Research and Development Expenses
Research and development expenses increased by $10.8 million, or 24%, for the six months ended June 30, 2019, compared to the six months ended June 30, 2018.
The increase was primarily due to $5.3 million in increased personnel and equity compensation expenses to support growth of our development activities, $2.5 million in increased medical affairs and other research activities
, and
$2.8 million caused by two components: increased manufacturing to support product registration and startup activities for FALCON and the extension trials for our registrational programs, which were offset by decreased clinical expenses due to fully enrolled and completed studies.
Research and development expenses, as a percentage of total expenses, was comparable to the prior period at 72% for the six months ended June 30, 2019 and 2018.
General and Administrative Expenses
General and administrative expenses increased by $4.4 million, or 26%, for the six months ended June 30, 2019, compared to the six months ended June 30, 2018.
The increase was primarily due to $5.0 million in increased personnel and equity compensation expenses, $2.0 million in increased rent and office expenses to support growth in our development activities, and $0.5 million in increased professional fees due to audit, legal, and tax-related services, offset by decreased sublicense fees and other expenses related to the achievement of a KKC milestone in 2018.
General and administrative expenses, as a percentage of total expenses, was comparable to the prior period at 28% for the six months ended June 30, 2019 and 2018.
Investment Income
Investment income increased by $2.8 million, or 405%, for the six months ended June 30, 2019, compared to the six months ended June 30, 2018, due to investment and interest income earned on higher balances of cash and cash equivalents.
Interest Expense
Interest expense increased by $3.4 million, or 240%, for the six months ended June 30, 2019, compared to the six months ended June 30, 2018, due to increased interest charges associated with additional borrowings under our Restated Loan Agreement entered in June 2018.
Provision for Taxes on Income
Provision for taxes on income was immaterial for the six months ended June 30, 2019 and 2018.
Cash-based Operating Expenses (non-GAAP) for the Three and Six Months Ended June 30, 2019 and 2018 (unaudited)
Total expenses (GAAP) were $41.5 million and $77.8 million for the three and six months ended June 30, 2019, respectively, compared to $34.2 million and $62.4 million for the three and six months ended June 30, 2018, respectively. Our cash-based operating expenses (a non-GAAP measure calculated as total expenses, less stock-based compensation expense and depreciation expense) were $36.8 million and $68.7 million for the three and six months ended June 30, 2019, respectively, compared to $31.6 million and $57.1 million for the three and six months ended June 30, 2018, respectively.
We expect our cash-based operating expenses to continue to increase in the future as we advance Bard and Omav through ongoing and future clinical trials, scale manufacturing for registrational and validation purposes, advance other product candidates into mid and later stage clinical trials, expand our product candidate portfolio, increase both our research and development and administrative personnel, and plan for commercialization of our product candidates.