What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2022-03-07 compared with 2021-02-25 · 168 added, 131 removed, 212 unchanged (59% of the section changed)

8 unchanged sentences

Our strategy is to advance the development of our proprietary product candidates, and where applicable, establish partnerships with leading biopharmaceutical companies where we retain certain development and commercialization rights.

Our most advanced wholly-owned antibody programs, imsidolimab, ANB030 and ANB032, are designed to modulate therapeutic targets that are genetically associated with human inflammatory disorders.

Our most advanced wholly-owned antibody programs, imsidolimab, rosnilimab, previously referred to as ANB030, and ANB032, are designed to modulate therapeutic targets that are genetically associated with human inflammatory disorders.

Imsidolimab, our IL-36R antibody previously referred to as ANB019, inhibits the interleukin-36 receptor (“IL-36R”), and is being developed for the treatment of multiple dermatological inflammatory diseases.

2 unchanged sentences

Food and Drug Administration (the “FDA”) granted Orphan Drug Designation for imsidolimab for the treatment of patients with GPP.

We are conducting an open-label, multi-dose, single-arm Phase 2 clinical trial of imsidolimab in 8 GPP patients, also referred to as the GALLOP clinical trial, where we announced positive topline data in October 2020.

Six of 8 (75%) patients treated with imsidolimab monotherapy achieved the primary endpoint of improvement in the clinical global impression scale (“CGI”) on Day 29.

Two of 8 (25%) patients were considered to have not met the primary endpoint because they dropped out of the clinical trial prior to Day 29.

The modified Japanese Dermatology Association Severity Index (“mJDA-SI”) score, which incorporates both dermatological and systemic aspects of GPP, decreased on average by 29% on Day 8 and 54% on Day 29.

Erythema with skin pustules, which clinically defines GPP, decreased by 60% on Day 8 and 94% on Day 29.

Serum c-reactive protein (“CRP”), which is an indicator of systemic inflammation, was normal (less than 5 mg/L) for 5 of the 6 patients achieving the primary endpoint on Day 29.

We completed an open-label, multi-dose, single-arm Phase 2 clinical trial of imsidolimab in 8 GPP patients, also referred to as the GALLOP clinical trial, where top-line data through week 16 was presented at the European Academy of Dermatology and Venerology (EADV) Congress on October 2, 2021.

In this trial, 6 of 8 (75%) patients treated with imsidolimab monotherapy achieved the primary endpoint of response on the clinical global impression (“CGI”) scale at week 4 and week 16, without requiring rescue medication.

Two of 8 (25%) patients were considered to have not met the primary endpoint because they dropped out of the trial prior to Day 29.

The Modified Japanese Dermatology Association severity index total score (“mJDA-SI”), which incorporates both dermatological and systemic aspects of GPP, decreased for patients on average by 29% at week 1, 54% at week 4 and 58% at week 16.

Erythema with pustules, which clinically defines GPP, decreased by 60% at week 1, 94% by week 4 and 98% by week 16.

Patients achieved a reduction in the Dermatology Life Quality Index (DLQI), which is a patient-reported measure, of 6 points at week 4 and 11 points by week 16, each of which exceeded the minimal clinically importance difference (MCID) of 4 points.

GPP Physician Global Assessment (GPPPGA) scale was implemented by protocol amendment during the course of the trial and was assessed in 4 of the 8 enrolled patients, where zero (clear) or 1 (almost clear) response was achieved in 2 (50%) patients at week 4 and 3 (75%) patients at week 16.

Genotypic testing indicated homozygous wild-type IL-36RN, CARD14 and AP1S3 alleles for all 8 patients.

We believe this suggests that imsidolimab may be broadly applicable to pustular diseases irrespective of genetic drivers.

Anti-drug antibodies were not detected as of Day 29 in any patient.

Through week 16, anti-drug antibodies were only detected in one patient, which occurred at week 12 and did not impact imsidolimab pharmacokinetics or efficacy.

Imsidolimab was generally well-tolerated, and most treatment-emergent adverse events were mild to moderate in severity and resolved without sequelae.

3 unchanged sentences

Another patient dropped out of the study on Day 22 due to investigator reported inadequate efficacy.

One patient contracted COVID-19 during the course of the clinical trial, which was mild, unrelated to imsidolimab, and did not lead to study discontinuation.

Data from the first two patients to have completed the Day 113 treatment period under this clinical trial, which we announced in September 2019, indicated sustained efficacy in these two patients through Day 113.

We plan to report full data from the GALLOP clinical trial at a medical conference in 2021.

While initial GPP epidemiology studies suggested at least 3,000 patients in the United States, recent medical claims analyses suggest GPP prevalence in the United States of at least 10,000 patients.

We met with the FDA during the fourth quarter of 2020 to review an orphan disease registration plan for imsidolimab for the treatment of GPP and anticipate initiating a Phase 3 clinical trial in mid-2021 following completion of protocol alignment and review of 16-week data from the GALLOP clinical trial by the FDA.

We are also conducting a randomized, double-blind, placebo-controlled 59-patient multi-dose clinical trial of imsidolimab in PPP, also referred to as the POPLAR clinical trial, where enrollment was completed in 2020 and top-line data are anticipated in the first quarter of 2021.

The primary endpoint of this clinical trial is change in palmo-plantar pustulosis area severity index (PPPASI) at week 16 relative to baseline.

PPP is a non-fatal form of pustular psoriasis that we estimate affects approximately 150,000 patients in the United States alone.

We have initiated a global registry of GPP and PPP patients, also referred to as the RADIANCE study, which we anticipate will improve understanding of the patient journey in these two indications and assist in enrollment of future GPP and PPP clinical trials.

We have initiated clinical development of imsidolimab for the treatment of skin toxicities associated with treatments with inhibitors of epidermal growth factor (“EGFRi”) and MAPK/ERK kinase (“MEKi”).

Treatment of solid tumors with EGFRi and/or MEKi is frequently limited by the occurrence of skin toxicities, including acneiform or papulopustular rash.

Recent translational data has suggested that these skin toxicities are mediated by excess IL-36 signaling, leading to IL-8-mediated cutaneous neutrophilia and acneiform rash.

Based on existing claims data, approximately 60,000 patients are prescribed EGFRi and/or MEKi treatments annually, and the vast majority of these patients experience skin toxicity, which in some cases leads to dose reduction and/or discontinuation of treatment.

Current standard-of-care treatments are generally ineffective in patients with the most severe grades of EGFRi and/or MEKi mediated skin toxicity.

During the fourth quarter of 2020, we initiated a Phase 2 clinical trial, called EMERGE, of imsidolimab in combination with EGFRi inhibitors, for the treatment of patients diagnosed with a certain baseline severity of skin toxicity, where 45 patients are randomized 2:1 between imsidolimab and placebo arms, to assess the efficacy of imsidolimab in the treatment of this indication.

We anticipate interim top-line data from this clinical trial at the end of 2021.

We have also initiated clinical development of imsidolimab in ichthyosis, which is a family of rare, inherited, dermatological disorders characterized by dry, scaling and thickened skin.

Recent human translational studies have suggested that the underlying skin inflammation responsible for ichthyosis is mediated by dysregulated IL-36 signaling, and we believe that imsidolimab treatment may be efficacious in treatment of this condition.

Approximately 6,000 patients in the United States are affected with moderate-to-severe levels of ichthyosis, and no approved therapies are available for this disease.

We have initiated a Phase 2 clinical trial, called INSPIRE, of imsidolimab in patients with certain baseline severity of ichthyosis, where 24 patients are randomized 2:1 between imsidolimab and placebo arms, and interim top-line data is anticipated in 2022.

We plan to initiate clinical development of imsidolimab in hidradenitis suppurativa, also known as acne inversa, which is a chronic inflammatory skin disease characterized by painful nodules in intertriginous areas that can progress to abscesses, sinus tracks and scarring.

Current treatment options for hidradenitis suppurativa, including antibiotics, corticosteroids and anti-TNF therapy, have variable efficacy in moderate-to-severe patients, which often leads to surgery for removal of hidradenitis suppurativa nodules.

Human translational studies have demonstrated elevated IL-36 cytokine expression in hidradenitis suppurativa skin biopsies, and we believe treatment of moderate-to-severe hidradenitis suppurativa with imsidolimab may lead to therapeutic benefit for this patient population.

Moderate-to-severe hidradenitis suppurativa affects approximately 150,000 adults in the United States.

We intend to initiate a Phase 2 clinical trial of imsidolimab in hidradenitis suppurativa, called HARP, in the second quarter of 2021.

We plan to initiate clinical development of imsidolimab in acne, which is the most common skin disorder in the United States, with approximately 7 million patients diagnosed with moderate-to-severe disease.

One patient contracted COVID-19 during the course of the clinical trial, which was deemed a serious adverse event unrelated to imsidolimab, and did not lead to study discontinuation.

While initial GPP epidemiology studies suggested at least 3,000 GPP patients in the United States, medical claims analyses conducted by IQVIA indicate approximately 37,000 unique patients were diagnosed with GPP at least once, and approximately 15,000 unique patients were diagnosed with GPP at least twice, by a physician between 2017 and 2019 using the International Classification of Diseases 10th Revision (ICD-10) billing code pertaining to GPP (L40.1).

We met with the FDA during the second quarter of 2021 for an end-of-Phase 2 meeting to review an orphan disease registration plan for imsidolimab for the treatment of GPP.

We have initiated our first Phase 3 trial for imsidolimab for GPP, called GEMINI-1, during the third quarter of 2021.

GEMINI-1 will enroll approximately 45 moderate-to-severe GPP patients, each undergoing an active flare at baseline, which will be randomized equally to receive a single dose of 750mg intravenous

(IV) imsidolimab, 300mg IV imsidolimab, or placebo.

The primary endpoint of the Phase 3 program is the proportion of patients achieving clear or almost clear skin as determined by a Generalized Pustular Psoriasis Physician’s Global Assessment (GPPPGA) score of zero or 1 at week 4 of GEMINI-1.

Patients completing the GEMINI-1 trial will subsequently be enrolled in GEMINI-2, our second Phase 3 trial for imsidolimab in GPP, where they will receive monthly doses of 200mg subcutaneous imsidolimab or placebo depending upon whether they are responders, partial responders or non-responders to treatment under GEMINI-1.

The objective of GEMINI-2 is to assess the efficacy and safety of imsidolimab after 6 months of monthly dosing.

We are conducting a global registry of GPP patients, also referred to as the RADIANCE study, which we anticipate will improve understanding of the patient journey and assist in enrollment of future GPP clinical trials.

We are conducting clinical development of imsidolimab in moderate-to-severe acne.

Acne is the most common skin disorder in the United States, with approximately 3 million patients diagnosed with moderate-to-severe disease.

Moderate-to-severe acne typically presents with painful papules, pustules, nodules, cysts and scarring.

A key contributing factor to the pathogenesis of acne is the immune response to p.

A key contributing factor to the pathogenesis of acne is the immune response to Propionibacterium acnes , or P.

acnes , which is associated with upregulated IL-36 cytokine activity, localized inflammation and neutrophil infiltration of the skin.

Existing therapies, including isotretinoin and systemic antibiotics, provide variable efficacy for moderate-to-severe acne patients and have practical limitations to their use given potential for clinically meaningful side effects.

We anticipate initiating a Phase 2 clinical trial of imsidolimab, called ACORN, for the treatment of moderate-to-severe acne

Our second wholly-owned program, ANB030, is an anti-PD-1 agonist antibody program designed to augment PD-1 signaling through ANB030 treatment to suppress T-cell driven human inflammatory diseases.

Genetic mutations in the PD-1 pathway are known to be associated with increased susceptibility to human inflammatory diseases, and hence we believe that ANB030 is applicable to diseases where PD-1 checkpoint receptor function may be under-represented.

We presented preclinical data for ANB030 at the Festival of Biologics Annual Meeting in March 2020, including translational data demonstrating in vitro activity of ANB030 in alopecia areata patient samples.

We initiated a Phase 1 healthy volunteer clinical trial in the first half of 2020, which is designed to assess the safety, pharmacokinetics and pharmacodynamics of ANB030 in single and multiple ascending dose cohorts.

We anticipate top-line data from this Phase 1 clinical trial in mid-2021.

We plan to initiate Phase 2 clinical trials of ANB030 in alopecia areata and vitiligo in the second half of 2021.

We are conducting a Phase 2 clinical trial of imsidolimab, called ACORN, where 120 patients will be randomized equally between two dose levels of imsidolimab and placebo, for the treatment of moderate-to-severe acne, and we anticipate top-line data during the first half of 2022.

We are conducting clinical development of imsidolimab in hidradenitis suppurativa, also known as acne inversa, which is a chronic inflammatory skin disease characterized by painful nodules in intertriginous areas that can progress to abscesses, sinus tracks and scarring.

Moderate-to-severe hidradenitis suppurativa affects approximately 150,000 adults in the United States.

We are conducting a Phase 2 clinical trial of imsidolimab in moderate-to-severe hidradenitis suppurativa, called HARP, where 120 patients will be randomized equally between two dose levels of imsidolimab and placebo, and we anticipate top-line data during the second half of 2022.

Our second wholly-owned program, rosnilimab, previously referred to as ANB030, is an anti-PD-1 agonist antibody program designed to augment PD-1 signaling through rosnilimab treatment to suppress T-cell driven human inflammatory diseases.

Genetic mutations in the PD-1 pathway are known to be associated with increased susceptibility to human inflammatory diseases, and hence we believe that rosnilimab is applicable to diseases where PD-1 checkpoint receptor function may be under-represented.

We presented preclinical data for rosnilimab at the Festival of Biologics Annual Meeting in March 2020, including translational data demonstrating in vitro activity of rosnilimab in alopecia areata patient samples.

We announced positive top-line data from a healthy volunteer Phase 1 clinical trial of rosnilimab in November 2021.

A total of 144 subjects were enrolled in the randomized, double-blind, placebo-controlled healthy volunteer Phase 1 trial, where single ascending dose (SAD) cohorts were administered single subcutaneous or intravenous doses of rosnilimab ranging between 0.02mg to 600mg or placebo, while multiple ascending dose (MAD) cohorts received four weekly subcutaneous doses of rosnilimab ranging between 60mg and 400mg or placebo.

Dose escalation was conducted subsequent to data safety monitoring board review of safety and tolerability parameters following each single and multiple ascending dose level.

Rosnilimab was generally well-tolerated and no dose limiting toxicities were observed.

The most frequent adverse event reported among SAD cohorts was increased circulating C-reactive protein levels of mild severity in nine (10%) rosnilimab-dosed subjects occurring sporadically in a dose-independent manner and a severe occurrence in one (3.3%) placebo-dosed subject.

MAD cohorts reported headache as the most frequent adverse event with mild occurrences in three (12.5%) rosnilimab-dosed subjects and none in placebo subjects.

Mild injection site reactions were observed in two subjects (11.1%) administered with multiple subcutaneous rosnilimab doses.

Two serious adverse events were reported in single dose cohorts, including obstructive pancreatitis in a placebo-dosed subject and COVID-19 infection in a rosnilimab-dosed subject leading to discontinuation which was deemed unrelated to treatment.

No serious adverse events were reported in subjects receiving multiple doses of rosnilimab or placebo.

Pharmacokinetic analyses demonstrated a favorable profile for rosnilimab with an estimated two-week half-life for subcutaneous and intravenous routes of administration and approximately 80% bioavailability.

Low-titer anti-drug antibodies were detected at low single dose levels in 19 (21%) rosnilimab-dosed subjects, but none were detected in high single dose or multiple dose subjects.

Full PD-1 receptor occupancy was observed rapidly during the first week following single subcutaneous rosnilimab doses at or above 60mg, and was maintained for at least 30 days at or above 200mg single subcutaneous doses.

These data support monthly subcutaneous dosing of rosnilimab for future patient trials.

Rosnilimab’s pharmacodynamic activity resulted in rapid and sustained reduction in the quantity and functional activity of PD-1+ T cells, which are known to be

pathogenic drivers of inflammatory diseases.

Conventional T (Tcon) cells (CD3+, CD25 low) expressing PD-1, which represented approximately 25% of peripheral T cells at baseline, were reduced by 50%, including in both CD4+ and CD8+ subsets, in a dose-dependent manner and in correlation with receptor occupancy.

This effect was maximized on high-PD-1 expressing Tcon cells, which represented approximately 5% of peripheral T cells, with 90% reduction relative to baseline.

Conversely, total T cells (CD3+), total Tcon cells (CD3+, CD25low) and total regulatory T (Treg) cells (CD3+, CD4+, CD25 bright, CD127-) were unchanged (<5% change from baseline), resulting in a favorable shift in the ratio of PD-1+ Tcon cells to total Treg cells post-treatment.

No effect (<5% reduction from baseline) was observed on any of the aforementioned cell types in placebo-dosed subjects.

In addition, an antigen-specific functional T cell recall response, measured as ex vivo interferon-gamma released in response to tetanus toxoid challenge, was inhibited in a receptor occupancy dependent manner and was consistent with the observed reduction of PD-1+ Tcon cells, to a maximum of approximately 90% relative to baseline within 30 days following single rosnilimab dose, while placebo administration had no effect.

Based upon these data, we believe rosnilimab’s in vivo mechanism has the potential to treat T-cell driven human inflammatory diseases.

During the fourth quarter of 2021, we initiated AZURE, a randomized placebo-controlled 45-patient Phase 2 trial of rosnilimab in moderate-to-severe alopecia areata patients with at least 50% scalp hair loss for at least 6 months prior to enrollment, where the primary endpoint is change in severity of alopecia tool (SALT) relative to baseline.

We continue to assess clinical development opportunities for rosnilimab in additional indications, including vitiligo and rheumatoid arthritis, and will make decisions pending additional data.

Our third wholly-owned program is an anti-BTLA modulator antibody, known as ANB032, which is broadly applicable to human inflammatory diseases associated with lymphoid and myeloid immune cell dysregulation.

Mutations in the BTLA signaling pathway are associated with human inflammatory disease, and we believe ANB032 silences pro-inflammatory signaling by modulating BTLA binding to HVEM.

We filed a Clinical Trial Notification (“CTN”) in Australia for ANB032 during the first quarter of 2021 and anticipate initiating a healthy volunteer Phase 1 trial in the first half of 2021 upon clearance of the CTN.

We are conducting a healthy volunteer Phase 1 trial of ANB032, under an Australian Clinical Trial Notification (“CTN”) and anticipate top-line data from this trial during the first half of 2022.

We presented preclinical data regarding ANB032 at the 2020 Federation of Clinical Immunology Societies (FOCIS) Virtual Annual Meeting in October 2020.

Etokimab, our anti-IL-33 antibody previously referred to as ANB020, inhibits the activity of the interleukin-33 cytokine (“IL-33”).

We have conducted a randomized, placebo-controlled Phase 2 clinical trial of etokimab in approximately 100 adult patients with CRSwNP (a debilitating atopic disorder associated with elevated IL-33 pathway signaling), also referred to as the

ECLIPSE clinical trial.

We recently reported top-line data from a week 16 analysis of the ECLIPSE clinical trial.

Patients dosed with etokimab every four (q4w) or eight weeks (q8w) failed to achieve the co-primary endpoints of statistically significant improvement in their bilateral nasal polyps score (“NPS”), an endoscopic measure of nasal occlusion, and in their sino-nasal outcome test (“SNOT-22”), a patient reported quality-of-life assessment, versus placebo at the week 8 time point.

Both endpoints demonstrated statistically significant improvement over baseline levels of NPS and SNOT-22.

Blood eosinophil levels, which are a biomarker of etokimab’s mechanism, demonstrated statistically significant reduction relative to baseline in both etokimab treatment arms.

Following this data, we have decided to discontinue further development of etokimab.

In addition to our wholly-owned antibody programs, multiple Company-developed antibody programs have been advanced to preclinical and clinical milestones under our collaborations.

2 unchanged sentences

(“GSK”) and an inflammation-focused collaboration with Bristol-Myers Squibb (“BMS”).

A Biologics License Application (“BLA”) for our most advanced partnered program, which is an anti-PD-1 antagonist antibody called dostarlimab, was submitted by GSK and accepted by the FDA for the treatment of advanced or recurrent deficient mismatch repair endometrial cancer (“dMMREC”), and FDA approval is anticipated in this indication during the first half of 2021.

This FDA approval is dependent on a pre-approval inspection of the dostarlimab manufacturing site by the FDA and is therefore contingent on easing of the coronavirus (“COVID-19”) pandemic travel restrictions.

In addition, the European Medicines Agency (“EMA”) recently accepted GSK’s Marketing Authorization Application (“MAA”) for dostarlimab in the European Union (“EU”) for dMMREC, and EMA approval is anticipated in this indication during the first half of 2021.

A second BLA submitted by GSK was accepted by the FDA during the first quarter of 2021 for dostarlimab in pan-deficient mismatch repair tumors (“PdMMRT”).

We received a $10.0 million cash milestone payment upon the FDA acceptance of GSK’s first BLA for dostarlimab and anticipate an additional $20.0 million cash milestone payment upon first FDA approval of dostarlimab during the first half of 2021.

We also received a $5.0 million milestone payment for the EMA acceptance of GSK’s first MAA for dostarlimab and anticipate an additional $10.0 million cash milestone payment upon first EMA approval of dostarlimab during the first half of 2021.

An additional $10.0 million cash milestone payment is anticipated by the end of the first quarter of 2021 for acceptance of the second FDA BLA referred to above.

Dostarlimab is currently in clinical development for various solid tumor indications, including dMMREC, PdMMRT, colorectal cancer, ovarian cancer, non-small cell lung cancer, cervical cancer, rectal cancer, clear cell sarcoma and head-and-neck squamous cell carcinoma.

We anticipate receiving additional milestones from GSK, of equal magnitude to the milestone payments outlined above, upon approval of the BLA and acceptance and approval of the EMA filings of dostarlimab for the PdMMRT indication.

Depending upon the timing of the aforementioned dostarlimab regulatory acceptance and approval milestones, we anticipate a total of $75.0 million in such milestone payments over the upcoming 18 months.

An additional $165.0 million in sales milestones is anticipated upon achievement of certain dostarlimab annual sales revenues.

In October 2020, we amended our GSK collaboration to increase royalties on global net sales of dostarlimab to 8-25%, add 1% royalty rate on GSK’s global net sales of Zejula and received a one-time cash payment of $60.0 million.

For more information about these collaborations, see “— Collaborations”.

A Biologics License Application (“BLA”) for our most advanced partnered program, which is an anti-PD-1 antagonist antibody called JEMPERLI (dostarlimab), was approved by the FDA in April 2021 for the treatment of advanced or recurrent deficient mismatch repair endometrial cancer (“dMMREC”).

This is the first AnaptysBio-generated antibody, of eight currently under clinical development, to obtain FDA approval.

We earned a $20.0 million milestone payment as a result of this FDA approval.

In addition, in April 2021 the European Medicines Agency (“EMA”) granted conditional marketing authorization in the European Union (“EU”) for JEMPERLI for use in women with mismatch repair deficient (dMMR)/microsatellite instability-high (MSI-H) recurrent or advanced endometrial cancer who have progressed on or following prior treatment with a platinum containing regimen, which approval makes JEMPERLI the first anti-PD-1 therapy available for endometrial cancer in Europe.

We earned a $10.0 million milestone payment as a result of this approval.

A second BLA submitted by GSK was accepted by the FDA during the first quarter of 2021 for JEMPERLI in pan-deficient mismatch repair tumors (“PdMMRT”).

We received a $10.0 million cash milestone payment upon the FDA acceptance of GSK’s second FDA BLA for JEMPERLI and received $20.0 million cash milestone payment in September 2021, upon FDA approval of this second FDA BLA of JEMPERLI in August.

JEMPERLI is currently in clinical development for various solid tumor indications, including dMMREC, PdMMRT, colorectal cancer, ovarian cancer, non-small cell lung cancer, cervical cancer, rectal cancer, clear cell sarcoma and head-and-neck squamous cell carcinoma.

GSK is conducting combination trials of dostarlimab with Zejula, belantamab mafodotin (BCMA ADC), GSK6097608 (anti-CD96) and GSK3745417 (STING agonist).

In addition, under GSK’s collaboration with iTeos Therapeutics, dostarlimab is being developed in combination with EOS-448 (anti-TIGIT) and inupadenant (A2A receptor antagonist) in various solid tumor indications, including registration-directed trials combining dostarlimab and EOS-448 for first-line PD-L1 high non-small cell lung cancer (NSCLC) patients, head and neck squamous cell cancer (HNSCC) and a third undisclosed indication.

In June 2021, GSK estimated potential peak annual global JEMPERLI sales on a non-risk adjusted basis of £1-£2 billion, which is currently equal to approximately $1.4 to $2.7 billion based on the GBP to USD exchange rate as of December 31, 2021, for currently approved indications and first-line use in endometrial and ovarian cancer only.

In October 2020, we amended our GSK collaboration to increase royalties on global net sales of JEMPERLI to 8% on annual global net sales below $1.0 billion and 12-25% of annual global net sales above $1.0 billion, add a 1% royalty rate on GSK’s global net sales of Zejula and received a one-time cash payment of $60.0 million.

In October 2021, we signed a royalty monetization agreement (“Royalty Monetization Agreement”) with Sagard Healthcare Royalty Partners (“Sagard”).

Pursuant to this transaction, we received a $250.0 million payment upon closing in December 2021, in exchange for JEMPERLI royalties due to us on annual commercial sales below $1.0 billion and certain future milestones starting in October 2021.

The aggregate JEMPERLI royalties and milestones to be received by Sagard under the Royalty Monetization Agreement is capped at certain

fixed multiples of the upfront payment based upon time.

For more information about these collaborations, see “— Collaborations” included in Part I, Item 1 of this Annual Report.

Following the closing of the Sagard royalty monetization transaction, we ended 2021 with $615.2 million in cash, cash equivalents and investments and intend to continue to operate in a capital-efficient manner.

As of December 31, 2021, we had an accumulated deficit of $321.8 million, primarily as a result of losses incurred since our inception in 2005.

1 unchanged sentence

For our discussion related to the results of our operations and liquidity and capital resources for fiscal year ended December 31, 2020 compared to the year ended December 31, 2019, please refer to Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2020.

In December 2019, a strain of coronavirus was reported in Wuhan, China and began to spread globally, including to the United States and Europe, in the following months.

The World Health Organization has declared COVID-19 to be a global pandemic.

The full impact of the COVID-19 pandemic is inherently uncertain at the time of this Annual Report.

The COVID-19 pandemic has resulted in travel restrictions and, in some cases, prohibitions of non-essential activities, disruption and shutdown of businesses, and greater uncertainty in global financial markets.

As COVID-19 has spread, it has significantly impacted the health and economic environment around the world, and many governments have closed most public establishments, including restaurants, workplaces, and schools.

We are continuing to proactively monitor and assess the COVID-19 global pandemic.

The full impact of the COVID-19 pandemic is inherently uncertain.

Our ongoing clinical trials have been, and may continue to be, affected by the closure of offices, or country borders, among other measures being put in place around the world.

The inability to travel and conduct face-to-face meetings can also make it more difficult to enroll new patients in ongoing or planned clinical trials.

Any of these circumstances will potentially have a negative impact on our financial results and the timing of our clinical trials.

The COVID-19 pandemic has caused us to modify our business practices (including but not limited to curtailing or modifying employee travel, moving to full remote work, and cancelling physical participation in meetings, events, and conferences), and we may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, patients, and business partners.

The extent of the impact of the COVID-19 pandemic on our future liquidity and operational performance will depend on certain developments, including the duration and spread of the outbreak, the availability and effectiveness of vaccines, the impact on our clinical trials, patients, and collaboration partners, and the effect on our suppliers.

While we have begun to re-open our offices, we continue to allow remote work, we continue to monitor developments of the COVID-19 pandemic and we may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, patients, and business partners.

We have implemented appropriate safety measures, following guidance from the Center for Disease Control and the Occupational Safety and Health Administration.

The extent of the impact of the COVID-19 pandemic on our future liquidity and operational performance will depend on certain developments, including the duration and spread of the outbreak, including its variants, the availability and effectiveness of vaccines, the impact on our clinical trials, patients, and collaboration partners, and the effect on our suppliers.

Financial Overview

1 unchanged sentence

We have not generated any revenue from product sales.

Our revenue has been derived from amortization of upfront license payments, research and development funding and milestone payments under collaboration and license agreements with our collaborators.

Our revenue has been derived from amortization of upfront license payments, research and development funding, milestone and royalty payments under collaboration and license agreements with our collaborators.

From inception through December 31, 2021, we have received $226.9 million in cash in non-dilutive funding from our collaborators.

4 unchanged sentences

For each of the four targets under the GSK agreement, we are eligible to receive up to $273.0 million in milestone payments, which are comprised of $18.0 million for preclinical and clinical development milestone payments, $90.0 million upon certain regulatory events and $165.0 million upon worldwide commercial sales thresholds.

In addition, GSK is obligated to pay us tiered royalties, ranging from 4% to 8%, for each product developed under the agreement, except in the case of dostarlimab where the royalties payable will be 8% to 25% as amended below, on annualized net sales of each antibody commercialized from the collaboration.

In addition, GSK is obligated to pay us tiered royalties, ranging from 4% to 8%, for each product developed under the agreement, except in the case of JEMPERLI where the royalties payable will be 8% to 25% as amended below, on annualized net sales of each antibody commercialized from the collaboration.

On October 23, 2020, we amended the GSK Agreement (the “Amendment”).

Under the Amendment, we agreed to permit GSK to conduct development and commercialization of Zejula, an oral, once-daily poly (ADP-ribose) polymerase (PARP) inhibitor, which has received US approval for the maintenance treatment of adult patients with advanced epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in a complete or partial response to first-line platinum-based chemotherapy and is under development for additional cancer indications.

In addition, under the Amendment, we were granted increased royalties upon sales of dostarlimab, an anti-PD-1 antagonist antibody under development by GSK for multiple oncological disorders, including endometrial cancer, non-small cell lung cancer, ovarian cancer, colorectal cancer, and mismatch repair deficient solid tumors, equal to 8% of Net Sales (as defined in the GSK Agreement) below $1.0 billion and from 12% up to 25% of Net Sales above $1.0 billion.

ovarian, fallopian tube, or primary peritoneal cancer who are in a complete or partial response to first-line platinum-based chemotherapy and is under development for additional cancer indications.

In addition, under the Amendment, we were granted increased royalties upon sales of JEMPERLI, an anti-PD-1 antagonist antibody under development by GSK for multiple oncological disorders, including endometrial cancer, non-small cell lung cancer, ovarian cancer, colorectal cancer, and mismatch repair deficient solid tumors, equal to 8% of Net Sales (as defined in the GSK Agreement) below $1.0 billion and from 12% up to 25% of Net Sales above $1.0 billion.

The Amendment also provided for a one-time non-refundable cash payment of $60.0 million that we received in the fourth quarter of 2020.

GSK also agreed, starting January 1, 2021, to pay us a 1% royalty on all GSK Net Sales of Zejula.

GSK also agreed, starting January 1, 2021, to pay us a 1% royalty less third-party royalty deduction on all GSK Net Sales of Zejula.

The $1.1 billion in cash milestone payments due under the GSK Agreement remain unchanged.

Additionally, under the terms of the Amendment, GSK has agreed to certain diligence commitments with respect to the future development of dostarlimab, and the parties have agreed to review such commitments under regular joint review committee meetings going forward.

Additionally, under the terms of the Amendment, GSK has agreed to certain diligence commitments with respect to the future development of JEMPERLI, and the parties have agreed to review such commitments under regular joint review committee meetings going forward.

From inception of the agreement through December 31, 2021, we have recognized $204.6 million in total revenue from GSK.

In October 2021, we entered into the Royalty Monetization Agreement with Sagard.

Under the terms of the Royalty Monetization Agreement, we received $250.0 million, upon closing in December 2021, in exchange for royalties payable to us under the GSK collaboration on annual global net sales of JEMPERLI below $1.0 billion, as well as certain milestone payments, starting in October 2021.

The aggregate JEMPERLI royalties and certain future milestones to be received by Sagard under the Royalty Monetization Agreement are capped at certain fixed multiples of the upfront payment based on time.

Milestones achieved through December 31, 2021 under the GSK Agreement are as follows:

(GSK4057190A/Dostarlimab)

(GSK4069889A/Cobolimab)

(JEMPERLI/Dostarlimab) Anti-TIM-3

(GSK4069889A/Cobolimab) Anti-LAG-3

(GSK40974386)

Milestone Event Amount Quarter Recognized Amount Quarter Recognized Amount Quarter Recognized

Initiated in vivo toxicology studies using good laboratory practices (GLPs)

$1.0M Q2'15 $1.0M Q4'15 $1.0M Q3'16

Initiated in vivo toxicology studies using good laboratory practices (GLPs) $1.0M Q2'15 $1.0M Q4'15 $1.0M Q3'16

IND clearance from the FDA $4.0M Q1'16 $4.0M Q2'16 $4.0M Q2'17

2 unchanged sentences

Phase 3 clinical trial initiation - second indication $5.0M Q2'19 — — — —

Filing of the first NDA - first indication $10.0M Q1'20 — — — —

Filing of the first MAA - first indication $5.0M Q1'20 — — — —

Filing of the first BLA (1) - first indication

$10.0M Q1'20 — — — —

Filing of the first MAA (2) - first indication

$5.0M Q1'20 — — — —

Filing of the first BLA - second indication

$10.0M Q1'21 — — — —

First BLA approval - first indication $20.0M Q2'21 — — — —

First MAA approval - first indication

$10.0M Q2'21 — — — —

First BLA approval - second indication $20.0M Q3'21 — — — —

(1) Biologics License Application (“BLA”)

(2) Marketing Authorization Application (“MAA”)

Milestones achieved during the discovery period were recognized as revenue pro-rata through December 31, 2016.

23 unchanged sentences

We conduct some of our early research and preclinical activities internally and plan to rely on third parties, such as CROs and CMOs, for the execution of certain of our research and development activities, such as in vivo toxicology and pharmacology studies, drug product manufacturing, and clinical trials.

We have completed Phase 1 clinical trials and have ongoing Phase 2 clinical trials for imsidolimab and an ongoing Phase 1 clinical trial for ANB030.

We expect our research and development expenses to be higher for the foreseeable future as we continue to advance our product candidates.

We have completed Phase 1 and Phase 2 clinical trials and have ongoing Phase 2 and 3 clinical trials for imsidolimab, completed a Phase 1 clinical trial and have an ongoing Phase 2 clinical trial in rosnilimab, and an ongoing Phase 1 trial in ANB032.

We expect our research and development expenses to be higher for the foreseeable future as we continue to advance our product candidates into larger clinical trials.

General and Administrative Expense

1 unchanged sentence

Other general and administrative expenses include allocated facility-related costs not otherwise included in research and development expenses, travel expenses, and professional fees for auditing, tax, and legal services.

Interest Expense

Interest expense consists of floating interest payments and amortization of discounts on our outstanding notes payable relating to our Loan and Security Agreement with Oxford Finance LLC and Silicon Valley Bank, as amended (the “Loan Agreement”).

On January 1, 2020, the Loan Agreement was paid in full, without penalty or premium.

Non-cash Interest Expense for the Sale of Future Royalties

Non-cash interest expense for the sale of future royalties consists of interest related to the liability for the sale of future royalties, as well as the amortization of debt issuance costs.

We impute interest on the unamortized portion of the liability for the sale of future royalties using the effective interest method and record interest expense based on timing of the payments over the term of the Royalty Monetization Agreement.

Our estimate of the interest rate under the arrangement is based on forecasted royalty and milestone payments expected to be made to Sagard over the life of the agreement.

Interest Income

1 unchanged sentence

Net Operating Loss and Research and Development Tax Credit Carryforwards

Since inception, we have accumulated net operating losses, or NOLs in all years except December 31, 2015 and 2014, in which we generated taxable income as a result of our collaboration agreement with GSK as well as expenses incurred by our Australian subsidiary which are not deductible for U.S.

Since inception, we have accumulated net operating losses (“NOLs”) in all years except December 31, 2015 and 2014, in which we generated taxable income as a result of our collaboration agreement with GSK as well as expenses incurred by our Australian subsidiary which are not deductible for U.S.

income tax purposes.

While we utilized NOLs in 2015 and 2014, we have since incurred losses and therefore continue to have a valuation allowance against our net deferred tax assets due to the uncertainty of the realization of such assets.

At December 31, 2020, we had federal and state net operating loss carryforwards (“NOLs”), of $248.4 million and $64.2 million, respectively.

The federal and state NOLs will begin to expire in 2028, unless previously utilized.

The federal NOLs includes $188.4 million of net operating losses generated in 2018 and after.

At December 31, 2021, we had federal and state NOL carryforwards of $293.4 million and $65.6 million, respectively.

The federal and state NOLs generated prior to 2018 will both begin to expire in 2028, unless previously utilized.

The federal NOL includes $233.4 million of net operating losses generated in 2018 and after.

Federal net operating losses generated in 2018 and after carryover indefinitely and may generally be used to offset up to 80% of future taxable income.

At December 31, 2021, we had federal and California research tax credit carryforwards of approximately $3.2 million and $10.6 million, respectively.

The federal research tax credit carryforwards will begin to expire in 2026 and the California state credits carryforward indefinitely.

The federal research tax credit carryforwards will begin to expire in 2041 and the California research tax credits carryforward indefinitely.

We also have foreign tax losses of $3.3 million, which will carry forward indefinitely, subject to a continuity of ownership test.

2 unchanged sentences

In September 2015, we completed a Section 382 and 383 of the Code ownership change analysis through December 31, 2014 and determined that there was an ownership change in 2007 that may limit the utilization of approximately $5.3 million and $5.4 million in Federal and state NOLs, respectively, and $0.2 million in both Federal and state research tax credits.

We extended the analysis period of the study through December 31, 2018, noting one additional ownership changes during fiscal 2017 that may limit the utilization of Federal and State NOLs.

We extended the analysis period of the study through September 30, 2021, noting ownership changes on January 31, 2017 and March 8, 2021, which limits the annual utilization of the Company’s NOLs and causes the expiration of approximately $15.0 million of federal research credits as they will not be utilized within the carryover period due to the Section 382 limitation.

Our use of federal and state NOLs and research credits could be limited further by the provisions of Section 382 of the U.S.

Internal Revenue Code of 1986, as amended, depending upon the timing and amount of additional equity securities that we have issued or will issue.

State NOL carryforwards may be similarly limited.

Limitations on our ability to use NOL carryforwards and research and development tax credits to offset future taxable income could require us to pay U.S.

3 unchanged sentences

Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”).

generally accepted accounting principles (“U.S.

The preparation of these financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities in our financial statements.

26 unchanged sentences

• Steering Committee Meetings.

The performance obligations under our collaboration and license agreements may also include our participation in a steering committees, which allows us to direct the progression of our discovery programs.

The performance obligations under our collaboration and license agreements may also include our participation in a steering committee, which allows us to direct the progression of our discovery programs.

As these steering committees would not occur or benefit the customer without the use of our licenses, these are not considered distinct.

22 unchanged sentences

To date, there have been no material differences between our estimates of such expenses and the amounts actually incurred.

Sale of Future Royalties

We treated the sale of future revenue from the Royalty Monetization Agreement with Sagard as debt, which will be amortized under the effective interest rate method over the estimated life of the related expected royalty stream.

We recorded the upfront proceeds, net of transaction costs, as a liability related to the sale of future revenue.

The liability and the related interest expense are based on our current estimates of future royalties and certain milestones expected to be paid over the life of the agreement.

We will periodically assess the expected royalty and milestone payments and to the extent our future estimates or timing of such payments are materially different than our previous estimates, we will prospectively recognize related interest expense.

Royalty revenue will be recognized as earned on net sales of JEMPERLI, and we will record the royalty payments to Sagard as a reduction of the liability when paid.

As such payments are made to Sagard, the balance of the liability will be effectively repaid over the life of the Royalty Monetization Agreement.

For further discussion of the sale of future revenue, refer to Note 5 — Sale of Future Royalties in the accompanying notes to the consolidated financial statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Recently Issued Accounting Pronouncements

4 unchanged sentences

A comparison of collaboration revenue is as follows:

December 31, Increase

(in thousands) 2020 2019 (Decrease)

December 31, Increase/(Decrease)

(in thousands) 2021 2020

GSK Milestones $ 60,000 $ 15,000 $ 45,000

GSK Royalty Revenue 3,175 — 3,175

GSK Amendment No.

3 Payment $ — $ 60,000 $ (60,000)

GSK milestones 15,000 8,000 7,000

Total collaboration revenue

$ 63,175 $ 75,000 $ (11,825)

Collaboration revenue during the year ended December 31, 2020 increased $67.0 million compared to the year ended December 31, 2019 primarily due to payment received related to an amendment to the GSK Agreement during 2020 and the timing of milestones achieved.

Collaboration revenue during the year ended December 31, 2021 decreased $11.8 million compared to the year ended December 31, 2020 primarily due to the payment received related to an amendment to the GSK Agreement during 2020, royalty revenue recognized during 2021 and the timing of milestones achieved.

We expect that any collaboration revenue we generate will continue to fluctuate from period to period as a result of the timing and amount of milestones from our existing collaborations.

Research and Development Expenses

Research and development expenses were $80.0 million during the year ended December 31, 2020 compared to $99.3 million during the year ended December 31, 2019, for a decrease of approximately $19.3 million.

The decrease is primarily

attributable to a $14.1 million decrease in outside services for preclinical and manufacturing expenses, a $3.7 million decrease in clinical expenses, a $1.1 million decrease in salaries and related expenses, including stock compensation expense, and a $0.4 million decrease in other research and development expenses.

Research and development expenses were $98.5 million during the year ended December 31, 2021 compared to $80.0 million during the year ended December 31, 2020, for an increase of approximately $18.5 million.

The increase is primarily attributable to a $10.7 million increase in clinical expenses, a $5.2 million increase in salaries and related expenses, including stock compensation expense, a $3.1 million increase in other research and development expenses, offset by a $0.5 million decrease in outside services for preclinical and manufacturing expenses.

We do not track fully burdened research and development costs separately for each of our product candidates.

8 unchanged sentences

Imsidolimab $ 50,095 $ 25,577 $ 24,518

Etokimab 14,483 41,872 (27,389)

ANB030 4,563 9,261 (4,698)

Rosnilimab 7,830 4,563 3,267

ANB032 6,628 9,447 (2,819)

Etokimab (1,681) 14,483 (16,164)

Preclinical and other unallocated costs 12,695 8,143 4,552

4 unchanged sentences

General and administrative expenses were $21.5 million during the year ended December 31, 2021 compared to $18.9 million during the year ended December 31, 2020, for an increase of approximately $2.6 million.

The increase is primarily due to a $1.5 million increase in legal expenses, a $1.3 million increase in personnel costs including stock compensation expense, and a $0.7 million increase in insurance expense, offset by a $0.4 million decrease in professional fees, a $0.1 million decrease in travel expense, and $0.2 million decrease in other general and administrative expense.

The increase is primarily due to a $2.8 million increase in personnel costs, including stock compensation expense, a $0.6 million increase in insurance expense, and a $0.2 million increase in other general and administrative expense, offset by a $1.0 million decrease in legal expense.

We expect that our general and administrative expenses will increase for the foreseeable future as we incur additional costs associated with being a publicly traded company, including legal, auditing and filing fees, additional insurance premiums, investor relations expenses and general compliance and consulting expenses.

We also expect our intellectual property related legal expenses, including those related to preparing, filing, prosecuting and maintaining patent applications, to increase as our intellectual property portfolio expands.

Interest Expense

Interest expense was $0.0 million during the year ended December 31, 2020.

Interest expense was $1.0 million during the year ended December 31, 2019 and primarily represents effective interest of approximately 12.67% on our outstanding Term Loans on an outstanding principal balance of $0.6 million as of December 31, 2019.

The decrease in interest expense during the periods is due to the final payment made on the Loan Agreement on January 1, 2020.

Non-cash Interest Expense for the Sale of Future Royalties

Interest expense was $1.5 million during the year ended December 31, 2021 compared to $0 during the year ended December 31, 2020.

The increase in interest expense during the periods is directly related to the non-cash interest expense on the liability related to the sale of future royalties.

Interest Income

Interest income was $4.0 million and $11.0 million during the years ended December 31, 2020 and 2019, respectively, which primarily related to our short-term and long-term investments, the balance of which decreased during the periods as a result of funding our clinical trial programs.

Interest income was $0.4 million during the year ended December 31, 2021 compared to $4.0 million during the year ended December 31, 2020.

The decrease in interest income was primarily related to our short-term and long-term investments, the balance of which decreased during the periods as a result of funding our clinical trial programs.

The decrease in interest income is also attributable to lower interest rates during the year ended December 31, 2021.

Provision for Income Taxes

The income tax benefit was $0.0 million and $0.2 million during the year ended December 31, 2020 and 2019, respectively.

The income tax benefit for the year ended December 31, 2019 is primarily related to the allocation of tax benefit to continuing operations offsetting income tax expense recorded in other comprehensive income that is related to unrealized gains.

Liquidity and Capital Resources

From our inception through December 31, 2020, we have received an aggregate of $804.0 million to fund our operations, which included $620.3 million from the sale of equity securities, $164.6 million from our collaboration agreements and $19.1 million from venture debt.

From our inception through December 31, 2021, we have received an aggregate of $1.1 billion to fund our operations, which included $622.8 million from the sale of equity securities, $250.0 million from the sale of future royalties, $226.9 million from our collaboration agreements and $19.1 million from venture debt.

As of December 31, 2021, we had $615.2 million in cash, cash equivalents and investments.

2 unchanged sentences

Our rights to payments under our collaboration agreements are our only committed external source of funds.

Specific to our collaboration agreement with GSK, dostarlimab is currently in clinical development for various solid tumor indications.

We anticipate receiving additional milestones from GSK, of equal magnitude to the milestone payments outlined above, upon acceptance and approval of BLA and EMA filings of dostarlimab for the PdMMRT indication.

An additional $165.0 million in sales milestones is anticipated upon achievement of certain dostarlimab annual sales revenues.

Our amended GSK Agreement also includes a royalty to GSK’s global net sales of Zejula that began in 2021.

Specific to our collaboration agreement with GSK, JEMPERLI is currently in clinical development for various solid tumor indications.

Earlier in 2021, we received additional milestones from GSK, as outlined above, following acceptance and approval of BLA and EMA filings of JEMPERLI for the PdMMRT indication.

Our amended GSK Agreement also includes a 1% royalty less third-party royalty deduction on GSK’s global net sales of Zejula that began in 2021.

In October 2021, we signed the Royalty Monetization Agreement with Sagard.

Pursuant to this transaction we received a $250.0 million payment upon closing in December 2021, in exchange for JEMPERLI royalties due to us on annual

commercial sales below $1.0 billion and certain future milestones starting in October 2021.

We recorded the upfront proceeds of $250.0 million, net of $0.4 million of transaction costs, as a liability related to the sale of future revenue.

The liability and the related interest expense are based on our current estimates of future royalties and certain milestones expected to be paid over the life of the agreement.

Royalty revenue will be recognized as earned on net sales of JEMPERLI, and we will record the royalty payments to Sagard as a reduction of the liability when paid.

As such payments are made to Sagard, the balance of the liability will be effectively repaid over the life of the Royalty Monetization Agreement.

In December 2021, we entered into an Open Market Sales Agreement with Jefferies LLC, through which we may offer and sell shares of our common stock having an aggregate offering of up to $150.0 million through Jefferies LLC, as our sales agent.

We will pay the sales agent a commission of up to 3% of the gross proceeds of sales made through the at-the-market offering program.

During the year ended December 31, 2021, we did not sell any shares under the at-the-market offering program and all $150.0 million remains available for sale.

Funding Requirements

5 unchanged sentences

Cash, cash equivalents and investments totaled $615.2 million as of December 31, 2021, compared to $411.2 million as of December 31, 2020.

We believe that our existing cash, cash equivalents and investments will fund our current operating plan at least into 2024.

We believe that our existing cash, cash equivalents and investments will fund our current operating plan for at least the next twelve months from the issuance of our consolidated financial statements.

We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect.

Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain.

Additionally, the process of testing product candidates in clinical trials and seeking regulatory approval is costly, and the timing of progress and expenses in these trials is uncertain.

The following table summarizes our cash flows for the years ended December 31, 2021 and 2020:

7 unchanged sentences

Operating Activities

Net cash used in operating activities during the year ended December 31, 2020 of $14.2 million was primarily due to our net loss of $19.9 million, adjusted for addbacks for non-cash items of $12.5 million which includes stock-based compensation and income from marketable securities and decreases in working capital of $6.8 million.

Net cash used in operating activities during the year ended December 31, 2019 of $69.5 million was primarily due to our net loss of $97.3 million, adjusted for addbacks for non-cash items of $11.0 million which includes stock-based compensation and income from marketable securities and increases in working capital of $16.9 million.

Net cash used in operating activities during the year ended December 31, 2021 of $45.9 million was primarily due to our net loss of $57.8 million, adjusted for addbacks for non-cash items of $19.3 million which includes stock-based compensation, amortization of operating right-of-use assets and liabilities, non-cash interest expense, and income from marketable securities and decreases in working capital of $7.4 million.

Net cash used in operating activities during the year ended December 31, 2020 of $14.2 million was primarily due to our net loss of $19.9 million, adjusted for addbacks for non-cash items of $12.5 million which includes stock-based compensation, amortization of operating right-of-use assets and liabilities, and income from marketable securities and decreases in working capital of $6.8 million.

Investing Activities

Cash provided by and used in investing activities during the year ended December 31, 2020 and 2019 was primarily due to the acquisition of investments upon receipt of the proceeds from our IPO and follow-on public offerings, offset by investment maturities.

Cash provided by investing activities during the year ended December 31, 2021 of $38.8 million was primarily due to the sale and maturities of investments of $158.8 million, offset by the acquisition of investments of $118.7 million and the purchases of property and equipment of approximately $1.3 million.

Cash provided by investing activities during the year ended December 31, 2020 of $94.5 million was primarily due to the sale and maturities of investments of $290.0 million, offset by the acquisition of investments of $194.9 million and the purchases of property and equipment of $0.6 million.

Financing Activities

Cash used in financing activities during the year ended December 31, 2020 of $0.9 million was primarily related to $1.4 million in repayments on our outstanding Term Loan, offset by proceeds of $0.5 million from the issuance of common stock as a result of option exercises.

Cash provided by financing activities during the year ended December 31, 2021 of $252.3 million was primarily related to $250.0 million received for the sale of future royalties, and $2.6 million proceeds received from the issuance of common stock as a result of option exercises, offset by $0.3 million for payments of issuance costs related to the sale of future royalties.

4 unchanged sentences

For further information related to our operating lease and future minimum annual obligations for license payments under our collaboration in-license agreements, see Note 10 — Commitments and Contingencies in the accompanying notes to the consolidated financial statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

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-K

Item 7. Management’s Discussion and Analysis