Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2024 to ensure the timely disclosure of required information in our SEC filings.
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. Our internal control over financial reporting is a process designed, as defined in Rule 13a-15(f) under the Exchange Act, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting is supported by written policies and procedures that:
1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
In connection with the preparation of our annual consolidated financial statements, management has undertaken an assessment of the effectiveness of our internal control over financial reporting based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of our internal control over financial reporting. Based on this assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2024.
Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Control Over Financial Reporting
No changes in our internal control over financial reporting occurred during our fourth quarter ended December 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Item 9B. Other Information
During the quarter ended June 30, 2024, entities in which one of our directors has an indirect pecuniary interest that is reportable under Section 16 of the Exchange Act, adopted a Rule 10b5-1 trading plan, which is set forth in the table below.
Name and Position
Action
Adoption/Termination Date
Rule 10b5-1 (1)
Non-Rule 10b5-1 (2)
Total Shares of Common Stock to be Sold
Expiration Date
Isaac Barchas ,
Director (3)
Adoption
May 23, 2024
X
2,410,553
May 21, 2027
(1) Contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.
(2) "Non-Rule 10b5-1 trading arrangement" as defined in Item 408(c) of Regulation S-K under the Exchange Act.
(3) The Rule 10b5-1 trading plan was adopted by Arsenal Bridge Venture II, LLC, or ABV II, and Arsenal Bridge Venture II-B LLC, or ABV II-B. Mr. Barchas is a co-founder and holder of a power of attorney with the ability to exercise voting and investment power over the shares held by ABV II and ABV II-B. Mr. Barchas disclaims beneficial ownership of the shares covered by the Rule 10b5-1 trading plan, except to the extent of his pecuniary interest, if any.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
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PART III
We will file a definitive proxy statement for our 2025 Annual Meeting of Stockholders, or the Proxy Statement, with the SEC, pursuant to Regulation 14A, not later than 120 days after the end of our fiscal year. Accordingly, certain information required by Part III has been omitted under General Instruction G(3) to Form 10-K. Only those sections of the Proxy Statement that specifically address the items set forth herein are incorporated by reference.
Item 10. Directors, Executive Officers, and Corporate Governance
The information required by this Item 10 will be set forth in the sections headed “Election of Directors,” “Information Regarding the Board and Corporate Governance,” “Executive Officers” and “Delinquent Section 16(a) Reports,” if any, in the Proxy Statement and is incorporated herein by reference.
We have adopted a Code of Business Conduct and Ethics that applies to all officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or person performing similar functions. A current copy of the Code of Business Conduct and Ethics is available on the Governance section of our website at investors.immunome.com. If we make any substantive amendments to the Code of Business Conduct and Ethics or grants any waiver from a provision of the Code of Business Conduct and Ethics to any executive officer or director that are required to be disclosed pursuant to SEC rules, we will promptly disclose the nature of the amendment or waiver on our website or in a current report on Form 8-K.
Item 11. Executive Compensation
The information required by this Item 11 will be set forth in the sections headed “Executive Compensation” and “Non-Employee Director Compensation” in the Proxy Statement and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item 12 will be set forth in the sections headed “Security Ownership of Certain Beneficial Owners and Management,” and “Executive Compensation,” in the Proxy Statement and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item 13 will be set forth in the sections headed “Certain Relationships and Related-Person Transactions,” and “Information Regarding the Board and Corporate Governance,” contained in the Proxy Statement and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
The information required by this Item 14 will be set forth in the section headed “Ratification of Selection of Independent Registered Accounting Firm,” in the Proxy Statement and is incorporated herein by reference.
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Part IV
Item 15. Exhibits and Financial Statement Schedules
The following documents are filed as part of this Annual Report on Form 10-K
(1) Financial Statements
The financial statements filed as part of this Annual Report on Form 10-K are listed in the “Index to the Consolidated Financial Statements” found on page 126.
(2) Financial Statement Schedules
All schedules are omitted because they are not applicable or the required information is included in the consolidated financial statements or notes thereto.
(3) Exhibits
The following documents listed in the Exhibit Index of this Annual Report on Form 10-K are incorporated by reference or are filed with this Annual Report on Form 10-K, in each case as indicated therein.
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EXHIBIT INDEX
Exhibit
Number
Description
1.1
Sales Agreement, by and between the Company and TD Securities (USA) LLC, dated May 14, 2024 (incorporated by reference to Exhibit 1.1 to our Quarterly Report on Form 10-Q filed on May 14, 2024).
2.1†+
Agreement and Plan of Merger and Reorganization, by and among the Company, Ibiza Merger Sub, Inc. and Morphimmune Inc., dated June 29, 2023 (Incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on June 29, 2023).
2.2+
Asset Purchase Agreement, by and between Immunome, Inc. and Ayala Pharmaceuticals, Inc., dated February 5, 2024 (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on February 6, 2024).
2.3†+
Asset Purchase Agreement, by and among Immunome, Inc., Zentalis Pharmaceuticals, Inc. and Zeno Management, Inc., dated October 25, 2024 (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed October 29, 2024).
3.1
Amended and Restated Certificate of Incorporation of Immunome, Inc. (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed October 6, 2020).
3.2
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Immunome, Inc., dated October 2, 2023, to implement Officer Exculpation (incorporated by reference to Exhibit 3.3 to our Current Report on Form 8-K filed October 4, 2023) .
3.3
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Immunome, Inc., dated October 2, 2023, to implement Authorized Share Increase (incorporated by reference to Exhibit 3.4 to our Current Report on Form 8-K filed October 4, 2023).
3.4
Amended and Restated Bylaws of Immunome, Inc. (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed October 6, 2020).
4.1
Form of Common Stock Certificate (incorporated by reference to Exhibit 4.2 to Amendment No. 1 to our Registration Statement on Form S-1/A filed on September 24, 2020).
4.2
Description of Securities (incorporated by reference to Exhibit 4.6 to our Annual Report on Form 10-K filed on March 16, 2023).
4.3
Form of Subscription Agreement, dated June 29, 2023 (Incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on June 29, 2023).
4.4
Stock Issuance Agreement, dated January 5, 2024, by and between Immunome, Inc. and Zentalis Pharmaceuticals, Inc. (incorporated by reference to Exhibit 4.3 to our Registration Statement on Form S-3 filed with the SEC on February 13, 2024).
4.5
Stock Issuance Agreement, dated August 7, 2024, by and between Immunome, Inc. and Bristol-Myers Squibb Company (incorporated by reference to Exhibit 4.7 to our Registration Statement on Form S-3 filed with the SEC on October 8, 2024).
4.6
Stock Issuance Agreement, by and between the Company and Zentalis Pharmaceuticals, Inc., dated October 25, 2024 (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the SEC on October 29, 2024).
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10.1#
Form of Indemnification Agreement between the Company and its directors and officers (incorporated by reference to Exhibit 10.1 to our Registration Statement on Form S-1 filed on September 9, 2020).
10.2#
Amended and Restated 2008 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.2 to our Registration Statement on Form S-1 filed on September 9, 2020).
10.3#
Form of Incentive Stock Option and Option Agreement for the Amended and Restated 2008 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.3 to our Registration Statement on Form S-1 filed on September 9, 2020).
10.4#
Amended and Restated 2018 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.4 to our Registration Statement on Form S-1 filed on September 9, 2020).
10.5#
Form of Incentive Stock Option and Option Agreement for the Amended and Restated 2018 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.5 to our Registration Statement on Form S-1 filed on September 9, 2020).
10.6#
2020 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on November 9, 2023) .
10.7#*
Forms of Executive and Non-Executive Stock Option Grant Notice, Option Agreement and Notice of Exercise for the 2020 Equity Incentive Plan.
10.8#
2020 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.8 to Amendment No. 1 to our Registration Statement on Form S-1/A filed on September 24, 2020).
10.9#
Morphimmune Inc. 2020 Equity Incentive Plan (incorporated by reference from Exhibit 10.44 to the Company’s Registration Statement on Form S-4/A (File No. 333-273792) filed with the SEC on August 28, 2023).
10.10#
Forms of Restricted Stock Purchase Agreement, Stock Option Agreement and Early Exercise Stock Purchase Agreement under the Morphimmune Inc. 2020 Equity Incentive Plan (incorporated by reference from Exhibit 10.45 to the Company’s Registration Statement on Form S-4/A (File No. 333-273792) filed with the SEC on August 28, 2023).
10.11#*
Immunome, Inc. 2024 Inducement Plan and Forms of Executive and Non-Executive Stock Option Grant Notice, Option Agreement and Notice of Exercise thereunder.
10.12#
Inducement Non-Qualified Stock Option Agreement, dated June 28, 2023, by and between the Company and Clay B. Siegall, Ph.D. (Filed as Exhibit 99.4 to the Company’s Registration Statement on Form S-8 filed on February 2, 2024 and incorporated herein by reference).
10.13#
Executive Employment Agreement dated June 28, 2023, by and between the Company and Clay B. Siegall, Ph.D. (Filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on June 29, 2023 and incorporated herein by reference) .
10.14#
Amendment No. 1 to Executive Employment Agreement dated December 1, 2023, by and between the Company and Clay B. Siegall, Ph.D (incorporated by reference to Exhibit 10.16 to our Annual Report on Form 10-K filed on March 28, 2024).
10.15#
Amended and Restated Employment Offer Terms dated November 30, 2023, by and between the Company and Sandra G. Stoneman (incorporated by reference to Exhibit 10.17 to our Annual Report on Form 10-K filed on March 28, 2024).
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10.16#
Amended and Restated Employment Offer Terms dated November 30, 2023, by and between the Company and Max Rosett (incorporated by reference to Exhibit 10.19 to our Annual Report on Form 10-K filed on March 28, 2024).
10.17#
Amended and Restated Employment Offer Terms dated November 30, 2023, by and between the Company and Jack Higgins, Ph.D (incorporated by reference to Exhibit 10.20 to our Annual Report on Form 10-K filed on March 28, 2024).
10.18#
Amended and Restated Employment Offer Terms dated November 30, 2023, by and between the Company and Robert Lechleider, M.D (incorporated by reference to Exhibit 10.21 to our Annual Report on Form 10-K filed on March 28, 2024).
10.19#
Employment Offer Letter dated February 7, 2024, by and between the Company and Kinney Horn (incorporated by reference to Exhibit 10.23 to our Annual Report on Form 10-K filed on March 28, 2024).
10.20#
Employment Offer Letter dated June 17, 2024, by and between Immunome, Inc. and Phil Tsai (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on August 12, 2024).
10.21#
Relocation Offer Letter dated January 20, 2025, by and between the Company and Max Rosett (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 3, 2025).
10.22#
Third Amended and Restated Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q filed November 9, 2023).
10.23†+
Master License Agreement, by and between Morphimmune Inc. and Purdue Research Foundation, dated as of January 19, 2021, as modified pursuant to that certain email by Max Rosett to representatives of Purdue University dated March 15, 2023 (incorporated by reference to Exhibit 10.43 to our Registration Statement on Form S-4 filed on August 8, 2023).
10.24*
Amendment #1 to Master License Agreement, by and between Morphimmune, Inc. and Purdue Research Foundation, dated October 16, 2024.
10.25†+
License Agreement dated November 29, 2017, by and between the Company (as assignee) and Bristol-Myers Squibb Company, as amended. (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on March 26, 2024).
10.26†
Amendment No. 2 to License Agreement, dated August 7, 2024, by and between the Company and Bristol-Myers Squibb Company (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on November 13, 2024).
10.27†+*
Lease dated October 5, 2023, by and between the Company and Nitrogen Propco 2020, L.P., as amended by the First Amendment to Lease dated May 13, 2024, and as amended by the Second Amendment to Lease dated December 16, 2024.
10.28†+*
Lease dated December 16, 2024, by and between the Company and Nitrogen Propco 2020, L.P.
19.1 *
Amended and Restated Insider Trading Policy
21.1
List of Subsidiaries (incorporated by reference to Exhibit 21.1 of our Annual Report on Form 10-K filed March 28, 2024).
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31.1*
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*††
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*††
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97
Incentive Compensation Recoupment Policy (incorporated by reference to Exhibit 97 of our Annual Report on Form 10-K filed March 28, 2024).
101*
The following financial information from the Annual Report on Form 10 K of IMMUNOME, INC. for the year ended December 31, 2024, formatted in Inline XBRL (eXtensible Business Reporting Language): (1) Balance Sheets as of December 31, 2024 and 2023; (2) Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 and 2023; (3) Statements of Changes in Stockholders’ Equity for the years ended December 31, 2024 and 2023; (4) Statements of Cash Flows for the years ended December 31, 2024 and 2023; and (5) Notes to Consolidated Financial Statements.
