What changed in this filing

/stocks — the workspaceLOADING

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2022-03-08 compared with 2021-03-03 · 123 added, 301 removed, 444 unchanged (49% of the section changed)

1 unchanged sentence

We are a smaller reporting company, as defined in Rule 12b-2 under

the Securities Exchange Act of 1934, as amended, for this reporting period and are not required to provide the information required under this item.

the Exchange Act

, for this reporting period and are not required to provide the

information required under this item.

CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

1 unchanged sentence

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm ( KPMG LLP , PCAOB ID 185 )

Consolidated Balance Sheets

8 unchanged sentences

We have audited the accompanying consolidated balance sheets of Magenta Therapeutics, Inc.

and subsidiary (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations and comprehensive loss, consolidated statements of stockholders’ equity, and consolidated statements of cash flows for each of the years then ended, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years then ended, in conformity with U.S.

and subsidiary (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with U.S.

generally accepted accounting principles.

15 unchanged sentences

Boston, Massachusetts

March 3, 2021

MAGENTA THERAPEUTICS, INC.

22 unchanged sentences

150,000,000 shares authorized;

48,541,601 shares and 39,466,254 shares issued and 48,533,135 shares and 39,260,532 shares outstanding as of December 31, 2020 and 2019, respectively

shares issued and outstanding as of December 31, 2021 and 48,541,601 shares issued and 48,533,135 shares outstanding as of December 31, 2020

Additional paid-in

Accumulated other comprehensive income (loss)

Accumulated other comprehensive loss

Accumulated deficit

15 unchanged sentences

Comprehensive loss:

Other comprehensive income (loss):

Unrealized gains (losses) on marketable securities

Total other comprehensive income (loss)

Other comprehensive loss:

Unrealized losses on marketable securities

Total other comprehensive loss

Total comprehensive loss

4 unchanged sentences

Comprehensive

Income (Loss)

Stockholders’

Income (Loss)

Balances at December 31, 2019

2 unchanged sentences

Issuance of common stock upon exercise of stock options

Issuance of common stock under Employee Stock Purchase Plan

Stock-based compensation expense

Unrealized gains on marketable securities

Unrealized losses on marketable securities

Balances at December 31, 2020

Issuance of common stock upon public offering net of underwriting discounts, commissions and offering costs

Issuance of common stock upon private investment, net of offering costs

Vesting of restricted stock

14 unchanged sentences

Loss on disposal of property and equipment

Net amortization (accretion) of premiums (discounts) on marketable securities

Net amortization of premiums on marketable securities

Changes in operating assets and liabilities:

10 unchanged sentences

Cash flows from financing activities:

Proceeds from private investment

Proceeds from public offerings, net of underwriting discounts and commissions

Payments of public offering costs

Payments of offering costs

Proceeds from exercise of common stock options

1 unchanged sentence

Net cash provided by financing activities

in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

5 unchanged sentences

Magenta Therapeutics, Inc.

(the “Company”) is a clinical-stage biotechnology company developing novel medicines to bring the curative power of stem cell transplants to more patients with blood cancers, genetic diseases and autoimmune diseases.

(the “Company”) is a clinical-stage biotechnology company developing novel medicines designed to bring the curative power of stem cell transplants to more patients with blood cancers, genetic diseases and autoimmune diseases.

The Company was incorporated under the laws of the State of Delaware in June 2015 as HSCTCo Therapeutics, Inc.

In February 2016, the Company changed its name to Magenta Therapeutics, Inc.

and in June 2018 the Company completed its initial public offering of common stock .

and in June 2018 the Company completed its initial public offering.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, the continuing impact of the novel coronavirus (“COVID-19”)

3 unchanged sentences

Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

In May 2019, the Company issued and sold 4,887,500 shares of its common stock, including the underwriters’ exercise in full of their option to purchase additional shares of common stock, in a follow-on

public offering at a public offering price of $ 13.25 per share, resulting in net proceeds of $ 60.3 million after underwriting discounts and commissions and other offering expenses.

In June 2020, the Company issued and sold

8,625,000 shares of its common stock, including the underwriters’ exercise in full of their option to purchase additional shares of common stock, in a

public offering at a public offering price of $

8.00 per share, resulting in net proceeds of $

64.6 million after underwriting discounts and commissions and other offering expenses.

The Company has a shelf registration statement on Form S-3

(the “Shelf”) on file with the Securities and Exchange Commission (the “SEC”), which covers the offering, issuance and sale of up to an aggregate of $ 350.0 million of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof.

The Company simultaneously entered into a sales agreement with Cowen and Company, LLC, as sales agent, to provide for the issuance and sale by the Company of up to $ 100.0 million of common stock from time to time in “at-the-market”

offerings under the Shelf (the “ATM Program”).

The Shelf was declared effective by the SEC on August 19, 2019.

As of December 31, 2020, no sales have been made pursuant to the ATM Program.

The Company has incurred recurring losses since inception, including net losses of $ 71.1 million and $ 74.9 million for the years ended December 31, 2021 and 2020, respectively.

