The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our financial statements and
related notes appearing elsewhere in this Quarterly Report on Form 10-Q and with
our audited financial statements and notes thereto for the year ended December
31, 2021, included in our Annual Report on Form 10-K, filed with the U.S.
Securities and Exchange Commission, or SEC, on March 15, 2022. Some of the
information contained in this discussion and analysis or set forth elsewhere in
this Quarterly Report on Form 10-Q, including information with respect to our
plans and strategy for our business, includes forward looking statements that
involve risks and uncertainties. As a result of many factors, including those
factors set forth in the "Risk Factors" section of this Quarterly Report on Form
10-Q and the Form 10-K, our actual results could differ materially from the
results described, in or implied, by these forward-looking statements. Please
also see the section of this Quarterly Report on Form 10-Q titled
"Forward-Looking Statements."

                                    Overview

We are a clinical-stage biopharmaceutical company developing a novel therapeutic
product for the acute treatment of migraine. Our product candidate, STS101, is a
drug-device combination of a proprietary dry-powder formulation of
dihydroergotamine mesylate, or DHE, which is designed to be quickly and easily
self-administered with a proprietary pre-filled, single-use, nasal delivery
device. DHE products have long been recommended as a first-line therapeutic
option for the acute treatment of migraine and have significant advantages over
other therapeutics for many patients. However, broad use has been limited by
invasive and burdensome administration and/or sub-optimal clinical performance
of available injectable and liquid nasal spray products. STS101 is specifically
designed to deliver the clinical advantages of DHE while overcoming these
shortcomings. If approved, we believe STS101 has the potential to be an
important and differentiated option for the acute treatment of migraine that can
address the unmet needs of many people living with migraines.

In September 2020, we announced topline data from the EMERGE Phase 3 efficacy
trial, or EMERGE trial, which randomized 1,201 migraine subjects to one of two
STS101 dose strengths or placebo. Although STS101 3.9 mg and 5.2 mg showed
favorable numerical differences versus placebo on the pre-specified co-primary
endpoints of freedom from pain and freedom from most bothersome symptom (from
among photophobia, phonophobia and nausea) at two hours post-administration,
these differences did not achieve statistical significance for either dose
strength. Both dose strengths of STS101 did, however, demonstrate significant
effects on both freedom from pain and most bothersome symptom by three hours
post-dose and later time points. Both STS101 dose strengths were well-tolerated
in the EMERGE trial, with low adverse event rates and no serious adverse events
reported.

In March 2021, we announced an update to our development plan for STS101 that
takes into account the findings from our analyses of results from our EMERGE
efficacy trial and results from our ongoing ASCEND open-label, Phase 3 long-term
safety trial of STS101 5.2 mg, or ASCEND trial. Our updated development plan for
STS101 included a Phase 1 trial, which we completed in June 2021, to evaluate
the pharmacokinetics, safety and tolerability of STS101 5.2 mg and two higher
dose strengths, as well as a new pivotal Phase 3 efficacy trial, or SUMMIT
trial, of STS101 5.2 mg that we initiated in June 2021. We anticipate announcing
topline results in November 2022 and we are planning for submission of a NDA to
the FDA in the first quarter of 2023.

In September 2022, we reported results from the ongoing ASCEND open-label, Phase
3 long-term safety trial of STS101 5.2 mg indicating that STS101 demonstrated a
favorable safety and tolerability profile, consistent with clinical experience
to date. Subject exposures over time with the STS101 incorporating the
second-generation nasal delivery device designed to improve performance exceeded
the FDA requirement to support the submission and potential approval of the
STS101 NDA.

A secondary objective of the ASCEND open-label trial is to assess the open-label
efficacy of STS101 in the acute treatment of migraine attacks over time. STS101
incorporating the second-generation nasal delivery device demonstrated
anti-migraine effects, including achievement of high rates of pain freedom and
most-bothersome-symptom freedom at two hours post-treatment, consistent with our
expectations and suggested that the second-generation nasal delivery device
introduced during the conduct of the ASCEND trial was associated with improved
clinical performance.

Our net losses were $46.9 million and $35.6 million for the nine months ended
September 30, 2022 and 2021, respectively. As of September 30, 2022, we had an
accumulated deficit of $188.7 million.

As we continue to develop, seek regulatory approval for and prepare to commercialize STS101, if approved, our expenses will increase substantially over recent periods.



