The following discussion and analysis should be read together with our condensed
consolidated financial statements and the related notes thereto included in Part
I, Item 1 of this Quarterly Report and our consolidated financial statements and
related notes thereto for the year ended December 31, 2021 included in our
Annual Report on Form 10-K filed with the SEC on March 11, 2022 ("2021 Annual
Report on Form 10-K"). This discussion and other parts of this report contain
forward-looking statements reflecting our current expectations that involve
risks and uncertainties, such as our plans, objectives, expectations,
intentions, and beliefs. See "Forward-Looking Statements" for a discussion of
the uncertainties, risks, and assumptions associated with these statements.
Actual results and the timing of events could differ materially from those
discussed in these forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to, those identified
below and those discussed in the section entitled "Risk Factors" included
elsewhere in this Quarterly Report.

Overview and recent developments

We are a biotechnology company advancing new treatments for patients with
serious diseases that are underserved by today's therapies. Marketed therapies
often leave room for improvements in efficacy, safety, and/or dosing
convenience. We believe that first-generation drugs rarely represent optimal
solutions, and that the potential exists to develop alternatives that improve
patient outcomes, moderate side effects, enhance quality of life, ease access
and augment market competition. Our business model is to identify product
opportunities in indications for which clinical trial data demonstrating
compelling proof of concept for a targeted mechanism of action already exists,
but the competitive evolution of product profiles and number of entrants appears
incomplete. We intend to prioritize indications that fast-follower and bio
superior competition could create significant medical benefit for patients.

We are developing three product candidates, VRDN-001, VRDN-002 and VRDN-003, to
treat patients who suffer from thyroid eye disease ("TED"). Our most advanced
product candidate, VRDN-001, is a differentiated humanized monoclonal antibody
that binds and blocks the insulin-like growth factor-1 receptor ("IGF-1R") with
subnanomolar affinity. This mechanism of action is clinically and commercially
validated for the treatment of TED. Our ongoing first clinical trial for
VRDN-001 is a Phase 1/2 proof of concept study that includes multiple
randomized, placebo-controlled cohorts of TED patients. This clinical trial is
designed to assess the potential for VRDN-001 to provide rapid improvements of
signs and symptoms of TED at six weeks, after two intravenous ("IV") infusions
of VRDN-001. The first cohort evaluated two infusions of 10 mg/kg of VRDN-001,
the second cohort is evaluating two infusions of 20 mg/kg of VRDN-001 and the
third cohort will enroll a cohort of TED patients at a dose of 3 mg/kg following
the completion of the 10 mg/kg and 20 mg/kg cohorts. Each cohort includes eight
patients randomized in a 3:1 ratio to receive VRDN-001 or placebo.

In August 2022, we announced positive initial clinical data from the first
cohort in our ongoing Phase 1/2 proof of concept clinical trial of VRDN-001
patients with TED. All patients in the first cohort were treated for two full
cycles and were evaluated for proptosis, clinical activity score ("CAS"), and
diplopia. At week 6, treatment with VRDN-001 demonstrated an 83% proptosis
responder rate, which is the percentage of patients who experienced a ?2mm
reduction in proptosis from baseline, a median time to proptosis response of 3
weeks and 2.4mm mean reduction in proptosis from baseline. Eighty three percent
(83%) of patients achieved maximal or near-maximal therapeutic effect on CAS,
defined as reaching a CAS of 0 or 1 on a 7-point composite measure of signs and
symptoms of TED, and a 4.3 point mean reduction in CAS from baseline was
observed. Treatment with VRDN-001 also demonstrated an 83% overall responder
rate, which is the percentage of patients who experienced a ?2mm reduction in
proptosis from baseline and a ?2 point reduction in CAS from baseline.

                                       35
--------------------------------------------------------------------------------
Table of Contents
Seventy five percent (75%) of patients with diplopia receiving VRDN-001 achieved
complete resolution of diplopia at week 6, which is defined as patients with
baseline diplopia who achieved a score of 0 on the Gorman Subjective Diplopia
scale.

We plan to report results from the second cohort at an upcoming medical meeting
in the fourth quarter of 2022. Enrollment for the second cohort is nearly
complete, and we continue to enroll TED patients at sites in the United States
and Canada.

The healthy volunteer portion of the trial includes doses of 3 mg/kg, 10 mg/kg
and 20 mg/kg in 13 subjects. No drug related adverse events associated with
hyperglycemia have been reported to date.
In the 10 mg/kg cohort, VRDN-001 was well-tolerated by all TED patients. There
were no reported serious adverse events ("SAEs"), no patient discontinuations,
and no hyperglycemia or infusion reactions as of August 9, 2022, the cutoff date
for follow up observation. Two cases of mild muscle spasms were reported and did
not require intervention. There was one report of "ringing in the ears" which
resolved within two weeks without intervention.

Other adverse events in the healthy volunteer portion of the trial have been
generally comparable to placebo and, to date, there have been no infusion
reactions or SAEs. Interim data from the healthy volunteer portion of the trial
for plasma levels of IGF-1, a biomarker for target engagement, showed a rapid
increase that saturated after the first infusion at levels that were similar for
all doses tested, including 3 mg/kg. We expect to report topline data from the 3
mg/kg cohort of the Phase 1/2 in TED patients in the fourth quarter of 2022.

VRDN-002 is a distinct, next-generation IGF-1R antibody incorporating half-life
extension technology and is designed to support administration as a convenient,
low-volume, subcutaneous injection for the treatment of TED. In March 2022, we
announced dosing of the first subject in a first-in-human Phase 1 clinical trial
evaluating VRDN-002. This is a single ascending dose clinical trial to explore
safety, tolerability, pharmacokinetics and pharmacodynamics of intravenously
administered VRDN-002 at doses of 3 mg/kg, 10 mg/kg, and 20 mg/kg in up to 16
healthy volunteers. In August 2022, we also announced first-in-human data from
the Phase 1 clinical trial of intravenously administered VRDN-002 in healthy
volunteers which supported the feasibility of a low-volume subcutaneous dosing
paradigm for TED patients. We are planning a subcutaneous proof of concept trial
in TED patients as the next step in VRDN-002 development, and we expect to
initiate that trial in the second half of 2023, with data expected in the second
half of 2023. We believe a low-volume subcutaneous injection would improve
convenience for patients and physicians, mitigate treatment burdens, and expand
the settings of care for TED therapies.

VRDN-003 is a half-life extended version of VRDN-001, maintaining the
pharmacologic function of VRDN-001 but incorporating the same half-life
extension technology used in VRDN-002, and like VRDN-002 is designed to support
administration as a convenient, low-volume, subcutaneous injection for the
treatment of TED. We expect to file an IND for VRDN-003 in the second quarter of
2023, with proof-of-concept data expected in the fourth quarter of 2023.

By the end of 2023, we expect to advance either VRDN-002 or VRDN-003 to
registrational trials based on clinical data from the two programs and plan to
initiate a global Phase 3 program designed to assess a potentially best-in-class
SC therapy for TED in early 2024.

In addition to developing therapies for TED, we are executing a similar
strategic approach to identify opportunities to develop fast-follower therapies
in other serious and/or rare disease indications. Our pipeline expansion is
focused on additional opportunities that leverage validated mechanisms and
technologies in therapeutic areas underserved by today's available medicines.
VRDN-004 is a therapeutic monoclonal antibody program currently in discovery
stage for an undisclosed rare disease. VRDN-005 is a second discovery-stage
program for another undisclosed indication in which we believe patient care can
be advanced with a novel therapeutic monoclonal antibody.
                                       36

————————————————– ——————————

Contents

The COVID-19 pandemic

The on-going COVID-19 pandemic continues to cause disruption throughout the
United States and worldwide. We could be materially and adversely affected by
the risks, or the public perception of the risks, related to the COVID-19
pandemic or any other epidemic, pandemic or public health crisis. Such risks
include, but are not limited to, potential disruptions to our supply chain that
may limit our ability to manufacture drug product for our clinical trials, and
delays to our planned or future clinical trials. The ultimate extent of the
impact of any epidemic, pandemic or other public health crisis on our business,
financial condition and results of operations will depend on future
developments, which are highly uncertain and cannot be predicted, including new
information that may emerge concerning the severity of such epidemic, pandemic
or other public health crisis and actions taken to contain or prevent the
further spread, among others. While our business has not been materially
impacted by the COVID-19 pandemic to date, we cannot predict whether our
business, financial condition and results of operations will be affected by the
COVID-19 pandemic in the future.

Overview of financial operations

Revenue

Historically, our revenues consisted primarily of upfront payments for licenses, milestone payments and payments for other research and development services earned under licensing and collaboration agreements as well as amounts earned in the some of the grants we’ve received.

In October 2020, we became party to a license agreement with Zenas BioPharma.
Since February 2021, we have entered into several letter agreements with Zenas
BioPharma in which we agreed to provide assistance to Zenas BioPharma with
certain development activities, including manufacturing. Under the terms of the
Zenas Agreements, we granted Zenas BioPharma an exclusive license to develop,
manufacture, and commercialize certain IGF-1R directed antibody products for
non-oncology indications in the greater area of China in exchange for upfront
non-cash consideration and non-refundable milestone payments upon achieving
specific milestone events during the contract term. Zenas BioPharma announced
that it had obtained IND approval in China in July 2022. Under the license
agreement we are entitled to receive a $1.0 million royalty payment from Zenas
BioPharma. Additionally, we may receive royalty payments based on a percentage
of the annual net sales of any licensed products sold on a country-by-country
basis in the greater area of China. The royalty percentage may vary based on
different tiers of annual net sales of the licensed products made. Zenas
BioPharma is obligated to make royalty payments to us for the royalty term in
the Zenas Agreements. In May 2022, we entered into a Manufacturing Development
and Supply Agreement with Zenas BioPharma to manufacture and supply, or have
manufactured and supplied, clinical drug product for development purposes.

In the future, we expect to continue to generate revenue from a combination of
license fees and other up-front payments, payments for research and development
services, milestone payments, product sales, and royalties in connection with
strategic alliances. We expect that any revenue we generate could fluctuate from
quarter to quarter as a result of the timing of our achievement of development
and commercial milestones, the timing and amount of payments relating to such
milestones, and the extent to which any of our product candidates are approved
and successfully commercialized by us or our strategic alliance collaborators,
if any. If we or our strategic alliance collaborators, if any, fail to develop
product candidates in a timely manner or to obtain regulatory approval for them,
then our ability to generate future revenue, and our results of operations and
financial position would be adversely affected.

                                       37
--------------------------------------------------------------------------------
Table of Contents
Research and Development Expenses

Research and development expenses include costs incurred for the research and development of our therapeutic programs and product candidates, which include:

• employee-related expenses, including salaries, severance, retention, benefits, insurance and stock-based compensation expenses;

•expenses incurred under agreements with clinical research organizations (“CROs”), investigational sites that conduct our clinical trials, and other clinical trial-related suppliers and consultants;

•the costs of acquiring, developing, and manufacturing and testing clinical and
preclinical materials, including costs incurred under agreements with contract
manufacturing organizations ("CMOs");

•costs associated with non-clinical activities and regulatory operations;

•licensing fees and milestone payments related to the acquisition and retention of certain licensed technologies and intellectual property rights; and

•installations, depreciation, market studies and other expenses, which include charges for rent and maintenance of installations, depreciation of leasehold improvements and equipment, and laboratory supplies.