5 unchanged sentences

Accordingly, the Company will need to obtain substantial additional funding in connection with continuing operations.

If the Company is unable to raise capital when needed, or on attractive terms, it could be forced to delay, reduce or eliminate its research or drug development programs or any future commercialization

Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary.

All intercompany balances and transactions have been eliminated.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods.

liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods.

Significant estimates and assumptions reflected in these financial statements include, but are not limited to, the accrual for research and development expenses and the valuation of stock-based awards.

1 unchanged sentence

Changes in estimates are recorded in the period in which they become known.

Actual results could differ from those estimates.

Actual results could differ from those

Concentrations of Credit Risk and of Significant Suppliers

41 unchanged sentences

The Company’s cash equivalents and marketable securities are carried at fair value, determined according to the fair value hierarchy described above (see Note 3).

The carrying values of the Company’s accounts payable and

accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.

The carrying values of the Company’s accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.

Deferred Rent

3 unchanged sentences

The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions.

All of the Company’s tangible assets are held in the

United States

All of the Company’s tangible assets are held in the United States.

Research and Development Costs

Research and development costs are expensed as incurred.

Research and development expenses are comprised of costs incurred in performing research and development activities, including salaries, stock-based compensation and benefits, facilities costs, depreciation, manufacturing expenses and external costs of outside vendors engaged to conduct preclinical development activities and clinical trials as well as the cost of licensing technology.

Research and development expenses are comprised of costs incurred in performing research and development activities, including salaries, stock-based

compensation and benefits, facilities costs, depreciation, manufacturing expenses and external costs of outside vendors engaged to conduct preclinical development activities and clinical trials as well as the cost of licensing technology.

Upfront payments and milestone payments made for the licensing of technology are expensed as research and development in the period in which they are incurred.

1 unchanged sentence

The prepaid amounts are expensed as the related goods are delivered or the services are performed.

Research Contract Costs and Accruals

The Company has entered into various research and development contracts with research institutions and other companies both inside and outside of the

United States

These agreements are generally cancelable, and related payments are recorded as research and development expenses as incurred.

The Company records accruals for estimated ongoing research costs.

When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or trials, including the phase or completion of events, invoices received and contracted costs.

Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period.

Research, Development and Manufacturing Contract Costs Accruals

The Company has entered into various research, development and manufacturing contracts with research institutions and other companies both inside and outside of the United States.

These agreements are generally cancelable, and related costs are recorded as research and development expenses as incurred.

The Company records accruals for estimated ongoing research, development and manufacturing costs.

When evaluating the adequacy of any accrual estimate, the Company analyzes a number of factors, including the Company’s knowledge of the progress of the studies or trials, including the phase or completion of events;

invoices received to date under the contracts;

communication from the third parties of any actual costs incurred during the period that have not yet been invoiced;

and the costs included in the contracts.

Significant judgments and estimates may be made in determining the accrued balances at the end of any reporting period.

Actual results could differ from the Company’s estimates.

9 unchanged sentences

The fair value of stock option grants is estimated using the Black-Scholes option-pricing model.

The Company historically has been a private company and lacks company-specific historical and implied volatility

The Company historically has been a private company and lacks company-specific historical and implied volatility information.

Therefore, the Company estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies along with the volatility of its own stock and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price.

18 unchanged sentences

Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders.

For the years ended December 31, 2020 and 2019, the Company’s only element of other comprehensive loss was unrealized gain s

) on marketable securities.

For the years ended December 31, 2021 and 2020, the Company’s only element of other comprehensive income (loss) was unrealized gains (losses) on marketable securities.

Net Loss per Share

8 unchanged sentences

Shares of common stock issuable under Employee Stock Purchase Plan

Recently Adopted Accounting Pronouncements

In December 2019, the Financing Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes

(“ASU 2019-12”).

includes several provisions to simplify the accounting for income taxes and removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods.

For public entities, the guidance is effective for annual reporting periods beginning after December 15, 2020 and for interim periods within those fiscal years.

For nonpublic entities and emerging growth companies that choose to take advantage of the extended transition period, the guidance is effective for annual reporting periods beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022.

Early adoption is permitted for all entities.

The Company early adopted ASU 2019-12

prospectively effective January 1, 2020 and the adoption did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

1 unchanged sentence

(“ASU 2016-02”).

will require lessees to recognize most leases on their balance sheet as a right-of-use

requires lessees to recognize most leases on their balance sheet as a right-of-use

asset and a lease liability.

Leases will be classified as either operating or finance, and classification will be based on criteria similar to current lease accounting, but without explicit bright lines.

Leases will be

classified as either operating or finance, and classification will be based on criteria similar to current lease accounting, but without explicit bright lines.

For public entities, the guidance was effective for annual reporting periods beginning after December 15, 2018 and for interim periods within those fiscal years.

14 unchanged sentences

The standard eliminates the probable initial recognition threshold and requires an entity to reflect its current estimate of all expected credit losses.

The allowance for credit losses is a valuation

account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected.

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected.

For public entities, the guidance was effective for annual reporting periods beginning after December 15, 2019 and for interim periods within those fiscal years.

2 unchanged sentences

In November 2019, the FASB issued ASU No.

which deferred the effective date for nonpublic entities to annual reporting periods beginning after December 15, 2022, including interim periods within those fiscal years.

which deferred the effective date for nonpublic entities to annual reporting periods beginning after December 15, 2022

, including interim periods within those fiscal years.

The Company does not believe the guidance will have a material impact on its consolidated financial statements.

2 unchanged sentences

treasury notes (due within one year)

treasury Notes (due after one year through two years)

As of December 31, 2020, marketable securities by security type consisted of (in thousands):

treasury notes (due within one year)

Agency bonds (due within one year)

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):

2 unchanged sentences

Money market funds

treasury notes

Marketable securities:

3 unchanged sentences

Money market funds

treasury notes

Marketable securities:

6 unchanged sentences

Accumulated depreciation and amortization

Depreciation and amortization expense was $ 2.0 million and $ 1.8 million for the years ended December 31, 2020 and 2019, respectively.

Depreciation and amortization expense was $ 2.0 million for each of the years ended December 31, 2021 and 2020, respectively.

Accrued Expenses

5 unchanged sentences

Accrued other

On May 6, 2019, the Company issued and sold 4,887,500 shares of its common stock, including the underwriters’ exercise in full of their option to purchase additional shares of common stock, in a follow-on

public offering at a public offering price of $ 13.25 per share, resulting in net proceeds of $ 60.3 million after underwriting discounts and commission and other offering expenses.

In May 2021, the Company issued and sold 9,599,998 shares of its common stock in a private placement at a purchase price of $ 9.00 per share, resulting in net proceeds of $ 86.1 million, after deducting offering expenses.

In connection with the private placement, the Company filed a resale registration statement with the Securities and Exchange Commission (the “SEC”) in June 2021 to register the resale of these shares by the purchasers in the private placement.

In June 2020, the Company issued and sold 8,625,000 shares of its common stock, including the underwriters’ exercise in full of their option to purchase additional shares of common stock, in a follow-on

public offering at a public offering price of $ 8.00 per share, resulting in net proceeds of $ 64.6 million after underwriting discounts and commissions and other offering expenses.

In August 2019, the Company filed a shelf registration statement on Form S-3

(the “Shelf”) with the Securities and Exchange Commission (the “SEC”), which covers the offering, issuance and sale of up to an aggregate of $ 350.0 million of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof.

public offering at a public offering price of $ 8.00 per share, resulting in net proceeds of $ 64.6 million after deducting underwriting discounts and commissions and other offering expenses.

The Company has a shelf registration statement on Form S-3

(the “Shelf”) on file with the SEC, which covers the offering, issuance and sale of up to an aggregate of $ 350.0 million of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof.

17 unchanged sentences

The Company also has outstanding stock options and restricted stock awards under the 2016 Plan, but is no longer granting awards under this plan.

he 2018 Plan is

administered by the board of directors, or at the discretion of the board of directors, by a committee of the board.

The exercise prices, vesting and other restrictions are determined at the discretion of the board of directors, or their committee if so delegated, except that the term of awards may not be greater than ten years .

The 2018 Plan is administered by the board of directors, or at the discretion of the board of directors, by a committee of the board.

The exercise prices, vesting and other restrictions are determined at the discretion of the

board of directors, or

their committee if so delegated, except that the term of awards may not be greater than ten years .

Vesting periods are determined at the discretion of the board of directors.

Awards typically vest over three or four years .

typically vest

over three or four years .

The exercise price for stock options granted may not be less than the fair value of common stock as of the date of grant.

1 unchanged sentence

2019 Employee Stock Purchase Plan

The Magenta Therapeutics, Inc.

2019 Employee Stock Purchase Plan (the “ESPP”) became effective in June 2019.

An aggregate of 166,525 shares were reserved for issuance under the ESPP.

In addition, on January 1, 2020 and each January 1 thereafter through January 1, 2029, the number of shares available for issuance shall be cumulatively increased by the lesser of (i) 1 % of the number of shares issued and outstanding on the immediately preceding December 31, (ii) 1,000,000 shares and (iii) such number of shares as determined by the compensation committee of the Company’s board of directors.

The offering periods begin in December and June of each year, with the initial offering period commencing on December 1, 2019.

Employees may elect to participate in t

he Magenta Therapeutics, Inc.

2019 Employee Stock Purchase Plan (the “ESPP”).

The purchase price of common stock under the ESPP is equal to 85 % of the lower of the fair market value of the common stock on the offering date or the exercise date.

The six-month offering

periods begin in December and June of each year.

During the year ended December 31, 2021, 25,563 shares of common stock were purchased under the ESPP at a weighted average purchase price of $ 5.53 per share.

During the year ended December 31, 2019, no shares were purchased under the ESPP.

As of December 31, 2020, 150,824 shares remained available for issuance under the ESPP.

During the year ended December 31, 2020, 15,701 shares of common stock were purchased under the ESPP at a weighted average purchase price of $ 6.59 per share.

The Company recognized less than $ 0.1 million of stock-based compensation during each of the years ended December 31, 2021 and 2020 related to the ESPP.

The number of shares reserved for issuance under the ESPP did not increase on January 1, 2021.

As of December 31, 2021, 125,261 shares remained available for issuance under the ESPP.

The ESPP provides that the number of shares reserved and available for issuance under the ESPP will automatically increase each January 1 through January 1, 2029, by the lesser of

(i) 1 % of the number of shares issued and outstanding on the immediately preceding December 31, (ii) 1,000,000 shares and (iii) such number of shares as determined by the compensation committee of the Company’s board of directors.

The number of shares reserved for issuance under the ESPP was increased by 587,991 shares on January 1, 2022.

Common Stock Option Valuation

5 unchanged sentences

Common Stock Option Activity

The following table summarizes the Company’s option activity since December 31, 2019:

The following table summarizes the Company’s option activity since Decembe r

(in thousands)

12 unchanged sentences

Outstanding as of December 31, 2021

The total fair value of restricted stock vested during the years ended December 31, 2020 and 2019 was $ 1.7 million and $ 9.3 million, respectively.

The total fair value of restricted stock vested during the years ended December 31, 2021 and 2020 was less than $ 0.1 million and $ 1.7 million, respectively.

Restricted Stock Units

During the year ended December 31, 2020, the Company granted service-based restricted stock units to certain employees.

The Company granted service-based restricted stock units to certain employees which vests over three years .

Upon vesting, each restricted stock unit entitles the holder to a specified number of shares of common stock.

2 unchanged sentences

Outstanding as of December 31, 2021

The total fair value of restricted stock units vested during the year ended December 31, 2021 was $ 0.3 million.

Performance Restricted Stock Units

During the year ended December 31, 2020, the Company granted performance-based restricted stock units to certain senior employees which vest upon the occurrence of certain operational and financial events.

The Company grants performance-based restricted stock units to certain senior employees which vest upon the occurrence of certain operational and financial events.

At the achievement of the performance-based vesting criteria, each performance-based restricted stock unit entitles the holder to a specified number of shares of common stock.

2 unchanged sentences

Outstanding as of December 31, 2021

The total fair value of performance restricted stoc k

units vested during the year ended December 31, 2021 was $ 1.0 million.

Stock-Based Compensation

Stock-based compensation expense was classified in the consolidated

statements of operations and comprehensive loss as follows (in thousands):

Stock-based compensation expense was classified in the consolidated statements of operations and comprehensive loss as follows (in thousands):

Research and development expenses

General and administrative expenses

As of December 31, 2020, total unrecognized compensation cost related to the unvested stock-based awards was $ 18.7 million, which is expected to be recognized over a weighted average period of 2.6 years.

This amount excludes unrecognized

compensation cost of $ 1.1 million

related to the performance restricted stock units as the performance conditions are not considered probable of achievement as of December 31, 2020.

As of December 31, 2021, unrecognized compensation expense related to unvested share-based awards with service-based vesting conditions was $ 20.7 million, which is expected to be recognized over a weighted average period of 2.8 years.

Additionally, the Company had unrecognized compensation cost of $ 1.9 million related to the unvested performance restricted stock units for which the performance conditions were not considered probable of achievement as of December 31, 2021.

Commitments and Contingencies

In May 2018, the Company entered into a sublease for up to approximately 69,000 square feet of office and laboratory space in Cambridge, Massachusetts.

The sublease was amended effective March 2019 to increase the lease payments over the lease term and to increase the sublandlord-funded tenant improvements.

In May 2018, the Company entered into a sublease, as amended, for up to approximately 69,000 square feet of office and laboratory space in Cambridge, Massachusetts.

The sublease is subject and subordinate to a prime lease between the sublandlord and the prime landlord.

1 unchanged sentence

The sublandlord has the right to terminate the sublease after five years .

The Company is also obligated to pay real estate taxes and other costs related to the premises, including costs of operations and management of the leased premises.

The Company is obligated to pay real estate taxes and other costs related to the premises, including costs of operations and management of the leased premises.

In connection with the sublease, as amended, the sublandlord funded $ 5.2 million in tenant improvements to the leased facility during 2019.

2 unchanged sentences

As of December 31, 2021 and 2020, the Company had long-term deferred rent of $ 6.4 million and $ 6.3 million, respectively, related to lease incentives and payment escalations.

As of December 31, 2020 and 2019, the short-term portion of deferred rent of $ 0.6 million for each period was included in accrued expenses and other current liabilities.

The Company recorded rent expense of $ 6.2 million and $ 6.1 million, respectively, during the years ended December 31, 2020 and 2019.

December 31, 2021 and 2020, the short-term portion of deferred rent of $ 0.6 million for each period was included in accrued expenses and other current liabilities.

The Company recorded rent expense of $ 6.2 million during each of the years ended December 31, 2021 and 2020.

As of December 31, 2021, the future minimum lease payments due under the noncancelable operating lease is as follows (in thousands):

In the fourth quarter of 2018, the Company entered into two two-year

sub-subleases

of approximately 27,000 square feet of office space in Cambridge, Massachusetts which were both set to expire in the fourth quarter of 2020.

In the third quarter of 2020, the Company amended each of the sub-subleases

to extend their expirations to July 2021 and April 2022, respectively.

As of December 31, 2020, the remaining rent payments due to the Company under the amended sub-subleases

In 2018, the Company entered into two sub-subleases

of approximately 27,000 square feet of office space in Cambridge, Massachusetts.

One of the sub-subleases,

as amended, expired in December 2021.

The remaining sub-sublease,

as amended, would have expired in April 2022.

In January 2022, the remaining sub-sublease

was further amended to increase the square footage from 13,643 square feet to 26,114 square feet and to extend the expiration to April 2023.

Total base rent payments due under the further amended sub-sublease

was $ 3.4 million .

The Company recorded other income of $ 2.9 million and $ 2.8 million during the years ended December 31, 2020 and 2019, respectively, related to these sub-subleases.

The Company recorded other income of $ 3.5 million and $ 2.9 million during the years ended December 31, 2021 and 2020, respectively, related to its sub-subleases.

Collaboration Agreement

In March 2018, the Company entered into a collaboration agreement with Heidelberg Pharma Research GmbH (“HDPR”) whereby the parties agreed to combine the Company’s stem cell platform with proprietary antibodies across up to four exclusive targets with HDPR’s proprietary Antibody Targeted Amanitin Conjugates platform.

Under the agreement, the Company may pay upfront technology access fees, research exclusivity fees and payment for research support.

Under the agreement, the Company may pay upfront technology access fees, research exclusivity fees

for research support.

Additionally, upon the exercise of certain license rights, the Company may be obligated to pay HDPR development, regulatory and commercial milestone payments of up to $ 83.5 million per target as well as royalties on net sales of products licensed under the agreement.

3 unchanged sentences

The Company is obligated to pay Harvard maintenance fees of $ 0.1 million annually and to reimburse qualified expenses related to the patents.

The Company is also obligated to pay milestone payments of up to $ 7.4 million for the first two

licensed products upon the achievement of certain development and regulatory milestones and to pay royalties on a product-by-product

The Company is also obligated to pay milestone payments of up to $ 7.4 million for the first two licensed products upon the achievement of certain development and regulatory milestones and to pay royalties on a product-by-product

and country-by-country

basis on net sales of products licensed under the agreement.

During each of the years ended December 31, 2020 and 2019, the Company recorded $ 0.1 million of research and development expenses related to the achievement of two

of these milestones.

During each of the years ended December 31, 2021 and 2020, the Company recorded $ 0.1 million of research and development expenses related to the achievement of two of these milestones.

The Company has a license agreement with Novartis International Pharmaceutical Ltd.

3 unchanged sentences

The Company is obligated to make payments of up to $ 177.0 million upon the achievement of specified clinical and regulatory milestones and up to $ 125.0 million upon the achievement of specified commercial milestones and to pay tiered royalties, on a product-by-product

and country-by-country

basis, up to a maximum of 20 % on net sales of products licensed under the agreement.

As of December 31, 2020, no milestones related to the Novartis License have been met.

country-by-country

basis, up to a maximum of 20 % on net sales of products

licensed under the agreement.

On December 13, 2021, the Company notified Novartis of its termination of the Novartis License which becomes effective 90 days from the date of notification.

Prior to the notice of termination, no milestones related to the Novartis License had been met.

The Company has agreements with third parties in the normal course of business, under which it can license certain developed technologies.

If the Company exercises its rights to license the respective technologies, it may be subject to additional fees and milestone payments.

During the year ended December 31, 2020, the Company recorded research and development expense of $ 0.8

million related to the license of certain developed technologies under these agreements.

During the year ended December 31, 2021, the Company did no t incur any expense related to these licenses.

During the year ended December 31, 2020, the Company recorded research and development expense of $ 0.8 million related to the license of certain developed technologies under these agreements.

Indemnification Agreements

3 unchanged sentences

To date, the Company has not incurred any material costs as a result of such indemnifications.

The Company is not aware of any claims under indemnification arrangements, and it has no

t accrued any liabilities related to such obligations in its consolidated financial statements as of December 31, 2020 or 2019.

The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its consolidated financial statements as of December 31, 2021 or 2020.

Legal Proceedings

6 unchanged sentences

Company contributions to the plan may be made at the discretion of the board of directors of the Company.

To date, the Company has not made any contributions to the plan.

Effective August 2021, the Company began making matching contributions of up to 2 % of eligible wages.

During the year ended December 31, 2021, the Company recorded $ 0.1 million of expense related to this matching contribution.

During the years ended December 31, 2021 and 2020, the Company recorded no income tax benefits for the net operating losses incurred or for the research and orphan drug tax credits generated in each year, due to its uncertainty of realizing a benefit from those items.

21 unchanged sentences

Net deferred tax assets and liabilities

As of December 31, 2020, the Company had net operating loss carryforwards for federal income tax purposes of $ 182.3 million, of which $ 17.5 million begin to expire in

2035 and $ 164.8 million can be carried forward indefinitely.

