What changed in this filing

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Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 97 added, 67 removed, 251 unchanged (40% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

September 30,

Current assets:

21 unchanged sentences

Common stock $ 0.0001 par value, 200,000,000 shares authorized;

33,509,090 and 2,745,480 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

33,694,355 and 2,745,480 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

1 unchanged sentence

Total stockholders’ equity (deficit)

Total liabilities, convertible preferred stock and stockholders’ equity (deficit)

Total liabilities, convertible preferred stock and stockholders’ equity

See accompanying notes to unaudited interim financial statements.

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating expenses:

13 unchanged sentences

convertible preferred stock

Subscriptions

Balance January 1, 2024

Issuance of Series B convertible preferred stock at $ 1.05 per share, net of issuance costs of $ 57

Issuance of common stock in initial public offering, net of issuance costs of $ 18,032

Conversion of convertible preferred stock into common stock

( 150,000,000 )

( 147,619,034 )

Exercise of stock options

1 unchanged sentence

Balance, March 31, 2024

Issuance costs of Series B convertible preferred stock

Repurchase of common stock

Exercise of stock options

1 unchanged sentence

Balance, June 30, 2024

Exercise of stock options

Stock-based compensation expense

Balance, September 30, 2024

See accompanying notes to unaudited interim financial statements.

4 unchanged sentences

convertible preferred stock

Subscriptions

Balance January 1, 2023

Issuance of common stock in initial public offering, net of issuance costs of $ 18,032

Conversion of convertible preferred stock into common stock

( 150,000,000 )

( 147,619,034 )

Issuance of Series B convertible preferred stock at $ 1.05 per share, net of issuance costs of $ 57

Exercise of stock options

1 unchanged sentence

Balance, March 31, 2023

Issuance costs of Series B convertible preferred stock

Repurchase of common stock

Exercise of stock options

1 unchanged sentence

Balance, June 30, 2023

Exercise of stock options

Stock-based compensation expense

Balance, September 30, 2023

See accompanying notes to unaudited interim financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

14 unchanged sentences

Proceeds from the sale of Series B convertible preferred stock, net of issuance costs

Payment of deferred offering costs

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of the period

9 unchanged sentences

(“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.

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, 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.

4 unchanged sentences

Development-Stage Risks and Liquidity

The Company has incurred losses since inception and has an accumulated deficit of $ 197.1 million as of June 30, 2024.

The Company has incurred losses since inception and has an accumulated deficit of $ 217.7 million as of September 30, 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 $ 298.7 million as of June 30, 2024 are sufficient to sustain planned operations through at least twelve months from the issuance date of these financial statements.

Management believes that cash and cash equivalents of $ 282.9 million as of September 30, 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.

9 unchanged sentences

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 June 30, 2024 and its results of operations for the three and six months ended June 30, 2024 and 2023.

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 September 30, 2024 and its results of operations for the three and nine months ended September 30, 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.

29 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Weighted-average shares of common stock outstanding

3 unchanged sentences

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:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Series A convertible preferred stock (as converted to common stock)

Series B convertible preferred stock (as converted to common stock)

Common stock subject to repurchase

Stock options

6 unchanged sentences

Early adoption is permitted.

A public entity should apply

A public entity should apply the amendments in the guidance retrospectively to all prior periods presented in the financial statements.

Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant

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NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

the amendments in the guidance retrospectively to all prior periods presented in the financial statements.

Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

segment expense categories identified and disclosed in the period of adoption.

The Company is currently evaluating the impact that this standard may have on its financial statements.

9 unchanged sentences

The Company is currently evaluating the impact that this standard may have on its financial statements.

In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures:

Disaggregation of Income Statement Expenses .

This standard requires the disclosure of more detailed information about the types of expenses in commonly presented expense captions, such as research and development, and general and administrative expenses.

This standard will be effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and may be applied either prospectively or retrospectively.

The Company is currently evaluating the impact that this standard may have on its financial statements.

Reverse Stock Split

1 unchanged sentence

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.

(g) License and Collaboration Agreements

The Company analyzes its license and collaborative agreements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards that are dependent on the commercial success of such activities.

To the extent the arrangement is within the scope of ASC 808, the Company assesses whether aspects of the arrangement are within the scope of other accounting literature.

If the Company concludes that some or all aspects of the arrangement represent a transaction with a customer, it accounts for those aspects of the arrangement within the scope of ASC 606, Revenue from Contracts with Customers .

None of the license and collaborative agreements discussed in Note 9 represent transactions with customers.

If the Company concludes that some or all aspects of the arrangement are within the scope of ASC 808 and do not represent a transaction with a customer, it recognizes costs incurred as a component of the related expense in the period incurred.

The arrangements may also require the Company to make payments on achievement of certain milestones, including clinical, regulatory, and development milestones.

Clinical, regulatory, and development milestones are recognized as research and development expense only when such milestones are deemed probable of being achieved.

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NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

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):

June 30, 2024

September 30, 2024

Current assets:

8 unchanged sentences

This approach results in a classification of these securities as Level 1 of the fair value hierarchy.

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NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

September 30,

Research and development

3 unchanged sentences

Accrued expenses consisted of the following (in thousands):

September 30,

Research and development

2 unchanged sentences

Other accrued expenses

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NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

Commitments and Contingencies

Operating lease expense was less than $ 0.1 million for each of the three and six months ended June 30, 2024 and 2023.

The Company’s remaining lease term and discount rate for its operating lease as of June 30, 2024 were 1.58 years and 10.0 %, respectively.

Future maturities of operating lease liabilities were as follows as of June 30, 2024 (in thousands):

Operating lease expense was less than $ 0.1 million for the three months ended September 30, 2024 and 2023, respectively.

Operating lease expense was $ 0.1 million and less than $ 0.1 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company’s remaining lease term and discount rate for its operating lease as of September 30, 2024 were 1.25 years and 10.0 %, respectively.

Future maturities of operating lease liabilities were as follows as of September 30, 2024 (in thousands):

Fiscal year ending:

3 unchanged sentences

Present value of lease liabilities

Cash paid for rent expense recorded during the three months ended June 30, 2024 and 2023 was less than $ 0.1 million.

Cash paid for rent expense recorded during the six months ended June 30, 2024 and 2023 was less than $ 0.1 million.

Cash paid for rent expense recorded during the three months ended September 30, 2024 and 2023 was less than $ 0.1 million.

Cash paid for rent expense recorded during the nine months ended September 30, 2024 and 2023 was $ 0.1 million and less than $ 0.1 million, respectively.

Stock-based Compensation

In June 2021, the Company adopted the 2021 Employee, Director and Consultant Equity Incentive Plan, as amended (the “2021 Plan”), that authorized the Company to grant up to 803,564 shares of common stock.

In 2022, the Company

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NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

amended the 2021 Plan and increased the total number of shares authorized under the Plan to 2,748,818 .

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 June 30, 2024, there were 3,802,245 shares available to be granted.

As of September 30, 2024, there were 3,758,647 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 .

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Research and development

General and administrative

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

The following is a summary of stock options activity:

3 unchanged sentences

Forfeited/Expired

Outstanding as of June 30, 2024

Exercisable as of June 30, 2024

Vested and expected to vest at June 30, 2024

The weighted-average grant-date fair value of options granted in the first six months of 2024 and 2023 were $ 7.49 and $ 2.74 per share, respectively.

Outstanding as of September 30, 2024

Exercisable as of September 30, 2024

Vested and expected to vest at September 30, 2024

The weighted-average grant-date fair value of options granted in the first nine months of 2024 and 2023 were $ 8.53 and $ 3.50 per share, respectively.

The fair value was estimated using the Black-Scholes option-pricing model based on the following assumptions:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Risk-free interest rate

1 unchanged sentence

3.45 % - 4.46 %

3.85 % - 4.66 %

3.45 % - 3.68 %

Expected term

5.5 - 6.1 years

6.0 - 6.1 years

5.5 - 6.1 years

Expected volatility

1 unchanged sentence

87.0 % - 89.5 %

87.0 % - 88.0 %

Expected dividend yield

Estimated fair value of the Company's common stock per share

15.90 - 20.15

Unrecognized compensation cost for awards not vested as of June 30, 2024 was $ 9.2 million and will be expensed over a weighted-average period of 2.81 years.

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NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

Unrecognized compensation cost for awards not vested as of September 30, 2024 was $ 10.0 million and will be expensed over a weighted-average period of 2.69 years.

License and Collaborative Agreements

In June 2021, the Company entered into a Global Technology Transfer and License Agreement with Allist (the “Allist Agreement”).

In June 2021, the Company entered into a Global Technology Transfer and License Agreement with Allist (“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.

1 unchanged sentence

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 six months ended June 30, 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.

1 unchanged sentence

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 six months ended June 30, 2024 and 2023, the Company incurred $ 0.3 million and $ 1.3 million, respectively, in cost reimbursements to Allist which have been recorded as research and development expense under the Clinical Collaboration.

The Company also was entitled to cost reimbursement from Allist of $ 0.3 million for each of the six months ended June 30, 2024 and 2023, which has been recorded as a reduction of research and development expenses.

During the nine months

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NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

ended September 30, 2024 and 2023, the Company incurred $ 0.5 million and $ 1.4 million, respectively, in cost reimbursements to Allist which have been recorded as research and development expense under the Clinical Collaboration.

The Company also was entitled to cost reimbursement from Allist of $ 0.3 million for each of the nine months ended September 30, 2024 and 2023, which has been recorded as a reduction of research and development expenses.

During the nine months ended September 30, 2024 and 2023, no milestones were met or achieved, or were probable of achievement.

In June 2024, the Company entered into a collaboration agreement with Jiangsu Alphamab Biopharmaceuticals Co., Ltd.

(“Alphamab”) to discover, develop and commercialize novel antibody drug conjugates (“ADCs”) for the treatment of cancers.

Under the agreement, both companies will leverage Alphamab’s proprietary linker-payload platform and glycan-conjugation technology to identify novel ADCs for oncology indications.

The agreement gives the Company exclusive rights to develop and commercialize ADCs globally, except greater China, which includes outside of mainland China, Hong Kong, Macau and Taiwan where Alphamab retains the right to develop and commercialize the ADCs.

Under the agreement, both companies seek to leverage Alphamab’s proprietary linker-payload platform and glycan-conjugation technology to identify novel ADCs for oncology indications.

The agreement gives the Company exclusive rights to develop and commercialize ADCs globally, except greater China, which includes mainland China, Hong Kong, Macau and Taiwan where Alphamab retains the right to develop and commercialize the ADCs.

The terms of the agreement include combined upfront and potential milestone payments to Alphamab of up to $ 615.5 million in aggregate for the potential programs, based on the achievement of certain regulatory, development, and sales milestones.

In addition, Alphamab is entitled to receive tiered sales royalties from the Company for each ADC product

The upfront payment was recorded to research and development expense during the three-month period ending June 30, 2024.

No milestones have been met or achieved, or are probable of achievement, since the inception of the agreement.

In December 2021, the Company entered into a Research Collaboration Agreement, as amended, effective June 30, 2023 (the “Aarvik Collaboration Agreement”), 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.

(“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 Aarvik Collaboration Agreement.

After the 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

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NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

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.

The Company incurred $ 0.8 million and $ 0.6 million in research and development expenses related to the Aarvik SOWs during the three months ended June 30, 2024 and 2023, respectively.

The Company incurred $ 1.0 million and $ 0.7 million in research and development expenses related to the Aarvik SOWs during the six months ended June 30, 2024 and 2023, respectively.

On August 9, 2024, the Company entered into an amendment and restatement of the Aarvik Collaboration Agreement (the “Amended and Restated Aarvik Collaboration Agreement”).

Under the Amended and Restated Aarvik Collaboration Agreement, Aarvik has granted the Company an exclusive option to obtain exclusive rights to certain of Aarvik’s intellectual property for the research, development, manufacture, use, commercialization, or other exploitation of the ADCs related to (i) the two agreed targets to which the compounds being developed under the collaboration bind, which is referred to as the Target Pair, and (ii) to acquire exclusive rights to certain intellectual property generated during the collaboration.

Under the Amended and Restated Aarvik Collaboration Agreement, Aarvik granted the Company an exclusive option to obtain exclusive rights to certain of Aarvik’s intellectual property for the research, development, manufacture, use, commercialization, or other exploitation of the ADCs related to (i) the two agreed targets to which the compounds being developed under the collaboration bind, which is referred to as the Target Pair, and (ii) the acquisition of exclusive rights to certain intellectual property generated during the collaboration.

The Company has not yet selected the indication or indications that it would pursue in the collaboration and anticipates doing so in connection with the identification of a lead candidate for IND-enabling studies.

Under the Amended and Restated Aarvik Collaboration Agreement, the Company is now required to pay Aarvik a collaboration initiation fee and research fees as provided in the SOWs in an aggregate of up to $ 4.7 million (based on estimated research fees).

Under the Amended and Restated Aarvik Collaboration Agreement, the Company is required to pay Aarvik a collaboration initiation fee and research fees as provided in the SOWs in an aggregate of up to $ 4.7 million (based on estimated research fees).

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NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

The Company incurred $ 1.7 million and $ 0.4 million in research and development expenses related to the Aarvik SOWs during the three months ended September 30, 2024 and 2023, respectively.

The Company incurred $ 2.7 million and $ 1.1 million in research and development expenses related to the Aarvik SOWs during the nine months ended September 30, 2024 and 2023, respectively.

With the exception of a $ 1.0 million payment to exercise an option which was recorded to research and development expense during the three month period ending September 30, 2024, no milestones have been met or achieved since the inception of the Aarvik Collaboration Agreement.

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 1. Financial Statements