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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________
Commission File Number: 001-39112

OYSTER POINT PHARMA, INC.
(Exact Name of Registrant as Specified in its Charter)

Delaware81-1030955
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
202 Carnegie Center, Suite 109 Princeton, New Jersey
08540
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (609) 382-9032

Securities registered pursuant to Section 12(b) of the Act:
Title of each class

Trading
Symbol(s)

Name of each exchange on which registered
Common stock, par value $0.001

OYST

Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§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 non-accelerated 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 12b-2 of the Exchange Act.
Large accelerated filer   Accelerated filer 
Non-accelerated filer   Smaller reporting company 
Emerging growth company





If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  
As of July 31, 2020, the registrant had 25,752,939 shares of common stock, $0.001 par value per share, outstanding.





SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Any statements contained in this Form 10-Q that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, such forward-looking statements are identified by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would,” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:
the likelihood of the Company's clinical trials demonstrating safety and efficacy of its product candidates, and other positive results;
the timing of initiation of the Company's future clinical trials, and the reporting of data from completed, current and future clinical trials and preclinical studies;
plans relating to the clinical development of the Company's product candidates, including the size, number and disease areas to be evaluated;
the size of the market opportunity and prevalence of dry eye disease (DED) for the Company's product candidates;
plans relating to commercializing the Company's product candidates, if approved, including the geographic areas of focus and sales strategy;
the success of competing therapies that are or may become available;
the Company's estimates of the number of patients in the United States who suffer from DED and the number of patients that will enroll in its clinical trials;
the beneficial characteristics, safety, efficacy and therapeutic effects of the Company's product candidates;
the timing, likelihood or scope of regulatory filings and approval for its product candidates;
the Company's ability to obtain and maintain regulatory approval of its product candidates;
the Company's plans relating to the further development and manufacturing of its product candidates, including additional indications for which it may pursue;
the expected potential benefits of strategic collaborations with third parties and the Company's ability to attract collaborators with development, regulatory and commercialization expertise;
existing regulations and regulatory developments in the United States and other jurisdictions;
the Company's plans and ability to obtain or protect intellectual property rights, including extensions of existing patent terms where available;
continued reliance on third parties to conduct additional clinical trials of the Company's product candidates, and for the manufacture and supply of product candidates, components for preclinical studies and clinical trials and products and components for commercialization of any approved products;
the need to hire additional personnel, and the Company's ability to attract and retain such personnel;
the potential effects of the SARS-CoV-2 virus pandemic on business, operations and clinical development timelines and plans;
the accuracy of estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
i


the Company's financial performance;
the sufficiency of existing capital resources to fund future operating expenses and capital expenditure requirements;
expectations regarding the period during which the Company will qualify as an emerging growth company under the JOBS Act; and
the Company's anticipated use of its existing resources and proceeds from the initial and follow-on public offering.
The Company has based these forward-looking statements largely on its current expectations and projections about its business, the industry in which it operates and financial trends that may affect business, financial condition, results of operations and growth prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q, as well as Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2019 and the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2020. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, they should not be relied on as predictions of future events. The events and circumstances reflected in these forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, the Company does not plan to publicly update or revise any forward-looking statements after the date of this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.
In addition, statements that “the Company believes” and similar statements reflect the Company's beliefs and opinions on the relevant subject. These statements are based upon information available to the Company as of the date of this Quarterly Report on Form 10-Q, and while the Company believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and the Company's statements should not be read to indicate that it has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

ii


TABLE OF CONTENTS

Page
ITEM 1
Financial Statements (unaudited)
Condensed Balance Sheets as of June 30, 2020 and December 31, 2019
Condensed Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2020 and 2019
Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity for the three and six months ended June 30, 2020 and 2019
Condensed Statements of Cash Flows for the six months ended June 30, 2020 and 2019
Notes to Unaudited Interim Condensed Financial Statements
ITEM 2Management's Discussion and Analysis of Financial Conditions and Results of Operations
ITEM 3
Quantitative and Qualitative Disclosure About Market Risk
ITEM 4
Controls and Procedures
PART II – OTHER INFORMATION
ITEM 1
Legal Proceedings
ITEM 1A
Risk Factors
ITEM 2
Unregistered Sales of Equity Securities and Use of Proceeds
ITEM 3
Defaults Upon Senior Securities
ITEM 4
Mine Safety Disclosures
ITEM 5
Other Information
ITEM 6
Exhibits
SIGNATURES

iii


PART I — FINANCIAL INFORMATION
ITEM 1 — FINANCIAL STATEMENTS
OYSTER POINT PHARMA, INC.
CONDENSED BALANCE SHEETS
(in thousands, except share and per share amounts)
(unaudited)


June 30, 2020December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents$226,748  $139,147  
Prepaid expenses and other current assets1,816  3,033  
Total current assets228,564  142,180  
Property and equipment, net483  181  
Restricted cash61  51  
Right-of-use assets, net874  797  
Total Assets$229,982  $143,209  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable$3,759  $507  
Accrued expenses and other current liabilities4,526  4,596  
Lease liabilities400  296  
Total current liabilities8,685  5,399  
Lease liabilities, non-current482  512  
Total Liabilities9,167  5,911  
Commitments and Contingencies (Note 8)
Stockholders’ Equity
Preferred stock, $0.001 par value per share; 5,000,000 shares authorized; none outstanding
    
Common stock, $0.001 par value per share; 1,000,000,000 shares authorized, 25,743,405 and 21,366,950 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
26  21  
Additional paid-in capital337,003  221,508  
Accumulated deficit(116,214) (84,231) 
Total Stockholders’ Equity220,815  137,298  
Total Liabilities and Stockholders’ Equity
$229,982  $143,209  
The accompanying notes are an integral part of these condensed financial statements.
1


OYSTER POINT PHARMA, INC.
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share amounts)
(unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Operating expenses:
Research and development$8,554  $8,101  $19,894  $10,506  
General and administrative6,940  3,132  12,529  4,737  
Total operating expenses15,494  11,233  32,423  15,243  
Loss from operations(15,494) (11,233) (32,423) (15,243) 
Other income, net 30  503  440  753  
Net loss and comprehensive loss$(15,464) $(10,730) $(31,983) $(14,490) 
Net loss per share, basic and diluted$(0.66) $(7.60) $(1.43) $(10.26) 
Weighted average shares outstanding, basic and diluted
23,442,530  1,412,354  22,405,031  1,412,161  

The accompanying notes are an integral part of these condensed financial statements.
2


OYSTER POINT PHARMA, INC.
CONDENSED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
(in thousands, except share amounts)
(unaudited)
Redeemable Convertible Preferred StockCommon StockAdditional Paid-In CapitalAccumulated DeficitTotal Stockholders’ Equity
SharesAmountSharesAmount
Balance at December 31, 2019  $  21,366,950  $21  $221,508  $(84,231) $137,298  
Net loss
—  —  —  —  —  (16,519) (16,519) 
Issuance of common stock upon exercise of stock options
—  —  3,530  —  4  —  

4  
Stock-based compensation expense
—  —  —  1,180  —  1,180  
Balance at March 31, 2020  $  21,370,480  $21  $222,692  $(100,750) $121,963  
Net loss
—  —  —  —  —  (15,464) (15,464) 
Issuance of common stock upon follow-on equity offering, net of issuance costs of $8,125
—  —  4,312,500  5  112,620  —  112,625  
Issuance of common stock upon exercise of stock options
—  —  60,425  —  82  —  82  
Stock-based compensation expense
—  —  —  —  1,609  —  1,609  
Balance at June 30, 2020  $  25,743,405  $26  $337,003  $(116,214) $220,815  



Redeemable Convertible Preferred StockCommon Stock
Additional Paid-In Capital
Accumulated Deficit
Total Stockholders’ Deficit
SharesAmountSharesAmount
Balance at December 31, 20187,611,691  $43,001  1,411,966  $1  $276  $(38,520) 

$(38,243) 
Net loss
—  —  —  —  —  (3,760) 

(3,760) 
Issuance of Series B redeemable convertible preferred stock, net of issuance costs of $146
6,015,431  84,852  —  —  —  —  —  
Stock-based compensation
—  —  —  —  40  —  

40  
Balance at March 31, 201913,627,122  $127,853  1,411,966  $1  $316  $(42,280) $(41,963) 
Net loss
—  —  —  —  —  (10,730) (10,730) 
Issuance of Series B redeemable convertible preferred stock, net of issuance costs of $2
566,159  $8,000  —  —  —  —    
Issuance of common stock upon exercise of stock options
—  —  7,060  —  7  —  7  
Stock-based compensation
—  —  —  —  1,175  —  1,175  
Balance at June 30, 201914,193,281  $135,853  1,419,026  $1  $1,498  $(53,010) $(51,511) 

The accompanying notes are an integral part of these condensed financial statements.
3


OYSTER POINT PHARMA, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended June 30,
20202019
Cash flows from operating activities
Net loss$(31,983) $(14,490) 
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense2,789  1,215  
Depreciation and amortization40    
Reduction in the carrying amount of the right-of-use assets188  26  
Changes in assets and liabilities:
Prepaid expenses and other assets1,217  (3,664) 
Accounts payable3,252  1,620  
Change in lease liabilities(207) (26) 
Accrued expenses and other current liabilities(394) 801  
Net cash used in operating activities(25,098) (14,518) 
Cash flows from investing activities
Purchase of property and equipment(342) (69) 
Net cash used in investing activities(342) (69) 
Cash flows from financing activities
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs  92,852  
Payment of deferred offering costs   (92) 
Proceeds from follow-on equity offering, net of issuance costs 112,965    
Proceeds from the issuance of common stock upon exercise of stock options86  7  
Net cash provided by financing activities113,051  92,767  
Net increase in cash, cash equivalents and restricted cash87,611  78,180  
Cash, cash equivalents and restricted cash at the beginning of the period139,198  5,228  
Cash, cash equivalents and restricted cash at the end of the period$226,809  $83,408  
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents$226,748  $83,357  
Restricted cash61  51  
Cash, cash equivalents and restricted cash$226,809  $83,408  
Supplemental cash flow information
Right-of-use for office space and office equipment acquired through leases$320  $  
Supplemental non-cash flow information
Unpaid additions to property and equipment, net$  $8  
Unpaid offering costs $340  $196  
The accompanying notes are an integral part of these condensed financial statements.

4


OYSTER POINT PHARMA, INC.
Notes to Unaudited Interim Condensed Financial Statements
1. Nature of Business, Basis of Presentation and Significant Accounting Policies
Description of the Business
Oyster Point Pharma, Inc. (the Company) was incorporated in the state of Delaware on June 30, 2015. From inception through June 30, 2020, the Company has been primarily engaged in business planning, research, clinical development of its lead therapeutic product candidates, recruiting and raising capital. The Company is a clinical stage biopharmaceutical company focused on the discovery, development and commercialization of pharmaceutical therapies to treat ocular surface diseases. The Company’s principal office is located in Princeton, New Jersey.

Liquidity

The Company incurred net losses of $32.0 million and $14.5 million for the six months periods ended June 30, 2020 and 2019, respectively, and had an accumulated deficit of $116.2 million as of June 30, 2020. The Company has historically financed its operations primarily through the sale and issuance of its securities. The Company completed its initial public offering (IPO) in November of 2019, selling 5,750,000 shares of common stock at a price of $16.00 per share. The net proceeds from the offering were $82.1 million. On May 19, 2020, the Company completed its follow-on equity offering selling 4,312,500 shares of common stock at a price of $28.00 per share. The net proceeds from the offering were $112.6 million. To date, none of the Company’s product candidates have been approved for sale and therefore it has not generated any revenue from product sales. The Company expects to incur increased sales and marketing expenses with the commercialization of new and existing products, if approved for sale, as well as increased research and development expenses as it develops additional product candidates. In addition, the Company expects its operating losses to continue to increase for the foreseeable future.

The Company is subject to risks and uncertainties as a result of the SARS-CoV-2 virus pandemic. The pandemic, which has continued to spread, and any related public health developments, have adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the pandemic or the full extent of its effects on the Company's financial condition, liquidity or results of operations.

The Company had cash and cash equivalents of $226.7 million as of June 30, 2020. Management believes that the Company’s current cash and cash equivalents will be sufficient to fund its planned operations for at least 12 months from the date of issuance of these financial statements.

Basis of Presentation

The unaudited interim condensed financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments, which are of a normal recurring nature, necessary to state fairly the Company’s financial position as of June 30, 2020 and as of December 31, 2019, the results of operations for the three and six months ended June 30, 2020 and 2019, and cash flows for the six months ended June 30, 2020 and 2019. While management believes that the disclosures presented are adequate to make the information not misleading, these unaudited condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto in the Company’s latest year-end financial statements, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The results of the Company’s operations for any interim period are not necessarily indicative of the results of operations for any other interim period or for the full year.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of expenses in the condensed financial statements and accompanying notes. Significant items subject to such estimates and assumptions include stock-based compensation and certain research and development accruals. Actual results could differ from these estimates, and such differences could be material to the Company’s financial position and results of operations.

5

OYSTER POINT PHARMA, INC.
Notes to Unaudited Interim Condensed Financial Statements (continued)
Summary of Significant Accounting Policies

The Company’s significant accounting policies are disclosed in Note 1. Organization and Summary of Significant Accounting Policies in the Annual Report on Form 10-K for the year ended December 31, 2019. There have been no material changes in the Company's accounting policies from those disclosed in the financial statements and the related notes included in the Annual Report on Form 10-K for the year ended December 31, 2019.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the FASB) under its accounting standard codifications (ASC) or other standard setting bodies and are adopted by the Company as of the specified effective date, unless otherwise discussed below.

Recently adopted accounting pronouncements

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes, which simplifies various aspects related to the accounting for income taxes. This ASU removes exceptions to the general principles in Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. For public companies, this ASU is effective for interim and annual reporting periods beginning after December 15, 2020. Early adoption is permitted. The Company adopted ASU 2019-12 and its adoption did not have a material effect on the Company's financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements. This ASU removes the requirement to disclose: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements. For public business entities, this ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2018-13 and its adoption did not have a material effect on the Company’s financial statements and related disclosures.

Recently issued accounting pronouncements not yet adopted

In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments. This ASU improves and clarifies various financial instruments topics, including the current expected credit losses standard issued in 2016. The ASU includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments have different effective dates. The Company is currently evaluating the impact the adoption of this ASU will have on its financial statements and related disclosures, but does not expect adoption will have a material impact on the Company’s financial statements and disclosures.

Reclassification

Certain prior year amounts have been reclassified for comparative purposes.

2. Fair Value Measurements
The Company assesses the fair value of financial instruments as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level 1 Quoted prices in active markets for identical assets or liabilities.

6

OYSTER POINT PHARMA, INC.
Notes to Unaudited Interim Condensed Financial Statements (continued)
Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

As of June 30, 2020, financial assets measured and recognized at fair value on a recurring basis were as follows (in thousands):

Fair Value Measurements at June 30, 2020
Quoted Price in Active Markets for Identical Assets (Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
Total
Assets
Money market funds$225,748  $  $  $225,748  
Total fair value of assets$225,748  $  $  $225,748  

As of December 31, 2019, financial assets measured and recognized at fair value on a recurring basis were as follows (in thousands):

Fair Value Measurements at December 31, 2019
Quoted Price
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Assets
Money market funds$138,147  $  $  $138,147  
Total fair value of assets$138,147  $  $  $138,147  

Money market funds are included in cash and cash equivalents on the balance sheets and are classified within Level 1 of the fair value hierarchy as they are valued using quoted market prices.

The carrying amounts reflected in the Company's condensed balance sheets for cash and cash equivalents, prepaid expenses and other current assets, restricted cash, accounts payable and accrued expenses and other liabilities approximate their fair values, due to their short-term nature.

There were no financial liabilities measured and recognized at fair value as of June 30, 2020 and December 31, 2019.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are money market funds included in cash and cash equivalents on the condensed balance sheets. The Company attempts to minimize the risks related to cash and cash equivalents by using highly-rated financial institutions that invest in a broad and diverse range of financial instruments. The Company's investment portfolio is maintained in accordance with its investment policy that defines allowable investments, specifies credit quality standards and limits the credit exposure of any single issuer.

7

OYSTER POINT PHARMA, INC.
Notes to Unaudited Interim Condensed Financial Statements (continued)
3. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):

June 30, 2020December 31, 2019
Accrued compensation1,481  1,214  
Accrued professional services1,199  1,163  
Accrued research and development expense1,846  2,219  
Total accrued expenses and other current liabilities
$4,526  $4,596  

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OYSTER POINT PHARMA, INC.
Notes to Unaudited Interim Condensed Financial Statements (continued)
4. Stockholders' Equity
Common Stock
The Company is authorized to issue 1,000,000,000 shares of common stock, at a par value of $0.001 per share. Each share of common stock is entitled to one vote.
The Company reserved common stock for future issuance as follows:

June 30, 2020
December 31, 2019
Outstanding options under the 2016 Plan2,678,6412,748,434
Outstanding options under the 2019 Plan603,24529,466
Equity awards available for grant under the 2019 Plan 2,124,7012,747,047
Unvested restricted stock units (RSUs) 77,53023,125
Shares reserved for purchase under the ESPP (a)
270,000270,000
Total5,754,1175,818,072

(a) — Employee Stock Purchase Plan approved in October 2019, as further described in Note 5. Equity Incentive Plans.

For further discussion on options and RSUs granted, exercised and cancelled during the six months ended June 30, 2020, see Note 5. Equity Incentive Plans.
Equity Offerings
On May 19, 2020, the Company completed its follow-on public offering selling 4,312,500 shares of common stock at a price to the public of $28.00 per share. The net proceeds from the offering were $112.6 million.
On November 4, 2019, upon the closing of the IPO, all outstanding shares of redeemable convertible preferred stock were converted into an aggregate of 14,193,281 shares of the Company’s common stock and $135.9 million of mezzanine equity was reclassified to common stock and additional paid-in capital. As of June 30, 2020 and December 31, 2019, there were no shares of redeemable convertible preferred stock issued and outstanding.

On February 15, 2019, the Company executed the Series B Preferred Stock Purchase Agreement to sell 6,581,590 shares of Series B redeemable convertible preferred stock. In February and April of 2019, the Company received gross cash proceeds of $85.0 million and $8.0 million, respectively, from the sale of Series B redeemable convertible preferred stock.

9

OYSTER POINT PHARMA, INC.
Notes to Unaudited Interim Condensed Financial Statements (continued)
5. Equity Incentive Plans
In October 2019, the Company’s Board of Directors (BOD) and stockholders approved the 2019 Equity Incentive Plan (the 2019 Plan). The 2019 Plan provides for the granting of stock options, restricted stock, restricted stock units, stock appreciation rights, performance units, and performance shares to the Company's employees, directors, and others.

The exercise price of an incentive stock option (ISO) and non-qualified stock option (NSO) shall not be less than 100% of the estimated fair value of the shares on the date of grant, as determined by the BOD. The exercise price of an ISO granted to a 10% stockholder shall not be less than 110% of the estimated fair value of the shares on the date of grant, as determined by the BOD. To date, outstanding options have a term of 10 years and generally vest monthly over a four-year period.

In October 2019, the Company’s BOD and stockholders also approved the 2019 Employee Stock Purchase Plan (the ESPP), which qualifies as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code, and pursuant to which 270,000 shares of common stock were reserved for future issuance. The ESPP is designed to enable eligible employees to purchase shares of the Company's common stock at a discount on a periodic basis through payroll deductions. There have been no ESPP purchases to date.

Stock Options

The following table summarizes stock option activity under the 2016 Plan and the 2019 Plan during the six months ended June 30, 2020 (in thousands, except share and per share data):

Outstanding Options
Number of Shares Underlying Outstanding Options
Weighted Average Exercise Price
Weighted Average Remaining Contractual Term (Years)Aggregate Intrinsic Value
Balance, January 1, 20202,777,900  $4.59  8.7$55,146  
Options granted575,029  32.40  
Options exercised(63,955) 1.34  1,874  
Options canceled(7,088) 17.52  91  
Balance, June 30, 20203,281,886  9.50  8.565,634  
Shares vested and exercisable as of June 30, 20201,289,392  2.29  7.934,283  
Vested and expected to vest as of June 30, 20203,281,886  $9.50  8.5$65,634  
The weighted average grant date fair value of options granted during the six months ended June 30, 2020 was $23.75 per share. As of June 30, 2020, the total unrecognized stock-based compensation expense for stock options was $20.4 million, which is expected to be recognized over a weighted average period of 3.3 years.


Restricted Stock Units

Restricted stock units (RSUs) consist of restricted stock unit awards which are granted to the Company's employees and directors. The value of an RSU award is based on the Company's stock price on the date of the grant. The shares underlying the RSUs are not issued until the RSUs vest. Upon vesting, each RSU converts into one share of the Company's common stock.

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OYSTER POINT PHARMA, INC.
Notes to Unaudited Interim Condensed Financial Statements (continued)
Activity with respect to the Company's restricted stock units during the six months ended June 30, 2020 was as follows (in thousands, except share and per share data):

Outstanding RSUs
Number of Shares Underlying Outstanding Awards
Weighted Average Grant Date Fair Value per Share
Weighted Average Remaining Contractual Term (Years)Aggregate Intrinsic Value
Outstanding at January 1, 202023,125  $16.00  2.8$565  
Restricted stock units granted54,405  28.03  1,525  
Balance, June 30, 202077,530  24.44  1.42,239  
Shares vested as of June 30, 2020    —  
Vested and expected to vest as of June 30, 202077,530  $24.44  1.4$2,239  
As of June 30, 2020, the total unrecognized stock-based compensation expense for RSUs was $1.7 million, which is expected to be recognized over a weighted average period of 1.2 years.

Fair Value of Common Stock

Prior to the IPO, the fair value of the Company’s common stock underlying the stock options was determined by the Board of Directors with assistance from management and, in part, on input from an independent third-party valuation firm. The Board of Directors determined the fair value of common stock by considering a number of objective and subjective factors, including valuations of comparable companies, sales of convertible preferred stock, operating and financial performance, the lack of liquidity of the Company’s common stock and the general and industry-specific economic outlook. Subsequent to the IPO, the fair value of the Company’s common stock is determined based on its closing market price.

Stock-Based Compensation Expense

Total stock-based compensation expense recorded related to awards granted to employees and non-employees was as follows (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Research and development$239  $209  $456  $214  
General and administrative1,370  966  2,333  1,001  
Total stock-based compensation expense $1,609  $1,175  $2,789  $1,215  

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OYSTER POINT PHARMA, INC.
Notes to Unaudited Interim Condensed Financial Statements (continued)
6. Net Loss Per Share
The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share data):

Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Numerator:
Net loss
$(15,464) $(10,730) $(31,983) $(14,490) 
Denominator:
Weighted average shares outstanding, basic and diluted
23,442,530  1,412,354  22,405,031  1,412,161  
Net loss per share, basic and diluted
$(0.66) $(7.60) $(1.43) $(10.26) 

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive:

As of June 30,
20202019
Series A redeemable convertible preferred stock  7,611,691  
Series B redeemable convertible preferred stock  6,581,590  
Options to purchase common stock3,281,886  2,321,804  
Unvested restricted stock units77,530    
Total
3,359,416  16,515,085  

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OYSTER POINT PHARMA, INC.
Notes to Unaudited Interim Condensed Financial Statements (continued)
7. Leases
Lease Obligations

In April 2019, the Company entered into a non-cancelable operating lease for office space in Princeton, New Jersey, commencing on July 1, 2019, for a period of three years from the commencement date. In January 2020, the Company amended this lease to include additional office space, with the same terms as the original lease. Total future minimum lease payments under this amendment are $0.9 million as of June 30, 2020. The total lease payments required over the life of this lease are $1.2 million. The remaining lease term was 2.1 years as of June 30, 2020. Rent expense was $0.2 million and less than $0.1 million for the six months ended June 30, 2020 and 2019, respectively.

The Company leases certain office equipment under finance leases with remaining lease terms of 2.2 to 2.8 years. At the commencement date, the Company determined the amount of lease liability using a discount rate of 3%, which management determined represents the rate implicit in the lease. Interest expense and amortization expense for the finance leases was immaterial for the three and six months ended June 30, 2020 and 2019, respectively.

Supplemental balance sheet information for the leases is as follows (in thousands):

June 30, 2020December 31, 2019
Operating lease right-of-use asset$832  $783  
Finance lease right-of-use asset42  14  
Total right-of-use asset
$874  $797  
Operating lease liabilities$382  $290  
Finance lease liabilities18  6  
Total lease liabilities
$400  $296  
Operating lease liabilities, non-current$454  $500  
Finance lease liabilities, non-current28  12  
Total lease liabilities, non-current
$482  $512  

The maturities of the lease liabilities under non-cancelable operating and finance leases are as follows (in thousands):

As of June 30, 2020Finance LeasesOperating LeasesTotal
2020 (remainder)$9  $214  $223  
202118  432  450  
202216  254  270  
20234    4  
Total undiscounted cash flows
47  900  947  
Less: imputed interest
(1) (64) (65) 
Total lease liability46  836  882  
Less: current portion
(18) (382) (400) 
Lease liability$28  $454  $482  

8. Commitments and Contingencies
Asset Purchase of OC-02
In October 2016, the Company entered into an asset purchase agreement pursuant to which it acquired the compound OC-02. The agreement provides for milestone payments of up to $37.0 million upon achievement of certain milestone events. The agreement also provides for royalty payments in the mid-single digit percentage on covered product net worldwide
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OYSTER POINT PHARMA, INC.
Notes to Unaudited Interim Condensed Financial Statements (continued)
sales. The Company’s obligation to pay royalties will terminate at the latter of patent expiration in each country or ten years. In addition, the Company is required to pay 15% of any (i) licensing revenue received that is related to OC-02 and (ii) revenue received from the sale of OC-02, up to a maximum aggregate amount of $10.0 million. No milestone was achieved or probable to be achieved or royalties payable accrued as of June 30, 2020 and as of December 31, 2019.

License Agreement

On October 18, 2019, the Company entered into a non-exclusive patent license agreement (the License Agreement) with Pfizer, which granted the Company non-exclusive rights under Pfizer’s patent rights covering varenicline tartrate to develop, manufacture, and commercialize the OC-01 varenicline product. Under the terms of the agreement, the Company made an upfront payment to Pfizer of $5 million. If the Company successfully commercializes OC-01, it may be required to pay a single milestone payment in the very low double-digit millions and tiered royalties on net sales of OC-01 at percentages ranging from the mid-single digits to the mid-teens. The royalty obligation to Pfizer will commence upon the first commercial sale of OC-01 and will expire upon the later of (a) the expiration of all regulatory or data exclusivity granted to Pfizer in connection with varenicline in the United States; and (b) the expiration or abandonment of the last valid claims of the licensed patents. No milestone was achieved or probable to be achieved or royalties payable accrued as of June 30, 2020 and as of December 31, 2019.

Contingencies and Indemnifications

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount.

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications, including for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to its technology. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but that have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations.

The Company has agreed to indemnify its directors and officers for certain events or occurrences while the director or officer is, or was serving, at the Company’s request in such capacity. The indemnification period covers all pertinent events and occurrences during the director’s or officer’s service. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is not specified in the agreements; however, the Company has director and officer insurance coverage that reduces its exposure and enables the Company to recover a portion of any future amounts paid.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion analyzes the Company's historical financial condition and results of operation. As you read this discussion and analysis, refer to the Company's financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q, which represents the results of operations for the three and six months ended June 30, 2020 and 2019. Also refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2019, which includes detailed discussions of various items impacting the Company's business, results of operations and financial condition. The discussion and analysis below has been organized as follows:

Executive Summary, including a description of the business and significant events that are important to understanding the results of operations and financial condition;
Results of operations, including an explanation of significant differences between the periods in the specific line items of the condensed statements of operations;
Financial condition addressing liquidity position, sources and uses of cash, capital resources and requirements, commitments, and off-balance sheet arrangements; and
Critical accounting policies which are most important to both the portrayal of the Company's financial condition and results of operations, and which require management's most difficult, subjective or complex judgment.

Some of the information contained in the following discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to the Company’s plans and strategy for its business, includes forward-looking statements within the meaning of Section 27A of the Act and Section 21E of the Exchange Act that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and in this Quarterly Report on Form 10-Q, the Company’s actual results could differ materially from the results described in or implied by these forward-looking statements. Please also see the section of this Quarterly Report on Form 10-Q titled “Special Note Regarding Forward-Looking Statements.”


Executive Summary

Introduction and Overview

Oyster Point Pharma, Inc. is a clinical stage biopharmaceutical company focused on the discovery, development and commercialization of first-in-class pharmaceutical therapies to treat ocular surface diseases. The Company's lead product candidate OC-01 (varenicline), a highly selective nicotinic acetylcholine receptor (nAChR) agonist, is being developed as a nasal spray to treat the signs and symptoms of dry eye disease (DED). OC-01’s novel mechanism of action is designed to re-establish tear film homeostasis by activating the trigeminal parasympathetic pathway and stimulating the glands and cells responsible for natural tear film production. Based on OC-01’s clinical trial results and its rapid onset of action, the Company believes OC-01, if approved, has the potential to become the new standard of care and redefine how DED is treated for millions of patients. The Company believes that targeting the parasympathetic nervous system through the use of locally administered cholinergic agonists has the potential to treat a wide range of diseases and disorders. The Company has identified several indications, including several outside of ophthalmology, where this approach could provide a meaningful benefit to patients.

Since its formation in June 2015, the Company has devoted substantially all of its resources to developing its product candidates. The Company has incurred significant operating losses to date. The Company’s net losses were $32.0 million and $14.5 million for the six months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, the Company had an accumulated deficit of $116.2 million. The Company expects that its operating expenses will increase significantly as it advances its product candidates through preclinical and clinical development, seeks regulatory approval, and prepares for and, if approved, proceeds to commercialization; acquires, discovers, validates and develops additional product candidates; obtains, maintains, protects and enforces its intellectual property portfolio; and hires additional personnel. In addition, the Company has incurred and will continue to incur additional costs associated with operating as a public company.

The Company does not have any products approved for sale and has not generated any revenue since inception. The Company’s ability to generate product revenue will depend on the successful development, regulatory approval and eventual commercialization of one or more of its product candidates. Until such time as it can generate significant revenue from product sales, if ever, the Company expects to finance its operations through private or public equity or debt financings, collaborative or other arrangements with corporate sources, or through other sources of financing. Adequate funding may not be available to the Company on acceptable terms, or at all. If the Company fails to raise capital or enter into such agreements as and when needed, it may have to significantly delay, scale back or discontinue the development and commercialization of its product candidates.
15



The Company plans to continue to use third-party service providers, including clinical research organizations (CROs) and contract manufacturing organization (CMOs), to carry out its preclinical and clinical development and to manufacture and supply the materials to be used during the development and commercialization of its product candidates. The Company does not currently have a sales force. If OC-01 is approved, the Company intends to deploy a specialty sales force at the launch of OC-01 of approximately 150 to 200 field representatives.

Recent Events

ONSET-2 Phase 3 positive Top-line Results

The Company released the results of the ONSET-2 Phase 3 clinical trial during the second quarter of 2020. During the ONSET-2 Phase 3 clinical trial conducted in 758 subjects, OC-01 demonstrated a statistically significant improvement (as compared to placebo) in signs of DED in both the 0.6 mg/ml and 1.2 mg/ml dose groups and statistically significant improvements (as compared to placebo) in both signs and symptoms of DED in the 1.2 mg/ml dose group.

With the completion of the ONSET-2 Phase 3 clinical trial, as well as the long-term safety follow-up of the ONSET-1 Phase 2b clinical trial, both of which are considered to be pivotal clinical trials, the Company plans to submit a New Drug Application (NDA) for OC-01 for the treatment of signs and symptoms of DED to the U.S. Food and Drug Administration (FDA) in the fourth quarter of 2020.

Follow-On Equity Offering

On May 19, 2020, the Company completed its follow-on public offering of 4,312,500 shares of its common stock at a price to the public of $28.00 per share. The net proceeds from the offering were $112.6 million.

Impact of the SARS-CoV-2 virus Pandemic

In March 2020, the World Health Organization declared the SARS-CoV-2 virus outbreak to be a pandemic. Also, in March of 2020, due to the SARS-CoV-2 virus pandemic, the Company experienced an impact at select clinical trial sites where ophthalmology practices were closed, or subjects were unable to attend visits, or where clinical trial sites did not feel comfortable putting their staff or subjects into a controlled adverse environment (CAE), which limited the Company's ability to assess the related secondary endpoint in its ONSET-2 study for those subjects. The Company then conducted a further post-hoc analyses on the data, which led to discovering additional treatment benefits in the 1.2 mg/ml dose group that were not captured with the statistical method used for analysis of the secondary endpoint. The Company intends to discuss with the FDA the appropriateness of its original secondary endpoint analysis and interpretation of the treatment benefit with the CAE of the 1.2 mg/ml dose group based on these post hoc analyses in the context of its planned NDA submission in the fourth quarter of 2020.

During the six months ended June 30, 2020, financial results of the Company were not significantly affected by the SARS-CoV-2 virus pandemic. However, the extent to which the SARS-CoV-2 virus outbreak affects the Company’s future financial results and operations will depend on future developments which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the outbreak, and current or future domestic and international actions to contain it and treat it. The Company continues to evaluate the impact of the SARS-CoV-2 virus pandemic on its trials, expected timelines and costs, as well as potential supply-chain challenges as it prepares itself for commercialization of the OC-01 candidate and as it continues to learn more about the impact of the SARS-CoV-2 virus pandemic on the industry.

The Company continues to develop pipeline candidates for the potential treatment of various medical indications. The ongoing SARS-CoV-2 virus pandemic may impact access to supplies necessary to conduct preclinical studies, cause delay to the timelines to initiate or complete in vitro or in vivo animal studies, or indirectly impact the operation of contract organizations that are necessary for the Company to advance preclinical projects. If the SARS-CoV-2 virus pandemic continues and persists for an extended period of time, the Company could experience significant disruptions to its clinical development timelines, which could adversely affect its business, financial condition and results of operations.

The ultimate impact of the SARS-CoV-2 virus pandemic or a similar health epidemic is highly uncertain and subject to change. The Company has taken a variety of measures to ensure the availability and functioning of the Company's critical infrastructure and to promote the safety and security of its employees. These measures include requiring remote working arrangements for employees, which will continue through the end of 2020, investing in personal protective equipment, and providing sick leave to affected employees. In addition, Company management is currently evaluating and developing an
16


implementation plan for employees’ safe return to the office once that option becomes feasible. The Company will continue to actively monitor the evolving situation related to the SARS-CoV-2 virus pandemic and may take further actions that alter its operations, including those that may be required by federal, state or local authorities, or that the Company determines are in the best interests of its employees, partners and other third-parties with whom the Company does business. At this point, the full extent to which the SARS-CoV-2 virus pandemic may affect the Company’s business, operations, preclinical and clinical development and commercialization timelines and plans, including the resulting impact on its expenditures and capital needs, remains uncertain.

For further discussion of the risks that the Company faces as a result of the SARS-CoV-2 virus pandemic refer to Part II, Item 1A, Risk Factors, of this Quarterly Report on Form 10-Q.

Components of Operating Results

Revenue

The Company has not generated any revenue from product sales and does not expect to do so in the near future.

Operating Expenses

Research and Development Expenses

Substantially all of the Company’s research and development expenses consist of expenses incurred in connection with the development of its product candidates. These expenses include fees paid to third parties to conduct certain research and development activities on the Company’s behalf, consulting costs, costs for laboratory supplies, product acquisition and license costs, certain payroll and personnel-related expenses, including salaries and bonuses, employee benefit costs and stock-based compensation expenses for employees dedicated to the Company’s research and product development and allocated overhead expenses, including rent, equipment, depreciation, information technology costs and utilities. The Company expenses both internal and external research and development expenses as they are incurred.

The Company does not allocate its costs by product candidate, as a significant amount of research and development expenses includes internal costs, such as payroll and other personnel expenses, laboratory supplies and allocated overhead expenses, and external costs, such as fees paid to third parties to conduct research and development activities on the Company's behalf, are not tracked by product candidate. Several of the Company's departments support multiple product candidate research and development programs, and therefore the costs cannot be allocated to a particular product candidate or development program. The Company tracks its research and development expenses by type of activity: clinical and preclinical, chemistry, manufacturing and controls (CMC), and other costs.

The Company is focusing substantially all of its resources on the development of its product candidates, particularly OC-01. The Company expects its research and development expenses to increase for at least the next few years, as it seeks to initiate additional clinical trials for its product candidates, complete its clinical programs, pursue regulatory approval of its product candidates and prepare for the possible commercialization of these product candidates. Predicting the timing or cost to complete the Company’s clinical programs or validation of its commercial manufacturing and supply processes is difficult and delays may occur because of many factors, including factors outside of the Company’s control. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that it currently anticipates, the Company could be required to expend significant additional financial resources and time on the completion of clinical development. Furthermore, the Company is unable to predict when or if its product candidates will receive regulatory approval with any certainty.

General and Administrative Expenses

General and administrative expenses consist principally of payroll and personnel expenses, including salaries and bonuses, benefits and stock-based compensation expenses, professional fees for legal, consulting, accounting and tax services, allocated overhead, including rent, equipment, depreciation, information technology costs and utilities, and other general operating expenses not otherwise classified as research and development expenses.

The Company anticipates that its general and administrative expenses will increase as a result of increased personnel costs, expanded infrastructure and higher consulting, legal and accounting services costs associated with complying with the
17


applicable stock exchange and SEC requirements, investor relations costs and director and officer insurance premiums associated with being a public company.

Other Income, Net

Other Income, net consists primarily of interest income earned on money market funds, which are included in cash and cash equivalents on the Company's condensed balance sheets.

Results of Operations

Comparison of the Results of Operations for the Three Months Ended June 30, 2020 and 2019

The following table summarizes the Company's results of operations for the periods indicated (in thousands, except percentages):

Three Months Ended June 30,
20202019$ Change% Change
Operating expenses:
Clinical, preclinical$1,881  $2,206  $(325) (15)%
Chemistry, manufacturing and controls (CMC)5,723  5,485  238  %
Other 950  410  540  132 %
Research and development8,554  8,101  453  %
General and administrative6,940  3,132  3,808  122 %
Loss from operations(15,494) (11,233) (4,261) 38 %
Other income, net 30  503  (473) (94)%
Net loss$(15,464) $(10,730) $(4,734) 44 %


Research and Development Expenses

Research and development expenses increased by $0.5 million during the three months ended June 30, 2020 compared to the three months ended June 30, 2019, primarily due to the Company's advancement of OC-01 development and higher employee headcount, which resulted in an increase in payroll and personnel-related expense, including salaries, bonuses, benefits and stock-based compensation, partially offset by lower expenses for clinical and preclinical studies.

General and Administrative Expenses

General and administrative expenses increased by $3.8 million during the three months ended June 30, 2020 compared to the three months ended June 30, 2019. The increase was due to higher headcount and reflects an increase in payroll and personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation of $1.8 million. Additionally, there was an increase in other general and administrative expenses of $1.6 million due to expansion of the Company's organization and operating as a publicly traded company. The Company also incurred higher commercial planning expenses of $0.4 million in anticipation of a U.S. launch of OC-01, if approved, in the fourth quarter of 2021.

Other Income, Net

Other income, net decreased by $0.5 million for the three months ended June 30, 2020 compared to the three months ended June 30, 2019, primarily due to lower rate of return on the money market funds earned during the period.
18



Comparison of the Six Months Ended June 30, 2020 and 2019

The following table summarizes the Company's results of operations for the periods indicated (in thousands, except percentages):

Six Months Ended June 30,
20202019$ Change% Change
Operating expenses:
Clinical, preclinical$7,993  $3,482  $4,511  130 %
Chemistry, manufacturing and controls (CMC)9,560  6,486  3,074  47 %
Other 2,341  538  1,803  335 %
Research and development19,894  10,506  9,388  89 %
General and administrative12,529  4,737  7,792