As of December 31, 2021, the Company had net operating loss carryforwards

for federal income tax purposes of $ 247.2 million, of which $ 17.5 million begin to expire in 2035 and $ 229.7 million can be carried forward indefinitely.

As of December 31, 2021, the Company had net operating loss carryforwards for state income tax purposes of $ 247.4 million which begin to expire in 2035 .

5 unchanged sentences

and then could be subject to additional adjustments, as required.

Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and orphan drug tax credit carryforwards before utilization.

limitation may result in expiration of a portion of the net operating loss carryforwards or research and orphan drug tax credit carryforwards before utilization.

The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets.

3 unchanged sentences

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2021 and 2020 related primarily to the increase in net operating loss carryforwards, capitalized research and development expenses and research and orphan drug tax credit carryforwards and were as follows (in thousands):

Year Ended December 31,

Valuation allowance as of beginning of year

5 unchanged sentences

There are currently no pending income tax examinations.

The Company’s tax years are open under statute from 201 7

to the present.

The Company’s tax years are open under statute from 2018 to the present.

The Company’s policy is to record interest and penalties related to income taxes as part of its income tax provision.

Related Parties

National Marrow Donor Program (as successor in interest to Be The Match BioTherapies, LLC)

Effective March 2018, the President of Be The Match BioTherapies, LLC became a member of the Company’s board of directors and subsequently was appointed Chief Executive Officer of the National Marrow Donor Program/Be The Match, or NMDP/Be The Match, organization in June 2020.

The Company has collaboration agreements with the National Marrow Donor Program (as successor in interest to Be The Match BioTherapies, LLC) and a research agreement with an affiliated organization, Center for International Blood and Marrow Transplant Research.

National Marrow Donor Program (as successor in interest to Be The Match BioTherapies Collection Services, LLC (formerly known as Be The Match BioTherapies, LLC))

Effective March 2018, Amy Lynn Ronneberg, the then serving President of Be The Match BioTherapies, LLC, became a member of the Company’s board of directors and subsequently was appointed Chief Executive Officer of the National Marrow Donor Program/Be The Match, or NMDP/Be The Match, organization in June 2020.

The Company has collaboration agreements with the National Marrow Donor Program (as successor in interest to Be The Match BioTherapies Collection Services, LLC (formerly known as Be The Match BioTherapies, LLC)) and a research agreement with an affiliated organization, Center for International Blood and Marrow Transplant Research.

In addition, in June 2020, the Company entered into a clinical collaboration agreement with NMDP/Be The Match to evaluate the potential utility of MGTA-145

1 unchanged sentence

Under the terms of this agreement, the Company shall fund up to fifty percent of NMDP/Be The Match clinical trial costs and provide the trial drugs which will be included in research and development expense.

During each of the years ended December 31, 2020 and 2019, the Company recorded $ 0.4 million of expense related to these agreements.

As of December 31, 2020 and 2019, amounts on the balance sheet related to these agreements was less than $ 0.1 million and $ 0.2 million, respectively, which were included in accounts payable and accrued expenses and as of December 31, 2020, less than $ 0.1 million was

included in prepaid and other current assets.

For the years ended December 31, 2021 and 2020, the Company recorded expense of $ 0.7 million and $ 0.4 million, respectively, related to these agreements.

As of December 31, 2021 and 2020, amounts on the consolidated balance sheets related to these agreements were $ 0.2 million and less than

$ 0.1 million, respectively, which amounts were included in accounts payable and

accrued expenses and other current liabilities and less than

million, which amounts were included in prepaid expenses and other current assets.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Principal Executive Officer (our Chief Executive Officer) and Principal Financial Officer (our Chief Financial and Operating Officer), has evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2020.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e)

and 15d-15(e)

under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company 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 a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2020, our Principal Executive Officer and Principal Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Internal Control Over Financial Reporting

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f)

under the Exchange Act.

Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in “Internal Control-Integrated Framework (2013)” issued by the Committee of Sponsoring Organization of the Treadway Commission.

Based on this assessment, management concluded that, as of December 31, 2020, our internal control over financial reporting was effective.

This Annual Report on Form 10-K

does not include an attestation report of our independent registered public accounting firm on internal control over financial reporting due to an exemption established by the JOBS Act for “emerging growth companies.”

Changes in Internal Control Over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f)

and 15d-15(f)

under the Exchange Act) occurred during the three months ended December 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item 10 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference.

EXECUTIVE COMPENSATION

The information required by this Item 11 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item 12 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item 13 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this Item 14 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2021 Annual Meeting of Stockholders and is incorporated herein by reference.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Financial Statements

For a list of the financial statements included herein, see Index to the Consolidated Financial Statements on page 144 of this Annual Report on Form 10-K,

incorporated into this Item by reference.

Financial Statement Schedules

Financial statement schedules have been omitted because they are either not required or not applicable or the information is included in the consolidated financial statements or the notes thereto.

The exhibits required by Item 601 of Regulation S-K

and Item 15(b) of this Annual Report on Form 10-K

are listed in the Exhibit Index immediately preceding the signature page of this Annual Report on Form 10-K.

The exhibits listed in the Exhibit Index are incorporated by reference herein.

Exhibit Index

Amended and Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No.

001-38541) filed with the Securities and Exchange Commission on June 25, 2018).

Amended and Restated By-laws of the Registrant (Incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No.

001-38541) filed with the Securities and Exchange Commission on June 25, 2018).

Specimen Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1/A (File No.

333-225178) filed with the Securities and Exchange Commission on June 8, 2018).

Second Amended and Restated Investors’ Rights Agreement by and among the Registrant and certain of its stockholders dated April 2, 2018 (Incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-1 (File No.

333-225178) filed with the Securities and Exchange Commission on May 24, 2018).

Description of Securities of the Registrant (Incorporated by reference to Exhibit 4.3 to the Registrant’s Annual Report on Form 10-K (File No.

001-38541) filed with the Securities and Exchange Commission on March 3, 2020).

2016 Stock Option and Grant Plan, as amended, and forms of award agreements thereunder (Incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-1 (File No.

333-225178) filed with the Securities and Exchange Commission on May 24, 2018).

2018 Stock Option and Incentive Plan and forms of award agreements thereunder (Incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statement on Form S-1/A (File No.

333-225178) filed with the Securities and Exchange Commission on June 8, 2018).

Senior Executive Cash Incentive Bonus Plan (Incorporated by reference to Exhibit 10.3 to the Registrant’s Registration Statement on Form S-1 (File No.

333-225178) filed with the Securities and Exchange Commission on May 24, 2018).

Form of Employment Agreement (Incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-1 (File No.

333-225178) filed with the Securities and Exchange Commission on May 24, 2018).

Employment Agreement by and between the Registrant and Jason Ryan, effective January 1, 2019 (Incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K (File No.

001-38541) filed with the Securities and Exchange Commission on November 19, 2018).

Form of Director and Officer Indemnification Agreement (Incorporated by reference to Exhibit 10.5 to the Registrant’s Registration Statement on Form S-1 (File No.

333-225178) filed with the Securities and Exchange Commission on May 24, 2018).

2019 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No.

001-38541) filed with the Securities and Exchange Commission on June 11, 2019).

License Agreement by and between the Registrant and President and Fellows of Harvard College, dated as of November 2, 2016 (Incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement on Form S-1 (File No.

333-225178) filed with the Securities and Exchange Commission on May 24, 2018).

License Agreement by and between the Registrant and Novartis International Pharmaceutical Ltd., dated as of April 3, 2017 (Incorporated by reference to Exhibit 10.7 to the Registrant’s Registration Statement on Form S-1 (File No.

333-225178) filed with the Securities and Exchange Commission on May 24, 2018).

Collaboration Agreement by and between the Registrant and National Marrow Donor Program d/b/a Be The Match BioTherapies, dated as of November 10, 2017 (Incorporated by reference to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1 (File No.

333-225178) filed with the Securities and Exchange Commission on May 24, 2018).

Project Rider #2, effective as of June 26, 2018, pursuant to the Collaboration Agreement by and between the Registrant and National Marrow Donor Program d/b/a Be The Match BioTherapies, dated as of November 10, 2017 (Incorporated by reference to Exhibit 10.9.1 to the Registrant’s Annual Report on Form 10-K (File No.

001-38541) filed with the Securities and Exchange Commission on March 19, 2019).

Project Rider #3, effective as of September 6, 2018, pursuant to the Collaboration Agreement by and between the Registrant and National Marrow Donor Program d/b/a Be The Match BioTherapies, dated as of November 10, 2017 (Incorporated by reference to Exhibit 10.9.2 to the Registrant’s Annual Report on Form 10-K (File No.

001-38541) filed with the Securities and Exchange Commission on March 19, 2019).

Amendment #1 to Project Rider #1, effective as of December 6, 2018, pursuant to the Collaboration Agreement by and between the Registrant and National Marrow Donor Program d/b/a Be The Match BioTherapies, dated as of November 10, 2017 (Incorporated by reference to Exhibit 10.9.3 to the Registrant’s Annual Report on Form 10-K (File No.

001-38541) filed with the Securities and Exchange Commission on March 19, 2019).

Amendment #2 to Project Rider #1, effective as of November 13, 2019, pursuant to the Collaboration Agreement by and between the Registrant and National Marrow Donor Program d/b/a Be The Match BioTherapies, dated as of November 10, 2017.

Amendment #3 to Project Rider #1, effective as of December 16, 2020, pursuant to the Collaboration Agreement by and between the Registrant and National Marrow Donor Program d/b/a Be The Match BioTherapies, dated as of November 10, 2017.

Amendment #1 to Project Rider #3, effective as of August 26, 2019, pursuant to the Collaboration Agreement by and between the Registrant and National Marrow Donor Program d/b/a Be The Match BioTherapies, dated as of November 10, 2017 (Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No.

001-38541) filed with the Securities and Exchange Commission on November 13, 2019).

Amendment #1 to Collaboration Agreement, effective as of December 31, 2020, pursuant to the Collaboration Agreement by and between the Registrant and National Marrow Donor Program d/b/a Be The Match BioTherapies, dated as of November 10, 2017.

Clinical Trial Agreement by and between the Registrant and Regents of the University of Minnesota, dated as of January 22, 2018 (Incorporated by reference to Exhibit 10.9 to the Registrant’s Registration Statement on Form S-1 (File No.

333-225178) filed with the Securities and Exchange Commission on May 24, 2018).

Master Development and Manufacturing Agreement by and between the Registrant and Bachem Americas, Inc., dated as of February 13, 2018 (Incorporated by reference to Exhibit 10.10 to the Registrant’s Registration Statement on Form S-1/A (File No.

333-225178) filed with the Securities and Exchange Commission on June 18, 2018).

Exclusive Research, Development Option and License Agreement by and between the Registrant and Heidelberg Pharma Research GmbH, dated as of March 1, 2018 (Incorporated by reference to Exhibit 10.11 to the Registrant’s Registration Statement on Form S-1 (File No.

333-225178) filed with the Securities and Exchange Commission on May 24, 2018).

Letter Agreement, effective as of February 28, 2019, by and between the Registrant and Heidelberg Pharma Research GmbH, relating to the Exclusive Research, Development Option and License Agreement by and between the Registrant and Heidelberg Pharma Research GmbH, dated as of March 1, 2018 (Incorporated by reference to Exhibit 10.12.1 to the Registrant’s Registration Statement on Form S-1 (File No.

333-231097) filed with the Securities and Exchange Commission on April 29, 2019).

Amendment, effective as of July 4, 2019, pursuant to the Exclusive Research, Development Option and License Agreement by and between the Registrant and Heidelberg Pharma Research GmbH, dated as of March 1, 2018 (Incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No.

001-38541) filed with the Securities and Exchange Commission on November 13, 2019).

Sublease by and between the Registrant and Novartis Institutes for BioMedical Research, Inc., dated as of May 4, 2018 (Incorporated by reference to Exhibit 10.13 to the Registrant’s Registration Statement on Form S-1 (File No.

333-225178) filed with the Securities and Exchange Commission on May 24, 2018).

First Amendment to Sublease Agreement, dated as of December 13, 2018, by and between the Registrant and Novartis Institutes for BioMedical Research, Inc.

(Incorporated by reference to Exhibit 10.14.1 to the Registrant’s Registration Statement on Form S-1 (File No.

333-231097) filed with the Securities and Exchange Commission on April 29, 2019).

Second Amendment to Sublease Agreement, dated as of August 19, 2020, by and between the Registrant and Novartis Institutes for BioMedical Research, Inc.

First Amendment to Employment Agreement, executed as of October 14, 2020, by and between the Registrant and John C.

Davis, Jr., M.D.

(Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No.

001-38541) filed with the Securities and Exchange Commission on November 5, 2020).

List of Subsidiaries of the Registrant.

Consent of KPMG LLP, independent registered public accounting firm.

Power of Attorney (included on signature page to this Annual Report on Form 10-K).

Certification of Principal Executive Officer pursuant to Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Financial Officer pursuant to Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*)

Inline XBRL Instance Document.

Inline XBRL Taxonomy Extension Schema Document.

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

Inline XBRL Taxonomy Extension Labels Linkbase Document.

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Inline XBRL Taxonomy Extension Definition Linkbase Document.

Filed herewith.

Furnished herewith.

Represents management compensation plan, contract or arrangement.

Application has been made to the Securities and Exchange Commission for confidential treatment of certain provisions.

Omitted material for which confidential treatment has been requested has been filed separately with the Securities and Exchange Commission.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MAGENTA THERAPEUTICS, INC.

March 3, 2021

/s/ Stephen Mahoney

Stephen Mahoney

Chief Financial and Operating Officer

(Principal Financial and Accounting Officer)

POWER OF ATTORNEY

Each person whose individual signature appears below hereby authorizes and appoints Jason Gardner and Stephen Mahoney, and each of them, with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney-in-fact

and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file any and all amendments to this annual report on Form 10-K

and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact

and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact

and agents or any of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Jason Gardner, D.Phil.

President, Chief Executive Officer and Director

(Principal Executive Officer)

March 3, 2021

Jason Gardner, D.Phil.

/s/ Stephen Mahoney

Chief Financial and Operating Officer

(Principal Financial and Accounting Officer)

March 3, 2021

Stephen Mahoney

/s/ Jeffrey Albers

March 3, 2021

Jeffrey Albers

/s/ Michael W.

March 3, 2021

/s/ Bruce Booth, D.Phil.

March 3, 2021

Bruce Booth, D.Phil.

/s/ Alexis A.

March 3, 2021

/s/ Blake Byers, Ph.D

March 3, 2021

Blake Byers, Ph.D

/s/ Thomas O.

March 3, 2021

/s/ Alison F.

March 3, 2021

Scadden, M.D.

March 3, 2021

Scadden, M.D.

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

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk