You should read the following management's discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and notes thereto for the year endedDecember 31, 2019 , included in our Annual Report on Form 10-K for the year endedDecember 31, 2019 , filed with theU.S. Securities and Exchange Commission (SEC) onFebruary 26, 2020 (the "Annual Report").
Forward-Looking Statements
This discussion contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are identified by words such as "believe," "will," "may," "estimate," "continue," "anticipate," "intend," "should," "plan," "expect," "predict," "could," "potentially" or the negative of these terms or similar expressions. You should read these statements carefully because they discuss future expectations, contain projections of future results of operations or financial condition, or state other "forward-looking" information. These statements relate to our future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in this report in Part II, Item 1A -"Risk Factors," and elsewhere in this Quarterly Report on Form 10-Q. Forward -looking statements are based on our management's beliefs and assumptions and on information currently available to our management. These statements, like all statements in this report, speak only as of their date, and we undertake no obligation to update or revise these statements in light of future developments. We caution investors that our business and financial performance are subject to substantial risks and uncertainties. Overview We are a clinical stage biopharmaceutical company focused on addressing the large and growing unmet need caused by transthyretin, or TTR, amyloidosis, or ATTR. We are advancing our product candidate, acoramidis (formerly AG10), to treat ATTR, a progressive and fatal family of diseases. We are currently investigating acoramidis in Phase 3 clinical trials in patients with ATTR cardiomyopathy (ATTR-CM) and patients with ATTR polyneuropathy (ATTR-PN) and expect to provide top-line data from Part A of the Phase 3 clinical trial in ATTR-CM in late 2021 or early 2022. Our financial information includes allocations of expenses attributable to certain corporate functions that were provided to us by BridgeBio and its affiliates and services we provide to BridgeBio and its affiliates, including expenses attributable to certain executive personnel, facility-related costs, advisory services, insurance costs and other general corporate expenses. These allocations were made based on direct usage or estimates which are considered to be reasonable by our management and in accordance with our services agreement with BridgeBio. Since the commencement of our operations, we have devoted substantially all of our resources to research and development activities in support of our product development efforts, hiring personnel, raising capital to support and expand such activities and general and administrative support for these operations. We have funded our operations to date primarily from the issuance and sale of shares of common stock, redeemable convertible preferred stock, notes convertible into shares of redeemable convertible preferred stock and licensing arrangements. InApril 2016 , we entered into a license agreement with theBoard of Trustees of theLeland Stanford Junior University , orStanford , for rights relating to novel TTR aggregation inhibitors. Under the license agreement,Stanford has granted us an exclusive worldwide license to make, use and sell products that are covered by the licensed patent rights. InOctober 2018 , theU.S. Food and Drug Administration , or FDA, granted orphan drug designation inthe United States to acoramidis for the treatment of ATTR, and the Committee for Orphan Medicinal Products of theEuropean Medicines Agency , or EMA, adopted a positive opinion for the designation of acoramidis as an orphan medicinal product in theEuropean Union , or EU, for the treatment of ATTR. The EMA also granted a product-specific pediatric investigational plan waiver to us for acoramidis. We have incurred net losses of$37.8 million during the year endedDecember 31, 2019 and$30.2 and$81.8 million during the three and nine months endedSeptember 30, 2020 , respectively, and we expect to continue to incur significant losses for the foreseeable future. As ofSeptember 30, 2020 , we had an accumulated deficit of$185.0 million . We expect these losses to increase as we continue our development of, and seek regulatory approvals for our product candidate, acoramidis, begin to commercialize acoramidis, if approved, and engage in any other research and development activities. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities. 22
-------------------------------------------------------------------------------- OnAugust 2, 2019 , we filed a Registration Statement on Form S-3, as amended (the "2019 Shelf") with theSEC in relation to the registration of common stock, preferred stock, debt securities, warrants and units of any combination thereof. We also simultaneously entered into an Open Market Sale Agreement ("2019 Sales Agreement") withJefferies LLC andSVB Leerink LLC (together, the "Sales Agents"), to provide for our offering, issuance and sale of up to an aggregate offering price of$100.0 million of our common stock from time to time in "at-the-market" offerings under the 2019 Shelf and subject to the limitations thereof. We will pay to the Sales Agents cash commissions of up to 3.0 percent of the gross proceeds of sales of common stock under the 2019 Sales Agreement. We issued 834,368 shares of common stock and received$48.1 million in net proceeds under the 2019 Sales Agreement throughSeptember 30, 2020 . InSeptember 2019 , we entered into a license agreement (the "License Agreement") withAlexion Pharma International Operations Unlimited Company , a subsidiary of Alexion Pharmaceuticals, Inc. (together, "Alexion") to develop and commercialize the Company's product candidate, acoramidis, inJapan . Additionally, inSeptember 2019 , we entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with Alexion, pursuant to which we sold to Alexion 556,173 shares of our common stock, for aggregate cash proceeds of$25.0 million . Under the terms of the License Agreement, we granted Alexion an exclusive license to certain of our intellectual property rights to develop, manufacture and commercialize acoramidis inJapan . In consideration for the license grant, we were entitled to receive an upfront payment of$25 million , with the potential for an additional one-time payment of$30.0 million subject to the achievement of a regulatory milestone. In addition, we are entitled to receive royalties in the low-teens on net sales by Alexion of acoramidis inJapan . The royalty rate is subject to reduction if Alexion is required to obtain intellectual property rights from third parties to develop, manufacture or commercialize acoramidis inJapan , or upon the introduction of generic competition into the market. InNovember 2019 , we entered into a Loan and Security Agreement withSilicon Valley Bank and Hercules Capital, Inc. ("SVB and Hercules Loan Agreement"). The SVB and Hercules Loan Agreement provides for up to$55.0 million in term loans to be drawn in three tranches as follows: (i) Tranche A loan of$17.5 million , (ii) Tranche B loan of up to$22.5 million which is available to be drawn untilOctober 31, 2020 , and (iii) Tranche C loan of up to$15.0 million available to be drawn upon a clinical trial milestone. The Tranche C loan is available to be drawn untilSeptember 30, 2021 . The Tranche A loan of$17.5 million was drawn onNovember 13, 2019 and there have not been any additional draws on the other tranches as ofSeptember 30, 2020 . The Tranche A loan bears interest at a fixed rate equal to 8.50% per annum that is due and payable monthly.
As of
OnOctober 5, 2020 , we entered into the Merger Agreement, with BridgeBio, Merger Sub, and Merger Sub II, providing for (i) the merger of Merger Sub with and into our company, with Eidos surviving the Initial Merger, and (ii) thereafter, the merger of Eidos with and into Merger Sub II, with Merger Sub II surviving as an indirect wholly owned subsidiary of BridgeBio. Under the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Initial Merger, each share of our common stock issued and outstanding immediately prior to the Effective Time (other than shares of our common stock (i) owned by us as treasury stock, (ii) owned by us, BridgeBio, Merger Sub, Merger Sub II or any other direct or indirect wholly owned subsidiary of BridgeBio and, in each case, not held on behalf of third parties and (iii) shares of our common stock that are subject to restricted stock awards will be converted into the right to receive, at the election of each stockholder of Eidos, (A) 1.85 shares of BridgeBio's common stock ("BridgeBio Common Stock") or (B)$73.26 in cash, subject to proration as necessary to ensure that the aggregate amount of cash consideration payable to stockholders is no greater than$175 million . The Mergers are conditioned on: (i) the approval of the majority of outstanding shares of our common stock; (ii) approval by a majority of the shares of our common stock held by stockholders other than (A) BridgeBio and any person or entity controlling, controlled by or under common control with BridgeBio (any such person, an "Affiliate") (including Merger Sub and Merger Sub II), (B) any of BridgeBio's directors or officers or BridgeBio's Affiliates' directors or officers (including Merger Sub and Merger Sub II) and (C) any of our directors or officers (other than members of the special committee of our independent directors that was formed in connection with the Mergers (the "Special Committee")); (iii) approval by at least 66-2/3% of our aggregate voting stock (as defined in Section 203 of the Delaware General Corporation Law (the "DGCL")) that is not owned (as defined in Section 203 of the DGCL) by BridgeBio, Merger Sub, Merger Sub II or any of their respective affiliates or associates (as such terms are defined in Section 203 of the DGCL) (the "Company Stockholder Approvals"); (iv) approval of the issuance of BridgeBio's common stock in connection with the Mergers by at least a majority of the votes cast by the holders of shares of BridgeBio's common stock voting on the matter; and (v) other 23 -------------------------------------------------------------------------------- customary closing conditions. The Mergers are expected to be completed in the first quarter of 2021, subject to the satisfaction or waiver of such closing conditions.
