Crinetics Pharmaceuticals Inc

Previous wording

Paltusotine, our lead product candidate, establishes a new class of oral selective nonpeptide somatostatin receptor type 2, or SST2, agonists designed for the treatment of acromegaly and carcinoid syndrome associated with NETs. Somatostatin is a neuropeptide hormone that broadly inhibits the secretion of other hormones, including growth hormone, or GH, from the pituitary gland. Acromegaly arises from a benign pituitary tumor that secretes excess GH that, in turn, causes excess secretion of insulin-like growth factor-1, or IGF-1, by the liver. This loss of homeostasis in the GH axis results in excess tissue growth and other adverse metabolic effects throughout the body. We estimate that approximately 27,000 people in the United States suffer from acromegaly, and depending on surgical success, we estimate that approximately 11,000 are candidates for chronic pharmacological intervention, of which somatostatin peptide analogs are the primary pharmacotherapy. Carcinoid syndrome occurs when NETs, which originate from neuroendocrine cells commonly found in the gut, lung or pancreas, secrete hormones or other chemical substances into the bloodstream that cause severe flushing or diarrhea, among other symptoms. NETs are present in approximately 175,000 adults in the United States. Of these, it is estimated that approximately 33,000 patients have carcinoid syndrome. Most NETs overexpress SST2 receptors and injected depots of peptide somatostatin analogs have become the first-line standard of care as detailed in National Comprehensive Cancer Network guidelines. In 2023, branded injected somatostatin peptide drugs accounted for approximately $2.5 billion in global sales for the treatment of acromegaly, NETs, and other uses. These drugs require painful monthly or daily injections and, in the case of somatostatin peptide drugs, often fail to fully control the disease in many acromegaly or carcinoid syndrome patients.

Current wording

Paltusotine, our lead product candidate, establishes a new class of oral selective nonpeptide somatostatin receptor type 2, or SST2, agonists designed for the treatment of acromegaly and carcinoid syndrome associated with NETs. Somatostatin is a neuropeptide hormone that broadly inhibits the secretion of other hormones, including growth hormone, or GH, from the pituitary gland. Acromegaly arises from a benign pituitary tumor that secretes excess GH that, in turn, causes excess secretion of insulin-like growth factor-1, or IGF-1, by the liver. This loss of homeostasis in the GH axis results in excess tissue growth and other adverse metabolic effects throughout the body. We estimate that approximately 27,000 people in the United States have been diagnosed with acromegaly, and depending on surgical success, we estimate that more than 11,000 are candidates for chronic pharmacological intervention, of which somatostatin peptide analog depot injections are currently the primary pharmacotherapy. Carcinoid syndrome occurs when NETs, which originate from neuroendocrine cells commonly found in the gut, lung or pancreas, secrete hormones or other chemical substances into the bloodstream that cause severe flushing or diarrhea, among other symptoms. NETs are present in approximately 175,000 adults in the United States. Of these, it is estimated that approximately 33,000 patients have carcinoid syndrome. Most NETs overexpress SST2 receptors and injected depots of peptide somatostatin analogs have become the first-line standard of care as detailed in National Comprehensive Cancer Network guidelines. In 2023, branded injected somatostatin peptide drugs accounted for approximately $2.5 billion in global sales for the treatment of acromegaly, NETs, and other uses. These drugs require painful monthly or daily injections and, in the case of somatostatin peptide drugs, often fail to fully control the disease in many acromegaly or carcinoid syndrome patients.

Previous wording

We believe that the results of the two trials could support global marketing applications for the use of paltusotine for all acromegaly patients who require pharmacotherapy, including untreated patients and those switching from other therapies. We plan to seek regulatory approval for paltusotine for the treatment of acromegaly in the United States with an anticipated submission of a New Drug Application to the U.S. Food and Drug Administration, or FDA in the second half of 2024 with the potential for approval in 2025. The U.S. Food and Drug Administration, or FDA, has granted orphan drug designation for paltusotine for the treatment of acromegaly.

Current wording

We believe that the results of the two trials could support global marketing applications for the use of paltusotine for all acromegaly patients who require pharmacotherapy, including untreated patients and those switching from other therapies. On September 26, 2024 we announced that we had submitted a New Drug Application, or NDA, to the U.S. Food and Drug Administration, or FDA, for paltusotine for the proposed treatment and long-term maintenance therapy of acromegaly, with the potential for approval in 2025. We anticipate receiving notification from the FDA on the status of the NDA submission in December 2024. The FDA has granted orphan drug designation for paltusotine for the treatment of acromegaly. We are also planning to file a Marketing Authorization Application, or MAA, with the European Medicines Agency in the first half of 2025.

Previous wording

We plan to engage with the FDA to align on a Phase 3 study design and have begun preparations to enable the initiation of a Phase 3 program by the end of 2024.

Current wording

In October 2024, we received comments from the FDA regarding our proposed Phase 3 design, and we are in the process of finalizing the protocol for our planned Phase 3 study. We anticipate the initiation of a Phase 3 program by the end of 2024.

Previous wording

We are conducting a Phase 2 study of atumelnant in adult CAH patients. This open-label study is designed to evaluate the safety, efficacy, and pharmacokinetics of different doses of atumelnant. In addition, biomarkers, including serum androstenedione (A4) and 17 hydroxyprogesterone (17-OHP), will be measured as we seek to evaluate the potential efficacy of atumelnant. We reported positive initial findings from our ongoing Phase 2 study in June 2024. The initial findings showed profound and rapid reductions in mean A4 and 17-OHP with 80 mg of atumelnant and those reductions were sustained at 12 weeks. The initial data showed that atumelnant was well-tolerated with no treatment-related severe or serious adverse events. The three cohorts evaluating different doses of atumelnant in the CAH Phase 2 study are now fully enrolled. Additional data from the study is expected in the fourth quarter of 2024 and we anticipate starting a Phase 3 CAH program in the first half of 2025.

Current wording

We are conducting a Phase 2 study of atumelnant in adult CAH patients. This open-label study is designed to evaluate the safety, efficacy, and pharmacokinetics of different doses of atumelnant. In addition, biomarkers, including serum androstenedione (A4) and 17 hydroxyprogesterone (17-OHP), will be measured as we seek to evaluate the potential efficacy of atumelnant. We reported positive initial findings from our ongoing Phase 2 study in June 2024. The initial findings showed profound and rapid reductions in mean A4 and 17-OHP with 80 mg of atumelnant and those reductions were sustained at 12 weeks. The initial data showed that atumelnant was well-tolerated with no treatment-related severe or serious adverse events. The three cohorts evaluating different doses of atumelnant in the CAH Phase 2 study have been fully enrolled and additional data from the study is expected by early 2025. We plan to meet with global regulatory authorities to align on a Phase 3 program in adult CAH patients, which we anticipate initiating in the first half of 2025, as well as a pediatric development program, which we plan to initiate in 2025.

Previous wording

We are also conducting a clinical trial of atumelnant in patients with Cushing’s disease. We entered into a Clinical Trial Agreement with the National Institute of Diabetes and Digestive and Kidney Diseases, or NIDDK, of the National Institutes of Health, or NIH, to collaborate on a company-sponsored multiple-ascending dose trial of atumelnant in ACTH dependent Cushing’s Syndrome, or ADCS. ADCS includes patients with either Cushing's disease or Ectopic ACTH Syndrome, or EAS. This open-label study is designed to evaluate safety, tolerability, and pharmacokinetics of different doses of atumelnant in patients with ADCS as well as to measure 24-hour urinary-free cortisol and serum cortisol as indicators of efficacy. We reported positive initial findings from our ongoing open-label Phase 1b/2a study in June 2024.

Current wording

We are also conducting a clinical trial of atumelnant in patients with Cushing’s disease. We entered into a Clinical Trial Agreement with the National Institute of Diabetes and Digestive and Kidney Diseases, or NIDDK, of the National Institutes of Health, or NIH, to collaborate on a company-sponsored multiple-ascending dose trial of atumelnant in ACTH dependent Cushing’s Syndrome, or ADCS. ADCS includes patients with either Cushing's disease or Ectopic ACTH Syndrome, or EAS. This open-label study is designed to evaluate safety, tolerability, and pharmacokinetics of different doses of atumelnant in patients with ADCS as well as to measure 24-hour urinary-free cortisol and serum cortisol as indicators of efficacy. We reported positive initial findings from our ongoing open-label Phase 1b/2a study in June 2024 and expect to initiate later stage clinical development in 2025.

Previous wording

We are developing antagonists of the parathyroid hormone, or PTH, receptor for the treatment of primary hyperparathyroidism, or PHPT and humoral hypercalcemia of malignancy, or HHM, and other diseases of excess PTH. PTH regulates calcium and phosphate homeostasis in bone and kidney through activation of its receptor, PTHR1. Increased activation of PTHR1, either via PTH or PTH-related peptide (PTHrP, PTHLH) can lead to skeletal, renal, gastrointestinal, and neurological problems. Primary hyperparathyroidism arises from a small, benign tumor on one or more of the parathyroid glands, which results in over-secretion of PTH, leading to increased blood calcium levels, or hypercalcemia. Some patients experience no symptoms, and many can have surgery to remove the tumor and/or hyperactive gland(s), while some require management with medical therapy. Symptomatic PHPT is characterized by skeletal, renal, gastrointestinal, and neurological manifestations with increased mortality. HHM typically arises in patients with advanced-stage cancers. In cases of HHM, over-secretion of PTHrP caused by the malignant tumor results in bone resorption and calcium reabsorption in the kidney, leading to hypercalcemia. We have identified investigational, orally available nonpeptide PTH antagonists that showed activity and drug-like properties in preclinical models. We have identified investigational, orally available nonpeptide PTH antagonists that showed activity and drug-like properties in preclinical models. We have selected a development candidate and are conducting first-in-human enabling activities in advance of commencing clinical trials.

Current wording

We are developing antagonists of the parathyroid hormone, or PTH, receptor for the treatment of primary hyperparathyroidism, or PHPT and humoral hypercalcemia of malignancy, or HHM, and other diseases of excess PTH. PTH regulates calcium and phosphate homeostasis in bone and kidney through activation of its receptor, PTHR1. Increased activation of PTHR1, either via PTH or PTH-related peptide (PTHrP, PTHLH) can affect bone metabolism and calcium regulation. Primary hyperparathyroidism arises from a small, benign tumor on one or more of the parathyroid glands, which results in over-secretion of PTH, leading to increased blood calcium levels, or hypercalcemia, increased urine -calcium levels, or hypercalciuria, as well as decreased phosphate levels, or hypophosphatemia. Many patients experience no symptoms. Surgery is indicated in symptomatic patients and asymptomatic patients with target organ involvement to remove the tumor and/or hyperactive gland(s). For patients who decline or cannot undergo surgery, management with medical therapy is recommended. Symptomatic PHPT is characterized by skeletal, renal, cardiovascular, gastrointestinal, neurobehavioral and neuromuscular manifestations with increased mortality. PHPT incidence in the U.S. has been highly influenced by changes in medical practice with the emergence of increased serum calcium and PTH screening and is now estimated to be approximately 200,000 cases. HHM is caused by over-secretion of PTHrP by a malignant tumor and results in bone resorption and calcium reabsorption in the kidney, leading to hypercalcemia. Patients with HHM typically have advanced-stage cancers, present severely symptomatic and tend to have limited survival of several months. HHM occurs in approximately 20% of all cancer patients during their clinical course. We have identified investigational, orally available nonpeptide PTH antagonists that showed activity and drug-like properties in preclinical models. We have selected a development candidate and are conducting first-in-human enabling activities and plan to file an IND application in 2025.

Previous wording

Somatostatin receptor type 3 (SST3) is expressed in cyst lining cells in ADPKD patients and localizes in cilia. As SST3 couples to the inhibitory Gi-proteins, a selective SST3 agonist decreases adenylyl cyclase activity and cAMP formation, thus inhibiting cystogenesis in ADPKD. We have identified an investigational, orally available selective SST3 nonpeptide agonist for the treatment of ADPKD and we are evaluating multiple avenues to advance this program into human clinical trials.

Current wording

Somatostatin receptor type 3 (SST3) is expressed in cyst lining cells in ADPKD patients and localizes in cilia. As SST3 couples to the inhibitory Gi-proteins, a selective SST3 agonist decreases adenylyl cyclase activity and cAMP formation, thus inhibiting cystogenesis in ADPKD. We have identified an investigational, orally available selective SST3 nonpeptide agonist for the treatment of ADPKD and are conducting first-in-human enabling activities and plan to file an IND application in 2025.

Previous wording

We are developing thyroid-stimulating hormone receptor, or TSHR, antagonists for the treatment of Graves’ disease and Thyroid Eye Disease, or TED, or Grave’s orbitopathy. Graves’ disease is an autoimmune condition that affects approximately 1 in 100 people in the United States and 2-3% of the population worldwide. It is characterized by the production of autoantibodies against TSHR, and the pathology of Graves’ disease is driven by these TSHR stimulatory antibodies, or TSAb, that result in heightened activation of TSHR. This overstimulation results in hyperthyroidism due to excessive production of thyroid hormones. Approximately 30% of Graves’ disease patients also develop TED due to overactivation of TSHR in orbital fibroblasts leading to excessive production of hyaluronic acid, adipogenesis, cytokine production, and fibrosis. This causes a constellation of debilitating symptoms including pain, swelling, blurry vision, diplopia, and proptosis. Several long-standing treatments for Graves’ hyperthyroidism are available including anti-thyroid drugs, radioactive iodine, or RAI, and surgery. RAI and surgery are definitive treatments for Graves’ hyperthyroidism, but often result in hypothyroidism. In addition, none of the current treatments for Graves’ hyperthyroidism are effective in treating TED and, in some cases, such as with RAI, the treatments worsen the condition. Blocking TSHR activation directly via a TSHR antagonist may provide an important new therapeutic mechanism to treat patients with Graves’ disease that would effectively treat both the hyperthyroidism and TED. We have identified investigational, orally available nonpeptide TSHR antagonists that demonstrate activity in preclinical models and possess good drug-like properties. We are evaluating a subset of molecules to identify potential development candidates that we believe will be suitable for evaluation in human clinical trials, and we expect to select a development candidate in 2024.

Current wording

We are developing thyroid-stimulating hormone receptor, or TSHR, antagonists for the treatment of Graves’ disease and Thyroid Eye Disease, or TED, or Grave’s orbitopathy. Graves’ disease is an autoimmune condition that affects approximately 1 in 100 people in the United States and 2-3% of the population worldwide. It is characterized by the production of autoantibodies against TSHR, and the pathology of Graves’ disease is driven by these TSHR stimulatory antibodies, or TSAb, that result in heightened activation of TSHR. This overstimulation results in hyperthyroidism due to excessive production of thyroid hormones. Approximately 30% of Graves’ disease patients also develop TED due to overactivation of TSHR in orbital fibroblasts leading to excessive production of hyaluronic acid, adipogenesis, cytokine production, and fibrosis. This causes a constellation of debilitating symptoms including pain, swelling, blurry vision, diplopia, and proptosis. Several long-standing treatments for Graves’ hyperthyroidism are available including anti-thyroid drugs, radioactive iodine, or RAI, and surgery. RAI and surgery are definitive treatments for Graves’ hyperthyroidism, but often result in hypothyroidism. In addition, none of the current treatments for Graves’ hyperthyroidism are effective in treating TED and, in some cases, such as with RAI, the treatments worsen the condition. Blocking TSHR activation directly via a TSHR antagonist may provide an important new therapeutic mechanism to treat patients with Graves’ disease that would effectively treat both the hyperthyroidism and TED. We have identified investigational, orally available nonpeptide TSHR antagonists that demonstrate activity in preclinical models and possess good drug-like properties. We have selected a development candidate and are conducting first-in-human enabling activities and plan to file an IND application in 2025.

Previous wording

We formed Radionetics Oncology, Inc., or Radionetics, in October 2021. Radionetics aims to develop a deep pipeline of novel, targeted, nonpeptide radiopharmaceuticals for the treatment of a broad range of oncology indications. In connection with the formation of Radionetics, we entered into a Collaboration and License Agreement with Radionetics, or the Radionetics License, granting Radionetics an exclusive worldwide license to our technology for the development of radiotherapeutics and related radio-imaging agents in exchange for an equity stake in Radionetics, a warrant, or the Radionetics Warrant to purchase additional shares of common stock of Radionetics, potential sales milestones in excess of $1.0 billion and single-digit royalties on net sales (see Note 11 to the condensed consolidated financial statements). In August 2023, we exercised the Radionetics Warrant to purchase 3,407,285 shares of Radionetics common stock with an exercise price of $0.00001 per share and invested $5.0 million to purchase 14,404,656 shares of preferred stock in Radionetics along with new and existing investors who participated in the transaction. Subsequent to the Radionetics Warrant exercise, we exchanged 60% of our total number of outstanding shares of Radionetics common stock for 32,344,371 shares of Radionetics preferred stock on a one-for-one basis. Additionally, in August 2023, the Radionetics License was amended to include additional sales milestones of up to $15.0 million. Following the amendment to the Radionetics License, we are eligible to receive total potential sales milestones in excess of $1.0 billion and single-digit royalties on net sales. In December 2023, Radionetics also completed a financing to sell additional shares of preferred stock to other investors. In June 2024, we amended the Radionetics License to reduce the number of development targets. Following the amendment to the Radionetics License, Crinetics is eligible to receive total potential sales milestones in excess of $300.0 million and single-digit royalties on net sales of the licensed targets and ownership of the non-license targets reverted back to Crinetics. In July 2024, Radionetics announced the formation of a strategic partnership with Eli Lilly and Company, or Lilly. Under the terms of the agreement, Radionetics received a $140 million upfront cash payment and Lilly obtained the exclusive right to acquire Radionetics upon conclusion of an exercise period for $1.0 billion. During the exercise period, Radionetics will continue to build out a proprietary pipeline of therapeutic assets. As of June 30, 2024, we have an approximately 25% ownership stake in Radionetics consisting of common and preferred stock.

Current wording

Radionetics Warrant exercise, we exchanged 60% of our total number of outstanding shares of Radionetics common stock for 32,344,371 shares of Radionetics preferred stock on a one-for-one basis. Additionally, in August 2023, the Radionetics License was amended to include additional sales milestones of up to $15.0 million. Following the amendment to the Radionetics License, we are eligible to receive total potential sales milestones in excess of $1.0 billion and single-digit royalties on net sales. In December 2023, Radionetics also completed a financing to sell additional shares of preferred stock to other investors. In June 2024, we amended the Radionetics License to reduce the number of development targets. Following the amendment to the Radionetics License, Crinetics is eligible to receive total potential sales milestones in excess of $300.0 million and single-digit royalties on net sales of the licensed targets and ownership of the non-license targets reverted back to Crinetics. In July 2024, Radionetics announced the formation of a strategic partnership with Eli Lilly and Company, or Lilly. Under the terms of the agreement, Radionetics received a $140 million upfront cash payment and Lilly obtained the exclusive right to acquire Radionetics upon conclusion of an exercise period for $1.0 billion. During the exercise period, Radionetics will continue to build out a proprietary pipeline of therapeutic assets. As of September 30, 2024, we have an approximately 25% ownership stake in Radionetics consisting of common and preferred stock.

Previous wording

To date, we have devoted substantially all of our resources to drug discovery, conducting preclinical studies and clinical trials, obtaining and maintaining patents related to our product candidates, licensing activities, and the provision of general and administrative support for these operations. We have recognized revenues from various research and development grants and license and collaboration agreements, but do not have any products approved for sale and have not generated any product sales. We have funded our operations primarily through our grant and license revenues, the private placement of our preferred stock, and sales of our common stock. As of June 30, 2024, we had unrestricted cash, cash equivalents, and investment securities of $863.0 million. During the six months ended June 30, 2024, the Company issued 1,223,775 shares of common stock pursuant to the 2019 ATM Offering (as defined below) for net proceeds of approximately $43.4 million and 0 shares of common stock pursuant to the 2024 ATM Offering (as defined below), in each case, after deducting commissions. On February 27, 2024, the Company entered into a stock purchase agreement with certain investors named therein, or the Purchasers, pursuant to which the Company agreed to issue and sell to the Purchasers in a private placement an aggregate of 8,333,334 shares of its common stock at a price of $42.00 per share for aggregate gross proceeds of approximately $350.0 million, before deducting offering expenses payable by the Company, or the Private Placement. The Private Placement closed on March 1, 2024. On March 19, 2024, the Company registered for resale the shares issued and sold in the Private Placement, pursuant to the Registration Rights Agreement entered into with the Purchasers, dated February 27, 2024.

Current wording

To date, we have devoted substantially all of our resources to drug discovery, conducting preclinical studies and clinical trials, obtaining and maintaining patents related to our product candidates, licensing activities, and the provision of general and administrative support for these operations. We have recognized revenues from various research and development grants and license and collaboration agreements, but do not have any products approved for sale and have not generated any product sales. We have funded our operations primarily through our grant and license revenues, the private placement of our preferred stock, and sales of our common stock. As of September 30, 2024, we had unrestricted cash, cash equivalents, and investment securities of $862.7 million. During the nine months ended September 30, 2024, the Company issued 1,223,775 shares of common stock pursuant to the 2019 ATM Offering (as defined below) for net proceeds of approximately $43.4 million and 928,912 shares of common stock pursuant to the 2024 ATM Offering (as defined below) for net proceeds of approximately $48.3 million, in each case, after deducting commissions. On February 27, 2024, the Company entered into a stock purchase agreement with certain investors named therein, or the Purchasers, pursuant to which the Company agreed to issue and sell to the Purchasers in a private placement an aggregate of 8,333,334 shares of its common stock at a price of $42.00 per share for aggregate gross proceeds of approximately $350.0 million, before deducting offering expenses payable by the Company, or the Private Placement. The Private Placement closed on March 1, 2024. On March 19, 2024, the Company registered for resale the shares issued and sold in the Private Placement, pursuant to the Registration Rights Agreement entered into with the Purchasers, dated February 27, 2024. On October 10, 2024, the Company completed an underwritten public offering of 11,500,000 shares of its common stock at a price to the public of $50.00 per share, which included 1,500,000 shares of common stock issued pursuant to the underwriters' option to purchase additional shares. Net proceeds from the offering were approximately $542.9 million, after underwriting discounts and commissions and other offering costs of approximately $32.1 million.

Previous wording

We have incurred cumulative net losses since our inception and, as of June 30, 2024, we had an accumulated deficit of $794.7 million. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and preclinical studies and our expenditures on other research and development activities. We expect our expenses and operating losses will increase substantially as we conduct our ongoing and planned clinical trials, continue our research and development activities and conduct preclinical studies, hire additional personnel, protect our intellectual property and incur costs associated with being a public company, including audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and Securities and Exchange Commission, or SEC, requirements, director and officer insurance premiums, and investor relations costs.

Current wording

We have incurred cumulative net losses since our inception and, as of September 30, 2024, we had an accumulated deficit of $871.5 million. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and preclinical studies and our expenditures on other research and development activities. We expect our expenses and operating losses will increase substantially as we conduct our ongoing and planned clinical trials, continue our research and development activities and conduct preclinical studies, hire additional personnel, protect our intellectual property and incur costs associated with being a public company, including audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and Securities and Exchange Commission, or SEC, requirements, director and officer insurance premiums, and investor relations costs.

Previous wording

License revenues for the six months ended June 30, 2023 were primarily derived from the Sanwa License and the Loyal License.

Current wording

License revenues for the nine months ended September 30, 2024 were primarily derived from the Sanwa License. There were no license revenues for the three months ended September 30, 2024.

Previous wording

On June 14, 2022, we and Sanwa, entered into a clinical supply agreement, or the Sanwa Clinical Supply Agreement, whereby the Company is responsible for manufacturing and supplying certain materials to Sanwa for specified activities under the Sanwa License. During each of the three and six months ended June 30, 2024, we recognized $0.1 million of revenues from the Sanwa Clinical Supply Agreement in the accompanying condensed consolidated statements of operations and comprehensive loss. During each of the three and six months ended June 30, 2023, we recognized $0.4 million of revenues from the Sanwa Clinical Supply Agreement in the accompanying condensed consolidated statements of operations and comprehensive loss.

Current wording

On June 14, 2022, we and Sanwa, entered into a clinical supply agreement, or the Sanwa Clinical Supply Agreement, whereby the Company is responsible for manufacturing and supplying certain materials to Sanwa for specified activities under the Sanwa License. During the nine months ended September 30, 2024 and 2023, we recognized $0.1 million and $0.4 million, respectively, of revenues from the Sanwa Clinical Supply Agreement in the accompanying condensed consolidated statements of operations and comprehensive loss. No significant supply purchases were made by Sanwa through the Sanwa Clinical Supply Agreement during each of the three months ended September 30, 2024 and 2023.

Previous wording

Our direct research and development expenses consist principally of external costs, such as fees paid to CROs, investigative sites and consultants in connection with our clinical trials, preclinical and non-clinical studies, and costs related to manufacturing clinical trial materials. The majority of our third-party expenses during the six months ended June 30, 2024 and 2023 related to the research and development of paltusotine and atumelnant, and in the six months ended June 30, 2023, CRN04777. We deploy our personnel and facility related resources across all of our research and development activities.

Current wording

Our direct research and development expenses consist principally of external costs, such as fees paid to CROs, investigative sites and consultants in connection with our clinical trials, preclinical and non-clinical studies, and costs related to manufacturing clinical trial materials. The majority of our third-party expenses during the nine months ended September 30, 2024 and 2023 related to the research and development of paltusotine, atumelnant, and discovery. We deploy our personnel and facility related resources across all of our research and development activities.

Previous wording

Revenues. Revenues during the three months ended June 30, 2024 and 2023 relate to the Sanwa License.

Current wording

Revenues. There were no revenues during the three months ended September 30, 2024. Revenues during the three months ended September 30, 2023 related to the Sanwa License.

Previous wording

Research and development expenses. Research and development expenses were $58.3 million and $40.6 million for the three months ended June 30, 2024 and 2023, respectively. The change was primarily due to an increase in personnel costs of $11.6 million, and increased outside services costs of $3.6 million, both of which were driven by the advancement of our clinical programs and the expansion of our preclinical portfolio. In addition, facilities and related costs increased by $2.3 million primarily due to the move to our new corporate office.

Current wording

Research and development expenses. Research and development expenses were $61.9 million and $43.8 million for the three months ended September 30, 2024 and 2023, respectively. The change was primarily due to an increase in personnel costs of $9.8 million, increased manufacturing activities costs of $3.4 million, and increased outside services costs of $2.7 million, all of which were driven by the advancement of our clinical programs and the expansion of our preclinical portfolio. In addition, facilities and related costs increased by $2.2 million primarily due to the move to our new corporate office.

Previous wording

Research and development expenses for our paltusotine program were $24.8 million and $22.5 million for the six months ended June 30, 2024 and 2023, respectively. The change was primarily due to increased spending on manufacturing activities of $3.9 million and an increase in outside services of $1.9 million offset by a $3.5 million decrease in clinical and regulatory costs.

Current wording

Research and development expenses for our paltusotine program were $12.7 million and $12.4 million for the three months ended September 30, 2024 and 2023, respectively. The change was primarily due to increased spending on manufacturing activities of $2.0 million and an increase in outside services costs of $0.7 million offset by a $1.5 million decrease in clinical and regulatory costs, and a $0.8 million decrease in nonclinical activities.

Previous wording

Research and development expenses for our atumelnant program were $5.0 million and $3.5 million for the three months ended June 30, 2024 and 2023, respectively. The change was primarily due to increased spending on clinical development activities of $1.1 million.

Current wording

Research and development expenses for our atumelnant program were $6.3 million and $3.6 million for the three months ended September 30, 2024 and 2023, respectively. The change was primarily due to increased spending on clinical development activities of $1.6 million, a $0.7 million increase in preclinical activities, and increased spending on manufacturing activities of $0.5 million.

Previous wording

Research and development expenses for our CRN04777 program were $0.1 million and $2.7 million for the three months ended June 30, 2024 and 2023, respectively. The change was primarily due the clinical hold received from the FDA in November 2022 which delayed the advancement of CRN04777 prior to its discontinuation from clinical development.

Current wording

Research and development expenses for our CRN04777 program were zero and $1.5 million for the three months ended September 30, 2024 and 2023, respectively. The change was primarily due to the clinical hold received from the FDA in November 2022 which delayed the advancement of CRN04777 prior to its discontinuation of clinical development.

Previous wording

Research and development expenses for our discovery programs were $6.5 million and $3.6 million for the three months ended June 30, 2024 and 2023, respectively. The change was primarily due to an increase in outside services of $1.0 million and increased spending in manufacturing and lab supplies of $1.4 million as a result of the expansion of our discovery efforts across new therapeutic targets.

Current wording

Research and development expenses for our discovery programs were $6.6 million and $3.7 million for the three months ended September 30, 2024 and 2023, respectively. The change was primarily due to an increase in spending in manufacturing activities of $1.4 million and an increase in spending on preclinical activities of $1.6 million as a result of the expansion of our discovery efforts across new therapeutic targets.

Previous wording

Research and development expenses for payroll and benefits were $18.2 million and $12.4 million for the three months ended June 30, 2024 and 2023, respectively. The change was primarily due to an increase in headcount to support our ongoing programs as well as for the expansion of our discovery efforts across new therapeutic targets.

Current wording

Research and development expenses for payroll and benefits were $19.6 million and $14.3 million for the three months ended September 30, 2024 and 2023, respectively. The change was primarily due to an increase in headcount to support our ongoing programs as well as for the expansion of our discovery efforts across new therapeutic targets.

Previous wording

Research and development expenses for stock-based compensation were $11.5 million and $5.6 million for the three months ended June 30, 2024 and 2023, respectively. The change was primarily due to an increase in headcount to support our ongoing programs as well as for the expansion of our discovery efforts across new therapeutic targets.

Current wording

Research and development expenses for stock-based compensation were $10.6 million and $6.1 million for the three months ended September 30, 2024 and 2023, respectively. The change was primarily due to an increase in headcount to support our ongoing programs as well as for the expansion of our discovery efforts across new therapeutic targets.

Previous wording

Other research and development expenses were $5.3 million and $2.7 million for the three months ended June 30, 2024 and 2023, respectively. The change was primarily due to an increase in facilities expenditures of $2.2 million.

Current wording

Other research and development expenses were $6.0 million and $2.3 million for the three months ended September 30, 2024 and 2023, respectively. The change was primarily due to an increase in facilities expenditures of $2.2 million and an increase in outside services costs of $0.9 million.

Previous wording

General and administrative expenses. General and administrative expenses were $24.8 million and $13.3 million for the three months ended June 30, 2024 and 2023, respectively. The change was primarily due to increases in personnel costs of $5.8 million and in outside services of $3.2 million. When compared to the second quarter of 2023, personnel expenses for the second quarter of 2024 reflected higher headcount and an increase of $2.9 million in non-cash stock-based compensation expense. The increase in outside services is primarily driven by costs associated with commercial planning for paltusotine.

Current wording

General and administrative expenses. General and administrative expenses were $25.9 million and $15.5 million for the three months ended September 30, 2024 and 2023, respectively. The change was primarily due to increases in personnel costs of $7.0 million and an increase in outside services costs of $1.9 million. When compared to the three months ended September 30 2023, personnel expenses for the three months ended September 30, 2024 reflected a higher headcount and an increase of $2.6 million in non-cash stock-based compensation expense. The increase in outside services costs is primarily driven by costs associated with commercial planning for paltusotine. In addition, facilities and related costs increased by $0.7 million primarily due to the move to our new corporate office.

Previous wording

Other income, net. Other income, net was $8.7 million and $2.0 million for the three months ended June 30, 2024 and 2023, respectively. The increase was primarily due to income generated by our investment securities.

Current wording

Other income, net. Other income, net was $11.0 million and $2.5 million for the three months ended September 30, 2024 and 2023, respectively. The increase was primarily due to income generated by our investment securities.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

Revenues. Revenues during the six months ended June 30, 2024 relate to the Sanwa License. Revenues during the six months ended June 30, 2023 include approximately $2.1 million from the Loyal License which was entered into during the first quarter of 2023 and $1.2 million and $0.4 million related to the Sanwa License and Sanwa Clinical Supply Agreement.

Current wording

Revenues. Revenues during the nine months ended September 30, 2024 relate to the Sanwa License. Revenues during the nine months ended September 30, 2023 include approximately $2.1 million from the Loyal License, which was entered into during the first quarter of 2023, in addition to $1.5 million and $0.4 million related to the Sanwa License and Sanwa Clinical Supply Agreement, respectively.

Previous wording

Research and development expenses. Research and development expenses were $111.7 million and $79.1 million for the six months ended June 30, 2024 and 2023, respectively. The change was primarily due to an increase in personnel costs of $21.0 million, increased outside services costs of $5.7 million, and increased facilities and related costs of $3.9 million associated with the move to our new corporate office.

Current wording

Research and development expenses. Research and development expenses were $173.6 million and $122.9 million for the nine months ended September 30, 2024 and 2023, respectively. The change was primarily due to an increase in personnel costs of $30.8 million, increased manufacturing activities costs of $9.6 million, increased outside services costs of $8.4 million, and increased facilities and related costs of $6.1 million associated with the move to our new corporate office, offset by a decrease in nonclinical activities of $3.9 million.

Previous wording

The following table summarizes our primary external and internal research and development expenses for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our primary external and internal research and development expenses for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

The following table summarizes our research and development expenses by program for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our research and development expenses by program for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

Research and development expenses for our paltusotine program were $11.8 million and $10.1 million for the three months ended June 30, 2024 and 2023, respectively. The change was primarily due to increased spending on manufacturing activities of $1.8 million and an increase in outside services of $1.5 million offset by a $1.5 million decrease in clinical and regulatory costs.

Current wording

Research and development expenses for our paltusotine program were $37.5 million and $34.9 million for the nine months ended September 30, 2024 and 2023, respectively. The change was primarily due to increased spending on manufacturing activities of $5.9 million and an increase in outside services costs of $2.6 million offset by a $5.0 million decrease in clinical and regulatory costs.

Previous wording

Research and development expenses for our atumelnant program were $9.0 million and $5.6 million for the six months ended June 30, 2024 and 2023, respectively. The change was primarily due to increased clinical and regulatory costs of $2.5 million and a $2.1 million increase in spending on manufacturing activities.

Current wording

Research and development expenses for our atumelnant program were $15.3 million and $9.3 million for the nine months ended September 30, 2024 and 2023, respectively. The change was primarily due to increased clinical and regulatory costs of $4.1 million and a $2.0 million increase in spending on manufacturing activities.

Previous wording

Research and development expenses for our CRN04777 program were $0.6 million and $5.8 million for the six months ended June 30, 2024 and 2023, respectively. The change was primarily due to the discontinuation of clinical development for CRN04777.

Current wording

Research and development expenses for our CRN04777 program were $0.6 million and $7.3 million for the nine months ended September 30, 2024 and 2023, respectively. The change was primarily due to the clinical hold received from the FDA in November 2022, which delayed the advancement of CRN04777 prior to its discontinuation of clinical development.

Previous wording

Research and development expenses for our discovery programs were $11.2 million and $5.1 million for the six months ended June 30, 2024 and 2023, respectively. The change was primarily due to an increase in outside services of $2.4 million and increased spending in manufacturing and lab supplies of $2.7 million as a result of the expansion of our discovery efforts across new therapeutic targets.

Current wording

Research and development expenses for our discovery programs were $17.8 million and $8.8 million for the nine months ended September 30, 2024 and 2023, respectively. The change was primarily due to an increase in outside services costs of $2.8 million, an increase in spending on manufacturing and lab supplies of $3.6 million and an increase in spending on preclinical activities of $2.4 million as a result of the expansion of our discovery efforts across new therapeutic targets.

Previous wording

Research and development expenses for payroll and benefits were $36.6 million and $24.3 million for the six months ended June 30, 2024 and 2023, respectively. The change was primarily due to an increase in headcount to support our ongoing programs as well as for the expansion of our discovery efforts across new therapeutic targets.

Current wording

Research and development expenses for payroll and benefits were $56.2 million and $38.6 million for the nine months ended September 30, 2024 and 2023, respectively. The change was primarily due to an increase in headcount to support our ongoing programs as well as for the expansion of our discovery efforts across new therapeutic targets.

Previous wording

Research and development expenses for stock-based compensation were $19.1 million and $10.3 million for the six months ended June 30, 2024 and 2023, respectively. The change was primarily due to an increase in headcount to support our ongoing programs as well as for the expansion of our discovery efforts across new therapeutic targets.

Current wording

Research and development expenses for stock-based compensation were $29.6 million and $16.4 million for the nine months ended September 30, 2024 and 2023, respectively. The change was primarily due to an increase in headcount to support our ongoing programs as well as for the expansion of our discovery efforts across new therapeutic targets.

Previous wording

Other research and development expenses were $10.4 million and $5.4 million for the six months ended June 30, 2024 and 2023, respectively. The change was primarily due to an increase in facilities expenditures of $3.9 million.

Current wording

Other research and development expenses were $16.5 million and $7.7 million for the nine months ended September 30, 2024 and 2023, respectively. The change was primarily due to an increase in facilities expenditures of $6.1 million and an increase in outside services costs of $1.5 million.

Previous wording

Other income, net. Other income, net was $15.8 million and $4.0 million for the six months ended June 30, 2024 and 2023, respectively. The increase was primarily due to income generated by our investment securities.

Current wording

Other income, net. Other income, net was $26.8 million and $6.5 million for the nine months ended September 30, 2024 and 2023, respectively. The increase was primarily due to income generated by our investment securities.

Previous wording

We have incurred cumulative net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. As of June 30, 2024, we had unrestricted cash, cash equivalents and investment securities of $863.0 million and an accumulated deficit of $794.7 million.

Current wording

We have incurred cumulative net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. As of September 30, 2024, we had unrestricted cash, cash equivalents and investment securities of $862.7 million and an accumulated deficit of $871.5 million.

Previous wording

The following table provides information regarding our cash flows for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table provides information regarding our cash flows for the nine months ended September 30, 2024 and 2023 (in thousands):