What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-08 · 60 added, 41 removed, 153 unchanged (40% of the section changed)

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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 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).

We are an innovative clinical-stage biopharmaceutical company developing a broad pipeline of novel immunotherapies by applying our proprietary technologies to our Tumor Activated T Cell Engager (TRACTr), Tumor Activated Immunomodulator (TRACIr), and Adaptive Immune Response Modulator (ARM) platforms.

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.

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The first patient for this trial was dosed in April 2023 and in February 2024 we announced positive early data for JANX008 that displayed anti-tumor activity in multiple tumor types with low-grade CRS and predominantly low-grade TRAEs.

We are also generating a number of unnamed TRACTr and TRACIr programs for potential future development, some of which are at development candidate stage or later.

We are currently assessing priorities in our preclinical pipeline.

The Adaptive Immune Response Modulator (ARM) platform builds upon our expertise to redesign bispecific TCEs to overcome the limitations of conventional TCEs in autoimmune diseases and oncology.

This platform aims to create differentiated product candidates that have a large safety window, off-the-shelf format positioning for higher dosing, rapid development and potential for improved performance.

The lead program, a CD19-ARM, has displayed rapid, deep and durable B-cell depletion in periphery and tissues with a prolonged memory B cell reset while maintaining a large safety window in non-human primates, supporting a potentially differentiated profile.

We are also generating a number of additional TRACTr, TRACIr and ARM programs for potential future development.

We were incorporated in June 2017.

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

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 were $57.4 million and $20.7 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, we had an accumulated deficit of $295.1 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.

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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.

If other banks and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our existing cash, cash equivalents and investments may be threatened and could have a material adverse effect on our business and financial condition.

Inflation generally affects us by increasing our salaries and fees paid to third-party contract service providers.

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

We recognized $0 and $10.1 million of revenue under the Merck Agreement for the six months ended June 30, 2025 and 2024, respectively.

Research and Development

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Results of Operations

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

Three Months Ended March 31,

Comparison of the Three Months Ended June 30, 2025 and 2024 (in thousands)

Three Months Ended June 30,

Collaboration revenue

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Collaboration Revenue

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.

Collaboration revenues were $0 and $8.9 million for the three months ended June 30, 2025 and 2024, respectively.

The decrease of $8.9 million was primarily due to the achievement of a developmental milestone related to the First Collaboration Target under the Merck Agreement in June 2024 and 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 March 31, 2025 and 2024 (in thousands):

Three Months Ended March 31,

The following table summarizes our direct and indirect research and development expenses for the three months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30,

Direct costs:

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Total research and development expenses

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 March 31, 2025 and 2024.

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 $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.

Research and development expenses were $34.7 million and $14.9 million for the three months ended June 30, 2025 and 2024, respectively.

The increase of $19.8 million was primarily due to increases in preclinical stage programs and other direct unallocated costs of $10.3 million, indirect costs of $5.0 million, direct costs related to the development of JANX007 of $4.2 million and direct costs related to the development of JANX008 of $0.3 million.

General and Administrative Expense

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.

General and administrative expenses were $10.5 million and $7.8 million for the three months ended June 30, 2025 and 2024, respectively.

The increase of $2.7 million was primarily due to increases in stock-based compensation of $2.0 million, other general and administrative expenses of $0.4 million and consulting and professional fees of $0.3 million.

Other income was $11.3 million and $7.9 million for the three months ended June 30, 2025 and 2024, respectively.

The increase of $3.4 million was due to an increase in cash and cash equivalents and short-term investments resulting in increased interest income.

Comparison of the Six Months Ended June 30, 2025 and 2024 (in thousands)

Six Months Ended June 30,

Collaboration revenue

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Collaboration Revenue

Collaboration revenues were $0 and $10.1 million for the six months ended June 30, 2025 and 2024, respectively.

The decrease of $10.1 million was primarily due to the achievement of a developmental milestone related to the First Collaboration Target under the Merck Agreement in June 2024 and 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 six months ended June 30, 2025 and 2024 (in thousands):

Six Months Ended June 30,

Direct costs:

Preclinical stage programs and other direct unallocated costs

Total direct costs

Indirect costs

Total research and development expenses

Research and development expenses were $59.7 million and $29.0 million for the six months ended June 30, 2025 and 2024, respectively.

The increase of $30.7 million was primarily due to increases in preclinical stage programs and other direct unallocated costs of $14.9 million, indirect costs of $9.5 million, direct costs related to the development of JANX007 of $5.8 million and direct costs related to the development of JANX008 of $0.5 million.

General and Administrative Expense

General and administrative expenses were $20.3 million and $15.2 million for the six months ended June 30, 2025 and 2024, respectively.

The increase of $5.1 million was primarily due to increases in stock-based compensation of $4.1 million, other general and administrative expenses of $0.7 million and consulting and professional fees of $0.3 million.

Other income was $22.6 million and $13.3 million for the six months ended June 30, 2025 and 2024, respectively.

The increase of $9.3 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 March 31, 2025, we had cash, cash equivalents, restricted cash and short-term investments of $1.01 billion.

As of June 30, 2025, we had cash, cash equivalents, restricted cash and short-term investments of $996.8 million.

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

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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.

As of June 30, 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.

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

Three Months Ended March 31,

Six Months Ended June 30,

Net cash provided by (used in):

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Financing activities

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

Net decrease in cash, cash equivalents and restricted cash

Operating Activities

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.

Net cash used in operating activities of $40.8 million for the six months ended June 30, 2025 was primarily due to our net loss of $57.4 million and a change in operating assets and liabilities and other non-cash charges of $5.1 million, adjusted for $21.7 million of stock-based compensation expense.

Net cash used in operating activities of $24.9 million for the six months ended June 30, 2024 was primarily due to our net loss of $20.7 million and a change in operating assets and liabilities and other non-cash charges of $15.5 million, adjusted for $11.3 million of stock-based compensation expense.

Investing Activities

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.

Net cash used in investing activities of $338.8 million for the six months ended June 30, 2025 was primarily due to $338.0 million of net purchases of short-term investments and by our purchase of property and equipment of $0.8 million.

Net cash used in investing activities of $304.6 million for the six months ended June 30, 2024 was primarily due to $304.3 million of net purchases of short-term investments and by our purchase of property and equipment of $0.3 million.

Financing Activities

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.

Net cash provided by financing activities of $1.5 million for the six months ended June 30, 2025 was primarily due to proceeds from stock option exercises and shares purchased under our employee stock purchase plan of $1.8 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 $324.9 million for the six months ended June 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 purchased under our employee stock purchase plan of $4.8 million.

Funding Requirements

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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.

The Torrey Plaza Lease commenced in July 2022.

The Torrey Plaza Lease

commenced in July 2022.

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.

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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 February 27, 2025.

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

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