7 unchanged sentences
Consolidated Statements of Operations and Comprehensive Loss
−Removed: Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)
+Added: Consolidated Statements of Stockholders’ Equity
Consolidated Statements of Cash Flows
4 unchanged sentences
We have audited the accompanying consolidated balance sheets of Lyell Immunopharma, Inc.
−Removed: (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).
+Added: (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.
generally accepted accounting principles.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
1 unchanged sentence
Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
−Removed: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
+Added: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
+Added: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of mate rial misstatement, whether due to error or fraud.
+Added: The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
+Added: As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
+Added: Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
2 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical Audit Matter
−Removed: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
+Added: Critical Audit Matters
+Added: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
−Removed: The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Accrued clinical expenses
1 unchanged sentence
During 2024, the Company incurred $171.6 million of research and development expenses and accrued $9.4 million for research and development expenses as of December 31, 2024, which includes clinical expenses.
−Removed: As described in Note 2 to the consolidated financial statements, clinical expenses are a component of research and development expense.
+Added: As described in Notes 2 and 10 to the consolidated financial statements, clinical expenses are a component of research and development expense.
The Company accrues and expenses clinical trial services performed by third parties based upon actual work completed in accordance with agreements established with its service providers.
3 unchanged sentences
How We Addressed the Matter in Our Audit
−Removed: We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the completeness and measurement of accrued clinical expenses.
To test the accrued clinical expenses, our audit procedures included, among other things, testing the accuracy and completeness of the underlying data used in the estimate, inspecting contracts with third-party service providers and obtaining information directly from third parties.
+Added: Impairment of long-lived assets
+Added: Description of the Matter
+Added: As discussed in Notes 2 and 5 to the consolidated financial statements, the Company’s long-lived assets are assessed for recoverability whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.
+Added: Recoverability is measured by comparison of the carrying amount of an asset group to the future net undiscounted cash flows that the assets are expected to generate.
+Added: If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds the fair value of the asset group.
+Added: The Company concluded that the carrying value of the asset group was not recoverable as it exceeded the future undiscounted cash flows the assets are expected to generate from their use and eventual disposition over the remaining useful life of the Company’s primary asset.
+Added: The Company applied a discounted cash flow method to estimate the fair values of their asset group.
+Added: As a result, the Company recorded an impairment charge of $51.3 million relating to their right‑of‑use assets and related leasehold improvements as of December 31, 2024.
+Added: Auditing the Company’s impairment model was challenging due to the subjective assumptions of market rental rates used as an input in determining the fair value of the right-of-use assets and related leasehold improvements.
+Added: How We Addressed the Matter in Our Audit
+Added: To test the Company’s accounting for the impairment of the asset group, our audit procedures included, among others, utilizing our valuation specialists to assist in evaluating the reasonableness of the Company’s valuation methodology and the market rental rate assumptions, performing an evaluation of market rental rates by benchmarking to other properties of similar type and within the geographic areas, and testing the completeness and accuracy of the inputs within the model.
/s/ Ernst & Young LLP
1 unchanged sentence
San Mateo, California
−Removed: February 28, 2024
+Added: March 11, 2025
Lyell Immunopharma, Inc.
28 unchanged sentences
Success payment liabilities
+Added: Contingent consideration payable
Total current liabilities
15 unchanged sentences
1,727,610 1,657,133
−Removed: Accumulated other comprehensive loss
−Removed: ( 94 ) ( 7,599 )
+Added: Accumulated other comprehensive income (loss)
Accumulated deficit
18 unchanged sentences
( 3,309 ) ( 2,790 ) ( 4,754 )
+Added: Acquired in-process research and development
+Added: Impairment of long-lived assets
Total operating expenses
4 unchanged sentences
24,068 23,453 7,053
−Removed: Other income (expense), net
+Added: Other income, net
4,694 1,846 1,887
Impairment of other investments ( 13,001 ) ( 12,923 ) ( 5,000 )
−Removed: Total other income (loss), net 12,376 3,940 ( 35,443 )
+Added: Total other income, net
15,761 12,376 3,940
+Added: ( 342,994 ) ( 234,632 ) ( 183,118 )
Other comprehensive loss:
7 unchanged sentences
261,480 250,983 247,080
−Removed: (1) Includes related-party revenue of zero , $ 84,653 and $ 10,509 for the years ended December 31, 2023, 2022 and 2021, respectively.
+Added: (1) Includes related-party revenue of zero for both the years ended December 31, 2024 and 2023 and $ 84,653 for the year ended December 31, 2022.
The accompanying notes are an integral part of these consolidated financial statements.
Lyell Immunopharma, Inc.
−Removed: Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)
+Added: Consolidated Statements of Stockholders’ Equity
(in thousands)
−Removed: Convertible Preferred Stock
Common Stock Additional
2 unchanged sentences
Total Stockholders’
−Removed: (Deficit) Equity
−Removed: Shares Amount Shares Amount
+Added: Shares Amount
Balance as of December 31, 2021
242,738 $ 24 $ 1,515,748 $ ( 1,623 ) $ ( 584,362 ) $ 929,787
−Removed: Proceeds from initial public offering, net of $ 33,198 in issuance costs
−Removed: — — 25,000 2 391,800 — — 391,802
−Removed: Conversion of convertible preferred stock to common stock ( 194,474 ) ( 1,010,968 ) 194,474 20 1,010,948 — — 1,010,968
−Removed: Issuance of common stock upon exercise of stock options — — 2,750 — 9,442 — — 9,442
Stock-based compensation 2,600 — 81,924 — — 81,924
+Added: Issuance of common stock upon exercise of stock options
+Added: 3,601 1 9,576 — — 9,577
+Added: Issuance of common stock under employee stock purchase plan 475 — 1,519 — — 1,519
+Added: Issuance of common stock in connection with restricted stock units, net of tax 153 — ( 461 ) — — ( 461 )
Other comprehensive loss — — — ( 5,976 ) — ( 5,976 )
2 unchanged sentences
249,567 $ 25 $ 1,608,306 $ ( 7,599 ) $ ( 767,480 ) $ 833,252
+Added: Stock-based compensation — — 47,084 — — 47,084
Issuance of common stock upon exercise of stock options
2 unchanged sentences
Issuance of common stock in connection with restricted stock units, net of tax 408 — ( 457 ) — — ( 457 )
−Removed: Stock-based compensation — — 2,600 — 81,924 — — 81,924
−Removed: Other comprehensive loss — — — — — ( 5,976 ) — ( 5,976 )
+Added: Other comprehensive income
+Added: — — — 7,505 — 7,505
Net loss — — — — ( 234,632 ) ( 234,632 )
1 unchanged sentence
253,958 $ 25 $ 1,657,133 $ ( 94 ) $ ( 1,002,112 ) $ 654,952
+Added: Stock-based compensation
+Added: — — 33,144 — — 33,144
Issuance of common stock upon exercise of stock options
2 unchanged sentences
Issuance of common stock in connection with restricted stock units, net of tax 1,217 — ( 76 ) — — ( 76 )
−Removed: Stock-based compensation
+Added: Issuance of common stock as payment for acquisition of IPR&D asset
37,500 4 36,007 — — 36,011
13 unchanged sentences
Adjustments to reconcile net loss to net cash used in operating activities:
+Added: Acquired IPR&D expense
+Added: Impairment of long-lived assets
Stock-based compensation expense
2 unchanged sentences
19,631 20,250 18,020
−Removed: Impairment of other investments 12,923 5,000 36,447
Net amortization and accretion on marketable securities
( 14,681 ) ( 9,596 ) ( 930 )
−Removed: Change in fair value of success payment liabilities
+Added: Impairment of other investments 13,001 12,923 5,000
+Added: Change in fair value of contingent consideration payable
( 3,804 ) — —
−Removed: Non-cash lease (income) expense
+Added: Non-cash lease income
( 2,198 ) ( 1,873 ) ( 1,553 )
Loss on property and equipment disposals, net 1,341 1,509 103
+Added: Change in fair value of success payment liabilities
+Added: ( 1,165 ) ( 2,780 ) ( 5,130 )
+Added: Gain on marketable equity security
Change in fair value of equity warrant
Gain on other investments — — ( 2,923 )
−Removed: Gain on net operating lease liability disposal — — ( 308 )
Changes in operating assets and liabilities:
2 unchanged sentences
Accounts payable
+Added: ( 3,234 ) 1,464 667
Accrued liabilities and other current liabilities
11 unchanged sentences
( 394,707 ) ( 476,880 ) ( 406,316 )
−Removed: Sales and maturities of marketable securities
+Added: Maturities of marketable securities
548,941 663,614 419,052
+Added: Acquisition of assets, net of cash acquired
+Added: ( 31,346 ) — —
Net cash provided by (used in) investing activities
5 unchanged sentences
Taxes paid related to net share settlement of equity awards ( 76 ) ( 457 ) ( 461 )
−Removed: Proceeds from initial public offering, net of issuance costs — — 391,802
Net cash provided by financing activities
1,326 1,743 10,635
−Removed: Net increase (decrease) in cash, cash equivalents and restricted cash
+Added: Net (decrease) increase in cash, cash equivalents and restricted cash
( 38,644 ) 22,097 ( 170,460 )
13 unchanged sentences
Non-cash investing and financing activities:
−Removed: Purchases of property and equipment included in accounts payable and accrued liabilities
+Added: Issuance of common stock related to the purchase of the IPR&D asset on Closing Date (Note 3)
$ 36,011 $ — $ —
−Removed: Remeasurement of operating lease right-of-use asset for lease modification
+Added: Contingent consideration payable related to the purchase of the IPR&D asset on Closing Date (Note 3 & 8)
$ 11,404 $ — $ —
+Added: Purchases of property and equipment included in accounts payable and accrued liabilities
+Added: $ 144 $ 29 $ 1,325
Acquisition of PACT Series D convertible preferred shares $ — $ — $ 2,923
−Removed: Conversion of convertible preferred stock to common stock upon closing of initial public offering $ — $ — $ 1,010,968
+Added: Remeasurement of operating lease right-of-use asset for lease modification
The accompanying notes are an integral part of these consolidated financial statements.
3 unchanged sentences
(the “Company”) was incorporated in Delaware in June 2018.
−Removed: The Company is a clinical-stage cell therapy company advancing a pipeline of product candidates for patients with solid tumors utilizing its proprietary ex vivo genetic and epigenetic T‑cell reprogramming technologies.
−Removed: The Company’s primary activities since incorporation have been to develop T‑cell therapies, conduct research and development, acquire technology, enter into strategic collaboration and license arrangements, enable and execute manufacturing activities in support of its product candidate development efforts, organize and staff the Company, conduct business planning, establish its intellectual property portfolio, submit regulatory submissions, execute clinical trials, raise capital and provide general and administrative support for these activities.
−Removed: Initial Public Offering
−Removed: In June 2021, the Company successfully completed its initial public offering (“IPO”) of its common stock.
−Removed: In connection with its IPO, the Company issued and sold 25,000,000 shares of common stock at an IPO price of $ 17.00 per share.
−Removed: The Company received $ 391.8 million in net proceeds, after deducting underwriting discounts and commissions of $ 29.8 million and offering expenses of $ 3.4 million.
−Removed: Upon the closing of the IPO, 194,474,431 shares of convertible preferred stock then outstanding converted into an equal number of shares of common stock.
−Removed: The related carrying value of the converted preferred stock of $ 1.0 billion was reclassified to common stock and additional paid in-capital.
+Added: The Company is a clinical-stage cell therapy company advancing a pipeline of proprietary next-generation chimeric antigen receptor (“CAR”) T-cell product candidates for patients with hematologic malignancies and solid tumors.
+Added: The Company’s primary activities since incorporation have been to develop T‑cell therapies, conduct research and development, acquire technology and product candidates, enter into strategic collaboration and license arrangements, enable and execute manufacturing activities in support of its product candidate development efforts, organize and staff the Company, conduct business planning, establish its intellectual property portfolio, submit regulatory submissions, execute clinical trials, raise capital and provide general and administrative support for these activities.
Basis of Presentation and Significant Accounting Policies
2 unchanged sentences
generally accepted accounting principles (“GAAP”).
−Removed: The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary.
+Added: The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.
All significant intercompany transactions and balances have been eliminated in consolidation.
7 unchanged sentences
The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect reported amounts and related disclosures.
−Removed: Specific accounts that require management estimates include, but are not limited to, stock-based compensation, valuation of success payments, valuation of other investments, revenue recognition and accrued expenses.
+Added: Specific accounts that require management estimates include, but are not limited to, stock-based compensation, valuation of long‑lived and acquired assets, other investments and accrued expenses.
Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
5 unchanged sentences
These adjustments increased revenue by $ 83.6 million, decreased net loss by $ 83.6 million and resulted in a $ 0.34 reduction in the Company’s basic and diluted net loss per common share for the year ended December 31, 2022 .
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
Comprehensive Loss
1 unchanged sentence
For the years ended December 31, 2024 , 2023 and 2022, this was comprised of net unrealized gains and losses on the Company’s marketable securities.
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
Cash, Cash Equivalents and Restricted Cash
The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents.
−Removed: Cash equivalents consist primarily of amounts invested in commercial paper and money market accounts.
−Removed: Restricted cash is cash held in a bank account and is used as collateral associated with the Company’s corporate credit card program.
+Added: Cash equivalents consist primarily of amounts invested in investment grade fixed income securities and money market accounts.
+Added: Restricted cash is cash held in a bank account and is used as collateral associated with the Company’s corporate credit card program as well as collateral for a letter of credit in favor of one of the Company’s landlords.
Marketable Securities
1 unchanged sentence
Such investments are classified as available-for-sale and are carried at fair value, with the unrealized gains and losses repo rted as a component of comprehensive loss.
−Removed: Realized gains and losses on available-for-sale securities are included in other income (expense), net.
+Added: Realized gains and losses on available-for-sale securities are included in other income, net.
The cost of investments sold is based on the specific-identification method.
1 unchanged sentence
Each reporting period, the Company evaluates whether declines in fair value below carrying value are due to expected credit losses, as well as the Company’s ability and intent to hold the investment until a forecasted recovery occurs.
−Removed: Expected credit losses, if any, are recorded as an allowance through other income (expense), net.
+Added: Expected credit losses, if any, are recorded as an allowance through other income, net.
Valuation of Other Investments
−Removed: The Company determines at the inception of each arrangement whether an investment or other interest is considered a variable interest entity (“VIE”).
−Removed: If the investment or other interest is determined to be a VIE, the Company evaluates whether it is considered the primary beneficiary.
−Removed: The primary beneficiary of a VIE is the party that meets both of the following criteria:
−Removed: (i) has the power to direct the activities that most significantly impact the VIE’s economic performance;
−Removed: and (ii) has the obligation to absorb losses or the right to receive benefits from the VIE.
−Removed: For any investments in VIEs in which the Company is considered the primary beneficiary, the assets, liabilities and results of operations of the VIE would be included in its consolidated financial statements.
−Removed: As of December 31, 2023 and 2022, there were no VIEs for which the Company was the primary beneficiary.
The Company accounts for its strategic equity interests in common stock and in-substance common stock in non‑publicly traded companies for which it does not have the ability to exercise significant influence in accordance with Accounting Standards Codification (“ASC”) 321, Investments – Equity Securities (“ASC 321”).
8 unchanged sentences
See Note 7, Other Investments , for details related to investment impairments recognized during the years ended December 31, 2024, 2023 and 2022.
−Removed: Additionally, the Company holds an equity warrant investment giving it the right to acquire stock of a non‑publicly traded company.
−Removed: Equity warrant investments are recorded within other assets at the estimated fair value, with gains and losses recognized in other income (expense), net.
−Removed: For the year ended December 31, 2022, in conjunction with the impairment of one of the Company’s other investments, the associated equity warrant investment’s fair value was
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
−Removed: determined to be negligible.
−Removed: The Company reduced the equity warrant investment’s fair value to zero for the year ended December 31, 2022.
−Removed: See Note 6, Fair Value Measurements , for additional details regarding the equity warrant investment.
Property and Equipment, Net
Property and equipment primarily consist of laboratory equipment, computer equipment and software, furniture and fixtures and leasehold improvements.
−Removed: Property and equipment are stated at cost less accumulated depreciation and amortization.
+Added: Property and equipment are stated at cost less accumulated depreciation and amortization and, if applicable, impairment charges.
Deprec iation is calculated using the straight-line method based on the estimated useful lives of the related assets, which are generally three to five years .
6 unchanged sentences
Recoverability is measured by comparison of the carrying amount of an asset group to the future net undiscounted cash flows that the assets are expected to generate.
−Removed: If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset group exceeds the fair value of the asset group.
−Removed: If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset.
−Removed: There has been no i mpairment of long-lived assets for any of the periods presented.
+Added: If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
+Added: amount of the asset group exceeds the fair value of the asset group.
+Added: If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset group.
+Added: Any impairment loss is allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts of those assets, except that the carrying amount of an individual asset shall not be reduced below its fair value.
+Added: The Company recognized impairment of long-lived assets expense of $ 51.3 million for the year ended December 31, 2024 and zero for both the years ended December 31, 2023 and 2022.
+Added: Factors that may indicate potential impairment and trigger an impairment test include, but are not limited to, general macroeconomic conditions, conditions specific to the industry and market, business climate or operational performance of the business and sustained decline in the stock price and market capitalization compared to net book value.
+Added: Calculating the fair value of a reporting unit, an asset group and an individual asset involves significant estimates and assumptions.
+Added: These estimates and assumptions include, among others, projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and the determination of appropriate market comparisons.
+Added: Changes in these factors and assumptions used can materially affect the amount of impairment loss recognized in the period the asset or asset group was considered impaired.
The Company leases certain office, laboratory and manufacturing spaces.
12 unchanged sentences
Additionally, the Company has elected the short-term lease recognition exemption for all short-term leases and as a result, lease liabilities and ROU assets are not included on the consolidated balance sheets for leases with an initial term of 12 months or less.
+Added: The Company evaluates lease arrangements for impairment whenever events or changes in circumstances indicate that the carrying amounts of the right-of-use asset may not be fully recoverable.
+Added: To the extent an impairment of the right-of-use asset is identified, the Company recognizes a lease impairment and subsequently amortizes the remaining lease asset on a straight-line basis (unless another systematic basis is more representative of the pattern in which the Company expects to consume the future economic benefits from the asset) from the date of impairment to the earlier of the right‑of‑use asset’s useful life or the end of the lease term.
Fair Value Measurements
1 unchanged sentence
The fair value hierarchy prioritizes valuation inputs based on the observable nature of those inputs.
−Removed: The fair value hierarchy applies only to the valuation inputs used in
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
−Removed: determining the reported fair value of the investments and is not a measure of the investment credit quality.
+Added: The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality.
The hierarchy defines three levels of valuation inputs:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
26 unchanged sentences
Upfront payments and milestones paid to third parties in connection with technology platforms that have not reached technological feasibility and do not have an alternative future use are expensed as incurred.
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
Clinical expenses are a component of research and development expense.
The Company accrues and expenses clinical trial services performed by third parties based upon actual work completed in accordance with agreements established with its service providers.
−Removed: The Company estimates the costs through discussions with internal personnel and external service providers as to the progress or stage of completion of services and the agreed-upon fees to be paid for such services.
+Added: The Company estimates the costs through discussions with internal personnel and
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
+Added: external service providers as to the progress or stage of completion of services and the agreed-upon fees to be paid for such services.
General and Administrative Expense
1 unchanged sentence
Legal costs include those related to corporate, dispute and patent matters.
−Removed: Success Payments
−Removed: The Company granted rights to success payments to Fred Hutchinson Cancer Center (“Fred Hutch”) and The Board of Trustees of the Leland Stanford Junior University (“Stanford”) pursuant to the terms of its research and collaboration agreements with each of those entities.
−Removed: Pursuant to the terms of these agreements, on each contractually prescribed measurement date, the Company may be required to make success payments based on increases in the estimated per share fair value of the Company’s common stock.
−Removed: See Note 3, License, Collaboration and Success Payment Agreements .
−Removed: The success payments are accounted for under A SC 718, Compensation – Stock Compensation , with the expense being recorded in research and development expenses.
−Removed: Once the service period is complete, the instrument continues to be remeasured each reporting period with all changes in value recognized immediately in other income (expense), net.
−Removed: The success payment liability is estimated at fair value at inception and at each subsequent reporting period, and the expense is accreted over th e service period of the research and collaboration agreement.
−Removed: To determine the estimated fair value of the success payments, the Company uses a Monte Carlo simulation methodology which models the future movement of stock prices based on several key variables combined with empirical knowledge of the process governing the behavior of the stock price.
−Removed: The following variables were incorporated in the estimated fair value of the success payment liability:
−Removed: estimated fair value of the Company’s common stock, expected volatility, risk-free interest rate and the estimated number and timing of valuation measurement dates on the basis of which payments may be triggered.
−Removed: The computation of expected volatility was estimated based on available information about the historical volatility of stocks of similar publicly traded companies for a period matching the expected term assumption.
Concentrations of Credit Risk and Off-balance Sheet Risk
The Company maintains its cash, cash equivalents and restricted cash with high quality, accredited financial institutions.
−Removed: Restricted cash is cash held in a bank account and is used as collateral associated with the Company’s corporate credit card program.
+Added: Restricted cash is cash held in a bank account and is used as collateral associated with the Company’s corporate credit card program as well as collateral for a letter of credit in favor of one of the Company’s landlords .
Cash, cash equivalents and restricted cash amounts, at times, may exceed federally insured limits.
9 unchanged sentences
If the likelihood of an adverse outcome is only reasonably possible (as opposed to probable), or if an estimate is not determinable, the Company provides disclosure of a material claim or contingency.
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
Stock-based Compensation
−Removed: Under ASC 718, the Company measures and recognizes expense for restricted stock awards (“RSAs”), restricted stock units (“RSUs”), employee stock purchases related to the Employee Stock Purchase Plan and stock options granted to employees, directors and consultants based on the fair value of the awards on the date of grant.
−Removed: The fair value of stock options is estimated using the Black-Scholes option pricing model.
−Removed: The Black-Scholes option pricing model requires inputs based on certain subjective assumptions including:
−Removed: stock price volatility, the expected term of stock options, the risk-free interest rate, expected dividends, and the fair value of the underlying common stock on the date of grant.
−Removed: The expected volatility is based on the historical volatility of the stock of similar entities within the Company’s industry over periods commensurate with the Company’s expected term assumption.
−Removed: The expected term of stock option grants represents the period the options are expected to remain outstanding and is based on the “simplified” method where the expected term is the midpoint between the vesting date and the end of the contractual term for each option.
−Removed: The Company generally uses the simplified method as provided for under the applicable guidance for entities with a limited history of relevant stock option exercise activity.
−Removed: The Company bases the risk-free interest rate on the interest rate payable on U.S.
−Removed: Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term.
−Removed: In reference to the expected dividend yield assumption, the Company has not historically paid, and does not expect for the foreseeable future to pay, a dividend.
+Added: Under ASC 718, the Company measures and recognizes expense for restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), employee stock purchases related to the Employee Stock Purchase Plan and stock options granted to employees, directors and consultants based on the fair value of the awards on the date of grant.
Stock-based compensation expense for RSAs, RSUs and stock options is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective award.
The Company accounts for forfeitures as they occur.
−Removed: The Company also granted stock options that vest in conjunction with certain performance conditions to certain key employees.
−Removed: At each reporting date, the Company is required to evaluate whether achievement of the performance conditions is probable.
−Removed: Compensation expense is recorded over the appropriate service period based upon the Company’s assessment of accomplishing each performance provision.
+Added: For RSAs, RSUs and certain PSUs, the fair value of the Company’s common stock is used to determine the resulting stock-based compensation expense.
+Added: The fair value of stock options is estimated on the date of grant using a Black-Scholes option pricing model, which requires management to apply judgment and make estimates using inputs including:
+Added: • Fair Value of Common Stock—The fair value of common stock is based on the closing price as reported on The Nasdaq Global Select Market on the date of grant.
+Added: • Expected Term—The expected term represents the period that a stock-based award is expected to be outstanding.
+Added: The Company generally uses the simplified method to determine the expected term, which is based on the average of the time-to-vesting and the contractual life of the option.
+Added: The Company generally uses the simplified method as provided for under the applicable guidance for entities with a limited history of relevant stock option exercise activity.
+Added: • Expected Volatility—The expected volatility of stock options is based on the historical volatility of the stock of similar entities within the Company’s industry over a period commensurate with the Company’s expected term assumption.
+Added: • Risk-Free Interest Rate—The risk-free interest rate is based on the interest rate payable on U.S.
+Added: Treasury securities in effect at the time of grant for a period that is commensurate with the Company’s expected term assumption.
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
+Added: • Expected Dividend—The Company has not historically paid, and does not expect for the foreseeable future to pay a dividend.
+Added: Therefore, the Company used an expected dividend yield of zero.
+Added: For awards with performance conditions that vest upon a performance condition being met, compensation expense is recognized for the number of shares expected to be earned after assessing the probability that a certain performance condition will be met and the targeted payout level associated with the performance condition expected to be achieved.
+Added: At each reporting date, the Company is required to evaluate whether achievement of a performance condition is probable.
+Added: Cumulative adjustments are recorded each quarter to reflect the estimated outcome of the performance-related conditions until the date results are determined and settled.
+Added: If performance conditions are not met or not expected to be met, any compensation expense previously recognized associated with the awards will be reversed.
+Added: The fair values of the Company’s PSUs that have market-based metrics are estimated using Monte Carlo simulations.
+Added: The Company applies an accelerated attribution method to recognize stock-based compensation expense over the applicable service period for these awards.
+Added: The number of shares expected to be earned is considered in the grant date valuation;
+Added: therefore, the expense is not subsequently adjusted to reflect the actual shares ultimately earned.
The Company determines its deferred tax assets and liabilities based on the differences between the financial reporting and tax basis of assets and liabilities.
5 unchanged sentences
The Company views its operations and manages its business in one operating segment and one reportable segment.
−Removed: Recently Issued Accounting Pronouncements
+Added: The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.
+Added: If the screen is met, the transaction is accounted for as an asset acquisition.
+Added: If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs which would meet the requirements of a business in which case the transaction is accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date, and that the fair value of acquired intangibles be recorded on the balance sheet.
+Added: Any excess of the purchase price over the assigned fair values of the net assets acquired is recorded as goodwill.
+Added: If the Company determines an acquisition does not meet the definition of a business combination under the acquisition method of accounting, the transaction is accounted for as an asset acquisition.
+Added: For asset acquisitions, a cost accumulation model is used to determine the cost of an asset acquisition, with cost allocated to acquired assets on a relative fair value basis.
+Added: Direct transaction costs are recognized as part of the cost of an asset acquisition.
+Added: The cost of an asset acquisition, including transaction costs, is allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis.
+Added: Goodwill is not recognized in an asset acquisition.
+Added: In an asset acquisition, upfront payments allocated to in-process research and development (“IPR&D”) are recorded in research and development expense if it is determined that there is no alternative future use, and subsequent milestone payments are recorded in research and development expense when achieved for technology that has not yet met product feasibility.
+Added: Contingent Consideration
+Added: Contingent consideration relates to the potential payments for achieving certain clinical and/or regulatory milestones.
+Added: For transactions accounted for as asset acquisitions, the Company records contingent consideration at fair value at the date of the acquisition when deemed probable.
+Added: Liabilities for contingent consideration are remeasured each reporting period and subsequent changes in fair value are recognized within other income, net in the Consolidated Statements of
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
+Added: Operations and Comprehensive Loss.
+Added: The assumptions utilized in the calculation of the fair values include the probability of success and the Company’s stock price.
+Added: Contingent consideration involves certain assumptions requiring significant judgment and actual results may differ from estimated amounts.
+Added: Recently Adopted Accounting Pronouncements
Segment Reporting
2 unchanged sentences
Entities with a single reportable segment are required to provide all the updated and existing segment disclosures required by Topic 280.
−Removed: The amendments are effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
−Removed: beginning after December 15, 2024 on a retrospective basis.
−Removed: The Company is assessing the effect of the new disclosure requirements and does not anticipate the adoption will have a material impact.
+Added: The Company adopted the annual requirements under ASU 2023-07 on January 1, 2024 on a retrospective basis and adopted interim requirements under ASU 2023-07 on January 1, 2025.
+Added: There was no impact on the Company’s reportable segments identified and additional required disclosures have been included in Note 20, Segment .
+Added: Recently Issued Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):
1 unchanged sentence
The amendments are effective for annual periods beginning after December 15, 2024 and may be applied either prospectively or retrospectively.
−Removed: The Company is assessing the effect of the new disclosure requirements and does not anticipate the adoption will have a material impact.
+Added: The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements.
+Added: Income Statement Expense Disaggregation
+Added: In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures , to require more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the face of the income statement.
+Added: This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027.
+Added: Early adoption is permitted.
+Added: The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements.
+Added: The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements.
+Added: On October 31, 2024 (the “Closing Date”), the Company completed its previously announced acquisition of ImmPACT Bio USA Inc., a Delaware corporation (“ImmPACT”), pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of October 24, 2024, by and among the Company, ImmPACT, Inspire Merger Sub Inc., a Delaware corporation and an indirect, wholly owned subsidiary of the Company (“Merger Sub”), and an attorney-in-fact of ImmPACT securityholders (the “Representative”).
+Added: Pursuant to the terms of the Merger Agreement, on the Closing Date, the Company acquired all of the outstanding equity interests of ImmPACT in exchange for an upfront payment of $ 30.0 million in cash (in addition to approximately $ 11.9 million for ImmPACT’s existing cash balance, net of certain of ImmPACT’s unpaid transaction expenses) and 37.5 million shares of Company common stock.
+Added: The acquisition was effected via a merger whereby Merger Sub merged with and into ImmPACT (the “Merger”), with ImmPACT surviving the merger as an indirect, wholly-owned subsidiary of the Company.
+Added: Contingent consideration following the Closing Date includes (a) additional equity consideration of 12.5 million shares of Company Common Stock (“contingent consideration payable”) that may be earned upon the achievement of the earlier to occur of (i) the demonstration of certain clinical milestones or (ii) the receipt of certain regulatory approvals and (b) a low single-digit royalty on future net sales of the dual-targeting CD19/20 CAR T‑cell product in the United States.
+Added: Contingent consideration payable in the Company’s Consolidated Balance Sheet as of December 31, 2024 consists of the additional equity consideration of 12.5 million shares of Company common stock.
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
+Added: The total consideration paid for the Merger consisted of the following (in thousands):
+Added: Fair value of components of purchase price consideration at closing:
+Added: As of Closing Date
+Added: Cash (including $ 11.9 million for existing cash balances)
+Added: Representative holdback
+Added: Contingent consideration payable
+Added: Company’s capitalizable transaction expenses
+Added: Total consideration paid
+Added: The fair value of the common stock consideration transferred for the acquisition of ImmPACT was calculated based on the closing stock price of the Company’s common stock on October 31, 2024, which was $ 0.9603 per share.
+Added: The fair value of the contingent consideration payable was derived based on certain valuation inputs, including the closing share price of Lyell common stock on October 31, 2024 and the probability of meeting the milestone, as further discussed in Note 8, Fair Value Measurements .
+Added: Pursuant to the terms of the Merger Agreement, the Company has a right to offset and cause the sellers to forfeit shares underlying the contingent consideration payable against certain indemnification claims and indemnifiable losses.
+Added: As a result of this provision, the number of shares underlying the contingent consideration payable is contingently subject to adjustments and the Company has concluded that the arrangement is not indexed to the Company’s equity pursuant to guidance in Accounting Standards Codification (“ASC”) 815-40.
+Added: Accordingly, the contingent consideration payable is classified as a liability, subject to be remeasured at fair value at each reporting date with changes in fair value reported in earnings until the liability is settled in accordance with the terms of the Merger Agreement.
+Added: The Company determined that the contingent consideration for the royalty payments is not subject to derivative accounting under ASC 815, Derivatives and Hedging , as its settlement is contingent upon future net sales of the Company's dual-targeting CD19/20 CAR T-cell product in the United States.
+Added: Therefore, the Company did not record an associated contingent consideration liability on the acquisition date for the royalty payments.
+Added: The Company will recognize any future contingent consideration payments in the period in which the royalty payments become due and payable.
+Added: The Company has not made or accrued for contingent payments relating to the royalty payments as these have not become due and payable.
+Added: The estimated fair value of the net acquired at Closing Date are as follows (in thousands):
+Added: Assets acquired:
+Added: As of Closing Date
+Added: Cash and cash equivalents $ 14,982
+Added: Prepaid expenses and other current assets 1,211
+Added: Property and equipment, net 4,446
+Added: Long-term deposits 459
+Added: Operating lease right-of-use assets 1,816
+Added: Assembled workforce intangible asset 1,315
+Added: IPR&D asset 87,184
+Added: Liabilities Assumed:
+Added: Accounts payable and other current liabilities $ 16,090
+Added: Operating lease liability, long-term 1,580
+Added: Total liabilities assumed 17,670
+Added: Total net assets acquired
+Added: The Company concluded that the arrangement met the definition of an asset acquisition rather than a business combination, as substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset,
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
+Added: IPR&D of product candidate IMPT-314.
+Added: The $ 87.2 million fair value of the IPR&D acquired was charged to acquired IPR&D expense during the year ended December 31, 2024 as it had no alternative future use at the time of the Closing Date.
License, Collaboration and Success Payment Agreements
−Removed: License Agreement - In 2018, the Company entered into a license agreement with Fred Hutch that grants the Company a worldwide, sublicensable license under certain patent rights (exclusive) and certain technology (non-exclusive) to research, develop and commercialize products and processes for all fields of use employing chimeric antigen receptors (“CARs”) and/or T-cell receptors (“TCRs”), subject to certain exceptions.
−Removed: The Company is required to pay Fred Hutch annual license maintenance payments of $ 50,000 on the second anniversary of the effective date, and each anniversary of the effective date thereafter until the first commercial sale of a licensed product.
−Removed: Collaboration - In 2018, the Company entered into a research and collaboration agreement with Fred Hutch (“Fred Hutch Collaboration Agreement”) focused on research and development of cancer immunotherapy products.
−Removed: The Company funded aggregate research performed by Fred Hutch of $ 12.0 million under the Fred Hutch Collaboration Agreement with the research conducted in accordance with a research plan and budget approved by the parties.
−Removed: The Fred Hutch Collaboration Agreement has a six-year term.
−Removed: The Company incurred $ 0.9 million, $ 1.7 million and $ 4.2 million in expense in connection with the Fred Hutch Collaboration Agreement for the years ended December 31, 2023, 2022 and 2021, respectively.
−Removed: Success Payments - In 2018, the Company granted Fred Hutch rights to certain success payments, pursuant to the terms of the Fred Hutch Collaboration Agreement.
−Removed: The potential payments for the Fred Hutch success payments are based on multiples of increased value ranging from 10 x to 50 x based on a comparison of the per share fair market value of the Company’s common stock relative to the original $ 1.83 per share issuance price of the Company’s Series A convertible preferred stock, which converted into an equal number of shares of the Company’s common stock in connection with the Company’s IPO.
−Removed: The aggregate success payments to Fred Hutch are not to exceed $ 200.0 million, which would only occur upon a 50 x increase in value.
+Added: License Agreement - In 2018, the Company entered into a license agreement with Fred Hutchinson Cancer Center (“Fred Hutch”) that grants the Company a worldwide, sublicensable license under certain patent rights (exclusive) and certain technology (non-exclusive) to research, develop and commercialize products and processes for all fields of use utilizing chimeric antigen receptors (“CARs”) and/or T-cell receptors (“TCRs”), subject to certain exceptions.
+Added: Collaboration and Success Payments - In 2018, the Company entered into a research and collaboration agreement with Fred Hutch (“Fred Hutch Collaboration Agreement”), pursuant to which it granted Fred Hutch rights to certain success payments.
+Added: The potential payments for the Fred Hutch success payments are based on multiples of increased value ranging from 10 times to 50 times based on a comparison of the per share fair market value of the Company’s common stock relative to the original $ 1.83 per share issuance price of the Company’s Series A convertible preferred stock, which converted into an equal number of shares of the Company’s common stock in connection with the closing of the Company’s initial public offering (“IPO”).
+Added: The aggregate success payments to Fred Hutch are not to exceed $ 200.0 million, which would only occur upon a 50 times increase in value relative to the original $ 1.83 per share issuance price of the Company’s Series A convertible preferred stock.
Each threshold is associated with a success payment, ascending from $ 10.0 million at $ 18.29 per share to $ 200.0 million at $ 91.44 per share, payable if such threshold is reached during the measurement period.
−Removed: Any previous success payments made are credited against the success payment owed as of any valuation date, such that Fred Hutch does not receive multiple success payments in connection with the same threshold.
The term of the success payment agreement ends on the earlier to occur of (i) the nine-year anniversary of the date of the agreement and (ii) a change in control transaction.
8 unchanged sentences
The valuation measurement dates are triggered by the following events:
−Removed: the one-year anniversary of the Company ’ s IPO and each two-year anniversary of the Company ’ s IPO thereafter, the closing of a change in control transaction and the last day of the term of the success payment agreement, unless the term has ended due to the
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
−Removed: closing of a change of control transaction.
+Added: the one-year anniversary of the Company ’ s IPO and each two-year anniversary of the Company ’ s IPO thereafter, the closing of a change in control transaction and the last day of the term of the success payment agreement, unless the term has ended due to the closing of a change of control transaction.
As of December 31, 2024, no success payments have been incurred as the per share fair value of the Company’s common stock was below the price required for payment.
1 unchanged sentence
As of December 31, 2022, the Company’s associated success payment liability was fully accreted to fair value as Fred Hutch had provided the requisite service obligation to earn the potential success payment consideration under the continued collaboration.
−Removed: For the year ended December 31, 2023 and future periods, the change in the Fred Hutch success payment liability fair value is recognized in other income (expense), net.
+Added: For the year ended December 31, 2023 and future periods, the change in the Fred Hutch success payment liability fair value is recognized in other income, net .
The success payment liability was $ 0.1 million and $ 0.7 million as of December 31, 2024 and 2023, respectively.
−Removed: With respect to the Fred Hutch Collaboration Agreement success payment obligations, the Company recognized gains of $ 1.9 million and $ 3.9 million fo r the years ended December 31, 2023 and 2022, respectively and success payment expense of $ 1.2 million for the year ended December 31, 2021.
−Removed: License Agreement - In 2019, the Company entered into a license agreement with Stanford to license specified patent rights.
+Added: With respect to the Fred Hutch Collaboration Agreement success payment obligations, the Company recognized success payment expense reversals of $ 0.5 million, $ 1.9 million and $ 3.9 million fo r the years ended December 31, 2024, 2023 and 2022, respectively .
+Added: License Agreement - In 2019, the Company entered into a license agreement with The Board of Trustees of the Leland Stanford Junior University (“Stanford”) to license specified patent rights.
The Company is required to pay Stanford annual license maintenance payments of $ 50,000 on the second anniversary of the effective date, and each anniversary of the effective date thereafter until the date of the first commercial sale of a licensed product.
−Removed: Milestone payments to Stanford of up to a maximum of $ 3.7 million per target are payable upon achievement of certain specified clinical and regulatory milestones.
−Removed: The Company is also obligated to pay Stanford $ 2.5 million collectively for all licensed products upon the achievement of a certain commercial milestone.
−Removed: Additionally, low single‑digit tiered royalties based on annual net sales of the licensed products are payable to Stanford.
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
Collaboration Agreement - In October 2020, the Company entered into a research and collaboration agreement with Stanford (“Stanford Collaboration Agreement”), focused on research and development of cellular immunotherapy products.
The Stanford Collaboration Agreement has a four-year term.
−Removed: The Company is committed to fund aggregate research performed by Stanford of $ 12.0 million under the Stanford Collaboration Agreement, and the research will be conducted in accordance with a research plan and budget approved by the parties.
−Removed: The Company incurred $ 3.0 million in expense in connection with the Stanford Collaboration Agreement for each of the years ended December 31, 2023, 2022, and 2021, respectively.
+Added: The Company funded aggregate research performed by Stanford of $ 12.0 million under the Stanford Collaboration Agreement, with the research conducted in accordance with a research plan and budget approved by the parties.
+Added: The Company incurred $ 2.3 million in expense in connection with the Stanford Collaboration Agreement for the year ended December 31, 2024 and $ 3.0 million in expense for both the years ended December 31, 2023 and 2022.
Success Payments - In October 2020, the Company granted Stanford rights to certain success payments, pursuant to the terms of the Stanford Collaboration Agreement.
−Removed: The potential payments for the Stanford Collaboration Agreement success payments are based on multiples of increased value ranging from 10 x to 50 x based on a comparison of the per share fair market value of the Company’s common stock relative to the original $ 1.83 per share issuance price of the Company’s Series A convertible preferred stock, which converted into an equal number of shares of the Company’s common stock in connection with the closing of the Company’s IPO.
−Removed: The aggregate success payments to Stanford are not to exceed $ 200.0 million, which would only occur upon a 50 times increase in value.
+Added: The potential payments for the Stanford Collaboration Agreement success payments are based on multiples of increased value ranging from 10 times to 50 times based on a comparison of the per share fair market value of the Company’s common stock relative to the original $ 1.83 per share issuance price of the Company’s Series A convertible preferred stock, which converted into an equal number of shares of the Company’s common stock in connection with the closing of the Company’s IPO.
+Added: The aggregate success payments to Stanford are not to exceed $ 200.0 million, which would only occur upon a 50 times increase in value relative to the original $ 1.83 per share issuance price of the Company’s Series A convertible preferred stock.
Each threshold is associated with a success payment, ascending from $ 10.0 million at $ 18.29 per share to $ 200.0 million at $ 91.44 per share, payable if such threshold is reached during the measurement period.
−Removed: Any previous success payments made are credited against the success payment owed as of any valuation date, so that Stanford does not receive multiple success payments in connection with the same threshold.
The term of each success payment agreement ends on the earlier to occur of (i) the nine year anniversary of the date of the agreement and (ii) a change in control transaction.
8 unchanged sentences
The valuation measurement dates are triggered by the following events:
−Removed: the one-year anniversary of the Company ’ s IPO and each two-year anniversary of the Company ’ s IPO thereafter, the closing of a change in control transaction and the last day of the term of the success payment agreement, unless the term has ended due to the
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
−Removed: closing of a change of control transaction.
+Added: the one-year anniversary of the Company ’ s IPO and each two-year anniversary of the Company ’ s IPO thereafter, the closing of a change in control transaction and the last day of the term of the success payment agreement, unless the term has ended due to the closing of a change of control transaction.
As of December 31, 2024, no success payments have been incurred as the per share fair value of the Company’s common stock was below the price required for payment.
−Removed: The estimated fair values of the success payments to Stanford as of December 31, 2023 and 2022 were $ 1.1 million and $ 3.3 million, respectively.
−Removed: The success payment liability is estimated at the fair value at inception and at each subsequent reporting period and the expense is accreted over the service period of the Stanford Collaboration Agreement as research and development expense.
+Added: The success payment liability is estimated at the fair value at inception and at each subsequent reporting period and the expense is accreted over the service period of the Stanford Collaboration Agreement as research and development expense through September 2024.
+Added: As of October 2024, the Company’s associated success payment liability was fully accreted to fair value as Stanford had provided the requisite service obligation to earn the potential success payment consideration under the continued collaboration.
+Added: For the year ended December 31, 2024 and future periods, the change in the Stanford success payment liability fair value is recognized in other income, net .
The success payment liability was $ 0.3 million and $ 0.9 million as of December 31, 2024 and 2023, respectively.
−Removed: With respect to the Stanford Collaboration Agreement success payment obligations, the Company recog nized gains of $ 0.9 million and $ 1.2 million for the year ended December 31, 2023 and 2022, respectively and success payment expense of $ 2.5 million for the year ended December 31, 2021.
+Added: With respect to the Stanford Collaboration Agreement success payment obligations, the Company recog nized success expense payment reversals of $ 0.6 million, $ 0.9 million and $ 1.2 million for the years ended December 31, 2024 and 2023 and 2022, respectively.
In 2019, the Company entered into the GSK Agreement with GSK for potential T‑cell therapies that apply the Company’s platform technologies and cell therapy innovations with TCRs or CARs under distinct collaboration programs.
1 unchanged sentence
The Company was expected to perform research and development services for each selected target up until a defined point (the “GSK Option Point”), at which time GSK would decide whether or not to exercise an option to obtain a license from the Company (“License Option”) and take over the future development and commercialization.
−Removed: In April 2021, GSK exercised the License Option on LYL331 (NY-ESO-1 TCR with c-Jun) and assumed sole responsibility for future development and commercialization of the program at its own cost and expense.
−Removed: The investigational new drug (“IND”) application for LYL132 was cleared in January 2022, though no patients were treated, and the IND for LYL331 was not submitted to the U.S.
−Removed: Food and Drug Administration.
GSK terminated the GSK Agreement effective December 24, 2022 and Lyell has also discontinued any further work on these programs.
There are no future performance obligations associated with the GSK Agreement.
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
The Company received a non-refundable upfront payment of $ 45.0 million under the GSK Agreement.
5 unchanged sentences
These adjustments increased revenue by $ 83.6 million, decreased net loss by $ 83.6 million and resulted in a $ 0.34 reduction in the Company’s basic and diluted net loss per common share for the year ended December 31, 2022 .
−Removed: The Company recognized revenue related to the research and development services related to the two initial targets of zero , $ 84.7 million and $ 10.5 million for the years ended December 31, 2023, 2022 and 2021 respectively.
+Added: The Company recognized revenue related to the research and development services related to the two initial targets of zero , zero and $ 84.7 million for the years ended December 31, 2024, 2023 and 2022 respectively.
As of December 31, 2024, there were no contract assets or contract liabilities related to the license contract.
5 unchanged sentences
The settlement agreement also included the termination of the PACT Commitment Agreement.
−Removed: The Company recorded a gain
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
−Removed: of $ 2.9 million in October 2022 for the estimated fair value of the PACT Series D convertible preferred stock, which was included in other investments in the Company’s Consolidated Balance Sheet as of December 31, 2022.
+Added: The Company recorded a gain of $ 2.9 million in October 2022 for the estimated fair value of the PACT Series D convertible preferred stock, which was included in other investments in the Company’s Consolidated Balance Sheet as of December 31, 2022.
In September 2023, the Company performed a qualitative assessment of potential indicators of impairment of the PACT Series D convertible preferred stock investment, resulting in $ 2.9 million impairment expense for the year ended December 31, 2023.
See Note 7, Other Investments , for additional details regarding the PACT investment impairment.
+Added: Impairment of Long-Lived Assets
+Added: As a result of the sustained decline in the Company’s stock price and related market capitalization, deferral and reprioritization of certain research and development programs and associated reduction in force, the Company performed an impairment assessment of long-lived assets for the year ended December 31, 2024.
+Added: The Company operates as a single reporting unit based on its business and reporting structure.
+Added: The Company determined all of its long-lived assets represent one asset group for the purposes of the long-lived asset impairment assessment.
+Added: The Company concluded that the carrying value of the asset group was not recoverable as it exceeded the future undiscounted cash flows the assets are expected to generate from their use and eventual disposition over the remaining useful life of the Company’s primary asset;
+Added: approximately six years remain on the initial term of the Company’s operating lease in South San Francisco, California, which expires in March 2031 .
+Added: To allocate and recognize the impairment loss, the Company determined individual fair values of its long-lived assets.
+Added: The Company applied a discounted cash flow method to estimate the fair values of its leasehold improvements and right-of-use assets.
+Added: These represented level 3 nonrecurring fair value measurements.
+Added: The remaining property and equipment, net was determined to not be impaired.
+Added: Based on this analysis, the Company recognized long‑lived asset impairment charges of $ 12.6 million on the lease right-of-use assets and $ 38.7 million on the related leasehold improvements during the year ended December 31, 2024.
+Added: No impairment was recognized on the remaining long-lived assets as their carrying values were not in excess of their fair values.
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
Cash Equivalents and Marketable Securities
−Removed: The fair value and amortized cost of cash equivalents and marketable securities by major security type are as follows (in thousands):
+Added: The fair value and amortized cost of cash equivalents and fixed income marketable securities by major security type are as follows (in thousands):
December 31, 2024
32 unchanged sentences
Total cash equivalents and marketable securities
−Removed: The fair values of securities held by the Company in an unrealized loss position for less than 12 months were $ 117.8 million and $ 287.8 million, as of December 31, 2023 and 2022, respectively.
−Removed: The fair values of securities held by the Company in an unrealized loss position for greater than 12 months were $ 43.6 million and $ 278.7 million as of December 31, 2023 and 2022, respectively.
−Removed: As of December 31, 2023 and 2022, all of the Company’s marketable securities had a maturity date of two years or less, were available for use and were classified as available-for-sale.
+Added: The fair values of money market and fixed income marketable securities held by the Company in an unrealized loss position for less than 12 months were $ 31.7 million and $ 117.8 million, as of December 31, 2024 and 2023, respectively.
+Added: The fair values of money market and fixed income marketable securities held by the Company in an unrealized loss position for greater than 12 months were zero and $ 43.6 million as of December 31, 2024 and 2023, respectively.
+Added: As of December 31, 2024 and 2023, all of the Company’s money market and fixed income marketable securities had a maturity date of two years or less, were available for use and were classified as available-for-sale.
The Company does not intend to sell these securities nor does the Company believe that it will be required to sell these securities before recovery of their amortized cost basis.
1 unchanged sentence
As such, an allowance for credit losses has not been recognized.
−Removed: Gross realized gains and losses were de minimis for the years ended December 31, 2023 and 2022 and as a
+Added: Gross realized gains and losses were de minimis for the years ended December 31, 2024 and 2023 and as a result, amounts reclassified out of accumulated other compr ehensive loss for the years ended December 31, 2024 and 2023 were also de minimis .
+Added: See Note 8, Fair Value Measurements , for additional information regarding cash equivalents and fixed income marketable securities.
Lyell Immunopharma, Inc.
Notes to Consolidated Financial Statements—(Continued)
−Removed: result, amounts reclassified out of accumulated other comprehensi ve loss for the years ended December 31, 2023 and 2022 were also de minimis .
−Removed: See Note 6, Fair Value Measurements , for additional information regarding cash equivalents and marketable securities.
Other Investments
−Removed: From time to time, the Company makes minority ownership strategic investments.
−Removed: As of December 31, 2023 and 2022, the aggregate carrying amounts of the Company’s strategic investments in non-publicly traded companies were $ 32.0 million and $ 44.9 million , respectively.
+Added: In prior years, the Company made minority ownership strategic investments.
+Added: As of December 31, 2024 and 2023, the aggregate carrying amount of the Company’s strategic investments in non-publicly traded companies was $ 19.0 million and $ 32.0 million , respectively.
These investments are measured at initial cost, minus impairment, if any, and plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
1 unchanged sentence
As a part of the acquisition of each of the Company’s other investments, the Company determines whether an investment or other interest is considered a variable interest.
−Removed: The Company held an interest in one entity as of December 31, 2023 and two entities as of December 31, 2022, that were concluded to be variable interests for which the Company was not the primary beneficiary as the Company did not have the not have the power to direct the activities that most significantly impact the economic performance of the VIEs.
−Removed: As of December 31, 2023 and 2022 , the carrying value and maximum exposure to loss of the Company’s variable interests were $ 13.0 million and $ 15.9 million, respectively, which are recorded in other investments in the Company’s Consolidated Balance Sheets.
−Removed: In October 2022, the Company received shares of PACT’s Series D non-voting convertible preferred stock (See Note 3, License, Collaboration and Success Payment Agreements ).
−Removed: The Company recognized its investment in PACT preferred stock at its estimated fair value of $ 2.9 million on October 1, 2022, which was included in the Company’s Consolidated Balance Sheet within other investments as of December 31, 2022.
−Removed: During the years ended December 31, 2023, 2022 and 2021, the Company performed qualitative assessments of potential indicators of impairment and determined that indicators existed for certain of its other investments.
−Removed: While there was no single event or factor in each instance, the Company considered the underlying companies’ operating cash flow requirements over the next year, liquid asset balances to fund those requirements and the underlying companies’ inability to raise funds as indicators of impairment.
+Added: As of both December 31, 2024 and 2023, t he Company held an interest in one entity that was concluded to be a variable interest for which the Company was not the primary beneficiary as the Company did not have the power to direct the activities that most significantly impact the economic performance of the variable interest entity.
+Added: As of December 31, 2024 and 2023 , the carrying value and maximum exposure to loss of the Company’s variable interests were zero and $ 13.0 million, respectively, which are recorded in other investments in the Company’s Consolidated Balance Sheets.
+Added: During the years ended December 31, 2024, 2023 and 2022, the Company performed qualitative assessments of potential indicators of impairment and determined that indicators existed for certain of its other investments with carrying amounts of $ 13.0 million, $ 12.9 million and $ 5.0 million , respectively.
+Added: During the year ended December 31, 2024, the anticipated funding for one of its other investments was not secured within the expected timeframe.
+Added: While no single event or factor was solely responsible for the impairments in each year, the Company considered the underlying companies’ operating cash flow requirements over the next year, liquid asset balances to fund those requirements and the underlying companies’ inability to raise funds as indicators of impairment.
Due to these indicators, the Company assessed the valuation of these investments and determined the fair values to be negligible and the impairments to be other-than-temporary in nature.
−Removed: As a result, the Company recorded impairment expenses of $ 2.9 million for the PACT Series D convertible preferred stock investment and $ 10.0 million for another investment for the year ended December 31, 2023, $ 5.0 million for an investment for the year ended December 31, 2022 and $ 36.4 million for the PACT Series C-1 convertible preferred stock investment for the year ended December 31, 2021 .
+Added: As a result, the Company recorded impairment expenses of $ 13.0 million for one investment for the year ended December 31, 2024, $ 12.9 million for two investments for the year ended December 31, 2023 and $ 5.0 million for one investment for the year ended December 31, 2022 .
The impairment expenses were recorded within impairment of other investments on the Consolidated Statements of Operations and Comprehensive Loss and as reductions to the investment balances within other investments on the Consolidated Balance Sheets.
12 unchanged sentences
— 21,492 — 21,492
+Added: Marketable equity security
Total financial assets
1 unchanged sentence
Financial liabilities:
+Added: Contingent consideration payable
+Added: $ — $ — $ 7,600 $ 7,600
Success payment liabilities
23 unchanged sentences
The Company measures the fair value of money market funds based on quoted prices in active markets for identical assets or liabilities.
+Added: The Company measures the fair value of marketable equity securities traded in active markets based on quoted prices of identical assets.
The Level 2 marketable securities include U.S.
Treasury securities, U.S.
−Removed: government agency securities and corporate debt securities, which securities are valued using third-party pricing sources.
+Added: government agency securities and corporate debt securities, which are valued using third-party pricing sources.
The pricing services applied industry standard valuation models.
Inputs utilized include market pricing based on real-time trade data for the same or similar securities and other significant inputs derived from or corroborated by observable market data.
−Removed: The Company’s success payment liabilities are Level 3 financial instruments, which are estimated using Monte Carlo simulations.
+Added: The Company’s contingent consideration payable is classified as a Level 3 financial instrument.
+Added: The contingent consideration payable valuation was estimated using the Company’s common stock price and management’s assessment of the likelihood of achieving either (i) specified clinical milestones or (ii) certain regulatory approvals, which was determined to be approximately 95 %.
+Added: The Company’s success payment liabilities are Level 3 financial instruments, which were estimated using Monte Carlo simulations through December 31, 2023.
Monte Carlo simulations model the future movement of stock prices based on several key variables combined with empirical knowledge of the process governing the behavior of the stock price.
−Removed: The following variables were incorporated in the estimated fair value of the success payment liabilities:
+Added: The following variables were incorporated in the Monte Carlo simulation to determine the estimated fair value of the success payment liabilities:
fair value of the Company ’ s common stock, expected volatility, the risk-free interest rate and the estimated number and timing of valuation measurement dates on the basis of which payments may be triggered.
The computation of expected volatility was estimated based on available information about the historical volatility of stocks of similar publicly traded companies for a period matching the expected term assumption.
−Removed: The following assumptions were incorporated into the calculation of the estimated fair value of the Fred Hutch success payment liability:
−Removed: Fair value of common stock
−Removed: $ 1.94 $ 3.47
−Removed: Risk-free interest rate
−Removed: 3.51 % - 5.19 %
−Removed: 3.58 % - 4.65 %
−Removed: Expected volatility
−Removed: 80.0 % 80.0 %
−Removed: Expected term (in years)
−Removed: The following assumptions were incorporated into the calculation of the estimated fair value of the Stanford success payment liability:
+Added: As of December 31, 2024 , success payment liabilities were estimated by management using its historical experience of the correlation of success payment fair values relative to the Company’s stock price.
+Added: The following assumptions were incorporated into the calculation of the estimated fair value of the Fred Hutch and Stanford success payment liabilities as of December 31, 2023:
Fair value of common stock
6 unchanged sentences
Expected term (in years)
−Removed: The Company utilizes estimates and assumptions in determining the estimated success payment liabilities and associated changes in fair value.
−Removed: A small change in the valuation of the Company’s common stock may have a relatively large change in the estimated fair value of the success payment liability and associated changes in fair value.
+Added: The Company utilizes estimates and assumptions in determining the estimated contingent consideration payable and success payment liabilities and associated changes in fair value.
+Added: A small change in the valuation of the Company’s common stock may have a relatively large change in the estimated fair value of the contingent consideration payable and success payment liabilities and associated changes in fair value.
+Added: Additionally, a small change in Management’s assessment of the likelihood of achieving either (i) specified clinical milestones or (ii) certain regulatory approvals related to the estimated valuation of the contingent consideration payable may have a relatively large change in its estimated fair value.
Lyell Immunopharma, Inc.
Notes to Consolidated Financial Statements—(Continued)
−Removed: The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial assets and liabilities (in thousands):
−Removed: Equity Warrant
−Removed: Investment Success Payment
+Added: The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities (in thousands):
+Added: Contingent Consideration Payable
+Added: Success Payment
Balance at December 31, 2022
−Removed: $ 1,067 $ 9,486
Change in fair value (1)
−Removed: ( 1,067 ) ( 5,130 )
Balance at December 31, 2023
Change in fair value (1)
+Added: ( 3,804 ) ( 1,165 )
Balance at December 31, 2024
−Removed: (1) The change in the fair value associated with the Fred Hutch success payment liabilities f or the year ended December 31, 2023 is recorded in other income (expense), net .
−Removed: The change in the fair value associated with the Fred Hutch success payment liabilities f or the year ended December 31, 2022, and t he change in the fair value associated with the Stanford success payment liabilities f or the years ended December 31, 2023 and 2022, respectively, are recorded as research and development expenses .
+Added: $ 7,600 $ 411
+Added: (1) The change in fair value of the contingent consideration payable subsequent to Closing Date is recorded in other income, net for the year ended December 31, 2024.
+Added: Changes in the fair value of Fred Hutch and Stanford success payment liabilities are recorded as either other income, net or research and development expenses, depending on the period.
(See Note 4, License, Collaboration, and Success Payment Agreements.)
−Removed: Changes in fair value associated with the equity warrant investment held are recorded in other income (expense), net.
In October 2022, the Company received non-voting PACT Series D convertible preferred stock with an estimated fair value of $ 2.9 million using the cost approach (See Note 4, License, Collaboration and Success Payment Agreements ).
20 unchanged sentences
Depreciation and amortization expense was $ 19.4 million , $ 20.2 million and $ 18.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.
+Added: During the year ended December 31, 2024, the Company recorded impairment losses of $ 38.7 million for leasehold improvements.
+Added: The Company did not record any impairment losses in 2023 and 2022.
+Added: See Note 5, Impairment of Long‑Lived Assets , for further information.
Lyell Immunopharma, Inc.
7 unchanged sentences
Accrued legal 692 395
−Removed: Accrued property and equipment — 732
Total accrued liabilities and other current liabilities $ 40,411 $ 28,126
−Removed: The Company’s lease portfolio is comprised of operating leases for laboratory, office and manufacturing facilities located in South San Francisco, California, and Seattle and Bothell, Washington with contractual periods expiring between December 2028 and March 2031.
+Added: The Company’s lease portfolio is comprised of operating leases for laboratory, office and manufacturing facilities located in South San Francisco and Los Angeles, California, and Seattle and Bothell, Washington with contractual periods expiring between January 2028 and March 2031.
In addition to minimum rent, the leases require payment of real estate taxes, insurance, common area maintenance charges and other executory costs.
6 unchanged sentences
The initial lease term expires in January 2031 with the option to extend the term for another 10 years, which is not reasonably assured.
−Removed: In January 2021, the Company amended the lease term to extend the lease expiration to March 2031, which resulted in an increase to the right-of-use asset and lease liability of $ 4.2 million.
+Added: In January 2021, the Company amended the lease term to extend the lease expiration to March 2031.
+Added: On the acquisition Closing Date, the Company acquired an operating lease agreement for approximately 26,000 square feet of office and laboratory space located in Los Angeles, California, with an initial lease term expiring in January 2028.
+Added: See Note 3, Acquisition , for further information regarding the acquisition.
+Added: The Company has one five-year option to extend the lease, which is not reasonably assured.
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
The following table summarizes the Company’s future minimum operating lease commitments, including expected lease incentives to be received, as of December 31, 2024 (in thousands):
8 unchanged sentences
Total $ 58,968
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
The operating lease costs for all operating leases were $ 9.2 million, $ 9.0 million and $ 9.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.
3 unchanged sentences
The weighted-average discount rates for operating leases were 8.5 % as of both December 31, 2024 and 2023.
−Removed: In May 2021, the Company entered into a sublease, whereby the Company agreed to sublease approximately 11,000 square feet of its space in South San Francisco, California currently leased by the Company.
−Removed: The sublease is classified as an operating lease and will expire in March 2031.
−Removed: The Company recognized sublease income for this sublease of $ 0.8 million for both the years ended December 31, 2023 and 2022 and $ 0.4 million for the year ended December 31, 2021.
+Added: The Company entered into subleases in May 2021 and September 2024, whereby the Company agreed to sublease approximately 11,000 and 12,150 square feet, respectively, of its currently leased space in South San Francisco, California currently leased by the Company.
+Added: These subleases are classified as operating leases and will expire in March 2031 and July 2026, respectively.
+Added: The Company recognized sublease income for these subleases of $ 1.1 million for the year ended December 31, 2024 and $ 0.8 million for both the years ended December 31, 2023 and 2022.
In September 2021, the Company entered into a sublease with Sonoma Biotherapeutics, Inc.
2 unchanged sentences
As a part of the sublease, in September 2021, the Company received a $ 4.6 million tenant improvement contribution payment, which will be recognized over the term of the sublease.
−Removed: The sublease is classified as an operating lease and will expire in March 2031.
−Removed: The Company recognized Sonoma sublease income of $ 1.9 million for both the years ended December 31, 2023 and 2022 and $ 0.6 million for the year ended December 31, 2021.
+Added: The sublease is classified as an operating lease and will expire in March 2031 if the approximate five-year renewal term is exercised.
+Added: The Company recognized Sonoma sublease income of $ 1.9 million for each of the years ended December 31, 2024, 2023 and 2022.
The Company’s sublease income is recognized within other operating income, net in the Consolidated Statements of Operations and Comprehensive Loss.
+Added: During the year ended December 31, 2024, the Company recorded impairment losses of $ 12.6 million for lease right‑of‑use assets.
+Added: The Company did not record any impairment losses for lease right-of-use assets in 2023 and 2022.
+Added: See Note 5, Impairment of Long‑Lived Assets , for further information.
Convertible Preferred Stock
−Removed: Upon the closing of the IPO, 194,474,431 shares of convertible preferred stock then outstanding converted into an equal number of shares of common stock.
As of December 31, 2024, no shares of convertible preferred stock were outstanding.
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
Stockholders’ Equity
4 unchanged sentences
As of December 31, 2024 and 2023, there wer e 294,875,546 shares and 253,957,709 shares of the Company’s common stock outstanding, respectively.
+Added: On February 28, 2024, the Company entered into a sales agreement with Cowen and Company, LLC (“Cowen”) acting as the Company’s sales agent (the “Sales Agreement”), pursuant to which the Company may offer and sell shares of common stock having an aggregate offering price of up to $ 150.0 million from time to time in a series of one or more at‑the‑market equity offerings.
+Added: The Company will pay Cowen commissions of up to 3 % of the gross proceeds of the sale, and reimbursement of certain expenses, under this agreement.
+Added: Neither the Company nor Cowen is obligated to sell any shares and, to date, the Company has not made any sales under the Sales Agreement.
Stock-based Compensation
2 unchanged sentences
In addition, the number of shares reserved for issuance under the 2021 Plan automatically increases on January 1 of each year for a period of ten years , beginning on January 1, 2022 and continuing through January 1, 2031, in an amount equal to (1) 5 % of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year, or (2) a lesser number of shares determined by the Company’s board of directors no later than December 31 of the immediately preceding year.
−Removed: On January 1, 2023, the Company reserved an additional 12,478,367 shares of common stock for issuance under the 2021 Plan representing 5 % of
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
−Removed: the total common shares outstanding as of December 31, 2022.
+Added: On January 1, 2024, the Company reserved an additional 12,697,885 shares of common stock for issuance under the 2021 Plan representing 5 % of the total common shares outstanding as of December 31, 2023.
Under the 2021 Plan, the Company may grant incentive stock options, non-statutory stock options, RSAs, RSUs, stock appreciation rights, performance awards and other stock‑based awards.
10 unchanged sentences
provided, however, that the Company’s board of directors may act to provide a lesser increase in number of shares.
−Removed: The Company’s board of directors elected to reserve no additional shares under the 2021 ESPP for the year beginning January 1, 2023 .
+Added: On January 1, 2024, the Company reserved an additional 2,539,577 shares of common stock for issuance under the 2021 ESPP representing 1 % of the total common shares outstanding as of December 31, 2023.
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
The Company may specify offerings with durations not more than 27 months and may specify shorter purchase periods within each offering.
−Removed: Under the 2021 ESPP, 986,391 , 475,363 and zero shares have been issued for the years ended December 31, 2023, 2022 and 2021, respectively.
+Added: Under the 2021 ESPP, 954,761 , 986,391 and 475,363 shares have been issued for the years ended December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2024 , 5,046,445 shares were available for future issuance pursuant to the 2021 ESPP.
16 unchanged sentences
$ 33,144 $ 47,084 $ 81,924
−Removed: Stock-based compensation expense for the year ended December 31, 2021 included the impact of an award accelerated in connection with the Company’s IPO of $ 2.6 million.
Stock Options and RSA Modifications
In November 2023, the Board of Directors of the Company approved, effective November 16, 2023, a one-time repricing of certain stock option awards that had been granted to date under the 2021 Plan and 2018 Plan.
−Removed: The repricing
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
−Removed: impacted stock options with exercise prices greater than $ 2.37 held by employees who remained employed as-of November 16, 2023 and were not impacted by the reduction in workforce.
+Added: The repricing impacted stock options with exercise prices greater than $ 2.37 held by employees who remained employed as-of November 16, 2023 and were not impacted by the reduction in workforce.
The original exercise prices of the repriced stock options ranged from $ 2.61 to $ 17.95 per share for 200 total grantees with 23,416,860 shares repriced.
Each stock option was repriced to have a per share exercise price of $ 1.87 , which was the closing price of the Company’s common stock on November 16, 2023.
−Removed: To receive the new exercise price, option holders must remain employed with the Company through November 15, 2024.
+Added: To receive the new exercise price, option holders were required to remain employed with the Company through November 15, 2024.
Additionally, the vesting schedule for the unvested shares underlying repriced stock options held by executives at the level of senior vice president and above was extended for an additional year.
7 unchanged sentences
As the remaining service period was determined to be nonsubstantive, the entire incremental expense of $ 3.7 million associated with the modification was recognized in the fourth quarter of 2022.
−Removed: In 2021, the Company had modifications due to the reduction in the service level for a previous CEO, who resigned as Executive Chairman in the fourth quarter of 2021, as well as an increase to certain awards’ post-termination exercise periods.
−Removed: The modifications in 2021 impacted both vested and unvested awards.
−Removed: Expense associated with vested awards is recognized in the period of the modification and expense associated with unvested awards is recognized over the remaining service life of the options or RSAs.
−Removed: The Company also had option modifications in 2021 for one individual resulting in incremental stock-based compensation expense of $ 1.0 million.
−Removed: The following table shows the total incremental stock-based compensation expense associated with modifications for previous CEOs by the year in which the modification occurred in the years December 31, 2023, 2022 and 2021 (in thousands):
−Removed: 2023 2022 2021
−Removed: Previous CEO - Options (1)
+Added: At December 31, 2024, total stock-based compensation cost related to unvested awards not yet recognized was $ 44.7 million, which is expected to be recognized over a remaining weighted-average period of 2.3 years.
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
+Added: Performance-Based Restricted Stock Units
+Added: During the year ended December 31, 2024, the Company granted PSU awards to certain key employees.
+Added: PSUs awarded to employees have a three-year performance period and vest based upon the Company’s performance against a two and three-year relative total shareholder return (“rTSR”) metric, as well as upon the achievement of certain clinical development milestones.
+Added: Certain of the clinical development milestones were determined to be probable of achievement as of December 31, 2024, representing 1.5 million shares.
+Added: For the portion of PSUs subject to certain clinical development milestones (other than the bonus clinical development milestone), 50 % vest upon the achievement of the applicable milestone, and the remaining 50 % vest upon the earlier of (a) one year of service from the date of such achievement and (b) the end of the three-year performance period.
+Added: The vesting of all PSU awards granted is also subject to the respective employee’s continued employment.
+Added: The Company valued the portion of PSUs subject to the rTSR metric using a Monte Carlo simulation.
+Added: The number of PSUs granted subject to the rTSR metrics represents the target number of units that are eligible to be earned based on the achievement of the metrics established at the beginning of the performance period, which ends on December 31 st of the three-year performance period.
+Added: For the portion of PSUs subject to the rTSR metrics, employees may ultimately earn between zero and 200 % of the target number of PSUs granted based on the degree of achievement of the applicable rTSR metric.
+Added: Accordingly, additional PSUs may be issued or currently outstanding PSUs may be cancelled upon final determination of the number of units earned.
+Added: Stock-based compensation expense recognized for the PSU awards was approximately $ 1.9 million for the year ended December 31, 2024 and zero for both the years ended December 31, 2023 and 2022.
+Added: A summary of the Company’s PSU activity was as follows:
+Added: Performance-Based Restricted Stock Units Outstanding
+Added: Weighted-Average
+Added: Value at Grant
+Added: Date Per Share
+Added: Unvested PSUs as of December 31, 2023
+Added: PSUs granted (1)
2,703,400 $ 1.88
−Removed: Previous CEO - Options (2)
−Removed: Previous CEO - RSA (2)
+Added: PSUs forfeited or canceled
+Added: Unvested PSUs as of December 31, 2024
2,703,400 $ 1.88
−Removed: (1) The modification for Previous CEO - Options for 2022 is for Ms.
−Removed: Elizabeth Homans, who resigned in December 2022.
−Removed: (2) The modifications for Previous CEO - Options and Previous CEO - RSA for 2021 are for Dr.
−Removed: Richard Klausner, who resigned as Executive Chairman in October 2021 and is now the Chair of Lyell’s Board.
−Removed: At December 31, 2023, total stock-based compensation cost related to unvested awards not yet recognized was $ 65.3 million, which is expected to be recognized over a remaining weighted-average period of 2.7 years.
+Added: (1) PSU grants reflect the target number of shares eligible to be earned at the time of grant.
+Added: As of December 31, 2024 , none of the PSU metrics have been met, resulting in no shares vesting.
Restricted Stock Awards
The Company had no unvested RSAs as of both December 31, 2024 and 2023.
−Removed: The fair value of RSAs vested during the years ended December 31, 2023, 2022 and 2021 was zero , $ 15.2 million and $ 57.1 million, respectively.
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
+Added: The fair value of RSAs vested during the years ended December 31, 2024, 2023 and 2022 was zero , zero and $ 15.2 million, respectively.
Restricted Stock Units
9 unchanged sentences
5,623,819 $ 1.72
−Removed: The fair value of RSUs vested during the years ended December 31, 2023 and 2022 w as $ 1.4 million and $ 1.5 million, respectively .
−Removed: No RSUs vested during the year ended December 31, 2021 .
+Added: The fair value of RSUs vested during the years ended December 31, 2024, 2023 and 2022 w as $ 2.0 million, $ 1.4 million and $ 1.5 million, respectively .
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
Stock Options
23 unchanged sentences
The Company has reported pre-tax operating losses for all periods presented.
−Removed: The Company’s net losses are derived solely from within the U.S.
+Added: The Company generated losses in the U.S.
+Added: and had a minimal amount of income in Israel.
The Company has not reflected any benefit for corresponding tax net operating loss carryforwards in the accompanying consolidated financial statements.
3 unchanged sentences
The Company also had U.S.
−Removed: state NOL carryforwards of $ 537.2 million that begin to expire in 2038.
+Added: state NOL carryforwards of $ 702.9 million that begin to expire in 2038 and foreign carryforwards of $ 5.8 million that do not expire.
The Company had gross U.S.
−Removed: federal and state tax credits of $ 24.2 million and $ 15.8 million as of December 31, 2023 and
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
−Removed: 2022, respectively, which may be used to offset future tax liabilities.
+Added: federal and state tax credits of $ 43.6 million and $ 24.2 million as of December 31, 2024 and 2023, respectively, which may be used to offset future tax liabilities.
The federal NOL carryforward period is indefinite, while the tax credits will begin to expire in 2039.
2 unchanged sentences
As of December 31, 2024, the Company had a capital loss carryforward of $ 52.5 million, which will expire in 2028.
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
A reconciliation of income taxes computed using the U.S.
8 unchanged sentences
( 20.39 ) ( 29.10 ) ( 28.89 )
−Removed: Collaboration revenue
Stock-based compensation
2 unchanged sentences
0.06 ( 0.06 ) ( 0.15 )
+Added: Collaboration revenue
Effective income tax rate
3 unchanged sentences
Deferred tax assets:
−Removed: Net operating loss carryforwards
+Added: Net operating loss carryforward
$ 176,298 $ 133,141
−Removed: Tax credit carryforwards
+Added: Tax credit carryforward
37,611 22,409
Capital loss carryforward
+Added: 14,705 14,368
Accrued liabilities and allowances
Deferred revenue
+Added: Property and equipment
Capitalized research and development 82,389 51,159
3 unchanged sentences
Stock-based compensation
+Added: 10,036 11,244
Gross deferred tax assets
3 unchanged sentences
Deferred tax assets, net of valuation allowance
−Removed: 14,938 16,628
Deferred tax liabilities:
2 unchanged sentences
Property and equipment
−Removed: ( 4,085 ) ( 5,351 )
Deferred tax liabilities
5 unchanged sentences
The Company has included the impact of this provision, which results in a deferred tax asset of approximately $ 82.4 million as of December 31, 2024.
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
The Company maintains a full valuation allowance on its net U.S.
1 unchanged sentence
The assessment regarding whether a valuation allowance is required considers the evaluation of both positive and negative evidence when concluding whether it is more likely than not that deferred tax assets are realizable.
−Removed: In making this assessment, significant weight is given to evidence that can be objectively verified.
+Added: In making this assessment, significant weight is
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
+Added: given to evidence that can be objectively verified.
In its evaluation, the Company considered its cumulative loss in recent years and its forecasted losses in the near-term as significant negative evidence.
3 unchanged sentences
deferred tax assets from net operating loss carryforwards, research and development tax credit carryforwards, research and development expenses capitalized and amortized for tax but deducted for GAAP and stock-based compensation.
+Added: In connection with the October 2024 acquisition of ImmPACT stock, the Company recorded U.S.
+Added: deferred tax assets of $ 39.6 million, which are mainly related to capitalized research costs and tax attribute carryforwards.
+Added: The deferred tax assets are considered not more likely than not to be realized and therefore are fully offset by a valuation allowance of $ 39.6 million.
+Added: ImmPACT has an Israeli subsidiary with deferred tax assets of $ 1.4 million, which are mainly related to tax attribute carryforwards.
+Added: These deferred tax assets are also fully offset by a valuation allowance of $ 1.4 million.
The Company will continue to assess the realizability of its deferred tax assets and adjust the valuation allowance as required by ASC 740.
15 unchanged sentences
Basic and diluted net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration for common stock equivalents.
−Removed: The Company’s potentially dilutive shares, which include unvested RSAs, unvested RSUs and options to purchase common stock, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive.
−Removed: Shares subject to options to purchase common stock, unvested RSAs and unvested RSUs were all excluded from consideration in the calculation of diluted net loss per share in all periods presented due to their anti-dilutive effects.
+Added: The Company’s potentially dilutive shares, which include unvested RSAs, unvested RSUs, unvested PSUs and options to purchase common stock, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive.
+Added: Shares subject to options to purchase common stock, unvested RSAs, unvested RSUs and unvested PSUs were all excluded from consideration in the calculation of diluted net loss per share in all periods presented due to their anti-dilutive effects.
Employee Benefit Plan
2 unchanged sentences
Beginning in 2022, the Company sponsors a defined-contribution savings plan with matching 401(k) contributions based upon the amount of the employees’ contributions subject to certain limitations.
−Removed: The Company made matching contributions to the 401(k) Plan on behalf of participants of $ 1.2 million and $ 1.0 million for the year ended December 31, 2023 and 2022, respectively, and none for the year ended December 31, 2021.
Lyell Immunopharma, Inc.
Notes to Consolidated Financial Statements—(Continued)
+Added: made matching contributions to the 401(k) Plan on behalf of participants of $ 1.0 million, $ 1.2 million and $ 1.0 million for the years ended December 31, 2024, 2023 and 2022 , respectively.
Commitments and Contingencies
17 unchanged sentences
See Note 4, License, Collaboration, and Success Payment Agreements .
−Removed: Revenue recognized in connection with the GSK agreement was zero , $ 84.7 million and $ 10.5 million for the years ended December 31, 2023, 2022 and 2021, respectively.
+Added: Revenue recognized in connection with the GSK agreement was zero for both the years ended December 31, 2024 and 2023, and $ 84.7 million for the year ended December 31, 2022.
GSK terminated the GSK Agreement effective December 24, 2022.
See Note 4, License, Collaboration, and Success Payment Agreements, for additional details regarding the termination of the GSK Agreement.
−Removed: Workforce Reduction
−Removed: In November 2023, the Company announced a reduction in its workforce to reduce operating costs and improve operating efficiency, pursuant to which the Company’s workforce was reduced by approximately 25 %.
−Removed: The execution of the reduction in workforce was substantially completed by the end of 2023.
−Removed: The Company incurred approximately $ 5.5 million in expenses related to one-time severance payments and other employee‑related costs as follows for the year ended December 31, 2023 (in thousands):
+Added: The Company reports segment information in accordance with the management approach, which reflects the internal reporting utilized by the Chief Operating Decision Maker (“CODM”), the Company’s President and Chief Executive Officer.
+Added: Based on the information used by the CODM to allocate resources and assess the Company’s performance, the Company has determined it operates in one segment.
+Added: The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance.
+Added: The CODM evaluates the performance of the Company’s sole reportable segment based on net income or loss that also is reported on the Consolidated Statements of Operations and Comprehensive Loss as net income or loss.
+Added: The measure of segment assets is reported on the Consolidated Balance Sheets as total assets.
+Added: The Company’s sole reportable segment generates revenue by providing research and development services.
+Added: Lyell Immunopharma, Inc.
+Added: Notes to Consolidated Financial Statements—(Continued)
Year Ended December 31,
+Added: 2024 2023 2022
+Added: Revenue $ 61 $ 130 $ 84,683
+Added: Operating expenses:
Research and development
+Added: Technical operations 63,419 64,393 55,412
+Added: Clinical operations 39,783 31,802 19,191
+Added: Research activities 37,772 53,567 57,328
+Added: Facilities and technology 26,342 25,636 25,081
+Added: Operations management 4,287 7,547 2,176
+Added: Total research and development expenses 171,603 182,945 159,188
General and administrative
−Removed: Total expense
−Removed: The workforce reduction expenses were incurred in 2023 and cash payments were significantly completed by the end of 2023.
−Removed: The Company has accrued liabilities of approximately $ 1.9 million related to the workforce reduction, which were included in the Company’s Consolidated Balance Sheet within Accrued Liabilities and Other Current Liabilities as of December 31, 2023.
−Removed: Lyell Immunopharma, Inc.
−Removed: Notes to Consolidated Financial Statements—(Continued)
−Removed: Subsequent Events
−Removed: On February 28, 2024, the Company entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC as the Company’s sales agent (“Agent”) with respect to an at-the-market offering program.
−Removed: In accordance with the terms of the Sales Agreement, the Company may offer and sell from time to time through the Agent shares of the Company’s common stock having an aggregate offering amount of up to $ 150.0 million (“the Placement Shares”).
−Removed: Sales of the Placement Shares, if any, will be made at prevailing market prices on Nasdaq at the time of sale, or as otherwise agreed with the Agent, by any method permitted by law deemed to be an “at-the-market offering” as defined in Rule 415 of the Securities Act of 1933, as amended.
−Removed: The Company will pay commissions to the Agent of up to 3 % of the gross proceeds of the sale of the Placement Shares sold under the Sales Agreement and reimburse the Agent for certain expenses.
−Removed: Neither the Company nor the Agent are obligated to sell any shares and, to date, the Company has not made any sales under the Sales Agreement.
+Added: Business support 33,973 47,428 84,500
+Added: Corporate expenses and outside services 14,450 15,575 27,717
+Added: Facilities and technology 3,618 3,980 5,090
+Added: Total general and administrative expenses 52,041 66,983 117,307
+Added: Other operating income, net ( 3,309 ) ( 2,790 ) ( 4,754 )
+Added: Acquired in-process research and development 87,184 — —
+Added: Impairment of long-lived assets
+Added: Total operating expenses 358,816 247,138 271,741
+Added: Loss from operations ( 358,755 ) ( 247,008 ) ( 187,058 )
+Added: Interest income, net 24,068 23,453 7,053
+Added: Other income, net 4,694 1,846 1,887
+Added: Impairment of other investments ( 13,001 ) ( 12,923 ) ( 5,000 )
+Added: Total other income, net 15,761 12,376 3,940
+Added: Net loss $ ( 342,994 ) $ ( 234,632 ) $ ( 183,118 )
+Added: Total expenditures for additions to the Company’s property and equipment, net were $ 0.6 million, $ 1.4 million and $ 21.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.
+Added: For the year ended December 31, 2024, approximately 73 % of revenue is attributable to a single customer headquartered in the United States and approximately 27 % of revenue is attributable to a single customer headquartered in China.
+Added: The Company’s revenues for the year ended December 31, 2023 are attributed to a single customer headquartered in the United States.
+Added: For the year ended December 31, 2022, approximately 100 % of the Company’s revenues were attributable to a single customer headquartered in the United Kingdom.
+Added: The Company’s long-lived assets as of December 31, 2024 and 2023 are located in the United States.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
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.