Since our inception in June 2016, we have invested substantially all of our
efforts and financial resources in the development of STS101 for the acute
treatment of migraine. We have incurred significant operating losses to date and
expect that our operating expenses will increase significantly as we advance
STS101 through clinical development, manufacturing and regulatory approval, and

                                       13
--------------------------------------------------------------------------------


as we prepare for commercialization of STS101, if approved; obtain, maintain,
protect and enforce our intellectual property portfolio; and hire additional
personnel. In addition, we expect to continue to incur increasing costs
associated with operating as a public company.

In October 2020, we entered into a sales agreement (the "SVB Sales Agreement")
with SVB Securities LLC (formerly known as SVB Leerink LLC) ("SVB") to sell
shares of our common stock, from time to time, through an at-the-market ("ATM")
equity offering program under which SVB acted as our sales agent and pursuant to
which we could sell common stock for aggregate gross sales proceeds of up to
$50.0 million. The issuance and sale of shares of common stock by us pursuant to
the SVB Sales Agreement was deemed an ATM offering under the Securities Act of
1933, as amended. SVB was entitled to compensation for its services equal to up
to 3.0% of the gross proceeds of any shares of common stock sold through SVB
under the SVB Sales Agreement. As of September 30, 2022, we had received $9.7
million in net proceeds from the sale of 1,538,461 shares of common stock
pursuant to the SVB Sales Agreement. Prior to the quarter ended September 30,
2022, we had not issued any shares of common stock under the SVB Sales
Agreement. In October 2022, we terminated the SVB Sales Agreement and the offer
and sale of shares under the SVB Sales Agreement prospectus supplement filed in
October 2020.

In November 2022, we entered into an At-the-Market Sales Agreement (the "Virtu
Sales Agreement"), with Virtu Americas LLC ("Virtu"), to sell shares of our
common stock, from time to time, through an ATM equity offering program under
which Virtu will act as its sales agent and pursuant to which we may sell common
stock for aggregate gross sales proceeds of up to $100.0 million. The issuance
and sale of shares of common stock by us pursuant to the Virtu Sales Agreement
is deemed an ATM offering under the Securities Act of 1933, as amended. Virtu is
entitled to compensation for its services equal to up to 3.0% of the gross
proceeds of any shares of common stock sold through Virtu under the Virtu Sales
Agreement.

We do not have any products approved for sale and have not generated any product
revenue since our inception. Our ability to generate product revenue will depend
on the successful development and eventual commercialization of STS101. Until
such time as we can generate significant revenue from sales of STS101, if ever,
we expect to finance our operations through the sale of equity, debt financings
or other capital sources, including potential collaborations with other
companies or other strategic transactions. Adequate funding may not be available
to us on acceptable terms, or at all. If we fail to raise capital or enter into
such agreements as and when needed, we may have to significantly delay, scale
back, or discontinue the development and commercialization of STS101.


As of September 30, 2022, we had cash, cash equivalents and marketable
securities of $64.4 million. Based on our current operating plans, we believe
that those cash, cash equivalents and marketable securities will be sufficient
to fund our projected operations for at least 12 months from the date of the
issuance of these condensed financial statements.

COVID-19



COVID-19 has placed strains on the providers of healthcare services, including
the healthcare clinics and institutions where we conduct our ongoing clinical
trials and may conduct planned clinical trials. To date, we have initiated and
completed enrollment of subjects in our planned STS101 clinical trials in
accordance with our previously communicated timeline objectives. We will
continue to follow the U.S. Food and Drug Administration ("FDA") guidance on
clinical trial conduct during the COVID-19 pandemic, including with respect to
remote monitoring of clinical data. To date, subjects in our clinical trials
have generally been able to complete their scheduled visits or treatments and we
have been able to collect the essential data from those visits or treatments, as
well as from the internet-connected electronic diary devices, as applicable,
subjects in our trials may use to record efficacy and other key data.


To date, we have not experienced any disruption in our supply of investigational
product necessary to conduct our clinical trials and, given our investigational
product inventories, believe we will be able to supply the needs of our clinical
trials. We are supporting our employees by utilizing remote work when necessary
and appropriate, leveraging virtual meeting technology and encouraging employees
to follow local guidelines.

                                       14
--------------------------------------------------------------------------------

Components of Operating Results

Operating Expenses

Research and Development Expenses



All of our research and development expenses consist of expenses incurred in
connection with the development of STS101 for the acute treatment of migraine.
These expenses include:

• payroll and personnel-related expenses, including salaries, annual cash

bonuses, employee benefit costs and stock-based compensation expenses for

our research and product development employees;

• fees paid to third parties to conduct preclinical and clinical studies and

other research and development activities, including contract research


       organizations, or CROs, contract manufacturing organizations, or CMOs,
       consultants, and other service providers; and

• costs for licenses and allocated overhead, including rent, equipment,

depreciation, information technology costs and utilities.




We expense both internal and external research and development expenses as they
are incurred. We have entered into various agreements with third party vendors
and CMOs. Our research and development accruals are estimated based on the level
of services performed, progress of the studies, including the phase or
completion of events or tasks, and contracted costs. The estimated costs of
research and development provided, but not yet invoiced, are included in accrued
and other current liabilities on the balance sheet. If the actual timing of the
performance of services or the level of effort varies from the original
estimates, we adjust the accrual accordingly. Payments made to CROs and CMOs
under these arrangements in advance of the performance of the related services
are recorded as prepaid expenses and other current assets until the services are
rendered. 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 as prepaid expenses and other current assets on our
balance sheet. The capitalized amounts are recognized as expense as the goods
are delivered or the related services are performed.

As we continue the development of STS101, we will continue to incur significant
research and development expenses, as we seek to advance STS101 through clinical
development, manufacturing and regulatory approval, and prepare for
commercialization of STS101, if approved. Predicting the timing or the cost to
complete our clinical trials or validation of our commercial manufacturing and
supply processes is difficult and delays may occur because of many factors,
including factors outside of our control. For example, if the FDA or other
regulatory authorities were to require us to conduct clinical trials beyond
those that we currently anticipate or if we experience delays in manufacturing
with any of our CMOs, we could be required to expend significant additional
financial resources and time on the completion of clinical development.
Furthermore, we are unable to predict with certainty when or if STS101 will
receive regulatory approval.

General and Administrative Expenses



General and administrative expenses consist principally of payroll and personnel
expenses, including salaries, benefits and stock-based compensation expenses,
professional fees for legal, consulting, accounting and tax services, directors
and officers insurance, allocated overhead, including rent, equipment,
depreciation, information technology costs, and utilities, and other general
operating expenses not otherwise classified as research and development expenses
including expenses associated with pre-commercialization activities.

We anticipate that our general and administrative expenses will increase as a
result of increased personnel costs, including salaries, benefits and
stock-based compensation expenses, expanded infrastructure and higher
consulting, legal and accounting services associated with maintaining compliance
with stock exchange listing and Securities and Exchange Commission, or SEC,
requirements, expenses associated with pre-commercialization activities,
investor relations costs and director and officer insurance premiums associated
with being a public company.

Interest Income

Interest income consists primarily of interest earned on our cash, cash equivalents and marketable securities.

Interest Expense

Interest expense consists primarily of interest related to our long-term debt and accretion of debt discount, debt issuance costs and final payment.


                                       15
--------------------------------------------------------------------------------

Results of Operations

Comparison of the Three Months Ended September 30, 2022 and 2021

The following table summarizes our results of operations for the periods indicated (in thousands, except percentages):


                                                Three Months Ended
                                                   September 30,
                                               2022             2021         Change        Change %
Operating expenses:
Research and development                    $   11,342       $   10,170     $   1,172             12 %
General and administrative                       4,067            3,160           907             29 %
Loss from operations                           (15,409 )        (13,330 )      (2,079 )           16 %
Interest income                                    269               33           236            715 %
Interest expense                                     -              (35 )          35           (100 )%
Net loss                                    $  (15,140 )     $  (13,332 )   $  (1,808 )           14 %

Research and Development Expenses



Research and development expenses increased from the three months ended
September 30, 2021 to the three months ended September 30, 2022 primarily due to
an increase of $1.0 million in clinical trial costs, which was mainly due to an
increase for the SUMMIT efficacy trial, as well as an increase of $0.4 million
in payroll and personnel expenses, partly offset by a decrease of $0.2 million
in manufacturing activities.

General and Administrative Expenses



General and administrative expenses increased from the three months ended
September 30, 2021 to the three months ended September 30, 2022 primarily due to
an increase of $0.5 million due to increased pre-commercialization activity, an
increase of $0.3 million of payroll and personnel expenses, including salaries,
benefits and stock-based compensation expenses, and an increase of $0.2 in
professional services for consulting, accounting, legal, tax and other
administrative fees.

Interest Income



Interest income increased from the three months ended September 30, 2021 to the
three months ended September 30, 2022 primarily as a result of the higher
interest yields in the three months ended September 30, 2022, partly offset by a
decrease in average balances of our cash, cash equivalents and marketable
securities in the three months ended September 30, 2022.

Interest Expense



Interest expense decreased from the three months ended September 30, 2021 to the
three months ended September 30, 2022 primarily attributable to a decrease of
outstanding debt balance, which was fully repaid in May 2022.

Comparison of the Nine Months Ended September 30, 2022 and 2021



                                            Nine Months Ended September
                                                        30,
                                               2022             2021         Change       Change %
Operating expenses:
Research and development                    $   35,394       $   25,769     $   9,625            37 %
General and administrative                      11,961            9,837         2,124            22 %
Loss from operations                           (47,355 )        (35,606 )     (11,749 )          33 %
Interest income                                    443              124           319           257 %
Interest expense                                   (13 )           (139 )         126           (91 )%
Net loss                                    $  (46,925 )     $  (35,621 )   $ (11,304 )          32 %

Research and Development Expenses



Research and development expenses increased from the nine months ended September
30, 2021 to the nine months ended September, 2022 primarily due to an increase
of $9.6 million in clinical trial costs, which was the net of an increase of
$10.1 million for the SUMMIT efficacy trial, $0.7 million for the ASCEND safety
trial, and $0.4 million for NDA preparation work, as well as an increase of $1.3
million in payroll and personnel expenses offset by decreases of $1.7 million
for the STS101 Phase 1 trials, and  a decrease of $1.5 million in manufacturing
activities.

                                       16
--------------------------------------------------------------------------------

General and Administrative Expenses



General and administrative expenses increased from the nine months ended
September 30, 2021 to the nine months ended September 30, 2022 primarily due to
an increase of $2.0 million due to increased pre-commercialization activity, and
an increase of $0.6 million of payroll and personnel expenses, including
salaries, benefits and stock-based compensation expenses, partly offset by a
decrease of $0.3 in professional services for consulting, accounting, tax and
other administrative fees, and a decrease of $0.2 million in allocated
facilities related expenses.

Interest Income



Interest income increased from the nine months ended September 30, 2021 to the
nine months ended September 30, 2022 primarily as a result of the higher
interest yields in the nine months ended September 30, 2022, partly offset by a
decrease in average balances of our cash, cash equivalents and marketable
securities in the nine months ended September 30, 2022.

Interest Expense



Interest expense decreased from the nine months ended September 30, 2021 to the
nine months ended September 30, 2022 primarily attributable to a decrease of
outstanding debt balance, which was fully repaid in May 2022.

Liquidity and Capital Resources

Sources of Liquidity



We have historically financed our operations primarily through the issuance of
common stock in our IPO, and private placements of equity securities and
borrowings under our long-term debt facility. We have no products approved for
sale, and we have not generated any revenue since inception. We expect to incur
significant additional operating losses over at least the next several years.

In October 2020, we entered into the SVB Sales Agreement with SVB to sell shares
of our common stock, from time to time, through an ATM equity offering program
under which SVB acted as our sales agent and pursuant to which we could sell
common stock for aggregate gross sales proceeds of up to $50.0 million. As of
September 30, 2022, we had received $9.7 million in net proceeds from the sale
of shares of common stock pursuant to the SVB Sales Agreement.

In November 2022, we entered into the Virtu Sales Agreement with Virtu to sell
shares of our common stock, from time to time, through an ATM equity offering
program under which Virtu will act as our sales agent and pursuant to which we
may sell common stock for aggregate gross sales proceeds of up to $100.0
million.

Credit Facility



In October 2018, we entered into the Loan Agreement with Silicon Valley Bank.
The Loan Agreement provided for loan advances of up to $10.0 million. We drew
down the first advance of $5.0 million as of the effective date of the Loan
Agreement. The remaining $5.0 million under the facility was never drawn down
and is no longer available for draw. Interest on the loan advances was payable
monthly at a floating per annum rate equal to the greater of 1.5% above the
prime rate and 6.5%. Upon the occurrence of an event of default, interest would
increase to 5.0% above the rate that is otherwise applicable. Principal on the
outstanding loan advance was repayable commencing on December 1, 2019 in 30
monthly payments through maturity. The maturity date of the loan advances was
May 1, 2022.

In May 2022, we repaid our entire obligation under the Loan Agreement amounting
to $0.4 million, including outstanding loan amount of $0.2 million and final
payment of $0.2 million.

Future Funding Requirements

We have incurred net losses since our inception. Our net losses were $46.9
million and $35.6 million for the nine months ended September 30, 2022 and 2021,
respectively. Based on our current operating plan, we believe that our existing
cash, cash equivalents and marketable securities will be sufficient to fund our
planned operations for at least 12 months from the date of the issuance of these
condensed financial statements.

As we continue the development of STS101, our operating expenses may increase substantially, as we seek to advance STS101 through clinical development, manufacturing and regulatory approval, and prepare for commercialization of STS101, if approved.


                                       17
--------------------------------------------------------------------------------


To the extent we continue to develop, seek approval for and prepare to
commercialize STS101, if approved, we will continue to require additional
capital to fund operations for the foreseeable future. We do not expect to
generate any meaningful revenue unless and until we obtain regulatory approval
of and commercialize STS101 or enter into collaborative agreements with third
parties, and we do not know when, or if, either will occur. We may seek to raise
capital through private or public equity or debt financings, collaborative or
other arrangements with corporate sources, or through other sources of
financing. Adequate additional funding may not be available to us on acceptable
terms, or at all. Our failure to raise capital as and when needed would have a
negative impact on our financial condition and our ability to pursue the
development and commercialization of STS101. Our need for additional capital
will depend on many factors, including:

• the scope, timing, rate of progress, results and costs of our clinical

trials for STS101, and most particularly, the SUMMIT Phase 3 efficacy trial

for STS101, as well as any clinical program we may pursue in any foreign


       jurisdictions;


    •  the scope and costs of manufacturing development and commercial
       manufacturing activities;


  • the cost, timing and outcome of regulatory review of STS101;

• the cost of building a commercial organization, including a sales force, in

anticipation of commercialization of STS101;

• the cost and timing associated with commercializing STS101, if approved;




  • the number and scope of clinical programs we decide to pursue;

• the costs of preparing, filing and prosecuting patent applications,

maintaining and enforcing our intellectual property rights and defending


       intellectual property-related claims;


  • any product liability or other lawsuits related to STS101;

• our efforts to enhance operational systems and our ability to attract, hire


       and retain qualified personnel, including personnel to support the
       commercialization of STS101;

• the extent to which we acquire or in-license other product candidates or

technologies;

• the payment of royalty payments owed under our existing license agreement;

• our ability to establish and maintain collaborations on favorable terms, if


       at all;


  • the costs associated with being a public company; and


  • the timing, receipt and amount of sales of STS101, if approved.


We are subject to the risks typically related to the development of new drug
product candidates, and we may encounter unforeseen expenses, difficulties,
complications, delays and other unknown factors that may adversely affect our
business. Despite our implementation of a new development plan for STS101, such
plan may change, which could significantly change the costs and timing
associated with its development of STS101 and our operations. Furthermore, our
operating plans may change in the future, and we will continue to require
additional capital to meet operational needs and capital requirements associated
with such operating plans. If we raise additional funds by issuing equity
securities, our stockholders may experience dilution. Any debt financing into
which we enter may impose upon us covenants that restrict our operations,
including limitations on our ability to incur liens or additional debt, pay
dividends, repurchase our common stock, make certain investments or engage in
certain merger, consolidation or asset sale transactions. For example, the Loan
Agreement contained many of these restrictions. Any debt financing or additional
equity that we raise may contain terms that are not favorable to us or our
stockholders. If we are unable to raise additional funds when needed, we may be
required to delay, reduce, or terminate our development program and clinical
trials. We may also be required to sell or license to others rights to STS101 in
certain territories or indications that we would prefer to develop and
commercialize ourselves. Adequate additional funding may not be available to us
on acceptable terms or at all. See "Risk Factors" for additional risks
associated with our substantial capital requirements.

                                       18

--------------------------------------------------------------------------------

© Edgar Online, source Glimpses