Immunome Inc. 10-Q

Item 1. Financial Statements. IMMUNOME, INC. Condensed Balance Sheets (Unaudited; In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 December 31, 2019 Assets ​ ​ ​ ​ Current assets: ​ ​ Cash ​ $ 6,744 ​ $ 2,543 Prepaid expenses and other current assets ​ 739 ​ 579 Total current assets ​ 7,483 ​ 3,122 Property and equipment, net ​ 1,741 ​ 1,700 Restricted cash ​ 100 ​ 100 Other assets ​ 2,659 ​ 138 Total assets ​ $ 11,983 ​ $ 5,060 Liabilities, convertible preferred stock, and stockholders’ deficit ​ ​ Current liabilities: ​ ​ Current portion of capital lease obligations ​ $ — ​ $ 239 Current portion of equipment loan payable ​ 144 ​ 212 Current portion of long-term debt ​ 305 ​ — Accounts payable ​ 2,627 ​ 548 Accrued expenses and other current liabilities ​ 2,330 ​ 666 Total current liabilities ​ 5,406 ​ 1,665 Equipment loan payable, net of current portion ​ 16 ​ 113 Long-term debt, net of current portion ​ 195 ​ — Warrant liability ​ 7,071 ​ — Deferred rent ​ 11 ​ 18 Total liabilities ​ 12,699 ​ 1,796 Commitments and contingencies (Note 9) ​ ​ Series A convertible preferred stock, $ 0.0001 par value; 45,000,000 and 30,000,000 shares authorized and 5,670,184 and 4,443,259 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively (liquidation value of $ 51,033 at September 30, 2020) ​ 48,369 ​ 38,894 Stockholders’ deficit: ​ ​ Common stock, $ 0.0001 par value; 65,000,000 and 50,000,000 shares authorized and 1,124,616 and 1,099,270 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively ​ — ​ — Additional paid-in capital ​ 1,236 ​ 927 Accumulated deficit ​ ( 50,321 ) ​ ( 36,557 ) Total stockholders’ deficit ​ ( 49,085 ) ​ ( 35,630 ) Total liabilities, convertible preferred stock, and stockholders’ deficit ​ $ 11,983 ​ $ 5,060 ​ The accompanying notes are an integral part of these unaudited condensed financial statements. ​ 3 Table of Contents IMMUNOME, INC. Condensed Statements of Operations (Unaudited; In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2020 2019 2020 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ Research and development ​ $ 1,644 ​ $ 2,234 ​ $ 5,651 ​ $ 6,391 General and administrative ​ 1,174 ​ 486 ​ 2,537 ​ 1,069 Total operating expenses ​ 2,818 ​ 2,720 ​ 8,188 ​ 7,460 Loss from operations ​ ( 2,818 ) ​ ( 2,720 ) ​ ( 8,188 ) ​ ( 7,460 ) Other expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in fair value of warrant liability ​ ​ ( 5,549 ) ​ ​ — ​ ​ ( 5,549 ) ​ ​ — Interest expense, net ​ ( 10 ) ​ ( 17 ) ​ ( 27 ) ​ ( 62 ) Total other expenses ​ ​ ( 5,559 ) ​ ​ ( 17 ) ​ ​ ( 5,576 ) ​ ​ ( 62 ) Net loss ​ $ ( 8,377 ) ​ $ ( 2,737 ) ​ $ ( 13,764 ) ​ $ ( 7,522 ) Per share information: ​ ​ ​ ​ Net loss per share of common stock, basic and diluted ​ $ ( 7.52 ) ​ $ ( 2.50 ) ​ $ ( 12.44 ) ​ $ ( 6.88 ) Weighted-average common shares outstanding, basic and diluted ​ 1,114,427 ​ 1,093,028 ​ 1,106,039 ​ 1,092,630 ​ The accompanying notes are an integral part of these unaudited condensed financial statements. ​ 4 Table of Contents IMMUNOME, INC. Condensed Statements of C hanges in Convertible Preferred Stock and Stockholders’ Deficit (Unaudited; In thousands, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Convertible preferred stock Stockholders’ deficit ​ ​ Series A ​ ​ Common stock ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ paid-in ​ Accumulated ​ ​ ​ ​ Shares Amount Shares Amount capital deficit Total Balance at June 30, 2020 5,670,184 ​ $ 48,391 ​ 1,112,393 ​ $ — ​ $ 1,115 ​ $ ( 41,944 ) ​ $ ( 40,829 ) Series A convertible preferred stock issuance costs — ​ ( 22 ) ​ — ​ — ​ — ​ — ​ — Share-based compensation expense — ​ — ​ — ​ — ​ 117 ​ — ​ 117 Exercise of stock options — ​ — ​ 12,223 ​ — ​ 4 ​ — ​ 4 Net loss — ​ — ​ — ​ — ​ — ​ ( 8,377 ) ​ ( 8,377 ) Balance at September 30, 2020 5,670,184 ​ $ 48,369 ​ 1,124,616 ​ $ — ​ $ 1,236 ​ $ ( 50,321 ) ​ $ ( 49,085 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2019 ​ 4,443,259 ​ $ 38,894 ​ ​ 1,099,270 ​ $ — ​ $ 927 ​ $ ( 36,557 ) ​ $ ( 35,630 ) Sale of Series A convertible preferred stock and warrants with a fair value of $1,522, net of $ 49 of issuance costs 1,226,925 ​ 9,475 ​ — ​ — ​ — ​ — ​ — Share-based compensation expense — ​ — ​ — ​ — ​ 302 ​ — ​ 302 Exercise of stock options — ​ — ​ 25,346 ​ — ​ 7 ​ — ​ 7 Net loss — ​ — ​ — ​ — ​ — ​ ( 13,764 ) ​ ( 13,764 ) Balance at September 30, 2020 5,670,184 ​ $ 48,369 ​ 1,124,616 ​ $ — ​ $ 1,236 ​ $ ( 50,321 ) ​ $ ( 49,085 ) ​ The accompanying notes are an integral part of these unaudited condensed financial statements. ​ ​ 5 Table of Contents IMMUNOME, INC. Condensed Statements of Changes in Convertible Preferred Stock and Stockholders’ Deficit (Unaudited; In thousands, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Convertible preferred stock Stockholders’ deficit ​ ​ Series A ​ ​ Common stock ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ paid-in ​ Accumulated ​ ​ ​ ​ Shares Amount Shares Amount capital deficit Total Balance at June 30, 2019 3,108,776 ​ $ 27,513 ​ 1,093,028 ​ $ — ​ $ 918 ​ $ ( 30,898 ) ​ $ ( 29,980 ) Share-based compensation expense — ​ — ​ — ​ — ​ 1 ​ — ​ 1 Net loss — ​ — ​ — ​ — ​ — ​ ( 2,737 ) ​ ( 2,737 ) Balance at September 30, 2019 3,108,776 ​ $ 27,513 ​ 1,093,028 ​ $ — ​ $ 919 ​ $ ( 33,635 ) ​ $ ( 32,716 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2018 ​ 3,108,776 ​ $ 27,513 ​ ​ 1,087,821 ​ $ — ​ $ 908 ​ $ ( 26,113 ) ​ $ ( 25,205 ) Share-based compensation expense — ​ — ​ — ​ — ​ 11 ​ — ​ 11 Exercise of stock options — ​ — ​ 5,207 ​ — ​ — ​ — ​ — Net loss — ​ — ​ — ​ — ​ — ​ ( 7,522 ) ​ ( 7,522 ) Balance at September 30, 2019 3,108,776 ​ $ 27,513 ​ 1,093,028 ​ $ — ​ $ 919 ​ $ ( 33,635 ) ​ $ ( 32,716 ) ​ The accompanying notes are an integral part of these unaudited condensed financial statements. ​ 6 Table of Contents ​ IMMUNOME, INC. Condensed Statements of Cash Flows (Unaudited; In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ 2020 ​ 2019 Cash flows from operating activities: ​ ​ ​ Net loss ​ $ ( 13,764 ) ​ $ ( 7,522 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ Depreciation and amortization ​ 499 ​ 454 Share-based compensation ​ 302 ​ 11 Change in fair value of warrant liability ​ ​ 5,549 ​ ​ — Deferred rent ​ ( 1 ) ​ 3 Changes in operating assets and liabilities: ​ ​ Prepaid expenses and other assets ​ ( 151 ) ​ ( 249 ) Accounts payable ​ 999 ​ 334 Accrued expenses and other current liabilities ​ 495 ​ ( 52 ) Net cash used in operating activities ​ ( 6,072 ) ​ ( 7,021 ) Cash flows from investing activities: ​ ​ Purchases of property and equipment ​ ( 540 ) ​ ( 166 ) Net cash used in investing activities ​ ( 540 ) ​ ( 166 ) Cash flows from financing activities: ​ ​ Proceeds from convertible promissory notes ​ — ​ 6,800 Proceeds from exercise of stock options ​ 7 ​ — Proceeds from long-term debt ​ 500 ​ — Proceeds from the sale of Series A convertible preferred stock ​ 11,046 ​ — Payment of IPO costs ​ ( 309 ) ​ — Payment of Series A convertible preferred stock issuance costs ​ ( 27 ) ​ — Payment of equipment loan payable ​ ( 165 ) ​ ( 183 ) Payment of capital lease obligations ​ ( 239 ) ​ ( 272 ) Net cash provided by financing activities ​ 10,813 ​ 6,345 Net increase (decrease) in cash and restricted cash ​ 4,201 ​ ( 842 ) Cash and restricted cash at beginning of period ​ 2,643 ​ 1,702 Cash and restricted cash at end of period ​ $ 6,844 ​ $ 860 Supplemental disclosures of cash flow information: ​ ​ Cash paid for interest ​ $ 27 ​ $ 72 Supplemental disclosures of non-cash investing and financing activities: ​ ​ Fair value of liability-classified warrants issued in connection with Series A convertible preferred stock ​ $ 1,522 ​ $ — Series A convertible preferred stock and warrants issuance costs in accounts payable ​ $ 22 ​ $ — IPO costs included in accounts payable and accrued expenses and other current liabilities ​ $ 2,221 ​ $ — ​ The accompanying notes are an integral part of these unaudited condensed financial statements. 7 Table of Contents IMMUNOME, INC. Notes to Condensed Financial Statements (Unaudited) ​ 1. Nature of the business and basis of presentation Organization Immunome, Inc. (“Immunome” or the “Company”) was incorporated as a Pennsylvania corporation on March 2, 2006 and was converted to a Delaware corporation on December 2, 2015. The Company is a biotechnology company focused on identifying novel cancer and infectious disease immunotherapies utilizing a patented process to immortalize human B cells. Since its inception, the Company has devoted substantially all of its resources to research and development, raising capital, building its management team and building its intellectual property portfolio. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, technical risks associated with the successful research, development and manufacturing of product candidates, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Current and future programs will require significant research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. Initial public offering On October 6, 2020, the Company closed its initial public offering (“IPO”) in which the Company issued and sold 3,250,000 shares of its common stock at a public offering price of $ 12.00 per share. On October 13, 2020, the underwriters exercised their option to purchase an additional 487,500 shares of the Company’s common stock at a purchase price of $ 12.00 per share. The Company received net proceeds of $ 41.7 million after deducting underwriting discounts and commissions of $ 3.1 million but before deducting other offering expenses. The Company’s common stock is listed on the Nasdaq Capital Market under the trading symbol “IMNM.” In addition, upon the closing of the IPO on October 6, 2020, (i) all of the Company’s outstanding shares of convertible preferred stock converted into 5,670,184 shares of common stock and (ii) all of the Company’s outstanding warrants to purchase convertible preferred stock converted into warrants to purchase common stock. On October 6, 2020, the Company filed an amended and restated certificate of incorporation to, among other things, increase the number of shares of common stock, $ 0.0001 par value per share, authorized for issuance to 200,000,000 and authorize the Company’s board of directors to issue up to 10,000,000 shares of “blank check” preferred stock, $ 0.0001 par value per share. As of September 30, 2020, the Company capitalized $ 2.5 million of deferred IPO costs, which are included in other assets on the condensed balance sheet, and which will be reclassified to additional paid-in capital upon the closing of the IPO. Liquidity The Company has incurred net losses since inception, including net losses of $ 13.8 million for the nine months ended September 30, 2020, and it expects to generate losses from operations for the foreseeable future primarily due to research and development for its potential product candidates. As of September 30, 2020, the Company had an accumulated deficit of $ 50.3 million. Prior to the IPO, the Company has funded its operations with proceeds from the issuance of debt and the sale of preferred stock. The Company expects to generate operating losses and negative operating cash flows for the foreseeable future. The Company expects that its cash as of September 30, 2020 and proceeds from its IPO will be sufficient to fund its operations for at least the next twelve months from the date these financial statements are issued and, therefore, the conditions raising substantial doubt in prior periods have been alleviated. The Company has sufficient cash to fund its operations into the first quarter of 2022 and will need additional financing thereafter to support its continuing operations 8 Table of Contents and pursue its growth strategy. Until such time as the Company can generate significant revenue from product sales, if ever, it expects to finance its operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. To the extent that the Company raises additional capital through the sale of equity or convertible debt securities, stockholders’ ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting the Company’s ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If the Company raises additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, it may have to relinquish valuable rights to technologies, future revenue streams, research programs or drug candidates, or grant licenses on terms that may not be favorable. If the Company is unable to raise additional funds through equity or debt financings or other arrangements when needed, it may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that the Company would otherwise prefer to develop and market. The Company may be unable to raise additional funds or enter into such other agreements when needed on favorable terms, or at all. The inability to raise capital as and when needed would have a negative impact on the Company’s financial condition and its ability to pursue its business strategy. If the Company cannot obtain the necessary funding, it will need to delay, scale back or eliminate some or all of its research and development programs or enter into collaborations with third parties to commercialize potential products or technologies that it might otherwise seek to develop or commercialize independently; consider other various strategic alternatives, including a merger or sale of the Company; or cease operations. Additionally, volatility in the capital markets and general economic conditions in the United States may be a significant obstacle to raising the required funds. Our ability to continue as a going concern is dependent on our ability to raise capital to fund our future business plans. Operations of the Company are subject to certain risks and uncertainties including various internal and external factors that will affect whether and when the Company’s product candidates become approved products and how significant their market share will be, some of which are outside of the Company’s control. The length of time and cost of developing and commercializing these product candidates and/or failure of them at any stage of the drug approval process will materially affect the Company’s financial condition and future operations. On March 11, 2020, the World Health Organization characterized the novel COVID-19 virus as a global pandemic. Although there is significant uncertainty as to the likely effects this disease may have in the future, to date there has not yet been a significant impact to the Company’s operations or financial statements. ​ 2. Summary of significant accounting policies Basis of presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). Unaudited interim results These unaudited condensed financial statements and accompanying notes should be read in conjunction with the Company’s annual financial statements and the notes thereto included in the Company’s IPO prospectus filed with the Securities and Exchange Commission on October 5, 2020. The accompanying condensed financial statements as of September 30, 2020 and for the three and nine months ended September 30, 2020 and 2019 are unaudited but include all adjustments that management believes to be necessary for a fair presentation of the periods presented. Interim results are not necessarily indicative of results for a full year. Balance sheet amounts as of December 31, 2019 have been derived from the audited financial statements as of that date. 9 Table of Contents Reverse stock split The Company’s board of directors approved a one-for- six reverse stock split of its issued and outstanding common stock, stock options, convertible preferred stock and convertible preferred stock warrants legally effective as of September 22, 2020. Accordingly, all convertible preferred shares and common stock shares, per share amounts, and additional paid-in capital amounts for all periods presented in the accompanying financial statements and notes thereto have been retroactively adjusted, where applicable, to reflect the reverse stock split. 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, liabilities and expenses. The Company bases its estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, the fair value of the Company’s common stock in connection with share-based compensation arrangements and the fair value of the Company’s liability-classified warrants. Actual results could differ from these estimates. Fair value of financial instruments ASC Topic 820, Fair Value Measurement (ASC 820), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the assets or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the price that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tiered value hierarchy that distinguishes between the following: Level 1 — Quoted market prices in active markets for identical assets or liabilities. Level 2 — Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. Level 3 — Unobservable inputs for the asset or liability (i.e. supported by little or no market activity). Level 3 inputs include management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgement. Accordingly, the degree of judgement exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Government contract funding The Company accounts for amounts received under its U.S. Department of Defense expense reimbursement contract as contra-research and development expenses in the condensed statements of operations. Warrant liability The Company issued warrants to purchase shares of Series A convertible preferred stock in connection with the June 2020 Series A convertible preferred stock sale. The warrants were classified as a liability on the condensed balance sheet at September 30, 2020 as the underlying Series A convertible preferred stock is contingently redeemable and outside of the Company’s control (see Note 11, Warrants to acquire shares of Series A convertible preferred stock). The fair value of the warrants on the date of issuance was recorded as a reduction of the carrying value of the Series A convertible preferred stock and as a long-term liability in the condensed balance sheet. The warrants will be 10 Table of Contents subsequently remeasured to fair value at each balance sheet date. Changes in the fair value of the warrants are recognized as other income or expense in the statements of operations. The change in fair value of the warrants during the three and nine months ended September 30, 2020 was $ 5.5 million. The Company used the Black Scholes option pricing model, which incorporated assumptions and estimates, to value the Series A convertible preferred stock warrants. Estimates and assumptions impacting the fair value measurement of the warrants included the fair value per share of the underlying Series A convertible preferred stock, the remaining contractual term of the warrants, risk-free interest rate, expected dividend yield and expected volatility of the price of the underlying Series A convertible preferred stock. The Company historically determined the fair value per share of the underlying Series A convertible preferred stock by taking into consideration the most recent sales of its Series A convertible preferred stock, results obtained from third party valuations and additional factors that were deemed relevant. As of September 30, 2020, the Company utilized the $ 12.00 per share IPO price to value the Series A convertible preferred stock warrants. The Company historically had been a private company and lacked company specific historical and implied volatility information of its stock. Therefore, it estimated the expected stock volatility based on the historical volatility of publicly traded peer companies for a term equal to the remaining contractual term of the warrants at the time. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrants. Expected dividend yield was determined based on the fact that the Company had never paid cash dividends and did not expect to pay any cash dividends in the foreseeable future. Research and development costs Research and development costs are charged to expense as incurred. Research and development costs consist of costs incurred in performing research and development activities, including salaries and bonuses, share-based compensation, employee benefits, facilities costs, laboratory supplies, depreciation and amortization, preclinical expenses, consulting and other contracted services. Additionally, under the terms of the license agreements to which the Company is a party, the Company is obligated to make future payments should certain development and regulatory milestones be achieved. No such costs have been incurred for the three or nine months ended September 30, 2020 and 2019. Costs for certain research and development activities are recognized based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the condensed financial statements as a prepaid or accrued expense. Net loss per share The Company follows the two-class method when computing net loss per share, as the Company has issued shares that meet the definition of participating securities. The two-class method determines net loss per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Basic net loss per share of common stock is computed by dividing the net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per share of common stock is computed by adjusting net loss to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net loss per share of common stock is computed by dividing the diluted net loss by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of common stock equivalents. 11 Table of Contents The following potentially dilutive securities outstanding as of September 30, 2020 and 2019 have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive: ​ ​ ​ ​ ​ ​ ​ ​ As of September 30, ​ 2020 2019 Stock options (1) 1,316,267 592,929 Convertible preferred stock warrants (1) ​ 1,035,196 ​ — Convertible preferred stock (1) 5,670,184 3,108,776 ​ 8,021,647 3,701,705 (1) Represents common stock equivalents. The Company’s Series A convertible preferred stock contractually entitles the holders of such shares to participate in dividends but does not contractually require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss, such losses are not allocated to participating securities. In periods in which the Company reports a net loss per share of common stock, diluted net loss per share of common stock is the same as basic net loss per share of common stock since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss per share of common stock for the three and nine months ended September 30, 2020 and 2019. Segment and geographic information Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The CODM is the Company’s Chief Executive Officer. The Company views its operations as and manages its business in one operating segment operating exclusively in the United States. 3. Fair value measurements The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis in the condensed balance sheet as of September 30, 2020 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices ​ Significant Other ​ Unobservable ​ ​ ​ ​ ​ In Active Markets ​ Observable ​ Inputs ​ September 30, 2020 (Level 1) Inputs (Level 2) (Level 3) Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ Warrant liability ​ $ 7,071 ​ $ — ​ $ — ​ $ 7,071 Total liabilities measured and recorded at fair value ​ $ 7,071 ​ $ — ​ $ — ​ $ 7,071 ​ The Company did no t transfer any financial instruments into or out of Level 3 classification during the three or nine months ended September 30, 2020. See Note 11, Warrants to acquire shares of Series A convertible preferred stock for a summary of the inputs used to calculate the warrant liability. 12 Table of Contents A reconciliation of the change in the fair value of the warrant liability for the nine months ended September 30, 2020 is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ Fair Value ​ ​ Measurements ​ ​ Using Significant ​ ​ Unobservable ​ ​ Inputs ​ (Level 3) Balance, December 31, 2019 ​ $ — Issuance of warrants on June 2, 2020 ​ ​ 1,522 Change in fair value of warrant liability ​ ​ 5,549 Warrant liability, September 30, 2020 ​ $ 7,071 ​ ​ 4. U.S. Department of Defense (“DoD”) expense reimbursement contract In July 2020, the Company entered into an Other Transaction Authority for Prototype Agreement (the “OTA Agreement”) with the DoD to fund the Company’s efforts in developing Biosynthetic Convalescent Plasma (“BCP”) to treat COVID-19. Under the OTA Agreement, the Company intends to develop BCP for use in the U.S. military population and the U.S. population as a whole, subject to approval by the U.S. Food and Drug Administration (“FDA”). The amount of funding being made available to the Company under this expense reimbursement contract is $ 13.3 million which, based on the Company’s anticipated expenditures, is expected to be received through mid-2021. The Company recorded contra-research and development expense in the amount of $ 0.6 million for each of the three and nine months ended September 30, 2020 in the condensed statements of operations. As of September 30, 2020, the Company had an expense reimbursement receivable balance of $ 0.3 million due from the DoD in prepaid expenses and other current assets on the condensed balance sheet. ​ 5. Accrued expenses Accrued expenses consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) September 30, 2020 December 31, 2019 IPO costs ​ $ 1,165 ​ $ — Compensation and related benefits ​ ​ 831 ​ ​ 426 Research and development, and other ​ 334 ​ 240 ​ ​ $ 2,330 ​ $ 666 ​ ​ ​ 6. Convertible promissory notes From January 2019 through July 2019, the Company issued $ 6.8 million of non-interest bearing convertible promissory notes to several existing Series A Preferred shareholders and new investors. These notes were scheduled to mature on February 2, 2020, if not converted or otherwise settled prior to maturity. Upon completion a qualified equity financing event, as defined in the notes, the notes automatically convert into shares of the stock sold in such qualified financing and at a price equal to 80 % of the subscription price. In the event that the Company were to sell additional shares of Series A Preferred prior to a qualified financing event, the notes will automatically convert into shares of Series A Preferred at a discount to the $ 9.00 per share subscription price. The discount is equal to 1 % for each month that has lapsed from the initial note issuance date to the date in which the extended sale of Series A Preferred is consummated. In November 2019, the Company completed the sale of its Series A Preferred and the notes automatically converted into 821,657 shares of Series A Preferred. The effective conversion price of the notes was less than the fair value of the Series A Preferred and therefore, no beneficial conversion feature was recorded for the discount. 13 Table of Contents The Company accounted for the conversion upon a qualified financing event as a bifurcated redemption feature as settlement under this feature would be in a variable number of shares and at a substantial discount. At issuance and over the term of the note, the Company determined the probability of settlement pursuant to the qualified financing event to be remote. As such, the estimated fair value of the redemption feature was de minimis. ​ 7. Equipment loan payables During 2016 through 2018, the Company entered into various equipment financing agreements (the Agreements) to purchase laboratory equipment. The Agreements provide for 36 to 38 monthly payments ranging from $ 1,000 to $ 8,000 . Interest rates for the Agreements range from 9.03 % to 12.08 %. Interest expense related to the equipment financing agreements was $ 10,000 and $ 11,000 for the three months ended September 30, 2020 and 2019, respectively, and $ 20,000 and $ 38,000 for the nine months ended September 30, 2020 and 2019, respectively. Future payments for the Agreements are as follows as of September 30, 2020 (in thousands): ​ ​ ​ ​ ​ Years ending December 31, Amount 2020 (represents three remaining months) ​ $ 51 2021 ​ 117 Total ​ 168 Less amounts representing interest ​ ( 8 ) Total equipment loan payable ​ $ 160 ​ ​ ​ 8. Long-term debt On April 30, 2020, the Company entered into a loan agreement with Silicon Valley Bank as the lender (“Lender”) for a loan in an aggregate principal amount of $ 0.5 million (the “Loan”) pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and implemented by the U.S. Small Business Administration. The Loan matures in two years and bears interest at a rate of 1 % per year, with all payments deferred through the six-month anniversary of the date of the Loan. Principal and interest are payable monthly commencing on October 30, 2020 and may be prepaid by the Company at any time prior to maturity without penalty. Interest expense for the nine months ended September 30, 2020 was de minimis. The Company may apply for forgiveness of amounts due under the Loan, with the amount of potential loan forgiveness to be calculated in accordance with the requirements of the PPP based on payroll costs, any mortgage interest payments, any covered rent payments and any covered utilities payments during the 8-week period after the origination date of the Loan. The Company is using the proceeds of the Loan for payroll and other qualifying expenses. While the Company believes that its use of the loan proceeds will meet the conditions of forgiveness of the loan, it cannot be assured that actions taken could cause the Company to be ineligible for forgiveness of the loan, in whole or in part. Proceeds received are recorded as long-term debt. In the event the debt is forgiven in a future period, the Company will recognize a gain on extinguishment in the statement of operations. The following table sets forth the Company’s future principal payments as of September 30, 2020 (in thousands): ​ ​ ​ ​ ​ Years ending December 31, Amount 2020 (represents three remaining months) ​ $ 55 2021 ​ 333 2022 ​ 112 Total ​ 500 Less current portion of long-term debt ​ ( 305 ) Long-term debt, net of current portion ​ $ 195 ​ ​ ​ 14 Table of Contents ​ 9. Commitments and contingencies Operating leases In May 2017, the Company entered into a 62-month office and laboratory space lease for approximately 11,000 square feet of space in Exton, Pennsylvania. The Company has an option to extend the lease for two additional five-year terms or to early terminate the lease at the end of the 38th month of the lease. The lease is subject to fixed rate escalation increases and the landlord waived the Company’s rent obligation for the first two months of the lease. Deferred rent is $ 11,000 and $ 18,000 as of September 30, 2020 and December 31, 2019, respectively, and is being amortized as a reduction in rent expense over the term of the lease. The Company recognizes rent expense on a straight-line basis over the expected lease term. Future minimum lease payments for the Company’s facility are as follows as of September 30, 2020 (in thousands): ​ ​ ​ ​ ​ Years ending December 31, Amount 2020 (represents three remaining months) ​ $ 56 2021 ​ 225 2022 ​ 153 ​ ​ $ 434 ​ Rent expense was $ 0.1 million and $ 0.1 million for the three months ended September 30, 2020 and 2019, respectively, and $ 0.2 million and $ 0.2 million for the nine months ended September 30, 2020 and 2019, respectively. Capital leases During 2016 and 2017, the Company entered into multiple capital leases for laboratory equipment. The leases provide for 36 to 38 monthly payments ranging from $ 2,000 to $ 32,000 . Interest rates for the leases range from 9.43 % to 11.35 %. Interest expense related to the leases was $ 7,000 and $ 34,000 for the nine months ended September 30, 2020 and 2019, respectively. The leases ended in July 2020. Employment agreements The Company entered into employment offer letter agreements (the “Employment Agreements”) with key personnel providing for compensation and severance in certain circumstances, as defined in the respective Employment Agreements. The Employment Agreements may be terminated by either the Company or the employees in accordance with the Employment Agreements and provide for annual pay increases and bonuses at the discretion of the Board of Directors. Employee benefit plan The Company maintains a defined-contribution plan under Section 401(k) of the Internal Revenue Code (the 401(k) Plan). The 401(k) Plan covers all employees who meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company assumes all administrative costs of the 401(k) Plan and makes matching contributions as defined in the 401(k) Plan document. ​ 10. Convertible preferred stock and stockholders’ deficit Series A convertible preferred stock During the year ended December 31, 2019, the Company sold 512,826 shares of its Series A Preferred at $ 9.00 per share in exchange for $ 4.6 million in gross proceeds and incurred $ 35,000 of related issuance costs. In November 2019, the Company issued 821,657 shares of Series A Preferred in connection with the conversion of the promissory notes of $ 6.8 million (see Note 6). In June 2020, the Company sold an additional 1,226,925 shares of Series A Preferred at $ 9.00 15 Table of Contents per share for $ 11.0 million in gross proceeds and incurred $ 27,000 of related issuance costs. In addition to the shares of Series A Preferred, the Company issued warrants to purchase 1,035,196 shares of the Company’s Series A Preferred. The warrants are exercisable at any time and have an exercise price of $ 9.00 per share and will terminate at the earlier of (i) three years from the date of issuance, (ii) upon liquidation or deemed liquidation of the Company and (iii) upon the Company’s securities trading at $ 27.00 per share for at least 10 days out of a consecutive 20 day trading period beginning after the first anniversary of an initial public offering of the Company’s common stock. The Company allocated $ 1.5 million of the gross proceeds from the June 2020 sale of the Series A Preferred to the warrant liability (see Note 11, Warrants to acquire shares of Series A convertible preferred stock), which represents the fair value of the warrants as of the date of grant. The Series A convertible preferred stock has the following key terms: Dividends — The holders of Series A Preferred shall be entitled to receive, when, as, and if declared by the Board of Directors, such dividends as may be declared from time to time by the Board of Directors. No cash dividends shall be declared and/or paid with respect to common stock until all declared but unpaid dividends on the preferred stock have been paid in full. Additionally, in the event that the Company declares, pays or sets aside any dividends on shares of common stock, the holders of Series A Preferred participate in such dividends on an as-converted basis. No dividends had been declared through September 30, 2020. Voting Rights — Holders of preferred stock have voting rights equal to the number of shares of common stock on a converted basis and have certain protective voting rights as a class. Liquidation — In the event of any liquidation, dissolution, or winding up of the Company, either voluntary or involuntary, or any deemed liquidation event, each holder of Series A Preferred shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holders of common stock by reason of their ownership thereof, in respect of each share of Series A Preferred owned by such holder, an amount per share equal to the greater of the following: (i) the sum of (A) $ 9.00 , being the original purchase price for such share (as adjusted for any stock splits, stock dividends, reverse stock splits, stock combinations, and other similar capitalization changes) plus (B) any dividends declared but unpaid thereon or (ii) such amount per share of Series A Preferred as would have been payable had all shares of Series A Preferred been converted into common stock immediately prior to such liquidation, dissolution or deemed liquidation event. Conversion Rights — The Series A Preferred is convertible at any time at the option of the holder into shares of common stock at a conversion price equal to $ 9.00 per share. Upon an event specified by vote or consent by the requisite holders or upon a public offering meeting the criteria specified in the certificate, the shares of Series A Preferred will be automatically converted into shares of common stock. The conversion price is subject to adjustment for certain events, including traditional dilutive events as well as weighted average down-round protection. Redemption — Upon the occurrence of a deemed liquidation event which does not result in the dissolution of the Company, as defined in the Company’s articles of incorporation, the Series A Preferred may be redeemed at the greater of (i) the original issuance price plus any declared but unpaid dividends and (ii) the estimated fair value of the Company’s common stock into which the Series A Preferred would convert into immediately prior to redemption. The Company classifies Series A Preferred as temporary equity in the accompanying balance sheets as certain deemed liquidation events are outside the Company’s control. Future Tranche Right Feature — In connection with the Company’s initial offering of its Series A Preferred in 2015, a future milestone closing provision (the Future Milestone) was included requiring the Company to sell, on the same terms and conditions as the initial offering, an aggregate of $ 3.5 million of additional Series A Preferred upon achievement of certain development and strategic milestones, as defined in the purchase agreement and at $ 9.00 per share, or 388,888 shares of Series A Preferred. The Future Milestone was not achieved as of September 30, 2020, and the Company’s obligations to sell the shares terminated upon completion of the Company’s IPO. The Company determined that the Future Tranche Right did not meet the definition of a freestanding financial instrument as it was not legally detachable. The Future Tranche Right was also evaluated as an embedded derivative and 16 Table of Contents the Company determined it did not meet the definition of a derivative instrument for which bifurcation would be required. As discussed in Note 1, all of the Company’s outstanding Series A Preferred converted into 5,670,184 shares of common stock upon the closing of the IPO on October 6, 2020. Common stock The holders of common stock are entitled to one vote for each share of common stock. Subject to the approval of the majority of Series A Preferred stockholders, and payment in full of all preferential dividends to which the holders of the Series A Preferred are entitled, the holders of common stock shall be entitled to receive dividends out of funds legally available. In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, after the payment or provision for payment of all debts and liabilities of the Company and all preferential amounts to which the holders of Series A Preferred are entitled with respect to the distribution of assets in liquidation, the holders of common stock shall be entitled to share ratably in the remaining assets of the Company available for distribution. At September 30, 2020, the Company had reserved 10,146,643 shares of common stock for conversion of Series A Preferred and warrants and exercise of stock options. ​ 11. Warrants to acquire shares of Series A convertible preferred stock Liability-classified warrants consist of 1,035,196 warrants to acquire shares of Series A convertible preferred stock issued in connection with the June 2020 sale of the Company’s Series A convertible preferred stock. These warrants are liability-classified as the underlying Series A convertible preferred stock is contingently redeemable and outside of the Company’s control. The warrants become exercisable for shares of the Company’s common stock upon completion of an IPO. The fair value of the warrants was estimated using a Black-Scholes pricing model with the following inputs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 2, 2020 September 30, 2020 Volatility rate ​ 79.0 % ​ 81.9 % Risk-free interest rate ​ 0.2 % ​ 0.2 % Expected term (in years) ​ 3.0 ​ 2.7 ​ Strike price (per share) ​ $ 9.00 ​ $ 9.00 ​ Fair value of Series A convertible preferred stock ​ $ 4.44 ​ $ 12.00 ​ ​ ​ ​ 12. Share-based compensation In July 2008, the board of directors adopted the 2008 Equity Incentive Plan (the “2008 Plan”) which provided for the grant of qualified incentive stock options and nonqualified stock options, restricted stock or other awards to the Company’s employees, officers, directors, advisors, and outside consultants for the issuance or purchase of shares of the Company’s common stock. The 2008 Plan was replaced in July 2018 with the Immunome, Inc. 2018 Equity Incentive Plan (the 2018 Plan and collectively with the 2008 Plan, the Plans). At the time that the 2008 Plan was terminated, there were 388,748 shares of the Company’s common stock available for grant that were transferred to the 2018 Plan. Any additional shares that become available for grant under the 2008 Plan after June 18, 2018 are automatically transferred to and made available for grant under the 2018 Plan. On September 24, 2020, the Plans were terminated and replaced with the 2020 Equity Incentive Plan (the 2020 Plan). The remaining 298,277 shares available for grant under the Plans will be available for issuance under the 2020 Plan and an additional 1,701,723 shares were authorized under the 2020 Plan. The Company also adopted the 2020 Employee Stock Purchase Plan (the “ESPP Plan”) on September 18, 2020 which provides for the grant of purchase rights to purchase shares of the Company’s common stock to eligible employees, as defined by the ESPP Plan. The maximum number of shares of common stock that may be issued under the ESPP Plan will not exceed 125,000 shares of common stock, plus the number of shares of common stock that are automatically added on January 1st of each calendar year for a period of up to ten years , commencing on the first January 1 following the year in which an IPO occurs and ending on, and including, January 1, 2030, in an amount equal 17 Table of Contents to the lesser of (i) 1 % of the total number of shares of common stock outstanding on December 31st of the preceding calendar year, and (ii) 1,000,000 shares of common stock. No awards have been granted under the ESPP Plan as of September 30, 2020. The 2020 Plan and the ESPP Plan are administered by the board of directors. The exercise prices, vesting and other restrictions are determined at the discretion of the board of directors. Stock options awarded under the Plans generally expire 10 years after the grant date unless the board of directors sets a shorter term. Vesting periods for awards under the Plans and the 2020 Plan are determined at the discretion of the board of directors. Incentive stock options and non-statutory stock options granted to employees, officers, members of the board of directors and consultants of the Company typically vest over two to four years . Certain options provide for accelerated vesting if there is a change in control, as defined in the Plans and the 2020 Plan. Share-based compensation expense recorded as research and development and general and administrative expenses in the condensed statements of operations is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, In thousands) 2020 2019 2020 2019 General and administrative ​ $ 78 ​ $ 1 ​ $ 208 ​ $ 5 Research and development ​ 39 ​ — ​ 94 ​ 6 ​ ​ $ 117 ​ $ 1 ​ $ 302 ​ $ 11 ​ Unrecognized compensation cost related to unvested options was $ 1.5 million as of September 30, 2020 and will be recognized over an estimated weighted average period of 2.82 years. Stock options The weighted average assumptions used in the Black-Scholes option-pricing model for stock options granted were: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ 2020 2019 Expected volatility ​ 82.2 % ​ 74.3 % Risk-free interest rate ​ 0.6 % ​ 2.5 % Expected life (in years) ​ 6.01 ​ 5.30 ​ Expected dividend yield ​ — ​ — ​ Fair value of common stock ​ $ 1.95 ​ $ 0.38 ​ ​ A summary of option activity during the nine months ended September 30, 2020 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Weighted ​ average ​ ​ ​ ​ average ​ remaining ​ ​ Number of ​ exercise price ​ contractual ​ shares per share term (years) Outstanding at January 1, 2020 ​ 583,622 ​ $ 0.47 ​ 6.30 Granted 760,698 ​ $ 1.33 Forfeited ( 2,707 ) ​ $ 0.50 Exercised ( 25,346 ) ​ $ 0.47 Outstanding at September 30, 2020 1,316,267 ​ $ 0.97 7.62 Exercisable at September 30, 2020 468,172 ​ $ 0.75 6.40 Vested or expected to vest at September 30, 2020 1,316,267 ​ $ 0.97 7.62 ​ The weighted-average grant date fair value per share of stock options granted during the nine months ended September 30, 2020 and 2019 was $ 0.87 and $ 0.24 , respectively. The aggregate intrinsic value of stock options 18 Table of Contents exercised during the nine months ended September 30, 2020 was $ 0.3 million. The aggregate intrinsic value of stock options outstanding at September 30, 2020 is $ 14.5 million. ​ In August 2020, the Company granted a total of 92,169 stock options to two of its officers, which option awards included both performance-based and service-based vesting conditions. These option awards were subsequently modified in September 2020 to eliminate the performance-based criteria. As a result of the modification, only service-based vesting conditions remained. All other terms and conditions of these option awards remain unchanged. Since the performance condition was not considered probable of being achieved prior to the modification, no share-based compensation expense was recorded prior to the modification. At the time of the modification, the fair value of these options awards was recalculated at $ 8.69 per option, and the resulting share-based compensation expense of $ 0.8 million will be recognized ratably over the requisite service period to the Company. ​ ​ 13. Related party transactions License agreements The Company has entered into license agreements with certain stockholders of the Company. Expenses with these related parties were de minimis and $ 0.1 million for the three months ended September 30, 2020 and 2019, respectively, and de minimis and $ 0.2 million for the nine months ended September 30, 2020 and 2019, respectively. There were no amounts owed to these related parties as of September 30, 2020 and December 31, 2019. Convertible promissory notes During the nine months ended September 30, 2019, the Company received $ 6.8 million upon issuing convertible promissory notes, of which $ 3.8 million was from several of its existing preferred stock investors. All of the convertible promissory notes were converted into shares of Series A Preferred (see Note 6). Broadband services agreement During November 2015, the Company entered into a Master Services Agreement (MSA) with BCM Advisory Partners LLC, Broadband Capital Partners LLC and Broadband Advisory (collectively, Broadband) pursuant to which Broadband agreed to provide corporate finance, strategic planning, and management services to the Company. The Company issued shares of common stock to Broadband and, starting May 1, 2016, is required to pay Broadband a cash fee of $ 20,000 per month for Broadband’s advisory services. The Company recorded $ 0.1 million and $ 0.1 million during the three months ended September 30, 2020 and 2019, respectively, and $ 0.2 million and $ 0.2 million during the nine months ended September 30, 2020 and 2019, respectively, related to the Broadband MSA which is included in general and administrative expenses in the statements of operations. ​ 14. Subsequent events On October 6, 2020, the Company closed its IPO in which the Company issued and sold 3,250,000 shares of its common stock at a public offering price of $ 12.00 per share. On October 13, 2020, the underwriters exercised their option to purchase an additional 487,500 shares of the Company’s common stock at a purchase price of $ 12.00 per share. The Company received net proceeds of $ 41.7 million after deducting underwriting discounts and commissions of $ 3.1 million but before deducting other offering expenses. The Company’s common stock is listed on the Nasdaq Capital Market under the trading symbol “IMNM.” In addition, upon the closing of the IPO on October 6, 2020, (i) all of the Company’s outstanding shares of convertible preferred stock converted into 5,670,184 shares of common stock and (ii) all of the Company’s outstanding warrants to purchase convertible preferred stock converted into warrants to purchase common stock. On October 6, 2020, the Company filed an amended and restated certificate of incorporation to, among other things, increase the number of shares of common stock, $ 0.0001 par value per share, authorized for issuance to 200,000,000 and authorize the Company’s board of directors to issue up to 10,000,000 shares of “blank check” preferred stock, $ 0.0001 par value per share. ​ 19 Table of Contents ​