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Item 7. Management’s Discussion and Analysis

2024-03-11 compared with 2023-03-01 · 164 added, 163 removed, 239 unchanged (58% of the section changed)

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We are a clinical-stage biotechnology company focused on delivering innovative immunology therapeutics.

We are developing immune cell modulating antibodies, including two wholly owned checkpoint agonists in clinical-stage development, for autoimmune and inflammatory disease:

rosnilimab, our PD-1 agonist, previously referred to as ANB030, in a planned Phase 2b trial for the treatment of moderate-to-severe rheumatoid arthritis (“RA”);

and ANB032, our BTLA agonist, in a planned Phase 2b trial for the treatment of moderate-to-severe atopic dermatitis (“AD”).

We also have other preclinical immune cell modulator candidates in our portfolio, including ANB033, an anti-CD122 antagonist antibody for the treatment of autoimmune and inflammatory diseases.

In addition, we have two cytokine antagonists that we are exploring options for out-licensing:

imsidolimab, our anti-IL-36R antibody, in a Phase 3 trial for the treatment of generalized pustular psoriasis (“GPP”), and etokimab, our anti-IL-33 antagonist that is Phase 2/3 ready.

We are developing immune cell modulating antibodies, including two wholly owned checkpoint agonists in clinical-stage development, for autoimmune and inflammatory diseases:

rosnilimab, our PD-1 agonist in a Phase 2b trial for the treatment of moderate-to-severe rheumatoid arthritis (“RA”) and a Phase 2 trial for the treatment of moderate-to-severe ulcerative colitis (“UC”);

and ANB032, our BTLA agonist, in a Phase 2b trial for the treatment of moderate-to-severe atopic dermatitis (“AD”).

We also have other preclinical immune cell modulator candidates for the treatment of autoimmune and inflammatory diseases in our portfolio, including ANB033, an anti-CD122 antagonist antibody, and ANB101, a BDCA2 modulator antibody.

In addition, we have developed two cytokine antagonists that we are exploring options for out-licensing:

imsidolimab, our anti-IL-36R antibody, in Phase 3 development for the treatment of generalized pustular psoriasis (“GPP”), and etokimab, our anti-IL-33 antagonist that is Phase 2/3 ready.

We have also discovered multiple therapeutic antibodies licensed to GlaxoSmithKline, Inc.

(“GSK”) in a financial collaboration for immune-oncology, including an anti-PD-1 antagonist antibody (JEMPERLI (dostarlimab-gxly)), an anti-TIM-3 antagonist antibody (cobolimab, GSK4069889) and an anti-LAG-3 antagonist antibody (GSK4074386).

(“GSK”) in a financial collaboration for immuno-oncology, including an anti-PD-1 antagonist antibody ( Jemperli (dostarlimab-gxly)) and an anti-TIM-3 antagonist antibody (cobolimab, GSK4069889).

We currently recognize revenue from milestones and royalties achieved under our immuno-oncology collaboration with GSK.

Our Wholly Owned Product Candidate Pipeline

Our immune cell modulating antibodies, including anti-inflammatory checkpoint agonists for PD-1 and BTLA, treat inflammatory disorders by down regulating immune responses mediated by multiple immune cell types including T-cells, B-cells, and dendritic cells.

We believe these molecules have potential applicability across a broad range of autoimmune and inflammatory disorders including dermatology, rheumatology, gastroenterology, respiratory, and neurology therapeutic areas.

Rosnilimab is designed to suppress aberrant T cell driven inflammation by augmenting signaling through PD-1 or targeted depletion of PD-1+ T cells.

Rosnilimab binds to PD-1 on a membrane proximal epitope that is on the opposite side of the receptor to that utilized by PD-L1 for binding, and thus preserves the ability of PD-L1 to agonize PD-1.

In the setting of T cell activation, rosnilimab binding has been shown to induce agonistic signaling and the recruitment of SHP2 to PD-1, in a manner similar to that by PD-L1.

In preclinical assays, rosnilimab prevented T cell expansion in antigen-specific response assays to numerous antigens, demonstrating prevention of T cell expansion and reduction in the secretion of inflammatory cytokines associated with multiple T cell types implicated in inflammatory pathology when dysregulated.

In addition to direct agonistic activity, rosnilimab is an IgG1k antibody with effector function that can drive targeted depletion of PD-1+ T cells via the induction of antibody-dependent cellular cytotoxicity (ADCC).

We believe this component of the mechanism of rosnilimab may provide more durable immune modulation by effectively eliminating the most pathogenic antigen-specific T cells in the setting of autoimmunity and inflammation.

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 insufficient to maintain immune homeostasis.

Our immune cell modulating antibodies, including checkpoint agonists for PD-1 and BTLA, treat inflammatory disorders by down regulating immune responses mediated by multiple immune cell types including T cells, B cells, and dendritic cells.

T cells require both antigen presentation to the T cell receptor and co-stimulation to be activated.

When these interactions are inhibited, T cells can’t be effectively primed to expand and differentiate into inflammatory T cells.

Inhibition of at least one of these signals is the basis of checkpoint agonism.

We believe these molecules have potential applicability across a broad range of autoimmune and inflammatory diseases including dermatology, rheumatology, gastroenterology, respiratory, and neurology therapeutic areas.

PD-1, or programmed cell death protein 1, is an inhibitory checkpoint receptor that regulates T cell proliferation, and cytokine secretion.

It is expressed preferentially on activated T cells, reducing the potential for off-target activity by rosnilimab.

Genetic mutations in the PD-1 pathway are known to be associated with increased susceptibility to human inflammatory diseases which leads us to believe that rosnilimab is applicable to diseases where PD-1 checkpoint receptor function may be insufficient to maintain immune homeostasis.

Rosnilimab is an IgG1 antibody that directly targets PD-1+ T cells, resulting in their agonism or depletion, broadly impacting pathogenic drivers of autoimmune and inflammatory diseases.

An IgG1 PD-1 agonist acts through three distinct mechanisms;

depletion of PD-1 high effector T cells, depletion of PD-1 high Tfh and Tph cells, and agonism of PD-1 int T cells.

This drives specific immunological outcomes in both inflamed tissue and the periphery, such as reduction in T cell proliferation, migration, and cytokine secretion, and reduction of plasma cell generation and autoantibody levels.

Rosnilimab is designed to enable formation of a tight immune synapse by binding to the PD-1 checkpoint receptor on a membrane-proximal epitope, and simultaneously anchoring to an Fc receptor, on an opposing cell, supporting crosslinking and excluding activating phosphatases such as CD45.

Rosnilimab also facilitates depletion by bringing effector cells into closer proximity to pathogenically activated PD-1 high T cells.

In in vitro studies, when PD-1+ T cells were cocultured in the presence of NK cells, rosnilimab demonstrated potent depletion of PD-1+ T cells.

In separate in vitro studies, in which T cells were stimulated in the presence of only dendritic cells (in the absence of any cells capable of mediating depletion), rosnilimab demonstrated potent agonism properties such as a reduction in PD-1+T cell proliferation and reduction in secretion of inflammatory cytokines.

We announced positive top-line data from a healthy volunteer Phase 1 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 (“IV”) doses of rosnilimab up to 600mg or placebo, while multiple ascending dose (MAD) cohorts received four weekly subcutaneous doses of rosnilimab ranging up to 400mg or placebo.

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 received subcutaneous or intravenous (“IV”) single doses of rosnilimab up to 600mg or

placebo, while multiple ascending dose (“MAD”) cohorts received four weekly subcutaneous doses of rosnilimab ranging up to 400mg or placebo.

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

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.

Two serious adverse events (“SAEs”) 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.

The COVID-19 infection was deemed unrelated to treatment.

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

Rosnilimab demonstrated a favorable pharmacokinetic profile with an estimated two-week half-life for subcutaneous and IV routes of administration.

Full PD-1 receptor occupancy was observed rapidly and was maintained for at least 30 days at or above 200mg

following single subcutaneous rosnilimab doses.

Rosnilimab pharmacodynamic activity demonstrated 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) 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+ 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 consistent ratio of PD-1+ Tcon cells to total Treg cells post-treatment in healthy volunteers.

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

We plan to conduct a randomized placebo-controlled multi-hundred patient global Phase 2b trial assessing three dose levels of subcutaneously administrated rosnilimab in moderate-to-severe RA for approximately six months on well-established endpoints including ACR 20/50/70 and DAS28.

We expect to initiate this trial in the third quarter of 2023 with top-line interim data anticipated by mid-year 2025.

We also plan to conduct a second global Phase 2 trial, in an indication to be announced, with trial initiation anticipated by the end of 2023.

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.

We conducted an interim review of blinded data in December 2022 which demonstrated robust reductions in peripheral PD-1+ T cells, including PD-1 high T cells reduction of >80%, across blinded pooled rosnilimab patients and placebo patients, which is consistent with observations in the healthy volunteer Phase 1 trial of >90% in rosnilimab treated patients.

The blinded data suggests rosnilimab administration was generally safe and well tolerated.

Interim results suggest that target improvement in severity of alopecia tool (SALT) was not achieved potentially due to an inadequate tested dose level, limited duration of treatment, and/or complexity of disease biology including the hair growth cycle.

Further development in alopecia areata will not be pursued.

The unblinded final results will be available in second half of 2023.

ANB032 is designed to augment BTLA signaling, which is broadly applicable to human inflammatory diseases associated with lymphoid and myeloid immune cell dysregulation.

Genetic studies have demonstrated that BTLA pathway mutations increase human susceptibility to multiple autoimmune diseases and insufficient BTLA signaling can lead to dysregulated T or B cell responses and changes in the function of dendritic cells.

BTLA modulates signaling of HVEM, governing HVEM’s interaction with its natural ligands, including LIGHT.

Polymorphisms in BTLA or molecules in the BTLA pathway such as HVEM are associated with inflammatory diseases, including aberrant T cell activity, B cell activity and dysregulation of downstream humoral immune responses (IgE, IgG secretion).

Similarly, BTLA knockout animals have spontaneous or enhanced severity of inflammatory disease, demonstrating aberrant T cell activity, B cell activity and dysregulation of pathogenic antibody responses upon immunization.

ANB032 is anticipated to down-modulate the activity of T cells, B cells and dendritic cells via several potential mechanisms:

BTLA agonistic activity, stabilization of the interaction of BTLA and HVEM in cis which prevents pro-inflammatory signaling mediated by HVEM ligands such as LIGHT, and abrogation of pro-inflammatory HVEM signaling mediated by BTLA in trans.

No SAEs were reported in subjects receiving multiple doses of rosnilimab or placebo .

Rosnilimab demonstrated a favorable pharmacokinetic (“PK”) profile with an estimated two-week half-life for subcutaneous and IV routes of administration.

Full PD-1 receptor occupancy was observed rapidly and was maintained for at least 30 days.

Potent and sustained reduction was observed in peripheral PD-1+ T cells for >30 days, including >90% reduction of PD-1 high T cells and a >50% reduction of PD-1+ T cells bringing the overall T cell composition to a less activated state, without meaningfully reducing overall T cell numbers.

We also completed a randomized placebo-controlled 45-patient Phase 2 trial assessing a single 400mg monthly dose of rosnilimab over six months in moderate-to-severe alopecia areata patients.

In January 2023, we reported interim results of blinded data which suggested that sufficient improvement in the severity of alopecia tool (SALT) endpoint necessary to justify further development in alopecia was not achieved.

Furthermore, we reported safety and pharmacodynamics data suggesting that rosnilimab was generally well tolerated, with no dose limiting toxicities observed and no SAEs reported.

We are conducting a randomized placebo-controlled 420-patient global Phase 2b trial assessing three dose levels of subcutaneously administrated rosnilimab in moderate-to-severe RA for up to 28 weeks on well-established endpoints including ACR20/50/70 and DAS28-CRP.

We anticipate reporting top-line data on the primary endpoint in the RA trial by mid 2025.

We are also conducting a randomized placebo-controlled 130-patient, global Phase 2 trial assessing two dose levels of subcutaneously administered rosnilimab in moderate-to-severe UC for up to 24 weeks on well-established endpoints including clinical remission on the modified Mayo score (“mMS”), clinical response on the mMS and endoscopic remission.

We anticipate reporting top-line data on the primary endpoint in the UC trial in the first half of 2026.

BTLA, or B and T lymphocyte attenuator, is an inhibitory checkpoint receptor that regulates T cells, B cells, and dendritic cell (“DC”) function.

BTLA is expressed only on immune cells and preferentially on activated immune cells, potentially enabling a broad mechanism of action while avoiding off-target activity.

ANB032 is a non-depleting antibody that binds to BTLA, and is anticipated to down-modulate the activity of T cells, B cells and dendritic cells both in inflamed tissue and the periphery via:

agonism resulting in inhibition of T cell expansion and migration, broad reduction of inflammatory Th1, Th2, Th17 and Th22 cytokines, and modulation of dendritic cells including inhibition of dendritic cell maturation, reduction in costimulatory molecule expression, and enhanced inducement of Tregs.

In in vitro studies, ANB032 demonstrated potent agonism and, in a murine model of GvHD, demonstrated superior disease-modification compared to control antibodies.

We announced positive top-line data from a healthy volunteer Phase 1 trial of ANB032, under a CTN, in April 2022.

A total of 96 subjects were enrolled in the randomized, double-blind, placebo-controlled healthy volunteer Phase 1 trial, where single ascending dose (SAD) cohorts received subcutaneous or IV single doses of ANB032 or placebo, while multiple ascending dose (MAD) cohorts received four weekly subcutaneous doses of ANB032 or placebo.

A total of 96 subjects were enrolled in the randomized, double-blind, placebo-controlled healthy volunteer Phase 1 trial, where SAD cohorts received subcutaneous or IV single doses of ANB032 or placebo, while MAD cohorts received four weekly subcutaneous doses of ANB032 or placebo.

ANB032 was generally well-tolerated and no dose limiting toxicities were observed.

No serious adverse events were reported.

ANB032 demonstrated a favorable pharmacokinetic profile with an estimated two-week half-life for subcutaneous and IV routes of administration.

Full PD-1 receptor occupancy was observed rapidly and was maintained for at least 30 days.

In in vitro studies, ANB032 pharmacodynamic activity demonstrated inhibition of T cell proliferation and reduction in inflammatory cytokine secretion (Th1, Th2, Th17).

While Th2 targeted therapies provide benefit to patients with chronic moderate-to-severe atopic dermatitis (AD), there is compelling evidence that AD is broader than a Th2 driven disease, as Th1, Th17 and other cell types, including dendritic cells contribute significantly to the pathogenesis.

ANB032 inhibition of inflammatory Th1, Th2 and Th17 activity, and modulation of additional cell types such as B cells and dendritic cells, creates the potential for broader, deeper and more durable responses than more narrowly targeted interventions.

We plan to conduct a randomized placebo-controlled 160 patient Phase 2 trial assessing three dose levels of subcutaneously administrated ANB032 in moderate-to-severe AD for 12 weeks on well-established endpoints including EASI75 and IGA 0/1.

We expect to initiate this clinical trial in the second quarter of 2023 with top-line interim data anticipated by the end of 2024.

No SAEs were reported.

ANB032 demonstrated a favorable PK profile with an estimated two-week half-life for subcutaneous and IV routes of administration.

Full BTLA receptor occupancy was observed rapidly and was maintained for at least 30 days.

While Th2 targeted therapies provide benefit to patients with chronic moderate-to-severe atopic dermatitis (AD), there is compelling evidence that AD is broader than a Th2 driven disease, as Th1, Th17, Th22 and other cell types, including dendritic cells, contribute significantly to the pathogenesis.

ANB032 inhibition of inflammatory Th1, Th2, Th17 and Th22 activity, and modulation of additional cell types such as B cells and dendritic cells, creates the potential for broader, deeper and more durable responses than more narrowly targeted interventions.

We are conducting a randomized placebo-controlled 160 patient global Phase 2b trial assessing three dose levels of subcutaneously administered ANB032 in moderate-to-severe AD for 12 weeks on well-established endpoints including EASI75 and IGA 0/1 measured at week 14.

Patients will then be followed for an additional 24 weeks after the final dose at week 12 to understand longer term safety as well as the potential for prolonged and sustained efficacy.

We anticipate reporting top-line data on the primary endpoint from this trial by the end of 2024.

ANB033 targets CD122, the common beta subunit shared by the IL-15 and IL-2 receptors.

IL-15 signaling mediates the survival and maintenance of tissue resident memory T cells (T RM ).

The presence of long-lived and persistent T RM has been shown to drive tissue-specific immune-mediated inflammation.

T RM are present in the skin in dermatologic diseases, where defined borders of inflammation often recur.

T RM are also observed in other tissue-specific inflammatory disorders including gastroenterology, rheumatology and respiratory.

ANB033 is designed with an affinity to CD122 that inhibits IL-15 signaling, leading to death of pathogenic T RM cells in diseased tissue, with the potential to achieve and maintain remission of inflammation through the elimination of these disease-causing cells.

In addition, ANB033 inhibits IL-2 signaling through the low affinity IL-2 receptor (comprised of CD122 and the common gamma subunit, CD132) expressed on T cells, while sparing regulatory T cells which express the high affinity IL-2 receptor (comprised of CD122, CD132 and the alpha receptor subunit for IL-2, CD25).

This drives reduction of pathogenic T cell numbers while sparing or potentially enhancing regulatory T cell numbers.

We anticipate submitting an IND for a Phase 1 clinical trial with ANB033 during the first half of 2024.

Imsidolimab inhibits the interleukin-36 receptor (IL-36R), and is being developed for the treatment of GPP.

We completed a Phase 1 clinical trial in healthy volunteers, which was presented at the European Academy of Allergy and Clinical Immunology in 2018, where imsidolimab was well-tolerated, no dose-limiting toxicities were observed, and no serious adverse events were reported.

IL-15 and IL-2 signaling mediate the proliferation and survival of NK cells and certain CD8 T cell subsets.

ANB033 is an antibody designed with an

affinity to CD122 that inhibits IL-15 and IL-2 signaling through the low affinity IL-2 receptor (comprised of CD122 and the common gamma subunit, CD132) while sparing IL-2 signaling through the high affinity IL-2 receptor (comprised of CD122, CD132 and the alpha receptor subunit for IL-2, CD25) expressed by regulatory T cells.

This leads to the potential to achieve and maintain remission of inflammation through the reduction of disease-causing NK cells and certain CD8 T cell subsets, while sparing regulatory T cells.

By preventing the consumption of IL-2 by pathogenic cells that express the low affinity IL-2 receptor, circulating levels of IL-2 may increase, potentially enhancing regulatory T cell numbers that express the high affinity IL-2 receptor in the setting of inflammation.

We anticipate submitting an IND for a Phase 1 clinical trial with ANB033 during the second quarter of 2024.

Blood dendritic cell antigen 2 (“BDCA2”) is a molecule specifically expressed on plasmacytoid dendritic cells (pDCs), a class of immune cells which, while found in relatively small numbers in healthy patients, are enriched in patients with a variety of inflammatory diseases, that is critical to the regulation of toll-like receptor signaling and interferon secretion.

pDCs are a key upstream node in the inflammatory cascade that serve as a bridge between innate and adaptive immunity.

They have been shown to be prolific secretors of type I interferons, which drive activation of a variety of downstream cell types including T cells and monocytes.

Together with their ability to present antigens to the adaptive immune system, this creates a pro-inflammatory environment for the establishment and perpetuation of autoimmune pathology.

BDCA2 has been implicated in the pathophysiology of systemic lupus erythematosus (SLE), where there exists mechanistic clinical proof of concept for pDC modulation.

ANB101 is a BDCA2 modulator antibody that targets pDCs and potently inhibits interferon secretion and modulates antigen presentation for the treatment of autoimmune and inflammatory diseases.

We anticipate submitting an IND for a Phase 1 clinical trial with ANB101 during the second half of 2024.

Imsidolimab is an IgG4 antibody that inhibits the function of the interleukin-36-receptor, or IL-36R, that is being developed for the treatment of GPP.

In July 2020, the FDA granted Orphan Drug Designation for imsidolimab for the treatment of patients with GPP.

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 in October 2021.

We have initiated two Phase 3 trials for imsidolimab for GPP.

The first, called 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 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 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 3 years of monthly dosing.

Top-line data from an interim analysis of GEMINI-1 is anticipated in the fourth quarter of 2023.

We announced in August 2022 that we intend to complete execution of our Phase 3 program in GPP and outl-icense imsidolimab prior to potential FDA approval.

We initiated two Phase 3 clinical trials for imsidolimab in GPP.

We successfully completed the first randomized placebo-controlled trial, called GEMINI-1, in 45 patients, assessing two, single dose levels of IV-administered imsidolimab.

As of October 2023, of the patients who received a single dose of 750mg IV imsidolimab, 53.3% achieved Generalized Pustular Psoriasis Physician Global Assessment (GPPPGA) 0/1 (clear or almost clear) at Week 4, our primary endpoint, compared to 13.3% of patients on placebo (p=0.0131).

The GPPPGA assessment, representing a stringent and comprehensive characterization of disease severity, required satisfying an overall clinical response score of 0/1 (clear or almost clear) collectively across each GPP disease attribute, including pustulation, erythema and scaling.

Imsidolimab demonstrated favorable safety, tolerability, and immunogenicity with no elevation of infection risk compared to placebo, no serious adverse events, and only 1 of 30 patients treated with imsidolimab generating anti-drug antibodies over the course of the study.

Patients completing the GEMINI-1 trial were eligible to be subsequently enrolled in GEMINI-2, our second Phase 3 trial for imsidolimab in GPP, where they 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.

Additionally, 66.7% (10/15) of placebo patients exited GEMINI-1 early, crossed-over to GEMINI-2 and were eligible to receive rescue therapy with a single dose of 750mg IV imsidolimab.

The objective of GEMINI-2 is to assess the long-term safety of imsidolimab through 3 years of monthly dosing, as well as assess the efficacy of imsidolimab to reduce the incidence or severity of recurrent flares of GPP.

We intend to out-license imsidolimab in 2024.

Etokimab inhibits IL-33 function and acts upstream of key cell types involved in atopy and the subsequent release of Th2 cytokines.

IL-33 is a pro-inflammatory cytokine that signals through the ST2 receptor, which multiple studies suggest serves as a central mediator of various immune responses leading to Th2-type inflammatory disorders, including asthma, COPD and atopic diseases.

Individuals with asthma symptoms express higher levels of IL-33 than healthy control subjects.

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IL-33 also acts on Th2 effector cells and Innate Lymphoid Cell Type 2 (ILC2), two types of white blood cells that initiate and orchestrate atopic responses.

We have no ongoing clinical trials of etokimab and announced in January 2023 that etokimab is available to out-license.

We have no ongoing clinical trials of etokimab and etokimab is available to out-license.

Collaborative Programs

Multiple Company-discovered antibody programs have been advanced to preclinical and clinical milestones under our collaborations.

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A second FDA approval was received in August 2021 for Jemperli in pan-deficient mismatch repair tumors (PdMMRT).

JEMPERLI is currently in Phase 3 trials for various solid tumor indications, including first-line advanced/recurrent endometrial cancer and first-line ovarian cancer.

In addition, under the collaboration, GSK is developing dostarlimab in combination with two other development programs from the GSK Agreement:

cobolimab, an anti-TIM-3 antibody, and GSK40974386, an anti-LAG-3 antibody for multiple solid tumor indications.

GSK is conducting a Phase 3 trial, COSTAR Lung, which is a randomized, open label 3-arm

trial comparing cobolimab plus dostarlimab plus docetaxel to dostarlimab plus docetaxel to docetaxel alone in patients with advanced NSCLC who have progressed on prior anti-PD-(L)1 therapy and chemotherapy.

In June 2021, GSK estimated potential peak annual global JEMPERLI sales on a non-risk adjusted basis of £1-£2 billion for currently approved indications and first-line use in endometrial and ovarian cancer only.

In July 2023, the FDA approved Jemperli in combination with chemotherapy for the treatment of adult patients with mismatch repair deficient (dMMR)/microsatellite instability-high (MSI-H) primary advanced or recurrent endometrial cancer.

In December 2023, the EMA approved, in the EU, Jemperli plus chemotherapy for dMMR/MSI-H primary advanced or recurrent endometrial cancer.

Jemperli is in clinical trials for various solid tumor indications, including a Phase 3 trial in first-line ovarian cancer with top-line results expected in the first half of 2024.

In addition, under the collaboration, GSK is developing dostarlimab in combination with another development program from the GSK Agreement, including cobolimab, an anti-TIM-3 antibody.

GSK is conducting a Phase 3 trial, COSTAR Lung, which is a randomized, open label 3-arm trial comparing cobolimab plus dostarlimab plus docetaxel to dostarlimab plus docetaxel to docetaxel alone in patients with advanced non-small-cell lung cancer (“NSCLC”) who have progressed on prior anti-PD-(L)1 therapy and chemotherapy with top-line results expected in the second half of 2024.

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

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Collaboration and Exclusive License Agreement with GSK

In March 2014, we entered into a Collaboration and Exclusive License Agreement with GSK (the “GSK Agreement”) for the development and commercialization of therapeutic monospecific and bispecific antibodies that antagonize PD-1, TIM-3, LAG-3 and/or a fourth undisclosed checkpoint receptor.

We received $17.0 million in upfront fees from GSK in March 2014, and in November 2014, we amended the agreement with GSK to include the development and commercialization of bispecific antibodies to another undisclosed target, for an additional upfront fee of $2.0 million.

Both upfront fees were recognized over the same period that our research and development services for which we were reimbursed were performed, which was extended through December 31, 2016 by amendment of the GSK Agreement in February 2016.

For each of the 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 JEMPERLI where the royalties payable will be 8% to 25% as described below, on annualized net sales of each antibody commercialized from the collaboration.

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

Under the 2020 Amendment, we were granted increased royalties upon sales of JEMPERLI (dostarlimab), an anti-PD-1 antagonist antibody under development by GSK for multiple oncological disorders, 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 2020 Amendment also provided for a one-time non-refundable cash payment of $60.0 million that we received in the fourth quarter of 2020.

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

Additionally, under the terms of the 2020 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, 2022, we have recognized $215.8 million in total revenue from GSK.

In October 2021, we entered into the JEMPERLI Royalty Monetization Agreement (the “JEMPERLI Royalty Monetization Agreement”) with Sagard.

In March 2014, we entered into a Collaboration and Exclusive License Agreement with GSK (the “GSK Agreement”) with TESARO, Inc.

(“Tesaro”), an oncology-focused biopharmaceutical company now a part of GlaxoSmithKline (Tesaro and GlaxoSmithKline are hereinafter referred to, collectively, as “GSK”).

Currently, under the GSK Agreement, GSK is developing Jemperli (dostarlimab), an anti-PD-1 antagonist antibody, as a monotherapy for various solid tumor indications.

In addition, GSK is developing dostarlimab in combination with additional therapies under the collaboration, including with another development program from the GSK Agreement:

cobolimab, an anti-TIM-3 antibody, in 2L NSCLC.

In October 2023, Amendment No.

5 to the GSK Agreement was agreed by both parties to terminate the anti-LAG-3 antagonist antibody development program under the GSK Agreement.

In accordance with the GSK Agreement and the amendment, we have regained full global rights to the anti-LAG-3 antagonist antibody development program.

For each remaining development program under the GSK Agreement, we are eligible to receive milestone payments if certain clinical trial events are achieved by GSK, if certain U.S.

and European regulatory submissions and approvals in multiple indications are achieved, and upon the achievement of specified levels of annual worldwide net sales.

We will also be eligible to receive tiered 4-8% royalties related to worldwide net sales of products developed under the collaboration.

On October 23,

2020, Amendment No.

3 to the GSK Agreement (the “Amendment”) was agreed to by both parties to permit GSK to conduct development and commercialization in combination with any third-party molecules of Zejula, an oral, once-daily poly (ADP-ribose) polymerase (PARP) inhibitor.

Under the Amendment, we were granted increased royalties upon sales of Jemperli , 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.

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

Under the terms of the Jemperli 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 Jemperli Royalty Monetization Agreement are capped at certain fixed multiples of the upfront payment based on time.

For more information see 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.

The GSK Agreement, as amended, expires when no further payments are due to us, unless earlier terminated.

Either party may terminate the GSK Agreement, as amended, in the event of an uncured material breach by the other party.

GSK may terminate the GSK Agreement, as amended, at any time upon 90 days’ prior written notice to us.

Milestones under the GSK Agreement are as follows:

(JEMPERLI/Dostarlimab) Anti-TIM-3

(GSK4069889A/Cobolimab) Anti-LAG-3

(GSK40974386)

Milestone Event Amount Quarter Recognized Amount Quarter Recognized Amount Quarter Recognized

( Jemperli /Dostarlimab)

(GSK4069889A/Cobolimab)

Milestone Event 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

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

Phase 2 clinical trial initiation $3.0M Q2'17 $3.0M Q4'17 $3.0M Q4'19

Phase 3 clinical trial initiation - first indication $5.0M Q3'18 $5.0M Q4'22 $5.0M —

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

$1.0M Q2'15 $1.0M Q4'15

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

Phase 2 clinical trial initiation $3.0M Q2'17 $3.0M Q4'17

Phase 3 clinical trial initiation - first indication $5.0M Q3'18 $5.0M Q4'22

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

Filing of the first BLA (1) - first indication

$10.0M Q1'20 $10.0M — $10.0M —

$10.0M Q1'20 $10.0M —

Filing of the first MAA (2) - first indication

$5.0M Q1'20 $5.0M — $5.0M —

$5.0M Q1'20 $5.0M —

Filing of the first BLA - second indication

$10.0M Q1'21 $10.0M — $10.0M —

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

$10.0M Q1'21 $10.0M —

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

First MAA approval - first indication

$10.0M Q2'21 $10.0M — $10.0M —

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

$10.0M Q2'21 $10.0M —

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

Filing of the first MAA - second indication (3)

$5.0M — $5.0M — $5.0M —

$5.0M — $5.0M —

First MAA approval - second indication (3)

$10.0M — $10.0M — $10.0M —

$10.0M — $10.0M —

First commercial sales milestone (3)

$15.0M — $15.0M — $15.0M —

$15.0M — $15.0M —

Second commercial sales milestone (3)

$25.0M — $25.0M — $25.0M —

$25.0M — $25.0M —

Third commercial sales milestone (3)

$50.0M — $50.0M — $50.0M —

Fourth commercial sales milestone $75.0M — $75.0M — $75.0M —

Milestones recognized through December 31, 2022 $93.0M — $13.0M — $8.0M —

Milestones that may be recognized in the future $180.0M — $260.0M — $265.0M —

$50.0M — $50.0M —

Fourth commercial sales milestone $75.0M — $75.0M —

Milestones recognized through December 31, 2023 $93.0M — $13.0M —

Milestones that may be recognized in the future $180.0M — $260.0M —

(1) Biologics License Application (“BLA”)

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(3) For Jemperli , the filing and approval of the first MAA for a second indication and first three commercial sales milestones are included as part of the royalty monetization agreement with Sagard, see Note 5

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

Milestones achieved during fiscal 2017 were recognized as revenue in the period earned, while milestones after December 31, 2017 were recognized upon determination that a significant reversal of revenue would not be probable.

Cash is generally received within 30 days of milestone achievement.

In connection with the 2020 Amendment, in October 2020 GSK agreed, under the terms of a settlement agreement (the “GSK Settlement Agreement”), to pay us a royalty on all GSK net sales of Zejula starting January 1, 2021.

Zejula is an oral, once-daily poly (ADP-ribose) polymerase (PARP) inhibitor, which has received U.S.

and European 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, has been approved for certain other indications, and is under development for additional cancer indications as well.

and European 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, has been approved for certain other indications, and is under development for additional cancer indications as well.

Under the GSK Settlement Agreement, the royalty is paid at a rate of 1% but is subject to reduction due to royalties paid to third parties, with a minimum royalty payable under the GSK Settlement Agreement of 0.5% of global net sales of Zejula.

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In addition, under the Zejula Royalty Monetization Agreement, we are entitled to receive an additional $10.0 million payment from DRI if Zejula is approved by the FDA for the treatment of endometrial cancer on or prior to December 31, 2025.

Antibody Generation Agreement with Bristol-Myers Squibb

In December 2011, we entered into a license and collaboration agreement (the “BMS Agreement”) with Celgene, now a part of Bristol-Myers Squibb (Celgene and Bristol-Myers Squibb are hereinafter referred to, collectively, as “BMS”), to develop therapeutic antibodies against multiple targets.

We granted BMS the option to obtain worldwide commercial rights to

antibodies generated against each of the targets under the agreement, which option was triggered on a target-by-target basis by our delivery of antibodies meeting certain pre-specified parameters pertaining to each target under the agreement.

The BMS Agreement provided for an upfront payment of $6.0 million from BMS, which we received in 2011, and recognized through 2014, milestone payments of up to $53.0 million per target, low single-digit royalties on net sales of antibodies against each target, and reimbursement of specified research and development costs.

From inception of the agreement through December 31, 2022, we have recognized $10.0 million in total revenue from BMS.

There was no revenue recognized under this agreement during the years ended December 31, 2022 or 2021.

Revenue was last recognized under this agreement in 2016.

Research and Development Expense

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• License and sub-license fees.

We may also incur in-process research and development expense as we acquire assets from other parties.

Acquired in-process research and development costs that have no alternative future use are immediately expensed.

We expense research and development costs as incurred.

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Net Operating Loss and Research and Development Tax Credit Carryforwards

and our Zejula Royalty Monetization Agreement and the requirement to capitalize and amortize R&D expenditure for tax purposes in 2022.

Since inception, we have accumulated net operating losses (“NOLs”) in all years except December 31, 2022, 2015 and 2014, in which we generated taxable income primarily attributable to our collaboration agreement with GSK in 2014 and 2015, and our Zejula Royalty Monetization Agreement and the requirement to capitalize and amortize R&D expenditure for tax purposes in 2022.

While we utilized NOLs in 2022, 2015 and 2014, we continue to incur 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.

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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.

As of December 31, 2022, we had federal and California research tax credit carryforwards of approximately $6.1 million and $12.2 million, respectively.

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

As of December 31, 2023, we had federal and state research tax credit carryforwards of approximately $12.1 million and $14.4 million, respectively.

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

The above NOL carryforward and the federal and state research tax credit carryforwards may be subject to an annual limitation under section 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions if we experience one or more ownership changes which would limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively.

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Revenue Recognition

Revenue is recognized in accordance with revenue recognition accounting guidance, which utilizes five basic steps to determine whether revenue can be recognized and to what extent:

Revenue is recognized in accordance with ASC 606, which utilizes five basic steps to determine whether revenue can be recognized and to what extent:

(i) identify the contract with a customer;

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Performance Obligations.

We evaluate deliverables on a contract-by-contract basis to determine whether each deliverable represents a good or service that is distinct or has the same pattern of transfer as other deliverables.

A deliverable is considered distinct if the customer can benefit from the good or service independently of other goods/services either in the contract or that can be obtained elsewhere, without regard to contract exclusivity, and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contact.

If the deliverable is not considered distinct, we combine such deliverables and account for them as a single performance obligation.

We allocate the consideration to each deliverable at the inception of the arrangement based on the transaction price.

We evaluate promised goods or services on a contract-by-contract basis to determine whether each deliverable represents a good or service that is distinct or has the same pattern of transfer as other deliverables.

A promised good or service is considered distinct if the customer can benefit from the good or service independently of other goods/services either in the contract or that can be obtained elsewhere, without regard to contract exclusivity, and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contact.

If the promised good or service is not considered distinct, we combine such deliverables and account for them as a single performance obligation.

We allocate the consideration to each performance obligation at the inception of the arrangement based on the transaction price.

Our performance obligations may include the following:

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For our collaboration agreements, this is generally over the period in which research and development services have been performed.

There were no new agreements with performance obligations entered into during the year ended December 31, 2023.

Transaction Price.

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Sale of Future Royalties

We treated the sale of future revenue from the JEMPERLI Royalty Monetization Agreement with Sagard and the Zejula Royalty Monetization Agreement with DRI LLP as a liability related to the sale of future royalties on the balance sheet.

The recorded the upfront proceeds, net of transaction costs, will be amortized under the effective interest rate method over the estimated life of the related expected royalty stream.

We treated the sale of future revenue from the Jemperli Royalty Monetization Agreement with Sagard and the Zejula Royalty Monetization Agreement with DRI as a liability related to the sale of future royalties on the balance sheet.

The recorded upfront proceeds, net of transaction costs, will be amortized under the effective interest rate method over the estimated life of the related expected royalty stream.

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.

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$ 17,157 $ 10,287 $ 6,870

Collaboration revenue during the year ended December 31, 2022 decreased $52.9 million compared to the year ended December 31, 2021 primarily due to one milestone earned and recognized in 2022 as compared to four milestones earned and recognized in 2021, partially offset by an increase of $2.1 million in royalty revenue.

Collaboration revenue during the year ended December 31, 2023 increased $6.9 million compared to the year ended December 31, 2022 primarily due to an increase of $11.9 million in royalty revenue, partially offset by one milestone for $5.0 million earned and recognized in 2022.

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 $88.8 million during the year ended December 31, 2022 compared to $98.5 million during the year ended December 31, 2021, for a decrease of approximately $9.7 million.

The decrease is primarily attributable to a $6.8 million decrease in outside services for preclinical and manufacturing expenses, a $4.7 million decrease in clinical expenses, partially offset by a $1.7 million increase in salaries and related expenses, including stock compensation expense, and a $0.1 million increase in other research and development expenses.

Research and development expenses were $132.3 million during the year ended December 31, 2023 compared to $88.8 million during the year ended December 31, 2022, for an increase of approximately $43.5 million.

The increase is primarily attributable to a $22.6 million increase in outside services for manufacturing expenses, a $11.4 million increase in clinical expenses, a $7.5 million increase in personnel costs, including $3.4 million in stock compensation expense, and a $2.0 million increase in other research and development expenses.

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

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External Costs

Imsidolimab $ 38,812 $ 50,095 $ (11,283)

Rosnilimab $ 25,010 $ 7,794 $ 17,216

ANB032 17,197 3,866 13,331

Etokimab 409 (1,681) 2,090

ANB033 11,520 1,706 9,814

Imsidolimab 31,769 38,812 (7,043)

Preclinical and other unallocated costs 14,526 11,838 2,688

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General and administrative expenses were $41.9 million during the year ended December 31, 2023 compared to $36.6 million during the year ended December 31, 2022, for an increase of approximately $5.3 million.

The increase is primarily due to a $13.5 million increase in personnel costs, including $11.1 million in stock compensation expense, a $0.9 million increase in market research cost, and a $0.8 million increase in other general and administrative expense, partially offset by a $0.1 million decrease in insurance and legal expense.

The increase is primarily due to a $4.3 million increase in personnel costs, including $2.5 million in stock compensation expense, a $0.4 million increase in legal cost, a $0.3 million increase in market research cost, and a $0.7 million increase in other general and administrative expense, partially offset by a $0.4 million decrease in insurance expense.

We expect that our general and administrative expenses will increase for the foreseeable future as we incur costs associated with being a publicly traded company, including stock compensation expense, 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.

Acquired in-process research and development

Acquired in-process research and development expenses were $7.3 million for the year ended December 31, 2023, due to the assets purchased pursuant to the Centessa Agreement.

For more information see Note 4 — Collaborative Research and Development Agreements 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.

Non-cash Interest Expense for the Sale of Future Royalties

Interest expense was $18.1 million during the year ended December 31, 2023 compared to $21.1 million during the year ended December 31, 2022.

The increase in interest expense during the period is directly related to the non-cash interest expense accrued on the liability related to the sale of future royalties, of which we had a full year of expense during 2022 as compared to one month of expense during 2021.

We also had an additional sale of future royalties in 2022 compared to 2021.

The decrease of $3.0 million in non-cash interest expense is due to a change in the expected timing for Sagard to be paid per the Jemperli Royalty Monetization Agreement, partially offset by $0.9 million in interest recognized on the liability related to Zejula Royalty Monetization Agreement that was completed in September 2022.

Interest Income

Interest income was $18.9 million during the year ended December 31, 2023 compared to $7.6 million during the year ended December 31, 2022.

The increase in interest income was primarily related to our short-term and long-term investments, the balance of which increased during the periods.

The increase in interest income is also attributable to higher interest rates during the year ended December 31, 2022.

The increase of $11.3 million in interest income was primarily related to our short-term and long-term investments.

The increase in interest income is due to higher interest rates during the year ended December 31, 2023.

Liquidity and Capital Resources

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We treated the sale of future revenue from the Jemperli 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

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

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.

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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.

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.

This agreement was terminated effective November 8, 2022.

In November 2022, we entered into the Cowen Sales Agreement with Cowen and Company, LLC, through which we may offer and sell shares of our common stock, having an aggregate offering of up to $150.0 million through Cowen and Company, LLC as our sales agent.

In November 2022, we entered into a Sales Agreement (the “Cowen Sales Agreement”) with Cowen and Company, LLC (“Cowen”), through which we may offer and sell shares of our common stock, having an aggregate offering of up to $150.0 million through Cowen as our sales agent.

As of December 31, 2023, we had sold no shares under this agreement.

Funding Requirements

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Under such agreements, we are contractually obligated to make certain minimum payments to the vendors with the amounts to be based on the timing of the termination and the specific terms of the agreement.

Additionally, on January 13, 2023, our board of directors authorized a stock repurchase program, whereby we may purchase up to $50.0 million in shares of our common stock, or the Repurchase Program.

The Repurchase Program may be carried out at the discretion of our board of directors through open market purchases, one or more Rule 10b5-1 trading plans, or other means in accordance with Rule 10b5-1 of the Exchange Act and Rule 10b-18 of the Exchange Act.

The Repurchase Program may be suspended, modified or discontinued at any time, and we have no obligation to repurchase any amount of our common stock under the Repurchase Program.

Cash, cash equivalents and investments totaled $417.9 million as of December 31, 2023, compared to $584.2 million as of December 31, 2022.

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

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.

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Financing activities (59,297) 44,017

Net (decrease) increase in cash and cash equivalents

Net decrease in cash and cash equivalents

$ (35,343) $ (424,421)

Operating Activities

Net cash used in operating activities during the year ended December 31, 2022 was $73.6 million, primarily due to our net loss of $128.7 million, adjusted for addbacks for non-cash items of $46.8 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 increases in working capital of $8.3 million.

Net cash used in operating activities during the year ended December 31, 2021 was $45.9 million, 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, 2023 was $120.8 million, primarily due to our net loss of $163.6 million, adjusted for addbacks for non-cash items of $43.1 million which includes stock-based compensation, amortization of operating right-of-use assets, non-cash interest expense, and income from marketable securities and increases in working capital of $0.2 million.

Net cash used in operating activities during the year ended December 31, 2022 was $73.6 million, primarily due to our net loss of $128.7 million, adjusted for addbacks for non-cash items of $48.3 million which includes stock-based compensation, amortization of operating right-of-use assets, non-cash interest expense, and income from marketable securities and increases in working capital of $6.8 million.

Investing Activities

Cash used in investing activities during the year ended December 31, 2022 was $394.8 million, primarily due to the sale and maturities of investments of $408.0 million, offset by the acquisition of investments of $802.5 million and the purchases of property and equipment of approximately $0.3 million.

Cash provided by investing activities during the year ended December 31, 2021 was $38.8 million, 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 $1.3 million.

Cash provided by investing activities during the year ended December 31, 2023 was $144.8 million, primarily due to the sale and maturities of investments of $449.5 million, offset by the acquisition of investments of $303.9 million and the purchases of property and equipment of approximately $0.8 million.

Financing Activities

Cash provided by financing activities during the year ended December 31, 2022 was $44.0 million, primarily related to $35.0 million received for the sale of future royalties, $11.8 million proceeds received from the issuance of common stock, offset by $2.5 million for repayments of the liability for the sale of future royalties and $0.3 million for payments of issuance costs related to the sale of future royalties.

Cash provided by financing activities during the year ended December 31, 2021 was $252.3 million, 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, offset by $0.3 million for payments of issuance costs related to the sale of future royalties.

Cash used in financing activities during the year ended December 31, 2023 was $59.3 million, primarily related to $50.0 million paid for repurchases and retirements of common stock, $11.8 million for repayments of the liability for the sale of future royalties and debt issuance costs, offset by $2.5 million proceeds received from the issuance of common stock.

Cash provided by financing activities during the year ended December 31, 2022 was $44.0 million, primarily related to $35.0 million received for the sale of future royalties, and $11.8 million proceeds received from the issuance of common stock, offset by $2.5 million for repayments of the liability for the sale of future royalties and $0.3 million for payments of issuance costs related to the sale of future royalties.

Contractual Obligations

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The amount of the cancellation or termination payments vary and are based on the timing of the cancellation or termination and the specific terms of the agreement and therefore are cancellable contracts.

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.

For further information related to our operating lease, 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.

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