The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto as of and for the year endedDecember 31, 2020 and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the year endedDecember 31, 2020 , filed with theSecurities and Exchange Commission (SEC) onFebruary 25, 2021 . Past operating results are not necessarily indicative of results that may occur in future periods. Forward-Looking Statements The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), which are subject to the "safe harbor" created by those sections. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management. The words "anticipates," "believes," "estimates," "expects," "intends," "may," "plans," "projects," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in Part II, Item IA, "Risk Factors" in this Quarterly Report on Form 10-Q and in our other filings with theSEC . The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements.
PREVIEW
Chimerix is a biopharmaceutical company whose mission it is to develop medicines that meaningfully improve and extend the lives of patients facing deadly diseases. InJune 2021 , theU.S. Food and Drug Administration (FDA) approved TEMBEXA (brincidofovir) for the treatment of smallpox as a medical countermeasure. Our two most advanced clinical-stage development programs are ONC201 and dociparstat sodium (DSTAT). ONC201 is in development for recurrent H3 K27M-mutant glioma. DSTAT is in Phase 3 development as a potential first-line therapy in acute myeloid leukemia (AML).
Recent developments
TEMBEXA (brincidofovir, BCV)
OnJune 4, 2021 , the FDA granted TEMBEXA approval for the treatment of smallpox. TEMBEXA is available in tablets and oral suspension. It is approved for adult and pediatric patients, including neonates. TEMBEXA was developed as a medical countermeasure for the treatment of smallpox under an ongoing collaboration withBiomedical Advanced Research and Development Authority (BARDA). OnJuly 19, 2021 , the FDA confirmed that, following the recent approval, TEMBEXA is entitled to seven years' orphan exclusivity for the treatment of smallpox beginning with theJune 4, 2021 marketing approval. In addition to orphan exclusivity, TEMBEXA patent coverage is expected to extend to 2034. TEMBEXA potentially fills an important role as a treatment countermeasure to smallpox; it has a differentiated mechanism of action, a relatively high barrier to resistance and available evidence suggests it can be used in patients who have received the other FDA approved smallpox antiviral treatment. In September, an article was published in the peer review journal,Antiviral Research , providing a thorough assessment of TEMBEXA as a medical counter measure for smallpox. By year-end, we expect to complete initial TEMBEXA drug product manufacturing in order to execute first shipments to the strategic national stockpile in response to a potential procurement contract to support national preparedness inthe United States .
Imipridones – ONC201, ONC206 and ONC212
Imipridones are a potential new class of selective cancer therapies. Clinical trials of ONC201 in glioma patients with the H3 K27M-mutation are underway at several locations in theU.S. Based on discussions with the FDA, we plan to integrate data from the ongoing ONC201 clinical studies into a registration cohort, along with a natural history study and other supporting clinical pharmacological data and CMC with the potential for New Drug Application (NDA) submission seeking accelerated approval. 20 --------------------------------------------------------------------------------
ONC201 – Results of a cohort of 50 patients with ONC201 in recurrent H3 K27M-mutant glioma
OnNovember 4, 2021 , we reported top-line results from the blinded independent central review (BICR) efficacy analysis. The efficacy analysis by BICR of the 50 patient cohort determined the overall response rate (ORR) to be 20.0% (95% Confidence Interval (CI): 10.0-33.7%) as determined by Response Assessment in Neuro-Oncology Criteria for High Grade Gliomas (RANO-HGG). The median duration of response (mDOR) was 11.2 months (95% CI: 3.8 - not reached) and the median time to response (mTTR) was 8.3 months. The cohort for a potential registration of ONC201 was comprised of the first 50 patients enrolled across five ONC201 clinical studies that met certain criteria. These patients were two years of age or older, had measurable diffuse midline glioma, harbored the H3 K27M mutation and had evidence of progression following prior therapy with at least radiation completed at least 90 days prior to enrollment, among certain other criteria. One serious adverse event identified by an investigator was possibly related to ONC201. Full safety data collection and analysis for this cohort is ongoing. Prior safety review of ONC201 identified the most commonly reported adverse events (AEs) as nausea/vomiting, fatigue and decreased lymphocyte counts. This data along with other supportive clinical data from the ONC201 clinical studies, a natural history evaluation, other supporting clinical pharmacology data and chemistry, manufacturing and controls (CMC) support will be compiled for review with theU.S. FDA in 2022.
In accordance with the terms of the merger agreement between
ONC206 and ONC212
Phase 1 clinical trials for ONC206, our second imipridone product candidate, and work to enable IND for our third imipridone candidate, ONC212, are still ongoing.
Dociparstat for first-line acute myeloid leukemia (AML)
During 2020, we conducted an end of Phase 2 meeting with the FDA related to our development of DSTAT in AML, which informed the design of the Phase 3 trial. We are currently enrolling in our 570-subject Phase 3 Dociparstat in AML with Standard Chemotherapy (DASH AML) study of DSTAT for the treatment of AML. The multicenter, randomized, double-blind, placebo-controlled, parallel-group study will evaluate the efficacy and safety of DSTAT in combination with standard intensive induction and consolidation chemotherapy for the treatment of newly-diagnosed AML patients.Chimerix expects to unblind data following enrollment of the first 80 evaluable patients in this study to assess complete response rates and minimal residual disease rates between the study arm and the control arm. To date, enrollment of this study has proceeded more slowly than expected due to hospital staffing shortages related to COVID-19. We expect to complete enrollment of the first 80 evaluable patients in the second half of 2022. Business Development Review In addition to our transactions withCantex Pharmaceuticals, Inc. (Cantex), SymBio Pharmaceuticals Limited (SymBio ) andOncoceutics, Inc. (Oncoceutics), management is continuing to conduct a review and assessment of potential transaction opportunities with the goal of building our product candidate pipeline, including, but not limited to, licensing, merger or acquisition transactions, issuing or transferring shares of common stock, or the license, purchase or sale of specific assets, in addition to other potential actions aimed at maximizing stockholder value. There can be no assurance that this review will result in the identification or consummation of any additional transaction. FINANCIAL OVERVIEW Revenues
To date, we have not generated any income from product sales. All of our revenue to date has come from government grants and contract and receipt of initial products under our collaboration and licensing agreements.
21 -------------------------------------------------------------------------------- InFebruary 2011 , we entered into a contract with BARDA, aU.S. governmental agency that supports the advanced research and development, manufacturing, acquisition, and stockpiling of medical countermeasures. The contract originally consisted of an initial performance period, referred to as the base performance segment, which ended onMay 31, 2013 , plus up to four extension periods, referred to as option segments, which have all been exercised. The contract was a cost-plus fixed fee development contract. Under the contract we received$72.5 million in expense reimbursement and$4.6 million in fees. The fourth and final option segment ended onSeptember 1, 2021 and the contract expired in accordance with its terms. Under the BARDA contract, we recognized revenue of$0.1 million and$1.6 million during the three months endedSeptember 30, 2021 and 2020, respectively, and we recognized revenue of$1.6 million and$4.2 million during the nine months endedSeptember 30, 2021 and 2020, respectively. InSeptember 2019 , we entered into a license agreement withSymBio for worldwide rights to develop, manufacture and commercialize TEMBEXA in all human indications, excluding the use for treatment of orthopoxviruses, including smallpox. Under the contract, we received a$5.0 million upfront payment inOctober 2019 and could receive up to an additional$180.0 million in potential regulatory and commercial milestones. Since the license agreement was entered into inSeptember 2019 , we have recognized all of the$5.0 million of revenue related to the upfront payment. The revenue from regulatory and commercial milestones and royalties from net sales will be recognized upon occurrence of the triggering events. In the future, we may generate revenue from a combination of product sales, license fees, milestone payments and royalties from the sales of products developed under licenses of our intellectual property. We expect that any revenue we generate will fluctuate from quarter to quarter as a result of the timing and amount of license fees, milestone and other payments, and the amount and timing of payments that we receive upon the sale of our products, to the extent any are successfully commercialized. If we fail to complete the development of any product candidates in a timely manner or obtain regulatory approval for them, our ability to generate future revenue, and our results of operations and financial position, would be materially adversely affected.
Research and development costs
Since our inception, we have focused our resources on our research and
development activities, including conducting preclinical studies and clinical
trials, manufacturing development efforts and activities related to regulatory
filings for our product candidates. We recognize research and development
expenses as they are incurred. Costs for certain development activities are
recognized based on an evaluation of the progress to completion of specific
tasks using information and data provided to us by our vendors. We cannot
determine with certainty the duration and completion costs of the current or
future clinical studies of any product candidates. Our research and development
expenses consist primarily of:
•fees paid to consultants and contract research organizations (CROs), including
in connection with preclinical and clinical trials, and other related clinical
trial fees, such as for investigator grants, patient screening, laboratory work,
clinical trial database management, clinical trial material management and
statistical compilation and analysis;
•salaries and related overhead expenses, which include stock option, restricted
stock units and employee stock purchase program compensation and benefits, for
personnel in research and development functions;
•payments to third-party manufacturers, which produce, test and package drug
substance and drug product (including continued testing of process validation
and stability);
•costs related to legal and compliance with regulatory requirements; and
•license fees for and milestone payments related to licensed products and
technologies.
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The table below summarizes our research and development expenses for the periods
indicated (in thousands). Our direct research and development expenses consist
primarily of external costs, such as fees paid to investigators, consultants,
central laboratories and CROs, in connection with our clinical trials,
preclinical development, and payments to third-party manufacturers of drug
substance and drug product. We typically use our employee and infrastructure
resources across multiple research and development programs.
Three Months Ended
2021 2020 2021 2020 Direct research and development expenses$ 7,296 $ 5,943 $ 19,169 $ 15,151 Research and development personnel costs - excluding stock-based compensation 4,081 2,770 13,171 8,286 Research and development personnel costs - stock-based compensation 1,853 625 4,995 2,090 Indirect research and development expenses 590 680 2,145 2,018 Total research and development expenses$ 13,820 $
10,018
The successful development of product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing or costs of the efforts that will be necessary to complete the development of any product candidates or the period, if any, in which material net cash inflows from any product candidates may commence. This is due to the numerous risks and uncertainties associated with our business, as detailed in Part II, Item IA, "Risk Factors" in this Quarterly Report on Form 10-Q and in our other filings with theSEC .
TEMBEXA (Brincidofovir, BCV)
We developed TEMBEXA for the treatment of smallpox. FDA marketing approval for TEMBEXA was received onJune 4, 2021 . Under our cost-plus-fixed fee BARDA contract, we incurred expenses in connection with the development of orthopoxvirus animal models, the demonstration of efficacy and pharmacokinetics of TEMBEXA in the animal models, the conduct of clinical studies for subjects with DNA viral infections, the manufacture and process validation of bulk drug substance and TEMBEXA 100 mg tablets and TEMBEXA 10 mg/mL oral suspension, and submission of the NDAs to the FDA. In addition, we have incurred additional supportive costs for the development of TEMBEXA for smallpox that we did not seek reimbursement for from BARDA. We have incurred costs related to the manufacturing of TEMBEXA for a possible procurement contract. These costs were expensed as incurred until the June approval. Following the June approval, costs related to the manufacturing of TEMBEXA are recorded and shown as inventory on the Consolidated Balance Sheets.
Imipridones program
InJanuary 2021 , we acquired Oncoceutics. In connection with the transaction, we recorded$82.9 million of acquired in-process research and development expenses for the three months endedMarch 31, 2021 , which included$25.0 million for an upfront payment to Oncoceutics,$43.4 million related to the fair value of 8,723,769 shares common stock issued to Oncoceutics, a$14.0 million promissory note due on the one-year anniversary of the acquisition, and$0.3 million related to transaction costs consisting primarily of legal and professional fees. As we continue to develop and prepareOncoceutics' lead compound, ONC201, for aU.S. regulatory approval, we expect to incur significant research and development expense. We also plan to incur development expenses in connection with the continued development of otherOncoceutics' compounds, including ONC206 and ONC212. Dociparstat sodium (DSTAT)
As we continue to focus on the development of DSTAT for the treatment of patients with AML, we expect research and development spending to increase with ongoing and planned clinical trials. We are currently recruiting our Phase 3 DASH AML trial.
General and administrative expenses
General and administrative expenses mainly include salaries and related costs of employees in executive, finance, marketing, investor relations, information technology, legal resources, human resources and administrative support functions. , including compensation expense and share-based benefits. Other significant general and administrative costs include costs related to accounting and legal services, the costs of various consultants, directors ‘and officers’ liability insurance, occupancy costs and information systems.
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Interest and other income, net
Net interest and other income consists primarily of interest earned on our cash, cash equivalents, and short and long-term investments.
Share-based compensation
TheFinancial Accounting Standards Board authoritative guidance requires that share-based payment transactions with employees be recognized in the financial statements based on their fair value and recognized as compensation expense over the vesting period. Total consolidated share-based compensation expense of$3.4 million and$1.3 million was recognized in the three months endedSeptember 30, 2021 and 2020, respectively, and$9.1 million and$4.0 million was recognized in the nine months endedSeptember 30, 2021 and 2020, respectively. The share-based compensation expense recognized included expense for stock options, RSUs and employee stock purchase plan purchase rights. We estimate the fair value of our share-based awards to employees and directors using the Black-Scholes pricing model. This estimate is affected by our stock price as well as assumptions including the expected volatility, expected term, risk-free interest rate, expected dividend yield, expected rate of forfeiture and the fair value of the underlying common stock on the date of grant.
For performance-based PSUs, we begin recording the expense when it is considered probable that the performance-based objective will be achieved. We assess the likelihood of meeting performance targets on a quarterly basis.
CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES
Our management's discussion and analysis of financial condition and results of operations is based on our unaudited consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted inthe United States of America (GAAP). The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate these estimates and judgments. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenues and expenses that are not readily apparent from other sources. Actual results and experiences may differ materially from these estimates. In addition, our reported financial condition and results of operations could vary if new accounting standards are enacted that are applicable to our business. We discussed accounting policies and assumptions that involve a higher degree of judgment and complexity in Note 1 to our consolidated financial statements in our Annual Report on Form 10-K for the year endedDecember 31, 2020 filed with theSEC onFebruary 25, 2021 . There have been no material changes during the nine months endedSeptember 30, 2021 to our critical accounting policies, significant judgments and estimates disclosed in our Annual Report on Form 10-K for the year endedDecember 31, 2020 . 24 --------------------------------------------------------------------------------
RESULTS OF OPERATIONS
Comparison of the three completed months
The following table summarizes our results of operations for the three months endedSeptember 30, 2021 andSeptember 30, 2020 , together with the changes in those items (in thousands, except percentages): Three Months Ended September 30, Dollar Change % Change 2021 2020 Increase/(Decrease) Revenues: Contract and grant revenue$ 105 $ 1,591 $ (1,486) (93.4) % Licensing revenue 2 18 (16) (88.9) Total revenues 107 1,609 (1,502) (93.3) % Operating expenses: Research and development 13,820 10,018 3,802 38.0 % General and administrative 4,887 3,151 1,736 55.1 % Total operating expenses 18,707 13,169 5,538 42.1 % Loss from operations (18,600) (11,560) (7,040) 60.9 % Other income: Interest income and other, net 40 149 (109) (73.2) % Net loss$ (18,560) $ (11,411) $ (7,149) 62.7 %
Revenue from contracts and licenses
For the three months endedSeptember 30, 2021 , total contract and licensing revenue decreased to$0.1 million compared to$1.6 million for the three months endedSeptember 30, 2020 . The decrease of$1.5 million , or 93.3%, is primarily attributable to a decrease in reimbursable expenses under our contract with BARDA.
Research and development costs
For the three months ended
•an increase of$4.8 million in research and development expenses related to our ongoing clinical trials in patients, preparation of data for the efficacy analysis by Blinded Independent Central Review of ONC201 in recurrent H3 K27M-mutant glioma patients, and the development and manufacture of ONC201 and ONC206 drug substance and drug product; and •an increase of$2.5 million in compensation expenses, of which$1.2 million is related to non-cash stock compensation, to support development of our current pipeline; offset by •a decrease of$2.4 million in brincidofovir development expenses with the approval of TEMBEXA inJune 2021 ; •a decrease of$1.1 million in DSTAT development costs primarily related to curtailment of the Phase 2 trial to assess DSTAT for acute lung injury in COVID-19 patients.
General and administrative expenses
For the three months endedSeptember 30, 2021 , our general and administrative expenses increased to$4.9 million compared to$3.2 million for the three months endedSeptember 30, 2020 . The increase of$1.7 million , or 55.1%, is primarily related to the following: •an increase of$1.2 million in compensation expenses, of which$0.9 million is related to non-cash stock compensation expense; and •an increase of$0.5 million in consulting, legal and operational expenses with the growth of the company's infrastructure. 25 --------------------------------------------------------------------------------
Interest and other income, net
For the three months endedSeptember 30, 2021 , our interest income and other, net decreased to$40,000 compared to$0.1 million for the three months endedSeptember 30, 2020 . This decrease is attributable to amortization of our investment premium balances offsetting interest earned.
Comparison of the completed nine months
The following table summarizes our results of operations for the nine months endedSeptember 30, 2021 andSeptember 30, 2020 , together with the changes in those items (in thousands except percentages): Nine Months Ended September 30, Dollar Change % Change 2021 2020 Increase/(Decrease) Revenues: Contract and grant revenue$ 1,928 $ 4,158 $ (2,230) (53.6) % Licensing revenue 5 94 (89) (94.7) % Total revenues$ 1,933 $ 4,252 (2,319) (54.5) % Operating expenses: Research and development$ 39,480 $ 27,545 11,935 43.3 % General and administrative 13,431 9,466 3,965 41.9 % Acquired in-process research and development$ 82,890 $ -$ 82,890 * Total operating expenses 135,801 37,011 98,790 266.9 % Loss from operations (133,868) (32,759) (101,109) 308.6 % Other income: Interest income and other, net 130 912 (782) (85.7) % Net loss$ (133,738) $ (31,847) $ (101,891) 319.9 %
* Not significant or not calculable
Revenue from contracts and licenses
For the nine months endedSeptember 30, 2021 , total contract and licensing revenue decreased to$1.9 million compared to$4.3 million for the nine months endedSeptember 30, 2020 . The decrease of$2.3 million , or 54.5%, is primarily related to a decrease in reimbursable expenses under our contract with BARDA.
Research and development costs
For the nine months ended
•an increase of$8.8 million related to research and development expenses of our ongoing clinical trials in patients, preparation of data for the efficacy analysis by Blinded Independent Central Review ONC201 in recurrent H3 K27M-mutant glioma, toxicology studies and development and the manufacture of ONC201 and ONC206 drug substance and drug product; and •an increase of$7.7 million in compensation expenses, of which$2.9 million relates to non-cash compensation to support development of our current pipeline; offset by •a decrease of$3.3 million in brincidofovir development expenses with the approval of TEMBEXA inJune 2021 ; and •a decrease of$1.5 million in DSTAT development costs related to curtailment of the Phase 2 trial to assess DSTAT for acute lung injury in COVID-19 patients. 26 --------------------------------------------------------------------------------
General and administrative expenses
For the nine months endedSeptember 30, 2021 , our general and administrative expenses increased to$13.4 million compared to$9.5 million for the nine months endedSeptember 30, 2020 . The increase of$4.0 million , or 41.9%, is primarily related to the following: •an increase of$2.8 million in compensation, of which$2.2 million relates to non-cash stock compensation; and •an increase of$1.1 million in consulting, legal other operational expense with the growth of the company's infrastructure.
In connection with our acquisition of Oncoceutics inJanuary 2021 , we recorded a total of$82.9 million of acquired in-process research and development expenses for the nine months endedSeptember 30, 2021 , which included$25.0 million for an upfront payment to Oncoceutics,$43.4 million related to the fair value of the 8,723,769 shares of common stock issued to Oncoceutics, a$14.0 million promissory note due on the one-year anniversary of the acquisition and$0.3 million related to transaction costs consisting primarily of legal and professional fees.
Interest and other income, net
For the nine months endedSeptember 30, 2021 , our interest income and other, net decreased to$0.1 million compared to$0.9 million for the nine months endedSeptember 30, 2020 . This decrease is attributable to amortization of our investment premium balances offsetting interest earned.
LIQUIDITY AND CAPITAL RESOURCES
As ofSeptember 30, 2021 , we had capital available to fund operations of approximately$124.6 million . Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. We have incurred losses since our inception in 2000 and as ofSeptember 30, 2021 , we had an accumulated deficit of$846.1 million . We may continue to incur losses for the foreseeable future. The size of our losses will depend, in part, on the rate of future expenditures and our ability to generate revenues. OnAugust 10, 2020 , we entered into an Open Market Sale AgreementSM (the Jefferies Sales Agreement) withJefferies LLC , as agent, pursuant to which we may offer and sell, from time to time through Jefferies, up to$75 million of shares of our common stock. Sales of our common stock made pursuant to the Jefferies Sales Agreement, if any, will be made under our shelf registration statement on Form S-3 (File No. 333-244146), which was declared effective by theSEC onAugust 17, 2020 . As ofSeptember 30, 2021 , we have not sold any shares of our common stock under the Jefferies Sales Agreement. OnJanuary 20, 2021 , we entered into an underwriting agreement (the Underwriting Agreement) withJefferies LLC andCowen and Company, LLC , as representatives of the several underwriters named therein (collectively, the Underwriters), relating to the issuance and sale of 11,765,000 shares (the Shares) of our common stock. The price to the public in this offering was$8.50 per share, and the Underwriters agreed to purchase the Shares from us pursuant to the Underwriting Agreement at a price of$7.99 per share. Under the terms of the Underwriting Agreement, we granted the Underwriters a 30-day option to purchase up to 1,764,750 additional shares of our common stock at the public offering price. The net proceeds to us from this offering were approximately$107.8 million , as the Underwriters' option to purchase additional shares was exercised in full, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. The offering closed onJanuary 25, 2021 . OnMay 6, 2021 , we filed an automatic shelf registration statement on Form S-3 with theSEC , which became effective upon filing, pursuant to which we registered for sale an unlimited amount of any combination of our common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that we may determine, so long as we continue to satisfy the requirements of a "well-known seasoned issuer" underSEC rules, This registration statement will remain in effect for up to three years from the date it became effective. As ofSeptember 30, 2021 , no sales have been made under the automatic shelf registration statement. We cannot assure that adequate funding will be available on terms acceptable to us, if at all. Any additional equity financings will be dilutive to our stockholders and any additional debt may involve operating covenants that may restrict our business. If adequate funds are not available through these means, we may be required to curtail significantly one or more of our research or development programs, and any launch and other commercialization expenses for any of our products that may receive 27 -------------------------------------------------------------------------------- marketing approval. We cannot assure you that we will successfully develop or commercialize our products under development or that our products, if successfully developed, will generate revenues sufficient to enable us to earn a profit. We believe that our existing cash, cash equivalents, and investments will enable us to fund our current operating expenses and capital requirements for at least the next 12 months. However, changing circumstances beyond our control may cause us to consume capital more rapidly than we currently anticipate.
Cash flow
The following table shows the main sources and uses of cash (in thousands):
Nine
Ended months
2021 2020 Cash sources and uses: Net cash used in operating activities$ (65,907) $ (26,993) Net cash (used in) provided by investing activities (67,285) 47,155 Net cash provided by financing activities 112,377 1,067 Net (decrease) increase in cash and cash equivalents $
(20 815)
The table above sets forth the net decrease or increase in cash and cash equivalents alone and not the change in our total capital available to fund operations, which also includes short-term and long-term investments. Cash and cash equivalents includes cash on hand and securities with original maturities of 90 days or less. Operating Activities Net cash used in operating activities of$65.9 million for the nine months endedSeptember 30, 2021 was primarily the result of our$133.7 million net loss, partially offset by the change in operating assets and liabilities and the add-back of non-cash expenses. The change in operating assets and liabilities includes an increase of$3.5 million in accounts payable and accrued liabilities and a decrease in accounts receivable of$0.3 million , partially offset by an increase in prepaid expenses and other assets of$2.0 million and an increase in inventories of$1.6 million . Non-cash expenses included add-backs of$43.4 million for the fair value of common stock issued in relation to the Oncoceutics acquisition,$14.0 million for the note payable due on the one-year anniversary of the Oncoceutics acquisition,$9.1 million for share-based compensation,$0.1 million of depreciation of property and equipment and$0.6 million of amortization of discount/premium on investments. Net cash used in operating activities of$27.0 million for the nine months endedSeptember 30, 2020 was primarily the result of our$31.8 million net loss offset by the change in operating assets and liabilities and the add-back of non-cash expenses. The change in operating assets and liabilities includes a decrease in prepaid expenses and other assets of$1.3 million and a decrease in accounts receivable of$0.9 million related to work on the BARDA contract, partially offset by a decrease of$1.3 million in accounts payable and accrued liabilities. Non-cash expenses included add-backs of$4.0 million for share-based compensation and$0.3 million of depreciation of property and equipment, offset by$0.3 million of amortization of discount/premium on investments.
Investment activities
Net cash used in investing activities of$67.3 million for the nine months endedSeptember 30, 2021 was primarily the result of the purchase of$105.4 million in short-term investments and the purchase of$9.6 million in long-term investments, partially offset by the maturity of$45.9 million in short-term investments and the sale of$2.0 million in short-term investments. Net cash provided by investing activities of$47.2 million for the nine months endedSeptember 30, 2020 was primarily the result of the maturity of$104.6 million in short-term investments and the sale of$1.5 million in short-term investments, partially offset by the purchase of$58.9 million in short-term investments.
Fundraising activities
Net cash provided by financing activities of$112.4 million for the nine months endedSeptember 30, 2021 was primarily the result of$107.8 million in proceeds from the issuance of common stock and$4.5 million in proceeds from the exercise of stock options and stock purchases through our ESPP. Net cash provided by financing activities of$1.1 million for the nine months endedSeptember 30, 2020 was primarily the result of$1.1 million in proceeds from the exercise of stock options and stock purchases through our ESPP. 28 --------------------------------------------------------------------------------
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
There have been no material changes to our contractual obligations and commitments outside the ordinary course of business from those disclosed under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations-Contractual Obligations and Commitments" as contained in our Annual Report on Form 10-K for the year endedDecember 31, 2020 filed by us with theSEC onFebruary 25, 2021 .
Off-balance sheet provisions
During the periods presented, we did not have and currently do not have any off-balance sheet agreements within the meaning of
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