We make non-refundable advance payments for goods and services that will be used
in future research and development activities. These payments are recorded as
expense in the period in which we receive or take ownership of the goods or when
the services are performed.

We record up-front and milestone payments to acquire and retain contractual
rights to in-licensed technology and intellectual property rights as research
and development expenses when incurred if there is uncertainty in our receiving
future economic benefit from the acquired contractual rights. We consider future
economic benefits from acquired contractual rights to licensed technology to be
uncertain until such a drug candidate is approved by the U.S. Food and Drug
Administration ("FDA") or when other significant risk factors are abated.

We expect that our research and development expenses will increase as we expand
our clinical development programs and initiate new clinical trials. The process
of conducting clinical trials and preclinical studies necessary to obtain
regulatory approval is costly and time consuming. We, or our strategic alliance
collaborators, if any, may never succeed in achieving marketing approval for any
of our product candidates. The probability of success for each product candidate
may be affected by numerous factors, including clinical data, preclinical data,
competition, manufacturability, and commercial viability of our product
candidates.

Successful development of future product candidates is highly uncertain and may
not result in approved products. Completion dates and completion costs can vary
significantly for each future product candidate and are difficult to predict. We
anticipate we will make determinations as to which programs to pursue and how
much funding to direct to each program on an ongoing basis in response to our
ability to maintain or enter into new strategic alliances with respect to each
program or potential product candidate, the scientific and clinical success of
each future product candidate, and ongoing assessments as to each future product
candidate's commercial potential. For example, upon receipt of topline data from
our planned proof of concept trial in VRDN-002 in the second half of 2023 and
following completion of enrollment of our Phase 3 clinical trial in VRDN-001, we
expect to determine which of VRDN-002 or VRDN-003 to advance into registrational
trials. We will need to raise additional capital and may seek additional
strategic alliances in the future in order to advance the various clinical
trials that are part of our clinical development program described above.
                                       38
--------------------------------------------------------------------------------
Table of Contents
General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related
benefits, including share-based compensation, and severance and retention
benefits related to our finance, accounting, human resources, legal, business
development, and other support functions, professional fees for auditing, tax,
and legal services, as well as insurance, board of director compensation,
consulting, and other administrative expenses.

Other income, net

Other income consists primarily of interest income, net of fees, and various
income items of a non-recurring nature. Interest expense consists of cash and
non-cash interest expense on our long-term debt. We earn interest income from
interest-bearing accounts, money market funds, and short-term investments.

Significant Accounting Policies and Estimates

There were no changes to our critical accounting policies as disclosed in our
2021 Annual Report on Form 10-K during the six months ended June 30, 2022. Our
significant accounting policies are disclosed in Note 2. Summary of Significant
Accounting Policies to our condensed consolidated financial statements included
in Part I, Item 1 of this Quarterly Report.

Operating results

Comparison of the three months ended June 30, 2022 and 2021.

                                                               Three Months Ended
                                                                    June 30,                           Increase
                                                            2022                   2021               (Decrease)
                                                                 (in thousands)
Collaboration revenue - related party                $       256               $    1,090          $        (834)
Research and development expenses                         21,712                   12,565                  9,147
General and administrative expenses                        8,108                    6,523                  1,585
Other income, net                                             73                          34                  39



Revenue

Revenue was $0.3 million for the three months ended June 30, 2022, as compared
to $1.1 million for the three months ended June 30, 2021. Revenue for both the
three months ended June 30, 2022 and 2021 was attributable to our collaboration
agreement with Zenas BioPharma. The $0.8 million decrease in revenue is due to
the timing of reimbursable activities performed under the collaboration
agreement.

Research and development costs

Research and development expenses were $21.7 million during the three months
ended June 30, 2022, compared to $12.6 million during the three months ended
June 30, 2021. The $9.1 million increase in research and development expenses is
primarily attributable to an increase of $2.1 million in personnel costs,
including share-based compensation, due to an increase in headcount; an increase
of $1.9 million in preclinical expenses, $1.2M of which is related to our
Antibody and Discovery Option Agreement with Paragon Therapeutics, Inc.; and an
increase of $2.4 million in clinical trial costs related to our lead product
candidates, VRDN-001 and VRDN-002. Offsetting these increases was a decrease of
$1.1 million in manufacturing costs due to expenses incurred during the three
months ended June 30, 2021 related to VRDN-001 and VRDN-002.

General and administrative expenses

                                       39

————————————————– ——————————

Contents

General and administrative expenses were $8.1 million during the three months
ended June 30, 2022, compared to $6.5 million during the three months ended
June 30, 2021. The $1.6 million increase in general and administrative expenses
is due primarily to an increase of $2.1 million in personnel costs, including
share based compensation, due to an increase in headcount. This increase was
offset by a decrease of $0.6 million in board of directors fees, including
share-based compensation, due additional share based compensation costs recorded
during the three months ended June 30, 2021 relating to the accelerated vesting
of awards to former board members' share-based awards.

Other income, net

Other income, net was $73 thousand during the three months ended June 30, 2022
compared to $34 thousand during the three months ended June 30, 2021. Other
income, net for the three months ended June 30, 2022 is comprised of $0.2
million of interest income on our short-term investments, offset by $0.2 million
in interest expense related to our Hercules loan agreement. Other income for the
three months ended June 30, 2021 is comprised of interest income earned on
short-term investments as well as sub-lease income.

Comparison of the six months ended June 30, 2022 and 2021.

                                                          Six Months Ended June 30,               Increase
                                                          2022                 2021              (Decrease)
                                                               (in thousands)
Collaboration revenue - related party                $        472          $    2,541          $     (2,069)
Research and development expenses                          39,458              26,371                13,087
General and administrative expenses                        16,467              12,683                 3,784
Other income, net                                             269                  89                   180



Revenue

Revenue was $0.5 million for the six months ended June 30, 2022, as compared to
$2.5 million for the six months ended June 30, 2021. Revenue for both the six
months ended June 30, 2022 and 2021 was attributable to our collaboration
agreement with Zenas BioPharma. The $2.1 million decrease in revenue is due to
the timing of activities performed under the collaboration agreement.

Research and development costs

Research and development expenses were $39.5 million during the six months ended
June 30, 2022, compared to $26.4 million during the six months ended June 30,
2021. The $13.1 million increase in research and development expenses is
primarily attributable to an increase of $3.4 million in personnel related
costs, including share-based compensation, due to an increase in headcount; an
increase of $5.1 million in milestone, license and option fees due to a $3.0
million milestone payment to ImmunoGen and the $2.5 million fee paid to Paragon
Therapeutics, Inc.; an increase of $4.3 million in clinical trial expenses
related to our lead product candidates, VRDN-001 and VRDN-002; an increase of
$2.1 million in costs associated with our preclinical programs; and an increase
of $0.9 million in consulting expenses. Offsetting this increases was a decrease
of $3.4 million in manufacturing activities due to IND-enabling studies for both
VRDN-001 and VRDN-002 that were incurred during the six months ended June 30,
2021.

General and administrative expenses

General and administrative expenses were $16.5 million during the six months
ended June 30, 2022, compared to $12.7 million during the six months ended June
30, 2021. The $3.8 million increase in general and
                                       40

————————————————– ——————————

Contents

administrative expenses is due primarily to an increase of $2.6 million of
personnel related expenses, including share-based compensation, due to an
increase in headcount; increases of $1.4 million in professional expenses,
including external consulting fees, legal and auditing costs. These increases
were offset by a decrease of $0.3 million in board of directors expenses,
including share-based compensation due to additional share-based compensation
expense recorded in 2021 relating to the acceleration of vesting to former board
members' grants.

Other Income, net

Other income, net was $0.3 million during the six months ended June 30, 2022
compared to $89 thousand during the six months ended June 30, 2021. Other
income, net for the six months ended June 30, 2022, is comprised of $0.4 million
of interest income earned on short-term investments as well as sub-lease income,
offset by $0.2 million in interest expense related to our Hercules loan
agreement. Other income, net for the six months ended June 30, 2021, is
comprised of interest income earned on short-term investments as well as
sub-lease income.

Cash and capital resources

Summarized cash flows for the six months ended June 30, 2022 and 2021 are as
follows:

                                         Six Months Ended
                                             June 30,
                                       2022           2021         Increase (Decrease)
                                                       (in thousands)
Net cash provided by (used in):
Operating activities                $ (39,128)     $ (26,170)     $            (12,958)
Investing activities                   22,826           (333)                   23,159
Financing activities                    5,296          8,311                    (3,015)
Total                               $ (11,006)     $ (18,192)     $              7,186



Operating Activities

Net cash used in operating activities was $39.1 million for the six months ended
June 30, 2022, and primarily consisted of a net loss of $55.2 million, adjusted
for non-cash items of $10.3 million (primarily share-based compensation of $9.5
million), and changes in working capital of $5.8 million.

Net cash used in operating activities was $26.2 million for the six months ended
June 30, 2021, and primarily consisted of a net loss of $36.4 million, adjusted
for non-cash items of $6.4 million (primarily share-based compensation of $7.0
million), and changes in working capital of $3.9 million.

Investing activities

Net cash from investing activities was $22.8 million in the six months ended June 30, 2022and consisted mainly of $23.3 million net proceeds from maturities and purchases of short-term investments, and offset by
$0.5 million in the purchase of goods and equipment.

Net cash used in investing activities was $0.3 million in the six months ended June 30, 2021and consisted of $0.3 million net purchases and maturities of short-term investments.

                                       41
--------------------------------------------------------------------------------
Table of Contents
Financing Activities

Net cash provided by financing activities was $5.3 million during the six months
ended June 30, 2022, and consisted primarily of $4.6 million in net proceeds
from the Hercules Loan and Security Agreement, as well as $0.7 million in
proceeds from the exercise of stock options, and $0.1 million in proceeds from
the issuance of common stock under our employee stock purchase plan.

Net cash provided by financing activities was $8.3 million for the six months ended June 30, 2021and consisted of $8.5 million net proceeds from the issuance of common shares.

Cash and capital resources

We have funded our operations to date principally through proceeds received from
the sale of our common stock, our Series A Preferred Stock, our Series B
Preferred Stock and other equity securities, debt financings, license fees, and
reimbursements received under collaboration agreements. As of June 30, 2022, we
had $161.2 million in cash, cash equivalents, and short-term investments, and
$4.6 million in long-term debt, net. We believe that our current cash, cash
equivalents and short-term investments, including the Term Loan (as defined
below), will be sufficient to fund our operations, including our clinical
development plan described above, into 2024.

We have no products approved for commercial sale and have not generated any
revenue from product sales. Since our inception and through June 30, 2022, we
have generated an accumulated deficit of $413.5 million. Substantially all of
our operating losses resulted from expenses incurred in connection with our
research and development programs and from general and administrative costs
associated with our operations.

We will continue to require substantial additional capital to continue the
development of our product candidates, and potential commercialization
activities, and to fund our ongoing operations, including our clinical
development plan described above. The amount and timing of future funding
requirements will depend on many factors, including the pace and results of our
clinical development efforts, equity financings, securing additional license and
collaboration agreements, and issuing debt or other financing vehicles. Our
ability to secure capital is dependent upon a number of factors, including
success in developing our technology and product candidates. Failure to raise
capital as and when needed, on favorable terms or at all, would have a negative
impact on our financial condition and our ability to develop our product
candidates. Changing circumstances may cause us to consume capital significantly
faster or slower than we currently anticipate. If we are unable to acquire
additional capital or resources, we will be required to modify our operational
plans to complete future milestones. We have based these estimates on
assumptions that may prove to be wrong, and we could exhaust our available
financial resources sooner than we currently anticipate. We may be forced to
reduce our operating expenses and raise additional funds to meet our working
capital needs, principally through the additional sales of our securities or
debt financings or entering into strategic collaborations.

Our material cash requirements include obligations as of June 30, 2022, as well
as resources required to fulfill our research and development activities and the
effects that such obligations and activities are expected to have on our
liquidity and cash flows in future periods. We expect that our operating losses
will fluctuate significantly from quarter to quarter and year to year due to
timing of our development activities and efforts to achieve regulatory approval.

If we raise additional funds through the issuance of debt, the obligations
related to such debt could be senior to rights of holders of our capital stock
and could contain covenants that may restrict our operations. Should additional
capital not be available to us in the near term, or not be available on
acceptable terms, we may be unable to realize value from our assets and
discharge our liabilities in the normal course of business, which may, among
other alternatives, cause us to further delay, substantially reduce, or
discontinue operational activities to conserve our cash resources.

                                       42
--------------------------------------------------------------------------------
Table of Contents
Loan and Security Agreement with Hercules Capital, Inc.

On April 1, 2022, we entered into a loan and security agreement (the "Hercules
Loan and Security Agreement") among the Company, certain of our subsidiaries
from time to time party thereto (together with the Company, collectively, the
"Borrower"), Hercules Capital, Inc. ("Hercules") and certain other lenders party
thereto (the "Lenders"). Under the Hercules Loan and Security Agreement, the
Lenders provided us with access to a term loan with an aggregate principal
amount of up to $75.0 million, in four tranches (collectively the "Term Loan"),
consisting of: (1) an initial tranche of $25.0 million, available through June
15, 2023; (2) a second tranche of $10.0 million, subject to the achievement of
certain regulatory milestones, available through June 15, 2023; (3) a third
tranche of $15.0 million, subject to the achievement of certain regulatory
milestones, available through March 15, 2024; and (4) a fourth tranche of $25.0
million, subject to approval by the Lenders' investment committee(s), available
through December 15, 2024. The first tranche of $25.0 million will be available
to us through June 15, 2023. Upon signing we drew an initial principal amount of
$5.0 million.

The Term Loan bears interest at a floating per annum rate equal to the greater
of (1) 7.45% and (2) 4.2% above the Prime Rate, provided that the Term Loan
interest rate shall not exceed a per annum rate of 8.95%. Interest is payable
monthly in arrears on the first day of each month. We are obligated to make
interest-only payments through April 1, 2024. If certain development milestones
are met, then the interest-only period will be extended to October 1, 2024, or
under a second extension if additional development milestones are met, to April
1, 2025, pursuant to a second extension. The obligations of the Borrower under
the Loan Agreement are secured by certain assets of the Borrower, including
substantially all of the assets of the Borrower, but excluding the Borrower's
intellectual property.

ATM Agreements

In November 2021, we entered into an Open Market Sale AgreementSM (the "November
2021 ATM Agreement") with Jefferies LLC ("Jefferies") under which we can offer
and sell, from time to time at our sole discretion, shares of our common stock
having an aggregate offering price of up to $75.0 million through Jefferies as
our sales agent in an "at the market" offering. Jefferies will receive a
commission equal to 3.0% of the gross sales proceeds of any common stock sold
through Jefferies under the November 2021 ATM Agreement. As of June 30, 2022, we
have not sold any shares under the November 2021 ATM Agreement. As described
below, we were previously a party to the April 2021 ATM Agreement (defined
below) with Jeffries and the Cowen ATM Agreement (defined below) with Cowen and
Company, LLC ("Cowen") during the years ended December 2021 and 2020, and those
agreements are no longer in effect.

In April 2021, we entered into an Open Market Sale AgreementSM (the "April 2021
ATM Agreement") with Jefferies under which we could offer and sell, from time to
time at our sole discretion, shares of our common stock having an aggregate
offering price of up to $50.0 million through Jefferies as our sales agent in an
"at the market" offering. Jefferies received a commission equal to 3.0% of the
gross sales proceeds of any common stock sold through Jefferies under the April
2021 ATM Agreement. During the year ended December 31, 2021, we sold an
aggregate of 2,551,269 shares of common stock pursuant to the terms of the April
2021 ATM Agreement, at a volume weighted-average price of $13.13 per share, for
aggregate net proceeds of approximately $32.4 million, including initial
expenses for executing the "at the market offering" and commissions to Jefferies
as sales agent.

Guaranteed public offers

In September 2021, we entered into an underwriting agreement (the "2021
Underwriting Agreement") with Jeffries, SVB Leerink LLC and Evercore Group, LLC
(collectively, the "Underwriters") for the sale and issuance of 7,344,543 shares
of common stock, which includes 1,159,089 shares of common stock issued in
connection with the exercise in full by the underwriters of their option to
purchase additional shares, at a public offering price of $11.00 per share and
23,126 shares of Series B Non-Voting Convertible Preferred Stock at a
                                       43
--------------------------------------------------------------------------------
Table of Contents
public offering price of $733.37 per share (the "2021 Public Offering"). Our
aggregate gross proceeds from the 2021 Public Offering were approximately $97.7
million, before deducting underwriting discounts and commissions and estimated
offering expenses payable by us.

In February 2020, we entered into an underwriting agreement with Oppenheimer &
Co., Inc. for the sale and issuance of 1,000,000 shares of our common stock and
warrants to purchase 500,000 shares of our common stock (the "2020 Public
Offering"). Each warrant has an exercise price of $16.50 per share, was
exercisable immediately and expires on the fifth anniversary of the date of
issuance. The 2020 Public Offering resulted in approximately $13.9 million of
net proceeds to us after deducting underwriting commissions and discounts and
other estimated offering expenses payable by us and excluding the proceeds from
the exercise of the warrants.

Purchase Agreements

In October 2020, we entered into a securities purchase agreement (the "Purchase
Agreement") with the purchasers named therein (the "Investors"). Pursuant to the
Purchase Agreement, we agreed to sell an aggregate of approximately 195,290
shares of Series A Preferred Stock for an aggregate purchase price of
approximately $91.0 million. Each share of Series A Preferred Stock is
convertible into 66.67 shares of our common stock, subject to specified
conditions. The powers, preferences, rights, qualifications, limitations, and
restrictions applicable to the Series A Preferred Stock are set forth in the
applicable certificate of designations. During the six months ended June 30,
2022, 66,898 shares of Series A Preferred Stock were converted into 4,460,083
shares of common stock.

In December 2019, we entered into a common stock purchase agreement with Aspire
Capital (the "Aspire Purchase Agreement"), which provides that, subject to the
terms, conditions, and limitations set forth therein, Aspire Capital is
committed to purchase up to an aggregate of $20.0 million of shares of our
common stock over the 30-month term of the Aspire Purchase Agreement. Upon
execution of the Aspire Purchase Agreement, we sold to Aspire Capital 106,564
shares of common stock at $9.38 per share for proceeds of $1.0 million as the
Initial Purchase Shares (as defined in the Purchase Agreement). During the year
ended December 31, 2020, we sold to Aspire Capital 412,187 shares of our common
stock at a weighted-average price of $21.35 per share for aggregate net proceeds
of $8.8 million. As of June 30, 2022, we have the ability to sell an additional
$10.2 million of shares of our common stock to Aspire Capital.

Contractual obligations and commitments

We are a smaller reporting company, as defined by Rule 12b-2 under the Exchange
Act and in Item 10(f)(1) of Regulation S-K, and are not required to provide the
information under this item.

© Edgar Online, source Previews