What changed in this filing

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Item 1. Financial Statements

2023-08-08 compared with 2023-05-09 · 198 added, 112 removed, 660 unchanged (32% of the section changed)

5 unchanged sentences

Cash and cash equivalents

Accounts receivable

Short-term investments

21 unchanged sentences

10,000,000 at

March 31, 2023 and December 31, 2022, respectively;

June 30, 2023 and December 31, 2022, respectively;

no shares issued

and outstanding at March 31, 2023 and December 31, 2022

and outstanding at June 30, 2023 and December 31, 2022

Common stock, $ 0.001 par value;

1 unchanged sentence

200,000,000 at

March 31, 2023 and December 31, 2022, respectively;

June 30, 2023 and December 31, 2022, respectively;

issued shares –

and 41,684,666 at March 31, 2023 and December 31, 2022, respectively;

and 41,684,666 at June 30, 2023 and December 31, 2022, respectively;

shares –

41,802,807 and 41,616,260 at March 31, 2023 and December 31, 2022,

41,867,536 and 41,616,260 at June 30, 2023 and December 31, 2022,

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Collaboration revenue

16 unchanged sentences

Unaudited Condensed Statements of Stockholders’

For the Three Months Ended March 31, 2023 and 2022

For the Six Months Ended June 30, 2023 and 2022

(in thousands, except share data)

3 unchanged sentences

Exercise of common stock options

Shares issued under employee stock purchase plan

Vesting of restricted shares

1 unchanged sentence

Unrealized gain on available-for-sale securities, net

Balance at March 31, 2023

Balance at June 30, 2023

Comprehensive

2 unchanged sentences

Exercise of common stock options

Shares issued under employee stock purchase plan

Vesting of restricted shares

1 unchanged sentence

Unrealized loss on available-for-sale securities, net

Balance at June 30, 2022

See accompanying notes.

Janux Therapeutics, Inc.

Unaudited Condensed Statements of Stockholders’

For the Three Months Ended June 30, 2023 and 2022

(in thousands, except share data)

Comprehensive

Stockholders’

Balance at March 31, 2023

Shares issued under employee stock purchase plan

Vesting of restricted shares

Stock-based compensation

Unrealized loss on available-for-sale securities, net

Balance at June 30, 2023

Comprehensive

Stockholders’

Balance at March 31, 2022

Exercise of common stock options

Shares issued under employee stock purchase plan

Vesting of restricted shares

Stock-based compensation

Unrealized loss on available-for-sale securities, net

Balance at June 30, 2022

See accompanying notes.

2 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities

3 unchanged sentences

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses and other current assets

9 unchanged sentences

Maturities of short-term investments

Net cash provided by (used in) investing activities

Net cash provided by investing activities

Cash flows from financing activities

10 unchanged sentences

Unrealized gain (loss) on available-for-sale securities, net

Operating lease liabilities arising from right-of-use assets

See accompanying notes.

6 unchanged sentences

Liquidity and Capital Resources

From its inception through March 31, 2023, the Company has devoted substantially all its efforts to organizing and staffing, business planning, raising capital and developing its TRACTr and TRACIr therapeutic platforms and clinical and preclinical assets.

The Company has incurred net losses and negative cash flows from operations since inception and had an accumulated deficit of $ 127.9 million as of March 31, 2023 .

From its inception through June 30, 2023, the Company has devoted substantially all its efforts to organizing and staffing, business planning, raising capital and developing its TRACTr and TRACIr therapeutic platforms and assets.

The Company has incurred net losses and negative cash flows from operations since inception and had an accumulated deficit of $ 145.4 million as of June 30, 2023 .

The Company has a limited operating history, has not generated any product revenue, and the sales and income potential of its business is unproven.

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Any of these actions could materially harm the Company’s business, results of operations and future prospects.

There can be no assurance that such financing will be available or will be at terms acceptable to the Company, especially in light of the COVID-19 pandemic and other public health crises, current financial conditions within the banking industry, including the effects of recent failures of financial institutions and liquidity levels, as well as recent or anticipated changes in interest rates and the inflationary macro environment.

There can be no assurance that such financing will be available or will be at terms acceptable to the Company, especially in light of COVID-19 and other public health crises, current financial conditions within the banking industry, including the effects of recent failures of financial institutions and liquidity levels, as well as recent or anticipated changes in interest rates and the inflationary macro environment.

Management believes the Company has sufficient capital to fund its operation for at least 12 months from the issuance date of these unaudited condensed financial statements.

Unaudited Interim Financial Information

The unaudited condensed financial statements as of March 31, 2023, and for the three months ended March 31, 2023 and 2022, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial statements.

The unaudited condensed financial statements as of June 30, 2023, and for the three and six months ended June 30, 2023 and 2022, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial statements.

These unaudited condensed financial statements have been prepared on the same basis as the Company’s audited financial statements and include all adjustments, consisting of only normal recurring accruals, which in the opinion of management are necessary to present fairly the Company’s financial position as of the interim date and results of operations for the interim periods presented.

35 unchanged sentences

Observable Inputs

As of March 31, 2023:

As of June 30, 2023:

Cash equivalents:

60 unchanged sentences

The following tables summarize short-term investments (in thousands):

As of March 31, 2023

As of June 30, 2023

Treasury securities

8 unchanged sentences

Commercial paper

The amortized cost and estimated fair value in the tables above exclu de $ 0.7 million and $ 0.7 million o f accrued interest receivable as of March 31, 2023 and December 31, 2022, respectively.

The amortized cost and estimated fair value in the tables above excl ude $ 1.5 million and $ 0.7 million o f accrued interest receivable as of June 30, 2023 and December 31, 2022, respectively.

Accrued interest receivable is included in prepaid expenses and other current assets in the accompanying balance sheets.

Contractual maturities of available-for-sale debt securities are as follows (in thousands):

As of March 31, 2023

As of June 30, 2023

Due in 1 Year or Less

14 unchanged sentences

Notes to Unaudited Condensed Financial Statements–(Continued)

As of March 31, 2023 , 38 out of 48 of our available-for-sale debt securities were in an aggregate gross unrealized loss position.

As of June 30, 2023, 40 out of 46 of our a vailable-for-sale debt securities were in an aggregate gross unrealized loss position.

The Company relies on both qualitative and quantitative factors to determine whether the unrealized loss for each available-for-sale debt security at any balance sheet date is due to a credit loss.

2 unchanged sentences

The Company considers the decline in market value for the securities to be primarily attributable to current economic conditions and interest rate adjustments, rather than credit-related factors and does not intend to sell any securities prior to maturity.

No allowance for credit losses has been recorded as of March 31, 2023 or December 31, 2022.

No allowance for credit losses has been recorded as of June 30, 2023 or December 31, 2022.

The following table summarizes our available-for-sale debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

As of March 31, 2023

As of June 30, 2023

Less Than 12 Months

1 unchanged sentence

Treasury securities

agency discount notes

Asset-backed securities

18 unchanged sentences

financial condition and generally does not require collateral.

As of March 31, 2023, and December 31, 2022, all of the Company’s accounts receivable, if any, relate to a single customer.

For the three months ended March 31, 2023 , all of the Company’s revenue related to a single customer.

As of June 30, 2023, and December 31, 2022, all of the Company’s accounts receivable, if any, relate to a single customer.

For the three and six months ended June 30, 2023 and 2022, all of the Company’s revenue related to a single customer.

Janux Therapeutics, Inc.

59 unchanged sentences

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities.

The Company has excluded weighted-average unvested shares of 49,457 shares and 307,765 shares from the weighted-average number of common shares outstanding for the three months ended March 31, 2023 and 2022, respectively.

Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods.

Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for potentially dilutive securities.

The Company has excluded weighted-average unvested shares of 26,987 shares, 197,515 shares, 38,160 shares and 252,335 shar es from the weighted-average number of shares of common stock outstanding for the three months ended June 30, 2023 and 2022 and six months ended June 30, 2023 and 2022, respectively.

Diluted net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock and dilutive common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods.

For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding as inclusion of the potentially dilutive securities would be anti-dilutive.

11 unchanged sentences

Computer equipment and software

Construction in progress

Assets not placed in service

Total property and equipment

28 unchanged sentences

The letter of credit amount is subject to a 50 % reduction subject to certain conditions on or following the date that is 54 months following the contractual lease commencement date.

Future minimum noncancelable operating lease payments as of March 31, 2023 are as follows (in thousands):

Future minimum noncancelable operating lease payments as of June 30, 2023 are as follows (in thousands):

2023 (remaining)

4 unchanged sentences

Operating lease liabilities, net of current portion

The Torrey Plaza lease had a remaining lease term of 9.8 years and a discount rate of 8 % as of March 31, 2023.

Operating lease expense included in the measurement of lease liabilities for the three months ended March 31, 2023 was $ 0.9 million.

Cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2023 was $ 0.3 million.

Operating lease expense and cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2022 were immaterial.

The Torrey Plaza lease had a remaining lease term of 9.6 years and a discount rate of 8 % as of June 30, 2023.

Operating lease expense included in the measurement of lease liabilities for the three and six months ended June 30, 2023 was $ 0.9 million and $ 1.7 million.

Cash paid for amounts included in the measurement of lease liabilities for the three and six months ended June 30, 2023 was $ 0.8 million and $ 1.1 million.

Operating lease expense included in the measurement of lease liabilities for the three and six months ended June 30, 2022 was $ 0.9 million and $ 1.0 million, respectively.

Cash paid for amounts included in the measurement of lease liabilities for the three and six months ended June 30, 2022 was immaterial.

Contingencies

1 unchanged sentence

The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

As of March 31, 2023 , the Company is not currently party to any material legal proceedings.

As of June 30, 2023, the Company is not currently party to any material le gal proceedings.

Related Party Transactions

6 unchanged sentences

Notes to Unaudited Condensed Financial Statements–(Continued)

Operating expense recognized by the Company under the 2021 Support Services Agreement for the three months ended March 31, 2023 was immaterial.

Operating expense recognized by the Company under the 2021 Support Services Agreement for the three months ended March 31, 2022 was as follows (in thousands):

Three Months Ended March 31, 2022

Operating expense recognized by the Company under the 2021 Support Services Agreement for the three and six months ended June 30, 2023 was immaterial.

Operating expense recognized by the Company under the 2021 Support Services Agreement for the three and six months ended June 30, 2022 was as follows (in thousands):

Three Months Ended

June 30, 2022

Six Months Ended

June 30, 2022

Research and development

6 unchanged sentences

The specific terms of any offering under the shelf registration statement are established at the time of such offering.

Additionally, in August 2022, the Company entered into an Open Market Sale Agreement SM (“Sale Agreement”) with Jefferies LLC (“Jefferies”) to sell shares of common stock, from time to time, through an “at the market offering”

In August 2022, the Company entered into an Open Market Sale Agreement SM (“Sale Agreement”) with Jefferies LLC (“Jefferies”) to sell shares of common stock, from time to time, through an “at the market offering”

program having an aggregate offering price of up to $ 100.0 million through which Jefferies would act as sales agent.

As of March 31, 2023, $ 100.0 million of common stock remained available for sale under the Sale Agreement.

On May 5, 2023 , the Company delivered written notice to Jefferies of its decision to terminate the Sale Agreement, which termination was effective immediately on the date of delivery.

In May 2023 , the Company terminated the Sale Agreement.

In May 2023, the Company entered into an ATM Equity Offering SM Sales Agreement (“New Sale Agreement”) with BofA Securities, Inc.

(“BofA”) to sell shares of common stock, from time to time, through an “at the market offering”

program having an aggregate offering price of up to $ 150.0 million through which BofA would act as sales agent.

There was no activity from the New Sale Agreement during the six months ended June 30, 2023.

As of June 30, 2023 , $ 150.0 million of common stock remained available for sale under the New Sale Agreement.

2017 Equity Incentive Plan

13 unchanged sentences

The number of shares reserved that were remaining under the 2017 Plan as of the effective date of the 2021 Plan, or 1,424,110 shares, were added to the shares initially reserved under the 2021 Plan upon its effectiveness and any future cancellations under the 2017 Plan will become available for future issuance under the 2021 Plan.

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

As of March 31, 2023 , there were 8,759,876 shares authorized for issuance under the 2021 Plan, inclusive of shares added from 2017 Plan cancellations.

Janux Therapeutics, Inc.

Notes to Unaudited Condensed Financial Statements–(Continued)

determined by the Company’s board of directors.

As of June 30, 2023, there wer e 8,759,876 shar es authorized for issuance under the 2021 Plan, inclusive of shares added from 2017 Plan cancellations.

A summary of the Company’s stock option activity under its Plans is as follows (in thousands, except share, per share data and years):

4 unchanged sentences

Forfeited or cancelled

Balance at March 31, 2023

Vested and expected to vest at March 31, 2023

Exercisable at March 31, 2023

The weighted-average grant date fair value per share of option grants for the three months ended March 31, 2023 and 2022 was $ 10.21 , and $ 14.02 , respectively.

The total intrinsic value of stock options exercised for the three months ended March 31, 2023 and 2022 was $ 1.5 million and $ 0.1 million, respectively.

As of March 31, 2023 , total unrecognized stock-based compensation cost associated with option grants was $ 52.7 million, which is expected to be recognized over a remaining weighted-average period of approximately 2.7 years.

Balance at June 30, 2023

Vested and expected to vest at June 30, 2023

Exercisable at June 30, 2023

The weighted-average grant date fair value per share of option grants for the six months ended June 30, 2023 and 2022 was $ 10.09 , and $ 12.65 , respectively.

The total intrinsic value of stock options exercised for the six months ended June 30, 2023 and 2022 was $ 1.5 million and $ 0.1 million, respectively.

As of June 30, 2023 , total unrecognized stock-based compensation cost associated with option grants was $ 49.3 million, which is expected to be recognized over a remaining weighted-average period of approximately 2.5 years.

The assumptions used in the Black-Scholes option pricing model to determine the fair value of stock option grants under the Plans were as follows:

Three Months Ended

Six Months Ended

Risk-free interest rate

3 unchanged sentences

83 % –

81 % –

Expected term (in years)

17 unchanged sentences

The ESPP permits eligible employees who elect to participate in an offering under the ESPP to have up to 15 % of their eligible earnings withheld, subject to certain limitations, to purchase shares of common stock pursuant to the ESPP.

The price of common stock purchased under the ESPP is equal to 85 % of the lower of the fair market value of the common stock at the commencement date of each offering period or the relevant date of purchase.

A total o f 466,000 shares of common stock were approved to be initially reserved for issuance under the ESPP.

In addition, the number of shares of common stock available for issuance under the ESPP

The price of common

Janux Therapeutics, Inc.

Notes to Unaudited Condensed Financial Statements–(Continued)

automatically increases on January 1 of each calendar year through January 1, 2031, in an amount equal to the lesser of (i) 1 % of the total number of shares of the Company’s common stock on the last day of the calendar month before the date of each automatic increase and (ii) 932,000 shares;

stock purchased under the ESPP is equal to 85 % of the lower of the fair market value of the common stock at the commencement date of each offering period or the relevant date of purchase.

A total o f 466,000 shares of common stock were approved to be initially reserved for issuance under the ESPP.

In addition, the number of shares of common stock available for issuance under the ESPP automatically increases on January 1 of each calendar year through January 1, 2031, in an amount equal to the lesser of (i) 1 % of the total number of shares of the Company’s common stock on the last day of the calendar month before the date of each automatic increase and (ii) 932,000 shares;

provided that before the date of any such increase, the Company’s board of directors may determine that such increase will be less than the amount set forth in clauses (i) and (ii).

In June 2021, employees began to enroll in the ESPP and the Company’s first offering period commenced.

For the three months ended March 31, 2023 and 2022, stock-based compensation expense related to the ESPP was immaterial.

As of March 31, 2023 , total unrecognized stock-based compensation expense related to the ESPP was $ 1.0 million, which is expected to be recognized over a remaining weighted-average period of approximately 1.4 years.

For the three and six months ended June 30, 2023, stock-based compensation expense related to t he ESPP was $ 0.4 million and $ 0.6 million, re spectively.

Stock-based compensation expense related to the ESPP for the three and six months ended June 30, 2022 was $ 0.2 million and $ 0.3 million, re spectively.

As of June 30, 2023 , total unrecognized stock-based compensation expense related to the ESPP was $ 0.6 million, which is expected to be recognized over a remaining weighted-average period of approximately 1.5 years.

Stock-Based Compensation Expense

1 unchanged sentence

Three Months Ended

Six Months Ended

Research and development

5 unchanged sentences

Vested shares

Balance at March 31, 2023

Balance at June 30, 2023

Common Stock Reserved for Future Issuance

8 unchanged sentences

In each case, once the Collaboration Targets are designated by Merck, they have the right to research, develop, make, have made, use, import, offer to sell, and sell compounds and any licensed products related thereto.

Merck selected the First Collaboration Target upon execution of the Merck Agreement and selected the Second Collaboration Target in May 2022.

Following the research term, Merck will have the sole right to research, develop, manufacture, and commercialize the licensed compounds and products directed against the Collaboration Targets.

Consideration in the Merck Agreement consists of (i) an $ 8.0 million non-refundable and non-creditable upfront fee, (ii) $ 8.0 million paid upon the selection of the Second Collaboration Target,

Merck selected the

Janux Therapeutics, Inc.

Notes to Unaudited Condensed Financial Statements–(Continued)

(iii) research program funding (iv) development and regulatory milestones, (v) commercial milestones, and (vi) royalty payments.

First Collaboration Target upon execution of the Merck Agreement and selected the Second Collaboration Target in May 2022.

Following the research term, Merck will have the sole right to research, develop, manufacture, and commercialize the licensed compounds and products directed against the Collaboration Targets.

Consideration in the Merck Agreement consists of (i) an $ 8.0 million non-refundable and non-creditable upfront fee, (ii) $ 8.0 million paid upon the selection of the Second Collaboration Target, (iii) research program funding (iv) development and regulatory milestones, (v) commercial milestones, and (vi) royalty payments.

Under the Merck Agreement, the Company is eligible to receive up to an aggregate of $ 142.5 million per Collaboration Target in milestone payments ($ 285.0 million collectively for both Collaboration Targets), contingent on the achievement of certain regulatory and development milestones.

6 unchanged sentences

Upon expiration of the agreement but not early termination thereof, and provided all payments due under the agreement have been made, Merck’s exclusive licenses under the agreement will become fully paid-up and perpetual.

The Company recognized $ 2.0 million and $ 1.6 million of revenue under the Merck Agreement for the three months ended March 31, 2023 and 2022, respectively.

As of March 31, 2023 , aggregate deferred revenue related to the Merck Agreement was $ 6.3 million, $ 4.9 million of which was classified as current.

The Company had $ 0.8 million and $ 0 of accounts receivable outstanding as of March 31, 2023 and December 31, 2022, respectively.

The Company recognized $ 1.1 million, $ 2.4 million, $ 3.1 million, and $ 4.0 million of revenue under the Merck Agreement for the three months ended June 30, 2023 and 2022 and six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023 , aggregate deferred revenue related to the Merck Agreement was $ 5.6 million, $ 5.3 million of which was classified as current.

The Company did no t have an accounts receivable balance outstanding as of June 30, 2023 and December 31, 2022.

The remaining performance obligations under the Merck Agreement relate to the Company’s conduct of research services and the Company’s participation in a joint research committee for the Second Collaboration Target.

The performance obligations related to the First Collaboration Target were completed as of March 31, 2023.

As it relates to the Second Collaboration Target, the Company estimates the remaining term of the research services, over which revenue will be recognized, to be 1.4 years as of March 31, 2023.

The performance obligations related to the First Collaboration Target were completed as of June 30, 2023 .

As it relates to the Second Collaboration Target, the Company estimates the remaining term of the research services, over which revenue will be recognized, to be 1.2 years as of June 30, 2023 .

Subsequent Events

In July 2023, the Company closed an underwritten offering of 4,153,717 shares of its common stock and pre-funded warrants to purchase 583,483 shares of common stock.

The shares of common stock were sold at a price of $ 12.46 per share and the pre-funded warrants were sold at a price of $ 12.459 per pre-funded warrant, resulting in gross proceeds of $ 59.0 million.

Fees related to the offering included u nderwriting discounts, commissions, and estimated offering expenses in the aggregate amount of $ 2.5 million, resulting in estimated net proceeds of $ 56.5 million.

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

6 unchanged sentences

Furthermore, past operating results are not necessarily indicative of results that may occur in future periods.

We are an innovative clinical-stage biopharmaceutical company developing a broad pipeline of novel immunotherapies by applying our proprietary technology to our Tumor Activated T Cell Engager (TRACTr) and Tumor Activated Immunomodulator (TRACIr) platforms to better treat patients suffering from cancer.

Our initial focus is on developing a novel class of T cell engagers (TCEs), and our lead product candidates are designed to target clinically validated drug targets.

While TCE therapeutics have displayed potent anti-tumor activity in hematological cancers, developing TCEs to treat solid tumors has faced challenges due to the limitations of prior TCE technologies, namely (i) overactivation of the immune system leading to cytokine release syndrome (CRS), (ii) on-target, healthy tissue toxicities and (iii) poor pharmacokinetics (PK) leading to short half-life.

We use our TRACTr platform technology to engineer product candidates designed to overcome these limitations.

We are developing a broad pipeline with lead programs targeting prostate-specific membrane antigen (PSMA), epidermal growth factor receptor (EGFR), and trophoblast cell surface antigen 2 (TROP2).

In October 2022, the first patient was dosed with our PSMA-TRACTr (JANX007) in our first-in-human Phase 1 clinical trial in patients with prostate cancer and we anticipate providing an interim clinical update from the trial in the second half of 2023.

In April 2023, the first patient was dosed with our EGFR-TRACTr (JANX008) in our first-in-human Phase 1 clinical trial in patients with advanced or metastatic solid tumors including colorectal cancer, squamous cell carcinoma of the head and neck, non-small cell lung cancer, and renal cell carcinoma.

For our TROP2-TRACTr we expect to select a development candidate in 2023.

We are also applying our proprietary technology to develop a TRACIr costimulatory bispecific product candidate (JANX009) against programmed death-ligand 1 (PD-L1) and Cluster of Differentiation 28 (CD28) designed to further enhance the anti-tumor activity of T cells, which we believe has the potential to be used as a single-agent or in combination with our current TRACTr pipeline and other modalities.

We expect to submit an Investigational New Drug application (IND) for this product candidate in 2023.

Based on data we have generated in non-human primates (NHPs), we believe our TRACTr and TRACIr product candidates have the potential for (i) significantly reduced risk of toxic CRS responses, (ii) reduced risk of on-target, healthy tissue toxicities, and (iii) improved half-life with once-weekly dosing in humans.

We are an innovative clinical-stage biopharmaceutical company developing tumor-activated immunotherapies for cancer.

Our proprietary technology has enabled the development of two distinct bispecific platforms:

Tumor Activated T Cell Engagers (TRACTr) and Tumor Activated Immunomodulators (TRACIr).

The TRACTr platform produces T cell engagers (TCEs) with a tumor antigen-binding domain and a CD3 T cell binding domain, while the TRACIr platform produces bispecifics with a tumor antigen-binding domain and a costimulatory CD28 binding domain.

The goal of both platforms is to provide cancer patients with safe and effective therapeutics that direct and guide their immune system to eradicate tumors while minimizing safety concerns.

Our initial focus is on developing a novel class of TRACTr therapeutics designed to target clinically validated TCE drug targets, but overcome liabilities associated with prior generations TCEs.

While TCE therapeutics have displayed potent anti-tumor activity in hematological cancers, developing TCEs to treat solid tumors has faced challenges due to the limitations of prior TCE technologies, namely (i) on-target healthy tissue immune activation that contributes to cytokine release syndrome (CRS) and healthy tissue toxicity and (ii) poor pharmacokinetics (PK) leading to short half-life.

Our first clinical candidate, JANX007, is a prostate-specific membrane antigen or PSMA-TRACTr and is being investigated in a Phase 1 clinical trial in adult subjects with metastatic castration-resistant prostate cancer (mCRPC).

In July 2023 we announced interim clinical data for JANX007 which displayed meaningful PSA drops in-line with what has been achieved by un-masked T cell engagers, and we believe displayed a differentiated profile with regards to CRS, healthy tissue toxicities and PK, consistent with the TRACTr mechanism-of-action.

Our second clinical candidate, JANX008, is an epidermal growth factor receptor or EGFR-TRACTr and is being studied in a Phase 1 clinical trial for the treatment of multiple solid cancers including colorectal cancer, squamous cell carcinoma of the head and neck, non-small cell lung cancer, and renal cell carcinoma.

The first patient for this trial was dosed in April 2023.

We are also developing a trophoblast cell surface antigen 2 or TROP2-TRACTr, a clinically validated anti-tumor target that is overexpressed in various cancer types, such as breast, lung, urothelial, endometrial, ovarian, prostate, pancreatic, gastric, colon, head and neck, and glioma.

We expect to select a TROP2-TRACTr development candidate in 2023.

Our TRACIr drug candidate, JANX009, is a programmed death-ligand 1 or PD-L1-TRACIr and is being investigated in preclinical studies for the treatment of solid tumors.

We expect to be ready to submit an Investigational New Drug application (IND) for this product candidate in 2023.

In addition to named programs, we are generating a number of unnamed TRACTr and TRACIr programs for potential future development.

With the additional capital raised from our underwritten offering in July 2023, we are well-positioned to advance another program into clinical trials and advance additional preclinical programs.

We are currently assessing priorities in our preclinical pipeline.

We were incorporated in June 2017.

2 unchanged sentences

We have never generated any revenue from product sales and have incurred net losses each year since we commenced operations.

We have funded our operations primarily with the net proceeds from the issuance of convertible promissory notes, the issuance of convertible preferred stock, the exercise of common stock options, proceeds from our initial public offering (IPO) and amounts received under a collaboration agreement with Merck Sharp & Dohme Corp.

We have funded our operations primarily with the net proceeds from the issuance of convertible promissory notes, the issuance of convertible preferred stock, the exercise of common stock options, proceeds from our initial public offering (IPO), the issuance of common stock and pre-funded warrants in public offerings and amounts received under a collaboration agreement with Merck Sharp & Dohme Corp.

We have incurred operating losses since our inception and have not yet generated any product revenue.

Our net losses were $17.5 million and $13.4 million for the three months ended March 31, 2023 and 2022, respectively.

As of March 31, 2023, we had an accumulated deficit of $127.9 million.

Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on a variety of factors including the timing and scope of our clinical and preclinical studies and our expenditures on other research and development activities and the timing of any revenue recognition under our collaboration agreement with Merck.

Our net losses were $35.0 million and $30.3 million for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, we had an accumulated deficit of $145.4 million.

timing of any revenue recognition under our collaboration agreement with Merck.

We expect our expenses and operating losses will increase substantially and that we will continue to incur significant losses for the foreseeable future as we conduct our ongoing and planned research and development activities and conduct preclinical studies and clinical trials, hire additional personnel, protect our intellectual property and incur additional costs associated with being a public company.

12 unchanged sentences

Risks and Uncertainties

Global economic and business activities continue to face widespread macroeconomic uncertainties, including those associated with the COVID-19 pandemic and other public health crises, bank failures, inflation and monetary supply shifts, recession risks and potential disruptions from the ongoing Russia-Ukraine conflict and related sanctions.

Global economic and business activities continue to face widespread macroeconomic uncertainties, including those associated with COVID-19 and other public health crises, bank failures, inflation and monetary supply shifts, recession risks and potential disruptions from the ongoing Russia-Ukraine conflict and related sanctions.

For example, in 2023, the Federal Deposit Insurance Corporation took control and was appointed receiver of certain financial institutions.

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To date, we have not generated any revenues from the commercial sale of any products, and we do not expect to generate revenues from the commercial sale of any products for the foreseeable future, if ever.

We recognized $2.0 million and $1.6 million of revenue under the Merck Agreement for the three months ended March 31, 2023 and 2022, respectively.

We recognized $3.1 million and $4.0 million of revenue under the Merck Agreement for the six months ended June 30, 2023 and 2022, respectively.

Research and Development

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Results of Operations

Comparison of the Three Months Ended March 31, 2023 and 2022

Three Months Ended March 31,

Comparison of the Three Months Ended June 30, 2023 and 2022

Three Months Ended June 30,

(in thousands)

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Collaboration Revenue

Collaboration revenues were $2.0 million and $1.6 million for the three months ended March 31, 2023 and 2022, respectively.

The increase of $0.4 million was due to an increase in full-time equivalent hours incurred in the performance of research services required under the Merck Agreement.

Collaboration revenues were $1.1 million and $2.4 million for the three months ended June 30, 2023 and 2022, respectively.

The decrease of $1.3 million was due to a decrease in full-time equivalent hours incurred in the performance of research services required under the Merck Agreement.

Research and Development Expense

The following table summarizes our direct and indirect research and development expenses for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

The following table summarizes our direct and indirect research and development expenses for the three months ended June 30, 2023 and 2022:

Three Months Ended June 30,

(in thousands)

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Food and Drug Administration (FDA) in May 2022 and January 2023, respectively.

As a result, we have separated direct costs for the development of JANX007 and JANX008 from preclinical stage programs and other direct unallocated costs for the three months ended March 31, 2023 and 2022.

We will further separate direct costs related to our other programs as future IND applications are cleared by the FDA.

These changes in presentation had no effect on net loss, total research and development expenses, stockholders' equity, or cash flows as previously reported.

Research and development expenses were $15.9 million and $10.2 million for the three months ended March 31, 2023 and 2022, respectively.

The increase of $5.7 million was primarily due to increases in indirect costs of $3.1 million, preclinical stage programs and other unallocated direct costs of $2.9 million and direct costs related to JANX007 of $0.6 million, offset by decreases in direct costs related to JANX008 of $0.9 million.

The increase in indirect costs was primarily due to personnel costs of $1.2 million, stock-based compensation expense of $0.7 million, and facilities and other costs of $1.2 million as operations grew in support of program advances.

Research and development expenses were $14.9 million and $14.1 million for the three months ended June 30, 2023 and 2022, respectively.

The increase of $0.8 million was primarily due to increases in indirect costs of $1.7 million and direct costs related to the development of JANX007 of $0.8 million, offset by decreases in direct costs related to the development of JANX008 of $1.3 million and preclinical stage programs and other unallocated direct costs of $0.4 million.

The increase in indirect costs was primarily due to personnel costs of $0.8 million, stock-based compensation expense of $0.4 million, and facilities and other costs of $0.5 million.

General and Administrative Expense

General and administrative expenses were $6.5 million and $4.9 million for the three months ended March 31, 2023 and 2022, respectively.

General and administrative expenses were $6.9 million and $5.5 million for the three months ended June 30, 2023 and 2022, respectively.

The increase of $1.4 million was primarily due to increases in stock-based compensation of $0.6 million, personnel and facilities related costs of $0.6 million and consulting and professional fees of $0.2 million.

Other income was $3.2 million and $0.4 million for the three months ended June 30, 2023 and 2022, respectively.

The increase of $2.8 million was due to the impact of increases in interest rates on our debt securities, resulting in increased interest income.

Comparison of the Six Months Ended June 30, 2023 and 2022

Six Months Ended June 30,

(in thousands)

Collaboration revenue

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Collaboration Revenue

Collaboration revenues were $3.1 million and $4.0 million for the six months ended June 30, 2023 and 2022, respectively.

The decrease of $0.9 million was due to a decrease in full-time equivalent hours incurred in the performance of research services required under the Merck Agreement.

Research and Development Expense

The following table summarizes our direct and indirect research and development expenses for the six months ended June 30, 2023 and 2022:

Six Months Ended June 30,

(in thousands)

Direct costs:

Preclinical stage programs and other direct unallocated costs

Total direct costs

Indirect costs

Total research and development expenses

IND applications for JANX007 and JANX008 were cleared by the FDA in May 2022 and January 2023, respectively.

As a result, we have separated direct costs for the development of JANX007 and JANX008 from preclinical stage programs and other direct unallocated costs for the six months ended June 30, 2023 and 2022.

We will further separate direct costs related to our other programs as future IND applications are cleared by the FDA.

These changes in presentation had no effect on net loss, total research and development expenses, stockholders' equity, or cash flows as previously reported.

Research and development expenses were $30.8 million and $24.3 million for the six months ended June 30, 2023 and 2022, respectively.

The increase of $6.5 million was primarily due to increases in indirect costs $4.8 million, preclinical stage programs and other unallocated direct costs of $2.5 million, direct costs related to the development of JANX007 of $1.4 million, offset by decreases in direct costs related to the development of JANX008 of $2.2 million.

The increase in indirect costs was primarily due to personnel costs of $2.0 million, facilities and other costs of $1.7 million and stock-based compensation expense of $1.1 million.

General and Administrative Expense

General and administrative expenses were $13.3 million and $10.5 million for the six months ended June 30, 2023 and 2022, respectively.

The increase of $2.8 million was primarily due to increases in stock-based compensation of $1.4 million and personnel and facilities related costs of $1.4 million.

Other income was $2.8 million and $0.1 million for the three months ended March 31, 2023 and 2022, respectively.

Other income was $6.1 million and $0.5 million for the six months ended June 30, 2023 and 2022, respectively.

The increase of $5.6 million was due to the impact of increases in interest rates on our debt securities, resulting in increased interest income.

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We have incurred net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses and negative cash flows for the foreseeable future.

As of March 31, 2023, we had cash, cash equivalents, restricted cash and short-term investments of $317.7 million.

As of June 30, 2023, we had cash, cash equivalents, restricted cash and short-term investments of $304.1 million.

Inclusive in this amount is $0.8 million of restricted cash that is not available for current use.

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The specific terms of any offering under the shelf registration statement are established at the time of such offering.

Additionally, in August 2022, we entered into an Open Market Sale Agreement SM (Sale Agreement) with Jefferies LLC (Jefferies) to sell shares of our common stock, from time to time, through an “at the market offering”

In August 2022, we entered into an Open Market Sale Agreement SM (Sale Agreement) with Jefferies LLC (Jefferies) to sell shares of our common stock, from time to time, through an “at the market offering”

program having an aggregate offering price of up to $100.0 million through which Jefferies would act as sales agent.

As of March 31, 2023, $100.0 million of common stock remained available for sale under the Sale Agreement.

On May 5, 2023, we delivered written notice to Jefferies of our decision to terminate the Sale Agreement, which termination was effective immediately on the date of delivery.

In May 2023, we terminated the Sale Agreement.

Additionally, in May 2023, we entered into an ATM Equity Offering SM Sales Agreement (New Sale Agreement) with BofA Securities, Inc.

(BofA) to sell shares of our common stock, from time to time, through an “at the market offering”

program having an aggregate offering price of up to $150.0 million through which BofA would act as sales agent.

As of June 30, 2023, $150.0 million of common stock remained available for sale under the New Sale Agreement.

In July 2023, we closed an underwritten offering of 4,153,717 shares of our common stock and pre-funded warrants to purchase 583,483 shares of common stock.

The shares of common stock were sold at a price of $12.46 per share and the pre-funded warrants were sold at a price of $12.459 per pre-funded warrant, resulting in gross proceeds of $59.0 million.

Fees related to the offering included underwriting discounts, commissions, and estimated offering expenses in the aggregate amount of $2.5 million, resulting in estimated net proceeds of $56.5 million.

The following summarizes our cash flows for the periods indicated:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

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Operating Activities

Net cash used in operating activities of $13.9 million for the three months ended March 31, 2023 was primarily due to our net loss of $17.5 million and a change in operating assets and liabilities and other non-cash charges of $1.9 million, adjusted for $5.5 million of stock-based compensation expense.

Net cash used in operating activities of $11.5 million for the three months ended March 31, 2022 was primarily due to our net loss of $13.4 million and a change in operating assets and liabilities and other non-cash charges of $2.1 million, adjusted for $4.0 million of stock-based compensation expense.

Net cash used in operating activities of $29.0 million for the six months ended June 30, 2023 was primarily due to our net loss of $35.0 million and a change in operating assets and liabilities and other non-cash charges of $5.0 million, adjusted for $11.0 million of stock-based compensation expense.

Net cash used in operating activities of $17.6 million for the six months ended June 30, 2022 was primarily due to our net loss of $30.3 million, adjusted for $8.4 million of stock-based compensation expense and a change in operating assets and liabilities and other non-cash charges of $4.3 million.

Investing Activities

Net cash used in investing activities of $8.7 million for the three months ended March 31, 2023 was primarily due to $8.4 million of net purchases of short-term investments and our purchase of property and equipment, primarily consisting of laboratory equipment of $0.3 million.

Net cash provided by investing activities of $31.1 million for the three months ended March 31, 2022 was primarily due to $32.1 million of net maturities of short-term investments offset by our purchase of property and equipment, primarily consisting of laboratory equipment of $1.0 million.

Net cash provided by investing activities of $9.1 million for the six months ended June 30, 2023 was primarily due to $10.0 million of net maturities of short-term investments offset by our purchase of property and equipment, primarily consisting of laboratory equipment of $0.9 million.

Net cash provided by investing activities of $40.1 million for the six months ended June 30, 2022 was primarily due to $42.0 million of net maturities of short-term investments offset by our purchase of property and equipment, primarily consisting of laboratory equipment of $1.9 million.

Financing Activities

Net cash provided by financing activities of $1.6 million for the three months ended March 31, 2023 was due to proceeds from stock option exercises.

Net cash provided by financing activities for the three months ended March 31, 2022 was immaterial.

Net cash provided by financing activities of $2.1 million for the six months ended June 30, 2023 was primarily due to proceeds from stock option exercises and proceeds from shares issued under our employee stock purchase plan.

Net cash provided by financing activities of $0.3 million for the six months ended June 30, 2022 was primarily due to proceeds from shares issued under our employee stock purchase plan.

Funding Requirements

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

We have based this estimate

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

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

Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain.

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our costs associated with expanding our facilities or building out our laboratory space;

the effects of the disruptions to and volatility in the credit and financial markets in the United States and worldwide from the COVID-19 pandemic or other epidemics;

the effects of the disruptions to and volatility in the credit and financial markets in the United States and worldwide from COVID-19 or other epidemics;

the costs of operating as a public company.

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We have the right (but not the obligation) to buy out our remaining royalty obligations with respect to each WuXi Biologics Licensed Product by paying WuXi Biologics a one-time payment in an amount ranging from low single digit million dollars to a maximum of $15.0 million (Buyout Option).

The royalty obligations will remain in

effect during the term of the Cell Line License Agreement so long as we have not exercised the Buyout Option.

The royalty obligations will remain in effect during the term of the Cell Line License Agreement so long as we have not exercised the Buyout Option.

See the section within Item 1 of Part I, “Notes to Condensed Financial Statements —

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Organization and Summary of Significant Accounting Policies”

of this Quarterly Report and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations —

of this Quarterly Report and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations —

Critical Accounting Policies and Estimates”

contained in our Annual Report on Form 10-K, filed with the SEC on March 10, 2023.

There have not been any material changes to the critical accounting policies discussed therein during the three months ended March 31, 2023.

There have not been any material changes to the critical accounting policies discussed therein during the three months ended June 30, 2023.

Quantitative and Qualitative Disclosures About Market Risk.

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

What changed 10-Q

Item 1. Financial Statements