What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-12 compared with 2024-05-14 · 127 added, 92 removed, 346 unchanged (39% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

March 31, 2024

June 30, 2024

December 31, 2023

17 unchanged sentences

Total liabilities

Commitments and contingencies (Note 6)

Stockholders’ equity:

1 unchanged sentence

10,000,000 shares authorized;

no shares issued or outstanding at March 31, 2024 and December 31, 2023

no shares issued or outstanding at June 30, 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

300,000,000 shares authorized at June 30, 2024 and December 31, 2023;

60,013,655 and 43,251,778 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

7 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Collaboration revenue

26 unchanged sentences

Balance at March 31, 2024

Share-based compensation expense

Exercise of stock options

Exercise of common stock warrants

Unrealized loss on marketable securities

Balance at June 30, 2024

Stockholders'

5 unchanged sentences

Balance at March 31, 2023

Share-based compensation expense

Vesting of restricted stock awards

Balance at June 30, 2023

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements .

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

2 unchanged sentences

Amortization of right-of-use asset

Accretion of discount related to marketable securities

Accretion of discounts on marketable securities

Share-based compensation expense

8 unchanged sentences

Cash flows from investing activities:

Cash paid in connection with Ayala asset acquisition

Cash paid in connection with Zentalis license agreement

Purchases of in-process research and development assets

Purchases of marketable securities

Maturities of marketable securities

Purchases of property and equipment

14 unchanged sentences

Total cash, cash equivalents, and restricted cash

IMMUNOME, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

Six Months Ended June 30,

Supplemental disclosures of non-cash investing and financing activities:

Issuance of common stock in exchange for in-process research and development

Liabilities assumed in Ayala asset acquisition

Issuance of common stock in exchange for in-process research and development assets

Net liabilities assumed from purchases of in-process research and development assets

Purchase of in-process research and development assets in accounts payable

Public offering costs included in accounts payable

Right-of-use assets obtained in exchange for operating lease liabilities

Issuance of common stock to certain board of directors in lieu of accrued compensation

Purchases of property and equipment in accounts payable

Offering costs in accounts payable and accrued expenses and other current liabilities

Purchases of property and equipment in accounts payable and accrued expenses and other current liabilities

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

Nature of the business

Immunome, Inc., or the Company, is a biopharmaceutical company focused on the development of targeted oncology therapies.

Immunome, Inc., or the Company or Immunome, is a biotechnology 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.

The Company’s goal is to establish a broad pipeline of preclinical and clinical assets and develop these assets into approved products for commercialization.

To support that goal, the Company invests heavily in both business development and internal discovery programs.

Immunome is advancing a pipeline comprising one clinical and two 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.

AL102 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.

The preclinical assets are IM-1021, a receptor tyrosine kinase-like orphan receptor 1, or ROR1, antibody-drug conjugate, or ADC, and IM-3050, a fibroblast activation protein, or FAP, targeted radioligand therapy, or RLT.

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.

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.

As of June 30, 2024, the Company had an accumulated deficit of $ 388.4 million, cash and cash equivalents of $ 165.3 million, and marketable securities of $ 113.0 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.

Through June 30, 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 June 30, 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.

14 unchanged sentences

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.

The Company’s significant accounting estimates include, but are not necessarily limited to, revenue recognition, the estimated fair value of share-based awards, accrued research and development expenses and the fair value of acquired in-process research and development assets.

Segment and geographic information

7 unchanged sentences

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.

Restricted cash represents collateral provided for a letter of credit issued as a security deposit in connection with one of the Company’s leased facilities.

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.

Restricted cash was $ 0.1 million at both June 30, 2024 and December 31, 2023.

Asset acquisitions

8 unchanged sentences

Contingent consideration payments made prior to regulatory approval are expensed as incurred.

Research and development expenses

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 and clinical development expenses, including manufacture and testing of clinical supplies, and amounts incurred under license agreements, consulting agreements and other contracted services.

Research and development costs are expensed as incurred.

Non-refundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized as prepaid expenses until the related goods are delivered or services are performed.

Such payments are evaluated for current or long-term classification based on when such services are expected to be received.

The Company estimates preclinical, clinical trial, and other research and development expenses based on the services performed pursuant to contracts with research institutions, contract manufacturing organizations, and third-party service providers that conduct and manage preclinical studies and clinical trials and perform research services on its behalf.

The Company records these costs of research and development activities based on the estimated services provided but not yet invoiced and includes these costs in accrued expenses and other current liabilities in the consolidated balance sheets and in research and development expense in the consolidated statements of operations.

The Company accrues these costs based on factors such as estimates of the work completed in accordance with agreements established with its third-party service providers, actual levels of patient enrollment and reported activities at clinical trial sites.

The Company makes judgments and estimates in determining the accrued expenses balance.

As actual costs become known, the Company adjusts its accrued expenses.

The Company has not experienced any material differences between accrued costs and actual costs incurred.

However, the status and timing of actual services performed may vary from the Company’s estimates, resulting in adjustments to expenses in future periods.

Changes in these estimates that result in material changes to the Company’s accrued expenses could materially affect the Company’s results of operations.

Net loss per share

1 unchanged sentence

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.

As the Company was in a net loss position for the three and six months ended June 30, 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,

Stock options outstanding

20 unchanged sentences

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

June 30, 2024

Amortized Cost

18 unchanged sentences

The Company’s marketable securities consist of U.S.

treasury debt securities with a contractual maturity date of 6 months .

treasury debt securities with a contractual maturity date of up to 6 months .

Collaboration agreement with AbbVie

14 unchanged sentences

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 Company recognized collaboration revenue of $ 2.4 million and $ 4.3 million for the three months ended June 30, 2024 and 2023, respectively, and $ 3.4 million and $ 6.6 million for the six months ended June 30, 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

Six Months Ended June 30, 2024

Beginning balance

Deferral of revenue

Recognition of revenue

Balance as of March 31, 2024

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.

Balance at the end of the period

As of June 30, 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 1.0 year.

Balance sheet components

1 unchanged sentence

Accrued expenses and other current liabilities consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

2 unchanged sentences

Severance accruals

Professional fees

Professional services and consulting

Short-term operating lease liability

Total accrued expenses and other current liabilities

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

2 unchanged sentences

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.

The Company made matching contributions to the 401(k) Plan of $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2024, respectively, and $ 0.1 million for both the three and six months ended June 30, 2023.

Asset acquisitions

On May 17, 2024, the Company and Atreca, Inc., or Atreca, completed an Asset Purchase Agreement, or the Atreca Purchase Agreement, initially entered into in December 2023, pursuant to which the Company acquired certain antibody-related assets and materials.

No liabilities were assumed under the Atreca Purchase Agreement as of the acquisition date.

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 group of similar identifiable IPR&D assets.

The total cost of the acquisition of $ 5.7 million, which consisted of an upfront payment of $ 5.5 million and direct transaction costs of $ 0.2 million, was immediately expensed in the Company’s condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2024 since the acquired IPR&D had no alternative future use.

Under the Atreca Purchase Agreement, the Company will be required to pay Atreca up to $ 7.0 million in the aggregate upon the achievement of certain clinical development milestone events.

Any potential future milestone payment amounts will be accrued when the related contingency is resolved and the milestone consideration becomes payable.

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.

On March 25, 2024, the Company and Ayala Pharmaceuticals, Inc., or Ayala, completed an Asset Purchase Agreement, or the Ayala Purchase Agreement, that was 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.

9 unchanged sentences

In-process research and development

Other long-term assets

Total assets acquired

3 unchanged sentences

Net assets acquired

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.

The cost attributable to the IPR&D was expensed in the Company’s condensed consolidated statements of operations and comprehensive loss for the six months ended June 30, 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.

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.

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.

22 unchanged sentences

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.

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.

As upfront 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.

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 six months ended June 30, 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.

10 unchanged sentences

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.

Under the Purdue License Agreement, the Company is obligated to pay PRF a low single-digit royalty on gross receipts from the sale of licensed products, 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.

In addition, the Company is obligated to pay PRF up to $ 3.8 million in the aggregate upon the achievement of specified development and commercialization milestones.

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.

4 unchanged sentences

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.

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.

Under the terms of these agreements, the Company may need to pay certain development, regulatory, and commercial milestones payments and royalties on product sales, if any.

Any potential future milestone payment amounts will be accrued when the related contingency is resolved and the milestone consideration becomes payable.

Royalty payments will be expensed in the period in which the underlying revenues are earned.

The Company currently leases approximately 29,000 square feet of office and laboratory space in Bothell, Washington, including 15,000 square feet of space that was added in May 2024 under an amended lease agreement, and approximately 11,000 square feet of office and laboratory space in Exton, Pennsylvania.

The Bothell lease expires on January 31, 2029, and includes two five-year renewal options that are not included in the lease term as it is not reasonably certain that they will be exercised.

The Exton lease expires on March 31, 2025.

Supplemental balance sheet information related to leases was as follows (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

5 unchanged sentences

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.

The Company recorded operating lease expense of $ 0.2 million and $ 0.3 million for the three and six months ended June 30, 2024, respectively, and $ 0.1 million for both the three and six months ended June 30, 2023.

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.

The Company did not incur significant variable lease costs for the three and six months ended June 30, 2024 and 2023.

Other information related to the Company’s operating leases was as follows:

March 31, 2024

June 30, 2024

December 31, 2023

2 unchanged sentences

Supplemental cash flow information related to the Company’s operating leases was as follows (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Cash paid for operating lease liabilities

The Company’s future minimum lease payments were as follows as of March 31, 2024 (in thousands):

The Company’s future minimum lease payments were as follows as of June 30, 2024 (in thousands):

Years ending December 31,

2024 (represents remaining nine months in 2024)

2024 (represents remaining six months in 2024)

2028 and thereafter

Total lease payments

Less imputed interest

Imputed interest

Tenant improvement allowance not yet received

Present value of operating lease liabilities

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 holders of common stock are 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 are 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

June 30, 2024

December 31, 2023

6 unchanged sentences

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.

2024 ATM Agreement

On May 14, 2024, the Company entered into an “at the market” sales agreement, or the 2024 ATM Agreement, with TD Securities (USA) LLC, or TD Cowen, as sales agent, pursuant to which 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 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.

No shares of common stock have been sold under the 2024 ATM Agreement as of June 30, 2024.

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.

The Company had 500,000 issued and outstanding common stock warrants as of December 31, 2023 with an exercise price of $ 10.00 per share and an expiration date of April 28, 2024.

During the three and six months ended June 30, 2024, warrants to purchase 30,371 and 373,057 shares of common stock were exercised for proceeds of $ 0.3 million and $ 3.7 million, respectively.

No warrants were exercised during the three and six months ended June 30, 2023.

On April 28, 2024, the remaining 126,943 common stock warrants expired and no warrants were issued and outstanding as of June 30, 2024.

Share-based compensation

4 unchanged sentences

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.

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.

As of June 30, 2024, there were 4,180,424 shares available for issuance under the 2020 Plan.

On October 2, 2023, the Morphimmune 2020 Equity Incentive Plan, or the Morphimmune Plan, 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 June 30, 2024.

Stock Options Granted for Chief Executive Officer

On June 28, 2023, Clay Siegall was granted 2,137,080 options to purchase shares of the Company’s common stock at an initial exercise price of $ 5.91 per share, or the Inducement Grant.

The options vest over time during Dr.

Siegall’s continued employment, which commenced on October 2, 2023, in connection with the closing of the Merger.

25 % of the options granted vest after one year of employment with the Company, and the remaining 75 % vest monthly over the 36 months immediately following the one-year anniversary.

The Inducement Grant, the Morphimmune Plan and the 2020 Plan are collectively refered to as the Plans.

2020 Employee Stock Purchase Plan

1 unchanged sentence

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.

As of June 30, 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 June 30, 2024.

Stock options

A summary of option activity under the Plans during the three months ended March 31, 2024 is as follows:

A summary of option activity under the Plans during the six months ended June 30, 2024 is as follows:

exercise price

1 unchanged sentence

Outstanding at December 31, 2023

Outstanding at March 31, 2024

Exercisable at March 31, 2024

Outstanding at June 30, 2024

Exercisable at June 30, 2024

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 grant date fair value of stock options granted during the six months ended June 30, 2024 and 2023 was $ 13.49 and $ 3.67 per share, respectively.

The aggregate intrinsic value of options exercised during the six months ended June 30, 2024 was $ 5.9 million.

No options were exercised during the six months ended June 30, 2023.

The weighted average assumptions used in the Black-Scholes option-pricing model for stock options granted were:

Three Months Ended March 31,

Six Months Ended June 30,

Expected volatility

3 unchanged sentences

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,

Three Months Ended June 30,

Six Months Ended June 30,

Research and development

1 unchanged sentence

Total share-based compensation expense

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.

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.

Unrecognized share-based compensation related to stock options was $ 43.7 million as of June 30, 2024 and is expected to be recognized over a weighted average period of 1.8 years.

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 1. Financial Statements