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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________________________________
FORM 10-Q
____________________________________________________
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022
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 001-39044
__________________________________
SPRINGWORKS THERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
__________________________________
Delaware83-4066827
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
100 Washington Blvd
Stamford, Connecticut
06902
(Address of principal executive offices)(Zip Code)
(203) 883-9490
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.0001 per shareSWTXThe 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 x 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 x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 filerxAccelerated 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 x
The number of outstanding shares of the Registrant’s Common Stock as of October 31, 2022 was 62,382,266.


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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, these forward-looking statements can be identified by the use of words such as “may”, “will”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, “continue” or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:
the success, cost and timing of our product development activities and clinical trials, including statements regarding the timing of our ongoing Phase 3 clinical trial of nirogacestat, the timing of our ongoing Phase 2b clinical trial of mirdametinib and the initiation and completion of any other clinical trials and related preparatory work, the expected timing of the availability of results of our clinical trials and the registrational nature of the Phase 3 clinical trial of nirogacestat and the potentially registrational nature of the Phase 2b clinical trial of mirdametinib;
the fact that topline or interim data from the Phase 3 clinical trial of nirogacestat or topline or interim data from other clinical studies may not be predictive of the final or more detailed results of such study or the results of other ongoing or future studies;
the potential attributes and benefits of our product candidates;
our plans to commercialize any of our product candidates that achieve approval either alone or in partnership with others;
our ability to obtain funding for our operations, including funding necessary to complete further development of our product candidates, and if approved, commercialization;
the period over which we anticipate our existing cash, cash equivalents and marketable securities, will be sufficient to fund our operating expenses and capital expenditure requirements;
the potential for our business development efforts to maximize the potential value of our portfolio;
our ability to identify, in-license or acquire additional product candidates;
the ability and willingness of our third-party collaborators to continue research and development activities relating to our product candidates, including those that are being developed as combination therapies;
our ability to obtain and maintain regulatory approval for our product candidates, and any related restrictions, limitations or warnings in the label of an approved product candidate;
the timing of our planned regulatory submissions and interactions, including the New Drug Application, or NDA, for nirogacestat planned for submission in the fourth quarter of 2022, the timing and outcome of decisions made by the U.S. Food and Drug Administration, or FDA, and other regulatory authorities, investigational review boards at clinical trial sites and publication review bodies;
the potential benefit of Orphan Drug Designation, Fast Track Designation and Breakthrough Therapy Designation for nirogacestat, mirdametinib and any other of our product candidates that may receive one or more of these designations;
our ability to compete with companies currently marketing or engaged in the development of treatments for desmoid tumors, NF1-PN and other oncology and rare disease indications;
our expectations regarding our ability to obtain and maintain intellectual property protection or market exclusivity for our product candidates and the duration of such protection;
our ability and the potential to successfully manufacture our product candidates for preclinical studies, clinical trials and, if approved, for commercial use, the capacity of our current contract manufacturing organizations, or CMOs, to
2

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support clinical supply and commercial-scale production for product candidates and our potential election to pursue additional CMOs for manufacturing supplies of drug substance and finished drug product in the future;
the size and growth potential of the markets for our product candidates, and our ability to serve those markets, either alone or in partnership with others;
the rate and degree of market acceptance of our product candidates, if approved;
regulatory developments in the United States and foreign countries;
our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;
the success of competing products that are, or may become, available;
risks associated with the ongoing COVID-19 pandemic, which may adversely impact our business, operations, preclinical studies, clinical trials, supply chain, strategy, goals and anticipated timelines;
our ability to attract and retain key scientific, medical, commercial and management personnel;
our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
our financial performance; and
developments and projections relating to our competitors or our industry.
Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events and future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those described under Part II, Item 1A, Risk Factors and elsewhere in this Quarterly Report. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
We may from time to time provide estimates, projections and other information concerning our industry, the general business environment, and the markets for certain diseases, including estimates regarding the potential size of those markets and the estimated incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events, circumstances or numbers, including actual disease prevalence rates and market size, may differ materially from the information provided. Unless otherwise expressly stated, we obtained this industry information, business information, market data, prevalence information and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data, and similar sources, in each case, from sources we consider to be reliable, and in some cases applying our own assumptions and analysis that may, in the future, prove not to have been accurate.
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SPRINGWORKS THERAPEUTICS, INC.
FORM 10-Q
FOR THE QUARTER ENDED September 30, 2022
INDEX
Page
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SpringWorks Therapeutics, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
September 30,
2022
December 31,
2021
(in thousands, except share and per-share data)(Unaudited)
Assets
Current assets:
Cash and cash equivalents$476,429 $103,961 
Marketable securities175,514 269,540 
Prepaid expenses and other current assets5,344 9,409 
Total current assets657,287 382,910 
Long-term marketable securities 59,230 
Property and equipment, net11,482 3,187 
Operating lease right-of-use assets4,908 1,010 
Equity investment4,873 2,883 
Restricted cash551 565 
Other assets2,453 2,709 
Total assets$681,554 $452,494 
Liabilities and Stockholders’ equity
Current liabilities:
Accounts payable$4,586 $3,429 
Accrued expenses39,289 25,378 
Operating lease liabilities, current733 1,162 
Other liabilities, current4,886  
Total current liabilities49,494 29,969 
Operating lease liabilities, long-term5,000 129 
Other liabilities, long-term14,660  
Total liabilities69,154 30,098 
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, no shares issued or outstanding at September 30, 2022 and December 31, 2021.
  
Common stock, $0.0001 par value, 150,000,000 shares authorized, 62,412,845 and 49,247,985 shares issued and 62,382,646 and 49,247,985 shares outstanding at September 30, 2022 and December 31, 2021, respectively.
6 5 
Additional paid-in capital1,111,002 715,216 
Accumulated deficit(495,752)(292,513)
Treasury stock, at cost (30,199 and 0 shares of common stock at September 30, 2022 and December 31, 2021, respectively).
(1,341) 
Accumulated other comprehensive loss(1,515)(312)
Total stockholders’ equity612,400 422,396 
Total liabilities and stockholders’ equity$681,554 $452,494 
See accompanying unaudited notes to condensed consolidated financial statements
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SpringWorks Therapeutics, Inc.
Condensed Consolidated Statements of Operations (Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except share and per-share data)2022202120222021
Operating expenses:
Research and development$36,067 $22,866 $108,194 $72,332 
General and administrative35,673 18,029 94,026 45,340 
Total operating expenses71,740 40,895 202,220 117,672 
Loss from operations(71,740)(40,895)(202,220)(117,672)
Interest and other income (expense):
Other expense, net(74)(58)(291)(96)
Interest income, net912 179 1,482 617 
Total interest and other income838 121 1,191 521 
Equity investment loss(1,486)(267)(2,210)(687)
Net loss$(72,388)$(41,041)$(203,239)$(117,838)
Net loss per share, basic and diluted$(1.37)$(0.84)$(4.04)$(2.43)
Weighted average common shares outstanding, basic and diluted52,900,819 48,595,420 50,298,015 48,417,300 
See accompanying unaudited notes to condensed consolidated financial statements

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SpringWorks Therapeutics, Inc.
Condensed Consolidated Statements of Comprehensive Loss (Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2022202120222021
Net loss$(72,388)$(41,041)$(203,239)$(117,838)
Changes in other comprehensive income:
Unrealized gain (loss) on marketable securities, net304 (1)(1,203)(17)
Total changes in other comprehensive income$304 $(1)$(1,203)$(17)
Comprehensive loss$(72,084)$(41,042)$(204,442)$(117,855)
See accompanying unaudited notes to condensed consolidated financial statements
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SpringWorks Therapeutics, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
CommonTreasuryAdditional
Paid-In
Capital
Accumulated
Other Comprehensive
Income
Accumulated
Deficit
Total
(in thousands, except share data)SharesAmountSharesAmount
Balance at June 30, 202149,103,066 $5 $ $691,953 $25 $(195,400)$496,583 
Stock-based compensation expense10,712 10,712 
Issuance of restricted stock awards53,260 — — 
Forfeitures of restricted stock awards(950)— 
Exercise of stock options53,049 425 425 
Other comprehensive income, net of tax(1)(1)
Net loss(41,041)(41,041)
Balance at September 30, 202149,208,425 $5  $ $703,090 $24 $(236,441)$466,678 
Balance at June 30, 202249,458,602 $5 22,430 $(1,129)$752,041 $(1,819)$(423,364)$325,734 
Stock-based compensation expense18,518 18,518 
Issuance of common stock to GSK2,050,819 — 55,454 55,454 
Issuance of common stock in private placement, net of issuance costs
8,650,520 1 216,830 216,831 
Issuance of common stock under at-the-market offering, net of issuance costs2,247,500 — 67,782 67,782 
Forfeitures of restricted stock awards(19,223)— 
Exercise of stock options24,627 377 377 
Shares of common stock used to satisfy tax withholding obligations1,205 (212)(212)
Other comprehensive income, net of tax304 304 
Net Loss(72,388)(72,388)
Balance at September 30, 202262,412,845 $6 23,635 $(1,341)$1,111,002 $(1,515)$(495,752)$612,400 

CommonTreasuryAdditional
Paid-In
Capital
Accumulated
Other Comprehensive
Income
Accumulated
Deficit
Total
(in thousands, except share data)SharesAmountSharesAmount
Balance at December 31, 202048,819,591 $5 $ $675,615 $41 $(118,603)$557,058 
Stock-based compensation expense26,562 26,562 
Issuance of restricted stock awards264,551 — 
Forfeitures of restricted stock awards(7,142)— 
Exercise of stock options131,425 913 913 
Other comprehensive income, net of tax(17)(17)
Net loss(117,838)(117,838)
Balance at September 30, 202149,208,425 $5  $ $703,090 $24 $(236,441)$466,678 
Balance at December 31, 202149,247,985 $5  $ $715,216 $(312)$(292,513)$422,396 
Stock-based compensation expense54,041 54,041 
Issuance of common stock to GSK2,050,819 — 55,454 55,454 
Issuance of common stock in private placement, net of issuance costs8,650,520 1 216,830 216,831 
Issuance of common stock under at-the-market offering, net of issuance costs2,247,500 — 67,782 67,782 
Issuance of restricted stock awards36,625 — — 
Forfeitures of restricted stock awards(26,806)— — 
Restricted stock units vested24,369 — — 
Exercise of stock options181,833 — 1,679 1,679 
Shares of common stock used to satisfy tax withholding obligations23,635 (1,341)(1,341)
Other comprehensive income, net of tax(1,203)(1,203)
Net Loss(203,239)(203,239)
Balance at September 30, 202262,412,845 $6 23,635 $(1,341)$1,111,002 $(1,515)$(495,752)$612,400 
See accompanying unaudited notes to condensed consolidated financial statements
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SpringWorks Therapeutics, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended September 30,
(in thousands)20222021
Operating activities
Net loss$(203,239)$(117,838)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense510 344 
Non-cash operating lease expense845 745 
Stock compensation expense54,041 26,562 
Equity investment loss2,210 687 
Changes in operating assets and liabilities
Prepaid expenses and other current assets4,065 (301)
Other assets256 (449)
Accounts payable1,162 1,148 
Accrued expenses13,542 8,613 
Lease liability(301)(1,039)
Other liabilities19,546 (33)
Net cash used in operating activities(107,363)(81,561)
Investing activities
Capital expenditures(8,440)(512)
Equity investments(4,200) 
Purchases of marketable securities(67,953)(218,863)
Proceeds from sale and maturity of debt securities220,006 246,786 
Net cash provided by investing activities139,413 27,411 
Financing activities
Proceeds from issuance of common stock to GSK55,454  
Proceeds from issuance of common stock in private placement, net of issuance costs216,830  
Proceeds from issuance of common stock under at-the-market offering, net of issuance costs67,782  
Treasury stock(1,341) 
Proceeds from stock option exercises1,679 913 
Net cash provided by financing activities340,404 913 
Net increase (decrease) in cash and cash equivalents372,454 (53,237)
Cash and cash equivalents including Restricted cash, beginning of period104,526 147,654 
Cash and cash equivalents including Restricted cash, end of period$476,980 $94,417 
Non-cash investing activities
Right-of-use assets obtained in exchange for operating lease obligations$5,580 $ 


See accompanying unaudited notes to condensed consolidated financial statements
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SpringWorks Therapeutics, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Nature of Operations
SpringWorks Therapeutics, Inc., together with its wholly-owned subsidiaries, collectively, the Company, is a clinical-stage biopharmaceutical company applying a precision medicine approach to acquiring, developing and commercializing life-changing medicines for underserved patient populations suffering from devastating rare diseases and cancer. The Company has a differentiated portfolio of small molecule targeted oncology product candidates and is advancing two late-stage clinical trials, one registrational and one potentially registrational, in rare tumor types, as well as several other programs addressing highly prevalent, genetically defined cancers. Two of the programs are late-stage clinical product candidates: nirogacestat and mirdametinib.
The Company has incurred losses and negative operating cash flows since inception and had an accumulated deficit of $495.8 million and $292.5 million, and working capital of $607.8 million and $352.9 million, as of September 30, 2022 and December 31, 2021, respectively. The Company is subject to those risks associated with any biopharmaceutical company that has substantial expenditures for development. There can be no assurance that the Company’s development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, the Company operates in an environment of rapid technological change and is largely dependent on the services of its employees, advisors, consultants and vendors.
At-the-Market Program
On February 25, 2021, the Company entered into a Sales Agreement with Cowen and Company, LLC serving as sales agent, or the Agent, with respect to an at-the-market offering program, or ATM Program, under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.0001 per share, or Common Stock, having an aggregate offering price of up to $200 million through the Agent. Any shares offered and sold in the ATM Program are issued pursuant to the Company’s registration statement on Form S-3, or the Registration Statement, filed with the Securities and Exchange Commission, or SEC, on October 6, 2020, the prospectus supplement relating to the ATM Program filed with the SEC on February 25, 2021, and any applicable additional prospectus supplements related to the ATM Program that form a part of the Registration Statement.
During the three months ended September 30, 2022, the Company sold 2,247,500 shares of Common Stock under the ATM Program for gross proceeds of $69.7 million, less commissions and other fees of $1.9 million for net proceeds of $67.8 million. As of September 30, 2022, approximately $130.3 million remains available under the ATM Program.
Private Placements
In September 2022, the Company and certain accredited investors, or the Investors, entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue to the Investors in a private placement transaction, or the Private Placement, an aggregate of 8,650,520 shares of Common Stock at a purchase price of $26.01 per share. In connection with the Private Placement, the Company received gross proceeds of approximately $225 million, and after deducting commissions and offering costs, net proceeds were approximately $216.8 million. In connection with the Private Placement, the Company and the Investors also entered into a registration rights agreement, dated September 7, 2022, providing for the registration for resale of the shares. The shares were registered for resale pursuant to the Registration Statement and the prospectus supplement relating to the shares filed with the SEC on September 26, 2022.
In September 2022, we entered into an expanded global, non-exclusive license and collaboration agreement with GSK, plc, formerly GlaxoSmithKline plc, or GSK, for nirogacestat in combination with belantamab mafodotin (belamaf) and, concurrent with the execution of such agreement, we entered into a stock purchase agreement, or the Stock Purchase Agreement, with an affiliate of GSK, Glaxo Group Limited, or GGL, under which GGL agreed to purchase from the Company in a private placement transaction 2,050,819 shares of Common Stock for an aggregate purchase price of approximately $75.0 million, or $36.57 per share. The shares were sold at a 25% premium to the volume-weighted average share price of the Company’s Common Stock for a specified 30-day period prior to entering into the Stock Purchase Agreement.
The Company had cash, cash equivalents and marketable securities of $651.9 million and $432.7 million as of September 30, 2022 and December 31, 2021, respectively. Based on the Company's cash, cash equivalents and marketable securities as of September 30, 2022, management estimates that its current liquidity will enable it to meet operating expenses through at least twelve months after the date that these financial statements are issued.
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COVID-19 Pandemic
On March 11, 2020, the World Health Organization designated the outbreak of the disease associated with the novel strain of coronavirus known as COVID-19 as a global pandemic. This disease continues to spread, including emerging variant strains of COVID-19, in the areas in which the Company operates. Governments and businesses around the world have taken unprecedented actions to mitigate the spread of COVID-19, including, but not limited to, shelter-in-place orders, quarantines, significant restrictions on travel, as well as restrictions that prohibit many employees from going to work. Uncertainty with respect to the economic impacts of the pandemic has introduced significant volatility in the financial markets. The global pandemic caused by COVID-19 (including the impact of emerging variant strains of the COVID-19 virus and stagnant vaccination rates) did not have significant impacts on the Company's financial condition, results of operations or cash flows during the periods presented. While the extent to which the ongoing COVID-19 pandemic impacts the Company’s future results will depend on future developments, the pandemic and associated impacts, including the duration, spread and intensity of the pandemic (including any resurgences), the impact of emerging variant strains of the COVID-19 virus and the rollout of COVID-19 vaccines, all of which remain uncertain and difficult to predict, could result in a material impact to the Company’s future financial condition, results of operations and cash flows.
2. Basis of Presentation
The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, for interim financial information and Article 10 of Regulation S-X of the SEC and should be read in conjunction with the Company's consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 24, 2022. The condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q are unaudited; however, in the opinion of management, such financial statements reflect all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, research and development expenses and the valuation of stock-based compensation awards. Management bases its estimates on historical experience, known trends and other market-specific or relevant factors that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. On an ongoing basis, management evaluates its estimates, and adjusts those estimates and assumptions when facts or circumstances change. Changes in estimates are recorded in the period in which they become known.
Research and Development Expenses
In accordance with ASC 730, “Research and Development”, expenditures for clinical development, including upfront licensing fees and milestone payments associated with products that have not yet been approved by the U.S. Food and Drug Administration, are charged to research and development expense as incurred. These expenses consist of expenses incurred in performing development activities, including salaries and benefits, stock-based compensation expense, preclinical expenses, clinical trial and related clinical manufacturing expenses, contract services and other outside expenses. Expenses incurred for certain research and development activities, including expenses associated with particular activities performed by contract research organizations, investigative sites in connection with clinical trials and contract manufacturing organizations, are recognized based on an evaluation of the progress or completion of specific tasks using either time-based measures or data such as information provided to the Company by its vendors on actual activities completed or costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of expense recognition. Expenses for research and development activities incurred that have yet to be invoiced by the vendors that perform the related activities are reflected in the consolidated financial statements as accrued research and development expenses. Advance payments for goods or services to be received in the future for research and development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or the services are performed.
Segment Information
Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment operating exclusively in the United States.
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Recently Adopted Accounting Pronouncements
There were no recently adopted accounting pronouncements that had a material impact on the Company's financial statements, and no recently issued accounting pronouncements that are expected to have a material impact on the Company's financial statements.
3. Marketable Securities
The following table summarizes the Company’s available-for-sale marketable securities as of September 30, 2022 and December 31, 2021:
As of September 30, 2022
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair Value
Marketable securities:
Short-term investments:
U.S. government securities$95,174 $ $(1,217)93,957 
Non-U.S. government securities9,339  (59)9,280 
Corporate debt securities41,699  (239)41,460 
Commercial paper30,817 — — 30,817 
Total$177,029 $ $(1,515)$175,514 
As of December 31, 2021
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair Value
Marketable securities:
Short-term investments:
U.S. government securities$105,043 $3 $(79)$104,967 
Corporate debt securities78,729  (52)78,677 
Commercial paper85,896 — — 85,896 
Long-term investments:
U.S. government securities59,414  (184)59,230 
Total$329,082 $3 $(315)$328,770 
The Company’s marketable securities are available-for-sale securities and consist of high-quality, highly liquid debt securities including corporate debt securities, U.S. government securities, non-U.S. government securities, and commercial paper.
The Company’s available-for-sale securities classified as short-term marketable securities in the condensed consolidated balance sheets mature within one year or less of the balance sheet date. Marketable securities that mature greater than one year from the balance sheet date are classified as long-term. As of September 30, 2022, the Company did not hold any investments with maturity dates greater than one year.
As of, and for the three and nine months ended September 30, 2022, the Company did not have any allowance for credit losses or impairments of its marketable securities.
4. Fair Value Measurements
The fair value of the Company’s financial assets measured on a recurring basis are classified based upon a fair value hierarchy consisting of the following three levels:
Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets, or liabilities.
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Level 2 — Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the instrument.
Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
The fair value hierarchy is based on inputs to valuation techniques used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing based upon their own market assumptions.
As of September 30, 2022 and December 31, 2021, the Company's financial assets and liabilities measured at fair value on a recurring basis consisted of the following:
As of September 30, 2022
Fair Value Hierarchy
(in thousands)TotalLevel 1Level 2Level 3
Cash equivalents:
Money market funds$395,246 $395,246 $ $ 
Short-term investments:
U.S. government securities93,958 93,958   
Non-U.S. government securities9,279  9,279  
Corporate debt securities41,460  41,460  
Commercial paper30,817  30,817  
Total$570,760 $489,204 $81,556 $ 
As of December 31, 2021
Fair Value Hierarchy
(in thousands)TotalLevel 1Level 2Level 3
Cash equivalents:
Money market funds$89,905 $89,905 $ $ 
Short-term investments:
U.S. government securities104,967 104,967  
Corporate debt securities78,677 78,677  
Commercial paper85,896 85,896  
Long-term investments:
U.S. government securities59,230 59,230   
Total$418,675 $254,102 $164,573 $ 
As of September 30, 2022 and December 31, 2021, the Company’s financial assets measured at fair value on a recurring basis using a market approach included cash equivalents, which consist of money market funds, and marketable securities, which consist of high-quality, highly liquid available-for-sale debt securities including corporate debt securities, U.S. government securities, non-U.S. government securities, and commercial paper.
The Company’s money market funds are readily convertible into cash and the net asset value of each fund on the last day of the quarter is used to determine fair value. The U.S. government securities are classified as Level 1 and valued utilizing quoted market prices. The Company’s corporate debt securities, non-U.S. government securities, and commercial paper are classified as Level 2 and valued utilizing various market and industry inputs.
The Company considers all highly liquid instruments that have maturities of three months or less when acquired to be cash equivalents. The carrying amounts reflected in the Company’s condensed consolidated balance sheets for cash equivalents, accounts payable, and accrued expenses approximate fair value due to their short-term maturities.
5. Collaboration, Licensing and Variable Interest Entities
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MapKure
In June 2019, the Company announced the formation of MapKure LLC., or MapKure, an entity jointly owned by the Company and BeiGene Ltd., or BeiGene. BeiGene licensed to MapKure exclusive rights to BGB-3245, an oral, small molecule selective inhibitor of specific BRAF driver mutations and genetic fusions. MapKure is advancing BGB-3245 through clinical development for solid tumor patients harboring BRAF driver mutations and genetic fusions that were observed to be sensitive to the compound in preclinical studies.
In conjunction with the formation of MapKure in June 2019, the Company purchased 3,500,000 Series A preferred units of MapKure, or a 25.0% ownership interest, for $3.5 million and in June 2020, the Company purchased an additional 3,500,000 Series A preferred units of MapKure for $3.5 million, increasing its ownership interest to 38.9%, as required by the terms of the Series A unit purchase agreement.
In June 2022, the Company made an additional investment in MapKure and purchased 4,200,000 Series B preferred units of MapKure for $4.2 million, pursuant to the terms of a Series B preferred unit purchase agreement. The Company is obligated to purchase an additional 2,800,000 Series B preferred units of MapKure for $2.8 million at a second closing under such agreement to be held in the first quarter of 2023. As of September 30, 2022, the Company’s ownership interest in MapKure was 38.9%. In addition to the Company’s equity ownership in MapKure, the Company has appointed a member to each of MapKure’s joint steering committee and board of directors. The Company also contributes to clinical development and other operational activities for BGB-3245 through a service agreement with MapKure.
The Company determined that MapKure is a variable interest entity. The Company is not the primary beneficiary, as the Company does not have the power to direct the activities that most significantly impact the economic performance of MapKure. Accordingly, the Company does not consolidate the financial statements of this entity and accounts for this investment using the equity method of accounting.
In accordance with ASC 323-10-35-6, the Company records MapKure’s earnings or losses based on a one quarter lag.
The Company recognized an equity loss of $1.5 million and $2.2 million for the three and nine months ended September 30, 2022, respectively and $0.3 million and $0.7 million for the three and nine months ended September 30, 2021, respectively. The Company’s ownership interest in MapKure is included in “Equity method investments” in the condensed consolidated balance sheets. As of September 30, 2022, the Company’s maximum exposure to loss as a result of the Company’s involvement with MapKure is $7.7 million, representing the carrying value of the investment of $4.9 million plus the unfunded obligation of $2.8 million.
Nirogacestat Expanded Non-Exclusive License and Collaboration with GSK
In September 2022, the Company announced an expansion of its ongoing, non-exclusive clinical collaboration with GSK, which originally commenced in June 2019. The announcement coincided with the entry by the Company and GSK into an amended and restated collaboration and license agreement, or the GSK License Agreement, for the potential continued development and commercialization of nirogacestat in combination with either belantamab mafodotin (belamaf), GSK’s antibody-drug conjugate, or ADC, targeting B-cell maturation antigen, or BCMA, or any other cytotoxic ADC targeting BCMA derived from belantamab that is controlled by GSK, either alone as a combination therapy, or together with other pharmaceutical agents.
Pursuant to the terms of the GSK License Agreement and concurrent with the execution of such agreement, the Company entered into a Stock Purchase Agreement with GGL, under which GGL purchased 2,050,819 shares of the Company’s Common Stock in a private placement transaction for an aggregate purchase price of approximately $75.0 million, or $36.57 per share. The shares were sold at a 25% premium to the volume-weighted average share price of the Company’s Common Stock for a specified 30-day period prior to entering into the Stock Purchase Agreement. The fair value of the Common Stock based on the closing price of Common Stock on the day prior to the effective date of the Stock Purchase Agreement was $55.5 million and was recorded to equity. The Company recorded the consideration received in excess of the fair value of the Common Stock of $19.5 million as deferred revenue.
Under the terms of the GSK License Agreement, the Company is also eligible to receive up to $550.0 million in additional payments, if certain development and commercial milestones are met. The Company continues to retain full commercial rights to nirogacestat. Additionally, SpringWorks will supply nirogacestat for future belamaf clinical trials and will seek to make nirogacestat commercially available in markets where approval has been sought by GSK for a combination with belamaf. GSK will continue to fund all development costs, except for those related to the supply of nirogacestat and certain expenses related to intellectual property rights.

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6. Accrued Expenses
Accrued expenses consists of the following:
September 30,December 31,
(in thousands)20222021
Accrued professional fees$8,086 $1,108 
Accrued compensation and benefits12,233 12,081 
Accrued research and development14,023 10,069 
Accrued other4,947 2,120 
Total accrued expenses$39,289 $25,378 

7. Commitments and Contingencies
The Company enters into contracts in the normal course of business for clinical trials, preclinical studies, manufacturing and other services and products for operating purposes. These contracts generally provide for termination following a certain period after notice and therefore the Company believes that non-cancelable obligations under these agreements are not material.
Additionally, the Company has excluded milestone or royalty payments or other contractual payment obligations as the timing and amounts of such obligations are unknown or uncertain.

Leases
In October 2018, the Company entered into a lease for its corporate headquarters in Stamford, CT. In January 2022, the Company amended this lease agreement to extend the lease term through April 2028, with two five-year renewal options or one ten-year renewal option. Pursuant to the amendment, the Company is entitled to $0.5 million in tenant allowances, which may be used to offset certain future capital expenditures, and the lease payments increase by 2.5% in each year commencing December 1, 2022. The amendment was treated as a modification and the lease liability and operating lease right-of-use asset were updated to reflect minimum lease payments and any other adjustments.
As of September 30, 2022, future lease payments under non-cancelable leases with terms greater than one year are as follows:

(in thousands)Operating Leases
2022$103 
20231,262 
20241,155 
20251,184 
2026 and thereafter2,881 
Total lease payments6,585 
Less: imputed interest(852)
Present value of lease liabilities$5,733 

Contingencies
From time to time, the Company may be involved in disputes or regulatory inquiries that arise in the ordinary course of business. When the Company determines that a loss is both probable and reasonably estimable, a liability is recorded and disclosed if the amount is material to the financial statements taken as a whole. When a material loss contingency is only reasonably possible, the Company does not record a liability, but instead discloses the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can reasonably be made.
As of September 30, 2022, there was no litigation or contingency with at least a reasonable possibility of a material loss.

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8. Stock-Based Compensation
2019 Equity Incentive Plan
The Company's 2019 Equity Incentive Plan, or the 2019 Equity Incentive Plan, provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock units, restricted stock awards, unrestricted stock awards and dividend equivalent rights to the Company’s officers, employees, directors and other key persons (including consultants). The number of shares reserved for issuance under the 2019 Equity Incentive Plan is cumulatively increased each January 1, through and including January 1, 2030, by 5% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31 or such lesser number of shares determined by the Company’s compensation committee.

The terms of stock options and restricted stock units and awards, including vesting requirements, are determined by the Board of Directors or its delegates, subject to the provisions of the 2019 Equity Incentive Plan. Restricted stock units and awards granted by the Company to employees generally vest over three years, and stock options granted by the Company to employees generally vest over four years. Restricted stock units and awards and stock options granted by the Company to directors generally vest over one year.
As of September 30, 2022, there were 3,303,208 shares available for issuance in connection with future awards under the 2019 Equity Incentive Plan.
Stock-Based Awards
During the nine months ended September 30, 2022, the Company granted 3,002,697 stock option awards to its officers, employees and directors under the 2019 Equity Incentive Plan. This included 1,297,800 stock option awards issued on August 15, 2022, or the Supplemental Grants, to certain employees, intended to retain talent and to provide market competitive compensation. No Supplemental Grants were provided to any officer or director of the Company.
During the nine months ended September 30, 2022, the Company awarded 672,153 restricted stock units and 36,625 restricted stock awards to its officers, employees and directors under the 2019 Equity Incentive Plan.
During the nine months ended September 30, 2022, 235,119 restricted stock awards previously issued to employees of the Company were released, 24,369 restricted stock units vested and 181,833 stock options were exercised.
As of September 30, 2022, there were 4,001,137 stock options vested and exercisable. In June 2019, the Company’s Chief Executive Officer, or CEO, received an award of 176,411 stock options, or the 2019 CEO Performance Award. During the quarter ended September 30, 2022, 11,026 options of the CEO Performance Award became exercisable upon the satisfaction of the market condition applicable to this award.
Stock-based compensation expense included in the condensed consolidated statements of operations for each of the periods presented is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2022202120222021
Research and development$7,101 $4,285 $22,217 $9,613 
General and administrative11,417 6,427 31,824 16,949 
Total stock-based compensation expense$18,518 $10,712 $54,041 $26,562 
As of September 30, 2022, the unrecognized compensation expense related to unvested stock options, restricted stock units and restricted stock awards was $149.1 million, $25.2 million and $12.6 million, respectively, which is expected to be recognized over a weighted-average remaining period of approximately 2.70 years, 2.30 years and 1.75 years, respectively.
As of September 30, 2022, the Company had 9,133,738 stock options outstanding, 614,511 unvested restricted stock units and 245,010 unvested restricted stock awards.
9. Net Loss per Share
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Since the Company had a net loss in each of the periods presented, basic and diluted net loss per share are the same. The table below provides potentially dilutive securities not included in the computation of the diluted net loss per share for the periods ended September 30, 2022 and September 30, 2021, because to do so would be anti-dilutive:
As of September 30,
20222021
Common stock options issued and outstanding9,133,738 6,424,419 
Restricted stock units subject to future vesting614,511  
Restricted stock awards subject to future vesting245,010 522,626 
Total potentially dilutive securities9,993,259 6,947,045 
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the financial condition and results of operations of SpringWorks Therapeutics, Inc. should be read in conjunction with the condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q, or Quarterly Report, and our consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, or 2021 Form 10-K, filed with the Securities and Exchange Commission, or SEC, on February 24, 2022. Unless the context otherwise requires, all references to "we," "us," "our," "SpringWorks," or the "Company" refer to SpringWorks Therapeutics, Inc., together with its subsidiaries. This discussion and analysis contains forward-looking statements based upon current expectations that involve risks and uncertainties. We caution you that forward-looking statements are not guarantees of future performance, and that our actual results of operations, financial condition and liquidity, and the developments in our business and the industry in which we operate, may differ materially from the results discussed or projected in the forward-looking statements contained in this Quarterly Report. We discuss risks and other factors that we believe could cause or contribute to these potential differences elsewhere in this Quarterly Report, including under Item 1A. “Risk Factors” and under “Special Note Regarding Forward-Looking Statements”. In addition, even if our results of operations, financial condition and liquidity, and the developments in our business and the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, they may not be predictive of results or developments in future periods. We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made. We disclaim any obligation, except as specifically required by law and the rules of the Securities and Exchange Commission, or SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

Overview
We are a clinical-stage biopharmaceutical company applying a precision medicine approach to acquiring, developing and commercializing life-changing medicines for underserved patient populations suffering from devastating rare diseases and cancer. We have a differentiated portfolio of small molecule targeted oncology product candidates and are advancing two late-stage clinical trials, one registrational and one potentially registrational, in rare tumor types, as well as several other programs addressing highly prevalent, genetically defined cancers. Our strategic approach and operational excellence across research, translational science, and clinical development have enabled us to rapidly advance our two lead product candidates into late-stage clinical trials while simultaneously entering into multiple shared-value partnerships with industry leaders to expand our portfolio. From this foundation, we are continuing to build a differentiated global biopharmaceutical company intensely focused on understanding patients and their diseases in order to develop transformative targeted medicines.

Our most advanced product candidate, nirogacestat, is an oral, small molecule gamma secretase inhibitor currently in development for the treatment of desmoid tumors, a rare and often debilitating and disfiguring soft tissue tumor for which there are currently no therapies approved by the U.S. Food and Drug Administration, or FDA. We believe nirogacestat may address the significant limitations associated with existing treatment options and has the potential to become the first therapy approved by the FDA for both newly diagnosed and previously treated desmoid tumors. Since we licensed nirogacestat from Pfizer Inc., or Pfizer, in August 2017, the FDA has granted us Orphan Drug Designation, Fast Track Designation and Breakthrough Therapy Designation for this indication, and the European Commission granted Orphan Drug Designation to nirogacestat for the treatment of soft tissue sarcoma. In May 2019, we announced the initiation of the DeFi trial, a registrational, double-blind, placebo-controlled Phase 3 trial evaluating the efficacy, safety and tolerability of nirogacestat for the treatment of adult patients with progressing desmoid tumors. In May 2022, we announced positive topline results from the DeFi trial, and we presented additional data from the DeFi trial at the European Society for Medical Oncology Congress in September 2022. The DeFi trial met its primary endpoint of improving progression-free survival, or PFS, demonstrating a statistically significant improvement for nirogacestat over placebo, with a 71% reduction in the risk of disease progression (hazard ratio (HR) = 0.29 (95% CI: 0.15, 0.55); p < 0.001). The median Kaplan-Meier estimate of PFS was not reached in the nirogacestat arm and was 15.1 months in the placebo arm. A PFS benefit was observed across all prespecified subgroups, including gender, tumor location, prior treatment or surgery, and mutational status. Confirmed objective response rate (complete response + partial response) based on RECIST v1.1 was 41% with nirogacestat versus 8% with placebo (p<0.001). The complete response rate was 7% in the nirogacestat arm and 0% in the placebo arm. Nirogacestat demonstrated statistically significant and clinically meaningful improvements in patient-reported outcomes, or PROs, which were key secondary endpoints of the study. Specifically, nirogacestat significantly reduced pain (p<0.001) and other desmoid tumor-specific symptoms (p<0.001) and also significantly improved physical/role functioning (p<0.001) and overall health-related quality of life (p=0.007). Most PRO benefits were observed as early as Cycle 2, which was the first timepoint for post-treatment evaluation, and were sustained over the duration of the study. Nirogacestat exhibited a manageable safety profile in the DeFi trial, with 95% of all treatment-emergent adverse events, or TEAEs, reported as Grade 1 or 2. The most frequently reported TEAEs in participants receiving nirogacestat as compared to the placebo arm were diarrhea (84% versus 35%), nausea (54% versus 39%), and fatigue (51% versus 36%). Forty-two percent of patients in the nirogacestat arm versus 0% in the placebo arm required dose reductions due to TEAEs, and
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20% of patients in the nirogacestat arm versus 1% in the placebo arm discontinued treatment due to TEAEs. Ovarian dysfunction, which was defined by investigator-reported events of amenorrhea, premature menopause, menopause, and ovarian failure, was observed in 75% (27/36) of women of childbearing potential receiving nirogacestat. These events resolved in 74% (20/27) of the affected participants, including 64% (9/14) of such participants who remained on nirogacestat treatment and 100% (11/11) of those participants who discontinued treatment for any reason. We plan to submit a New Drug Application, or NDA, to the FDA under its Real-Time Oncology Review program in the fourth quarter of 2022.

We are also evaluating nirogacestat for the treatment of ovarian granulosa cell tumors, a subtype of ovarian cancer. In September 2022, we announced that the first patient had been dosed in a Phase 2 trial evaluating nirogacestat as a monotherapy in patients with recurrent ovarian granulosa cell tumors.

Our second product candidate is mirdametinib, an oral, small molecule MEK inhibitor currently in development for the treatment of neurofibromatosis type 1-associated plexiform neurofibromas, or NF1-PN, a rare tumor of the peripheral nerve sheath that causes significant pain and disfigurement, and that most often manifests in children. We believe that mirdametinib has the potential to offer a best-in-class profile in order to enable the long-term treatment required for this patient population, as compared to other MEK inhibitors. As with nirogacestat, we licensed mirdametinib from Pfizer in August 2017; since then, the FDA has granted mirdametinib both Orphan Drug Designation and Fast Track Designation for NF1-PN, and the European Commission has granted mirdametinib Orphan Drug Designation for NF1. In October 2019, we announced the initiation of the ReNeu trial, a potentially registrational Phase 2b clinical trial of mirdametinib for pediatric and adult patients with NF1-PN. In February 2021, we reported interim clinical data from the first 20 adult patients enrolled in the Phase 2b ReNeu trial, and updated interim clinical data from these patients were presented in June 2021 at the Children's Tumor Foundation NF Conference. In November 2021, we announced full enrollment of the ReNeu trial.

We are also evaluating mirdametinib for the treatment of solid tumors harboring mitogen activated protein kinase, or MAPK, aberrations, in both monotherapy and combination approaches. In June 2021, we announced the initiation of Phase 1/2 clinical trial of mirdametinib in children and young adults with low-grade glioma. The study is sponsored by St. Jude Children’s Research Hospital and supported by SpringWorks. In August 2021, we announced the evaluation of mirdametinib in a Phase 1b/2a platform study sponsored by Memorial Sloan Kettering Cancer Center and supported by SpringWorks to explore the compound both as a monotherapy and as a combination therapy in advanced solid tumors harboring MAPK-activating mutations. The trial, which initiated in the third quarter of 2021, is initially exploring mirdametinib in two patient cohorts: the first in combination with fulvestrant, a selective estrogen receptor degrader, in patients with estrogen receptor-positive metastatic breast cancer with MAPK alterations (particularly inactivating mutations in NF1), and as a monotherapy in advanced solid tumors harboring oncogenic MEK1 or MEK2 mutations.

In addition to our late-stage programs in rare oncology indications, we have expanded our portfolio to develop targeted therapies for the treatment of highly prevalent hematologic malignancies and genetically defined metastatic solid tumors. To advance this strategy, we are taking a precision medicine approach in collaboration with industry leaders. In hematologic malignancies, we have announced collaborations with GSK plc, formerly GlaxoSmithKline plc, or GSK, Janssen Biotech, Inc., Pfizer, Allogene Therapeutics, Inc., or Allogene, Precision BioSciences, Inc., Seagen, Inc., AbbVie Inc and Regeneron Pharmaceuticals, Inc., or Regeneron, to develop novel combination regimens of nirogacestat alongside our collaborators’ B-cell maturation antigen, or BCMA, directed therapies for the treatment of multiple myeloma. In addition to our industry collaborations with leading BCMA-directed therapy developers, we are working with the Fred Hutchinson Cancer Research Center and Dana-Farber Cancer Institute to further explore nirogacestat’s ability to potentiate BCMA-directed therapies as part of sponsored research agreements. In October 2021, we announced an update from our ongoing clinical collaboration with GSK evaluating nirogacestat in combination with belantamab mafodotin (belamaf) in patients with relapsed or refractory multiple myeloma, or RRMM; the initiation of an expanded Phase 2 cohort from the first combination dose level that evaluated 0.95 mg/kg dose of belamaf every three weeks plus nirogacestat based on encouraging preliminary data observed in the Phase 1 cohort. We also announced the addition of two new sub-studies that will explore belamaf plus nirogacestat in combination with (i) pomalidomide plus dexamethasone and (ii) lenalidomide plus dexamethasone in patients with RRMM, both of which were initiated and began dosing patients in the third quarter of 2022. In June 2022, initial clinical data from the Phase 1/2 study evaluating nirogacestat in combination with belamaf in patients with RRMM were presented at the 2022 American Society of Clinical Oncology, or ASCO, Annual Meeting. At the time of data cut-off, the ORR at low-dose (0.95 mg/kg) belamaf plus nirogacestat across the dose exploration, or DE, and cohort expansion, or CE, arms was 38% in 24 patients, with 17% of patients achieving a very good partial response, or VGPR, or better. The ORR of the belamaf monotherapy control arm was 50% in 14 patients, with 0% of patients achieving a VGPR or better. An encouraging safety profile for the combination was observed, with Grade 3 ocular adverse events occurring in 1/14 (7%) patients in the low-dose belamaf plus nirogacestat combination compared to 7/14 patients (50%) in the belamaf monotherapy arm, using the Keratopathy Visual Acuity ocular toxicity grading scale. The DE cohort utilized the CTCAE-5 ocular toxicity grading scale; the low-dose belamaf plus nirogacestat combination demonstrated Grade 3 ocular adverse events in 2/10 (20%) patients. In September 2022, we announced an expansion of our ongoing, non-exclusive clinical collaboration with GSK to include the potential for continued development and commercialization of the combination of nirogacestat and belamaf in earlier lines of treatment, including newly diagnosed multiple myeloma. In August 2022, Allogene announced that it has decided not to advance ALLO-715 in
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combination with nirogacestat into dose expansion cohorts. Accordingly, no further enrollment is expected in the ongoing Phase 1 study with Allogene.

In genetically defined metastatic solid tumors, our current clinical-stage efforts center on the MAPK pathway. In collaboration with BeiGene, Ltd., or BeiGene, we are exploring the combination of mirdametinib with BeiGene’s lifirafenib in RAS mutated and other MAPK aberrant cancers. In addition, we are exploring the use of BGB-3245 in a distinct set of genetically defined BRAF mutated tumors via MapKure, LLC, or MapKure, an entity jointly owned by us and BeiGene. In June 2022, we presented initial clinical data from the ongoing Phase 1/2 study evaluating mirdametinib in combination with lifirafenib in patients with advanced solid tumors with MAPK-activating mutations and the ongoing Phase 1 study evaluating BGB-3245 in patients with advanced solid tumors with BRAF or RAS mutations, providing evidence of a manageable safety profile and clinical activity in a variety of solid tumor types with MAPK-activating mutations for each program.

Together, we believe that our portfolio provides multiple opportunities for value creation across three distinct categories of oncology programs, each of which has the potential to provide meaningful clinical benefit to patients suffering from severe rare diseases and cancer. In our late-stage rare oncology programs, we believe that our two most advanced phase trials with nirogacestat and mirdametinib each have best-in-class potential for the patient populations in which they are being advanced. In our malignant hematology programs, we believe that nirogacestat has the potential to become a cornerstone of BCMA combination therapy in multiple myeloma and we are seeking to achieve this goal by working with partners developing BCMA-targeted agents across modalities. In our biomarker defined metastatic solid tumor programs, we believe that our precision medicine approach to cancers harboring mutations in key MAPK pathway genes, such as RAS and BRAF, provides the opportunity for meaningful clinical benefit for biomarker defined patient populations.

Furthermore, we intend to continue to build our portfolio by licensing additional programs with strong biological rationales and validated mechanisms of action, such as the TEA Domain, or TEAD, inhibitor program that we in-licensed from Katholieke
Universiteit Leuven, or KU Leuven and the Flanders Institute for Biotechnology, and the portfolio of epidermal growth factor receptor small molecule inhibitors that we in-licensed from Dana-Farber Cancer Institute. We also plan to continue using shared-value partnerships to maximize the potential of our therapies to serve patients. We continue to invest in building leading preclinical development, clinical development and commercial capabilities and have focused on structuring innovative partnerships that seek to align incentives and optimize business outcomes for each party involved. We believe that this approach will continue to allow us to expand our shared-value relationships with innovators, maximize the potential of our existing and future portfolio, and support the building of a scalable and sustainable business focused on the efficient advancement and commercialization of product candidates that hold the potential to transform the lives of patients living with severe rare diseases and cancer.

Recent Developments

In September 2022, we announced that the first patient had been dosed in a Phase 2 trial evaluating nirogacestat as a monotherapy in patients with recurrent ovarian granulosa cell tumors.

In September 2022, as described in greater detail above, we presented data from the DeFi trial, a double-blind, placebo-controlled Phase 3 trial evaluating the efficacy, safety and tolerability of nirogacestat in adult patients with progressing desmoid tumors, at the European Society for Medical Oncology Congress 2022. Positive topline results from the DeFi trial were announced in May 2022.

In September 2022, we entered into an expanded global, non-exclusive license and collaboration agreement with GSK, or the GSK License Agreement, for nirogacestat in combination with either belantamab mafodotin (belamaf), or with any other cytotoxic antibody-drug conjugate targeting BCMA derived from belantamab that is controlled by GSK, either alone as a combination therapy, or together with other pharmaceutical agents. Concurrent with the execution of such agreement, we entered into a stock purchase agreement, or the Stock Purchase Agreement, with an affiliate of GSK, Glaxo Group Limited, or GGL, under which GGL purchased 2,050,819 shares of our common stock, par value $0.0001 per share, or Common Stock, in a private placement transaction for an aggregate purchase price of approximately $75.0 million, or $36.57 per share. The shares were sold at a 25% premium to the volume-weighted average share price of Common Stock for a specified 30-day period prior to entering into the Stock Purchase Agreement. We are also eligible to receive up to $550.0 million in additional payments based on reaching certain development and commercial milestones. We retain full commercial rights to nirogacestat. Additionally, SpringWorks will supply nirogacestat for future belamaf clinical trials and will seek to make nirogacestat commercially available in markets where approval has been sought by GSK for combination with belamaf. GSK will continue to fund all development costs, except for those related to the supply of nirogacestat and certain expenses related to intellectual property rights.

In September 2022, we and certain accredited investors, or the Investors, entered into a securities purchase agreement pursuant to which we agreed to sell and issue to the Investors in a private placement transaction, or Private Placement, an aggregate of
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8,650,520 shares of Common Stock at a purchase price of $26.01 per share. Upon closing of the Private Placement, we received gross proceeds of approximately $225 million, and after deducting commissions and offering costs, net proceeds were approximately $216.8 million. In connection with the Private Placement, the Company and the Investors also entered into a registration rights agreement providing for the registration for resale of the shares of Common Stock. The shares were registered for resale pursuant to the Company’s registration statement on Form S-3, or the Registration Statement, filed with the SEC on October 6, 2020 and the prospectus supplement relating to the shares filed with the SEC on September 26, 2022.

In August 2022, we sold 2,247,500 shares of Common Stock under our at-the-market offering program, or ATM Program, for gross proceeds of $69.7 million, less commissions of $1.9 million for net proceeds of $67.8 million.

In June 2022, as described in greater detail above, initial clinical data from the Phase 1/2 study evaluating nirogacestat in combination with belantamab mafodotin (belamaf), GSK's antibody drug conjugate targeting BCMA, in patients with RRMM were presented at the 2022 ASCO Annual Meeting. Long-term follow-up data from a Phase 2 study sponsored by the National Cancer Institute, or NCI, evaluating nirogacestat in patients with progressing desmoid tumors were also presented at the 2022 ASCO Annual Meeting.
In June 2022, we made an additional investment in MapKure and purchased 4,200,000 Series B preferred units of MapKure for $4.2 million pursuant to the terms of a Series B preferred unit purchase agreement. Pursuant to the agreement, we are obligated to purchase an additional 2,800,000 Series B preferred units of MapKure for $2.8 million at a second closing to be held in the first quarter of 2023.
In April 2022, we entered into a clinical trial collaboration and supply agreement with Regeneron to evaluate nirogacestat in combination with REGN5458, Regeneron’s investigational bispecific antibody targeting CD3 and BCMA, in patients with RRMM. Pursuant to the terms of the agreement, other than expenses related to the manufacturing and supply of nirogacestat and certain expenses related to intellectual property rights, Regeneron is responsible for the clinical development and will assume all costs associated with the study.
COVID-19 Impact
In December 2019, a novel strain of coronavirus, severe acute respiratory syndrome coronavirus 2, or SARS-CoV-2, was identified in Wuhan, China. On March 11, 2020, the World Health Organization designated the outbreak of COVID-19, the disease associated with SARS-CoV-2, as a global pandemic. The disease continues to spread, including emerging variant strains of COVID-19, in the areas in which we operate. Governments and businesses around the world have taken unprecedented actions to mitigate the spread of COVID-19, including, but not limited to, shelter- in-place orders, quarantines, significant restrictions on travel, as well as restrictions that prohibit many employees from going to work. Since the onset of the COVID-19 pandemic, we have undertaken a number of business continuity measures to mitigate potential disruption to our operations and in order to preserve the integrity of our research and development programs. To date, we have not experienced any material disruptions to the execution of the research and development activities that we currently have underway; however, as a result of the COVID-19 pandemic, or any impacts of emerging variant strains of the COVID-19 virus, stagnant vaccination rates and related factors, we may experience disruptions that could impact our research and development timelines and outcomes. We will continue to evaluate the impact of the ongoing COVID-19 pandemic, along with the impact of emerging variants, on our business. While the extent to which COVID-19 impacts our future results will depend on future developments, including the duration, spread and intensity of the pandemic (including any resurgences), the impact of emerging variant strains of the COVID-19 virus and the rollout of COVID-19 vaccines, all of which remain uncertain and difficult to predict, it is possible that the global pandemic and its associated economic impacts could result in a material impact to our business, future financial condition, results of operations and cash flows.
Based on our cash, cash equivalents and marketable securities balance as of September 30, 2022, of $651.9 million, management estimates that its current liquidity position will enable it to meet operating expenses into 2026. For further details on our liquidity position, see the "Results of Operations."
Components of our results of operations
Revenue
We have not generated any commercial revenue from the sale of products. If our development efforts for our current product candidates or additional product candidates that we may develop in the future are successful and can be commercialized, we may generate revenue in the future from product sales. We may enter into collaboration and license agreements from time to time that provide for certain payments to us which may be accounted for as revenue from such collaboration or license agreements.
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Operating expenses
Research and development expenses
Our research and development expenses consist of expenses incurred in connection with the development of our product candidates. These expenses include:
employee-related expenses, which include salaries, benefits and stock-based compensation for our research and development personnel;
fees paid to consultants for services directly related to our research and development programs;
expenses incurred under agreements with third-party contract research organizations, or CROs, investigative clinical trial sites, academic institutions and consultants that conduct research and development activities on our behalf or in collaboration with us;
costs associated with preclinical studies and clinical trials;
costs associated with the manufacture of drug substance and finished drug product for preclinical testing and clinical trials;
costs associated with technology and intellectual property licenses; and
an allocated portion of facilities and facility-related costs, which include expenses for rent and other facility-related costs and other supplies.
External costs for research and development expenses are tracked on a program-by-program basis. Internal costs for research and development expenses, such as compensation-related costs for our research and development employees, as well as depreciation and other indirect costs, are not tracked on a program-by-program basis.
Expenditures for clinical development, including upfront licensing fees and milestone payments associated with our product candidates, are charged to research and development expense as incurred. These expenses consist of expenses incurred in performing development activities, including salaries and benefits, materials and supplies, preclinical expenses, clinical trial and related clinical manufacturing expenses, depreciation of equipment, contract services and other outside expenses. Costs for certain development activities, such as manufacturing and clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using either time-based measures or data such as information provided to us by our vendors on actual activities completed or costs incurred.
We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in activities related to developing our product candidates and our preclinical programs, and as certain product candidates advance into later stages of development, including the DeFi trial and the ReNeu trial. The process of conducting the necessary clinical trials to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates.
General and administrative expenses
General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance, corporate, commercial, business development and administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters; professional fees for accounting, auditing, tax and administrative consulting services; insurance costs; administrative travel expenses; and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support the continued development of our product candidates and expand operations to support the organization.
Interest and other income
Interest and other income consists primarily of interest income. Interest income consists of interest earned on our cash, cash equivalents and available-for-sale marketable securities.
Equity investment loss
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The equity investment loss represents the Company’s share of losses from the MapKure investment, which is accounted for using the equity method of accounting.
Results of Operations
Comparison of the three months ended September 30, 2022 and September 30, 2021
The following table summarizes our results of operations for the three months ended September 30, 2022 and September 30, 2021:
Three Months Ended September 30,
(in thousands)20222021$ Change% Change
Operating Expenses:
Research and development$36,067 $22,866 $13,201 58 %
General and administrative35,673 18,029 17,644 98 %
Total operating expenses71,740 40,895 30,845 75 %
Loss from operations(71,740)(40,895)(30,845)75 %
Interest and other income (expense):
Other expense, net(74)(58)(16)28 %
Interest income, net912 179 733 409 %
Total interest and other income838 121 717 593 %
Equity investment loss(1,486)(267)(1,219)457 %
Net loss$(72,388)$(41,041)$(31,347)76 %
Research and Development
Research and development expense increased by $13.2 million to $36.1 million for the three months ended September 30, 2022 from $22.9 million for the three months ended September 30, 2021, an increase of 58%.
The increase in research and development expense was primarily attributable to an increase of $8.5 million in external costs related to drug manufacturing, clinical trial and other research and a $6.0 million increase in internal costs driven by the growth in employee costs associated with increases in the number of personnel, including an increase in stock-based compensation expense.
General and Administrative
General and administrative expense was $35.7 million for the three months ended September 30, 2022, an increase of $17.6 million from $18.0 million for the three months ended September 30, 2021.
The increase in general and administrative expense was primarily attributable to a $9.2 million increase in internal costs driven by the growth in employee costs associated with increases in the number of personnel, including an increase in stock-based compensation expense as we continue to expand our operations to support the organization, and an $8.0 million increase in information technology costs and consulting and professional services, including legal, regulatory and compliance, as we continue to build new capabilities, including commercial.
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Comparison of the nine months ended September 30, 2022 and September 30, 2021
The following table summarizes our results of operations for the nine months ended September 30, 2022 and September 30, 2021:
Nine Months Ended September 30,
(in thousands)20222021$ Change% Change
Operating Expenses:
Research and development$108,194 $72,332 $35,862 50 %
General and administrative94,026 45,340 48,686 107 %
Total operating expenses202,220 117,672 84,548 72 %
Loss from operations(202,220)(117,672)(84,548)72 %
Interest and other income (expense):
Other expense, net(291)(96)(195)203 %
Interest income, net1,482 617 865 140 %
Total interest and other income1,191 521 670 129 %
Equity investment loss(2,210)(687)(1,523)222 %
Net loss$(203,239)$(117,838)$(85,401)72 %
Research and Development
Research and development expense increased by $35.9 million to $108.2 million for the nine months ended September 30, 2022 from $72.3 million for the nine months ended September 30, 2021, an increase of 50%.
The increase in research and development expense was primarily attributable to a $27.8 million increase in internal costs driven by the growth in employee costs associated with increases in the number of personnel, including an increase in stock-based compensation expense, and an increase of $19.7 million in external costs related to drug manufacturing, clinical trial and other research, partially offset by an $11.0 million decrease in licensing costs related to the nonrefundable upfront payment to KU Leuven and VIB for the in-licensing of the TEAD inhibitor program in May 2021.
General and Administrative
General and administrative expense was $94.0 million for the nine months ended September 30, 2022, an increase of $48.7 million or 107% from $45.3 million for the nine months ended September 30, 2021.
The increase in general and administrative expense was primarily attributable to a $27.0 million increase in internal costs driven by the growth in employee costs associated with increases in the number of personnel, including an increase in stock-based compensation expense as we continued to expand our operations to support the organization, and a $20.0 million increase in information technology costs and consulting and professional services, including legal, regulatory and compliance, as we continue to build new capabilities, including commercial.
Liquidity and Capital Resources
Sources of Liquidity
We have incurred operating losses and experienced negative operating cash flows since our inception and anticipate that we will continue to incur losses for at least the foreseeable future. Our net loss was $203.2 million and $117.8 million for the nine months ended September 30, 2022 and 2021, respectively. We had an accumulated deficit of $495.8 million and $292.5 million as of September 30, 2022 and December 31, 2021, respectively. Based on our cash, cash equivalents and marketable securities balances as of September 30, 2022, management estimates that our liquidity position will enable it to meet operating expenses through at least twelve months after the date that this Quarterly Report is filed. Our marketable securities consist of high-quality, highly liquid available-for-sale debt securities including corporate debt securities, U.S. government securities, non-U.S. government securities, and commercial paper.
At-the-Market Program
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In August 2022, the Company sold 2,247,500 shares of Common Stock as part of its ATM Program, for gross proceeds of $69.7 million, less commissions and other fees of $1.9 million for net proceeds of $67.8 million. Shares offered and sold in the ATM Program were issued pursuant to the Company’s registration statement on Form S-3, or Registration Statement, filed with the SEC on October 6, 2020, the prospectus supplement relating to the ATM Program filed with the SEC on February 25, 2021, and any applicable additional prospectus supplements related to the ATM Program that form a part of the Registration Statement. As of September 30, 2022, the Registration Statement permits the Company to offer and sell Common Stock having an aggregate value of approximately $130.3 million through the Company’s selling agent under the ATM Program.
Private Placements
In September 2022, the Company and the Investors, entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue to the Investors in the Private Placement, an aggregate of 8,650,520 shares of Common Stock at a purchase price of $26.01 per share. Upon closing of the Private Placement, the Company received gross proceeds of approximately $225 million, and after deducting commissions and offering costs, net proceeds were approximately $216.8 million.
In September 2022, we entered into the GSK License Agreement and concurrent with the execution of such agreement, the Company entered into the Stock Purchase Agreement, with GGL, under which GGL purchased 2,050,819 shares of Common Stock in a private placement transaction for an aggregate purchase price of approximately $75.0 million, or $36.57 per share. The shares were sold at a 25% premium to the volume-weighted average share price of