Full Press Release Details
MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
February 23, 2023, Enliven Therapeutics, Inc. (formerly, Imara Inc.) (the Company ) completed its business combination with Enliven Inc. (formerly, Enliven Therapeutics, Inc.)
( Enliven ) in accordance with the terms of the Agreement and Plan of Merger, dated as of October 13, 2022 (the Merger Agreement ), pursuant to which, subject to the terms and
conditions thereof, a wholly owned subsidiary of the Company, Iguana Merger Sub, Inc. merged with and into Enliven, with Enliven surviving as a wholly owned subsidiary of the Company, and the surviving corporation of the merger (the
Merger ). Effective at 5:00 p.m. Eastern Time on February 23, 2023, the Company effected a 1-for-4 reverse stock split of its common
stock (the Reverse Stock Split ) and implemented a reduction in the number of authorized shares of common stock to 100,000,000 shares; effective at 5:01 p.m. Eastern Time, the Company completed the Merger; and
effective at 5:02 p.m. Eastern Time, the Company changed its name to Enliven Therapeutics, Inc. Following the completion of the Merger, the business conducted by Enliven became primarily the business conducted by the Company, which is a
clinical-stage biopharmaceutical company focused on the discovery and development of small molecule inhibitors to help patients with cancer.
this section, references to we, our, us and our company refer to Enliven.
following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing in Exhibit 99.2 to this Amendment No. 1 (the Amended 8-K ) to the Company s Current Report on Form 8-K previously filed on March 1, 2023 (the Closing
8-K ). Some of the information contained in this discussion and analysis or set forth in the Company s definitive proxy statement/prospectus filed with the Securities and Exchange
Commission (the SEC ) on January 23, 2023 (the definitive proxy statement/prospectus ), including information with respect to our plans and strategy for our business, and includes
forward-looking statements that involve risks, uncertainties and assumptions. As a result of many factors, including those factors set forth in the Risk Factors in Exhibit 99.2 to the Closing 8-K,
our actual results could differ materially from the results described in or implied by these forward-looking statements. You should carefully read the Risk Factors in Exhibit 99.2 to the Closing
8-K, to gain an understanding of the factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section titled Cautionary Statement Concerning
Forward-Looking Statements and Market and Industry Data in the definitive proxy statement/prospectus. Capitalized terms not defined herein shall have the meaning granted to them in the definitive proxy statement/prospectus.
We are a clinical-stage biopharmaceutical
company focused on the discovery and development of small molecule inhibitors to help patients with cancer live not only longer, but better. We aim to address existing and emerging unmet needs with a precision oncology approach that improves
survival and enhances overall patient well-being. Our discovery process combines deep insights from clinically validated biological targets and differentiated chemistry with the goal of designing therapies for unmet needs. By combining clinically
validated targets and specific TPPs with disciplined clinical trial design and regulatory strategy, we aim to develop drugs with an increased probability of clinical and commercial success. Clinically validated targets refers to biological targets
that have demonstrated statistical significance on efficacy endpoints in published third-party clinical trials which we believe supports the development of our product candidates by increasing our probability of success. We have assembled a team of
seasoned drug hunters with significant expertise in discovery and development of small molecule kinase inhibitors. Our team includes leading chemists who have been the primary or co-inventor of over 20 product
candidates that have been advanced to clinical trials, including four FDA-approved products: Koselugo (selumetinib), Mektovi (binimetinib), Tukysa (tucatinib), and Retevmo (selpercatinib). We are currently
advancing two parallel lead product candidates, ELVN-001 and ELVN-002, as well as pursuing several additional research stage opportunities that align with our
development approach.
The following table summarizes our product candidate pipeline:
We were incorporated in the State of Delaware in June 2019 and are headquartered in Boulder, Colorado. Since our inception,
we have devoted substantially all of our resources to research and development activities, including with respect to our BCR-ABL and HER2 programs and our other programs, business planning, establishing and
maintaining our intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these activities.
We also do not own or operate, and currently have no plans to establish, any manufacturing facilities. We rely, and expect to continue to rely, on third
parties for the manufacture of our product candidates for clinical and preclinical testing and any future clinical testing, as well as for commercial manufacturing should any of our product candidates obtain marketing approval. We believe that this
strategy allows us to maintain a more efficient infrastructure by eliminating the need for us to invest in our own manufacturing facilities, equipment and personnel while also enabling us to focus our expertise and resources on the development of
our product candidates. In addition, we generally expect to rely on third parties for the manufacture of any companion diagnostics we may develop.
To date, we have funded our operations primarily through private placements of our convertible preferred stock and sale of common stock. We have raised
aggregate gross proceeds of $140.5 million from these private placements before issuance costs and an aggregate of $164.5 million from the sale of common stock in the Financing Transaction further described below. As of December 31,
2022, we had cash and cash equivalents of $75.5 million. Based on our current operating plan, our existing cash and cash equivalents as of the date of this Form 8-K/A filing, will be sufficient to fund
our planned operating expenses and capital expenditure requirements for at least the next 12 months.
As of December 31, 2022, we had an accumulated
deficit of $82.9 million. We have incurred losses and negative cash flows from operations since inception, including net losses of $37.7 million and $24.7 million for the years ended December 31, 2022 and 2021, respectively. We
expect that our operating losses and negative operating cash flows will continue for the foreseeable future as we continue to develop our product candidates.
Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on a variety of factors including the timing and scope of our research and development activities. We expect our expenses and capital requirements will
increase substantially in connection with our ongoing activities as we:
We do not have any products approved for commercial sale, and we have not generated any revenue from product sales or other sources. Our ability to generate
product revenue sufficient to achieve and maintain profitability will depend upon the successful development and eventual commercialization of one or more of our product candidates which we expect, if it ever occurs, will take many years. We will
therefore require substantial additional capital to develop our product candidates and support our continuing operations. Accordingly, until such time that we can generate a sufficient amount of revenue from product sales or other sources, if ever,
we expect to finance our operations through private or public equity or debt financings, loans or other capital sources, which could include income from collaborations, partnerships or other marketing, distribution, licensing or other strategic
arrangements with third parties, or from grants. However, we may be unable to raise additional capital from these sources on favorable terms, or at all. Our failure to obtain sufficient capital on acceptable terms when needed could have a material
adverse effect on our business, results of operations or financial condition, including requiring us to delay, reduce or curtail our research, product development or future commercialization efforts. We may also be required to license rights to
product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. We cannot provide assurance that we will ever generate positive cash flow from operating activities.
On October 13, 2022, we entered into the Merger Agreement with the Company and Merger Sub. Pursuant to the Merger Agreement, Merger Sub merged with and
into Enliven, with Enliven continuing as a wholly owned subsidiary of the Company and the surviving corporation of the Merger. The Merger is intended to qualify for federal income tax purposes as a tax-free
reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the Code ), and, in the event that former Enliven stockholders, including stockholders that participated in the Financing
Transaction (as defined below), are in control of the Company (within the meaning of Section 368(c) of the Code), as a non-taxable exchange of shares of Enliven common stock for shares of
Company common stock within the meaning of Section 351(a) of the Code.
At the closing of the Merger, (a) each outstanding share of Enliven
common stock (including common stock issued upon the conversion of our preferred stock) was converted into the right to receive a number of shares of Company common stock (after giving effect to the Reverse Stock Split) equal to the exchange ratio
per the Merger Agreement; and (b) each then outstanding Enliven stock option that had not previously been exercised prior to the closing of the Merger was assumed by the Company. Under the exchange ratio formula in the Merger Agreement, as of
immediately after the Merger, our former stockholders own approximately 84% of the outstanding shares of Company common stock, and stockholders of the Company as of immediately prior to the Merger own approximately 16% of the outstanding shares of
Company common stock.
Concurrently with the execution of the Merger Agreement, and in order to provide Enliven with additional
capital for its development programs prior to the closing of this Merger, certain new and current investors purchased an aggregate of $164.5 million of common stock of Enliven (the Financing Transaction ).
The Merger and the Financing Transaction were completed on February 23, 2023.
Macroeconomic and Geopolitical Developments and the COVID-19 Pandemic
We are monitoring macroeconomic and geopolitical developments, such as the Russia-Ukraine conflict, and inflation so that the Company can be prepared to react
to new developments as they arise. We are carefully monitoring these developments, as well as the COVID-19 pandemic, and the resulting economic impact.
The extent of the impact of these developments on our business, operations and research and development timelines and plans remains uncertain, and will depend
on numerous factors, including the impact, if any, on our personnel, the responses of governmental entities, and the responses of third parties such as CROs, CMOs and other third parties with whom we do business. As a result of the COVID-19 pandemic, our employees are currently telecommuting, which may impact certain of our operations over the near term and long term. Additionally, certain third parties with whom we engage or may engage,
including collaborators, contract organizations, third-party manufacturers, suppliers, clinical trial sites, regulators and other third parties are similarly adjusting their operations and assessing their capacity in light of the COVID-19 pandemic. For example, we use third parties including Pharmaron to conduct preclinical studies and clinical trials and provide us with API. Pharmaron has previously experienced delays as a result of COVID-19 which resulted in minor delays in our preclinical studies and could delay the timing of the nomination of our product candidate for our third program. While the extent of the impact of the current COVID-19 pandemic on our business and financial results is uncertain, a continued and prolonged public health crisis such as the COVID-19 pandemic could have a material
negative impact on our business, financial condition and operating results. For more information regarding the risks related to COVID-19, see the Risk Factors in Exhibit 99.2 to the Company s
Components of Our Results of Operations
To date, we have not generated any revenue
and we do not expect to generate any revenue from the sale of products or from other sources in the foreseeable future.
Research and Development
development expenses account for a significant portion of our operating expenses and consist primarily of external and internal expenses incurred in connection with the discovery and development of our product candidates.
External expenses include:
Internal expenses include:
We expense research and development expenses in the periods in which they are incurred. At any one time, we are working on multiple
programs, and we do not track our research and development expenses on a program specific basis. Our internal resources, employees and infrastructure are not directly tied to any one research or drug discovery program and are typically deployed
across multiple programs. As such, we do not track research costs on a program specific basis. 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 utilize CROs for our research and development activities and CMOs for our manufacturing activities, and we do not have our own laboratory or
manufacturing facilities. Therefore, we have no material facilities expenses attributed to research and development.
Product candidates in later stages
of development generally have higher development costs than those in earlier stages. 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, expand, maintain, protect and enforce our intellectual property portfolio, and hire additional research and development
The successful development of our product candidates is highly uncertain, and we do not believe it is possible at this time to accurately
project the nature, timing and estimated costs of the efforts necessary to complete the development of, and obtain regulatory approval for, any of our product candidates. To the extent our product candidates continue to advance into clinical trials,
as well as advance into larger and later-stage clinical trials, our expenses will increase substantially and may become more variable. The duration, costs and timing of preclinical studies and clinical trials and development of our product
candidates are subject to numerous uncertainties and will depend on a variety of factors, including:
Any of these factors could significantly impact the costs, timing and viability associated with the development of our product
General and Administrative
administrative expenses consist of salaries, bonuses, related benefits and stock-based compensation expense for personnel in executive, finance and administrative functions; professional fees for legal, consulting, accounting and audit services; and
travel expenses, technology costs and other allocated expenses. We expense general and administrative expenses in the periods in which they are incurred.
We expect that our general and administrative expenses will increase substantially over the next several years as we hire additional personnel to support the
growth of our business. In addition, the newly combined company will continue to incur significant expenses associated with being a public company, including expenses related to accounting, audit, legal, regulatory, public company reporting and
compliance, director and officer insurance, investor and public relations, and other administrative and professional services.
income primarily consists of interest income generated from our cash equivalents in interest-bearing money market accounts.
Results of Operations
Comparison of the Years Ended December 31, 2022 and 2021
The following table summarizes our results of operations for the periods indicated: