Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion an d Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024. Unless otherwise indicated, all references in this Quarterly Report on Form 10-Q to “Immunome,” the “company,” “we,” “our,” “us” or similar terms refer to Immunome, Inc. and its subsidiary.
Forward-Looking Statements
In addition to historical financial information, this discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled “Risk Factors” under Part II, Item 1A below. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “should,” “will” or the negative of these terms or other similar expressions.
Furthermore, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.
Overview
We are a clinical-stage targeted oncology company committed to developing first-in-class and best-in-class targeted therapies designed to improve outcomes for cancer patients. We are advancing an innovative portfolio of therapeutics, drawing on leadership that previously played key roles in the design, development, and commercialization of cutting-edge targeted cancer therapies, including antibody-drug conjugate therapies, or ADCs. We believe that the pursuit of novel or underexplored targets will be central to the next generation of transformative therapies. Our goal is to establish a broad pipeline of preclinical and clinical assets and develop these assets into approved products for commercialization.
We are advancing a pipeline that includes three clinical assets and three preclinical assets. Varegacestat, formerly AL102, is an investigational gamma secretase inhibitor, or GSI, currently under evaluation in a Phase 3 clinical trial for the treatment of desmoid tumors. IM-1021, a receptor tyrosine kinase-like orphan receptor 1, or ROR1, antibody-drug conjugate, is currently under evaluation in a Phase 1 trial with the first patient dosed in February 2025. IM-3050, a fibroblast activation protein, or FAP, targeted radioligand therapy, or RLT, received IND clearance in April 2025 and we expect to initiate a Phase 1 trial in the second half of 2025. Our preclinical assets include three solid tumor ADC drug candidates: IM-1617, IM-1340, and IM-1335, all of which are undergoing IND-enabling activities. In addition, we have multiple ADCs currently undergoing lead optimization in advance of future development decisions.
Currently, our internal discovery efforts center on designing ADCs against novel or underexplored targets. We believe that pursuing differentiated targets provides a path to significant clinical benefit and meaningful market opportunities. This strategy is supported by HC74, the differentiated, novel topoisomerase 1 inhibitor, or TOP1i, payload we purchased from Zentalis Pharmaceuticals, Inc., or Zentalis, in October 2024. We have efforts underway to develop additional linkers and payloads and believe that a broad toolbox of linkers and payloads supports our mission to design and develop a diverse pipeline of ADCs.
Our current programs
Varegacestat (formerly AL102)
Our lead clinical asset is varegacestat, an oral, once daily GSI that is being evaluated for the treatment of desmoid tumors. In the Phase 2 RINGSIDE study Part A, varegacestat demonstrated objective response rates, or ORR, of 75% of evaluable patients and 64% in the intent-to-treat population; median reduction in tumor volume of 88%; and an 85% reduction in T2 imaging, which is suggestive of a reduction in cellularity. The Phase 2 data also show a safety profile consistent with the GSI class. Varegacestat received Orphan Drug Designation from the European Medicines Agency, or EMA, in July 2025, and
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previously received this designation from the U.S. Food and Drug Administration, or FDA, in November 2023. Enrollment in a Phase 3 registrational trial was completed in February 2024, and we expect to report topline data from this trial in the second half of 2025. We acquired varegacestat from Ayala Pharmaceuticals, Inc., or Ayala, in March 2024.
IM-1021 (Solid Tumor and B-Cell Lymphoma ADC)
IM-1021 is a ROR1 ADC that incorporates HC74, our proprietary TOP1i payload. ROR1 is expressed in both hematologic malignancies and solid tumors with limited normal tissue expression, and previous ADCs targeting ROR1 have demonstrated clinical activity. In preclinical studies, IM-1021 showed sustained tumor regression in preclinical models, including a mouse model of triple-negative breast cancer, or TNBC, and a mouse model of mantle cell lymphoma, or MCL. We believe that IM-1021 may provide improved therapeutic index as compared to other ROR1-targeted ADCs in development. IM-1021 received IND clearance in December 2024, and the Phase 1 clinical trial is ongoing with a starting dose of 2 mg/kg of adjusted ideal body weight. We expect dose escalation to include patients both with solid tumors and with B-cell lymphomas.
IM-3050 (FAP Radioligand Therapy)
IM-3050 is a FAP-targeted lutetium-177, Lu-177 or 177Lu, RLT product candidate for the treatment of solid tumors. FAP is a cell surface protease that serves as a tumor-specific marker due to its broad expression on cancer associated fibroblasts, the most common tumor stromal cell. FAP is expressed in 75% of solid tumors. IM-3050 is designed to deliver radioactive 177Lu directly to FAP- expressing cells, where the “bystander” effect of the radiation may damage or kill nearby tumor cells. We believe this RLT approach could overcome the limitations, such as poor internalization and low expression on tumor cells, that make FAP an unsuitable target for ADCs. In vivo data show single dose antitumor activity and tolerability. We received IND clearance for this program in April 2025 and expect to initiate a Phase 1 clinical trial in the second half of 2025.
IM-1617 (Solid Tumor ADC)
IM-1617 is a potential first-in-class ADC that targets an undisclosed receptor that is preferentially expressed in a broad array of solid tumors, including colorectal cancer, or CRC, non-small cell lung cancer, or NSCLC, and breast and ovarian cancers. The target is a receptor tyrosine kinase that promotes tumor cell survival and mediates immune cell exclusion, providing potential for a secondary mechanism of action. IND-enabling work for IM-1617 is ongoing.
IM-1340 (Solid Tumor ADC)
IM-1340 is a potential first-in-class ADC for the treatment of multiple solid tumors. The target of IM-1340 is underexplored and non-obvious in cancer and, to our knowledge, there are no ADCs or other therapeutic modalities in development against it. It has a unique expression profile that spans neuroendocrine tumors, or NETs, and other carcinomas, including lung and prostate tumors, with limited expression in normal tissue. IND-enabling work for IM-1340 is ongoing.
IM-1335 (Solid Tumor ADC)
IM-1335 is being developed for the treatment of solid tumor indications. It shares a target with a competitor’s now-discontinued investigational ADC that showed clinical activity prior to discontinuation. Our goal in designing IM-1335 was to optimize the safety and efficacy through a deep understanding of target biology and ADC optimization. We identified limitations that we expect contributed to the failure of the prior ADC against this target, and we believe that IM-1335 overcomes these limitations. IND-enabling work for IM-1335 is ongoing.
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Other Programs and Platforms
In addition to the already described current programs, we expect to continue to invest in discovery efforts intended to expand our pipeline. Additional ADC programs are the primary focus of these efforts. We believe that our team’s ADC expertise positions us to develop the next generation of transformative ADCs. This expertise comprises executive leadership with a proven record of success, an ADC-focused discovery team with deep experience in ADC design, and a seasoned development team whose members spearheaded the development of multiple FDA-approved ADCs. We pair our portfolio of antibodies to potential first-in-class ADC targets with rigorous target selection based on a deep understanding of target biology. That target-driven approach is complemented by HC74, our differentiated, proprietary TOP1i payload and our optimized, proprietary linkers.
Components of our results of operations
Collaboration revenue
We have not generated any revenue from product sales and do not expect to do so for the foreseeable future. To date, we have generated our revenue through a Collaboration and Option Agreement, or the Collaboration Agreement, with AbbVie Global Enterprises Ltd., or AbbVie, which terminated in accordance with its terms in July 2025. Revenue recognized under the Collaboration Agreement consisted of payments received from AbbVie and was recognized over the performance period. No further collaboration revenue will be recognized under the Collaboration Agreement.
In-process research and development expenses
Intangible assets acquired in an asset acquisition for use in research and development activities which have no alternative future use are expensed as in-process research and development, or IPR&D, expense on the acquisition date.
Research and development expenses
Research and development expenses consist of costs incurred in performing research and development activities, which include:
• personnel-related expenses, including salaries, bonuses, benefits and share-based compensation for employees engaged in research and development functions;
• expenses incurred in connection with the advancement of our programs and product candidates, including under agreements with consultants, contractors, contract research organizations, or CROs, and other third-party vendors and suppliers;
• expenses to conduct clinical trials including regulatory and quality assurance;
• the cost of process development, validation, and the manufacturing of drug supplies for use in our preclinical studies and clinical trials;
• laboratory supplies and research materials and other infrastructure-related expenses; and
• facilities, depreciation and amortization and other expenses which include direct and allocated expenses.
We expense research and development costs as incurred. Advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the benefits are consumed.
Research and development activities are central to our business model. We expect that our research and development expenses will increase substantially in connection with the continuation of our activities and new agreements.
General and administrative expenses
General and administrative expenses consist primarily of salaries and other related costs, including share-based compensation for personnel in our executive, business development, and administrative functions. General and administrative expenses also include legal fees relating to intellectual property and corporate matters, professional fees for accounting, auditing, tax and consulting services, insurance costs, travel, direct and allocated facility related expenses and other operating costs.
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We anticipate that our general and administrative expenses will increase in the future to support increased and progressed research and development activities and to operate as a public company.
Interest income
Interest income consists of interest earned on our marketable securities and on our cash and cash equivalent balances held with financial institutions.
Results of operations
Comparison of the three months ended June 30, 2025 and 2024
The following table summarizes our results of operations for the periods presented (in thousands):
Three Months Ended June 30,
2025
2024
Change
Collaboration revenue
$
4,015
$
2,364
$
1,651
Operating expenses:
In-process research and development
—
6,312
(6,312
)
Research and development (1)
40,451
29,083
11,368
General and administrative (1)
10,042
6,978
3,064
Total operating expenses
50,493
42,373
8,120
Loss from operations
(46,478
)
(40,009
)
(6,469
)
Interest income
3,081
3,887
(806
)
Net loss
$
(43,397
)
$
(36,122
)
$
(7,275
)
(1) Amounts include non-cash share-based compensation expense as follows (in thousands):
Three Months Ended June 30,
2025
2024
Change
Research and development
$
2,233
$
1,041
$
1,192
General and administrative
3,114
2,186
928
Total share-based compensation expense
$
5,347
$
3,227
$
2,120
Collaboration revenue
Collaboration revenue increased by $1.7 million, from $2.4 million for the three months ended June 30, 2024 to $4.0 million for the three months ended June 30, 2025. The increase was primarily due to an increase in certain research and development activities allocated to AbbVie during the three months ended June 30, 2025 compared to the same period in 2024. As of June 30, 2025, we have recognized all revenue and costs associated with our performance obligation under the agreement.
In-process research and development expense
There was no IPR&D expense for the three months ended June 30, 2025. IPR&D expense for the three months ended June 30, 2024 was related to the write-off of IPR&D assets that were determined to have no alternative future use.
Research and development expenses
Research and development expenses increased by $11.4 million, from $29.1 million for the three months ended June 30, 2024 to $40.5 million for the three months ended June 30, 2025.
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The table below summarizes the components of our research and development expenses for the periods presented (in thousands):
Three Months Ended June 30,
2025
2024
Change
Varegacestat (1)
$
12,733
$
4,526
$
8,207
IM-1021 (2)
1,728
7,685
(5,957
)
IM-3050 (3)
1,012
3,182
(2,170
)
Other product candidates (4)
11,206
8,206
3,000
Indirect research and development (5)
13,772
5,484
8,288
Total
$
40,451
$
29,083
$
11,368
(1) The increase for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was due primarily to increases in manufacturing and clinical trial activities related to varegacestat, which we acquired from Ayala in March 2024.
(2) The decrease for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was due primarily to the timing of outsourced research, manufacturing and IND-enabling activities, partially offset by an increase in clinical trial activities as we initiated our Phase 1 trial in February 2025.
(3) The decrease for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was due primarily to the timing of outsourced research, manufacturing and IND-enabling activities, partially offset by an increase in clinical trial start up activities as we prepare to initiate our Phase 1 trial. We received IND clearance for this program in April 2025.
(4) The increase for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was due primarily to increased manufacturing activities for our product candidates, partially offset by reductions in professional and contract laboratory services due to the replacement of certain outsourced services with internal resources.
(5) The increase for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was due primarily to an increase in personnel and personnel-related costs in support of our product candidates and discovery programs.
General and administrative expenses
General and administrative expenses increased by $3.1 million, from $7.0 million for the three months ended June 30, 2024 to $10.0 million for the three months ended June 30, 2025. The increase was primarily a result of a $2.0 million increase in personnel-related costs from an increase in headcount, including a $0.9 million increase in share-based compensation.
Interest income
Interest income decreased by $0.8 million from $3.9 million for the three months ended June 30, 2024 to $3.1 million for the three months ended June 30, 2025. The decrease was primarily a result of lower interest rates during the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
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Comparison of the six months ended June 30, 2025 and 2024
The following table summarizes our results of operations for the periods presented (in thousands):
Six Months Ended June 30,
2025
2024
Change
Collaboration revenue
$
6,941
$
3,393
$
3,548
Operating expenses:
In-process research and development
—
118,266
(118,266
)
Research and development (1)
77,323
44,452
32,871
General and administrative (1)
20,732
12,983
7,749
Total operating expenses
98,055
175,701
(77,646
)
Loss from operations
(91,114
)
(172,308
)
81,194
Interest income
6,077
6,694
(617
)
Net loss
$
(85,037
)
$
(165,614
)
$
80,577
(1) Amounts include non-cash share-based compensation expense as follows (in thousands):
Six Months Ended June 30,
2025
2024
Change
Research and development
$
4,667
$
1,424
$
3,243
General and administrative
6,383
3,962
2,421
Total share-based compensation expense
$
11,050
$
5,386
$
5,664
Collaboration revenue
Collaboration revenue increased by $3.5 million, from $3.4 million for the six months ended June 30, 2024 to $6.9 million for the six months ended June 30, 2025. The increase was primarily due to an increase in certain research and development activities allocated to AbbVie during the six months ended June 30, 2025 compared to the same period in 2024. As of June 30, 2025, we have recognized all revenue and costs associated with our performance obligation under the agreement.
In-process research and development expenses
There was no IPR&D expense for the six months ended June 30, 2025. IPR&D expense for the six months ended June 30, 2024 primarily related to the write-off of IPR&D assets that were acquired from Zentalis, Ayala and others and determined to have no alternative future use.
Research and development expenses
Research and development expenses increased by $32.9 million, from $44.5 million for the six months ended June 30, 2024 to $77.3 million for the six months ended June 30, 2025.
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The table below summarizes the components of our research and development expenses for the periods presented (in thousands):
Six Months Ended June 30,
2025
2024
Change
Varegacestat (1)
$
27,120
$
4,776
$
22,344
IM-1021 (2)
4,795
10,409
(5,614
)
IM-3050 (3)
2,045
5,154
(3,109
)
Other product candidates (4)
18,049
14,501
3,548
Indirect research and development (5)
25,314
9,612
15,702
Total
$
77,323
$
44,452
$
32,871
(1) The increase for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was due primarily to manufacturing and clinical trial activities related to varegacestat, which we acquired from Ayala in March 2024.
(2) The decrease for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was due primarily to the timing of outsourced research, manufacturing and IND-enabling activities, partially offset by an increase in clinical trial activities as we initiated our Phase 1 trial in February 2025.
(3) The decrease for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was due primarily to the timing of outsourced research, manufacturing and IND-enabling activities, partially offset by an increase in clinical trial start up activities as we work to initiate our Phase 1 trial. We received IND clearance for this program in April 2025.
(4) The increase for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was due primarily to increased manufacturing activities for our product candidates, partially offset by reductions in recruiting, professional and contract laboratory services due to the replacement of certain outsourced services with internal resources.
(5) The increase for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was due primarily to an increase in personnel and personnel-related costs in support of our product candidates and discovery programs.
General and administrative expenses
General and administrative expenses increased by $7.7 million, from $13.0 million for the six months ended June 30, 2024 to $20.7 million for the six months ended June 30, 2025. The increase was primarily a result of a $5.2 million increase in personnel-related costs from an increase in headcount, including a $2.4 million increase in share-based compensation.
Interest income
Interest income decreased by $0.6 million from $6.7 million for the six months ended June 30, 2024 to $6.1 million for the six months ended June 30, 2025. The decrease was primarily a result of lower interest rates during the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
Liquidity and capital resources
Sources of liquidity
Since our inception in 2006, we have devoted substantially all our resources to research and development, raising capital, building our management team, building our intellectual property portfolio and entering and executing on collaborations and strategic transactions. To date, we have financed our operations primarily through sales of our equity securities.
To date, we have not generated any revenue from commercial sale of products and do not expect to generate revenue from commercial sales for the foreseeable future. Since inception, we have incurred significant operating losses and negative cash flows from operations. Our net losses were $43.4 million and $36.1 million for the three months ended June 30, 2025 and 2024, respectively, and $85.0 million and $165.6 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, we had cash, cash equivalents and marketable securities of $268.0 million and an accumulated deficit of $600.8 million.
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In January 2025, we issued 22,258,064 shares of our common stock at $7.75 per share for net proceeds of $161.7 million, after deducting underwriting discounts and commissions and offering expenses payable by us, or the 2025 Financing.
In May 2024, we entered into an “at the market” sales agreement, or the 2024 ATM Agreement, with TD Securities (USA) LLC, or TD Cowen, as sales agent, pursuant to which we may offer and sell from time to time shares of our common stock having an aggregate offering price of up to $200.0 million, or the ATM Shares . We have agreed to pay TD Cowen a commission of up to 3.0% of the aggregate gross proceeds from any ATM Shares sold through the 2024 ATM Agreement. As of June 30, 2025, we had sold an aggregate of 2,030,431 shares of common stock under the 2024 ATM Agreement for gross proceeds of $20.0 million and net proceeds of approximately $19.6 million, with approximately $180.0 million remaining available for future offerings. No shares of common stock were sold under the 2024 ATM Agreement during the six months ended June 30, 2025.
Cash flows
The following table summarizes our sources and uses of cash for the six months ended June 30, 2025 and 2024 (in thousands):
Six Months Ended June 30,
2025
2024
Cash used in operating activities
$
(102,456
)
$
(34,567
)
Cash used in investing activities
(59,082
)
(118,919
)
Cash provided by financing activities
162,173
220,139
Net increase in cash and cash equivalents and restricted cash
$
635
$
66,653
Operating activities
Net cash used in operating activities for the six months ended June 30, 2025 was $102.5 million, consisting primarily of our net loss of $85.0 million and a net change in operating assets and liabilities of $28.8 million, partially offset by noncash charges of $11.4 million. The noncash charges primarily consisted of $11.1 million of share-based compensation. The change in operating assets and liabilities primarily consisted of a decrease in accrued expenses and other current liabilities of $7.9 million, a decrease in accounts payable of $8.8 million, a decrease in deferred revenue of $6.9 million and an increase in prepaid expenses and other assets of $5.3 million.
Net cash used in operating activities for the six months ended June 30, 2024 was $34.6 million, consisting primarily of our net loss of $165.6 million, partially offset by noncash charges of $123.7 million and a net change in operating assets and liabilities of $7.3 million. The noncash charges primarily consisted of $118.3 million of in-process research and development assets acquired without alternative future use and $5.4 million of share-based compensation. The change in operating assets and liabilities primarily consisted of an increase in accrued expenses and other current liabilities of $7.6 million, an increase in accounts payable of $2.4 million and a decrease in prepaid expenses and other assets of $0.9 million, partially offset by a decrease in deferred revenue of $3.4 million.
Investing activities
Net cash used in investing activities for the six months ended June 30, 2025 was $59.1 million, consisting of $123.3 million of purchases of marketable securities, $6.2 million of purchases of IPR&D assets and $4.6 million of purchases of property and equipment, partially offset by $75.0 million from maturities of marketable securities.
Net cash used in investing activities for the six months ended June 30, 2024 was $118.9 million, consisting primarily of $112.7 million of purchases of marketable securities, $41.7 million of purchases of IPR&D assets and $4.5 million of purchases of property and equipment, partially offset by $40.0 million from maturities of marketable securities.
Financing activities
Net cash provided by financing activities for the six months ended June 30, 2025 was $162.2 million, consisting of gross proceeds of $172.5 million from the 2025 Financing and $0.4 million from the exercise of options, partially offset by offering costs of $10.8 million from the 2025 Financing.
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Net cash provided by financing activities for the six months ended June 30, 2024 was $220.1 million, consisting of gross proceeds of $230.0 million from a follow-on public offering we completed in February 2024, or the 2024 Financing, and $4.8 million from the exercise of options and common stock warrants, partially offset by offering costs of $14.6 million from our 2024 Financing and 2024 ATM Agreement.
Funding requirements
We expect our expenses to increase substantially in connection with our ongoing and future activities, particularly as we advance and expand our clinical development of varegacestat, seek regulatory approval for varegacestat, advance the clinical development of IM-1021 and IM-3050, continue the development of our other current product candidates and any future product candidates, and continue to pursue our business development strategy. We expect that our primary uses of capital will be for clinical development services, non-clinical research, strategic transactions, manufacturing, legal and other regulatory compliance expenses, compensation and related expenses, risk management and general overhead costs.
We expect that our existing cash, cash equivalents and marketable securities as of June 30, 2025 will be sufficient to fund our current and planned operating expenses and capital expenditures for at least 12 months from the filing date of this Quarterly Report on Form 10-Q. We will need additional financing to support our continuing operations and pursue our research and development strategy. We have based these estimates on assumptions that may prove to be imprecise, and we may exhaust our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development of our programs, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the research and development of our programs and product candidates.
Our future funding requirements will depend on many factors including:
• the scope, progress, results and costs of discovery, preclinical development, manufacturing and clinical trials for programs and product candidates that we currently own and those that we may discover or acquire rights to in the future;
• the extent to which we acquire or in-license products, intellectual property and other technologies and the terms on which we acquire or in-license those assets;
• the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights, and defending intellectual property-related claims and the success of our intellectual property portfolio;
• the costs, timing and outcome of regulatory review of the programs and product candidates we may develop;
• the costs of future activities, including product sales, medical affairs, marketing, manufacturing, distribution, coverage and reimbursement for any programs or product candidates for which we receive regulatory approval;
• the success of our existing and any future license agreements, collaborations and other strategic transactions and the achievement of milestones or occurrence of other developments that trigger payments to or from us under any such agreements and transactions; and
• the costs of operating as a public company.
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Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, including pursuant to the 2024 ATM Agreement, debt financings, collaborations, strategic alliances and licensing arrangements. As a result of the war between Russia and Ukraine, conflicts in the Middle East, trade wars, bank failures, inflationary pressures on the economy and monetary policy responses taken by government agencies and other macroeconomic and political factors, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth and uncertainty about economic stability. There can be no assurance that deterioration in credit and financial markets and confidence in economic conditions will not occur. If equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive. To the extent that we raise additional capital through the sale of equity, including pursuant to the 2024 ATM Agreement, or convertible debt securities, the ownership interest of any purchaser will be or could be diluted and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market programs and product candidates that we would otherwise prefer to develop and market ourselves. If we cannot obtain the necessary funding to support these activities on favorable terms, or at all, we will need to delay, scale back or eliminate some or all of our research and development programs, including our clinical and preclinical development of our product candidates.
Contractual obligations and contingencies
We have no material non-cancelable purchase commitments with service providers, as we have generally contracted on a cancelable, purchase order basis. Our expected material cash requirements do not include potential contingent payments that we may be required to pay upon the achievement of development, regulatory or commercial milestones pursuant to asset acquisitions and license agreements to which we are a party, nor do they include potential contingent payments upon the achievement of development, regulatory and commercial milestones or royalty payments that we may be required to make under license agreements we have entered into or may enter into with various entities pursuant to which we have in-licensed certain intellectual property. For further details on the potential contingent payments related to asset acquisitions and license agreements, see Note 7 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Critical accounting policies and estimates
There have been no material changes in our critical accounting policies and estimates from those disclosed in our Form 10-K for the fiscal year ended December 31, 2024. For a discussion of our critical accounting policies and estimates, refer to “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical accounting policies and estimates ” in Part II, Item 7 of our Form 10-K for the fiscal year ended December 31, 2024.
Recent accounting pronouncements
See Note 2, Summary of significant accounting policies , to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information regarding recently issued accounting pronouncements.
JOBS Act
We currently qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies, including reduced disclosure about our executive compensation arrangements, exemption from the requirements to hold non-binding advisory votes on executive compensation and golden parachute payments and exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting. We may choose to take advantage of some, but not all, of the available exemptions.
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In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company. Therefore, the reported results of operations contained in our financial statements may not be directly comparable to those of other public companies.
As of June 30, 2025, the market value of our common stock held by non-affiliates exceeded $700.0 million. As a result, effective December 31, 2025, we will be a large accelerated filer and thus will cease to be an emerging growth company. Additionally, we will no longer qualify as a smaller reporting company beginning with our first Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2026. As a result of this transition, we will be subject to certain disclosure and compliance requirements that apply to other public companies that did not previously apply to us due to our status as an emerging growth company and smaller reporting company. These requirements include, but are not limited to: the requirement that our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002; the requirement that we provide more detailed disclosures regarding executive compensation; and the requirement that we hold a non-binding advisory vote on executive compensation and obtain shareholder approval of any golden parachute payments not previously approved.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.