104
Cover Page Interactive Data File (formatted as Inline XBRL).
*
Filed or furnished herewith.
#
Management contracts or compensatory plans or arrangements
†
Certain portions of this exhibit (indicated by asterisks) have been omitted because they are not material and is the type of information the Company treats as private or confidential.
+
Schedules and exhibits to the agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.
††
The certifications attached as Exhibits 32.1 and 32.2 that accompany this Annual Report on Form 10-K are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.
Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
IMMUNOME, INC.
Date: March 19, 2025
By:
/s/ Clay B. Siegall Ph.D.
Name: Clay B. Siegall, Ph.D.
Title: President and Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Clay B. Siegall, Ph.D. and Max Rosett, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign this report, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons in the capacities and on the dates indicated on behalf of the Registrant.
Signature
Title
Date
/s/ Clay B. Siegall
President, Chief Executive Officer and Director
March 19, 2025
Clay B. Siegall Ph.D.
( Principal Executive Officer )
/s/ Max Rosett
Chief Financial Officer
March 19, 2025
Max Rosett
( Principal Financial and Accounting Officer )
/s/ Isaac Barchas
Director
March 19, 2025
Isaac Barchas, J.D
/s/ Jean-Jacques Bienaime
Director
March 19, 2025
Jean-Jacques Bienaime
/s/ James Boylan
Director
March 19, 2025
James Boylan
/s/ Carol Schafer
Director
March 19, 2025
Carol Schafer
/s/ Sandra Swain
Director
March 19, 2025
Sandra Swain, M.D.
/s/ Philip Wagenheim
Director
March 19, 2025
Philip Wagenheim
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IMMUNOME, INC.
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 42 )
127
Consolidated Balance Sheets as of December 31, 2024 and 2023
128
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 and 2023
129
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2024 and 2023
130
Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023
131
Notes to the Consolidated Financial Statements
133
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Table of Contents
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Immunome, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Immunome, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2022.
Philadelphia, Pennsylvania
March 19, 2025
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IMMUNOME, INC.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
143,351
$
98,679
Marketable securities
73,952
39,463
Prepaid expenses and other current assets
4,036
6,561
Total current assets
221,339
144,703
Property and equipment, net
10,113
2,073
Operating right-of-use assets
4,278
1,564
Restricted cash
100
100
Other long-term assets
4,411
100
Total assets
$
240,241
$
148,540
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$
14,189
$
3,311
Accrued expenses and other current liabilities
33,177
8,025
Deferred revenue, current
6,941
10,493
Total current liabilities
54,307
21,829
Deferred revenue, non-current
—
5,489
Operating lease liabilities, net of current portion
4,769
1,340
Total liabilities
59,076
28,658
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $ 0.0001 par value; 10,000,000 shares authorized; no shares issued or outstanding at December 31, 2024 and 2023
—
—
Common stock, $ 0.0001 par value; 300,000,000 shares authorized at December 31, 2024 and 2023; 64,460,829 and 43,251,778 shares issued and outstanding at December 31, 2024 and 2023, respectively
6
4
Additional paid-in capital
696,872
342,663
Accumulated other comprehensive income
57
22
Accumulated deficit
( 515,770 )
( 222,807 )
Total stockholders’ equity
181,165
119,882
Total liabilities and stockholders’ equity
$
240,241
$
148,540
The accompanying notes are an integral part of these consolidated financial statements .
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IMMUNOME, INC.
Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share amounts)
Year Ended December 31,
2024
2023
Collaboration revenue
$
9,041
$
14,018
Operating expenses:
In-process research and development
152,344
80,802
Research and development
129,542
23,089
General and administrative
32,955
19,657
Total operating expenses
314,841
123,548
Loss from operations
( 305,800 )
( 109,530 )
Interest income
12,837
2,724
Net loss
$
( 292,963 )
$
( 106,806 )
Net loss per share, basic and diluted
$
( 5.00 )
$
( 5.38 )
Weighted-average shares outstanding, basic and diluted
58,639,441
19,843,651
Comprehensive loss:
Net loss
$
( 292,963 )
$
( 106,806 )
Unrealized gain on marketable securities
35
22
Comprehensive loss
$
( 292,928 )
$
( 106,784 )
The accompanying notes are an integral part of these consolidated financial statements .
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IMMUNOME, INC.
Consolidated Statements of Changes in Stockholders’ Equity
(in thousands, except share amounts)
Accumulated
Additional
Other
Total
Common Stock
Paid-in
Comprehensive
Accumulated
Stockholders'
Shares
Amount
Capital
Income
Deficit
Equity
Balance at December 31, 2022
12,128,843
$
1
$
132,653
$
—
$
( 116,001 )
$
16,653
Share-based compensation expense
—
—
6,153
—
—
6,153
Issuance of common stock under prior ATM, net of $ 1 of issuance costs
5,925
—
34
—
—
34
Issuance of common stock
55,250
—
221
—
—
221
Issuance of common stock for PIPE transaction, net of $ 9,000 of issuance costs
21,690,871
2
116,001
—
—
116,003
Issuance of common stock and stock-based equity awards for Morphimmune merger
8,835,710
1
87,160
—
—
87,161
Vesting of restricted stock awards
12,498
—
70
—
—
70
Exercise of stock options
522,681
—
371
—
—
371
Unrealized gain on marketable securities
—
—
—
22
—
22
Net loss
—
—
—
—
( 106,806 )
( 106,806 )
Balance at December 31, 2023
43,251,778
4
342,663
22
( 222,807 )
119,882
Share-based compensation expense
—
—
15,748
—
—
15,748
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 in connection with BMS License Agreement Amendment
230,415
—
2,699
—
—
2,699
Issuance of common stock under Zentalis Purchase Agreement
1,805,502
—
20,990
—
—
20,990
Issuance of common stock for public offering, net of commissions and offering costs of $ 14,592
11,500,000
2
215,408
—
—
215,410
Issuance of common stock under ATM, net of $ 424 issuance costs
2,030,431
—
19,576
—
—
19,576
Exercise of stock options
795,571
—
2,024
—
—
2,024
Exercise of common stock warrants
373,057
—
3,731
—
—
3,731
Unrealized gain on marketable securities
—
—
—
35
—
35
Net loss
—
—
—
—
( 292,963 )
( 292,963 )
Balance at December 31, 2024
64,460,829
$
6
$
696,872
$
57
$
( 515,770 )
$
181,165
The accompanying notes are an integral part of these consolidated financial statements.
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IMMUNOME, INC.
Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31,
2024
2023
Cash flows from operating activities:
Net loss
$
( 292,963 )
$
( 106,806 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
1,567
457
Amortization of right-of-use asset
535
271
Accretion of discounts on marketable securities
( 2,899 )
( 512 )
Share-based compensation expense
15,748
6,223
Charge for purchase of in-process research and development assets
152,344
80,802
Changes in operating assets and liabilities:
Prepaid expenses and other assets
906
( 4,144 )
Accounts payable
9,526
( 608 )
Accrued expenses and other current liabilities
13,550
614
Deferred revenue
( 9,041 )
15,982
Operating lease liabilities
( 67 )
153
Net cash used in operating activities
( 110,794 )
( 7,568 )
Cash flows from investing activities:
Purchases of in-process research and development assets
( 46,335 )
—
Purchases of marketable securities
( 186,555 )
( 38,929 )
Cash acquired in connection with Morphimmune merger, net of transaction costs
—
9,276
Maturities of marketable securities
155,000
—
Purchases of property and equipment
( 7,173 )
( 831 )
Net cash used in investing activities
( 85,063 )
( 30,484 )
Cash flows from financing activities:
Proceeds from public offering
230,002
—
Payment of offering costs
( 15,228 )
( 8,997 )
Proceeds from PIPE transaction
—
125,000
Proceeds from exercise of stock options
2,024
371
Proceeds from exercise of common stock warrants
3,731
—
Proceeds from issuance of common stock under ATM
20,000
34
Net cash provided by financing activities
240,529
116,408
Net increase in cash and cash equivalents and restricted cash
44,672
78,356
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
$
143,451
$
98,779
Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents
$
143,351
$
98,679
Restricted cash
100
100
Total cash, cash equivalents, and restricted cash
$
143,451
$
98,779
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IMMUNOME, INC.
Consolidated Statements of Cash Flows
(In thousands)
Year Ended December 31,
2024
2023
Supplemental disclosures of non-cash investing and financing activities:
Issuance of common stock and stock-based equity awards for the Morphimmune merger
$
—
$
87,161
Issuance of common stock in exchange for in-process research and development assets
$
97,722
$
—
Net liabilities assumed from purchases of in-process research and development assets
$
2,041
$
—
Purchase of in-process research and development assets in accounts payable and accrued expenses
$
6,246
$
—
Right-of-use assets obtained in exchange for operating lease liabilities
$
1,189
$
1,325
Remeasurement of operating right-of-use asset and lease liability due to lease modifications
$
2,035
$
226
Issuance of common stock to certain board of directors in lieu of accrued compensation
$
—
$
221
Purchases of property and equipment in accounts payable and accrued expenses and other current liabilities
$
2,806
$
372
The accompanying notes are an integral part of these consolidated financial statements.
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IMMUNOME, INC.
Notes to Consolidated Fi nancial Statements
1. Nature of the business
Organization
Immunome, Inc., or the Company or Immunome, a clinical-stage targeted oncology company committed to developing targeted therapies designed to improve outcomes for cancer patients. Since its inception, the Company has devoted substantially all its resources to research and development, raising capital, building its management team, extending its intellectual property portfolio, and executing strategic partnerships and transactions. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, risks associated with research, development, and manufacturing activities, uncertain results of preclinical and clinical testing, development of new technological innovations and products by competitors, dependence on key personnel, partners and third-party vendors, protection of proprietary technology, compliance with government regulations, regulatory approval of products and the ability to secure additional capital to fund operations.
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 December 31, 2024, the Company had an accumulated deficit of $ 515.8 million, cash and cash equivalents of $ 143.4 million and marketable securities of $ 74.0 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 December 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 December 31, 2024, together with the proceeds received from the 2025 Financing (see Note 13), will be sufficient to fund its current and planned operating expenses and capital expenditures for at least 12 months from the filing date of this Annual Report on Form 10-K. 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.
2. Summary of significant accounting policies
Basis of presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted, or GAAP, in the United States. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification, or ASC, and Accounting Standards Updates, or ASU, promulgated by the Financial Accounting Standards Board, or FASB.
Principles of consolidation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.
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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 audited 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, 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
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, or CODM, in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The CODM views the Company’s operations and manages its business as one operating and reporting segment, which is the business of development of targeted oncology therapies exclusively in the United States.
Cash and cash equivalents
The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash held in banks, money market funds and U.S. treasury securities.
Restricted cash
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 December 31, 2024 and 2023.
Marketable securities
The Company’s marketable securities consist of investments in U.S. Treasury debt securities. Debt securities are classified as available-for-sale and are carried at fair value with the unrealized gains and losses, net of tax, included in accumulated other comprehensive income, a component of stockholders’ equity. These debt securities have an original maturity period greater than 90 days, but less than one year. The Company classifies marketable securities that are available for use in current operations as current assets on the consolidated balance sheets.
The Company periodically reviews its marketable securities for declines in fair value below the amortized cost basis to determine whether the impairment, if any, is due to credit-related or other factors. This review includes the credit worthiness of the security issuers, the severity of the unrealized losses, whether the Company has the intent to sell the securities and whether it is more likely than not the Company will be required to sell the securities before the recovery of the amortized cost basis. Unrealized gains and losses on available-for-sale securities are reported in other comprehensive loss, and as a component of stockholders' equity until their disposition, with the exception of unrealized losses believed to be related to credit losses which are recognized as an allowance for credit losses on the consolidated balance sheet with the corresponding charge in other income in the period the impairment occurs. Impairment assessments are made at the individual security level each reporting period. The Company elected to exclude accrued interest receivable from the amortized cost basis of its available-for-sale debt securities and to not measure an allowance for credit losses for accrued interest receivable. To date, there have been no credit-related declines in value or other impairments of the Company’s investments in marketable securities. Realized gains and losses from the sale of marketable securities, if any, are calculated using the specific-identification method.
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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.
Property and equipment
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight-line method over the estimated useful life of each asset as follows:
Asset category
Estimated useful life
Lab equipment
5 years
Leasehold improvements
Shorter of useful life or remaining lease term
Computer equipment
3 years
Office equipment
5 years
Furniture and fixtures
5 years
Expenditures for repairs and maintenance of assets are charged to expense as incurred, while major betterments are capitalized. Upon retirement or sale, the cost and related accumulated depreciation and amortization of assets disposed of are removed from the accounts and any resulting gain or loss is included in the consolidated statements of operations and comprehensive loss.
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 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.
Impairment of long-lived assets
The Company evaluates its long-lived assets, which consist primarily of property and equipment and operating right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. There were no impairment losses recognized during the years ended December 31, 2024 and 2023.
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Equity issuance costs
The Company capitalizes costs directly associated with equity financings as deferred offering costs on its consolidated balance sheet. These costs remain capitalized until such financings are consummated, at which time such costs are recorded on a pro rata basis against the gross proceeds from the applicable financing. If a financing is abandoned, deferred offering costs are expensed.
Collaboration revenue
The Company evaluates its collaborative arrangements pursuant to ASC 808, Collaborative Arrangements , or ASC 808, and ASC 606, Revenue from Contracts with Customers , or ASC 606. The Company considers the nature and contractual terms of collaborative arrangements and assesses whether the arrangement involves a joint operating activity pursuant to which the Company is an active participant and is exposed to significant risks and rewards with respect to the arrangement. If the Company is an active participant and is exposed to significant risks and rewards with respect to the arrangement, the Company accounts for the arrangement as a collaboration under ASC 808. If it is not exposed to significant risks and rewards and the contract is with a customer, the Company accounts for the collaboration under ASC 606.
Payments pursuant to collaborative arrangements may include non-refundable upfront payments, research option and license option payments, milestone payments upon the achievement of significant regulatory and development events, commercial sales milestones, and royalties on product sales. The amount of variable consideration is constrained until it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under a collaboration arrangement, the Company applies the five-step model of ASC 606: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract, including whether they are capable of being distinct; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
The Company applies significant judgment when evaluating whether contractual obligations represent distinct performance obligations, allocating transaction price to performance obligations within a contract, determining when performance obligations have been met, and assessing the recognition of variable consideration. When consideration is received prior to the Company completing its performance obligation under the terms of a contract, a contract liability is recorded as deferred revenue. Deferred revenue expected to be recognized as revenue within the 12 months following the balance sheet date is classified as a current liability.
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, and preclinical and clinical development expenses, including process development, validation, and the manufacture of drug supplies, costs to conduct clinical trials, 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.
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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.
Share-based compensation
The Company’s share-based compensation program allows for grants of stock options and restricted stock awards to employees and non-employees, including directors.
The Company accounts for its share-based compensation awards granted to employees and non-employees based on the estimated fair value on the date of grant and recognizes compensation expense of those awards over the requisite service period, which is the vesting period of the respective award. The Company accounts for forfeitures as they occur. For share-based awards with service-based vesting conditions, the Company recognizes compensation expense on a straight-line basis over the service period.
The Company estimates the fair value of stock option awards on the grant date using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. Due to the lack of Company-specific historical and implied volatility data, the Company has based its computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to the Company, including stage of product development and biopharmaceutical industry focus. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. The Company uses the simplified method to calculate the expected term for options granted to employees and non-employees whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the options due to its lack of sufficient historical data. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The exercise price is the fair value of the common stock as of the measurement date.
Leases
At the inception of an arrangement, the Company determines whether an arrangement contains a lease based on facts and circumstances present in the arrangement. An arrangement is or contains a lease if the arrangement conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Typically, lessees are required to recognize leases with a term greater than one year on the consolidated balance sheets as an operating or finance lease liability and right-of-use asset. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. The Company has elected the practical expedient to not recognize right-of-use assets for leases with a term of 12 months or less. The Company does not have any finance leases as of December 31, 2024 or 2023.
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Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the remaining lease term. Options to extend the lease term are included in the Company’s assessment of the lease term only if there is reasonable assurance that the Company will renew. As the rate implicit on the Company’s leases is not readily determinable, the Company uses its secured incremental borrowing rate to determine the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company could borrow on a collateralized basis the amount of lease payments in the same currency, for a similar term, in a similar economic environment.
In addition, the Company’s leases may require payment of additional costs, such as utilities, maintenance, and other operating costs, which are generally referred to as non-lease components and vary based on future outcomes. The Company has elected not to separate lease and non-lease components. Only the fixed costs for lease components and their associated non-lease components are accounted for as a single lease component and recognized as part of an operating right-of-use asset and lease liability. Any variable expenses are recognized in operating expenses as incurred. Rent expense for an operating lease liability is recognized on a straight-line basis over the lease term and is included in operating expenses in the consolidated statements of operations and comprehensive loss.
Income taxes
The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some or all of the net deferred tax assets may not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and recent results of operations, primarily over the most recent three-year period. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained upon an audit. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being recognized. Change in recognition or measurement are reflected in the period in which the change in judgement occurs.
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 years ended December 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):
December 31,
2024
2023
Stock options outstanding
11,990,781
7,978,291
Common stock warrants
—
500,000
11,990,781
8,478,291
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Recently adopted accounting standards
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) – 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 adopted interim requirements under ASU 2023-07 on January 1, 2025. There was no impact on the Company’s reportable segments identified and additional required disclosures have been included in Note 11.
Recent accounting standards not yet adopted
In December 2023, the FASB issued 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 believes that the adoption of this ASU will not have a material impact on the consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. This guidance is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
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.
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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):
December 31, 2024
Level
Amortized Cost
Unrealized Gain
Unrealized Loss
Fair Value
Cash equivalents:
Money market funds
1
$
46,987
$
—
$
—
$
46,987
U.S. treasury securities
2
94,379
40
—
94,419
Marketable securities:
U.S. treasury securities
2
73,935
17
—
73,952
Total financial assets
$
215,301
$
57
$
—
$
215,358
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 up to 6 months .
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.
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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 collaboration revenue of $ 9.0 million and $ 14.0 million for the years ended December 31, 2024 and 2023, respectively.
The following table summarizes the change in deferred revenue (in thousands):
Year Ended December 31,
2024
2023
Beginning balance
$
15,982
$
—
Deferral of revenue
—
30,000
Recognition of revenue
( 9,041 )
( 14,018 )
Balance at the end of the period
$
6,941
$
15,982
As of December 31, 2024, the Company expects to recognize the deferred revenue associated with the non-refundable upfront fee over the estimated remaining research and development period of approximately 0.5 years.
5. Balance sheet components
Property and equipment
Property and equipment consisted of the following (in thousands):
December 31,
2024
2023
Lab equipment
$
9,501
$
5,386
Construction in progress
3,297
—
Leasehold improvements
1,636
233
Computer equipment
270
326
Office equipment and furniture and fixtures
158
36
Property and equipment at cost
14,862
5,981
Less accumulated depreciation and amortization
( 4,749 )
( 3,908 )
Property and equipment, net
$
10,113
$
2,073
Depreciation and amortization expense was $ 1.6 million and $ 0.5 million for the years ended December 31, 2024 and 2023, respectively.
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Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
December 31,
2024
2023
Research and development
$
24,185
$
1,794
Compensation and related benefits
5,222
2,734
Severance accruals
639
1,436
Professional services and consulting
933
1,019
Operating lease liabilities, current portion
63
310
Other
2,135
732
Total accrued expenses and other current liabilities
$
33,177
$
8,025
6. 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 $ 0.6 million and $ 0.2 million to the 401(k) Plan for the years ended December 31, 2024 and 2023, respectively.
7. Strategic transactions and agreements
Ayala Pharmaceuticals
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 varegacestat (then known as 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.
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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
Other long-term assets
2,480
Total assets acquired
$
75,862
Liabilities assumed:
Accrued expenses
$
4,521
Total liabilities assumed
$
4,521
Net assets acquired
$
71,341
The cost attributable to the IPR&D was expensed in the Company’s consolidated statements of operations and comprehensive loss for the year ended December 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.
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 ADC platform technology, ROR1 antibodies and ADCs targeting ROR1 to exploit products covered by or incorporating the licensed intellectual property rights, or, collectively, the Zentalis Licensed Assets.
As upfront consideration for the license, the Company paid to Zentalis $ 15.0 million in cash and issued to Zentalis 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 consolidated statement of operations and comprehensive loss for the year ended December 31, 2024 since the acquired IPR&D had no alternative future use.
On October 25, 2024, the Company and Zentalis entered into an asset purchase agreement, or the Zentalis Purchase Agreement, pursuant to which the Company purchased the Zentalis Licensed Assets that were licensed to the Company under the then-existing Zentalis License Agreement dated January 5, 2024, together with all the customary rights and obligations of a sole owner, or the Zentalis Asset Purchase. Upon the closing of the Zentalis Asset Purchase, the Zentalis License Agreement was terminated in its entirety, including the termination of all of the Company’s contingent milestone and royalty payment obligations. Certain accrued rights and obligations of the parties survive the closing of the Zentalis Asset Purchase.
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As consideration for the Zentalis Asset Purchase, the Company issued to Zentalis 1,805,502 unregistered shares of its common stock at an aggregate fair value of $ 21.0 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 October 25, 2024 of $ 12.11 per share less a discount of 4.0 % related to unregistered share restrictions. The consideration paid to Zentalis for the Zentalis Asset Purchase was immediately recognized as IPR&D expense in the Company’s consolidated statement of operations and comprehensive loss for the year ended December 31, 2024. The Company is also obligated to pay Zentalis a one-time payment of $ 5.0 million in cash upon the achievement of a developmental milestone that was previously a milestone under the Zentalis License Agreement.
As of December 31, 2024, the Company has achieved the developmental milestone and has accrued $ 5.0 million within accrued expenses and other current liabilities on the consolidated balance sheet since the related contingency is resolved and the milestone consideration is payable.
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.
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 in the Company’s consolidated statements of operations and comprehensive loss for the year ended December 31, 2023 since the acquired IPR&D had no alternative future use.
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The consideration paid and the relative fair values of assets acquired and liabilities assumed were as follows (in thousands):
Amount
Common stock issued to Morphimmune shareholders
$
72,453
Share-based equity awards allocated to consideration paid
14,708
Transaction costs
792
Consideration paid
$
87,953
Assets acquired:
Cash and cash equivalents
$
10,068
Prepaid expenses and other current assets
191
Property and equipment
646
In-process research and development
80,802
Total assets acquired
$
91,707
Liabilities assumed:
Accounts payable
$
1,147
Accrued expenses
2,607
Total liabilities assumed
$
3,754
Net assets acquired
$
87,953
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 varegacestat, or the BMS Licensed Compounds, and products containing AL101 or varegacestat, 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 varegacestat 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.
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Following the closing of the Ayala Purchase Agreement, on August 7, 2024, the Company and BMS entered into Amendment No. 2 to the BMS License Agreement, or the BMS License Agreement Amendment. As consideration to BMS for entering into the BMS License Agreement Amendment, the Company issued BMS 230,415 unregistered shares of its common stock at an aggregate fair value of $ 2.7 million. The fair value of the common stock issued to BMS was based on the closing stock price of the Company’s common stock on August 7, 2024 of $ 12.46 per share less a discount of 6.0 % related to unregistered share restrictions. The consideration paid to BMS to amend the BMS License Agreement was immediately recognized as IPR&D expense in the Company’s consolidated statement of operations and comprehensive loss for the year ended December 31, 2024.
Other asset acquisitions and license agreements
The Company has entered into various other asset purchase and license agreements to further acquire, discover, develop and commercialize certain technologies and treatments. During the year ended December 31, 2024, the Company paid total consideration of $ 10.8 million under these other agreements, including upfront fees and transaction costs, which was recognized as IPR&D expense in the Company’s consolidated statement of operations and comprehensive loss since the acquired IPR&D had no alternative future use. There was no IPR&D expense under these agreements for the year ended December 31, 2023.
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.
As of December 31, 2024, the Company has achieved certain milestones under these agreements and has accrued $ 0.8 million within accrued expenses and other current liabilities on the consolidated balance sheet since the related contingency is resolved and the milestone consideration is payable.
8. Leases
The Company currently leases approximately 39,000 square feet of office and laboratory space in Bothell, Washington, including 15,000 square feet of space that was added in May 2024 and 10,000 square feet of space that was added in December 2024 under amended lease agreements. In December 2024, the Company was granted a one-time tenant improvement allowance of $ 3.5 million which was considered payable by the lessor at the commencement date. The Bothell lease also includes an expansion option to lease approximately 13,000 additional square feet of office and laboratory space with a $ 4.7 million tenant improvement allowance. The Bothell lease expires on March 31, 2033, 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 Company also leases approximately 11,000 square feet of office and laboratory space in Exton, Pennsylvania. The Exton lease expires on March 31, 2025.
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Supplemental balance sheet information related to leases was as follows (in thousands):
December 31,
2024
2023
Operating leases:
Operating lease right-of-use assets
$
4,278
$
1,564
Operating lease liabilities, current portion
$
63
$
310
Operating lease liabilities, net of current portion
4,769
1,340
Total operating lease liabilities
$
4,832
$
1,650
Operating lease liabilities, current portion is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets.
The Company recorded operating lease expense of $ 0.8 million and $ 0.3 million for the years ended December 31, 2024 and 2023, respectively. 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 years ended December 31, 2024 and 2023.
Other information related to the Company’s operating leases was as follows:
December 31,
2024
2023
Weighted-average remaining lease term (in years)
8.15
4.81
Weighted-average discount rate
9.5 %
8.3 %
Supplemental cash flow information related to the Company’s operating leases was as follows (in thousands):
Year Ended December 31,
2024
2023
Cash paid for operating lease liabilities
$
337
$
246
The Company’s future minimum lease payments were as follows as of December 31, 2024 (in thousands):
Years ending December 31,
Amount
2025
$
929
2026
1,304
2027
1,577
2028
1,616
2029 and thereafter
7,333
Total lease payments
12,759
Less: imputed interest
( 4,202 )
Less: tenant improvement allowance not yet received
( 3,725 )
Present value of operating lease liabilities
$
4,832
9. 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 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.
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The Company has reserved the following shares of common stock for issuance, on an as-converted basis, as follows:
December 31,
2024
2023
Stock options issued and outstanding under the Plans
11,990,781
7,978,291
Common stock warrants outstanding
—
500,000
Remaining shares available for issuance under the Plans
2,631,369
4,250,303
Remaining shares available for issuance under the ESPP
906,251
473,733
Total reserved common stock
15,528,401
13,202,327
2024 Public Offering
In February 2024, the Company completed a 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. In November 2024, the Company sold 2,030,431 shares of common stock under the 2024 ATM Agreement resulting in net proceeds of approximately $ 19.6 million.
Warrants to acquire shares of common stock
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 year ended December 31, 2024, warrants to purchase 373,057 shares of common stock were exercised for proceeds of $ 3.7 million and the remaining 126,943 common stock warrants expired unexercised. No warrants were exercised during the year ended December 31, 2023. No warrants were issued and outstanding as of December 31, 2024.
10. 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. The number of shares of common stock reserved for issuance under the 2020 Plan will automatically increase on January 1 of each year, beginning on January 1, 2021 and continuing through and including January 1, 2030, by 4 % of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the Company’s board of directors. As of December 31, 2024, there were 1,698,331 shares available for issuance under the 2020 Plan. On January 1, 2025, the number of shares available for future issuance under the 2020 Plan increased by 2,578,433 shares.
Stock options under the 2020 Plan typically last ten years unless the board of directors decides otherwise. Vesting periods vary, typically ranging from one to four years for employees, officers, directors, and consultants. Some options may vest faster in case of a change in control, as defined in 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 373,738 shares available for issuance under the Morphimmune Plan as of December 31, 2024.
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2024 Inducement Plan
In October 2024, the Company adopted the 2024 Inducement Plan, or the 2024 Plan, to reserve 2,000,000 shares of the Company’s common stock to be used exclusively for grants of equity awards to individuals that were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company. The terms and conditions of the 2024 Plan are substantially similar to the Company’s 2020 Plan. As of December 31, 2024, there were 559,300 shares available for issuance under the 2024 Plan.
Stock options granted to 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, the 2024 Plan and the 2020 Plan are collectively referred to as the Plans.
2020 Employee Stock Purchase Plan
The Company also adopted the 2020 Employee Stock Purchase Plan, or the ESPP, in September 2020. Under the ESPP, employees meeting certain specific employment qualifications are eligible to participate and can purchase shares of common stock through payroll deductions. The purchase price is 85 % of the lower of the fair market value of the stock at the commencement or end of the offering period. The ESPP permits eligible employees to purchase shares of common stock through payroll deductions for up to 15 % of qualified compensation.
The maximum number of shares of common stock that may be issued under the ESPP will not exceed 125,000 shares of common stock, plus the number of shares of common stock that are automatically added on January 1 of each calendar year for a period of up to ten years , commencing on the first January 1 following the year in which an initial public offering, or IPO, occurs and ending on, and including, January 1, 2030, in an amount equal to the lesser of (i) 1 % of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, and (ii) 1,000,000 shares of common stock. As of December 31, 2024, there were 906,251 shares available under the ESPP. No shares of common stock have been issued under the ESPP as of December 31, 2024. On January 1, 2025, the number of shares available for future issuance under the ESPP increased by 644,608 shares.
Stock options
A summary of option activity under the Plans during the year ended December 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
6,616,169
14.66
Exercised
( 769,382 )
2.93
Forfeited
( 1,443,809 )
10.67
Expired
( 390,488 )
20.93
Outstanding at December 31, 2024
11,990,781
$
10.02
8.69
$
34,209
Exercisable at December 31, 2024
3,381,263
$
5.11
7.26
$
22,083
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.
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The weighted-average grant date fair value per share of stock options granted during the years ended December 31, 2024 and 2023 was $ 10.86 and $ 6.09 , respectively. The aggregate intrinsic value for options exercised during the years ended December 31, 2024 and 2023 was $ 10.3 million and $ 5.9 million, respectively.
The weighted average assumptions used in the Black-Scholes option-pricing model for stock options granted were:
Year Ended December 31,
2024
2023
Expected volatility
88.4
%
92.1
%
Risk-free interest rate
4.0
%
4.6
%
Expected term (in years)
5.85
5.60
Expected dividend yield
—
%
—
%
Share-based compensation expense recorded in the consolidated statements of operations and comprehensive loss is as follows (in thousands):
Year Ended December 31,
2024
2023
Research and development
$
5,146
$
1,981
General and administrative
10,602
4,242
Total share-based compensation expense
$
15,748
$
6,223
Unrecognized compensation cost related to unvested options was $ 75.2 million as of December 31, 2024 and will be recognized over an estimated weighted-average period of 3.4 years.
11. Segment information
The Company has one operating and reportable segment related to the development of targeted oncology therapies. The segment derives its current revenues from research and development collaborations.
The CODM assesses performance for the segment based on net loss, which is reported on the consolidated statement of operations and comprehensive loss as net loss. The measure of segment assets is reported on the consolidated balance sheet as total assets. When evaluating the Company’s financial performance, the CODM regularly reviews total revenues, total expenses and research and development expenses by program.
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The table below is a summary of the segment net loss, including significant segment expense categories (in thousands):
Year Ended December 31,
2024
2023
Collaboration revenue
$
9,041
$
14,018
Less:
In-process research and development
( 152,344 )
( 80,802 )
Direct research and development expenses (1)
Varegacestat
( 27,954 )
—
IM-1021
( 24,130 )
—
IM-3050
( 13,359 )
—
Other
( 35,335 )
( 11,278 )
Indirect research and development (2)
( 28,764 )
( 11,811 )
General and administrative (3)
( 32,955 )
( 19,657 )
Total operating expenses
( 314,841 )
( 123,548 )
Loss from operations
( 305,800 )
( 109,530 )
Interest income
12,837
2,724
Net loss
$
( 292,963 )
$
( 106,806 )
(1) Direct research and development expenses include external costs, such as costs related to manufacturing, outsourced research, product development, and clinical trial costs, including fees paid to investigators, consultants, central laboratories and CROs to specific product candidates.
(2) Indirect research and development expenses include personnel salary, benefit and share-based compensation costs, depreciation and amortization, laboratory materials and services, and certain overhead expenses.
(3) General and administrative expenses include personnel salary, benefit and share-based compensation costs, legal fees, professional fees for accounting, auditing, tax and consulting services, insurance costs, travel, depreciation and amortization, and certain overhead expenses.
12. Income taxes
A reconciliation of the federal income tax rate to the Company’s effective tax rate is as follows:
Year Ended December 31,
2024
2023
Federal tax benefit at statutory rate
21.0
%
21.0
%
State tax, net of federal benefit
0.5
( 1.3 )
Research and development credits
2.1
0.7
Share-based compensation
( 0.7 )
( 0.9 )
Write-off of IPR&D
—
( 15.9 )
Change in valuation allowance
( 22.8 )
( 3.6 )
Other
( 0.1 )
—
—
%
—
%
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The components of the Company’s deferred taxes are as follows (in thousands):
December 31,
2024
2023
Deferred tax assets:
Net operating loss carryforwards
$
29,346
$
22,784
Research and development intangibles
62,188
10,135
Research and development credits
10,021
3,782
Share-based compensation
2,385
2,533
Deferred revenue
1,474
—
Accruals and reserves
1,236
546
Lease liability
1,026
350
Other
77
75
Gross deferred tax assets
107,753
40,205
Less: valuation allowance
( 106,720 )
( 39,827 )
Net deferred tax asset
1,033
378
Deferred tax liability
Depreciation
( 125 )
( 46 )
Right-of-use asset
( 908 )
( 332 )
Total deferred tax liabilities
( 1,033 )
( 378 )
Net deferred taxes
$
—
$
—
The Company had no income tax expense due to the operating losses utilization for the years ended December 31, 2024 and 2023. Management has evaluated the positive and negative evidence bearing upon the realizability of the Company’s net deferred tax assets and has determined that it is more likely than not that the Company will not recognize the benefits of the net deferred tax assets. As a result, the Company has recorded a full valuation allowance at December 31, 2024 and 2023. The valuation allowance increased by $ 66.9 million and $ 9.2 million in 2024 and 2023, respectively, due to capitalized IPR&D expense, increase in net operating loss carryforwards and research and development tax credits, and deductible accrued expenses.
Realization of the future tax benefits is dependent on many factors, including the Company’s ability to generate taxable income within the net operating loss carryforward period. Under the provisions of the Internal Revenue Code, certain substantial changes in the Company’s ownership, including a sale of the Company or significant changes in ownership due to sales of equity, may have limited, or may limit in the future, the amount of net operating loss and other attributes including research and development credit carry forwards which could be used annually to offset future taxable income. Utilization of the net operating loss carryforwards and research and development tax credit carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986 due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of net operating loss and research and development credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. Based upon the evaluation of ownership changes through December 31, 2024, the Company believes that an ownership change likely occurred as a result of the Morphimmune transaction on October 2, 2023, that could limit the Company’s ability to utilize its net operating loss or research and development credit carryforwards. The Company has not generated taxable income or a current tax liability and has not utilized its net operating loss or research and development credit carryforwards as of December 31, 2024.
As of December 31, 2024, the Company had $ 119.9 million of federal and $ 95.6 million of state net operating loss carryforwards. If not utilized, the federal and state net operating loss carryforwards expire starting in 2027. Included in the federal net operating loss carryforwards are $ 102.8 million of net operating losses generated from 2018 to 2024 that will not expire and are limited to offset 80 % of the Company’s taxable income for years beginning after December 31, 2020. Certain federal and state net operating loss carryforwards expire at various dates through 2043. As of December 31, 2024, the Company had cumulative $ 9.9 million of federal and $ 0.2 million of state R&D tax credits . These tax credit carryforwards will expire at various dates through 2044.
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A reconciliation of the beginning and ending amount of unrecognized tax benefits were as follows (in thousands):
December 31,
2024
2023
Beginning balance
$
37
$
37
Additions for tax positions taken in prior years
19
—
Ending balance
$
56
$
37
If the unrecognized tax benefits for uncertain tax positions as of December 31, 2024 are recognized, there will be no impact to the effective tax rate due to the valuation allowance. The Company recognizes interest and penalties related to the unrecognized tax benefits as a component of income tax expense. As of December 31, 2024, there were no material interest and penalties on uncertain tax benefits. The Company does not anticipate any significant changes to its unrecognized tax benefits in the next 12 months.
The Company filed income tax returns in the United States and Pennsylvania in all tax years since inception. The tax years 2006 and beyond remain open to examination by these jurisdictions. Carryforward attributes generated in all years since inception remain subject to adjustment. The Company is not currently under examination by the Internal Revenue Service or any other jurisdiction for these years.
13. Subsequent events
On January 31, 2025, the Company completed a public offering of 22,258,064 shares of its common stock at a price of $ 7.75 per share. The gross proceeds to the Company from the offering were $ 172.5 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.
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