What changed in this filing

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Item 1. Financial Statements

2024-11-06 compared with 2024-08-06 · 183 added, 151 removed, 500 unchanged (40% of the section changed)

4 unchanged sentences

(in thousands, except share and per share amounts)

September 30,

2024 December 31,

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Operating lease liabilities, current

Deferred revenue ($ 2,487 and $ 2,487 from related party, respectively)

Deferred revenue ($ 2,487 from related party as of September 30, 2024, and December 31, 2023)

Total current liabilities 32,159 28,302

LONG-TERM LIABILITIES

Deferred revenue, net of current portion ($ 2,487 and $ 3,730 from related party, respectively)

Deferred revenue, net of current portion ($ 1,865 and $ 3,730 from related party as of September 30, 2024, and December 31, 2023, respectively)

MSKCC success payments liability 1,005 2,939

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STOCKHOLDERS’ EQUITY

Common stock, par value $ 0.0001 per share, 300,000,000 shares authorized at June 30, 2024, and December 31, 2023, respectively;

90,362,771 and 88,448,948 shares issued and outstanding as of June 30, 2024, and December 31, 2023, respectively

Common stock, par value $ 0.0001 per share, 300,000,000 shares authorized at September 30, 2024, and December 31, 2023;

90,552,687 and 88,448,948 shares issued and outstanding as of September 30, 2024, and December 31, 2023, respectively

Additional paid-in-capital 693,305 667,648

Accumulated other comprehensive (loss) income

Accumulated other comprehensive income

Accumulated deficit ( 412,900 ) ( 299,285 )

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(in thousands, except share and per share amounts)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Licensing and collaboration revenue (including $ 2,245 and $ 2,867 for three and six months ended June 30, 2024, respectively, and $ 1,150 for each of the three- and six-month periods ended June 30, 2023, from related parties)

Licensing and collaboration revenue (including $ 622 and $ 3,488 for three and nine months ended September 30, 2024, respectively, and $ 622 and $ 1,772 for three and nine months ended September 30, 2023, respectively, from related parties)

$ 2,024 $ 23,662 $ 7,917 $ 30,919

4 unchanged sentences

Loss from operations ( 38,238 ) ( 14,633 ) ( 127,741 ) ( 78,617 )

Other income (expense):

Other income:

Change in fair value of equity securities ( 14 ) ( 4 ) ( 116 ) 3

4 unchanged sentences

Net loss ( 34,684 ) ( 10,002 ) ( 113,615 ) ( 67,565 )

Other comprehensive income (loss):

Net unrealized (loss) gain on available-for-sale marketable securities, net of tax

Other comprehensive income:

Net unrealized gain on available-for-sale marketable securities, net of tax

1,108 155 759 537

12 unchanged sentences

BALANCE—December 31, 2023 88,448,948 $ 8 $ 667,648 $ 30 $ ( 299,285 ) $ 368,401

Issuance of common stock under ESPP

Issuances of common stock under ESPP

122,035 — 667 — — 667

Issuance of common stock on exercise of options 134,347 — 489 — — 489

Issuance of common stock in connection with our ATM offering, net of offering expenses

Issuances of common stock on exercises of options

134,347 — 489 — — 489

Issuance of common stock upon vesting of RSUs

Issuances of common stock in connection with our ATM offering, net of offering expenses

1,594,171 1 11,329 — — 11,330

Issuances of common stock upon vesting of RSUs

15,000 — — — — —

Stock-based compensation expense — — 3,988 — — 3,988

2 unchanged sentences

BALANCE—March 31, 2024 90,314,501 $ 9 $ 684,121 $ ( 322 ) $ ( 340,519 ) $ 343,289

Issuance of common stock under ESPP

Issuances of common stock under ESPP

400 — 2 — — 2

Issuance of common stock on exercise of options 47,870 — 129 — — $ 129

Issuances of common stock on exercises of options

47,870 — 129 — — 129

Stock-based compensation expense — — 4,738 — — 4,738

2 unchanged sentences

BALANCE—June 30, 2024 90,362,771 $ 9 688,990 $ ( 319 ) $ ( 378,216 ) $ 310,464

Issuances of common stock under ESPP

138,743 — 246 — — 246

Issuances of common stock upon vesting of RSUs

51,173 — — — — —

Stock-based compensation expense — — 4,069 — — 4,069

Net loss — — — — ( 34,684 ) ( 34,684 )

Other comprehensive income — — — 1,108 — 1,108

BALANCE—September 30, 2024 90,552,687 $ 9 $ 693,305 $ 789 $ ( 412,900 ) $ 281,203

BALANCE—December 31, 2022 61,029,184 $ 6 $ 499,598 $ ( 1,518 ) $ ( 197,215 ) $ 300,871

Issuance of common stock under ESPP

Issuances of common stock under ESPP

70,271 — 404 — — 404

Issuance of common stock on exercise of options 55,433 — 115 — — 115

Issuance of common stock in connection with our ATM offering, net of offering expenses

Issuances of common stock on exercises of options

55,433 — 115 — — 115

Issuances of common stock in connection with our ATM offering, net of offering expenses

168,635 — 1,007 — — 1,007

Stock-based compensation expense — — 3,131 — — 3,131

2 unchanged sentences

BALANCE—March 31, 2023 61,323,523 $ 6 $ 504,255 $ ( 730 ) $ ( 225,259 ) $ 278,272

Issuance of common stock on exercise of options 86,085 — 236 — — 236

Issuance of common stock pursuant to private placement with Pfizer

Issuances of common stock on exercises of options

86,085 — 236 — — 236

Issuances of common stock pursuant to private placement with Pfizer

4,690,431 — 17,290 — — 17,290

Stock-based compensation expense — — 3,585 — — 3,585

2 unchanged sentences

BALANCE—June 30, 2023 66,100,039 $ 6 $ 525,366 $ ( 1,136 ) $ ( 254,778 ) $ 269,458

Issuances of common stock under ESPP

68,183 — 382 — — 382

Issuances of common stock on exercises of options

83,407 — 372 — — 372

Issuances of common stock upon vesting of RSUs

63,596 — — — — —

Issuances of common stock in connection with follow-on public offering, net of offering expenses

22,115,384 2 134,423 — — 134,425

Stock-based compensation expense — — 3,478 — — 3,478

Net loss — — — — ( 10,002 ) ( 10,002 )

Other comprehensive income

— — — 155 — 155

BALANCE—September 30, 2023 88,430,609 $ 8 $ 664,021 $ ( 981 ) $ ( 264,780 ) $ 398,268

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Depreciation and amortization 2,743 2,785

Gain on disposal of fixed assets — ( 34 )

Loss (gain) on disposal of fixed assets

Non-cash consideration for licensing and collaboration revenue ( 1,634 ) ( 61 )

18 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from maturities of marketable securities

Proceeds from sales and maturities of marketable securities

325,553 283,193

2 unchanged sentences

Payments to acquire in-process research and development ( 1,625 ) —

Net cash provided by investing activities 44,156 31,767

Net cash provided by (used in) investing activities 70,677 ( 36,709 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of common stock pursuant to private placement with Pfizer

Proceeds from exercise of stock options

Proceeds from purchases of common stock under ESPP

Proceeds from issuance of common stock related to our ATM, net of offering expenses

Proceeds from public follow-on public offering, net of offering expenses

Proceeds from issuances of common stock pursuant to private placement with Pfizer

Proceeds from exercises of stock options

Proceeds from issuances of common stock under ESPP

Proceeds from issuances of common stock related to our ATM, net of offering expenses

Net cash provided by financing activities 12,861 154,341

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Our wholly owned subsidiaries hold interests in our equity investments and do not have operating activities.

We have incurred operating losses and negative cash flows from operations since our inception and we had an accumulated deficit of $ 378.2 million as of June 30, 2024.

During the six months ended June 30, 2024, we incurred a net loss of $ 78.9 million and used $ 70.1 million of cash in operating activities.

We have incurred operating losses and negative cash flows from operations since our inception and we had an accumulated deficit of $ 412.9 million as of September 30, 2024.

During the nine months ended September 30, 2024, we incurred a net loss of $ 113.6 million and used $ 102.7 million of cash in operating activities.

We expect to continue to incur substantial losses, and our ability to achieve and sustain profitability will depend on the successful development, regulatory approval, and commercialization of our product candidates and on our ability to generate sufficient revenue to support our cost structure.

We may never achieve profitability and, unless and until we do, we will need to continue to raise additional capital.

Our management expects that existing cash, cash equivalents, and marketable securities of $ 311.8 million as of June 30, 2024, will be sufficient to fund our current operating plan for at least the next 12 months from the date of issuance of our unaudited condensed consolidated financial statements.

Our management expects that existing cash, cash equivalents, and marketable securities of $ 281.0 million as of September 30, 2024, will be sufficient to fund our current operating plan for at least the next 12 months from the date of this Quarterly Report on Form 10-Q (“Form 10-Q”).

Summary of Significant Accounting Policies

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Three Months Ended

Six Months Ended As of

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Licensee A * * 10.4 % * * *

Licensee B 18.7 % 17.1 % 20.5 % 19.5 % 59.3 % 47.5 %

Licensee C * 36.6 % * 41.1 % * *

Nine Months Ended As of

September 30,

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

34.9 % * 24.2 % * 68.5 % 47.5 %

* 90.8 % * 79.1 % * *

30.7 % * 23.6 % * * *

* * 20.5 % * * *

14.0 % * * * * *

11.2 % * * * * *

* * * * 15.9 % *

Total 90.8 % 90.8 % 68.3 % 79.1 % 84.4 % 47.5 %

1 unchanged sentence

We monitor economic conditions to identify facts or circumstances that may indicate if any of our accounts receivable are not collectible or if contract assets should be impaired.

No allowance for credit losses or contract asset impairment was recorded as of June 30, 2024, or December 31, 2023.

No allowance for credit losses or contract asset impairment was recorded as of September 30, 2024, or December 31, 2023.

Recent Accounting Pronouncements Not Yet Adopted

In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements:

Codification Amendments in Response to the U.S.

Securities and Exchange Commission (“SEC”) Disclosure Update and Simplification Initiative.

This ASU aligns the requirements in the Accounting Standards Codification (“ASC”) to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the SEC.

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.

Securities and Exchange Commission (“SEC”).

The effective date for each amended topic in the ASC is either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective or June 30, 2027, if the SEC has not removed the requirements by that date.

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Improvements to Income Tax Disclosures.

This ASU requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal

years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of the adoption of ASU 2023-09.

This ASU requires public entities, on an annual basis, to provide disclosure of specific categories in the rate

reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of the new guidance and do not expect that the adoption of ASU 2023-09 will have a material impact on our consolidated financial statements.

In March 2024, the FASB issued ASU No.

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We recognize transfers into and out of levels within the fair value hierarchy in the period in which the actual event or change in circumstances that caused the transfer occurs.

No such transfers occurred during the six months ended June 30, 2024, and 2023.

No such transfers occurred during the nine months ended September 30, 2024, and 2023.

