Q3--12-31false00016377150.10.10001637715us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001637715us-gaap:PrivatePlacementMember2023-01-012023-09-300001637715us-gaap:PerformanceSharesMembersrt:ChiefExecutiveOfficerMember2024-09-300001637715okur:EmployeeStockPurchasePlan2021Member2024-07-012024-09-300001637715okur:EquityIncentivePlan2021Memberus-gaap:RestrictedStockUnitsRSUMember2024-09-300001637715us-gaap:RetainedEarningsMember2023-03-310001637715us-gaap:RetainedEarningsMember2023-01-012023-03-310001637715us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001637715us-gaap:CommonStockMember2023-09-300001637715us-gaap:PrivatePlacementMemberus-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001637715okur:PrivateInvestmentInPublicEquityInvestorsMemberokur:MergerAgreementMember2024-09-300001637715okur:EquityIncentivePlan2021Memberokur:TimeBasedRestrictedStockUnitsRsuMember2024-09-300001637715okur:EquityIncentivePlan2021Memberokur:TimeBasedRestrictedStockUnitsRsuMember2024-01-012024-09-300001637715us-gaap:AdditionalPaidInCapitalMember2023-09-300001637715us-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-300001637715us-gaap:FairValueMeasurementsRecurringMember2023-12-310001637715us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001637715us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-3100016377152023-06-3000016377152023-03-310001637715us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-300001637715us-gaap:EmployeeStockOptionMember2024-01-012024-09-300001637715okur:EquityIncentivePlan2021Memberus-gaap:ShareBasedCompensationAwardTrancheTwoMemberokur:TimeBasedRestrictedStockUnitsRsuMember2024-01-012024-09-300001637715okur:EquityIncentivePlan2021Memberus-gaap:ShareBasedCompensationAwardTrancheOneMemberokur:TimeBasedRestrictedStockUnitsRsuMember2024-01-012024-09-300001637715okur:UkSharesaveSubPlanMember2024-01-012024-09-300001637715us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001637715us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-09-300001637715us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001637715us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001637715us-gaap:AdditionalPaidInCapitalMember2023-03-3100016377152023-07-012023-09-300001637715us-gaap:PrivatePlacementMember2023-04-012023-06-300001637715us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001637715okur:VtvTherapeuticsLlcMemberus-gaap:ResearchAndDevelopmentExpenseMember2017-12-012017-12-310001637715okur:MergerAgreementMemberus-gaap:SubsequentEventMember2024-10-042024-10-040001637715us-gaap:CommonStockMemberokur:AtTheMarketFacilityMember2023-01-012023-03-310001637715us-gaap:RetainedEarningsMember2023-04-012023-06-300001637715us-gaap:CommonClassBMember2024-11-040001637715us-gaap:CommonStockMemberokur:PublicOfferingMember2023-04-012023-06-300001637715okur:EquityIncentivePlan2021Member2024-09-300001637715us-gaap:CommonStockMember2023-12-310001637715us-gaap:CommonClassAMember2024-11-040001637715us-gaap:RetainedEarningsMember2024-09-300001637715us-gaap:CommonStockMember2023-07-012023-09-300001637715us-gaap:PerformanceSharesMember2023-12-310001637715us-gaap:FairValueMeasurementsRecurringMemberokur:PerformanceAwardLiabilityMember2023-12-3100016377152024-04-012024-06-300001637715us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001637715us-gaap:SubsequentEventMemberokur:ReneoMember2024-10-040001637715okur:UkSharesaveSubPlanMember2024-09-300001637715okur:EquityIncentivePlan2021Memberokur:PerformanceBasedRestrictedStockUnitsRSUMember2024-07-012024-09-300001637715us-gaap:CommonStockMemberus-gaap:PrivatePlacementMember2023-04-012023-06-300001637715us-gaap:RetainedEarningsMember2022-12-310001637715us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001637715us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300001637715us-gaap:RestrictedStockUnitsRSUMember2024-09-300001637715us-gaap:USTreasurySecuritiesMember2023-12-3100016377152023-04-012023-06-300001637715okur:PublicOfferingMemberus-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001637715us-gaap:CommonStockMember2023-06-300001637715okur:VtvTherapeuticsLlcMember2024-10-222024-10-220001637715okur:UnvestedRestrictedStockUnitsMember2023-01-012023-09-300001637715us-gaap:CommonStockMember2024-03-310001637715okur:AtTheMarketFacilityMemberus-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001637715okur:UkSharesaveSubPlanMember2024-07-012024-09-300001637715us-gaap:CommonClassAMemberokur:MergerAgreementMemberus-gaap:SubsequentEventMember2024-10-042024-10-040001637715us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-300001637715us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-09-300001637715us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001637715us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001637715us-gaap:CommonStockMemberokur:CommonStockRepurchaseAgreementMemberokur:VtvTherapeuticsLlcMember2023-10-302023-10-3000016377152023-01-012023-03-3100016377152024-09-300001637715us-gaap:AdditionalPaidInCapitalMember2023-12-310001637715us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-3000016377152024-01-012024-03-310001637715us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-3100016377152023-01-012023-09-300001637715okur:EquityIncentivePlan2021Memberokur:PerformanceBasedRestrictedStockUnitsRSUMember2024-01-012024-09-300001637715us-gaap:SubsequentEventMemberokur:MergerAgreementMemberokur:UnvestedOptionsMemberokur:ReneoMember2024-10-012024-10-310001637715us-gaap:PerformanceSharesMember2024-09-300001637715us-gaap:CommonClassAMemberus-gaap:SubsequentEventMemberokur:MergerAgreementMember2024-10-040001637715us-gaap:GeneralAndAdministrativeExpenseMember2023-07-012023-09-300001637715us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-09-300001637715us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-09-300001637715us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001637715okur:VtvTherapeuticsLlcMember2017-12-012017-12-3100016377152023-01-012023-12-310001637715us-gaap:SubsequentEventMemberokur:OnkureMember2024-10-040001637715okur:PublicOfferingMember2023-01-012023-09-300001637715us-gaap:RetainedEarningsMember2024-04-012024-06-300001637715us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001637715us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001637715us-gaap:EmployeeStockOptionMember2024-09-300001637715us-gaap:AdditionalPaidInCapitalMember2022-12-310001637715okur:EquityIncentivePlan2021Memberokur:MarketBasedUnitsMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2024-01-012024-09-3000016377152024-03-3100016377152024-07-012024-09-300001637715us-gaap:CommonStockMemberus-gaap:SubsequentEventMemberokur:MergerAgreementMember2024-10-042024-10-040001637715us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300001637715us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-3000016377152024-06-300001637715us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001637715us-gaap:PerformanceSharesMember2024-01-012024-09-300001637715okur:PrivateInvestmentInPublicEquityInvestorsMemberus-gaap:SubsequentEventMember2024-10-040001637715us-gaap:CommonStockMember2023-03-310001637715okur:AtTheMarketFacilityMember2023-01-012023-03-3100016377152023-12-310001637715us-gaap:RetainedEarningsMember2024-06-300001637715okur:UkSharesaveSubPlanMember2024-01-012024-01-310001637715us-gaap:RetainedEarningsMember2023-12-310001637715us-gaap:RetainedEarningsMember2023-07-012023-09-300001637715us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001637715us-gaap:CommonClassAMemberus-gaap:SubsequentEventMemberokur:MergerAgreementMemberus-gaap:PrivatePlacementMember2024-10-042024-10-040001637715us-gaap:RetainedEarningsMember2023-09-300001637715okur:EquityIncentivePlan2021Memberokur:MarketBasedUnitsMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2024-09-300001637715us-gaap:AdditionalPaidInCapitalMember2023-06-300001637715us-gaap:CommonStockMember2024-09-300001637715okur:EquityIncentivePlan2021Memberokur:PerformanceBasedRestrictedStockUnitsRSUMember2024-09-300001637715okur:AtTheMarketFacilityMember2023-01-012023-09-3000016377152022-12-310001637715okur:EquityIncentivePlan2021Memberokur:PerformanceBasedRestrictedStockUnitsRSUMember2023-01-012023-09-300001637715us-gaap:CommonStockMemberokur:EquityIncentivePlan2014Member2024-01-012024-09-300001637715us-gaap:RetainedEarningsMember2023-06-300001637715us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001637715us-gaap:RestrictedStockUnitsRSUMemberokur:MergerAgreementMemberokur:ReneoMemberus-gaap:SubsequentEventMember2024-10-012024-10-310001637715us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001637715okur:MergerAgreementMemberus-gaap:SubsequentEventMemberokur:ReneoMember2024-10-012024-10-310001637715us-gaap:FairValueInputsLevel3Memberokur:PerformanceAwardLiabilityMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001637715us-gaap:EmployeeSeveranceMemberus-gaap:SubsequentEventMemberokur:MergerAgreementMember2024-10-042024-10-040001637715us-gaap:ResearchAndDevelopmentExpenseMember2023-07-012023-09-300001637715us-gaap:CommonStockMember2023-04-012023-06-300001637715us-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonClassAMemberokur:MergerAgreementMemberus-gaap:SubsequentEventMember2024-10-040001637715okur:LeaseAgreementMember2024-07-012024-07-310001637715okur:PublicOfferingMember2023-04-012023-06-300001637715us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001637715us-gaap:CommonClassAMemberus-gaap:SubsequentEventMemberokur:MergerAgreementMemberus-gaap:PrivatePlacementMember2024-10-040001637715okur:EquityIncentivePlan2021Memberokur:PerformanceBasedRestrictedStockUnitsRSUMember2023-07-012023-09-300001637715okur:UnvestedRestrictedStockUnitsMember2024-01-012024-09-300001637715us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001637715okur:PublicOfferingMember2023-07-012023-09-300001637715us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-09-300001637715okur:EquityIncentivePlan2021Memberus-gaap:RestrictedStockUnitsRSUMember2023-12-310001637715us-gaap:AdditionalPaidInCapitalMember2024-07-012024-09-300001637715okur:TwentyTwentyFourEquityIncentivePlanMemberus-gaap:CommonClassAMemberokur:MergerAgreementMemberus-gaap:SubsequentEventMember2024-10-040001637715okur:EmployeeStockPurchasePlan2021Member2024-09-300001637715us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001637715us-gaap:CommonClassAMemberus-gaap:SubsequentEventMemberokur:ReneoMember2024-10-0400016377152023-09-300001637715us-gaap:SubsequentEventMemberokur:MergerAgreementMemberus-gaap:CommonClassBMember2024-10-040001637715us-gaap:FairValueMeasurementsRecurringMember2024-09-300001637715us-gaap:CommonStockMember2024-07-012024-09-300001637715us-gaap:AdditionalPaidInCapitalMember2024-03-310001637715okur:EquityIncentivePlan2021Memberus-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-300001637715us-gaap:CommonStockMember2022-12-310001637715us-gaap:ResearchAndDevelopmentExpenseMember2024-07-012024-09-300001637715us-gaap:RetainedEarningsMember2024-03-310001637715us-gaap:CommonClassAMemberokur:MergerAgreementMemberus-gaap:SubsequentEventMemberokur:TwentyTwentyFourEmployeeStockPurchasePlanMember2024-10-040001637715us-gaap:AdditionalPaidInCapitalMember2024-06-300001637715us-gaap:RetainedEarningsMember2024-07-012024-09-300001637715us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300001637715us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300001637715us-gaap:AdditionalPaidInCapitalMember2024-09-300001637715okur:LeaseAgreementMember2024-01-012024-09-300001637715us-gaap:GeneralAndAdministrativeExpenseMember2024-07-012024-09-300001637715okur:EmployeeStockPurchasePlan2021Member2024-01-012024-09-3000016377152024-01-012024-09-300001637715us-gaap:RetainedEarningsMember2024-01-012024-03-310001637715us-gaap:PerformanceSharesMembersrt:ChiefExecutiveOfficerMember2024-01-012024-09-300001637715us-gaap:CommonStockMember2024-06-300001637715us-gaap:USTreasurySecuritiesMember2024-09-30okur:Daysxbrli:purexbrli:sharesiso4217:USD
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|
|
|
|
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2024
or
|
|
|
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 001-40315
ONKURE THERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
|
|
|
|
Delaware |
47-2309515 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
|
6707 Winchester Circle, Suite 400 Boulder, Colorado (Address of Principal Executive Offices) |
80301 (Zip Code) |
(Registrant’s telephone number, including area code): (720) 307-2892 |
Securities registered pursuant to Section 12(b) of the Act:
|
|
|
|
|
Title of each class |
|
Trading symbol |
|
Name of each exchange on which registered |
Class A Common Stock, par value $0.0001 per share |
|
OKUR |
|
The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Large accelerated filer |
☐ |
|
|
|
|
Accelerated filer |
☐ |
|
|
|
|
|
|
Smaller reporting company |
☒ |
Non-accelerated filer |
☒ |
|
|
|
|
Emerging growth company |
☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 4, 2024, the registrant had 12,652,890 shares of Class A common stock, $0.0001 par value per share, and 686,527 shares of Class B common stock, $0.0001 par value per share, outstanding.
Explanatory Note
On October 4, 2024 (the Closing Date), the Delaware corporation formerly known as “Reneo Pharmaceuticals, Inc.” (Reneo) completed its previously announced merger transaction pursuant to the terms of the Agreement and Plan of Merger, dated as of May 10, 2024 (the Merger Agreement), by and among Reneo, Radiate Merger Sub I, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Reneo (Merger Sub I), Radiate Merger Sub II, LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of Reneo (Merger Sub II), and OnKure, Inc., a Delaware corporation (Legacy OnKure).
Pursuant to the Merger Agreement, on the Closing Date, (i) Reneo effected a reverse stock split of Reneo’s issued common stock at a ratio of 1:10 (the Reverse Stock Split), (ii) Reneo changed its name to “OnKure Therapeutics, Inc.”, (iii) Reneo reclassified all of its common stock as Class A Common Stock, and (iv) Merger Sub I merged with and into Legacy OnKure (the Merger), with Legacy OnKure as the surviving company in the Merger and, after giving effect to such Merger, Legacy OnKure became a wholly-owned subsidiary of OnKure Therapeutics, Inc. (together, the Combined Company). Pursuant to the terms of the Merger Agreement, OnKure determined that the Merger would qualify for the intended tax treatment even if only the merger with Merger Sub I was consummated, and therefore the parties determined not to consummate the second merger with Merger Sub II contemplated by the Merger Agreement.
Because the Merger was completed after the period covered by the financial statements included in this Quarterly Report on Form 10-Q, this Quarterly Report on Form 10-Q includes historical financial information, including as of and for the nine months ended September 30, 2024, of Reneo, unless otherwise indicated or as the context otherwise requires. In addition, except where otherwise indicated, the information in this Quarterly Report on Form 10-Q as of and for the periods prior to the effective time of the Merger gives effect to the Reverse Stock Split.
Unless the context otherwise requires, “OnKure,” “we,” “us,” “our,” and the “Company” refer to the Combined Company. All references herein to the “Board” refer to the board of directors of the Combined Company.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy, development plans, planned preclinical studies and clinical trials, future results of clinical trials, expected research and development costs, regulatory strategy, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
•our future results of operations and financial position;
•our ability to obtain funding for our operations, including funding necessary to develop and commercialize our current and future product candidates, subject to regulatory approvals;
•our cash runway and our ability to extend our operating capital;
•the initiation, timing, progress and results of our preclinical and clinical activities, including the suspension of development activity for mavodelpar;
•the potential of our technologies and our ability to execute on our corporate strategy;
•our ability to obtain and adequately protect intellectual property rights for our product candidates;
•our ability to obtain regulatory approval for our product candidates and any related restrictions, limitations and/or warnings in the label of any approved product candidate;
•existing regulations and regulatory developments in the United States and other jurisdictions; and
•our ability to realize some or all of the anticipated benefits of the Merger.
We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.
In addition, statements such as “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.
TABLE OF CONTENTS
Part I. Financial Information
ONKURE THERAPEUTICS, INC.
(Formerly Reneo Pharmaceuticals, Inc.)
Consolidated Balance Sheets
(In thousands, except share and par value data)
|
|
|
|
|
|
|
|
|
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
|
|
(Unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
60,689 |
|
|
$ |
27,632 |
|
Short-term investments |
|
|
15,979 |
|
|
|
75,331 |
|
Prepaid expenses and other current assets |
|
|
331 |
|
|
|
3,659 |
|
Total current assets |
|
|
76,999 |
|
|
|
106,622 |
|
Property and equipment, net |
|
|
59 |
|
|
|
134 |
|
Right-of-use assets |
|
|
440 |
|
|
|
599 |
|
Other non-current assets |
|
|
147 |
|
|
|
81 |
|
Total assets |
|
$ |
77,645 |
|
|
$ |
107,436 |
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
237 |
|
|
$ |
8,717 |
|
Accrued expenses |
|
|
725 |
|
|
|
9,129 |
|
Private placement deposit |
|
|
2,000 |
|
|
|
— |
|
Operating lease liabilities, current portion |
|
|
286 |
|
|
|
331 |
|
Total current liabilities |
|
|
3,248 |
|
|
|
18,177 |
|
Operating lease liabilities, less current portion |
|
|
379 |
|
|
|
642 |
|
Performance award |
|
|
— |
|
|
|
7 |
|
Total liabilities |
|
|
3,627 |
|
|
|
18,826 |
|
Commitments and contingencies |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Common stock, $0.0001 par value; 200,000,000 shares authorized at September 30, 2024 and December 31, 2023; 3,343,525 shares issued and outstanding at September 30, 2024 and 3,342,034 shares issued and outstanding at December 31, 2023, respectively |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
309,969 |
|
|
|
307,076 |
|
Accumulated deficit |
|
|
(235,953 |
) |
|
|
(218,474 |
) |
Accumulated other comprehensive income |
|
|
2 |
|
|
|
8 |
|
Total stockholders’ equity |
|
|
74,018 |
|
|
|
88,610 |
|
Total liabilities and stockholders’ equity |
|
$ |
77,645 |
|
|
$ |
107,436 |
|
The accompanying notes are an integral part of these consolidated financial statements.
ONKURE THERAPEUTICS, INC.
(Formerly Reneo Pharmaceuticals, Inc.)
Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
$ |
904 |
|
|
$ |
13,622 |
|
|
$ |
6,436 |
|
|
$ |
39,009 |
|
General and administrative |
|
|
3,760 |
|
|
|
7,266 |
|
|
|
14,155 |
|
|
|
19,038 |
|
Total operating expenses |
|
|
4,664 |
|
|
|
20,888 |
|
|
|
20,591 |
|
|
|
58,047 |
|
Loss from operations |
|
|
(4,664 |
) |
|
|
(20,888 |
) |
|
|
(20,591 |
) |
|
|
(58,047 |
) |
Other income |
|
|
972 |
|
|
|
1,692 |
|
|
|
3,112 |
|
|
|
4,213 |
|
Net loss |
|
|
(3,692 |
) |
|
|
(19,196 |
) |
|
|
(17,479 |
) |
|
|
(53,834 |
) |
Unrealized gain (loss) on short-term investments |
|
|
15 |
|
|
|
10 |
|
|
|
(6 |
) |
|
|
22 |
|
Comprehensive loss |
|
$ |
(3,677 |
) |
|
$ |
(19,186 |
) |
|
$ |
(17,485 |
) |
|
$ |
(53,812 |
) |
Net loss per share attributable to common stockholders, basic and diluted |
|
$ |
(1.10 |
) |
|
$ |
(5.68 |
) |
|
$ |
(5.23 |
) |
|
$ |
(18.11 |
) |
Weighted-average shares used in computing net loss per share, basic and diluted |
|
|
3,342,824 |
|
|
|
3,380,794 |
|
|
|
3,343,287 |
|
|
|
2,971,868 |
|
The accompanying notes are an integral part of these consolidated financial statements.
ONKURE THERAPEUTICS, INC.
(Formerly Reneo Pharmaceuticals, Inc.)
Consolidated Statements of Changes in Stockholders’ Equity
(In thousands, except share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Accumulated Other |
|
|
|
|
|
Total |
|
|
|
Common Stock |
|
|
Paid-In |
|
|
Comprehensive |
|
|
Accumulated |
|
|
Stockholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Income (Loss) |
|
|
Deficit |
|
|
Equity |
|
Balances, December 31, 2023 |
|
|
3,342,034 |
|
|
$ |
— |
|
|
$ |
307,076 |
|
|
$ |
8 |
|
|
$ |
(218,474 |
) |
|
$ |
88,610 |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
1,078 |
|
|
|
— |
|
|
|
— |
|
|
|
1,078 |
|
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(20 |
) |
|
|
— |
|
|
|
(20 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(8,426 |
) |
|
|
(8,426 |
) |
Balances, March 31, 2024 |
|
|
3,342,034 |
|
|
$ |
— |
|
|
$ |
308,154 |
|
|
$ |
(12 |
) |
|
$ |
(226,900 |
) |
|
$ |
81,242 |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
989 |
|
|
|
— |
|
|
|
— |
|
|
|
989 |
|
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
|
|
|
(1 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,361 |
) |
|
|
(5,361 |
) |
Balances, June 30, 2024 |
|
|
3,342,034 |
|
|
$ |
— |
|
|
$ |
309,143 |
|
|
$ |
(13 |
) |
|
$ |
(232,261 |
) |
|
$ |
76,869 |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
826 |
|
|
|
— |
|
|
|
— |
|
|
|
826 |
|
Issuance of common stock in connection with equity plans |
|
|
1,491 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15 |
|
|
|
— |
|
|
|
15 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,692 |
) |
|
|
(3,692 |
) |
Balances, September 30, 2024 |
|
|
3,343,525 |
|
|
$ |
— |
|
|
$ |
309,969 |
|
|
$ |
2 |
|
|
$ |
(235,953 |
) |
|
$ |
74,018 |
|
ONKURE THERAPEUTICS, INC.
(Formerly Reneo Pharmaceuticals, Inc.)
Consolidated Statements of Changes in Stockholders’ Equity
(In thousands, except share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Accumulated Other |
|
|
|
|
|
Total |
|
|
|
Common Stock |
|
|
Paid-In |
|
|
Comprehensive |
|
|
Accumulated |
|
|
Stockholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
(Loss) Income |
|
|
Deficit |
|
|
Equity |
|
Balances, December 31, 2022 |
|
|
2,469,955 |
|
|
$ |
— |
|
|
$ |
236,696 |
|
|
$ |
(43 |
) |
|
$ |
(136,683 |
) |
|
$ |
99,970 |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
1,157 |
|
|
|
— |
|
|
|
— |
|
|
|
1,157 |
|
Issuance of common stock in connection with at-the-market facility, net of issuance costs |
|
|
40,787 |
|
|
|
— |
|
|
|
1,009 |
|
|
|
— |
|
|
|
— |
|
|
|
1,009 |
|
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
55 |
|
|
|
— |
|
|
|
55 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(15,107 |
) |
|
|
(15,107 |
) |
Balances, March 31, 2023 |
|
|
2,510,742 |
|
|
$ |
— |
|
|
$ |
238,862 |
|
|
$ |
12 |
|
|
$ |
(151,790 |
) |
|
$ |
87,084 |
|
Issuance of common stock in public offering, net of offering costs |
|
|
790,625 |
|
|
|
— |
|
|
|
58,862 |
|
|
|
— |
|
|
|
— |
|
|
|
58,862 |
|
Issuance of common stock in private placement, net of offering costs |
|
|
62,500 |
|
|
|
— |
|
|
|
4,667 |
|
|
|
— |
|
|
|
— |
|
|
|
4,667 |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
1,207 |
|
|
|
— |
|
|
|
— |
|
|
|
1,207 |
|
Issuance of common stock in connection with equity plans |
|
|
16,210 |
|
|
|
— |
|
|
|
282 |
|
|
|
— |
|
|
|
— |
|
|
|
282 |
|
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(43 |
) |
|
|
— |
|
|
|
(43 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(19,531 |
) |
|
|
(19,531 |
) |
Balances, June 30, 2023 |
|
|
3,380,077 |
|
|
$ |
— |
|
|
$ |
303,880 |
|
|
$ |
(31 |
) |
|
$ |
(171,321 |
) |
|
$ |
132,528 |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
1,429 |
|
|
|
— |
|
|
|
— |
|
|
|
1,429 |
|
Issuance of common stock in connection with equity plans |
|
|
7,137 |
|
|
|
— |
|
|
|
173 |
|
|
|
— |
|
|
|
— |
|
|
|
173 |
|
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10 |
|
|
|
— |
|
|
|
10 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(19,196 |
) |
|
|
(19,196 |
) |
Balances, September 30, 2023 |
|
|
3,387,214 |
|
|
$ |
— |
|
|
$ |
305,482 |
|
|
$ |
(21 |
) |
|
$ |
(190,517 |
) |
|
$ |
114,944 |
|
The accompanying notes are an integral part of these consolidated financial statements.
ONKURE THERAPEUTICS, INC.
(Formerly Reneo Pharmaceuticals, Inc.)
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
2024 |
|
|
2023 |
|
Cash flows from operating activities |
|
|
|
|
|
|
Net loss |
|
$ |
(17,479 |
) |
|
$ |
(53,834 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
Stock-based compensation |
|
|
2,893 |
|
|
|
3,793 |
|
Depreciation and amortization |
|
|
40 |
|
|
|
126 |
|
Amortization/accretion on short-term investments |
|
|
(1,904 |
) |
|
|
(3,551 |
) |
Changes in the fair value of performance award |
|
|
(7 |
) |
|
|
1,040 |
|
Non-cash lease expense |
|
|
128 |
|
|
|
354 |
|
Loss on disposal of fixed asset |
|
|
37 |
|
|
|
5 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Prepaid and other assets |
|
|
3,351 |
|
|
|
2,025 |
|
Accounts payable and accrued expenses |
|
|
(16,884 |
) |
|
|
6,507 |
|
Operating lease liabilities |
|
|
(277 |
) |
|
|
(394 |
) |
Net cash used in operating activities |
|
|
(30,102 |
) |
|
|
(43,929 |
) |
Cash flows from investing activities |
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(2 |
) |
|
|
(196 |
) |
Purchase of available-for-sale short-term investments |
|
|
(67,750 |
) |
|
|
(190,058 |
) |
Proceeds from maturities of available-for-sale short-term investments |
|
|
129,000 |
|
|
|
161,000 |
|
Net cash provided by (used in) investing activities |
|
|
61,248 |
|
|
|
(29,254 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
Private placement deposit in advance of the closing |
|
|
2,000 |
|
|
|
— |
|
Payments of deferred costs in connection with private placement transaction |
|
|
(89 |
) |
|
|
— |
|
Proceeds from public offering of common stock, net of offering costs |
|
|
— |
|
|
|
58,862 |
|
Proceeds from private placement of common stock, net of offering costs |
|
|
— |
|
|
|
4,667 |
|
Proceeds from issuance of common stock under the at-the-market facility, net of offering costs |
|
|
— |
|
|
|
1,009 |
|
Proceeds from issuance of common stock in connection with equity plans |
|
|
— |
|
|
|
455 |
|
Net cash provided by financing activities |
|
|
1,911 |
|
|
|
64,993 |
|
Net increase (decrease) in cash and cash equivalents |
|
|
33,057 |
|
|
|
(8,190 |
) |
Cash and cash equivalents, beginning of period |
|
|
27,632 |
|
|
|
19,927 |
|
Cash and cash equivalents, end of period |
|
$ |
60,689 |
|
|
$ |
11,737 |
|
Noncash investing and financing activities: |
|
|
|
|
|
|
Property and equipment in accounts payable |
|
$ |
— |
|
|
$ |
11 |
|
The accompanying notes are an integral part of these consolidated financial statements.
ONKURE THERAPEUTICS, INC.
(Formerly Reneo Pharmaceuticals, Inc.)
Notes to Consolidated Financial Statements
(Unaudited)
1. Organization and Business
On October 4, 2024 (the Closing Date), Reneo Pharmaceuticals, Inc., a Delaware corporation and our predecessor company (Reneo), consummated the previously announced merger pursuant to the terms of the Agreement and Plan of Merger, dated as of May 10, 2024 (the Merger Agreement), by and among Reneo, Radiate Merger Sub I, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Reneo (Merger Sub I), Radiate Merger Sub II, LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of Reneo (Merger Sub II), and OnKure, Inc., a Delaware corporation (Legacy OnKure). Pursuant to the Merger Agreement, on the Closing Date, (i) Reneo effected a reverse stock split of Reneo’s issued common stock at a ratio of 1:10 (the Reverse Stock Split), (ii) Reneo changed its name to “OnKure Therapeutics, Inc.”, (iii) Reneo reclassified all of its common stock as Class A Common Stock, and (iv) Merger Sub I merged with and into Legacy OnKure (the Merger), with Legacy OnKure as the surviving company in the Merger and, after giving effect to such Merger, Legacy OnKure became a wholly-owned subsidiary of OnKure Therapeutics, Inc. (together, the Combined Company). Pursuant to the terms of the Merger Agreement, OnKure determined that the Merger would qualify for the intended tax treatment even if only the merger with Merger Sub I was consummated, and therefore the parties determined not to consummate the second merger with Merger Sub II contemplated by the Merger Agreement.
Concurrently with the closing of the Merger, Reneo completed a private placement with certain investors (the PIPE Investors) to purchase 2,839,005 shares of Class A Common Stock at a price per share of approximately $22.895 per share for an aggregate purchase price of approximately $65.0 million, including the conversion of outstanding convertible notes and accrued but unpaid interest thereon held by certain Legacy OnKure investors (the Concurrent PIPE Investments). As of September 30, 2024, the Company recorded $2 million in liabilities as a result of cash received from investors prior to closing of the PIPE. In connection with the Concurrent PIPE Investments, Reneo entered into a registration rights agreement with the PIPE Investors, pursuant to which Reneo agreed to use commercially reasonable efforts to prepare and file a registration statement with the SEC within 45 calendar days after the Closing Date, registering the resale of the shares of Class A Common Stock issued pursuant to the Concurrent PIPE Investments. Immediately after the effective time of the Merger, following the consummation of the Concurrent PIPE Investments, Legacy OnKure stockholders owned approximately 53.6%, pre-Merger Reneo stockholders owned approximately 25.1%, and the PIPE Investors owned approximately 21.3% of the Combined Company’s outstanding common stock.
As of the open of trading on October 7, 2024, the Class A Common Stock of the Combined Company began trading on the Nasdaq Global Market (Nasdaq) under the symbol “OKUR.”
OnKure Therapeutics, Inc. (OnKure or the Company) is a clinical-stage biopharmaceutical company focused on the discovery and development of precision medicines designed to target biologically validated drivers of cancers underserved by available therapies. Using a structure- and computational chemistry-driven drug design platform, the Company is committed to improving clinical outcomes for patients by building a robust pipeline of small molecule drugs designed to selectively target specific mutations thought to be key drivers of cancer. The Company’s lead product candidate, OKI-219, is a highly selective inhibitor of 3 kinase alpha (PI3Kα), a key mediator in cancer growth signaling, harboring the H1047R mutation (PI3KαH1047R) that has a much smaller impact on non-mutated (or wild-type) PI3Kα (PI3KαWT). OKI-219 is currently in a first-in-human Phase 1 monotherapy dose-escalation trial in H1074R-mutated advanced solid tumors including breast cancer. Early clinical data are anticipated in the fourth quarter of 2024. In addition to OKI-219, the Company is also pursuing programs designed to selectively target the other specific mutations of PI3Kα.
The unaudited interim financial statements included in this Quarterly Report on Form 10-Q are representative of Reneo’s operations prior to the closing of the Merger, the adoption of OnKure’s business plan and the commencement of conducting OnKure’s business. Unless the context otherwise requires, references to
the “Company” or “OnKure” refer to OnKure Therapeutics, Inc. and its subsidiaries after completion of the Merger. In addition, references to “Reneo” refer to the Company prior to the completion of the Merger.
Liquidity
From its inception in 2014, Reneo incurred significant losses and negative cash flows from operations and expects to continue to incur net losses into the foreseeable future and may never become profitable. As of September 30, 2024, Reneo had cash, cash equivalents and short-term investments of $76.7 million.
Following the completion of the Merger, as described in more detail in Note 10, management believes the Company’s cash, cash equivalents and short-term investments will be sufficient to fund OnKure’s current operating plan for at least the next 12 months from the date of issuance of these unaudited condensed financial statements.
2. Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
Reneo has prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted, although Reneo believes that the disclosures made are adequate to make the information not misleading. Reneo recommends that the unaudited consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in Reneo’s Annual Report on Form 10-K for the year ended December 31, 2023.
In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements, have been included in the accompanying unaudited financial statements. Interim results are not necessarily indicative of results that may be expected for any other interim period or for an entire year.
The accompanying unaudited consolidated financial statements include the accounts of Reneo and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Concurrently with the closing of the Merger on October 4, 2024, as described in more detail in Note 10, Subsequent Events, Reneo effected the Reverse Stock Split. All share and per share amounts, excluding the number of authorized shares and par value, (which were unchanged as a result of the Reverse Stock Split), contained in these financial statements and accompanying notes, and this Quarterly Report on Form 10-Q give retroactive effect to the Reverse Stock Split.
Summary of Significant Accounting Policies
The significant accounting policies used in the preparation of these consolidated financial statements for the nine months ended September 30, 2024 are consistent with those discussed in Note 2 to the consolidated financial statements in Reneo’s Annual Report on Form 10-K for the year ended December 31, 2023.
New Accounting Pronouncements
There were various accounting standards and interpretations issued recently, none of which are expected to have a material impact on Reneo’s financial position, operations or cash flows.
3. Net Loss Per Share
Reneo computes basic loss per share by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share assumes the conversion, exercise or issuance of all potential common stock
equivalents, unless the effect of inclusion would be anti-dilutive. For purposes of this calculation, common stock shares to be issued upon exercise of all outstanding stock options and vesting of restricted stock units were excluded from the diluted net loss per share calculation for the three and nine months ended September 30, 2024 and 2023 because such shares are anti-dilutive.
Historical outstanding anti-dilutive securities not included in the diluted net loss per share calculation include the following:
|
|
|
|
|
|
|
|
|
|
|
As of September 30, |
|
|
|
2024 |
|
|
2023 |
|
Common stock options outstanding |
|
|
467,129 |
|
|
|
609,580 |
|
Unvested restricted stock units |
|
|
29,658 |
|
|
|
44,150 |
|
Total |
|
|
496,787 |
|
|
|
653,730 |
|
4. Fair Value Measurements
ASC Topic 820, Fair Value Measurement, establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and Reneo’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing an asset or liability based on market data obtained from sources independent of Reneo. Unobservable inputs are inputs that reflect Reneo’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.
ASC Topic 820 identifies fair value as the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 establishes a three-tier fair value hierarchy that distinguishes between the following:
•Level 1 – Observable inputs such as quoted prices in active markets for identical assets or liabilities.
•Level 2 – Inputs, other than quoted prices in active markets, which are observable for the asset or liability, either directly or indirectly.
•Level 3 – Unobservable inputs in which there is little or no market data, which requires Reneo to develop its own assumptions.
Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Reneo’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. Reneo’s financial assets are subject to fair value measurements on a recurring basis.
Reneo categorizes its money market funds as Level 1, using the quoted prices in active markets. Commercial paper and U.S. treasury securities are categorized as Level 2, using significant other observable inputs. The fair value of Reneo’s investments in certain money market funds is their face value and such instruments are classified as Level 1 and are included in cash and cash equivalents on the consolidated balance sheets.
In connection with Reneo’s chief executive officer’s (CEO) employment agreement, he was entitled to receive a special performance bonus in the amount of $7.5 million (Performance Award), payable in cash, common stock or a combination of cash and common stock, at the election of Reneo, based on achievement of certain conditions as described in more detail in Note 8. Reneo estimated the fair value of the Performance Award using a Monte Carlo simulation, which incorporates the stock price at the date of the valuation and utilizes Level 3 inputs such as volatility, probabilities of success, and other inputs that are not observable in active markets. The Performance Award is required to be measured at fair value on a recurring basis each reporting period, with changes in the fair value recognized in general and administrative expense in the consolidated statements of operations and comprehensive loss over the derived service period of the award.
No assets or liabilities were transferred into or out of their classifications during the nine months ended September 30, 2024.
The recurring fair value measurement of the Company’s assets and liabilities measured at fair value at September 30, 2024 consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted Prices in Active Markets For Identical Items (Level 1) |
|
|
Significant Other Observable Inputs (Level 2) |
|
|
Significant Unobservable Inputs (Level 3) |
|
|
Total |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
Money market investments |
|
$ |
57,629 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
57,629 |
|
Short-term investments: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury securities |
|
|
— |
|
|
|
15,979 |
|
|
|
— |
|
|
|
15,979 |
|
Total |
|
$ |
57,629 |
|
|
$ |
15,979 |
|
|
$ |
— |
|
|
$ |
73,608 |
|
The recurring fair value measurement of Reneo’s assets and liabilities measured at fair value at December 31, 2023 consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted Prices in Active Markets For Identical Items (Level 1) |
|
|
Significant Other Observable Inputs (Level 2) |
|
|
Significant Unobservable Inputs (Level 3) |
|
|
Total |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
Money market investments |
|
$ |
10,983 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
10,983 |
|
U.S. treasury securities |
|
|
— |
|
|
|
9,928 |
|
|
|
— |
|
|
|
9,928 |
|
Short-term investments: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury securities |
|
|
— |
|
|
|
75,331 |
|
|
|
— |
|
|
|
75,331 |
|
Total |
|
$ |
10,983 |
|
|
$ |
85,259 |
|
|
$ |
— |
|
|
$ |
96,242 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Performance award |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
7 |
|
|
$ |
7 |
|
Total |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
7 |
|
|
$ |
7 |
|
The following table sets forth a summary of changes in the fair value measurements of the Performance Award liability (in thousands):
|
|
|
|
|
|
|
Performance Award |
|
Balance as of January 1, 2024 |
|
$ |
7 |
|
Change in fair value |
|
|
(7 |
) |
Balance as of September 30, 2024 |
|
$ |
0 |
|
5. Marketable Debt Securities
Reneo’s investments in debt securities are carried at fair value and classified as current assets available-for-sale and represent the investment of funds available for current operations. Accretion of bond discount and interest income on marketable securities is included in other income as a separate component of other income (expense) on the statement of operations and comprehensive loss. Unrealized gains and losses on
available-for-sale debt securities are included in other comprehensive income or loss, and charged to income or expense in the period when realized. The following tables summarize the gross unrealized gains and losses of Reneo’s available-for-sale securities (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2024 |
|
|
|
Amortized Cost |
|
|
Gross Unrealized Gains |
|
|
Gross Unrealized Losses |
|
|
Fair Market Value |
|
Available-for-sale securities: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury securities |
|
$ |
15,976 |
|
|
$ |
2 |
|
|
$ |
— |
|
|
$ |
15,978 |
|
Total |
|
$ |
15,976 |
|
|
$ |
2 |
|
|
$ |
— |
|
|
$ |
15,978 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2023 |
|
|
|
Amortized Cost |
|
|
Gross Unrealized Gains |
|
|
Gross Unrealized Losses |
|
|
Fair Market Value |
|
Available-for-sale securities: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury securities |
|
$ |
75,324 |
|
|
$ |
8 |
|
|
$ |
(1 |
) |
|
$ |
75,331 |
|
Total |
|
$ |
75,324 |
|
|
$ |
8 |
|
|
$ |
(1 |
) |
|
$ |
75,331 |
|
As of September 30, 2024, Reneo considered the unrealized losses in its investment portfolio to be temporary in nature and not due to credit losses. Reneo has the intent and ability to hold such investments until their recovery at fair value. Reneo did not have any realized gains or losses in its available for sale securities during the three and nine months ended September 30, 2024 and 2023.
6. Accrued Expenses
Accrued expenses consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2024 |
|
|
As of December 31, 2023 |
|
Accrued clinical and regulatory |
|
$ |
— |
|
|
$ |
3,661 |
|
Accrued contract manufacturing cost |
|
|
— |
|
|
|
1,100 |
|
Accrued compensation |
|
|
361 |
|
|
|
3,948 |
|
Accrued other |
|
|
364 |
|
|
|
420 |
|
Total accrued expenses |
|
$ |
725 |
|
|
$ |
9,129 |
|
7. Leases
Prior to the closing of the Merger on October 4, 2024, Reneo’s headquarters was located in Irvine, California, where it leases office space under a lease agreement that expires in November 2026. Reneo leases additional office space located in Sandwich, United Kingdom under a lease agreement that expires in October 2027, with an option to early terminate in October 2025 with no termination fee. In January 2024, Reneo exercised its early termination option and made the final termination lease payment of $0.2 million in July 2024.
Other information related to Reneo’s operating leases as of the balance sheet dates presented are as follows:
|
|
|
|
|
|
|
|
|
|
|
As of September 30, |
|
|
|
2024 |
|
|
2023 |
|
Weighted incremental borrowing rate |
|
|
5 |
% |
|
|
5 |
% |
|