CytomX Therapeutics, Inc. 10-Q

Item 4 Controls and Procedures 30 PART II – OTHER INFORMATION Item 1. Legal Proceedings 31 Item 1A. Risk Factors 31 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 73 Item 3. Defaults Upon Senior Securities 73 Item 4. Mine Safety Disclosures 73 Item 5. Other Information 73 Item 6. Exhibits 74 Signatures 75 2 Forward-Looking Statements This Quarterly Report on Form 10-Q contains certain forward-looking statements that involve risks and uncertainties. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would,” “annualized” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. A number of important factors could cause our actual results to differ materially from those indicated in these forward-looking statements, including those factors identified in “Risk Factors” or “Management’s Discussion and Analysis of Financial Condition and Results of Operations” or the following: • our expectations regarding the potential benefits, activity, effectiveness and safety of our product candidates and therapeutics developed utilizing our PROBODY® conditionally activated platform technology; • the initiation, timing, progress and results of our ongoing clinical trials, research and development programs, preclinical studies, and Investigational New Drug Application (“IND”), Clinical Trial Application, New Drug Application (“NDA”), Biologics License Application (“BLA”), and other regulatory submissions; • the timing of the completion of our ongoing clinical trials and the timing and availability of clinical data from such clinical trials; • our ability to identify and develop additional product candidates; • our dependence on collaborators for developing, obtaining regulatory approval for and commercializing product candidates in the collaboration; • our or a collaborator’s ability to obtain and maintain regulatory approval of any of our product candidates; • our receipt and timing of any milestone payments or royalties under any research collaboration and license agreements or arrangements; • our expectations and beliefs regarding the evolution of the market for cancer therapies and development of the oncology industry; • the rate and degree of market acceptance of any approved product candidates; • the commercialization of any approved product candidates; • our ability to establish and maintain collaborations and retain commercial rights for our product candidates in such collaborations; • the implementation of our business model and strategic plans for our business, technologies and product candidates; • our estimates of our expenses, ongoing losses, future revenue and capital requirements; • our ability to obtain additional funds for our operations and continue as a going concern; • our or any collaborator’s ability to obtain and maintain intellectual property protection for our technologies and product candidates and our ability to operate our business without infringing the intellectual property rights of others; • our reliance on third parties to conduct our preclinical studies or any future clinical trials; • our reliance on third-party supply and manufacturing partners to supply the materials and components for, and manufacture, our research and development, preclinical and clinical trial product supplies, including third parties in Europe and China; • our ability to attract and retain qualified key management and technical personnel; • our ability to secure and maintain licenses of intellectual property to protect our technologies and product candidates; • our financial performance; 3 • developments relating to our competitors, our industry, international conflict or uncertainties; and • the extent to which any future pandemic and related governmental regulations and restrictions may impact our business, including our research, clinical trials, which include ongoing site initiation and patient enrollment, manufacturing and financial condition. Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part II, Item 1A. Risk Factors and discussed elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. This Quarterly Report on Form 10-Q also contains estimates, projections and other information concerning our industry, our business and the markets for certain drugs and therapeutic biologics, including data regarding the estimated size of those markets, their projected growth rates and the incidence of certain medical conditions. Information that is based on estimates, forecasts, projections or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained these industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data and similar sources. In some cases, we do not expressly refer to the sources from which these data are derived. Except where the context otherwise requires, in this Quarterly Report on Form 10-Q, “we,” “us,” “our” and the “Company” refer to CytomX Therapeutics, Inc. Trademarks This Quarterly Report on Form 10-Q includes trademarks, service marks and trade names owned by us or other companies. All trademarks, service marks and trade names included in this Quarterly Report on Form 10-Q are the property of their respective owners. 4 PART I – FINANCIAL INFORMATION Item 1. Condensed Financi al Statements (Unaudited) CYTOMX THERAPEUTICS, INC. CONDENSED BAL ANCE SHEETS (in thousands) March 31, December 31, 2025 2024 (unaudited) (1) Assets Current assets: Cash and cash equivalents $ 47,604 $ 38,052 Short-term investments 32,282 62,571 Accounts receivable 1,956 3,103 Prepaid expenses and other current assets 4,786 3,579 Total current assets 86,628 107,305 Property and equipment, net 2,229 2,467 Intangible assets, net 547 583 Goodwill 949 949 Restricted cash 1,028 1,027 Operating lease right-of-use asset 7,055 8,136 Other assets 61 66 Total assets $ 98,497 $ 120,533 Liabilities and Stockholders' Equity (Deficit) Current liabilities: Accounts payable $ 276 $ 1,088 Accrued liabilities 11,406 12,338 Operating lease liabilities - short term 5,293 5,145 Deferred revenue, current portion 33,226 67,201 Total current liabilities 50,201 85,772 Deferred revenue, net of current portion 16,214 26,862 Operating lease liabilities - long term 2,856 4,240 Other long term liabilities 4,177 4,115 Total liabilities 73,448 120,989 Commitments and contingencies Stockholders' equity (deficit): Convertible preferred stock — — Common stock 1 1 Additional paid-in capital 693,103 691,095 Accumulated other comprehensive (loss) income ( 1 ) 27 Accumulated deficit ( 668,054 ) ( 691,579 ) Total stockholders' equity (deficit) 25,049 ( 456 ) Total liabilities and stockholders' equity (deficit) $ 98,497 $ 120,533 __________________ (1) The condensed balance sheet as of December 31, 2024 was derived from the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. See accompanying notes to condensed financial statements. 5 CYTOMX THERAPEUTICS, INC. CONDENSED STATEMENTS OF OPERA TIONS AND COMPREHENSIVE INCOME (in thousands, except share and per share data) (Unaudited) Three Months Ended March 31, 2025 2024 Revenues $ 50,917 $ 41,463 Operating expenses: Research and development 18,868 22,052 General and administrative 9,428 7,754 Total operating expenses 28,296 29,806 Income from operations 22,621 11,657 Interest income 955 2,194 Other (expense) income, net 11 ( 11 ) Income before income taxes 23,587 13,840 Provision for income taxes 62 49 Net Income 23,525 13,791 Other comprehensive income (loss): Unrealized loss on investments, net of tax ( 28 ) ( 105 ) Total comprehensive income $ 23,497 $ 13,686 Net income per share: Basic $ 0.27 $ 0.17 Diluted $ 0.27 $ 0.17 Shares used to compute net income per share Basic 87,121,502 82,029,466 Diluted 87,150,666 82,630,020 See accompanying notes to condensed financial statements. 6 CYTOMX THERAPEUTICS, INC. CONDENSED STATEMENTS OF STOC KHOLDERS’ EQUITY (DEFICIT) (in thousands, except share data) (Unaudited) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders' Shares Amount Capital Income (Loss) Deficit Equity (Deficit) Balance at December 31, 2024 80,099,889 $ 1 $ 691,095 $ 27 $ ( 691,579 ) $ ( 456 ) Exercise of stock options and release of RSUs 521,404 — — — — — Stock-based compensation — — 2,008 — — 2,008 Other comprehensive loss — — — ( 28 ) — ( 28 ) Net income — — — — 23,525 23,525 Balance at March 31, 2025 80,621,293 $ 1 $ 693,103 $ ( 1 ) $ ( 668,054 ) $ 25,049 Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders' Shares Amount Capital Income (Loss) Deficit Deficit Balance at December 31, 2023 67,310,838 $ 1 $ 675,905 $ 95 $ ( 723,448 ) $ ( 47,447 ) Exercise of stock options and release of RSUs 826,797 — 174 — — 174 Stock-based compensation — — 1,907 — — 1,907 Other comprehensive loss — — — ( 105 ) — ( 105 ) Net income — — — — 13,791 13,791 Balance at March 31, 2024 68,137,635 $ 1 $ 677,986 $ ( 10 ) $ ( 709,657 ) $ ( 31,680 ) See accompanying notes to condensed financial statements. 7 CYTOMX THERAPEUTICS, INC. CONDENSED STATEMEN TS OF CASH FLOWS (in thousands) (Unaudited) Three Months Ended March 31, 2025 2024 Cash flows from operating activities: Net income $ 23,525 $ 13,791 Adjustments to reconcile net income to net cash used in operating activities: Amortization of intangible assets 36 36 Depreciation and amortization 349 431 Accretion of discounts on short-term investments ( 454 ) ( 1,866 ) Stock-based compensation expense 2,008 1,907 Non-cash lease expense 1,081 986 Changes in operating assets and liabilities Accounts receivable 1,147 ( 9,745 ) Prepaid expenses and other assets ( 1,202 ) 1,212 Accounts payable ( 804 ) 581 Accrued liabilities and other long-term liabilities ( 2,106 ) ( 4,434 ) Deferred revenue ( 44,623 ) ( 28,944 ) Net cash used in operating activities ( 21,043 ) ( 26,045 ) Cash flows from investing activities: Purchases of property and equipment ( 119 ) ( 115 ) Purchases of short-term investments ( 19,785 ) — Maturities of short-term investments 50,500 45,000 Net cash provided by investing activities 30,596 44,885 Cash flows from financing activities: Proceeds from exercise of stock options — 174 Net cash provided by financing activities — 174 Net increase in cash, cash equivalents and restricted cash 9,553 19,014 Cash, cash equivalents and restricted cash, beginning of period 39,079 18,088 Cash, cash equivalents and restricted cash, end of period $ 48,632 $ 37,102 Supplemental disclosures of noncash investing items: Purchases of property and equipment in accounts payable and accrued liabilities $ — $ 6 See accompanying notes to condensed financial statements. 8 CytomX Therapeutics, Inc. Notes to Condensed Financial Statements (Unaudited) 1. Descriptio n of the Business CytomX Therapeutics, Inc. (the “Company”) is a clinical-stage, oncology-focused biopharmaceutical company developing potent biologics designed to remain masked and inactive in healthy tissue and to be unmasked and preferentially activated in the tumor microenvironment. The Company aims to build a commercial enterprise to maximize its impact on the treatment of cancer. 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 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. 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying interim condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Liquidity and Going Concern The Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year of the date that the condensed financial statements are issued. As of March 31, 2025, the Company had cash, cash equivalents and short-term investments of $ 79.9 million and an accumulated deficit of $ 668.1 million . The Company expects that its liquidity requirement will be sufficient to fund current planned operations into the second quarter of 2026, which is less than one year from the date of filing this Quarterly Report on Form 10-Q and will need to raise additional capital to fund continued operations. The Company has historically financed its operations primarily through sales of its securities, including sales of common stock in its initial public offering (the “IPO”), subsequent stock offerings and through its at-the-market offering, sales of its convertible preferred securities prior to the IPO, and payments received under its collaboration agreements. In January 2025, the Company announced a restructuring plan to streamline the organization and reduce costs, which included a 40 % reduction in the Company’s workforce and prioritized capital allocation. In addition, the Company is evaluating future financing opportunities, an d intends to secure additional funding. However, there can be no assurance that any additional financing will be available to the Company on acceptable terms, if at all. If events or circumstances occur such that the Company does not obtain additional funding, it may be necessary to significantly reduce its scope of operations to reduce the current rate of spending, which could include further reductions in staff and the need to delay, limit, reduce or terminate current or future product development, which could have a material adverse effect on the Company’s business, results of operations and financial condition. Moreover, even if financing efforts are successful and additional capital is obtained, available liquidity may still be insufficient to eliminate the aforementioned substantial doubt regarding the Company’s ability to continue as a going concern. The accompanying condensed financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The condensed financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern. Unaudited Interim Financial Information 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, 2025 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, 2024 filed with the SEC. 9 CytomX Therapeutics, Inc. Notes to Condensed Financial Statements (Unaudited) Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant Accounting Policie s There have been no material changes to our significant accounting policies during the three months ended March 31, 2025, as compared to the significant accounting policies disclosed in “Note 2. Basis of Presentation and Summary of Significant Accounting Policies” of the “Notes to Financial Statements” included in Part II, Item 8 of our 2024 Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC. Recently Issued Accounting Standards Not Yet Adopted In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounts Standards Update (“ASU”) 2024-03, Disaggregation of Income Statement Expenses ("ASU 2024-03"), which enhances transparency in income statement disclosures. ASU 2024-03 requires entities to disclose detailed information about specific components of income statement expenses, such as employee compensation, depreciation, and amortization, as well as other significant expense categories. The objective is to provide financial statement users with greater insight into the nature and variability of expenses, improving their ability to analyze financial performance and make informed decisions. ASU 2025-01 clarified that this ASU 2024-03 is effective for the annual reporting periods beginning after December 15, 2026 and for interim periods within annual reporting periods beginning after December 15, 2027 with early adoption permitted. The Company expects to adopt this ASU during the year ended December 31, 2026 on a prospective basis and is currently evaluating its financial statement impact. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which enhances transparency in income tax disclosures. ASU 2023-09 requires entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The Company will adopt this ASU as of December 31, 2025 on a prospective basis and is currently evaluating the impact on its financial statements. 3. Net Income Per Share Basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding for the period. Diluted net income (loss) per share is calculated using the weighted-average number of common shares outstanding, plus potential dilutive common stock during the period. Diluted net loss per share is the same as basic net loss per share in the period when the effect of the potentially dilutive securities is anti-dilutive. The pre-funded warrants are included in both the basic and diluted EPS calculation. The following table presents the calculation of basic and diluted net income per share: 10 CytomX Therapeutics, Inc. Notes to Condensed Financial Statements (Unaudited) Three Months Ended March 31, 2025 2024 (in thousands, except share and per share data) Numerator: Net income $ 23,525 $ 13,791 Denominator: Basic Weighted-average common shares outstanding 80,198,376 67,606,389 Weighted-average pre-funded warrants 6,923,126 14,423,077 Weighted-average common shares outstanding used to calculate basic net income per share 87,121,502 82,029,466 Diluted Weighted-average common shares outstanding used to calculate basic net income per share 87,121,502 82,029,466 Effect of potentially dilutive securities: Stock options, ESPP & RSUs 29,164 600,554 Weighted-average common shares outstanding used to calculate diluted net income per share 87,150,666 82,630,020 Net income per share Basic $ 0.27 $ 0.17 Diluted $ 0.27 $ 0.17 The following weighted-average outstanding shares of potentially dilutive securities are excluded from the computation of diluted net income (loss) per share for the periods presented, because including them would have been anti-dilutive: Three Months Ended March 31, 2025 2024 Options and ESPP to purchase common stock 16,024,352 13,710,289 Common stock warrants 11,538,462 11,538,462 RSUs 2,761,968 227,525 Total 30,324,781 25,476,276 4. Fair Value Measurements and Investments The Company determines the fair value of financial and non-financial assets and liabilities using the fair value hierarchy, which establishes three levels of inputs that may be used to measure fair value, as follows: • Level I: Inputs which include quoted prices in active markets for identical assets and liabilities. • Level II: Inputs other than Level I that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level III: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. 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 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. Our Level II marketable securities are valued using third-party pricing sources, which can include observable market prices, interest rates and yield curves observable at commonly quoted intervals for similar assets as observable inputs for pricing. 11 CytomX Therapeutics, Inc. Notes to Condensed Financial Statements (Unaudited) 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, 2025 Valuation Hierarchy Amortized Cost Gross Unrealized Losses Aggregate Fair Value (in thousands) Assets Money market funds Level I $ 13,021 $ — $ 13,021 Restricted cash (money market funds) Level I 1,028 — 1,028 U.S. Treasury Securities Level II 67,147 ( 1 ) 67,146 Total $ 81,196 $ ( 1 ) $ 81,195 December 31, 2024 Valuation Hierarchy Amortized Cost Gross Unrealized Gains Aggregate Fair Value (in thousands) Assets Money market funds Level I $ 28,313 $ — $ 28,313 Restricted cash (money market funds) Level I 1,027 — $ 1,027 U.S. Treasury Securities Level II 72,503 27 $ 72,530 Total $ 101,843 $ 27 $ 101,870 As of March 31, 2025, the remaining contractual terms of those investments are less than a year. Based upon our quarterly impairment review, we determined that the unrealized losses were not attributed to credit risk but were primarily associated with changes in interest rates and market liquidity. Based on the scheduled maturities of our marketable securities, we determined that it was more likely than not that we will hold these marketable securities to maturity for a recovery of our cost basis. 5. Accrued Liabilities Accrued liabilities consisted of the following: March 31, December 31, 2025 2024 (in thousands) Research and clinical expenses $ 5,693 $ 8,581 Payroll and related expenses 3,821 2,578 Legal and professional expenses 974 689 Restructuring expenses 855 — Other accrued expenses 63 490 Total $ 11,406 $ 12,338 12 CytomX Therapeutics, Inc. Notes to Condensed Financial Statements (Unaudited) 6. Collaboration and License Agreements The following table summarizes the revenue by collaboration partner: Three Months Ended March 31, 2025 2024 (in thousands) Amgen 9,486 1,279 Astellas 9,446 15,452 Bristol Myers Squibb 30,364 19,634 Regeneron 1,614 2,393 Moderna 7 2,705 Total revenue $ 50,917 $ 41,463 Amgen, Inc. On September 29, 2017, the Company and Amgen, Inc. (“Amgen”) entered into a Collaboration and License Agreement (the “Amgen Agreement”). Pursuant to the Amgen Agreement, the Company received an upfront payment of $ 40.0 million in October 2017. Concurrent with the Amgen Agreement, the Company and Amgen entered into a Share Purchase Agreement pursuant to which Amgen purchased 1,156,069 shares of the Company’s common stock at a price of $ 17.30 per share for total proceeds of $ 20.0 million. Under the terms of the Amgen Agreement, as amended, the Company and Amgen were co-developing a conditionally activated T-cell engager (“TCE”) targeting epidermal growth factor receptor (the “EGFR Products”). The Company was responsible for early-stage development of EGFR Products and Amgen was to be responsible for late-stage development and commercialization of EGFR Products. Following potential advancement beyond early-stage development, the Company had the right to elect to participate financially in the global co-development of EGFR Products with Amgen, during which the Company would have been responsible for a certain percentage of the worldwide development costs and entitled to certain percentage of profit sharing in the U.S., for EGFR Products. In addition, the Company was also eligible to receive up to $ 460.0 million in development, regulatory, and commercial milestone payments for EGFR Products, and royalties in certain percentages of worldwide commercial sales. In October 2021, CytomX and Amgen executed an amendment to the Amgen Agreement primarily to (1) extend the target selection date for Amgen to select its additional targets for research and development, and (2) reduce the total number of milestone events and increase the total amount of milestone payments for EGFR Products. 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. Amgen had the right to select a total of up to three targets, including the two additional targets. The Company and Amgen collaborated in the research and development of conditionally activated T-cell engaging bispecifics therapies directed against such targets. Amgen had selected one such target (the “Amgen Other Product”). Except with respect to preclinical activities to be conducted by CytomX, Amgen would have been responsible, at its expense, for the development, manufacture, and commercialization of all Amgen Products. In January 2022, the IND for the EGFR product (CX-904) was allowed to proceed by the U.S. Food and Drug Administration (“FDA”) and the program progressed into Phase 1 dose escalation. In March 2025, CytomX and Amgen jointly decided to not continue CX-904 development and Amgen terminated its license to the EGFR Products. In April 2025, the Amgen Other Product was also terminated with 60 days written notice pursuant to the Amgen Agreement. The Amgen research collaboration remains in effect with the current scope being the preclinical TCE CytomX selected from Amgen’s preclinical pipeline further discussed below. At the initiation of the collaboration, CytomX had the option to select from programs specified in the Amgen Agreement, an existing preclinical stage TCE product from the Amgen preclinical pipeline. In March 2018, CytomX selected the program and this program is currently in preclinical development. CytomX is responsible, at its expense, for converting this program to a conditionally activated TCE product, and thereafter, will be responsible for development, manufacturing, and commercialization of the product (“CytomX Product”). 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, 2025 and December 31, 2024, deferred revenue related to the EGFR Products performance obligation was $ 0.3 million and $ 9.7 million, respectively. A cumulative adjustment from a change in estimate of $ 8.4 million was recognized in the first quarter of 2025 due to Amgen terminating its license to the EGFR Product in March 2025. Deferred revenue related to the Amgen Other Products performance 13 CytomX Therapeutics, Inc. Notes to Condensed Financial Statements (Unaudited) obligation was immaterial as of March 31, 2025 and December 31, 2024. The Company expects to complete the performance obligations under the Amgen Agreement and recognize the remaining deferred revenue in the second quarter of 2025. Astellas Pharma Inc. The Company and Astellas Pharma, Inc. (“Astellas”) entered into a Collaboration and License Agreement (the “Astellas Agreement”) on March 23, 2020, the effective date, to collaborate on preclinical research activities to discover and develop certain antibody compounds for the treatment of cancer using the Company’s PROBODY therapeutic technology. Under the terms of the Astellas Agreement, the Company granted Astellas an exclusive, worldwide right to develop and commercialize PROBODY therapeutics for up to four collaboration targets including one initial target and three additional targets (“Additional Targets”). In addition, Astellas had the right to expand the number of Additional Targets from three up to five (the “Expansion Option”) before the third anniversary of the effective date. Furthermore, for a specified number of targets, at a pre-specified time prior to the initiation of the first pivotal study of a product against such target, the Company may elect to participate in certain development costs and share in the profits generated in the United States with respect to such product (“Cost Share Option”). The Cost Share Option, if exercised, will also provide the option for the Company to co-commercialize such product in the United States. The Company does not consider the Cost Share Option as a performance obligation at the inception of the agreement as participation is at the Company’s discretion. Pursuant to the Astellas Agreement, the consideration from Astellas was comprised of an upfront fee of $ 80.0 million and total potential contingent payments for development, regulatory and sales milestones of up to an aggregate of approximately $ 1.6 billion. The Company is also entitled to tiered royalties from high-single digit to mid-teen percentage royalties from potential future sales. Astellas is responsible for all preclinical research costs incurred by either party as set forth in the preclinical research plan and the Company will receive research and development service fees based on a prescribed full-time employee ("FTE") rate. In January 2023, the Company announced that it achieved a clinical candidate milestone under the Astellas Agreement which triggered a $ 5.0 million milestone payment to the Company which was fully recognized in the first quarter of 2023 as the Company had completed its related performance obligation of the first collaboration target which resulted in the clinical candidate nomination for further development. In March 2024, the Company announced that it achieved the good laboratory practices ("GLPs") toxicology milestone for this candidate which triggered a $ 5.0 million milestone payment to the Company. 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 this first collaboration target. Also, in March 2024, the Company announced that it achieved a clinical candidate milestone for a second collaboration target under the Astellas Agreement which triggered an additional $ 5.0 million milestone payment to the Company. 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 second collaboration target which resulted in the clinical candidate nomination for further development. In the first quarter of 2025, Astellas initiated GLP toxicology studies for the second collaboration target, triggering a $ 5.0 million milestone payment to CytomX. As of March 31, 2025 and December 31, 2024, deferred revenue relating to the Astellas Agreement was $ 13.9 million and $ 17.4 million, respectively. The amount due from Astellas under the Astellas Agreement wa s $ 1.0 million as of March 31, 2025 and $ 1.1 million as of December 31, 2024. Bristol Myers Squibb Company On May 23, 2014, the Company and Bristol Myers Squibb Company (“Bristol Myers Squibb” or “BMS”) 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, including the target CTLA-4. The effective date of the BMS Agreement was July 7, 2014. Under the terms of the BMS Agreement, the Company granted Bristol Myers Squibb exclusive worldwide rights to develop and commercialize PROBODY therapeutics for up to four oncology targets. Bristol Myers Squibb had additional rights to substitute up to two collaboration targets within three years of the effective date of the BMS Agreement. These rights expired in May 2017. Each collaboration target had a two-year research term and the two additional targets had to be nominated by Bristol Myers Squibb within five years of the effective date of the BMS Agreement. The research term for each collaboration target could be extended in one year increments up to three times. Pursuant to the BMS Agreement, the financial consideration from Bristol Myers Squibb was comprised of an upfront payment of $ 50.0 million and estimated research and development service fees, and the Company was initially entitled to receive contingent payments of up to 14 CytomX Therapeutics, Inc. Notes to Condensed Financial Statements (Unaudited) $ 25.0 million for additional targets and contingent payments for development, regulatory and sales milestones. 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 and commercialize PROBODY therapeutics for up to eight additional targets. The effective date of Amendment 1 was April 25, 2017. Under the terms of Amendment 1, the Company continued to have obligations to Bristol Myers Squibb to discover and conduct preclinical development of PROBODY therapeutics against any targets they chose to select during the research period under the terms of Amendment 1. Pursuant to Amendment 1, the financial consideration from Bristol Myers Squibb was comprised of an upfront payment of $ 200.0 million, estimated research and development service fees, and contingent payments for development, regulatory and sales milestones for the eight targets. The Company was also entitled to tiered mid-single to low double-digit percentage royalties from potential future sales. Amendment 1 did not change the term of Bristol Myers Squibb’s royalty obligation under the BMS Agreement. Bristol Myers Squibb’s royalty obligation continues on a licensed-product by licensed-product basis until the later of (i) the expiration of the last claim of the licensed patents covering the licensed products in the country, (ii) the twelfth anniversary of the first commercial sale of a licensed product in a country, or (iii) the expiration of any applicable regulatory, pediatric, orphan drug or data exclusivity with respect to such product. In February 2021, the Company and Bristol Myers Squibb amended the BMS Agreement and entered into Amendment Number 2 to amend the Collaboration and License Agreement (“Amendment 2”), as previously amended by Amendment 1. Subsequent to Amendment 2, in addition to Bristol Myers Squibb’s ongoing development of the CTLA-4 program, Bristol Myers Squibb also had the exclusive worldwide rights to develop and commercialize PROBODY therapeutics for up to five oncology targets. Under the terms of Amendment 2, the period for target selection was extended and in 2022, all remaining targets were selected. The Company continues to collaborate with Bristol Myers Squibb to discover and conduct preclinical development of PROBODY therapeutics against targets selected by Bristol Myers Squibb over the estimated research period, which is projected to end in April 2025. Pursuant to Amendment 2, the Company was eligible to receive contingent payments for development, regulatory and sales milestones. It is also entitled to tiered mid-single to low double-digit percentage of royalties from potential future sales. The Company accounted for Amendment 2 as a modification and reallocated the remaining unrecognized transaction price to the remaining performance obligations. In October 2022, the Company and Bristol Myers Squibb amended the BMS Agreement and entered into Amendment Number 3 (“Amendment 3”), as previously amended by Amendment 1 and Amendment 2, to clarify the rights and restrictions of certain new proprietary antibodies that the parties exchanged. There were no substantive changes to each party's performance obligations. 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 to the CTLA-4 target under the collaboration. 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 ipilimumab. 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's research efforts on all the ongoing programs were completed in April 2025 upon which all remaining deferred revenue is expected to be recognized by the second quarter of 2025. As of March 31, 2025 and December 31, 2024, deferred revenue relating to the BMS Agreement was $ 11.6 million and $ 41.9 million, respectively. ModernaTX, Inc. The Company and ModernaTX, Inc. (“Moderna”) entered into a Collaboration and License Agreement (the “Moderna Agreement”) on December 30, 2022, the effective date, to collaborate on discovery and preclinical research and development activities to create investigational messenger RNA (mRNA) based conditionally activated therapies using the Company’s PROBODY therapeutic technology. Moderna is solely responsible for the development (preclinical and clinical), manufacturing, and commercialization of any products under the Moderna Agreement. 15 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. In exchange, the Company received an upfront payment of $ 35.0 million in January 2023, including $ 5.0 million of prepaid research and development service fees. The Company will continue to receive research and development service fees according to the preclinical research work plans based on a prescribed FTE rate and is eligible to receive up to approximately $ 1.2 billion in future development, regulatory, and commercial milestone payments. 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. Due to Moderna's budget considerations in 2025, the Company's remaining activities for its performance obligation are currently expected to be carried out primarily in 2026 and 2027. As of March 31, 2025 and December 31, 2024, deferred revenue relating to the Moderna Agreement was $ 9.3 million and $ 9.3 million, respectively. The amount due from Moderna under the Moderna Agreement was immaterial and $ 0.9 million as of March 31, 2025 and December 31, 2024, respectively. Regeneron Pharmaceuticals, Inc. The Company and Regeneron Pharmaceuticals Inc. (“Regeneron”) entered into a Collaboration and License Agreement (the “Regeneron Agreement”) on November 16, 2022, to collaborate on creation of conditionally-activated investigational bispecific cancer therapies utilizing the Company’s PROBODY therapeutic platform and Regeneron’s Veloci-Bi® bispecific antibody development platform. The Company and Regeneron will collaborate on preclinical research and discovery activities for initially agreed upon collaboration programs (“Collaboration Program”) with an option to expand additional Collaboration Programs (“Additional Collaboration Program Option”). Under the Collaboration and License Agreement, the Company granted Regeneron an exclusive, worldwide, royalty-bearing license under certain Company intellectual property to develop, manufacture, commercialize and otherwise exploit licensed products (“Licensed Products”) for all human and non-human diagnostic, prophylactic and therapeutic uses in oncology. Regeneron is responsible for funding the cost of preclinical research and discovery activities of both parties for all Licensed Products and for funding the cost of development, manufacturing and commercialization of all Licensed Products worldwide. Pursuant to the Regeneron Agreement, the consideration from Regeneron is comprised of an upfront fee of $ 30.0 million, contingent payments for development and regulatory milestones and commercial milestone payments of up to an aggregate of approximately $ 0.8 billion. If Regeneron exercises its Additional Collaboration Program Option, the Company would be eligible to receive additional upfront and milestone payments aggregating up to approximately $ 1.2 billion. The Company is also entitled to tiered royalties from high-single digit to low-teen percentage royalties from potential future sales. In addition, the Company will receive research and development service fees based on a prescribed FTE rate. As of March 31, 2025 and December 31, 2024, deferred revenue relating to the Regeneron Agreement was $ 14.3 million and $ 15.6 million, respectively. The amount due from Regeneron under the Regeneron Agreement was $ 0.8 million and $ 1.0 million as of March 31, 2025 and December 31, 2024, respectively. Contract Liabilities The following table presents changes in the Company’s total contract liabilities during the three months ended March 31, 2025 and 2024: Deferred Revenue (in thousands) December 31, 2024 $ 94,063 Additions 1,355 Revenue recognized ( 45,978 ) March 31, 2025 $ 49,440 December 31, 2023 $ 212,315 Additions 2,266 Revenue recognized ( 31,210 ) March 31, 2024 $ 183,371 The Company expects that the $ 49.4 million of deferred revenue related to the following contracts as of March 31, 2025 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 16 CytomX Therapeutics, Inc. Notes to Condensed Financial Statements (Unaudited) 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 $ 0.3 million of deferred revenue related to the Amgen EGFR Products is expected to be recognized until the second quarter of 2025 . • The $ 13.9 million of deferred revenue related to the Astellas Agreement is expected to be recognized until 2026 . • The $ 11.6 million of deferred revenue related to the BMS Agreement is expected to be recognized in the second quarter of 2025 . • The $ 9.3 million of deferred revenue related to the Moderna Agreement, together with research and development service fees, is expected to be recognized primarily in 2026 and 2027 due to Moderna's budget considerations in 2025. • The $ 14.3 million of deferred revenue related to the Regeneron Agreement, together with research and development service fees, is expected to be recognized until 2026 . 7. 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 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 agreed to make an additional annual license maintenance fees of $ 0.8 million through 2031 . In the event that the Company terminates the agreement due to material concern of the safety or efficacy of the related technology, 50 % of all remaining maintenance fees will become due immediately. Otherwise, all remaining maintenance fees will become due immediately upon early termination of the agreement unless there is a material breach by UCSB. 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. In the first quarter 2025, the Company incurred $ 0.2 million of sublicense fees triggered by achieving the GLP toxicology studies milestone for the second clinical candidate which was nominated by Astellas in March 2024. For the three months ended March 31, 2025 and 2024, the Company incurred sublicense expenses of $ 1.1 million and $ 1.6 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 exchange, the Company made an upfront license payment of $ 7.5 million, and will pay up to $ 35.0 million in certain clinical development milestones and up to $ 320.0 million in regulatory approval and commercial milestone payments, if achieved. ImmunoGen is also entitled to royalties on product sales ranging from the mid-to-high single digits percentages. In April 2024, the Company made a $ 5.0 million payment of the $ 35.0 million in potential clinical development milestone payments to AbbVie (formerly ImmunoGen) with respect to achieving the milestone of dosing the first patient for CX-2051 under the ImmunoGen 2019 License Agreement. Seattle Genetics, Inc ("SGEN") In August 22, 2023, the Company entered into a Transition Agreement (the “Transition Agreement”) with AbbVie Global Enterprises Ltd. (“AbbVie”), pursuant to which the Company regained exclusive worldwide rights to develop CX-2029, a CD71-targeting conditionally 17 CytomX Therapeutics, Inc. Notes to Condensed Financial Statements (Unaudited) activated antibody drug conjugate. The Transition Agreement superseded the CD71 Co-Development and License Agreement (the “Collaboration Agreement”) entered into between the Company and AbbVie Ireland Unlimited Company (an affiliate entity of AbbVie) in 2016, that was terminated in May 2023, and granted certain intellectual property rights from AbbVie to enable the continued development of CX-2029 by the Company for all human and nonhuman diagnostic, prophylactic, and therapeutic uses. Pursuant to the Transition Agreement, the Company paid an annual license maintenance fee of $ 0.3 million to SGEN for certain related technology starting 2023 through the date on which licensee receives first regulatory approval in the territory for the applicable licensed product. The Company terminated the Transition Agreement in the first quarter of 2025. 8. Common Stock 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, the Company 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. In May 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. The following table summarizes the Company's outstanding warrants as of March 31, 2025 Pre-funded Warrants Tranche 1 Warrants Tranche 2 Warrants Number of warrants Weighted- Average Exercise Price Per Share Number of warrants Weighted- Average Exercise Price Per Share Number of warrants Weighted- Average Exercise Price Per Share Warrants Outstanding 6,923,077 $ 0.00001 5,769,231 $ 4.16 5,769,231 $ 6.24 9. Stock-Based Compensation Stock Options Activities for the Company’s stock option plans for the three months ended March 31, 2025 were as follows: Options Outstanding Number of Options Weighted- Average Exercise Price Per Share Balance at December 31, 2024 14,562,061 $ 6.20 Options granted 2,825,305 0.86 Option forfeited/expired ( 608,307 ) 2.28 Balance at March 31, 2025 16,779,059 $ 5.44 The Company recorded $ 1.3 million and $ 1.4 million of stock-based compensation expense related to the stock option plans for the three months ended March 31, 2025 and 2024, respectively. 18 CytomX Therapeutics, Inc. Notes to Condensed Financial Statements (Unaudited) Time-based RSUs ("TRSU") Activities for the Company’s TRSUs for the three months ended March 31, 2025 were as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Balance at December 31, 2024 1,853,232 $ 2.00 RSU's awarded 1,867,163 0.86 RSU's vested ( 521,404 ) 2.22 RSU's forfeited ( 408,037 ) 1.91 Balance at March 31, 2025 2,790,954 $ 1.21 The Company recorded $ 0.2 million and $ 0.4 million of stock-based compensation expense related to the TRSUs for the three months end March 31, 2025 and 2024, respectively. Performance-based RSUs ("PSUs") 2023 PSU 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”). As of December 31, 2024, the PSUs for 2023-Tranche-1 were canceled as the related performance condition was not met by December 2024. As of March 31, 2025, the Company determined that it is probable that the performance condition will be satisfied for 2023-Tranche-2 and hence recorded $ 0.5 million compensation cost during the quarter ended March 31, 2025. 2024 PSU 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”). 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, 2025. Activities for the Company’s PSUs for the three months ended March 31, 2025, were as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Balance at December 31, 2024 1,190,000 $ 1.94 PSU's forfeited ( 330,000 ) 1.95 Balance at March 31, 2025 860,000 $ 1.94 Stock-based Compensation Total stock-based compensation recorded was as follows: Three Months Ended March 31, 2025 2024 (in thousands) Research and development $ 563 $ 707 General and administrative 1,445 1,200 Total stock-based compensation expense $ 2,008 $ 1,907 19 CytomX Therapeutics, Inc. Notes to Condensed Financial Statements (Unaudited) 10. Income Taxes The Company maintains a full valuation allowance against its net deferred tax assets through December 31, 2024 . The Company files income taxes in the U.S. federal jurisdiction, the state of California and various other U.S. states. The state of California contested the Company’s tax position on revenue apportionment for upfront and milestone payments resulting from the Company’s collaboration and licensing agreements for the years 2017 and 2018. In September 2023, the Company received Notice of Proposed Assessment (“NOPA”) from the Franchise Tax Board. The Company recorded an uncertain tax position of $ 4.2 million in long term liabilities for the proposed tax assessment, penalties and interest through March 31, 2025. Of the unrecognized tax benefits as of March 31, 2025, approximately $ 5.1 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 contest the proposed assessment in November 2023. Due to the ongoing nature of the examination and dis cussions with the state of California, the Company is unable to estimate a date by which this matter will be resolved. 11. Segment Disclosures The Company operates as a single operating segment. The Chief Executive Officer is identified as the Chief Operating Decision Maker (CODM). The CODM primarily reviews the Company’s financial information on an aggregate basis. The CODM utilizes the aggregated financial information to make strategic decisions, assess performance, and allocate resources across the Company. The aggregate information includes the revenue by collaboration partner, research and development expense by program, as well as net income that is reported on the Statements of Operations and Comprehensive Income. Net income is used to monitor budget versus actual results in assessing performance of the segment and in establishing management's compensation. The measure of segment assets is reported on the Balance Sheets as total assets. All of the Company’s long-lived assets are located in the United States. In addition to the revenue by collaborative partners disclosed in Note 6, the CODM reviews the following significant expenses in making decisions about the allocation of resources and assessing performance (in thousands): Three Months Ended March 31, 2025 2024 (in thousands) Total revenue $ 50,917 $ 41,463 External costs incurred by product candidate (target): CX-904 (EGFRxCD3) 1,111 1,212 CX-2051 (EpCAM) 4,270 3,081 CX-801 (IFNα2b) 488 999 Other wholly owned and partnered programs 397 3,185 General research and development expenses 2,530 4,013 Total external costs 8,796 12,490 Internal costs 10,072 9,562 Research and development expenses 18,868 22,052 General and administrative expenses 9,428 7,754 Total operating expenses 28,296 29,806 Income from operations 22,621 11,657 Interest income 955 2,194 Other income (expense), net 11 ( 11 ) Income before income taxes 23,587 13,840 Provision for income taxes 62 49 Segment and net income $ 23,525 $ 13,791 12. Restructuring On January 6, 2025, the Company announced a restructuring plan to streamline its organization and prioritize CX-2051 (EpCAM PROBODY ® ADC), CX-801 and its activities to support its research collaborations. This plan resulted in a reduction of approximately 40 % of its workforce and was substantially completed in the first quarter of 2025. The Company estimates the total restructuring charges of approximately $ 3.0 million , primarily related to one-time severance payments and other employee-related costs. This includes $ 1.8 million of 20 CytomX Therapeutics, Inc. Notes to Condensed Financial Statements (Unaudited) research and development expenses and $ 1.1 million of general and administrative expenses that were recorded during the three months ended March 31, 2025. The following is a summary of activities of restructuring costs for the three months ended March 31, 2025 (in thousands): Severance and Benefits Costs Stock Based Compensation Total Restructuring cost recorded $ 2,833 $ 77 $ 2,910 Cash payment ( 1,974 ) — ( 1,974 ) Changes in estimates ( 4 ) — ( 4 ) Non-cash charges — ( 77 ) ( 77 ) Balance at March 31, 2025 $ 855 $ — $ 855 21 Item 2. Management’s Discuss ion and Analysis of Financial Condition and Results of Operations You should read the following management’s discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and notes thereto for the year ended December 31, 2024, included in our Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission (“SEC”) on March 6, 2025. This discussion and other parts of this report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this report titled “Risk Factors.” Except as may be required by law, we assume no obligation to update these forward-looking statements or the reasons that results could differ from these forward-looking statements. Overview We are a clinical-stage, oncology-focused biopharmaceutical company focused on developing novel, conditionally activated, masked biologics designed to be preferentially unmasked and activated in the tumor microenvironment. 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 are a leader in the field of masked, conditionally activated oncology therapeutics and have established biologics localization as a strategic area of research and development in the biopharmaceutical industry. Our vision is to transform lives with safer, more effective therapies with the goal to address major unmet needs in oncology. Our proprietary, versatile, multi-modality PROBODY technology platform is designed to enable conditional activation of potent masked biologic therapeutic candidates within the tumor microenvironment while minimizing drug activity in healthy tissues and circulation. Our platform is built on a strong foundation of tumor biology expertise, including deep knowledge of tumor-associated enzymes known as proteases. Proteases are tightly controlled in normal tissues but often dysregulated and active in tumor microenvironments where they play important roles in cancer cell migration, invasion and metastasis. Leveraging our deep scientific knowledge, we conceived of and constructed our PROBODY therapeutic platform which allows us to genetically engineer biologic therapeutic candidates to contain protease-cleavable masks. Our masking strategy is designed to reduce binding of biologic therapeutics to their targets until the mask is removed by proteases in the tumor microenvironment, providing more selective targeting of the tumor. We are employing our leading, masking platform technology to address some of the biggest challenges in oncology biologics research and development. These include the validation of potential new targets for antibody-drug conjugates (“ADCs”), increasing the therapeutic index for immune modulators such as cytokines, and opening therapeutic window for novel T-cell engagers (“TCEs”) targeting solid tumors. We have utilized our PROBODY therapeutic platform and masking technology to build a promising pipeline of potential first-in-class and best-in-class clinical-stage molecules. These are CX-2051, an investigational, conditionally activated ADC targeting epithelial cell adhesion molecule (“EpCAM”), and CX-801, an investigational, masked version of interferon alpha-2b (“IFNα2b”). Our current clinical-stage molecules address targets or mechanisms that have been previously validated as having anti-cancer activity but have been limited in their utilization due to systemic toxicities. We have incorporated our significant, multi-modality masking, conditional activation expertise and clinical learnings to optimize predicted therapeutic index and the clinical potential of these promising agents through tumor localized, conditional activation. CX-2051, a conditionally activated, PROBODY ADC, targets EpCAM. High expression of EpCAM has been documented in many tumor types, including colorectal cancer (“CRC”). The CX-2051 payload, a next generation topoisomerase-1 inhibitor payload licensed from AbbVie (formerly ImmunoGen), is tailored to have anti-tumor activity against multiple EpCAM-expressing indications, including colorectal cancer. The payload-antibody linker we selected for CX-2051 is designed to drive bystander killing of neighboring tumor cells, contributing to anti-tumor activity. The design of CX-2051 is intended to establish a clinically meaningful therapeutic window for the systemic treatment of EpCAM-expressing cancers where previous industry efforts targeting EpCAM have not been successful due to dose-limiting toxicities. CX-2051 has demonstrated strong preclinical activity and tolerability in multiple preclinical models, including colorectal cancer. The IND for CX-2051 was allowed to proceed by the FDA in January 2024 and a Phase 1 clinical trial of CX-2051 in patients with EpCAM expressing solid tumors, with an initial focus in CRC, was commenced in April 2024. No pre-screening of CRC patients based on tumor EpCAM expression is being conducted because of anticipated high and uniform EpCAM expression in CRC. As of May 2025, the Phase 1 study had reached the seventh dose escalation level. In May 2025, the Company announced positive interim Phase 1 data as of an April 7, 2025 data cutoff in advanced metastatic colorectal cancer. The data encompassed certain results from 25 CRC patients treated with CX-2051 at 5 dose levels ranging from 2.4 mg/kg to 10 mg/kg, administered every three weeks (“Q3W”). The 2.4 mg/kg and 4.8 mg/kg doses were single patient dose escalation cohorts not anticipated to be therapeutically active. At the 7.2 mg/kg, 8.6 mg/kg, and 10 mg/kg doses, 23 patients were treated, 18 of whom were efficacy 22 evaluable, having had at least one post-baseline tumor assessment as of the data cutoff. Patients enrolled in the study at the time of data cutoff had previously received a median of 4 prior lines of therapy and all patients had previously been treated with irinotecan. 64% of patients had liver metastases, 64% had KRAS mutations, and 96% were microsatellite stable. Patients were not preselected based on EpCAM expression levels. As of the data cutoff, 18 patients were efficacy-evaluable at the expansion doses of 7.2 mg/kg, 8.6 mg/kg, and 10 mg/kg Q3W. The overall response rate across these cohorts was 28%, five of eighteen (5/18) patients demonstrated confirmed partial RECIST v1.1 responses. Three of seven (3/7) efficacy evaluable patients at the dose of 10 mg/kg Q3W demonstrated confirmed partial responses per RECIST v1.1. The disease control rate, including responding patients and patients with stable disease was 94% (17/18). Preliminary median progression free survival (PFS) was 5.8 months as of the data cutoff with 10 of 18 patients remaining on study treatment. As of the data cutoff, 25 patients were evaluable for safety. CX-2051 was generally well-tolerated as of the data cutoff with manageable adverse events, with no dose limiting toxicities. Most treatment related adverse events (TRAEs) were Grade 1 or Grade 2 in severity. The most common reported TRAEs were diarrhea (18 patients, 5 Grade 3), nausea (11 patients, 1 Grade 3), vomiting (8 patients, No Grade 3), fatigue (8 patients, 1 Grade 3), anemia (5 patients, 3 Grade 3), hypokalemia (3 patients, 1 Grade 3), neutrophil count decrease (2 patients, 2 Grade 3) and neutropenia (2 patients, 1 Grade 3). TRAEs included serious adverse events in 5 patients (1 Grade 2, 4 Grade 3). No Grade 4 or 5 TRAEs were observed. No events of interstitial lung disease or febrile neutropenia were reported as of the data cutoff. The Company announced that it has commenced CX-2051 dose expansions at the 7.2 mg/kg, 8.6 mg/kg, and 10 mg/kg doses Q3W with the goal to enroll a total of approximately 20 patients at each dose level. The Company expects to provide an additional Phase 1 data update in the first quarter of 2026. The Company is planning initiation of a Phase 2 study in colorectal cancer in the first half of 2026. CX-801 is our PROBODY interferon ("IFN") alpha( a )-2b clinical program. IFNα2b provides a potentially superior approach to activating anti-tumor immune responses than other cytokines. 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 allowed to proceed by the FDA in January 2024, and in the third quarter of 2024 the first patient was dosed in the CX-801 Phase 1 dose escalation study in solid tumors. The Phase 1 dose escalation study is focused on patients with advanced melanoma. In Phase 1 dose escalation, the study will evaluate safety, translational biomarkers and signs of clinical activity for CX-801 monotherapy and in combination with KEYTRUDA ® . In the second quarter of 2024, CytomX announced a clinical collaboration with Merck to supply KEYTRUDA for evaluation of its combination with CX-801 in the Phase 1 study. The Phase 1 study is currently in the fourth monotherapy dose escalation cohort where the dose of CX-801 exceeds the approved dose of the unmasked peginterferon alfa-2b (SYLATRON™). Initial Phase 1a clinical and translational data in patients with advanced melanoma is expected in the second half of 2025. We are also active in the research and development of PROBODY T-cell Engagers. In 2022, we advanced our first TCE into the clinic. CX-904, which was partnered with Amgen, is a conditionally activated TCE against EGFR and CD3. In preclinical studies, CytomX’s PROBODY EGFRxCD3 TCE demonstrated anti-tumor activity and better tolerability when compared to TCEs without PROBODY masking. In May 2022, the first patient was dosed in a Phase 1 study evaluating CX-904 as a treatment for patients with advanced solid tumors. As of the end of 2024, the Phase 1 study of CX-904 had enrolled over 70 patients and a maximum tolerated dose had not been reached. In March 2025, based on CX-904 clinical observations to-date as well as CytomX pipeline priorities, CytomX and Amgen jointly decided to not further develop the CX-904 program. We are also continuously engaged in drug discovery efforts towards the generation of new clinical candidates across multiple modalities for the treatment of cancer, including additional ADCs, Cytokines, TCEs, and mRNAs reflecting the versatility of our PROBODY platform. We do not have any products approved for sale, and we continue to incur significant research and development as well as general and administrative expenses related to our operations. 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. We will need to commit significant time, resources, and funding to develop our wholly-owned and partnered product candidates in clinical trials. We are unable to provide the nature, timing, and estimated costs of the efforts necessary to complete the development of our product candidates because, among other reasons, of regulatory uncertainty, manufacturing limitations, and the pace of enrollment of our clinical trials, which is a function of many factors, including the availability and proximity of patients with the relevant condition. We currently have no manufacturing capabilities and do not intend to establish any such capabilities in the near term. As such, we are dependent on third parties to supply our product candidates according to our specifications, in sufficient quantities, on time, in compliance with appropriate regulatory standards and at competitive prices. 23 Restructuring On January 6, 2025, we announced a restructuring plan (the “2025 Restructuring Plan”) to streamline our organization and prioritize CX-2051, CX-801 and our activities to support our research collaborations. The restructuring plan resulted in a reduction of approximately 40% of our workforce and was substantially completed in the first quarter of 2025. We estimate the total restructuring charges of approximately $3.0 million, primarily related to one-time severance payments and other employee-related costs. This includes $1.8 million of research and development expenses and $1.1 million of general and administrative expenses that were recorded during the three months ended March 31, 2025. Going Concern As of March 31, 2025 and December 31, 2024, we had an accumulated deficit of $668.1 million and $691.6 million, respectively, and cash, cash equivalents and short-term investments of $79.9 million and $100.6 million, respectively. Our current operating plan and projected cash outflows for the upcoming periods raise doubt about our ability to continue as a going concern for at least 12 months from the issuance of the financial statements included elsewhere in this Quarterly Report. We will need to raise additional capital to fund continued operations beyond the second quarter of 2026. We have implemented a restructuring plan to reduce our workforce by 40% which was substantially completed in the first quarter of 2025, to extend our cash runway. We are also taking steps to identify access to future capital and expect to be able to access capital in the future. However, there can be no assurance that any additional financing will be available to us on acceptable terms, if at all. If events or circumstances occur such that we do not obtain additional funding, it may be necessary to significantly reduce the scope of operations to reduce the current rate of spending, which could include further reductions in staff and the need to delay, limit, reduce or terminate current or future product development, which could have a material adverse effect on our business, results of operations and financial condition. Moreover, even if financing efforts are successful and additional capital is obtained, available liquidity may still be insufficient to eliminate the aforementioned substantial doubt regarding our ability to continue as a going concern. Critical Accounting Policies and Estimates The preparation of our Condensed Financial Statements requires us to make estimates and judgments that affect the reported amounts in the financial statements and related disclosures. On an ongoing basis, management evaluates its significant accounting policies and estimates. We base our estimates on historical experience and on various market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly from these estimates. Estimates are assessed each period and updated to reflect current information. A summary of our critical accounting policies and estimates is presented in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024. Except as noted in the revenue discussion below, there have been no material changes to our critical accounting policies and estimates for the three months ended March 31, 2025. Components of Results of Operations Revenue Our revenue to date has been primarily derived from non-refundable license payments, milestone payments and reimbursements for research and development expenses under our research, collaboration, and license agreements. We recognize revenue from upfront payments over the term of our estimated period of performance under the agreement using an input method for the entire performance obligation. In applying the input method of revenue recognition, we use actual full-time equivalent (“FTE”) hours incurred relative to estimated total FTE hours expected to be incurred for each combined performance obligation over the estimated research service period of each collaboration target. In addition to receiving upfront payments, we are entitled to variable payments related to research and development services provided and may be entitled to milestone and other contingent payments upon achieving predefined objectives. Revenue from variable payments related to research and development or milestones and other contingent payments, when it is probable that there will not be a significant revenue reversal, is also recognized over the performance period based on a similar method. For the foreseeable future, we do not expect to generate any revenue from the sale of products unless and until such time as our product candidates have advanced through clinical development and obtained regulatory approval. We expect that any revenue we generate in the foreseeable future will fluctuate from year to year as a result of the timing and amount of milestones and other payments from our collaboration agreements with Amgen, Astellas, Bristol Myers Squibb, Regeneron, Moderna and any other collaboration partners, and as a result of the fluctuations in the research and development expenses we incur in the performance of assigned activities under these agreements. Research and Development Expenses Our research and development expenses consist primarily of costs incurred to conduct research, such as the discovery and development of our product candidates, clinical development, including activities with third parties, such as contract research organizations (“CRO”) and contract 24 development and manufacturing organizations (“CMO”), and the manufacture of drug products used in clinical trials, as well as the development of product candidates pursuant to our research, collaboration and license agreements. Research and development expenses include personnel costs, including stock-based compensation expense, contractor services, laboratory materials and supplies, depreciation and maintenance of research equipment, and an allocation of related facilities costs. We expense research and development costs as incurred. We expect our research and development expenses could vary substantially in the future as we prioritize our pipeline opportunities, advance our product candidates through clinical trials, initiate additional clinical trials, and pursue regulatory approval of our product candidates. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for our product candidates may be affected by a variety of factors including: the safety and efficacy of our product candidates, early clinical data, investment in our clinical program, the ability of collaborators to successfully develop our licensed product candidates, competition, manufacturing capability and commercial viability. We may never succeed in achieving regulatory approval for any of our product candidates. As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of our product candidates. General and Administrative Expenses General and administrative expenses include personnel costs, expenses for outside professional services and other allocated expenses. Personnel costs consist of salaries, bonuses, benefits and stock-based compensation. Outside professional services consist of accounting and audit services, legal and other consulting fees. Allocated expenses primarily consist of rent expense related to our office and information technology related costs. Interest Income Interest income primarily consists of interest income from our cash equivalents and investments, and accretion of discounts or amortization of premiums on our investments. Other Income (Expense), Net Other income (expense), net consists primarily of gains and losses resulting from changes to currency exchange rates. Income Taxes Income taxes are recorded in accordance with ASC 740, Accounting for Income Taxes, or ASC 740, which provides for deferred taxes using an asset and liability approach. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financial statements or tax returns. We determine our deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. 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. 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. 25 Results of Operations Revenue The following table summarizes our revenue by collaboration partner during the respective periods: Three Months Ended March 31, 2025 2024 Change (in thousands) Amgen 9,486 1,279 8,207 Astellas 9,446 15,452 (6,006 ) Bristol Myers Squibb 30,364 19,634 10,730 Regeneron 1,614 2,393 (779 ) Moderna 7 2,705 (2,698 ) Total revenue $ 50,917 $ 41,463 $ 9,454 The increase in revenue of $9.5 million for the three months ended March 31, 2025, compared to the corresponding period of 2024 was primarily due to: • An increase in revenue under the BMS Agreement driven by higher percentage of completion of the existing targets. The contractual research term under the BMS Agreement concludes in the second quarter of 2025, at which point the performance obligation and corresponding revenue recognition are expected to be complete and BMS will be responsible for the future research and development of the collaboration programs; • An increase in revenue under the Amgen Agreement due to a cumulative adjustment from a change in estimate of $8.4 million resulting from Amgen terminating its license to the EGFR Product in March 2025. The $0.3 million remaining deferred revenue is expected to be recognized in the 2nd quarter of 2025; • A decrease in revenue under the Astellas Agreement primarily driven by higher preclinical milestone payments in the first quarter of 2024 compared to the first quarter of 2025; and • A decrease in revenue under the Moderna Agreement driven by Moderna's budget considerations in 2025 where the $9.3 million of remaining deferred revenue is expected to be recognized primarily in 2026 and 2027. Operating Costs and Expenses Research and Development Expenses The following table summarizes our research and development expenses by program incurred during the respective periods presented: Three Months Ended March 31, 2025 2024 Change (in thousands) External costs incurred by product candidate (target): CX-904 (EGFRxCD3) $ 1,111 $ 1,212 $ (101 ) CX-2051 (EpCAM) 4,270 3,081 1,189 CX-801 (IFNα2b) 488 999 (511 ) Other wholly owned and partnered programs 397 3,185 (2,788 ) General research and development expenses 2,530 4,013 (1,483 ) Total external costs 8,796 12,490 (3,694 ) Internal costs 10,072 9,562 510 Total research and development expenses $ 18,868 $ 22,052 $ (3,184 ) Research and development expenses decreased by $3.2 million for the three months ended March 31, 2025, compared to the corresponding period of 2024 primarily due to reduced pre-clinical activities in the wholly owned and partnered programs and decreased manufacturing activities for CX-801, partially offset by increased clinical trial activities related to CX-2051 and CX-801, and $1.8 million restructuring 26 expenses which were primarily included in internal costs. We expect program development expenses in future quarters to be primarily focused in CX-2051. General and Administrative Expenses Three Months Ended March 31, 2025 2024 Change (in thousands) General and administrative $ 9,428 $ 7,754 $ 1,674 General and administrative expenses increased by $1.7 million for the three months ended March 31, 2025, compared to the corresponding period of 2024, primarily driven by $1.1 million of restructuring expenses as well as other personnel related expenses. We expect general and administrative related personnel expenses to decrease in future quarters of 2025 due to one-time restructuring costs incurred in the first quarter of 2025 and lower headcount as a result of the January 2025 restructuring. Restructuring During the three months ended March 31, 2025, we recognized aggregate restructuring cost of approximately $2.9 million, primarily related to severance and benefits. This included $1.8 million in research and development expenses and $1.1 million in general and administrative expenses. The total restructuring cost is expected to be approximately $3.0 million, with the remaining costs expected to be incurred in the three months ended June 30, 2025. The restructuring was substantially completed in the first quarter of 2025. Interest Income and Other Income (Expense), Net Three Months Ended March 31, 2025 2024 Change (in thousands) Interest income $ 955 $ 2,194 $ (1,239 ) Other income (expense), net 11 (11 ) 22 Total interest income and other expense $ 966 $ 2,183 $ (1,217 ) Interest income decreased by $1.2 million during the three months ended March 31, 2025 compared to the corresponding period of 2024. The decrease was primarily driven by lower interest rates and the lower cash and cash equivalents and short-term investments position. Income Taxes Three Months Ended March 31, 2025 2024 Change (in thousands) Provision for income taxes $ 62 $ 49 $ 13 The $0.1 million tax provision represented the interest accrued for the three months ended March 31,2025 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, 2025, we had cash, cash equivalents and short-term investments of $79.9 million and an accumulated deficit of $668.1 million, compared to cash, cash equivalents and short-term investments of $100.6 million and an accumulated deficit of $691.6 million as of December 31, 2024. 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. We received gross proceeds of 27 approximately $30.0 million. In March 2024, we achieved a clinical candidate milestone for a second collaboration target as well as the GLP toxicology studies milestone for the first collaboration target nominated in January 2023 under the Astellas Agreement; as a result, we collected the two milestone payments totaling $10.0 million in April 2024. In the first quarter of 2025, we achieved the GLP toxicology studies for the second collaboration target nominated in March 2024 under the Astellas Agreement; as a result, we collected the $5.0 million milestone payment in March 2025. On January 6, 2025, we announced the 2025 Restructuring Plan to streamline our organization and prioritize CX-2051 investment and activities to support our research collaborations. The restructuring plan resulted in a reduction to our workforce by approximately 40% and was substantially completed in the first quarter of 2025. In February 2020, we initiated an at-the-market offering program (“ATM”) pursuant to a sales agreement with Jefferies, LLC (as amended on March 4, 2022 and August 9, 2024, the "Sales Agreement"). In 2024, we sold 3,925,202 shares at a weighted average price of $1.8 per share under our at-the-market ("ATM") offering and received net proceeds of approximately $6.9 million after deducting the 3.0% sales commission and related issuance cost. For the three months ended March 31, 2025, we did not sell any shares under the ATM. Based upon our current operating plan and liquidity requirements, we expect our existing capital resources will be sufficient to fund operations into the second quarter of 2026. We have implemented a restructuring plan to streamline our organization and reduce costs, which included a 40% reduction of our workforce and revised capital allocation priorities, which was substantially completed in the first quarter of 2025. We are also evaluating available financing opportunities to improve our liquidity profile. However, there can be no assurance that the restructuring will achieve our anticipated operating results, or that additional financing will be available on acceptable terms, if at all. 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 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. As such, we may alter our expenditures as a result of contingencies such as the failure of one or all of our product candidates currently in clinical development, the acceleration of one or all of our product candidates in clinical development, the initiating of clinical trials for additional product candidates, the identification of more promising product candidates in our research efforts or unexpected operating costs and expenditures. In addition, we will need to raise additional capital to fund our operation beyond the second quarter of 2026 and we are taking steps to identify access to future capital, and expect to be able to access capital in the future. There can be no assurance, however, that such efforts will be successful; or if they are successful, that the terms and conditions of such financing will be favorable to us. Summary Statement of Cash Flows The following table summarizes our cash flows for the periods indicated: Three Months Ended March 31, 2025 2024 (in thousands) Net cash used in operating activities $ (21,043 ) $ (26,045 ) Net cash provided by investing activities 30,596 44,885 Net cash provided by financing activities — 174 Net increase in cash, cash equivalents and restricted cash $ 9,553 $ 19,014 Cash Flows from Operating Activities During the three months ended March 31, 2025, cash used in operating activities was $21.0 million, which consisted of a net income of $23.5 million and non-cash charges of $3.0 million, adjusted by a net decrease of $47.5 million relating to the change of our net operating assets and liabilities. The non-cash charges primarily consisted of $2.0 million in stock-based compensation, $1.1 million in non-cash lease expense, $0.4 million in depreciation and amortization, partially offset by $0.5 million in accretion of discounts on investments. The change in our net operating assets and liabilities was primarily due to: 28 • a net decrease of $44.6 million in deferred revenue resulting from the continued recognition of deferred revenue from existing customers; • a decrease of $2.8 million in accounts payable, accrued and other long-term liabilities primarily due to timing of payments; and • an decrease of $1.2 million in cashflows from prepaid and other current assets primarily due to increase in advance payments, partially offset by • an increase of $1.1 million in cashflows from accounts receivable primarily due to timing of collection of service revenue. 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. The non-cash charges primarily consisted of $1.9 million in stock-based compensation, $1.0 million in non-cash lease expense, $0.5 million in depreciation and amortization, partially offset by $1.9 million in accretion of discounts on investments. The change in our net operating assets and liabilities was primarily due to: • a net decrease of $28.9 million in deferred revenue resulting from the continued recognition of deferred revenue from existing customers; • a decrease of $3.9 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; offset by • 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. Cash Flows from Investing Activities During the three months ended March 31, 2025, cash provided by investing activities was $30.6 million consisted of $50.5 million of proceeds from the maturities of short-term investments partially offset by $19.8 million used in purchase of short-term investment and $0.1 million of capital expenditures used to purchase property and equipment. 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. Cash Flows from Financing Activities During the three months ended March 31, 2025, there was no cash used in or provided by 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. Contractual Obligations During the three months ended March 31, 2025, 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, 2024. 29 Item 3. Quantitative and Qualitat ive Disclosure About Market Risk We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. Item 4. Controls and Proc edures Evaluation of Disclosure Controls and Procedures The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934, as amended (the “Exchange Act”) refers to controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its Principal Executive and Principal Financial Officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. 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, 2025, 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, 2025. 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, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 30 PART II – OTHER INFORMATION