to carry out and complete statistical analyses, process validation work, final data collection and validation, and other work associated with moving towards preparing for locking, unblinding and analyzing the trial results. We are also incurring substantial expenses to prepare for manufacturing validation and scale-up.
Our operating costs also include the costs of preparations for the launch of new or expanded clinical trial programs, such as our planned Phase II clinical trials. The preparation costs include payments to regulatory consultants, lawyers, statisticians, sites and others, evaluation of potential investigators, the clinical trial sites and the CROs managing the trials and other service providers, and expenses related to institutional approvals, clinical trial agreements (business contracts with sites), training of medical and other site personnel, trial supplies and other. Additional substantial costs relate to the maintenance and substantial expansion of manufacturing capacity, for both the US and Europe.
Our operating costs also include significant legal and accounting costs in operating the Company.
Research and development:
Discovery and preclinical research and development expenses include costs for substantial external scientific personnel, technical and regulatory advisers, and others, costs of laboratory supplies used in our internal research and development projects, travel, regulatory compliance, and expenditures for preclinical and clinical trial operation and management when we are actively engaged in clinical trials.
Because we are pre-revenue company, we do not allocate research and development costs on a project basis. We adopted this policy, in part, due to the unreasonable cost burden associated with accounting at such a level of detail and our limited number of financial and personnel resources.
In December 2018, recognizing the importance of manufacturing to the Company’s future commercialization, the Company’s Board approved an option pool for external manufacturing personnel with options exercisable for 5.5 million shares. The Company has worked with several manufacturing groups to date. As the Company continues to progress towards data lock and unblinding of the Phase 3 trial results, the Company anticipates reviewing its manufacturing arrangements and incentives, and anticipates implementing this option pool as part of that process. (None of the options for manufacturing personnel have been issued yet). The exercise price and exercise period determined by the Board in December 2018 for this manufacturing pool were $0.25 per share and ten years, the same as for the options approved for Company employees and directors shortly before that, in November 2018.
General and administrative:
General and administrative expenses include personnel related salary and benefit expenses, cost of facilities, insurance, travel, legal services, property and equipment and amortization of stock options and warrants.
Three Months Ended June 30, 2020 and 2019
We recognized a net loss of $58 million and net income of $0.2 million for the three months ended June 30, 2020 and 2019, respectively.
Research and Development Expense
For the three months ended June 30, 2020 and 2019, research and development expense was $3.1 million and $3.3 million, respectively. The slight decrease is within a normal fluctuation range for our external consultant expenses.
The following table summarizes expenses incurred (i.e., amounts invoiced, which have only been partly paid) to related parties during the three months ended June 30, 2020 and 2019 (amount in thousands):
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For the three months ended
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June 30,
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2020
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2019
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Advent BioServices
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$
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1,227
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$
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1,263
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