What changed in this filing

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Item 1. Financial Statements

2022-08-02 compared with 2022-05-03 · 166 added, 111 removed, 514 unchanged (35% of the section changed)

5 unchanged sentences

Cash and cash equivalents

Marketable securities—available-for-sale (amortized cost $ 291,613 and $ 291,871 as of March 31, 2022 and December 31, 2021, respectively;

allowance for credit losses $ 0 as of March 31, 2022 and December 31, 2021)

Marketable securities—available-for-sale (amortized cost $ 292,350 and $ 291,871 as of June 30, 2022 and December 31, 2021, respectively;

allowance for credit losses $ 0 as of June 30, 2022 and December 31, 2021)

Accounts receivable

27 unchanged sentences

400,000,000 shares authorized;

221,409,550 and 221,084,433 shares issued and outstanding as of March 31, 2022 and December 31, 2021 , respectively

221,875,396 and 221,084,433 shares issued and outstanding as of June 30, 2022 and December 31, 2021 , respectively

Additional paid-in capital

9 unchanged sentences

Three Months Ended

Six Months Ended

Product revenues, net

12 unchanged sentences

Interest expense

Unrealized loss on long term investments

Unrealized (loss) gain on long term investments

Income before provision for income taxes

4 unchanged sentences

INCYTE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in thousands)

Three Months Ended

Other comprehensive loss:

Foreign currency translation loss

Six Months Ended

Other comprehensive income (loss):

Foreign currency translation (loss) gain

Unrealized loss on marketable securities, net of tax

Defined benefit pension gain, net of tax

Other comprehensive loss

Other comprehensive income (loss)

Comprehensive income

3 unchanged sentences

(unaudited, in thousands, except number of shares)

For the Three Months Ended March 31, 2021

Accumulated Other

3 unchanged sentences

Balances at January 1, 2022

( 1,726,455 )

Issuance of 323,582 shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units, net of shares withheld for taxes

3 unchanged sentences

Balances at March 31, 2022

( 1,672,920 )

For the Three Months Ended March 31, 2022

Issuance of 274,693 shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and performance shares, net of shares withheld for taxes and 189,684 shares of Common Stock under the ESPP

Issuance of 1,469 shares of Common Stock for services rendered

Stock compensation

Other comprehensive income

Balances at June 30, 2022

INCYTE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)

(unaudited, in thousands, except number of shares)

Accumulated Other

3 unchanged sentences

Balances at January 1, 2021

( 1,726,455 )

Issuance of 389,512 shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units, net of shares withheld for taxes

3 unchanged sentences

Balances at March 31, 2021

( 1,672,920 )

Issuance of 390,001 shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and performance shares, net of shares withheld for taxes and 153,082 shares of Common Stock under the ESPP

Issuance of 1,288 shares of Common Stock for services rendered

Stock compensation

Other comprehensive income

Balances at June 30, 2021

( 1,523,464 )

See accompanying notes.

2 unchanged sentences

(unaudited, in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities :

36 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

Organization and business

5 unchanged sentences

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

The condensed consolidated balance sheet as of March 31, 2022, the condensed consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for the three months ended March 31, 2022 and 2021, are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which we consider necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The condensed consolidated balance sheet as of June 30, 2022, the condensed consolidated statements of operations, comprehensive income (loss), and stockholders’ equity for the three and six months ended June 30, 2022 and 2021, and the condensed consolidated statements of cash flows for the six months ended June 30, 2022 and 2021, are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which we consider necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The condensed consolidated balance sheet at December 31, 2021 has been derived from our audited consolidated financial statements.

14 unchanged sentences

Three Months Ended

Six Months Ended

JAKAFI revenues, net

13 unchanged sentences

The following is a summary of our marketable security portfolio for the periods presented (in thousands):

March 31, 2022

June 30, 2022

Debt securities (government)

3 unchanged sentences

Debt security assets were assessed for risk of expected credit losses.

As of March 31, 2022 and December 31, 2021, the available-for-sale debt securities were held in U.S.-government backed securities and in Treasury bonds and were assessed on an individual security basis to have a de minimis risk of credit loss.

As of June 30, 2022 and December 31, 2021, the available-for-sale debt securities were held in U.S.-government backed securities and in Treasury bonds and were assessed on an individual security basis to have a de minimis risk of credit loss.

Fair Value Measurements

10 unchanged sentences

government debt securities that are classified as available-for-sale.

At March 31, 2022 and December 31, 2021, our Level 2 U.S.

At June 30, 2022 and December 31, 2021, our Level 2 U.S.

government debt securities were valued using readily available pricing sources which utilize market observable inputs, including the current interest rate and other characteristics for similar types of investments.

Our long term investments classified as Level 1 were valued using their respective closing stock prices on The Nasdaq Stock Market.

We did not experience any transfers of financial instruments between the fair value hierarchy levels during the three months ended March 31, 2022.

We did not experience any transfers of financial instruments between the fair value hierarchy levels during the six months ended June 30, 2022.

The following fair value hierarchy table presents information about each major category of our financial assets measured at fair value on a recurring basis (in thousands):

5 unchanged sentences

Balance as of

March 31, 2022

June 30, 2022

Cash and cash equivalents

18 unchanged sentences

Balance as of

March 31, 2022

June 30, 2022

Acquisition-related contingent consideration

9 unchanged sentences

Total liabilities

The following is a roll forward of our Level 3 liabilities (in thousands):

The following is a rollforward of our Level 3 liabilities (in thousands):

Balance at January 1,

1 unchanged sentence

Change in fair value of contingent consideration

Balance at March 31,

Balance at June 30,

The fair value of the contingent consideration was determined on the date of acquisition, June 1, 2016, using an income approach based on projected future net revenues of ICLUSIG in the European Union and other countries for the approved third line treatment over 18 years , and discounted to present value at a rate of 10 %.

The fair value of the contingent consideration is remeasured each reporting period, with changes in fair value recorded in the condensed consolidated statements of operations.

The valuation inputs utilized to estimate the fair value of the contingent consideration as of March 31, 2022 and December 31, 2021 included a discount rate of 10% and updated projections of future net revenues of ICLUSIG in the European Union and other countries for the approved third line treatment.

The change in fair value of the contingent consideration during the three months ended March 31, 2022 was due primarily to the passage of time.

The valuation inputs utilized to estimate the fair value of the contingent consideration as of June 30, 2022 and December 31, 2021 included a discount rate of 10 % and updated projections of future net revenues of ICLUSIG in the European Union and other countries for the approved third line treatment.

The change in fair value of the contingent consideration during the three and six months ended June 30, 2022 was due primarily to the passage of time and updated projections of future net revenues of ICLUSIG.

We make payments to Takeda Pharmaceutical Company Limited quarterly based on the royalties or any additional milestone payments earned in the previous quarter.

At March 31, 2022 and December 31, 2021, contingent consideration earned but not yet paid was $ 8.4 million and $ 19.6 million, respectively, and was included in accrued and other current liabilities.

At June 30, 2022 and December 31, 2021, contingent consideration earned but not yet paid was $ 16.7 million and $ 19.6 million, respectively, and was included in accrued and other current liabilities.

Concentration of credit risk and current expected credit losses

5 unchanged sentences

In July 2019, we entered into a collaboration and license agreement with Zai Lab (Shanghai) Co., Ltd., a subsidiary of Zai Lab Limited (collectively, “Zai Lab”).

The above collaboration partners comprised, in aggregate, 24 % and 36 % of the accounts receivable balance as of March 31, 2022 and December 31, 2021, respectively.

The above collaboration partners comprised, in aggregate, 37 % and 36 % of the accounts receivable balance as of June 30, 2022 and December 31, 2021, respectively.

For further information relating to these collaboration and license agreements, refer to Note 7.

3 unchanged sentences

Percentage of Total Net

Product Revenues for the

Three Months Ended

Six Months Ended

We are exposed to risks associated with extending credit to customers related to the sale of products.

Customers A, B, C, D and E comprised, in aggregate, 36 % and 31 % of the accounts receivable balance as of March 31, 2022 and December 31, 2021, respectively.

Customers A, B, C, D and E comprised, in aggregate, 31 % of the accounts receivable balance as of both June 30, 2022 and December 31, 2021.

The concentration of credit risk relating to our other product revenues or accounts receivable is not significant.

We assessed our collaborative and customer receivable assets as of March 31, 2022 according to our accounting policy for applying reserves for expected credit losses, noting minimal history of uncollectible receivables and the continued perceived creditworthiness of our third party sales relationships, upon which the expected credit losses were considered de minimis.

As of March 31, 2022 and December 31, 2021, we had no allowance for doubtful accounts.

We assessed our collaborative and customer receivable assets as of June 30, 2022 according to our accounting policy for applying reserves for expected credit losses, noting minimal history of uncollectible receivables and the continued perceived creditworthiness of our third party sales relationships, upon which the expected credit losses were considered de minimis.

As of June 30, 2022 and December 31, 2021, we had no allowance for doubtful accounts.

Our inventory balance consists of the following (in thousands):

4 unchanged sentences

Inventories, stated at the lower of cost and net realizable value, consist of raw materials, work in process and finished goods.

At March 31, 2022, $ 35.5 million of inventory was classified as current on the condensed consolidated balance sheet as we expect this inventory to be consumed for commercial use within the next twelve months.

At March 31, 2022, $ 35.4 million of inventory was classified as non-current on the condensed consolidated balance sheet as we did not expect this inventory to be consumed for commercial use within the next twelve months.

At June 30, 2022, $ 54.5 million of inventory was classified as current on the condensed consolidated balance sheet as we expect this inventory to be consumed for commercial use within the next twelve months.

At June 30, 2022, $ 39.6 million of inventory was classified as non-current on the condensed consolidated balance sheet as we did not expect this inventory to be consumed for commercial use within the next twelve months.

We obtain some inventory components from a limited number of suppliers due to technology, availability, price, quality or other considerations.

The loss of a supplier, the deterioration of our relationship with a supplier, or any unilateral violation of the contractual terms under which we are supplied components by a supplier could adversely affect our total revenues and gross margins.

We capitalize inventory after FDA approval as the related costs are expected to be recoverable through the commercialization of the product.

We capitalize inventory after U.S.

Food and Drug Administration (FDA) approval as the related costs are expected to be recoverable through the commercialization of the product.

Costs incurred prior to FDA approval are recorded as research and development expense in our statements of operations.

At March 31, 2022, inventory with approximately $ 69.9 million of product costs incurred prior to FDA approval had not yet been sold.

At June 30, 2022, inventory with approximately $ 66.0 million of product costs incurred prior to FDA approval had not yet been sold.

We expect to sell the pre commercialization inventory over the next 30 months and, as a result, cost of product revenues will reflect a lower average per unit cost of materials.

6 unchanged sentences

In addition, we are eligible to receive up to $ 75.0 million of additional potential development and regulatory milestones relating to graft-versus-host-disease (“GVHD”).

We have recognized and received, in the aggregate, $ 157.0 million for the achievement of development milestones, $ 280.0 million for the achievement of regulatory milestones and $ 200.0 million for the achievement of sales milestones through March 31, 2022.

We have recognized and received, in the aggregate, $ 157.0 million for the achievement of development milestones, $ 340.0 million for the achievement of regulatory milestones, and $ 200.0 million for the achievement of sales milestones through June 30, 2022.

In April 2022, we recognized a $ 15.0 million regulatory milestone for the positive opinion issued by the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) that recommends granting marketing authorization for capmatinib (TABRECTA) as a monotherapy for the treatment of adults with a dvanced non-small cell lung cancer.

Additionally, in May 2022, we recognized a $ 45.0 million regulatory milestone as a result of the European Commission’s approval of JAKAVI (ruxolitinib) as the first post-steroid treatment for acute and chronic GVHD.

We also are eligible to receive tiered, double-digit royalties ranging from the upper-teens to the mid-twenties on future JAKAVI net sales outside of the United States, and tiered, worldwide royalties on TABRECTA net sales that range from 12 % to 14 %.

We are obligated to pay to Novartis tiered royalties in the low single-digits on future JAKAFI net sales within the United States contingent on certain conditions.

During the three months ended March 31, 2022 and 2021, such royalties on net sales within the United States totaled $ 21.7 million and $ 17.8 million, respectively, and were reflected in cost of product revenues on the condensed consolidated statements of operations.

At March 31, 2022 and December 31, 2021, $ 162.1 million and $ 148.1 million, respectively, of accrued royalties were included in accrued and other current liabilities on the condensed consolidated balance sheets.

During the three and six months ended June 30, 2022, such royalties on net sales within the United States totaled $ 29.3 million and $ 51.0 million, respectively, and were reflected in cost of product revenues on the condensed consolidated statements of operations.

During the three and six months ended June 30, 2021, such royalties on net sales within the United States totaled $ 25.9 million and $ 43.7 million, respectively, and were reflected in cost of product revenues on the condensed consolidated statements of operations.

At June 30, 2022 and December 31, 2021, $ 191.4 million and $ 148.1 million, respectively, of accrued royalties were included in accrued and other current liabilities on the condensed consolidated balance sheets.

Each company is responsible for costs relating to the development and commercialization of ruxolitinib in its respective territories, with costs of collaborative studies shared equally.

Novartis is also responsible for all costs relating to the development and commercialization of capmatinib.

For the three months ended March 31, 2022 and 2021, we recorded $ 70.8 million and $ 65.6 million, respectively, of product royalty revenues related to Novartis net sales of JAKAVI outside the United States.

For the three months ended March 31, 2022 and 2021, we recorded $ 3.5 million and $ 2.0 million, respectively, of product royalty revenues related to Novartis net sales of TABRECTA worldwide.

Milestone and contract revenue under the Novartis agreement was $ 60.0 million for both the three and six months ended June 30, 2022.

Product royalty revenue related to Novartis net sales of JAKAVI outside of the United States for the three and six months ended June 30, 2022 was $ 83.6 million and $ 154.6 million, respectively.

Product royalty revenue related to Novartis net sales of JAKAVI outside of the United States for the three and six months ended June 30, 2021 was $ 82.0 million and $ 147.6 million, respectively.

Product royalty revenue related to Novartis net sales of TABRECTA worldwide for the three and six months ended June 30, 2022 was $ 3.6 million and $ 7.1 million, respectively.

Product royalty revenue related to Novartis net sales of TABRECTA worldwide for the three and six months ended June 30, 2021 was $ 2.5 million and $ 4.5 million, respectively.

Lilly – Baricitinib

2 unchanged sentences

Under this agreement, we were initially eligible to receive up to $ 150.0 million for the achievement of development milestones, up to $ 365.0 million for the achievement of regulatory milestones and up to $ 150.0 million for the achievement of sales milestones.

We have recognized and received, in aggregate, $ 149.0 million for the achievement of development milestones, $ 265.0 million for the achievement of regulatory milestones and $ 50.0 million for the achievement of sales milestones through March 31, 2022.

We have recognized and received, in aggregate, $ 149.0 million for the achievement of development milestones, $ 335.0 million for the achievement of regulatory milestones and $ 50.0 million for the achievement of sales milestones through June 30, 2022.

We are also eligible to receive tiered, double-digit royalty payments on future global sales with rates ranging up to mid-twenties if a product is successfully commercialized.

In May 2020, we amended our agreement with Lilly to enable Lilly to develop and commercialize baricitinib for the treatment of COVID-19.

As part of the amended agreement, in addition to the royalties described above, we will be entitled to receive additional royalty payments with rates in the low teens on global net sales of baricitinib for the treatment of COVID-19 that exceed a specified aggregate global net sales threshold.

Product royalty revenue related to Lilly net sales of OLUMIANT outside of the United States for the three months ended March 31, 2022 and 2021 was $ 48.0 million and $ 32.3 million, respectively.

In June 2022, we recognized a $ 40.0 million regulatory milestone for the FDA approval of OLUMIANT as a first-in-disease systemic treatment for adults with severe alopecia areata.

Additionally, in June 2022 we recognized a $ 20.0 million regulatory milestone for the European Commission’s approval for OLUMIANT for the treatment of adults with severe alopecia areata, and a $ 10.0 million regulatory milestone for the Ministry of Health, Labour and Welfare of Japan’s approval for OLUMIANT for the treatment of adults with severe alopecia areata in Japan.

Milestone and contract revenue under the Lilly agreement was $ 70.0 million for both the three and six months ended June 30, 2022.

Product royalty revenue related to Lilly net sales of OLUMIANT outside of the United States for the three and six months ended June 30, 2022 was $ 30.3 million and $ 78.3 million, respectively.

Product royalty revenue related to Lilly net sales of OLUMIANT outside of the United States for the three and six months ended June 30, 2021 was $ 36.0 million and $ 68.3 million, respectively.

Lilly - Ruxolitinib

12 unchanged sentences

The agreement may be terminated by us for convenience upon 12 months ’ notice and may also be terminated under certain other circumstances, including material breach.

As of March 31, 2022, we have paid Agenus milestones totaling $ 30.0 million and Agenus is eligible to receive up to an additional $ 500.0 million in future contingent development, regulatory and commercialization milestones across all programs in the collaboration.

In addition, in 2017 we also agreed to purchase 10.0 million shares of Agenus common stock for an aggregate purchase price of $ 60.0 million in cash, or $ 6.00 per share.

The fair market value of our long term investment in Agenus as of March 31, 2022 and December 31, 2021 was $ 29.7 million and $ 38.9 million, respectively.

In 2020, we sold an aggregate of approximately 3.7 million shares of Agenus common stock resulting in gross proceeds of approximately $ 17.2 million.

In 2021, we sold an aggregate of approximately 2.0 million shares of Agenus common stock resulting in gross proceeds of approximately $ 10.5 million.

As of March 31, 2022, we owned less than 5 % of the outstanding shares of Agenus common stock.

We intend to hold the investment in Agenus for the foreseeable future and therefore, are accounting for our shares held in Agenus at fair value whereby the investment is marked to market through earnings in each reporting period.

As of June 30, 2022, we have paid Agenus milestones totaling $ 30.0 million and Agenus is eligible to receive up to an additional $ 500.0 million in future contingent development, regulatory and commercialization milestones across all programs in the collaboration.

In addition, in 2017 we purchased 10.0 million shares of Agenus Inc.’s common stock for an aggregate purchase price of $ 60.0 million in cash, or $ 6.00 per share.

In 2020, we sold an aggregate of approximately 3.7 million shares of Agenus Inc.’s common stock resulting in gross proceeds of approximately $ 17.2 million.

In 2021, we sold an aggregate of approximately 2.0 million shares of Agenus Inc.’s common stock resulting in gross proceeds of approximately $ 10.5 million.

The fair market value of our long term investment in Agenus Inc.

at June 30, 2022 and December 31, 2021 was $ 23.4 million and $ 38.9 million, respectively.

As of June 30, 2022, we owned less than 5 % of the outstanding shares of Agenus Inc.’s common stock.

We intend to hold the investment in Agenus Inc.

for the foreseeable future and therefore, are accounting for our shares held in Agenus Inc.

at fair value whereby the investment is marked to market through earnings in each reporting period.

Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying condensed consolidated balance sheets.

For the three months ended March 31, 2022 and 2021, we recorded an unrealized loss of $ 9.2 million and $ 5.9 million, respectively, based on the change in fair value of Agenus Inc.’s common stock during the respective periods.

For the three and six months ended June 30, 2022, we recorded an unrealized loss of $ 6.3 million and $ 15.4 million, respectively, based on the change in fair value of Agenus Inc.’s common stock during the respective periods.

For the three and six months ended June 30, 2021, we recorded an unrealized gain of $ 37.8 million and $ 31.9 million, respectively, based on the change in fair value of Agenus Inc.’s common stock during the respective periods.

In December 2016, we entered into a Collaboration and License Agreement with Merus N.V.

11 unchanged sentences

If Merus opts to cease co-funding a program as to which it exercised its co-development option, then Merus will no longer receive a share of profits in the United States but will be eligible to receive the same milestones from the co-funding termination date and the same tiered royalties described above with respect to programs where Merus does not have a right to co-fund development and, depending on the stage at which Merus chose to cease co-funding development costs, Merus will be eligible to receive additional royalties ranging up to 4 % of net sales in the United States.

As of March 31, 2022, we have paid Merus milestones totaling $ 2.0 million.

In addition, in 2016 we entered into a Share Subscription Agreement with Merus, pursuant to which we agreed to purchase 3.2 million common shares of Merus for an aggregate purchase price of $ 80.0 million in cash, or $ 25.00 per share.

The fair market value of our total long term investment in Merus as of March 31, 2022 and December 31, 2021 was $ 93.9 million and $ 112.9 million, respectively.

As of June 30, 2022, we have paid Merus milestones totaling $ 2.0 million.

In addition, in 2016 we entered into a Share Subscription Agreement with Merus, pursuant to which we purchased 3.2 million common shares of Merus for an aggregate purchase price of $ 80.0 million in cash, or $ 25.00 per share.

In January 2021, we purchased 350,000 common shares in Merus’ underwritten public offering of 4,848,485 common shares at the public offering price of $ 24.75 per share, or an aggregate purchase price of $ 8.7 million.

As of March 31, 2022, we owned approximately 8 % of the outstanding common shares of Merus.

The fair market value of our total long term investment in Merus at June 30, 2022 and December 31, 2021 was $ 80.4 million and $ 112.9 million, respectively.

As of June 30, 2022, we owned approximately 8 % of the outstanding common shares of Merus.

We have concluded that we have the ability to exercise significant influence, but not control, over Merus based primarily on our ownership interest, the level of intra-entity transactions between us and Merus related to development expenses, as well as other qualitative factors.

1 unchanged sentence

We believe the fair value option to be the most appropriate accounting method to account for securities in publicly held collaborators for which we have significant influence.

For the three months ended March 31, 2022 and 2021 we recorded an unrealized loss of $ 19.0 million and an unrealized gain of $ 9.4 million, respectively, based on the change in fair value of Merus’ common shares during the respective periods.

For the three and six months ended June 30, 2022, we recorded an unrealized loss of $ 13.5 million and $ 32.5 million, respectively, based on the change in fair value of Merus’ common shares during the respective periods.

For the three and six months ended June 30, 2021, we recorded an unrealized gain of $ 0.6 million and $ 10.0 million, respectively, based on the change in fair value of Merus’ common shares during the respective periods.

In January 2017, we entered into a Collaboration and License Agreement with Calithera Biosciences, Inc.

4 unchanged sentences

We will be entitled to 60 % of the profits and losses from net sales of licensed product in the United States, and Calithera will have the right to co-detail licensed products in the United States, and we have agreed to pay Calithera tiered royalties ranging from the low to mid-double digits on net sales of licensed products outside the United States.

As of March 31, 2022, we have paid Calithera milestones totaling $ 12.0 million.

As of June 30, 2022, we have paid Calithera milestones totaling $ 12.0 million.

Calithera delivered notice of its decision to opt out of its co-funding obligation, effective on September 30, 2020.

3 unchanged sentences

We will have the right to take over the conduct of all activities related to the research, development and commercialization of INCB001158 for all indications in the hematology/oncology field.

In addition, in 2017, we entered into a Stock Purchase Agreement with Calithera for the purchase of 1.7 million common shares of Calithera for an aggregate purchase price of $ 8.0 million in cash, or $ 4.65 per share.

The fair market value of our long term investment in Calithera at March 31, 2022 and December 31, 2021 was $ 0.7 million and $ 1.1 million, respectively.

As of March 31, 2022, we owned approximately 2 % of the outstanding shares of Calithera common stock.

In addition, in 2017, we entered into a Stock Purchase Agreement with Calithera, pursuant to which we purchased 1.7 million shares of Calithera common stock for an aggregate purchase price of $ 8.0 million in cash, or $ 4.65 per share.

In June 2022, Calithera effected a one-for-twenty stock split of its outstanding common stock, adjusting our ownership to 86,021 shares of Calithera’s common stock.

The fair market value of our long term investment in Calithera at June 30, 2022 and December 31, 2021 was $ 0.2 million and $ 1.1 million, respectively.

As of June 30, 2022, we owned approximately 2 % of the outstanding shares of Calithera common stock.

We intend to hold the investment in Calithera for the foreseeable future and therefore, are accounting for our shares held in Calithera at fair value whereby the investment is marked to market through earnings in each reporting period.

Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying condensed consolidated balance sheets.

For the three months ended March 31, 2022 and 2021 we recorded an unrealized loss of $ 0.5 million and $ 4.3 million, respectively, based on the change in fair value of Calithera’s common stock during the respective periods.

For the three and six months ended June 30, 2022 we recorded an unrealized loss of $ 0.5 million and $ 0.9 million, respectively, based on the change in fair value of Calithera’s common stock during the respective periods.

For the three and six months ended June 30, 2021 we recorded an unrealized loss of $ 0.5 million and $ 4.8 million, respectively, based on the change in fair value of Calithera’s common stock during the respective periods.

In October 2017, we entered into a Global Collaboration and License Agreement with MacroGenics, Inc.

4 unchanged sentences

In addition, MacroGenics has the right to manufacture a portion of both companies’ global clinical and commercial supply needs of INCMGA0012.

As of March 31, 2022, we have paid MacroGenics developmental milestones totaling $ 70.0 million.

MacroGenics is eligible to receive up to an additional $ 365.0 million in future contingent development and regulatory milestones, and up to $ 330.0 million in sales milestones as well as tiered royalties ranging from 15 % to 24 % of global net sales.

Research and development expenses for the three months ended March 31, 2022 and 2021 also included $ 13.5 million and $ 13.6 million, respectively, of development costs incurred pursuant to the MacroGenics agreement.

At March 31, 2022 and December 31, 2021, a total of $ 0.4 million and $ 0.7 million of such costs were included in accrued and other liabilities on the condensed consolidated balance sheets.

As of June 30, 2022, we have paid MacroGenics developmental milestones totaling $ 70.0 million and MacroGenics was eligible to receive up to an additional $ 365.0 million in future contingent development and regulatory milestones, and up to $ 330.0 million in sales milestones as well as tiered royalties ranging from 15 % to 24 % of global net sales.

In July 2022, we amended our agreement with MacroGenics to reflect changes related to the payment of certain milestones and paid MacroGenics $ 30.0 million.

As a result, after the amendment, MacroGenics will be eligible to receive up to an additional $ 335.0 million in future contingent development and regulatory milestones, and the aforementioned sales milestones and royalties.

Research and development expenses for the three and six months ended June 30, 2022 also included $ 14.8 million and $ 28.3 million, respectively, of development costs incurred pursuant to the MacroGenics agreement.

Research and development expenses for the three and six months ended June 30, 2021 also included $ 17.6 million and $ 31.2 million, respectively, of development costs incurred pursuant to the MacroGenics agreement.

At June 30, 2022 and December 31, 2021, a total of $ 0.6 million and $ 0.7 million of such costs were included in accrued and other liabilities on the condensed consolidated balance sheets.

In January 2018, we entered into a Target Discovery, Research Collaboration and Option Agreement with Syros Pharmaceuticals, Inc.

2 unchanged sentences

We have agreed to pay Syros up to $ 54.0 million in target selection and option exercise fees should we decide to exercise all of our options under the agreement.

For products resulting from the collaboration against each of the seven selected and validated targets, we have agreed to pay up to $ 50.0 million in potential development and regulatory

milestones and up to $ 65.0 million in potential sales milestones.

For products resulting from the collaboration against each of the seven selected and validated targets, we have agreed to pay up to $ 50.0 million in potential development and regulatory milestones and up to $ 65.0 million in potential sales milestones.

Syros is also eligible to receive low single-digit royalties on net sales of products resulting from the collaboration.

In addition, in 2018, we entered into a Stock Purchase Agreement with Syros for the purchase of 0.8 million shares of common stock of Syros for an aggregate purchase price of $ 10.0 million in cash, or $ 12.61 per share.

Subsequently in 2018, we entered into an Amended Stock Purchase Agreement with Syros for the purchase of an additional 0.1 million common shares of Syros for an aggregate purchase price of $ 1.4 million in cash, or $ 9.55 per share.

The fair market value of our long term investment in Syros as of March 31, 2022 and December 31, 2021 was $ 1.1 million and $ 3.1 million, respectively.

As of March 31, 2022, we owned less than 2 % of the outstanding shares of Syros common stock.

In addition, in 2018, we entered into a Stock Purchase Agreement with Syros, pursuant to which we purchased 0.8 million shares of Syros common stock for an aggregate purchase price of $ 10.0 million in cash, or $ 12.61 per share.

Subsequently in 2018, we entered into an Amended Stock Purchase Agreement with Syros, pursuant to which we purchased an additional 0.1 million shares of Syros common stock for an aggregate purchase price of $ 1.4 million in cash, or $ 9.55 per share.

The fair market value of our long term investment in Syros as of June 30, 2022 and December 31, 2021 was $ 0.9 million and $ 3.1 million, respectively.

As of June 30, 2022, we owned less than 2 % of the outstanding shares of Syros common stock.

We intend to hold the investment in Syros for the foreseeable future and therefore, are accounting for our shares held in Syros at fair value whereby the investment is marked to market through earnings in each reporting period.

Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying condensed consolidated balance sheets.

For the three months ended March 31, 2022 and 2021, we recorded an unrealized loss of $ 1.9 million and $ 3.2 million, respectively, based on the change in fair value of Syros’ common stock during the respective periods.

For the three and six months ended June 30, 2022, we recorded an unrealized loss of $ 0.2 million and $ 2.2 million, respectively, based on the change in fair value of Syros’ common stock during the respective periods.

For the three and six months ended June 30, 2021, we recorded an unrealized loss of $ 1.9 million and $ 5.1 million, respectively, based on the change in fair value of Syros’ common stock during the respective periods.

In December 2018, we entered into a Research Collaboration and Licensing Agreement with Innovent.

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MorphoSys’ right to receive royalties in any particular country will expire upon the last to occur of (a) the expiration of patent rights in that particular country, (b) a specified period of time after the first post-marketing authorization sale of a licensed product comprising tafasitamab in that country, and (c) the expiration of any regulatory exclusivity for that licensed product in that country.

In addition, under the terms of the agreement and pursuant to a related purchase agreement, we agreed to purchase American Depositary Shares (“ADSs”), each representing 0.25 of an ordinary share of MorphoSys AG, for an aggregate purchase price of $ 150.0 million or $ 41.33 per ADS (such ADSs to be purchased, the “New ADSs”).

The fair market value of our long term investment in MorphoSys as of March 31, 2022 and December 31, 2021, was $ 24.6 million and $ 34.2 million, respectively.

As of March 31, 2022, we owned approximately 3 % of the outstanding shares of MorphoSys common stock.

In addition, under the terms of the agreement and pursuant to a related purchase agreement, we purchased American Depositary Shares (“ADSs”), each representing 0.25 of an ordinary share of MorphoSys AG, for an aggregate purchase price of $ 150.0 million or $ 41.33 per ADS (such ADSs to be purchased, the “New ADSs”).

The fair market value of our long term investment in MorphoSys as of June 30, 2022 and December 31, 2021 was $ 17.5 million and $ 34.2 million, respectively.

As of June 30, 2022, we owned approximately 3 % of the outstanding ordinary shares of MorphoSys.

We intend to hold the investment in MorphoSys for the foreseeable future and therefore, are accounting for our shares held in MorphoSys at fair value whereby the investment is marked to market through earnings in each reporting period.

Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying condensed consolidated balance sheets.

For the three months ended March 31, 2022 and 2021, we recorded an unrealized loss of $ 9.6 million and $ 23.7 million, respectively, based on the change in fair value of MorphoSys’ common stock during the respective periods.

Our 50 % share of the United States loss for the commercialization of tafasitamab for the three months ended March 31, 2022 and 2021 was $ 4.7 million and $ 10.5 million, respectively, and is recorded as collaboration loss sharing on the condensed consolidated statement of operations.

Research and development expenses for the three months ended March 31, 2022 and 2021, includes $ 21.0 million and $ 14.9 million, respectively, related to our 55 % share of the co-development costs for tafasitamab.

At March 31, 2022 and December 31, 2021, $ 41.5 million and $ 21.5 million, respectively, was included in accrued and other liabilities on the condensed consolidated balance sheet for amounts due to MorphoSys under the agreement.

For the three and six months ended June 30, 2022, we recorded an unrealized loss of $ 7.1 million and $ 16.7 million, respectively, based on the change in fair value of MorphoSys’ ordinary shares during the respective periods.

For the three and six months ended June 30, 2021, we recorded an unrealized loss of $ 9.2 million and $ 32.9 million, respectively, based on the change in fair value of MorphoSys’ ordinary shares during the respective periods.

Our 50 % share of the United States loss for the commercialization of tafasitamab for the three and six months ended June 30, 2022 was $ 2.5 million and $ 7.3 million, respectively, and is recorded as collaboration loss sharing on the condensed consolidated statement of operations.

Our 50 % share of the United States loss for the commercialization of tafasitamab for the three and six months ended June 30, 2021 was $ 9.8 million and $ 20.3 million, respectively, and is recorded as collaboration loss sharing on the condensed consolidated statement of operations.

Research and development expenses for the three and six months ended June 30, 2022, includes $ 27.5 million and $ 48.5 million, respectively, related to our 55 % share of the co-development costs for tafasitamab.

Research and development expenses for the three and six months ended June 30, 2021, includes $ 19.4 million and $ 34.3 million, respectively, related to our 55 % share of the co-development costs for tafasitamab.

At June 30, 2022 and December 31, 2021, $ 42.5 million and $ 21.5 million, respectively, was included in accrued and other liabilities on the condensed consolidated balance sheets for amounts due to MorphoSys under the agreement.

In September 2020, we entered into a Collaboration and License Agreement with Nimble Therapeutics, Inc.

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In September 2021, we recognized an upfront payment under this agreement of $ 35.0 million upon our transfer of technology related to the licensed product candidate to InnoCare, which was recorded in milestone and contract revenues on the consolidated statement of operations for the year ended December 31, 2021.

Under the terms of this agreement, we are eligible to receive up to an additional $ 45.0 million in potential development and regulatory milestones.

Under the terms of this agreement, we are eligible to receive up to an additional $ 82.5 million in potential development, regulatory and commercial milestones.

We recognize development and regulatory milestones upon confirmation of achievement of the event, as development and regulatory approvals are events not controllable by us but rather development activities of InnoCare and decisions made by regulatory agencies.

In the event of commercialization, we are eligible to receive up to $ 37.5 million in potential sales milestones from InnoCare.

We will recognize sales milestones in the corresponding period of the product sale upon confirmation of net sales milestone threshold achievement by InnoCare.

We are also eligible to receive tiered royalties from the low to mid-twenties on future product sales resulting from the collaboration.

In the event of commercialization, we will recognize sales milestones in the corresponding period of the product sale upon confirmation of net sales milestone threshold achievement by InnoCare.

In September 2021, we entered into a Collaboration and License Agreement with Syndax Pharmaceuticals, Inc.

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Under the terms of the agreement, we received exclusive commercialization rights outside of the United States, and Syndax and we have co-commercialization rights in the United States, with respect to axatilimab.

We will be responsible for leading the commercialization strategy and booking all revenue from sales of tafasitamab globally, and Syndax will have the option to co-commercialization axatilimab with Incyte in the United States.

We will be responsible for leading the commercialization strategy and booking all revenue from sales of axatilimab globally, and Syndax will have the option to co-commercialization axatilimab with Incyte in the United States.

Incyte and Syndax will share equally the profits and losses from the co-commercialization efforts in the United States.

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Syndax is eligible to receive up to $ 220.0 million in future contingent development and regulatory milestones and up to $ 230.0 million in sales milestones as well as tiered royalties ranging in the mid-teens on net sales in Europe and Japan and low double digit percentage on net sales in the rest of the world outside of the United States.

Syndax’ right to receive royalties in any particular country will expire upon the last to occur of (a) the expiration of patent rights in that particular country, (b) a specified period of time after the first post-marketing authorization sale of a licensed product comprising tafasitamab in that country, and (c) the expiration of any regulatory exclusivity for that licensed product in that country.

In addition, under the terms of the agreement and pursuant to a related stock purchase agreement, we agreed to purchase approximately 1.4 million shares of common stock of Syndax for an aggregate purchase price of $ 35.0 million, or $ 24.62 per share.

We agreed, subject to limited exceptions, not to sell or otherwise transfer any of the shares for a six month period after the closing date of the sale.

Syndax’ right to receive royalties in any particular country will expire upon the last to occur of (a) the expiration of patent rights in that particular country, (b) a specified period of time after the first post-marketing authorization sale of a licensed product comprising axatilimab in that country, and (c) the expiration of any regulatory exclusivity for that licensed product in that country.

In addition, under the terms of the agreement and pursuant to a related stock purchase agreement, we purchased approximately 1.4 million shares of Syndax common stock for an aggregate purchase price of $ 35.0 million, or $ 24.62 per share.

We completed the purchase of the shares on December 9, 2021 when the closing price on The Nasdaq Stock Market was $ 17.48 per share.

Of the $ 35.0 million aggregate purchase price paid, $ 24.8 million was allocated to our stock purchase and was recorded within long term investments and $ 10.2 million, representing premium paid on the purchase, was allocated to research and development expense on the consolidated statement of operations for the year ended December 31, 2021.

The fair market value of our long term investment in Syndax as of March 31, 2022 and December 31, 2021 was $ 24.7 million and $ 31.1 million.

As of March 31, 2022, we owned approximately 3 % of the outstanding shares of Syndax common stock.

The fair market value of our long term investment in Syndax as of June 30, 2022 and December 31, 2021 was $ 27.4 million and $ 31.1 million.

As of June 30, 2022, we owned less than 3 % of the outstanding shares of Syndax common stock.

We intend to hold the investment in Syndax for the foreseeable future and therefore, are accounting for our shares held in Syndax at fair value whereby the investment is marked to market through earnings in each reporting period.

Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying condensed consolidated balance sheets.

For the three months ended March 31, 2022, we recorded an unrealized loss of $ 6.4 million based on the change in fair value of Syndax’s common stock during the period.

For the three and six months ended June 30, 2022, we recorded an unrealized gain of $ 2.7 million and an unrealized loss of $ 3.8 million, respectively, based on the change in fair value of Syndax’s common stock during the respective periods.

In April 2022, we entered into a strategic alliance agreement with Maruho, Co., Ltd (“Maruho”) for the development, manufacturing and exclusive commercialization of ruxolitinib cream, for treatment of autoimmune and inflammatory dermatology indications in Japan.

Maruho will receive the rights to develop, manufacture and exclusively commercialize ruxolitinib cream, and other potential future topical formulations of ruxolitinib, in autoimmune and inflammatory dermatologic diseases, including vitiligo and atopic dermatitis, in Japan.

Under the terms of the agreement, we received an upfront payment from Maruho which was deferred and recorded in other liabilities on the condensed consolidated balance sheet and we are eligible to receive additional potential development, regulatory and commercial milestones and royalties on net sales of the licensed product in Japan.

Property and equipment, net

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In February 2018, we signed an agreement to rent a building in Morges, Switzerland for an initial term of 15 years plus one year of free rent, with multiple options to extend for an additional 20 years .

The building serves as our new European headquarters and consists of approximately 100,000 square feet of office space.

The building serves as our new

European headquarters and consists of approximately 100,000 square feet of office space.

This building allowed for consolidation of our European operations that were located in Geneva and Lausanne, Switzerland.

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At that time, we determined the lease to be a finance lease and recorded a lease liability of $ 31.1 million and a finance lease right-of-use asset of $ 29.1 million, net of a lease incentive from our landlord of $ 2.0 million.

We have capitalized approximately $ 19.5 million in leasehold improvements as of March 31, 2022 relating to Morges.

We have capitalized approximately $ 19.5 million in leasehold improvements as of June 30, 2022 relating to Morges.

In July 2018, we signed an agreement to purchase land located in Yverdon, Switzerland.

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Upon this parcel, we are constructing a large molecule production facility.

Construction activity commenced in July 2018, and as of March 31, 2022, we have capitalized approximately $ 198.9 million in costs for construction, ground preparation and architectural and engineering studies.

Inspection from competent authorities was finalized in March 2022, and we currently expect the facility to be GMP approved in the second half of 2022.

Construction activity commenced in July 2018, and as of June 30, 2022, we have capitalized approximately $ 198.1 million in costs for construction, ground preparation and architectural and engineering studies.

Inspection from competent authorities was finalized in March 2022, and in June 2022 Swissmedic authorities granted the GMP drug manufacturing license for this facility.

Accrued and other current liabilities

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Stock compensation

We recorded $ 43.8 million and $ 47.3 million, respectively, of stock compensation expense on the condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021.

Stock compensation expense included within our condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021 included research and development expense of $ 26.3 million and $ 29.9 million, respectively.

Stock compensation expense included within our condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021 also included selling, general and administrative expense of $ 16.9 million and $ 17.2 million, respectively.

Stock compensation expense included within our condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021 also included cost of product revenues of $ 0.6 million and $ 0.2 million, respectively.

We utilized the Black-Scholes valuation model for estimating the fair value of the stock compensation granted for options, with the following weighted-average assumptions:

We recorded $ 46.5 million and $ 90.3 million of stock compensation expense on our condensed consolidated statements of operations for the three and six months ended June 30, 2022, respectively.

We recorded $ 44.8 million and $ 92.1 million of stock compensation expense on our condensed consolidated statements of operations for the three and six months ended June 30, 2021, respectively.

Stock compensation expense included within our condensed consolidated statements of operations included research and development expense of $ 28.1 million, $ 54.4 million, $ 28.0 million and $ 57.9 million for the three and six months ended June 30, 2022 and 2021, respectively.

Stock compensation expense included within our condensed consolidated statements of operations also included selling, general and administrative expense of $ 17.7 million, $ 34.6 million, $ 16.4 million and $ 33.6 million for the three and six months ended June 30, 2022 and 2021, respectively.

Stock compensation expense included within our condensed consolidated statements of operations also included cost of product revenues of $ 0.7 million, $ 1.3 million, $ 0.4 million and $ 0.6 million, respectively, for the three and six months ended June 30, 2022 and 2021.

We utilized the Black-Scholes valuation model for estimating the fair value of the stock compensation granted, with the following weighted-average assumptions:

Employee Stock Options

Employee Stock Purchase Plan

For the Three Months Ended March 31,

For the Three Months Ended

For the Six Months Ended

For the Three Months Ended

For the Six Months Ended

Average risk-free interest rates

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Options cancelled

Balance at March 31, 2022

Balance at June 30, 2022

Our annual stock option grants generally have a 10-year term and vest over four years , with 25 % vesting after one year and the remainder vesting in 36 equal monthly installments.

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RSUs released

PSUs released

RSUs cancelled

PSUs cancelled

Balance at March 31, 2022

Balance at June 30, 2022

RSUs and PSUs are granted to our employees at the share price on the date of grant.

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Compensation expense for PSUs with market performance conditions is calculated using a Monte Carlo simulation model as of the date of grant and recorded over the requisite service period.

For the three months ended March 31, 2022 and 2021, we recorded $ 1.8 million and $ 2.6 million, respectively, of stock compensation expense for PSUs on our condensed consolidated statements of operations.

For the three and six months ended June 30, 2022 we recorded $ 0.1 million and $ 1.9 million, respectively, of stock compensation expense for PSUs on our condensed consolidated statements of operations.

For the three and six months ended June 30, 2021 we recorded $ 0.6 million and $ 3.2 million of stock compensation expense for PSUs on our condensed consolidated statements of operations.

The following table summarizes our shares available for grant under the 2010 Stock Plan.

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Options, RSUs and PSUs cancelled

Balance at March 31, 2022

Balance at June 30, 2022

Based on our historical experience of employee turnover, we have assumed an annualized forfeiture rate of 5 % for our options, RSUs and PSUs.

Under the true-up provisions of the stock compensation guidance, we will record additional expense if the actual forfeiture rate is lower than we estimated, and will record a recovery of prior expense if the actual forfeiture is higher than we estimated.

Total compensation cost of options granted but not yet vested, as of March 31, 2022, was $ 68.0 million, which is expected to be recognized over the weighted average period of approximately 1.2 years.

Total compensation cost of RSUs granted but not yet vested, as of March 31, 2022, was $ 153.8 million, which is expected to be recognized over the weighted average period of approximately 1.9 years.

Total compensation cost of PSUs granted but not yet vested, as of March 31, 2022, was $ 25.1 million, which is expected to be recognized over the weighted average period of 1.6 years, should the underlying performance conditions be deemed probable of achievement.

For the three months ended March 31, 2022 and 2021, we recorded income tax expense of approximately $ 32.5 million and $ 15.8 million, respectively.

The tax expense for the three months ended March 31, 2022 increased as compared to that for the prior year period due to the release of our valuation allowance against a majority of our U.S.

Total compensation cost of options granted but not yet vested, as of June 30, 2022, was $ 53.0 million, which is expected to be recognized over the weighted average period of approximately 1.0 years.

Total compensation cost of RSUs granted but not yet vested, as of June 30, 2022, was $ 128.8 million, which is expected to be recognized over the weighted average period of approximately 1.6 years.

Total compensation cost of PSUs granted but not yet vested, as of June 30, 2022, was $ 22.7 million, which is expected to be recognized over the weighted average period of 1.9 years, should the underlying performance conditions be deemed probable of achievement.

For the three and six months ended June 30, 2022, we recorded income tax expense of approximately $ 67.9 million and $ 100.5 million, respectively.

For the three and six months ended June 30, 2021, we recorded income tax expense of approximately $ 22.2 million and $ 38.0 million, respectively.

The tax expense for the three and six months ended June 30, 2022 increased as compared to that for the prior year periods due to the release of our valuation allowance against a majority of our U.S.

research and development tax credit carryforwards and other deferred tax assets at December 31, 2021.

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deferred tax assets as well as select state and foreign deferred tax assets.

The balance of our unrecognized tax benefits (including penalties and interest) increased by approximately $ 6.3 million during the three months ended March 31, 2022, resulting in movements to other liabilities and deferred income tax asset on the condensed consolidated balance sheet.

The balance of our unrecognized tax benefits (including penalties and interest) increased by approximately $ 9.4 million during the six months ended June 30, 2022, resulting in movements to other liabilities and deferred income tax

asset on the condensed consolidated balance sheet.

The overall increase is primarily driven by unrecognized tax benefits related to current year operations and research and development tax credits.

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Net income per share

Net income per share was calculated as follows for the periods indicated below (in thousands, except per share data):

Net income per share was calculated as follows for the periods indicated below:

Three Months Ended

Six Months Ended

Basic net income

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Three Months Ended

Six Months Ended

Outstanding stock options and awards

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Employees may contribute a portion of their compensation, which is then matched by us, subject to certain limitations.

Defined contribution expense for the three months ended March 31, 2022 and 2021 was $ 4.9 million and $ 4.1 million, respectively.

Defined contribution expense for the three and six months ended June 30, 2022 was $ 4.7 million and $ 9.6 million, respectively.

Defined contribution expense for the three and six months ended June 30, 2021 was $ 4.3 million and $ 8.4 million, respectively.

Defined Benefit Pension Plans

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Three Months Ended

Six Months Ended

Interest cost

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We expect to contribute a total of $ 6.4 million to the pension plans in 2022 inclusive of the amounts contributed to the plan during the current period.

Contingencies

Commitments and contingencies

We have entered into the collaboration agreements described in Note 7, as well as various other collaboration agreements that are not individually, or in the aggregate, significant to our operating results or financial condition at this time.

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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 1. Financial Statements