TYRA BIOSCIENCES, INC. You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties, including those described in the section entitled "Forward Looking Statements and Market Data." Our actual results and the timing of selected events could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those set forth under the section entitled "Risk Factors" or in other parts of this Annual Report.
Overview
We are a clinical-stage biotechnology company focused on developing next-generation precision medicines that target large opportunities in Fibroblast Growth Factor Receptor (FGFR) biology. Our in-house precision medicine platform, SNÅP, enables rapid and precise drug design through iterative molecular SNÅPshots that help predict genetic alterations most likely to cause acquired resistance to existing therapies. Our initial focus is on applying our accelerated small molecule drug discovery engine to develop therapies in targeted oncology and genetically defined conditions.
In oncology, the widespread availability of approved targeted treatments, such as kinase inhibitors, has transformed the cancer treatment landscape. Despite the therapeutic benefit that targeted oncology treatments have created for some patients, the response rate and duration of efficacy is often limited by acquired drug resistance, off-target toxicities and other shortcomings of existing therapies. We are using our proprietary SNÅP platform, which is optimized to enable rapid and precise refinement of structural design through iterative molecular SNÅPshots, in order to generate novel product candidates that are specifically designed to limit off-target toxicities and address acquired drug resistance to provide next-generation treatment options. Genomic alterations in FGFR family members occur in approximately 7% of all human cancers, representing about 126,000 new cases per year.
We are advancing multiple oncology product candidates toward the clinic,
including our lead product candidate TYRA-300, an FGFR3 selective inhibitor with
an initial focus on patients with metastatic urothelial carcinoma of the bladder
and urinary tract (mUC). We submitted an Investigational New Drug application
(IND) to the
Beyond oncology, FGFR3 is implicated in many developmental conditions, such as
achondroplasia (ACH) and other skeletal dysplasias, due to its role in
regulating bone and cartilage formation. In
We are also advancing our second oncology product candidate, TYRA-200, an
FGFR1/2/3 inhibitor with potency against activating FGFR2 gene alterations, as
well as clinically important molecular brake and gatekeeper resistance
mutations. In
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Since the commencement of our operations in 2018, we have devoted substantially
all of our resources to organizing and staffing the company, business planning,
raising capital, developing our proprietary SNÅP platform, undertaking research
and development activities for our development programs, establishing our
intellectual property portfolio, and providing general and administrative
support for our operations. We have not generated any revenue to date and have
funded our operations primarily from our initial public offering (IPO), private
placements of our convertible preferred stock, and the issuance of Simple
Agreements for Future Equity. Our net losses for the years ended
We have incurred significant operating losses since inception. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical development activities, other research and development activities and capital expenditures. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future particularly if and as we conduct preclinical studies and clinical trials, continue our research and development activities, utilize third parties to manufacture our product candidates and related raw materials, hire additional personnel, expand and protect our intellectual property, and incur additional costs associated with being a public company.
Based on our current operating plan, we believe that our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditures through at least 2024. We have never generated any revenue and do not expect to generate any revenues from product sales unless and until we successfully complete development of and obtain regulatory approval for our product candidates, which will not be for several years, if ever. In addition, if we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may not be able to raise additional funds or enter into such other arrangements when needed or on favorable terms, or at all. If we are unable to raise additional capital or enter into such arrangements when needed, we could be forced to delay, limit, reduce or terminate our research and development programs or future commercialization efforts, or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.
Components of Results of Operations
Operating Expenses
Research and Development Expenses
To date, our research and development expenses consist primarily of external and internal costs related to the development of our SNÅP platform and our product candidates and development programs. Our research and development expenses primarily include:
• external costs, including: o
expenses incurred in connection with conducting clinical trials, including investigator grants and site payments for time and pass-through expenses and expenses incurred under agreements with CROs, central laboratories and other vendors and service providers engaged to conduct our trials;
o
expenses incurred in connection with the discovery and preclinical development of our product candidates, including under agreements with third parties, such as consultants and CROs;
o
costs associated with consultants for chemistry, manufacturing and controls (CMC) development, and other services;
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o
the cost of manufacturing compounds for use in our preclinical studies, including under agreements with third parties, such as consultants and third-party manufacturers; and
o
costs related to compliance with drug development regulatory requirements; and
•
internal costs, including:
o
employee-related expenses, including salaries, related benefits, travel and share-based compensation expenses for employees engaged in research and development functions;
o
the costs of laboratory supplies and acquiring, developing and manufacturing preclinical study materials; and
o
facilities, depreciation and other expenses, which include allocated expenses for rent and maintenance of facilities, and supplies.
We expense research and development expenses in the periods in which they are incurred. External expenses are recognized based on an evaluation of the progress to completion of specific tasks using information provided to us by our service providers or our estimate of the level of service that has been performed at each reporting date. We track external expenses on a development program and other program specific basis. However, we do not track internal costs on a program specific basis because these costs primarily relate to compensation, early research and consumable costs, which are deployed across multiple programs under development.
Research and development activities are central to our business model. There are numerous factors associated with the successful development of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. In addition, future regulatory factors beyond our control may impact our clinical development programs. Product candidates in later stages of development generally have higher development costs than those in earlier stages of development. As a result, we expect that our research and development expenses will increase substantially over the next several years as we advance our product candidates through preclinical studies into and through clinical trials, continue to discover and develop additional product candidates and expand our pipeline, maintain, expand, protect and enforce our intellectual property portfolio, and hire additional personnel.
Our future research and development expenses may vary significantly based on a wide variety of factors such as:
•
the number and scope, rate of progress, expense and results of our discovery and preclinical development activities and clinical trials;
•
the number of trials required for approval;
•
the number of sites included in each of our trials;
•
the countries in which the trials are conducted;
•
the length of time required to enroll eligible patients;
•
the number of patients that participate in the trials;
•
the ability to identify appropriate patients eligible for our clinical trials;
•
the number of doses that patients receive;
•
the drop-out or discontinuation rates of patients;
•
potential additional safety monitoring requested by regulatory agencies;
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•
the duration of patient participation in the trials and follow-up;
•
the phase of development of the product candidate;
•
the efficacy and safety profile of the product candidate;
•
the timing, receipt, and terms of any approvals from applicable regulatory
authorities including the FDA and non-
•
maintaining a continued acceptable safety profile of our product candidates following approval, if any;
•
the cost and timing of manufacturing our product candidates;
•
significant and changing government regulation and regulatory guidance;
•
the impact of any business interruptions to our operations or to those of the third parties with whom we work, particularly in light of the COVID-19 pandemic environment;
•
geopolitical instability, such as the war in
•
adverse effects on the financial markets, the global economy, the supply chain and our expenses due to the COVID-19 pandemic or other epidemic diseases, geopolitical instability, inflation, rising interest rates and other factors; and
•
the extent to which we establish additional strategic collaborations or other arrangements.
A change in the outcome of any of these variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate.
The process of conducting the necessary preclinical and clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for our product candidates or any future candidates may be affected by a variety of factors. We may never succeed in achieving regulatory approval for any of our product candidates or any future candidates.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel-related
expenses, including employee salaries, bonuses, benefits, and stock-based
compensation charges, for personnel in executive and administrative functions.
Other significant general and administrative expenses include legal fees
relating to intellectual property and corporate matters, professional fees for
accounting, tax and consulting services and insurance costs. We expect our
general and administrative expenses will increase for the foreseeable future to
support our increased research and development activities, manufacturing
activities, and the increased costs associated with operating as a public
company. These increased costs will likely include increased expenses related to
hiring of additional personnel, audit, legal, regulatory and tax-related
services associated with maintaining compliance with exchange listing and
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Results of Operations for the Years Ended
The following table summarizes our results of operations for the periods
indicated (in thousands):
Year Ended December 31,
2022 2021 Change
Operating expenses:
Research and development $ 43,008 $ 20,636 $ 22,372
General and administrative 15,919 5,652 10,267
Total operating expenses 58,927 26,288 32,639
Loss from operations (58,927 ) (26,288 ) (32,639 )
Other income (expense):
Interest income 3,652 13 3,639
Other expense (50 ) (19 ) (31 )
Total other income (expense) 3,602 (6 ) 3,608
Net loss and comprehensive loss
Research and Development Expenses
Research and development expenses were
The following table summarizes our research and development expenses by
development program for the years ended
Year Ended December 31,
2022 2021
External research and development expense by
program TYRA-300$ 9,958 $ 5,964 TYRA-200 5,879 2,593 FGFR3 ACH 2,676 895 RET 4,936 2,882 FGFR4 1,988 1,509 Other development programs 2,086 54 Unallocated research and development expense Other research and development 2,822 1,391 Compensation and stock-based compensation 12,663 5,348
Total research and development expense
General and Administrative Expenses
General and administrative expenses were
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Liquidity and Capital Resources
Sources of Liquidity
On
Our primary uses of cash to date have been to fund our research and development activities, including with respect to TYRA-300 and TYRA-200 and other research programs, business planning, establishing and maintaining our intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations.
On
We are not obligated to sell, and the Agent is not obligated to buy or sell, any shares of common stock under the Sales Agreement. No assurance can be given that we will sell any shares of common stock under the Sales Agreement, or, if we do, as to the price or amount of shares of common stock that we may sell or the dates when such sales will take place.
Cash Flows
The following table sets forth a summary of our cash flows for the periods indicated (in thousands):
Year Ended December 31,
2022 2021
Net cash used in operating activities
(559 ) (645 )
Net cash provided by financing activities 632 311,348
Net cash increase (decrease) for the period
Operating Activities
Net cash used in operating activities for the year ended
Net cash used in operating activities for the year ended
Investing Activities
Net cash used in investing activities for the years ended
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Financing Activities
Net cash provided by financing activities was
Net cash provided by financing activities was
Future Funding Requirements
Based on our current operating plan, we believe that our existing cash and cash equivalents will be sufficient to meet our anticipated operating expenses and capital expenditures through at least 2024. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of conducting preclinical studies and testing product candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain.
Our future capital requirements will depend on many factors, including:
•
the initiation, type, number, scope, results, costs and timing of, our ongoing and planned preclinical studies and clinical trials of existing product candidates or clinical trials of other potential product candidates we may choose to pursue in the future, including based on feedback received from regulatory authorities;
•
the costs and timing of manufacturing for current or future product candidates, including commercial scale manufacturing if any product candidate is approved;
•
the costs, timing and outcome of regulatory review of current or future product candidates;
•
the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights;
•
our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting;
•
the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development personnel;
•
the costs and timing of establishing or securing sales and marketing capabilities if any current or future product candidate is approved;
•
our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products;
•
costs associated with any products or technologies that we may in-license or acquire; and
•
delays or issues with any of the above, including that the risk of each may be exacerbated by the ongoing COVID-19 pandemic, any future epidemic diseases, potential geopolitical instability, inflation or rising interest rates.
Until such time, if ever, as we can generate substantial product revenues to support our cost structure, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional
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funds or enter into such other arrangements when needed on favorable terms or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.
Contractual Obligations and Commitments
We lease our corporate office and laboratory space in
In
In addition, we have entered into agreements in the normal course of business with certain vendors for the provision of goods and services, which includes manufacturing services with CMOs and development services with CROs. These agreements may include certain provisions for purchase obligations and termination obligations that could require payments for the cancellation of committed purchase obligations or for early termination of the agreements. The amount of the cancellation or termination payments vary and are based on the timing of the cancellation or termination and the specific terms of the agreement. These obligations and commitments are not separately presented.
Critical Accounting Policies, Significant Judgments, and Use of Estimates
Our management's discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events, and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are described in more detail in Note 2 to our financial statements included elsewhere in this filing, we believe the following accounting policies and estimates to be most critical to the preparation of our financial statements.
Research and development expenses consist of external and internal costs associated with the Company's research and development activities, including its discovery and research efforts and the preclinical and clinical development of its product candidates. Research and development costs are expensed in the period incurred.
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The Company has entered into various research and development contracts with clinical research organizations, clinical manufacturing organizations, clinical sites and other vendors and consultants. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and payments made in advance of or after performance are reflected in the accompanying balance sheets as prepaid expenses or accrued liabilities, respectively. The Company records accruals for estimated costs incurred for ongoing research and development activities. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the services, including the phase or completion of events, invoices received and contracted costs. The Company holds discussions with applicable personnel and outside service providers as to the progress of clinical trials, or the services completed. Significant judgments and estimates may be made in determining the prepaid or accrued balances at the end of any reporting period. Actual results could differ from the Company's estimates. Nonrefundable advance payments for goods and services, including fees for process development, are deferred and recognized as expense in the period that the related goods are consumed, or services are performed.
Recently Issued Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our financial statements appearing elsewhere in this Annual Report on Form 10-K.
Emerging Growth Company and Smaller Reporting Company Status
We are an "emerging growth company" as defined in the Jumpstart Our Business
Startups Act of 2012, as amended (JOBS Act). We will remain an emerging growth
company until the earliest to occur of: (i) the last day of the fiscal year in
which we have more than
In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies. We have elected to use the extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date on which we (i) are no longer an emerging growth company and (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
We are also a "smaller reporting company" as defined in the Exchange Act. We may
continue to be a smaller reporting company if either (i) the market value of our
stock held by non-affiliates is less than
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