What changed in this filing

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Item 4. Controls and Procedures

2024-08-08 compared with 2024-05-08 · 184 added, 131 removed, 647 unchanged (33% of the section changed)

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CONDENSED BAL ANCE SHEETS

(in thousands, except share and per share data)

(in thousands)

Current assets:

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CYTOMX THERAPEUTICS, INC.

CONDENSED STATEMENTS OF OPERA TIONS AND COMPREHENSIVE LOSS

CONDENSED STATEMENTS OF OPERA TIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except share and per share data)

Three Months Ended

Six Months Ended

Operating expenses:

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Balance at March 31, 2024

Exercise of stock options and release of RSUs

Issuance of common stock under the ESPP

Issuance of common stock under the Open Market Sale Agreement, net of issuance cost

Exercise of pre-funded warrants

Stock-based compensation

Other comprehensive loss

Balance at June 30, 2024

Comprehensive

6 unchanged sentences

Balance at March 31, 2023

Exercise of stock options

Release of RSUs

Issuance of common stock under the ESPP

Stock-based compensation

Other comprehensive loss

Balance at June 30, 2023

See accompanying notes to condensed financial statements.

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(in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

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Deferred revenue

Net cash (used in) provided by operating activities

Net cash used in operating activities

Cash flows from investing activities:

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Cash flows from financing activities:

Proceeds from exercise of stock options

Proceeds from issuance of common stock, net of issuance costs

Proceeds from employee purchase plan and exercise of stock options

Net cash provided by financing activities

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The Company is advancing potential first-in-class and best-in-class therapeutics created using its PROBODY® therapeutic technology platform that could meaningfully improve outcomes for cancer patients.

Its proprietary and unique PROBODY technology platform is designed to enable “conditional activation” of antibody-based drugs in the tumor microenvironment across multiple therapeutic modalities.

Its proprietary and unique PROBODY technology platform is designed to enable “conditional activation” of masked antibody-based drugs in the tumor microenvironment across multiple therapeutic modalities.

The Company is located in South San Francisco, California and was incorporated in the state of Delaware in September 2010.

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The accompanying interim condensed financial statements and related disclosures are unaudited, have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented.

The condensed results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period.

The condensed results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period.

The accompanying condensed financial statements should be read in conjunction with the audited financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC.

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The Company is evaluating the impact on our financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

Net Income (Loss) Per Share

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Three Months Ended

Six Months Ended

(in thousands, except share and per share data)

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Three Months Ended

Six Months Ended

Options and ESPP to purchase common stock

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The carrying amounts of the Company’s financial instruments, including restricted cash, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities.

The Company’s financial instruments consist of Level I assets which consist primarily of highly liquid money market funds, some of which are included in restricted cash and U.S.

The Company’s financial instruments consist of Level I and Level II assets which consist primarily of highly liquid money market funds, some of which are included in restricted cash and U.S.

Treasury securities that are included in cash equivalents or short-term investments.

The following tables set forth the fair value of the Company’s investments subject to fair value measurements on a recurring basis and the level of inputs used in such measurements:

March 31, 2024

June 30, 2024

(in thousands)

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Treasury Securities

As of March 31, 2024, the remaining contractual terms of those investments are less than a year.

As of June 30, 2024 , the remaining contractual terms of those investments are less than a year.

CytomX Therapeutics, Inc.

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Three Months Ended

Six Months Ended

(in thousands)

Bristol Myers Squibb

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In each of May 2023 and March 2024, CytomX and Amgen executed an amendment to the Amgen Agreement to extend the target selection period for Amgen to select its additional targets for research and development as further discussed below.

Under the terms of the Amgen Agreement, as amended, the Company and Amgen will co-develop a conditionally activated T-cell engagers (“TCEs”) targeting epidermal growth factor receptor (the “EGFR Products”).

Under the terms of the Amgen Agreement, as amended, the Company and Amgen will co-develop a conditionally activated T-cell engager (“TCE”) targeting epidermal growth factor receptor (the “EGFR Products”).

The Company is responsible for early-stage development of EGFR Products and Amgen will be responsible for late-stage development and commercialization of EGFR Products.

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In January 2022, the IND for the EGFR product (CX-904) was allowed to proceed by the U.S.

Food and Drug Administration (“FDA”).

Food and Drug Administration (“FDA”) and the program continues in an ongoing Phase 1 study.

Amgen also has the right to select a total of up to three targets, including the two additional targets discussed below.

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Amgen is eligible to receive up to $ 203.0 million in development, regulatory, and commercial milestone payments for the CytomX Product, and tiered mid-single digit to low double-digit percentage royalties.

As of March 31, 2024 and December 31, 2023, deferred revenue related to the EGFR Products performance obligation was $ 11.5 million and $ 12.8 million, respectively.

Deferred revenue related to the Amgen Other Products performance obligation was immaterial as of March 31, 2024 and December 31, 2023.

As of June 30, 2024 and December 31, 2023, deferred revenue related to the EGFR Products performance obligation was $ 10.5 million and $ 12.8 million, respectively.

Deferred revenue related to the Amgen Other Products performance obligation was immaterial as of June 30, 2024 and December 31, 2023.

CytomX Therapeutics, Inc.

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The $ 5.0 million milestone payment was fully recognized in the first quarter of 2024 as the Company had completed its related performance obligation of the collaboration target which resulted in the clinical candidate nomination for further development.

As of March 31, 2024 and December 31, 2023, deferred revenue relating to the Astellas Agreement was $ 27.6 million and $ 31.0 million, respectively.

The amount due from Astellas under the Astellas Agreement wa s $ 12.1 million as of March 31, 2024 which included the $ 10.0 million of milestone payments earned in March 2024, and $ 2.2 million as of December 31, 2023.

As of June 30, 2024 and December 31, 2023, deferred revenue relating to the Astellas Agreement was $ 23.6 million and $ 31.0 million, respectively.

The amount due from Astellas under the Astellas Agreement wa s $ 1.5 million as of June 30, 2024 and $ 2.2 million as of December 31, 2023.

Bristol Myers Squibb Company

On May 23, 2014, the Company and Bristol Myers Squibb Company (“Bristol Myers Squibb”) entered into a Collaboration and License Agreement (the “BMS Agreement”) to discover and develop compounds for use in human therapeutics aimed at multiple immuno-oncology targets using the Company’s PROBODY therapeutic technology.

The effective date of the BMS Agreement was July 7, 2014.

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In addition, the Company was entitled to royalty payments in the mid-single digits to low double-digit percentages from potential future sales.

On March 17, 2017, the Company and Bristol Myers Squibb amended the BMS agreement and entered into Amendment Number 1 to Extend Collaboration and License Agreement (“Amendment 1”).

Amendment 1 granted Bristol Myers Squibb exclusive worldwide rights to develop

CytomX Therapeutics, Inc.

Notes to Condensed Financial Statements (Unaudited)

and commercialize PROBODY therapeutics for up to eight additional targets.

On March 17, 2017, the Company and Bristol Myers Squibb amended the BMS agreement and entered into Amendment Number 1 to Extend Collaboration and License Agreement (“Amendment 1”).

Amendment 1 granted Bristol Myers Squibb exclusive worldwide rights to develop and commercialize PROBODY therapeutics for up to eight additional targets.

The effective date of Amendment 1 was April 25, 2017 (“Amendment Effective Date”).

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In March 2024, following a Bristol Myers Squibb corporate portfolio prioritization process, Bristol Myers Squibb notified CytomX that it does not intend to continue the development of BMS-986288 beyond the current Phase 2 study and terminated its collaboration license on the CTLA-4 target under the collaboration.

As of March 31, 2024, the Company is eligible to receive approximately $ 1.8 billion in contingent payments for development, regulatory and sales milestones for the ongoing collaboration programs.

BMS-986288 was Bristol Myers Squibb’s leading next generation PROBODY CTLA-4 program that it had previously prioritized over BMS-986249, which was a PROBODY version of ipilumamab.

In June 2024, Bristol Myers Squibb prioritized its pre-clinical research activities under the collaboration and revised the research scope by one collaboration target.

The Company determined that it has no further obligations related to the target that was deprioritized and accounted for the reduction of the target as a modification and the related remaining unrecognized transaction price was reallocated to the remaining performance obligations.

The Company continues to be obligated to perform research work under Amendment 2 executed in February 2021 for multiple ongoing research programs.

As of June 30, 2024, the Company is eligible to receive approximately $ 1.3 billion in contingent payments for development, regulatory and sales milestones for the ongoing collaboration programs.

The Company reevaluated the remaining potential milestone payments and determined that significant revenue reversal was probable as the achievement of such milestones was highly dependent on factors outside the Company’s control.

As a result, these payments continued to be fully constrained and were not included in the transaction price as of March 31, 2024.

As of March 31, 2024 and December 31, 2023, deferred revenue relating to the BMS Agreement was $ 100.3 million and $ 119.9 million, respectively.

As a result, these payments continued to be fully constrained and were not included in the transaction price as of June 30, 2024.

CytomX Therapeutics, Inc.

Notes to Condensed Financial Statements (Unaudited)

As of June 30, 2024 and December 31, 2023, deferred revenue relating to the BMS Agreement was $ 86.8 million and $ 119.9 million, respectively.

ModernaTX, Inc.

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Moderna is solely responsible for the development (preclinical and clinical), manufacturing, and commercialization of any products under the Moderna Agreement.

CytomX Therapeutics, Inc.

Notes to Condensed Financial Statements (Unaudited)

Under the terms of the Moderna Agreement, the Company granted Moderna an exclusive, worldwide right to develop and commercialize PROBODY therapeutics for the collaboration programs.

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The Company is also eligible to receive tiered royalties from high-single digit to low-teen percentage rates of annual global net sales of any products that are commercialized under the Moderna Agreement.

The Moderna Agreement also provided Moderna with an option to participate in an equity financing by CytomX at market price, subject to certain terms, conditions and regulatory requirements.

As of March 31, 2024 and December 31, 2023, deferred revenue relating to the Moderna Agreement was $ 21.5 million and $ 24.2 million, respectively.

As of June 30, 2024 and December 31, 2023, deferred revenue relating to the Moderna Agreement was $ 19.1 million and $ 24.2 million, respectively.

The amount due from Moderna under the Moderna Agreement wa s $ 0.2 million as of June 30, 2024 and $ 0 as of December 31, 2023.

Regeneron Pharmaceuticals, Inc.

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In addition, the Company will receive research and development service fees based on a prescribed FTE rate.

As of March 31, 2024 and December 31, 2023, deferred revenue relating to the Regeneron Agreement was $ 22.5 million and $ 24.4 million, respectively.

The amount due from Regeneron under the Regeneron Agreement was $ 1.0 million and $ 1.1 million as of March 31, 2024 and December 31, 2023, respectively.

As of June 30, 2024 and December 31, 2023, deferred revenue relating to the Regeneron Agreement was $ 20.4 million and $ 24.4 million, respectively.

The amount due from Regeneron under the Regeneron Agreement was $ 1.0 million and $ 1.1 million as of June 30, 2024 and December 31, 2023, respectively.

CytomX Therapeutics, Inc.

Notes to Condensed Financial Statements (Unaudited)

Contract Liabilities

The following table presents changes in the Company’s total contract liabilities during the three months ended March 31, 2024 and 2023:

The following table presents changes in the Company’s total contract liabilities during the six months ended June 30, 2024 and 2023:

Deferred Revenue

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Revenue recognized

March 31, 2024

June 30, 2024

December 31, 2022

Revenue recognized

March 31, 2023

The Company expects that the $ 183.4 million of deferred revenue related to the following contracts as of March 31, 2024 will be recognized as revenue based on actual FTE effort and estimated program progress as set forth below.

However, the timing of revenue recognition could differ from the estimates depending on facts and circumstances impacting the various contracts, including progress of research and

CytomX Therapeutics, Inc.

Notes to Condensed Financial Statements (Unaudited)

development, resources assigned to the contracts by the Company or its collaboration partners or other factors outside of the Company’s control.

June 30, 2023

The Company expects that the $ 160.5 million of deferred revenue related to the following contracts as of June 30, 2024 will be recognized as revenue based on actual FTE effort and estimated program progress as set forth below.

However, the timing of revenue recognition could differ from the estimates depending on facts and circumstances impacting the various contracts, including progress of research and development, resources assigned to the contracts by the Company or its collaboration partners or other factors outside of the Company’s control.

• The $ 10.5 million of deferred revenue related to the Amgen EGFR Products is expected to be recognized until 2026 .

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• The $ 20.4 million of deferred revenue related to the Regeneron Agreement, together with research and development service fees, is expected to be recognized until 2026 .

License Agreement

UCSB Agreement

In August 2010, the Company entered into an exclusive, worldwide license agreement with University of California, Santa Barbara (“UCSB”), relating to the use of certain patents and technology relating to its core technology, including its therapeutic antibodies, and to certain patent rights the Company co-owns with UCSB covering PROBODY antibodies and other pro-proteins (the “UCSB Agreement”).

Pursuant to the UCSB Agreement, the Company is obligated to (i) make royalty payments to UCSB on net sales of its products covered under the agreement, subject to annual minimum amounts, (ii) make milestone payments to UCSB upon the occurrence of certain events, (iii) make a milestone payment to UCSB upon occurrence of an IPO or change of control, and (iv) reimburse UCSB for prosecution and maintenance of the licensed patents.

As part of the UCSB Agreement, the Company has annual minimum royalty obligations of $ 0.2 million under the terms of certain exclusive licensed patent rights.

In April 2019, the Company entered into Amendment No.3 to the UCSB Agreement to adjust and clarify certain sublicense terms (“Amendment No.3”).

Under the terms of Amendment No.3, the Company and UCSB agreed to modify the determination of sublicense revenues payable by the Company to UCSB on certain existing collaboration agreements and on collaboration agreements executed subsequent to Amendment No.3.

In exchange, the Company agreed to make an upfront payment of $ 1.0 million as well as additional annual license maintenance fees of $ 0.8 million through 2031 .

In March 2024, the Company incurred $ 0.6 million of sublicense fees triggered by achieving the GLP toxicology studies milestone for the first clinical candidate which was nominated by Astellas in 2023, as well as by achieving the clinical candidate nomination milestone for a second collaboration target under the Astellas Agreement.

For the three months ended March 31, 2024 and 2023, the Company incurred sublicense expenses of $ 1.6 million and $ 1.1 million, respectively, under the provisions of the UCSB Agreement.

ImmunoGen (acquired by AbbVie in 2024)

In December 2019, the Company entered into a License Agreement (the “ImmunoGen 2019 License”) with ImmunoGen, Inc.

to obtain an exclusive license with respect to epithelial cell adhesion molecule (“EPCAM”).

Under the ImmunoGen 2019 License, ImmunoGen agreed to transfer its know-how, patents, intellectual property rights, and technology transfer materials and information related to its EpCAM program.

The license gives the Company the sole ability to develop, manufacture, use and commercialize any licensed product that incorporates, is comprised of, or otherwise derived from PROBODY technology that targets EpCAM in any human therapeutic field on a worldwide basis.

In April 2024, the Company incurred a $ 5.0 million milestone payable to ImmunoGen with respect to achieving the milestone of dosing the first patient for CX-2051 under the ImmunoGen 2019 License Agreement.

In February 2020, the Company entered into the Open Market Sale Agreement (the “Sales Agreement”) with Jefferies LLC (“Jefferies”), to sell its common stock, at par value $ 0.00001 per share, with aggregate gross sales proceeds of up to $ 75,000,000 , from time to time upon the Company’s request, through an at the market offering under which Jefferies will act as sales agent.

Pursuant to the Sales Agreement, Jefferies as the sales agent will receive a commission of 3.0 % of the gross sales price for shares of common stock sold under the Sales Agreement.

In April 2024, under the Sales Agreement, the Company sold 2,270,608 shares at an average price of $ 2.20 per share and received net proceeds of approximately $ 4.8 million after deducting the 3.0 % sales commission and related issuance cost.

In June 2023, the Company entered into an agreement with BVF Partners L.P.

(“BVF”) for a private placement and received an aggregate net proceeds of approximately $ 29.7 million in July 2023, after deducting issuance costs of approximately $ 0.3 million.

In the private placement, CytomX issued pre-funded warrants to BVF to purchase up to 14,423,077 shares of common stock, accompanying Tranche 1 warrants to purchase up to 5,769,231 shares of common stock and accompanying Tranche 2 warrants to purchase up to 5,769,231 shares of common stock, at a combined price of $ 2.08 per share.

On May 1, 2024, BVF exercised its right to purchase 7.5 million shares of common stock through its pre-funded warrants at an exercise price of $ 0.00001 per share.

CytomX Therapeutics, Inc.

Notes to Condensed Financial Statements (Unaudited)

The following table summarizes the Company's outstanding warrants as of June 30, 2024:

Pre-funded Warrants

Tranche 1 Warrants

Tranche 2 Warrants

Exercise Price

Warrants Outstanding

In the May 2024 annual meeting of stockholders, the Company's authorized shares of common stock were approved to increase from 150,000,000 shares to 300,000,000 shares.

Stock-Based Compensation

Stock Options

Activities for the Company’s stock option plans for the three months ended March 31, 2024 were as follows:

Activities for the Company’s stock option plans for the six months ended June 30, 2024 were as follows:

Options Outstanding

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Option forfeited/expired

Balance at March 31, 2024

The Company recorded $ 1.4 million and $ 1.9 million of stock-based compensation expense related to the stock option plans for the three months ended March 31, 2024 and 2023, respectively.

Balance at June 30, 2024

The Company recorded $ 1.5 million and $ 1.7 million of stock-based compensation expense related to the stock options for the three months ended June 30, 2024 and 2023, respectively.

The Company recorded $ 2.9 million and $ 3.6 million of stock-based compensation expense related to the stock option plans for the six months ended June 30, 2024 and 2023, respectively.

Time-based RSUs ("TRSU")

Activities for the Company’s TRSUs for the three months ended March 31, 2024 were as follows:

Activities for the Company’s TRSUs for the six months ended June 30, 2024 were as follows:

Weighted Average Grant Date Fair Value Per Share

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RSU's cancelled

Balance at March 31, 2024

The Company recorded $ 0.4 million and $ 0.4 million of stock-based compensation expense related to the TRSUs for the three months end March 31, 2024 and 2023, respectively.

Balance at June 30, 2024

The Company recorded $ 0.4 million and $ 0.5 million of stock-based compensation expense related to the TRSUs for the three months ended June 30, 2024 and 2023, respectively.

The Company recorded $ 0.8 million and $ 1.0 million of stock-based compensation expense related to the TRSUs for the six months ended June 30, 2024 and 2023, respectively.

CytomX Therapeutics, Inc.

Notes to Condensed Financial Statements (Unaudited)

Performance-based RSUs ("PSUs")

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In December 2023, the Company determined that the performance conditions for 2022-Tranche 1 was satisfied and the award was vested in December 2023.

As a result, the Company recorded $ 55,000 and the remaining $ 128,000 c ompensation cost for the 2022-Tranche 1 award for the year ended December 31, 2022 and 2023, respectively.

As of March 31, 2024 and December 31, 2023, the Company determined that it is probable that the performance conditions for the 2022-Tranche 2 will be satisfied and recorded $ 19,000 and $ 106,000 compensation cost for the award for the three months ended March 31, 2024 and for the fiscal year 2023, respectively.

As a result, the Company recorded $ 55,000 and the remaining $ 128,000 compensation cost for the 2022-Tranche 1 award for the year ended December 31, 2022 and 2023, respectively.

As of June 30, 2024 and December 31, 2023, the Company determined that it is probable that the performance conditions for the 2022-Tranche 2 will be satisfied and recorded $ 19,000 , $ 38,000 and $ 106,000 compensation cost for these awards for the three and six months ended June 30, 2024 and for the fiscal year 2023, respectively.

In February 2023, the Company granted 760,000 PSUs to executive employees with an aggregated grant date fair value of approximately $ 1.9 million.

Vesting for 50% of the PSUs granted will occur upon attaining certain specific milestones by December 2024 (“2023-Tranche 1”), and the remaining 50% will vest upon attaining certain specific milestones by December 2025 (“2023-Tranche 2”).

The Company determined that it is not probable that the performance conditions will be satisfied for each of these tranches and hence no compensation cost was recorded for these awards through March 31, 2024.

CytomX Therapeutics, Inc.

Notes to Condensed Financial Statements (Unaudited)

In January 2024, the Company granted 810,000 PSUs to executive employees with an aggregated grant date fair value of approximately $ 1.3 million.

Vesting for 50% of the PSUs granted will occur upon attaining certain specific milestones by December 2025 (“2024-Tranche 1”), and the remaining 50% will vest upon attaining certain specific milestones by December 2026 (“2024-Tranche 2”).

Activities for the Company’s PSUs for the three months ended March 31, 2024, were as follows:

Activities for the Company’s PSUs for the six months ended June 30, 2024, were as follows:

Weighted Average Grant Date Fair Value Per Share

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PSU's awarded

Balance at March 31, 2024

Balance at June 30, 2024

Stock-based Compensation

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Three Months Ended

Six Months Ended

(in thousands)

Research and development

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The complaint seeks unspecified monetary damages.

In September 2022, the Company filed a motion to dismiss the case and the Court granted the parties’ stipulation to stay all pending case deadlines until that motion is finally resolved.

In September 2022, the Company filed a motion

CytomX Therapeutics, Inc.

Notes to Condensed Financial Statements (Unaudited)

to dismiss the case and the Court granted the parties’ stipulation to stay all pending case deadlines until that motion is finally resolved.

On October 30, 2023, Magistrate Judge Burke issued a Report & Recommendation that recommended granting Company’s motion to dismiss all counts of the complaint.

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The Company believes that the lawsuit is without merit and intends to vigorously defend itself.

The Company does not believe a loss is probable and has no t recorded any amount as a contingent liability for claims associated with this lawsuit as of March 31, 2024.

The Company does not believe a loss is probable and has no t recorded any amount as a contingent liability for claims associated with this lawsuit as of June 30, 2024 .

License Agreement

UCSB Agreement

As part of the UCSB Agreement, the Company has annual minimum royalty obligations of $ 0.2 million under the terms of certain exclusive licensed patent rights.

In April 2019, the Company entered into Amendment No.3 to the UCSB Agreement to adjust and clarify certain sublicense terms (“Amendment No.3”).

In exchange, the Company agreed to make an upfront payment of $ 1.0 million as well as additional annual license maintenance fees of $ 0.8 million through 2031 .

For the three and six months ended June 30, 2024 , the Company incurred sublicense expenses of $ 0.1 million and $ 1.6 million under the provisions of the UCSB Agreement.

For the three and six months ended June 30, 2023, the Company incurred sublicense expenses of $ 0 and $ 1.1 million under the provisions of the UCSB Agreement.

ImmunoGen (acquired by AbbVie in 2024)

In December 2019, the Company entered into a License Agreement (the “ImmunoGen 2019 License”) with ImmunoGen, Inc.

to obtain an exclusive license with respect to epithelial cell adhesion molecule (“EPCAM”).

Under the ImmunoGen 2019 License, ImmunoGen agreed to transfer its know-how, patents, intellectual property rights, and technology transfer materials and information related to its EpCAM program.

In April 2024, the Company incurred a $ 5.0 million milestone payment to AbbVie (formerly ImmunoGen) with respect to achieving the milestone of dosing the first patient for CX-2051 under the ImmunoGen 2019 License Agreement.

The Company maintains a full valuation allowance against its net deferred tax assets due to the Company’s history of losses through December 31, 2023 .

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In September 2023, the Company received Notice of Proposed Assessment (“NOPA”) from the Franchise Tax Board.

The Company recorded an uncertain tax position of $ 3.9 million in long term liabilities for the proposed tax assessment, penalties and interest through March 31, 2024 .

Of the unrecognized tax benefits as of March 31, 2024, approximately $ 3.9 million would affect the Company’s effective tax rate if recognized.

The Company recorded an uncertain tax position of $ 4.0 million in long term liabilities for the proposed tax assessment, penalties and interest through June 30, 2024.

Of the unrecognized tax benefits as of June 30, 2024 , approximately $ 4.0 million would affect the Company’s effective tax rate if recognized.

In addition, utilization of carryforward attributes and indirect federal tax effects of the assessment would result in a reduction in deferred tax assets of $ 5.1 million.

The Company filed a protest to

CytomX Therapeutics, Inc.

Notes to Condensed Financial Statements (Unaudited)

filed a protest to contest the proposed assessment in November 2023.

contest the proposed assessment in November 2023.

Due to the ongoing n ature of the examination and discussions with the state of California, the Company is unable to estimate a date by which this matter will be resolved.

Subsequent Event

Pursuant to the Sales Agreement, Jefferies as the sales agent will receive a commission of 3.0 % of the gross sales price for shares of common stock sold under the Sales Agreement.

In June 2023, the Company entered into an agreement with BVF Partners L.P.

(“BVF”) for a private placement and received an aggregate net proceeds of approximately $ 29.7 million in July 2023, after deducting issuance costs of approximately $ 0.3 million.

On May 1, 2024, BVF exercised its right to purchase 7.5 million shares of common stock at an exercise price of $ 0.00001 per share.

CytomX Therapeutics, Inc.

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We aim to build a commercial enterprise to maximize our impact on the treatment of cancer.

By pioneering a novel class of localized biologic drug candidates, powered by our PROBODY® therapeutic technology platform, we lead the field of masked, conditionally activated oncology therapeutics and have established biologics localization as a strategic area of research and development.

Our vision is to transform lives with safer, more effective therapies with the goal to address major unmet needs in oncology.

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We reported in January 2023 that the initial single patient cohort phase of the study was complete and that the “3+3” patient cohort phase had been initiated.

On May 8, 2024, we reported a Phase 1a data update based on an April 16, 2024 data cutoff.

On May 8, 2024, we reported initial Phase 1a data based on an April 16, 2024 data cutoff.

As of the data cutoff, the CX-904-101 study had enrolled 35 patients with advanced metastatic solid tumor types that are generally known to express EGFR, including pancreatic, colorectal (CRC), non-small cell lung cancer (NSCLC), head and neck squamous cell carcinoma (HNSCC), gastric, and esophageal cancers.

Patients enrolled in the study were heavily pre-treated and had a median of 4 prior lines of therapy.

19 patients were enrolled into initial non-step dosing cohorts with target doses ranging from 0.007 mg to 6 mg, and 16 patients were subsequently enrolled into step-dosing cohorts with target doses ranging from 5 mg to 10 mg and with tocilizumab prophylaxis.

Enrollment into a cohort with a target dose of 15 mg is ongoing.

19 patients were enrolled into initial non-step dosing cohorts with target doses ranging from 0.007 mg to 6 mg, and 16 patients were subsequently enrolled into step-dosing cohorts with

CytomX Therapeutics, Inc.

As of the cutoff date, CX-904 demonstrated a favorable safety profile that supports administration and monitoring of enrolled patients in an outpatient setting.

target doses ranging from 5 mg to 10 mg and with tocilizumab prophylaxis.

As of the April 16, 2024 data cutoff enrollment into a cohort with a target dose of 15 mg was ongoing.

As of the cutoff date, CX-904 demonstrated a favorable safety profile.

There were no observed cases of cytokine release syndrome (CRS) of any grade in step-dosing cohorts as of the cutoff date.

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A second patient (5 mg target dose) with a confirmed response achieved a 51% tumor reduction and remained on study treatment as of the data cutoff.

In addition, a third pancreatic cancer patient maintained stable disease with no evidence of tumor growth through 3.5 months of study treatment, remaining on treatment as of the data cutoff.

In addition, a third pancreatic cancer patient maintained stable disease with no evidence of tumor growth through 3.5 months of study treatment, and remained on treatment as of the data cutoff.

Preliminary pharmacokinetic and pharmacodynamic data were consistent with the PROBODY TCE mechanism of action, including maintained masking in circulation, and CD8+ T-cell margination and tumor infiltration.

CX-904 Phase 1a dose escalation and optimization continues, with future enrollment focused on determining a recommended Phase 2 dose, or doses.

We expect to provide an additional Phase 1a dose escalation update by the end of 2024.

These additional data will inform discussions with CytomX partner, Amgen, towards initiation of Phase 1b expansion cohorts in specific EGFR positive tumor types.

Our pipeline also includes CX-2051, a wholly-owned conditionally activated, PROBODY ADC paired with a next-generation camptothecin payload and directed toward the epithelial cellular adhesion molecule (EpCAM).

CX-2051 is licensed from ImmunoGen.

The CX-904 Phase 1 dose escalation is ongoing with enrollment focused in patients with pancreatic ductal carcinoma, non-small cell lung cancer, and head and neck squamous cell carcinoma across multiple target dose cohorts with a focus on determining a recommended Phase 1b dose, or doses.

A CX-904 Phase 1 program update is expected by the end of 2024, including a potential decision, to initiate Phase 1b expansion cohorts in specific EGFR positive tumor types.

Our pipeline also includes CX-2051, a wholly-owned conditionally activated, PROBODY ADC paired with a next-generation camptothecin payload (Topoisomerase-1 inhibitor) and directed toward the epithelial cellular adhesion molecule (EpCAM).

CX-2051 is licensed from AbbVie (formerly ImmunoGen).

CX-2051 has been tailored to optimize the therapeutic index for the systemic treatment of EpCAM-expressing epithelial cancers where previous industry efforts targeting EpCAM have not been successful due to dose-limiting toxicities.

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The IND for CX-2051 was cleared by the FDA in January 2024 and Phase 1 clinical initiation in EpCAM expressing solid tumors, including CRC commenced in April 2024.

The Phase 1 dose escalation will follow a Bayesian Optimal Interval (BOIN) design and is intended to demonstrate clinical proof of concept to potentially move into dose expansion studies in 2025.

As of August 2024, the third cohort in the Phase 1 study had been opened with early enrollment focused primarily in CRC.

The Phase 1 dose escalation is intended to demonstrate clinical proof of concept to potentially move into dose expansion studies in 2025.

Initial Phase 1 data for CX-2051 is expected in the first half of 2025.

Another wholly-owned product candidate is CX-801, an interferon ("IFN") alpha-2b PROBODY.

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CX-801 is a dually masked, conditionally activated version of IFNα2b that has the potential to become a cornerstone of combination therapy for a wide range of tumor types.

The IND for CX-801 was cleared by the FDA in January 2024 and initiation of Phase 1 dose escalation in solid tumors including melanoma, renal, and head and neck squamous cell carcinoma is expected in the first half of 2024.

In Phase 1 dose escalation, we will use a BOIN design to evaluate safety and signs of clinical activity for CX-801 and progress into combinations, where CX-801 has the potential to be cornerstone of therapy, including in combination with checkpoint inhibitors.

On May 7, 2024 CytomX announced a clinical collaboration with Merck to evaluate CX-801 in combination with KEYTRUDA® in the Phase 1 study.

The IND for CX-801 was cleared by the FDA in January 2024, and in June 2024 the first clinical site for the CX-801 Phase 1 dose escalation study in solid tumors was activated.

The Phase 1 dose escalation study will enroll patients with melanoma, renal cell carcinoma, and head and neck squamous cell carcinoma.

In Phase 1 dose escalation, we will evaluate safety and signs of clinical activity for CX-801 monotherapy and in combination with KEYTRUDA®.

In second quarter of 2024, CytomX announced a clinical collaboration with Merck to supply KEYTRUDA for evaluation of CX-801 in combination with KEYTRUDA® in the Phase 1 study.

CX-2029 was previously developed in a global co-development collaboration with AbbVie.

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In March 2023, following the completion of the Phase 2 Study in squamous non-small cell lung cancer (“sqNSCLC”), head and neck squamous cell carcinoma (“HNSCC”), esophageal and gastro-esophageal junction (“E/GEJ”) cancers, AbbVie notified CytomX that it would not advance CX-2029 into additional clinical studies and terminated the 2016 CD71 License and Collaboration Agreement.

CytomX re-acquired full rights to CX-2029 but does not currently have plans to make further significant investments in the solid tumor program in the near-term but continues to view CD71 as a target of strategic interest, including novel next-generation strategies.

_______________________________

1 In-patient monitoring is not required following treatment at cleared dose levels

CytomX re-acquired full rights to CX-2029 but does not currently have

plans to make further significant investments in the solid tumor program in the near-term but continues to view CD71 as a target of strategic interest, including novel next-generation strategies.

CytomX Therapeutics, Inc.

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We do not have any products approved for sale, and we continue to incur significant research and development and general administrative expenses related to our operations.

As of March 31, 2024 and December 31, 2023, we had an accumulated deficit of $709.7 million and $723.4 million, respectively.

As of June 30, 2024 and December 31, 2023, we had an accumulated deficit of $716.2 million and $723.4 million, respectively.

Global health authorities, including the FDA, regulate many aspects of a product candidate’s life cycle, including research and development and preclinical and clinical testing.

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We also account for uncertain tax positions in accordance with the provisions of ASC 740.

When uncertain tax positions exist, we recognize the tax benefit of tax positions to the extent that the benefit will more likely than not be realized.

When uncertain tax positions exist, we recognize the tax benefit of tax positions to the extent that the benefit will be more likely than not be realized.

The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.

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Other income (expense), net consists primarily of gains and losses resulting from changes to currency exchange rates.

Results of Operations

CytomX Therapeutics, Inc.

Results of Operations

The following table summarizes our revenue by collaboration partner during the respective periods:

Three Months Ended

Six Months Ended

(in thousands)

Bristol Myers Squibb

Total revenue

The increase in revenue of $18.0 million for the three months ended March 31, 2024 compared to the corresponding period of 2023 was primarily due to:

The increase in revenue of $0.4 million for the three months ended June 30, 2024 compared to the corresponding period of 2023 was primarily due to an increase in revenue under the Regeneron Agreement and Moderna Agreement driven by higher percentage of completion of research collaboration programs that commenced in 2023.

The increase in revenue of $18.4 million for the six months ended June 30, 2024 compared to the corresponding period of 2023 was primarily due to:

• An increase in revenue under the BMS Agreement driven by higher percentage of completion of the existing targets;

• An increase in revenue under the Astellas Agreement primarily driven by two milestone payments of $5.0 million each, triggered in March 2024.

One was related to the nomination of a second clinical candidate while the other was related to the milestone achievement of GLP toxicology study of the first clinical candidate.

One was related to the nomination of a second clinical candidate while the other was related to the milestone achievement of GLP toxicology study initiation for the first clinical candidate.

Astellas revenue in the first quarter of 2023 included the $5.0 million milestone for the 1st clinical candidate nomination achieved in the collaboration;

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Three Months Ended

(in thousands)

Six Months Ended

External costs incurred by product candidate (target):

(in thousands)

CX-904 (EGFRxCD3)

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Total research and development expenses

Research and development expenses increased by $0.9 million for the three months ended March 31, 2024, compared to the corresponding period of 2023.

This was primarily due to increased laboratory contract services and manufacturing activities related to CX-904, CX-2051

Research and development expenses increased by $4.5 million and $5.4 million for the three and six months ended June 30, 2024 compared to the corresponding periods of 2023.

This was primarily due to:

CytomX Therapeutics, Inc.

and other wholly owned and partnered programs, as well as consulting, personnel and license related expenses, offset by decreased manufacturing activities for CX-801 program and winding down of clinical study activities related to the CX-2009 and CX-2029 programs.

• a $5.0 million milestone payment to AbbVie (formerly ImmunoGen) in the current period, included in the general research and development expenses, for dosing the first patient for CX-2051 in Phase 1 under the ImmunoGen 2019 License Agreement;

• increase in manufacturing activities for the CX-2051 program and clinical trial activities for the CX-904 program;

• increase in consulting and personnel related expenses, offset by

• decrease in laboratory contract services and manufacturing activities for the CX-801 program and winding down of clinical study activities related to the CX-2029 and CX-2009 programs.

General and Administrative Expenses

Three Months Ended

Six Months Ended

(in thousands)

General and administrative

General and administrative expenses decreased by $0.2 million for the three months ended March 31, 2024, compared to the corresponding period of 2023, primarily due to lower rent as a result of partial sublease of the Company’s headquarters.

General and administrative expenses increased by $1.0 million for the three months ended June 30, 2024, compared to the corresponding period of 2023, primarily due to higher consulting expenses, personnel related expenses and intellectual property related legal services expenses.

General and administrative expenses increased by $0.8 million for the six months ended June 30, 2024, compared to the corresponding period of 2023, primarily due to higher consulting expenses, personnel related expenses and intellectual property related legal services expenses partially offset by lower rent as a result of partial sublease of the Company’s headquarters started in March 2023.

Interest Income and Other Income (Expense), Net

Three Months Ended

Six Months Ended

(in thousands)

Interest income

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Total interest income and other expense

Total interest income was $2.2 million for the three months ended March 31, 2024, compared to $2.3 million in the corresponding period of 2023.

Interest income decreased by $0.3 million and $0.5 million for the three and six months ended June 30, 2024, respectively, compared to the corresponding periods of 2023 was primarily driven by lower interest rates and the lower cash and cash equivalents and short-term investments position as compared to the corresponding periods.

Three Months Ended

Six Months Ended

(in thousands)

Provision for income taxes

The $0.1 million tax provision represented the interest accrued for the three months ended March 31,2024 related to the proposed assessment received from the state of California for the years 2017 and 2018.

The $0.1 million and $0.1 million tax provision represented the interest accrued for the three and six months ended June 30, 2024, respectively, related to the proposed assessment received from the state of California for the years 2017 and 2018.

Liquidity and Capital Resources

Sources of Liquidity

As of March 31, 2024, we had cash, cash equivalents and short-term investments of $150.3 million and an accumulated deficit of $709.7 million, compared to cash, cash equivalents and short-term investments of $174.5 million and an accumulated deficit of $723.4 million as of December 31, 2023.

As of June 30, 2024, we had cash, cash equivalents and short-term investments of $137.2 million and an accumulated deficit of $716.2 million, compared to cash, cash equivalents and short-term investments of $174.5 million and an accumulated deficit of $723.4 million as of December 31, 2023.

To date, we have financed our operations primarily through sales of our common stock in conjunction with the IPO, subsequent stock offerings and through our at-the-market offering, sales of our convertible preferred securities prior to our IPO, payments received under our collaboration agreements and proceeds from private placements of our common stock, warrants and pre-funded warrants.

In July 2023, we completed a private placement and issued pre-funded warrants to purchase an aggregate of 14,423,077 shares of common stock, accompanying Tranche 1 warrants to purchase up to 5,769,231 shares of common stock and accompanying Tranche 2 warrants to purchase up to 5,769,231 shares of common stock, at a combined price of $2.08 per share.

In July 2023, we completed a private placement and issued pre-funded warrants to purchase an aggregate of 14,423,077 shares of common

CytomX Therapeutics, Inc.

stock, accompanying Tranche 1 warrants to purchase up to 5,769,231 shares of common stock and accompanying Tranche 2 warrants to purchase up to 5,769,231 shares of common stock, at a combined price of $2.08 per share.

We received gross proceeds of approximately $30.0 million.

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However, if the anticipated operating results and future financing are not achieved in future periods, our planned expenditures may need to be reduced in order to extend the time period over which the then-available resources would be able to fund the operations.

The amounts and timing of our actual expenditures depend on numerous factors, including the progress of our preclinical and clinical development efforts, the results of any clinical trials and other studies, our operating costs and expenditures and other factors described under the caption “Risk

CytomX Therapeutics, Inc.

Factors” in this Quarterly Report on Form 10-Q.

The cost and timing of developing our product candidates is highly uncertain and subject to substantial risks and changes.

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The following table summarizes our cash flows for the periods indicated:

Three Months Ended

Six Months Ended

(in thousands)

Net cash (used in) provided by operating activities

Net cash used in operating activities

Net cash provided by (used in) investing activities

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Cash Flows from Operating Activities

During the three months ended March 31, 2024, cash used in operating activities was $26.0 million, which consisted of a net income of $13.8 million and non-cash charges of $1.5 million, adjusted by a net decrease of $41.3 million relating to the change of our net operating assets and liabilities.

During the six months ended June 30, 2024, cash used in operating activities was $45.6 million, which consisted of a net income of $7.3 million and non-cash charges of $3.4 million, adjusted by a net decrease of $56.3 million relating to the change of our net operating assets and liabilities.

The non-cash charges primarily consisted of $3.8 million in stock-based compensation, $2.0 million in non-cash lease expense, $0.9 million in depreciation and amortization, partially offset by $3.3 million in accretion of discounts on investments.

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• a decrease of $7.0 million in accounts payable, accrued and other long-term liabilities primarily due to timing of payments;

• a decrease of $9.7 million in cashflows from accounts receivable primarily related to the $10.0 million milestones receivable in the current quarter for the second clinical candidate nomination and the initiation of GLP toxicology study for the first nominated clinical candidate under the Astellas Agreement;

• an increase $1.2 million in cashflows from prepaid and other current assets primarily due to decrease in advance payments due to timing of payment.

During the three months ended March 31, 2023, cash provided by operating activities was $9.4 million, which consisted of a net loss of $3.3 million, adjusted by non-cash charges of $2.4 million and a net increase of $10.3 million relating to the change of our net operating assets and liabilities.

• an increase of $2.5 million in cashflows from accounts receivable, prepaid and other current assets primarily due to decrease in advance payments due to timing of payment.

During the six months ended June 30, 2023, cash used in operating activities was $15.8 million, which consisted of a net loss of $4.4 million, adjusted by non-cash charges of $4.6 million and a net decrease of $16.0 million relating to the change of our net operating assets and liabilities.

The non-cash charges primarily consisted of $4.8 million in stock-based compensation, $1.8 million in non-cash lease expense, $1.2 million in depreciation and amortization, partially offset by $3.2 million in accretion of discounts on investments.

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• an increase of $34.1 million in cash flows from accounts receivable primarily related to the receipt of the $35.0 million upfront payment and prepaid research under the Moderna agreement entered into in December 2022.

• a increase $0.8 million in cashflows from prepaid and other current assets primarily due to decrease in advance payments to our third party manufacturing vendors and timing of payments.

• an increase of $2.4 million in cashflows from prepaid and other current assets primarily due to a decrease in advance payments to our third party manufacturing vendors and timing of payments.

Cash Flows from Investing Activities

During the three months ended March 31, 2024, cash provided by investing activities was $44.9 million consisted of $45.0 million of proceeds from the maturities of short-term investments partially offset by $0.1 million of capital expenditures used to purchase property and equipment.

During the three months ended March 31, 2023, cash used in investing activities was $146.6 million used to purchase short-term investments.

During the six months ended June 30, 2024, cash provided by investing activities was $66.4 million, which consisted of $160.0 million of proceeds from the maturities of short-term investments partially offset by $93.4 million used in the purchase of short-term investments and $0.2 million of capital expenditures used to purchase property and equipment.

During the six months ended June 30, 2023, cash used in investing activities was $120.6 million, which consisted of $220.0 million used in the purchase of short-term investments and $0.6 million of capital expenditures used to purchase property and equipment, partially offset by $100.0 million in proceeds received upon the maturity of marketable securities.

Cash Flows from Financing Activities

During the three months ended March 31, 2024, cash provided by financing activities was $0.2 million consisted of proceeds from the exercise of stock options.

During the three months ended March 31, 2023, there were no financing activities.

During the six months ended June 30, 2024, cash provided by financing activities was $5.2 million, which consisted of $4.8 million of net proceeds from issuance of common stock, net of issuance costs and $0.4 million of proceeds from the exercise of stock options and employee stock purchases under the employee stock purchase plan.

During the six months ended June 30, 2023, cash provided by financing activities consisted of $0.3 million of proceeds from the exercise of stock options and employee stock purchases under the employee stock purchase plan.

Contractual Obligations

During the three months ended March 31, 2024, there were no material changes in contractual obligations from the amounts disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

During the six months ended June 30, 2024, there were no material changes in contractual obligations from the amounts disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

CytomX Therapeutics, Inc.

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Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives.

Our management, with the participation of our Principal Executive and Principal Financial Officers, has evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2024, the end of the period covered by this Quarterly Report on Form 10-Q.

Based on their evaluation and subject to the foregoing, the Principal Executive and Principal Financial Officers concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2024.

Our management, with the participation of our Principal Executive and Principal Financial Officers, has evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2024, the end of the period covered by this Quarterly Report on Form 10-Q.

Changes in Internal Controls Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our fiscal quarter ended March 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our fiscal quarter ended June 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

CytomX Therapeutics, Inc.

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

What changed 10-Q

Item 4. Controls and Procedures