What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-01 compared with 2023-05-02 · 90 added, 62 removed, 717 unchanged (17% of the section changed)

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

The following discussion of our financial condition and results of operations as of and for the three months ended March 31, 2023 should be read in conjunction with the unaudited condensed consolidated financial statements and notes to those statements included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements as of and for the year ended December 31, 2022 included in our Annual Report on Form 10-K for the year ended December 31, 2022 previously filed with the SEC.

The following discussion of our financial condition and results of operations as of and for the three and six months ended June 30, 2023 should be read in conjunction with the unaudited condensed consolidated financial statements and notes to those statements included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements as of and for the year ended December 31, 2022 included in our Annual Report on Form 10-K for the year ended December 31, 2022 previously filed with the SEC.

Forward-Looking Statements

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• our patent prosecution and maintenance efforts.

• the potential effects of the COVID-19 pandemic and efforts undertaken or to be undertaken by us or applicable governmental authorities on local and global economic conditions, and on our business, results of operations and financial condition.

These forward-looking statements reflect our current views with respect to future events, are based on assumptions and are subject to risks and uncertainties.

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• Competition for our products could harm our business and result in a decrease in our revenue.

• The COVID-19 pandemic and measures to address the pandemic, as well as other geopolitical events, have adversely affected and could in the future adversely affect our business and results of operations.

• Public health pandemics, natural disasters, and other geopolitical events, could adversely affect our business and results of operations.

• We or our collaborators may be unsuccessful in discovering and developing drug candidates, and we may spend significant time and money attempting to do so, in particular with our later stage drug candidates.

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We have retained all development and commercialization rights to JAKAFI in the United States and are eligible to receive development and sales milestones as well as royalties from product sales outside the United States.

We hold patents that cover the composition of matter and use of ruxolitinib.

We hold patents that cover the composition of matter and use of ruxolitinib and its salt.

These patents, including applicable extensions, currently expire in mid-2028 and late-2028.

In December 2022, we were granted pediatric exclusivity which adds six months to the expiration for all ruxolitinib patents listed in FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book) as of the date of the grant.

In December 2022, we were granted pediatric exclusivity, which adds six months to the expiration for all ruxolitinib patents listed in FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book) as of the date of the grant of pediatric exclusivity.

MONJUVI (tafasitamab-cxix) / MINJUVI (tafasitamab)

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We will work with the FDA to determine the appropriate next steps.

Phase II trials combining ruxolitinib with investigational agents from our portfolio such as INCB57643 (BET) and INCB00928 (ALK2) in patients with MF are ongoing, and additional discovery and development initiatives are also ongoing within the LIMBER program, which are evaluating internally-discovered compounds, and candidates from collaboration partners.

Phase II trials combining ruxolitinib with investigational agents from our portfolio such as INCB57643 (BET) and INCB00928 (ALK2) in patients with MF are ongoing, and in June 2023, at the American Society of Clinical Oncology (ASCO) annual meeting, updated data was presented which demonstrated early signals of clinical activity of both agents in monotherapy and in combination with ruxolitinib.

Additional discovery and development initiatives are also ongoing within the LIMBER program, which are evaluating internally-discovered compounds, and candidates from collaboration partners.

We recently announced the discontinuation of LIMBER-304 and LIMBER-313, two Phase III studies evaluating ruxolitinib in combination with parsaclisib in MF patients with a suboptimal response to ruxolitinib monotherapy and in first-line MF, respectively.

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In May 2022, Syndax announced that axatilimab was granted fast-track designation by the FDA for the treatment of patients with chronic GVHD after failure of two or more lines of systemic therapy.

In July 2023, we and Syndax announced that AGAVE-201 had met its primary endpoint across all cohorts with an overall response rate (ORR) of 74% at the dose of 0.3 mg/kg administered every two weeks.

The data highlight the durable response seen at the 0.3 mg/kg dose with 60% of patients who responded to axatilimab still responding at one year.

INCA033989 (mCALR)

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CALR mutations are responsible for disease development in approximately 25-35% of patients with MF and ET.

INCA033989 is expected to enter clinical studies in 2023.

In July 2023, we initiated a Phase I study evaluating INCA033989.

Tafasitamab is an anti-CD19 antibody and is being investigated as a therapeutic option in B cell malignancies in a number of ongoing and planned combination trials.

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announced a clinical trial collaboration and supply agreement to investigate the combination of INCB99280 and adagrasib, a KRASG12C selective inhibitor, in patients with KRASG12C-mutated solid tumors.

In July 2023, we initiated t wo Phase I studies evaluating INCB99280 in combination with axitinib (VEGF) and in combination with ipilimumab (CTLA-4).

A Phase II study evaluating INCB99280 in patients with select solid tumors who are checkpoint inhibitor naive was also initiated.

Additionally, we initiated a Phase II study evaluating INCB99280 in metastatic cutaneous squamous cell carcinoma (cSCC) or locally advanced cSCC.

W e and Replimune Group, Inc.

announced a clinical trial collaboration and supply agreement to investigate the combination of INCB99280 and RP1 in patients with cutaneous squamous cell carcinoma.

RP1 is Replimune’s lead oncolytic immunotherapy product candidate and is based on a proprietary new strain of herpes simplex virus engineered for robust tumor selective replication and genetically armed with a fusogenic protein (GALV-GP R-) and GM-CSF, intended to maximize tumor killing potency, the immunogenicity of tumor cell death, and the activation of a systemic anti-tumor immune response.

Indication and status

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Pivotal Phase II (third-line plus therapy) (AGAVE-201)

ruxolitinib + axatilimab (JAK1/JAK2 + anti-CSF-1R) Chronic GVHD:

ruxolitinib + axatilimab 2 (JAK1/JAK2 + anti-CSF-1R)

Chronic GVHD:

Phase I/II in preparation

INCA033989 (mCALR) Myelofibrosis, essential thrombocythemia:

Entering clinic in 2023

tafasitamab (CD19) 3

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Phase II (POD1UM-101, POD1UM-204)

INCB99280 (Oral PD-L1) Solid tumors:

KRASG12C-mutated solid tumors:

Phase I/Ib in combination with adagrasib 5 , in preparation

INCB99280 (Oral PD-L1) Solid tumors (combination):

Solid tumors (monotherapy):

Cutaneous squamous cell carcinoma (cSCC):

INCB99318 (Oral PD-L1)

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In April 2023, we presented preclinical data at AACR which showed INCA33890 inhibits tumor growth in PD-1-resistant mouse models.

In July 2023, we initiated a Phase I study evaluating INCA33890 in patients with select advanced solid tumors.

Our earlier-stage clinical programs in hematology and oncology, are included in the table below.

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We continue to expand the development of ruxolitinib cream into new indications as part of our efforts to maximize the potential opportunity with ruxolitinib cream.

In July 2023, we announced that the Phase III trial (TRuE-AD3) evaluating ruxolitinib cream in pediatric AD patients (age > 2 and <12) had met its primary endpoint.

The study showed significantly more patients treated with ruxolitinib cream 0.75% and 1.5% achieved Investigator's Global Assessment Treatment Success (IGA-TS) than patients treated with vehicle control.

We are also developing povorcitinib (formerly INCB54707), which is an oral small molecule selective JAK1 inhibitor.

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The data demonstrated that longer-term treatment with povorcitinib 75 mg resulted in sustained and durable efficacy across all treatment arms and importantly, 22-29% of patients achieved HiSCR100, which is defined as a 100% reduction from baseline in total AN count with no increase from baseline in abscess or draining tunnel count.

Povorcitinib is currently in two phase 3 studies in moderate to severe HS.

Povorcitinib is currently in two phase III studies in moderate to severe HS.

In March 2023, 36-week results from the Phase IIb study evaluating povorcitinib in patients with extensive vitiligo were presented as an oral late-breaking presentation at the American Academy of Dermatology (AAD) Annual Meeting.

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Specifically, the study met its primary endpoint and patients receiving povorcitinib experienced statistically superior improvements in T-VASI at Week 24 compared to placebo.

In July 2023, we initiated two Phase II trials evaluating povorcitinib in patients with moderate to severe uncontrolled asthma and in chronic spontaneous urticaria.

Earlier-Stage Development Programs in Dermatology

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Its lead asset, auremolimab (VM6) is a novel, humanized anti-IL-15Rβ monoclonal antibody designed to target and deplete autoreactive tissue resident memory T cells (TRM) that has demonstrated efficacy as a treatment for vitiligo in preclinical models.

IND-enabling studies are underway, and clinical development for auremolimab is currently expected to begin in 2023.

In July 2023, auremolimab received IND clearance and is expected to enter the clinic in 2023.

Indication and status

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Below is a brief description of our significant business relationships and collaborations and related license agreements that expand our pipeline and provide us with certain rights to existing and potential new products and technologies.

Additional information regarding our collaboration agreements, including their financial and accounting impact on our business and results of operations, can be found in Note 7 of notes to the consolidated financial statements included in Item 8 of this report.

Out-License Agreements

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Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Form 10-K.

There have been no significant changes to our critical accounting policies or estimates during the three months ended March 31, 2023.

There have been no significant changes to our critical accounting policies or estimates during the six months ended June 30, 2023.

Recent Accounting Pronouncements

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Results of Operations

We recorded net income of $21.7 million and basic and diluted net income per share of $0.10 for the three months ended March 31, 2023, as compared to net income of $38.0 million and basic and diluted net income per share of $0.17 in the corresponding period in 2022.

We recorded net income of $203.5 million and basic net income per share of $0.91 and diluted net income per share of $0.90 for the three months ended June 30, 2023, as compared to net income of $161.4 million and basic net income per share of $0.73 and diluted net income per share of $0.72 in the corresponding period in 2022.

We recorded net income of $225.3 million and basic net income per share of $1.01 and diluted net income per share of $1.00 for the six months ended June 30, 2023, as compared to net income of $199.4 million and basic net income per share of $0.90 and diluted net income per share of $0.89 in the corresponding period in 2022.

Three Months Ended

(in millions)

June 30, Six Months Ended

2023 2022 2023 2022

(in millions) (in millions)

JAKAFI revenues, net $ 682.4 $ 597.7 $ 1,262.4 $ 1,142.1

OPZELURA revenues, net 80.2 16.6 136.8 29.3

ICLUSIG revenues, net 29.1 26.2 56.8 52.3

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MINJUVI revenues, net 13.2 4.4 19.7 8.9

OPZELURA revenues, net 56.6 12.8

ZYNYZ revenues, net 0.6 — 0.6 —

Total product revenues, net 827.1 663.9 1,520.3 1,269.6

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Total revenues $ 954.6 $ 911.4 $ 1,763.3 $ 1,644.6

The increase in JAKAFI net product revenues for the three months ended March 31, 2023 as compared to the corresponding period in 2022 was comprised of a volume increase of $26.1 million and a price increase of $9.4 million.

The JAKAFI net product revenues increase was primarily driven by growth in patient demand across all indications and was partially offset by higher gross-to-net deductions for Medicare and commercial co-pay assistance consistent with historical prior year’s first quarters, as well as an increase in the volume of JAKAFI sold at discounted prices under the federal 340B drug pricing program.

The quarter was also impacted by lower weeks on hand channel inventory than normal due to timing of certain customer purchases.

The increase in OPZELURA net product revenues for the three months ended March 31, 2023 was driven by increased patient demand and expanded coverage.

OPZELURA net product revenues for the three months ended March 31, 2023 were negatively impacted by an increase in co-pay assistance due to higher commercial patient deductibles at the beginning of the plan year and higher Medicaid utilization volume.

In addition, OPZELURA volume was negatively impacted by an acceleration of refills in December 2022 driven by patient demand in advance of annual deductible reset or health plan changes.

The increase in JAKAFI product revenues for the three months ended June 30, 2023 as compared to the corresponding period in 2022 was comprised of a volume increase of $61.3 million and a price increase of $23.4 million.

The increase in JAKAFI net product revenues for the six months ended June 30, 2023 as compared to the corresponding period in 2022 was comprised of a volume increase of $81.7 million and a price increase of $38.6 million.

The JAKAFI net product revenues increase was primarily driven by growth in patient demand across all indications and inventory level normalizing at the end of the second quarter of 2023.

The increase in OPZELURA net product revenues for the three and six months ended June 30, 2023 was driven by increased patient demand and expanded coverage.

The increase in MINJUVI net product revenues for the three and six months ended June 30, 2023 was driven by the recognition of approximately $6.0 million of previously deferred MINJUVI revenue related to the Early Access Program in France, which ended in June 2023.

Our product revenues may fluctuate from quarter to quarter due to our customers’ purchasing patterns over the course of the year, including as a result of increased inventory building by customers in advance of expected or announced price increases.

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The following table provides a summary of activity with respect to our sales allowances and accruals (in thousands):

Three Months Ended March 31, 2023 Discounts and

Six Months Ended June 30, 2023 Discounts and

Fees Government

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Credits/payments for prior period sales (22,076) (84,001) (17,073) (5,562) (128,712)

Balance at March 31, 2023 $ 18,801 $ 186,000 $ 13,535 $ 6,775 $ 225,111

Balance at June 30, 2023 $ 15,348 $ 183,117 $ 14,958 $ 8,578 $ 222,001

Government rebates and chargebacks are the most significant component of our sales allowances.

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Product royalty revenues on commercial sales of OLUMIANT by Lilly are based on net sales of licensed products in licensed territories as provided by Lilly.

JAKAVI and OLUMIANT product royalty revenues for the three months ended March 31, 2023 as compared to the corresponding period in 2022 were impacted by unfavorable changes in foreign currency exchange rates, while OLUMIANT product royalty revenues were also impacted by a decrease in net product sales of OLUMIANT for use as a treatment for COVID-19.

JAKAVI and OLUMIANT product royalty revenues for the three and six months ended June 30, 2023 as compared to the corresponding period in 2022 were impacted by unfavorable changes in foreign currency exchange rates.

Product royalty revenues on commercial sales of PEMAZYRE by Innovent are based on net sales of licensed products in licensed territories as provided by Innovent.

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Three Months Ended

(in millions)

June 30, Six Months Ended

2023 2022 2023 2022

(in millions) (in millions)

Product costs $ 23.3 $ 12.2 $ 46.8 $ 24.3

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Total cost of product revenues $ 68.3 $ 50.6 $ 125.1 $ 93.3

Cost of product revenues includes all product related costs, reserves for obsolescence, employee personnel costs, including stock compensation, for those employees dedicated to the production of our commercial products, royalties under our collaborative agreements and amortization of our licensed intellectual property rights for ICLUSIG.

The increase in cost of product revenues for the three months ended March 31, 2023 as compared to the same periods in 2022 was primarily due to product related costs for our commercial products including OPZELURA.

The increase in cost of product revenues for the three and six months ended June 30, 2023 as compared to the same periods in 2022 was primarily due to growth in net product revenues.

Operating Expenses

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Three Months Ended

(in millions)

June 30, Six Months Ended

2023 2022 2023 2022

(in millions) (in millions)

Salary and benefits related $ 98.6 $ 83.3 $ 199.0 $ 167.8

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We account for research and development costs by natural expense line and not costs by project.

The increase in salary and benefits related expense for the three months ended March 31, 2023 as compared to the corresponding periods in 2022 was due primarily to increased development headcount to sustain our development pipeline.

The increase in salary and benefits related expense for the three and six months ended June 30, 2023 as compared to the corresponding periods in 2022 was due primarily to increased development headcount to sustain our development pipeline.

Stock compensation expense may fluctuate from period to period based on the number of awards granted, stock price volatility and expected award lives, as well as expected award forfeiture rates which are used to value equity-based compensation.

The increase in clinical research and outside services expense for the three months ended March 31, 2023 as compared to the corresponding period in 2022 was primarily due to continued investment in our late stage development assets and the timing of certain expenses.

Research and development expenses include upfront and milestone expenses related to our collaborative agreements of $2.7 million and $20.0 million, respectively, for the three months ended March 31, 2023 and 2022.

Research and development expenses for the three months ended March 31, 2023 and 2022 were net of $0.6 million and $10.3 million, respectively, of costs reimbursed by our collaborative partners.

The increase in clinical research and outside services expense for the three and six months ended June 30, 2023 as compared to the corresponding period in 2022 was primarily due to continued investment in our late stage development assets.

Research and development expenses include upfront and milestone expenses related to our collaborative agreements of $7.0 million and $9.7 million, respectively, for the three and six months ended June 30, 2023.

Research and development expenses include upfront and milestone expenses related to our collaborative agreements of $2.5 million and $22.5 million, respectively, for the three and six months ended June 30, 2022.

Research and development expenses for the three and six months ended June 30, 2023 and 2022 were net of $25.1 million, $25.7 million, $24.3 million and $34.6 million, respectively, of costs reimbursed by our collaborative partners.

In addition to one-time expenses resulting from upfront fees in connection with the entry into any new or amended collaboration agreements and payment of milestones under those agreements, research and development expenses may fluctuate from period to period depending upon the stage of certain projects and the level of preclinical and clinical trial related activities.

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Three Months Ended

(in millions)

June 30, Six Months Ended

2023 2022 2023 2022

(in millions) (in millions)

Salary and benefits related $ 74.4 $ 65.4 $ 147.3 $ 132.7

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Total selling, general and administrative expenses $ 283.9 $ 253.3 $ 599.5 $ 462.9

The increase in salary and benefits related expense for the three months ended March 31, 2023 as compared to the corresponding period in 2022 was due primarily to increased headcount.

The increase in salary and benefits related expense for the three and six months ended June 30, 2023 as compared to the corresponding period in 2022 was due primarily to increased headcount.

This increased headcount was due primarily to the establishment of our dermatology commercial organization.

The increase in other contract services and outside costs for the three months ended March 31, 2023, as compared to the corresponding periods in 2022, was primarily due to expenses related to promotional activities to support the launch of OPZELURA for the treatments of atopic dermatitis and vitiligo, and timing of certain expenses.

The increase in other contract services and outside costs for the three and six months ended June 30, 2023, as compared to the corresponding periods in 2022, was primarily due to expenses related to promotional activities to support the launch of OPZELURA for the treatment of vitiligo.

Loss on change in fair value of acquisition-related contingent consideration

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The fair value of the acquisition-related contingent consideration is remeasured quarterly.

The loss on change in fair value of the acquisition-related contingent consideration for the three months ended March 31, 2023 and 2022 was $6.2 million and $6.4 million, respectively, which is recorded in loss on change in fair value of acquisition-related contingent consideration on the condensed consolidated statements of operations.

The loss on change in fair value of the contingent consideration during the three months ended March 31, 2023 was due primarily to the passage of time.

The loss on change in fair value of the acquisition-related contingent consideration for the three and six months ended June 30, 2023 was $8.4 million and $14.6 million, respectively, which is recorded in loss on change in fair value of acquisition-related contingent consideration on the condensed consolidated statements of operations.

The loss on change in fair value of the acquisition-related contingent consideration for the three and six months ended June 30, 2022 was $3.3 million and $9.7 million, respectively, which is recorded in loss on change in fair value of acquisition-related contingent consideration on the condensed consolidated statements of operations.

The loss on change in fair value of the contingent consideration during the three and six months ended June 30, 2023 was due primarily to the passage of time.

(Profit) and loss sharing under collaboration agreements

Under the collaboration and license agreement with MorphoSys, which was executed in March 2020, we and MorphoSys are both responsible for the commercialization efforts of tafasitamab in the United States and will share equally the profits and losses from the co-commercialization efforts.

Our 50% share of the United States profit or loss for the commercialization of tafasitamab for the three months ended March 31, 2023 was a profit of $1.4 million, and was a $4.7 million loss for the three months ended March 31, 2022, and is recorded as (profit) and loss sharing under collaboration agreements on the condensed consolidated statement of operations.

Interest income and other, net

For the three and six months ended June 30, 2023, our 50% share of the profits for tafasitamab was $0.5 million and $1.9 million, respectively, as recorded in (profit) and loss sharing under collaboration agreements on the condensed consolidated statement of operations.

For the three and six months ended June 30, 2022, our 50% share of the losses for tafasitamab was $2.5 million and $7.3 million, respectively, as recorded in (profit) and loss sharing under collaboration agreements on the condensed consolidated statement of operations.

Interest income and other, net .

Interest income and other, net for the three months ended March 31, 2023 and 2022 was $32.9 million and $1.3 million, respectively.

The increase in Interest income and other, net for the three months ended March 31, 2023 primarily relates to an increase in interest income.

Unrealized loss on long term investments.

Interest income and other, net for the three and six months ended June 30, 2023 was $42.7 million and $75.5 million, respectively.

Interest income and other, net for the three and six months ended June 30, 2022 was $0.5 million and $1.8 million, respectively.

The increase in Interest income and other, net for the three and six months ended June 30, 2023 primarily relates to an increase in interest earned on our cash equivalents and marketable securities.

Unrealized gain (loss) on long term investments.

Unrealized gains and losses on long term investments will fluctuate from period to period, based on the change in fair value of the securities we hold in our publicly held collaboration partners.

The following table provides a summary of those unrealized losses:

The following table provides a summary of those unrealized gains (losses):

Three Months Ended

(in millions)

June 30, Six Months Ended

2023 2022 2023 2022

(in millions) (in millions)

Agenus $ 0.9 $ (6.3) $ (9.7) $ (15.4)

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Syndax (0.2) 2.7 (6.4) (3.8)

Mink 0.2 — 0.2 —

Syros — (0.2) (0.1) (2.2)

Total unrealized loss on long term investments $ (5.3) $ (46.6)

Total unrealized gain (loss) on long term investments $ 41.8 $ (24.9) $ 36.5 $ (71.5)

Provision for income taxes.

The provision for income taxes for the three months ended March 31, 2023 and 2022 was $30.2 million and $32.5 million, respectively.

Our effective tax rate for both of the three months ended March 31, 2023 and 2022 was higher than the U.S.

statutory rate primarily due to foreign losses with no associated tax benefit (i.e., full valuation allowance).

While the tax expense for the three months ended March 31, 2023 decreased marginally as compared to that for the prior year period, the effective tax rate increased as a result of lower U.S.

earnings, while unbenefited foreign losses remained flat.

The provision for income taxes for the three and six months ended June 30, 2023 was $74.1 million and $104.2 million, respectively.

The provision for income taxes for the three and six months ended June 30, 2022 was $67.9 million and $100.5 million, respectively.

Our effective tax rate for each of the three and six months ended June 30, 2023 and 2022 was higher than the U.S.

statutory rate primarily due to foreign losses with no associated tax benefit (i.e., full valuation allowance) and an increase in our valuation allowance against certain U.S.

federal and state deferred tax assets offset to a lesser extent by tax rate benefits associated with research and development and orphan drug tax credit generations and foreign derived intangible income deductions.

The effective tax rate for the three and six months ended June 30, 2023 decreased as compared to that for the prior year periods due to a greater tax benefit recognized in 2023 associated with research and development and orphan drug tax credit generations.

Liquidity and Capital Resources

Due to historical net losses, we had an accumulated deficit of $416 million as of March 31, 2023.

Due to historical net losses, we had an accumulated deficit of $212 million as of June 30, 2023.

We have funded our research and development operations through cash received from customers, sales of equity securities, the issuance of convertible notes, and collaborative arrangements.

At March 31, 2023, we had available cash, cash equivalents and marketable securities of $3.1 billion.

At June 30, 2023, we had available cash, cash equivalents and marketable securities of $3.4 billion.

Our cash and marketable securities balances are held in a variety of interest-bearing instruments, including money market accounts, and U.S.

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Available cash is invested in accordance with our investment policy’s primary objectives of liquidity, safety of principal and diversity of investments.

Net cash used in operating activities for the three months ended March 31, 2023 was $105.6 million and net cash provided by operating activities for the three months ended March 31, 2022 was $215.7 million.

The decrease in cash provided by operating activities was due primarily to changes in working capital due to a reduction of our accounts payable balance at March 31, 2023.

Net cash provided by operating activities for the six months ended June 30, 2023 was $200.9 million and net cash provided by operating activities for the six months ended June 30, 2022 was $389.9 million.

The decrease in cash provided by operating activities was due primarily to changes in working capital.

Our investing activities, other than purchases, sales and maturities of marketable securities, have consisted predominantly of capital expenditures and purchases of long term investments.

Net cash used in investing activities was $28.6 million for the three months ended March 31, 2023, which represented purchases of marketable securities of $54.9 million, payments for intangible assets of $15.0 million, and capital expenditures of $11.9 million, offset in part by the sale and maturities of marketable securities of $53.2 million.

Net cash used in investing activities was $16.7 million for the three months ended March 31, 2022, which represented capital expenditures of $17.0 million, offset in part by the sales and maturities of marketable securities of $0.3 million.

Net cash used in investing activities was $36.0 million for the six months ended June 30, 2023, which represented purchases of marketable securities of $152.3 million, payments for intangible assets of $15.0 million, and capital expenditures of $19.2 million, offset in part by the sale and maturities of marketable securities of $150.5 million.

Net cash used in investing activities was $29.2 million for the six months ended June 30, 2022, which represented purchases of marketable securities of $44.0 million and capital expenditures of $28.7 million, offset in part by the sales and maturities of marketable securities of $43.5 million.

In the future, net cash used by investing activities may fluctuate significantly from period to period due to the timing of strategic equity investments, acquisitions, and capital expenditures and maturities/sales and purchases of marketable securities.

Net cash provided by financing activities was $4.0 million and $0.1 million for the three months ended March 31, 2023 and 2022, respectively, primarily representing proceeds from the issuance of common stock under our stock plans, offset in part by cash paid to ARIAD/Takeda for contingent consideration.

Net cash provided by financing activities was $16.9 million and $16.0 million for the six months ended June 30, 2023 and 2022, respectively, primarily representing proceeds from the issuance of common stock under our stock plans, offset in part by cash paid to ARIAD/Takeda for contingent consideration.

In October 2019, we entered into an agreement with Wilmington Friends School Inc., to purchase property for $50.0 million to expand our global headquarters.

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We may increase the maximum revolving commitments or add one or more incremental term loan facilities, subject to obtaining commitments from any participating lenders and certain other conditions, in an amount not to exceed $250.0 million plus a contingent additional amount that is dependent on our pro forma consolidated leverage ratio.

As of March 31, 2023, we had no outstanding borrowings and were in compliance with all covenants under this facility.

As of June 30, 2023, we had no outstanding borrowings and were in compliance with all covenants under this facility.

income tax payments will increase significantly in 2023 resulting from the full utilization in 2022 of our research and development and orphan drug tax credit carryforwards generated in prior years.

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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