What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-12 compared with 2024-11-14 · 63 added, 102 removed, 156 unchanged (51% of the section changed)

8 unchanged sentences

These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements .

We are a clinical-stage biopharmaceutical company pioneering a new class of complement medicines for people living with devastating inflammatory-related diseases.

We are a biopharmaceutical company advancing a late-stage clinical platform of novel therapies for people living with devastating classical complement-mediated neuroinflammatory diseases.

The classical complement pathway is a core component to the body’s immune system that activates a powerful inflammatory cascade.

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• Guillain-Barré Syndrome, or GBS:

We are advancing our lead candidate, ANX005, an investigational, full-length monoclonal antibody, or mAb, formulated for intravenous administration for the potential treatment of patients with GBS, a rare antibody-mediated autoimmune disease that is the most common cause of acute neuromuscular paralysis with no approved therapies in the U.S.

In the second quarter of 2024, we announced positive results from the completed pivotal Phase 3 trial in GBS at the 2024 Peripheral Nerve Society Annual Meeting.

Data showed that ANX005-treated patients demonstrated faster and more complete recovery from week 1 through week 26 on primary and multiple pre-specified endpoints.

Early, robust and durable treatment effects expedited recovery and led to patients walking and off ventilation approximately one month earlier.

A single infusion of ANX005 was generally well-tolerated with a safety profile similar to placebo and adverse events balanced across groups.

We intend to establish comparability of the GBS patient population in our Phase 3 trial with patients from the International Guillain-Barré Syndrome Outcomes Study, or IGOS, a global, prospective, observational, multicenter cohort study that has enrolled 2,000 patients who were followed for one to three years.

We have initiated a real-world evidence, or RWE, comparability protocol with IGOS with initial topline data anticipated by year-end 2024 to support our planned Biologics License Applications, or BLA, submission in the first half of 2025.

ANX005 has been granted Fast Track and orphan drug designation for the treatment of GBS from the FDA.

ANX005 has also been granted orphan designation from the European Medicines Agency, or EMA.

We are advancing our lead candidate, tanruprubart (formerly ANX005), an investigational, full-length monoclonal antibody, or mAb, formulated for intravenous administration as the potential first-targeted treatment for patients with GBS.

Tanruprubart has consistently demonstrated rapid and sustained functional improvements in multiple placebo-controlled trials.

GBS is a rare antibody-mediated autoimmune disease that is the most common cause of acute neuromuscular paralysis, with no therapies in the United States approved by the U.S.

Food and Drug Administration, or FDA.

The rare and acute nature of GBS has shaped our clinical development program conducted primarily in Southeast Asia to generate a comprehensive data package that includes successful placebo-controlled proof-of-concept and Phase 3 data, Real-World Evidence indirect comparison data of tanruprubart’s treatment effect versus current standard of care, and drug-drug interaction safety data with tanruprubart with current standard of care.

We are also preparing to initiate in the second quarter of 2025 the open-label tanruprubart FORWARD study, measuring pharmacokinetics, pharmacodynamics, early efficacy in week 1, and safety in up to 30 subjects in the United States, Canada, and Europe, which is designed to broaden Western patient, physician and healthcare community experience.

We anticipate this comprehensive data package to support our Biologics License Application, or BLA, and are targeting a meeting with the Center for Drug Evaluation and Research of the FDA in the second quarter of 2025, ahead of our planned BLA submission.

Tanruprubart has been granted Fast Track and orphan drug designation for the treatment of GBS from the FDA.

Tanruprubart has also been granted orphan designation from the European Medicines Agency, or EMA.

• Geographic Atrophy, or GA:

We are advancing ANX007, an antigen-binding fragment, or Fab , formulated for intravitreal administration for the potential treatment of patients with GA, the leading cause of blindness in the elderly, that affects an estimated eight million people globally.

In the Phase 2 ARCHER trial, ANX007 was shown to preserve vision on multiple measures and provided significant structural protection within the retina, particularly of photoreceptors in the central fovea that are important to visual acuity.

ANX007 was generally well-tolerated through month 12, with no increase in choroidal

neovascularization rates between the treated and sham arms and no events of retinal vasculitis reported.

In August 2024, we announced that patient dosing was initiated in the global pivotal Phase 3 ARCHER II trial, the only GA pivotal program utilizing visual protection as the global regulatory-aligned primary end point.

Topline data from the ARCHER II trial are expected in the second half of 2026.

Plans for a Phase 3 injection-controlled study, ARROW, are being assessed.

ANX007 has been granted Fast Track designation from the FDA and is the first therapeutic candidate for the treatment of GA to receive Priority Medicine, or PRIME, designation by the EMA, which provides early and proactive support to developers of promising medicines that may offer a major therapeutic advantage over existing treatments or benefit to patients without treatment options.

We are advancing ANX007, an antigen-binding fragment, or Fab, formulated for intravitreal administration, as the first potential program with a global registration path to approval in Europe and the United States for the treatment of dry AMD with GA.

Dry AMD with GA is a leading cause of vision loss in the elderly, that affects more than an estimated eight million people globally, and there are no approved therapies targeting the preservation of vision in

this disease.

ANX007 is designed to block C1q locally in the eye, to provide more complete protection against excess classical complement activity and the loss of photoreceptor neurons.

It is the only investigational therapy in GA to show significant vision preservation on assessments of best corrected visual acuity, or BCVA, and low luminance visual acuity, or LLVA, demonstrating significant protection from vision loss in both normal and low light conditions, as well as significant preservation of central retinal photoreceptors necessary for visual acuity as demonstrated in the Phase 2 ARCHER trial.

In 2024, we initiated our Phase 3 ARCHER II trial, a global, sham-controlled, double-masked trial expected to enroll ~630 patients who have dry AMD with GA.

The primary endpoint of ARCHER II is prevention of ≥15-letter loss of BCVA, and a secondary objective structural measure is prevention of ellipsoid zone (EZ) loss.

The single-study program will be analyzed as two sub-studies for the U.S.

in accordance with the FDA’s two-trial recommendation.

Accordingly, we no longer plan to conduct a second injection-controlled head-to-head Phase 3 trial.

We expect to complete enrollment of ARCHER II in the third quarter of 2025 and report topline data in the second half of 2026.

ANX007 is the first and only therapeutic candidate for the treatment of GA to receive Priority Medicine, or PRIME, designation by the EMA, which provides early and proactive support to developers of promising medicines that may offer a major therapeutic advantage over existing treatments or benefit to patients without treatment options.

• ANX1502 for Autoimmune Indications:

We are advancing ANX1502, a novel oral small molecule inhibitor of classical complement which we believe is first-in-kind.

In a Phase 1 single-ascending dose, or SAD, and multiple-ascending dose, or MAD, clinical trial in healthy volunteers, ANX1502 was generally well tolerated with no serious adverse events, achieved target levels of active drug and showed supportive impact on a pharmacodynamic biomarker of complement activity.

We have completed a bridging study from liquid to a tablet formulation of ANX1502 and have initiated an open-label single arm proof-of-concept, or POC, study in patients with cold agglutinin disease, or CAD.

The POC study in CAD patients will evaluate ANX1502 administered twice daily for up to four weeks and will characterize the pharmacodynamics of ANX1502 on objective and established markers of complement activation and disease hemolysis.

Initial data are expected in the first quarter of 2025.

In a Phase 1 single-ascending dose, or SAD, and multiple-ascending dose, or MAD, clinical trial in healthy volunteers designed to evaluate the safety, tolerability, pharmacokinetics, or PK, and pharmacodynamics, or PD, ANX1502 was generally well tolerated across cohorts with no serious adverse events, achieved target levels of active drug and showed supportive impact on a PD biomarker of complement activity.

We are evaluating a tablet formulation of ANX1502 in an ongoing proof-of-concept study in patients with cold agglutinin disease, or CAD, to assess PK, PD and clinical efficacy endpoints (e.g., hemolysis as measured by reduction of elevated bilirubin) and data are expected in mid-2025.

Following the successful completion of the proof-of-concept study, we intend to evaluate ANX1502 in a host of diseases, including serious complement-mediated autoimmune diseases, with the aim of providing enhanced efficacy and offering convenient dosing administration for long-term treatment of chronic conditions.

We were incorporated in March 2011 and commenced operations later that year.

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We have incurred net losses each year since our inception.

Our net losses were $34.8 million and $32.5 million for the three months ended September 30, 2024 and 2023, respectively, and $89.6 million and $106.3 million for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, we had an accumulated deficit of $662.1 million and cash and cash equivalents and short-term investments of $340.1 million.

Our net losses were $54.4 million and $25.2 million for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, we had an accumulated deficit of $765.1 million and cash and cash equivalents and short-term investments of $263.7 million.

Components of Operating Results

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• professional services agreements with third party contract organizations, investigative clinical trial sites and consultants that conduct research and development activities on our behalf;

• contract manufacturing costs to produce clinical trial materials and commercial materials to support any

BLA to the FDA;

• contract manufacturing costs to produce clinical trial materials and commercial materials to support

BLA package submission to the FDA;

• laboratory supplies and materials.

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Results of Operations

Comparison of the Three Months Ended September 30, 2024 and 2023

Comparison of the Three Months Ended March 31, 2025 and 2024

The following tables summarize our results of operations for the periods presented:

Three Months Ended

September 30,

(in thousands)

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Three Months Ended

September 30,

(in thousands)

1 unchanged sentence

Clinical and nonclinical outside services

Consulting and professional services

Contract manufacturing

Laboratory supplies and materials

Indirect costs:

Compensation and personnel-related

(including stock-based compensation)

Facilities and depreciation

Total research and development expenses

Research and development expenses increased by $2.2 million, or 8%, for the three months ended September 30, 2024 compared to the same period in 2023.

The increase was primarily due to an increase of $2.9 million in consulting and professional services supporting the advancement of our flagship programs, an increase of $0.8 million in contract manufacturing expenses for ANX005, an increase of $0.5 million in facilities related costs due to the expiration of a sublease agreement, and an increase of $0.5 million in compensation and personnel-related expenses due to an increase in headcount, partially offset by a decrease of $2.3 million in direct clinical and nonclinical outside services costs due to completion of the Phase 2 ARCHER trial in GA in 2023, and a decrease of $0.2 million in laboratory supplies and materials.

General and Administrative Expenses

Three Months Ended

September 30,

(in thousands)

Compensation and personnel-related

(including stock-based compensation)

Consulting and professional services

Facilities and depreciation

Total general and administrative expenses

General and administrative expenses increased by $2.4 million, or 36%, for the three months ended September 30, 2024 compared to the same period in 2023.

The increase was primarily due to an increase of $2.5 million in consulting and professional services costs for business development, market research, and recruitment costs.

Interest and other income, net

Interest and other income, net, increased by $2.3 million, or 101%, for the three months ended September 30, 2024 compared to the same period in 2023.

The increase was primarily due to higher average cash and investment balances and favorable interest rates.

Comparison of the Nine Months Ended September 30, 2024 and 2023

The following tables summarize our results of operations for the periods presented:

Nine Months Ended

September 30,

(in thousands)

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Interest and other income, net

Research and Development Expenses

Nine Months Ended

September 30,

(in thousands)

Direct costs:

Clinical and nonclinical outside services

Consulting and professional services

Contract manufacturing

Laboratory supplies and materials

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Total research and development expenses

Research and development expenses decreased by $14.4 million, or 16%, for the nine months ended September 30, 2024 compared to the same period in 2023.

The decrease was primarily due to a decrease of $10.8 million in direct clinical and nonclinical outside services costs due to completion of the Phase 2 ARCHER trial in GA in 2023, a decrease of $8.0 million due to timing of contract manufacturing expenses for ANX005, a decrease of $0.9 million of laboratory supplies and materials, and a decrease in $0.6 million in compensation and personnel-related expenses, partially offset by an increase of $4.4 million in consulting and professional services supporting the advancement of our flagship programs, and an increase of $1.5 million in facilities related costs due to the expiration of a sublease agreement.

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*Greater than 200% change for the periods presented.

Research and development expenses increased by $27.2 million, or 130%, for the three months ended March 31, 2025 compared to the same period in 2024.

The change was primarily attributable to a $14.1 million increase in contract manufacturing expenses related to the timing of activities for tanruprubart (ANX005) supporting the preparation of the BLA submission, as well as the initiation of the manufacturing technology transfer of ANX007 to a commercial-ready facility.

In addition, compensation and personnel-related expenses increased by $4.6 million, driven by higher headcount.

Consulting and professional services expenses increased by $4.2 million, primarily to support the preparation of our BLA submission for tanruprubart in GBS and to provide ongoing support for the ARCHER II clinical trial.

We also incurred $3.9 million in additional direct clinical and nonclinical outside services costs associated with continued advancement of the ARCHER II clinical trial.

General and Administrative Expenses

Nine Months Ended

September 30,

Three Months Ended

(in thousands)

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Total general and administrative expenses

General and administrative expenses increased by $2.3 million, or 10%, for the nine months ended September 30, 2024 compared to the same period in 2023.

The increase was primarily due to an increase of $2.2 million in consulting and professional services costs

for business development, market research, and recruitment costs, and an increase of $0.4 million in facilities related costs due to the expiration of a sublease agreement, partially offset by a decrease in compensation and personnel-related expenses of $0.3 million.

General and administrative expenses increased by $1.6 million, or 21%, for the three months ended March 31, 2025 compared to the same period in 2024.

The increase was primarily due to an increase in compensation and personnel-related expenses of $0.8 million due to an increase in headcount, and an increase of $0.6 million in consulting and professional services and recruitment costs.

Interest and other income, net

Interest and other income, net, increased by $4.6 million, or 63%, for the nine months ended September 30, 2024 compared to the same period in 2023.

The increase was primarily due to higher average cash balance and favorable interest rates.

Interest and other income, net, decreased by $0.3 million, or 10%, for the three months ended March 31, 2025 compared to the same period in 2024.

The decrease was primarily due to lower average cash and investment balances.

Liquidity and Capital Resources

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We have funded our operations primarily through the sale of equity securities.

As of September 30, 2024, we had available cash and cash equivalents and short-term investments of $340.1 million and an accumulated deficit of $662.1 million.

As of March 31, 2025, we had available cash and cash equivalents and short-term investments of $263.7 million and an accumulated deficit of $765.1 million.

Historical Cash Flows

Nine Months Ended

September 30,

Three Months Ended

(in thousands)

Net cash used in operating activities

Net cash (used in) provided by investing activities

Net cash provided by (used in) investing activities

Net cash provided by financing activities

Decrease in cash, cash equivalents and restricted cash

Increase (decrease) in cash, cash equivalents and restricted cash

Cash Flows from Operating Activities

Cash used in operating activities for the nine months ended September 30, 2024 was $82.0 million, which consisted of a net loss of $89.6 million and a net change of $3.2 million in our operating assets and liabilities, partially offset by $10.8 million in non-cash charges.

The non-cash charges consisted of stock-based compensation of $14.2 million, depreciation and amortization of $1.6 million, reduction in the carrying amount of right-of-use assets of $1.0 million, partially offset by accretion of discount on available-for-sale securities of $6.0 million.

Cash used in operating activities for the nine months ended September 30, 2023 was $97.7 million, which consisted of a net loss of $106.3 million and a net change of $5.3 million in our operating assets and liabilities, partially offset by $14.0 million in non-cash charges.

The non-cash charges consisted of stock-based compensation of $13.8 million, depreciation and amortization of $1.6 million, reduction in the carrying amount of right-of-use assets of $0.8 million, partially offset by accretion of discount on available-for-sale securities of $2.3 million.

Cash used in operating activities for the three months ended March 31 , 2025 was $50.1 million, which consisted of a net loss of $54.4 million, partially offset by $4.1 million in non-cash charges and a net change of $0.2 million in our operating assets and liabilities.

The non-cash charges consisted of stock-based compensation of $5.1 million, depreciation and amortization of $0.5 million and a reduction in the carrying amount of right-of-use assets of $0.4 million, partially offset by accretion of discount on available-for-sale securities of $1.9 million.

Cash used in operating activities for the three months ended March 31, 2024 was $28.3 million, which consisted of a net loss of $25.2 million and a net change of $7.5 million in our operating assets and liabilities, partially offset by $4.4 million in non-cash charges.

The non-cash charges consisted of stock-based compensation of $4.7 million, depreciation and amortization of $0.5 million and a reduction in the carrying amount of right-of-use assets of $0.3 million, partially offset by accretion of discount on available-for-sale securities of $1.1 million.

Cash Flows from Investing Activities

Cash used in investing activities for the nine months ended September 30, 2024 was $219.8 million, which consisted of $411.9 million of purchases of available-for-sale securities, partially offset by $192.1 million of proceeds from maturities of available-for-sale securities.

Cash provided by investing activities for the nine months ended September 30, 2023 was $72.9 million, which consisted of $156.7 million of proceeds from maturities of available-for-sale securities, partially offset by $83.6 million of purchases of available-for-sale securities and $0.2 million of equipment purchases.

Cash provided by investing activities for the three months ended March 31, 2025 was $97.6 million, which consisted of $159.5 million of proceeds from maturities of available-for-sale securities, partially offset by $61.8 million of purchases of available-for-sale securities and $0.1 million of purchases of property and equipment.

Cash used in investing activities for the three months ended March 31, 2024 was $77.3 million, which consisted of $100.3 million of purchases of available-for-sale securities, partially offset by $23.0 million of proceeds from maturities of available-for-sale securities.

Cash Flows from Financing Activities

Cash provided by financing activities for the nine months ended September 30, 2024 was $156.2 million, which consisted of $116.8 million of net proceeds from the issuance of common stock and pre-funded warrants under our 2024 financing, $38.3 million of net proceeds from the issuance of common stock under our 2021 ATM program and $1.1 million of proceeds from the exercise of common stock options and employee stock purchase plan purchases.

Cash provided by financing activities for the nine months ended September 30, 2023 was $17.9 million, which consisted of $17.5 million of net proceeds from the issuance of common stock to a related party under our at-the-market offering program and $0.4 million of proceeds from the exercise of common stock options and employee stock purchase plan purchases.

Cash provided by financing activities for the three months ended March 31, 2025 was $0.1 million, which consisted of $0.1 million of proceeds from the exercise of common stock options.

Cash provided by financing activities for the three months ended March 31, 2024 was $32.4 million, which consisted of $32.2 million of net proceeds from the issuance of common stock under our 2021 ATM program and $0.2 million of proceeds from the exercise of common stock options.

Funding Requirements

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We issued an aggregate of 2,582,557 shares of common stock upon the cashless exercise of the pre-funded warrants in March 2023.

We issued an aggregate of 19,901 shares of common stock upon the cashless exercise of the common warrants in June 2024.

Subsequent to September 30, 2024 and through the date of issuance of these interim unaudited condensed financial statements, the Company issued an aggregate of 2,739,096 shares of common stock upon the cashless exercise of the pre-funded warrants.

We issued an aggregate of 19,901 and 2,739,096 shares of common stock upon the cashless exercise of the common warrants and pre-funded warrants in June 2024 and November 2024, respectively.

Pre-Funded and Common Warrants

The following summarizes warrant activity during the nine months ended September 30, 2024 and 2023:

The following summarizes warrant activity during the three months ended March 31, 2025 and 2024:

Number of Common Warrants

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Balances as of December 31, 2024

Balances as of September 30, 2024

Balances as of March 31, 2025

Number of Common Warrants

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Balances as of December 31, 2023

Balances as of September 30, 2023

Balances as of March 31, 2024

2024 At-the-Market (ATM) Program

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TD Cowen is entitled to compensation up to 3% of the aggregate gross proceeds for the common stock sold through the 2024 ATM program.

As of September 30, 2024, we have not made any sales under the 2024 ATM program.

Subsequent to September 30, 2024 and through the date of issuance of our interim unaudited condensed financial statements, we sold 750,000 shares of common stock under the 2024 ATM for net proceeds of approximately $4.5 million, after deducting commissions paid to TD Cowen.

As of March 31, 2025, approximately $95.4 million remained available for the offer and sale of shares of common stock under the 2024 ATM program.

2021 ATM Program

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TD Cowen is entitled to compensation up to 3% of the aggregate gross proceeds for the common stock sold through the 2021 ATM program.

During the nine months ended September 30, 2024 and 2023, we sold 7,576,067 shares and 2,646,458 shares of common stock, respectively, under the 2021 ATM program for net proceeds of approximately $38.4 million and $17.5 million, respectively, after deducting commissions paid to TD Cowen.

The Form S-3 registration statement pursuant to which the 2021 ATM Program is registered expired on August 15, 2024, and no shares of common stock may be sold under the 2021 ATM Program after that date.

During the three months ended March 31, 2024, we sold 6,639,348 shares of common stock under the 2021 ATM program for net proceeds of approximately $32.2 million, after deducting commissions paid to TD Cowen and other financing costs.

The Form S-3 registration statement, which registered the 2021 ATM Program, expired on August 15, 2024.

As a result, no shares of common stock may be sold under the 2021 ATM Program.

Critical Accounting Policies and Estimates

3 unchanged sentences

Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material.

During the quarter ended September 30, 2024, there were no material changes to our critical accounting policies or in the methodology used for estimates from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023.

During the quarter ended March 31, 2025, there were no material changes to our critical accounting policies or in the methodology used for estimates from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Recent Accounting Pronouncements Not Yet Adopted

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis