Comparison of the Six Months Ended June 30, 2022 and 2021
Research and Development Expenses
Research and development expenses increased by $0.5 million, or 5%, to $10.6 million for the six months ended June 30, 2022 from $10.1 million for the six months ended June 30, 2021. The increase was primarily related to increases in manufacturing costs associated with our Zygel program and increased employee-related costs partially offset by reductions in clinical and stock-based compensation expenses.
General and Administrative Expenses
General and administrative expenses decreased by $0.2 million, or 2%, to $7.5 million for the six months ended June 30, 2022 from $7.7 million for the six months ended June 30, 2021. The decrease was primarily related to lower stock-based compensation expenses and a decrease in proxy solicitation costs related to our annual meeting partially offset by higher employee-related costs, including recruiting fees and increased directors’ and officers’ liability insurance costs.
Other Income (Expense)
During the six months ended June 30, 2022 and 2021, we recognized $0.2 million and $11,576 respectively, in interest income. The increase in interest income was related to interest income received from the ATO for the payment of prior year’s non-AOF research and development incentives and higher average interest rates earned on our investments. During the six months ended June 30, 2022 and 2021, we recognized foreign currency losses of $0.5 million and $0.2 million, respectively. Foreign currency gains and losses are due primarily to the remeasurement of the Subsidiary’s assets and liabilities, which are denominated in the local currency to the Subsidiary’s functional currency, which is the U.S. dollar.
Liquidity and Capital Resources
Since our inception in 2007, we have devoted most of our cash resources to research and development and general and administrative activities. We have financed our operations primarily with the proceeds from the issuance and sale of equity securities (most notably our initial public offering, our follow-on public offerings and sales under our “at-the-market” offerings), convertible promissory notes, state and federal grants and research services.
To date, we have not generated any revenue from the sale of products, and we do not anticipate generating any revenue from the sales of products for the foreseeable future. We have incurred losses and generated negative cash flows from operations since inception. As of June 30, 2022, our principal sources of liquidity were our cash and cash equivalents of $62.5 million. Our working capital was $56.1 million as of June 30, 2022.
Management believes that cash and cash equivalents as of June 30, 2022 are sufficient to fund operations and capital requirements through the end of 2023 or early 2024, after the expected availability of top line results from its confirmatory pivotal Phase 3 RECONNECT trial of Zygel in patients with FXS. The economic effects of the COVID-19 pandemic remain fluid and management will continue to closely monitor the situation to ensure our cash and cash equivalents will help us manage the impact of the COVID-19 pandemic on our business and related liquidity needs. Substantial additional financings will be needed to fund our operations and to complete clinical development of and to commercially develop our product candidates. There can be no assurance that such financing will be available when needed or on acceptable terms. Our ability to access the capital markets or otherwise raise such capital may be adversely impacted by global economic conditions and the disruptions to, and volatility in, financial markets in the United States and worldwide resulting from, among other factors, inflation, the ongoing COVID-19 pandemic and geopolitical tensions or the outbreak of hostilities or war.
Equity Financings
On May 11, 2021, we entered into a Controlled Equity OfferingSM Sales Agreement, or the 2021 Sales Agreement, with Cantor Fitzgerald & Co., Canaccord Genuity, LLC, H.C. Wainwright & Co. LLC and Ladenburg Thalmann & Co. Inc., as sales agents, pursuant to which, under a prospectus filed in May 2022, we may sell, from time to time, up to $75.0 million of our common stock. In the first half of 2022, we sold and issued 1,345,952 shares of common stock under the 2021 Sales Agreement in the open market at a weighted average selling price of $1.97 per share, resulting in gross