Immunome Inc. 10-Q

Item 1. Financial Statements. IMMUNOME, INC. Condensed Consolidated Balance Sheets (In thousands, except share and per share data) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2024 December 31, 2023 Assets ​ ​ ​ ​ ​ Current assets: ​ ​ ​ Cash and cash equivalents ​ $ 269,723 ​ $ 98,679 Marketable securities ​ ​ 39,983 ​ ​ 39,463 Prepaid expenses and other current assets ​ 3,620 ​ 6,561 Total current assets ​ 313,326 ​ 144,703 Property and equipment, net ​ 4,302 ​ 2,073 Operating right-of-use assets ​ ​ 1,458 ​ ​ 1,564 Restricted cash ​ 100 ​ 100 Other long-term assets ​ ​ 568 ​ ​ 100 Total assets ​ $ 319,754 ​ $ 148,540 Liabilities and stockholders’ equity ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 7,179 ​ $ 3,311 Accrued expenses and other current liabilities ​ 10,844 ​ 8,025 Deferred revenue, current ​ ​ 12,745 ​ ​ 10,493 Total current liabilities ​ 30,768 ​ 21,829 Deferred revenue, non-current ​ ​ 2,208 ​ ​ 5,489 Operating lease liabilities, net of current portion ​ 1,206 ​ 1,340 Total liabilities ​ 34,182 ​ 28,658 Commitments and contingencies (Note 6) ​ ​ Stockholders’ equity: ​ ​ ​ Preferred stock, $ 0.0001 par value; 10,000,000 shares authorized; no shares issued or outstanding at March 31, 2024 and December 31, 2023 ​ ​ — ​ ​ — Common stock, $ 0.0001 par value; 300,000,000 and 200,000,000 shares authorized at March 31, 2024 and December 31, 2023, respectively; 59,694,243 and 43,251,778 shares issued and outstanding at March 31, 2024 and December 31, 2023 , respectively ​ ​ 6 ​ ​ 4 Additional paid-in capital ​ 637,861 ​ 342,663 Accumulated other comprehensive income ​ ​ 4 ​ ​ 22 Accumulated deficit ​ ( 352,299 ) ​ ( 222,807 ) Total stockholders’ equity ​ 285,572 ​ 119,882 Total liabilities and stockholders’ equity ​ $ 319,754 ​ $ 148,540 ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements . ​ 3 Table of Contents IMMUNOME, INC. Condensed Consolidated Statements of Operations and Comprehensive Loss (In thousands, except share and per share data) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2024 2023 Collaboration revenue ​ $ 1,029 ​ $ 2,364 Operating expenses: ​ ​ In-process research and development ​ ​ 111,954 ​ ​ — Research and development ​ ​ 15,369 ​ ​ 3,913 General and administrative ​ 6,005 ​ 2,922 Total operating expenses ​ 133,328 ​ 6,835 Loss from operations ​ ( 132,299 ) ​ ( 4,471 ) Interest income ​ 2,807 ​ 201 Net loss ​ $ ( 129,492 ) ​ $ ( 4,270 ) Net loss per share, basic and diluted ​ $ ( 2.51 ) ​ $ ( 0.35 ) Weighted-average shares outstanding, basic and diluted ​ 51,544,383 ​ 12,182,478 Comprehensive loss: ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 129,492 ) ​ $ ( 4,270 ) Unrealized loss on marketable securities ​ ​ ( 18 ) ​ ​ — Comprehensive loss ​ $ ( 129,510 ) ​ $ ( 4,270 ) ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements . ​ 4 Table of Contents IMMUNOME, INC. Condensed Consolidated Statements of Changes in Stockholders’ Equity (In thousands, except share data) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Comprehensive ​ Accumulated ​ Stockholders' ​ ​ Shares Amount Capital Income Deficit Equity Balance at December 31, 2023 ​ 43,251,778 ​ $ 4 ​ $ 342,663 ​ $ 22 ​ $ ( 222,807 ) ​ $ 119,882 Share-based compensation expense ​ — ​ ​ — ​ ​ 2,159 ​ ​ — ​ ​ — ​ ​ 2,159 Issuance of common stock under Zentalis License Agreement 2,298,586 ​ ​ — ​ ​ 23,388 ​ ​ — ​ ​ — ​ ​ 23,388 Issuance of common stock under the Ayala Asset Purchase Agreement 2,175,489 ​ ​ — ​ ​ 50,645 ​ ​ — ​ ​ — ​ ​ 50,645 Issuance of common stock for public offering, net of commissions and offering costs of $ 14,592 ​ 11,500,000 ​ ​ 2 ​ ​ 215,408 ​ ​ — ​ ​ — ​ ​ 215,410 Exercise of stock options ​ 125,704 ​ ​ — ​ ​ 171 ​ ​ — ​ ​ — ​ ​ 171 Exercise of common stock warrants ​ 342,686 ​ ​ — ​ ​ 3,427 ​ ​ — ​ ​ — ​ ​ 3,427 Unrealized loss on marketable securities ​ — ​ ​ — ​ ​ — ​ ​ ( 18 ) ​ ​ — ​ ​ ( 18 ) Net loss — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 129,492 ) ​ ​ ( 129,492 ) Balance at March 31, 2024 59,694,243 ​ $ 6 ​ $ 637,861 ​ $ 4 ​ $ ( 352,299 ) ​ $ 285,572 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Accumulated ​ Stockholders' ​ Shares Amount Capital Deficit Equity Balance at December 31, 2022 12,128,843 ​ $ 1 ​ $ 132,653 ​ $ ( 116,001 ) ​ $ 16,653 Share-based compensation expense — ​ ​ — ​ ​ 1,200 ​ ​ — ​ ​ 1,200 Issuance of common stock under ATM, net of $ 1 of issuance costs ​ 5,925 ​ ​ — ​ ​ 34 ​ ​ — ​ ​ 34 Issuance of common stock ​ 55,250 ​ ​ — ​ ​ 221 ​ ​ — ​ ​ 221 Vesting of restricted stock awards ​ 4,166 ​ ​ — ​ ​ 24 ​ ​ — ​ ​ 24 Net loss — ​ ​ — ​ ​ — ​ ​ ( 4,270 ) ​ ​ ( 4,270 ) Balance at March 31, 2023 12,194,184 ​ $ 1 ​ ​ 134,132 ​ $ ( 120,271 ) ​ $ 13,862 ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements . ​ 5 Table of Contents IMMUNOME, INC. Condensed Consolidated Statements of Cash Flows (In thousands) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2024 2023 Cash flows from operating activities: ​ ​ ​ Net loss ​ $ ( 129,492 ) ​ $ ( 4,270 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: ​ ​ ​ ​ Depreciation and amortization ​ 157 ​ 94 Amortization of right-of-use asset ​ ​ 106 ​ ​ 54 Accretion of discount related to marketable securities ​ ​ ( 538 ) ​ ​ — Share-based compensation expense ​ 2,159 ​ 1,224 Charge for purchase of in-process research and development assets ​ ​ 111,954 ​ ​ — Changes in operating assets and liabilities: ​ ​ ​ ​ Prepaid expenses and other assets ​ 2,473 ​ 214 Accounts payable ​ 2,396 ​ 687 Accrued expenses and other current liabilities ​ 669 ​ ( 1,404 ) Deferred revenue ​ ​ ( 1,029 ) ​ ​ 27,636 Operating lease liabilities ​ ​ ( 25 ) ​ ​ ( 62 ) Net cash (used in) provided by operating activities ​ ( 11,170 ) ​ 24,173 Cash flows from investing activities: ​ ​ Cash paid in connection with Ayala asset acquisition ​ ​ ( 20,060 ) ​ ​ — Cash paid in connection with Zentalis license agreement ​ ​ ( 15,007 ) ​ ​ — Purchases of property and equipment ​ ( 2,164 ) ​ ( 106 ) Net cash used in investing activities ​ ( 37,231 ) ​ ( 106 ) Cash flows from financing activities: ​ ​ Proceeds from public offering ​ ​ 230,002 ​ ​ — Payment of offering costs ​ ​ ( 14,155 ) ​ ​ — Proceeds from exercise of stock options ​ 171 ​ — Proceeds from exercise of common stock warrants ​ ​ 3,427 ​ ​ — Proceeds from issuance of common stock under ATM, net ​ ​ — ​ ​ 34 Net cash provided by financing activities ​ 219,445 ​ 34 Net increase in cash and cash equivalents and restricted cash ​ 171,044 ​ 24,101 Cash and cash equivalents and restricted cash at beginning of period ​ 98,779 ​ 20,423 Cash and cash equivalents and restricted cash at end of period ​ $ 269,823 ​ $ 44,524 Reconciliation of cash and cash equivalents and restricted cash: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 269,723 ​ $ 44,424 Restricted cash ​ ​ 100 ​ ​ 100 Total cash, cash equivalents, and restricted cash ​ $ 269,823 ​ $ 44,524 Supplemental disclosures of non-cash investing and financing activities: ​ ​ ​ ​ Issuance of common stock in exchange for in-process research and development ​ $ 74,033 ​ $ — Liabilities assumed in Ayala asset acquisition ​ $ 2,041 ​ $ — Purchase of in-process research and development assets in accounts payable ​ $ 813 ​ $ — Public offering costs included in accounts payable ​ $ 437 ​ $ — Issuance of common stock to certain board of directors in lieu of accrued compensation ​ $ — ​ $ 221 Purchases of property and equipment in accounts payable ​ $ 594 ​ $ 223 ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements . ​ 6 Table of Contents IMMUNOME, INC. Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Nature of the business Organization Immunome, Inc., or the Company, is a biopharmaceutical company focused on the development of targeted oncology therapies. The Company believes that the pursuit of novel or underexplored targets will be central to the next generation of transformative therapies, and it is dedicated to developing targeted cancer therapies with first-in-class and best-in-class potential. The Company’s goal is to establish a broad pipeline of preclinical and clinical assets and successfully develop such assets into approved products for commercialization. To support that goal, the Company invests heavily in both business development and internal discovery platforms. Immunome is advancing a program pipeline comprising one clinical and three preclinical assets. The clinical asset is AL102, an investigational gamma secretase inhibitor, or GSI, currently under evaluation in a Phase 3 trial for the treatment of desmoid tumors that was acquired from Ayala Pharmaceuticals, Inc. on March 25, 2024. The preclinical assets are IM-1021, a receptor tyrosine kinase-like orphan receptor 1, or ROR1, antibody-drug conjugate, or ADC; IM-3050, a fibroblast activation protein, or FAP, targeted radioligand therapy, or RLT, candidate; and IM-4320, an anti-IL-38 immunotherapy candidate. On October 2, 2023, the Company completed its merger with Morphimmune Inc., or Morphimmune, a preclinical biotechnology company focused on developing targeted oncology therapies, and Morphimmune became a wholly owned subsidiary of Immunome. Liquidity The Company has incurred significant operating losses since inception and expects to continue to incur losses from operations for the foreseeable future as it pursues development of its therapeutic candidates and other programs. As of March 31, 2024, the Company had an accumulated deficit of $ 352.3 million, non-restricted cash and cash equivalents of $ 269.7 million, and marketable securities of $ 40.0 million. The Company has not generated any product revenue to date and does not expect to generate product revenue until it successfully completes development and obtains regulatory approval for at least one of its product candidates. Through March 31, 2024, the Company has funded its operations primarily through sales of equity securities and strategic partnerships and transactions as well as expense reimbursement s from a government contract that ended in 2022 . The Company expects that its existing cash, cash equivalents and marketable securities at March 31, 2024 are sufficient to fund its 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. Beyond that date, the Company may need to raise additional capital through a combination of equity offerings, debt financings, collaborations, strategic alliances, and licensing arrangements to achieve its longer-term business objectives. 7 Table of Contents 2. Summary of significant accounting policies Basis of presentation The accompanying unaudited interim financial statements have been prepared in accordance with the accounting principles generally accepted in the United States, or GAAP, and following the requirements of the Securities and Exchange Commission, or the SEC, for interim reporting. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these unaudited condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual financial statements and related notes included in the Company’s Form 10-K filed with the SEC on March 28, 2024, which provide a more complete discussion of the Company’s accounting policies and certain other information. The December 31, 2023 condensed consolidated balance sheet has been derived from the Company’s annual financial statements. These unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and include all adjustments that management believes to be necessary for a fair presentation of the Company’s financial information. Interim results are not necessarily indicative of results for a full year or any future interim period. Principles of consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the unaudited condensed consolidated financial statements and the accompanying notes. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates. The Company’s significant accounting estimates include, but are not necessarily limited to, the expected volatility used to estimate fair value of stock options, accrued research and development expenses, the fair value of acquired in-process research and development assets, and revenue recognition. Segment and geographic information Operating segments are defined as components of an entity about which separate discrete information is available and regularly reviewed by the chief operating decision maker, its Chief Executive Officer, in deciding how to allocate resources and in assessing performance. The Company has determined that it operates as one operating and reporting segment exclusively in the United States. Concentration of credit risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents and marketable securities. The Company maintains deposits in a financial institution in excess of government insured limits. Management believes that the Company is not exposed to significant credit risk as the Company’s deposits are held at a financial institution that management believes to be of high credit quality, and the Company has not experienced any losses on these deposits. Management also believes that the Company is not exposed to significant credit risk as it relates to marketable securities because the Company only invests in U.S government securities. Restricted cash Restricted cash represents collateral provided for a letter of credit issued as a security deposit in connection with the Company’s lease of its corporate facility in Bothell, Washington. Cash will be released from restriction upon termination of the lease. Restricted cash was $ 0.1 million at both March 31, 2024 and December 31, 2023. 8 Table of Contents Asset acquisitions Acquisitions of assets or a group of assets that do not meet the definition of a business are accounted for as asset acquisitions, with a cost accumulation model used to determine the cost of the acquisition. Common stock issued as consideration in an acquisition of assets is generally measured based on the acquisition date fair value of the equity interests issued. Direct transaction costs are recognized as part of the cost of an acquisition of assets. Intangible assets that are acquired in an asset acquisition for use in research and development activities that have an alternative future use are capitalized as in-process research and development, or IPR&D. Acquired IPR&D that has no alternative future use is expensed immediately as a component of in-process research and development expense in the condensed consolidated statements of operations and comprehensive loss. In addition to upfront consideration, acquisitions of assets may also include contingent consideration payments to be made for future milestone events or royalties on net sales of future products. The Company assesses whether such contingent consideration is subject to liability classification and fair value measurement or meets the definition of a derivative. Contingent consideration payments in an acquisition of assets not required to be accounted for as a liability at fair value are recognized when the contingency is resolved, and the consideration is paid or becomes payable. Contingent consideration payments made prior to regulatory approval are expensed as incurred. Net loss per share Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding for the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding for the period, including the effect of dilutive securities. As the Company was in a net loss position for the three months ended March 31, 2024 and 2023, diluted net loss per share is the same as basic net loss per share because the effects of potentially dilutive securities are antidilutive. The following potentially dilutive securities have been excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive (on an as-converted basis): ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2024 2023 Stock options outstanding ​ 8,531,683 ​ 2,493,410 Common stock warrants ​ 157,314 ​ 1,303,112 Unvested restricted stock awards ​ — ​ 20,834 ​ ​ 8,688,997 ​ 3,817,356 ​ Recent accounting standards not yet adopted In December 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2023-09, Improvements to Income Tax Disclosures , which updates income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in this update are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is still in the process of determining the effect this ASU will have on the condensed consolidated financial statements. 9 Table of Contents In November 2023, the FASB issued ASU 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures. ASU 2023-07 requires disclosure of incremental segment information on an interim and annual basis and provides new segment disclosure requirements for entities with a single reportable segment. ASU 2023-07 is effective for all public companies for fiscal years beginning after December 15, 2023, and interim periods within fiscal periods beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. The Company adopted annual requirements under ASU 2023-07 on January 1, 2024 and plans to adopt interim requirements under ASU 2023-07 on January 1, 2025. The Company will begin including financial statement disclosures in accordance with ASU 2023-07 in its Annual Report on Form 10-K for the year ended December 31, 2024. 3. Fair value measurement The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ​ Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following tables summarize the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2024 ​ Level Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash equivalents: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market funds 1 ​ $ 46,482 ​ $ — ​ $ — ​ $ 46,482 U.S. treasury securities 2 ​ ​ 219,101 ​ ​ 4 ​ ​ ( 1 ) ​ ​ 219,104 Marketable securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. treasury securities 2 ​ ​ 39,982 ​ ​ 1 ​ ​ — ​ ​ 39,983 Total financial assets ​ ​ $ 305,565 ​ $ 5 ​ $ ( 1 ) ​ $ 305,569 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ Level ​ Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash equivalents: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market funds 1 ​ $ 73,988 ​ $ — ​ $ — ​ $ 73,988 U.S. treasury securities 2 ​ ​ 22,993 ​ ​ — ​ ​ — ​ ​ 22,993 Marketable securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. treasury securities 2 ​ ​ 39,441 ​ ​ 22 ​ ​ — ​ ​ 39,463 Total financial assets ​ ​ $ 136,422 ​ $ 22 ​ $ — ​ $ 136,444 ​ The Company’s marketable securities consist of U.S. treasury debt securities with a contractual maturity date of 6 months . ​ ​ ​ 10 Table of Contents 4. Collaboration agreement with AbbVie In January 2023 , the Company entered into a Collaboration and Option Agreement, or the Collaboration Agreement, with AbbVie Global Enterprises Ltd., or AbbVie, pursuant to which the Company is using its discovery platform to discover and validate targets derived from patients with three specified tumor types, and antibodies that bind to such targets, which may be the subject of further development and commercialization by AbbVie. Pursuant to the terms of the Collaboration Agreement, the Company granted AbbVie an exclusive option to purchase all rights to each novel target-antibody pair, or a Validated Target Pair or VTP, that the Company generates that meets certain mutually agreed criteria, up to a maximum of 10 in total, for all human and non-human diagnostic, prophylactic and therapeutic uses throughout the world, including the development and commercialization of certain products, or Products, derived from the assigned VTP. AbbVie paid the Company a nonrefundable upfront payment of $ 30.0 million in January 2023 and will be required to pay certain additional platform access payments of up to $ 70.0 million in aggregate based on the Company’s use of its discovery platform in connection with activities under each stage of the research plan and delivery of VTPs to AbbVie. If AbbVie exercises its option to purchase a VTP, then AbbVie will be required to pay an option exercise fee in the low single-digit millions for each of up to 10 VTPs for which it exercises an option. For each Product, the Company is eligible to receive development and commercial based milestones of up to $ 120.0 million in the aggregate and sales milestones of up to $ 150.0 million in the aggregate for the achievement of specified levels of annual net sales. The Company is also eligible to receive tiered royalties at percentage rates in the low single digits on annual net sales of any Products that are commercialized by AbbVie. AbbVie’s obligation to pay royalties will terminate, on a Product-by-Product and country-by-country basis, upon the earlier of (a) the later of (i) 10 years following the first commercial sale for such Product in such country, or (ii) expiration of all valid claims of patent rights covering the Product in such country, and (b) the expiration of all applicable regulatory exclusivities for such Product in such country. AbbVie may terminate the Collaboration Agreement at any time for convenience upon a specified period of prior written notice. The Company determined that the Collaboration Agreement represents a contract with a customer and consists of one performance obligation to provide research and development services, or R&D services, to AbbVie. The Company evaluated the options to continue the R&D services and options to purchase licenses to each VTP and concluded that these options did not represent material rights. The Company determined the initial transaction price of the single performance obligation to be $ 30.0 million, as the variable consideration for additional R&D services, option exercise payments, and development milestone payments are all subject to constraint at contract inception. At each reporting period, the Company will reevaluate the variable consideration subject to constraint and, if necessary, will adjust its estimate of the overall transaction price. For the sales-based royalties, the Company will recognize revenue when the related sales occur. Revenue from the Collaboration Agreement will be recognized over the estimated performance of the R&D services using the cost-to-cost input method which the Company believes best depicts the transfer of control to the customer. Under the cost-to-cost input method, the extent of progress towards completion is measured based on the ratio of actual costs incurred to the total estimated costs expected upon satisfying the performance obligation. The Company recognized $ 1.0 million and $ 2.4 million of collaboration revenue for the three months ended March 31, 2024 and 2023, respectively. The following table summarizes the change in deferred revenue (in thousands): ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2024 Balance as of December 31, 2023 ​ $ 15,982 Recognition of revenue ​ ( 1,029 ) Balance as of March 31, 2024 ​ $ 14,953 ​ 11 Table of Contents As of March 31, 2024, the Company expects to recognize the deferred revenue associated with the non-refundable upfront fee over the estimated research and development period of approximately 1.25 years. 5. Balance sheet components Accrued expenses and other current liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2024 December 31, 2023 Research and development ​ $ 6,445 ​ $ 1,680 Compensation and related benefits ​ ​ 1,032 ​ ​ 2,734 Severance accruals ​ ​ 1,485 ​ ​ 1,436 Professional fees ​ ​ 1,408 ​ ​ 1,670 Short-term operating lease liability ​ ​ 419 ​ ​ 310 Other ​ 55 ​ 195 Total accrued expenses and other current liabilities ​ $ 10,844 ​ $ 8,025 ​ ​ ​ ​ ​ ​ ​ ​ 6. Commitments and contingencies Employment agreements The Company entered into employment agreements, or the Employment Agreements, with certain 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 respective Employment Agreements (subject to the payment of severance upon certain terminations) and provide for annual pay adjustments 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, or 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. The Company made matching contributions of $ 0.1 million to the 401(k) Plan for each of the three months ended March 31, 2024 and 2023. 7. Asset acquisitions Ayala Pharmaceuticals On March 25, 2024, the Company and Ayala Pharmaceuticals, Inc., or Ayala, completed an Asset Purchase Agreement, or the Ayala Purchase Agreement, initially entered into in February 2024, pursuant to which the Company acquired Ayala’s AL101 and AL102 programs and assumed certain liabilities associated with the acquired assets. The upfront consideration included (i) payment of approximately $ 20.0 million in cash, and (ii) the issuance of 2,175,489 unregistered shares of the Company’s common stock at an aggregate fair value of $ 50.6 million on the acquisition date. The fair value of the shares issued to Ayala was based on the closing stock price of the Company’s common stock on March 25, 2024 of $ 24.00 per share less a discount of 3.0 % related to unregistered share restrictions. The Company accounted for the transaction as an asset acquisition as substantially all of the fair value of the gross assets acquired was concentrated in two programs that were grouped as a single identifiable IPR&D asset. The assets acquired in the transaction were measured based on the estimated fair value of the consideration paid of $ 71.3 million, which included direct transaction costs of $ 0.7 million. 12 Table of Contents The consideration paid and the relative fair values of the assets acquired and liabilities assumed were as follows (in thousands): ​ ​ ​ ​ ​ ​ Amount Common stock issued to Ayala ​ $ 50,645 Upfront consideration paid to Ayala ​ ​ 20,039 Transaction costs ​ ​ 657 Consideration paid ​ $ 71,341 ​ ​ ​ ​ Assets acquired: ​ ​ ​ In-process research and development ​ $ 73,382 Total assets acquired ​ $ 73,382 Liabilities assumed: ​ ​ ​ Accrued expenses ​ $ 2,041 Total liabilities assumed ​ $ 2,041 Net assets acquired ​ $ 71,341 ​ The cost attributable to the IPR&D was expensed in the Company’s condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2024 since the acquired IPR&D had no alternative future use. Under the Ayala Purchase Agreement, the Company will be required to pay Ayala up to $ 37.5 million in the aggregate upon the achievement of certain development, regulatory and commercial milestone events. Any potential future milestone payment amounts will be accrued when the related contingency is resolved, and the milestone consideration becomes payable. Atreca In December 2023, the Company entered into an agreement with Atreca, Inc., or Atreca, on the terms of a cash acquisition pursuant to which the Company would acquire certain antibody-related assets and materials for an upfront payment of $ 5.5 million and up to $ 7.0 million in clinical development milestones. The closing of the transaction is subject to customary conditions, including the approval of Atreca’s stockholders. As of March 31, 2024, the transaction had not closed. Morphimmune On October 2, 2023, the Company completed its merger with Morphimmune, or the Merger, and acquired all of the outstanding equity interests of Morphimmune in exchange for 8,835,710 shares of the Company's common stock, based upon an exchange ratio of 0.3042 shares of the Company’s common stock for each outstanding share of Morphimmune capital stock. Under the terms of the Agreement and Plan of Merger and Reorganization dated as of June 28, 2023, the Company assumed Morphimmune’s 2020 Equity Incentive Plan and all outstanding options to purchase shares of Morphimmune capital stock were converted into 2,472,563 options to purchase shares of the Company’s common stock with a weighted average exercise price of $ 1.29 per share. All other terms and conditions associated with these options, including vesting and exercisability, are governed by the original terms and conditions of the Morphimmune 2020 Equity Incentive Plan. 13 Table of Contents The Company accounted for the acquisition of Morphimmune as an asset acquisition as substantially all of the fair value of the gross assets acquired was concentrated in two programs that were grouped as a single identifiable IPR&D asset. The assets acquired in the transaction were measured based on the estimated fair value of the consideration paid of $ 88.0 million, which included direct transaction costs of $ 0.8 million. The consideration paid consisted of $ 72.5 million of the Company’s common stock based on the closing stock price on October 2, 2023 of $ 8.20 per share and $ 14.7 million related to the value of Morphimmune’s share-based awards assumed by Immunome as of the same date. The cost of the acquisition allocated to the acquired IPR&D of $ 80.8 million was expensed since the acquired IPR&D had no alternative future use. 8. Licensing arrangements Bristol-Myers Squibb In connection with the closing of the Ayala Purchase Agreement in March 2024, the Company assumed a license agreement, the BMS License Agreement, with Bristol-Myers Squibb Company, or BMS, pursuant to which the Company obtained a worldwide, non-transferable, royalty-bearing, exclusive, sublicensable, license under certain patent rights and know-how of BMS to research, discover, develop, make, have made, use, sell, offer to sell, export, import and commercialize AL101 and AL102, or the BMS Licensed Compounds, and products containing AL101 or AL102, or the BMS Licensed Products, for all uses including the prevention, treatment or control of any human or animal disease, disorder or condition. Under the BMS License Agreement, the Company is obligated to use commercially reasonable efforts to develop at least one BMS Licensed Product. The Company is also required to use commercially reasonable efforts to obtain regulatory approvals in certain major market countries for at least one BMS Licensed Product, as well as to affect the first commercial sale of and commercialize each BMS Licensed Product after obtaining such regulatory approval. The Company is required to pay BMS up to approximately $ 142.0 million in the aggregate upon the achievement of certain clinical development or regulatory milestones for AL101 and AL102 across multiple indications. In addition, the Company is required to pay BMS up to $ 50.0 million in the aggregate upon the achievement of certain commercial milestones for each BMS Licensed Product. Any potential future milestone payment amounts will be accrued when the related contingency is resolved, and the milestone consideration becomes payable. BMS is also eligible to receive tiered royalties ranging from a high single-digit to a low teen percentage on annual worldwide net sales of any BMS Licensed Products. Royalty payments will be expensed in the period in which the underlying revenues are earned. BMS has the right to terminate the BMS License Agreement in its entirety if the Company fails to fulfill its development and commercialization obligations within a defined period of time following written notice by BMS. The Company has the right to terminate the BMS License Agreement for convenience upon prior written notice to BMS. Upon termination of the BMS License Agreement by the Company for convenience or by BMS, the Company will grant an exclusive, non-transferable, sublicensable, worldwide license to BMS for certain patent rights that are necessary to develop, manufacture or commercialize the BMS Licensed Compounds or BMS Licensed Products. In exchange for such license, BMS will be obligated to pay the Company a low single-digit percentage royalty on net sales of the BMS Licensed Compounds and/or BMS Licensed Products by it or its affiliates, licensees or sublicensees, provided that the termination occurred after a specified developmental milestone for such BMS Licensed Compounds and/or BMS Licensed Products. Zentalis Pharmaceuticals On January 5, 2024, the Company entered into a license agreement with Zentalis Pharmaceuticals, Inc., or the Zentalis License Agreement, pursuant to which the Company received an exclusive, worldwide, royalty-bearing, sublicensable license under certain intellectual property relating to Zentalis’ proprietary antibody-drug conjugate, or ADC, platform technology, ROR1 antibodies and ADCs targeting ROR1 to exploit products covered by or incorporating the licensed intellectual property rights. Under the Zentalis License Agreement, the Company is required to use commercially reasonable efforts to develop an ADC targeting ROR1, two additional ADCs, and commercialize any product that has received regulatory approval. 14 Table of Contents As up front consideration for the license, the Company paid to Zentalis $ 15.0 million in cash and issued 2,298,586 unregistered shares of its common stock at an aggregate fair value of $ 23.4 million. The fair value of the common stock issued to Zentalis was based on the closing stock price of the Company’s common stock on January 5, 2024 of $ 11.12 per share less a discount of 8.5 % related to unregistered share restrictions. The Company accounted for the transaction as an asset acquisition as substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable IPR&D asset. The consideration paid to acquire the license and intellectual property rights, which included transaction costs of $ 0.2 million, was immediately recognized as IPR&D expense in the Company’s condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2024 since the acquired IPR&D had no alternative future use. Under the Zentalis License Agreement, the Company is obligated to pay Zentalis an aggregate of up to $ 150.0 million in development and regulatory milestones for the first product containing an ADC targeting ROR1, or a ROR1 ADC Product, to achieve such milestones, and commercial milestones on ROR1 ADC Products. The Company is also obligated to pay Zentalis mid-to-high single digit royalties on ROR1 ADC Products. In addition, the Company is obligated to pay Zentalis up to $ 25.0 million in development and regulatory milestones for the first product from each of the first five additional development programs using the licensed platform technology to generate products, and mid-single digit royalties on products from each such program. Any potential future milestone payment amounts will be accrued when the related contingency is resolved, and the milestone consideration becomes payable. The Company’s royalty payment obligation will commence, on a product-by-product and country-by-country basis, on the first commercial sale of such product in such country and will expire on the latest of (a) the 10-year anniversary of such first commercial sale for such product in such country, (b) the expiration of regulatory exclusivity for such product in such country, and (c) the expiration of the last-to-expire valid claim of a licensed patent covering such product in such country. Royalty payments will be expensed in the period in which the underlying revenues are earned. The Zentalis License Agreement will continue until the expiration of all royalty payment obligations. The Zentalis License Agreement may be terminated early by (a) either party in its entirety upon (i) the other party’s uncured material breach, subject to a notice and cure period, (ii) any insolvency event of the other party or (iii) prolonged force majeure, (b) the Company, either in its entirety or in part, for convenience upon a specified period prior written notice, or (c) Zentalis (i) in its entirety if the Company challenges one of the licensed patents or (ii) fails to meet certain development activity benchmarks within specified time periods. Purdue Research Foundation Upon closing of the Merger, the Company assumed certain license agreements that Morphimmune had entered into prior to the Merger. In January 2022, Morphimmune entered into a Master License Agreement, or the Purdue License Agreement, with Purdue Research Foundation, or PRF. Under the Purdue License Agreement, PRF granted Morphimmune a royalty-bearing, transferable, worldwide, exclusive license, sublicensable through multiple tiers, under certain intellectual property owned by PRF to research, develop, manufacture, and commercialize the licensed products in all fields of use with limited exceptions. Under the Purdue License Agreement, Morphimmune paid PRF a one-time upfront payment of $ 0.2 million upon execution and $ 0.1 million on each of the first and second anniversary of the effective date of the Purdue License Agreement. During the period commencing on the date of first commercial sale of a licensed product and ending upon the date of expiration of the last valid claim of the licensed patents covering such licensed product in a country, referred to as the royalty term, the Company will pay PRF an earned unit royalty of a low single-digit percentage on gross receipts from sale of the licensed product, and beginning with the first sale of a licensed product, a tiered minimum annual royalty from the low to mid six-digit figure range less the unit royalties due for the annual period. Upon the achievement of specified development and commercialization milestones, the Company will pay PRF the milestone payments as specified in the Purdue License Agreement, which may be up to $ 3.8 million in the aggregate. The Company is also required to pay PRF an annual maintenance fee ranging from a low five-digit figure to a low six-digit figure prior to first sale of a licensed product and a low double-digit percentage of sublicense income received for sublicenses of licensed intellectual property, the percentage depending upon the timing of execution of the sublicense. 15 Table of Contents The Purdue License Agreement expires on a licensed product-by-licensed product and country-by-country basis, upon expiration of the royalty term for such licensed product for the applicable country. The Company may terminate the Purdue License Agreement upon at least one month’s prior written notice to PRF. PRF may terminate the Purdue License Agreement and the licenses granted thereunder if the Company fails to cure a payment default or other material breach of the Purdue License Agreement after written notice from PRF, or if Morphimmune becomes insolvent. Other License Agreements The Company has entered into various other license agreements to further discover, develop and commercialize certain technologies and treatments. As of March 31, 2024, the Company may need to pay developmental and regulatory milestone payments of up to approximately $ 6.0 million. In addition, the Company may need to pay royalty rates on net product sales, a portion of certain sublicense and collaboration payments, and certain commercial milestone payments of up to approximately $ 7.5 million, if any. The Company did not make any development, regulatory, or commercial milestone payments under these licensing agreements during the three months ended March 31, 2024 and 2023. 9. Leases The Company currently leases approximately 11,000 square feet of office and laboratory space in Exton, Pennsylvania under a lease that expires on March 31, 2025, and approximately 14,000 square feet of office and laboratory space in Bothell, Washington, under a lease that expires on October 31, 2028. Supplemental balance sheet information related to leases was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2024 ​ ​ December 31, 2023 Operating leases: ​ ​ ​ ​ ​ Operating lease right-of-use assets $ 1,458 ​ $ 1,564 ​ ​ ​ ​ ​ ​ Operating lease liabilities, current portion $ 419 ​ $ 310 Operating lease liabilities, net of current portion ​ 1,206 ​ ​ 1,340 Total operating lease liabilities $ 1,625 ​ $ 1,650 ​ Operating lease liabilities, current portion is included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets. For each of the three months ended March 31, 2024 and 2023, the Company recorded operating lease expense of $ 0.1 million. Under the terms of the lease agreements, the Company is also responsible for certain variable lease payments that are not included in the measurement of the lease liability. The Company did not incur significant variable lease costs for the three months ended March 31, 2024 and 2023. Other information related to the Company’s operating leases was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2024 ​ ​ December 31, 2023 Weighted-average remaining lease term (in years) ​ 4.20 ​ ​ 4.81 Weighted-average discount rate ​ 8.3 % ​ ​ 8.3 % ​ Supplemental cash flow information related to the Company’s operating leases was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2024 2023 Cash paid for operating lease liabilities $ 63 ​ $ 61 ​ 16 Table of Contents The Company’s future minimum lease payments were as follows as of March 31, 2024 (in thousands): ​ ​ ​ ​ ​ Years ending December 31, Amount 2024 (represents remaining nine months in 2024) ​ $ 388 2025 ​ 464 2026 ​ ​ 412 2027 ​ ​ 422 2028 ​ ​ 433 Total lease payments ​ ​ 2,119 Less imputed interest ​ ​ ( 494 ) Present value of operating lease liabilities ​ $ 1,625 ​ ​ 10. Common stock Common stock The holders of common stock are entitled to one vote for each share of common stock. The holders of common stock shall be entitled to receive dividends out of funds legally available if and when declared by the Company’s board of directors. In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, the holders of common stock shall be entitled to share ratably in the remaining assets of the Company available for distribution. The Company has reserved the following shares of common stock for issuance, on an as-converted basis, as follows: ​ ​ ​ ​ ​ ​ March 31, 2024 ​ December 31, 2023 Stock options issued and outstanding under the Plans 8,531,683 ​ 7,978,291 Common stock warrants outstanding 157,314 ​ 500,000 Remaining shares available for issuance under the Plans 5,327,876 ​ 4,250,303 Remaining shares available for issuance under the ESPP 906,251 ​ 473,733 Total reserved common stock 14,923,124 ​ 13,202,327 ​ Follow-on public offering In February 2024, the Company completed a follow-on public offering and issued 11,500,000 shares of its common stock at $ 20.00 per share for net proceeds of $ 215.4 million, after deducting underwriting discounts and commissions and offering expenses. Warrants to acquire shares of common stock The Company had 157,314 and 500,000 issued and outstanding common stock warrants as of March 31, 2024 and December 31 2023, respectively, with an exercise price of $ 10.00 per share and an expiration date of April 28, 2024. During the three months ended March 31, 2024, warrants to purchase 342,686 shares of common stock were exercised for proceeds of $ 3.4 million. No warrants were exercised during the three months ended March 31, 2023. ​ 11. Share-based compensation 2020 Equity Incentive Plan In September 2020, the Company adopted the 2020 Equity Incentive Plan, or the 2020 Plan, which supersedes all prior equity incentive plans. No further awards will be granted under the 2018 Equity Incentive Plan, or 2018 Plan. Awards forfeited, cancelled, or repurchased from the above plans are returned to the pool of shares of common stock available for issuance under the 2020 Plan. On January 1, 2024, the shares of common stock authorized for issuance under the 2020 Plan increased by 1,730,071 shares. As of March 31, 2024, there were 4,398,174 shares available for issuance under the 2020 Plan. 17 Table of Contents On October 2, 2023, the Morphimmune 2020 Equity Incentive Plan, or the Morphimmune Plan, (or collectively with the 2020 Plan, the Plans), was assumed by the Company in conjunction with the Merger (Note 7). There were 929,702 shares available for issuance under the Morphimmune Plan as of March 31, 2024. 2020 Employee Stock Purchase Plan The Company adopted the 2020 Employee Stock Purchase Plan, or ESPP, in September 2020. On January 1, 2024, the shares of common stock authorized for issuance under the ESPP increased by 432,518 shares. As of March 31, 2024, there were 906,251 shares available for issuance under the ESPP. No shares of common stock have been issued under the ESPP as of March 31, 2024. Stock options A summary of option activity under the Plans during the three months ended March 31, 2024 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ Weighted ​ average ​ Aggregate ​ ​ ​ ​ average ​ remaining ​ Intrinsic ​ ​ Number of ​ exercise price ​ contractual ​ Value ​ shares per share term (years) ​ (in thousands) Outstanding at December 31, 2023 7,978,291 ​ $ 6.15 ​ 8.62 ​ $ 45,360 Granted ​ 1,129,434 ​ ​ 19.86 ​ ​ ​ ​ ​ Exercised ( 137,112 ) ​ ​ 6.22 ​ ​ ​ ​ ​ Forfeited ​ ( 344,339 ) ​ ​ 8.26 ​ ​ ​ ​ ​ Expired ( 94,591 ) ​ ​ 20.86 ​ ​ ​ ​ ​ Outstanding at March 31, 2024 8,531,683 ​ $ 7.71 ​ 8.33 ​ $ 146,173 Exercisable at March 31, 2024 3,115,238 ​ $ 5.38 ​ 6.62 ​ $ 61,212 ​ Aggregate intrinsic value in the above table is calculated as the difference between the exercise price of the options and the Company’s fair value of its common stock as of period end. The weighted-average grant date fair value of stock options granted during the three months ended March 31, 2024 and 2023 was $ 14.62 and $ 4.18 per share, respectively. The aggregate intrinsic value of options exercised during the three months ended March 31, 2024 was $ 2.5 million. No options were exercised during the three months ended March 31, 2023. The weighted average assumptions used in the Black-Scholes option-pricing model for stock options granted were: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2024 2023 Expected volatility ​ 84.1 % ​ 87.9 % Risk-free interest rate ​ 4.1 % ​ 3.9 % Expected term (in years) ​ 6.06 ​ 5.96 ​ Expected dividend yield ​ — % ​ — % ​ Share-based compensation expense recorded in the condensed consolidated statements of operations and comprehensive loss is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2024 2023 Research and development ​ $ 383 ​ $ 430 General and administrative ​ 1,776 ​ 794 Total share-based compensation expense ​ $ 2,159 ​ $ 1,224 ​ 18 Table of Contents Unrecognized share-based compensation related to stock options was $ 37.1 million as of March 31, 2024 and is expected to be recognized over a weighted average period of 1.9 years. ​ 12. Subsequent events 2024 ATM Agreement On May 14, 2024, the Company entered into a sales agreement, or the 2024 ATM Agreement, with TD Securities (USA) LLC, or TD Cowen, as sales agent, pursuant to which the Company may offer and sell from time to time shares of its common stock having an aggregate offering price of up to $ 200.0 million, or the ATM Shares. The sales of the ATM Shares, if any, will be made by any method permitted that is deemed to be an “at-the-market” equity offering as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, including sales made directly on or through the Nasdaq Capital Market. The Company has 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. The Company has not yet sold any ATM Shares under the 2024 ATM Agreement. ​ 19 Table of Contents