What changed in this filing

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Item 1. Financial Statements

2022-05-13 compared with 2021-11-15 · 418 added, 481 removed, 567 unchanged (61% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

September 30,

Current assets:

3 unchanged sentences

Total current assets

Property and equipment, net

Operating lease right-of-use asset

Other non-current assets

4 unchanged sentences

Accrued expenses

Operating lease liability, current

Total current liabilities

Early-exercise liability

Operating lease liability, non-current

Other non-current liability

Total liabilities

Commitments and contingencies (Note 8)

Convertible preferred stock (Series A, B and C) $ 0.0001 par value;

no shares authorized, issued and outstanding at September 30, 2021;

12,647,934 shares authorized, issued and outstanding at December 31, 2020;

aggregate liquidation preference of $ 0 and $ 169,900 at September 30, 2021 and December 31, 2020, respectively

Stockholders’

equity (deficit):

Preferred stock:

Undesignated preferred stock, $ 0.0001 par value;

10,000,000 shares authorized at September 30, 2021;

no shares authorized at December 31, 2020;

no shares issued and outstanding at September 30, 2021 and December 31, 2020

Preferred stock (undesignated), $ 0.0001 par value;

10,000,000 shares

authorized and no shares issued and outstanding at March 31, 2022

and December 31 2021

Common stock, $ 0.0001 par value;

1,000,000,000 shares authorized at September 30, 2021;

150,000,000 shares authorized at December 31, 2020;

111,251,660 shares issued and outstanding at September 30, 2021;

28,193,240 shares issued and 5,593,240 shares outstanding at December 31, 2020

1,000,000,000 shares authorized,

109,675,173 shares issued and outstanding at March 31, 2022;

1,000,000,000 shares authorized, 111,251,660 shares

issued and 110,782,909 shares outstanding at December 31, 2021

Treasury stock, at cost;

no shares and 22,600,000 shares at September 30, 2021 and December 31, 2020, respectively

0 shares and 468,751 shares at

March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital

Accumulated other comprehensive income

Accumulated other comprehensive loss

Accumulated deficit

7 unchanged sentences

(In thousands, except share and per share amounts)

September 30,

(Inception) to

September 30,

Operating expenses:

5 unchanged sentences

Other income (expense):

Interest income

Other expense

Other income (expense), net

Total other income (expense), net

4 unchanged sentences

Weighted-average common shares outstanding, basic and diluted

(1) Includes related-party amounts of $ 1,826 and $ 2,261 for the three and nine months ended September 30, 2021, respectively, and $ 291 for both the three months ended September 30, 2020 and for the period from June 3, 2020 (inception) to September 30, 2020 (see Note 15).

(2) Includes related-party amounts of $ 4,000 and $ 7,500 for the three and nine months ended September 30, 2021, respectively, and $ 39,915 for both the three months ended September 30, 2020 and for the period from June 3, 2020 (inception) to September 30, 2020 (see Note 15).

(1) Includes related-party amounts of $ 2,000 and $ 188 for the three months ended March 31, 2022 and 2021, respectively (see Note 15).

(2) Includes related-party amounts of $ 0 and $ 1,000 for the three months ended March 31, 2022 and 2021, respectively (see Note 15).

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

8 unchanged sentences

Stockholders’

Income (Loss)

Equity (Deficit)

Balances at June 3, 2020 (Inception)

Issuance of common stock at inception

Issuance of restricted common stock upon early exercise of stock options

Balances at June 30, 2020

Issuance of Series A convertible preferred stock in exchange for license and common stock

Issuance of Series A convertible preferred stock, net of issuance costs of $ 194

Balances at December 31, 2020

Stock-based compensation expense

Balances at September 30, 2020

Balances at March 31, 2021

Convertible Preferred Stock

2 unchanged sentences

Stockholders’

Income (Loss)

Equity (Deficit)

Balances at December 31, 2021

Stock-based compensation expense

Balances at March 31, 2021

Issuance of Series C convertible preferred stock, net of issuance costs of $ 337

Issuance of common stock

Vesting of restricted common stock from early-exercised options

Stock-based compensation expense

Exercise of stock options

Repurchase of unvested restricted common stock

Retirement of treasury stock

Balances at June 30, 2021

Issuance of common stock upon completion of initial public offering, net of commissions, underwriting discounts and offering costs

Conversion of convertible preferred stock to common stock

Stock-based compensation expense

Vesting of restricted common stock from early-exercised options

Unrealized gain on available-for-sale securities, net of tax

Balances at September 30, 2021

Balances at March 31, 2022

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

2 unchanged sentences

(In thousands)

September 30, 2021

(Inception) to

September 30, 2020

March 31, 2022

March 31, 2021

Cash flows from operating activities:

1 unchanged sentence

Stock-based compensation expense

Non-cash acquired in-process research and development

Net amortization of premiums and accretion of discounts on marketable securities

Non-cash payments

Amortization of operating lease right-of-use asset

Depreciation expense

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Other non-current assets

Accounts payable

Accrued expenses

Other non-current assets

Operating lease liabilities

Other non-current liabilities

Net cash used in operating activities

Cash flows from investing activities:

Purchase of marketable securities

Net cash used in investing activities

Maturities of marketable securities

Net cash provided by investing activities

Cash flows from financing activities:

Proceeds from issuance of convertible preferred stock, net of issuance costs paid

Proceeds from issuance of common stock, net of commissions and underwriting discounts

Proceeds from early exercises of stock options

Payments of initial public offering costs

Proceeds from exercises of stock options

Payments for repurchases of unvested restricted common stock

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental disclosure of non-cash financing activities:

Deferred offering and issuance costs included in accounts payable and accrued expenses

Issuance of Series A convertible preferred stock in exchange for assigned rights, license and repurchased common stock

Supplemental disclosure of non-cash investing and financing activities:

Operating lease right-of-use asset recognized upon adoption of ASC 842

Deferred offering and issuance costs included in accrued expenses

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

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Nature of the Business and Basis of Presentation

Adagio Therapeutics, Inc., together with its consolidated subsidiary (the “Company”), is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of antibody-based solutions for infectious diseases with pandemic potential, including coronavirus disease 2019 (“COVID-19”) and influenza.

The Company’s initial focus is on the virus SARS-CoV-2, its variants and the disease caused by this virus, which is known as COVID-19.

The Company initiated clinical trials for its lead product candidate, ADG20, in February 2021.

ADG20 is designed to be a potent, long-acting and broadly neutralizing antibody for both the prevention and treatment of COVID-19 as either a single or combination agent.

Adagio Therapeutics, Inc., together with its consolidated subsidiary (the “Company”), is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of differentiated products for the prevention and treatment of infectious diseases.

The Company is developing its lead product candidate, adintrevimab, for the prevention and treatment of COVID-19, the disease caused by the virus SARS-CoV-2 and its variants.

Beyond COVID-19, the Company is leveraging robust antibody discovery and development capabilities that have enabled expedited advancement of adintrevimab into clinical trials to develop therapeutic or preventative options for other infectious diseases, such as additional coronaviruses and influenza.

The Company initiated clinical trials for adintrevimab in February 2021.

Adintrevimab is designed to be a potent, long-acting and broadly neutralizing antibody for both the prevention and treatment of COVID-19.

The Company was incorporated in the State of Delaware in June 2020.

The Company operates as a virtual company and plans to maintain a corporate headquarters for general and administrative purposes only.

The Company operates as a virtual company and maintains a corporate headquarters for general and administrative purposes only.

In addition, the Company engages third parties, including Adimab, LLC (“Adimab”), to perform ongoing research and development and other services on its behalf.

The Company is subject to a number of risks and uncertainties common to early-stage companies in the biopharmaceutical industry, including, but not limited to, completing clinical trials, the ability to raise additional capital to fund operations, obtaining regulatory approval for product candidates, market acceptance of products, competition from substitute products, protection of proprietary intellectual property, compliance with government regulations, the impact of COVID-19, dependence on key personnel, the ability to attract and retain qualified employees, and reliance on third-party organizations for the manufacturing, clinical and commercial success of its product candidates.

On July 30, 2021, the Company effected a five-for-one stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios of each series of the Company’s preferred stock (see Note 9).

The Company is subject to a number of risks and uncertainties common to early-stage companies in the biopharmaceutical industry, including, but not limited to, completing clinical trials, the ability to raise additional capital to fund operations, obtaining regulatory approval for product candidates, market acceptance of products, competition from substitute products, protection of proprietary intellectual property, compliance with government regulations, the impact of COVID-19, dependence on key personnel, the ability to attract and retain qualified employees, and reliance on third-party organizations for the discovery, manufacturing, clinical and commercial success of its product candidates.

In July 2021, the Company effected a five-for-one stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios of each series of the Company’s preferred stock (see Note 9).

Accordingly, all share and per share amounts for all periods presented in the accompanying condensed consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split and adjustment of the preferred stock conversion ratios.

On August 10, 2021, the Company completed its initial public offering (“IPO”) pursuant to which it issued and sold 20,930,000 shares of its common stock, including 2,730,000 shares pursuant to the full exercise of the underwriters’

In August 2021, the Company completed its initial public offering (“IPO”) pursuant to which it issued and sold 20,930,000 shares of its common stock, including 2,730,000 shares pursuant to the full exercise of the underwriters’

option to purchase additional shares.

The aggregate net proceeds received by the Company from the IPO were approximately $ 330.9 million, after deducting underwriting discounts and commissions of $ 24.9 million, but before deducting offering expenses payable by the Company, which were $ 3.4 million.

The aggregate net proceeds received by the Company from the IPO were approximately $ 327.5 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company.

Upon the closing of the IPO, all shares of the Company’s convertible preferred stock then outstanding converted into 84,722,420 shares of common stock (see Note 10).

The Company has not generated any revenue since inception.

The Company’s lead product candidate could require significant additional research and development efforts, including extensive clinical testing and regulatory approval prior to commercialization.

These efforts require significant amounts of additional capital, adequate personnel and infrastructure and compliance-reporting capabilities.

Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales, including government supply contracts.

The accompanying condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities and commitments in the ordinary course of business.

Since inception, the Company has funded its operations primarily with proceeds from sales of convertible preferred stock, and most recently, with proceeds from the IPO.

The Company has incurred recurring losses since inception, including net losses of $ 143.7 million f or the nine months ended September 30, 2021 and $ 65.3 million for the period from inception through December 31, 2020.

As of September 30, 2021, the Company had an accumulated deficit of $ 209.1 million.

The Company has primarily funded its operations with proceeds from sales of convertible preferred stock and proceeds from the Company’s IPO.

The Company has incurred losses and negative cash flows from operations since its inception, including a net loss of $ 100.7 million for the three months ended March 31, 2022.

As of March 31, 2022, the Company had an accumulated deficit of $ 392.8 million.

The Company expects to continue to generate operating losses for the foreseeable future.

As of November 15, 2021, the issuance date of these interim condensed consolidated financial statements, the Company expects that its cash, cash equivalents and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the issuance date of the interim condensed consolidated financial statements.

The future viability of the Company beyond that point is dependent on its ability to raise additional capital to finance its operations.

The Company expects to seek additional funding through private equity financings, public offerings, government or private-party grants, debt financings or other capital sources, including collaborations with other companies or other strategic transactions.

The Company expects that its existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the issuance date of the interim condensed consolidated financial statements.

The Company expects to seek additional funding through equity offerings, government or private-party grants, debt financings or other capital sources, including collaborations with other companies or other strategic transactions.

The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into collaborations or other arrangements.

The terms of any financing may adversely affect the holdings or rights of the Company’s stockholders.

If the Company is unable to continue to obtain sufficient capital, the Company will be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations.

If the Company is unable to obtain sufficient capital, the Company could be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion, or future commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations.

Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all.

1 unchanged sentence

In March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic.

The evolving and constantly changing impact of the pandemic will directly affect the potential commercial prospects of ADG20 for the prevention and treatment of COVID-19.

The severity of the COVID-19 pandemic and the continued emergence of variants of concern (such as the widespread Delta variant), the availability, administration and acceptance of vaccines, monoclonal antibodies, antiviral agents and other therapeutic modalities, the introduction of local, national and/or employer vaccine mandates, and the potential development of “herd immunity”

by the global population will affect the design and enrollment of the Company’s clinical trials, the potential regulatory authorization or approval of the Company’s product candidates and the commercialization of the Company’s product candidates, if approved.

In addition, the Company’s business and operations may be more broadly adversely affected by the COVID-19 pandemic.

The evolving and constantly changing impact of the pandemic will directly affect the potential commercial prospects of adintrevimab and other product candidates for the prevention and treatment of COVID-19.

The severity of the COVID-19 pandemic and the continued emergence of variants of concern (such as the widespread Omicron variant and its sublineages and the Delta variant), the availability, administration and acceptance of vaccines, monoclonal antibodies, antiviral agents and other therapeutic modalities, vaccine mandates by employers and/or local or national governments, and the potential development of “herd immunity”

by the global population will affect the design and enrollment of the Company's clinical trials, the potential regulatory authorization or approval of the Company's product candidates and the commercialization of the Company's product candidates, if approved.

In addition, the Company's business and operations may be more broadly adversely affected by the COVID-19 pandemic.

The COVID-19 outbreak and government measures taken in response have had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred, supply chains have been disrupted, facilities and production have been suspended and demand for certain goods and services, such as medical services and supplies, has spiked, while demand for other goods and services has fallen.

The global COVID-19 pandemic continues to evolve rapidly, and the Company will continue to monitor it closely.

The ultimate extent of the impact of the COVID-19 pandemic on the Company’s business, financial condition, operations and product development timelines and plans remains highly uncertain and will depend on future developments, including the duration and spread of outbreaks and the continued emergence of variants, and the impact on the Company’s clinical trial design and enrollment, trial sites, contract research organizations, contract manufacturing organizations and other third par ties with which it does business, as well as its impact on regulatory authorities and the Company’s key scientific and management personnel.

The ultimate extent of the impact of the COVID-19 pandemic on the Company's business, financial condition, operations and product development timelines and plans remains highly uncertain and will depend on future developments, including the duration and spread of outbreaks and the continued emergence of variants, its impact on the Company's clinical trial design and enrollment, trial sites, contract research organizations ( “

CROs ”

), contract development and manufacturing organizations ( “

CDMOs ”) , and other third parties with which the Company does business, as well as its impact on regulatory authorities and the Company's key scientific and management personnel.

To date, the Company has experienced some delays and disruptions in its development activities as a result of the COVID-19 pandemic.

Some of the Company's contract research organizations, contract manufacturing organizations and other service providers also continue to be impacted.

Some of the Company's CROs, CDMOs and other service providers also continue to be impacted.

The Company will continue to monitor developments as it addresses the disruptions, delays and uncertainties relating to the COVID-19 pandemic.

These developments and the impact of the COVID-19 pandemic on the financial markets and the overall economy are highly uncertain and cannot be predicted.

If the financial markets and/or the overall economy are impacted for an extended period, the Company's results and operations may be materially adversely affected and may affect the Company’s ability to raise capital.

Basis of Presentation

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.

GAAP”).

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Adagio Therapeutics Security Corporation.

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

The accompanying condensed consolidated financial statements include the accounts of Adagio Therapeutics, Inc.

and its wholly owned subsidiary, Adagio Therapeutics Security Corporation.

All intercompany accounts and transactions have been eliminated in consolidation.

The Company views its operations and manages its business in one operating segment, which is the business of discovering, developing and commercializing antibody-based solutions for infectious diseases.

The Company views its operations and manages its business in one operating segment, which is the business of discovering, developing and commercializing differentiated products for the prevention and treatment of infectious diseases.

Summary of Significant Accounting Policies

As of September 30, 2021, the Company’s significant accounting policies and estimates, which are detailed in the Company’s final prospectus related to the IPO filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, on August 6, 2021, have not changed except as discussed below.

Marketable Securities

Marketable securities represent holdings of available-for-sale marketable debt securities in accordance with the Company’s investment policy.

The Company determines the appropriate classification of marketable securities at the time of purchase and reevaluates such designation at each balance sheet date.

The Company classified all of its marketable securities at September 30, 2021 as "available-for-sale”

pursuant to ASC320, Investments –

Debt and Equity Securities.

Investments not classified as cash equivalents are presented as either short-term or long-term investments based on both their maturities as well as the time period the Company intends to hold such securities.

Available-for-sale securities are maintained by an investment manager and consist of U.S.

treasury securities.

Available-for-sale securities are carried at fair value with the unrealized gains and losses included in other comprehensive income (loss) as a component of stockholders’

equity (deficit) until realized.

Any premium or discount arising at purchase is amortized or accreted to interest expense or income over the life of the instrument.

Realized gains and losses are determined using the specific identification method and are included in other income (expense).

There were no material realized gains or losses on marketable securities recognized for the three or nine months ended September 30, 2021.

The Company reviews marketable securities for other-than-temporary impairment whenever the fair value of a marketable security is less than the amortized cost and evidence indicates that a marketable security’s carrying amount is not recoverable within a reasonable period of time.

Other-than-temporary impairments of investments are recognized in the consolidated statements of operations and comprehensive loss if the Company has experienced a credit loss, has the intent to sell the marketable security, or if it is more likely than not that the Company will be required to sell the marketable security before recovery of the amortized cost basis.

Evidence considered in this assessment includes reasons for the impairment, compliance with the Company’s investment policy, the severity and

duration of the impairment and changes in value subsequent to the end of the period.

There were no other-than-temporary impairments of investments recognized for the three or nine months ended September 30, 2021.

As of March 31, 2022, the Company’s significant accounting policies and esti mates, which are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the U.S.

Securities and Exchange Commission ( “

) on March 31, 2022 (as subsequently amended by Amendment No.

1 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 29, 2022, the “

2021 Form 10-K ”) have not changed except as discussed below.

Effective January 1, 2022, the Company adopted ASU No.

2016-02, Leases (Topic 842) (“ASC 842”) using the required modified retrospective approach and utilizing the effective date as its date of initial application.

As a result, prior periods are presented in accordance with the previous guidance in ASC 840, Leases (“ASC 840”).

The Company evaluates whether an arrangement is or contains a lease at the inception date.

If determined to be or contain a lease, the Company determines the classification of the lease at the commencement date, which represents the date at which the lessor makes the underlying asset available for use by the Company.

When determining the expected accounting lease term, the Company includes the noncancellable lease term, together with periods covered by (i) an option to extend the lease if the Company is reasonably certain to exercise such option, (ii) an option to terminate the lease if the Company is reasonably certain not to exercise such option and (iii) an option to extend or not terminate the lease where the exercise of such option is controlled by the lessor.

The Company has elected the short-term lease exemption, which allows the Company to not recognize lease liabilities and right-of-use assets arising from lease arrangements with original lease terms of twelve months or less.

The Company elected the practical expedient to not separate lease and non-lease components for its leases.

Right-of-use assets represent the Company’s right to use an underlying asset over the lease term and lease liabilities represent the Company’s obligation to make lease payments under the arrangement.

The Company measures its lease liabilities as the present value of the lease payments, discounted using an incremental borrowing rate, as interest rates implicit in lease arrangements are generally not readily determinable.

The Company measures its right-of-use assets as the present value of its lease payments at the commencement date.

The incremental borrowing rate represents the interest rate at which the Company could borrow an amount equal to the lease payments on a fully collateralized basis, over a similar term, in a similar economic environment.

The Company recognizes rent expense for operating leases on a straight-line basis.

The Company recognizes variable lease expenses as incurred.

The Company remeasures right-of-use assets and lease liabilities when a lease is modified, and the modification is not accounted for as a separate contract.

A modification is accounted for as a separate contract if the modification grants the Company an additional right of use not included in the original lease arrangement and the increase in lease payments is commensurate with the additional right of use.

The Company assesses its right-of-use assets for impairment in a manner consistent with its assessment for long-lived assets held and used in operations.

Unaudited Interim Financial Information

The accompanying condensed consolidated balance sheet as of December 31, 2020 was derived from audited financial statements but does not include all disclosures required by U.S.

The accompanying unaudited condensed consolidated financial statements as of September 30, 2021, for the three and nine months ended September 30, 2021, for the three months ended September 30, 2020, and for the period from June 3, 2020 (inception) to September 30, 2020 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements.

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with U.S.

GAAP have been condensed or omitted pursuant to such rules and regulations.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2020 which are included in the Company’s final prospectus related to the IPO filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, on August 6, 2021.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s condensed consolidated financial position as of September 30, 2021 and condensed consolidated results of operations for the three and nine months ended September 30, 2021, for the three months ended September 30, 2020, and for the period from June 3, 2020 (inception) to September 30, 2020, and the condensed consolidated cash flows for the nine months ended September 30, 2021 and for the period from June 3, 2020 (inception) to September 30, 2020 have been made.

The Company’s condensed consolidated results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2021.

The accompanying condensed consolidated balance sheet as of March 31, 2022, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 and 2021, the condensed consolidated statements of cash flows for the three months ended March 31, 2022 and 2021 and the condensed consolidated statements of convertible preferred stock and stockholders’

equity (deficit) for the three months ended March 31, 2022 and 2021 are unaudited.

The accompanying unaudited condensed consolidated financial statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements.

The accompanying consolidated balance sheet as of December 31, 2021 was derived from audited financial statements, but does not include all disclosures required by GAAP.

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

These interim condensed consolidated financial statements should be read in conjunction with the Company’s audited annual consolidated financial statements, and the notes thereto, as of and for the year ended December 31, 2021, which are included in the Company’s 2021 Form 10-K.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s condensed consolidated financial position as of March 31, 2022 and December 31, 2021, the condensed consolidated results of operations for the three months ended March 31, 2022 and March 31, 2021, the condensed consolidated cash flows for the three months ended March 31, 2022 and March 31, 2021 and changes in stockholders’

equity (deficit) for the three months ended March 31, 2022 and March 31, 2021 have been made.

The Company’s condensed consolidated results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2022.

Use of Estimates

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GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting periods.

Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, research and development expenses and related prepaid or accrued costs and the valuation of common stock and resulting stock-based compensation expense.

Prior to the IPO, significant estimates and assumptions also included the valuation of common stock and resulting stock-based compensation expense.

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

2 unchanged sentences

Actual results may differ materially from those estimates or assumptions.

The Company is monitoring the potential impact of the COVID-19 pandemic on its business and consolidated financial statements.

The Company is not aware of any specific event or circumstance that would require any update to its estimates or judgments reflected in these consolidated financial statements or a revision of the carrying value of its assets or liabilities as of the issuance date of these condensed consolidated financial statements.

The Company is monitoring the potential impact of the COVID-19 pandemic on its business and condensed consolidated financial statements.

The Company is not aware of any specific event or circumstance that would require any update to its estimates or judgments reflected in these condensed consolidated financial statements or a revision of the carrying value of its assets or liabilities as of the issuance date of these condensed consolidated financial statements.

These estimates may change as new events occur and additional information is obtained.

Recently Issued Accounting Pronouncements

Recently Issued and Adopted Accounting Pronouncements

The Company qualifies as an “emerging growth company”

4 unchanged sentences

In February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842) (“ASU 2016-02”

or “ASC 842”), as subsequently amended.

2016-02, Leases (Topic 842) (“ASC 842”), as subsequently amended.

ASC 842 sets forth the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors).

2 unchanged sentences

ASC 842 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.

This classification determines whether lease expense is recognized based on an effective interest method for finance leases or on a straight-line basis over the term of the lease for operating leases.

In addition, a lessee is also required to record (i) a right-of-use asset and a lease liability on its balance sheets for all leases with a term of greater than 12 months regardless of their classification and (ii) lease expense on its statement of operations for operating leases and amortization and interest expense on its statement of operations for financing leases.

A lessee is also required to record (i) a right-of-use asset and a lease liability on its balance sheets for all leases with a term of greater than 12 months regardless of their classification and (ii) lease expense on its statement of operations for operating leases and amortization and interest expense on its statement of operations for financing leases.

Leases with a term of 12 months or less may be accounted for similar to existing guidance for operating leases under ASC 840.

ASC 842 also requires lessees and lessors to disclose key information about their leasing transactions.

In July 2018, the FASB issued ASU No.

2018-11, Leases (Topic 842) , which added an optional transition method that allows companies to adopt the standard as of the beginning of the year of adoption as opposed to the earliest comparative period presented.

In November 2019, the FASB issued guidance delaying the effective date for all entities, except for public entities.

For public entities, ASU 2016-02 was effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years.

In June 2020, the FASB issued ASU No.

2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842):

Effective Dates for Certain Entities (“ASU 2020-05”), which delayed the adoption date of ASU 2016-02 for nonpublic entities.

For nonpublic entities, ASU 2016-02 is effective for annual periods beginning after December 15, 2021, including interim periods within annual periods beginning after December 15, 2022.

Early adoption is permitted, including in an interim period.

Entities are required to adopt ASC 842 using a modified retrospective transition method.

The Company will recognize its lease on the balance sheet on the adoption date of January 1, 2022, by recording a right-of-use asset and a corresponding lease liability.

The Company does not expect the adoption of ASC 842 to have a material impact on the Company’s consolidated financial statements and related disclosures.

The Company adopted the new standard and used the modified retrospective approach with January 1, 2022 as the initial date of application.

The Company elected the available package of practical expedients which allowed the Company to not reassess previous accounting conclusions around whether arrangements are or contain leases, the classification of leases, and the treatment of initial direct costs.

As a result of the adoption of ASC 842, the Company recorded (i) an operating lease liability, current of $ 0.3 million, (ii) an operating lease liability, non-current of $ 1.4 million and (iii) an operating lease right-of-use asset of $ 1.7 million, net of the unamortized balance of deferred rent liability as of the transition date.

There was no impact from the adoption of ASC 842 to the Company’s results of operations and cash flows from operations.

A summary of the impact of the adoption is as follows (in thousands):

December 31, 2021

Impact of Adoption

January 1, 2022

Operating lease right-of-use asset

Operating lease liability, current

Other non-current liability

Operating lease liability, non-current

In June 2016, the FASB issued ASU No.

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ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively, “Topic 326”).

The main objective of this update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date.

To achieve this objective, the amendments in this update replace the incurred loss impairment methodology in current guidance with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

Under ASU 2016-13, expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities are required to be recorded through an allowance for credit losses.

The update also limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which the carrying value exceeds fair value.

The measurement of expected credit losses will be based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount.

ASU 2016-13 also establishes additional disclosure requirements related to credit risks.

For public entities that qualify as a filer with the Securities and Exchange Commission, excluding entities eligible to be smaller reporting companies, ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years.

Early adoption is permitted.

In November 2019, the FASB issued ASU No.

2019-10, which deferred the effective date for nonpublic entities to annual reporting periods beginning after December 15, 2022, including interim periods within those fiscal years.

The main objective of this update and amendments is to provide information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date and utilize a methodology that requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

Expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities are required to be recorded through an allowance for credit losses.

The update limits the recognition of the amount of credit losses for available-for-sale debt securities to the amount by which the carrying value exceeds fair value.

The measurement will be based on relevant information, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount and requires disclosure requirements related to credit risks.

In November 2019, the FASB deferred the effective date for nonpublic entities to annual reporting periods beginning after December 15, 2022, including interim periods within those fiscal years.

ASU 2016-13 is applied by means of a cumulative-effect adjustment to the opening retained earnings as of the beginning of the first reporting period in which the guidance is effective.

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In August 2020, the FASB issued ASU No.

2018-15, Intangibles–Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (“ASU 2018-15”).

The amendments in ASU 2018-15 align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).

Accordingly, the update requires entities in a hosting arrangement that is a service contract to follow the guidance in ASC 350-40, Internal-Use Software (“ASC 350-40”) to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense.

Costs to develop or obtain internal-use software that cannot be capitalized under ASC 350-40, such as training costs and certain data conversion costs, also cannot be capitalized for a hosting arrangement that is a service contract.

Therefore, an entity in a hosting arrangement that is a service contract determines which project stage an implementation activity relates to.

Costs for implementation activities in the application development stage are capitalized depending on the nature of the costs, while costs incurred during the preliminary project and post-implementation stages are expensed as the activities are performed.

ASU 2018-15 also requires entities to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement.

ASU 2018-15 was effective for public entities for annual periods beginning after December 15, 2019, including interim periods within those fiscal years.

For nonpublic entities, ASU 2018-15 is effective for annual reporting periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021.

Early adoption is permitted, including adoption in any interim period.

ASU 2018-15 is applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption.

The Company does not expect the adoption of ASU 2018-15 to have a material impact on its consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”).

ASU 2019-12 eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

The update also clarifies and simplifies other aspects of the accounting for income taxes.

For public entities, ASU 2019-12 is required to be adopted for annual periods beginning after December 15, 2020, including interim periods within those fiscal years.

For nonpublic entities, ASU 2019-12 is effective for annual periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.

Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued or made available for issuance.

An entity that elects to early adopt the update in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period.

Additionally, an entity that elects early adoption must adopt all the amendments in the update in the same period.

The Company is currently evaluating the potential impact that the adoption of this standard may have on its consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU No.

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

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Debt and Equity Securities, and carried at fair value in the accompanying condensed consolidated balance sheet on a settlement date basis.

The following tables summarize the gross unrealized gains and losses of the Company’s marketable securities as of September 30, 2021 (in thousands):

The Company did no t hold any available-for-sale marketable securities as of March 31, 2022.

The following tables summarize the gross unrealized gains and losses of the Company’s marketable securities as of December 31, 2021 (in thousands):

Amortized Cost

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Unrealized Losses

September 30, 2021

Treasury securities

No available-for-sale securities held as of September 30, 2021 had remaining maturities greater than twelve months.

The Company did no t hold any available-for-sale securities as of December 31, 2020.

No available-for-sale marketable securities held as of December 31, 2021 had remaining maturities greater than twelve months.

Fair Value Measurements

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Fair Value Measurements at

September 30, 2021:

March 31, 2022:

Cash equivalents:

Money market fund

Marketable securities:

treasury securities

Money market funds

Fair Value Measurements at

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Cash equivalents:

Money market fund

The money market fund was valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy.

The U.S treasury securities were valued by the Company based on Level 1 inputs.

In determining the fair value of the U.S.

treasury securities, the Company relied on quoted prices for identical securities in active markets.

There were no changes to the valuation methods during the three and nine months ended September 30, 2021, during the three months ended September 30, 2020, and for the period from June 3, 2020 (inception) to September 30, 2020.

Money market funds

Marketable securities:

Treasury securities

The money market funds were valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy.

The Company did not hold any U.S.

Treasury securities as of March 31, 2022.

There were no changes to the valuation methods during the three months ended March 31, 2022 or March 31, 2021.

The Company evaluates transfers between levels at the end of each reporting period.

There were no transfers into or out of Level 3 fair value measurements during the three and nine months ended September 30, 2021, during the three months ended September 30, 2020, and for the period from June 3, 2020 (inception) to September 30, 2020.

There were no transfers into or out of Level 1, Level 2 or Level 3 fair value measurements during the three months ended March 31, 2022 or March 31, 2021.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

September 30,

Prepaid external research, development and manufacturing costs

Prepaid insurance

Prepaid compensation and related expenses

Interest receivable

Prepaid compensation and other

Accrued Expenses

Accrued expenses consisted of the following (in thousands):

September 30,

Accrued external research, development and manufacturing costs

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Adimab Assignment Agreement

In July 2020, the Company entered into an Assignment and License Agreement with Adimab (the “Adimab Assignment Agreement”).

In July 2020, the Company entered into an Assignment and License Agreement with Adimab (“Adimab Assignment Agreement”).

Under the terms of the agreement, Adimab assigned to the Company all rights, title and interest in and to certain of its coronavirus-specific antibodies (“CoV Antibodies”), including modified or derivative forms thereof, and related intellectual property (“Adimab CoV Assets”).

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Additionally, the Company has the sole right to prosecute, maintain, enforce and defend patents covering the CoV Antibodies and Products, all at its own expense.

Amounts paid with respect to services performed by Adimab on the Company’s behalf under the Adimab Assignment Agreement are recognized as research and development expense as such amounts are incurred.

For the three months ended March 31, 2022 and 2021, the Company recognized $ 0.3 million and $ 0.2 million, respectively, of research and development expense in connection with services provided by Adimab.

Please refer to Note 15 for additional information.

In July 2020, in consideration for the rights assigned and license conveyed under the Adimab Assignment Agreement, the Company issued 5,000,000 shares of its Series A convertible preferred stock (the “Series A Preferred Stock”), then having a fair value of $ 40.0 million, to Adimab.

Concurrently, the Company repurchased 21,250,000 shares of the Company’s common stock from Adimab, then having a fair value of $ 85,000 .

Concurrently, Adimab relinquished 21,250,000 shares of the Company’s common stock to the Company, then having a fair value of $ 85,000 .

Additionally, the Company is obligated to pay Adimab up to $ 16.5 million upon the achievement of specified development and regulatory milestones for the first Product under the agreement that achieves such specified milestones and up to $ 8.1 million upon the achievement of specified development and regulatory milestones for the second Product under the agreement that achieves such specified milestones.

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however, milestone payments do not accrue for certain in vitro diagnostic devices consisting of or containing CoV Antibodies.

In February 2021, the Company achieved the first specified milestone under the agreement upon dosing of the first patient in a Phase 1 global clinical trial evaluating ADG20, which obligated the Company to make a $ 1.0 million milestone payment to Adimab.

April 2021, the Company achieved the second specified milestone under the agreement upon dosing of the first patient in a Phase 2 global clinical trial evaluating ADG20 for the prevention of COVID-19, which obligated the Company to make a $ 2.5 million milestone payment to Adimab.

In August 2021, the Company achieved the third specified milestone under the agreement upon dosing of the first patient in a Phase 3 global clinical trial evaluating ADG20 for the prevention of COVID-19, which obligated the Company to make a $ 4.0 million milestone payment to Adimab.

The Company recognized each expense when it became probable upon achievement of the first, second and third milestones in February, April and August 2021, respectively.

The next potential milestone under the Adimab Assignment Agreement is a $ 4.0 million milestone related to the acceptance of the filing of the first New Drug Application (or “

) for a Product by the FDA.

During the three and nine months ended September 30, 2021, the Company recognized $ 4.0 million and $ 7.5 million, respectively, as in-process research and development (“IPR&D”) expense in connection with contingent consideration payable under the Adimab Assignment Agreement.

For both the three months ended September 30, 2020 and for the period from June 3, 2020 (inception) to September 30, 2020, the Company recognized $ 39.9 million as IPR&D expense in connection with the upfront consideration payable under the Adimab Assignment Agreement to acquire rights to Adimab’s antibodies relating to COVID-19 and SARS and related intellectual property and a license to certain of Adimab’s platform patents and technology for use in the research and development of our product candidates.

In February 2021, the Company achieved the first specified milestone under the agreement upon dosing of the first patient in a Phase 1 global clinical trial evaluating adintrevimab, which obligated the Company to make a $ 1.0 million milestone payment to Adimab.

In April 2021, the Company achieved the second specified milestone under the agreement upon dosing of the first patient in a Phase 2 global clinical trial evaluating adintrevimab for the prevention of COVID-19, which obligated the Company to make a $ 2.5 million milestone payment to Adimab.

In August 2021, the Company achieved the third specified milestone under the agreement upon dosing of the first patient in a Phase 3 global clinical trial evaluating adintrevimab for the prevention of COVID-19, which obligated the Company to make a $ 4.0 million milestone payment to Adimab.

The Company recognized each expense when achievement of each of the first, second and third milestones became probable of achievement in February, April and August 2021, respectively.

The next potential milestone under the Adimab Assignment Agreement is a $ 4.0 million milestone related to the acceptance of the filing of the first New Drug Application (“NDA”) for a Product by the U.S.

Food and Drug Administration (the “FDA”), which was not considered probable as of March 31, 2022.

During the three months ended March 31, 2022, the Company did no t recognize any in-process research and development (“IPR&D”) expense in connection with contingent consideration payable under the Adimab Assignment Agreement.

During the three months ended March 31, 2021, the Company recognized $ 1.0 million as IPR&D expense in connection with upfront consideration and contingent consideration payable under the Adimab Assignment Agreement.

The Company is obligated to pay Adimab royalties of a mid-single-digit percentage based on net sales of any Products, once commercialized.

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In addition, the Company is obligated to pay Adimab royalties of a specified percentage in the range of 45 % to 55 % of any compulsory sublicense consideration received by the Company in lieu of certain royalty payments.

Except for the first milestone payment of $ 1.0 million, the second milestone payment of $ 2.5 million, and the third milestone payment of $ 4.0 million, which were paid by the Company to Adimab in March, May and September 2021, respectively, no other milestone, royalty or other contingent payments had become due to Adimab through September 30, 2021.

Except for the first milestone payment of $ 1.0 million, the second milestone payment of $ 2.5 million and the third milestone payment of $ 4.0 million, which were paid by the Company to Adimab in March, May and September 2021, respectively, no other milestone, royalty or other contingent payments had become due to Adimab through March 31, 2022.

Unless earlier terminated, the Adimab Assignment Agreement remains in effect until the expiration of the last-to-expire Royalty Term for any and all Products.

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Upon any termination of the agreement prior to its expiration, all licenses and rights granted pursuant to the arrangement will automatically terminate and revert to the granting party and all other rights and obligations of the parties will terminate.

The Company concluded the Adimab Assignment Agreement represented an asset acquisition of IPR&D assets with no alternative future use.

The Company concluded that the Adimab Assignment Agreement represented an asset acquisition of IPR&D assets with no alternative future use.

The arrangement did not qualify as a business combination because substantially all of the fair value of the assets acquired was concentrated in a single asset.

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The Company allocated the $40.0 million fair value of the 5,000,000 shares of Series A Preferred Stock to the IPR&D assets and to the repurchased common stock based on their relative fair values on the acquisition date.

As of that date and before allocation, the Company determined the fair value of the repurchased common stock was $ 85,000 , based on the results of a third-party valuation, and the fair value of the IPR&D assets was $40.0 million.

As of that date and before allocation, the Company determined that the fair value of the repurchased common stock was $ 85,000 , based on the results of a third-party valuation, and that the fair value of the IPR&D assets was $40.0 million.

The Company determined the fair value of the 5,000,000 shares of Series A Preferred Stock based on the $ 8.00 price per share paid for the stock by new investors in the Company’s Series A Preferred Stock financing, which closed on the same date as the date on which the Company acquired the CoV Antibodies and Adimab CoV Assets under the Adimab Assignment Agreement.

For the three and nine months ended September 30, 2021, the Company recognized $ 0.5 million and $ 0.9 million, respectively, of expense in connection with services provided by Adimab.

For the three months ended September 30, 2020 and for the period from June 3, 2020 (inception) to September 30, 2020, the Company recognized $ 0.3 million of expense in connection with services provided to Adimab.

Please refer to Note 15 for additional information.

Adimab Collaboration Agreement

On May 21, 2021, the Company entered into a Collaboration Agreement with Adimab (the “Adimab Collaboration Agreement”) for the discovery and optimization of proprietary antibodies as potential therapeutic product candidates.

In May 2021, the Company entered into a Collaboration Agreement with Adimab (the “Adimab Collaboration Agreement”) for the discovery and optimization of proprietary antibodies as potential therapeutic product candidates.

Under the agreement, the Company and Adimab will collaborate on research programs for a specified number of targets selected by the Company within a specified time period.

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The Company may also elect to decrease the scope of Adimab’s exclusivity obligations and obtain a corresponding decrease in the quarterly fee.

For both the three and nine months ended September 30, 2021, the Company recognized $ 1.3 million of research and development expense related to the quarterly fee.

During the three months ended March 31, 2022, the Company recognized $ 1.3 million of research and development expense related to the quarterly fee.

For each agreed upon research program that is commenced, the Company is obligated to pay Adimab quarterly for its services performed during a given research program at a specified full-time equivalent rate;

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Amounts paid with respect to services performed by Adimab on the Company’s behalf in each of the research programs under the Adimab Collaboration Agreement are recognized as research and development expense as such amounts are incurred and services are rendered.

For both the three and nine months ended September 30, 2021, the Company recognized less than $ 0.1 million and $ 0.1 million of expense, respectively, in connection with services provided by Adimab.

Through September 30, 2021, the Company has no t paid a drug delivery fee or optimization completion fee to Adimab and the Company has not exercised its option with respect to any program.

During the three months ended March 31, 2022, the Company recognized $ 0.4 million of expense in connection with services provided by Adimab.

Through March 31, 2022, the Company has no t paid a drug delivery fee or optimization completion fee to Adimab and the Company has not exercised its option with respect to any program.

The Company is obligated to pay Adimab up to $ 18.0 million upon the achievement of specified development and regulatory milestones for each product under the agreement that achieves such milestones.

The next potential milestone under the Adimab Collaboration Agreement is a $1.0 million milestone related to dosing of the first subject in a Phase 1 trial, which was not considered probable as of March 31, 2022.

The Company is also obligated to pay Adimab royalties of a mid-single-digit percentage based on net sales of any product under the agreement, subject to reductions for third-party licenses.

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In consideration for this work, the Company is obligated to pay Adimab royalties of a low single-digit percentage based on net sales of products that contain such antigens for the same royalty term as antibody-based products, but the Company is not obligated to make any milestone payments for such antigen products.

Through September 30, 2021, the Company has not paid any royalties to Adimab under the Adimab Collaboration Agreement.

Through March 31, 2022, the Company has not paid any royalties to Adimab under the Adimab Collaboration Agreement.

The Adimab Collaboration Agreement will expire (i) if the Company does not exercise any option, upon the conclusion of the last Evaluation Term for the research programs, or (ii) if the Company exercises an option, on the expiration of the last royalty term for a product in a particular country, unless the agreement is earlier terminated.

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Each Licensed Product generated under the arrangement will be produced from a transformed or transfected version of the proprietary cell line derived by WuXi (each of such transformed or transfected cell lines, a “Licensed Cell Line”).

The Company was obligated to pay an upfront fee of $ 0.2 million to WuXi upon completion of cell bank generation for the first Licensed Cell Line created under the arrangement.

Such amount became due in December 2020, was an accrued expense as of December 31, 2020 and was included in accounts payable as of September 30, 2021 .

The Company paid an upfront fee of $ 0.2 million to WuXi upon completion of cell bank generation for the first Licensed Cell Line created under the arrangement.

The Company is also obligated to pay royalties in the range of 0.3 % to 0.5 % to WuXi based on net sales of any Licensed Products manufactured by the Company or a third party on its behalf.

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Royalties are due on a Licensed Product-by-Licensed Product basis commencing on the date of the first commercial sale of the applicable product and continue for so long as the Company commercializes Licensed Products or until the Company exercises its option to buy out the royalty obligations.

Through September 30, 2021 , no royalties had become due to WuXi.

Through March 31, 2022, no royalties had become due to WuXi.

The Cell Line License Agreement remains in effect until it is terminated.

The Company may terminate the Cell Line License Agreement at any time with advance written notice to WuXi.

The Company may terminate the Cell Line License Agreement at any time with notice to WuXi.

WuXi may terminate the Cell Line License Agreement in the event the Company fails to make a payment when due under the arrangement and such non-payment is not cured within a specified period after notice.

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The Company concluded that the Cell Line License Agreement represented an asset acquisition of IPR&D with no alternative future use.

Therefore, the aggregate acquisition cost of $ 0.2 million, consisting solely of the upfront fee, was recognized as acquired IPR&D expense during the period from June 3, 2020 (inception) to December 31, 2020.

The arrangement did not qualify as a business combination because substantially all of the fair value of the assets acquired was concentrated in a single asset.

Therefore, the aggregate acquisition cost of $ 0.2 million, consisting solely of the upfront fee, was recognized as acquired IPR&D expense for the period from June 3, 2020 (inception) to December 31, 2020.

Research Collaboration and License Agreement with The Scripps Research Institute

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The Company is obligated to provide the research funding necessary to carry out the Research Program pursuant to the budget outlined in each Research Plan.

As of September 30, 2021, the Company paid TSRI $ 1.5 million in funding, which is credited against research funding payable by the Company under the Research Agreement.

In August 2021, the Company paid TSRI $ 1.5 million in funding, which was credited against research funding payable by the Company under the Research Agreement.

Additionally, the Company is obligated to make specified payments to TSRI to the extent that TSRI complies with certain exclusivity covenants.

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Following the exercise of the Option, the Company has the sole right and responsibility for the further development and potential commercialization of the associated Licensed Product, at its sole cost and expense.

As of September 30, 2021, the Company had not exercised its Option.

As of March 31, 2022, the Company had not exercised its Option.

To the extent any TSRI Licensed Product covered by the Research Agreement is commercialized, the Company is obligated to pay TSRI royalties of a low single-digit percentage on a TSRI Licensed Product-by-Licensed Product and country-by-country basis based on a percentage of net sales, subject to reduction and floor.

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The Company may terminate the Research Agreement at any time upon advance written notice to TSRI or upon the appointment of certain personnel deemed unacceptable.

In addition, TSRI

may terminate the Research Agreement if the Company fails to perform or observe any contractual term in any material respect or in the event of a material breach by the Company that remains uncured for a specified period.

In addition, TSRI may terminate the Research Agreement if the Company fails to perform or observe any contractual term in any material respect or in the event of a material breach by the Company that remains uncured for a specified period.

Following early termination, all licenses will terminate and revert to TSRI, all sublicenses granted by the Company will automatically terminate, and any then-existing sublicensees will have the right to obtain a direct license from TSRI.

Amounts incurred for services performed by TSRI under each of the research plans are expensed to research and development expense as the services are rendered.

For the three and nine months ended September 30, 2021, the Company recorded $ 0.4 million and $ 1.5 million, respectively, of expense associated with services performed under the Research Agreement.

During the three months ended March 31, 2022, the Company recognized $ 0.9 million of expense associated with services performed under the Research Agreement.

In April 2022, the Company provided written notice to TSRI to terminate the Research Agreement.

Commitments and Contingencies

Operating Lease Commitments

On September 14, 2021, the Company entered into a five year lease agreement (the “lease”) for approximately 9,600 square feet of office space in Waltham, Massachusetts.

In September 2021, the Company entered into a five year noncancelable facilities lease agreement for approximately 9,600 square feet of office space in Waltham, Massachusetts.

The monthly rental payments under the lease, which include base rent charges of $ 0.4 million per year, are subject to periodic rent increases through September 2026.

The Company recognizes rent expense on a straight-line basis over the lease term and records deferred rent for rent expense incurred but not yet paid.

The Company's rent expense for the three months ended September 30, 2021 was less than $ 0.1 million.

In addition to base rent, monthly rental payments include the Company’s proportionate share of operating expenses.

The lease terms provide for one five-year extension term with base rent calculated on the then-market rate.

The components of operating lease expense were as follows (in thousands):

Operating lease cost

Variable lease cost

Total lease cost

Supplemental cash flow information related to the operating lease was as follows (in thousands)

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows related to operating leases

Future minimum lease payments under the noncancelable lease as of March 31, 2022 was as follows (in thousands):

Year Ending December 31,

Operating Lease

2022 (excluding the three months ended March 31, 2022)

Total lease payments

Present value adjustment

Present value of operating lease liability

As of March 31, 2022, the Company’s operating lease was measured using a weighted-average incremental borrowing rate of 6 % over a weighted-average remaining lease term of 4.5 years.

License Agreements

The Company has entered into license agreements with Adimab, WuXi and TSRI (see Note 7).

In April 2022, the Company provided written notice to TSRI to terminate the Research Agreement.

Manufacturing Agreements

In December 2020, the Company entered into a Commercial Manufacturing Services Agreement with WuXi, which was amended and restated in August 2021 (as amended and restated, the “Commercial Manufacturing Agreement”).

The Commercial Manufacturing Agreement outlines the terms and conditions under which WuXi will manufacture ADG20 drug substance and drug product for commercial use.

The Company committed to minimum non-cancelable purchase obligations related to batches of ADG20 drug substance and certain services with respect to the product requirements for 2021 and 2022, the payments for which will extend into 2023, and batches of ADG20 drug product and certain services with respect to the product requirements for 2022, the payments for which will extend into 2023.

There has been no material change to future minimum payments under non-cancelable purchase obligations associated with the Commercial Manufacturing Agreement.

As of September 30, 2021 , the Company paid $ 9.4 million under the Commercial Manufacturing Agreement.

The $9.4 million payment resulted in a short-term prepaid expense of $ 3.6 million, included in "Prepaid expenses and other current assets", and a long-term prepaid expense of $ 5.8 million, included in "Other non-current assets", on the condensed consolidated balance sheet.

The Commercial Manufacturing Agreement outlines the terms and conditions under which WuXi manufactures adintrevimab drug substance and drug product for commercial use.

The Company committed to minimum noncancelable purchase obligations related to batches of a dintrevimab drug substance and certain services with respect to the product requirements for 2022, the payments for which will extend into 2023, and batches of a dintrevimab drug product and certain services with respect to the product requirements for 2022, the payments for which will extend into 2023.

As of March 31, 2022, there were no material changes to future minimum payments under non-cancelable purchase obligations associated with the Commercial Manufacturing Agreement.

As of March 31, 2022, the Company had paid an aggregate of $ 19.6 million under the Commercial Manufacturing Agreement.

The payments of $19.6 million resulted in a current prepaid expense of $ 17.4 million, included in prepaid expenses and other current assets, and $ 2.2 million was expensed to research and development expense as incurred.

In April 2022, the total volume of contractually binding drug substance and drug product batches to be manufactured under the Commercial Manufacturing Agreement was reduced, resulting in a decrease of the previous commitment of minimum non-cancelable purchase obligations of $ 107.8 million and a related credit in the low eight-figures to be received in the future toward services rendered by WuXi.

Unless earlier terminated, the Commercial Manufacturing Agreement remains in effect for an initial period of five years and thereafter automatically renews for further successive periods of five years each.

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Other Contracts

The Company enters into agreements with third parties during the ordinary course of business for various products and services, including those related to research, pre clinical and clinical operations, manufacturing and support.

These contracts do not contain any material minimum purchase commitments.

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The actual amounts the Company could pay in the future to the vendors under such agreements may differ from the purchase order amounts due to cancellation provisions.

The termination fees were not probable of payment as of September 30, 2021 and December 31, 2020.

The termination fees were not probable of payment as of March 31, 2022 and December 31, 2021.

Legal Proceedings

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Legal fees and other costs associated with such proceedings are expensed as incurred.

As of September 30, 2021 and December 31, 2020, the Company was not a party to any material legal proceedings.

As of March 31, 2022 and December 31, 2021, the Company was not a party to any material legal proceedings.

Indemnification Agreements

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In July 2020, the Company issued and sold 6,237,500 shares of Series A Preferred Stock, at a price of $ 8.00 per share, for gross proceeds of $ 49.9 million and incurred $ 0.2 million of issuance costs.

Concurrently, the Company issued 5,000,000 shares of Series A Preferred Stock, then having a fair value of $ 40.0 million, to Adimab as consideration payable pursuant to the Adimab Assignment Agreement (see Note 7).

Concurrently, the Company issued 5,000,000 shares of Series A Preferred Stock to Adimab as consideration payable pursuant to the Adimab Assignment Agreement (see Note 7).

In October and November 2020, the Company issued and sold 1,410,434 shares of Series B Preferred Stock, at a price of $ 56.72 per share, for gross proceeds of $ 80.0 million and incurred $ 0.2 million of issuance costs.

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The terms of the Series C Preferred Stock are substantially the same as the terms of the Series A Preferred Stock and Series B Preferred Stock, except that the Original Issue Price per share and the Conversion Price per share of the Series C Preferred Stock is $ 78.08578 .

On July 30, 2021, the Company filed an amended and restated certificate of incorporation, which increased the Company’s authority to issue (i) 150,000,000 shares of common stock and (ii) 16,944,484 shares of Preferred Stock.

On August 10, 2021, in connection with the closing of the IPO, the Company filed an amended and restated certificate of incorporation to, among other things:

In July 2021, the Company filed an amended and restated certificate of incorporation, which increased the Company’s authority to issue (i) 150,000,000 shares of common stock and (ii) 16,944,484 shares of Preferred Stock.

In August 2021, in connection with the closing of the IPO, the Company filed an amended and restated certificate of incorporation to, among other things:

(i) increase the number of authorized shares of common stock from 150,000,000 shares to 1,000,000,000 shares, (ii) eliminate all references to the previously existing series of convertible preferred stock and (iii) authorize 10,000,000 shares of undesignated preferred stock that may be issued from time to time by the Company’s board of directors in one or more series.

Upon issuance of each class of Preferred Stock, the Company assessed the embedded conversion and liquidation features of the shares and determined that such features did not require the Company to separately account for these features.

The Company also concluded that no beneficial conversion feature existed on the issuance dates of each class of Preferred Stock.

Upon issuance of each series of Preferred Stock, the Company assessed the embedded conversion and liquidation features of the securities and determined that such features did not require the Company to separately account for these features.

The Company also concluded that no beneficial conversion feature existed on the issuance date of each series of Preferred Stock.

Upon the closing of the Company’s IPO in August 2021, all shares of the Company’s convertible preferred stock then outstanding converted into 84,722,420 shares of common stock (see Note 10).

As of December 31, 2020, Preferred Stock consisted of the following (in thousands, except share amounts):

December 31, 2020

Shares Issued

Issuable Upon

Series A Preferred Stock

Series B Preferred Stock

The voting, dividend and liquidation rights of the holders of shares of the Company’s common stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock set forth above and described in the Company’s final prospectus related to the IPO filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act on August 6, 2021.

The voting, d ividend and liquidation rights of the holders of shares of the Company’s common stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock set forth above and described in the Company’s final prospectus related to the IPO filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Securities Act”) on August 6, 2021.

In June 2020, the Company issued and sold 21,250,000 shares of its common stock to Adimab upon formation of the Company for $ 0.00002 per share.

In July 2020, such shares of common stock were repurchased by the Company from Adimab contemporaneous with the execution of the Adimab Assignment Agreement, pursuant to which the Company acquired certain intellectual property rights in exchange for the issuance of 5,000,000 shares of its Series A Preferred Stock.

As of September 30, 2021 the 21,250,000 shares of common stock repurchased from Adimab were retired and redesignated as authorized but unissued shares of the Company’s common stock.

As of December 31, 2020 , the 21,250,000 shares of common stock repurchased from Adimab were recorded as treasury stock in the accompanying condensed consolidated balance sheets and condensed consolidated statements of convertible preferred stock and stockholders’

equity (deficit) as such shares were not retired.

As of March 31, 2022 and December 31, 2021 the 21,250,000 shares of common stock repurchased from Adimab were retired and redesignated as authorized but unissued shares of the Company’s common stock.

The fair value of the repurchased common stock was $ 0.004 per share, or $ 85,000 in the aggregate, as determined based on a third-party valuation (see Note 7).

In April 2021, the Company increased the number of shares of common stock authorized for issuance from 19,000,000 to 23,251,555 shares and increased the number of shares of preferred stock authorized for issuance from 12,647,934 to 16,944,484 shares, of which 4,296,550 shares were designated as Series C Preferred Stock.

As described in Note 9 above, on July 30, 2021, the Company filed an amended and restated certificate of incorporation, which increased the Company’s authority to issue 150,000,000 shares of common stock.

On August 10, 2021, in connection with the closing of the IPO, the Company filed an amended and restated certificate of incorporation to, among other things, increase the number of authorized shares of common stock from 150,000,000 shares to 1,000,000,000 shares.

As of September 30, 2021 , the Company had reserved 36,417,895 shares of common stock for the exercise of outstanding stock options and the issuance of awards available for grant under the Company’s 2020 Equity Incentive Plan, 2021 Equity Incentive Plan and 2021 Employee Stock Purchase Plan (see Note 11).

As of December 31, 2020 , the Company had reserved 80,466,735 shares of common stock for the potential conversion of shares of Preferred Stock into common stock, the exercise of outstanding stock options and the issuance of awards available for grant under the Company’s 2020 Equity Incentive Plan (see Note 11).

As described in Note 9 above, in July 2021, the Company filed an amended and restated certificate of incorporation, which increased the Company’s authority to issue 150,000,000 shares of common stock.

In August 2021, in connection with the closing of the IPO, the Company filed an amended and restated certificate of incorporation to, among other things, increase the number of authorized shares of common stock from 150,000,000 shares to 1,000,000,000 shares.

As of March 31, 2022, the Company had reserved 43,533,527 shares of common stock for the exercise of outstanding stock options and the issuance of awards available for grant under the Company’s 2020 Equity Incentive Plan, 2021 Equity Incentive Plan and 2021 Employee Stock Purchase Plan (see Note 11).

Treasury Stock

In April and May 2021, the Company retired an aggregate of 22,600,000 shares of its common stock held in treasury.

In April and May 2021, the Company retired an aggregate of 22,600,000 shares of common stock held in treasury.

Upon retirement, the shares were redesignated as authorized but unissued shares of the Company’s common stock.

In November 2021, the Company repurchased 468,751 shares of unvested restricted common stock at the original purchase price upon a termination of service during the vesting period.

As of December 31, 2021, the shares of common stock repurchased were recorded as treasury stock in the accompanying consolidated balance sheets and consolidated statements of convertible preferred stock and stockholders’

equity (deficit) as such shares were not retired.

The fair value of the repurchased common stock was insignificant.

In February 2022, the Company repurchased 1,158,089 shares of unvested restricted common stock at the original purchase price upon a termination of service during the vesting period.

The shares of common stock repurchased were recorded as treasury stock in the accompanying condensed consolidated balance sheets and consolidated statements of convertible preferred stock and stockholders’

equity (deficit) as such shares were not retired.

The fair value of the repurchased common stock was insignificant.

In March 2022, the Company retired an aggregate of 1,626,840 shares of common stock held in treasury.

Upon retirement, the shares were redesignated as authorized but unissued shares of the Company’s common stock.

Initial Public Offering

On August 10, 2021, the Company completed its IPO, pursuant to which it issued and sold 20,930,000 shares of its common stock, including 2,730,000 shares of its common stock pursuant to the full exercise of the underwriters’

In August 2021, the Company completed its IPO, pursuant to which it issued and sold 20,930,000 shares of its common stock, including 2,730,000 shares of its common stock pursuant to the full exercise of the underwriters’

option to purchase additional shares.

The aggregate net proceeds received by the Company from the IPO were approximately $ 330.9 million, after deducting underwriting discounts and commissions, but before deducting offering expenses payable by the Company, which were $ 3.4 million.

Upon the closing of the IPO, all of the shares of the Company’s convertible preferred stock then outstanding converted into 84,722,420 shares of common

Upon the closing of the IPO, all of the shares of the Company’s convertible preferred stock then outstanding converted into 84,722,420 shares of common stock.

Upon the conversion of the convertible preferred stock, the Company reclassified the carrying value of the convertible preferred stock to common stock (at par value) and additional paid-in capital.

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The exercise price for stock options granted may not be less than the fair market value of the Company’s common stock on the date of grant, as determined by the board of directors, or at least 110 % of the fair market value of the Company’s common stock on the date of grant in the case of an incentive stock option granted to an employee who owns stock representing more than 10 % of the voting power of all classes of stock as determined by the board of directors as of the date of grant.

The Company’s board of directors determined the fair value of the Company’s common stock, taking into consideration its most recently available valuation of common stock performed by third parties as well as additional factors which may have changed since the date of the most recent contemporaneous valuation through the date of grant.

Prior to the IPO, the Company’s board of directors determined the fair value of the Company’s common stock, taking into consideration its most recently available valuation of common stock performed by third parties as well as additional factors which may have changed since the date of the most recent contemporaneous valuation through the date of grant.

Stock options granted under the 2020 Plan expire after ten years and typically vest over a four-year period with the first 25 % vesting upon the first anniversary of a specified vesting commencement date and the remainder vesting in 36 equal monthly installments over the succeeding three years , contingent on the recipient’s continued employment or service.

Certain awards of stock options permit the holders to exercise the option in whole or in part prior to the full vesting of the option in exchange for unvested shares of restricted common stock with respect to any unvested portion of the option so exercised.

As of September 30, 2021 , there were no shares authorized to be issued and no shares reserved for future issuance under the 2020 Plan.

As of December 31, 2020 , there were 22,820,305 shares authorized to be issued and 14,258,995 shares reserved for future issuance under the 2020 Plan.

As of March 31, 2022, there were 12,102,733 shares authorized to be issued upon the exercise of outstanding stock option grants and no shares reserved for future issuance under the 2020 Plan.

2021 Equity Incentive Plan

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In addition, the number of shares of the Company’s common stock reserved for issuance under the 2021 Plan will automatically increase on the first day of each calendar year, beginning on January 1, 2022 and continuing through January 1, 2031, in an amount equal to 5 % of the shares of common stock outstanding on the last day of the calendar month before the date of each automatic increase, or a lesser number of shares determined by the board of directors.

On January 1, 2022, 5,539,145 shares of common stock were automatically added to the shares authorized for issuance under the 2021 Plan pursuant to the terms of the 2021 Plan.

The shares of common stock underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, repurchased or are otherwise terminated by the Company under the 2021 Plan will be added back to the shares of common stock available for issuance under the 2021 Plan.

As of September 30, 2021, there were 35,075,122 shares authorized to be issued and 17,614,161 shares reserved for future issuance under the 2021 Plan.

As of March 31, 2022, there were 42,190,754 shares authorized to be issued, which includes 22,452,807 shares reserved for future issuance under the 2021 Plan.

Stock Option Valuation

The fair value of stock option grants is estimated using the Black-Scholes option-pricing model.

The Company historically has been a private company and lacks company-specific historical and implied volatility information.

Prior to its IPO in August 2021, the Company had been a private company.

Due to the proximity to the IPO, the Company continues to lack sufficient company-specific historical and implied volatility information.

Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price.

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Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The following table presents, on a weighted-average basis, the assumptions used in the Black-Scholes option-pricing model to determine the fair value of stock options granted:

September 30,

(Inception) to

September 30,

Fair value of common stock

The following table presents, on a weighted-average basis, the assumptions used in the Black-Scholes option-pricing model to determine the grant date fair value of stock options granted :

Expected term (in years)

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Outstanding at December 31, 2021

Outstanding at September 30, 2021

Vested and expected to vest at September 30, 2021

Options exercisable at September 30, 2021

The weighted-average grant date fair value of stock options granted during the three and nine months ended September 30, 2021 was $ 9.03 and $ 6.51 , respectively, per option.

The weighted-average grant date fair value for the three months ended September 30, 2020 and the period from June 3, 2020 (inception) to September 30, 2020 was $ 0.68 and $ 0.21 , respectively, per option.

Outstanding at March 31, 2022

Vested and expected to vest at March 31, 2022

Options exercisable at March 31, 2022

The weighted-average grant date fair value of stock options granted during the three months ended March 31, 2022 was $ 4.23 per share.

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair market value of the common stock for the options that were in the money at March 31, 2022 and December 31, 2021.

The total intrinsic value of stock options exercised was $ 0.3 million for the three months ended March 31, 2022.

Early Exercise of Stock Options into Restricted Stock

The Company’s restricted stock activity during the nine months ended September 30, 2021 is solely due to shares of restricted common stock issued pursuant to the permitted early exercise of stock options.

The Company’s restricted stock activity during the three months ended March 31, 2022 is solely due to shares of restricted common stock issued pursuant to the permitted early exercise of stock options.

Shares of common stock issued upon exercise of unvested stock options are restricted and continue to vest in accordance with the original vesting schedule applicable to the associated stock option award.

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A summary of the Company’s unvested common stock from option early exercises that is subject to repurchase by the Company is as follows:

Unvested restricted stock at June 3, 2020 (inception)

Unvested restricted stock at December 31, 2021

Unvested restricted stock at September 30, 2021

Proceeds from the early exercise of stock options are recorded as an early-exercise liability on the consolidated balance sheets.

Unvested restricted stock at March 31, 2022

Proceeds from the early exercise of stock options are recorded as an early-exercise liability on the condensed consolidated balance sheets.

The liability for unvested common stock subject to repurchase is then reclassified to common stock and additional paid-in capital as the Company’s repurchase right lapses.

Shares issued pursuant to the early exercise of stock options are not considered to be outstanding for accounting purposes until the shares vest.

As of September 30, 2021 and December 31, 2020 the liability related to the payments for unvested shares from early-exercised options was less than $ 0.1 million.

As of March 31, 2022 and December 31, 2021 the liability related to the payments for unvested shares from early-exercised options was less than $ 0.1 million.

Stock-Based Compensation Expense

The Company recorded stock-based compensation expense in the following expense categories of its condensed consolidated statements of operations and comprehensive loss (in thousands):

September 30,

(Inception) to

September 30,

Research and development

Selling, general and administrative

As of September 30, 2021 , total unrecognized stock-based compensation expense related to unvested stock-based awards was $ 86.7 million, which is expected to be recognized over a weighted-average period of 3.6 years.

For the three and nine months ended September 30, 2021 , the three months ended September 30, 2020, and the period from June 3, 2020 (inception) to September 30, 2020, the Company recorded no income tax benefits for the net operating losses incurred or for the research and development tax credits generated in each period, due to its uncertainty of realizing a benefit from those items.

In February 2022, Tillman U.

Gerngross, Ph.D., resigned as Chief Executive Officer and President and as a member of the Company's board of directors.

In accordance with his resignation, Dr.

Gerngross's outstanding stock options were forfeited, resulting in a reversal of selling, general and administrative related stock-based compensation expense of approximately $ 4.6 million.

As of March 31, 2022 , total unrecognized stock-based compensation expense related to unvested stock-based awards was $ 95.8 million, which is expected to be recognized over a weighted-average period of 3.2 years.

2021 Employee Stock Purchase Plan

In July 2021, the Company’s board of directors adopted, and its stockholders approved, the 2021 Employee Stock Purchase Plan (the ‘‘2021 ESPP’’), which became effective immediately prior to and contingent upon the execution of the underwriting agreement related to the Company’s IPO.

A total of 1,342,773 shares of common stock were initially reserved for issuance under the 2021 ESPP.

There were no shares issued under the 2021 ESPP as of March 31, 2022.

The number of shares of common stock that may be issued under the 2021 ESPP will automatically increase on the first day of each calendar year, beginning on January 1, 2022 and continuing through January 1, 2031, by an amount equal to the lesser of (i) 1 % of the shares of common stock outstanding on the last day of the calendar month before the date of each automatic increase, (ii) 2,685,546 shares and (iii) an amount determined by the Company’s board of directors.

The number of shares to be issued under the 2021 ESPP did not increase on January 1, 2022.

For the three months ended March 31, 2022 and 2021, the Company recorded no income tax benefits for the net operating losses incurred or for the research and development tax credits generated in each period, due to its uncertainty of realizing a benefit from those items.

All of the Company’s operating losses since inception have been generated in the United States.

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compensation.

For the three and nine months ended September 30, 2021 , the Company contributed $ 0.2 million and $ 0.4 million, respectively, to the 401(k) Plan.

For the three months ended September 30, 2020 and for the period from June 3, 2020 (inception) to September 30, 2020, the Company contributed an insignificant amount to the 401(k) Plan.

For the three months ended March 31, 2022 and 2021, the Company contributed $ 0.2 million and less than $ 0.1 million, respectively, to the 401(k) Plan.

Net Loss per Share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share amounts):

September 30,

(Inception) to

September 30,

Net loss attributable to common stockholders

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Shares of unvested restricted common stock are not considered outstanding for accounting purposes until vested and were excluded from the calculations of basic net loss per share attributable to common stockholders for all periods presented.

Net loss per share data is not applicable for the three months ended March 31, 2021 as the Company had no shares of common stock outstanding for accounting purposes during that period.

All of the 5,593,240 shares of common stock issued and outstanding as of March 31, 2021 were shares of unvested restricted common stock issued by the Company upon the early exercise of stock options granted in June 2020.

As a result, such shares are not considered outstanding for accounting purposes until vested and were excluded from the calculations of basic net loss per share attributable to common stockholders for the three months ended March 31, 2021.

The Company’s potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share.

Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

The Company excluded the following potential

common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated, because including them would have had an anti-dilutive effect:

Three and Nine Months

September 30,

(Inception) to

September 30,

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated, because including them would have had an anti-dilutive effect:

Convertible preferred stock (as converted to common stock)

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Related Party Transactions

Adimab participated in the Series B Preferred Stock financing and the Series C Preferred Stock financing by purchasing 44,076 and 128,064 shares of Series B Preferred Stock and Series C Preferred Stock, respectively, for an aggregate purchase price of $ 2.5 million and $ 10.0 million, respectively (see Note 9).

Adimab Assignment Agreement

Under the Adimab Assignment Agreement, Adimab, a principal stockholder of the Company, received upfront consideration in the form of Series A Preferred Stock, is entitled to receive milestone and royalty payments upon specified conditions, and receives payments from the Company for providing ongoing services under the agreement (see Note 7).

Adimab participated in the Series B and C Preferred Stock financings by purchasing 44,076 and 128,064 shares of Series B and C Preferred Stock, respectively, for an aggregate purchase price of $ 2.5 million and $ 10 million, respectively (see Note 9).

During the three and nine months ended September 30, 2021, the Company recognized $ 4.0 million and $ 7.5 million, respectively, as IPR&D expense in connection with milestones payable under the Adimab Assignment Agreement.

For the three months ended September 30, 2020 and for the period from June 3, 2020 (inception) to September 30, 2020 the Company recognized $ 39.9 million as IPR&D expense in connection with the upfront consideration payable under the Adimab Assignment Agreement (see Note 7).

During the three and nine months ended September 30, 2021 , the Company recognized $ 0.5 million and $ 0.9 million of research and development expense, respectively, with respect to services performed by Adimab on the Company’s behalf under the Adimab Assignment Agreement.

During the three months ended September 30, 2020, and for the period from June 3, 2020 (inception) to September 30, 2020, the Company recognized $ 0.3 million of research and development expense with respect to services performed by Adimab on the Company’s behalf under the Adimab Assignment Agreement.

During the three months ended March 31, 2022, the Company did no t recognize any IPR&D expense pursuant to the Adimab Assignment Agreement.

During the three months ended March 31, 2021, the Company recognized $ 1.0 million as IPR&D expense in connection with milestones payable under the Adimab Assignment Agreement (see Note 7).

During the three months ended March 31, 2022 and 2021, the Company recognized $ 0.3 million and $ 0.2 million of research and development expense, respectively, with respect to services performed by Adimab on the Company’s behalf under the Adimab Assignment Agreement (see Note 7).

Adimab Collaboration Agreement

Under the Adimab Collaboration Agreement, the Company is obligated to pay Adimab for certain fees, milestone and royalty payments (see Note 7).

For the three and nine months ended September 30, 2021, the Company recognized $ 1.3 million of research and development expense related to the quarterly fee.

For the three and nine months ended September 30, 2021 , the Company recognized less than $ 0.1 million and $ 0.1 million, respectively, of research and development expense with respect to services performed by Adimab on the Company’s behalf under the Adimab Collaboration Agreement.

As of September 30, 2021 and December 31, 2020, $ 0.6 million and $ 0.6 million, respectively, was due to Adimab under both the Adimab Assignment Agreement and the Adimab Collaboration Agreement by the Company.

As of September 30, 2021 and December 31, 2020, no amounts were due from Adimab under the Adimab Assignment Agreement or the Adimab Collaboration Agreement to the Company.

During the three months ended March 31, 2022, the Company recognized $ 1.3 million of research and development expense related to the quarterly fee.

During the three months ended March 31, 2022 , the Company recognized $ 0.4 million of research and development expense with respect to services performed by Adimab on the Company’s behalf under the Adimab Collaboration Agreement.

As of March 31, 2022 and December 31, 2021, $ 2.0 million and $ 0.6 million, respectively, was due to Adimab under both the Adimab Assignment Agreement and the Adimab Collaboration Agreement by the Company.

As of March 31, 2022 and December 31, 2021, no amounts were due from Adimab under the Adimab Assignment Agreement or the Adimab Collaboration Agreement to the Company.

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

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our final prospectus for our initial public offering filed pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, or the Securities Act, with the SEC, on August 6, 2021 (the “Prospectus”).

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on March 31, 2022 (as subsequently amended by Amendment No.

1 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 29, 2022, the “2021 Form 10-K”).

Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “we,”

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refer to Adagio Therapeutics, Inc.

together with its consolidated subsidiaries.

together with its consolidated subsidiary.

Forward-Looking Statements

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Adagio Therapeutics, Inc.

is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of antibody-based solutions for infectious diseases with pandemic potential, including COVID-19 and influenza.

We are developing our lead product candidate, ADG20, for the prevention and treatment of coronavirus disease 2019, or COVID-19, the disease caused by the virus SARS-CoV-2 and its variants.

is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of differentiated products for the prevention and treatment of infectious disease.

We are developing our lead product candidate, adintrevimab, for the prevention and treatment of coronavirus disease 2019, or COVID-19, the disease caused by the virus SARS-CoV-2 and its variants.

COVID-19 has caused the current global pandemic that remains a significant global health crisis and has resulted in millions of deaths and lasting health problems in many survivors.

We believe that COVID-19 will become an endemic disease requiring a variety of effective, safe and convenient prevention and treatment options for years to come.

We aim to address COVID-19 and future potential viral outbreaks by building a portfolio of antibodies with broadly neutralizing activity against multiple members of the coronavirus family or additional viruses with pandemic potential.

Our portfolio of antibodies was discovered by Adimab, LLC, or Adimab, an industry leader in translating target hypotheses into therapeutically relevant antibodies with their proprietary platform, which has resulted in more than 400 antibody discovery programs.

ADG20 is designed to be a potent, long-acting and broadly neutralizing antibody for both the prevention and treatment of COVID-19 as either a single or combination agent.

We believe several attributes differentiate ADG20.

Unlike other antibody-based therapies specifically targeting SARS-CoV-2, ADG20 has demonstrated an ability in non-clinical studies to neutralize a diverse panel of circulating SARS-CoV-2 variants, including the newly emerged Lambda, Mu and Delta plus variants, as well as a broad range of SARS-like viruses with neutralization potency at IC 50 (half maximal inhibitory concentrations) of approximately 0.01 mcg/mL or less in live-virus cellular assays.

We believe this demonstrated in vitro neutralization activity will translate into a low-clinical dose which, in turn, may translate into the ability to conveniently deliver ADG20 as a single intramuscular, or IM, injection.

Data from a six-month evaluation timepoint in our Phase 1 healthy volunteer study ADG20-1-001 confirmed the extended half-life of ADG20, which approached 100 days based on data from the 300 mg IM dose cohort and we believe may allow for protection of up to twelve months.

As of September 4, 2021, there were no study drug related adverse events, serious adverse events, injection-site reactions or hypersensitivity reactions reported through a minimum of three months follow-up across all cohorts .

In addition, in an exploratory analysis, 50% serum virus neutralizing antibody titers against an authentic SARS-CoV-2 D614G variant measured six months after a single 300 mg IM dose of ADG20 were similar to observed peak titers with the RNA-1273 vaccine series and exceeded those achieved with the AZD1222 vaccine series.

We are conducting two separate Phase 2/3 clinical trials:

our EVADE trial to evaluate ADG20 for the prevention of COVID-19 and our STAMP trial to evaluate ADG20 for the treatment of COVID-19.

Additionally, our portfolio includes multiple broadly neutralizing antibodies, including ADG10, for potential use with ADG20 as a combination therapy for the prevention and treatment of COVID-19 and future coronavirus outbreaks.

We are leveraging our team’s collective expertise and capabilities to deliver adintrevimab to patients and to discover novel solutions to infectious diseases through internal research and collaborations.

Adintrevimab is designed to be a potent, long-acting and broadly neutralizing antibody for both the prevention and treatment of COVID-19.

We believe several key attributes combine to potentially differentiate adintrevimab, including breadth, potency, durability of protection, convenient intramuscular, or IM, administration, and potential for broad application across multiple indications, depending on the SARS-CoV-2 variant.

Data from our Phase 1 healthy volunteer study ADG20-1-001 confirmed the extended half-life of adintrevimab, which we believe may allow for durable protection against COVID-19, depending on the variant.

In February 2022, we expanded the Phase 1 study to evaluate safety and pharmacokinetics at higher doses.

As of March 27, 2022, there were no study drug related adverse events, serious adverse events, injection-site reactions or hypersensitivity reactions reported across all dose levels evaluated.

We are assessing adintrevimab in two separate Phase 2/3 clinical trials:

our EVADE trial to evaluate adintrevimab for the prevention of COVID-19 and our STAMP trial to evaluate adintrevimab for the treatment of COVID-19.

Our EVADE clinical trial is a global Phase 2/3 clinical trial evaluating adintrevimab as a prevention for COVID-19 in both the post-exposure and pre-exposure settings.

Our STAMP trial is our global Phase 2/3 clinical trial evaluating adintrevimab as a treatment for COVID-19.

Due to the emergence and global spread of the Omicron variant, against which adintrevimab has reduced in vitro neutralization potency compared to prior variants, enrollment in both EVADE and STAMP was paused on January 11, 2022, and preliminary safety and efficacy data were evaluated in pre-and post-Omicron populations (EVADE) and non-Omicron/Omicron populations (STAMP).

In the primary analysis population, patients infected with or exposed to a non-Omicron variant, or the pre-Omicron group, adintrevimab met the primary objectives across all three indications, demonstrating statistically significant and clinically meaningful efficacy.

In pre-exposure and post-exposure prophylaxis, adintrevimab was associated with 71% and 75% relative risk reductions compared to placebo, respectively, in the prevention of reverse transcription-polymerase chain reaction, or RT-PCR, confirmed symptomatic COVID-19.

In an exploratory analysis of patients exposed to the Omicron variant, or the post-Omicron group, in pre-exposure prophylaxis, adintrevimab was associated with a clinically meaningful reduction in the risk of developing RT-PCR confirmed symptomatic COVID-19 compared with placebo.

In treatment, adintrevimab was associated with a 66% relative risk reduction compared to placebo in the incidence COVID-19 related hospitalization or all cause death through Day 29 in the pre-Omicron group.

In patients treated within three days of symptom onset, adintrevimab was associated with a reduced risk of COVID-19 hospitalization or death from any cause through Day 29 by 74% compared to placebo.

A preliminary analysis of available safety data in each trial revealed a safety profile similar to that of placebo for adintrevimab.

The Omicron BA.2 variant, which has shown reduced in vitro susceptibility to monoclonal antibodies, has recently emerged as the current predominant variant of SARS-CoV-2 in the United States.

Adintrevimab, which has demonstrated broadly neutralizing activity in vitro against SARS-CoV-2 variants of concern including Alpha, Beta, Delta, Delta Plus, Gamma and Omicron BA.1, has markedly reduced neutralization activity in vitro against the Omicron BA.2 variant.

Based on feedback from the FDA regarding adintrevimab’s lack of neutralizing activity against the BA.2 variant, we are pausing the submission of an Emergency Use Authorization, or EUA, request.

We intend to continue engaging with the FDA and monitor the evolution of SARS-CoV-2 and the in vitro activity of adintrevimab against predominant variants in the United States to determine the optimal timing for the planned EUA request.

In addition we continue engaging with other health authorities outside of the United States on potential authorization pathways for adintrevimab.

We are committed to advancing adintrevimab as a potential future therapeutic option in anticipation of the emergence of new variants.

We are on-track to have more than one million doses of adintrevimab secured in 2022, in preparation of its potential utility as a prophylaxis and treatment option for COVID-19 in the future.

We are also evaluating additional broadly neutralizing antibodies targeting the receptor binding domain, or RBD, as well as other subdomains within the spike protein for COVID-19.

In addition, we plan to leverage our robust antibody discovery and development capabilities and our partnerships that together have enabled our expedited advancement of adintrevimab into clinical trials to develop therapeutic or preventative options for other infectious diseases, such as additional coronaviruses and influenza.

We continue to evaluate product candidates for infectious diseases with high unmet medical need through in-licensing opportunities that may leverage our team’s expertise and capabilities.

SARS-CoV-2 has given rise to a global pandemic that swept rapidly throughout the world in 2020.

Of significant current concern is the continued emergence of a number of SARS-CoV-2 variants with increased transmissibility, pathogenicity, and/or the ability to evade neutralizing antibodies.

In addition to the emergence of these variants, there are multiple factors that we believe contribute to the likelihood of COVID-19 becoming an endemic threat, including:

(1) viral transmission before symptom onset;

(2) uneven global rollout of vaccinations;

(3) ongoing vaccine hesitancy;

(4) limited duration of immunity conferred by both natural infection and vaccination;

(5) limited vaccine efficacy against certain SARS-CoV-2 variants;

(6) uncertain impact of vaccines on transmission;

and (7) variable implementation of virus mitigation behaviors, such as wearing masks and social distancing.

We also believe that future pandemics similar to the COVID-19 pandemic are likely because, in many parts of the world, humans live in close proximity to animal species harboring coronaviruses that are capable of infecting humans.

Our vision is to discover, develop and commercialize differentiated products for the prevention and treatment of infectious diseases.

To enable this vision, our current discovery efforts are focused on unique antibody-based product candidates that we optimize to improve breadth, potency, half-life, where applicable, and developability.

Key elements that we believe differentiate our approach include:

(1) recognition of the importance of and identification of broadly neutralizing antibodies;

(2) industry-leading B cell mining, protein engineering and developability screening capabilities through our internal expertise and collaborations;

and (3) reducing risk of clinical resistance.

We were formed in June 2020.

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In connection with the rights and license acquired, we issued 5,000,000 shares of our Series A Preferred Stock to Adimab.

Since our inception, we have devoted substantially all of our resources to organizing and staffing, building an intellectual property portfolio, business planning, conducting research and development, establishing arrangements with third parties for the manufacture of our product candidates and raising capital.

We rely heavily on external consultants and contract research organizations, or CROs, to conduct our non-clinical, preclinical and clinical activities.

In May 2021, we entered into a funded discovery agreement with Adimab focused on discovery efforts for new antibodies that may be effective against other coronaviruses and influenza, both of which have the potential to cause pandemics.

In the event that Adimab discovers an antibody that is expected to meet certain product profiles developed by us, we will have the exclusive option to require Adimab to assign us its rights in any such antibody and to grant us certain licenses.

In addition, we engage other third parties to perform ongoing research and development and other services on our behalf.

Since our inception, we have devoted substantially all of our resources to organizing and staffing, building an intellectual property portfolio, business planning, conducting research and development, establishing and executing arrangements with third parties for the manufacture of our product candidates and raising capital.

We rely heavily on partnerships, external consultants and contract research organizations, or CROs, to conduct our discovery, non-clinical, preclinical and clinical activities.

Additionally, we are currently dependent on WuXi Biologics (Hong Kong) Limited, or WuXi, a contract development and manufacturing organization, or CDMO, for the manufacture of our product candidates for clinical and commercial use.

We expect to continue to rely on third parties for clinical trials and the manufacture and testing of our product candidates.

Since our inception, we have financed our operations with approximately $464.7 million of net proceeds from sales of our preferred stock, and most recently, with proceeds from our initial public offering, or IPO.

Since our inception, we have financed our operations with net proceeds of $464.7 million from sales of our preferred stock, and most recently, with net proceeds from our initial public offering, or IPO.

In August 2021, we completed our IPO, pursuant to which we issued and sold 20,930,000 shares of our common stock, including 2,730,000 shares of common stock pursuant to the full exercise of the underwriters’

option to purchase additional shares.

We received aggregate net proceeds from our IPO of approximately $330.9 million, after deducting underwriting discounts and commissions, but before deducting offering expenses payable by the Company, which were $3.4 million.

To date, we have not generated any revenue from any sources, including product sales.

In February 2021, we advanced ADG20 into a Phase 1 clinical trial.

In April and August 2021, we advanced ADG20 into two Phase 2/3 clinical trials.

We received aggregate net proceeds from our IPO of $327.5 million, after deducting underwriting discounts and commissions and offering expenses payable by us.

To date, we have not generated any revenue from any sources, including product sales or government supply contracts.

We have not yet commenced significant development activities with respect to other product candidates.

Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates, if approved.

Since our inception, we have incurred significant losses, including net losses of $65.3 million for the period from June 3, 2020 (inception) to December 31, 2020 and of $143.7 million for the nine months ended September 30, 2021.

As of September 30, 2021, we had an accumulated deficit of $209.1 million.

We expect to continue to incur significant expenses and recognize substantial losses in the foreseeable future as we expand and progress our research and development activities as well as the associated manufacturing activities and commercialization efforts.

Since our inception, we have incurred significant losses, including a net loss of $100.7 million for the three months ended March 31, 2022.

As of March 31, 2022, we had an accumulated deficit of $392.8 million.

We expect to continue to incur significant expenses and recognize losses in the foreseeable future as we expand and progress our research and development activities as well as the associated manufacturing activities and commercialization efforts.

In addition, our losses from operations may fluctuate significantly from period to period depending on the timing of our clinical trials and our expenditures on other research and development activities, including any associated manufacturing activities, and potential commercialization efforts.

We anticipate that our expenses will increase significantly in connection with our ongoing activities, as we:

continue to conduct our ongoing clinical trials of ADG20, including advancement through late-stage global clinical trials, as well as initiate and complete additional clinical trials of future product candidates or current product candidates in new indications or patient populations;

Our expenses could increase substantially in connection with our ongoing activities, as we:

continue to conduct our ongoing clinical trials of a dintrevimab , including advancement through late-stage global clinical trials, as well as initiate and complete additional clinical trials of future product candidates or current product candidates in new indications or patient populations ;

continue to advance the preclinical development of our other product candidates and our preclinical and discovery programs;

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pursue marketing approvals or EUA and reimbursement for our product candidates;

acquire or in-license other product candidates, intellectual property and/or technologies;

develop, establish and validate our commercial-scale current good manufacturing practices, or cGMP, manufacturing process;

manufacture material under cGMP, for potential EUA and commercial sales at our contracted manufacturing facilities;

acquire or in-license other product candidates, intellectual property and/or discovery technologies;

validate our commercial-scale current good manufacturing practices, or cGMP, manufacturing process ;

manufacture material under cGMP at our contracted manufacturing facilities for clinical trials and potential EUA, regulatory approval and commercial sales ;

maintain, expand, enforce, defend and protect our intellectual property portfolio;

comply with regulatory requirements established by the applicable regulatory authorities;

establish a sales, marketing and distribution infrastructure and scale up manufacturing capabilities to commercialize any product candidates for which we may obtain regulatory approval or EUA;

establish a sales, marketing and distribution infrastructure to commercialize any product candidates for which we may obtain regulatory approval or EUA;

hire and retain additional personnel, including research, clinical, development, manufacturing, quality control, quality assurance, regulatory and scientific personnel;

add operational, financial, corporate development, management information systems and administrative personnel, including personnel to support our product development and planned future commercialization efforts;

incur additional legal, accounting and other expenses in operating as a public company.

incur additional legal, accounting and other expenses in operating as a public company, including expenses related to corporate governance matters and stockholder proposals for our 2022 annual meeting of stockholders .

We do not anticipate generating revenue from product sales, including government supply contracts, unless and until we successfully complete clinical development and obtain marketing approvals or EUA for one or more of our product candidates.

We are currently establishing our commercial infrastructure to support the anticipated marketing and distribution of our product candidates.

Subject to receiving marketing approval or EUA for prevention and/or treatment of COVID-19, we expect to enter into arrangements with third parties for the sale, marketing and distribution of our product candidates.

Subject to receiving marketing approval or EUA for any of our product candidates for the prevention and/or treatment of COVID-19, we expect to enter into arrangements with third parties for the sale, marketing and distribution of our product candidates.

Accordingly, if we obtain marketing approval or EUA for any of our product candidates, we will incur significant additional commercialization expenses related to product manufacturing, marketing, sales and distribution.

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If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.

Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability.

Because of the numerous risks and uncertainties associated with pharmaceutical product development and emergence of adintrevimab susceptible SARS-CoV-2 variants of concern, or VOCs , we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability.

We may never obtain regulatory approval for any of our product candidates.

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If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

We believe that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2023.

Based on our current operating plan, we believe that our existing cash and cash equivalents of $532.2 million as of March 31, 2022, will be sufficient to fund our operating expenses and capital expenditure requirements into the second half of 2024.

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

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In March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic.

The evolving and constantly changing impact of the pandemic will directly affect the potential commercial prospects of ADG20 for the prevention and treatment of COVID-19.

The severity of the COVID-19 pandemic and the continued emergence of VOCs (such as the widespread Omicron variant and its sublineages and the Delta variant), the availability, administration and acceptance of vaccines, monoclonal antibodies, antiviral agents and other therapeutic modalities, vaccine mandates by employers and/or local or national governments, and the potential development of “herd immunity”

by the global population will affect the design and enrollment of our clinical trials, the potential regulatory authorization or approval of our product candidates and the commercialization of our product candidates, if approved.

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The global COVID-19 pandemic continues to evolve rapidly, and we will continue to monitor it closely.

The ultimate extent of the impact of the COVID-19 pandemic on our business, financial condition, operations and product development timelines and plans remains highly uncertain and will depend on future developments, including the duration and spread of outbreaks and the continued emergence of variants, its impact on our clinical trial design and enrollment, trial sites, contract research organizations, contract manufacturing organizations and other third parties with which we do business, as well as its impact on regulatory authorities and our key scientific and management personnel.

The ultimate extent of the impact of the COVID-19 pandemic on our business, financial condition, operations and product development timelines and plans remains highly uncertain and will depend on future developments, including the duration and spread of outbreaks and the continued emergence of variants, its impact on our clinical trial design and enrollment, trial sites, contract research organizations, or CROs, contract development and manufacturing organizations, or CDMOs, and other third parties with which we do business, as well as its impact on regulatory authorities and our key scientific and management personnel.

To date, we have experienced some delays and disruptions in our development activities as a result of the COVID-19 pandemic.

Some of our contract research organizations, contract manufacturing organizations and other service providers also continue to be impacted.

We will continue to monitor developments as it addresses the disruptions, delays and uncertainties relating to the COVID-19 pandemic.

Some of our CROs, CDMOs and other service providers also continue to be impacted.

We will continue to monitor developments as we address the disruptions, delays and uncertainties relating to the COVID-19 pandemic.

These developments and the impact of the COVID-19 pandemic on the financial markets and the overall economy are highly uncertain and cannot be predicted.

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personnel-related expenses, including salaries, bonuses, benefits and other compensation-related costs, including stock-based compensation expense, for employees engaged in research and development functions;

expenses incurred under agreements with third parties, such as consultants, contractors and CROs, that conduct the non-clinical and preclinical studies and clinical trials of our product candidates and research programs;

expenses incurred under agreements with third parties, such as collaborators, consultants, contractors and CROs, that conduct the discovery, non-clinical and preclinical studies and clinical trials of our product candidates and research programs;

costs of procuring manufactured product candidates for use in non-clinical studies, preclinical studies and clinical trials from third-party CDMOs;

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The prepaid amounts are expensed as the related goods are delivered or the services are performed, or when it is no longer expected that the goods will be delivered or the services rendered.

Our primary focus since inception has been the development of ADG20.

Our primary focus since inception has been the development of a dintrevimab .

Our research and development costs consist primarily of external costs, such as fees paid to CDMOs, CROs and consultants in connection with our non-clinical studies, preclinical studies and clinical trials.

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Product candidates in later stages of clinical development generally have higher and more variable development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

We expect that our research and development expenses will increase substantially in the near term as we advance ADG20 through clinical development on a global basis, pursue regulatory approval of ADG20, continue to discover and develop additional product candidates and incur expenses associated with hiring additional personnel to support our research and development efforts, including the associated manufacturing activities.

Our research and development expenses could increase substantially in the near term as we advance a dintrevimab through clinical development on a global basis, pursue regulatory approval of a dintrevimab , continue to discover and develop additional product candidates and incur expenses associated with hiring additional personnel to support our research and development efforts, including the associated manufacturing activities.

At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of any of our product candidates.

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the number and scope of preclinical and clinical programs we decide to pursue;

filing acceptable investigational new drug applications with the U.S.

Food and Drug Administration or comparable foreign applications that allow commencement of our planned clinical trials or future clinical trials for our product candidates;

filing acceptable investigational new drug applications with the FDA or comparable foreign applications that allow commencement of our planned clinical trials or future clinical trials for our product candidates;

sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials, manufacture the product candidates and complete associated regulatory activities;

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the costs associated with the development of any additional development programs and product candidates we identify in-house or acquire through collaborations;

the prevalence, nature and severity of adverse events experienced with ADG20 or any other product candidates;

the prevalence, nature and severity of adverse events experienced with adintrevimab or any other product candidates;

the terms and timing of any collaboration, license or other arrangement, including the terms and timing of any milestone payments thereunder;

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We may never succeed in obtaining regulatory approval or EUA for any of our product candidates.

In addition, in the absence of a Public Health Emergency (or “

), we may not be able to receive an EUA.

The national PHE declaration is currently in effect through January 2022 and may or may not be renewed.

In addition, in the absence of a declaration by the U.S.

Department of Health and Human Services of a federal public health emergency, or a Public Health Emergency, we will not be able to receive an EUA.

The declaration of a Public Health Emergency was most recently renewed in April 2022 and may or may not be renewed again.

Acquired In-Process Research and Development Expenses

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We expensed the cost of the IPR&D assets because they had no alternative future use as of the acquisition date.

We will recognize additional acquired IPR&D expenses in the future if and when we become obligated to make contingent milestone payments to Adimab under the terms of the agreement by which we acquired the IPR&D assets.

We will recognize additional acquired IPR&D expenses in the future if and when it is deemed probable that we will make contingent milestone payments to Adimab under the terms of the agreement by which we acquired the IPR&D assets.

Selling, General and Administrative Expenses

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These costs relate to the operation of the business, unrelated to the research and development function, or any individual program.

We anticipate that our selling, general and administrative expenses will increase significantly in the future as our business expands and we increase our headcount to support the expected growth in our research and development activities and the potential commercialization of our product candidates.

In particular, we expect to incur additional commercialization expenses prior to any regulatory approval or EUA of our product candidates as we continue to expand our commercial function to support potential future product launches.

We also anticipate that we will incur increased expenses associated with operating as a public company, including increased costs of accounting, audit, legal, regulatory and tax-related services, director and officer insurance premiums, and investor and public relations costs.

Our selling, general and administrative expenses could increase in the future as our business expands and we increase our headcount to support the expected growth in our research and development activities and the potential commercialization of our product candidates.

In particular, we could incur additional commercialization expenses prior to any regulatory approval or EUA of our product candidates as we continue to expand our commercial function to support potential future product launches.

We also anticipate that we will continue to incur increased expenses associated with operating as a public company, including increased costs of accounting, audit, legal, regulatory and tax-related services, director and officer insurance premiums, and investor and public relations costs.

We also expect to incur additional intellectual property-related expenses as we file additional patent applications to protect innovations arising from our research and development activities.

Through September 30, 2021, we have operated as a virtual company.

Through March 31, 2022, we have operated as a virtual company and maintain a corporate headquarters for general and administrative purposes only .

Therefore, we do not incur material operating expenses for the rent, maintenance and insurance of facilities or for depreciation of fixed assets.

Interest Income

Interest income consists of interest earned from our cash, cash equivalents and marketable securities.

We expect our interest income to modestly increase as we continue to invest the cash received from our sales of Series C preferred stock in April 2021 and the net proceeds from our IPO in August 2021 .

For the three and nine months ended September 30, 2021, the three months ended September 30, 2020, and for the period from June 3, 2020 (inception) to September 30, 2020, the Company recorded no income tax benefits for the net operating losses incurred or for the research and development tax credits generated in each period, due to its uncertainty of realizing a benefit from those items.

Other Income (Expense), Net

Other income (expense), net consists of interest income earned from our cash, cash equivalents and marketable securities and the net amortization or accretion of premiums and discounts related to our marketable securities.

We expect our interest income to vary each reporting period depending on our average bank deposits, money market funds and investment balances during the period and market interest rates.

Since our inception, we have not recorded any income tax expense or realized benefits for the net losses we have incurred or for the research and development tax credits generated in each period as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss, or NOL, carryforwards and tax credit carryforwards will not be realized.

Results of Operations

Comparison of the three months ended September 30, 2021 and 2020

The following table summarizes our results of operations for the three months ended September 30, 2021 and 2020:

September 30,

Comparison of the three months ended March 31, 2022 and 2021

The following table summarizes our results of operations for the three months ended March 31, 2022 and 2021:

(in thousands)

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Other income (expense):

Interest income

Other expense

Other income (expense), net

Total other income (expense), net

Net loss and comprehensive loss

The following discussion presents the components of our expenses for the periods presented:

Research and Development Expenses

September 30,

(in thousands)

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Total research and development expenses

Research and development expenses were $45.4 million for the three months ended September 30, 2021, compared to $7.3 million for the three months ended September 30, 2020.

The increase of $25.6 million in direct costs related to our ADG20 program was primarily due to overall increases in our clinical study costs and manufacturing expenses.

The increase of $4.4 million in direct costs related to our ADG10 program was driven by manufacturing expenses, for which there were no costs incurred during the three months ended September 30, 2020.

Personnel-related costs, including salaries, bonuses, benefits and other compensation-related costs were $4.7 million and stock-based compensation expense was $2.2 million for the three months ended September 30, 2021, compared to personnel-related costs of $0.5 million and stock-based compensation expense of less than $0.1 million for the three months ended September 30, 2020.

The overall increase in personnel-related costs is attributable to the hiring of individuals to support the development of our product candidates.

The increase in external discovery related costs and other of $1.7 million was primarily driven by the $1.3 million quarterly fee under the Adimab Collaboration Agreement, $0.5 million in professional services and consulting costs, offset by $0.1 million of other research and development related costs.

Acquired In-Process Research and Development Expenses

Acquired IPR&D expenses of $4.0 million for three months ended September 30, 2021 consisted of the cost we incurred in the period under the Adimab Assignment Agreement for a milestone payment that became due to Adimab in August 2021 upon the dosing of the first patient in a Phase 3 global clinical trial evaluating ADG20 for the prevention of COVID-19.

The amount of this contingent payment was recognized as an IPR&D expense based on the nature of the associated assets acquired from Adimab on the date of the milestone achievement.

to COVID-19 and SARS and related intellectual property and a license to certain of Adimab’s platform patents and technology for use in the research and development of our product candidates.

We expensed the cost of the IPR&D assets because they had no alternative future use as of the acquisition date.

Selling, General and Administrative Expenses

September 30,

(in thousands)

Personnel-related costs

Professional and consultant fees

Total selling, general and administrative expenses

Selling, general and administrative expenses for the three months ended September 30, 2021 were $11.1 million, compared to $0.8 million for the three months ended September 30, 2020.

Personnel-related costs increased by $6.2 million due to increased hiring to support general and administrative functions.

Personnel-related costs, including salaries, bonuses, benefits and other compensation-related costs were $2.6 million and stock-based compensation expense was $3.8 million for the three months ended September 30, 2021, compared to personnel-related costs of $0.2 million and stock-based compensation expense of less than $0.1 million for the three months ended September 30, 2020.

The increase of $3.6 million in professional services and consultant fees and the increase of $0.4 million in other expenses was attributable to costs incurred as we began operating as a public company, including insurance premiums and other fees.

Other income was less than $0.1 million for the three months ended September 30, 2021 and $0 for the three months ended September 30, 2020, consisting primarily of interest earned on invested cash balances.

Comparison of the nine months ended September 30, 2021 to the period from June 3, 2020 (inception) to September 30, 2020

The following table summarizes our results of operations for the nine months ended September 30, 2021 and for the period from June 3, 2020 (inception) to September 30, 2020:

September 30,

(Inception) to

September 30,

(in thousands)

Operating expenses:

Research and development

Acquired in-process research and development

Selling, general and administrative

Total operating expenses

Loss from operations

Other income (expense):

Interest income

Other expense

Total other income (expense), net

Net loss and comprehensive loss

Research and Development Expenses

September 30,

(Inception) to

September 30,

(in thousands)

Direct, external research and development expenses by program:

Unallocated research and development expenses:

Personnel-related costs

External discovery-related and other costs

Total research and development expenses

Research and development expenses were $114.5 million for the nine months ended September 30, 2021, compared to $7.3 million for the period from June 3, 2020 (inception) to September 30, 2020.

The increase of $84.3 million in direct costs related to our ADG20 program was primarily due to overall increases in our clinical study costs and manufacturing expenses.

The increase of $4.4 million in direct costs related to our ADG10 program was primarily due to manufacturing expenses, for which there were no costs incurred for the period from June 3, 2020 (inception) to September 30, 2020.

Personnel-related costs, including salaries, bonuses, benefits and other compensation-related costs, were $10.9 million and stock-based compensation expense was $3.6 million for the nine months ended September 30, 2021, compared to personnel-related costs of $0.5 million and stock-based compensation expense of less than $0.1 million for the period from June 3, 2020 (inception) to September 30, 2020.

The overall increase in personnel-related costs is attributable to the hiring of more individuals to support the development of ADG20 and ADG10.

The increase in external discovery-related and other costs and other of $4.5 million was primarily driven by $1.3 million quarterly fee under the Adimab Collaboration Agreement, $1.5 million related to the TSRI Research Agreement and an increase in professional services and consultant fees.

Research and development expenses were $92.0 million for the three months ended March 31, 2022, compared to $34.0 million for the three months ended March 31, 2021.

The $58.0 million increase in research and development expenses was primarily due to the following:

The increase in direct costs related to our adintrevimab program of $46.9 million was primarily due to overall increases in our contract manufacturing and contract research expenses of $33.6 million related to the production of materials for use in our clinical trials and nonclinical studies for the adintrevimab program, as well as supply for use under a potential EUA for adintrevimab, procured from WuXi, our sole-source supplier of drug substance and drug product, and clinical trial expenses of $13.7 million related to ongoing activities for our clinical trials for the adintrevimab program, partially offset by lower costs due to a pause in trial enrollment during the three months ended March 31, 2022.

These overall increases were offset by a decrease in other external research and development costs of $0.4 million.

Personnel-related costs, including salaries, bonuses, benefits and other compensation-related costs were $6.3 million and stock-based compensation expense was $3.2 million for the three months ended March 31, 2022, compared to personnel-related costs of $2.0 million and stock-based compensation expense of $0.3 million for the three months ended March 31, 2021.

The increase in personnel-related costs of $7.2 million was primarily due to the hiring of additional individuals to support the development of our product candidates, including an increase in stock-based compensation expense of $2.9 million.

The increase in external discovery-related and other costs of $3.8 million was primarily due to the $1.3 million quarterly fee under the Adimab Collaboration Agreement, which was entered into during the second quarter of 2021, $0.9 million related to services performed under the Research Collaboration and License Agreement with TSRI, $0.6 million with respect to services performed by Adimab on our behalf under the Adimab Assignment Agreement and the Adimab Collaboration Agreement, and $1.0 million in other external costs, including consulting services, insurance costs and software expenditures.

Acquired In-Process Research and Development Expenses

Acquired IPR&D expenses of $7.5 million for the nine months ended September 30, 2021 consisted of the costs we incurred in the period under the Adimab Assignment Agreement for a $1.0 million milestone payment that became due to Adimab in February 2021 upon the dosing of the first patient in a Phase 1 global clinical trial evaluating ADG20, a $2.5 million milestone payment that became due to Adimab in April 2021 upon the dosing of the first patient in the first Phase 2 global clinical trial of a product licensed under the agreement, and a $4.0 million milestone payment that became due to Adimab in August 2021 upon dosing of the first patient in a Phase 3 global clinical trial evaluating ADG20 for the prevention of COVID-19.

The amounts of these contingent payments were recognized as an IPR&D expense based on the nature of the associated assets acquired from Adimab on the date of the milestone achievement.

Acquired IPR&D expense of $39.9 million for the three months ended September 30, 2020 consisted of the costs we incurred in the period under the Adimab Assignment Agreement to acquire rights to Adimab’s antibodies relating to COVID-19 and SARS and related intellectual property and a license to certain of Adimab’s platform patents and technology for use in the research and development of our product candidates.

We expensed the cost of the IPR&D assets because they had no alternative future use as of the acquisition date.

There was no IPR&D expense recognized during the three months ended March 31, 2022.

Acquired IPR&D expenses of $1.0 million for the three months ended March 31, 2021 consisted of the cost we incurred in the period under the Adimab Assignment Agreement for a milestone payment that became due to Adimab in February 2021 upon the dosing of the first patient in a Phase 1 clinical trial evaluating adintrevimab.

The amount of this contingent payment was recognized as an IPR&D expense based on the nature of the associated assets acquired from Adimab on the date the milestone achievement became probable.

Selling, General and Administrative Expenses

September 30,

(Inception) to

September 30,

(in thousands)

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Total selling, general and administrative expenses

Selling, general and administrative expenses for the nine months ended September 30, 2021 were $21.9 million, compared to $0.9 million for the period from June 3, 2020 (inception) to September 30, 2020.

Personnel-related costs increased by $11.7 million due to increased hiring to support general and administrative functions.

Personnel-related costs, including salaries, bonuses, benefits and other compensation-related costs, were $5.7 million and stock-based compensation expense was $6.3 million for the nine months ended September 30, 2021, compared to personnel-related costs of $0.2 million and stock-based compensation expense of less than $0.1 million for the period from June 3, 2020 (inception) to September 30, 2020.

The increase of $8.5 million in professional services and consultant fees and the increase of $0.8 million in other expenses is attributable to costs incurred as we began operating as a public company, including insurance premiums and other fees.

Other income was less than $0.1 million for the nine months ended September 30, 2021 and $0 for the period from June 3, 2020 (inception) to September 30, 2020, consisting of primarily of interest earned on invested cash balances.

Selling, general and administrative expenses were $8.7 million for the three months ended March 31, 2022, compared to $3.7 million for the three months ended March 31, 2021.

The $5.0 million increase in selling, general and administrative expenses was primarily due to the following:

Personnel-related costs, including salaries, bonuses, benefits and other compensation-related costs were $2.8 million and stock-based compensation expense was a credit of $1.2 million for the three months ended March 31, 2022, compared to personnel-related costs of $1.2 million and stock-based compensation expense of $0.3 million for the three months ended March 31, 2021.

The increase in personnel-related costs of $0.1 million was primarily due to the hiring of additional individuals to support our operations as we began operating as a public company, partially offset by the reversal of stock-based compensation expense related to the forfeiture of stock options in conjunction with the resignation of our former Chief Executive Office and President.

The increase in professional services and consultant fees of $4.7 million was primarily attributable to costs incurred as we began operating as a public company, including director and officer insurance premiums, and other fees.

Other costs remained relatively consistent between periods.

Other Income (Expense), Net

Other income (expense), net was less than $0.1 million for the three months ended March 31, 2022, consisting primarily of interest earned on invested cash balances.

There was no other income (expense), net recognized during the three months ended March 31, 2021.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception in June 2020, we have not generated any revenue from any sources, including from product sales, and have incurred significant operating losses and negative cash flows from operations.

We expect to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our product candidates.

To date, we have funded our operations with $467.7 million of net proceeds from sales of our preferred stock, and most recently, with $330.9 million of net proceeds from our IPO completed in August 2021.

As of September 30, 2021, we had cash, cash equivalents and marketable securities of $666.3 million.

In August 2021, we completed our IPO pursuant to which we issued and sold 20,930,000 shares of our common stock, including 2,730,000 shares of common stock pursuant to the full exercise of the underwriters’

Since our inception in June 2020, we have not generated any revenue from any sources, including from product sales or government supply contracts, and have incurred significant operating losses and negative cash flows from operations.

We expect to incur substantial expenses and operating losses for the foreseeable future as we advance the clinical development of our product candidates.

To date, we have financed our operations with net proceeds of $464.7 million from sales of our preferred stock, and most recently, with net proceeds from our IPO in August 2021, in which we issued and sold 20,930,000 shares of our common stock, including 2,730,000 shares of common stock pursuant to the full exercise of the underwriters’

option to purchase additional shares.

We received aggregate net proceeds from our IPO of $327.5 million, after deducting underwriting discounts and commissions and offering expenses payable by us.

As of March 31, 2022, we had cash and cash equivalents of $532.2 million.

The following table summarizes our sources and uses of cash for each of the periods presented:

September 30,

(Inception) to

September 30,

(in thousands)

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by investing activities

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net decrease in cash and cash equivalents

Operating Activities

During the nine months ended September 30, 2021, operating activities used $111.5 million of cash, primarily due to our net loss of $143.7 million, partially offset by non-cash stock-based compensation expense of $9.9 million and net cash provided by changes in our operating assets and liabilities of $21.7 million.

Net cash provided by changes in our operating assets and liabilities consisted of a $8.9 million increase in accounts payable and a $30.1 million increase in accrued expenses, partially offset by a $11.3 million increase in prepaid expenses and other current assets and a $6.0 million increase in other non-current assets.

The increases in accounts payable and accrued expenses were primarily due to amounts owed to vendors in connection with our research and development activities, including increased external costs associated with clinical trials and manufacturing, as well as increases in accrued employee bonuses.

The increase in prepaid expenses and other current assets and other non-current assets was primarily due to prepayments for external research and development activities and prepayments for insurance premiums.

During the period from June 3, 2020 (inception) to September 30, 2020, operating activities used $1.1 million of cash, primarily due to our net loss of $48.1 million, offset by non-cash acquired IPR&D of $39.9 million and net cash provided by changes in our operating assets and liabilities of $7.0 million.

Net cash provided by changes in our operating assets and liabilities consisted of a $5.2 million increase in accounts payable and a $1.9 million increase in accrued expenses.

During the three months ended March 31, 2022, operating activities used $59.0 million of cash, primarily due to our net loss of $100.7 million, partially offset by non-cash charges of $2.3 million.

Net cash provided by changes in our operating assets and liabilities consisted of a $20.3 million increase in accrued expenses and a $12.9 million increase in accounts payable, partially offset by a $3.2 million decrease in prepaid expenses and other current assets and a $3.1 million decrease in other non-current assets.

The increases in accounts payable and accrued expenses were primarily due to increased external costs associated with our research and development activities, including clinical trials and clinical and commercial manufacturing .

During the three months ended March 31, 2021, operating activities used $23.7 million of cash, primarily resulting from our net loss of $38.7 million, partially offset by non-cash charges of $0.6 million and net cash provided by changes in our operating assets and liabilities of $14.4 million.

Net cash provided by changes in our operating assets and liabilities for the three months ended March 31, 2021 consisted primarily of a $12.4 million increase in accrued expenses and a $3.2 million increase in accounts payable, both partially offset by a $1.2 million increase in prepaid expenses and other current assets.

The increases in accounts payable, accrued expenses and prepaid expenses were primarily due to increased external costs associated with our research and development activities, including clinical trials and manufacturing.

In all periods presented, other changes in prepaid expenses and other current assets, accounts payable, accrued expenses and other liabilities not described above were generally due to growth in our business, the advancement of our research programs, and the timing of vendor invoicing and payments.

Investing Activities

Net cash used in investing activities during the nine months ended September 30, 2021 consisted of $188.6 million in investment purchases.

We had no cash used in or provided by investing activities for the period from June 3, 2020 (inception) to September 30, 2020.

Net cash provided by investing activities during the three months ended March 31, 2022 consisted of $49.0 million in maturities of marketable securities.

We had no cash used in or provided by investing activities for the three months ended March 31, 2021.

Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2021 consisted of $328.3 million from sales of our common stock and $335.2 million of net proceeds from the issuance of our Series C Preferred Stock in April 2021.

Net cash provided by financing activities from June 3, 2020 (inception) to September 30, 2020 consists of $49.7 million from the issuance of our Series A preferred stock in July 2020.

Net cash provided by financing activities during the three months ended March 31, 2022 primarily consisted of less than $0.1 million from exercises of stock options.

We had no cash used in or provided by financing activities for the three months ended March 31, 2021.

Funding Requirements

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the non-clinical and preclinical studies and the current and future clinical trials of our product candidates.

Our expenses could increase in connection with our ongoing activities, particularly as we advance the non-clinical and preclinical studies and the current and future clinical trials of our product candidates, including any associated manufacturing activities, and potential commercialization efforts .

Our funding requirements and timing and amount of our operating expenditures will depend on many factors, including:

the rate of progress in the development of AGD20 and our other product candidates;

the scope, progress, results and costs of non-clinical studies, preclinical development, laboratory testing and clinical trials for ADG20 and future product candidates and associated development programs;

the rate of progress in the development of adintrevimab and our other product candidates;

the scope, progress, results and costs of discovery, non-clinical studies, preclinical development, laboratory testing and clinical trials for adintrevimab and future product candidates and associated development programs;

the extent to which we develop, in-license or acquire other product candidates and technologies in our pipeline;

the scope, progress, results and costs as well as timing of process development and manufacturing scale-up and validation activities associated with ADG20 and our future product candidates and other programs as we advance them through preclinical and clinical development;

the scope, progress, results and costs of manufacturing and validation activities associated with adintrevimab and with the development and manufacturing of our future product candidates and other programs as we advance them through preclinical and clinical development;

the number and development requirements of product candidates that we may pursue;

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our headcount growth and associated costs as we expand our research and development capabilities and establish a commercial infrastructure;

the timing and costs of securing sufficient capacity for commercial supply of our product candidates, or the raw material components thereof;

the timing and costs of securing sufficient capacity for clinical and commercial supply of our potential future product candidates, or the raw material components thereof;

the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval or EUA;

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the progression of the COVID-19 pandemic and emergence of potential outbreaks of other coronaviruses, including the impact of any business interruptions to our operations or to those of our contract manufacturers, suppliers or other vendors resulting from the COVID-19 pandemic or other similar public health crises.

As of November 15, 2021, we believe that our existing cash, cash equivalents and marketable securities, including the net proceeds from our IPO, will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2023.

As of May 13, 2022, we believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the second half of 2024.

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

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, government or private-party grants, debt financings, collaborations, strategic alliances and licensing arrangements.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, ownership interest will be diluted, and the terms of such securities may include liquidation or other preferences and anti-dilution protections that adversely affect as a common stockholders’

To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of such securities may include liquidation or other preferences and anti-dilution protections that adversely affect your rights as a common stockholder.

Additional debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring debt, making acquisitions or capital expenditures or declaring dividends, which could adversely constrain our ability to conduct our business, and may require the issuance of warrants, which could potentially dilute your ownership interest.

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Contractual Obligations and Commitments

There have been no material changes to our contractual obligations from those described in the Prospectus.

During the three months ended March 31, 2022, there were no material changes to our contractual obligations from those described in the 2021 Form 10-K.

For additional information, see Note 8 to our condensed consolidated financial statements appearing in this Quarterly Report on Form 10-Q.

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The preparation of our financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, revenue, costs and expenses, and related disclosures.

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates”

in our Prospectus.

Our critical accounting policies and estimates are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates”

in our 2021 Form 10-K.

If actual results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our reported financial condition and results of operations could be materially affected.

There have been no significant changes to our critical accounting policies from those described in the Prospectus.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission.

There have been no significant changes to our critical accounting policies and estimates from those described in the 2021 Form 10-K, except as disclosed in Note 2 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations and cash flows is disclosed in Note 2 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Internal Control over Financial Reporting

We identified a material weakness in our internal control over financial reporting that existed as of September 30, 2021.

See Item 4, Controls and Procedures.

If we are unable to remediate this material weakness, or if we identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business.

Emerging Growth Company Status

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We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item .

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