The Merger Agreement includes customary representations, warranties and covenants, including, but not limited to, covenants by us and BridgeBio to conduct our businesses in the ordinary course during the period between the execution of the Merger Agreement and consummation of the Mergers and to refrain from taking certain actions specified in the Merger Agreement.
The Merger Agreement may be terminated, among other circumstances, (i) by either party if the Mergers are not consummated byJune 4, 2021 , (ii) by us if BridgeBio's board of directors changes its recommendation with respect to the issuance of shares of BridgeBio common stock in connection with the Mergers or (iii) by BridgeBio if our board of directors or the Special Committee changes its recommendation with respect to the Mergers. The Merger Agreement further provides that upon termination of the Merger Agreement under certain circumstances, we must pay BridgeBio a termination fee of$35 million , and upon termination of the Merger Agreement under certain circumstances, BridgeBio must pay us a termination fee of$100 million . In connection with the execution of the Merger Agreement, we have also entered into voting agreements (the "Voting Agreements") with members of BridgeBio's board of directors andKKR Genetic Disorder L.P. , collectively owning approximately 36% of BridgeBio's outstanding common stock, pursuant to which they agreed, among other things, to vote their shares in favor of the issuance of BridgeBio's common stock in connection with the Mergers.
Upon the closing of the Mergers and subject to the terms of the Merger Agreement, we will become an indirect wholly-owned subsidiary of BridgeBio, and our common stock will cease to trade on the NASDAQ Global Select Market.
The foregoing descriptions of the Merger Agreement and the Voting Agreements do not purport to be complete and are qualified in their entirety by reference to the full text of the Merger Agreement, a form of the Voting Agreements entered into by the BridgeBio directors party thereto and the Voting Agreement entered into byKKR Genetic Disorder L.P. , copies of which were filed as Exhibit 2.1, Exhibit 2.2 and Exhibit 2.3, respectively, to our Form 8-K filed with theSecurities and Exchange Commission (the "SEC"), onOctober 7, 2020 . If the transactions contemplated by the Merger Agreement are not consummated within the timeframe we currently anticipate, we will need to obtain additional financing in the future and may seek financing through the issuance of our common stock, through other equity or debt financings or through collaborations or partnerships with other companies. The amount and timing of our future funding requirements will depend on many factors, including our ability to consummate the transactions contemplated by the Merger Agreement and the timing thereof, the pace and results of our clinical development efforts for acoramidis and other research and development activities. We may not be able to raise additional capital on terms acceptable to us, or at all, and any failure to raise capital as and when needed would compromise our ability to execute on our business plan and we may have to significantly delay, scale back, or discontinue the development of acoramidis or curtail any efforts to expand our product pipeline. In addition, under the terms of the Merger Agreement, we may not, without the written consent of BridgeBio, issue equity securities, incur indebtedness in excess of certain limits or enter into material strategic partnerships, in each case subject to certain exceptions, which makes it more difficult to raise capital during the term of the Merger Agreement, if needed. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities. We experienced impacts on certain aspects of our business, including delays in activation of clinical sites and enrollment of patients in our clinical trials, during the quarter endedSeptember 30, 2020 due to the global outbreak of SARS-CoV-2, the novel strain of coronavirus that causes Coronavirus disease 19 (COVID-19). The ultimate impacts of the COVID-19 pandemic on our business are currently unknown. We will continue to actively monitor the situation and may take further precautionary and preemptive actions as may be required by federal, state or local authorities or that we determine are in the best interests of public health and safety and that of our patient community, employees, partners, suppliers and stockholders. We cannot predict the effects that such actions, or the impact of the COVID-19 pandemic on global business operations and economic conditions may have on our business or strategy, including the effects on our ongoing and planned clinical development activities and prospects, or on our financial and operating results.
Financial operations overview
Revenue
License revenue consists of consideration earned for performance obligations satisfied pursuant to our License Agreement. We have not generated any revenue from the sale of any drugs, and we do not expect to generate any revenue unless or until we obtain regulatory approval of and commercialize our product candidate. OnSeptember 9 , 24 -------------------------------------------------------------------------------- 2019, we entered into a license agreement with Alexion. In consideration for the license grant, we received an upfront nonrefundable payment of$25.0 million . Additionally, onSeptember 9, 2019 , we entered into a Stock Purchase Agreement with Alexion wherein we agreed to sell to Alexion 556,173 shares of the Company's common stock, par value$0.001 per share, for aggregate cash proceeds of approximately$25.0 million . In connection with the license agreement, we finalized a clinical supply agreement with Alexion onJuly 10, 2020 . There are no additional performance obligations to be accounted for as there is no minimum purchase requirement in the clinical supply agreement. We billed Alexion$0.1 million inAugust 2020 and recognized$0.1 million of revenue from the clinical supply agreement during the three months endedSeptember 30, 2020 .
Cost of license revenue
Cost of license revenue includes sublicensing fees payable toStanford in the period incurred under the terms of the Stanford Agreement (see Note 9 to our unaudited condensed financial statements included in this report) corresponding to the recognition of license revenue from Alexion. Cost of license revenue does not include any allocated overhead costs, or costs that are immaterial.
Research and development expense
Research and development expense consists primarily of costs incurred for the development of acoramidis, which include:
• employee-related expenses, including salaries, benefits and stock-based
compensation;
• laboratory, manufacturing and other vendor expenses related to the
execution of preclinical studies and clinical trials; • the costs related to the production of clinical supplies and the
engagement of consultants and other third-party service providers that conduct research and development activities on our behalf; • fees paid under our license agreement withStanford ; and
• facilities and other allocated expenses, expenses for rent, depreciation
and amortization, maintenance of facilities and other supplies.
We expense all research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors, collaborators and third-party service providers. Nonrefundable payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are deferred and capitalized. The capitalized amounts are recognized as expense as the goods are delivered or the related services are performed.
The following table summarizes our research and development expenses incurred during the respective periods (in thousands):
Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Clinical development$ 11,473 $ 4,602 $ 27,621 $ 12,803 Contract manufacturing 4,181 3,231 13,333 10,476 Preclinical, discovery and other research and development costs 862 1,342 2,099 2,538 Compensation and related personnel costs 5,748 2,599 14,133 6,785 Facility and other costs 304 213 881 431$ 22,568 $ 11,987 $ 58,067 $ 33,033 We expect our research and development expenses to increase substantially for the foreseeable future as we continue to conduct research and development activities related to acoramidis and advance acoramidis into later stages of clinical development, including our ongoing and planned Phase 3 clinical development activities for acoramidis in ATTR-CM and ATTR-PN and any subsequent preclinical or clinical development activities. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of acoramidis is highly uncertain. In addition, we believe that delays in our ongoing and planned clinical trials and 25 -------------------------------------------------------------------------------- adjustments to certain of our study procedures, such as increased frequency of home visits, as a result of the COVID-19 pandemic, could increase our expenditures, although it is difficult to predict the full effects of the COVID-19 pandemic on our research and development activities at this time. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization of acoramidis, if at all.
General and administrative expense
Our general and administrative expenses consist primarily of personnel costs, allocated facility costs and other expenses for outside professional services, including legal, human resource, audit and accounting services. Personnel costs consist of salaries, benefits and stock-based compensation. We expect to incur additional expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of theSecurities and Exchange Commission , orSEC , and listing standards applicable to companies listed on a national securities exchange, additional insurance expenses, investor relations activities and other administrative and professional services. We also expect to increase the size of our administrative function to support the growth of our business.
Interest expense
Interest expense consists of cash and non-cash components. The cash component of interest expense is attributable to borrowings under our loan agreements. Refer to Note 5 Debt obligation, for further information on our loan agreements. The non-cash component consists of interest expense recognized from the amortization of debt discounts derived from the debt issuance costs capitalized on our balance sheet.
Other income (expense), net
Other income (expense), net primarily includes interest income during the three
and nine months ended
Comparison of the three months and nine months endedSeptember 30, 2020 and 2019 License revenue Three Months Nine Months Ended Ended September 30, Increase (Decrease) September 30, Increase (Decrease) in thousands 2020 2019 $ % 2020 2019 $ % License revenue$ 127 $ 26,691 (26,564 ) 100%$ 127 $ 26,691 (26,564 ) 100% The$0.1 million license revenue recognized for the quarter endedSeptember 30, 2020 was related to the clinical supply agreement with Alexion. The license revenue recognized in 2019 was entirely attributable to revenue related to the Alexion License Agreement for which performance obligations were satisfied. Cost of license revenue Three Months Nine Months Ended Ended September 30, Increase (Decrease) September 30, Increase (Decrease) in thousands 2020 2019 $ % 2020 2019 $ % Cost of license revenue $ -$ 2,500 (2,500 ) 100% $ -$ 2,500 - 100% Cost of license revenue was$2.5 million for the quarter endedSeptember 30, 2019 , and there was no cost of license revenue for the quarter endedSeptember 30, 2020 . The cost of license revenue was related to the obligations under theStanford license agreement, whereby we are required to pay a portion of license fees received. 26
--------------------------------------------------------------------------------
Research and development expense
Three Months Nine Months Ended Ended September 30, Increase (Decrease) September 30, Increase (Decrease) in thousands 2020 2019 $ % 2020 2019 $ % Research and development$ 22,568 $ 11,987 10,581 88%$ 58,067 $ 33,033 25,034 76% Research and development expense increased by$10.6 million , or 88%, during the three months endedSeptember 30, 2020 , compared to the three months endedSeptember 30, 2019 . The increase was primarily attributable to an increase of$7.2 million in clinical trial related activities and contract manufacturing activities for our clinical trials and drug supply, an increase in personnel costs of$2.4 million , and an increase in stock-based compensation costs of$1.0 million . Research and development expense increased by$25.0 million , or 76%, during the nine months endedSeptember 30, 2020 , compared to the nine months endedSeptember 30, 2019 . The increase was primarily attributable to an increase of$17.5 million in clinical trial related activities and contract manufacturing activities for our clinical trials and drug supply, an increase in personnel costs of$5.2 million , and an increase in stock-based compensation of$2.4 million .
General and administrative expense
Three Months Nine Months Ended Ended September 30, Increase (Decrease) September 30, Increase (Decrease) in thousands 2020 2019 $ % 2020 2019 $ % General and administrative$ 6,962 $ 5,953 1,009 17%$ 22,590 $ 12,285 10,305 84% General and administrative expense increased by$1.0 million , or 17%, during the three months endedSeptember 30, 2020 , compared to the three months endedSeptember 30, 2019 . The increase was primarily attributable to an increase of$0.8 million due to the stock modification in connection with the acceleration of equity awards held by former directors in connection with their resignation from our board of directors inAugust 2020 , an increase of marketing cost of$0.4 million , an increase of$0.3 million due to an increase in costs for director and officers insurance, an increase of$0.3 million for related party expenses, and an increase of$0.2 million in personnel-related expenses due to an increase in headcount to support the growth of our operations, offset by a decrease of consulting costs of$1.0 million due to timing. General and administrative expense increased by$10.3 million , or 84%, during the nine months endedSeptember 30, 2020 , compared to the nine months endedSeptember 30, 2019 . The increase was primarily attributable to an increase in consulting fees of$3.4 million , an increase in marketing cost of$2.7 million , an increase of$2.0 million for stock compensation expense, including$0.8 million due to the stock modification of former non-employee directors in connection with their resignation from our board of directors inAugust 2020 as described above, an increase of$0.8 million due to an increase in costs for director and officers insurance, an increase of$0.8 million in personnel-related expenses due to an increase in headcount to support the growth of our operations, and an increase of$0.6 million for related party expenses. Interest expense Three Months Nine Months Ended Ended September 30, Increase (Decrease) September 30, Increase (Decrease) in thousands 2020 2019 $ % 2020 2019 $ % Interest expense$ (766 ) $ - (766 ) 100%$ (1,888 ) $ - - 100% Interest expense of$0.8 million and$1.9 million during the three months and nine months endedSeptember 30, 2020 , respectively, was related to the obligations under the SVB and Hercules Loan Agreement, whereby we are required to pay interest for money received. This also reflects amortization of issuance costs and debt discount, accretion of the end of term payment and change in the derivative liability, which were not present during the three months and nine months endedSeptember 30, 2019 . 27
-------------------------------------------------------------------------------- Other income (expense), net Three Months Nine Months Ended Ended September 30, Increase (Decrease) September 30, Increase (Decrease) in thousands 2020 2019 $ % 2020 2019 $ % Other income (expense), net$ (7 ) $ 680 (687 ) -101%$ 569 $ 2,272 (1,703 ) -75% Other income (expense), net was an expense of$7,000 during the three months endedSeptember 30, 2020 , compared to an income of$0.7 million during the three months endedSeptember 30, 2019 . The decrease in other income during the three months endedSeptember 30, 2020 reflected a decrease of interest income related to our money market funds due to a decrease in interest rates. Other income (expense), net was an income of$0.6 million during the nine months endedSeptember 30, 2020 , compared to an income of$2.3 million during the nine months endedSeptember 30, 2019 . The decrease in other income during the nine months endedSeptember 30, 2019 was attributable to a decrease in interest income related to our money market funds due to a decrease in interest rates.
Critical accounting policies and estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance withUnited States generally accepted accounting principles, orU.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies are fully described in Note 2 of our Annual Report. There were no significant changes to our critical accounting policies disclosed in our audited financial statements as ofDecember 31, 2019 . We believe that the accounting policies discussed are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management's judgments and estimates.
Liquidity and Capital Resources
Liquidity and Capital Expenditures
Liquidity
As ofSeptember 30, 2020 , we had$147.3 million of cash and cash equivalents and an accumulated deficit of$185.0 million . InSeptember 2019 , we received$50.0 million in aggregate cash proceeds from Alexion upon the execution of the License Agreement and Stock Purchase Agreement. InNovember 2019 , we entered into the SVB and Hercules Loan Agreement and drew proceeds of$17.5 million in debt financing. OnAugust 2, 2019 , we filed a Registration Statement on Form S-3, as amended (the "2019 Shelf") with theSEC in relation to the registration of common stock, preferred stock, debt securities, warrants and units of any combination thereof. We also simultaneously entered into an Open Market Sale Agreement ("2019 Sales Agreement") withJefferies LLC andSVB Leerink LLC (each a "Sales Agent" and together, the "Sales Agents"), to provide for the offering, issuance and sale by the Company of up to an aggregate offering price of$100.0 million of its common stock from time to time in "at-the-market" offerings under the 2019 Shelf and subject to the limitations thereof. We will pay to the Sales Agent cash commissions of up to 3.0 percent of the gross proceeds of sales of common stock under the 2019 Sales Agreement. We issued 834,368 shares of common stock and received$48.1 million in net proceeds under the 2019 Sales Agreement throughSeptember 30, 2020 . Our primary uses of cash are to fund operating expenses, primarily research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses. We believe, based on our current operating plan and expected expenditures without giving effect to the transactions contemplated by the Merger Agreement and assuming we remain a standalone entity, that our existing cash and cash equivalents will be sufficient to meet our anticipated operating and capital expenditure requirements for at least the next 28 -------------------------------------------------------------------------------- 12 months from the filing of this Quarterly Report on Form 10-Q. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Our ultimate success depends on the outcome of our research and development activities. We expect to incur additional losses in the future and we anticipate the need to raise additional capital to fully implement our business plan if the transactions contemplated by the Merger Agreement are not completed within the timeframe we currently expect. To the extent additional capital is required prior to the completion of the transaction with BridgeBio or the termination of the Merger Agreement, we are prohibited from issuing equity securities, incurring indebtedness or entering into material partnerships with third parties, in each case subject to certain exceptions, without the prior written consent of BridgeBio. We expect to incur increased general and administrative expenses at least through 2020 in connection with the transactions contemplated under the Merger Agreement and, depending on whether the transactions contemplated under the Merger Agreement are consummated and the timing thereof, to further increase our research and development activities as we conduct our Phase 3 clinical trials of acoramidis in ATTR-CM and ATTR-PN. In particular, if the transactions contemplated under the Merger Agreement are not completed within the timeframe we currently expect, we expect continued spending on clinical trials, continued manufacturing activities and higher payroll expenses as we increase our professional and scientific staff to support later-stage clinical development of acoramidis, and we will require additional financing to fund working capital and pay our obligations. During the term of the Merger Agreement, we are restricted from various activities, including the issuance of debt or equity to public or private investors under certain circumstances. Accordingly, there can be no assurance that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable to us. Our future funding requirements will depend on many factors, including the following:
• our ability to complete the transactions contemplated under the Merger
Agreement, whether the Merger Agreement is terminated, and the timing of
these events;
• the progress, timing, scope, results and costs of our ongoing and planned
clinical trials and other research and development activities related to
acoramidis and any other product candidates we may identify and pursue,
including the ability to enroll patients in a timely manner in our clinical trials;
• the costs of obtaining acoramidis in amounts sufficient for our ongoing
and planned clinical trials and, if approved, for commercialization;
• the cost, timing and outcomes of any regulatory approvals for acoramidis;
• our ability to successfully commercialize acoramidis, if approved;
• the extent to which we may acquire or in-license other product candidates
and technologies; • our ability to attract, hire and retain qualified personnel; and
• the cost of obtaining, maintaining, preparing, filing, prosecuting,
defending and enforcing any patent claims and other intellectual property
rights related to acoramidis and any other product candidates we may identify and pursue. 29
-------------------------------------------------------------------------------- If we need to raise additional capital to fund our operations, funding may not be available to us on acceptable terms, or at all. If we are unable to obtain adequate financing when needed, we may have to delay, reduce the scope of or suspend one or more of our preclinical studies, research and development programs or commercialization efforts. We may seek to raise any necessary additional capital through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. To the extent that we raise additional capital through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders' rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
Cash flows
The following table summarizes our cash flows for the periods indicated (in thousands): Nine Months EndedSeptember 30, 2020 2019
Net cash used in operating activities
Cash flows from operating activities
During the nine months endedSeptember 30, 2020 , cash used in operating activities was$68.6 million and consisted primarily of a net loss of$81.8 million . Our non-cash charges of$9.1 million primarily consisted of stock-based compensation expense. The change in our net operating assets of$4.2 million was primarily due to an increase in accounts payable and accrued expenses of$5.4 million due to the timing of payments and the timing of activities for which payments were made, offset by a decrease in prepaid expenses and other current and non-current assets of$1.2 million . During the nine months endedSeptember 30, 2019 , cash used in operating activities was$15.1 million and consisted primarily of a net loss of$18.9 million . Our non-cash charges of$3.8 million primarily consisted of stock-based compensation expense. The change in our net operating assets of($0.1) million was primarily due to a reduction of prepaid expenses and other current and non-current assets of$4.9 million , due to the timing of payments and the timing of activities for which payments were made offset by the increase in accounts payable and accrued expenses of$4.7 million , as a result of an increase in operating expenses and timing of payments.
Cash flows from investing activities
During the nine months endedSeptember 30, 2020 andSeptember 30, 2019 , cash used in investing activities was$0.4 million and$0.1 million ; respectively, which consisted of our purchase of property and equipment for our office and employees.
Cash flows from financing activities
During the nine months endedSeptember 30, 2020 , cash provided by financing activities was$25.1 million ; which consisted of$24.1 million from proceeds from the issuance of common stock under our at-the-market offering facility;$1.0 million due to the receipt of funds from stock purchases under our employee stock purchase plan and the exercise of common stock options. During the nine months endedSeptember 30, 2019 , cash provided by financing activities was$24.0 million ; which consisted of$23.3 million related to the issuance of common stock to Alexion and$0.7 million due to the receipt of funds from our employee stock purchase plan and the exercise of common stock options 30 --------------------------------------------------------------------------------
Contractual Obligations and Other Commitments
There have been no material changes outside the ordinary course of our business to our contractual obligations during the nine months endedSeptember 30, 2020 , as compared to those disclosed in our Annual Report.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, as defined underSEC rules, including the use of structured finance, special purpose entities or variable interest entities.
Recent Accounting Pronouncements
For information on Recent Accounting Pronouncements refer to Note 2 of Notes to Unaudited Condensed Financial Statements.
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