What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2024-11-06 · 44 added, 72 removed, 150 unchanged (44% of the section changed)

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

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (Quarterly Report) and the audited financial statements and related notes thereto as of and for the year ended December 31, 2023 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (SEC), on March 8, 2024.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (Quarterly Report) and the audited financial statements and related notes thereto as of and for the year ended December 31, 2024 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (SEC), on February 27, 2025.

Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties.

10 unchanged sentences

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 February 2024 we announced updated interim clinical data for JANX007 which displayed meaningful PSA drops, a favorable safety profile, low-grade CRS, and PK, consistent with the TRACTr mechanism-of-action.

In December 2024, we announced updated interim clinical data for JANX007 which displayed meaningful and prolonged PSA drops, encouraging anti-tumor activity, a favorable safety profile including CRS and treatment-related adverse events (TRAEs) primarily limited to Cycle 1 and lower grades, and PK consistent with the TRACTr mechanism-of-action.

In May 2025, we provided updated results from the patients reported in December 2024 which displayed a consistent durability and safety profile that supported the initiation of Phase 1b expansion studies.

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 carcinoma, squamous cell carcinoma of the head and neck, non-small cell lung cancer, renal cell carcinoma, small cell lung cancer, pancreatic ductal adenocarcinoma and triple-negative breast cancer.

8 unchanged sentences

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

Our net losses were $48.8 million and $46.5 million for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, we had an accumulated deficit of $217.5 million.

Our net losses were $23.5 million and $14.8 million for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, we had an accumulated deficit of $261.3 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.

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.

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.

We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more product candidates, which will not be for many years, if ever.

11 unchanged sentences

Risks and Uncertainties

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

Global economic and business activities continue to face widespread geopolitical and macroeconomic uncertainties, including those associated with public health crises, bank failures, inflation and monetary supply shifts, recent and changing tariff policy announcements, tariffs, trade tensions and retaliatory measures by other countries, supply chain disruptions, recession risks and potential disruptions from the Russia-Ukraine conflict, the war in the Middle East and related sanctions.

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

4 unchanged sentences

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 $10.6 million and $5.6 million of revenue under the Merck Agreement for the nine months ended September 30, 2024 and 2023, respectively.

We recognized $0 and $1.3 million of revenue under the Merck Agreement for the three months ended March 31, 2025 and 2024, respectively.

Research and Development

26 unchanged sentences

Results of Operations

Comparison of the Three Months Ended September 30, 2024 and 2023 (in thousands)

Three Months Ended September 30,

Comparison of the Three Months Ended March 31, 2025 and 2024 (in thousands)

Three Months Ended March 31,

Collaboration revenue

5 unchanged sentences

Collaboration Revenue

Collaboration revenues were $0.4 million and $2.5 million for the three months ended September 30, 2024 and 2023, respectively.

Collaboration revenues were $0 and $1.3 million for the three months ended March 31, 2025 and 2024, respectively.

The decrease of $1.3 million was primarily due to the completion of our research activities under the Merck Agreement in August 2024.

Research and Development Expense

The following table summarizes our direct and indirect research and development expenses for the three months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended September 30,

The following table summarizes our direct and indirect research and development expenses for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended March 31,

Direct costs:

3 unchanged sentences

Total research and development expenses

IND applications for JANX007 and JANX008 were cleared by the U.S.

Investigational new drug (IND) applications for JANX007 and JANX008 were cleared by the U.S.

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 September 30, 2024 and 2023.

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

Research and development expenses were $18.6 million and $11.9 million for the three months ended September 30, 2024 and 2023, respectively.

Research and development expenses were $25.1 million and $14.1 million for the three months ended March 31, 2025 and 2024, respectively.

The increase of $11.0 million was primarily due to increases in direct costs related to the development of JANX007 of $1.6 million, direct costs related to the development of JANX008 of $0.2 million, preclinical stage programs and other direct unallocated costs of $4.6 million and indirect costs of $4.6 million.

General and Administrative Expense

General and administrative expenses were $17.7 million and $6.4 million for the three months ended September 30, 2024 and 2023, respectively.

The increase of $11.3 million was primarily due to increases in stock-based compensation of $10.0 million, consulting and professional fees of $0.9 million and other general and administrative expenses of $0.4 million.

Other income was $7.8 million and $4.2 million for the three months ended September 30, 2024 and 2023, respectively.

The increase of $3.6 million was due to an increased cash and cash equivalents balance resulting in increased interest income.

Comparison of the Nine Months Ended September 30, 2024 and 2023 (in thousands)

Nine Months Ended September 30,

Collaboration revenue

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Collaboration Revenue

Collaboration revenues were $10.6 million and $5.6 million for the nine months ended September 30, 2024 and 2023, respectively.

The increase of $5.0 million was primarily due to the achievement of a developmental milestone related to the First Collaboration Target under the Merck Agreement in June 2024 offset by 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 nine months ended September 30, 2024 and 2023 (in thousands):

Nine Months Ended September 30,

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 nine months ended September 30, 2024 and 2023.

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

Research and development expenses were $47.6 million and $42.7 million for the nine months ended September 30, 2024 and 2023, respectively.

The increase of $4.9 million was primarily due to increases in direct costs related to the development of JANX007 of $4.4 million, direct costs related to the development of JANX008 of $0.4 million and indirect costs of $2.3 million, offset by decreases in preclinical stage programs and other direct unallocated costs of $2.4 million.

General and Administrative Expense

General and administrative expenses were $32.8 million and $19.8 million for the nine months ended September 30, 2024 and 2023, respectively.

The increase of $13.0 million was primarily due to increases in stock-based compensation of $10.7 million, consulting and professional fees of $1.4 million and other general and administrative expenses of $0.9 million.

Other income was $21.0 million and $10.3 million for the nine months ended September 30, 2024 and 2023, respectively.

The increase of $10.7 million was due to an increased cash and cash equivalents balance resulting in increased interest income.

General and administrative expenses were $9.8 million and $7.3 million for the three months ended March 31, 2025 and 2024, respectively.

The increase of $2.5 million was primarily due to increases in stock-based compensation of $2.1 million and other general and administrative expenses of $0.4 million.

Other income was $11.4 million and $5.4 million for the three months ended March 31, 2025 and 2024, respectively.

The increase of $6.0 million was due to an increase in cash and cash equivalents and short term investments resulting in increased interest income.

Liquidity and Capital Resources

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 September 30, 2024, we had cash, cash equivalents, restricted cash and short-term investments of $658.8 million.

As of March 31, 2025, we had cash, cash equivalents, restricted cash and short-term investments of $1.01 billion.

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

2 unchanged sentences

In February 2024, we delivered written notice to BofA that we were suspending and terminating the prospectus related to the shares of our common stock issuable pursuant to the terms of the Sale Agreement.

In May 2024, we filed a shelf registration statement on Form S-3 which included a new prospectus which covers the offering, issuance and sale of up to a maximum aggregate offering price of $150.0 million of our common under the Sale Agreement.

As of September 30, 2024, $150.0 million of common stock remained available for sale under the 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.

In May 2024, we filed a shelf registration statement on Form S-3ASR which included a new prospectus which covers the offering, issuance and sale of up to a maximum aggregate offering price of $150.0 million of our common under the Sale Agreement.

As of March 31, 2025, $150.0 million of common stock remained available for sale under the 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 at an exercise price of $0.001 per share.

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

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

In March 2024, we closed an underwritten offering of 5,397,301 shares of our common stock and pre-funded warrants to purchase 1,935,483 shares of common stock.

In March 2024, we closed an underwritten offering of 5,397,301 shares of our common stock and pre-funded warrants to purchase 1,935,483 shares of common stock at an exercise price of $0.001 per share.

The shares of common stock were sold at a price of $46.50 per share and the pre-funded common stock warrants were sold at a price of $46.499 per pre-funded common stock warrant, resulting in gross proceeds of $341.0 million.

Fees related to the offering included underwriting discounts, commissions, and offering expenses in the aggregate amount of $20.9 million, resulting in net proceeds of $320.1 million.

The registration statement on Form S-3ASR that we filed in May 2024 provides us with the ability to offer an unlimited amount of certain securities, including shares of our common stock, from time to time.

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

In December 2024, we closed an underwritten offering of 6,150,793 shares of our common stock and pre-funded warrants to purchase 238,095 shares of common stock at an exercise price of $0.001 per share.

The shares of common stock were sold at a price of $63.00 per share and the pre-funded common stock warrants were sold at a price of $62.999 per pre-funded common stock warrant, resulting in gross proceeds of $402.5 million.

Fees related to the offering included underwriting discounts, commissions, and offering expenses in the aggregate amount of $24.6 million, resulting in net proceeds of $377.9 million.

The following summarizes our cash flows for the periods indicated (in thousands):

Nine Months Ended September 30,

Three Months Ended March 31,

Net cash provided by (used in):

2 unchanged sentences

Financing activities

Net decrease in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Operating Activities

Net cash used in operating activities of $27.1 million for the nine months ended September 30, 2024 was primarily due to our net loss of $48.8 million and a change in operating assets and liabilities and other non-cash charges of $5.1 million, adjusted for $26.8 million of stock-based compensation expense.

Net cash used in operating activities of $40.7 million for the nine months ended September 30, 2023 was primarily due to our net loss of $46.5 million and a change in operating assets and liabilities and other non-cash charges of $9.7 million, adjusted for $15.5 million of stock-based compensation expense.

Net cash used in operating activities of $17.0 million for the three months ended March 31, 2025 was primarily due to our net loss of $23.5 million and a change in operating assets and liabilities and other non-cash charges of $4.2 million, adjusted for $10.7 million of stock-based compensation expense.

Net cash used in operating activities of $14.8 million for the three months ended March 31, 2024 was primarily due to our net loss of $14.8 million and a change in operating assets and liabilities and other non-cash charges of $5.6 million, adjusted for $5.6 million of stock-based compensation expense.

Investing Activities

Net cash used in investing activities of $291.9 million for the nine months ended September 30, 2024 was primarily due to $291.6 million of net purchases of short-term investments and by our purchase of property and equipment of $0.3 million.

Net cash used in investing activities of $52.3 million for the nine months ended September 30, 2023 was primarily due to $51.0 million of net purchases of short-term investments and by our purchase of property and equipment, primarily consisting of laboratory equipment of $1.3 million.

Net cash used in investing activities of $340.4 million for the three months ended March 31, 2025 was primarily due to $340.0 million of net purchases of short-term investments and by our purchase of property and equipment of $0.4 million.

Net cash used in investing activities of $113.7 million for the three months ended March 31, 2024 was primarily due to $113.5 million of net purchases of short-term investments and by our purchase of property and equipment of $0.2 million.

Financing Activities

Net cash provided by financing activities of $326.6 million for the nine months ended September 30, 2024 was primarily due to proceeds from the issuance of common stock and pre-funded common stock warrants, net of issuance costs, of $320.1 million and proceeds from stock option exercises and shares issued under our employee stock purchase plan (ESPP) of $6.5 million.

Net cash provided by financing activities of $58.7 million for the nine months ended September 30, 2023 was primarily due to proceeds from the issuance of common stock and pre-funded common stock warrants, net of issuance costs, of $56.5 million, and exercises of common stock options and from shares issued under our ESPP of $2.2 million.

Net cash provided by financing activities of $0.6 million for the three months ended March 31, 2025 was primarily due to proceeds from stock option exercises of $0.9 million, adjusted for issuance costs paid in connection with an underwritten offering in December 2024 of $0.3 million.

Net cash provided by financing activities of $322.2 million for the three months ended March 31, 2024 was primarily due to proceeds from the issuance of common stock and pre-funded common stock warrants, net of issuance costs, of $320.5 million, and exercises of common stock options of $1.7 million.

Funding Requirements

16 unchanged sentences

• 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 resulting from geopolitical and macroeconomic conditions, including recent and changing tariff policy announcements, tariffs, trade tensions and retaliatory measures by other countries, supply chain disruptions, recession risks, the military conflict in Ukraine and Russia, the war in the Middle East, epidemics and bank failures;

• the costs of operating as a public company.

9 unchanged sentences

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 Unaudited Condensed Financial Statements — Note 3 — Commitments and Contingencies” of this Quarterly Report for additional information.

See the section within

Item 1 of Part I, “Notes to Unaudited Condensed Financial Statements — Note 3 — Commitments and Contingencies” of this Quarterly Report for additional information.

In October 2021, we entered into a noncancelable agreement to lease office and laboratory space in San Diego, California (Torrey Plaza Lease) with aggregate payments of approximately $38.0 million over the 126-month term of the lease.

4 unchanged sentences

Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancellable obligations of our service providers, up to the date of cancellation.

Smaller Reporting Company, Emerging Growth Company and Non-Accelerated Filer status

We are an “emerging growth company” as defined in the Jumpstart our Business Startups Act of 2012 (JOBS Act), and are also a “smaller reporting company” as defined in the Exchange Act.

Accordingly, we have the ability to take advantage of several scaled disclosure accommodations in accordance with smaller reporting company and emerging growth company rules as defined by the SEC.

We will remain an emerging growth company, smaller reporting company and non-accelerated filer until December 31, 2024, after which time we will become a large accelerated filer.

We will need to reassess, as of June 30, 2025, whether we continue to qualify as a large accelerated filer for filings beyond the fiscal year ending December 31, 2025 and annually on June 30th thereafter.

Critical Accounting Policies and Estimates

6 unchanged sentences

Our critical accounting policies are those accounting principles generally accepted in the United States that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles.

For a description of our critical accounting policies, see Item 1 of Part I, “Notes to Unaudited Condensed Financial Statements — Note 1 — Organization and Summary of Significant Accounting Policies” 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 8, 2024.

There have not been any material changes to the critical accounting policies discussed therein during the nine months ended September 30, 2024.

Quantitative and Qualitative Disclosures About Market Risk.

Not applicable to a smaller reporting company.

There have not been any material changes to the critical accounting policies discussed therein during the three months ended March 31, 2025.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis