GLYCOMIMETICS : MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q) – marketscreener.com

Certain statements contained in this Quarterly Report on Form 10-Q mayconstitute forward-looking statements within the meaning of Section 27A of theSecurities Act of 1933, as amended, and Section 21E of the Securities ExchangeAct of 1934, as amended. The words or phrases "would be," "will allow," "intendsto," "will likely result," "are expected to," "will continue," "is anticipated,""estimate," "project," or similar expressions, or the negative of such words orphrases, are intended to identify "forward-looking statements." We have basedthese forward-looking statements on our current expectations and projectionsabout future events. Because such statements include risks and uncertainties,actual results may differ materially from those expressed or implied by suchforward-looking statements. Factors that could cause or contribute to thesedifferences include those below and elsewhere in this Quarterly Report on Form10-Q, our Annual Report on Form 10-K, particularly in Part I - Item 1A, "RiskFactors," and our other filings with the Securities and Exchange Commission.Statements made herein are as of the date of the filing of this Form 10-Q withthe Securities and Exchange Commission and should not be relied upon as of anysubsequent date. Unless otherwise required by applicable law, we do notundertake, and we specifically disclaim, any obligation to update anyforward-looking statements to reflect occurrences, developments, unanticipatedevents or circumstances after the date of such statement.The following discussion and analysis of our financial condition and results ofoperations should be read in conjunction with our unaudited financial statementsand related notes that appear in Item 1 of this Quarterly Report on Form 10-Qand with our audited financial statements and related notes for the year endedDecember 31, 2019, which are included in our Annual Report on Form 10-K filedwith the Securities and Exchange Commission on February 28, 2020.Overview We are a clinical-stage biotechnology company focused on the discovery anddevelopment of novel glycomimetic drugs to address unmet medical needs resultingfrom diseases in which carbohydrate biology plays a key role. We are developinga pipeline of glycomimetics, which are molecules that mimic the structure ofcarbohydrates involved in important biological processes, to inhibitdisease-related functions of carbohydrates such as the roles they play ininflammation, cancer and infection. We believe this represents an innovativeapproach to drug discovery to treat a wide range of diseases. We are focusingour efforts on drug candidates for rare diseases that we believe will qualifyfor orphan drug designation.Our proprietary glycomimetics platform is based on our expertise in carbohydratechemistry and our understanding of the role carbohydrates play in key biologicalprocesses. Most human proteins are modified by the addition of complexcarbohydrate structures to the surface of such proteins, which affects thefunctions of the proteins and their interactions with other molecules. Ourinitial research and development efforts have focused on drug candidatestargeting selectins, which are proteins that serve as adhesion molecules andbind to carbohydrates that are involved in the inflammatory component andprogression of a wide range of diseases, including hematologic disorders, cancerand cardiovascular disease. For example, we believe that members of the selectinfamily play a key role in tumor metastasis and resistance to chemotherapy.Inhibiting specific carbohydrates from binding to selectins has long been viewedas a potentially attractive approach for therapeutic intervention. The abilityto successfully develop drug-like compounds that inhibit binding with selectins,known as selectin antagonists, has historically been limited by the complexitiesof carbohydrate chemistry. We believe our expertise in carbohydrate chemistryenables us to design selectin antagonists and other glycomimetics that mayinhibit the disease-related functions of certain carbohydrates in order todevelop novel drug candidates to address orphan diseases with high unmet medicalneed. Our lead glycomimetic drug candidate, uproleselan, is a specific E-selectininhibitor that we are developing to be used in combination with chemotherapy totreat patients with acute myeloid leukemia, or AML, a life-threateninghematologic cancer, and potentially other hematologic cancers. We completed aninitial Phase 1 trial in healthy volunteers for uproleselan, and in May 2017 wecompleted enrollment in a Phase 1/2 clinical trial in patients with eitherrelapsed/refractory or de novo/secondary AML. In December 2018, at the annualmeeting of the American Society of Hematology, or ASH, we presented clinicaldata from this Phase 1/2 clinical trial that showed high remission rates,improved overall survival and improved event-free survival, all compared tohistorical controls derived from third-party clinical trials evaluatingtreatment with standard chemotherapy. 18 Table of ContentsIn March 2018, we announced our design for a randomized, double-blind,placebo-controlled Phase 3 clinical trial to evaluate uproleselan in individualswith relapsed/refractory AML, which design is aligned with guidance receivedfrom the U.S. Food and Drug Administration, or FDA. Based on consultations withthe FDA, the single pivotal trial is planned to enroll approximately 380 adultpatients with relapsed or refractory AML at centers in the United States,Canada, Europe and Australia. We dosed the first patient in this trial inNovember 2018. The primary efficacy endpoint will be overall survival;importantly, the FDA has advised us that data on overall survival will not needto be censored for transplant in the primary efficacy analysis, meaning thatpatients who proceed to transplant will continue to be included as part of thesurvival analysis. All patients will be treated with standard chemotherapy ofeither MEC (mitoxantrone, etoposide and cytarabine) or FAI (fludarabine,cytarabine and idarubicin), with approximately one-half of the patientsrandomized to receive uproleselan in addition to chemotherapy. Patientsreceiving uproleselan will be dosed for one day prior to initiation ofchemotherapy, twice a day through the chemotherapy regimen, and then for twodays after the end of chemotherapy, which was the same regimen as in the Phase1/2 trial. The dose regimen will be fixed, rather than weight-based, which webelieve will simplify administration. We plan to offer up to three cycles ofconsolidation therapy in both arms of the trial for patients who achieveremission. We believe that multiple cycles of treatment in patients who respondmay drive an even deeper response in patients treated with uproleselan. If thisis the case, it could lengthen the duration of remission with potential foradditional benefit on survival. Key secondary endpoints of the Phase 3 trialwill include the incidence of severe mucositis and remission rate, which will beassessed in a hierarchical fashion which may provide supportive data.The recent imposition of "lockdown," "social distancing" and "shelter in place"directives by state and federal governments in the United States as well asgovernments in other regions of the world in response to the COVID-19 pandemic,including in locations in which our Phase 3 clinical trial of uproleselan isbeing conducted, has resulted in slowed clinical site initiation, patientrecruitment and enrollment rates in April 2020. We cannot at this timefully assess whether these slower rates reflect a long- or short-term changethat could potentially materially adversely impact the timing of completion ofenrollment of our Phase 3 clinical trial. We continue to closely monitor theCOVID-19 situation and any potential impact to our planned activities.Uproleselan received orphan drug designation from the FDA in May 2015 for thetreatment of patients with AML. In June 2016, uproleselan received fast trackdesignation from the FDA for the treatment of adult patients with relapsed orrefractory AML and elderly patients aged 60 years or older with AML. In May2017, uproleselan received Breakthrough Therapy designation from the FDA for thetreatment of adult patients with relapsed or refractory AML. In May 2017, theEuropean Commission, based on a favorable recommendation from the EMA Committeefor Orphan Medicinal Products, granted orphan designation for uproleselan forthe treatment of patients with AML. In June 2018, we received a response fromthe EMA to our request for scientific advice with respect to our MarketingAuthorization Application, or MAA, development plan. Based on this guidance, weare conducting the global Phase 3 clinical trial and intend to pursue regulatoryapproval of uproleselan for the treatment of AML.In May 2018, we signed a Cooperative Research and Development Agreement, orCRADA, with the National Cancer Institute, or NCI, part of the NationalInstitutes of Health. Under the terms of the CRADA, we will collaborate withboth the NCI and the Alliance for Clinical Trials in Oncology to conduct a Phase2/3 randomized, controlled clinical trial testing the addition of uproleselan toa standard cytarabine/daunorubicin chemotherapy regimen (7&3) in older adultswith previously untreated AML who are suitable for intensive chemotherapy. Theprimary endpoint will be overall survival, which is defined as the time from thedate of randomization to death from any cause, with a planned interim analysisbased on event-free survival after the first 250 patients have been enrolled inthe trial. The full trial is expected to enroll approximately 670patients. Under the terms of the CRADA, the NCI may also fund additionalresearch, including clinical trials involving pediatric patients with AML aswell as preclinical experiments and clinical trials evaluating alternativepopulations and chemotherapy regimens. We will supply uproleselan as well asprovide financial support to augment data analysis and monitoring for the Phase3 program. The trial opened for enrollment in early 2019 and enrolled the firstpatient in April 2019.As a potential life-cycle extension to uproleselan, we have rationally designedan innovative antagonist of E-selectin, GMI-1687, that could be suitable forsubcutaneous administration. When given by subcutaneous injection in animalmodels, GMI-1687 has been observed to have equivalent activity to uproleselan,but at an approximately 1,000-fold lower dose. We believe that GMI-1687 could bedeveloped to broaden the clinical usefulness of an E-selectin antagonist toconditions where outpatient treatment is preferred or required. We are currentlyconducting preclinical 19 Table of Contents

studies with GMI-1687 to support our planned submission of an investigational new drug application, or IND, to the FDA.

initiate and conduct our planned clinical trials of uproleselan, GMI-1359 and

GMI-1687, including fulfilling our funding and supply commitments related to

the clinical trial of uproleselan being conducted in collaboration with NCI;

conduct NDA-enabling activities related to manufacture, toxicology and clinical

pharmacology for our product candidates;

manufacture additional uproleselan drug supplies for validation and prepare for

commercialization;

seek to discover and develop additional drug candidates;

seek regulatory approvals for any drug candidates that successfully complete

clinical trials;

ultimately establish a sales, marketing and distribution infrastructure and

scale up external manufacturing capabilities to commercialize any drug

candidates for which we may obtain regulatory approval;

maintain, expand and protect our intellectual property portfolio;

hire additional clinical, quality control, regulatory and scientific personnel;

and

add operational, financial and management information systems and personnel,

including personnel to support our drug development and potential future

commercialization efforts.

Our Collaboration and License Agreements

University of Basel

Critical Accounting Policies and Significant Judgments and Estimates

Components of Operating Results

Revenue

The duration, costs and timing of clinical trials and development of our drug candidates will depend on a variety of factors that include:

the length of time required to enroll eligible patients, which we expect to be

lengthened as a result of the ongoing COVID-19 pandemic;

the number of doses that patients receive;

the drop-out or discontinuation rates of patients;

potential additional safety monitoring or other studies requested by regulatory

agencies;

the duration of patient follow-up; and

the safety and efficacy profile of the drug candidate.

Interest Income

Interest income consists of interest income earned on our cash and cash equivalents.

Results of Operations for the Three Months Ended March 31, 2020 and 2019

The following table sets forth our results of operations for the three months ended March 31, 2020 and 2019:

Research and Development Expense

The following table summarizes our research and development expense by functional area for the three months ended March 31, 2020 and 2019:

The following table summarizes our research and development expense by drug candidate for the three months ended March 31, 2020 and 2019:

General and Administrative Expense

The following table summarizes the components of our general and administrative expense for the three months ended March 31, 2020 and 2019:

Liquidity and Capital Resources

establishing commercial manufacturing capabilities or making arrangements with

obtaining and maintaining patent and trade secret protection and regulatory

launching commercial sales of drugs, if and when approved, whether alone or in

obtaining and maintaining healthcare coverage and adequate reimbursement.

We may require additional capital beyond our currently anticipated amounts. Additional capital may not be available on reasonable terms, or at all. If we raise additional funds through collaboration arrangements in the future, we

Net cash provided by (used in):

Net change in cash and cash equivalents $ (3,378)$ (14,357)

Net cash used in investing activities for the three months ended March 31, 2020 and 2019 was for computer, office and laboratory equipment.

Net cash provided by financing activities for the three months ended March 31, 2020 and 2019 consisted of proceeds from stock option exercises.

Off-Balance Sheet Arrangements

During the three months ended March 31, 2020, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

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GLYCOMIMETICS : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q) - marketscreener.com