What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-02-27 compared with 2024-03-11 · 220 added, 142 removed, 781 unchanged (32% of the section changed)

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When billing terms under these contracts do not coincide with the timing of when the work is performed, the Company makes estimates of the costs incurred by third parties during the period and the outstanding obligations to those third parties as of period end.

Estimates of costs incurred during the period that are included in period-end prepaid or accrued expense balances are based on a number of factors, including the Company’s knowledge of the research and development programs and clinical manufacturing activities associated with project status and milestones, invoicing to date, and the provisions in the contract.

Estimates of costs incurred during the period that are included in period-end prepaid or accrued expense balances are based on a number of factors, including the review of open contracts and purchase orders, communicating with personnel and service providers to identify services that have been performed on the Company’s behalf and estimating the level of service performed and the associated costs incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost.

Significant judgments and estimates are made by the Company in determining the costs incurred during the period that are included in prepaid or accrued expense balances at the end of each reporting period.

We identified the evaluation of research and development costs as a critical audit matter.

These estimates are based on certain assumptions and inputs that were challenging to assess, including the Company’s knowledge of the status of research and development programs and associated completion status, project milestones achieved, raw materials used in manufacturing,

and, for larger clinical trials, per patient costs, patient enrollment status, project costs, and site costs.

Significant auditor judgment, subjectivity, and effort were required to evaluate the assumptions and inputs to these estimates.

Subjective auditor judgment was involved in evaluating the nature and extent of evidence available in evaluating certain assumptions and inputs that were used in

estimating the degree of completion of research and development programs when the Company has not yet been invoiced or otherwise notified of the actual cost.

The following are the primary procedures we performed to address this critical audit matter.

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San Diego, California

March 11, 2024

February 27, 2025

AnaptysBio, Inc.

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Additional paid in capital 829,860 702,969

Accumulated other comprehensive loss ( 797 ) ( 5,246 )

Accumulated other comprehensive gain (loss) 305 ( 797 )

Accumulated deficit ( 759,327 ) ( 614,096 )

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( 114,949 ) ( 164,411 ) ( 115,154 )

Other income (expense), net:

Other (expense) income, net:

Interest income

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Non-cash interest expense for the sale of future royalties ( 50,087 ) ( 18,083 ) ( 21,108 )

Other (expense) income, net

Total other income (expense), net

788 ( 13,546 ) ( 982 )

Other income (expense), net 14 ( 2 ) 12

Total other (expense) income, net ( 30,279 ) 788 ( 13,546 )

Loss before income taxes ( 145,228 ) ( 163,623 ) ( 128,700 )

Benefit (Provision) for income taxes 4 ( 24 ) —

(Provision) Benefit for income taxes ( 3 ) 4 ( 24 )

( 145,231 ) ( 163,619 ) ( 128,724 )

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Common Stock Additional

Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated

Paid-in Capital Accumulated Other Comprehensive Gain (Loss) Accumulated

Deficit Total

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Issuance of common stock from exercises of options and employee stock purchase plan 139 — 2,421 — — 2,421

Issuance of common stock upon vesting of restricted stock units 69 — — — — —

Repurchases and retirements of common stock ( 2,124 ) ( 2 ) ( 50,454 ) ( 50,456 )

Stock-based compensation

— — 33,205 — — 33,205

Comprehensive loss — — — ( 4,824 ) — ( 4,824 )

Comprehensive income — — — 4,449 — 4,449

Net loss — — — — ( 163,619 ) ( 163,619 )

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Issuance of common stock upon vesting of restricted stock units 1,108 — — — — —

Repurchases and retirements of common stock ( 2,124 ) ( 2 ) ( 50,454 ) ( 50,456 )

Net share settlement of restricted stock units ( 347 ) — ( 7,504 ) — ( 7,504 )

Issuance of common stock, net of $ 6,516 of transaction costs

2,751 3 93,874 — — 93,877

Stock-based compensation

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1,791 1,724 1,660

Non-cash interest expense

18,083 21,108 1,450

Gain on disposal of property and equipment — — ( 15 )

Non-cash interest expense for sale of future royalties 50,087 18,083 21,108

Changes in operating assets and liabilities:

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Sales and maturities of investments 476,132 449,480 408,016

Proceeds from the sale of property and equipment — — 15

Purchases of property and equipment ( 358 ) ( 807 ) ( 358 )

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CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from public offerings, net of underwriters' fees 94,369 — —

Proceeds from issuance of common stock 6,473 2,472 11,827

Proceeds from the sale of future royalties 50,000 — 35,000

Repayment of liability for sale of future royalties ( 11,726 ) ( 2,474 ) —

Principal repayment of liability for sale of future royalties ( 15,233 ) ( 11,726 ) ( 2,474 )

Payments for repurchase of common stock ( 456 ) ( 50,000 ) —

Payment for net share settlement of equity awards ( 7,504 ) — —

Payments for offering costs, net ( 492 ) — —

Payments for issuance costs related to the sale of future royalties ( 103 ) ( 43 ) ( 336 )

Net cash (used in) provided by financing activities

( 59,297 ) 44,017 252,298

Net (decrease) increase in cash, cash equivalents, and restricted cash

( 35,343 ) ( 424,421 ) 245,213

Cash, cash equivalents and restricted cash, beginning of period 71,308 495,729 250,516

Cash, cash equivalents and restricted cash, end of period $ 35,965 $ 71,308 $ 495,729

Net cash provided by (used in) financing activities 127,054 ( 59,297 ) 44,017

Net increase (decrease) in cash and cash equivalents 87,115 ( 35,343 ) ( 424,421 )

Cash and cash equivalents, beginning of period 35,965 71,308 495,729

Cash and cash equivalents, end of period $ 123,080 $ 35,965 $ 71,308

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Interest portion of repayment for sale of future royalties $ 42,132 $ — $ —

Non-cash investing and financing activities:

Leased assets obtained in exchange for operating lease liabilities $ — $ — $ 20,685

Amounts accrued for property and equipment

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Amounts accrued for issuance costs related to the sale of future royalties

$ — $ 80 $ 102

Amounts accrued for repurchase of common stock

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(“we,” “us,” “our,” or the “Company”) was incorporated in the state of Delaware in November 2005.

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 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 are a clinical-stage biotechnology company focused on delivering innovative immunology therapeutics for autoimmune and inflammatory diseases.

Our pipeline includes our lead program, rosnilimab, a depleter and agonist targeting PD-1+ T cells, 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”).

We also have other antibodies in our portfolio, including ANB033, a CD122 antagonist in a Phase 1 trial and ANB101, a BDCA2 modulator, entering a Phase 1 trial.

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

(“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).

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

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

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If events or circumstances occur such that we do not obtain additional funding, we will most likely be required to reduce our plans and/or certain discretionary spending, which could have a material adverse effect on our ability to achieve our intended business objectives.

AnaptysBio management believes our currently available resources will provide sufficient funds to enable us to meet our operating plans for at least the next twelve months from the issuance of our consolidated financial statements.

Our management believes our currently available resources will provide sufficient funds to enable us to meet our operating plans for at least the next 12 months from the issuance of our consolidated financial statements.

The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Public Offerings

On August 15, 2024, we completed an underwritten public offering selling 2,750,498 shares of common stock, at an offering price of $ 36.50 per share.

The aggregate net proceeds received by us from the offering were $ 93.9 million, net of underwriting discounts and commissions and offering expenses of $ 6.5 million, in the aggregate.

Summary of Significant Accounting Policies

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Long Lived Assets

Long-lived assets, consisting of property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable based on undiscounted cash flows.

If long-lived assets are impaired, an impairment loss is recognized and is measured as the amount by which the carrying value exceeds the estimated fair value of the assets.

Long-lived assets, consisting of property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

If circumstances require a long-lived asset or asset group to be tested for possible impairment, we first compare undiscounted cash flows expected to be generated by the asset or asset group to its carrying amount.

If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment loss is recognized and is measured as the amount by which the carrying value exceeds the estimated fair value of the assets.

No impairment charges were recorded during the years ended December 31, 2024, 2023, or 2022.

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When an operating lease includes lease incentives such as leasehold improvement allowances, the lease incentive is included in ROU asset.

For leases that have greater than a 12-month lease term, the ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term.

For leases that have greater than a 12-month lease term, the ROU assets and lease liabilities are recognized based on the present value of the future minimum unpaid lease payments over the lease term.

For this purpose, we consider only payments that are fixed and determinable at the time of commencement.

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We treat the liability related to the sale of future royalties as debt, amortized under the effective interest rate method over the estimated life of the Jemperli Royalty Monetization Agreement and the Zejula Royalty Monetization Agreement.

The amortization of the liability related to the sale of future revenue is based on our current estimates of future royalty

The amortization of the liability related to the sale of future revenue is based on our current estimates of future royalty payments.

Royalty and milestone revenue will be recognized as earned and the payments made will be recorded as a reduction of the liability when paid.

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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 allocate the consideration to each deliverable at the inception of the arrangement based on the stand alone selling price.

Our performance obligations may include the following:

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Research and development services are updated for actual invoices.

Given the nature of our agreements, milestones are estimated using the most likely amount and are evaluated on a quarterly basis.

Given the nature of our agreements, milestones are estimated using the

most likely amount and are evaluated on a quarterly basis.

Upon commercialization, royalty payments will be recognized in the period incurred.

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The significant estimates in our accrued research and development expenses include the costs incurred for services performed by our vendors in connection with research and development activities for which we have not yet been invoiced.

Upfront and milestone payments incurred under our in-licensing agreements are expensed as acquired in-process research and development in the period in which they are incurred, provided that the technology or method has no alternative future use.

Upfront and milestone payments incurred under our in-licensing agreements are expensed as research and development in the period in which they are incurred, provided that the technology or method has no alternative future use.

Acquired In-process Research and Development

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We measure compensation expense over the expected vesting period on a straight-line basis.

Each Performance Stock Unit (“PSU”) represents one equivalent share of our common stock to be issued after achievement of the performance metrics specified in the grant.

The fair value of our PSUs is estimated as of the grant date, based upon the expected achievement of the performance metrics specified in the grant and the closing market price of our common stock on the date of grant.

The grant date fair value is estimated using a Monte Carlo simulation.

The compensation expense for the awards is recognized over the requisite service period regardless of whether the market conditions are achieved and will only be adjusted for pre-vesting forfeitures due to the termination of the recipient’s employment with the Company prior to the expiration of the requisite service period.

No tax benefits for stock-based compensation have been recognized in the statements of changes in stockholders’ equity or cash flows.

We have not recognized, and do not expect to recognize in the near future, any tax benefit related to stock-based compensation cost as a result of our full valuation allowance on net deferred tax assets and net operating loss carryforwards.

Segment Reporting

ASC Topic 280, Segment Reporting, establishes standards for companies to report financial statement information about operating segments.

Operating segments are defined as components of an enterprise engaging in business activities for which separate financial information is available that is regularly evaluated by the company’s chief operating decision-makers in deciding how to allocate resources and assess performance.

Our chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer, who reviews results at a consolidated level only.

Therefore, we determined we operate as one reportable segment focused on research and development activities to deliver immunology therapeutics for autoimmune and inflammatory diseases.

We account for income taxes under the asset and liability method.

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Options to purchase common stock 6,076 4,279 3,602

Restricted stock units 521 375 —

6,916 4,800 3,977

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Unless otherwise discussed, we believe the impact of any recently issued pronouncements, not yet effective will not have a material impact on our consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires enhanced disclosure of significant segment expenses on an annual and interim basis.

The guidance will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning December 15, 2024, with early adoption permitted.

Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements.

We are currently assessing the impact that this standard will have on our consolidated financial statements.

Improvements to Reportable Segment Disclosures , which requires enhanced disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss on an annual and interim basis and should be applied retrospectively to all prior periods presented in the financial statements.

We adopted this standard retrospectively on December 31, 2024.

For the purpose of the adoption of ASU 2023-07, we performed an evaluation of financial information regularly reviewed by the CODM for purposes of evaluating performance and allocating resources.

Financial information provided to and used by the CODM is consistent with our consolidated GAAP financial statements including our Consolidated Statements of Operations, see Note 11.

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

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We are currently assessing the impact that this standard will have on our consolidated financial statements.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement .

The new disclosure requirements are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

We are currently evaluating the provisions of this guidance and assessing the potential impact on our financial statement disclosures.

Balance Sheet Accounts and Supplemental Disclosures

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Accrued compensation and related expenses $ 8,449 $ 7,201

Accrued professional fees 1,168 607

Accrued professional fees and other expenses

Accrued research, development and manufacturing expenses

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Accrued for repurchase of common stock

Other 244 296

Total accrued expenses

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Collaborative Research and Development Agreements

GlaxoSmithKline Collaboration

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.

GSK Collaboration

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

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

Currently, under the GSK Agreement, GSK is developing Jemperli (dostarlimab) 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.

cobolimab, a 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 preclinical and clinical trial events are achieved by GSK, if certain U.S.

5 to the GSK Agreement (the “GSK Amendment No.

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

In accordance with the GSK Agreement and the GSK Amendment No.

5, we have regained full global rights to the 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.

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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.

3 to the GSK Agreement (the “GSK Amendment No.

3”) 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 (“Zejula”).

Under GSK Amendment No.

3, 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, 12 % of Net Sales between $ 1.0 billion and $ 1.5 billion, 20 % of Net Sales between $ 1.5 billion and $ 2.5 billion and 25 % of Net Sales above $ 2.5 billion.

Unless earlier terminated by either party upon specified circumstances, the GSK Agreement will terminate, with respect to each specific developed product, upon the later of the 12 th anniversary of the first commercial sale of the product or the expiration of the last to expire of any patent.

We assessed these arrangements in accordance with ASC 606 and concluded that the contract counterparty, GSK, is a customer.

We assessed these arrangements in accordance with Accounting Standards Codification 606 and concluded that the contract counterparty, GSK, is a customer.

We identified the following material promises under the GSK Agreement:

(1) the licenses under certain patent rights and transfer of certain development and regulatory information, (2) research and development (“R&D”) services, and (3) joint steering committee meetings.

We considered the research and discovery capabilities of GSK for these specific programs and the fact that the discovery and optimization of these antibodies is proprietary and could not, at the time of contract inception, be provided by other vendors, to conclude that the license does not have stand-alone functionality and is therefore not distinct.

have stand-alone functionality and is therefore not distinct.

Additionally, we determined that the joint steering committee participation would not have been provided without the R&D services and GSK Agreement.

Based on these assessments, we identified all services to be interrelated and therefore concluded that the promises should be combined into a single performance obligation at the inception of the arrangement.

As of December 31, 2023, the transaction price for the GSK Agreement and Amendments includes the upfront payment, research reimbursement revenue and milestones and royalties earned to date, which are allocated in their entirety to the single performance obligation.

As of December 31, 2024, the transaction price for the GSK Agreement and its associated amendments includes the upfront payment, research reimbursement revenue and milestones and royalties earned to date, which are allocated in their entirety to the single performance obligation.

We recognized $ 51.3 million in royalty revenue during the year ended December 31, 2024 related to GSK’s net sales of Jemperli and Zejula during the period, which we estimate based on either GSK’s prior sales experience or actuals.

Of the royalty revenue recognized during the year ended December 31, 2023, $ 13.8 million is Jemperli non-cash revenue related to the Jemperli Royalty Monetization Agreement, $ 3.4 million is Zejula non-cash revenue related to the Zejula Monetization Agreement, each of such agreements as described in Note 5.

Of the royalty revenue recognized during the year ended December 31, 2024, $ 47.4 million is Jemperli non-cash revenue related to the Jemperli Royalty Monetization Agreement (as amended), and $ 3.9 million is Zejula non-cash revenue related to the Zejula Monetization Agreement, each of such agreements as described in Note 5.

We recognized $ 17.2 million in royalty revenue during the year ended December 31, 2023, related to GSK’s net sales of Jemperli and Zejula during the period based on GSK’s prior sales experience or actuals.

Of the royalty revenue recognized during the year ended December 31, 2022, $ 2.3 million is Jemperli non-cash revenue related to the Jemperli Royalty Monetization Agreement, $ 1.6 million is Zejula revenue prior to the Zejula Royalty Monetization Agreement and $ 1.4 million is Zejula non-cash revenue related to the Zejula Royalty Monetization Agreement.

Of the royalty revenue recognized during the year ended December 31, 2023, $ 13.8 million is Jemperli non-cash revenue related to the Jemperli Royalty Monetization Agreement (as amended) and $ 3.4 million is Zejula non-cash revenue related to the Zejula Royalty Monetization Agreement.

We recognized $ 5.3 million in royalty revenue during the year ended December 31, 2022.

Of the royalty revenue recognized during the year ended December 31, 2022, $ 2.3 million is Jemperli non-cash revenue related to the Jemperli Royalty Monetization Agreement (as amended), $ 1.6 million is Zejula revenue prior to the to the Zejula Royalty Monetization Agreement and $ 1.4 million is Zejula non-cash revenue related to the Zejula Royalty Monetization Agreement.

GSK reports sales information to us on a one quarter lag and differences between actual and estimated royalty revenues will be adjusted in the following quarter.

All royalty revenue related to Zejula global net sales starting July 2022, will be paid directly to a wholly-owned subsidiary of DRI Healthcare Trust pursuant to the Zejula Royalty Monetization Agreement, as described in Note 5.

No clinical milestones were recognized during the year ended December 31, 2023 and we recognized one clinical milestone for $ 5.0 million during the year ended December 31, 2022.

Two sales milestones, for a total of $ 40.0 million, were recognized during the year ended December 31, 2024 when Jemperli annual sales exceeded both the $ 250.0 million and $ 500.0 million sales thresholds.

These sales milestones are Jemperli non-cash revenue related to the Jemperli Royalty Monetization Agreement (as amended).

No milestones were recognized during the year ended December 31, 2023, and we recognized one clinical milestone for $ 5.0 million during the year ended December 31, 2022.

No other future clinical or regulatory milestones have been included in the transaction price, as all milestone amounts were subject to the revenue constraint.

As part of the constraint evaluation, we considered numerous factors including the fact that the receipt of milestones is outside of our control and contingent upon success in future clinical trials, an outcome that is difficult to predict, and GSK’s efforts.

Any consideration related to sales-based milestones, including royalties, will be recognized when the related sales occur as they were determined to relate predominantly to the intellectual property license granted to GSK and therefore have also been excluded from the

transaction price.

We will re-evaluate the variable transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

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( Jemperli /Dostarlimab)

(GSK4069889A/Cobolimab)

(GSK4069889/Cobolimab)

Milestone Event Amount Quarter Recognized Amount Quarter Recognized

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First commercial sales milestone (3)

$ 15.0 M — $ 15.0 M —

$ 15.0 M Q3'24 $ 15.0 M —

Second commercial sales milestone (3)

$ 25.0 M — $ 25.0 M —

$ 25.0 M Q4'24 $ 25.0 M —

Third commercial sales milestone (3)

$ 50.0 M — $ 50.0 M —

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

Fourth commercial sales milestone (4)

$ 75.0 M — $ 75.0 M —

Milestones recognized through December 31, 2024 $ 133.0 M — $ 13.0 M —

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(2) Marketing Authorization Application (“MAA”)

(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.

Cash is generally received within 30 days of milestone achievement.

We recognized $ 17.2 million in revenue under the GSK Agreement during the year ended December 31, 2023, of which $ 17.2 million was related to royalty revenue and none was related to milestone revenue, as there were no milestones earned during the year.

(4) For Jemperli , we retained the rights to a $ 75.0 million sales milestone when Jemperli annual Net Sales exceed $ 1 billion.

We recognized $ 91.3 million in revenue under the GSK Agreement during the year ended December 31, 2024, of which $ 51.3 million was related to royalty revenue and $ 40.0 million was related to milestone revenue, as there were two milestones earned during the year.

We recognized $ 17.2 million in revenue during the year ended December 31, 2023, of which $ 17.2 million was related to royalty revenue and none was related to milestone revenue, as there were no milestones earned during the year.

We recognized $ 10.3 million in revenue during the year ended December 31, 2022, of which $ 5.3 million was related to royalty revenue and $ 5.0 million was related to one milestone.

We recognized $ 63.2 million in revenue during the year ended December 31, 2021, of which $ 60.0 million was related to four milestones and $ 3.2 million was related to royalty revenue.

On November 24, 2023, we entered into an exclusive license agreement (the “Centessa Agreement”) with Centessa Pharmaceuticals (UK) Limited (“Centessa”), pursuant to which we acquired the exclusive global development and commercialization rights to a blood dendritic cell antigen 2 (BDCA2) modulator antibody portfolio, including lead asset CBS004 (renamed ANB101), CBS008 (renamed ANB102) and the related family of backup antibodies, for the treatment of autoimmune and inflammatory diseases.

On November 24, 2023, we entered into an exclusive license agreement (as amended, the “Centessa Agreement”) with Centessa Pharmaceuticals (UK) Limited (“Centessa”), pursuant to which we acquired the exclusive global development and commercialization rights to a blood dendritic cell antigen 2 (BDCA2) modulator antibody portfolio, including lead asset CBS004 (renamed ANB101), CBS008 (renamed ANB102) and the related family of backup antibodies, for the treatment of autoimmune and inflammatory diseases.

In connection with the Centessa Agreement, we paid Centessa an upfront cash payment of $ 4.0 million and an additional cash payment of $ 3.0 million as reimbursement to Centessa for manufacturing costs incurred.

There were $ 0.3 million in transaction costs incurred.

The total transaction amount of $ 7.3 million was expensed as in-process research and development in December 2023, and the $ 7.0 million in payments made as of December 31, 2023 were classified as an operating activity in

the statement of cash flows.

The total transaction amount of $ 7.3 million was expensed as in-process research and development and classified as an operating activity in the statement of cash flows.

We accounted for the transaction as an asset acquisition as the set of acquired assets did not constitute a business.

Under the term of the agreement, Centessa may be entitled to receive potential future payments of up to $ 10.0 million upon the achievement of a certain event-based milestone and would be entitled to receive on a product-by-product and country-by-country basis, a royalty of low single digits on annual net sales of any product in the territory in each calendar year.

As of December 31, 2023, achievement of the milestone is not probable and, therefore, we have not recognized a liability for the associated $ 10.0 million contingent consideration.

Under the terms of the agreement, Centessa may be entitled to receive potential future payments of up to $ 10.0 million upon the achievement of a certain event-based milestone and would be entitled to receive on a product-by-product and country-by-country basis, a royalty of low single digits on annual net sales of any product in the territory in each calendar year.

December 31, 2024, achievement of the milestone is not probable and, therefore, we have not recognized a liability for the associated $ 10.0 million contingent consideration.

Sale of Future Royalties

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In October 2021, we signed a royalty monetization agreement (“ 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 in exchange for royalties and milestones payable to us under our GSK collaboration on annual global net sales of Jemperli below $ 1.0 billion starting in October 2021 (not including any combination products that contain both Jemperli and another Development Antibody).

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

Once Sagard receives an aggregate amount of either $ 312.5 million ( 125 % of the upfront) by the end of 2026, or $ 337.5 million ( 135 % of the upfront) during 2027, or $ 412.5 million ( 165 % of the upfront) at any time after 2027, the Jemperli Royalty Monetization Agreement will expire resulting in us regaining all subsequent Jemperli royalties and milestones.

In May 2024, we entered into an amendment to the Jemperli Royalty Monetization Agreement, Amendment No.

1 (the “ Jemperli Amendment”) under which we sold additional receivables to Sagard in exchange for $ 50.0 million.

The Jemperli Amendment includes all Jemperli sales, including any product containing Jemperli , whether or not such product constitutes a combination product, and the threshold amounts of aggregate Jemperli royalties and milestones to be received by Sagard under the Jemperli Amendment is either $ 600.0 million if received by the end of March 31, 2031, or $ 675.0 million if received thereafter.

Once either of these thresholds are met, the Jemperli Royalty Monetization Agreement and the Jemperli Amendment will expire, resulting in us regaining all subsequent Jemperli royalties and milestones.

As of December 31, 2024, Sagard has received a total of $ 63.8 million in royalties and milestones.

The Jemperli Royalty Monetization Agreement includes a call option pursuant to which at any time after December 1, 2024, we may reacquire our interest in the specified royalties by paying Sagard (in cash) a specified amount as described in the Jemperli Royalty Monetization Agreement.

The exercise of this call option is at our sole discretion, which we currently do not anticipate exercising.

The proceeds received from Sagard of $ 250.0 million were recorded as a liability, net of transaction costs of $ 0.4 million, which will be amortized over the estimated life of the arrangement using the effective interest rate method.

We retained the rights to a $ 75.0 million sales milestone when Jemperli annual Net Sales exceed $ 1 billion.

The proceeds received from Sagard of $ 250.0 million and $ 50.0 million were recorded as a liability, net of transaction costs of $ 0.4 million and $ 0.1 million, which will be amortized over the estimated life of the arrangement using the effective interest rate method.

The aggregate future estimated payments, less the $ 299.5 million, net of proceeds, will be recognized as non-cash interest expense over the life of the agreement.

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Over the life of the arrangement, the actual effective interest rate will be affected by the amount and the timing of the royalty payments received by Sagard and changes in our forecasted royalties.

At each reporting date, we will reassess our estimate of total future royalty payments to be received and if such payments are materially different than our original estimates, we will prospectively adjust the imputed interest rate and the related amortization of the royalty obligation.

We recognized Jemperli non-cash royalty revenue of approximately $ 13.8 million and $ 2.3 million during the years ended December 31, 2023 and 2022, respectively and non-cash interest expense of approximately $ 17.1 million and $ 20.4 million during the years ended December 31, 2023 and 2022, respectively.

At each reporting date, we will reassess our estimate of total future royalty payments to be received and if such payments are materially different than our prior estimates, we will prospectively adjust the imputed interest rate and the related amortization of the royalty obligation.

We recognized two sales milestones for a total of $ 40.0 million during the year ended December 31, 2024, when Jemperli annual sales exceeded both the $ 250.0 million and $ 500.0 million thresholds.

No milestones were recognized during the years ended December 31, 2023 and 2022.

We recognized Jemperli non-cash royalty revenue of approximately $ 47.4 million, $ 13.8 million and $ 2.3 million during the years ended December 31, 2024, 2023 and 2022, respectively and non-cash interest expense of approximately $ 49.1 million, $ 17.1 million and $ 20.4 million during the years ended December 31, 2024, 2023 and 2022, respectively.

The interest and amortization of issuance costs is reflected as non-cash interest expense for the sale of future royalties in the Consolidated Statements of Operations.

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Liability related to sale of future Jemperli royalties and milestones - balance at 12/31/2023

Proceeds from sale of future royalties 50,000

Issuance costs related to the sale of future royalties ( 103 )

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Liability related to sale of future royalties and milestones - ending balance $ 323,658

(1) Of the non-cash interest expense recognized, $ 3.7 million was capitalized interest for the year ended December 31, 2024.

Zejula Royalty Monetization Agreement

In October 2020, in connection with Amendment No.

3 to the GSK Agreement, 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.

Under the GSK Settlement Agreement, the royalty is paid at a rate of 1.0 % 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.

The current effective royalty rate is 0.5 %.

In September 2022, we signed a purchase and sale agreement (the “Zejula Royalty Monetization Agreement”) with a wholly-owned subsidiary of DRI Healthcare Trust (“DRI”) to monetize all of our future royalties on global net sales of Zejula under the GSK Settlement Agreement.

Under the terms of the Zejula Royalty Monetization Agreement, we received $ 35.0 million in exchange for all royalties payable by GSK to us under the GSK Settlement Agreement on global net sales of Zejula starting in July 2022 (the “Purchased Royalty Interest”).

In October 2020, in connection with GSK Amendment No.

3, GSK agreed, under the terms of a settlement agreement (the “GSK Settlement Agreement”), to pay us a royalty of 0.5 % on all GSK net sales of Zejula starting January 1, 2021.

In September 2022, we signed a purchase and sale agreement (the “Zejula Royalty Monetization Agreement”) with a wholly owned subsidiary of DRI to monetize all of our future royalties on global net sales of Zejula under the GSK Settlement Agreement.

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 U.S.

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

We estimate the effective interest rate used to record non-cash interest expense under the Zejula Royalty Monetization Agreement based on the estimate of future royalty payments to be received by DRI.

As of December 31, 2023, the estimated effective rate under the agreement was 2.7 %.

Over the life of the arrangement, the actual effective interest rate will be affected by the amount and the timing of the royalty payments received by DRI and the changes in our forecasted royalties.

We recognized Zejula non-cash royalty revenue of approximately $ 3.4 million and $ 1.4 million during the years ended December 31, 2023 and 2022, respectively and non-cash interest expense of approximately $ 1.0 million and $ 0.7 million during the years ended December 31, 2023 and 2022, respectively.

We recognized Zejula non-cash royalty revenue of approximately $ 3.9 million, $ 3.4 million and $ 1.4 million during the years ended December 31, 2024, 2023 and 2022, respectively and non-cash interest expense of approximately $ 1.0 million, $ 1.0 million and $ 0.7 million during the years ended December 31, 2024, 2023 and 2022, respectively.

The interest and amortization of issuance costs is reflected as non-cash interest expense for the sale of future royalties in the Consolidated Statements of Operations.

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(in thousands) December 31, 2024

Liability related to sale of future Zejula royalties - balance at 12/31/2022

Liability related to sale of future Zejula royalties and milestones - balance at 12/31/2023 $ 32,717

Amortization of issuance costs 29

Royalty payments to DRI

Royalty and milestone payments to DRI ( 3,900 )

Non-cash interest expense recognized 922

Liability related to sale of future royalties - ending balance

Liability related to sale of future royalties and milestones - ending balance $ 29,768

Fair Value Measurements and Available for Sale Investments

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284,495 284,495 — —

Certificates of deposit (2)

Agency securities (2)

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Certificates of deposit (2)

2,856 — 2,856 —

Agency securities (2)

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These investments are carried at fair value and are included in the tables above.

The aggregate market value, cost basis, and gross unrealized gains and losses of available-for-sale investments by security type, classified in cash equivalents, short-term and long-term investments as of December 31, 2023 are as follows:

The aggregate market value, cost basis, and gross unrealized gains and losses of available-for-sale investments by security type, classified in short-term and long-term investments as of December 31, 2024 are as follows:

(in thousands) Amortized

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$ 7,587 $ — $ ( 8 ) $ 7,579

Certificates of deposit (2)

246 — ( 2 ) 244

Commercial and corporate obligations (2)

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(1) Of our outstanding agency securities, $ 7.6 million have maturity dates of less than one year and $ 0.0 million have a maturity date of between one to two years as of December 31, 2024.

(2) Of our outstanding certificates of deposit, $ 0.2 million have a maturity date of less than one year and $ 0.0 million have a maturity date of between one to two years as of December 31, 2023.

(2) Of our outstanding commercial and corporate obligations, $ 10.7 million have maturity dates of less than one year and $ 0.0 million have a maturity date of between one to two years as of December 31, 2024.

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Agency securities $ 7,579 $ ( 8 ) $ — $ — $ 7,579 $ ( 8 )

Certificates of Deposit — — 244 ( 2 ) 244 ( 2 )

Commercial and corporate obligations 5,160 ( 9 ) 15,200 ( 74 ) 20,360 ( 83 )

US Treasury Securities 25,250 ( 7 ) — — 25,250 ( 7 )

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Total $ 106,530 $ ( 120 ) $ 132,167 $ ( 669 ) $ 238,697 $ ( 789 )

As of December 31, 2023 and 2022, unrealized losses on available-for-sale investments were $ 0.8 million and $ 5.1 million, respectively, with unrealized losses of $ 0.7 million, on available for sale investments that were in an unrealized loss position for greater than 12 months as of December 31, 2023.

We do not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost basis, accordingly, no allowance for credit losses was recorded.

As of December 31, 2024 and 2023, unrealized losses on available-for-sale investments were less than $0.1 million and $ 0.8 million, respectively, with no unrealized losses, on available for sale investments that were in an unrealized loss position for greater than 12 months as of December 31, 2024.

We do not intend to sell the investments and it is not more likely than not

that we will be required to sell the investments before recovery of their amortized cost basis, accordingly, no allowance for credit losses was recorded.

Stockholders’ Equity

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Stock Repurchase Program

In January 2023, our Board of Directors authorized a stock repurchase program (the “Repurchase Program”) to repurchase up to $ 50.0 million of our outstanding common stock, par value $ 0.001 per share.

In January 2023, our Board of Directors authorized a stock repurchase program (the “Repurchase Program”) to repurchase up to $ 50.0 million of our outstanding common stock.

The Repurchase Program was completed in May 2023.

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Open Market Sales Agreement

In November 2022, we entered into the Cowen Sales Agreement with 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.

In November 2024, we entered into a sales agreement with TD Securities (USA) LLC (“TD Cowen”), through which we may offer and sell shares of our common stock, having an aggregate offering of up to $ 100.0 million through TD Cowen as our sales agent.

Our prior sales agreement with Cowen terminated upon effectiveness of the registration statement on the Form S-3 we filed in connection with our sales agreement with TD Cowen.

As of December 31, 2024, we had sold no shares under this agreement.

Underwriting Agreement

In August 2024, we entered into an underwriting agreement with TD Securities (USA) LLC and Leerink Partners LLC as representatives to the several underwriters listed therein (the “Underwriters”), pursuant to which we issued and sold an aggregate of 2,750,498 shares of our common stock to the Underwriters, at an offering price of $ 36.50 per share.

The net proceeds from these sales were approximately $ 93.9 million, net of underwriting discounts and commissions and offering expenses of $ 6.5 million, in the aggregate.

Equity Incentive Plans

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Under the 2017 Plan, we may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then our employees, officers, directors or consultants.

In addition, the number of shares of stock available for issuance under the 2017 Plan will be automatically increased each January 1, beginning on January 1, 2018, by 4 % of the aggregate number of outstanding shares of our common stock as of the immediately preceding December 31 or such lesser number as determined by our Board of Directors.

In addition, the number of shares of stock available for issuance under the 2017 Plan were to be automatically increased each January 1, beginning on January 1, 2018, by 4 % of the aggregate number of outstanding shares of our common stock as of the immediately preceding December 31 or such lesser number as determined by our Board of Directors.

The 2017 Plan automatically increased by 1,063,871 shares as of January 1, 2024.

At our annual stockholder meeting on June 12, 2024, the 2017 Plan was amended, eliminating the automatic annual share increase and the number of shares available for issuance was increased by 2,700,000 shares.

All future share increases will require stockholder approval.

As of December 31, 2024, 2,882,340 shares were available for future issuance.

Employee Stock Purchase Plan

In January 2017, our Board of Directors and stockholders approved and adopted the 2017 Employee Stock Purchase Plan or the ESPP.

In January 2017, our Board of Directors and stockholders approved and adopted the 2017 Employee Stock Purchase Plan (“ESPP”).

In addition, the number shares of stock available for issuance under the ESPP will be automatically increased each January 1, beginning on January 1, 2018, by 1 % of the aggregate number of outstanding shares of our common stock as of the immediately preceding December 31 or such lesser number as determined by our Board of Directors.

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Outstanding at December 31, 2024 6,086,289 $ 25.20 7.63 $ 534

4,225,615 $ 27.36 7.42 $ 5,827

Exercisable at December 31, 2024 2,829,196 $ 28.60 6.32 $ 534

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RSU expected to vest at December 31, 2024 1,227,677 $ 21.79 1.46 $ 16,254

Performance Stock Units

A Performance Stock Unit (“PSU”) represents one equivalent share of our common stock to be issued after achievement of the performance metrics specified in the grant.

The fair value of our PSUs is estimated as of the grant date of July 22, 2024, based upon the expected achievement of the performance metrics specified in the grant and the closing market price of our common stock on the date of grant.

The grant date fair value is estimated using a Monte Carlo simulation using the following assumptions:

Twelve months ended

Volatility of common stock 59.0 %

Risk-free interest rate 4.1 %

Contract term (in years) 3.9

The requisite service period over which the compensation expense will be recognized is July 22, 2024 through July 1, 2028.

The following table presents a summary of activity with respect to our PSUs:

Number of Performance Stock Units Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Term (in years)

Outstanding at January 1, 2024 — $ — —

Granted 511,000 $ 24.69

Released — $ —

Forfeitures ( 6,500 ) $ 24.69

Outstanding at December 31, 2024 504,500 $ 24.69 3.52

Stock-Based Compensation Expense

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Management evaluates when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions at each reporting date.

estimated fair values of stock option awards granted were determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions:

The estimated fair values of stock option awards granted were determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions:

2024 2023 2022

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We determine the appropriate risk-free interest rate, expected term for employee stock-based awards, contractual term for non-employee stock-based awards, and volatility assumptions.

The weighted-average expected option term for employee and non-employee stock-based awards reflects the historical option term for 2023 and the simplified life method for 2022 and 2021, which defines the life as the average of the contractual term of the options and the weighted-average vesting period for all option tranches.

The weighted-average expected option term for employee and non-employee stock-based awards reflects the historical option term.

Expected volatility incorporates the historical volatility of our stock price.

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$ 34,048 $ 33,205 $ 27,356

On March 20, 2022, our then Chief Executive Officer (“former CEO”), resigned by mutual agreement with the Board of Directors.

In connection with his separation agreement, we modified certain equity awards and recognized approximately $ 3.2 million in non-cash stock-based compensation expense.

Given the former CEO had substantially rendered the required services per his separation agreement, we recorded the full expense related to the modification in the period ending March 31, 2022.

Additionally, on March 21, 2022, we awarded our newly appointed Interim President and Chief Executive Officer RSUs for 887,043 shares of the Company’s common stock.

The fair value of the award will be recognized as part of compensation cost, occurring ratably over the stated 24-month requisite service period.

During the year ended December 31, 2023, we recognized $ 11.7 million and $ 9.2 million during the year ended December 31, 2022 of non-cash stock-based compensation cost related to the award.

At December 31, 2023, there was $ 31.6 million of unrecognized compensation cost related to unvested stock option awards, which is expected to be recognized over a remaining weighted average vesting period of 2.67 years, $ 12.2 million of unrecognized cost related to unvested RSU awards, which is expected to be recognized over a period of 1.23 years, and $ 0.2 million of unrecognized compensation cost related to the ESPP, which is expected to be recognized over a remaining weighted-average vesting period of 0.37 years.

(1) Includes $ 2.6 million related to two year RSU initially issued to our Chief Executive Officer in March 2022 and now fully recognized.

(2) Includes $ 11.7 million related to two year RSU initially issued to our Chief Executive Officer in March 2022 and now fully recognized.

(3) Includes $ 9.2 million related to two year RSU initially issued to our Chief Executive Officer in March 2022 and now fully recognized.

At December 31, 2024, there was $ 44.1 million of unrecognized compensation cost related to unvested stock option awards, which is expected to be recognized over a remaining weighted average vesting period of 2.75 years, $ 20.1 million of unrecognized cost related to unvested RSU awards, which is expected to be recognized over a period of 2.75 years, $ 11.0 million of unrecognized cost related to unvested PSU awards, which is expected to be recognized over a period of 3.52 years, and $ 0.4 million of unrecognized compensation cost related to the ESPP, which is expected to be recognized over a remaining weighted-average vesting period of 0.37 years.

Employee Benefit Plan

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federal tax regulations.

We elected to match 100 % of an employee’s contributions up to 10 % of the employees’ eligible salary with a maximum limit of $ 22,500 in 2023, 100 % of an employee’s contribution up to 6 % of the employees’ salary with a maximum limit of $ 11,000 in 2022, and $ 8,000 in 2021.

We elected to match 100 % of an employee’s contributions up to 10 % of the employees’ eligible salary with a maximum limit of $ 23,000 in 2024, 100 % of an employee’s contribution up to 10 % of the employees’ salary with a maximum limit of $ 22,500 in 2023, and 100 % of an employee’s contribution up to 6 % of the employee’s salary with a maximum limit of $ 11,000 in 2022.

For the years ended December 31, 2024, 2023, and 2022, we incurred approximately $ 2.2 million, $ 1.6 million, and $ 1.0 million, respectively of costs related to the 401(k) plan.

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The terms of the Lease Agreement provide us with an option to extend the term of the lease for an additional five years , as well as a one-time option to terminate the lease after seven years with the payment of a termination fee.

The exercise of the lease option is at our sole discretion, which we currently do not anticipate exercising and as such was not recognized as part of the ROU asset and lease liability.

The exercise of the lease option is at our sole discretion, which we currently do not anticipate exercising and as such was not recognized as part of the right-of-use asset (the “ROU asset”) and lease liability.

The monthly base rent was initially $ 4.20 per rentable square foot and is increased by 3 % annually.

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Accordingly, we have not recognized any liabilities relating to these obligations for any period presented.

Segment Reporting

We operate as one reportable segment focused on research and development activities to deliver immunology therapeutics for autoimmune and inflammatory diseases.

Segment profit or loss is measured as the net loss reported on our Consolidated Statements of Operations and Comprehensive Loss and net loss is used to monitor results.

Our segment revenue consists of non-cash royalties and milestones, and is derived from collaboration agreements, see Note 4.

The measure of segment assets is reported on our Consolidated Balance Sheets as total assets.

The CODM is our Chief Executive Officer.

The CODM manages the business activities on a consolidated basis in making decisions regarding resource allocation and performance assessment.

The following table is a summary of segment revenue, loss and our significant expenses (in thousands):

Year Ended December 31,

2024 2023 2022

Collaboration revenue $ 91,280 $ 17,157 $ 10,287

Operating expenses:

Rosnilimab 53,422 25,010 7,794

ANB032 26,084 17,197 3,866

ANB033 12,460 11,520 1,706

ANB101 3,367 — —

Imsidolimab 8,284 31,769 38,812

Preclinical and other unallocated costs 14,350 14,526 11,838

Total External R&D (1)

117,967 100,022 64,016

Total Internal R&D (2)

45,873 32,261 24,782

Total R&D 163,840 132,283 88,798

Acquired in-process research and development

External G&A (3)

10,033 8,294 7,285

Internal G&A (1)

32,356 33,652 29,358

Total G&A 42,389 41,946 36,643

Total operating expenses 206,229 181,568 125,441

Loss from operations ( 114,949 ) ( 164,411 ) ( 115,154 )

Interest income 19,794 18,873 7,550

Non-cash interest expense ( 50,087 ) ( 18,083 ) ( 21,108 )

Other income (expense), net 14 ( 2 ) 12

Total other (expense) income, net ( 30,279 ) 788 ( 13,546 )

Loss before income taxes ( 145,228 ) ( 163,623 ) ( 128,700 )

(Provision) Benefit for income taxes ( 3 ) 4 ( 24 )

Segment net loss ( 145,231 ) ( 163,619 ) ( 128,724 )

(1) External R&D consists of costs associated with our research and development activities, including drug discovery efforts, preclinical and clinical development of our programs, manufacturing, and allocated facility-related costs.

(2) Internal R&D and G&A consist of salaries and wages, stock-based compensation, recruiting and other employee benefits.

(3) External G&A consists of general and administrative expenses including legal services, insurance, professional fees for auditing, tax, and market research, and allocated facility-related costs not otherwise included in research and development expenses.

The components of loss before income tax provision consist of the following:

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Consolidated net loss before income taxes $ ( 145,228 ) $ ( 163,623 ) $ ( 128,700 )

For the years ended December 31, 2023 and 2022, we recognized an income tax benefit of $ 4,000 and income tax provision of $ 24,000 , respectively, related to state income taxes.

For the year ended December 31, 2021, we recognized no benefit or provision for income taxes.

For the years ended December 31, 2024, 2023 and 2022, we recognized income tax provision of $ 3,000 , income tax benefit of $ 4,000 , and income tax provision of $ 24,000 respectively, related to state income taxes.

Significant components of our deferred tax assets and liabilities are as follows:

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We also have foreign tax losses of $ 2.8 million, which will carry forward indefinitely, subject to a continuity of ownership test.

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.

The above NOL carryforward and the federal and state research credit carryforwards may be subject to 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.

In general, an ownership change as defined by Section 382 and 383, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percentage points over a three-year period.

In September 2015, we completed a Section 382 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 subsequently extended the analysis period of the study through December 31, 2022, noting ownership changes on January 31, 2017 and March 8, 2021.

To reflect the impact of the January 31, 2017 and March 8, 2021 ownership changes, we reduced federal research credit carryforwards by approximately $ 15.0 million.

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.

If a change in ownership were to have occurred, NOL and tax credits carryforwards could be eliminated or restricted.

We experienced ownership changes as defined by Section 382 of the Code during 2007, 2017 and 2021.

As a result, as of December 31, 2024, there are $114.6 million of federal NOLs available to offset taxable income in future years without

Section 382 limitation, while $186.1 million of federal NOLs are subject to annual limitations over future periods.

State NOL and credit carryforwards may be similarly limited.

Our use of federal and state NOLs and research credits could be further limited if we experience one or more ownership changes subsequent to December 31, 2024.

If a change in ownership occurs, NOLs and tax credit carryforwards could be eliminated or restricted.

If eliminated, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance.

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Change in the valuation allowance 36,148 35,784 29,385

Income tax (benefit) expense $ ( 4 ) $ 24 $ —

Income tax expense (benefit) $ 3 $ ( 4 ) $ 24

We recognize a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits.

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Balance at the beginning of the year $ 5,016 $ 3,369

Increase related to prior year tax positions

(Decrease) increase related to prior year tax positions

Increase related to current year tax positions 1,899 1,494

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Due to our losses incurred, we are essentially subject to income tax examination by tax authorities from inception to date.

Subsequent Event

Exclusive License Agreement

On January 31, 2025, we entered into an Exclusive License Agreement (the “License Agreement”) with Vanda Pharmaceuticals Inc.

(“Vanda”) pursuant to which we granted to Vanda an exclusive, global license for the development and commercialization of imsidolimab (IL-36R antagonist mAb), which has completed two registration-enabling global Phase 3 trials, GEMINI-1 and GEMINI-2, evaluating the safety and efficacy of imsidolimab in patients with Generalized Pustular Psoriasis (GPP).

Pursuant to the terms of the License Agreement, we received an upfront payment of $ 10.0 million and a $ 5.0 million payment for existing drug supply.

Anaptys is also eligible to receive up to $ 35.0 million for future regulatory approval and sales milestones in addition to a 10 % royalty on net sales.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 7A. Quantitative and Qualitative Disclosures About Market Risk