The interim unaudited condensed financial statements and this Management'sDiscussion and Analysis of Financial Condition and Results of Operations shouldbe read in conjunction with the financial statements and notes thereto for theyear ended December 31, 2019 and the related Management's Discussion andAnalysis of Financial Condition and Results of Operations, both of which arecontained in our Annual Report on Form 10-K for the year ended December 31,2019, or Annual Report, filed with the Securities and Exchange Commission onMarch 12, 2020. Past operating results are not necessarily indicative of resultsthat may occur in future periods.FORWARD-LOOKING STATEMENTSThis quarterly report on Form 10-Q contains "forward-looking statements" withinthe meaning of federal securities laws made pursuant to the safe harborprovisions of the Private Securities Litigation Reform Act of 1995. Our actualresults could differ materially from those anticipated in these forward-lookingstatements as a result of various factors, including those set forth below underPart II, Item 1A, "Risk Factors" in this quarterly report on Form 10-Q. Exceptas required by law, we assume no obligation to update these forward-lookingstatements, whether as a result of new information, future events or otherwise.These statements, which represent our current expectations or beliefs concerningvarious future events, may contain words such as "may," "will," "expect,""anticipate," "intend," "plan," "believe," "estimate" or other words indicatingfuture results, though not all forward-looking statements necessarily containthese identifying words. Such statements may include, but are not limited to,statements concerning the following:the initiation, cost, timing, progress and results of, and our expected abilityto undertake certain activities and accomplish certain goals with respect to ourresearch and development activities, preclinical studies and clinical trials;our ability to obtain and maintain regulatory approval of our productcandidates, and any related restrictions, limitations, and/or warnings in thelabel of an approved product candidate;our ability to obtain funding for our operations;our plans to research, develop and commercialize our product candidates;the potential election of any strategic collaboration partner to pursuedevelopment and commercialization of any programs or product candidates that aresubject to a collaboration with such partner;our ability to attract collaborators with relevant development, regulatory andcommercialization expertise;future activities to be undertaken by our strategic collaboration partners,collaborators and other third parties;our ability to obtain and maintain intellectual property protection for ourproduct candidates;the size and growth potential of the markets for our product candidates, andour ability to serve those markets;our ability to successfully commercialize, and our expectations regardingfuture therapeutic and commercial potential with respect to our productcandidates;the rate and degree of market acceptance of our product candidates;our ability to develop sales and marketing capabilities, whether alone or withpotential future collaborators;regulatory developments in the United States and foreign countries;the performance of our third-party suppliers and manufacturers;the success of competing therapies that are or may become available;the loss of key scientific or management personnel;our ability to successfully secure and deploy capital;our ability to satisfy our debt obligations;the accuracy of our estimates regarding future expenses, future revenues,capital requirements and need for additional financing;the potential impact of the COVID-19 pandemic on our business; andthe risks and other forward-looking statements described under the caption"Risk Factors" under Part II, Item 1A of this quarterly report on Form 10-Q.In addition, statements that "we believe" and similar statements reflect ourbeliefs and opinions on the relevant subject. These statements are based uponinformation available to us as of the date of this report, and while we believesuch information 20--------------------------------------------------------------------------------forms a reasonable basis for such statements, such information may be limited orincomplete, and our statements should not be read to indicate that we haveconducted an exhaustive inquiry into, or review of, all potentially availablerelevant information. These statements are inherently uncertain and investorsare cautioned not to unduly rely upon these statements.OVERVIEWWe are a clinical-stage biopharmaceutical company focused on discovering anddeveloping first-in-class drugs targeting microRNAs to treat diseases withsignificant unmet medical need. We were formed in 2007 when AlnylamPharmaceuticals, Inc. ("Alnylam") and Ionis Pharmaceuticals, Inc. ("Ionis")contributed significant intellectual property, know-how and financial and humancapital to pursue the development of drugs targeting microRNAs pursuant to alicense and collaboration agreement. Our most advanced product candidates areRG-012 and RGLS4326. RG-012 is an anti-miR targeting miR-21 for the treatment ofAlport syndrome, a life-threatening kidney disease with no approved therapyavailable. In November 2018, we and Sanofi agreed to transition furtherdevelopment activities of our miR-21 programs, including our RG-012 program. Asa result, Sanofi became responsible for all costs incurred in the development ofRG-012 and any other miR-21 programs. The transition activities were completedin the second quarter of 2019. RGLS4326 is an anti-miR targeting miR-17 for thetreatment of autosomal dominant polycystic kidney disease ("ADPKD"). In additionto these clinical programs, we continue to develop a pipeline of preclinicaldrug product candidates.microRNAs are naturally occurring ribonucleic acid ("RNA") molecules that play acritical role in regulating key biological pathways. Scientific research hasshown that an imbalance, or dysregulation, of microRNAs is directly linked tomany diseases. Furthermore, many different infectious pathogens interact andbind to host microRNA to survive. To date, over 500 microRNAs have beenidentified in humans, each of which can bind to multiple messenger RNAs thatcontrol key aspects of cell biology. Since many diseases are multi-factorial,involving multiple targets and pathways, the ability to modulate multiplepathways by targeting a single microRNA provides a new therapeutic approach fortreating complex diseases.RNA plays an essential role in the process used by cells to encode and translategenetic information from deoxyribonucleic acid, or DNA, to proteins. RNA iscomprised of subunits called nucleotides and is synthesized from a DNA templateby a process known as transcription. Transcription generates different types ofRNA, including messenger RNAs that carry the information for proteins in thesequence of their nucleotides. In contrast, microRNAs are RNAs that do not codefor proteins but rather are responsible for regulating gene expression bymodulating the translation and decay of target messenger RNAs. By interactingwith many messenger RNAs, a single microRNA can regulate the expression ofmultiple genes involved in the normal function of a biological pathway. Manypathogens, including viruses, bacteria and parasites, also use host microRNAs toregulate the cellular environment for survival. In some instances, the hostmicroRNAs are essential for the replication and/or survival of the pathogen. Forexample, miR-122 is a microRNA expressed in human hepatocytes and is a keyfactor for the replication of the hepatitis C virus ("HCV").We believe that microRNA therapeutics have the potential to become a new andmajor class of drugs with broad therapeutic application for the followingreasons:microRNAs play a critical role in regulating biological pathways by controllingthe translation of many target genes;microRNA therapeutics regulate disease pathways which may result in moreeffective treatment of complex multi-factorial diseases;many human pathogens, including viruses, bacteria and parasites, use microRNAs(host and pathogen encoded) to enable their replication and suppression of hostimmune responses; andmicroRNA therapeutics may be synergistic with other therapies because of theirdifferent mechanism of action.We have assembled significant expertise in the microRNA field, includingexpertise in microRNA biology and oligonucleotide chemistry, a broadintellectual property estate, relationships with key opinion leaders and adisciplined drug discovery and development process. We are using our microRNAexpertise to develop chemically modified, single-stranded oligonucleotides thatwe call anti-miRs to modulate microRNAs and address underlying disease. Webelieve microRNAs may play a critical role in complex disease and that targetingthem with anti-miRs may become a source of a new and major class of drugs withbroad therapeutic application, much like small molecules, biologics andmonoclonal antibodies.We believe that microRNA biomarkers may be used to select optimal patientsegments in clinical trials and to monitor disease progression or relapse. Webelieve these microRNA biomarkers can be applied toward drugs that we developand drugs developed by other companies with which we partner or collaborate. 21--------------------------------------------------------------------------------Since our inception through June 30, 2020, we have received $342.5 million fromthe sale of our equity and convertible debt securities, $91.8 million from ourstrategic collaborations, principally from upfront payments, research fundingand preclinical and clinical milestones, and $19.8 million in net proceeds fromour Term Loan. As of June 30, 2020, we had cash and cash equivalents of $23.4million.Development Stage Pipeline

We currently have two programs in clinical development.

Preclinical Pipeline

We currently have multiple programs in various stages of preclinicaldevelopment.

18 $ 6$ 6,796Research and development expenses

The following table shows a summary of our cash flows for the six months endedJune 30, 2020 and 2019 (in thousands):

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REGULUS THERAPEUTICS : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 19...