Level 1 financial instruments are comprised of money market fund investments and U.S.

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The following table sets forth our financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):

Fair Value Measurements as of June 30, 2024

Fair Value Measurements as of September 30, 2024

Total Level 1 Level 2 Level 3

1 unchanged sentence

$ 193,812 $ 193,812 $ — $ —

Commercial paper ($ 18,210 included in cash and cash equivalents)

43,931 — 43,931 —

government agency bonds ($ 3,973 included in cash and cash equivalents)

31,515 — 31,515 —

Commercial paper ($ 5,990 included in cash and cash equivalents)

30,203 — 30,203 —

Money market fund investments (included in cash and cash equivalents) 16,411 16,411 — —

18 unchanged sentences

Total fair value of liabilities $ 2,939 $ — $ — $ 2,939

The fair value and amortized cost of cash equivalents and available-for-sale marketable securities by major security type as of June 30, 2024, and December 31, 2023, are presented in the following tables (in thousands):

As of June 30, 2024

The fair value and amortized cost of cash equivalents and available-for-sale marketable securities by major security type as of September 30, 2024, and December 31, 2023, are presented in the following tables (in thousands):

As of September 30, 2024

Treasury bills ($ 5,596 included in cash and cash equivalents)

$ 193,198 $ 617 $ ( 3 ) $ 193,812

Commercial paper ($ 18,210 included in cash and cash equivalents)

43,961 — ( 30 ) 43,931

government agency bonds ($ 3,973 included in cash and cash equivalents)

31,380 136 ( 1 ) 31,515

Commercial paper ($ 5,990 included in cash and cash equivalents)

30,173 32 ( 2 ) 30,203

Money market fund investments (included in cash equivalents)

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The following table presents the fair value of available-for-sale marketable securities by contractual maturities (in thousands):

June 30, 2024

September 30, 2024

Due in less than one year $ 196,208

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Change in fair value ( 1,934 )

Balance at June 30, 2024 $ 841

Our liability for the MSKCC success payments is carried at fair value and changes are recognized as expense or income as part of other income (expense) until the success payments liability is paid or expires.

We recorded a $ 1.8 million and $ 0.3 million change in the fair value of the MSKCC success payments liability as a gain in other income (expense) in our unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended June 30, 2024, and 2023, respectively.

We recorded a $ 2.1 million and $ 0.5 million change in the fair value of the MSKCC success payments liability as a gain in other income (expense) in our unaudited condensed consolidated statements of operations and comprehensive loss for the six months ended June 30, 2024, and 2023, respectively.

Balance at September 30, 2024 $ 1,005

Our liability for the MSKCC success payments is carried at fair value and changes are recognized as expense or income as part of other income until the success payments liability is paid or expires.

We recorded a $ 0.2 million and $ 0.1 million change in the fair value of the MSKCC success payments liability as a loss in other income in our unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended September 30, 2024, and 2023, respectively.

We recorded a $ 1.9 million and $ 0.4 million change in the fair value of the MSKCC success payments liability as a gain in other income in our unaudited condensed consolidated statements of operations and comprehensive loss for the nine months ended September 30, 2024, and 2023, respectively.

The table below summarizes key assumptions used in the valuation of the MSKCC success payments liability:

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In addition, we incorporated the estimated number and timing of valuation measurement dates in the calculation of the MSKCC success payments liability.

As of June 30, 2024, we did not note any significant changes to the inputs used in the MSKCC success payments liability fair value calculation, other than a change in the fair value of our common stock to $ 1.64 per share.

As of September 30, 2024, we did not note any significant changes to the inputs used in the MSKCC success payments liability fair value calculation, other than a change in the fair value of our common stock to $ 1.96 per share.

Significant Agreements

1 unchanged sentence

For further information regarding our significant agreements, see Note 4 to the consolidated financial statements included in our Form 10-K.

During the three months ended June 30, 2023, we recognized $ 1.4 million in revenue associated with the now-terminated Collaboration and License Agreement, dated February 9, 2021 (as amended, “AbbVie Agreement”) with AbbVie Manufacturing Management Unlimited Company (“AbbVie”).

During the six months ended June 30, 2023, we recognized $ 3.0 million in revenue under the AbbVie Agreement.

No revenue was recognized under the AbbVie Agreement during each of the three- or six-month periods ended June 30, 2024, as the AbbVie Agreement was terminated

effective October 25, 2023.

As of June 30, 2024, and December 31, 2023, we had no amounts recorded in accounts receivable, contract assets, or deferred revenue in our consolidated balance sheets related to the AbbVie Agreement.

During the three months ended September 30, 2023, we recognized $ 21.5 million in revenue associated with the now-terminated Collaboration and License Agreement, dated February 9, 2021 (as amended, “AbbVie Agreement”) with AbbVie Manufacturing Management Unlimited Company (“AbbVie”).

During the nine months ended September 30, 2023, we recognized $ 24.5 million in revenue under the AbbVie Agreement.

No revenue was recognized under the AbbVie Agreement during each of the three- and nine-month periods ended September 30, 2024, as the AbbVie Agreement was terminated effective October 25, 2023.

As of September 30, 2024, and December 31, 2023, we had no amounts recorded in

accounts receivable, contract assets, or deferred revenue in our consolidated balance sheets related to the AbbVie Agreement.

Our significant agreements may include nonrefundable, upfront payments;

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Our obligation to make such payments is contingent upon milestones being achieved, licensed products being commercialized, and the agreements remaining in effect.

For the three months ended June 30, 2024, and 2023, we recorded $ 0.3 million and $ 0.4 million, respectively, as research and development expense in our unaudited consolidated statements of operations and comprehensive loss related to our license agreements.

For the six months ended June 30, 2024, and 2023, we recorded $ 1.6 million and $ 0.8 million, respectively, as research and development expense in our unaudited condensed consolidated statements of operations and comprehensive loss related to our significant agreements.

For the three months ended June 30, 2024, and 2023, we recorded $ 0.2 million and $ 1.0 million, respectively, as general and administrative expense for patent prosecution and maintenance costs in our unaudited condensed consolidated statements of operations and comprehensive loss, which includes reimbursements of patent prosecution and maintenance costs of $ 0.4 million and $ 0.7 million, respectively.

For the six months ended June 30, 2024, and 2023, we recorded $ 0.4 million and $ 1.8 million, respectively, as general and administrative expense for patent prosecution and maintenance costs in our unaudited condensed consolidated statements of operations and comprehensive loss, which includes reimbursements of patent prosecution and maintenance costs of $ 0.5 million and $ 1.1 million, respectively.

As of June 30, 2024, certain license and assignment agreements included potential future payments from us for development, regulatory, and sales milestones totaling approximately $ 159.9 million.

For the three months ended September 30, 2024, and 2023, we recorded $ 0.2 million and $ 0.4 million, respectively, as research and development expense in our unaudited condensed consolidated statements of operations and comprehensive loss related to our license agreements.

For the nine months ended September 30, 2024, and 2023, we recorded $ 1.8 million and $ 1.2 million, respectively, as research and development expense in our unaudited condensed consolidated statements of operations and comprehensive loss related to our significant agreements.

For the three months ended September 30, 2024, and 2023, we recorded $ 0.1 million and $ 0.4 million, respectively, as general and administrative expense for patent prosecution and maintenance costs in our unaudited condensed consolidated statements of operations and comprehensive loss, which includes reimbursements of patent prosecution and maintenance costs of $ 0.4 million and $ 0.1 million, respectively.

For the nine months ended September 30, 2024, and 2023, we recorded $ 0.5 million and $ 2.2 million, respectively, as general and administrative expense for patent prosecution and maintenance costs in our unaudited condensed consolidated statements of operations and comprehensive loss, which includes reimbursements of patent prosecution and maintenance costs of $ 0.9 million and $ 1.3 million, respectively.

As of September 30, 2024, certain license and assignment agreements included potential future payments from us for development, regulatory, and sales milestones totaling approximately $ 159.9 million.

Disaggregation of Revenue

We disaggregate revenue by geographical market based on the location of research and development activities of our licensees and collaborators.

The following table is a summary of revenue by geographic location for the three and six months ended June 30, 2024, and 2023 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

The following table is a summary of revenue by geographic location for the three and nine months ended September 30, 2024, and 2023 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

2 unchanged sentences

Total $ 2,024 $ 23,662 $ 7,917 $ 30,919

During the three months ended June 30, 2024, we recognized $ 2.8 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 0.7 million of revenue related to performance obligations satisfied over time.

During the three months ended June 30, 2023, we recognized $ 2.4 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 1.4 million of revenue related to performance obligations satisfied over time.

During the six months ended June 30, 2024, we recognized $ 4.6 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 1.3 million of revenue related to performance obligations satisfied over time.

During the six months ended June 30, 2023, we recognized $ 4.3 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 3.0 million of revenue related to performance obligations satisfied over time.

During the three months ended September 30, 2024, we recognized $ 1.4 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 0.6 million of revenue related to performance obligations satisfied over time.

During the three months ended September 30, 2023, we recognized $ 1.6 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 22.1 million of revenue related to performance obligations satisfied over time that included $ 21.5 million in licensing and collaboration revenue associated with the now-terminated AbbVie Agreement.

During the nine months ended September 30, 2024, we recognized $ 6.0 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 1.9 million of revenue related to performance obligations satisfied over time.

During the nine months ended September 30, 2023, we recognized $ 5.8 million of revenue related to performance obligations satisfied at a point in time, and we recognized $ 25.1 million of revenue related to performance obligations satisfied over time which included $ 24.5 million in licensing and collaboration revenue associated with the now-terminated AbbVie Agreement.

Contract Balances

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Contract liabilities consist of deferred revenue and relate to amounts invoiced to, or advance consideration received from, licensees that precede our satisfaction of the associated performance obligations.

As of June 30, 2024, and December 31, 2023, our deferred revenue balance primarily resulted from the upfront payment received relating to our performance obligation to Pfizer Inc.

As of September 30, 2024, and December 31, 2023, our deferred revenue balance primarily resulted from the upfront payment received relating to our performance obligation to Pfizer Inc.

The remaining deferred revenue relates to upfront payments received under license agreements that also include nonrefundable annual license fees, which are accounted for as material rights for license renewals and are recognized at the point in time when annual license fees are paid by the licensees and the renewal periods begin.

The following table presents changes in our contract assets and liabilities during the six months ended June 30, 2024 (in thousands):

The following table presents changes in our contract assets and liabilities during the nine months ended September 30, 2024 (in thousands):

Balance as of

1 unchanged sentence

Balance as of

September 30,

Accounts receivable $ 148 $ 4,757 $ ( 4,721 ) $ 184

3 unchanged sentences

Deferred revenue, current and long-term $ 8,949 $ 1,250 $ ( 3,423 ) $ 6,776

Unbilled accounts receivable decreased $ 0.5 million during the six months ended June 30, 2024, primarily due to the decrease in minimum annual royalties under our license agreements.

Deferred revenue decreased during the six months ended June 30, 2024, primarily due to the recognition of deferred revenue related to the satisfaction of our performance obligation to Pfizer.

See Note 7 to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for additional information.

During the six months ended June 30, 2024, and 2023, we recognized $ 1.6 million and $ 2.4 million of revenue, respectively, which was included in the opening contract liabilities balances at the beginning of the respective periods.

During the nine months ended September 30, 2024, and 2023, we recognized $ 2.2 million and $ 23.2 million of revenue, respectively, which was included in the opening contract liabilities balances at the beginning of the respective periods.

Transaction Prices Allocated to Remaining Performance Obligations

Remaining performance obligations represent in aggregate the amount of a transaction price that has been allocated to performance obligations not delivered as of the end of a reporting period.

The value of transaction prices allocated to remaining unsatisfied performance obligations as of June 30, 2024, was approximately $ 7.4 million.

The value of transaction prices allocated to remaining unsatisfied performance obligations as of September 30, 2024, was approximately $ 6.8 million.

We expect to recognize approximately $ 2.8 million of remaining performance obligations as revenue in the next 12 months and to recognize the remainder thereafter.

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Other receivables consisted of the following (in thousands):

September 30,

2024 December 31,

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

September 30,

2024 December 31,

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Property and equipment, net, consisted of the following (in thousands):

September 30,

2024 December 31,

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Property and equipment, net $ 19,565 $ 18,270

Depreciation and amortization expenses related to property and equipment were $ 0.9 million and $ 0.6 million for the three months ended June 30, 2024, and 2023, respectively.

Depreciation and amortization expenses related to property and equipment were $ 1.6 million and $ 1.2 million, for the six months ended June 30, 2024, and 2023, respectively.

Depreciation and amortization expenses related to property and equipment were $ 1.1 million and $ 1.6 million for the three months ended September 30, 2024, and 2023, respectively.

Depreciation and amortization expenses related to property and equipment were $ 2.7 million and $ 2.8 million, for the nine months ended September 30, 2024, and 2023, respectively.

Accrued expenses and other current liabilities consisted of the following (in thousands):

September 30,

2024 December 31,

Accrued employee compensation and related expenses $ 6,486 $ 9,517

Accrued research and development expenses $ 12,150 $ 8,720

Accrued employee compensation and related expenses 7,087 9,517

Accrued securities litigation settlement

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Pfizer Investment

During the three months ended June 30, 2024, we recognized $ 0.6 million of revenue from our Information Rights Agreement with Pfizer, dated June 29, 2023, pursuant to which we had originally allocated $ 7.5 million as a contract with a customer under ASC Topic 606.

During the six months ended June 30, 2024, we recognized $ 1.2 million of revenue from Pfizer.

We did no t recognize any revenue from Pfizer during each of the three- and six-month periods ended June 30, 2023.

As of June 30, 2024, there was approximately $ 5.0 million of related party deferred revenue ($ 2.5 million included in current liabilities and $ 2.5 million included in long-term liabilities) related to our performance obligation to Pfizer.

During the three months ended September 30, 2024, we recognized $ 0.6 million of revenue from our Information Rights Agreement with Pfizer, dated June 29, 2023, pursuant to which we had originally allocated $ 7.5 million as a contract with a customer under ASC Topic 606.

During the nine months ended September 30, 2024, we recognized $ 1.9 million of revenue from Pfizer.

During each of the three- and nine-month periods ended September 30, 2023, we recognized $ 0.6 million of revenue from Pfizer.

As of September 30, 2024, there was approximately $ 4.4 million of related party deferred revenue ($ 2.5 million included in current liabilities and $ 1.9 million included in long-term liabilities) related to our performance obligation to Pfizer.

As of December 31, 2023, there was approximately $ 6.2 million of related party deferred revenue ($ 2.5 million included in current liabilities and $ 3.7 million included in long-term liabilities) related to our performance obligation to Pfizer.

Edge Animal Health

During the three months ended June 30, 2024, we received additional shares of convertible preferred stock pursuant to anti-dilution rights associated with the Exclusive License Agreement for Veterinary Therapeutics (as amended, the “Edge chRDNA License Agreement”) with Edge Animal Health (“Edge”), a private company and related party.

Edge issued to us 1,623,275 shares of convertible preferred stock with an estimated fair value of $ 1.6 million, based on management’s best estimate and judgment.

In June 2024, we received additional shares of convertible preferred stock pursuant to anti-dilution rights associated with the Exclusive License Agreement for Veterinary Therapeutics (as amended, “Edge chRDNA License Agreement”) with Edge Animal Health (“Edge”), a private company and related party.

Edge issued 1,623,275 shares of convertible preferred stock to us with an estimated fair value of $ 1.6 million, based on management’s best estimate and judgment.

The Edge chRDNA License Agreement is a contract with a customer under ASC 606.

Accordingly, we recognized $ 1.6 million as revenue during each of the three- and six-month periods ended June 30, 2024.

We did not recognize any revenue in connection with the Edge chRDNA License Agreement in 2023.

On May 16, 2023, we entered into an Exclusive License Agreement for Veterinary Therapeutics (CRISPR-Cas9) (the “Edge Cas9 License Agreement”), under which we granted Edge an exclusive worldwide license to certain CRISPR-Cas9 intellectual property rights in the field of veterinary therapeutics.

We did no t recognize any revenue in connection with the Edge chRDNA License Agreement during the three months ended September 30, 2024.

We recognized $ 1.6 million as revenue during the nine months ended September 30, 2024.

We did no t recognize any revenue in connection with the Edge chRDNA License Agreement in 2023.

On May 16, 2023, we entered into an Exclusive License Agreement for Veterinary Therapeutics (CRISPR-Cas9) (“Edge Cas9 License Agreement”), under which we granted Edge an exclusive worldwide license to certain CRISPR-Cas9 intellectual property rights in the field of veterinary therapeutics.

Previously, on May 15, 2020, we entered into an Option for an Exclusive License under which Edge could exercise its option within three years upon payment of a total of $ 1.2 million, which option Edge exercised and paid $ 1.2 million, and we entered into the Edge Cas9 License Agreement.

We recognized $ 1.2 million of revenue in connection with the Edge Cas9 License Agreement for each of the three and six months ended June 30, 2023.

We did not recognize any revenue in connection with the Edge Cas9 License Agreement in 2024.

We did no t recognize any revenue in connection with the Edge Cas9 License Agreement in 2024.

We did no t recognize any revenue in connection with the Edge Cas9 License Agreement during the three months ended September 30, 2023.

We recognized $ 1.2 million of revenue in connection with the Edge Cas9 License Agreement during the nine months ended September 30, 2023.

Operating Lease Obligations

As of June 30, 2024, we had operating leases for our laboratory and office space in Berkeley, California, consisting of approximately 75,000 square feet, with remaining lease terms up to 8.1 years.

As of September 30, 2024, we had operating leases for our laboratory and office spaces in Berkeley, California, consisting of approximately 75,000 square feet, with remaining lease terms up to 7.8 years.

Certain of our laboratory and office space lease agreements include options to extend the terms for a period of five years and also contain provisions for future rent increases.

1 unchanged sentence

The components of lease costs, which are included in our unaudited condensed consolidated statements of operations and comprehensive loss, were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

3 unchanged sentences

Total lease cost $ 2,013 $ 2,000 $ 6,010 $ 5,937

(1) Includes $ 0.6 million and $ 0.6 million of variable lease cost related to operating expenses and taxes for the three months ended June 30, 2024, and June 30, 2023, respectively.

Includes $ 1.3 million and $ 1.2 million of variable lease cost related to operating expenses and taxes for the six months ended June 30, 2024, and 2023, respectively.

(1) Includes $ 0.7 million of variable lease cost related to operating expenses and taxes for each of the three- month periods ended September 30, 2024, and September 30, 2023.

Includes $ 2.0 million and $ 1.9 million of variable lease cost related to operating expenses and taxes for the nine months ended September 30, 2024, and 2023, respectively.

Supplemental information related to our leases was as follows (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Cash paid for amounts included in the measurement of lease liabilities:

1 unchanged sentence

The following table summarizes the weighted-average remaining lease term and weighted-average discount rate for our corporate laboratory and office leases:

September 30,

2024 December 31,

1 unchanged sentence

Weighted-average discount rate 11.3 % 11.3 %

The following table summarizes a maturity analysis of our operating lease liabilities showing the aggregate lease payments as of June 30, 2024 (in thousands):

The following table summarizes a maturity analysis of our operating lease liabilities showing the aggregate lease payments as of September 30, 2024 (in thousands):

Remainder of 2024 (1)

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Some of these agreements also include contingent payments that will become payable if and when certain development, regulatory, clinical, and/or commercial milestones are achieved by us.

As of June 30, 2024, satisfaction and timing of such contingent payments is uncertain and thus cannot be reasonably estimated.

As of September 30, 2024, satisfaction and timing of such contingent payments are uncertain and thus cannot be reasonably estimated.

Guarantees and Indemnifications

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Our exposure under these agreements is unknown because claims may be made against us in the future.

As of June 30, 2024, and December 31, 2023, we did not have any material indemnification claims that were probable or reasonably possible, and consequently, we have not recorded related liabilities.

As of September 30, 2024, and December 31, 2023, we did not have any material indemnification claims that were probable or reasonably possible, and consequently, we have not recorded related liabilities.

From time to time, we may become involved in litigation arising in the ordinary course of business.

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Caribou Biosciences, Inc., et al.

, Case Number 4:23-cv-01742-YGR (“Bergman Case”).

The Bergman complaint challenges disclosures regarding our company’s business, operations, and prospects, specifically with respect to the alleged durability of CB-010’s therapeutic effect and the product candidate’s clinical and commercial prospects, in alleged violation of Sections 11 and 15 of the Securities Act of 1933, as amended (“Securities Act”), and Sections 10(b) and 20(a) of the Exchange Act.

On September 18, 2023, plaintiffs filed an amended complaint adding the IPO underwriters as defendants and making substantially the same allegations as the original complaint.

, Case Number 23-cv-01742 (“Bergman Case”).

The Bergman complaint challenged disclosures regarding our company’s business, operations, and prospects, specifically with respect to the alleged durability of CB-010’s therapeutic effect and the product candidate’s clinical and commercial prospects, in alleged violation of Sections 11 and 15 of the Securities Act of 1933, as amended (“Securities Act”), and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”).

On September 18, 2023, plaintiffs filed an amended complaint adding the initial public offering (“IPO”) underwriters as defendants and making substantially the same allegations as the original complaint.

On November 14, 2023, we filed a motion to dismiss the amended complaint for failure to state a claim.

Motion to dismiss briefing was completed on February 21, 2024.

On April 22, 2024, we reached an agreement in principle with plaintiffs to settle the Bergman Case for $ 3.9 million, which is included in general and administrative expense for the three months ended March 31, 2024, in exchange for a full release of the putative class’s claims against us and all of our current and former officers, current and former members of our board of directors, the IPO underwriters, and the other named defendant.

The parties filed a settlement agreement with the court on June 26, 2024, which the court must approve before settlement is final.

On March 22, 2023, a putative class action lawsuit was filed in Superior Court of the State of California for the County of Alameda against our company and certain of our officers and current and former members of our board of directors, Lowry v.

Caribou Biosciences, Inc., et al., Case Number T23-1084 (“Lowry Case”).

The Lowry Case challenges disclosures regarding our company’s business, operations, and prospects, specifically with respect to the alleged durability of CB-010’s therapeutic effect and the product candidate’s clinical and commercial prospects, in alleged violation of Sections 11 and 15 of the Securities Act.

The allegations and claims in the Lowry Case are substantially similar to the Securities Act claims asserted in the Bergman Case.

On April 26, 2023, we filed a motion to stay the Lowry Case during the pendency of the parallel federal court litigation in the Bergman Case, and, on July 11, 2023, our motion to stay was denied.

On September 11, 2023, plaintiff filed an amended complaint making substantially the same allegations as the original complaint.

On November 9, 2023, we filed a motion to dismiss the amended complaint on the grounds that our certification of incorporation mandates that Securities Act claims against us be brought in federal court.

On February 28, 2024, the court granted our motion to dismiss, and, on April 15, 2024, the court entered an order of dismissal.

Common stock reserved for future issuance consisted of the following:

June 30, 2024 As of

On April 22, 2024, we reached an agreement in principle with plaintiffs to settle the Bergman Case for $ 3.9 million, which was included in general and administrative expense for the three months ended March 31, 2024, in exchange for a full release of the putative class’s claims against us and all our current and former officers, current and former members of our board of directors, the IPO underwriters, and the other named defendant.

The parties filed a settlement agreement with the court on June 26, 2024, and, on October 15, 2024, the court issued an order preliminarily approving the settlement and setting a final settlement approval hearing for February 18, 2025.

Common stock reserved for future issuances consisted of the following:

September 30, 2024 As of

December 31, 2023

Stock options, issued and outstanding 11,611,364 9,410,404

Stock options, authorized for future issuance 6,439,947 5,952,012

Stock available under our employee stock purchase plan 2,278,409 1,516,355

Unvested restricted stock units and performance-based restricted stock units 1,312,339 205,357

Total common stock reserved for future issuance 22,071,412 17,084,128

Stock options, authorized for future issuances 6,827,620 5,952,012

Stock available under ESPP 2,139,666 1,516,355

Unvested RSUs and PSUs 1,302,846 205,357

Total common stock reserved for future issuances 21,881,496 17,084,128

Shelf Registration Statement

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The terms of any offering under the Shelf Registration Statement will be established at the time of such offering, as described in a prospectus supplement to the Shelf Registration Statement to be filed with the SEC prior to the completion of any such offering.

In July and August 2023, we issued and sold a total of 22,115,384 shares of our common stock in an underwritten follow-on public offering at a price to the public of $ 6.50 per share, which included the full exercise of the underwriters’

right to purchase 2,884,615 additional shares of our common stock.

The total gross proceeds from the offering were approximately $ 143.7 million ($ 134.4 million net of underwriting discounts and commissions and offering expenses).

2 unchanged sentences

On August 9, 2022, we entered into an at-the-market Open Market Sale Agreement SM (“ATM Sales Agreement”) with Jefferies LLC (“Jefferies”), pursuant to which, through Jefferies as sales agent, we may from time to time, sell shares of our common stock having an aggregate offering price of up to $ 100.0 million in gross proceeds under the Shelf Registration Statement.

As of June 30, 2024, we have sold 1,762,806 shares of our common stock under the ATM Sales Agreement, at an average price per share of $ 7.32 for aggregate gross proceeds of $ 12.9 million ($ 12.3 million net of offering expenses).

As of September 30, 2024, we have sold 1,762,806 shares of our common stock under the ATM Sales Agreement, at an average price per share of $ 7.32 for aggregate gross proceeds of $ 12.9 million ($ 12.3 million net of offering expenses).

Stock-Based Compensation

1 unchanged sentence

In July 2021, our board of directors adopted, and our stockholders approved, the 2021 Equity Incentive Plan (“2021 Plan”) that became effective on July 22, 2021.

As of June 30, 2024, we had 6,439,947 shares available for issuance under the 2021 Plan.

The following table summarizes stock option activity under our equity incentive plans during the six months ended June 30, 2024:

As of September 30, 2024, we had 6,827,620 shares available for issuance under the 2021 Plan.

The following table summarizes stock option activity under our equity incentive plans during the nine months ended September 30, 2024:

Stock Options Weighted-

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Options cancelled or forfeited ( 1,145,525 ) 8.35

Outstanding at June 30, 2024 12,040,717 $ 7.59 7.8 $ 19

Exercisable at June 30, 2024 5,262,980 $ 8.01 6.8 $ 19

Vested and expected to vest at June 30, 2024 12,040,717 $ 7.59 7.8 $ 19

Outstanding at September 30, 2024 11,611,364 $ 7.44 7.4 $ 41

Exercisable at September 30, 2024 5,810,961 $ 8.03 6.1 $ 41

Vested and expected to vest at September 30, 2024 11,611,364 $ 7.44 7.4 $ 41

(1) The aggregate intrinsic value is calculated as the difference between the stock option exercise price and the estimated fair value of the underlying common stock at the end of each reporting period referenced above.

Grant Date Fair Value

During the three months ended June 30, 2024, and 2023, we granted 223,450 and 486,366 stock options to employees with a weighted average grant date fair value of $ 2.16 and $ 2.95 , respectively.

During the six months ended June 30, 2024, and 2023, we granted 3,137,177 and 3,022,706 stock options to employees with a weighted average grant date fair value of $ 4.42 and $ 3.94 , respectively.

During the three months ended September 30, 2024, and 2023, we granted 391,525 and 384,095 stock options to employees with a weighted average grant date fair value of $ 1.49 and $ 3.64 , respectively.

During the nine months ended September 30, 2024, and 2023, we granted 3,528,702 and 3,406,801 stock options to employees with a weighted average grant date fair value of $ 4.09 and $ 3.91 , respectively.

We estimated the fair value of each employee stock option award on the grant date using the Black-Scholes option-pricing model based on the following assumptions:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

6 unchanged sentences

3.7 % to 4.5 %

3.5 % to 4.6 %

Expected dividend yield 0.0 % 0.0 % 0.0 % 0.0 %

As of June 30, 2024, there was $ 31.1 million of unrecognized stock-based compensation expense related to employee stock options that is expected to be recognized over a weighted-average period of 2.7 years.

As of September 30, 2024, there was $ 24.5 million of unrecognized stock-based compensation expense related to employee stock options that is expected to be recognized over a weighted-average period of 2.6 years.

Restricted Stock Units

During the six months ended June 30, 2024, we granted 1,143,617 restricted stock units (“RSUs”), and we did not grant any performance-based RSUs (“PSUs”) under the 2021 Plan.

A summary of the status of and change in unvested RSUs and PSUs as of June 30, 2024 was as follows:

During the nine months ended September 30, 2024, we granted 1,342,842 restricted stock units (“RSUs”) to employees, and we did not grant any performance-based RSUs (“PSUs”) to employees under the 2021 Plan.

A summary of the status of and change in unvested RSUs and PSUs as of September 30, 2024, was as follows:

Number of Shares Underlying Outstanding RSUs and PSUs Weighted-Average Grant Date Fair Value per RSU and PSU

3 unchanged sentences

Forfeited ( 179,180 ) 7.17

Unvested, June 30, 2024 1,312,339 $ 6.60

Unvested, September 30, 2024 1,302,846 $ 5.73

On August 22, 2022, we granted PSUs to our executive officers, which will vest contingent upon the achievement of a clinical milestone for CB-010 during a performance period ending December 31, 2024, and the executive officer’s continued employment during the performance period.

As of June 30, 2024, the achievement of this milestone was not considered probable and, therefore, no stock-based compensation was recorded.

As of June 30, 2024, the total unrecognized stock-based compensation expense related to unvested RSUs was $ 6.8 million, which is expected to be recognized over the remaining weighted-average vesting period of 3.2 years.

As of June 30, 2024, there was approximately $ 0.6 million of unrecognized stock-based compensation expense related to unvested PSUs.

As of September 30, 2024, the achievement of this milestone was not considered probable and, therefore, no stock-based compensation was recorded.

As of September 30, 2024, the total unrecognized stock-based compensation expense related to unvested RSUs was $ 5.7 million, which is expected to be recognized over the remaining weighted-average vesting period of 2.9 years.

As of September 30, 2024, there was approximately $ 0.4 million of unrecognized stock-based compensation expense related to unvested PSUs.

Employee Stock Purchase Plan (“ESPP”)

In July 2021, our board of directors adopted, and our stockholders approved, the ESPP, which became effective on July 22, 2021.

We issued 330,002 shares of common stock under the ESPP as of June 30, 2024.

We recorded $ 0.5 million in accrued liabilities related to contributions withheld as of June 30, 2024.

We issued 468,745 shares of common stock under the ESPP as of September 30, 2024.

We recorded $ 0.1 million in accrued liabilities related to contributions withheld as of September 30, 2024.

Stock-Based Compensation Expense

We recorded stock-based compensation expense related to employee equity-based awards grants in our unaudited condensed consolidated statements of operations and comprehensive loss as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

3 unchanged sentences

The above stock-based compensation expense related to the following equity-based awards (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

5 unchanged sentences

In 2017, we established a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (“Tax Code”).

Our 401(k) plan is available to all employees and allows participants to defer a portion of their annual compensation on a pretax basis subject to applicable laws.

Our 401(k) plan is available to all employees and allows participants to defer a portion of

their annual compensation on a pretax basis subject to applicable laws.

We also provide a 4 % match for employee contributions up to a certain limit.

During the six months ended June 30, 2024, and 2023, we contributed $ 0.7 million and $ 0.5 million, respectively, to our 401(k) plan.

No income tax expense was recorded during each of the three- and six-month periods ended June 30, 2024, and 2023 due to our operating losses.

During the nine months ended September 30, 2024, and 2023, we contributed $ 0.9 million and $ 0.8 million, respectively, to our 401(k) plan.

No income tax expense was recorded during each of the three- and nine-month periods ended September 30, 2024, and 2023 due to our operating losses.

Net Loss Per Share

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

4 unchanged sentences

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:

September 30,

Stock options outstanding 11,611,364 9,523,394

3 unchanged sentences

13,175,175 9,826,108

Subsequent Events

Restructuring Charge

On July 16, 2024, we announced that we had discontinued preclinical research activities associated with our allogeneic CAR-NK platform and reduced our workforce by 21 positions, or approximately 12 %.

In connection with the workforce reduction, we will incur approximately $ 0.5 million to $ 1.0 million in costs, consisting primarily of cash severance costs, benefits, and transition support services for impacted employees, which we expect to recognize in the third quarter of 2024.

The workforce reduction was completed during the third quarter of 2024.

As a result, we recorded a total of $ 0.6 million in non-recurring restructuring charges during the three months ended September 30, 2024, consisting primarily of cash severance costs, continuation of benefits, and transition support services for impacted employees.

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