What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2024-08-12 compared with 2024-05-14 · 38 added, 43 removed, 1345 unchanged (6% of the section changed)

12 unchanged sentences

these decisions may prove to be wrong and may adversely impact our business.

● We may fail to realize the business benefits anticipated as a result of completed or pending strategic transactions.

● Clinical trials are expensive, time-consuming and difficult to design and implement.

2 unchanged sentences

● Because we may rely on third parties for manufacturing, supply and testing, some of which may be sole source vendors, for preclinical and clinical development materials and commercial supplies, our supply may become limited or interrupted or may not be of satisfactory quantity or quality.

● There is no guarantee that our collaboration with AbbVie will result in the successful discovery and validation of targets for further development and commercialization by AbbVie.

● It is difficult and costly to protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection.

● We may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business.

● Others may challenge inventorship or claim an ownership interest in our intellectual property which could expose us to litigation and have a significant adverse effect on our prospects.

● If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

● We may fail to realize the business benefits anticipated as a result of completed or pending strategic transactions.

● The market price of our common stock is expected to be volatile, and purchasers of our common stock could incur substantial losses.

12 unchanged sentences

Since our inception, we have devoted substantially all of our resources to research and development, raising capital, pursuing strategic transactions, building our management team and building our intellectual property portfolio, and we have incurred significant operating losses.

As of March 31, 2024, we had an accumulated deficit of $352.3 million.

Our net loss for the year ended December 31, 2023 was $106.8 million and $129.5 million for the three months ended March 31, 2024.

In 2023, the net loss included $80.8 million of in-process research and development (IPR&D) expense in relation to our acquisition of Morphimmune, which occurred in October 2023.

In the first quarter of 2024, the net loss included $112.0 million of IPR&D expense inclusive of $73.4 million in relation to our asset purchase agreement with Ayala, and $38.6 million in relation to our licensing agreement with Zentalis.

Substantially all our losses have resulted from IPR&D expense, from expenses incurred in connection with our research and development programs, and from general and administrative costs associated with our operations.

As of June 30, 2024, we had an accumulated deficit of $388.4 million.

Our net loss for the year ended December 31, 2023 was $106.8 million and $165.6 million for the six months ended June 30, 2024.

To date, we have not generated any revenue from product sales, and we have not identified or sought or obtained regulatory approval for the marketing or sale of any product.

23 unchanged sentences

Prior to obtaining approval to commercialize a product candidate in the United States or elsewhere, we or our collaborators must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses.

In 2022, we advanced IMM-BCP-01 into Phase 1 clinical trials for the treatment of SARS-CoV-2, but we since decided to cease further development of IMM-BCP-01 until we identify a partner to continue trials and further development.

In 2022, we advanced IMM-BCP-01 into Phase 1 clinical trials for the treatment of SARS-CoV-2, but we since decided to cease further development of IMM-BCP-01.

As such, AL102 is currently our only clinical trial candidate.

We acquired this asset and have not yet conducted or completed any clinical trials for our current development candidates previously.

We acquired this asset and have not yet conducted or completed any clinical trials for any of our other current development candidates.

We also have limited experience as a company in preparing and submitting marketing applications and have not previously submitted an NDA or other comparable foreign regulatory submission for any product candidate.

14 unchanged sentences

In addition, we incur additional costs associated with operating as a public company.

Based on our current operating plan, we expect that our existing cash, cash equivalents and marketable securities as of March 31, 2024 will enable us to fund our current and planned operating expenses and capital expenditures for at least 12 months from the filing date of this Quarterly Report on Form 10-Q.

Based on our current operating plan, we expect that our existing cash, cash equivalents and marketable securities as of June 30, 2024 will enable us to fund our current and planned operating expenses and capital expenditures for at least 12 months from the filing date of this Quarterly Report on Form 10-Q.

Our future capital requirements and the period for which we expect our existing resources to support our operations may vary significantly from what we expect.

37 unchanged sentences

Most of our development candidates are in the early stages of development, other than AL102, which is a Phase 3 clinical asset, and we are subject to the risks of failure inherent in the development of candidates based on novel approaches, targets and mechanisms of action.

In November 2021, we submitted an IND for the IMM-BCP-01 program to the FDA.

In March 2022, the FDA communicated that the clinical study can be initiated for our antibody cocktail for the treatment of SARS-CoV-2 following a brief clinical hold, and we initiated the Phase 1b study of IMM-BCP-01 in patients infected with SARS-CoV-2 in June 2022.

On January 6, 2023, we announced that we successfully completed dosing of the first cohort of patients in a Phase 1b trial with no significant treatment-related adverse events.

We decided to seek a partner in order to continue the trial and for any further development activities.

No assurance can be given that we will be able to find a suitable partner for IMM-BCP-01, that any potential partner will offer us satisfactory partnering terms or that any such partner will have success in its development and commercialization efforts.

We anticipate submitting INDs for IM-3050 and IM-1021 in the first quarter of 2025 and for IM-4320 at a later date.

We anticipate submitting INDs for IM-1021 and IM-3050 in the first quarter of 2025.

However, there can be no assurance that we will be able to do so as anticipated or that we will not face regulatory or other hurdles, including the requirement to provide additional data.

If we do not advance IM-4320, IM-1021 or IM-3050 to IND as anticipated, we may incur significant delays and expense identifying another development candidate, if any.

If we do not advance IM-1021 or IM-3050 to IND as anticipated, or if the FDA does not accept or delays our IND submission or puts a submission on hold, we may incur significant delays and expense identifying another development candidate, if any.

Accordingly, you should consider our prospects in light of the costs, uncertainties, delays, and difficulties frequently encountered by biotechnology companies such as ours.

17 unchanged sentences

In the natural course of progressing our development candidates, we may make decisions about prioritization that may prove to be incorrect.

In addition, because we have limited financial and other resources, we may be limited in our ability to pursue all potential development candidates of interest, including IM-4320, IM-1021, IM-3050 and AL102, even if we would otherwise choose to do so if these limitations did not exist.

In addition, because we have limited financial and other resources, we may be limited in our ability to pursue all potential development candidates of interest, including IM-1021, IM-3050 and AL102, even if we would otherwise choose to do so if these limitations did not exist.

For these reasons, we may fail to capitalize on viable opportunities.

8 unchanged sentences

As a targeted radioligand therapy, our IM-3050 program may face additional and potentially unpredictable challenges.

Lutetium-177 (177Lu), or Lu-177, oncology therapy is relatively new, only two Lu-177 therapies have been approved in the United States or the European Union and only a limited number of clinical trials of products based on Lu-177 therapies have commenced.

Lutetium-177 (177Lu), or Lu-177, oncology therapy is relatively new;

only two Lu-177 therapies have been approved in the United States or the European Union and only a limited number of clinical trials of products based on Lu-177 therapies have commenced.

As such, it is difficult to accurately predict the developmental challenges we may incur in advancing IM-3050 through candidate nomination, preclinical studies and clinical trials, if at all.

4 unchanged sentences

● if our product is successfully approved for commercial sale, our revenue may be negatively impacted by the limited number of sites that can administer radioligand therapies;

due to the short half-life of Lu-177, we may incur significant expense developing the means required to effectively and timely distribute drug products to clinical sites and, if approved, to sites for administration to patients.

● due to the short half-life of L u-177, we may incur significant expense developing the means required to effectively and timely distribute drug products to clinical sites and, if approved, to sites for administration to patients.

There is no guarantee that our collaboration with AbbVie Global Enterprises Ltd., or AbbVie, will result in the successful discovery and validation of targets for further development and commercialization by AbbVie.

67 unchanged sentences

Since the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of participants who are available for our clinical trials at such clinical trial sites.

Additionally, because we anticipate that some of our oncology clinical trials will be in patients with advanced solid tumors, the patients are typically in the late stages of the disease and may experience disease progression or adverse events independent from our development candidates, making them unevaluable for purposes of the trial and requiring additional enrollment.

Additionally, because we anticipate that some of our oncology clinical trials will be in patients with advanced solid tumors or lymphomas, the patients are typically in the late stages of the disease and may experience disease progression or adverse events independent from our development candidates, making them unevaluable for purposes of the trial and requiring additional enrollment.

Delays in enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our pipeline.

We may experience delays in completion of our clinical trials based on study design.*

The clinical trial for AL102, RINGSIDE Part B is an event-driven study, which means that the study can end only when a certain pre-specified number of events have occurred.

It is not possible to predict accurately when the requisite events will occur and, given this inherent uncertainty, there can be no assurance that timing for completion of the study and reporting of data will be achieved as and when anticipated by the Company.

Any delays in our clinical programs could significantly harm our business, financial condition and prospects.

We face substantial competition, which may result in others discovering, developing or commercializing products more quickly or marketing them more successfully than us.

14 unchanged sentences

In November 2023, Springworks received FDA approval for its oral gamma secretase inhibitor, OGSIVEO ® (nirogacestat), for the treatment of adult patients with progressing tumors who require systemic treatment.

Desmoid tumors treatments also include surgery, hormonal therapy, targeted therapy and chemotherapy.

Desmoid tumors treatments also include surgery, hormonal therapy, cryotherapy, targeted therapy and chemotherapy.

There are several other companies developing FAP-targeted radioligand therapies which may represent the most direct competition to our IM-3050 program.

171 unchanged sentences

Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations.

Regulators in the US are also increasingly scrutinizing certain data transfers and may also impose certain data localization requirements.

Regulators in the United States are also increasingly scrutinizing certain personal data transfers and have and may further impose personal data localization requirements or restrictions on cross-border personal data transfers.

Our employees and personnel have used, and may in the future use, generative artificial intelligence, or AI, technologies to perform their work, and the disclosure and use of personal information in generative AI technologies is subject to various privacy laws and other privacy obligations.

49 unchanged sentences

This calculation is made on a drug product by drug product basis and the amount of the rebate owed to the federal government is directly dependent on the volume of a drug product that is paid for by Medicare Parts B or D.

Additionally, starting in payment year 2026, the CMS will negotiate drug prices annually for a select number of single source Part D drugs without generic or biosimilar competition.

Additionally, starting in payment year 2026, CMS will begin to reimburse negotiated drug prices annually for a select number of single source Part D drugs without generic or biosimilar competition.

On August 29, 2023, the list of the first 10 drugs that will be subject to price negotiations was published, although the Medicare drug price negotiation program is currently subject to legal challenges.

174 unchanged sentences

If we choose to continue to pursue collaborations and other strategic transactions, we may not be able to enter into such transactions on acceptable terms, if at all, which could adversely affect our development and commercialization activities, impact our cash position, increase our expenses, and present significant distractions to our management.*

We have, and may continue to consider strategic transactions, such as the Ayala Asset Purchase, our Collaboration Agreement with AbbVie, the Zentalis License Agreement, acquisitions of companies like the merger with Morphimmune, other asset purchases, collaborations, joint ventures and out- or in-licensing.

We have, and may continue to consider and engage in strategic transactions, asset purchases, collaborations, joint ventures and out- or in-licensing.

The competition for partners is intense, and the negotiation process is time-consuming and complex.

83 unchanged sentences

In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or third-parties’ with whom we work supply chains have not been compromised.

While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.

While we have implemented security measures designed to protect against and recover from security incidents, there can be no assurance that these measures will be effective.

We take steps designed to detect, mitigate and remediate vulnerabilities in our information security systems (such as our hardware and/or software, including that of third parties with whom we work), but we may not be able to detect, mitigate, and remediate all such vulnerabilities including on a timely basis.

4 unchanged sentences

Certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data.

Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents.

Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.

Applicable data privacy and security obligations may require us, or we may voluntarily choose, to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents, or to take other actions, such as providing credit monitoring and identity theft protection services.

Such disclosures and related actions can be costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.

If we (or a third party with whom we work) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);

15 unchanged sentences

Additionally, sensitive data of the Company could be leaked, disclosed, or revealed as a result of or in connection with the use of generative AI technologies by our employees, our personnel, or third parties with whom we work.

Our current laboratory operations are concentrated in two locations, and we or the third parties upon whom we depend on may be adversely affected by natural or other disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

Our current laboratory operations are concentrated in two locations, and we or the third parties upon whom we depend may be adversely affected by natural or other disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

Our current business operations are concentrated in the greater Seattle and Philadelphia areas.

210 unchanged sentences

If we fail to comply with our obligations under any license, collaboration or other intellectual property-related agreements, we may be required to pay damages and could lose intellectual property rights that may be necessary for developing, commercializing and protecting our current or future targeted therapeutics, or we could lose certain rights to grant sublicenses.*

We are reliant upon in-licenses to certain patent rights and proprietary technology from third parties, including BMS, Zentalis, and Purdue University, or Purdue, that are or may become important or necessary to our discovery and ADC platforms or targeted therapeutics pipeline.

We are reliant upon in-licenses to certain patent rights and proprietary technologies from third parties that are or may become important or necessary to our discovery and ADC platforms or targeted therapeutics pipeline.

Our current license agreements impose, and any future license agreements we enter into are likely to impose, various development, commercialization, funding, milestone, royalty, diligence, sublicensing, insurance, patent prosecution, and enforcement or other obligations on us.

1 unchanged sentence

If we are in breach of our license agreements, we may be required to pay damages and the licensor may have the right to terminate the license.

License termination could result in a material adverse effect on our ability to use our discovery and ADC platforms and/or targeted therapeutics and our ability to develop, manufacture, and sell products that are discovered using or are covered by the licensed technology or could enable a competitor to gain access to the licensed technology.

Termination of any of our license agreements could result in a material adverse effect on our ability to use our discovery and ADC platforms and/or targeted therapeutics and our ability to develop, manufacture, and sell products that are discovered using or are otherwise covered by technology licensed under those agreements, or could enable a competitor to gain access to the licensed technology.

Under our current and future license agreements, we may not have all intellectual property rights necessary for developing, commercializing, and protecting our current or future targeted therapeutics.*

36 unchanged sentences

In addition, parties making claims against us may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources, and we may not have sufficient resources to bring these actions to a successful conclusion.

While we perform periodic searches for relevant patents and patent applications with respect to our programs and development candidates, and uses thereof, we cannot guarantee the completeness or thoroughness of any of our patent searches or analyses including the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, nor can we be certain that we have identified each and every patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of any of our targeted therapeutics in any jurisdiction.

While we perform periodic searches for relevant patents and patent applications with respect to our programs and development candidates, and uses thereof, we cannot guarantee the completeness or thoroughness of any of our patent searches or analyses including, but not limited to, the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, nor can we be certain that we have identified each and every patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of any of our targeted therapeutics in any jurisdiction.

Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that any of our targeted therapeutics may be accused of infringing.

25 unchanged sentences

Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business, which could have a material adverse effect on our financial condition and results of operations.

Others may challenge inventorship or claim an ownership interest in our intellectual property which could expose it to litigation and have a significant adverse effect on its prospects.

Others may challenge inventorship or claim an ownership interest in our intellectual property which could expose us to litigation and have a significant adverse effect on our prospects.*

Determinations of inventorship can be subjective.

29 unchanged sentences

Many of our current or former employees or consultants and our licensors’ current or former employees or consultants, including our senior management, were previously employed at universities or biotechnology or biopharmaceutical companies, including some which may be competitors or potential competitors.

Although we take commercially reasonable steps to ensure that our employees do not use the proprietary information, know-how or trade secrets of others in their work for us, including incorporating such intellectual property into our targeted therapeutics, we may be subject to claims that we or these employees have misappropriated the intellectual property of a third party.

Although we take commercially reasonable steps to ensure that our employees and consultants do not use the proprietary information, know-how or trade secrets of others in their work for us, including incorporating such intellectual property into our platforms and programs, we may be subject to claims that we or these employees or consultants have misappropriated the intellectual property of a third party or breached other obligations to.

Litigation or arbitration may be necessary to defend against these claims.

45 unchanged sentences

● the inability to successfully combine the two businesses in a manner that permits us to realize the technology platform synergies anticipated to result from the Merger, which would result in the anticipated benefits of the Merger not being realized in the time frame currently anticipated or at all;

the complexities associated with managing the larger combined businesses and integrating personnel from the two companies, while at the same time attempting to (i) continue pursuing pre-clinical and clinical development of existing development candidates, (ii) researching and developing new development candidates based on each company’s respective platforms, and (iii) identifying and pursuing other potential strategic transactions or collaborations;

● the complexities associated with managing the larger combined businesses and integrating personnel from the two companies, while at the same time attempting to (i) continue pursuing preclinical and clinical development of existing development candidates, (ii) researching and developing new development candidates based on each company’s respective platforms, and (iii) identifying and pursuing other potential strategic transactions or collaborations;

● the additional complexities of combining two companies with different histories, operating structures and technology foundations;

15 unchanged sentences

We face competition for personnel from other companies, universities, public and private research institutions, government entities and other organizations.

As of March 31, 2024, we had 62 full-time employees.

As of June 30, 2024, we had 78 full-time employees.

The continued operation of our business and execution of our plans will require material additional staffing within the next twelve months.

53 unchanged sentences

● the introduction of technological innovations or new therapies that compete with our potential products;

changes in the structure of health care payment systems;

● changes in the structure of healthcare payment systems;

● period-to-period fluctuations in our financial results.

18 unchanged sentences

In connection with the closing of the public offering, we issued and sold 11,500,000 shares of our common stock.

Additionally, we have issued shares of our common stock in connection with strategic transactions, including, for example, the Zentalis License and the Ayala Asset Purchase.

We issued 2,298,586 shares to Zentalis in connection with the Zentalis License and 2,175,489 shares to Ayala in connection with the Ayala Asset Purchase, both of which are registered for resale on a Form S-3 filed with the SEC in April 2024.

We issued 2,298,586 shares to Zentalis in connection with the Zentalis License Agreement and 2,175,489 shares to Ayala in connection with the Ayala Asset Purchase Agreement, both of which are registered for resale on a Form S-3 filed with the SEC in April 2024.

The shares issued to Zentalis and Ayala are subject a to (i) a six-month lock-up with respect to half of the shares and (ii) an orderly market disposition.

20 unchanged sentences

We have elected to avail ourselves of an exemption that allows us to delay adopting new or revised accounting standards until such time as those standards apply to private companies.

As a result, we will not be subject to the same new or revised accounting standards as other public companies that comply with the public company effective dates, including the new lease accounting standard.

As a result, we will not be subject to the same new or revised accounting standards as other public companies that comply with the public company effective dates, including but not limited to the new lease accounting standard.

We have also elected to take advantage of certain of the reduced disclosure obligations in this Quarterly Report and may elect to take advantage of other reduced reporting requirements in future filings.

6 unchanged sentences

federal net operating loss, or NOL, carryforwards generated in taxable periods beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such NOL carryforwards is limited to 80% of taxable income.

It is uncertain if and to what extent various states will conform to federal law.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, federal NOL carryforwards and other tax attributes may become subject to an annual limitation in the event of certain cumulative changes in ownership.

2 unchanged sentences

Similar rules may apply under state tax laws.

In addition, there may be other limitations under state law on our ability to utilize NOLs, including temporary suspensions or other limitations on the use of NOLs to offset taxable income.

If we earn taxable income, such limitations could result in increased future income tax liability to us, and our future cash flows could be adversely affected.

39 unchanged sentences

The United States and global economies are facing growing inflation, higher interest rates and potential recession.

Furthermore, a severe or prolonged economic downturn, including a recession or depression or political disruption such as the war between Ukraine and Russia and the conflicts in the Middle East could result in a variety of risks to our business, including weakened demand for our development candidates, if approved, relationships with any vendors or business partners located in affected geographies and our ability to raise additional capital when needed on acceptable terms, if at all.

Furthermore, a severe or prolonged economic downturn, including a recession or depression or political disruption such as the war between Ukraine and Russia and the conflicts in the Middle East, including the war between the State of Israel and Hamas, could result in a variety of risks to our business, including weakened demand for our development candidates, if approved, relationships with any vendors or business partners located in affected geographies and our ability to raise additional capital when needed on acceptable terms, if at all.

A weak or declining economy or political disruption, including any international trade disputes, could also strain our manufacturers or suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our potential products.

75 unchanged sentences

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 1A. Risk Factors