ArriVent BioPharma, Inc. 10-Q

Item 1. Financial Statements ARRIVENT BIOPHARMA, INC. BALANCE SHEETS (in thousands, except share and per share data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2024 2023 Assets ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 317,393 ​ $ 150,389 ​ Prepaid expenses and other current assets ​ 10,087 ​ 9,579 ​ Total current assets ​ 327,480 ​ 159,968 ​ Right of use assets – operating leases ​ 250 ​ 291 ​ Deferred offering costs ​ ​ — ​ ​ 2,732 ​ Other assets ​ 108 ​ 107 ​ Total assets ​ $ 327,838 ​ $ 163,098 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit) ​ ​ ​ Current liabilities: ​ ​ ​ Accounts payable ​ $ 4,098 ​ $ 4,532 ​ Accrued expenses ​ 5,732 ​ 6,952 ​ Operating lease liabilities ​ 147 ​ 140 ​ Total current liabilities ​ 9,977 ​ 11,624 ​ Operating lease liabilities ​ 138 ​ 177 ​ Total liabilities ​ 10,115 ​ 11,801 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies (Note 7) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Series A convertible preferred stock $ 0.0001 par value, 150,000,000 shares authorized; 150,000,000 shares issued and outstanding at December 31, 2023 ​ — ​ 149,865 ​ Series B convertible preferred stock $ 0.0001 par value, 147,619,034 shares authorized; 147,619,034 shares issued and outstanding at December 31, 2023 ​ ​ — ​ ​ 154,625 ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity (deficit): ​ ​ ​ ​ ​ ​ ​ Preferred stock $ 0.0001 par value, 10,000,000 shares authorized; no shares issued and outstanding ​ — ​ — ​ Common stock $ 0.0001 par value, 200,000,000 shares authorized; 33,493,750 and 2,745,480 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively ​ ​ 3 ​ ​ — ​ Additional paid-in capital ​ 492,982 ​ 4,652 ​ Accumulated deficit ​ ( 175,262 ) ​ ( 157,845 ) ​ Total stockholders’ equity (deficit) ​ 317,723 ​ ( 153,193 ) ​ Total liabilities, convertible preferred stock and stockholders’ equity (deficit) ​ $ 327,838 ​ $ 163,098 ​ ​ See accompanying notes to unaudited interim financial statements. ​ 7 Table of Contents ​ ARRIVENT BIOPHARMA, INC. STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ ​ 2024 2023 ​ Operating expenses: ​ ​ ​ Research and development $ 16,975 $ 10,236 ​ General and administrative ​ 3,699 ​ 1,936 ​ Total operating expenses ​ 20,674 ​ 12,172 ​ Operating loss ​ ( 20,674 ) ​ ( 12,172 ) ​ Interest income ​ 3,257 ​ — ​ Net loss ​ $ ( 17,417 ) ​ $ ( 12,172 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Share information: ​ ​ ​ Net loss per share of common stock, basic and diluted ​ $ ( 0.70 ) ​ $ ( 9.45 ) ​ Weighted-average shares of common stock outstanding, basic and diluted ​ 25,046,531 ​ 1,287,574 ​ ​ See accompanying notes to unaudited interim financial statements. ​ ​ ​ 8 Table of Contents ARRIVENT BIOPHARMA, INC. STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) (in thousands, except share and per share data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Series A ​ Series B ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ convertible preferred stock ​ convertible preferred stock ​ ​ Common stock ​ paid-in ​ Accumulated ​ ​ ​ Shares Amount Shares Amount Shares Amount capital deficit Total Balance January 1, 2023 150,000,000 ​ $ 149,865 104,761,894 ​ $ 109,706 ​ 2,597,738 ​ $ — ​ $ 3,403 ​ $ ( 88,512 ) ​ $ ( 85,109 ) Issuance of Series B convertible preferred stock at $ 1.05 per share, net of issuance costs of $ 57 — ​ — 42,857,140 ​ 44,943 ​ — ​ — ​ — ​ — ​ — Exercise of stock options — ​ — — ​ — ​ 11,417 ​ — ​ 26 ​ — ​ 26 Stock-based compensation expense — ​ — — ​ — ​ — ​ — ​ 166 ​ — ​ 166 Net loss — ​ — — ​ — ​ — ​ — ​ — ​ ( 12,172 ) ​ ( 12,172 ) Balance, March 31, 2023 150,000,000 ​ $ 149,865 147,619,034 ​ $ 154,649 ​ 2,609,155 ​ $ — ​ $ 3,595 ​ $ ( 100,684 ) ​ $ ( 97,089 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance January 1, 2024 150,000,000 ​ $ 149,865 147,619,034 ​ $ 154,625 ​ ​ 2,745,480 ​ $ — ​ $ 4,652 ​ $ ( 157,845 ) ​ $ ( 153,193 ) Issuance of common stock in initial public offering, net of issuance costs of $ 18,032 — ​ — — ​ — ​ 11,180,555 ​ 1 ​ 183,216 ​ — ​ 183,217 Conversion of convertible preferred stock into common stock ​ ( 150,000,000 ) ​ ​ ( 149,865 ) ​ ( 147,619,034 ) ​ ​ ( 154,625 ) ​ ​ 19,567,306 ​ ​ 2 ​ ​ 304,488 ​ ​ — ​ 304,490 Exercise of stock options — ​ — — ​ — ​ 409 ​ — ​ 1 ​ — ​ 1 Stock-based compensation expense — ​ — — ​ — ​ — ​ — ​ 625 ​ — ​ 625 Net loss — ​ — — ​ — ​ — ​ — ​ — ​ ( 17,417 ) ​ ( 17,417 ) Balance, March 31, 2024 — ​ $ — — ​ $ — ​ 33,493,750 ​ $ 3 ​ $ 492,982 ​ $ ( 175,262 ) ​ $ 317,723 ​ ​ ​ See accompanying notes to unaudited interim financial statements. ​ ​ ​ 9 Table of Contents ARRIVENT BIOPHARMA, INC. STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ 2024 2023 Cash flows from operating activities: ​ ​ Net loss ​ $ ( 17,417 ) ​ $ ( 12,172 ) Adjustment to reconcile net loss to net cash used in operating activities: ​ ​ ​ Stock-based compensation expense ​ 625 ​ 166 Changes in operating assets and liabilities: ​ ​ Prepaid expenses and other current assets ​ ( 508 ) ​ ( 2,454 ) Other assets ​ ( 1 ) ​ ( 3 ) Accounts payable ​ ​ ( 374 ) ​ ​ ( 380 ) Accrued expenses ​ ( 963 ) ​ ( 2,038 ) Operating lease liabilities ​ 10 ​ — Net cash used in operating activities ​ ( 18,628 ) ​ ( 16,881 ) Cash flows from financing activities: ​ ​ Proceeds from issuance of common stock in an initial public offering, net ​ 185,631 ​ — Proceeds from the exercise of stock options ​ 1 ​ 26 Proceeds from the sale of Series B convertible preferred stock, net of issuance costs ​ — ​ 44,943 Net cash provided by financing activities ​ 185,632 ​ 44,969 ​ ​ ​ ​ ​ ​ ​ Net increase in cash and cash equivalents ​ 167,004 ​ 28,088 Cash and cash equivalents at beginning of the period ​ 150,389 ​ 163,372 Cash and cash equivalents at end of the period ​ $ 317,393 ​ $ 191,460 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosures of non-cash financing and investing activities ​ ​ Deferred offering costs transferred to additional paid in capital ​ $ 2,414 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ See accompanying notes to unaudited interim financial statements. ​ ​ 10 Table of Contents ARRIVENT BIOPHARMA, INC. NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (1) Background ArriVent BioPharma, Inc., a Delaware Corporation (the “Company”), founded on April 14, 2021, is a clinical-stage biopharmaceutical company focused on identifying, licensing and globalizing top biopharma innovations from around the world to deliver important medicines to patients. In June 2021, the Company entered into a license agreement with Shanghai Allist Pharmaceuticals Co. Ltd. (“Allist”) which granted the Company an exclusive license under certain intellectual property owned or controlled by Allist to develop, manufacture and commercialize any product containing firmonertinib or any of its derivatives as an active ingredient, for all uses, in all countries and territories other than greater China, which includes mainland China, Hong Kong, Macau and Taiwan (See Note 9). The Company’s lead development candidate, firmonertinib, is a third-generation tyrosine kinase inhibitor currently being evaluated in multiple clinical trials across a range of epidermal growth factor receptor (EGFR) mutations in non-small cell lung cancer (NSCLC), many for which there are limited treatment options. ​ On January 30, 2024, the Company completed the closing of its initial public offering of 9,722,222 shares of common stock at a price of $ 18.00 per share. Additionally, the underwriters exercised their option to purchase an additional 1,458,333 shares of common stock at a price of $ 18.00 per share. The shares of common stock began trading on the Nasdaq Global Market on January 26, 2024, under the symbol “AVBP”. The Company received net proceeds of $ 183.2 million, after deducting underwriting discounts and commissions and other estimated offering expenses. In addition, as a result of the closing of the Company’s initial public offering, the Company’s Series A and Series B convertible preferred stock converted into 19,567,306 shares of common stock in January 2024. ​ ​ (2) Development-Stage Risks and Liquidity The Company has incurred losses since inception and has an accumulated deficit of $ 175.3 million as of March 31, 2024. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales from its product candidates currently in development. Management believes that cash and cash equivalents of $ 317.4 million as of March 31, 2024 are sufficient to sustain planned operations through at least twelve months from the issuance date of these financial statements. The Company is subject to those risks associated with any specialty biotechnology company that has substantial expenditures for research and development. There can be no assurance that the Company’s research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, the Company operates in an environment of rapid technological change and is largely dependent on the services of its employees and consultants. ​ (3) Summary of Significant Accounting Policies The summary of significant accounting policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 28, 2024 (the “Annual Report”) has not materially changed, except as set forth below. (a) Interim Financial Statements The accompanying unaudited interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any references in these notes to applicable guidance are meant to refer to GAAP as found in Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). 11 Table of Contents ARRIVENT BIOPHARMA, INC. NOTES TO THE UNAUDITED FINANCIAL STATEMENTS In the opinion of management, the accompanying interim financial statements include all the normal and recurring adjustments (which consist primarily of accruals, estimates, and assumptions that impact financial statements) considered necessary to present fairly the Company’s financial position as of March 31, 2024 and its results of operations for the three months ended March 31, 2024 and 2023. Certain information and disclosures normally included in the annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, have been condensed or omitted. These interim financial statements should be read in conjunction with the audited financial statements and related notes as of and for the year ended December 31, 2023, and the notes thereto, which are included in the Annual Report. The December 31, 2023 balance sheet has been derived from the audited financial statements. The results of operations for the interim periods are not necessarily indicative of the results to be expected for a full year, any other interim periods or any future year or period. (b) Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from such estimates. Estimates and assumptions are periodically reviewed, and the effects of revisions are reflected in the financial statements in the period they are determined to be necessary. Significant areas that require management’s estimates include the fair value of the Company’s common stock prior to the completion of the Company’s initial public offering, stock-based compensation expense assumptions and accrued research and development expenses. (c) Fair Value Measurements The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: • Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. • Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Management believes that the carrying amounts of the Company’s financial instruments, principally cash equivalents and accounts payable, approximate fair value due to the short-term nature of those instruments. (d) Net Loss per Share Basic net loss per share of common stock is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during each period. Diluted net loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock and stock options, which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted- 12 Table of Contents ARRIVENT BIOPHARMA, INC. NOTES TO THE UNAUDITED FINANCIAL STATEMENTS average number of shares of common stock is the same for basic net loss per share since when a net loss exists, potentially dilutive securities are not included in the calculation as their impact is anti-dilutive. The Company’s convertible preferred stock entitled the holder to participate in dividends and earnings of the Company, and, if the Company had recognized net income, it would have used the two-class method to calculate earnings per share. The two-class method was not applicable during periods with a net loss, as the holders of the convertible preferred stock had no obligation to fund losses. The following table sets forth the computation of net loss, basic and diluted (in thousands, except share and per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ ​ 2024 2023 Numerator: ​ ​ Net loss $ ( 17,417 ) $ ( 12,172 ) Denominator: ​ ​ ​ ​ ​ ​ ​ Weighted-average shares of common stock outstanding ​ 25,046,531 ​ 2,602,488 Less: Weighted-average shares of common stock subject to repurchase ​ — ​ ( 1,314,914 ) Weighted-average shares of common stock outstanding, basic and diluted ​ 25,046,531 ​ 1,287,574 ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share attributable to common stockholders, basic and diluted ​ $ ( 0.70 ) ​ $ ( 9.45 ) ​ ​ The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ 2024 2023 Series A convertible preferred stock (as converted to common stock) — 9,861,923 Series B convertible preferred stock (as converted to common stock) — 9,705,383 Common stock subject to repurchase ​ — ​ 1,314,914 ​ Stock options 2,547,253 1,546,972 ​ ​ 2,547,253 ​ 22,429,192 ​ ​ (e) Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This standard includes the requirement that public business entities, on an annual basis, disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate). It also requires that all entities disclose, on an annual basis, the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes and the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5% of total income taxes paid (net of refunds received) and requires that all entities disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal, state, and foreign. Lastly, this standard eliminates the requirement for all entities to disclose the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months or make a statement that an estimate of the range cannot be made. This standard is effective for the Company for the annual period beginning January 1, 2026. Early adoption is permitted. This standard should be applied on a 13 Table of Contents ARRIVENT BIOPHARMA, INC. NOTES TO THE UNAUDITED FINANCIAL STATEMENTS prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact that this standard may have on its financial statements. (f) Reverse Stock Split On January 23, 2024, the Company filed an amendment to its Articles of Incorporation and effected a 15.21 -for-1 reverse stock split of its issued and outstanding shares of common stock. All common stock share and per-share amounts presented in the financial statements and related notes have been retroactively adjusted to reflect the reverse stock split. ​ ​ (4) Fair Value Measurements The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2024 ​ Level 1 Level 2 Level 3 Total Current assets: ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents - money market funds ​ $ 127,579 ​ $ — ​ $ — ​ $ 127,579 Total assets measured at fair value ​ $ 127,579 ​ $ — ​ $ — ​ $ 127,579 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ Level 1 Level 2 Level 3 Total Current assets: ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents - money market funds ​ $ 124,322 ​ $ — ​ $ — ​ $ 124,322 Total assets measured at fair value ​ $ 124,322 ​ $ — ​ $ — ​ $ 124,322 ​ Money market accounts are highly liquid investments. The pricing information on the Company’s money market account is based on quoted prices in active markets. This approach results in a classification of these securities as Level 1 of the fair value hierarchy. ​ (5) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2024 2023 Research and development ​ $ 7,758 ​ $ 8,450 ​ Professional fees ​ 419 ​ 240 ​ Insurance ​ 1,035 ​ 128 ​ Tax credit receivable ​ 875 ​ 761 ​ ​ ​ $ 10,087 ​ $ 9,579 ​ ​ ​ 14 Table of Contents ARRIVENT BIOPHARMA, INC. NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (6) Accrued Expenses Accrued expenses consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2024 2023 Research and development ​ $ 4,422 ​ $ 3,126 ​ Professional fees ​ 238 ​ 411 ​ Compensation and related expenses ​ 1,035 ​ 3,353 ​ Other accrued expenses ​ 37 ​ 62 ​ ​ ​ $ 5,732 ​ $ 6,952 ​ ​ ​ (7) Commitments and Contingencies Leases The Company has one operating lease that it subleases for its office space in California, which commenced in November 2023 with an original lease term through January 2026. This lease replaced a lease at the same address which commenced in January 2022 with an original lease term through January 2024 (which ended in January 2024). The Company also leases other space with an initial lease term of less than twelve months; therefore, it does not recognize this lease as an operating lease on the balance sheet. The Company’s operating lease right-of-use (“ROU”) asset and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. The Company is responsible for payment of certain real estate taxes, insurance and other expenses on certain of its leases. These amounts are generally considered to be variable and are not included in the measurement of the ROU assets and lease liability. The Company accounts for non-lease components, such as maintenance, separately from lease components. Operating lease expense was less than $ 0.1 million for each of the three months ended March 31, 2024 and 2023. The Company’s remaining lease term and discount rate for its operating lease as of March 31, 2024 were 1.83 years and 10.0 %, respectively. Future maturities of operating lease liabilities were as follows as of March 31, 2024 (in thousands): ​ ​ ​ ​ Fiscal year ending: ​ ​ Remainder of 2024 ​ $ 126 2025 ​ ​ 173 2026 ​ 14 Total future minimum payments ​ 313 Less imputed interest ​ ​ ( 28 ) Present value of lease liabilities ​ $ 285 ​ Cash paid for rent expense recorded during each of the three months ended March 31, 2024 and 2023 was less than $ 0.1 million. Aarvik Research Agreement In December 2021, the Company entered into a Research Collaboration Agreement, as amended, effective June 2023, with Aarvik Pharmaceuticals, Inc. (“Aarvik”), under which the Company is required to pay Aarvik up to $ 3.1 million on statements of work (“SOWs”) and an initiation fee of $ 0.3 million predefined in the agreement. After the 15 Table of Contents ARRIVENT BIOPHARMA, INC. NOTES TO THE UNAUDITED FINANCIAL STATEMENTS completion of the SOWs, the Company has an exclusive option to license the Aarvik intellectual property, and the option to acquire certain of Aarvik’s intellectual property, after which it is the Company’s sole responsibility to research, develop, manufacture and commercialize any applicable compound and product in the field and territory. If the Company exercises that option, it would be obligated to pay up to $ 18.0 million per product upon the achievement of certain clinical and regulatory milestone events and up to $ 80.0 million per product in commercial milestones. Additionally, the Company would be obligated to pay Aarvik royalties in the mid-single digits based on net sales of licensed products. During each of the three months ended March 31, 2024 and 2023, the Company incurred $ 0.1 million in research and development expenses related to the Aarvik SOWs. (8) Stock-based Compensation In June 2021, the Company adopted the 2021 Employee, Director and Consultant Equity Incentive Plan (the “2021 Plan”), as amended, that authorized the Company to grant up to 803,564 shares of common stock. In 2022, the Company amended the 2021 Plan and increased the total number of shares authorized under the Plan to 2,748,818 . In January 2024, the Company adopted the 2024 Employee, Director and Consultant Equity Incentive Plan (the “2024 Plan”) that authorized the Company to grant up to 3,900,000 shares of common stock plus any remaining ungranted or forfeited shares from the 2021 Plan. As of March 31, 2024, there were 3,939,333 shares available to be granted. The Company’s stock options vest based on the terms in the awards agreements and generally vest over four years . The Company recorded stock-based compensation expense in the following expense categories in its accompanying statements of operations (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ ​ 2024 2023 Research and development ​ $ 235 ​ $ 83 ​ General and administrative ​ 390 ​ 83 ​ ​ ​ $ 625 ​ $ 166 ​ ​ The following is a summary of stock options activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ Weighted ​ average ​ ​ ​ ​ ​ ​ average ​ remaining ​ Aggregate ​ ​ ​ ​ exercise ​ contractual ​ Intrinsic Value ​ Options price term (years) (in thousands) Outstanding as of December 31, 2023 1,683,156 ​ $ 3.38 ​ ​ ​ ​ Granted 886,776 ​ 8.17 ​ ​ ​ Exercised ( 409 ) ​ 2.28 ​ ​ ​ 2 Forfeited/expired ​ ( 22,270 ) ​ ​ 14.91 ​ ​ ​ ​ ​ Outstanding as of March 31, 2024 2,547,253 ​ ​ 4.94 8.82 ​ ​ 32,961 Exercisable as of March 31, 2024 564,452 ​ ​ 2.60 7.96 ​ ​ 8,616 Vested and expected to vest at March 31, 2024 2,547,253 ​ $ 4.94 8.82 ​ $ 32,961 ​ 16 Table of Contents ARRIVENT BIOPHARMA, INC. NOTES TO THE UNAUDITED FINANCIAL STATEMENTS The weighted-average grant-date fair value of options granted in 2024 and 2023 were $ 6.03 and $ 2.79 per share, respectively. The fair value was estimated using the Black-Scholes option-pricing model based on the following assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ ​ 2024 2023 Risk-free interest rate ​ 3.85 % - 3.98 % ​ ​ 3.45 % ​ Expected term ​ 5.5 - 6.1 years ​ 6.1 years ​ Expected volatility ​ 93.1 % - 93.2 % ​ ​ 91.1 % ​ Expected dividend yield ​ — ​ — ​ Estimated fair value of the Company's common stock per share ​ $ 5.85 - 6.04 $ 2.79 ​ ​ Unrecognized compensation cost for awards not vested as of March 31, 2024 was $ 7.8 million and will be expensed over a weighted-average period of 3.1 years. ​ ​ (9) Allist License Agreement In June 2021, the Company entered into a Global Technology Transfer and License Agreement with Allist (the “Allist Agreement”). Pursuant to the Allist Agreement, the Company was granted an exclusive license under certain intellectual property to develop, manufacture and commercialize certain licensed products in the field in the licensed territory. Upon execution of the Allist Agreement, the Company paid Allist a non-refundable cash payment of $ 40.0 million and issued 1,276,250 shares of its common stock. Upon the achievement of certain clinical, regulatory and commercial milestones using the licensed technology, the Company is obligated to make future milestone payments to Allist. During the three months ended March 31, 2024 and 2023, no clinical milestones were met or achieved. The Company is obligated to make future milestone payments of up to $ 105.0 million in clinical and regulatory milestones and up to $ 655.0 million in sales milestones. Furthermore royalties, ranging from high single digit percentages to low mid-teen percentage will be payable on net sales of licensed products in licensed territories. In connection with the Allist Agreement, in December 2021, the parties also entered into a Joint Clinical Collaboration Agreement (“Clinical Collaboration”) to define the framework under which the parties will cooperate and share costs related to global clinical studies to be conducted jointly by the Company and Allist. During the three months ended March 31, 2024 and 2023, the Company incurred $ 0.2 million and $ 0.6 million, respectively, in cost reimbursements to Allist which have been recorded as research and development expense under the Clinical Collaboration Agreement. The Company also was entitled to cost reimbursement from Allist of $ 0.1 million for each of the three months ended March 31, 2024 and 2023, which has been recorded as a reduction of research and development expenses. The Company assessed the Clinical Collaboration in accordance with ASC 808, Collaborative Arrangements , and determined that the arrangement did not meet the definition of a collaborative arrangement under ASC 808 since, while the Company and Allist are active participants in the activities under the Clinical Collaboration, both parties are not exposed to significant risks and rewards dependent on the commercial success of the activities. ​ ​ ​ 17 Table of Contents