What changed in this filing

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Item 1. Financial Statements

2020-11-04 compared with 2020-08-05 · 92 added, 86 removed, 509 unchanged (26% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

September 30,

2020 December 31,

23 unchanged sentences

Preferred stock, $ 0.001 par value:

10,000,000 shares authorized as of June 30, 2020 and December 31, 2019;

no shares were issued and outstanding as of June 30, 2020 and December 31, 2019

10,000,000 shares authorized as of September 30, 2020 and December 31, 2019;

no shares were issued and outstanding as of September 30, 2020 and December 31, 2019

Common stock, $ 0.001 par value:

200,000,000 shares authorized as of June 30, 2020 and December 31, 2019;

139,233,450 and 124,267,358 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively

200,000,000 shares authorized as of September 30, 2020 and December 31, 2019;

139,755,839 and 124,267,358 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively

Additional paid-in capital 1,695,411 1,023,876

8 unchanged sentences

(In thousands, except share and per share amounts)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

9 unchanged sentences

Loss before income taxes ( 66,197 ) ( 50,702 ) ( 181,651 ) ( 123,740 )

Benefit from income taxes — 159 — 209

Benefit (expense) from income taxes — ( 33 ) — 176

Net loss ( 66,197 ) ( 50,735 ) ( 181,651 ) ( 123,564 )

Other comprehensive income:

Net unrealized gain on available-for-sale investments 220 756 685 1,855

Net unrealized gain (loss) on available-for-sale investments ( 877 ) ( 295 ) ( 192 ) 1,560

Net comprehensive loss $ ( 67,074 ) $ ( 51,030 ) $ ( 181,843 ) $ ( 122,004 )

7 unchanged sentences

Shares Amount

Balance - March 31, 2020 125,262,537 $ 125 $ 1,055,386 $ ( 450,602 ) $ 1,610 $ 606,519

Balance - June 30, 2020 139,233,450 $ 139 $ 1,673,026 $ ( 511,576 ) $ 1,830 $ 1,163,419

Issuance of common stock upon exercise of stock options and vesting of RSUs

3 unchanged sentences

Stock-based compensation — — 17,823 — — 17,823

Issuance of common stock from public offering, net of commissions and offering costs of $ 36.8 million

Employee stock purchase plan

90,577 — 1,406 — — 1,406

Net loss — — — ( 66,197 ) — ( 66,197 )

Net unrealized gain on available-for-sale investments

Net unrealized loss on available-for-sale investments

— — — — ( 877 ) ( 877 )

Balance - June 30, 2020 139,233,450 $ 139 $ 1,673,026 $ ( 511,576 ) $ 1,830 $ 1,163,419

Balance - September 30, 2020 139,755,839 $ 140 $ 1,695,411 $ ( 577,773 ) $ 953 $ 1,118,731

Common Stock Additional

17 unchanged sentences

Net loss — — — ( 181,651 ) — ( 181,651 )

Net unrealized gain on available-for-sale investments

Net unrealized loss on available-for-sale investments

— — — — ( 192 ) ( 192 )

Balance - June 30, 2020 139,233,450 $ 139 $ 1,673,026 $ ( 511,576 ) $ 1,830 $ 1,163,419

Balance - September 30, 2020 139,755,839 $ 140 $ 1,695,411 $ ( 577,773 ) $ 953 $ 1,118,731

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

8 unchanged sentences

Shares Amount

Balance - March 31, 2019 121,527,320 $ 121 $ 922,816 $ ( 243,114 ) $ 1,405 $ 681,228

Balance - June 30, 2019 121,631,278 $ 122 $ 937,709 $ ( 284,357 ) $ 2,161 $ 655,635

Issuance of common stock upon exercise of stock

3 unchanged sentences

Stock-based compensation — — 12,835 — — 12,835

Employee stock purchase plan 63,333 1,099 — 1,099

Net loss — — — ( 50,735 ) — ( 50,735 )

Net unrealized gain on available-for-sale investments

Net unrealized loss on available-for-sale investments

— — — — ( 295 ) ( 295 )

Balance - June 30, 2019 121,631,278 $ 122 $ 937,709 $ ( 284,357 ) $ 2,161 $ 655,635

Balance - September 30, 2019 121,895,479 $ 122 $ 952,820 $ ( 335,092 ) $ 1,866 $ 619,716

Common Stock Additional

16 unchanged sentences

— — — — 1,560 1,560

Balance - June 30, 2019 121,631,278 $ 122 $ 937,709 $ ( 284,357 ) $ 2,161 $ 655,635

Balance - September 30, 2019 121,895,479 $ 122 $ 952,820 $ ( 335,092 ) $ 1,866 $ 619,716

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

2 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

31 unchanged sentences

Non-cash investing activities:

Property and equipment purchases in accounts payable and accrued liabilities $ 8,298 $ 13,667

Property and equipment purchases in accounts payable and accrued and other current liabilities $ 7,909 $ 6,571

Supplemental disclosure:

18 unchanged sentences

The Company’s ultimate success depends on the outcome of its research and development activities.

The Company had cash and cash equivalents and investments of $ 1.1 billion as of June 30, 2020.

Since inception through June 30, 2020, the Company has incurred cumulative net losses of $ 511.6 million.

The Company had cash and cash equivalents and investments of $ 1.0 billion as of September 30, 2020.

Since inception through September 30, 2020, the Company has incurred cumulative net losses of $ 577.8 million.

Management expects to incur additional losses in the future to fund its operations and conduct product research and development and recognizes the need to raise additional capital to fully implement its business plan.

16 unchanged sentences

All material intercompany balances and transactions have been eliminated during consolidation.

The condensed consolidated balance sheet as of June 30, 2020, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2020 and 2019, the condensed consolidated statements of stockholders’ equity as of June 30, 2020 and 2019, the condensed consolidated statements of cash flows for the six months ended June 30, 2020 and 2019, and the financial data and other financial information disclosed in the notes to the condensed consolidated financial statements are unaudited.

The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020, or for any other future annual or interim period.

The condensed consolidated balance sheet as of September 30, 2020, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2020 and 2019, the condensed consolidated statements of stockholders’ equity as of September 30, 2020 and 2019, the condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019, and the financial data and other financial information disclosed in the notes to the condensed consolidated financial statements are unaudited.

The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020, or for any other future annual or interim period.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and related notes for the year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2020.

5 unchanged sentences

Significant Accounting Policies

There have been no significant changes to the accounting policies during the three and six months ended June 30, 2020, as compared to the significant accounting policies described in Note 1 of the “Notes to Financial Statements” in the Company’s audited financial statements included in its Annual Report, with the exception of the recently adopted accounting pronouncements in the section below.

There have been no significant changes to the accounting policies during the three and nine months ended September 30, 2020, as compared to the significant accounting policies described in Note 1 of the “Notes to Financial Statements” in the Company’s audited financial statements included in its Annual Report, with the exception of the recently adopted accounting pronouncements in the section below.

Recently Adopted Accounting Pronouncements

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The adoption resulted in the Company no longer needing to determine the tax effect from unrealized gains on available for sale securities, which previously had been disclosed in the condensed consolidated statement of operations as a benefit from income taxes.

The impact of the adoption in the three and six months ended June 30, 2020 is that the benefit from income taxes in the condensed consolidated statement of operations and comprehensive loss is zero for both periods compared to recognition of a $ 0.2 million and $ 0.2 million tax benefit for the three and six months ended June 30, 2019, respectively.

The impact of the adoption in the three and nine months ended September 30, 2020 is that the benefit from income taxes in the condensed consolidated statement of operations and comprehensive loss is zero for both periods compared to recognition of a zero and $ 0.2 million tax benefit for the three and nine months ended September 30, 2019, respectively.

Recent Accounting Pronouncements Not Yet Adopted

7 unchanged sentences

Investments are measured at fair value based on inputs other than quoted prices that are derived from observable market data and are classified as Level 2 inputs except for investments in U.S treasury securities which are classified as Level 1.

There were no Level 3 assets or liabilities as of June 30, 2020 and as of December 31, 2019.

Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type as of June 30, 2020 and as of December 31, 2019 are presented in the following tables:

June 30, 2020

There were no Level 3 assets or liabilities as of September 30, 2020 and as of December 31, 2019.

Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type as of September 30, 2020 and as of December 31, 2019 are presented in the following tables:

September 30, 2020

Level 1 Level 2 Level 3 Fair Value

19 unchanged sentences

Financial Instruments

The fair value and amortized cost of cash equivalents and available-for-sale securities by major security type as of June 30, 2020 and as of December 31, 2019 are presented in the following tables:

June 30, 2020

The fair value and amortized cost of cash equivalents and available-for-sale securities by major security type as of September 30, 2020 and as of December 31, 2019 are presented in the following tables:

September 30, 2020

Amortized Cost Unrealized Gains Unrealized Losses Fair Value

25 unchanged sentences

Total cash equivalents and investments $ 536,629

As of June 30, 2020, the remaining contractual maturities of available-for-sale securities were less than 3 years.

As of September 30, 2020, the remaining contractual maturities of available-for-sale securities were less than 3 years.

There have been no significant realized losses on available-for-sale securities for the periods presented.

As of June 30, 2020, unrealized losses on available-for-sale investments are not attributed to credit risk.

As of September 30, 2020, unrealized losses on available-for-sale investments are not attributed to credit risk.

The Company believes that it is more-likely-than-not that investments in an unrealized loss position will be held until maturity and all interest and principal will be received.

4 unchanged sentences

Property and Equipment consist of the following:

September 30,

2020 December 31,

17 unchanged sentences

In October 2019, the Territory was expanded to all countries in the world.

No milestone or royalty payments were made in the three months ended June 30, 2020 and 2019 respectively.

No milestone or royalty payments were made in the three months ended September 30, 2020 and 2019 respectively.

Pfizer is also eligible to receive, on a product-by-product and country-by-country basis, royalties in single-digit percentages on annual net sales for products covered by the Pfizer Agreement or that use certain Pfizer intellectual property and for which an investigational new drug application (IND) is first filed on or before April 6, 2023.

23 unchanged sentences

All costs the Company incurred in connection with this agreement were recognized as research and development expenses.

For the three and six months ended June 30, 2020 and 2019, zero costs were incurred related to the achievement of a clinical development milestone under this agreement.

For the three and six months ended June 30, 2020 and 2019, zero costs were incurred associated with research services performed by Cellectis under this agreement.

For the three and nine months ended September 30, 2020, zero costs were incurred related to the achievement of a clinical development milestone under this agreement.

For the three and nine months ended September 30, 2019, $ 5.0 million of costs were incurred related to the achievement of a clinical development milestone under this agreement.

License and Collaboration Agreement with Servier

1 unchanged sentence

In October 2019, the Company agreed to waive its rights to the one additional target.

Under the Servier Agreement, the Company has an exclusive license to develop, manufacture and commercialize UCART19 in the field of anti-tumor adoptive immunotherapy in the United States, with an exclusive option to obtain the same rights for additional product candidates in the United States and, if Servier does not elect to pursue development or commercialization of those product candidates in certain markets outside of the United States pursuant to its license, outside of the United States as well.

Under the Servier Agreement, the Company has an exclusive license to develop, manufacture and commercialize UCART19, ALLO-501 and ALLO-501A in the field of anti-tumor adoptive immunotherapy in the United States, with an exclusive option to obtain the same rights for additional product candidates in the United States and, if Servier does not elect to pursue development or commercialization of those product candidates in certain markets outside of the United States pursuant to its license, outside of the United States as well.

The Company is not required to make any additional payments to Servier to exercise an option.

15 unchanged sentences

Unless earlier terminated in accordance with the Servier Agreement, the Servier Agreement will continue, on a licensed product-by-licensed product and country-by-country basis, until the Servier Royalty Term with respect to the sale of such licensed product in such country expires.

For the three and six months ended June 30, 2020, the Company recorded $ 0.9 million and $ 1.9 million, respectively, of net cost recoveries under the cost-sharing terms of the Servier Agreement as a reduction to research and development expenses.

For the three and six months ended June 30, 2019, the Company recorded $ 2.4 million and $ 3.1 million, respectively, of costs as research and development expenses.

As of June 30, 2020, amounts due from Servier of $ 0.8 million were recorded in other current assets in the accompanying condensed consolidated balance sheets.

For the three and nine months ended September 30, 2020, the Company recorded $ 4.1 million and $ 5.9 million, respectively, of net cost recoveries under the cost-sharing terms of the Servier Agreement as a reduction to research and development expenses.

For the three and nine months ended September 30, 2019, the Company recorded $ 1.5 million and $ 4.5 million, respectively, of costs as research and development expenses.

As of September 30, 2020, amounts due from Servier of $ 3.1 million were recorded in other current assets in the accompanying condensed consolidated balance sheets.

As of December 31, 2019, amounts due to Servier of $ 2.2 million were recorded in accrued and other current liabilities in the accompanying condensed consolidated balance sheets.

17 unchanged sentences

Either party may also terminate the Collaboration Agreement with written notice upon material breach by the other party, if such breach has not been cured within a defined period of receiving such notice, or in the event of the other party’s insolvency.

The Company has determined that Notch continues to be a variable interest entity as of June 30, 2020.

The Company has determined that Notch continues to be a variable interest entity as of September 30, 2020.

The Company does not have the power to direct the activities which most significantly affect Notch's economic performance.

Accordingly, for the three and six months ended June 30, 2020, the Company did not consolidate Notch because the Company determined that it was not the primary beneficiary.

For the three and six months ended June 30, 2020, the Company recorded $ 0.4 million and $ 0.7 million, respectively, in collaboration costs as research and development expenses.

Accordingly, for the three and nine months ended September 30, 2020, the Company did not consolidate Notch because the Company determined that it was not the primary beneficiary.

For the three and nine months ended September 30, 2020, the Company recorded $ 1.2 million and $ 2.0 million, respectively, in collaboration costs as research and development expenses.

Commitments and Contingencies

1 unchanged sentence

The lease term is 127 months beginning August 2018 through February 2029 with an option to extend the term for another seven years which is not reasonably assured of exercise.

The Company has made certain tenant improvements, including the addition of laboratory space, and has received $ 5.0 million of tenant improvement allowances up to June 30, 2020.

The Company has made certain tenant improvements, including the addition of laboratory space, and has received $ 5.0 million of tenant improvement allowances up to September 30, 2020.

The rent payments began on March 1, 2019 after an abatement period.

4 unchanged sentences

In February 2019, the Company entered into a lease agreement for approximately 118,000 square feet of space to develop a cell therapy manufacturing facility in Newark, California.

The lease has a term of 188 months and is expected to commence in October 2020.

The lease has a term of 188 months and is expected to commence in November 2020.

Upon certain conditions, the Company has two ten-year options to extend the lease which are not reasonably assured of exercise.

Rent payments are expected to begin in early 2021 after an abatement period.

The Company is entitled to a tenant improvement allowance of $ 2.9 million for costs related to the design and construction of certain Company improvements.

The Company maintained letters of credit for the benefit of landlords in the amount of $ 4.3 million which is disclosed as restricted cash as of June 30, 2020 and December 31, 2019, respectively.

The Company maintained letters of credit for the benefit of landlords which is disclosed as restricted cash in the condensed consolidated balance sheet.

Restricted cash related to letters of credit due to landlords was $ 5.2 million and $ 4.3 million as of September 30, 2020 and December 31, 2019, respectively.

The balance sheet classification of our lease liabilities were as follows (in thousands):

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

Operating lease liabilities

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

2 unchanged sentences

Total lease costs $ 2,198 $ 1,651 $ 6,504 $ 4,778

Cash paid for amounts included in the measurement of lease liabilities for the six months ended June 30, 2020 was $ 2.8 million and was included in net cash used in operating activities in our condensed consolidated statements of cash flows.

The undiscounted future lease payments under the lease agreements as of June 30, 2020 were as follows (in thousands):

Cash paid for amounts included in the measurement of lease liabilities for the nine months ended September 30, 2020 was $ 4.2 million and was included in net cash used in operating activities in our condensed consolidated statements of cash flows.

The undiscounted future lease payments under the lease agreements as of September 30, 2020 were as follows (in thousands):

Year ending December 31:

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The weighted average discount rate used to determine the operating lease liability was 8.36 %.

As of June 30, 2020, the weighted average remaining lease term for our operating leases is 10.4 years.

As of September 30, 2020, the weighted average remaining lease term for our operating leases is 10.41 years.

Other Commitments

In July 2020, the Company entered into a Solar Power Purchase and Energy Services Agreement with Onyx Development Group LLC (Onyx) for the installation and operation of a solar photovoltaic generating system and battery energy storage system at the Company's cell therapy manufacturing facility in Newark, California.

The agreement has a term of 20 years and is expected to commence in the first quarter of 2021.

The Company is obligated to pay for electricity generated from the system at an agreed rate for the duration of the agreement term.

Termination of the agreement by the Company will result in a termination payment due of approximately $ 4.3 million.

In connection with the agreement, the Company maintains a letter of credit for the benefit of Onyx in the amount of $ 4.3 million which is disclosed as restricted cash in the condensed consolidated balance sheet as of September 30, 2020.

The Company has entered into certain license agreements for intellectual property which is used as part of our development and manufacturing processes.

1 unchanged sentence

These agreements require payment of annual license fees and may include conditional milestone payments for achievement of specific research, clinical and commercial events, and royalty payments.

The timing and likelihood of any significant conditional milestone payments or royalty payments becoming due was not probable as of June 30, 2020.

The timing and likelihood of any significant conditional milestone payments or royalty payments becoming due was not probable as of September 30, 2020.

The Company enters into contracts in the normal course of business that includes arrangements with clinical research organizations, vendors for preclinical research and vendors for manufacturing.

These agreements generally allow for cancellation with notice.

As of June 30, 2020, the Company had non-cancellable purchase commitments of $ 5.6 million.

As of September 30, 2020, the Company had non-cancellable purchase commitments of $ 3.9 million.

Equity Method Investment

In conjunction with the execution of the Notch Agreement (see Note 6), the Company also entered into a Share Purchase Agreement with the Company acquiring shares of Notch’s Series Seed convertible preferred stock for a total investment cost of $ 5.1 million which includes transaction costs of $ 0.1 million, resulting in a 25 % ownership interest in Notch.

The Company’s total equity investment in Notch as of June 30, 2020 and December 31, 2019 was $ 4.7 million and $ 4.9 million, respectively, and the Company accounted for the investment using the equity method of accounting.

During the three and six months ended June 30, 2020, the Company recognized its share of Notch's net loss under the other expenses caption within the condensed consolidated statements of operations.

The Company's share of Notch's net loss was $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2020.

The Company’s total equity investment in Notch as of September 30, 2020 and December 31, 2019 was $ 4.5 million and $ 4.9 million, respectively, and the Company accounted for the investment using the equity method of accounting.

Stock-Based Compensation

7 unchanged sentences

Restricted Stock Units granted typically vest annually over a four-year period but may be granted with different vesting terms.

As of June 30, 2020, there were 12,562,263 shares reserved by the Company under the 2018 Plan for the future issuance of equity awards.

As of September 30, 2020, there were 12,321,515 shares reserved by the Company under the 2018 Plan for the future issuance of equity awards.

Stock Option Activity

7 unchanged sentences

Forfeited ( 635,616 ) 12.13

Balance, June 30, 2020 11,051,439 $ 16.28 8.59 $ 293,934

Exercisable, June 30, 2020 6,474,921 $ 14.24 8.45 $ 184,688

Vested and expected to vest, June 30, 2020 11,051,439 $ 16.28 8.59 $ 293,934

The aggregate intrinsic values of options outstanding, exercisable, vested and expected to vest were calculated as the difference between the exercise price of the options and the closing price of the Company’s common stock on the Nasdaq Global Select Market on June 30, 2020.

For the six months ended June 30, 2020, the estimated weighted-average grant-date fair value of employee options granted was $ 20.01 per share.

As of June 30, 2020, there was $ 91.8 million of unrecognized stock-based compensation related to unvested stock options, which is expected to be recognized over a weighted-average period of 2 years, 336 days .

Balance, September 30, 2020 10,783,633 $ 17.12 8.50 $ 223,554

Exercisable, September 30, 2020 6,476,316 $ 14.98 8.41 $ 147,320

Vested and expected to vest, September 30, 2020 10,783,633 $ 17.12 8.50 $ 223,554

For the nine months ended September 30, 2020, the estimated weighted-average grant-date fair value of employee options granted was $ 21.35 per share.

As of September 30, 2020, there was $ 87.7 million of unrecognized stock-based compensation related to unvested stock options, which is expected to be recognized over a weighted-average period of 2 years, 273 days .

The fair value of employee, consultant and director stock option awards was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions:

Six Months Ended June 30,

Nine Months Ended September 30,

Expected term in years 5.31 - 6.09

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Forfeited ( 143,515 ) 24.48

Unvested June 30, 2020 2,491,709 $ 25.18 2.03 $ 106,695

Vested and expected to vest, June 30, 2020 2,491,709 $ 25.18 2.03 $ 106,695

As of June 30, 2020, there was $ 55.1 million of unrecognized stock-based compensation related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 3 years, 55 days .

Unvested September 30, 2020 2,517,294 $ 25.86 1.87 $ 94,927

Vested and expected to vest, September 30, 2020 2,517,294 $ 25.86 1.87 $ 94,927

As of September 30, 2020, there was $ 55.1 million of unrecognized stock-based compensation related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 3 years, 4 days .

Total stock-based compensation related to stock options, restricted stock units, employee stock purchase plan and vesting of the founders’ common stock was as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

8 unchanged sentences

The proceeds are reclassified to paid-in capital as the repurchase right lapses.

As of June 30, 2020 and December 31, 2019 there was $ 2.8 million and $ 2.8 million recorded in accrued and other liabilities and $ 2.5 million and $ 3.9 million recorded in other long-term liabilities related to shares held by employees and directors that were subject to repurchase.

The underlying shares are shown as outstanding in the condensed consolidated financial statements since the exercise date but the shares which are subject to future vesting conditions are not included in the calculation of earnings per share.

As of September 30, 2020 and December 31, 2019 there was $ 2.8 million and $ 2.8 million recorded in accrued and other liabilities and $ 1.8 million and $ 3.9 million recorded in other long-term liabilities related to shares held by employees and directors that were subject to repurchase.

underlying shares are shown as outstanding in the condensed consolidated financial statements since the exercise date but the shares which are subject to future vesting conditions are not included in the calculation of earnings per share.

Related Party Transactions

As of June 30, 2020, Pfizer held 22,032,040 shares of Common Stock and had appointed one member to the Company’s board of directors.

As of September 30, 2020, Pfizer held 22,032,040 shares of Common Stock and had appointed one member to the Company’s board of directors.

In April 2018, the Company and Pfizer entered into a transition services agreement (the Pfizer TSA) for Pfizer to provide professional services to the Company related to research and development, project management, and other administrative functions.

In September 2019, the Company and Pfizer terminated the Pfizer TSA.

For the three and six months ended June 30, 2020, the costs incurred under the Pfizer TSA were zero .

For the three and six months ended June 30, 2019, the costs incurred under the Pfizer TSA were $ 1.8 million and $ 4.2 million, respectively.

For the three and nine months ended September 30, 2020, the costs incurred under the Pfizer TSA were zero .

For the three and nine months ended September 30, 2019, the costs incurred under the Pfizer TSA were $ 0.7 million and $ 4.9 million, respectively.

The Company also purchased certain lab supplies from Pfizer in connection with its research and development activities.

For the three and six months ended June 30, 2020, the total lab supplies and services purchased from Pfizer were zero .

For the three and six months ended June 30, 2019, the total lab supplies and services purchased from Pfizer were $ 0.4 million and $ 1.0 million, respectively.

As of June 30, 2020 and December 31, 2019, the Company had an amount payable to Pfizer of zero and $ 1.7 million, respectively, which was recorded in the accrued and other current liabilities on the accompanying condensed consolidated balance sheets.

For the three and nine months ended September 30, 2020, the total lab supplies and services purchased from Pfizer were zero .

For the three and nine months ended September 30, 2019, the total lab supplies and services purchased from Pfizer were zero and $ 1.1 million, respectively.

As of September 30, 2020 and December 31, 2019, the Company had an amount payable to Pfizer of zero and $ 0.1 million, respectively, which was recorded in the accrued and other current liabilities on the accompanying condensed consolidated balance sheets.

Sublease Agreement

3 unchanged sentences

The Company’s executive chairman, Arie Belldegrun, M.D., FACS, is a trustee of the Belldegrun Family Trust, which controls Bellco Capital Advisors Inc.

The total right of use asset and associated liability recorded related to this related party lease was $ 0.1 million at June 30, 2020 and $ 0.1 million and $ 0.2 million, respectively, at December 31, 2019.

The total right of use asset and associated liability recorded related to this related party lease was $ 0.1 million at September 30, 2020 and $ 0.1 million and $ 0.2 million, respectively, at December 31, 2019.

In February 2019, the Company subleased 2,180 square feet of its office space in New York, New York, to ByHeart, Inc.

3 unchanged sentences

In September 2019, the Company entered into an amendment to the sublease agreement and increased the subleased space to 2,907 square feet.

Sublease income for the three and six months ended June 30, 2020 were $ 0.1 million and $ 0.2 million, respectively, and was recognized as other income.

Sublease income for the three and six months ended June 30, 2019 was $ 0.1 million and $ 0.1 million, respectively.

Sublease income for the three and nine months ended September 30, 2020 were $ 0.1 million and $ 0.3 million, respectively, and was recognized as other income.

Sublease income for the three and nine months ended September 30, 2019 was $ 0.1 million and $ 0.2 million, respectively.

Consulting Agreements

In June 2018, the Company entered into a services agreement with Two River Consulting LLC (Two River) a firm affiliated with the Company’s President and Chief Executive Officer, the Company’s Executive Chairman of the board of directors, and a director of the Company to provide various managerial, administrative, accounting and financial services to the Company.

The costs incurred for services provided under this agreement were $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2020, respectively, and $ 0.1 million and $ 0.3 million for the three and six months ended June 30, 2019, respectively.

The costs incurred for services provided under this agreement were $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2020, respectively, and $ 0.2 million and $ 0.5 million for the three and nine months ended September 30, 2019, respectively.

In August 2018, the Company entered into a consulting agreement with Bellco.

4 unchanged sentences

The Company also reimburses Bellco for out of pocket expenses incurred in performing the services.

The cost incurred for services provided and out-of-pocket expenses incurred under this consulting agreement were $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2020, respectively, and $ 0.1 million and $ 0.3 million for the three and six months ended June 30, 2019, respectively.

The cost incurred for services provided and out-of-pocket expenses incurred under this consulting agreement were $ 0.2 million and $ 0.6 million for the three and nine months ended September 30, 2020, respectively, and $ 0.1 million and $ 0.4 million for the three and nine months ended September 30, 2019, respectively.

The Company has a history of losses, and expects to record a loss in 2020.

2 unchanged sentences

The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the period presented due to their anti-dilutive effect:

September 30,

Stock options to purchase common stock 10,783,633 9,492,134

5 unchanged sentences

Subsequent Events

The agreement has a term of 20 years and is expected to commence in the first quarter of 2021.

The Company is obligated to pay for electricity generated from the system at an agreed rate for the duration of the agreement term.

Termination of the agreement by the Company will result in a termination payment due of approximately $ 4.3 million.

In connection with the agreement, the Company will maintain a letter of credit for the benefit of Onyx in the amount of $ 4.3 million and increased the letter of credit for the benefit of the landlord of the Newark manufacturing facility by $ 0.9 million.

On October 6, 2020, the Company entered into a strategic five-year collaboration agreement with The University of Texas MD Anderson Cancer Center ("MD Anderson") for the preclinical and clinical investigation of allogeneic CAR T cell product candidates.

Under the terms of the agreement, the Company and MD Anderson plan to collaborate on the design and conduct of preclinical and clinical studies with oversight from a joint steering committee.

The Company has committed up to $ 15.0 million of funding for the duration of the agreement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements