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Item 2. Management’s Discussion and Analysis

2025-05-14 compared with 2024-11-14 · 81 added, 166 removed, 193 unchanged (56% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and related notes included in Part I, Item 1 of this Quarterly Report, and our audited consolidated financial statements and notes thereto as of and for the fiscal year ended December 31, 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in the Form 10.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and related notes included in Part I, Item 1 of this Quarterly Report, and our audited consolidated financial statements and notes thereto as of and for the fiscal year ended December 31, 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, or the Annual Report.

Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report contains forward-looking statements that involve risk and uncertainties, including those described in the section titled “Special Note Regarding Forward-Looking Statements.” As a result of many factors, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We are a clinical-stage biopharmaceutical company with a pipeline of novel biologic therapeutic candidates, developed using our proprietary modular protein engineering platforms.

We leverage our innovative protein engineering technologies and deep understanding of target biology to create therapeutic candidates with attributes and mechanisms superior to current approaches and applicable to a range of challenging, validated targets with high potential.

We leverage our innovative protein engineering technologies and deep understanding of target biology to create therapeutic candidates with attributes and mechanisms we believe to be superior to current approaches and applicable to a range of challenging, validated targets with high potential.

Separation from Former Parent

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.

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 29, 2024, Inhibrx, Inc., or the Former Parent, effected 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, upon which the Former Parent completed a distribution to holders of its shares of common stock of 92% of the issued and outstanding shares of our common stock, or the Distribution.

On May 30, 2024, the Former Parent completed a series of internal restructuring transactions, or the Separation.

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 Aventis Inc., or the Acquirer, a wholly-owned subsidiary of Sanofi S.A., or Sanofi;

and (ii) by way of 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, 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.

From and after the closing, Inhibrx Biosciences continues to operate as a stand-alone, publicly traded company focused on ozekibart (INBRX-109) and INBRX-106.

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.

Refer to Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for further discussion of the underlying basis used to prepare the unaudited condensed consolidated financial statements.

The operating results presented in the Company’s historical financial statements prior to the Merger and in connection with the Separation and the Merger may not be indicative of the results of the Company following the Merger and Separation.

Transactions with Related Parties

We have entered into a Separation and Distribution Agreement and various agreements relating to transition services, licenses and certain other matters with the Former Parent.

These agreements govern our relationship with the Former Parent prior to, at and after 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.

These agreements include the allocation of employee benefits, taxes and certain other liabilities and obligations attributable to periods prior to, at and after the Distribution.

We have agreed to provide the Former Parent with indemnities with respect to liabilities arising out of our business, and the Former Parent has agreed to provide us with indemnities with respect to liabilities arising out of the business retained by the Former Parent.

These agreements also include arrangements with respect to support services and a number of on-going commercial relationships.

The terms of these agreements, including amounts billed during the period, are discussed in greater detail in Note 7 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

On May 30, 2024, the Former Parent completed the merger, or the Merger, of Art Acquisition Sub, Inc., a wholly-owned subsidiary of Aventis Inc., or the Acquirer, a wholly-owned subsidiary of Sanofi S.A., or Sanofi, with and into the Former Parent with the Former Parent continuing as the surviving entity.

Pursuant to the Merger (i) all assets and liabilities primarily related to INBRX-101, or the 101 Business, were transferred to the Acquirer;

and (ii) by way of the Separation, we 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.

From and after the closing, Inhibrx continues to operate as a stand-alone, publicly traded company focused on ozekibart (INBRX-109) and INBRX-106, both of which are clinical-stage programs.

The operating results presented our historical financial statements prior to the Merger and in connection with the Separation and the Merger may not be indicative of our results following the Merger and Separation.

Current Clinical Pipeline

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ozekibart (INBRX-109) INBRX-106

Tetravalent DR5

agonist Hexavalent OX40

Tetravalent DR5 agonist

Hexavalent OX40 agonist

Program Therapeutic Area Target(s)/Format STAGE OF DEVELOPMENT

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ozekibart (INBRX-109)

ozekibart (INBRX-109) is a tetravalent death receptor 5, or DR5, agonist currently being evaluated in patients diagnosed with difficult-to-treat cancers, such as chondrosarcoma, mesothelioma, colorectal cancer, Ewing sarcoma and pancreatic adenocarcinoma.

Ozekibart (INBRX-109) is a tetravalent death receptor 5, or DR5, agonist currently being evaluated in patients diagnosed with chondrosarcoma, colorectal cancer, and Ewing sarcoma.

Chondrosarcoma

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The primary endpoint for this Phase 2 trial is progression-free survival, or PFS.

Data from the registration-enabling Phase 2 trial in unresectable or metastatic conventional chondrosarcoma is expected during the middle of 2025.

Ewing sarcoma and colorectal adenocarcinoma

On November 2, 2023, we announced preliminary efficacy and safety data from the Phase 1 trial of ozekibart (INBRX-109) in combination with Irinotecan, or IRI, and Temozolomide, or TMZ, for the treatment of advanced or metastatic, unresectable Ewing sarcoma.

Data from the registration-enabling Phase 2 trial in unresectable or metastatic conventional chondrosarcoma is expected during the third quarter of 2025.

Ewing sarcoma

In November 2023, we announced interim efficacy and safety data from the cohort of the Phase 1 trial evaluating ozekibart (INBRX-109) in combination with Irinotecan, or IRI, and Temozolomide, or TMZ, for the treatment of advanced or metastatic, unresectable Ewing sarcoma.

Overall, ozekibart (INBRX-109) in combination with IRI/TMZ was well tolerated from a safety perspective.

Based on this preliminary data, the ongoing Phase 1/2 trial in the Ewing sarcoma cohort was expanded.

We are also in the process of expanding the cohort for colorectal adenocarcinoma.

The data from both of these cohorts is expected during the middle of 2025.

Interim data on this cohort are anticipated during the second half of 2025.

Colorectal adenocarcinoma

In January 2025, we announced interim efficacy and safety data from the cohort of the Phase 1 trial evaluating ozekibart (INBRX-109) in combination with FOLFIRI for the treatment of advanced or metastatic, unresectable colorectal adenocarcinoma, or CRC.

Efficacy was assessed in 10 of the 13 patients evaluable as of the cutoff date of

December 2, 2024, who received at least one dose of ozekibart, based on RECIST v1.1 criteria.

We expanded recruitment of this cohort by 50 patients as a result of these preliminary findings in order to validate these findings in a more uniform patient population.

Data on this cohort are anticipated in the third quarter of 2025.

INBRX-106 is a precisely engineered hexavalent sdAb-based therapeutic candidate targeting OX40, designed to be an optimized agonist of this co-stimulatory receptor.

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We observed durable responses across multiple tumor types.

In Part 4 of the Phase 1/2 trial, we continue to enroll patients with NSCLC and HNSCC, both in combination with Keytruda.

In one cohort, we are investigating NSCLC patients who all had previous checkpoint inhibitor exposure and have a PDL-1 tumor proportion score, or TPS, of greater than 50%.

We have also expanded the HNSCC cohort, which is evaluating HNSCC patients who are CPI naive with a combined positive score, or CPS, of greater than one.

Primary endpoints for these cohorts are objective response rate, or ORR, disease control rate, or DCR, duration of response, or DOR, and safety.

In addition, a new cohort has been initiated in NSCLC to evaluate chemotherapy when used in conjunction with the INBRX-106 and Keytruda combination.

In Part 4 of the Phase 1/2 trial, we continue to enroll patients with NSCLC in combination with Keytruda.

Primary endpoints for this cohort is objective response rate, or ORR, disease control rate, or DCR, duration of response, or DOR, and safety.

In addition, a new cohort was initiated in NSCLC to evaluate chemotherapy when used in conjunction with the INBRX-106 and Keytruda combination.

The primary endpoint for this cohort is safety.

We expect to have a more mature dataset on all three cohorts during the second half of 2025 and plan to provide an update at that time.

We expect to have a more mature dataset on these cohorts during the fourth quarter of 2025 and plan to provide an update at that time.

In June 2024, a seamless Phase 2/3 clinical trial was initiated for INBRX-106 in combination with Keytruda as a first-line treatment for patients with local advanced recurrent or metastatic head HNSCC.

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We plan to enroll approximately 60 patients in the Phase 2 portion with a primary endpoint of ORR supported by secondary endpoints of DOR, PFS, and safety.

We expect to announce initial data on Phase 2 during the second half of 2025.

We expect to announce initial data on Phase 2 during the fourth quarter of 2025.

If positive, we anticipate this data will ungate the Phase 3 portion, where we expect approximately 350 patients will be randomized to INBRX-106 or placebo in combination with Keytruda.

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As of the date of this Quarterly Report, our research and development expenses have related primarily to research activities, including our discovery efforts, and preclinical and clinical development and the manufacturing of our therapeutic candidates.

Research and development expenses are recognized as incurred and payments made prior to

the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.

Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.

In accordance with the applicable accounting and regulatory requirements, we track all research and development expenses in the aggregate and do not manage or track either external or internal expenses on a program-by-program basis.

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• other internal expenses, such as laboratory supplies and other shared research and development costs.

We expect that research and development expense will continue to increase over the next several years as we continue development of our therapeutic candidates currently in clinical stage development, support our preclinical programs, and continue to discover new therapeutic candidates, as well as increase our headcount.

In particular, clinical development of our therapeutic candidates, as opposed to preclinical development, generally has higher development costs, primarily due to the increased size and duration of later-stage clinical trials.

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• facilities, depreciation and other expenses, which include direct and allocated expenses for depreciation and amortization, rent and maintenance of facilities, insurance and supplies.

We expect our G&A expenses will continue to increase in the future to support our continued research and development activities.

We expect increased costs related to pre-commercialization and business development activities, including the hiring of additional personnel as we continue to build our commercial team in preparation for our future product launches.

Additionally, we expect other professional service fees to increase, including but not limited to, patent-related costs for filing, prosecution and maintenance of our therapeutic candidates, and compliance costs, accounting, legal, regulatory and tax-related services, investor and public relations and additional personnel.

We expect certain of our G&A expenses will continue to increase in the future to support our continued research and development activities, including costs related to pre-commercialization and business development activities.

Additionally, we will continue to incur other professional service fees, including but not limited to, legal costs associated with the filing, prosecution, and maintenance of our patents for our therapeutic candidates, and other legal matters, as well as costs associated with services for compliance, accounting, legal, regulatory, tax, investor and public relations.

Other Income (Expense)

Interest expense.

Interest expense consists of interest on our former loans with Oxford incurred prior to the Merger, upon which the outstanding debt was assumed by the Acquirer.

Interest expense consists of interest on our 2025 Loan Agreement with Oxford during the three months ended March 31, 2025 and on our former loans with Oxford incurred prior to the Merger in 2024, upon which the outstanding debt was assumed by the Acquirer.

Interest income.

Interest income consists of interest earned on cash and cash equivalents, which include investments held during the period in highly liquid debt securities with original maturities of less than three months from our date of acquisition.

Gain related to transaction with Acquirer.

Gain related to transaction with Acquirer consists of our gain recorded in connection with the completion of the Merger during the second quarter of 2024.

We do not expect future income or gains in connection with the Merger in future periods.

Interest income consists of interest earned on cash and cash equivalents.

Results of Operations

Comparison of the Three Months Ended September 30, 2024 and September 30, 2023

Comparison of the Three Months Ended March 31, 2025 and March 31, 2024

The following table summarizes our condensed consolidated results of operations for each of the periods indicated (in thousands, except percentages):

THREE MONTHS ENDED

SEPTEMBER 30, CHANGE

MARCH 31, CHANGE

2025 2024 ($) (%)

License fee revenue $ — $ 119 $ (119) (100) %

Total revenue — 119 (119) (100) %

Operating expense:

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Other income (expense), net (50) (59) 9 (15) %

Total other income (expense) 2,933 (5,960) 8,893 (149) %

Provision for income taxes — 2 (2) (100) %

Total other expense

(410) (4,885) 4,475 (92) %

License Fee Revenue

License fee revenue during the three months ended September 30, 2023 was $0.1 million and consisted of revenue related to a former option agreement which was completed during 2023.

We did not recognize any revenue during the three months ended September 30, 2024.

$ (43,311) $ (78,710) $ 35,399 (45) %

Research and Development Expense

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THREE MONTHS ENDED

SEPTEMBER 30, CHANGE

MARCH 31, CHANGE

2025 2024 ($) (%)

External expenses:

Contract manufacturing $ 10,417 $ 10,475 $ (58) (1) %

Clinical trials $ 13,265 $ 19,778 $ (6,513) (33) %

Contract manufacturing 8,550 25,202 (16,652) (66) %

Other external research and development 2,278 2,034 244 12 %

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Total research and development expenses $ 36,877 $ 63,851 $ (26,974) (42) %

Research and development expenses increased by $0.8 million from $38.1 million during the three months ended September 30, 2023 to $38.9 million during the three months ended September 30, 2024.

The overall increase was primarily due to the following factors:

• clinical trial expense increased by $2.8 million, primarily due to the expansion of our ongoing registration-enabling Phase 2 trial for ozekibart (INBRX-109) for the treatment of unresectable or metastatic conventional chondrosarcoma and due to the expansion of our INBRX-106 Phase 1/2 trial and initiation of the Phase 2/3 trial for HNSCC, including expenses for in-house clinical trial support, offset in part by decreased expenses incurred following the termination of our INBRX-105 program, which we announced during the first quarter of 2024 and the spin-off of our INBRX-101 program, which occurred during the second quarter of 2024;

• personnel-related expense decreased by $2.5 million, which was primarily related to a decrease in stock compensation expense as a result of less stock options outstanding under the 2024 Plan following the termination of the 2017 Plan in connection with the Merger;

• facility and equipment-related expense increased by $0.8 million, which was attributable to expenses related to capitalized software placed in service during the current year;

• other research and development expense decreased by $0.2 million, which was primarily attributable to a decrease in preclinical studies, offset in part by increases in clinical consulting services.

G&A expenses remained consistent at $7.9 million during each of the three months ended September 30, 2024 and September 30, 2023.

During the three months ended September 30, 2024, the composition of these expenses fluctuated primarily due to the following factors:

Research and development expenses decreased by $27.0 million from $63.9 million during the three months ended March 31, 2024 to $36.9 million during the three months ended March 31, 2025.

The overall decrease was primarily due to the following factors:

• clinical trial expense decreased by $6.5 million, primarily due to decreased expenses following the spin-off of our INBRX-101 program, which occurred during the second quarter of 2024;

• contract manufacturing expense decreased by $16.7 million, primarily due to decreased expenses following the spin-off of our INBRX-101 program, which occurred during the second quarter of 2024;

• personnel-related expense decreased by $3.9 million, which was primarily related to a decrease in stock compensation expense as a result of fewer stock options outstanding under the 2024 Plan following the

termination of the 2017 Plan in connection with the Merger and a decrease in headcount during the three months ended March 31, 2025.

G&A expenses decreased by $4.0 million from $10.0 million during the three months ended March 31, 2024 to $6.0 million during the three months ended March 31, 2025.

The overall decrease was primarily due to the following factors:

• personnel-related expenses decreased by $1.2 million, which was primarily related to a decrease in stock compensation expense as a result of less stock options outstanding under the 2024 Plan following the termination of the 2017 Plan in connection with the Merger;

• offset by professional services-related expenses related to legal and accounting services, which increased by $1.0 million, primarily attributable to intellectual property, other general corporate matters, and legal proceedings.

Other income (expense)

Interest expense.

Interest expense was $8.1 million during the three months ended September 30, 2023, all of which related to interest incurred and the amortization of debt discounts related to the 2020 Loan Agreement with Oxford and subsequent amendments between November 2020 and October 2022, or collectively, the Amended 2020 Loan Agreement.

We did not incur any interest during the three months ended September 30, 2024 following the closing of the Merger on May 30, 2024, the date upon which the Acquirer assumed our outstanding debt.

Interest income.

During the three months ended September 30, 2024, we earned $2.9 million of interest income related to interest earned on our sweep and money market account balances.

During the three months ended September 30, 2023, we earned $2.3 million of interest income, which consisted of $1.7 million of interest income related to interest earned on our sweep and money market account balances and $0.6 million of interest earned on our investments in U.S.

Treasury Bills.

Comparison of the Nine Months Ended September 30, 2024 and September 30, 2023

The following table summarizes our condensed consolidated results of operations for each of the periods indicated (in thousands, except percentages):

NINE MONTHS ENDED

SEPTEMBER 30, CHANGE

2024 2023 ($) (%)

License fee revenue $ 100 $ 166 $ (66) (40) %

Total revenue 100 166 (66) (40) %

Operating expense:

Research and development 170,376 109,549 60,827 56 %

General and administrative 111,244 21,549 89,695 416 %

Total operating expense 281,620 131,098 150,522 115 %

Loss from operations (281,520) (130,932) (150,588) 115 %

• professional services-related expenses related to legal services, which decreased by $0.9 million, primarily attributable to the conclusion of legal proceedings and a decrease in general corporate expenses;

• a decrease in expenses related to the Merger of $0.6 million incurred during three months ended March 31, 2024.

Other income (expense)

Gain related to transaction with Acquirer 2,021,498 — 2,021,498 100 %

Interest expense.

Interest income 8,937 7,221 1,716 24 %

Other income (expense), net

15 (422) 437 (104) %

Total other income (expense)

2,016,959 (16,818) 2,033,777 (12,093) %

Provision for income taxes 2 7 (5) (71) %

Net income (loss)

$ 1,735,437 $ (147,757) $ 1,883,194 (1,275) %

License Fee Revenue

License fee revenue during the nine months ended September 30, 2024 was $0.1 million and consisted of revenue related to our Regeneron Agreement, which we recognized following the grant of a six-month extension of the option term.

License fee revenue during the nine months ended September 30, 2023 was $0.2 million and consisted of revenue related to a former option agreement which was completed during 2023.

Research and Development Expense

The following table sets forth the primary external and internal research and development expenses (in thousands, except percentages):

NINE MONTHS ENDED

SEPTEMBER 30, CHANGE

2024 2023 ($) (%)

External expenses:

Contract manufacturing $ 46,911 $ 25,821 $ 21,090 82 %

Clinical trials 39,339 30,473 $ 8,866 29 %

Other external research and development 9,439 7,489 1,950 26 %

Internal expenses:

Personnel 62,454 35,895 26,559 74 %

Equipment, depreciation, and facility 7,200 5,294 1,906 36 %

Other internal research and development 5,033 4,577 456 10 %

Total research and development expenses $ 170,376 $ 109,549 $ 60,827 56 %

Research and development expenses increased by $60.8 million from $109.5 million during the nine months ended September 30, 2023 to $170.4 million during the nine months ended September 30, 2024.

The overall increase was primarily due to the following factors:

• contract manufacturing expense increased by $21.1 million due to the nature of the development and manufacturing activities performed during the current period at our CDMO and CRO partners supporting our clinical and preclinical therapeutic candidates, which reflect the stage-specific needs of our programs, including early and late stage drug substance clinical manufacturing, analytical development, QC testing, and stability studies, as well as drug product development, scale-up, robustness studies, and selected BLA-enabling activities;

• clinical trial expense increased by $8.9 million, primarily due to the expansion of our ongoing registration-enabling Phase 2 trial for ozekibart (INBRX-109) for the treatment of unresectable or metastatic conventional chondrosarcoma and due to the expansion of our INBRX-106 Phase 1/2 trial and initiation of the Phase 2/3 trial for HNSCC, including expenses for in-house clinical trial support, as well as costs incurred for our registration-enabling Phase 2 trial for INBRX-101 for the treatment of emphysema due to AATD, prior to our spin-off of the INBRX-101 program during the period.

These expenses were offset in part by reduced clinical expenses following the termination of our INBRX-105 program;

• personnel-related expense increased by $26.6 million, which was primarily related to $25.9 million in stock option expense recognized upon the acceleration of outstanding options in connection with the closing of the Merger;

• facility and equipment-related expense increased by $1.9 million, which was attributable to expenses related to capitalized software placed in service during the period;

• other research and development expense increased by $2.4 million, which was primarily attributable to an increase in preclinical studies and clinical consulting services.

G&A expenses increased by $89.7 million from $21.5 million during the nine months ended September 30, 2023 to $111.2 million during the nine months ended September 30, 2024.

The overall increase during the nine months ended September 30, 2024, was primarily due to the following factors:

• expenses related to the Merger of $68.1 million, consisting of legal, advisory, and consulting services performed in connection to the transaction, and SEC filing fees in connection with filings related to the transaction;

• personnel-related expenses increased by $16.4 million, which was primarily related to $15.2 million in stock option expense recognized upon the acceleration of outstanding options in connection with the close of the Merger;

• professional services-related expenses related to legal services increased by $2.9 million, which was primarily attributable to intellectual property, other general corporate matters, and legal proceedings;

• pre-commercialization expenses increased by $2.2 million, primarily related to increases in consulting services and scientific publications to support our commercial operations business intelligence strategies related to ozekibart (INBRX-109) and prior to the Merger, related to INBRX-101, in addition to a focus on patient advocacy and recruitment efforts, offset in part by a decrease in market research efforts following the disposition of INBRX-101.

Other Expense

Interest expense.

Interest expense decreased by $10.1 million from $23.6 million during the nine months ended September 30, 2023 to $13.5 million during the nine months ended September 30, 2024, all of which relates to interest incurred and the amortization of debt discounts related to the Amended 2020 Loan Agreement.

The decrease in interest expense is the result of the extinguishment of the Amended 2020 Loan Agreement in connection with the Merger.

We did not incur any interest following the close of the Merger on May 30, 2024, the date upon which the Acquirer assumed our outstanding debt.

Interest expense was $8.1 million during the three months ended March 31, 2024, all of which related to interest incurred and the amortization of debt discounts related to the Amended 2020 Loan Agreement, under which we had $200.0 million in outstanding principal during the period.

Interest expense was $2.7 million during the three months ended March 31, 2025, all of which related to interest incurred and the amortization of debt discounts related to the 2025 Loan Agreement, under which we had $100.0 million in outstanding principal during the period.

Interest income.

During the nine months ended September 30, 2024, we earned $8.9 million of interest income related to interest earned on our sweep and money market account balances.

During the nine months ended September 30, 2023, we earned $7.2 million of interest income, which consisted of $2.8 million of interest income related to interest earned on our sweep and money market account balances and $4.4 million of interest earned on our investments in U.S.

Treasury Bills.

The increase in interest income during the nine months ended September 30, 2024 is the result of higher cash and cash equivalent balances, coupled with rising interest rates, generating higher returns.

Gain related to transaction with Acquirer.

During the nine months ended September 30, 2024, we earned $2.0 billion of other income, consisting of gains recorded in connection with the completion of the Merger.

We recorded a gain of $1.7 billion related to Merger consideration for our outstanding common stock, warrants, and stock options, in addition to $211.3 million related to the extinguishment of our Amended 2020 Loan assumed by the Acquirer.

In addition to the Acquirer assuming our outstanding debt, the Acquirer assumed outstanding assets and liabilities related to INBRX-101 upon the transaction, resulting in a gain of $14.5 million.

The Acquirer also reimbursed us for or paid on our behalf $68.0 million of transaction costs related to the Merger, resulting in a gain.

We do not expect future income or gains in connection with the Merger in future periods.

During the three months ended March 31, 2025 and March 31, 2024, we earned $2.3 million and $3.3 million of interest income related to interest earned on our sweep and money market account balances, respectively.

Liquidity, Capital Resources and Financial Condition

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As of the date of this Quarterly Report, sources of capital raised to fund our operations have been comprised of the sale of equity securities, borrowings under our prior loan and security agreements, payments received from commercial partners for licensing rights to our therapeutic candidates under development, grants, and proceeds from the sale and issuance of convertible promissory notes.

In January 2025, we entered into the 2025 Loan Agreement with Oxford, upon which we received gross proceeds of $100.0 million.

The 2025 Loan Agreement provides for up to an additional $50.0 million to be funded upon our request and at Oxford’s sole discretion.

Future Funding Requirements

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Our net income or losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities, as well as the timing of other corporate transactions.

During the nine months ended September 30, 2024,

we had net income of $1.7 billion following the closing of the Merger, and during the nine months ended September 30, 2023, our net loss was $147.8 million.

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

Based upon our current operating plans, we believe that our existing cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months from the date of filing of this Form 10-Q.

Our forecast of the period through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

During the three months ended March 31, 2025 our net loss was $43.3 million.

As of March 31, 2025, we had an accumulated deficit of $149.4 million and cash and cash equivalents of $216.5 million.

Our forecast of the period through which our financial resources will be adequate to support our operations is a forward-looking

statement that involves risks and uncertainties, and actual results could vary materially.

We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect.

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Our material cash requirements from known contractual and other obligations primarily relate to our lease obligations and services provided by our third party CROs and CDMOs.

We have two leases for our laboratory and office space, which expire in 2025, with an option to extend the leases for an additional five years.

As of September 30, 2024, we had future minimum rental payments under these leases of $1.9 million, all of which are classified as current.

Our lease for our laboratory and office space expires in 2028, with an option to extend for an additional three years.

As of March 31, 2025, we had future minimum rental payments under these leases of $9.3 million, of which $2.7 million and $6.6 million are current and non-current, respectively.

For more information regarding these lease agreements, refer to Note 8 to the unaudited condensed consolidated financial statements.

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These contracts are generally cancellable, with notice, at our option.

We have recorded accrued expenses of approximately $21.2 million in our condensed consolidated balance sheets for expenditures incurred by CROs and CDMOs as of September 30, 2024.

We have recorded accrued expenses of approximately $28.2 million in our condensed consolidated balance sheets for expenditures incurred by CROs and CDMOs as of March 31, 2025.

While these contracts are generally cancellable, some may contain specific activities that involve one or more noncancellable commitments.

Depending on the timing and reasoning of the exit, certain termination penalties may apply and can range from the cost of work performed to date up to twelve months of future committed manufacturing costs.

As of March 31, 2025, the noncancellable portion of these contracts totaled in aggregate, excluding amounts recorded in accounts payable and accrued expenses as of this date, approximately $3.3 million.

The noncancellable purchase commitments relate to future contract manufacturing of drug supply for one of our therapeutic candidates.

Cash Flow Summary

The following table sets forth a summary of the net cash flow activity for each of the periods indicated (in thousands):

NINE MONTHS ENDED SEPTEMBER 30,

THREE MONTHS ENDED MARCH 31,

Net cash used in operating activities $ (35,895) $ (63,050)

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Operating Activities

Net cash used in operating activities was $150.7 million during the nine months ended September 30, 2024 and consisted primarily of net income of $1.7 billion, adjusted for non-cash items.

Non-cash adjustments primarily related to gains recorded upon the Merger of $2.0 billion.

Other non-cash adjustments included accretion on our debt discount and the non-cash portion of interest expense related to our debt of $2.1 million, stock-based compensation expense, including expense related to the acceleration of options upon the Merger, of $55.5 million, depreciation and amortization of $1.6 million and non-cash lease expense of $1.4 million.

Changes in operating assets and liabilities also contributed to the cash used in operating activities, primarily related to an increase in other non-current assets of $3.5 million due to prepayments and additional deposits we made to our CRO partners during the period.

Additionally, the operating lease liability decreased by $1.3 million as a result of lease payments made throughout the period.

These uses of cash were offset by increases in accrued expenses and other current liabilities of $35.9 million and an increase in accounts payable of $21.0 million due to the timing of payments to our CRO and CDMO partners during the period, each of which excludes the liabilities related to INBRX-101 which were assumed by the Acquirer in the Merger.

Net cash used in operating activities was $136.5 million during the nine months ended September 30, 2023 and consisted primarily of a net loss of $147.8 million, adjusted for non-cash items including accretion on our debt discount and the non-cash portion of interest expense related to our debt of $3.7 million, stock-based compensation expense of $18.4 million, depreciation and amortization of $0.9 million and non-cash lease expense of $1.3 million.

Changes in operating assets and liabilities also contributed to the cash used in operating activities, primarily related to an increase in prepaid expenses and other current assets of $19.3 million due to the prepayment of raw materials to one of our CDMO partners during the third quarter of 2023 and a decrease in accounts payable of $0.8 million.

This was offset in part by an increase in accrued expenses and other current liabilities of $8.7 million due to the timing of payments to our CRO and CDMO partners during the period.

Additionally, the operating lease liability decreased by $1.4 million as a result of lease payments made throughout the period, while deferred revenue decreased by $0.2 million due to the recognition of revenue under a former option agreement upon declination of the option.

Net cash used in operating activities was $35.9 million during the three months ended March 31, 2025 and consisted primarily of a net loss of $43.3 million, adjusted for non-cash items, including accretion on our debt discount and the non-cash portion of interest expense related to our debt of $0.5 million, stock-based compensation expense of $2.5 million, depreciation and amortization of $0.7 million and non-cash lease expense of $0.4 million.

Changes in operating assets and liabilities also contributed to the cash used in operating activities, including the decrease in operating lease liability of $0.2 million as a result of lease payments made throughout the period and the decrease in accounts payable of $0.4 million.

These uses of cash were offset by a decrease in accounts receivables and receivables from related parties of $0.2 million upon the collection of balances during the period, a decrease in prepaid expenses and other current assets of $0.7 million and an increase in accrued expenses of $2.9 million due to the timing of payments to our CRO and CDMO partners during the period.

Net cash used in operating activities was $63.1 million during the three months ended March 31, 2024 and consisted primarily of a net loss of $78.7 million, adjusted for non-cash items including accretion on our debt discount and the non-cash portion of interest expense related to our debt of $1.2 million, stock-based compensation expense of $6.4 million, depreciation and amortization of $0.4 million and non-cash lease expense of $0.5 million.

Changes in operating assets and liabilities also contributed to the cash used in operating activities, primarily related to an increase in prepaid expenses and other current assets of $2.4 million and an increase in other non-current assets of $1.4 million due to prepayments and additional deposits we made to our CRO partners during the quarter.

Additionally, receivables increased by $0.6 million as related to interest income earned in our interest-bearing bank accounts, while the operating lease liability decreased by $0.5 million as a result of lease payments made throughout the period.

These uses of cash were offset by increases in accrued expenses and other current liabilities of $8.0 million and an increase in accounts payable of $4.1 million due to the timing of payments to our CRO and CDMO partners during the period.

Investing Activities

Net cash used in investing activities was $2.6 million and $1.2 million during the nine months ended September 30, 2024 and September 30, 2023, respectively, and was related to capital purchases of software and laboratory equipment.

Net cash used in investing activities was $21,000 and $1.1 million during the three months ended March 31, 2025 and March 31, 2024, respectively, and was related to capital purchases of software and laboratory equipment.

Financing Activities

Net cash provided by financing activities was $71.7 million during the nine months ended September 30, 2024, which consisted of proceeds upon the exercise of stock options.

Net cash provided by financing activities was $201.1 million during the nine months ended September 30, 2023, which consisted primarily of gross proceeds of $200.0 million from the issuance of our common stock and pre-funded warrants to purchase shares of our common stock in a private placement transaction, offset in part by the payment of $0.1 million of issuance costs associated with this transaction.

Additionally, we received approximately $1.2 million of proceeds upon the exercise of stock options.

Net cash provided by financing activities was $99.8 million during the three months ended March 31, 2025, which consisted of net proceeds from the 2025 Loan Agreement which we entered into in January 2025.

Net cash provided by financing activities was $38.7 million during the three months ended March 31, 2024, which consisted of proceeds from the exercise of stock options.

Critical Accounting Estimates and Policies

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The preparation of financial statements requires us to make estimates and judgements that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.

We base our estimates on historical experience and on various other assumptions that we believe

to be reasonable under the circumstances.

Changes in estimates are reflected in reported results for the period in which they become known.

Actual results could differ significantly from the estimates made by our management.

There have been no material changes to our critical accounting policies and estimates from those disclosed in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Exhibit 99.1 to the Form 10.

There have been no material changes to our critical accounting policies and estimates from those disclosed in our financial statements and the related notes and other financial information included in the 2024 Annual Report.

Emerging Growth Company

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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 2. Management’s Discussion and Analysis