Acumen Pharmaceuticals, Inc. - Quarter Report: 2022 March (Form 10-Q)

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule of the Exchange Act).    Yes  ☐    No  ☒

		March 31, 2022				December 31, 2021
		(unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	108,764			$	122,162
Marketable securities, short-term			80,326				72,075
Prepaid expenses and other current assets			3,008				4,424
Total current assets			192,098				198,661
Marketable securities, long-term			27,658				31,619
Property and equipment, net			51				36
Right-of-use asset			201				—
Other assets			79				14
Total assets		$	220,087			$	230,330
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	1,219			$	1,088
Accrued expenses and other current liabilities			2,578				4,059
Operating lease liability, current portion			139				—
Total current liabilities			3,936				5,147
Operating lease liability, net of current portion			62				—
Total liabilities			3,998				5,147
Commitments and contingencies (Note 9 )
Stockholders’ equity
Preferred stock, $0.0001 par value; 10,000,000 shares authorized and no shares issued and outstanding as of March 31, 2022 and December 31, 202 1			—				—
Common stock, $0.0001 par value; 300,000,000 shares authorized and 40,473,270 shares issued and outstanding as of March 31, 2022 and December 31, 2021			4				4
Additional paid-in capital			353,599				352,981
Accumulated deficit			(136,700	)			(127,571	)
Accumulated other comprehensive loss			(814	)			(231	)
Total stockholders’ equity			216,089				225,183
Total liabilities and stockholders’ equity		$	220,087			$	230,330

		Three Months Ended March 31,
		2022				2021
Operating expenses
Research and development		$	5,985			$	2,578
General and administrative			3,221				1,215
Total operating expenses			9,206				3,793
Loss from operations			(9,206	)			(3,793	)
Other income (expense)
Interest income, net			76				4
Change in fair value of preferred stock tranche rights liability and preferred stock warrant liability			—				(23,217	)
Other income, net			1				9
Total other income (expense)			77				(23,204	)
Net loss			(9,129	)			(26,997	)
Other comprehensive loss
Unrealized loss on marketable securities			(583	)			—
Comprehensive loss		$	(9,712	)		$	(26,997	)
Net loss per common share, basic and diluted		$	(0.23	)		$	(64.41	)
Weighted-average shares outstanding, basic and diluted			40,473,270				419,124

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We are a clinical-stage biopharmaceutical company developing a novel disease-modifying approach to target what we believe to be a key underlying cause of Alzheimer’s Disease, or AD. Alzheimer’s disease is a progressive neurodegenerative disease of the brain that leads to loss of memory and cognitive functions and ultimately results in death. Our scientific founders pioneered research on soluble amyloid-beta oligomers, or AβOs, which are globular assemblies of the Aß peptide that are distinct from Aß monomers and amyloid plaques. We are currently focused on advancing a targeted immunotherapy drug candidate, ACU193, through clinical proof of mechanism trials in early AD patients. We initiated a Phase 1 clinical trial of ACU193 in 2021, which we named This trial is enrolling patients with mild dementia or mild cognitive impairment due to AD, conditions referred to as “early AD.” is a U.S.-based, multi-center, randomized, double-blind, placebo-controlled clinical trial with overlapping single ascending dose, or SAD, and multiple ascending dose, or MAD, cohorts involving a total of approximately 62 patients with early AD. The overall objective of the trial is to evaluate the safety and tolerability and establish clinical proof of mechanism of ACU193 administered intravenously. The primary trial endpoints are focused on safety and immunogenicity. An important safety measure will be the use of magnetic resonance imaging, or MRI, to assess the presence or absence of amyloid-related imaging abnormalities. Secondary endpoints include pharmacokinetics in plasma and cerebrospinal fluid, or CSF, and target engagement as evidenced by detection of ACU193 bound to AßOs in CSF. Clinical scales typically used in AD trials as well as computerized cognitive testing are included as exploratory measures. In October 2021, we announced the initial dosing of the first patient in the trial and the subsequent successful sentinel safety review of the first two patients. Due to delays in clinical trial site activation and patient enrollment that we believe are principally related to the effects of the pandemic, we are expanding the anticipated number of trial sites to support our enrollment objectives and anticipated timelines. Clinical trial site activation and patient recruitment and enrollment is ongoing. Based on current site activations and enrollment rates, we anticipate reporting our topline data from the trial in the first half of 2023.

We have incurred net losses and negative cash flows from operations since our inception. Our net losses were $9.1 million and $27.0 million for the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, we had an accumulated deficit of $136.7 million. Our net losses and cash flows from operations may fluctuate significantly from and depending on the timing of nonclinical studies, clinical trials and our expenditures on other research and development activities. We expect our expenses and operating losses will increase substantially for the foreseeable future as we advance ACU193 in clinical trials, seek to expand our product candidate portfolio through developing additional product candidates, grow our clinical, regulatory and quality capabilities, and incur additional costs associated with operating as a public company. It is likely that we will seek third-party collaborators for the future commercialization of ACU193 or any other product candidate that is approved for marketing. However, we may seek to commercialize our products at our own expense, which would require us to incur significant additional expenses for marketing, sales, manufacturing and distribution.

In March 2020, the World Health Organization declared a global pandemic and the United States declared a national emergency with respect to In response to the pandemic, a number of governmental orders and other public health guidance measures have been implemented across much of the United States, including in the locations of our office, clinical trial sites and third parties on whom we rely. We implemented a work-from-home policy allowing employees and consultants who can work from home to do so.

Business travel has been limited, and online video and teleconference technology is used to meet virtually rather than in person. We have taken measures to secure our research and development activities, while work in laboratories by our partners has been organized to reduce risk of transmission.

In October 2021, we announced the initial dosing of the first patient in and the subsequent successful sentinel safety review of the first two patients. Due to delays in clinical trial site activation and patient enrollment that we believe are principally related to effects of we are expanding the anticipated number of trial sites to support our enrollment objectives and anticipated timelines. However, we cannot assure that we will not experience additional delays in site activation or enrollment. Clinical trial site activation and patient recruitment and enrollment is ongoing. Based on current site activations and enrollment rates, we anticipate reporting our topline data from this trial in the first half of 2023.

The ultimate impact of the pandemic on our business, results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the pandemic on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, our business, results of operations, financial position and cash flows may be materially adversely affected.

We expect that our general and administrative expenses will increase as our organization and headcount needed in the future grows to support continued research and development activities and potential commercialization of our product candidates. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, attorneys and accountants, among other expenses. Additionally, we expect to incur increased expenses associated with being a public company, including costs of additional personnel, accounting, audit, legal, regulatory associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance costs, and investor and public relations costs.

Prior to our IPO on July 6, 2021, changes in the fair values of the Series warrant liability and the Series B tranche rights were recognized as a component of other income (expense). The liability and the Series B tranche rights were initially recorded at fair value as liabilities on our balance sheet. Each was subsequently at fair value at the end of each reporting period and also upon the exercise of the warrant on June 22, 2021, and upon settlement of the tranche rights with the milestone closing for the Series B on June 17, 2021.

Other income was $0.1 million for the three months ended March 31, 2022, which was primarily due to net interest income on the Company’s portfolio of marketable securities. Other expense was $23.2 million for the three months ended March 31, 2021, due almost entirely to the changes in the fair values of the liability and the Series B tranche rights.

As of March 31, 2022, our cash, cash equivalents and marketable securities totaled $216.7 million. Our marketable securities mature over the next one and years. We enter into contracts in the

Net cash used in operating activities was $8.3 million and $2.4 million for the three months ended March 31, 2022 and 2021, respectively. Net cash used in operating activities during the three months ended March 31, 2022 primarily consisted of our net loss of $9.1 million, which was reduced by adjustments of $0.6 million for stock-based compensation and $0.2 million for net accretion and amortization on marketable securities, plus cash used of $1.5 million in accrued expenses and other current liabilities mainly due to research and development and employee liabilities; partially offset by $1.4 million of cash provided by prepaid expenses mainly associated with research and development and insurance, and $0.1 million from an increase in accounts payable.

Net cash used in operating activities during the three months ended March 31, 2021 was primarily due to our net loss of $27.0 million, including other expenses of $23.2 million related to the change in the fair values of the Series warrant liability and the Series B tranche liability, partially offset by increases in accounts payable of $0.4 million and accrued expenses and other current liabilities of $1.0 million.

Our significant accounting policies are more fully described in Note 2 to our unaudited condensed financial statements located in “Part I – Financial Information, Item 1. Financial Statements” in this Quarterly Report on Form

We may take advantage of these provisions until we no longer qualify as an emerging growth company. We will cease to qualify as an emerging growth company on the date that is the earliest of: (i) December 31, 2025, (ii) the last day of the fiscal year in which we have more than $1.07 billion in total annual gross revenues, (iii) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of our common stock that is held by exceeds $700 million as of the prior June 30th, or (iv) the date on which we have issued more than $1.0 billion of debt over the prior three-year period. We may choose to take advantage of some but not all of these reduced reporting burdens. We have taken advantage of certain reduced reporting requirements in this Quarterly Report on Form and our other filings with the SEC. Accordingly, the information contained herein may be different than you might obtain from other public companies in which you hold equity interests.

We are also a “smaller reporting company,” meaning that the market value of our shares held by is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our shares held by is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our Quarterly Report on Form and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

As a “smaller reporting company” as defined by Item 10 of Regulation the Company is not required to provide the information required by this item.

We maintain “disclosure controls and procedures,” as defined in the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules the Exchange Act as of March 31, 2022. Based on the evaluation of our disclosure controls and procedures, our management concluded that, as of March 31, 2022, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in this Quarterly Report on (a) reported within the time periods specified by SEC rules and regulations, and (b) communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding any required disclosure.

There have been no changes in our internal control over financial reporting, as such term is defined in and promulgated under the Securities Exchange Act of 1934, as amended, that occurred during the fiscal quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and trading price of our securities. In addition to the other information set forth in this Quarterly Report on Form you should carefully consider the factors described in Part I, Item 1A. “ Risk Factors” of our Annual Report on Form for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission on March 28, 2022.

On June 30, 2021, our Registration Statement on Form as amended (File was declared effective in connection with our initial public offering, pursuant to which we sold an aggregate of 11,499,998 shares of our common stock, including the full exercise of the underwriters’ option to purchase additional shares, at a price to the public of $16.00 per share. BofA Securities, Inc, Credit Suisse Securities (USA) LLC, and Stifel, Nicolaus & Company, Incorporated acted as joint lead book-running managers and UBS Securities LLC also acted as a book-running manager for the offering.