What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-14 compared with 2024-08-13 · 157 added, 125 removed, 442 unchanged (39% of the section changed)

3 unchanged sentences

(In thousands, except share data and par value)

JUNE 30, DECEMBER 31,

SEPTEMBER 30, DECEMBER 31,

Current assets:

1 unchanged sentence

Accounts receivable 455 778

Other receivables

Receivables from related parties 672 —

17 unchanged sentences

Preferred stock, $ 0.0001 par value;

15,000,000 shares authorized as of June 30, 2024 and December 31, 2023;

no shares issued or outstanding as of June 30, 2024 and December 31, 2023.

15,000,000 shares authorized as of September 30, 2024 and December 31, 2023;

no shares issued or outstanding as of September 30, 2024 and December 31, 2023.

Common stock, $ 0.0001 par value;

120,000,000 shares authorized as of June 30, 2024 and December 31, 2023;

14,475,904 and 47,369,511 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.

120,000,000 shares authorized as of September 30, 2024 and December 31, 2023;

14,475,904 and 47,369,511 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.

Additional paid-in-capital 236,733 657,232

7 unchanged sentences

THREE MONTHS ENDED

JUNE 30, SIX MONTHS ENDED

SEPTEMBER 30, NINE MONTHS ENDED

SEPTEMBER 30,

2024 2023 2024 2023

44 unchanged sentences

14,476 $ 1 $ 233,768 $ ( 14,403 ) $ 219,366

Stock-based compensation expense — — 2,965 — 2,965

Net loss — — — ( 43,864 ) ( 43,864 )

Balance as of September 30, 2024

14,476 $ 1 $ 236,733 $ ( 58,267 ) $ 178,467

(Shares) Common Stock

12 unchanged sentences

43,667 $ 4 $ 443,525 $ ( 468,341 ) $ ( 24,812 )

Stock-based compensation expense — — 6,530 — 6,530

Issuance of shares upon exercise of stock options 2 — 21 — 21

Issuance of common stock and pre-funded warrants in private placement, net of issuance costs 3,621 1 199,644 — 199,645

Net loss — — — ( 51,789 ) ( 51,789 )

Balance as of September 30, 2023

47,290 $ 5 $ 649,720 $ ( 520,130 ) $ 129,595

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

2 unchanged sentences

(In thousands)

SIX MONTHS ENDED

NINE MONTHS ENDED

SEPTEMBER 30,

Cash flows from operating activities

11 unchanged sentences

Accounts receivable 323 ( 88 )

Other receivables

Receivables from related parties ( 672 ) 14

10 unchanged sentences

Cash flows from financing activities

Proceeds from issuance of common stock and pre-funded warrants in private placement

Issuance costs associated with issuance of common stock and pre-funded warrants in private placement — ( 130 )

Proceeds from the exercise of stock options 71,678 1,231

Net cash provided by financing activities 71,678 201,101

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

( 81,592 ) 63,462

3 unchanged sentences

Payable for purchase of fixed assets $ 6 $ 108

Issuance costs associated with the issuance of common stock and pre-funded warrants in private placement in accounts payable

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

6 unchanged sentences

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC, related to an interim report on the Form 10-Q.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary.

5 unchanged sentences

Accordingly, the accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the related notes thereto for the fiscal year ended December 31, 2023, which are included in Exhibit 99.1 to our Registration Statement on Form 10, as amended (File No.

001-42031), which was filed with the Securities and Exchange Commission, or the SEC, and declared effective by the SEC on May 24, 2024, or the Form 10.

Reclassification of Prior Year Presentation

Certain prior year amounts have been reclassified for consistency with the current year presentation.

These reclassifications had no effect on the reported results of operations.

001-42031), which was filed with and declared effective by the SEC on May 24, 2024, or the Form 10.

Separation and Distribution

In January 2024, Inhibrx, Inc., or the Former Parent, announced its intent, as approved by its board of directors, to effect the spin-off of INBRX-101, an optimized, recombinant alpha-1 antitrypsin, or AAT, augmentation therapy currently in a registrational trial for the treatment of patients with alpha-1 antitrypsin deficiency.

In January 2024, Inhibrx, Inc., or the Former Parent, announced its intent, as approved by its board of directors, to effect the spin-off of INBRX-101, an optimized, recombinant alpha-1 antitrypsin, or AAT, augmentation therapy in a registrational trial for the treatment of patients with alpha-1 antitrypsin deficiency.

The Former Parent and the Company signed an Agreement and Plan of Merger, dated as of January 22, 2024, or the Merger Agreement, with Aventis Inc., a Pennsylvania corporation, or the Acquirer, and a wholly-owned subsidiary of Sanofi S.A., or Sanofi, and Art Acquisition Sub, Inc., a Delaware corporation, or the Merger Sub, and a wholly-owned subsidiary of Acquirer, along with a Separation and Distribution Agreement, dated as of January 22, 2024, by and among the Former Parent, the Company and Acquirer.

The Merger Agreement provided for the acquisition by Acquirer of the Former Parent, or the Merger, to be accomplished through the merger of Merger Sub with and into the Company with the Company continuing as the surviving entity.

The Merger Agreement provided for the acquisition by Acquirer of the Former Parent, or the Merger, to be accomplished through the merger of Merger Sub with and into the Former Parent with the Former Parent continuing as the surviving entity.

On May 29, 2024, the Former Parent completed a distribution to holders of its shares of common stock of 92 % of the issued and outstanding shares of common stock of the Company, or the Distribution.

On May 30, 2024, the Former Parent completed the Merger, pursuant to which (i) all assets and liabilities primarily related to INBRX-101, or the 101 Business, were transferred to the Acquirer, a wholly-owned subsidiary of Sanofi;

discovery pipeline, as well as the remaining close-out obligations related to its previously terminated program, INBRX-105.

and (ii) by way of a series of internal restructuring transactions, or the Separation, the Company acquired the assets and liabilities and corporate infrastructure associated with its ongoing programs, INBRX-106 and ozekibart (INBRX-109), and its discovery pipeline, as well as the remaining close-out obligations related to its previously terminated program, INBRX-105.

Upon the closing of the Merger, the Company became a stand-alone, publicly traded company.

In connection with the Separation, the Former Parent completed a distribution to holders of its shares of common stock of 92 % of the issued and outstanding shares of common stock of the Company, or the Distribution.

On May 30, 2024, each Former Parent stockholder received:

(i) $ 30.00 per share in cash, (ii) one contingent value right per share, representing the right to receive a contingent payment of $ 5.00 in cash upon the achievement of a regulatory milestone, and (iii) one SEC-registered, publicly listed, share of Inhibrx Biosciences for every four shares of the Former Parent’s common stock held.

In connection with the foregoing transactions, each Former Parent stockholder received:

for every four shares of the Former Parent’s common stock held.

The Acquirer retained an equity interest in the Company of 8 % upon the Distribution.

4 unchanged sentences

The Acquirer may pay an additional $ 300.0 million in consideration under the contingent value rights issued upon the achievement of a regulatory milestone.

Notwithstanding the legal form of the spin-off, the Separation and Distribution is being treated as a reverse spin-off for financial accounting and reporting purpose in accordance with ASC 505-60, Spinoffs and Reverse Spinoffs because (i) a wholly-owned subsidiary of Acquirer merged with and into Former Parent immediately following the Distribution;

Notwithstanding the legal form of the spin-off, the Separation and Distribution is being treated as a reverse spin-off for financial accounting and reporting purposes in accordance with ASC 505-60, Spinoffs and Reverse Spinoffs because (i) a wholly-owned subsidiary of the Acquirer merged with and into the Former Parent immediately following the Distribution;

(ii) no senior management of the Former Parent were retained by the Former Parent following the Distribution;

2 unchanged sentences

Therefore, for periods prior to the spin-off, the Company’s financial statements are the historical financial statements of the Former Parent.

For periods prior to the spin-off, descriptions of historical business activities are presented as if the spin-off had already occurred, and the Former Parent’s activities related to such assets and liabilities had been performed by the Company.

For all periods prior to the spin-off, all outstanding shares referenced in these financial statements are those shares outstanding of the Former Parent at each respective date, unless otherwise indicated as adjusted for the distribution ratio.

For such periods, descriptions of historical business activities are presented as if the spin-off had already occurred, and the Former Parent’s activities related to such assets and liabilities had been performed by the Company.

In addition, for all periods prior to the spin-off, all outstanding shares referenced in these financial statements are those shares outstanding of the Former Parent at each respective date, unless otherwise indicated as adjusted for the distribution ratio.

Following the spin-off, all outstanding shares referenced are those of the Company, which, as discussed above, were issued on a four-to-one ratio of the Former Parent’s outstanding shares.

3 unchanged sentences

In accordance with this guidance, the disposal of the 101 Business has been accounted for as a dividend-in-kind, with a gain recognized for the difference between the fair value and carrying value of the disposed assets.

The Company recorded a gain on the transaction of $ 2.0 billion during the three and six months ended June 30, 2024, which consists of the following components (in thousands):

THREE AND SIX MONTHS ENDED

JUNE 30, 2024

The Company recorded a gain on the transaction of $ 2.0 billion during the nine months ended September 30, 2024, which consists of the following components (in thousands):

NINE MONTHS ENDED

SEPTEMBER 30, 2024

Merger consideration for common stock, warrants, and stock options $ 1,727,687

3 unchanged sentences

Total gain recognized $ 2,021,498

The gain related to the Merger consideration payable to shareholders of $ 1.7 billion was recorded, net of consideration allocated to the shares issued to Acquirer, through a reduction to retained earnings of $ 1.2 billion, representing the amount of retained earnings available at closing of the Merger, with the remaining amount of $ 563.8 million recorded through additional paid-in capital.

As of June 30, 2024, the Company had an accumulated deficit of $ 14.4 million and cash and cash equivalents of $ 226.9 million.

From its inception and through June 30, 2024, the Company has devoted substantially all of its efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of its therapeutic candidates, pre-commercialization activities, organizing and staffing the Company, establishing its intellectual property portfolio and raising capital to support and expand these activities.

The gain related to the Merger consideration payable to shareholders of $ 1.7 billion was recorded, net of consideration allocated to the shares issued to Acquirer, through a reduction to retained earnings of $ 1.2 billion, representing the amount of retained earnings available at the closing of the Merger, with the remaining amount of $ 563.8 million recorded through additional paid-in capital.

As of September 30, 2024, the Company had an accumulated deficit of $ 58.3 million and cash and cash equivalents of $ 196.3 million.

From its inception and through September 30, 2024, the Company has devoted substantially all of its efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of its therapeutic candidates, pre-commercialization activities, organizing and staffing the Company, establishing its intellectual property portfolio and raising capital to support and expand these activities.

The Company believes that its existing cash and cash equivalents will be sufficient to fund the Company’s operations for at least 12 months from the date these unaudited condensed consolidated financial statements are issued.

2 unchanged sentences

If the Company raises capital through additional debt financings, it may be subject to covenants limiting or restricting its ability to take specific actions, such as incurring additional debt or making certain capital expenditures.

To the extent that the Company raises additional capital through strategic licensing, collaboration or other similar agreement, it may have to relinquish valuable rights to its therapeutic candidates, future revenue streams or research programs at an earlier stage of development or on less favorable terms than it would otherwise choose, or to grant licenses on terms that may not be favorable to the Company.

To the extent that the Company raises additional capital through strategic licensing, collaboration or other similar agreements, it may have to relinquish valuable rights to its therapeutic candidates, future revenue streams or research programs at an earlier stage of development or on less favorable terms than it would otherwise choose, or to grant licenses on terms that may not be favorable to the Company.

There can be no assurance as to the availability or terms upon which such financing and capital might be available in the future.

4 unchanged sentences

The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes.

The Company’s most significant estimates relate to evaluation of whether revenue recognition

criteria have been met, accounting for development work and preclinical studies and clinical trials, determining the assumptions used in measuring stock-based compensation, the incremental borrowing rate estimated in relation to the Company’s operating lease, and valuation allowances for the Company’s deferred tax assets.

The Company’s most significant estimates relate to evaluation of whether revenue recognition criteria have been met, accounting for development work and preclinical studies and clinical trials, determining the assumptions used in measuring stock-based compensation, the incremental borrowing rate estimated in relation to the Company’s operating lease, and valuation allowances for the Company’s deferred tax assets.

The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances.

6 unchanged sentences

Financial instruments that subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents.

The Company maintains deposits in federally insured financial institutions in excess of federally insured limits by the Federal Deposit Insurance Corporation, or FDIC, of up to $250,000.

The Company’s cash management and investment policy limits investment instruments to investment-grade securities with the objective to preserve capital and to maintain liquidity until the funds can be used in operations.

The Company maintains deposits in federally insured financial institutions in excess of federally insured limits by the Federal Deposit Insurance Corporation, or the FDIC, of up to $250,000.

The Company’s cash management and investment policy limits investment instruments to investment-grade securities

with the objective to preserve capital and to maintain liquidity until the funds can be used in operations.

The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial condition of the depository institutions in which those deposits are held.

10 unchanged sentences

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

During the six months ended June 30, 2023, the Company’s investments in debt securities consisted of U.S.

During the nine months ended September 30, 2023, the Company’s investments in debt securities consisted of U.S.

Treasury Bills, which were classified as Level 1 in the fair value hierarchy.

Due to the short-term nature of these securities which were classified as cash equivalents, the amortized value approximated fair value and the Company did not remeasure these instruments at fair value.

As of June 30, 2024 and December 31, 2023, the Company held no investments in debt securities.

The Company’s debt outstanding during the period was classified as Level 2 in the fair value hierarchy.

As of June 30, 2024 and December 31, 2023, the Company had no financial instruments measured at fair value on a recurring basis.

As of September 30, 2024 and December 31, 2023, the Company held no investments in debt securities.

The Company’s long-term debt outstanding as of December 31, 2023 was classified as Level 2 in the fair value hierarchy.

As of September 30, 2024 and December 31, 2023, the Company had no financial instruments measured at fair value on a recurring basis.

Accrued Research and Development and Clinical Trial Costs

1 unchanged sentence

The Company’s preclinical studies and clinical trials are performed internally, by third party contract research organizations, or CROs, and/or clinical investigators.

The Company also engages with contract development and manufacturing organizations, or CDMOs, for clinical supplies and manufacturing scale-up

activities related to its therapeutic candidates.

The Company also engages with contract development and manufacturing organizations, or CDMOs, for clinical supplies and manufacturing scale-up activities related to its therapeutic candidates.

Invoicing from these third parties may be monthly based upon services performed or based upon milestones achieved.

8 unchanged sentences

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock outstanding during the same period.

Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock and potentially dilutive common shares outstanding during the same period.

Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially dilutive common shares outstanding during the same period.

The Company excludes common stock equivalents from the calculation of diluted net earnings (loss) per share when the effect is anti-dilutive.

The weighted average number of common stock used in the basic and diluted net income (loss) per common stock calculations includes the weighted-average pre-funded warrants outstanding during the period as they are exercisable at any time for nominal cash consideration.

During the three and six months ended June 30, 2024, outstanding shares during the period consist both of shares of the Former Parent and of the Company.

The weighted average number of shares of common stock used in the basic and diluted net income (loss) per common stock calculations includes the weighted-average pre-funded warrants outstanding during the period as they are exercisable at any time for nominal cash consideration.

During the nine months ended September 30, 2024, outstanding shares during the period consist both of shares of the Former Parent and of the Company.

For purposes of computing earnings (loss) per share only, for all periods presented in its condensed consolidated statements of operations, the Company adjusted all outstanding shares of the Former Parent, including potentially dilutive securities, by the four-to-one distribution ratio used in the Distribution.

In periods in which the Company has a net income, the Company applies the treasury stock method to determine the dilutive effect of potentially dilutive securities.

In periods in which the Company has net income, the Company applies the treasury stock method to determine the dilutive effect of potentially dilutive securities.

Potentially dilutive securities included in the diluted earnings per share are as follows (in thousands):

THREE MONTHS ENDED JUNE 30, 2024 SIX MONTHS ENDED JUNE 30, 2024

NINE MONTHS ENDED SEPTEMBER 30, 2024

Outstanding stock options 242

Warrants to purchase common stock 1

Total 188 366

In periods in which the Company has a net loss, basic loss per share and diluted loss per share are identical since the effect of potentially dilutive common shares is anti-dilutive and therefore excluded.

Accordingly, for the three and six months ended June 30, 2023, there is no difference in the number of shares used to calculate basic and diluted shares outstanding.

Accordingly, for the three months ended September 30, 2024 and the three and nine months ended September 30, 2023, there is no difference in the number of shares used to calculate basic and diluted shares outstanding.

Potentially dilutive securities not included in the calculation of diluted loss per share are as follows (in thousands):

AS OF JUNE 30, 2023

AS OF SEPTEMBER 30,

Outstanding stock options 910 1,667

Warrants to purchase common stock — 12

Total 910 1,679

Segment Information

17 unchanged sentences

The Company is currently evaluating the impact of this accounting standard update on the Company’s consolidated financial statements and related disclosures.

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 , which requires additional disclosure about specific expense categories in the notes to financial statements.

The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements.

The Company is currently evaluating the impact of this accounting standard update on the Company’s consolidated financial statements and related disclosures.

OTHER FINANCIAL INFORMATION

1 unchanged sentence

Prepaid expense and other current assets were comprised of the following (in thousands):

JUNE 30, 2024 DECEMBER 31, 2023

SEPTEMBER 30, 2024 DECEMBER 31, 2023

Clinical trials (1)

13 unchanged sentences

Property and equipment, net were comprised of the following (in thousands):

JUNE 30, 2024 DECEMBER 31, 2023

SEPTEMBER 30, 2024 DECEMBER 31, 2023

Machinery and equipment $ 9,740 $ 8,480

7 unchanged sentences

(1) As of December 31, 2023, consists of renovations to the Company’s office space and software not yet placed in service.

Depreciation and amortization expense for the three and six months ended June 30, 2024 and June 30, 2023 consisted of the following (in thousands):

Depreciation and amortization expense for the three and nine months ended September 30, 2024 and September 30, 2023 consisted of the following (in thousands):

THREE MONTHS ENDED

JUNE 30, SIX MONTHS ENDED

SEPTEMBER 30, NINE MONTHS ENDED

SEPTEMBER 30,

2024 2023 2024 2023

4 unchanged sentences

Accrued expenses were comprised of the following (in thousands):

JUNE 30, 2024 DECEMBER 31, 2023

SEPTEMBER 30, 2024 DECEMBER 31, 2023

Clinical trials (1)

26 unchanged sentences

The Company did not make any payment upon the extinguishment of the debt and did not incur any prepayment penalties.

Upon the Acquirer’s assumption of the outstanding debt, the Company recorded a gain of $ 211.3 million, the net carrying amount of the Amended 2020 Loans upon extinguishment, within the gain on transaction in its condensed consolidated statements of operations.

Upon the Acquirer’s assumption of the outstanding debt, the Company recorded a gain of $ 211.3 million, the net carrying amount of the Amended 2020 Loans upon extinguishment, within the gain related to transaction with Acquirer in its condensed consolidated statements of operations.

Interest Expense

Prior to the Separation, interest expense was calculated using the effective interest method and was inclusive of non-cash amortization of the debt discount and accretion of the final payment.

During the three months ended June 30,

2024, interest expense was $ 5.4 million, $ 0.8 million of which related to non-cash amortization of the debt discount and accretion of the final payment.

During the six months ended June 30, 2024, interest expense was $ 13.5 million, $ 2.1 million of which related to non-cash amortization of the debt discount and accretion of the final payment.

During the three months ended June 30, 2023, interest expense was $ 7.9 million, $ 1.2 million of which related to non-cash amortization of the debt discount and accretion of the final payment.

During the six months ended June 30, 2023, interest expense was $ 15.5 million, $ 2.4 million of which related to non-cash amortization of the debt discount and accretion of the final payment.

During the nine months ended September 30, 2024, interest expense was $ 13.5 million, $ 2.1 million of which related to non-cash amortization of the debt discount and accretion of the final payment.

During the three months ended September 30, 2023, interest expense was $ 8.1 million, $ 1.2 million of which related to non-cash amortization of the debt discount and accretion of the final payment.

During the nine months ended September 30, 2023, interest expense was $ 23.6 million, $ 3.7 million of which related to non-cash amortization of the debt discount and accretion of the final payment.

The Company did not incur any interest expense during the three months ended September 30, 2024.

STOCKHOLDERS’ EQUITY

3 unchanged sentences

The Company issued one SEC-registered, publicly listed, share of Inhibrx Biosciences for every four shares of the Former Parent’s common stock held, resulting in 13,316,140 shares of common stock issued to common stockholders of the Former Parent.

The Former Parent retained an equity interest in the Company of 8 %, or 1,157,926 shares.

Upon the Distribution, the Former Parent retained an equity interest in the Company of 8 %, or 1,157,926 shares.

The Company issued 1,838 shares of common stock to Oxford in connection with the Oxford Warrants (as defined below) in the Distribution.

2 unchanged sentences

The purchase price of the pre-funded warrants was $ 19.3499 per pre-funded warrant, with an exercise price of $ 0.0001 per share.

The Company received gross proceeds of $ 200.0 million from the Private Placement, before deducting $ 0.4 million of offering expenses payable by the Company.

The Company received gross proceeds of approximately $ 200.0 million from the Private Placement, before deducting $ 0.4 million of offering expenses payable by the Company.

The pre-funded warrants were equity-classified and carried at the instruments’ fair value upon issuance.

The pre-funded warrants were exercisable upon issuance pursuant to certain beneficial ownership limitations as defined in the Purchase Agreement and will expire when exercised in full.

During the second quarter of 2024, certain Purchasers exercised 2,747,245 pre-funded warrants for 2,746,454 shares of the Former Parent’s common stock.

In connection with the execution of the Merger Agreement, the Former Parent entered into an Agreement Relating to the Pre-Funded Warrant to Purchase Common Stock and Securities Purchase Agreement, dated as of January 22, 2024, by and between the Former Parent and each holder of the pre-funded warrants purchased in the Private Placement so that on the date of the Distribution, any remaining pre-funded warrants of the Former Parent not already exercised to purchase the Former Parent’s common stock become exercisable for an equivalent number of the Company’s common stock at an exercise price of $ 0.0001 per share, pursuant to certain beneficial ownership limitations.

During the second quarter of 2024, certain Purchasers exercised 2,747,245 pre-funded warrants on a cashless basis for a net of 2,746,454 shares of the Former Parent’s common stock.

In connection with the execution of the Merger Agreement, the Former Parent entered into an Agreement Relating to the Pre-Funded Warrant to Purchase Common Stock and Securities Purchase Agreement, dated as of January 22, 2024, by and between the Former Parent and each holder of the pre-funded warrants purchased in the Private Placement so that on the date of the Distribution, any remaining pre-funded warrants of the Former Parent not already exercised to purchase the Former Parent’s common stock became exercisable for an equivalent number of shares of the Company’s common stock at an exercise price of $ 0.0001 per share, pursuant to certain beneficial ownership limitations.

The Company has evaluated the amendment and accounted for this as a modification to the original Purchase Agreement.

As part of the Separation and Distribution, each holder of outstanding pre-funded warrants received (i) $ 30.00 per pre-funded warrant in cash, less the applicable exercise price per share, (ii) one contingent value right per share, representing the right to receive a contingent payment of $ 5.00 in cash upon the achievement of a regulatory milestone, and (iii) one pre-funded warrant of Inhibrx Biosciences for every four of the Former Parent’s pre-funded warrants held.

Following the Separation and Distribution and as of June 30, 2024, pre-funded warrants to purchase 991,849 shares of the Company’s common stock are outstanding at an exercise price of $ 0.0001 per share.

Following the Separation and Distribution and as of September 30, 2024, pre-funded warrants to purchase 991,849 shares of the Company’s common stock are outstanding at an exercise price of $ 0.0001 per share.

The pre-funded warrants are exercisable upon issuance pursuant to certain beneficial ownership limitations as defined in the Purchase Agreement, as amended, and will expire when exercised in full.

7 unchanged sentences

All outstanding warrants with an exercise price which exceeded the total consideration of $ 35.00 were canceled upon the Merger for no consideration.

As of June 30, 2024, no Oxford Warrants were outstanding.

As of September 30, 2024, no Oxford Warrants were outstanding.

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance as of June 30, 2024 for the Company and December 31, 2023 for the Former Parent consisted of the following (in thousands):

JUNE 30, 2024 DECEMBER 31, 2023

Common stock reserved for future issuance as of September 30, 2024 for the Company and December 31, 2023 for the Former Parent consisted of the following (in thousands):

SEPTEMBER 30, 2024 DECEMBER 31, 2023

Options to purchase common stock issued and outstanding 3,641 6,494

10 unchanged sentences

The options were subject to four-year vesting with a one-year cliff and had a contractual term of 10 years.

A summary of the Company’s stock option activity under its 2017 Plan for the six months ended June 30, 2024 is as follows (in thousands, except for per share data and years):

A summary of the Company’s stock option activity under its 2017 Plan for the nine months ended September 30, 2024 is as follows (in thousands, except for per share data and years):

Number of Shares Weighted Average Exercise Price

5 unchanged sentences

Canceled in connection with the Merger ( 152 ) $ 41.56

Outstanding as of June 30, 2024

Vested and exercisable as of June 30, 2024

The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2024 and June 30, 2023 was $ 65.3 million and $ 1.3 million, respectively.

Aggregate intrinsic value of stock options exercised and outstanding was calculated using the fair value of common stock on the date of exercise and the fair value of common stock as of June 30, 2024, respectively.

The total fair value of stock options vested during the six months ended June 30, 2024 and June 30, 2023 was $ 42.5 million and $ 13.8 million, respectively.

Outstanding as of September 30, 2024

Vested and exercisable as of September 30, 2024

The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2024 and September 30, 2023 was $ 65.3 million and $ 1.3 million, respectively.

The total fair value of stock options vested during the nine months ended September 30, 2024 and September 30, 2023 was $ 42.5 million and $ 19.0 million, respectively.

Following the Merger and as of May 30, 2024, no stock options remained outstanding under the 2017 Plan.

1 unchanged sentence

All outstanding options with an exercise price less than or equal to the total consideration of $ 35.00 vested immediately upon the Merger and were settled for the consideration of:

(i) $ 30.00 per share in cash, less the applicable exercise price of their stock option and (ii) one contingent value right per share, representing the right to receive a contingent payment of $ 5.00 in cash upon the achievement of a regulatory milestone.

(i) $ 30.00 per share in cash, less the applicable exercise price of their stock option and (ii) one contingent value right per share, representing the right to

receive a contingent payment of $ 5.00 in cash upon the achievement of a regulatory milestone.

In connection with the acceleration of the eligible stock options, the Company recognized $ 39.3 million in stock compensation expense.

2 unchanged sentences

Stock-Based Compensation Expense

The weighted-average assumptions used by the Company to estimate the fair value of stock option grants using the Black-Scholes option pricing model, as well as the resulting weighted-average fair value, for the six months ended June 30, 2023 were as follows:

SIX MONTHS ENDED

JUNE 30, 2023

NINE MONTHS ENDED

SEPTEMBER 30, 2023

Risk-free interest rate 3.76 %

3 unchanged sentences

Weighted average fair value $ 16.89

The Company did not grant any stock options under the 2017 Plan during the six months ended June 30, 2024.

The Company did not grant any stock options under the 2017 Plan during the nine months ended September 30, 2024.

Stock-based compensation expense for stock options under the 2017 Plan consisted of the following (in thousands):

THREE MONTHS ENDED

JUNE 30, SIX MONTHS ENDED

SEPTEMBER 30, NINE MONTHS ENDED

SEPTEMBER 30,

2024 2023 2024 2023

2 unchanged sentences

Total stock-based compensation expense $ — $ 6,530 $ 51,534 $ 18,419

As of June 30, 2024, the Company had no remaining unrecognized stock-based compensation expense related to its stock options under the 2017 Plan following the termination of the plan subsequent to the Merger.

As of September 30, 2024, the Company had no remaining unrecognized stock-based compensation expense related to its stock options under the 2017 Plan following the termination of the plan subsequent to the Merger.

In connection with the Separation, the Company adopted the 2024 Omnibus Incentive Plan, or the 2024 Plan, which provides for the issuance of incentive stock options, restricted and unrestricted stock awards, and other stock-based awards.

As of June 30, 2024, an aggregate of 4.0 million shares of common stock were authorized for issuance under the 2024 Plan, of which 0.4 million remained available for issuance.

As of September 30, 2024, an aggregate of 4.0 million shares of common stock were authorized for issuance under the 2024 Plan, of which 0.4 million remained available for issuance.

Stock Option Activity

2 unchanged sentences

The options are subject to four-year vesting with a one-year cliff and have a contractual term of 10 years.

A summary of the Company’s stock option activity under its 2024 Plan for the six months ended June 30, 2024 is as follows (in thousands, except for per share data and years):

A summary of the Company’s stock option activity under its 2024 Plan for the nine months ended September 30, 2024 is as follows (in thousands, except for per share data and years):

Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term

2 unchanged sentences

Granted 3,671 $ 15.85

Outstanding as of June 30, 2024

Forfeited ( 30 ) $ 15.86

Outstanding as of September 30, 2024

3,641 $ 15.85 9.7 $ 54

Vested and exercisable as of June 30, 2024

No stock options were exercised or vested during the six months ended June 30, 2024.

Vested and exercisable as of September 30, 2024

No stock options were exercised or vested during the nine months ended September 30, 2024.

The Company expects all outstanding stock options to vest.

There was no activity under the 2024 Plan during the six months ended June 30, 2023.

There was no activity under the 2024 Plan during the nine months ended September 30, 2023.

Stock-Based Compensation Expense

SIX MONTHS ENDED

JUNE 30, 2024

NINE MONTHS ENDED

SEPTEMBER 30, 2024

Risk-free interest rate 4.56 %

4 unchanged sentences

Stock-based compensation expense for stock options under the 2024 Plan consisted of the following (in thousands):

THREE AND SIX MONTHS ENDED

JUNE 30, 2024

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 30, 2024

Research and development $ 1,717 $ 2,320

1 unchanged sentence

Total stock-based compensation expense $ 2,965 $ 4,002

There was no expense incurred under the 2024 plan during the three or six months ended June 30, 2023.

As of June 30, 2024, the Company had $ 42.2 million of total unrecognized stock-based compensation expense related to its stock options, which is expected to be recognized over a weighted-average period of 3.8 years.

There was no expense incurred under the 2024 Plan during the three or nine months ended September 30, 2023.

As of September 30, 2024, the Company had $ 39.3 million of total unrecognized stock-based compensation expense related to its stock options, which is expected to be recognized over a weighted-average period of 3.6 years.

LICENSE REVENUES

1 unchanged sentence

THREE MONTHS ENDED

JUNE 30, SIX MONTHS ENDED

SEPTEMBER 30, NINE MONTHS ENDED

SEPTEMBER 30,

2024 2023 2024 2023

11 unchanged sentences

The Company is also entitled to receive certain developmental milestone payments of up to an aggregate of $ 51.5 million per therapeutic, as well as percentage tiered royalties on future product sales with rates in the mid-single digits.

Due to the uncertainty in the achievement of the developmental milestones and

future sales, the variable consideration associated with the future milestone payments has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur.

Due to the uncertainty in the achievement of the developmental milestones and future sales, the variable consideration associated with the future milestone payments has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur.

These estimates will be re-assessed at each reporting period.

3 unchanged sentences

The Company recognized the $ 0.1 million of revenue related to this extension at the point in time in which the extension was granted.

During each of the three and six months ended June 30, 2024, the Company recognized $ 0.1 million of revenue related to this agreement.

The Company did no t recognize any revenue under this agreement during the three and six months ended June 30, 2023.

During the nine months ended September 30, 2024, the Company recognized $ 0.1 million of revenue related to this agreement.

The Company did no t recognize any revenue under this agreement during the three months ended September 30, 2024 or the three and nine months ended September 30, 2023.

RELATED PARTY TRANSACTIONS

6 unchanged sentences

Transition Services Agreement

In connection with the Separation, the Company also entered into the Transition Services Agreement with the Former Parent under which the Company or one of its affiliates will provide the Former Parent or other Sanofi entities with certain transition services for a limited time to ensure an orderly transition following the Separation.

The services that the Company agreed to provide to Former Parent or other Sanofi entities under the Transition Services Agreement include certain finance and accounting, including payroll, tax, and procurement, information technology, legal and intellectual property, clinical study support, technical operations, regulatory, quality assurance, commercial and medical affairs, and other services.

The Former Parent will pay the Company for any such services received by the Former Parent or other Sanofi entities, as applicable, at agreed amounts as set forth in the Transition Services Agreement.

During the three and six months ended June 30, 2024, the Company billed the Former Parent for $ 0.2 million under the Transition Services Agreement.

The Company recognized this amount as other income and the balance is recorded as receivables from related parties in the Company’s condensed consolidated balance sheets as of June 30, 2024.

In connection with the Separation, the Company also entered into the Transition Services Agreement with the Former Parent under which the Company or one of its affiliates provide the Former Parent or other Sanofi entities with certain transition services for a limited time to ensure an orderly transition following the Separation.

The services that the Company agreed to provide to the Former Parent or other Sanofi entities under the Transition Services Agreement include certain finance and accounting, including payroll, tax, and procurement, information technology, legal and intellectual property, clinical study support, technical operations, regulatory, quality assurance, commercial and medical affairs, and other services.

The Former Parent pays the Company for any such services received by the Former Parent or other Sanofi entities, as applicable, at agreed amounts as set forth in the Transition Services Agreement.

During the three and nine months ended September 30, 2024, the Company billed the Former Parent for $ 0.1 million and $ 0.2 million, respectively, for services performed under the Transition Services Agreement.

The Company recognized this amount as other income.

The Company has received $ 0.1 million, and the remaining balance of $ 0.1 million is recorded as receivables from related parties in the Company’s condensed consolidated balance sheets as of September 30, 2024.

Additionally, the Transition Services Agreement requires the Former Parent to reimburse the Company for certain severance payments made by the Company to certain Company employees whose employment was terminated as a result of the Merger.

During the three and nine months ended September 30, 2024, the Company billed the Former Parent for $ 1.0 million of severance payments to former employees.

The Company has received $ 0.4 million, and the remaining balance of $ 0.6 million is recorded as receivables from related parties in the Company’s condensed consolidated balance sheets as of September 30, 2024.

Pharmacovigilance Agreement

2 unchanged sentences

In September 2017, the Company entered into a seven-year lease agreement as its sole location in La Jolla, California.

The lease expires in June 2025 with an option to extend the lease an additional five years , which is not

included in the right-of-use asset and lease liabilities.

The lease expires in June 2025 with an option to extend the lease an additional five years , which is not included in the right-of-use asset and lease liabilities.

The lease contained an initial base rent of approximately $ 0.1 million per month with 2 % annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which to be determined annually.

1 unchanged sentence

The amended lease terminates coterminously with the initial lease agreement and contains an initial base rent of approximately $ 30,000 per month with 2 % annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which is to be determined annually.

The operating right-of-use asset and operating lease liability as of June 30, 2024 and December 31, 2023 were as follows (in thousands):

JUNE 30, 2024 DECEMBER 31, 2023

The operating right-of-use asset and operating lease liability as of September 30, 2024 and December 31, 2023 were as follows (in thousands):

SEPTEMBER 30, 2024 DECEMBER 31, 2023

Operating right-of-use asset

4 unchanged sentences

Total operating lease liability $ 1,835 $ 3,173

During each of the three months ended June 30, 2024 and June 30, 2023, the Company recognized operating lease expense of $ 0.8 million.

During the six months ended June 30, 2024 and June 30, 2023, the Company recognized operating lease expense of $ 1.6 million and $ 1.7 million, respectively.

During the three months ended June 30, 2024 and June 30, 2023, the Company paid $ 0.6 million and $ 0.5 million in cash for amounts included in the measurement of the operating lease liability, respectively.

During each of the six months ended June 30, 2024 and June 30, 2023, the Company paid $ 1.1 million in cash for amounts included in the measurement of the operating lease liability.

As of June 30, 2024 and December 31, 2023, the Company’s operating lease had a remaining term of 1.0 and 1.5 years, respectively.

During each of the three months ended September 30, 2024 and September 30, 2023, the Company recognized operating lease expense of $ 0.9 million.

During the nine months ended September 30, 2024 and September 30, 2023, the Company recognized operating lease expense of $ 2.5 million and $ 2.6 million, respectively.

During the three months ended September 30, 2024 and September 30, 2023, the Company paid $ 0.4 million and $ 0.5 million in cash for amounts included in the measurement of the operating lease liability, respectively.

During the nine months ended September 30, 2024 and September 30, 2023, the Company paid $ 1.5 million and $ 1.6 million in cash for amounts included in the measurement of the operating lease liability, respectively.

As of September 30, 2024 and December 31, 2023, the Company’s operating lease had a remaining term of 0.8 years and 1.5 years, respectively.

The Company discounts its lease payments using its incremental borrowing rate as of the commencement of the lease.

The Company determined a weighted-average discount rate of 8.2 % as of June 30, 2024 and December 31, 2023.

The Company determined a weighted-average discount rate of 8.2 % as of September 30, 2024 and December 31, 2023.

Future minimum rental commitments for the Company’s operating leases reconciled to the operating lease liability are as follows (in thousands):

JUNE 30, 2024

2024 (six months)

SEPTEMBER 30, 2024

2024 (three months)

Total future minimum lease payments $ 1,892

5 unchanged sentences

Regardless of the outcome, such proceedings or claims can have an adverse impact on the Company because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.

I-Mab Litigation

On March 1, 2022, I-Mab Biopharma, or I-Mab, filed a lawsuit against the Former Parent and Brendan Eckelman, the Company’s co-founder and Chief Scientific Officer, in the United States District Court for the District of Delaware, C.A.

I-Mab Biopharma Litigation

On March 1, 2022, I-Mab Biopharma filed a lawsuit against the Former Parent and Brendan Eckelman, the Company’s co-founder and Chief Scientific Officer, in the United States District Court for the District of Delaware, C.A.

22-00276-CJB, asserting claims for misappropriation of trade secrets related to Dr.

Eckelman’s service as an expert witness for Tracon Pharmaceuticals, Inc., or Tracon, in Tracon’s arbitration against I-Mab.

Briefing on motions for summary judgment was recently completed.

As of the date of this Quarterly Report on Form 10-Q, a hearing date on the pending motions has not been set.

Trial is currently scheduled to commence in late October 2024.

I-Mab is seeking royalty damages and alternative damages in the form of unjust enrichment.

The Company is unable to reasonably estimate possible damages or a range of possible damages in this matter given the uncertainty and therefore has not recorded a liability on its books as of June 30, 2024.

Eckelman’s service as an expert witness for Tracon Pharmaceuticals, Inc., or Tracon, in Tracon’s arbitration against I-Mab Biopharma.

I-Mab Biopharma sought royalty damages and alternative damages in the form of unjust enrichment.

As of September 30, 2024, the Company did not expect an adverse outcome in the trial scheduled for October 2024, or any damages to be awarded, and thus has not recorded a liability on its books as of September 30, 2024.

See Note 10 for further discussion of the trial subsequent to the period.

SUBSEQUENT EVENTS

I-Mab Biopharma Litigation

On November 4, 2024, the Company announced a legal victory in the trade secrets case discussed in Note 9 brought by I-Mab Biopharma in the United States District Court for the District of Delaware.

The jury found in favor of the Company, rejecting all allegations of misappropriation before it.

I-Mab Biopharma had initiated the lawsuit on March 1, 2022, alleging that the Company and its Chief Scientific Officer, Brendan Eckelman, Ph.D., improperly accessed and used proprietary information related to several of I-Mab Biopharma’s research projects during a prior arbitration proceeding involving I-Mab Biopharma, for which Dr.

Eckelman served as an expert witness.

However, the jury found no basis for these claims in finding in favor of the Company, and thus the Company is not liable for any damages in this matter.

Certain matters remain before the Court.

Operating Lease

On November 12, 2024, the Company entered into a three-year lease agreement for its sole location in La Jolla, California, which the Company currently occupies under two existing lease agreements expiring June 30, 2025.

The new lease term begins on July 1, 2025 and expires on June 30, 2028 with an option to extend the lease an additional three years .

The lease contains an initial base rent of $ 0.2 million per month with 3 % annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which is to be determined annually.

In addition, the lease provides for a four-month rent abatement period of approximately $ 0.7 million.

This abatement will be applied to the existing lease agreements beginning in the fourth quarter of 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements