 reverse stock split
that is expected to be effected prior to consummation of the merger.
|
ii. |
Reflects the price per share of Gemini common stock, which is the closing trading price of Gemini common stock outstanding as of December 23, 2022, adjusted to reflect the impact of the anticipated Gemini 1:10
reverse stock split.
|
iii. |
The estimated purchase price includes the estimated acquisition-date fair value of the assumed Gemini’s equity awards attributable to pre-combination service (which amount is determined based on the closing
trading price of Gemini common stock on December 23, 2022, the number of Gemini equity awards outstanding on this date, and the period of service provided by the holders of the awards prior to the merger closing date). The following table
presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the estimated acquisition-date fair value of the assumed Gemini’s equity awards:
|
Expected term (in years)
|
3.45
|
|||
Volatility
|
57 |
%
|
||
Risk free interest rate
|
4.28
|
%
|
||
Dividend yield
|
0
|
%
|
Shares of Disc common stock outstanding
|
8,858,587
|
|||
Estimated shares of Disc common stock to be issued upon consummation of the Disc pre-closing financing
|
21,314,737
|
|||
Shares of Disc common stock to be issued upon conversion of Disc convertible preferred stock
|
84,166,665
|
|||
Total
|
114,339,989
|
|||
Estimated exchange ratio
|
0.1096
|
|||
Estimated shares of Gemini common stock to be issued to Disc shareholders upon closing of the merger
|
12,531,640
|
A. |
As a condition of the closing, Gemini repaid its term loan and accrued interest and other related fees in the third quarter of 2022. For the purposes of the unaudited pro forma condensed combined statements of
operations, Gemini’s repayment of its term loan is reflected as if it occurred on January 1, 2021, with interest expense related to the debt facility of $0.4 million and $0.2 million removed from the unaudited pro forma condensed combined
statements of operations for the year ended December 31, 2021 and the nine months ended September 30, 2022, respectively.
|
B. |
The Disc pre-closing financing is contingent on the merger and is expected to close concurrently with execution of the merger and immediately prior to the consummation of the merger. The Disc pre-closing financing
consists of an executed subscription agreement to receive $53.5 million in proceeds. The potential use of proceeds from the Disc pre-closing financing has not yet been finalized, and as a result, for the purposes of the unaudited pro forma
condensed combined statement of operations, no adjustments were made to reflect interest income or the use of proceeds from the Disc pre-closing financing.
|
C. |
Immediately prior to completing the merger, all classes of convertible preferred stock of Disc are expected to convert to common shares at a 1:1 conversion ratio, Series Seed convertible preferred stock are
expected to convert to 5,000,000 Disc common shares, Series A convertible preferred stock are expected convert to 41,666,666 Disc common shares and Series B convertible preferred stock are expected to convert to 37,499,999 Disc common
shares.
|
D. |
To reflect Gemini’s estimated transaction costs of $8.1 million that were not accrued or expensed as of September 30, 2022, consisting of legal and accounting related fees of approximately $0.2 million, directors’
and officers’ liability tail insurance costs of approximately $6.1 million, and investment banking fees of approximately $1.8 million as an increase in accrued expenses, a reduction in prepaid insurance of $1.2 million and an increase to
accumulated deficit of $8.1 million in the unaudited pro forma condensed combined balance sheet.
|
E. |
To reflect Disc’s estimated transaction costs of $7.3 million that were not accrued or expensed as of September 30, 2022, consisting of legal and accounting related fees of approximately $0.5 million and
investment banking fees of approximately $5.7 million as an increase in accrued expenses, a reduction in capitalized deferred transaction costs of $1.1 million and a reduction to additional paid-in capital of $7.3 million in the unaudited
pro forma condensed combined balance sheet. As the merger will be accounted for as a reverse recapitalization equivalent to the issuance of equity for the net assets, primarily cash and cash equivalents, of Gemini, these direct and
incremental costs are treated as a reduction of the net proceeds received within additional paid-in capital.
|
F. |
Gemini’s estimated compensation expense of $1.4 million related to change-in-control cash payments, retention and severance payments resulting from pre-existing employment agreements that will be payable in cash
in connection with the merger but were not incurred as of September 30, 2022 is reflected as an increase to accrued expenses and accumulated deficit in the unaudited pro forma condensed combined balance sheet. Gemini’s compensation costs of
$1.4 million are reflected as general and administrative expense in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2021.
|
G. |
Disc’s estimated post-merger compensation expense of $0.3 million related to a change-in-control cash payment resulting from the decision to approve a one-time payment to an executive of Gemini that will be
payable in cash in connection with the merger but was not incurred as of September 30, 2022 is reflected as an increase to accrued expenses and accumulated deficit in the unaudited pro forma condensed combined balance sheet. Disc’s
compensation costs of $0.3 million are reflected as general and administrative expense in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2021.
|
H. |
Estimated share-based compensation costs are recognized as a result of the transaction based on the fair value of the outstanding unvested awards on the merger date. The amounts are either recognized as a
post-merger expense or are recognized in part as pre-merger expense of Gemini and in part as post-merger expense of the combined company, based on the specific facts and circumstances of each award. Certain awards included accelerated
vesting upon both a change of control and subsequent separation of the individual. As a result, a portion of the expense is recognized as pre-merger expense of Gemini and a portion is recognized as post-merger expense of the combined
entity, based on the percentage of the original service period of the awards that had elapsed as of the merger date. Certain other awards did not include an acceleration of vesting term upon a change of control but were modified in August
2022 to include acceleration upon a change of control. This modification was deemed to be in contemplation of the merger. The expense for the modified awards is recognized as post-merger expense of the combined entity based on the fair
value of the awards on the merger date. As a result, $0.1 million of expense was recognized as pre-merger expense of Gemini for certain awards that were not previously recognized, and are reflected as an increase to additional paid-in
capital and accumulated deficit in the unaudited pro forma condensed combined balance sheet and $1.1 million of expense was recognized as post-merger expense of the combined entity for certain awards that were not previously recognized, and
are reflected as an increase to additional paid-in capital and accumulated deficit in the unaudited pro forma condensed combined balance sheet. Total share-based compensation costs of $1.2 million are reflected as general and administrative
expense in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2021.
|
I. |
The impacts of the Disc Pre-closing Financing pro forma adjustments on the equity accounts are as follows:
|
(amounts in thousands, except share amounts)
|
Common
|
Additional
Paid-In
Capital
|
Accumulated
Deficit
|
Total
Stockholders’
Deficit
|
||||||||||||||||||||||||
Disc
|
Gemini
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||
Consummation of Disc pre-closing financing
|
21,314,737
|
$
|
2
|
—
|
$
|
—
|
$
|
53,498
|
$
|
—
|
$
|
53,500
|
||||||||||||||||
Total adjustment
|
21,314,737
|
$
|
2
|
—
|
$
|
—
|
$
|
53,498
|
$
|
—
|
$
|
53,500
|
(amounts in thousands, except share amounts)
|
Common
|
Additional
Paid-In
Capital
|
Accumulated
Deficit
|
Total
Stockholders’
Deficit
|
||||||||||||||||||||||||
Disc
|
Gemini
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||
Conversion of outstanding Disc convertible preferred stock into common stock
|
84,166,665
|
$
|
8
|
—
|
$
|
—
|
$
|
141,848
|
$
|
—
|
$
|
141,856
|
||||||||||||||||
Payment of transaction costs associated with the merger
|
—
|
$
|
—
|
—
|
$
|
—
|
$
|
(7,309
|
)
|
$
|
(8,097
|
)
|
$
|
(15,406
|
)
|
|||||||||||||
Payment of change-in-control, retention and severance in connection with the merger
|
—
|
$
|
—
|
—
|
$
|
—
|
$
|
—
|
$
|
(1,741
|
)
|
$
|
(1,741
|
)
|
||||||||||||||
Stock-based compensation costs recognized by Gemini related to acceleration of vesting of equity awards upon Closing
|
—
|
$
|
—
|
33,640
|
$
|
—
|
$
|
97
|
$
|
(97
|
)
|
$
|
—
|
|||||||||||||||
Stock-based compensation costs recognized by Disc subsequent to the merger date related to Gemini equity awards
|
23,267
|
$
|
—
|
—
|
$
|
—
|
$
|
1,069
|
$
|
(1,069
|
)
|
$
|
—
|
|||||||||||||||
Elimination of Gemini’s historical equity carrying values, after pro forma adjustments
|
—
|
$
|
—
|
(43,333,093
|
)
|
$
|
(4
|
)
|
$
|
(314,948
|
)
|
$
|
219,923
|
$
|
(95,029
|
)
|
||||||||||||
The effect of the reverse recapitalization of Gemini
|
—
|
$
|
—
|
4,363,575
|
$
|
1
|
$
|
95,028
|
$
|
—
|
$
|
95,029
|
||||||||||||||||
Exchange of outstanding Disc common stock into Gemini common stock based on the estimated exchange ratio for purposes of these pro forma condensed combined financial
information
|
(114,286,498
|
)
|
$
|
(11
|
)
|
12,525,778
|
$
|
1
|
$
|
10
|
$
|
—
|
$
|
—
|
||||||||||||||
Issuance of shares of combined company to Roche at the Closing
|
—
|
$
|
—
|
482,064
|
$
|
—
|
$
|
11,044
|
$
|
(1,144
|
)
|
$
|
9,900
|
|||||||||||||||
Total adjustment
|
(30,096,566
|
)
|
$
|
(3
|
)
|
(25,928,036
|
)
|
$
|
(2
|
)
|
$
|
(73,161
|
)
|
$
|
207,775
|
$
|
134,609
|
(amounts in thousands, except share amounts)
|
Common
|
Additional
Paid-In
Capital
|
Accumulated
Deficit
|
Total
Stockholders’
Deficit
|
||||||||||||||||||||||||
Disc
|
Gemini
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||
Gemini’s historical equity carrying values as of September 30, 2022
|
—
|
$
|
—
|
43,299,453
|
$
|
4
|
$
|
314,851
|
$
|
(210,288
|
)
|
$
|
104,567
|
|||||||||||||||
Pro form adjustments
|
||||||||||||||||||||||||||||
Payment of Gemini transaction costs associated with the merger
|
—
|
$
|
—
|
—
|
$
|
—
|
$
|
—
|
$
|
(8,097
|
)
|
$
|
(8,097
|
)
|
||||||||||||||
Payment of Gemini change-in-control, retention and severance in connection with the merger
|
—
|
$
|
—
|
—
|
$
|
—
|
$
|
—
|
$
|
(1,441
|
)
|
$
|
(1,441
|
)
|
||||||||||||||
Stock-based compensation costs recognized by Gemini related to acceleration of vesting of equity awards upon Closing
|
—
|
$
|
—
|
33,640
|
$
|
—
|
$
|
97
|
$
|
(97
|
)
|
$
|
—
|
|||||||||||||||
Gemini’s historical equity carrying values as of September 30, 2022, after pro forma adjustments
|
—
|
$
|
—
|
43,333,093
|
$
|
4
|
$
|
314,948
|
$
|
(219,923
|
)
|
$
|
95,029
|
J. |
Roche is expected to receive shares of the combined organization equal to 2.85% of the outstanding shares immediately following the closing of the merger, including the Disc pre-closing financing. This stock
issuance is pursuant to the contractual terms of the existing license agreement between Roche and Disc and resulted in the settlement of the derivative liability of $9.9 million, increase in additional paid-in capital of $11.0 million and
increase in accumulated deficit of $1.1 million.
|
K. |
The pro forma combined basic and diluted earnings per share have been adjusted to reflect the pro forma net loss for the year ended December 31, 2021 and the nine months ended September 30, 2022. In addition, the
weighted average shares outstanding for these periods have been adjusted to give effect to the issuance of Gemini’s common stock in connection with the Disc pre-closing financing and the merger as of September 30, 2022. As the combined
organization is in a net loss position for both periods presented, any adjustment for potentially dilutive shares would be anti-dilutive, and as such basic and diluted loss per share are the same for both periods presented. The following
table presents the calculation of the pro forma weighted average number of common stock outstanding. The estimated number of shares reflects the impact of the anticipated Gemini 1:10 reverse stock split that is expected to be effected prior
to consummation of the merger:
|
Year Ended
December 31, 2021
|
Nine Months Ended
September 30, 2022
|
|||||||
Weighted-average Disc common shares outstanding-basic and diluted
|
8,014,679
|
8,604,591
|
||||||
Impact of Disc pre-closing financing assuming consummation as of January 1, 2021
|
21,314,737
|
21,314,737
|
||||||
Impact of Disc convertible preferred stock assuming conversion as of January 1, 2021
|
84,166,665
|
84,166,665
|
||||||
Total
|
113,496,081
|
114,085,993
|
||||||
Application of estimated exchange ratio to historical Disc weighted-average shares outstanding
|
0.1096
|
0.1096
|
||||||
Adjusted Disc weighted-average shares outstanding
|
12,439,170
|
12,503,824
|
||||||
Impact of Gemini common stock issued to Roche assuming issuance as of January 1, 2021
|
482,064
|
482,064
|
||||||
Impact of Gemini common stock related to stock units that accelerated vesting as of January 1, 2021
|
33,640
|
33,640
|
||||||
Impact of common shares issued upon vesting of equity awards for the combined company as of January 1, 2021
|
23,267
|
23,267
|
||||||
Weighted-average Gemini common shares outstanding-basic and diluted
|
4,036,230
|
4,323,617
|
||||||
Pro forma combined weighted average number of shares of common stock-basic and diluted
|
17,014,371
|
17,366,412
|