On November 3, 2021 Charles River Laboratories International, Inc. (NYSE: CRL) reported its results for the third quarter of 2021 (Press release, Charles River Laboratories, NOV 3, 2021, View Source [SID1234594353]). For the quarter, revenue was $895.9 million, an increase of 20.5% from $743.3 million in the third quarter of 2020.

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Acquisitions contributed 5.9% to consolidated third-quarter revenue growth. The impact of foreign currency translation benefited reported revenue growth by 1.0%. Excluding the effect of these items, organic revenue growth was 13.6%, driven by contributions from all three business segments. The comparison to last year’s COVID-19-related impact increased the reported and organic revenue growth rates in the third quarter of 2021 by 1.8% and 1.7%, respectively.

On a GAAP basis, third-quarter net income attributable to common shareholders was $103.4 million, an increase of 0.5% from net income of $102.9 million for the same period in 2020. Third-quarter diluted earnings per share on a GAAP basis were $2.01, a decrease of 1.0% from $2.03 for the third quarter of 2020. GAAP net income and earnings per share reflect higher revenue and a lower tax rate, which were offset by venture capital investment losses. GAAP net income and earnings per share included a loss from the Company’s venture capital and other strategic investments of $0.15 per share in the third quarter of 2021, compared to a gain of $0.29 per share for the same period in 2020. The Company’s venture capital and other strategic investment performance has been excluded from non-GAAP results.

On a non-GAAP basis, net income was $139.1 million for the third quarter of 2021, an increase of 17.9% from $118.0 million for the same period in 2020. Third‑quarter diluted earnings per share on a non-GAAP basis were $2.70, an increase of 15.9% from $2.33 per share for the third quarter of 2020. The non-GAAP net income and earnings per share increases were primarily driven by higher revenue and a lower tax rate.

James C. Foster, Chairman, President and Chief Executive Officer, said, "Our strong third-quarter results demonstrate the effectiveness of our strategy, the sustained strength of industry fundamentals, and the success we have had in becoming our clients’ partner of choice from concept, to nonclinical development, to the safe manufacture of their life-saving therapeutics."

"We continue to add people and capacity to accommodate growing client demand and to build a scalable operating model; to enhance our scientifically distinguished portfolio; and to work with clients to devise outsourcing solutions which enable them to increase productivity and speed to market. We believe these efforts will enable us to achieve our strategic and financial goals, both in 2021 and over the longer term," Mr. Foster concluded.

Third-Quarter Segment Results

Research Models and Services (RMS)

Revenue for the RMS segment was $171.3 million in the third quarter of 2021, an increase of 12.7% from $151.9 million in the third quarter of 2020. The impact of foreign currency translation contributed 1.4% and the acquisition of Cellero contributed 0.6% to third-quarter RMS revenue. Organic revenue growth of 10.7% was primarily driven by robust demand for research models, particularly in China, as well as higher revenue for research model services, particularly the Genetically Engineered Models and Services (GEMS) business. Third-quarter revenue for the cell supply business, which consists of HemaCare and Cellero, continued to be impacted by limitations on donor availability. The comparison to last year’s COVID-19-related impact increased the reported and organic revenue growth rates in the third quarter of 2021 by 2.2% and 2.1%, respectively.

In the third quarter of 2021, the RMS segment’s GAAP operating margin decreased to 22.8% from 24.4% in the third quarter of 2020, and on a non-GAAP basis, the operating margin decreased to 26.1% from 27.7%. The GAAP and non-GAAP operating margin decreases were primarily driven by the cell supply business.

Discovery and Safety Assessment (DSA)

Revenue for the DSA segment was $531.8 million in the third quarter of 2021, an increase of 15.3% from $461.2 million in the third quarter of 2020. The impact of foreign currency translation contributed 0.9%, and the acquisitions of Distributed Bio and Retrogenix contributed 1.4% to DSA revenue growth. Organic revenue growth of 13.0% was driven by both the Safety Assessment and Discovery Services businesses. From a client perspective, biotechnology clients were the primary driver of DSA revenue growth, with solid contributions from global biopharmaceutical clients as well.

In the third quarter of 2021, the DSA segment’s GAAP operating margin increased to 21.9% from 19.6% in the third quarter of 2020. The increase was primarily due to lower acquisition-related adjustments associated with contingent consideration. On a non-GAAP basis, the operating margin decreased by 90 basis points to 24.3% from 25.2% in the third quarter of 2020, primarily due to the impact of foreign currency translation, which reduced the DSA operating margin by approximately 70 basis points. In addition, a Discovery Services milestone payment received in the third quarter of 2020 contributed approximately 50 basis points to last year’s DSA operating margin.

Manufacturing Solutions (Manufacturing)

Revenue for the Manufacturing segment was $192.9 million in the third quarter of 2021, an increase of 48.1% from $130.2 million in the third quarter of 2020. The impact of foreign currency translation contributed 1.1%, and the acquisitions of Cognate BioServices (Cognate) and Vigene Biosciences (Vigene) contributed 27.9% to third-quarter Manufacturing revenue. Organic revenue growth of 19.1% was driven primarily by robust demand in the Biologics Testing Solutions and Microbial Solutions businesses. The comparison to last year’s COVID-19-related impact increased the reported and organic revenue growth rates in the third quarter of 2021 by 4.4% and 3.5%, respectively.

In the third quarter of 2021, the Manufacturing segment’s GAAP operating margin decreased to 25.2% from 37.1% in the third quarter of 2020, and on a non-GAAP basis, the operating margin decreased to 32.7% from 39.1%. The GAAP and non-GAAP operating margin decreases were driven primarily by the addition of the Cognate and Vigene CDMO businesses. The GAAP operating margin also declined due to amortization of intangible assets and acquisition-related costs associated with the transactions.

Updates 2021 Guidance

The Company is updating its 2021 financial guidance, which was previously provided on August 4, 2021. The Company completed the divestitures of its RMS operations in Japan and its CDMO site in Sweden on October 12th. The effect of these transactions will reduce revenue by nearly $20 million and non-GAAP diluted earnings per share by less than $0.10 in the fourth quarter of 2021. The divestitures have been reflected in the updated 2021 financial guidance.

The primary drivers of the updated reported revenue growth guidance are the impact of foreign exchange and the divestitures. Foreign currency translation is now expected to benefit reported revenue growth by 1.5% to 2.0% in 2021, compared to the prior outlook of a 2.5% benefit.

The Company is updating its GAAP and non-GAAP earnings per share guidance, primarily to reflect a lower-than-expected tax rate driven by R&D tax credits and a favorable excess tax benefit from stock-based compensation, partially offset by the impact of the divestitures. On a GAAP basis, the updated guidance also reflects a gain related to the sale of the Company’s RMS Japan operations.

On November 3, 2021 Aclaris Therapeutics, Inc. (NASDAQ: ACRS), a clinical-stage biopharmaceutical company focused on developing novel drug candidates for immuno-inflammatory diseases, reported that management will participate in the following upcoming investor conferences (Press release, Aclaris Therapeutics, NOV 3, 2021, View Source [SID1234594351]):

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Jefferies London Healthcare Conference. Dr. Neal Walker, the President and CEO of Aclaris, will participate in a virtual fireside chat which will be available beginning on Thursday, November 18, 2021 at 3:00 a.m. ET. Management will be available November 18th throughout the day for virtual one-on-one meetings.

Piper Sandler 33rd Annual Virtual Healthcare Conference. Dr. Walker will participate in a virtual fireside chat which will be available beginning on Monday, November 22, 2021 at 10:00 a.m. ET. Management will be available December 1st throughout the day for virtual one-on-one meetings.
A live webcast of each fireside chat may be accessed through the "Events" page of the "Investors" section of Aclaris’ website, www.aclaristx.com. Each webcast will be archived for at least 30 days on the Aclaris website.

On November 3, 2021 Cellectis S.A. (NASDAQ: CLLS – EURONEXT GROWTH: ALCLS) (the "Company"), a gene-editing company with clinical-stage immuno-oncology programs using allogeneic chimeric antigen receptor (CAR)-T cells and gene therapy programs for genetic diseases, reported the release of two abstracts, which were accepted for presentation at the 63rd American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting taking place from December 11-14, 2021 (Press release, Cellectis, NOV 3, 2021, View Source [SID1234594350]). The Company will present updated preliminary clinical data from its BALLI-01 clinical trial in patients with relapsed/refractory B-cell acute lymphoblastic leukemia (B-ALL), and preclinical data for TALGlobin01 for patients with HbSS Sickle Cell Disease (SCD).

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"2021 has been a busy and productive year for Cellectis, with our proprietary clinical and preclinical programs making noteworthy progress. Cellectis is advancing one of the most robust allogeneic CAR-T pipelines and we are excited to share additional preliminary data from our BALLI-01 clinical trial, which is evaluating UCART22, in patients with relapsed and refractory B-cell acute lymphoblastic leukemia for whom there continues to be an urgent need for safe and effective treatments. We are also proud to disclose initial pre-clinical data from our .HEAL platform’s product candidate, TALGlobin01, which demonstrates that TALEN could be specific and efficient at correcting the mutated beta-globin gene, the underlying cause of sickle cell disease," said Carrie Brownstein, MD, Chief Medical Officer at Cellectis.

Cellectis Poster Presentations

BALLI-01 investigating UCART22 product candidate in R/R B-ALL

The abstract includes updated preliminary data from the Phase I, open-label, dose-escalation BALLI-01 study in patients with R/R B-ALL from the first cohort of patients who received UCART22 after FCA (fludarabine, cyclophosphamide and alemtuzumab) lymphodepletion. The data show that the addition of alemtuzumab to fludarabine and cyclophosphamide was well tolerated, deepened host T-cell depletion and promoted CAR-T cell expansion.

UCART22 is a novel and genetically modified allogeneic T-cell product manufactured from healthy donor cells. T-cells are transduced using a lentiviral vector to express the anti-CD22 chimeric antigen receptor (CAR) and are modified to disrupt the T-cell receptor alpha constant (TRAC) and CD52 genes to minimize risk of graft-vs-host disease (GvHD) and to allow use of anti-CD52–directed drugs for lymphodepletion.

These data are encouraging and support the continued enrollment into the study. Additional data will be presented at the congress.

Poster Abstract Session:
Title: Preliminary Results from the Flu/Cy/Alemtuzumab Arm of the Phase I BALLI-01 Trial of UCART22, an Anti-CD22 Allogeneic CAR-T Cell Product, in Adult Patients with Relapsed or Refractory (R/R) CD22+ B-Cell Acute Lymphoblastic Leukemia (B-ALL)
Abstract: #1746
Presenter: Jain Nitin, MD, The University of Texas MD Anderson Cancer Center, Department of Leukemia, Houston, TX
Session Name: 704, cellular immunotherapies, Clinical Poster I
Date & Time & Location: December 11, 2021 5:30-7:30PM ET, Georgia World Congress Center, Hall B5

TALGlobin01; an autologous ex vivo TALEN-edited CD34+ HSC therapy for the treatment of Sickle Cell Disease

Sickle cell disease (SCD) is a common inherited disease that stems from a single mutation in the HBB gene.

TALGlobin01 is an autologous cell-based gene therapy product designed to repair the mutated b-globin gene (HBB), and subsequently restore production of Hemoglobin A in HBSS sickle cell disease.

The data that will be presented are the first demonstration that TALEN-based engineering could be used to correct the mutation in the beta-globin gene of homozygous sickle cell anemia patient-derived hematopoietic stem and progenitor cells. The data showed high level of hemoglobin A expression, reversion of sickling phenotype, the capacity of TALGlobin01 edited cells to engraft in vivo, and a low level of off-target cleavage. Collectively, the data demonstrate high efficiency and safety of TALEN treatment in HSPCs and positioned it as the best-in-class gene editing technology for gene therapy product development.

Poster Abstract Session:

Title: Pre-clinical development of a highly efficient TALEN-based correction of β-globin gene in patient-derived hematopoietic stem and progenitor cells (HSPCs) to treat sickle cell disease
Abstract: #1856
Presenter: Julien Valton, PhD, Vice President Gene Therapy, Cellectis
Session Name: 801, Gene therapies Poster I
Session Date & Time & Location: Dec 11, 2021, 5:30-7:30PM ET, Georgia World Congress Center, Hall B5

ASH abstracts are now available on www.hematology.org

On November 3, 2021 Herantis Pharma Plc ("Herantis"), focusing on disease modifying therapies for debilitating neurodegenerative diseases, reported that Dr. Craig Cook, Chief Executive Officer, will hold 1×1 meetings and have a company presentation at the following investor conferences (Press release, Herantis Pharma, NOV 3, 2021, View Source,c3446216 [SID1234594328]):

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Redeye Life Science Day 2021 – November 11th (Virtual)

Virtual Presentation at 16:10 – 16:30 EET / 15:10 – 15:30 CET

H.C. Wainwright 7th Annual Israel Virtual Conference – November 15, 2021

1×1 meetings and virtual presentation.

8th China HealthCare Summit, November 18 – 19, 2021 (Virtual)

1×1 meetings and virtual presentation.

All presentations will be available via a digital library, which is accessible to event participants only. Please contact the conference organizers, or send an email to [email protected], if you wish to schedule a meeting with Herantis.

On November 3, 2021 Merus N.V. (Nasdaq: MRUS) ("Merus", the "Company," "we", or "our"), a clinical-stage oncology company developing innovative, full-length multispecific antibodies (Biclonics and Triclonics), reported a regulatory update for the zenocutuzumab (Zeno) program in NRG1 positive (NRG1+) solid tumors, financial results for the third quarter that ended September 30, 2021, and provided a business update (Press release, Merus, NOV 3, 2021, View Source [SID1234594295]).

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"Our recent regulatory interactions with the FDA demonstrate the maturation of the Zeno program as we continue on the path to potential BLA submission," said Bill Lundberg, M.D., President, Chief Executive Officer of Merus. "In addition, with MCLA-158, we are also encouraged by the early interim clinical data we recently reported in head and neck cancer, and the continued progress of our other clinical programs. We believe the positive results we are seeing in the clinic further validate the strength of our platform."

Clinical Programs

Zenocutuzumab (Zeno or MCLA-128: HER3 x HER2 Biclonics)

Alignment obtained with the FDA on registration approach for a potential tumor agnostic indication: clinical update planned for 1H22

Merus met with the U.S. Food and Drug Administration (FDA) in an end-of-phase Type B meeting to discuss interim results from the ongoing phase 1/2 eNRGy trial and Early Access Program (EAP) in NRG1+ cancers, and to discuss the development plan for Zeno. Merus and the FDA officials discussed the available Zeno monotherapy data and a potential data package to support a biologics license application (BLA) submission.

Merus designed the phase 1/2 eNRGY trial to support potential registration in either a tumor-specific or a tumor agnostic NRG1+ indication(s). Based on feedback received from the FDA, Merus believes that the trial design and planned enrollment will be appropriate to potentially support a BLA submission seeking a tumor agnostic indication for Zeno in patients with previously treated NRG1+ cancers. Merus believes that, if the rate of enrollment and efficacy remains consistent, a sufficient number of patients will be enrolled in the eNRGy trial and EAP, with sufficient follow up, by mid-2022, that could provide a potential registrational data set.

Andrew Joe, M.D., Chief Medical Officer of Merus, stated, "We are very pleased with our recent regulatory interactions including alignment with the FDA on a tumor agnostic approach for NRG1+ cancers, for which Zeno has already received Fast Track designation. Regulatory interactions such as these represent continued progress in Merus’ mission to bring our novel multispecific antibody therapy candidates to patients with serious unmet medical need."

As of September 1, 2021 more than 80 patients with NRG1+ cancers have been treated with Zeno monotherapy in our phase 1/2 eNRGy trial and EAP. Merus plans to provide a further clinical program update in the first half of 2022.

Details of the eNRGy trial can be found at www.ClinicalTrials.gov and Merus’ trial website at www.nrg1.com, or by calling 1-833-NRG-1234.

In addition, we presented preclinical data on Zeno at the 2021 AACR (Free AACR Whitepaper)-NCI-EORTC Virtual AACR-NCI-EORTC (Free AACR-NCI-EORTC Whitepaper) International Conference on Molecular Targets and Cancer Therapeutics (EORTC-NCI-AACR) (Free ASGCT Whitepaper) (Free EORTC-NCI-AACR Whitepaper). The bispecific HER2/HER3 antibody Zeno blocked cell growth 100 fold more potently than the bivalent HER3 antibody derived from Zeno, in an NRG1 driven growth assay, and potently blocked NRG1-fusion mediated downstream signaling and growth in in vitro and in vivo models. Zeno induced both antibody-dependent cellular cytotoxicity (ADCC) and antibody-dependent cellular phagocytosis (ADCP) mediated killing of cancer cells in a dose-dependent manner.

MCLA-158 (petosemtamab: Lgr5 x EGFR Biclonics): Solid Tumors

Dose expansion continues in the phase 1 trial: update planned for 2022

We shared early interim clinical data of the MCLA-158 program in patients with advanced HNSCC at the 2021 AACR (Free AACR Whitepaper)-NCI-EORTC Virtual AACR-NCI-EORTC (Free AACR-NCI-EORTC Whitepaper) International Conference on Molecular Targets and Cancer Therapeutics (EORTC-NCI-AACR) (Free ASGCT Whitepaper) (Free EORTC-NCI-AACR Whitepaper). Among 10 patients with previously treated advanced HNSCC, as of the August 9, 2021 safety and efficacy data cutoff, the median age was 65 and the median number of prior lines of therapy was two. Seven patients were evaluable for an interim efficacy analysis by investigator assessment (three patients were enrolled <8 weeks from the data cutoff date). Three of seven patients achieved a best response of partial response, with one achieving complete response after the data cutoff date. Tumor reduction was observed in the target lesions of all seven patients. The safety results presented for MCLA-158 were based on 29 patients with advanced solid tumors who were treated at 1500 mg every two weeks across the phase 1 trial. The most frequent adverse events (AEs) were infusion related reactions with 72% any grade and 7% grade 3 or greater. Mild to moderate skin toxicity (3% grade ≥3) was also observed.

MCLA-145 (CD137 x PD-L1 Biclonics): Solid Tumors

Phase 1 trial continues: update planned for ESMO (Free ESMO Whitepaper) Immuno-Oncology Congress 2021

The phase 1, open-label, single-agent clinical trial of MCLA-145 is ongoing. The trial consists of a dose escalation phase, to be followed by a planned dose expansion phase. MCLA-145 is the first drug candidate co-developed under Merus’ global collaboration and license agreement with Incyte Corporation ("Incyte"), which permits the development and commercialization of up to 11 bispecific and monospecific antibodies from the Merus Biclonics platform. Merus retains full rights to develop and commercialize MCLA-145, if approved, in the United States; and Incyte holds full rights to develop and commercialize MCLA-145 outside the United States. We plan to provide an update at ESMO (Free ESMO Whitepaper) Immuno-Oncology Congress 2021.

MCLA-129 (EGFR x c-MET Biclonics): Solid Tumors

The phase 1/2, open-label, single-agent clinical trial of MCLA-129 is ongoing and consists of a dose escalation phase, to be followed by planned expansion cohorts evaluating MCLA-129 for the treatment of patients with advanced non-small cell lung cancer (NSCLC) and other solid tumors. MCLA-129 is a Biclonics, which binds to EGFR and c-MET and is being investigated for the treatment of solid tumors. EGFR is an important oncogenic driver in many cancers, and upregulation of c-MET signaling has been associated with resistance to EGFR inhibition. We plan to provide an update after the recommended phase 2 dose has been reached.

MCLA-129 is subject to a collaboration and license agreement with Betta Pharmaceuticals Co. Ltd. (Betta), which permits Betta to exclusively develop MCLA-129 in China, while Merus retains full ex-China rights.

In October 2021, Betta announced that the first patient was dosed in Betta’s sponsored phase 1/2 trial of MCLA-129 in China in patients with advanced solid tumors.

Collaborations Update

Incyte

In the third quarter Merus received a milestone payment for achieving pre-clinical candidate nomination of a novel bispecific antibody (target pair program) under the global collaboration and license agreement with Incyte. Candidate nomination has triggered this program’s next phase of IND-enabling studies by Incyte.

Merus receives reimbursement for research activities related to the collaboration and is eligible to receive potential development, regulatory and commercial milestones and sales royalties for any products, if approved.

Loxo Oncology at Lilly

In January 2021 Merus and Loxo Oncology at Lilly, a research and development group of Eli Lilly and Company (Lilly) announced a research collaboration and exclusive license agreement that will leverage Merus’ proprietary Biclonics platform along with the scientific and rational drug design expertise of Loxo Oncology at Lilly to research and develop up to three CD3-engaging T-cell re-directing bispecific antibody therapies. The collaboration is progressing well with active research programs underway.

Third Quarter 2021 Financial Results

We ended the third quarter with cash, cash equivalents and marketable securities of $333.2 million compared to $207.8 million at December 31, 2020. The increase was primarily the result of net proceeds from our follow-on offering and proceeds from the collaboration with and equity investment by Eli Lilly and Company ("Lilly"), net of cash used in operations and other items. Based on the Company’s current operating plan, we expect that our existing cash and cash equivalents and marketable securities of $333.2 million as of September 30, 2021, will fund the Company’s operations into the second half of 2024.

Collaboration revenue for the three months ended September 30, 2021 increased by $5.1 million as compared to the three months ended September 30, 2020, primarily as a result of an increase from a Lilly upfront payment amortization and reimbursement revenues of $5.0 million that commenced in the first quarter of 2021. The change in exchange rates did not significantly impact collaboration revenue.

Research and development expense for the three months ended September 30, 2021 increased by $8.5 million as compared to the three months ended September 30, 2020, primarily as a result of an increase in clinical and manufacturing costs related to our programs and stock-based compensation.

General and administrative expense for the three months ended September 30, 2021 increased by $1.1 million as compared to the three months ended September 30, 2020, primarily as a result of an increase in stock-based compensation and other personnel related expenses, partially offset by decreases in legal and depreciation costs.

Collaboration revenue for the nine months ended September 30, 2021 increased by $13.5 million as compared to the nine months ended September 30, 2020, primarily as a result of an increase from a Lilly upfront payment amortization and reimbursement revenues of $11.0 million that commenced in the first quarter of 2021, and $1.0 million of milestone revenue related to Incyte reflecting activities in the period. The change in exchange rates did not significantly impact collaboration revenue.

Research and development expense for the nine months ended September 30, 2021 increased by $23.2 million as compared to the nine months ended September 30, 2020, primarily as a result of an increase in clinical and manufacturing costs related to our programs and stock-based compensation.

General and administrative expense for the nine months ended September 30, 2021 increased by $4.0 million as compared to the nine months ended September 30, 2020, primarily as a result of an increase in stock-based compensation and other personnel related expenses partially offset by decreases in legal and IP related costs and travel expenses.

Other income (loss), net consists of interest earned and fees paid on our cash and cash equivalents held on account, accretion of investment earnings and net foreign exchange (losses) gains on our foreign denominated cash, cash equivalents and marketable securities. Other gains or losses relate to the issuance and settlement of financial instruments.