10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-50768

 

ACADIA PHARMACEUTICALS INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

06-1376651

(State of Incorporation)

(I.R.S. Employer Identification No.)

 

12830 El Camino Real, Suite 400

San Diego, California

92130

(Address of Principal Executive Offices)

(Zip Code)

 

(858) 558-2871

(Registrant’s Telephone Number, Including Area Code)

 

 

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

 

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, par value $0.0001 per share

ACAD

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

Total shares of registrant’s common stock outstanding as of the close of business on July 26, 2023:

 

Class

 

Number of Shares Outstanding

Common Stock, $0.0001 par value

 

163,728,859

 

 


 

ACADIA PHARMACEUTICALS INC.

FORM 10-Q

TABLE OF CONTENTS

 

 

 

PAGE NO.

 

 

 

PART I. FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Financial Statements

 

1

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets

 

1

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations

 

2

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Loss

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity

 

5

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

6

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

19

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

27

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

27

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

29

 

 

 

 

 

Item 1A.

 

Risk Factors

 

29

 

 

 

 

 

Item 6.

 

Exhibits

 

64

 

 

 

SIGNATURES

 

65

 

i


 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ACADIA PHARMACEUTICALS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

 

 

 

June 30,
2023

 

 

December 31,
2022

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

107,941

 

 

$

114,846

 

Investment securities, available-for-sale

 

 

267,437

 

 

 

301,977

 

Accounts receivable, net

 

 

81,852

 

 

 

62,195

 

Interest and other receivables

 

 

2,304

 

 

 

885

 

Inventory

 

 

9,199

 

 

 

6,636

 

Prepaid expenses

 

 

23,895

 

 

 

21,398

 

Total current assets

 

 

492,628

 

 

 

507,937

 

Property and equipment, net

 

 

5,193

 

 

 

6,021

 

Operating lease right-of-use assets

 

 

52,382

 

 

 

55,573

 

Intangible assets, net

 

 

68,219

 

 

 

 

Restricted cash

 

 

8,120

 

 

 

5,770

 

Long-term inventory

 

 

4,924

 

 

 

4,924

 

Other assets

 

 

11,303

 

 

 

7,587

 

Total assets

 

$

642,769

 

 

$

587,812

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Accounts payable

 

$

18,811

 

 

$

12,746

 

Accrued liabilities

 

 

169,131

 

 

 

112,884

 

Total current liabilities

 

 

187,942

 

 

 

125,630

 

Operating lease liabilities

 

 

49,778

 

 

 

52,695

 

Other long-term liabilities

 

 

9,256

 

 

 

9,074

 

Total liabilities

 

 

246,976

 

 

 

187,399

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 5,000,000 shares authorized at June 30, 2023
   and December 31, 2022;
no shares issued and outstanding at June 30, 2023 and
   December 31, 2022

 

 

 

 

 

 

Common stock, $0.0001 par value; 225,000,000 shares authorized at June 30, 2023
   and December 31, 2022;
163,355,787 shares and 162,064,872 shares issued and
   outstanding at June 30, 2023 and December 31, 2022, respectively

 

 

16

 

 

 

16

 

Additional paid-in capital

 

 

2,807,770

 

 

 

2,770,923

 

Accumulated deficit

 

 

(2,411,458

)

 

 

(2,369,551

)

Accumulated other comprehensive loss

 

 

(535

)

 

 

(975

)

Total stockholders’ equity

 

 

395,793

 

 

 

400,413

 

Total liabilities and stockholders’ equity

 

$

642,769

 

 

$

587,812

 

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

 

1


 

ACADIA PHARMACEUTICALS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Product sales, net

 

$

165,235

 

 

$

134,563

 

 

$

283,697

 

 

$

250,031

 

Total revenues

 

 

165,235

 

 

 

134,563

 

 

 

283,697

 

 

 

250,031

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product sales

 

 

7,459

 

 

 

2,667

 

 

 

9,126

 

 

 

5,617

 

Research and development

 

 

58,771

 

 

 

75,646

 

 

 

127,915

 

 

 

204,501

 

Selling, general and administrative

 

 

95,968

 

 

 

89,901

 

 

 

197,203

 

 

 

186,580

 

Total operating expenses

 

 

162,198

 

 

 

168,214

 

 

 

334,244

 

 

 

396,698

 

Income (loss) from operations

 

 

3,037

 

 

 

(33,651

)

 

 

(50,547

)

 

 

(146,667

)

Interest income, net

 

 

4,550

 

 

 

580

 

 

 

8,350

 

 

 

685

 

Other (loss) income

 

 

(1,244

)

 

 

(497

)

 

 

3,601

 

 

 

(157

)

Income (loss) before income taxes

 

 

6,343

 

 

 

(33,568

)

 

 

(38,596

)

 

 

(146,139

)

Income tax (benefit) expense

 

 

5,229

 

 

 

443

 

 

 

3,311

 

 

 

928

 

Net income (loss)

 

$

1,114

 

 

$

(34,011

)

 

$

(41,907

)

 

$

(147,067

)

Earnings (net loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.01

 

 

$

(0.21

)

 

$

(0.26

)

 

$

(0.91

)

Diluted

 

$

0.01

 

 

$

(0.21

)

 

$

(0.26

)

 

$

(0.91

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

163,458

 

 

 

161,654

 

 

 

163,109

 

 

 

161,443

 

Diluted

 

 

165,046

 

 

 

161,654

 

 

 

163,109

 

 

 

161,443

 

 

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

 

2


 

ACADIA PHARMACEUTICALS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income (loss)

 

$

1,114

 

 

$

(34,011

)

 

$

(41,907

)

 

$

(147,067

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (loss) gain on investment securities

 

 

(318

)

 

 

(236

)

 

 

439

 

 

 

(658

)

Foreign currency translation adjustments

 

 

3

 

 

 

5

 

 

 

1

 

 

 

7

 

Comprehensive income (loss)

 

$

799

 

 

$

(34,242

)

 

$

(41,467

)

 

$

(147,718

)

 

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

 

3


 

ACADIA PHARMACEUTICALS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(41,907

)

 

$

(147,067

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Stock-based compensation

 

 

29,859

 

 

 

35,475

 

Amortization of premiums and accretion of discounts on investment securities

 

 

(3,758

)

 

 

547

 

Amortization of intangible assets

 

 

1,364

 

 

 

 

(Gain) loss on strategic investment

 

 

(3,601

)

 

 

158

 

Loss on sale of investment securities

 

 

505

 

 

 

 

Depreciation

 

 

828

 

 

 

1,031

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

(19,657

)

 

 

(3,587

)

Interest and other receivables

 

 

(1,419

)

 

 

42

 

Inventory

 

 

(2,519

)

 

 

1,465

 

Prepaid expenses

 

 

(2,497

)

 

 

2,940

 

Other assets

 

 

(115

)

 

 

 

Operating lease right-of-use assets

 

 

3,405

 

 

 

3,172

 

Accounts payable

 

 

6,065

 

 

 

4,978

 

Accrued liabilities

 

 

26,875

 

 

 

16,854

 

Operating lease liabilities

 

 

(3,342

)

 

 

(3,972

)

Long-term liabilities

 

 

182

 

 

 

(1,490

)

Net cash used in operating activities

 

 

(9,732

)

 

 

(89,454

)

Cash flows from investing activities

 

 

 

 

 

 

Purchases of investment securities

 

 

(228,675

)

 

 

(125,377

)

Sale and maturity of investment securities

 

 

266,910

 

 

 

200,925

 

Intangible assets

 

 

(40,000

)

 

 

 

Net cash (used in) provided by investing activities

 

 

(1,765

)

 

 

75,548

 

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from issuance of common stock, net of issuance costs

 

 

6,944

 

 

 

6,298

 

Net cash provided by financing activities

 

 

6,944

 

 

 

6,298

 

Effect of exchange rate changes on cash

 

 

(2

)

 

 

6

 

Net increase in cash, cash equivalents and restricted cash

 

 

(4,555

)

 

 

(7,602

)

Cash, cash equivalents and restricted cash

 

 

 

 

 

 

Beginning of period

 

 

120,616

 

 

 

153,205

 

End of period

 

$

116,061

 

 

$

145,603

 

Supplemental disclosure of noncash information:

 

 

 

 

 

 

Accrued milestone and contingent payments in connection with asset acquisition

 

$

29,583

 

 

$

 

 

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

 

4


 

ACADIA PHARMACEUTICALS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(Unaudited)

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Total stockholders’ equity, beginning balances

 

$

374,258

 

 

$

444,797

 

 

$

400,413

 

 

$

540,894

 

Common stock:

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

 

16

 

 

 

16

 

 

 

16

 

 

 

16

 

Ending balance

 

 

16

 

 

 

16

 

 

 

16

 

 

 

16

 

Additional paid-in capital:

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

 

2,787,034

 

 

 

2,712,025

 

 

 

2,770,923

 

 

 

2,694,646

 

Issuance of common stock from exercise of stock options
   and units

 

 

2,815

 

 

 

806

 

 

 

4,281

 

 

 

3,273

 

Issuance of common stock pursuant to employee stock
   purchase plan

 

 

2,663

 

 

 

3,025

 

 

 

2,663

 

 

 

3,025

 

Stock-based compensation

 

 

15,258

 

 

 

20,462

 

 

 

29,903

 

 

 

35,374

 

Ending balance

 

 

2,807,770

 

 

 

2,736,318

 

 

 

2,807,770

 

 

 

2,736,318

 

Accumulated deficit:

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

 

(2,412,572

)

 

 

(2,266,632

)

 

 

(2,369,551

)

 

 

(2,153,576

)

Net income (loss)

 

 

1,114

 

 

 

(34,011

)

 

 

(41,907

)

 

 

(147,067

)

Ending balance

 

 

(2,411,458

)

 

 

(2,300,643

)

 

 

(2,411,458

)

 

 

(2,300,643

)

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

 

(220

)

 

 

(612

)

 

 

(975

)

 

 

(192

)

Other comprehensive (loss) income

 

 

(315

)

 

 

(231

)

 

 

440

 

 

 

(651

)

Ending balance

 

 

(535

)

 

 

(843

)

 

 

(535

)

 

 

(843

)

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity, ending balances

 

$

395,793

 

 

$

434,848

 

 

$

395,793

 

 

$

434,848

 

 

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

 

5


 

ACADIA PHARMACEUTICALS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Business

Acadia Pharmaceuticals Inc. (the Company), based in San Diego, California, is a biopharmaceutical company focused on the development and commercialization of innovative medicines to address unmet medical needs in central nervous system (CNS) disorders and rare diseases.

In April 2016, the U.S. Food and Drug Administration (FDA) approved the Company’s first drug, NUPLAZID® (pimavanserin), for the treatment of hallucinations and delusions associated with Parkinson’s disease psychosis (PDP). NUPLAZID became available for prescription in the United States in May 2016.

In March 2023, the FDA approved the Company’s second drug, DAYBUE™ (trofinetide), for the treatment of Rett syndrome. DAYBUE became available for prescription in the United States in April 2023.

2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company should be read in conjunction with the audited financial statements and notes thereto as of and for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K (Annual Report) filed with the Securities and Exchange Commission (the SEC). The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements reflect all adjustments (consisting of normal recurring adjustments) that are necessary for a fair statement of the financial position, results of operations, cash flows, and stockholders’ equity for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ materially from those estimates.

 

Risk and Uncertainties

Global economic and business activities continue to face widespread macroeconomic uncertainties, including labor shortages, inflation and monetary supply shifts, recession risks, recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures, potential disruptions from the Russia-Ukraine conflict, and the lingering effects of the COVID-19 pandemic. The Company continues to actively monitor the impact of these macroeconomic factors on its financial condition, liquidity, operations and workforce. The extent of the impact of these factors on the Company’s operational and financial performance, including its ability to execute its business strategies and initiatives in the expected time frame, will depend on future developments, which are uncertain and cannot be predicted; however, any continued or renewed disruption resulting from these factors could negatively impact the Company’s business.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated statements of cash flows that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in thousands):

 

 

 

Six Months Ended June 30, 2023

 

 

Six Months Ended June 30, 2022

 

 

 

Beginning of
period

 

 

End of
period

 

 

Beginning of
period

 

 

End of
period

 

Cash and cash equivalents

 

$

114,846

 

 

$

107,941

 

 

$

147,435

 

 

$

139,833

 

Restricted cash

 

 

5,770

 

 

 

8,120

 

 

 

5,770

 

 

 

5,770

 

Total cash, cash equivalents and restricted cash shown in
   the condensed consolidated statements of cash flows

 

$

120,616

 

 

$

116,061

 

 

$

153,205

 

 

$

145,603

 

 

6


 

Accounts Receivable

Accounts receivable are recorded net of customer allowances for distribution fees, prompt payment discounts, chargebacks, and credit losses. Allowances for distribution fees, prompt payment discounts and chargebacks are based on contractual terms. The Company estimated the current expected credit losses of its accounts receivable by assessing the risk of loss and available relevant information about collectability, including historical credit losses, existing contractual payment terms, actual payment patterns of its customers, individual customer circumstances, and reasonable and supportable forecast of economic conditions expected to exist throughout the contractual life of the receivable. The Company has not historically experienced significant credit losses. Based on its assessment, as of June 30, 2023 the Company determined that an allowance for credit loss was not required.

Revenues

The Company operates in one business segment. Results of its operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. Revenues consist of net product sales to customers, all of which are sales in the U.S. Revenues by product are as follows (in thousands):

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

NUPLAZID

 

$

142,018

 

 

$

134,563

 

 

$

260,480

 

 

$

250,031

 

DAYBUE

 

 

23,217

 

 

 

 

 

 

23,217

 

 

 

 

   Product sales, net

 

$

165,235

 

 

$

134,563

 

 

$

283,697

 

 

$

250,031

 

License Fees and Royalties

The Company expenses amounts paid to acquire licenses associated with products under development when the ultimate recoverability of the amounts paid is uncertain and the technology has no alternative future use when acquired. Acquisitions of technology licenses are charged to expense or capitalized based upon management’s assessment regarding the ultimate recoverability of the amounts paid and the potential for alternative future use. The Company has determined that technological feasibility for its product candidates is reached when the requisite regulatory approvals are obtained to make the product available for sale.

In connection with the first commercial sale of DAYBUE in April 2023, the Company made a milestone payment of $40.0 million pursuant to its 2018 license agreement with Neuren Pharmaceuticals Limited (Neuren), as disclosed in Note 9. The Company capitalized the $40.0 million payment as an intangible asset and began amortizing the asset in April 2023 on a straight-line basis over the estimated useful life of the licensed patents through early 2036 The Company recorded amortization expense related to this intangible asset of $0.8 million for the six months ended June 30, 2023. As of June 30, 2023, estimated future amortization expense related to the Company’s intangible asset was $1.6 million for the remainder of 2023, and $3.1 million for each subsequent year.

Following the FDA approval of DAYBUE, the Company was granted a Rare Pediatric Disease Priority Review Voucher (PRV). Pursuant to the license agreement, the Company is required to pay Neuren one third of the value of the PRV at the time of sale or use of the PRV. If the PRV is sold, the amount to be paid will be the sale value net of applicable fees. If the PRV is not sold but used by the Company, the amount to be paid will be the average price of the three most recent publicly announced sales of Rare Pediatric Disease PRVs immediately preceding the issuance of the PRV to the Company. The Company capitalized the $29.6 million for the estimated PRV value owed to Neuren as an intangible asset and began amortizing it in April 2023 on a straight-line basis over the estimated useful life of the licensed patents through early 2036. The Company recorded amortization expense related to this intangible asset of $0.6 million for the six months ended June 30, 2023. As of June 30, 2023, estimated future amortization expense related to the Company’s intangible asset was $1.2 million for the remainder of 2023, and $2.3 million for each subsequent year.

Royalties incurred in connection with the Company’s license agreement with Neuren, as disclosed in Note 9, are expensed to cost of product sales as revenue from product sales is recognized.

7


 

Intangible Assets

Finite-lived intangible assets are recorded at cost, net of accumulated amortization, and, if applicable, impairment charges. Amortization of finite-lived intangible assets is recorded over the assets’ estimated useful lives on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. We review our finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such intangible assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of intangible the assets exceeds the estimated fair value of the intangible assets. No impairment loss was recorded on intangible assets during the three and six months ended June 30, 2023.

3. Earnings (Net Loss) Per Share

Basic earnings (net loss) per share is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (net loss) per share is computed by dividing the net income (loss) by the weighted average number of common shares and common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of diluted earnings (net loss) per share calculation, equity awards, employee stock purchase plan rights, and warrants are considered to be common stock equivalents.

For the three and six months ended June 30, 2023, potentially dilutive shares excluded from calculation of diluted earnings (net loss) per share due to anti-dilutive effect were approximately 16,378,000 shares and 23,174,000 shares, respectively. For the three and six months ended June 30, 2022, potentially dilutive shares excluded from calculation of diluted net loss per share due to anti-dilutive effect were approximately 21,645,000 shares. Potential dilutive shares included from calculation of diluted earnings per share were approximately 1,588,000 shares for the three months ended June 30, 2023.

4. Stock-Based Compensation

The following table summarizes the total stock-based compensation expense included in the Company’s statements of operations for the periods presented (in thousands):

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023