What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-06 · 62 added, 63 removed, 204 unchanged (38% of the section changed)

17 unchanged sentences

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.

IM-3050, a fibroblast activation protein, or FAP, targeted radioligand therapy, or RLT, received IND clearance in April 2025 and we plan to initiate a Phase 1 trial in early 2026 after delivery of third-party diagnostic radiotracer supply.

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.

IM-1617, IM-1340, and IM-1335, all of which are advancing towards 2026 IND submissions.

In addition, we have multiple ADCs currently undergoing lead optimization in advance of future development decisions.

10 unchanged sentences

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

previously received this designation from the U.S.

Varegacestat received Orphan Drug Designation from the European Medicines Agency, or EMA, in July 2025, and previously received this designation from the U.S.

Food and Drug Administration, or FDA, in November 2023.

6 unchanged sentences

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.

The Phase 1 clinical trial is ongoing, with objective responses observed in patients with B-cell lymphomas at multiple dose levels.

We expect to present initial data for IM-1021 in 2026.

IM-3050 (FAP Radioligand Therapy)

5 unchanged sentences

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.

We received IND clearance for this program in April 2025 and plan to initiate a Phase 1 trial in early 2026 after delivery of third-party diagnostic radiotracer supply.

IM-1617 (Solid Tumor ADC)

48 unchanged sentences

Results of operations

Comparison of the three months ended June 30, 2025 and 2024

Comparison of the three months ended September 30, 2025 and 2024

The following table summarizes our results of operations for the periods presented (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Collaboration revenue

7 unchanged sentences

(1) Amounts include non-cash share-based compensation expense as follows (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Research and development

2 unchanged sentences

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.

There was no collaboration revenue for the three months ended September 30, 2025.

Collaboration revenue for the three months ended September 30, 2024 of $2.9 million was related to certain research and development activities under the Collaboration Agreement with AbbVie.

As of June 30, 2025, we had 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.

There was no IPR&D expense for the three months ended September 30, 2025.

IPR&D expense for the three months ended September 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.

Research and development expenses increased by $12.0 million, from $37.2 million for the three months ended September 30, 2024 to $49.2 million for the three months ended September 30, 2025.

The table below summarizes the components of our research and development expenses for the periods presented (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Varegacestat (1)

1 unchanged sentence

Indirect research and development (5)

(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.

(1) The increase for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was due primarily to increases in consulting and manufacturing activities to support our Phase 3 trial and a potential future NDA submission.

(2) The decrease for the three months ended September 30, 2025 compared to the three months ended September 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 September 30, 2025 compared to the three months ended September 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.

(4) The increase for the three months ended September 30, 2025 compared to the three months ended September 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 September 30, 2025 compared to the three months ended September 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.

General and administrative expenses increased by $1.4 million, from $9.5 million for the three months ended September 30, 2024 to $10.9 million for the three months ended September 30, 2025.

The increase was primarily a result of a $1.6 million increase in personnel-related costs from an increase in headcount, including a $0.8 million increase in share-based compensation, which was partially offset by decreases in other general operating costs.

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.

Comparison of the six months ended June 30, 2025 and 2024

Interest income decreased by $0.7 million from $3.4 million for the three months ended September 30, 2024 to $2.7 million for the three months ended September 30, 2025.

The decrease was primarily a result of lower interest rates during the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Comparison of the nine months ended September 30, 2025 and 2024

The following table summarizes our results of operations for the periods presented (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Collaboration revenue

7 unchanged sentences

(1) Amounts include non-cash share-based compensation expense as follows (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Research and development

2 unchanged sentences

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.

Collaboration revenue increased by $0.6 million, from $6.3 million for the nine months ended September 30, 2024 to $6.9 million for the nine months ended September 30, 2025.

The increase was primarily due to an increase in certain research and development activities allocated to AbbVie during the nine months ended September 30, 2025 compared to the same period in 2024.

As of June 30, 2025,we had 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.

There was no IPR&D expense for the nine months ended September 30, 2025.

IPR&D expense for the nine months ended September 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.

Research and development expenses increased by $44.9 million, from $81.7 million for the nine months ended September 30, 2024 to $126.5 million for the nine months ended September 30, 2025.

The table below summarizes the components of our research and development expenses for the periods presented (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Varegacestat (1)

1 unchanged sentence

Indirect research and development (5)

(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.

(1) The increase for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was due primarily to clinical trial activities, as well as manufacturing and consulting activities associated with our Phase 3 trial and in preparation for potential a future NDA submission

(2) The decrease for the nine months ended September 30, 2025 compared to the nine months ended September 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 nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was due primarily to the timing of outsourced research, manufacturing and IND-enabling activities.

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.

(4) The increase for the nine months ended September 30, 2025 compared to the nine months ended September 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 nine months ended September 30, 2025 compared to the nine months ended September 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.

General and administrative expenses increased by $9.2 million, from $22.5 million for the nine months ended September 30, 2024 to $31.7 million for the nine months ended September 30, 2025.

The increase was primarily a result of a $6.8 million increase in personnel-related costs from an increase in headcount, including a $3.2 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.

Interest income decreased by $1.4 million from $10.1 million for the nine months ended September 30, 2024 to $8.8 million for the nine months ended September 30, 2025.

The decrease was primarily a result of lower interest rates during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Liquidity and capital resources

4 unchanged sentences

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.

Our net losses were $57.5 million and $47.1 million for the three months ended September 30, 2025 and 2024, respectively, and $142.5 million and $212.7 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, we had cash and cash equivalents of $272.6 million and an accumulated deficit of $658.3 million.

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.

1 unchanged sentence

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.

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,

During the three and nine months ended September 30, 2025, the Company sold 4,625,156 shares of common stock in two transactions under the 2024 ATM Agreement for gross proceeds of $45.9 million and net proceeds of approximately $44.9 million.

As of September 30, 2025, we had sold an aggregate of 6,655,587 shares of common stock under the 2024 ATM Agreement for gross proceeds of $65.9 million and net proceeds of approximately $64.5 million, with approximately $134.1 million remaining available for future offerings.

The following table summarizes our sources and uses of cash for the nine months ended September 30, 2025 and 2024 (in thousands):

Nine Months Ended September 30,

Cash used in operating activities

Cash used in investing activities

Cash provided by (used in) investing activities

Cash provided by financing activities

1 unchanged sentence

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.

Net cash used in operating activities for the nine months ended September 30, 2025 was $143.0 million, consisting primarily of our net loss of $142.5 million and a net change in operating assets and liabilities of $18.5 million, partially offset by noncash charges of $18.0 million.

The noncash charges primarily consisted of $17.8 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 change in operating assets and liabilities primarily consisted of a decrease in accounts payable of $6.9 million, a decrease in deferred revenue of $6.9 million, an increase in prepaid expenses and other assets of $3.4 million and a decrease in accrued expenses and other current liabilities of $1.2 million.

Net cash used in operating activities for the nine months ended September 30, 2024 was $68.7 million, consisting primarily of our net loss of $212.7 million, partially offset by noncash charges of $134.4 million and a net change in operating assets and liabilities of $9.6 million.

The noncash charges primarily consisted of $125.0 million of in-process research and development assets acquired without alternative future use and $10.3 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.

The change in operating assets and liabilities primarily consisted of an increase in accrued expenses and other current liabilities of $13.5 million and a decrease in prepaid expenses and other assets of $2.3 million, partially offset by a decrease in deferred revenue of $6.3 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.

Net cash provided by investing activities for the nine months ended September 30, 2025 was $64.8 million, consisting of $200.0 million from maturities of marketable securities, partially offset by $123.3 million of purchases of marketable securities, $6.2 million of purchases of IPR&D assets and $5.7 million of purchases of property and equipment.

Net cash used in investing activities for the nine months ended September 30, 2024 was $94.8 million, consisting primarily of $112.7 million of purchases of marketable securities, $46.1 million of purchases of IPR&D assets and $6.0 million of purchases of property and equipment, partially offset by $70.0 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.

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.

Net cash provided by financing activities for the nine months ended September 30, 2025 was $207.6 million, consisting of gross proceeds of $172.5 million from the 2025 Financing, $45.9 from the 2024 ATM Agreement, and $0.8 million from the exercise of options, partially offset by offering costs of $11.7 million from the 2025 Financing and 2024 ATM Agreement.

Net cash provided by financing activities for the nine months ended September 30, 2024 was $220.4 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 $5.3 million from the exercise of options and common stock warrants, partially offset by offering costs of $14.8 million from our 2024 Financing and 2024 ATM Agreement.

Funding requirements

1 unchanged sentence

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 expect that our existing cash and cash equivalents as of September 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.

35 unchanged sentences

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, we will no longer be an emerging growth company effective as of December 31, 2025 or a smaller reporting company beginning with our Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2026.

Based on recent SEC guidance, we will, however, continue to be a non-accelerated filer through at least our fiscal year ending December 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.

We will not, however, be subject to the requirement that our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404 while we are a non-accelerated filer.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis