What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-09 compared with 2023-05-05 · 99 added, 51 removed, 246 unchanged (38% of the section changed)

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Factors that could cause actual results to differ include, but are not limited to, those risks and uncertainties associated with:

the impact of the COVID-19 pandemic on Immunome’s business, operations, strategy, goals and anticipated milestones;

our expectations regarding the announced merger transaction with Morphimmune;

the fact that research and development data are subject to differing interpretations and assessments;

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Since inception we have incurred significant operating losses.

Our net losses for the three months ended March 31, 2023 and 2022 were $4.3 million and $11.7 million, respectively.

As of March 31, 2023, we had cash and cash equivalents of $44.4 million.

Our net losses for the three months ended June 30, 2023 and 2022 were $5.6 million and $8.9 million, respectively, and $9.8 million and $20.6 million for the six months ended June 2023 and 2022, respectively.

As of June 30, 2023, we had cash and cash equivalents of $38.4 million.

We expect to continue to incur significant expenses and operating losses for the foreseeable future as we continue advancement of our programs and develop product candidates.

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● add operational, financial and management information systems and infrastructure to support our research and development programs, and any future commercialization efforts;

● complete the Merger with Morphimmune

As a result of these anticipated expenditures and potential unanticipated expenditures, we will need substantial additional financing to support our continuing operations and pursue our growth strategy.

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Debt financing and preferred 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 development candidates that we would otherwise prefer to develop and market ourselves.

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 development candidates that we would otherwise prefer to develop and market ourselves.

We 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 our financial condition and our ability to pursue our business strategy.

We expect that our cash as of March 31, 2023 will be sufficient to fund our operations at least 12 months from the filing date of this Quarterly Report on Form 10-Q.

We expect that our cash as of June 30, 2023, exclusive of any potential proceeds received in connection with the potential closing of the Merger and concurrent PIPE transaction, will be sufficient to fund our operations at least 12 months from the filing date of this Quarterly Report on Form 10-Q.

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.

See “Liquidity and capital resources.” Due to the numerous risks and uncertainties associated with the research and 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 development candidates.

Merger Agreement

On June 29, 2023, we entered into an Agreement and Plan of Merger and Reorganization, or the Merger Agreement, with Morphimmune Inc., a Delaware corporation, or Morphimmune, a biotechnology company focused on developing targeted oncology therapeutics, and Ibiza Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Immunome, or Merger Sub.

Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, Merger Sub will be merged with and into Morphimmune, with Morphimmune surviving as our wholly owned subsidiary, or the Merger.

The Merger is intended to qualify as a tax-free reorganization for U.S.

federal income tax purposes and is expected to close by the end of 2023.

At the Effective time, each share of Morphimmune capital stock outstanding immediately prior to the Effective Time will be automatically converted solely into the right to receive 0.3042 shares of the Company’s common stock, or the Exchange Ratio, and, if applicable, an amount in cash, rounded to the nearest whole cent, in lieu of any fractional share interest in the Company’s common stock to which such holder otherwise would have been entitled (after aggregating all fractional shares issuable to such holder).

Each option to purchase shares of Morphimmune capital stock, or a Morphimmune Option, that is outstanding and unexercised immediately prior to the Effective Time under Morphimmune’s 2020 Equity Incentive Plan, or the Morphimmune Plan, whether or not vested, will be converted into and become an option to purchase the Company’s common stock using the Exchange Ratio, and the Company will assume the Morphimmune Plan and each such Morphimmune Option in accordance with the terms of the Morphimmune Plan and the terms of the stock option agreement by which such Morphimmune Option is evidenced.

Immediately following the Merger, the pre-Merger equityholders of the Company are expected to own approximately 55% of the shares of the Company’s common stock and the pre-Merger equityholders of Morphimmune are expected to own approximately 45% of the Company’s common stock, in each case, on a fully diluted basis, excluding out-of-the-money securities of the Company as of June 28, 2023, unallocated shares of the Company’s common stock available for issuance under the Company’s 2020 Equity Incentive Plan and employee stock purchase plan, and the grant of a stock option to Dr.

Clay Siegall, Ph.D., in connection with his employment agreement to become Chief Executive Officer of the Company upon consummation of the Merger, and prior to giving effect to the PIPE financing as described below.

Anticipated Accounting Treatment

The Merger is expected to be treated as an asset acquisition by Immunome of Morphimmune in accordance with U.S.

Upon completion of the Merger, Immunome will obtain control of Morphimmune’s assets consisting primarily of cash and in-process research and development (IPR&D) associated with Morphimmune’s potential primary product candidate, Mi-1001, and development program, 177 Lu-FAP.

In accordance with U.S.

GAAP, Immunome must first assess whether an integrated set of assets and activities should be accounted for as an acquisition of a business or an asset acquisition.

An initial screen test is completed to determine if substantially all of the fair value of the gross assets acquired of Morphimmune is concentrated in a single asset or group of similar assets.

If that screen is met, the set is not considered a business and is accounted for as an asset acquisition.

Immunome will account for the acquisition of Morphimmune as an asset acquisition as substantially all of the fair value of the gross assets being acquired of Morphimmune is concentrated within the FA-TLR7a and 177 Lu-FAP development programs which are considered a group of similar assets.

These programs are deemed to be similar IPR&D assets being acquired based on the similarity of:

(i) their current preclinical stage of development, (ii) solid tumor therapeutic indications, (iii) risks for development, (iv) regulatory pathway, and (v) economics of commercialization.

Since the IPR&D being acquired has no alternative future use, Immunome expects to record the amount of consideration allocated to the IPR&D assets as research and development expense in its statement of operations on the date of acquisition.

Subscription Agreements

In connection with the execution of the Merger Agreement, on June 29, 2023, the Company entered into subscription agreements, each, a Subscription Agreement, with certain investors, or the PIPE Investors, pursuant to which, among other things, the PIPE Investors have agreed to subscribe for and purchase, and the Company has agreed to issue and sell to the PIPE Investors, an aggregate of 21,690,871 shares of the Company’s common stock for an aggregate purchase price of approximately $125.0 million, on the terms and subject to the conditions set forth therein.

The shares of the Company’s common stock were sold to the PIPE Investors at a price per share equal to $5.75 and, in the case of affiliate investors, $5.91 per share, the consolidated closing bid price per share immediately preceding the entry into the Subscription Agreement.

The closing of the PIPE financing is expected to occur in connection with and immediately following the consummation of the Merger.

Our current programs and strategic collaboration

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We believe that this information could potentially guide patient selection for early clinical testing and may improve the overall probability of demonstrating clinical utility, thereby improving the probability of clinical success.

We plan to submit our IND application for the IMM-ONC-01 program by mid-2023.

We plan to submit our IND application for the IMM-ONC-01 program in the first quarter of 2024.

SARS-CoV-2 (IMM-BCP-01)

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We may in-license or acquire complementary intellectual property as needed or required, and we may continue to build our know-how and trade secrets.

We may pursue both therapeutic and diagnostic applications of our antibodies through composition of matter and/or method of use patents.

While our initial focus area is oncology, we may invest in intellectual property in other therapeutic areas as well.

As an example, we may pursue both therapeutic and diagnostic applications of our antibodies through composition of matter and/or method of use patents.

While the focus area of our current programs is oncology, we may invest in intellectual property in other therapeutic areas as well.

We believe that our technology has broad utility and could enable the formation of attractive strategic partnerships, as exemplified by our OTA Agreement with the DoD and the Collaboration Agreement with AbbVie.

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The Collaboration Agreement will expire upon the expiration of the last to expire royalty payment obligation with respect to all Products in all countries, subject to earlier expiration if all option exercise periods for all Validated Target Pairs expire without AbbVie exercising any option.

In addition, the research term will terminate if AbbVie does not elect to make certain platform access payments at specified points during the research term, in order for us to continue the

target discovery activities under the collaboration.

In addition, the research term will terminate if AbbVie does not elect to make certain platform access payments at specified points during the research term, in order for us to continue the target discovery activities under the collaboration.

The Collaboration Agreement may be terminated by (a) either party upon the other party’s uncured material breach, or upon any insolvency event of the other party, (b) AbbVie for convenience upon a specified period prior written notice, or (c) AbbVie for our breach of representations and warranties with respect to debarment or compliance with anti-bribery and anti-corruption laws.

If AbbVie has the right to terminate the Collaboration Agreement for our uncured material breach or a breach of representations and warranties with respect to debarment or compliance with anti-bribery and anti-corruption laws, AbbVie may elect to continue the Collaboration Agreement, subject to certain specified reductions applicable to certain of AbbVie’s payment obligations (with a specified floor on such reductions).

COVID-19 pandemic

The ongoing COVID-19 pandemic continues to affect economies and businesses around the world.

The extent and duration of such effects remain uncertain and difficult to predict, particularly as virus variants continue to spread.

We are actively monitoring and managing our response and assessing actual and potential impacts to our operating results and financial condition, as well as developments in our business, which could further impact the developments, trends and expectations described below.

See “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 16, 2023 and elsewhere in our filings with the SEC for a discussion of the potential adverse impact of COVID-19 on our business, results of operations and financial condition.

Components of our results of operations

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In connection with the OTA Agreement, we record expense reimbursements received from the DoD as contra-research and development expenses in the same period the underlying expenses are incurred.

Under the provisions of the CARES Act signed into law on March 27, 2020 and the subsequent extension of the CARES Act, the Company was deemed eligible to receive the employee retention credit subject to certain criteria.

The Company recognized the employee retention credit as contra-expense to personnel related costs in research and development expenses in the condensed statements of operations.

General and administrative expenses

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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.

The Company recognized the employee retention credit as contra-expense to personnel related costs in general and administrative expenses in the condensed statements of operations.

Interest income

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Results of operations

The ultimate extent of the impact of any epidemic, pandemic, outbreak, or other public health crisis on our results of operations will depend on future developments, which are highly uncertain, including new information that may emerge concerning the severity of COVID-19 and its variants or other public health crisis and actions taken to contain or prevent the further spread, among others.

The ultimate extent of the impact of any epidemic, pandemic, outbreak, or other public health crisis on our results of operations will depend on future developments, which are highly uncertain, including public health crises and actions taken to contain or prevent the further spread, among others.

Accordingly, we cannot fully predict the extent to which our business and results of operations will be affected by the pandemic.

Comparison of the three months ended March 31, 2023 and 2022

Three Months Ended March 31,

Comparison of the three and six months ended June 30, 2023 and 2022

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

Collaboration revenue

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Interest income

Three months ended March 31, 2023 and 2022

Three months ended June 30, 2023 and 2022

Collaboration revenue

In January 2023, we entered into the Collaboration Agreement with AbbVie and recognized collaboration revenue of $2.4 million for the three months ended March 31, 2023.

No collaboration revenue was recognized for the three months ended March 31, 2022.

In January 2023, we entered into the Collaboration Agreement with AbbVie and recognized collaboration revenue of $4.3 million for the three months ended June 30, 2023.

No collaboration revenue was recognized for the three months ended June 30, 2022.

Research and development expenses

Research and development expenses were $3.9 million and $8.1 million for the three months ended March 31, 2023 and 2022, respectively.

Research and development expenses decreased by $4.2 million for the three months ended March 31, 2023.

Of the $4.2 million decrease in research and development expenses, BCP-01 program related expenses decreased by $2.4

million, net of contra expense, as a result of our decision to seek a partner in order to continue the BCP-01 trial and further development activities.

ONC-01 program related expenses decreased by $2.0 million as a result of a decrease in product development activities.

Personnel-related expenses decreased by $0.2 million primarily as a result of a decrease in retention bonuses.

Research and development expenses were $5.7 million for both the three months ended June 30, 2023 and 2022.

Research and development expenses were flat for the three months ended June 30, 2023.

ONC-01 external program related expenses decreased by $1.2 million as a result of a decrease in product development activities.

BCP-01 external program related expenses decreased by $1.0 million, net of contra expense, as a result of our decision to seek a partner in order to continue the BCP-01 trial and further development activities.

These decreases were offset by an increase of $1.3 million in outsourced research and materials relating to the AbbVie collaboration.

In addition, personnel related costs increased by $0.9 million for the three months ended June 30, 2023 primarily as a result of $0.6 million contra-expense to personnel related costs relating to the CARES Act employee retention credit recorded during the three months ended June 30, 2022 and a $0.3 million increase in fringe benefits.

General and administrative expenses

General and administrative expenses were $2.9 million and $3.6 million for the three months ended March 31, 2023 and 2022, respectively.

General and administrative expenses decreased by $0.7 million for the three months ended March 31, 2023.

The decrease was primarily a result of a $0.3 million decrease in professional fees including consulting and legal related costs and $0.4 million decrease in general expenses including insurance.

General and administrative expenses were $4.3 million and $3.2 million for the three months ended June 30, 2023 and 2022, respectively.

General and administrative expenses increased by $1.1 million for the three months ended June 30, 2023.

The increase was primarily a result of a $1.6 million increase in professional fees including consulting and legal related costs associated with the Merger offset by a $0.4 million decrease in general expenses including insurance, and a $0.1 million decrease in personnel-related costs.

Personnel-related costs decreased as a result of a $0.3 million decrease in share-based compensation offset by $0.2 million in contra-expense to personnel related costs relating to the CARES Act employee retention credit recorded during the three months ended June 30, 2023.

Interest income

Interest income was $0.2 million and $1,000 for the three months ended March 31, 2023 and 2022, respectively.

Interest income increased by $0.2 million for the three months ended March 31, 2023 as a result of increased interest rates on our cash balances held with a financial institution.

Interest income was $0.2 million and $2,000 for the three months ended June 30, 2023 and 2022, respectively.

Interest income increased by $0.2 million for the three months ended June 30, 2023 as a result of increased interest rates on our cash balances held with a financial institution.

Six months ended June 30, 2023 and 2022

Collaboration revenue

In January 2023, we entered into the Collaboration Agreement with AbbVie and recognized collaboration revenue of $6.6 million for the six months ended June 30, 2023.

No collaboration revenue was recognized for the six months ended June 30, 2022.

Research and development expenses

Research and development expenses were $9.6 million and $13.8 million for the six months ended June 30, 2023 and 2022, respectively.

Research and development expenses decreased by $4.2 million for the six months ended June 30, 2023.

Of the $4.2 million decrease in research and development expenses, ONC-01 external program related expenses decreased by $3.4 million as a result of a decrease in product development activities.

BCP-01 external program related expenses decreased by $3.2 million, net of contra expense, as a result of our decision to seek a partner in order to continue the BCP-01 trial and further development activities.

These decreases were offset by an increase of $1.7 million in outsourced research and materials relating to the AbbVie collaboration.

In addition, personnel related costs increased by $0.7 million for the six months ended June 30, 2023 primarily as a result of $0.6 million contra-expense to personnel related costs relating to the CARES Act employee retention credit recorded during the six months ended June 30, 2023.

General and administrative expenses

General and administrative expenses were $7.2 million and $6.8 million for the six months ended June 30, 2023 and 2022, respectively.

General and administrative expenses increased by $0.4 million for the three months ended June 30, 2023.

The increase was primarily a result of a $1.2 million increase in professional fees, including consulting and legal related costs associated with the Merger, offset by a $0.8 million decrease in general expenses including insurance.

Interest income

Interest income was $0.4 million and $3,000 for the six months ended June 30, 2023 and 2022, respectively.

Interest income increased by $0.4 million for the six months ended June 30, 2023 as a result of increased interest rates on our cash balances held with a financial institution.

Liquidity and capital resources

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We expect to incur significant expenses and operating losses for the foreseeable future as we continue advancement of our programs and development candidates.

Through March 31, 2023, we raised an aggregate of $155.1 million in gross proceeds from sales of our common stock, Series A convertible preferred stock and warrants, warrant and stock option exercises, the issuance of convertible promissory notes, the Paycheck Protection Program, or PPP, loan that was forgiven in May 2021, and strategic partnerships with AbbVie Global Enterprises Ltd, or AbbVie and the Department of Defense, or the DoD.

Through June 30, 2023, we raised an aggregate of $155.2 million in gross proceeds from sales of our common stock, Series A convertible preferred stock and warrants, warrant and stock option exercises, the issuance of convertible promissory notes, the Paycheck Protection Program, or PPP, loan that was forgiven in May 2021, and strategic partnerships with AbbVie Global Enterprises Ltd, or AbbVie.

In January 2023, we received a $30.0 million upfront payment from AbbVie under the collaboration and option agreement, or the Collaboration Agreement.

In addition, we received $17.6 million in expense reimbursement from the DoD under the Other Transaction Authority for Prototype Agreement, or the OTA Agreement, from inception through 2022.

In addition, we received $17.6 million in expense reimbursement from the Department of Defense, or DoD under the Other Transaction Authority for Prototype Agreement, or the OTA Agreement, from inception through 2022.

On October 1, 2021, we entered into an Open Market Sale Agreement, or the ATM Agreement, with Jefferies Group LLC, which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, we may elect, from time to time, to offer and sell shares of common stock under the registration statement having an aggregate offering price of up to $75.0 million through Jefferies Group LLC acting as sales agent.

We filed a shelf registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission, or the SEC, on October 14, 2021, pursuant to which we may issue from time-to-time securities with an aggregate value of up to $200.0 million.

Through March 31, 2023, we sold 5,925 shares of common stock under the ATM Agreement resulting in net proceeds of approximately $34,000.

We filed a shelf registration

statement on Form S-3, which was declared effective by the Securities and Exchange Commission, or the SEC, on October 14, 2021, pursuant to which we may issue from time-to-time securities with an aggregate value of up to $200.0 million.

Through June 30, 2023, we sold 5,925 shares of common stock under the ATM Agreement resulting in net proceeds of approximately $34,000.

We can elect to sell additional shares under the ATM Agreement or shelf registration statement.

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There are no assurances that we will receive additional payments from AbbVie beyond the $30.0 million upfront payment.

The closing of the PIPE financing is expected to occur in connection with and immediately following the consummation of the Merger.

We will need to raise additional capital before we exhaust our current cash to continue to fund our research and development, including our plans to continue advancement of our programs and development candidates and new product development, as well as to fund operations.

As and if necessary, we will seek to raise additional funds through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements.

give no assurances that we will be able to secure such additional sources of funds to support our operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs.

The following table summarizes our sources and uses of cash for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

We can give no assurances that we will be able to secure such additional sources of funds to support our operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs.

The following table summarizes our sources and uses of cash for the six months ended June 30, 2023 and 2022:

Six Months Ended June 30,

(in thousands)

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Operating activities

Net cash provided by operating activities for the three months ended March 31, 2023 was $24.2 million, consisting primarily of increases in deferred revenue of $27.6 million, noncash charges of $1.4 million for share-based compensation expense, depreciation and amortization of right-of-use asset, and increases in accounts payable of $0.7 million, and decreases in prepaid expenses and other current assets of $0.2 million, offset by our net loss of $4.3 million and net decreases of accrued expenses and other current liabilities and other long-term liabilities of $1.5 million.

Net cash used in operating activities for the three months ended March 31, 2022 was $6.4 million, consisting primarily of our net loss of $11.7 million and decreases of accrued expenses and other liabilities of $0.9 million, offset by net noncash charges of $1.4 million for share-based compensation expense, depreciation and amortization of right-of-use asset, decreases in prepaid expenses and other assets of $4.0 million, and increases in accounts payable of $0.8 million.

Net cash provided by operating activities for the six months ended June 30, 2023 was $18.5 million, consisting primarily of increases in deferred revenue of $23.4 million, noncash charges of $2.6 million for share-based compensation expense, depreciation and amortization of right-of-use asset, increases in accounts payable of $1.3 million, and decreases in prepaid expenses and other assets of $1.2 million, offset by our net loss of $9.8 million.

Net cash used in operating activities for the six months ended June 30, 2022 was $14.4 million, consisting primarily of our net loss of $20.6 million and decreases in accrued expenses and other liabilities of $3.3 million, offset by noncash charges of $2.9 million for stock compensation expense, depreciation and amortization of right-of-use asset, decreases in prepaid expenses and other assets of $4.4 million, and increases in accounts payable of $2.2 million.

Investing activities

During the three months ended March 31, 2023 and 2022, we used $0.1 million and $6,000, respectively, for the purchase of property and equipment.

During the six months ended June 30, 2023 and 2022, we used $0.4 million and $0.2 million, respectively, for the purchase of property and equipment.

Financing activities

During the three months ended March 31, 2023, financing activities provided approximately $34,000 in net proceeds from the sales of common stock under the ATM agreement.

During the three months ended March 31, 2022, financing activities provided $32,000 from exercise of stock options.

During the six months ended June 30, 2023, financing activities provided approximately $34,000 in net proceeds from the sales of common stock under the ATM agreement.

During the six months ended June 30, 2022, financing activities provided $32,000 from exercise of stock options.

Funding requirements

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● acquire or in-license products, intellectual property, and technologies;

● complete the Merger with Morphimmune;

● continue to operate as a public company.

We expect that our existing cash at March 31, 2023 will enable us to fund our current and planned operating expenses and capital expenditures at least 12 months from the filing date of this Quarterly Report on Form 10-Q.

We expect that our existing cash at June 30, 2023, exclusive of any potential proceeds received in connection with the potential closing of the merger and concurrent PIPE transaction, will enable us to fund our current and planned operating expenses and capital expenditures at least 12 months from the filing date of this Quarterly Report on Form 10-Q.

We will need additional financing to support its continuing operations and pursue its research and development strategy.

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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, debt financings, collaborations, strategic alliances, and licensing arrangements.

We do not have any committed external source of funds.

Other than in connection with the possible PIPE, we do not have any committed external source of funds.

To the extent that we raise additional capital through the sale of equity 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.

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The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements.

We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

We base our estimates on historical experience, known trends and events and various other

factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

We evaluate our estimates and assumptions on an ongoing basis.

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If we are not exposed to significant risks and rewards and the contract is with a customer, we account for the collaboration under ASC 606.

Payments pursuant to collaborative arrangements may include non-refundable upfront payments, research option and license option payments, milestone payments upon the achievement of significant regulatory and development

events, commercial sales milestones, and royalties on product sales.

The amount of variable consideration is constrained until it is probable that the revenue is not at a significant risk of reversal in a future period.

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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