What changed in this filing

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Item 1. Financial Statements

2021-02-04 compared with 2020-11-05 · 1664 added, 754 removed, 257 unchanged (90% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and

per share amounts)

September 30,

(Amounts in thousands, except share

and per share amounts)

Current assets:

5 unchanged sentences

Property, plant and equipment, net

Research and development incentives receivable - long term

Restricted cash

15 unchanged sentences

Common stock, $0.001 par value;

150,000,000 shares authorized as of September 30, 2020 and March 31, 2020;

40,312,272 and 36,668,743 shares issued and outstanding as of September 30, 2020 and March 31, 2020, respectively

150,000,000 shares authorized as of December 31, 2020 and March 31, 2020;

46,384,675 and 36,668,743 shares issued and outstanding as of December 31, 2020 and March 31, 2020, respectively

Additional paid-in capital

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF

(Amounts in thousands, except share and

per share amounts)

(Amounts in thousands, except share

and per share amounts)

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

Operating expenses:

3 unchanged sentences

Loss from operations

Other income:

Other income (expense):

Research and development incentives

2 unchanged sentences

Interest expense on debt obligations

Total other income, net

Loss on extinguishment of debt

Other income (expense)

income (expense), net

Net loss attributable to common stockholders

8 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

Other comprehensive loss:

Foreign currency translation loss

Foreign currency translation gain (loss)

Net unrealized gain (loss) on short-term investments, net of tax

3 unchanged sentences

REPLIMUNE GROUP, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

(Amounts in thousands, except share amounts)

14 unchanged sentences

Balances as of September 30, 2020

Foreign currency translation adjustment

Unrealized loss on short-term investments

Exercise of stock options

Issuance of prefunded warrants to purchase common stock, net of $3,750 issuance costs

Issuance of common stock, net of issuance costs and underwriter fees of $13,775

Stock-based compensation expense

Balances as of December 31, 2020

Balances as of March 31, 2019

10 unchanged sentences

Balances as of September 30, 2019

Issuance of common stock through ATM sales, net of offering costs

Issuance of common shares upon closing of follow-on

public offering, net of issuance costs and underwriter fees of $4,017

Issuance of prefunded warrants to purchase common

stock, net of issuance costs and underwriter fees of $1,797

Foreign currency translation adjustment

Unrealized loss on short-term investments

Exercise of stock options

Stock-based compensation expense

Balances as of December 31, 2019

The accompanying notes are an integral part

3 unchanged sentences

(Amounts in thousands)

Six Months Ended

September 30,

Nine Months Ended

Cash flows from operating activities:

3 unchanged sentences

Noncash interest expense

Loss on extinguishment of debt

Net amortization of premiums and discounts on short-term investments

15 unchanged sentences

Cash flows from financing activities:

Proceeds from long-term debt, net of debt issuance costs

Proceeds from issuance of common stock in follow-on public offering, net of issuance costs

Proceeds from issuance of prefunded warrants to purchase common stock, net of issuance costs

Proceeds from issuance of common stock in follow-on public offering, net of underwriting fees and discounts

Proceeds from issuance of prefunded warrants to purchase common stock, net of underwriting fees and discounts

Proceeds from issuance of common stock through ATM sales

Proceeds from long-term debt

Principal payment of long-term debt

Payment of long-term debt extinguishment costs

Payment of issuance costs

Principal payment of finance lease obligation

2 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net increase in cash, cash equivalents and restricted cash

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

Cash, cash equivalents and restricted cash at beginning of period

4 unchanged sentences

Net unrealized gain (loss) on short-term investments

Issuance costs included in accounts payable

Purchases of property and equipment included in accounts payable

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

(Amounts in thousands, except share and

per share amounts)

(Dollars in thousands, except share

and per share amounts)

Nature of the business

Replimune Group, Inc.

(the “Company”)

is a clinical-stage biotechnology company focused on the development of oncolytic immunotherapies to treat cancer.

Replimune Group, Inc.,

whose predecessor was founded in 2015, is the parent company of its wholly owned, direct and indirect subsidiaries:

Replimune Limited

(“Replimune UK”);

(the “Company”) is a clinical-stage biotechnology company focused on the development of oncolytic immunotherapies to

treat cancer.

Replimune Group, Inc., whose predecessor was founded in 2015, is the parent company of its wholly owned, direct

and indirect subsidiaries:

Replimune Limited (“Replimune UK”);

Replimune, Inc.

(“Replimune US”);

Replimune Securities Corporation;

and Replimune

(Ireland) Limited.

The Company is subject to risks and uncertainties

common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new

technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations

and the ability to secure additional capital to fund operations.

Product candidates currently under development will require significant

additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization.

These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance

and reporting capabilities.

Even if the Company’s product development efforts are successful, it is uncertain when, if ever,

the Company will realize significant revenue from product sales.

Basis of presentation

The accompanying consolidated financial

statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities

and commitments in the ordinary course of business.

The Company has incurred recurring losses since its inception, including net

losses of $20,095 and $11,139 for the three months ended September 30, 2020 and 2019, respectively and net losses of $37,588 and

$20,647 for the six months ended September 30, 2020 and 2019, respectively.

In addition, as of September 30, 2020, the Company

had an accumulated deficit of $149,886.

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

As of the issuance date of these consolidated financial statements, the Company expects that its cash and cash equivalents and

short-term investments will be sufficient to fund its operating expenses and capital expenditure requirements through at least

12 months from the issuance of the consolidated financial statements.

Impact of the COVID-19 coronavirus

In December 2019, a novel strain of coronavirus,

which causes the disease known as COVID-19, was reported to have surfaced in Wuhan, China.

Since then, COVID-19 coronavirus has

spread globally.

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic and the U.S.

imposed travel restrictions on travel between the United States, Europe and certain other countries.

The impact of this pandemic

has been, and will likely continue to be, extensive in many aspects of society, which has resulted, and will likely continue to

result, in significant disruptions to the global economy as well as businesses and capital markets around the world.

In response to public health

directives and orders and to help minimize the risk of the virus to employees, the Company has taken precautionary measures,

including implementing work-from-home policies for the Company’s employees, other than those in its laboratory, those

performing manufacturing functions and certain other employees as deemed appropriate from time to time.

For those employees,

the Company has implemented stringent safety measures designed to comply with applicable federal, state and local guidelines

instituted in response to the COVID-19 pandemic.

The Company has taken these and other precautionary steps while maintaining

business continuity in order to continue to progress its programs.

While there has been no prolonged material disruption to

the Company’s business to date, the impact of the virus, including work-from-home policies, may negatively impact

productivity, disrupt the Company’s business, and delay its preclinical research and clinical trial activities and its

development program timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions

and other limitations on the Company’s ability to conduct its business in the ordinary course.

Other impacts to the

Company’s business may include temporary closures of its suppliers and disruptions or restrictions on its

employees’ ability to travel.

Any prolonged material disruption to the Company’s employees or suppliers could

adversely impact the Company’s preclinical research and clinical trial activities, financial condition and results of

operations, including its ability to obtain financing.

(“Replimune US”);

Securities Corporation;

and Replimune (Ireland) Limited.

The Company is subject

to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development

by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance

with government regulations and the ability to secure additional capital to fund operations.

Product candidates currently under

development will require significant additional research and development efforts, including preclinical and clinical testing and

regulatory approval, prior to commercialization.

These efforts require significant amounts of additional capital, adequate personnel

and infrastructure and extensive compliance and reporting capabilities.

Even if the Company’s product development efforts

are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

of presentation

The accompanying consolidated

financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of

liabilities and commitments in the ordinary course of business.

The Company has incurred recurring losses since its inception,

including net losses of $21,783 and $16,189 for the three months ended December 31, 2020 and 2019, respectively and net losses

of $59,371and $36,836 for the nine months ended December 31, 2020 and 2019, respectively.

In addition, as of December 31,

2020, the Company had an accumulated deficit of $171,669.

The Company expects to continue to generate operating losses for the

foreseeable future.

As of the issuance date of these consolidated financial statements, the Company expects that its cash and cash

equivalents and short-term investments will be sufficient to fund its operating expenses and capital expenditure requirements through

at least 12 months from the issuance of the consolidated financial statements.

Impact of the

COVID-19 coronavirus

In December 2019,

a novel strain of coronavirus, which causes the disease known as COVID-19, was reported to have surfaced in Wuhan, China.

then, COVID-19 coronavirus has spread globally.

In March 2020, the World Health Organization declared the COVID-19 outbreak

a pandemic and the U.S.

government imposed travel restrictions on travel between the United States, Europe and certain other countries.

The impact of this pandemic has been, and will likely continue to be, extensive in many aspects of society, which has resulted,

and will likely continue to result, in significant disruptions to the global economy as well as businesses and capital markets

around the world.

In response to public

health directives and orders and to help minimize the risk of the virus to employees, the Company has taken precautionary measures,

including implementing work-from-home policies for the Company’s employees, other than those in its laboratory, those performing

manufacturing functions and certain other employees as deemed appropriate from time to time.

For those employees, the Company has

implemented stringent safety measures designed to comply with applicable federal, state and local guidelines instituted in response

to the COVID-19 pandemic.

The Company has taken these and other precautionary steps while maintaining business continuity in order

to continue to progress its programs.

While there has been no prolonged material disruption to the Company’s business to

date, the impact of the virus, including work-from-home policies, may negatively impact productivity, disrupt the Company’s

business, and delay its preclinical research and clinical trial activities and its development program timelines, the magnitude

of which will depend, in part, on the length and severity of the restrictions and other limitations on the Company’s ability

to conduct its business in the ordinary course.

Other impacts to the Company’s business may include temporary closures of

its suppliers and disruptions or restrictions on its employees’

ability to travel.

Any prolonged material disruption to the

Company’s employees or suppliers could adversely impact the Company’s preclinical research and clinical trial activities,

financial condition and results of operations, including its ability to obtain financing.

Summary of significant accounting policies

Principles of consolidation

The accompanying consolidated financial

statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP,

and include the accounts of the Company and its direct and indirect wholly owned subsidiaries, Replimune UK, Replimune US, Replimune

Securities Corporation and Replimune (Ireland) Limited after elimination of all intercompany accounts and transactions.

Use of estimates

The preparation of consolidated financial

statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets

and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the

reported amounts of expenses during the reporting periods.

Significant estimates and assumptions reflected in these consolidated

financial statements include, but are not limited to, the accrual for research and development expenses and the valuation of stock-based

The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors

that it believes to be reasonable under the circumstances.

The full extent to which the COVID-19 pandemic

will directly or indirectly impact our business, results of operations and financial condition, including, expenses, research and

development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result

of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19.

We have made estimates

of the impact of COVID-19 within our financial statements and there may be changes to those estimates in future periods.

Estimates are periodically reviewed in light

of reasonable changes in circumstances, facts and experience.

Changes in estimates are recorded in the period in which they become

of consolidation

The accompanying consolidated

financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America,

or GAAP, and include the accounts of the Company and its direct and indirect wholly owned subsidiaries, Replimune UK, Replimune

US, Replimune Securities Corporation and Replimune (Ireland) Limited after elimination of all intercompany accounts and transactions.

The preparation of

consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated

financial statements and the reported amounts of expenses during the reporting periods.

Significant estimates and assumptions reflected

in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses and

the valuation of stock-based awards.

The Company bases its estimates on historical experience, known trends and other market-specific

or other relevant factors that it believes to be reasonable under the circumstances.

The full extent to

which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including,

expenses, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain,

including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19.

We have made estimates of the impact of COVID-19 within our financial statements and there may be changes to those estimates in

future periods.

Estimates are periodically

reviewed in light of reasonable changes in circumstances, facts and experience.

Changes in estimates are recorded in the period

in which they become known.

Actual results could differ from those estimates or assumptions.

Unaudited interim financial information

The accompanying consolidated balance sheet

as of September 30, 2020, the consolidated statements of operations, of comprehensive loss and of stockholders’ equity for

the three and six months ended September 30, 2020 and 2019 and the consolidated statements of cash flows for the six months ended

September 30, 2020 and 2019 are unaudited.

The unaudited interim consolidated financial statements have been prepared on the same

basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which

include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of

September 30, 2020 and the results of its operations for the three and six months ended September 30, 2020 and 2019 and its cash

flows for the six months ended September 30, 2020 and 2019.

The financial data and other information disclosed in these consolidated

notes related to the three and six months ended September 30, 2020 and 2019 are unaudited.

The results for the three and six months

ended September 30, 2020 are not necessarily indicative of results to be expected for the year ending March 31, 2021, any other

interim periods or any future year or period.

The financial information included herein should be read in conjunction with the

financial statements and notes in the Company's Annual Report on Form 10-K for the year ended March 31, 2020.

During the three and six months

ended September 30, 2020, there have been no changes to the Company’s significant accounting policies as described

in the Company's Annual Report on Form 10-K for the year ended March 31, 2020 which was filed with the Securities and Exchange

Commission on June 3, 2020, except as described below.

Recently adopted accounting

pronouncements

In August 2018, the FASB issued ASU

2018-13, Fair Value Measurement (Topic 820), Disclosure Framework- Changes to the Disclosure Requirements for

Fair Value Measurement (“ASU 2018-13”).

The amendments in this ASU require certain existing disclosure requirements

in Topic 820 to be modified or removed, and certain new disclosure requirements to be added to the Topic.

In addition, this ASU

allows entities to exercise more discretion when considering fair value measurement disclosures.

The Company adopted ASU 2018-13

on April 1, 2020.

The adoption of ASU 2018-13 did not have a material impact on the Company's consolidated financial statements.

In November 2018, the FASB issued ASU No.

Unaudited interim financial

The accompanying consolidated

balance sheet as of December 31, 2020, the consolidated statements of operations, of comprehensive loss and of stockholders’

equity for the three and nine months ended December 31, 2020 and 2019 and the consolidated statements of cash flows for the

nine months ended December 31, 2020 and 2019 are unaudited.

The unaudited interim consolidated financial statements have been

prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all

adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial

position as of December 31, 2020 and the results of its operations for the three and nine months ended December 31, 2020

and 2019 and its cash flows for the nine months ended December 31, 2020 and 2019.

The financial data and other information

disclosed in these consolidated notes related to the three and nine months ended December 31, 2020 and 2019 are unaudited.

The results for the three and nine months ended December 31, 2020 are not necessarily indicative of results to be expected

for the year ending March 31, 2021, any other interim periods or any future year or period.

The financial information included

herein should be read in conjunction with the financial statements and notes in the Company's Annual Report on Form 10-K for

the year ended March 31, 2020.

During the three and

nine months ended December 31, 2020, there have been no changes to the Company’s significant accounting policies as

described in the Company's Annual Report on Form 10-K for the year ended March 31, 2020 which was filed with the Securities

and Exchange Commission on June 3, 2020, except as described below.

adopted accounting pronouncements

In August 2018,

the FASB issued ASU No.

2018-13, Fair Value Measurement (Topic 820), Disclosure Framework- Changes to the Disclosure

Requirements for Fair Value Measurement (“ASU 2018-13”).

The amendments in this ASU require certain existing

disclosure requirements in Topic 820 to be modified or removed, and certain new disclosure requirements to be added to the Topic.

In addition, this ASU allows entities to exercise more discretion when considering fair value measurement disclosures.

adopted ASU 2018-13 on April 1, 2020.

The adoption of ASU 2018-13 did not have a material impact on the Company's consolidated

financial statements.

In November 2018,

the FASB issued ASU No.

2018-18, Collaborative Arrangements (Topic 808):

Clarifying the Interaction between Topic 808 and Topic 606 (“ASU2018-18”),

which clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under

Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account.

In those situations,

all the guidance in Topic 606 should be applied, including recognition, measurement, presentation, and disclosure requirements.

The standard adds unit-of-account guidance in Topic 808 to align with the guidance in Topic 606 (that is, a distinct good or service)

when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606,

and requires that in a transaction with a collaborative arrangement participant that is not directly related to sales to third

parties, presenting the transaction together with revenue recognized under Topic 606 is precluded if the collaborative arrangement

participant is not a customer.

The standard is effective for interim and annual periods beginning after December 15, 2019,

with early adoption permitted, including adoption in any interim period for public business entities for periods in which financial

statements have not been issued.

Amendments in the standard should be applied retrospectively to the date of initial application

of Topic 606, but entities may elect to apply the amendments in this Update retrospectively either to all contracts or only to

contracts that are not completed at the date of initial application of Topic 606, and should disclose the election.

An entity may

also elect to apply the practical expedient for contract modifications that is permitted for entities using the modified retrospective

transition method in Topic 606.

Clarifying the Interaction between Topic 808 and

Topic 606 (“ASU 2018-18”), which clarifies that certain transactions between collaborative arrangement participants

should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context

of a unit of account.

In those situations, all the guidance in Topic 606 should be applied, including recognition, measurement,

presentation, and disclosure requirements.

The standard adds unit-of-account guidance in Topic 808 to align with the guidance in

Topic 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of

the arrangement is within the scope of Topic 606, and requires that in a transaction with a collaborative arrangement participant

that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under Topic

606 is precluded if the collaborative arrangement participant is not a customer.

The standard is effective for interim and annual

periods beginning after December 15, 2019, with early adoption permitted, including adoption in any interim period for public

business entities for periods in which financial statements have not been issued.

Amendments in the standard should be applied

retrospectively to the date of initial application of Topic 606, but entities may elect to apply the amendments in this Update

retrospectively either to all contracts or only to contracts that are not completed at the date of initial application of Topic

606, and should disclose the election.

An entity may also elect to apply the practical expedient for contract modifications that

is permitted for entities using the modified retrospective transition method in Topic 606.

The Company adopted ASU 2018-18 on April 1,

The adoption of ASU 2018-18 did not have

a material impact on the Company's consolidated financial statements.

Recently issued accounting

pronouncements

In June 2016, the FASB issued ASU No.

2016-13, Financial

Instruments- Credit Losses (Topic 326).

The standard changes how entities will measure credit losses for most financial

assets and certain other instruments that are not measured at fair value through net income.

Financial assets measured at amortized

cost will be presented at the net amount expected to be collected by using an allowance for credit losses.

In April 2019,

The adoption of ASU 2018-18 did not have a material impact on the Company's consolidated financial statements.

issued accounting pronouncements

In June 2016,

the FASB issued ASU No.

2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit

Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which clarifies and corrects certain

unintended applications of the guidance contained in each of the amended Topics.

Additionally, in May 2019, the FASB issued

2019-05, Financial Instruments - Credit Losses (Topic 326), which provides an option

to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost.

The standard is effective

for fiscal years and interim periods beginning after December 15, 2023.

Early adoption is permitted for all periods beginning

after December 15, 2018.

The adoption of ASU 2016-13 is not expected to have a material impact on the Company's consolidated

financial statements.

2016-13, Financial Instruments- Credit Losses (Topic 326).

The standard changes how

entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value

through net income.

Financial assets measured at amortized cost will be presented at the net amount expected to be collected by

using an allowance for credit losses.

In April 2019, the FASB issued ASU No.

2019-04, Codification Improvements

to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial

Instruments, which clarifies and corrects certain unintended applications of the guidance contained in each of the amended

Additionally, in May 2019, the FASB issued ASU No.

2019-05, Financial Instruments - Credit

Losses (Topic 326), which provides an option to irrevocably elect to measure certain individual financial assets at fair

value instead of amortized cost.

The standard is effective for fiscal years and interim periods beginning after December 15,

Early adoption is permitted for all periods beginning after December 15, 2018.

The adoption of ASU 2016-13 is not expected

to have a material impact on the Company's consolidated financial statements.

In December 2019,

the FASB issued ASU No.

2019-12 Income Taxes (Topic 740)-Simplifying the Accounting for Income Taxes (ASU 2019-12) ,

as part of its initiative to reduce complexity in the accounting standards.

The amendments in ASU 2019-12 eliminates certain exceptions

related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the

recognition of deferred tax liabilities for outside basis differences.

ASU 2019-12 also clarifies and simplifies other aspects

of the accounting for income taxes.

The standard is effective for fiscal years and interim periods beginning after December 15,

The Company is currently evaluating the impact of this new guidance on its financial statements and related disclosures

but does not expect the adoption of ASU 2019-12 to have a material impact on the Company's consolidated financial statements.

Fair value of financial assets and liabilities

The following tables present information

about the Company’s financial assets and liabilities measured at fair value on a recurring basis:

Fair Value Measurements as of

September 30, 2020 Using:

December 31, 2020 Using:

Money market funds

US Treasury bonds

US Government Agency bonds

US Treasury bonds

Fair Value Measurements as of

7 unchanged sentences

market funds held by the Company are all government backed securities.

During the three and six months ended September

During the three and nine months ended December 31,

2020 and 2019, there were no transfers between levels.

5 unchanged sentences

Cash equivalents consisted

of money market funds at September 30, 2020 and March 31, 2020.

of money market funds at December 31, 2020 and March 31, 2020.

Short-term investments

1 unchanged sentence

consisted of the following:

September 30, 2020

December 31, 2020

Gross unrealized

3 unchanged sentences

March 31, 2020

Gross unrealized

Amortized cost

Gross unrealized gains

Gross unrealized losses

Commercial paper

5 unchanged sentences

of the following:

September 30,

Construction in progress

4 unchanged sentences

Accumulated depreciation and amortization

Depreciation and amortization expense was

$425 and $816 for the three and six months ended September 30, 2020, respectively, and $42 and $84 for the three and six months

ended September 30, 2019, respectively.

Depreciation and amortization expense are recorded within research and development and

general and administrative expenses in the consolidated statement of operations.

Depreciation and amortization

expense was $402 and $1,217 for the three and nine months ended December 31, 2020, respectively, and $107 and $191 for the

three and nine months ended December 31, 2019, respectively.

Depreciation and amortization expense are recorded within research

and development and general and administrative expenses in the consolidated statement of operations.

Accrued expenses and other current liabilities

1 unchanged sentence

consisted of the following:

September 30,

Accrued research and development costs

3 unchanged sentences

Long-term debt consisted of the following:

September 30,

Principal amount of long-term debt

2 unchanged sentences

Hercules Loan Agreement

On August 8, 2019, (the “Closing

Date”) the Company and certain of its affiliates entered into a Loan and Security Agreement (as amended, the “Hercules

Loan Agreement”) with Hercules Capital, Inc.

(“Hercules”) pursuant to which Hercules agreed to make available

to the Company a secured term loan facility in the amount of $30,000 (the “Term Loan Facility”), subject to certain

terms and conditions.

The Company borrowed $10,000 under the Hercules Loan Agreement in one advance as a single tranche Term Loan

on the Closing Date upon which the Company paid a $225 facility charge and incurred $130 in additional closing and legal fees.

The Company may borrow the unused $20,000 available under the Term Loan Facility in two separate advances.

The second advance of

up to $10,000 may be borrowed between January 1, 2020 and December 15, 2020 and the third advance of up to $10,000 may

be borrowed between July 1, 2020 and June 30, 2021.

June 1, 2020, the Company entered into the First Amendment to the Hercules Loan Agreement (the “Hercules First

Amendment”), to, among other things, increase the aggregate principal amount of the secured term loan facility from

$30,000 to $40,000 , by adding a fourth advance of up to $10,000.

Pursuant to the Hercules First Amendment, the Company

may borrow the second advance of $10,000 between October 1, 2020 and December 15, 2020.

In the event the Company does not

draw on the second advance or if the Term Loan Facility is terminated prior to a draw of the second advance, the Company

shall pay Hercules a one-time facility charge fee of $100 on the earliest of (i) December 16, 2020 or (ii) the date the

Company prepays the outstanding obligations.

The third advance of up to $10,000 may be borrowed between July 1, 2020 and June

The fourth advance of up to $10,000 may be borrowed between July 1, 2021 and December 15, 2021.

incurred $100 in additional closing and legal fees in connection with Hercules First Amendment which were capitalized and

will be amortized as part of the effective yield.

Additionally, the Hercules First Amendment extended the interest only

payment period from March 1, 2022 to September 1, 2022 (the “Amortization Date”).

Advances under the Term Loan Facility bear

interest at a rate per annum equal to the greater of either (i) the prime rate as reported in The Wall Street Journal plus

2.75%, or (ii) 8.75%.

The Hercules Loan Agreement includes covenants, limitations, and events of default customary for similar

The term of the Hercules Loan Agreement is four years, ending August 1, 2023.

Interest is payable on a monthly basis until

the Amortization Date.

After the Amortization Date, payments shall consist of equal monthly installments of principal and interest

payable until the secured obligations are repaid in full.

At any time the Company may prepay the principal

of any advance pursuant to the terms of the Term Loan Facility subject to a prepayment charge equal to:

3.0%, if such advance is

prepaid within the first twelve months following the Closing Date, 2.0%, if such advance is prepaid after twelve months but prior

to twenty four months following the Closing Date, and 1.0%, if such advance is prepaid anytime thereafter.

The Company will also

pay a charge equal to the product of 4.95% and the aggregate amount of any advance made pursuant to the terms of the Term Loan

The Term Loan Facility is secured by substantially

all of the Company’s assets, but excluding its intellectual property, and subject to certain exceptions and exclusions.

The Hercules Loan Agreement contains customary

covenants for transactions of this type and other covenants agreed to by the parties, including, among others, (i) the provision

of delivery of annual and quarterly financial statements and insurance policies and restrictions on incurring debt, granting liens,

making acquisitions, making loans, paying dividends, dissolving, and entering into leases and asset sales.

The Hercules Loan Agreement

also provides for customary events of default, including, among others, events of default relating to failure to make payment,

bankruptcy, breach of covenants, breaches of representations and warranties, change of control, judgment and material adverse effects.

On August 8, 2019,

(the “Closing Date”) the Company and certain of its affiliates entered into a Loan and Security Agreement (as amended,

the “Hercules Loan Agreement”) with Hercules Capital, Inc.

(“Hercules”) pursuant to which Hercules

agreed to make available to the Company a secured term loan facility in the amount of $30,000 (the “Term Loan Facility”),

subject to certain terms and conditions.

The Company borrowed $10,000 under the Hercules Loan Agreement in one advance as a single

tranche term loan on the Closing Date upon which the Company paid a $225 facility charge and incurred $130 in additional closing

and legal fees.

On June 1, 2020,

the Company entered into the First Amendment to the Hercules Loan Agreement (the “Hercules First Amendment”), to, among

other things, increase the aggregate principal amount of the secured term loan facility from $30,000 to $40,000.

Pursuant to the

Hercules First Amendment, subject to the achievement of certain milestones, the Company could have borrowed three tranches of up

to $10,000 between October 1, 2020 and December 15, 2020, July 1, 2020 and June 30, 2021, and July 1,

2021 and December 15, 2021, respectively.

The Company incurred $100 in additional closing and legal fees in connection with

Hercules First Amendment which were capitalized and will be amortized as part of the effective yield.

On December 15,

2020, the Company entered into a Payoff Letter with respect to the Hercules Loan Agreement, which resulted in a loss on extinguishment

of debt of $913 including both cash and non-cash expense.

Pursuant to the Payoff Letter, the Company paid a total of $10,839 to

Hercules, representing $10,000 in outstanding principal, $495 end of term charge, $300 early termination fee due and $44 in accrued

interest owed to Hercules under the Hercules Loan Agreement.

In connection with the execution of the Payoff Letter and the repayment

of the Company’s outstanding obligations under the Hercules Loan Agreement, the Hercules Loan Agreement and the related loan

documents were terminated.

The Term Loan Facility

was secured by substantially all of the Company’s assets, but excluding its intellectual property, and subject to certain

exceptions and exclusions.

All liens on the Company’s assets held by Hercules were released in connection with the execution

of the Payoff Letter.

In connection with

entering into the Hercules Loan Agreement, the Company paid Hercules $355 of upfront fees, including closing costs and legal fees

associated with entering into the agreement, which were recorded as a debt discount.

In connection with entering into the Hercules

Loan Agreement, the Company paid Hercules $355 of upfront fees, including closing costs and legal fees associated with entering

into the agreement, which were recorded as a debt discount.

In connection with entering into the Hercules First Amendment, the

Company paid $100 of upfront fees, including closing costs and legal fees associated with entering into the amendment, which were

recorded as debt discount, totaling the debt discount to $455 as of September 30, 2020.

The debt discount is reflected as a reduction

of the carrying value of long-term debt on the Company’s consolidated balance sheet and is being amortized to interest expense

over the term of the loan using the effective interest method.

Company recognized aggregate interest expense under the Hercules Loan Agreement of $286 and $570 during the three and six

months ended September 30, 2020, respectively, which included non-cash interest expense of $63 and $126 for the three and six months

ended September 30, 2020, respectively, $29 and $56 related to the accretion of the debt discount and $34 and $70 related to the

accretion of the final payment for the three and six months ended September 30, 2020, respectively.

The Company’s annual

effective interest rate under the Hercules Loan Agreement (after giving effect to the Hercules First Amendment) was approximately

10.5% as of September 30, 2020.

There were no principal payments due or

paid under the Hercules Loan Agreement during the three and six months ended September 30, 2020.

Future payments of long-term debt

as of September 30, 2020 are as follows (fiscal years):

Future long-term debt payments:

2021 (remaining six months) $

Total debt payments $

The table of future payments of long-term

debt excludes the end of term charge of $495 as of September 30, 2020, which is due upon the maturity of the loan.

Stockholders’ Equity

As of September 30, 2020 and March 31, 2020,

the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue up to 150,000,000 shares

of common stock, par value $0.001 per share.

As of September 30, 2020 and March 31, 2020,

the Company had reserved 13,638,824 and 10,449,033 shares of common stock for the exercise of outstanding stock options, the number

of shares remaining available for grant under the Company’s 2018 Omnibus Incentive Compensation Plan and the Company’s

Employee Stock Purchase Plan (see Note 9) and the exercise of the outstanding warrants to purchase shares of common, respectively.

Undesignated preferred

As of September 30, 2020, the Company’s

certificate of incorporation, as amended and restated, authorized the Company to issue up to 10,000,000 shares of undesignated

preferred stock, par value $0.001 per share.

There were no undesignated preferred shares issued or outstanding as of September 30,

Convertible preferred stock and preferred

stock warrants

Prior to the IPO, the Company

issued series seed convertible preferred stock (the “series seed preferred stock”), series A convertible preferred

stock (the “series A preferred stock”) and series B convertible preferred stock (the “series B preferred stock”).

The series seed preferred stock, series A preferred stock and series B preferred stock are collectively referred to as the “preferred

stock.” In connection with the closing of the IPO, the preferred stock converted into 19,157,360 shares of common stock on

a 1:9.94688 basis.

There was no preferred stock outstanding as of September 30, 2020 and March 31, 2020.

connection with the issuance of the series seed preferred stock, the Company issued to the holders of the series seed preferred

stock warrants for the purchase of 50,000 shares of series seed preferred stock, which became fully vested and exercisable in the

year of issuance.

The warrants to purchase shares of series seed preferred stock were issued at an exercise price of $10.00 per

share and expire on the earlier of September 16, 2025 or a qualified change of control event.

In connection with the closing

of the IPO , the series seed preferred stock warrants became exercisable for 497,344 shares of common stock and the exercise price

was adjusted to $1.01 per share.

Upon the closing of the IPO, the series seed preferred stock warrants and were reclassified to

stockholders’ equity.

The warrants to purchase 497,344 shares of common stock remain outstanding as of September 30,

In August 2019, the

Company entered into a Sales Agreement (as amended, the “2019 Sales Agreement”) with SVB Leerink LLC (the

“Agent”), pursuant to which the Company could sell, from time to time, at its option, up to an aggregate amount

of $75,000 of shares of the Company’s common stock, $0.001 par value per share, through the Agent, as the

Company’s sales agent.

In June 2020, the 2019 Sales Agreement was amended to reduce the aggregate offering amount under

the 2019 Sales Agreement from $75,000 of shares to $30,000 of shares.

On August 11, 2020, the 2019 Sales

Agreement was terminated by the execution by the Company and the Agent of a new sales agreement (the “2020 Sales Agreement”).

Under the 2020 Sales Agreement the Company may sell, from time to time, at its option, up to an aggregate of $75,000 of shares

of the Company’s common stock, $0.001 par value per share (the “Shares”), through the Agent, as the Company’s

On October 21, 2020, the 2020 Sales Agreement was amended to reduce the aggregate offering amount under the

2020 Sales Agreement from $75,000 of Shares to $62,500 of Shares (Note 14).

Any Shares to be offered and sold

under the 2020 Sales Agreement will be issued and sold (i) by methods deemed to be an “at the market offering” (“ATM”)

as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended or in negotiated transactions, if authorized

by the Company and (ii) pursuant to, and only upon the effectiveness of, a registration statement on Form S-3 filed by the Company

with the Securities and Exchange Commission on August 11, 2020 for an offering of up to $350,000 of various securities, including

shares of the Company’s common stock, preferred stock, debt securities, warrants and/or units for sale to the public in one

or more public offerings.

Subject to the terms of the 2020

Sales Agreement, the Agent will use reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions

(including any price, time or size limits or other customary parameters or conditions the Company may impose).

The Company cannot

provide any assurances that it will issue any Shares pursuant to the 2020 Sales Agreement.

The Company will pay the Agent a commission

of up to 3.0% of the gross proceeds from the sale of the Shares, if any.

The Company has also agreed to provide the Agent with

customary indemnification rights.

During the year ended March 31,

2020, the Company issued and sold 287,559 shares of common stock under the 2019 Sales Agreement, for gross proceeds of $4,568 less

offering fees of $137 for net proceeds of $4,431 under the ATM.

The Company has not issued and sold any shares under the 2020 Sales

Agreement as of September 30, 2020.

First Amendment, the Company paid $100 of upfront fees, including closing costs and legal fees associated with entering into the

amendment, which were recorded as debt discount.

The debt discount is reflected as a reduction of the carrying value of long-term

debt on the Company’s consolidated balance sheet and is being amortized to interest expense over the term of the loan using

the effective interest method.

The Company recognized

aggregate interest expense under the Hercules Loan Agreement of $247 and $817 during the three and nine months ended December 31,

2020, respectively, which included non-cash interest expense of $55 and $181 for the three and nine months ended December 31,

2020, respectively.

Non-cash interest expense related to the amortization of the debt discount of $26 and $82 and the accretion

of the final payment of $29 and $99 for the three and nine months ended December 31, 2020, respectively.

Stockholders’

As of December 31,

2020 and March 31, 2020, the Company’s certificate of incorporation, as amended and restated, authorized the Company

to issue up to 150,000,000 shares of common stock, par value $0.001 per share.

As of December 31,

2020 and March 31, 2020, the Company had reserved 14,753,921 and 10,449,033 shares of common stock for the exercise of outstanding

stock options, the number of shares remaining available for grant under the Company’s 2018 Omnibus Incentive Compensation

Plan and the Company’s Employee Stock Purchase Plan (see Note 9) and the exercise of the outstanding warrants to purchase

shares of common stock, respectively.

preferred stock

As of December 31,

2020, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue up to 10,000,000

shares of undesignated preferred stock, par value $0.001 per share.

There were no undesignated preferred shares issued or outstanding

as of December 31, 2020.

Convertible preferred stock

and preferred stock warrants

The Company has issued

series seed convertible preferred stock (the “series seed preferred stock”), series A convertible preferred stock (the

“series A preferred stock”) and series B convertible preferred stock (the “series B preferred stock”).

The series seed preferred stock, series A preferred stock and series B preferred stock are collectively referred to as the “preferred

stock.”

In connection with the closing of the Company’s initial public offering (the “IPO”) in 2018, the

preferred stock converted into 19,157,360 shares of common stock on a 1:9.94688 basis.

There was no preferred stock outstanding

as of December 31, 2020 and March 31, 2020.

connection with the issuance of the series seed preferred stock, the Company issued to the holders of the series seed

preferred stock warrants for the purchase of 50,000 shares of series seed preferred stock, which became fully vested and

exercisable in the year of issuance.

The warrants to purchase shares of series seed preferred stock were issued at an

exercise price of $10.00 per share and expire on the earlier of September 16, 2025 or a qualified change of control

In connection with the closing of the IPO, the series seed preferred stock warrants became exercisable for 497,344

shares of common stock and the exercise price was adjusted to $1.01 per share.

Upon the closing of the IPO, the series seed

preferred stock warrants were reclassified to stockholders’

The warrants to purchase 497,344 shares of common

stock remain outstanding as of December 31, 2020.

In August 2019,

the Company entered into a Sales Agreement (as amended, the “2019 Sales Agreement”) with SVB Leerink LLC (the “Agent”),

pursuant to which the Company could sell, from time to time, at its option, up to an aggregate amount of $75,000 of shares of the

Company’s common stock, $0.001 par value per share, through the Agent, as the Company’s sales agent.

In June 2020,

the 2019 Sales Agreement was amended to reduce the aggregate offering amount under the 2019 Sales Agreement from $75,000 of shares

to $30,000 of shares.

On August 11,

2020, the 2019 Sales Agreement was terminated by the execution by the Company and the Agent of a new sales agreement, which was

subsequently amended on October 21, 2020 (as amended, the “2020 Sales Agreement”).

Under the 2020 Sales Agreement

the Company may sell, from time to time, at its option, up to an aggregate of $62,500 of shares of the Company’s common stock,

$0.001 par value per share (the “Shares”), through the Agent, as the Company’s sales agent.

Any Shares to be offered

and sold under the 2020 Sales Agreement will be issued and sold (i) by methods deemed to be an “at the market offering”

(“ATM”) as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended or in negotiated

transactions, if authorized by the Company and (ii) pursuant to, and only upon the effectiveness of, a registration statement

on Form S-3 filed by the Company with the Securities and Exchange Commission on August 11, 2020 for an offering of up

to $350,000 of various securities, including shares of the Company’s common stock, preferred stock, debt securities, warrants

and/or units for sale to the public in one or more public offerings.

Subject to the terms

of the 2020 Sales Agreement, the Agent will use reasonable efforts to sell the Shares from time to time, based upon the Company’s

instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose).

Company cannot provide any assurances that it will issue any Shares pursuant to the 2020 Sales Agreement.

The Company will pay

the Agent a commission of up to 3.0% of the gross proceeds from the sale of the Shares, if any.

The Company has also agreed to

provide the Agent with customary indemnification rights.

During the year ended

March 31, 2020, the Company issued and sold 287,559 shares of common stock under the 2019 Sales Agreement, for gross proceeds

of $4,568 less offering fees of $137 for net proceeds of $4,431 under the ATM.

The Company has not issued and sold any shares under

the 2020 Sales Agreement as of December 31, 2020.

Equity offerings

In November 2019, the Company

entered into an Underwriting Agreement (the “November 2019 Underwriting Agreement”) with J.P.

Morgan Securities LLC

and SVB Leerink LLC, as representatives of the several underwriters named therein (the “November 2019 Underwriters”),

relating to the issuance and sale of an aggregate of (a) 3,678,031 shares of the Company’s common stock (the “November

2019 Shares”), and (b) pre-funded warrants to purchase 2,200,000 shares of the Company’s common stock (the “November

2019 Pre-Funded Warrants”) to the Underwriters (the “November 2019 Offering”).

The November 2019 Shares

were sold to the purchasers at the public offering price of $13.61 per share.

The November 2019 Pre-Funded Warrants were sold at

a public offering price of $13.6099 per November 2019 Pre-Funded Warrant, which represents the per share public offering price

for the Company’s common stock less a $0.0001 per share exercise price for each such November 2019 Pre-Funded Warrant.

December 2019, the November 2019 Underwriters partially exercised their purchase option pursuant to the Underwriting Agreement,

and the Company issued and sold an additional 838,530 shares of its common stock.

The Company received aggregate net proceeds

of approximately $85,598 in the November 2019 Offering, after deducting underwriting discounts, commissions and other

offering expenses payable by the Company of approximately $5,814.

Funds affiliated with Redmile Group,

LLC purchased all of the November 2019 Pre-Funded Warrants.

The November 2019 Pre-Funded Warrants are exercisable at any time after

the date of issuance.

A holder of November 2019 Pre-Funded Warrants may not exercise the November 2019 Pre-Funded Warrant if the

holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of the Company’s common

stock outstanding immediately after giving effect to such exercise.

A holder of November 2019 Pre-Funded Warrants may increase

or decrease this percentage to any other percentage by providing at least 61 days’ prior notice to the Company.

September 30, 2020, none of the November 2019 Pre-Funded Warrants had been exercised.

In June 2020, the Company entered

into a separate Underwriting Agreement (the “June 2020 Underwriting Agreement”) with J.P.

Morgan Securities LLC and

SVB Leerink LLC, as representatives of the several underwriters named therein (the “June 2020 Underwriters”), relating

to the issuance and sale of an aggregate of (a) 2,826,088 shares of the Company’s common stock (the “June 2020

Shares”), and (b) pre-funded warrants to purchase 1,521,738 shares of the Company’s common stock (the “June

2020 Pre-Funded Warrants”) to the Underwriters (the “June 2020 Offering”).

The June 2020 Shares were sold

to the purchasers at the public offering price of $23.00 per share.

The June 2020 Pre-Funded Warrants were sold at a public offering

price of $22.9999 per June 2020 Pre-Funded Warrant, which represents the per share public offering price for the Company’s

common stock less a $0.0001 per share exercise price for each such June 2020 Pre-Funded Warrant.

The June 2020 Underwriters fully

exercised their purchase option pursuant to the June 2020 Underwriting Agreement, and the Company issued and sold an additional

652,173 shares of its common stock.

In November 2019,

the Company entered into an underwriting agreement (the “November 2019 Underwriting Agreement”) with J.P.

Securities LLC and SVB Leerink LLC, as representatives of the several underwriters named therein (the “November 2019

Underwriters”), relating to the issuance and sale of an aggregate of (a) 3,678,031 shares of the Company’s common

stock (the “November 2019 Shares”), and (b) pre-funded warrants to purchase 2,200,000 shares of the Company’s

common stock (the “November 2019 Pre-Funded Warrants”) to the November 2019 Underwriters (the “November 2019

Offering”).

The November 2019 Shares were sold at the public offering price of $13.61 per share.

The November 2019

Pre-Funded Warrants were sold at a public offering price of $13.6099 per November 2019 Pre-Funded Warrant, which represented

the per share public offering price for the November 2019 Shares less a $0.0001 per share exercise price for each such November 2019

Pre-Funded Warrant.

In December 2019, the November 2019 Underwriters partially exercised their purchase option pursuant

to the November 2019 Underwriting Agreement, and the Company issued and sold an additional 838,530 shares of its common stock.

The Company received aggregate net proceeds of approximately $85,598 in the November 2019 Offering, after deducting

underwriting discounts, commissions and other offering expenses payable by the Company of approximately $5,814.

Funds affiliated with

Redmile Group, LLC purchased all of the November 2019 Pre-Funded Warrants.

The November 2019 Pre-Funded Warrants are

exercisable at any time after the date of issuance.

A holder of November 2019 Pre-Funded Warrants may not exercise the November 2019

Pre-Funded Warrants if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares

of the Company’s common stock outstanding immediately after giving effect to such exercise.

In June 2020,

the Company entered into a separate underwriting agreement (the “June 2020 Underwriting Agreement”) with J.P.

Morgan Securities LLC and SVB Leerink LLC, as representatives of the several underwriters named therein (the “June 2020

Underwriters”), relating to the issuance and sale of an aggregate of (a) 2,826,088 shares of the Company’s common

stock (the “June 2020 Shares”), and (b) pre-funded warrants to purchase 1,521,738 shares of the Company’s

common stock (the “June 2020 Pre-Funded Warrants”) to the June 2020 Underwriters.

The June 2020

Shares were sold at the public offering price of $23.00 per share.

The June 2020 Pre-Funded Warrants were sold at a public

offering price of $22.9999 per June 2020 Pre-Funded Warrant, which represented the per share public offering price for the

June 2020 Shares less a $0.0001 per share exercise price for each such June 2020 Pre-Funded Warrant.

The June 2020

Underwriters fully exercised their purchase option pursuant to the June 2020 Underwriting Agreement, and the Company issued

and sold an additional 652,173 shares of its common stock.

The Company received aggregate net proceeds of approximately $107,782 after

deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $7,217.

Funds affiliated with Redmile Group,

LLC and funds affiliated with a second institutional investor purchased all of the June 2020 Pre-Funded Warrants.

The June 2020

Pre-Funded Warrants are exercisable at any time after the date of issuance.

A holder of June 2020 Pre-Funded Warrants may not exercise

the June 2020 Pre-Funded Warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number

of shares of the Company’s common stock outstanding immediately after giving effect to such exercise.

A holder of June 2020

Pre-Funded Warrants may increase or decrease this percentage up to 19.99% by providing at least 61 days’ prior notice to

As of September 30, 2020, none of the June 2020 Pre-Funded Warrants had been exercised.

than as set forth in Note 10 to these consolidated financial statements, including in the calculation of basic and diluted

net loss per share attributable to common stockholders, the 3,721,738 shares of the Company’s common stock into which the

November 2019 Pre-Funded Warrants and the June 2020 Pre-Funded Warrants are exercisable are not included in the number of issued

and outstanding shares of the Company’s common stock set forth herein.

Funds affiliated with

Redmile Group, LLC and funds affiliated with a second institutional investor purchased all of the June 2020 Pre-Funded Warrants.

The June 2020 Pre-Funded Warrants are exercisable at any time after the date of issuance.

A holder of June 2020 Pre-Funded

Warrants may not exercise the June 2020 Pre-Funded Warrants if the holder, together with its affiliates, would beneficially

own more than 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to

such exercise.

A holder of June 2020 Pre-Funded Warrants may increase or decrease this percentage up to 19.99% by providing

at least 61 days’

prior notice to the Company.

October 2020, pursuant to an underwriting agreement with J.P.

Morgan Securities LLC and SVB Leerink LLC, as

representatives of the several underwriters named therein, the Company issued and sold to the underwriters (a) 5,625,000

shares of the Company’s common stock, inclusive of the underwriters 30-day option to purchase up to an additional

937,500 shares of the Company’s common stock, and (b) pre-funded warrants to purchase 1,562,500 shares of the

Company’s common stock (the “October 2020 Pre-Funded Warrants”).

The shares of the Company’s

common stock were sold to the underwriters at the public offering price of $40.00 per share and the pre-funded warrants were

sold at a public offering price of $39.99 per October 2020 Pre-Funded Warrant, which represented the per share public offering price

for the Company’s common stock less a $0.0001 per share exercise price for each such pre-funded warrant.

received aggregate net proceeds of approximately $269,975 after deducting underwriting discounts, commissions and

other offering expenses payable by the Company of approximately $17,525.

Funds affiliated with

Redmile Group, LLC and funds affiliated with a second institutional investor purchased all of the October 2020 Pre-Funded

The October 2020 Pre-Funded Warrants are exercisable at any time after the date of issuance.

A holder of October 2020

Pre-Funded Warrants may not exercise the October 2020 Pre-Funded Warrants if the holder, together with its affiliates, would

beneficially own more than 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving

effect to such exercise.

A holder of October 2020 Pre-Funded Warrants may increase or decrease this percentage up to 19.99%

by providing at least 61 days’

prior notice to the Company.

Other than as set forth

in Note 10 to these consolidated financial statements, including in the calculation of basic and diluted net loss per share attributable

to common stockholders, the 5,284,238 shares of the Company’s common stock into which the November 2019 Pre-Funded Warrants,

the June 2020 Pre-Funded Warrants and October 2020 Pre-Funded Warrants are exercisable are not included in the number

of issued and outstanding shares of the Company’s common stock set forth herein.

As of December 31, 2020, none of the

November 2019 Pre-Funded Warrants, the June 2020 Pre-Funded Warrants, or the October 2020 Pre-Funded Warrants had

been exercised.

Stock-based compensation

2015 Enterprise Management

Incentive Share Option Plan

The 2015 Enterprise Management Incentive

Share Option Plan of Replimune UK (the “2015 Plan”) provided for Replimune UK to grant incentive stock options, non-statutory

Enterprise Management Incentive Share Option Plan

The 2015 Enterprise

Management Incentive Share Option Plan of Replimune UK (the “2015 Plan”) provided for Replimune UK to grant incentive

stock options, non-statutory stock options, stock awards, stock units, stock appreciation rights and other stock-based awards.

Incentive stock options are granted only to the Company’s employees, including officers and directors who are also employees.

Non-statutory stock options are granted to employees, members of the board of directors, outside advisors and consultants of the

Equity Compensation Plan

In July 2017,

in conjunction with the Reorganization, the 2015 Plan was terminated, and all awards were cancelled with replacement awards issued

under the 2017 Equity Compensation Plan (the “2017 Plan”).

Subsequent to the Reorganization, no additional grants will

be made under the 2015 Plan and any outstanding awards under the 2015 Plan will continue with their original terms.

concluded that the cancellation of the 2015 Plan and issuance of replacement awards under the 2017 Plan was a modification with

no change in the material rights and preferences and therefore no recorded change in the fair value of each respective award.

The Company’s

2017 Plan provides for the Company to grant incentive stock options or non-statutory stock options, stock awards, stock units,

stock appreciation rights and other stock-based awards.

Incentive stock options may be granted only to the Company’s employees,

including officers and directors who are also employees.

Restricted stock awards and non-statutory stock options may be granted

to employees, officers, members of the board of directors, advisors and consultants of the Company.

The maximum number of common

shares that may be issued under the 2017 Plan was 2,659,885, of which none remained available for future grants as of December 31,

Shares with respect to which awards have expired, terminated, surrendered or cancelled under the 2017 Plan without having

been fully exercised will be available for future awards under the 2017 Plan.

In addition, shares of common stock that are tendered

to the Company by a participant to exercise an award are added to the number of shares of common stock available for the grant

Omnibus Incentive Compensation Plan

On July 9, 2018,

the Company’s board of directors adopted, and the Company’s stockholders approved the 2018 Omnibus Incentive Compensation

Plan (the “2018 Plan”), which became effective immediately prior to the effectiveness of the registration statement

for the Company’s initial public offering.

The 2018 Plan provides for the issuance of incentive stock options, non-qualified

stock options, stock awards, stock units, stock appreciation rights and other stock-based awards.

Incentive stock options are granted

only to the Company’s employees, including officers and directors who are also employees.

Non-statutory stock options are

granted to employees, members of the board of directors, outside advisors and consultants of the Company.

2017 Equity Compensation

In July 2017, in conjunction with the Reorganization,

the 2015 Plan was terminated, and all awards were cancelled with replacement awards issued under the 2017 Equity Compensation Plan

(the “2017 Plan”).

Subsequent to the Reorganization, no additional grants will be made under the 2015 Plan and any

outstanding awards under the 2015 Plan will continue with their original terms.

The Company concluded that the cancellation of

the 2015 Plan and issuance of replacement awards under the 2017 Plan was a modification with no change in the material rights and

preferences and therefore no recorded change in the fair value of each respective award.

The Company’s 2017 Plan provides

for the Company to grant incentive stock options or non-statutory stock options, stock awards, stock units, stock

appreciation rights and other stock-based awards.

Incentive stock options may be granted only to the Company’s

employees, including officers and directors who are also employees.

Restricted stock awards and non-statutory stock options

may be granted to employees, officers, members of the board of directors, advisors and consultants of the Company.

maximum number of common shares that may be issued under the 2017 Plan was 2,659,885 of which 0 remained available for future

grants as of September 30, 2020.

Shares with respect to which awards have expired, terminated, surrendered or cancelled

under the 2017 Plan without having been fully exercised will be available for future awards under the 2017 Plan.

shares of common stock that are tendered to the Company by a participant to exercise an award are added to the number of

shares of common stock available for the grant of awards.

2018 Omnibus Incentive

Compensation Plan

On July 9, 2018, the Company’s

board of directors adopted, and the Company’s stockholders approved the 2018 Omnibus Incentive Compensation Plan (the “2018

Plan”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s

initial public offering.

The 2018 Plan provides for the issuance of incentive stock options, non-qualified stock options, stock

awards, stock units, stock appreciation rights and other stock-based awards.

The number of shares initially reserved for issuance

under the 2018 Plan is 3,617,968 shares.

If any options or stock appreciation rights, including outstanding options and stock appreciation

rights granted under the 2017 Plan (up to 2,520,247 shares), terminate, expire, or are canceled, forfeited, exchanged, or surrendered

without having been exercised, or if any stock awards, stock units or other stock-based awards, including outstanding awards granted

under the 2017 Plan, are forfeited, terminated, or otherwise not paid in full in shares of common stock, the shares of the Company’s

common stock subject to such grants will be available for purposes of our 2018 Plan.

On April 1, 2020, the number of shares

reserved for issuance under the 2018 Plan automatically increased by 1,466,749 shares pursuant to the terms of the 2018 Plan.

April 1, 2019, the number of shares reserved for issuance under the 2018 Plan automatically increased by 1,266,278 shares

pursuant to the terms of the 2018 Plan.

As of September 30, 2020, 1,722,528 shares remained available for future grants under

the 2018 Plan.

The 2015 Plan, the 2017 Plan and the 2018

Plan was administered by the board of directors or, at the discretion of the board of directors, by a committee of the board of

The number of shares initially

reserved for issuance under the 2018 Plan is 3,617,968 shares.

If any options or stock appreciation rights, including outstanding

options and stock appreciation rights granted under the 2017 Plan (up to 2,520,247 shares), terminate, expire, or are canceled,

forfeited, exchanged, or surrendered without having been exercised, or if any stock awards, stock units or other stock-based awards,

including outstanding awards granted under the 2017 Plan, are forfeited, terminated, or otherwise not paid in full in shares of

common stock, the shares of the Company’s common stock subject to such grants will be available for purposes of our 2018

On April 1, 2020, the number of shares reserved for issuance under the 2018 Plan automatically increased by 1,466,749

shares pursuant to the terms of the 2018 Plan.

On April 1, 2019, the number of shares reserved for issuance under the 2018

Plan automatically increased by 1,266,278 shares pursuant to the terms of the 2018 Plan.

As of December 31, 2020, 1,613,894

shares remained available for future grants under the 2018 Plan.

The 2015 Plan, the

2017 Plan and the 2018 Plan was administered by the board of directors or, at the discretion of the board of directors, by a committee

of the board of directors.

However, the board of directors shall administer and approve all grants made to non-employee directors.

prices, vesting and other restrictions are determined at the discretion of the board of directors, except that the exercise price

per share of incentive stock options may not be less than 100% of the fair market value of the common stock on the date of grant

(or 110% of fair value in the case of an award granted to employees who hold more than 10% of the total combined voting power of

all classes of stock at the time of grant) and the term of stock options may not be greater than five years for an incentive stock

option granted to a 10% stockholder and greater than ten years for all other options granted.

Stock options awarded under both

plans expire ten years after the grant date, unless the board of directors sets a shorter term.

Vesting periods for both plans

are determined at the discretion of the board of directors.

Incentive stock options granted to employees and non-statutory options

granted to employees, officers, members of the board of directors, advisors, and consultants of the Company typically vest over

Employee Stock Purchase

On July 9, 2018, the Company’s board

of directors adopted and the Company’s stockholders approved the Employee Stock Purchase Plan (the “ESPP”), which

became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO.

The total shares

of common stock initially reserved for issuance under the ESPP is limited to 348,612 shares.

In addition, as of the first trading

day of each fiscal year during the term of the ESPP (excluding any extensions), an additional number of shares of the Company’s

common stock equal to 1% of the total number of shares outstanding on the last trading day in the immediately preceding fiscal

year or 697,224 shares, whichever is less (or such lesser amount as determined by the Company’s board of directors) will

be added to the number of shares authorized under the ESPP.

In accordance, on April 1, 2020 and 2019, the number of shares reserved

for issuance under the ESPP automatically increased by 366,687 and 316,569 shares respectively, for a total of 1,031,868 shares

reserved for the ESPP.

If the total number of shares of common stock to be purchased pursuant to outstanding purchase rights on

any particular date exceed the number of shares then available for issuance under the ESPP, then the plan administrator will allocate

the available shares pro-rata and refund any excess payroll deductions or other contributions to participants.

The Company’s

ESPP is not currently active.

Stock option valuation

The fair value of stock option grants

is estimated using the Black-Scholes option-pricing model.

The exercise prices, vesting and other restrictions are determined at the discretion of the board of directors, except that the

exercise price per share of incentive stock options may not be less than 100% of the fair market value of the common stock on the

date of grant (or 110% of fair value in the case of an award granted to employees who hold more than 10% of the total combined

voting power of all classes of stock at the time of grant) and the term of stock options may not be greater than five years for

an incentive stock option granted to a 10% stockholder and greater than ten years for all other options granted.

Stock options

awarded under both plans expire ten years after the grant date, unless the board of directors sets a shorter term.

Vesting periods

for both plans are determined at the discretion of the board of directors.

Incentive stock options granted to employees and non-statutory

options granted to employees, officers, members of the board of directors, advisors, and consultants of the Company typically vest

over four years.

Stock Purchase Plan

On July 9, 2018,

the Company’s board of directors adopted and the Company’s stockholders approved the Employee Stock Purchase Plan (the

“ESPP”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s

The total shares of common stock initially reserved for issuance under the ESPP is limited to 348,612 shares.

as of the first trading day of each fiscal year during the term of the ESPP (excluding any extensions), an additional number of

shares of the Company’s common stock equal to 1% of the total number of shares outstanding on the last trading day in the

immediately preceding fiscal year or 697,224 shares, whichever is less (or such lesser amount as determined by the Company’s

board of directors) will be added to the number of shares authorized under the ESPP.

In accordance, on April 1, 2020 and 2019,

the number of shares reserved for issuance under the ESPP automatically increased by 366,687 and 316,569 shares respectively, for

a total of 1,031,868 shares reserved for the ESPP.

If the total number of shares of common stock to be purchased pursuant to outstanding

purchase rights on any particular date exceed the number of shares then available for issuance under the ESPP, then the plan administrator

will allocate the available shares pro-rata and refund any excess payroll deductions or other contributions to participants.

Company’s ESPP is not currently active.

option valuation

The fair value of stock

option grants is estimated using the Black-Scholes option-pricing model.

The Company lacks company-specific historical and implied

volatility information.

Therefore, it estimated its expected stock volatility based on the historical volatility of a

publicly traded set of peer companies.

For options with service-based vesting conditions, the expected term of the

Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as

“plain-vanilla” options.

The expected term of stock options granted to non-employees is equal to the contractual

term of the option award.

The risk-free interest rate is determined by reference to the U.S.

Treasury yield curve in effect

at the time of grant of the award for time periods approximately equal to the expected term of the award.

Expected dividend

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

the foreseeable future.

following table presents, on a weighted-average basis, the assumptions that the Company used to determine the grant-date fair value

of stock options granted to employees and directors:

Therefore, it estimated its expected stock volatility based on the historical volatility of a publicly

traded set of peer companies.

For options with service-based vesting conditions, the expected term of the Company’s stock

options has been determined utilizing the “simplified”

method for awards that qualify as “plain-vanilla”

The expected term of stock options granted to non-employees is equal to the contractual term of the option award.

risk-free interest rate is determined by reference to the U.S.

Treasury yield curve in effect at the time of grant of the award

for time periods approximately equal to the expected term of the award.

Expected dividend yield is based on the fact that the Company

has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The following table

presents, on a weighted-average basis, the assumptions that the Company used to determine the grant-date fair value of stock options

granted to employees and directors:

Three Months Ended

September 30,

Six Months Ended

September 30,

Nine Months Ended

Risk-free interest rate

2 unchanged sentences

Expected dividend yield

Stock options

following table summarizes the Company’s stock option activity:

The following table

summarizes the Company’s stock option activity:

Outstanding as of March 31, 2020

Outstanding as of September 30, 2020

Outstanding as of December 31, 2020

Options exercisable as of March 31, 2020

Options exercisable as of September 30, 2020

The aggregate intrinsic value of stock options

is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common

stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock.

The weighted average grant-date fair value

per share of stock options granted during the six months ended September 30, 2020 and 2019 was $8.28 and $9.82, respectively.

The total fair value of options vested during the three months and six months ended September 30, 2020 was $1,628 and $6,261, respectively.

The total fair value of options vested during the three months and six months ended September 30, 2019 was $3,206 and $3,417, respectively.

Stock-based compensation expense

Stock-based compensation expense was classified

in the consolidated statements of operations as follows:

Options exercisable as of December 31, 2020

The aggregate intrinsic

value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the

Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s

common stock.

The weighted average

grant-date fair value per share of stock options granted during the nine months ended December 31, 2020 and 2019 was $10.06

and $9.63, respectively.

The total fair value of options vested during the three months and nine months ended December 31,

2020 was $2,069 and $8,330, respectively.

The total fair value of options vested during the three months and nine months ended

December 31, 2019 was $1,063 and $4,480, respectively.

Stock-based compensation

expense was classified in the consolidated statements of operations as follows:

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

Research and development

General and administrative

As of September 30, 2020, total unrecognized

compensation cost related to the unvested stock-based awards was $29,049, which is expected to be recognized over a weighted average

period of 2.96 years.

As of December 31,

2020, total unrecognized compensation cost related to the unvested stock-based awards was $31,002, which is expected to be recognized

over a weighted average period of 2.95 years.

Net loss per share

Basic and diluted net loss per share attributable

to common stockholders was calculated as follows:

Basic and diluted net

loss per share attributable to common stockholders was calculated as follows:

Three Months Ended

September 30,

Six Months Ended

September 30,

Nine Months Ended

Net loss attributable to common stockholders

1 unchanged sentence

Net loss per share attributable to common stockholders, basic and diluted

November 2019 Pre-Funded Warrants and the June 2020 Pre-Funded Warrants are included in the calculation of basic and diluted

net loss per share attributable to common stockholders.

The Company’s potentially dilutive securities, which include stock

options, preferred stock and warrants to purchase shares of series seed preferred stock, have been excluded from the computation

of diluted net loss per share as the effect would be to reduce the net loss per share.

Therefore, the weighted average number of

common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from

the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them

would have had an anti-dilutive effect:

Three and Six Months Ended

September 30,

The November 2019

Pre-Funded Warrants, the June 2020 Pre-Funded Warrants and October 2020 Pre-Funded Warrants are included as outstanding

common stock in the calculation of basic and diluted net loss per share attributable to common stockholders.

The Company’s

potentially dilutive securities, which include stock options and warrants to purchase shares of series seed preferred stock, have

been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share.

the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable

to common stockholders is the same.

The Company excluded the following potential common shares, presented based on amounts outstanding

at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated

because including them would have had an anti-dilutive effect:

Three and Nine Months Ended

Options to purchase common stock

1 unchanged sentence

Significant agreements

Agreement with Bristol-Myers

Squibb Company

In February 2018, the Company entered into

an agreement with Bristol-Myers Squibb Company (“BMS”).

Pursuant to the agreement, BMS will provide to the Company,

at no cost, a compound for use in the Company’s ongoing clinical trial.

Under the agreement, the Company will sponsor, fund

and conduct the clinical trial in accordance with an agreed-upon protocol.

BMS granted the Company a non-exclusive, non-transferrable,

royalty-free license (with a right to sublicense) under its intellectual property to its compound in the clinical trial and agreed

to supply its compound, at no cost to the Company, for use in the clinical trial.

In January 2020, this agreement was expanded

to cover an additional cohort of 125 patients with anti-PD-1 failed melanoma.

Unless earlier terminated, the agreement

will remain in effect until (i) the completion of the clinical trial, (ii) all related clinical trial data have been

delivered to both parties and (iii) the completion of any statistical analyses and bioanalyses contemplated by the clinical

trial protocol or any analysis otherwise agreed upon by the parties.

with Bristol-Myers Squibb Company

In February 2018,

the Company entered into an agreement with Bristol-Myers Squibb Company (“BMS”).

Pursuant to the agreement, BMS will

provide to the Company, at no cost, a compound for use in the Company’s ongoing clinical trial of RP1.

Under the agreement,

the Company will sponsor, fund and conduct the clinical trial in accordance with an agreed-upon protocol.

BMS granted the Company

a non-exclusive, non-transferrable, royalty-free license (with a right to sublicense) under its intellectual property to its compound

in the clinical trial and agreed to supply its compound, at no cost to the Company, for use in the clinical trial.

In January 2020,

this agreement was expanded to cover an additional cohort of 125 patients with anti-PD-1 failed melanoma.

Unless earlier terminated,

the agreement will remain in effect until (i) the completion of the clinical trial, (ii) all related clinical trial data

have been delivered to both parties and (iii) the completion of any statistical analyses and bioanalyses contemplated by the

clinical trial protocol or any analysis otherwise agreed upon by the parties.

The agreement may be terminated by either party (i) in

1 unchanged sentence

proceedings or (iii) for safety reasons.

Upon termination, the licenses granted to the Company to use BMS’s compound

in the clinical trial will terminate.

In April 2019, the Company entered

into a separate agreement with BMS on terms similar to the terms set forth in the agreement described above, pursuant to which

BMS will provide to the Company, at no cost, nivolumab for use in the Company’s Phase 1 clinical trial of RP2 in combination

with nivolumab.

As of September 30, 2020, the Company had

not incurred any costs and does not expect to incur future costs in connection with this agreement.

In April 2019,

the Company entered into a separate agreement with BMS on terms similar to the terms set forth in the agreement described above,

pursuant to which BMS will provide to the Company, at no cost, nivolumab for use in the Company’s Phase 1 clinical trial

of RP2 in combination with nivolumab.

As of December 31,

2020, the Company had not incurred any costs and does not expect to incur future costs in connection with this agreement.

with Regeneron Pharmaceuticals, Inc .

In May 2018, the Company entered into an

agreement with Regeneron Pharmaceuticals, Inc.

(“Regeneron”).

The Company and Regeneron are each independently

developing compounds for the treatment of certain tumor types.

Pursuant to the agreement, the Company and Regeneron will undertake

one or more clinical trials using a combination of the compounds being developed by each entity.

Under the agreement, each study

will be conducted under terms set out in a separately agreed upon study plan that will identify the name of the sponsor and which

party will manage the particular clinical trial, and include the protocol, the budget and a schedule of clinical obligations.

June 2018, under the terms of the agreement between the Company and Regeneron, the parties agreed to the first study plan.

Company and Regeneron have agreed to the protocol, budget, sample testing and clinical obligations schedule under the study plan.

Development and supply costs associated with the study plan will be split equally between the Company and Regeneron.

Pursuant to the terms of the agreement,

each party granted the other party a non-exclusive license under its respective intellectual property and agreed to contribute

the necessary resources needed to fulfill its respective obligations, in each case, under the terms of the agreed-upon or to-be

agreed upon study plans.

Development costs of a particular clinical trial will be split equally between the Company and Regeneron.

The agreement may be terminated by either

party if (i) there is no active study plan for which a final study report has not been completed, (ii) the parties have

not entered into a study plan for an additional clinical trial within a period of time after the delivery of the most recent final

study report or (iii) in the event of a material breach.

The Company will account for costs incurred

as part of the study, including costs to supply compounds for use in the study, as research and development expenses within the

consolidated statement of operations.

The Company will recognize any amounts received from Regeneron in connection with this agreement

as an offset to research and development expense within the consolidated statement of operations.

Under the terms of the agreement, on a quarterly

basis the Company and Regeneron true-up costs of the study and make corresponding payments to the party that incurred the majority

of the costs.

During the three and six months ended September 30, 2020 or 2019, the Company did not make any payments under

the terms of the agreement to Regeneron.

During the three and six months ended September 30, 2020, the Company received

payments under the terms of the agreement to Regeneron of $1,433 and $2,404, respectively.

During the three and six months

ended September 30, 2019, the Company received payments under the terms of the agreement to Regeneron of $337 and $912, respectively.

As of September 30, 2020 and March 31, 2020, the Company recorded $1,453 and $971 of receivables from Regeneron in connection

with this agreement in prepaid expenses and other current assets in the consolidated balance sheet, respectively.

In May 2018, the

Company entered into an agreement with Regeneron Pharmaceuticals, Inc.

(“Regeneron”).

The Company and Regeneron

are each independently developing compounds for the treatment of certain tumor types.

Pursuant to the agreement, the Company and

Regeneron will undertake one or more clinical trials using a combination of the compounds being developed by each entity.

the agreement, each study will be conducted under terms set out in a separately agreed upon study plan that will identify the name

of the sponsor and which party will manage the particular clinical trial, and include the protocol, the budget and a schedule of

clinical obligations.

In June 2018, under the terms of the agreement between the Company and Regeneron, the parties agreed

to the first study plan.

The Company and Regeneron have agreed to the protocol, budget, sample testing and clinical obligations

schedule under the study plan.

Development and supply costs associated with the study plan will be split equally between the Company

and Regeneron.

Pursuant to the terms

of the agreement, each party granted the other party a non-exclusive license under its respective intellectual property and agreed

to contribute the necessary resources needed to fulfill its respective obligations, in each case, under the terms of the agreed-upon

or to-be agreed upon study plans.

Development costs of a particular clinical trial will be split equally between the Company and

Regeneron in accordance with the agreed upon study plan.

The agreement may be

terminated by either party if (i) there is no active study plan for which a final study report has not been completed, (ii) the

parties have not entered into a study plan for an additional clinical trial within a period of time after the delivery of the most

recent final study report or (iii) in the event of a material breach.

The Company will account

for costs incurred as part of the study, including costs to supply compounds for use in the study, as research and development

expenses within the consolidated statement of operations.

The Company will recognize any amounts received from Regeneron in connection

with this agreement as an offset to research and development expense within the consolidated statement of operations.

Under the terms

of the agreement, on a quarterly basis the Company and Regeneron true-up costs of the study and make corresponding payments

to the party that incurred the majority of the costs.

During the three and nine months ended December 31, 2020 or 2019,

the Company did not make any payments under the terms of the agreement from Regeneron.

During the three and nine months

ended December 31, 2020, the Company received payments under the terms of the agreement from Regeneron of $1,453 and

$3,857, respectively.

During the three and nine months ended December 31, 2019, the Company received payments under

the terms of the agreement from Regeneron of $760 and $2008, respectively.

As of December 31, 2020 and March 31,

2020, the Company recorded $1,195 and $971 of receivables from Regeneron in connection with this agreement in prepaid

expenses and other current assets in the consolidated balance sheet, respectively.

Commitments and contingencies

In April 2016, the Company entered into

a lease agreement for office and laboratory space in Abingdon, England.

On June 29, 2020 the Company modified the lease terms to

extend the expiration date to April 3, 2031 and the lease modification was not accounted for as a separate contract.

the lease modification, the lease liability was remeasured in accordance with the updated terms of the contract and the associated

lease liability and right-of-use asset was increased by $1,580.

The Company has the right to terminate the lease as of April 4,

2026 upon at least twelve months’ prior written notice.

Monthly lease payments are inclusive of base rent, ancillary charges,

non-rent shared tenant occupancy costs and the respective value added tax to be paid.

Monthly lease payments include base rent

of approximately $29 through June 23, 2020, $14 from June 24, 2020 through December 24, 2020, and $29 thereafter.

rent is subject to increase after April 2021 in proportion to the Retail Price Index or market rates.

The lease is classified as

an operating lease.

In June 2018, the Company entered into an

agreement to lease approximately 63,000 square feet of office, manufacturing and laboratory space in Framingham, Massachusetts.

Pursuant to the lease agreement, the lease term commenced in December 2018, subject to the landlord completing certain agreed upon

landlord improvements.

In April 2016,

the Company entered into a lease agreement for office and laboratory space in Abingdon, England.

On June 29, 2020 the Company

modified the lease terms to extend the expiration date to April 3, 2031 and the lease modification was not accounted for as

a separate contract.

As part of the lease modification, the lease liability was remeasured in accordance with the updated terms

of the contract and the associated lease liability and right-of-use asset was increased by $1,580.

The Company has the right to

terminate the lease as of April 4, 2026 upon at least twelve months’

prior written notice.

Monthly lease payments are

inclusive of base rent, ancillary charges, non-rent shared tenant occupancy costs and the respective value added tax to be paid.

Monthly lease payments include base rent of approximately $29 through June 23, 2020, $14 from June 24, 2020 through December 24,

2020, and $29 thereafter.

Monthly base rent is subject to increase after April 2021 in proportion to the Retail Price Index

or market rates.

The lease is classified as an operating lease.

In June 2018,

the Company entered into an agreement to lease approximately 63,000 square feet of office, manufacturing and laboratory space in

Framingham, Massachusetts.

Pursuant to the lease agreement, the lease term commenced in December 2018, subject to the landlord

completing certain agreed upon landlord improvements.

The rent commencement date started in August 2019.

The initial lease term is ten years from the rent commencement

date and includes two optional five-year extensions.

Annual lease payments during the first year were $2,373 with increases of

3.0% each year thereafter until the expiration of the lease.

Construction was completed associated with

approximately 10,500 square feet of the leased space in Framingham, Massachusetts and the Company occupied the building as office

space beginning August 1, 2019.

The Company recorded a right-of-use asset and lease liability associated with the occupied

space as of August 1, 2019.

The Company recorded $2,368 in related construction costs to the right-of-use asset upon the lease

commencement date which were reclassified from prepaid rent.

The Company occupied the remainder of the facility, approximately

52,500 square feet used as laboratory space, on October 22, 2019.

The Company recorded a right-of-use asset and lease

liability associated with the remaining space as of October 22, 2019.

The Company recorded $18,164 in related construction costs

and $261 in rent payments made prior to the lease commencement date to the right-of-use asset upon the lease commencement date

which were reclassified from prepaid rent.

The initial lease

term is ten years from the rent commencement date and includes two optional five-year extensions.

Annual lease payments during

the first year were $2,373 with increases of 3.0% each year thereafter until the expiration of the lease.

Construction was completed

associated with approximately 10,500 square feet of the leased space in Framingham, Massachusetts and the Company occupied the

building as office space beginning August 1, 2019.

The Company recorded a right-of-use asset and lease liability associated

with the occupied space as of August 1, 2019.

The Company recorded $2,368 in related construction costs to the right-of-use

asset upon the lease commencement date which were reclassified from prepaid rent.

The Company occupied the remainder of the facility,

approximately 52,500 square feet used as laboratory space, on October 22, 2019.

The Company recorded a right-of-use asset

and lease liability associated with the remaining space as of October 22, 2019.

The Company recorded $18,164 in related construction

costs and $261 in rent payments made prior to the lease commencement date to the right-of-use asset upon the lease commencement

date which were reclassified from prepaid rent.

The lease is classified as a financing lease.

In June 2019, the Company entered into

an agreement to lease approximately 18,700 square feet of office space in Woburn, Massachusetts.

Pursuant to the lease agreement,

the lease term commenced in August 2019.

In June 2019,

the Company entered into an agreement to lease approximately 18,700 square feet of office space in Woburn, Massachusetts.

to the lease agreement, the lease term commenced in August 2019.

The rent commenced in September 2019.

The initial lease term is ten years from

the rent commencement date and includes an optional five-year extension.

Annual lease payments during the first year are $488 with

increases of approximately 1.6% each year.

The Company recorded a right-of-use asset and a lease liability of $4,363 upon the commencement

date of the lease and the lease is classified as an operating lease.

The Company determines if an arrangement

is a lease at inception.

Operating leases are included in our balance sheet as right-to-use—operating leases, operating lease

liabilities, current and operating lease liabilities, non-current.

Finance leases are included in the balance sheet as right-to-use

asset—finance lease finance lease liabilities, current, and finance lease liabilities, non-current.

Certain of the Company’s

lease agreements contain renewal options;

however, the Company does not recognize right-of-use assets or lease liabilities for

renewal periods unless it is determined that the Company is reasonably certain of renewing the lease at inception or when a triggering

event occurs.

As the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate

in calculating the present value of the lease payments.

Since the Company elected to account for each lease component and its associated

non-lease components as a single combined lease component, all contract consideration was allocated to the combined lease component.

Some of the Company’s lease agreements contain rent escalation clauses (including index-based escalations).

The Company recognizes

the minimum rental expense on a straight-line basis based on the fixed components of a lease arrangement.

The Company amortizes

this expense over the term of the lease beginning with the date of initial possession, which is the date the Company can enter

the leased space and begin to make improvements in preparation for its intended use.

Variable lease components represent amounts

that are not fixed in nature and are not tied to an index or rate, and are recognized as incurred.

The initial lease

term is ten years from the rent commencement date and includes an optional five-year extension.

Annual lease payments during the

first year are $488 with increases of approximately 1.6% each year.

The Company recorded a right-of-use asset and a lease liability

of $4,363 upon the commencement date of the lease and the lease is classified as an operating lease.

The Company determines

if an arrangement is a lease at inception.

Operating leases are included in our balance sheet as right-to-use—operating leases,

operating lease liabilities, current and operating lease liabilities, non-current.

Finance leases are included in the balance

sheet as right-to-use asset—finance lease finance lease liabilities, current, and finance lease liabilities, non-current.

Certain of the Company’s lease agreements contain renewal options;

however, the Company does not recognize right-of-use assets

or lease liabilities for renewal periods unless it is determined that the Company is reasonably certain of renewing the lease at

inception or when a triggering event occurs.

As the Company’s leases do not provide an implicit rate, the Company estimated

the incremental borrowing rate in calculating the present value of the lease payments.

Since the Company elected to account for

each lease component and its associated non-lease components as a single combined lease component, all contract consideration was

allocated to the combined lease component.

Some of the Company’s lease agreements contain rent escalation clauses (including

index-based escalations).

The Company recognizes the minimum rental expense on a straight-line basis based on the fixed components

of a lease arrangement.

The Company amortizes this expense over the term of the lease beginning with the date of initial possession,

which is the date the Company can enter the leased space and begin to make improvements in preparation for its intended use.

lease components represent amounts that are not fixed in nature and are not tied to an index or rate, and are recognized as incurred.

Three Months Ended

September 30,

Six Months Ended

September 30,

Nine Months Ended

Finance lease costs:

3 unchanged sentences

Total lease cost

Finance lease costs of $89 and $60 are recognized

in general and administrative expenses for the three months ended September 30, 2020 and 2019, respectively, and $179 and $149 for

the six months ended September 30, 2020 and 2019, respectively.

Finance lease costs of $518 and $0 are recognized in research and

development expenses for the three months ended September 30, 2020 and 2019, respectively, and $1,035 and $0 for the six months

ended September 30, 2020 and 2019, respectively.

Operating leases costs are recognized in general and administrative expenses for

the three and six months ended September 30, 2020 and 2019.

The following table summarizes the maturity of the Company’s

lease liabilities on an undiscounted cash flow basis and a reconciliation to the operating and financing lease liabilities recognized

on our balance sheet as of September 30, 2020:

lease liabilities

September 30, 2020

Operating leases

Financing lease

2021 (remaining six months)

Finance lease costs

of $90 and $90 are recognized in general and administrative expenses for the three months ended December 31, 2020 and 2019,

respectively, and $268 and $149 for the nine months ended September 30, 2020 and 2019, respectively.

Finance lease costs of

$518 and $517 are recognized in research and development expenses for the three months ended December 31, 2020 and 2019, respectively,

and $1,553 and $517 for the nine months ended December 31, 2020 and 2019, respectively.

Operating leases costs are recognized

in general and administrative expenses for the three and nine months ended December 31, 2020 and 2019.

The following table

summarizes the maturity of the Company’s lease liabilities on an undiscounted cash flow basis and a reconciliation to the

operating and financing lease liabilities recognized on our balance sheet as of September 30, 2020:

December 31, 2020

2021 (remaining three months)

Total lease payments

1 unchanged sentence

The following table provides lease disclosure

as of September 30, 2020 and March 31, 2020:

September 30, 2020

as of December 31, 2020 and March 31, 2020:

March 31, 2020

7 unchanged sentences

Total lease liabilities

following table provides lease disclosure for the six months ended September 30, 2020 and 2019:

September 30,

paid for amounts included in the measurement of lease liabilities:

cash flows from operating leases

cash flows from finance leases

asset obtained in exchange for new operating lease liabilities

Weighted-average

remaining lease term - operating leases

Weighted-average

remaining lease term - financing leases

Weighted-average

discount rate - operating leases

Weighted-average

discount rate - financing leases

The variable lease costs and short-term lease costs

were insignificant for three and six months ended September 30, 2020 and 2019.

Manufacturing commitments

The Company has entered into an agreement

with a contract manufacturing organization to provide clinical trial products.

As of September 30, 2020 and March 31, 2020, the

Company had committed to minimum payments under these arrangements totaling $2,137 and $3,569, respectively, through March 31,

Indemnification agreements

In the ordinary course of business, the

Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect

to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property

infringement claims made by third parties.

In addition, the Company has entered into indemnification agreements with members of

its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may

arise by reason of their status or service as directors or officers.

The maximum potential amount of future payments the Company

could be required to make under these indemnification agreements is, in many cases, unlimited.

To date, the Company has not incurred

any material costs as a result of such indemnifications.

The Company is not aware of any claims under indemnification arrangements,

and therefore it has not accrued any liabilities related to such obligations in its consolidated financial statements as of September

30, 2020 or March 31, 2020.

Legal proceedings

The Company is not a party to any litigation

and does not have contingency reserves established for any litigation liabilities.

The following table provides

lease disclosure for the nine months ended December 31, 2020 and 2019:

Nine Months Ended

Other information

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

Operating cash flows from operating leases

Operating cash flows from finance leases

Financing cash flows from finance leases

Right-to-use asset obtained in exchange for new operating lease liabilities

Weighted-average remaining lease term - operating leases

Weighted-average remaining lease term - financing leases

Weighted-average discount rate - operating leases

Weighted-average discount rate - financing leases

The variable lease costs and short-term lease costs were insignificant

for three and nine months ended December 31, 2020 and 2019.

Manufacturing

The Company has entered

into an agreement with a contract manufacturing organization to provide clinical trial products.

As of December 31, 2020 and

March 31, 2020, the Company had committed to minimum payments under these arrangements totaling $1,622 and $3,569, respectively,

through March 31, 2021.

Indemnification

In the ordinary course

of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other

parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from

intellectual property infringement claims made by third parties.

In addition, the Company has entered into indemnification agreements

with members of its executive management team and its board of directors that will require the Company, among other things, to

indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers.

potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases,

To date, the Company has not incurred any material costs as a result of such indemnifications.

The Company is not aware

of any claims under indemnification arrangements, and therefore it has not accrued any liabilities related to such obligations

in its consolidated financial statements as of December 31, 2020 or March 31, 2020.

The Company is not

a party to any litigation and does not have contingency reserves established for any litigation liabilities.

Geographic information

1 unchanged sentence

the United States (Massachusetts) and the United Kingdom (Oxfordshire).

Information about the Company’s long-lived assets

held in different geographic regions is presented in the tables below:

September 30, 2020

December 31, 2020

March 31, 2020

1 unchanged sentence

United Kingdom

Subsequent events

On October 26, 2020, pursuant to an underwriting

agreement with J.P.

Morgan Securities LLC and SVB Leerink LLC, as representatives of the several underwriters named therein, the

Company issued and sold to the underwriters (a) 5,625,000 shares of the Company’s common stock, inclusive of the underwriters

30-day option to purchase up to an additional 937,500 shares of the Company’s common stock, and (b) pre-funded warrants

to purchase 1,562,500 shares of the Company’s common stock.

The shares of the Company’s common stock were sold to the

underwriters at the public offering price of $40.00 per share and the pre-funded warrants were sold at a public offering price

of $39.99 per warrant share, which represents the per share public offering price for the Company’s common stock less a $0.0001

per share exercise price for each such pre-funded warrant.

The Company received aggregate net proceeds

of approximately $270 million after deducting underwriting discounts, commissions and other offering expenses payable by the

Management’s Discussion

and Analysis of Financial Condition and Results of Operations.

You should read

the following discussion and analysis of our financial condition and results of operations together with our unaudited consolidated

financial statements and related notes appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q, or this

Quarterly Report, and with our audited consolidated financial statements and notes thereto for the year ended March 31, 2020,

included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

In addition to historical

information, some of the statements contained in this discussion and analysis or set forth elsewhere in this Quarterly Report,

including information with respect to our plans and strategy for our business, constitute forward-looking statements within the

meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,

as amended, or the Exchange Act.

We have based these forward-looking statements on our current expectations and projections about

future events.

The following information and any forward-looking statements should be considered in light of factors discussed

elsewhere in this Quarterly Report, particularly including those risks identified in Part II, Item 1A “Risk Factors”

and our other filings with the SEC.

We caution you that

forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition

and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements

contained in this Quarterly Report.

Statements made herein are as of the date of the filing of this Quarterly Report with the Securities

Exchange Commission, or SEC, and should not be relied upon as of any subsequent date.

Even if our results of operations, financial

condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements

contained in this Quarterly Report, they may not be predictive of results or developments in future periods.

We disclaim any obligation,

except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect

any change in our expectations or in events, conditions or circumstances on which any such statements may be based or that may

affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

We are a clinical-stage

biotechnology company committed to applying our leading expertise in the field of oncolytic immunotherapy to transform the lives

of cancer patients.

We use our proprietary Immulytic platform to design and develop product candidates that are intended to maximally

activate the immune system against cancer.

Oncolytic immunotherapy

is an emerging drug class, which we intend to establish as the second cornerstone of immune-based cancer treatments, alongside

checkpoint blockade.

Oncolytic immunotherapy exploits the ability of certain viruses to selectively replicate in and directly kill

tumors, as well as induce a potent, patient-specific, anti-tumor immune response.

Our product candidates incorporate multiple mechanisms

of action into a practical “off-the-shelf”

approach that is intended to maximize the immune response against a patient’s

cancer and to offer significant advantages over personalized vaccine approaches.

We believe that the bundling of multiple approaches

for the treatment of cancer into single therapies will simplify the development path of our product candidates, while also improving

patient outcomes at a lower cost to the healthcare system than the use of multiple different drugs.

The foundation of our

Immulytic platform consists of a proprietary, engineered strain of herpes simplex virus 1, or HSV-1, that has been “armed”

with a fusogenic glycoprotein intended to substantially increase anti-tumor activity.

Our Immulytic platform enables us to incorporate

various genes into HSV-1 that are intended to further augment the inherent properties of HSV-1 in order to both directly destroy

tumor cells and induce an anti-tumor immune response.

We currently have three product candidates in our development pipeline:

our lead product candidate, RP2 and RP3.

We are conducting a

number of clinical trials of RP1, both as a monotherapy and in combination with anti-PD-1 therapy, with a focus on immune-responsive

We are actively enrolling patients in a randomized, controlled Phase 2 clinical trial of RP1 in up to approximately

240 patients with cutaneous squamous cell carcinoma, or CSCC, RP1’s lead indication.

This registration-directed clinical

trial is evaluating RP1 in combination with cemiplimab, an anti-PD-1 therapy developed by Regeneron Pharmaceuticals, Inc.,

or Regeneron, versus cemiplimab alone.

Regeneron has granted to us a non-exclusive royalty-free license to cemiplimab for use in

this trial, is funding one-half of the clinical trial costs, and is supplying cemiplimab at no cost to us.

If this clinical trial

generates compelling clinical data demonstrating the benefits of the combined treatment, we believe the data could support a filing

with regulatory authorities seeking marketing approval.

We expect the primary data read-out from this Phase 2 clinical trial

will be in 2022.

We have also opened

for enrollment a Phase 1b clinical trial of single agent RP1 in solid organ transplant recipients with CSCC, which we believe

to be potentially registrational (in its own right or, subject to discussion with regulatory authorities, following enrollment

of additional patients, including as a potential label expansion after an initial approval of RP1 in a different indication).

are currently enrolling approximately 30 patients in this clinical trial to assess the safety and efficacy of RP1 in liver and

kidney transplant recipients with recurrent CSCC.

Progress in this clinical trial has been particularly impacted by COVID-19, as

the patient population is severely immune-compromised and considered very high risk if they were to contract COVID-19.

Nevertheless,

we expect to dose the first patient in this clinical trial in early 2021 and present initial data from this clinical trial in the

second half of the year.

We have also entered

into a collaboration with Bristol-Myers Squibb Company, or BMS, under which it has granted us a non-exclusive, royalty-free license

to, and is supplying at no cost, its anti-PD-1 therapy, nivolumab, for use in combination with RP1 in a multi-cohort Phase 1/2

clinical trial.

We are currently enrolling a 125-patient extension cohort of RP1 combined with nivolumab in anti-PD-1 failed cutaneous

We initiated this cohort after completing enrollment in a prior Phase 2 cohort in the same clinical trial of approximately

30 patients with melanoma.

The data generated in the prior melanoma cohort demonstrated that RP1 combined with nivolumab has

the potential to treat anti-PD-1 failed melanoma.

We also believe this cohort to be potentially registrational (in its own right

or, subject to discussion with regulatory authorities, following enrollment of additional patients).

We expect that the primary

data read-out from this Phase 2 melanoma cohort will be in 2022.

In October 2020 we announced updated clinical data from

our multi-cohort Phase 1/2 clinical trial evaluating RP1 in combination with nivolumab in patients with melanoma and non-melanoma

skin cancers.

As reported, RP1 in combination with nivolumab has continued to be well tolerated, and we believe demonstrates continued

promising efficacy signals of anti-tumor activity in patients with skin cancers, including in patients with anti-PD-1 failed and

other difficult-to-treat melanomas, and in patients with CSCC.

We continue to enroll

patients in other Phase 2 cohorts under our collaboration with BMS in which we are testing RP1 in combination with nivolumab,

including a non-melanoma skin cancers cohort, a microsatellite instability high, or MSI-H/dMMR tumor cohort, and we have recently

opened for enrollment a cohort of 30 patients with anti-PD-1 failed non-small cell lung cancer, or NSCLC.

We and BMS recently agreed

to increase the number of patients in our non-melanoma skin cancer cohort from 30 to 45 patients to include anti-PD-1 failed patients.

Due in part to COVID-19 related disruptions, we expect the original 30 patient non-melanoma skin cancer cohort to be fully accrued

in early 2021.

Before we determine the next stages of development in this indication, we intend to enroll a total of 15 patients

into our MSI-H/dMMR cohort.

We continue to accumulate data in the MSI-H/dMMR cohort and expect to decide whether to pursue MSI-H/dMMR

tumors into registration-directed development later in 2021.

We are also developing

additional product candidates, RP2 and RP3, that have been further engineered to enhance anti-tumor immune responses and are intended

to address additional tumor types.

In addition to the expression of GALV-GP R(-) and human GM-CSF, RP2 has been engineered to express

an antibody-like molecule intended to block the activity of CTLA-4, a protein that inhibits the full activation of an immune response,

including to tumors.

RP3, which does not include the expression of GM-CSF, has been engineered with the intent to further stimulate

an anti-tumor immune response through activation of the immune co-stimulatory pathways through expression of the ligands for CD40L

and 4-1BBL, in addition to anti-CTLA-4 and GALV-GP R(-).

We initiated a Phase 1

clinical trial of RP2 alone and in combination with nivolumab in October 2019.

This clinical trial is also being conducted

as part of our collaboration with BMS, under which BMS has granted us a non-exclusive, royalty-free license to, and will supply

at no cost, nivolumab, for use in combination with RP2.

We and BMS recently agreed to increase the number of patients in the combination

part of the clinical trial from 12 to 30 patients.

In October 2020, we presented positive data from the single agent RP2 portion

of the clinical trial that showed deep and durable responses, including demonstration of uninjected tumor response in patients

with difficult to treat advanced cancers.

This data supports the hypothesis that anti-CTLA-4 delivered intra-tumorally through

oncolytic virus replication, with accompanying antigen release and presentation, can provide potent anti-tumor effects.

the monotherapy phase of this clinical trial with RP2, enrollment of patients treated with RP2 used in combination with nivolumab

is currently underway and we expect to present initial combination data in mid-2021.

We have obtained clearance

from the Medicines and Healthcare Products Regulatory Agency in the United Kingdom to begin clinical development with RP3 and in

December 2020 we initiated dosing in this clinical trial.

This Phase 1 clinical trial is designed to evaluate RP3 alone and

combined with anti-PD-1 therapy in advanced solid tumor patients.

Initial data from this clinical trial is expected to be presented

in the second half of 2021.

RP1, RP2 and RP3 are

administered by direct injection into solid tumors, guided either visually or by ultrasound, computerized tomography, or CT, or

other imaging methods.

We believe that direct injection maximizes virus-mediated tumor cell death, provides the most efficient

delivery of virus-encoded immune activating proteins into the tumor with the goal of activating systemic immunity, and limits the

systemic toxicities that could be associated with intravenous administration.

Activation of systemic immunity through local administration

is intended to lead to the induction of anti-tumor immune responses leading to clinical response of tumors that have not themselves

been injected.

Since our inception,

we have devoted substantially all of our resources to developing our Immulytic platform, building our intellectual property portfolio,

conducting research and development of our product candidates, business planning, raising capital and providing general and administrative

support for our operations.

To date, we have financed our operations primarily with proceeds from the sale of equity securities

and to a lesser extent the proceeds from the issuance of debt securities.

We do not have any products approved for sale and have

not generated any revenue from product sales.

Since our initial public

offering, or IPO, on July 24 2018, we have raised an aggregate of approximately $569.2 million in net proceeds to fund our

operations, of which $101.2 million was from our IPO, $463.6 million was from three separate follow-on offerings, or the Public

Offerings, that we closed in November 2019, June 2020 and October 2020, respectively, and $4.4 million was from

at-the-market offerings.

We sold 7,407,936 shares of common stock in our IPO, an aggregate of 13,619,822 shares of our common stock

and pre-funded warrants to purchase 5,284,238 shares of our common stock in the Public Offerings, and 287,559 shares of common

stock through our at-the-market facility.

Funds affiliated with

two separate institutional investors hold all of our outstanding pre-funded warrants.

Other than as set forth in Note 8 of our

condensed consolidated financial statements appearing elsewhere in this Quarterly Report, the shares of our common stock into which

our outstanding pre-funded warrants are exercisable are not included in the number of issued and outstanding shares of our common

stock set forth in this Quarterly Report.

In addition, on August 8,

2019, we entered into a Loan and Security Agreement with Hercules Capital, Inc., or Hercules, which we refer to as the Hercules

Loan Agreement, pursuant to which we borrowed $10.0 million under a secured term loan facility in the amount of $30.0 million.

The Hercules Loan Agreement was subsequently amended on June 1, 2020, in order to, among other things, increase the secured

term loan facility from $30.0 million to $40.0 million.

On December 15, 2020, we paid a total of $10.8 million, representing

the outstanding principal, accrued and unpaid interest, fees, costs and expenses due and owing under the Hercules Loan Agreement

and related loan documents, in repayment of all of our outstanding obligations thereunder, and thereby terminated the Hercules

Loan Agreement and the related loan documents.

Since our inception,

we have incurred significant operating losses.

Our ability to generate product revenue sufficient to achieve profitability will

depend on the successful development and eventual commercialization of one or more of our product candidates.

Our net losses were

$21.8 million and $16.2 million for the three months ended December 31, 2020 and 2019, respectively and net losses of $59.4

million and $36.8 million for the nine months ended December 31, 2020 and 2019, respectively.

As of December 31, 2020,

we had an accumulated deficit of $171.7 million.

These losses have resulted primarily from costs incurred in connection with research

and development activities and general and administrative costs associated with our operations.

We expect to continue to incur

significant expenses and increasing operating losses for at least the next several years.

We anticipate that

our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly as we

advance the preclinical activities and clinical trials of our product candidates, and if and as we:

● conduct our current and future clinical trials with RP1, RP2 and RP3;

● further preclinical development of our platform;

● operate our own in-house manufacturing facility;

● seek to identify and develop additional product candidates;

● seek marketing approvals for any of our product candidates that successfully complete clinical

trials, if any;

● establish a sales, marketing and distribution infrastructure to commercialize any products for

which we may obtain marketing approval;

● until our manufacturing facility is fully validated, continued limited manufacturing by third parties

for clinical development;

● maintain, expand and protect our intellectual property portfolio;

● hire and retain additional clinical, quality control, scientific and general and administration

● acquire or in-license other drugs and technologies;

● add operational, financial and management information systems and personnel, including personnel

to support our research and development programs, any future commercialization efforts and operating as a public company.

We will not generate

revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for RP1

or our other product candidates.

If we obtain regulatory approval for any of our product candidates and do not enter into a commercialization

partnership in any jurisdiction, we expect to incur significant expenses related to developing our internal commercialization capability

to support product sales, marketing, and distribution.

As a result, we will

need additional funding to support our continuing operations and pursue our growth strategy.

Until such time as we can generate

significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings,

debt financings, collaborations, strategic alliances, and marketing, distribution, or licensing arrangements.

We may be unable

to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all.

fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back, or discontinue

the development and commercialization of one or more of our product candidates.

Because of the numerous

risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount

of increased expenses or when, or if, we will be able to achieve or maintain profitability.

Even if we are able to generate product

sales, we may not become profitable.

If we fail to become profitable or are unable to sustain profitability on a continuing basis,

then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

As of December 31,

2020, we had cash and cash equivalents and short-term investments of $493.3 million.

We believe that our existing cash and cash

equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements through

at least 12 months from the issuance of the consolidated financial statements included in this Quarterly Report.

See “—Liquidity

and capital resources”

and “Risk factors—Risks related to our financial position and need for additional capital.”

In December 2019,

a novel strain of coronavirus, which causes the disease known as COVID-19, was reported to have surfaced in Wuhan, China.

In March 2020,

the World Health Organization declared the COVID-19 outbreak a pandemic, which continues to spread throughout the U.S.

and worldwide.

We could be materially and adversely affected by the risks, or the public perception of the risks, related to an epidemic, pandemic,

outbreak, or other public health crisis, such as the recent outbreak of COVID-19.

We are continuing to monitor the global outbreak

and spread of COVID-19 and have taken steps to identify and mitigate the adverse impacts on, and risks to, our business posed by

its spread and actions taken by governmental and health authorities to address the COVID-19 pandemic.

The spread of COVID-19 has

caused us to modify our business practices, including implementing a global work from home policy for certain employees who are

able to perform their duties remotely and reducing travel.

For those employees working from our facilities, including certain essential

employees in our laboratory and who perform manufacturing functions, and certain other employees as deemed essential from time

to time, we have implemented stringent safety measures designed to comply with applicable federal, state and local guidelines instituted

in response to the COVID-19 pandemic.

Fluctuation in infection rates in the regions in which we operate has resulted in periodic

changes in restrictions that vary from region to region and require vigilant attention and rapid response to new or reinstated

We expect to continue to take actions as may be required or recommended by government authorities or as we determine are

in the best interests of our employees, the patients we serve and other business partners in light of COVID-19.

The COVID-19 pandemic

has delayed, and we expect it may continue to delay, the timing of patient enrollment and treatment in certain of our ongoing clinical

For example, the enrollment of our clinical trial of RP1 in liver and kidney transplant patients with CSCC, representing

highly immunocompromised patient populations, has been slower than expected for reasons we attribute to the COVID-19 pandemic.

However, the extent of these delays is currently unknown and has and will likely continue to vary by clinical study site and may

be amplified as a result of the impacts of a “second wave”

of the virus outbreak.

In addition, we may incur unforeseen

costs as a result of disruptions in clinical supply or preclinical study or clinical trial delays.

While vaccines for COVID-19

are being, and have been developed, there is no guarantee that any such vaccine will be effective, work as expected or be made

available or will be accepted on a significant scale and in a timely manner.

The impact of COVID-19 on our business future results

will largely depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate

geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States

and other countries, business closures or business disruptions, the ultimate impact on financial markets and the global economy,

and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

See “Risk

Factors—Our financial condition and results of operations could be adversely affected by the recent novel coronavirus disease-2019,

or COVID-19, outbreak.”

in Part II, Item 1A of this Quarterly Report.

Components of our results of operations

To date, we have not

generated any revenue from product sales as we do not have any approved products and do not expect to generate any revenue from

the sale of products in the near future.

If our development efforts for RP1 or any other product candidates that we may develop

in the future are successful and result in regulatory approval, or if we enter into collaboration or license agreements with third

parties, we may generate revenue in the future from a combination of product sales or payments from those collaborations or license

Operating expenses

Our expenses since

inception have consisted solely of research and development costs and general and administrative costs.

Research and development expenses

Research and development

expenses consist primarily of costs incurred for our research activities, including our discovery efforts and the development of

our product candidates, and include:

● expenses incurred under agreements with third parties, including clinical research organizations,

or CROs, that conduct research, preclinical activities and clinical trials on our behalf as well as contract manufacturing organizations,

or CMOs, that manufacture our product candidates for use in our preclinical and clinical trials;

● salaries, benefits and other related costs, including stock-based compensation expense, for personnel

engaged in research and development functions;

● costs of outside consultants, including their fees, stock-based compensation and related travel

● costs of laboratory supplies and acquiring, developing and manufacturing preclinical study and

clinical trial materials;

● costs related to compliance with regulatory requirements in connection with the development of

our product candidates;

● facility-related expenses, which include direct depreciation costs and allocated expenses for rent

and maintenance of facilities and other operating costs.

costs will be partially offset by our agreement with Regeneron related to our

Phase 2 clinical trial of RP1 in approximately 240 patients with clinical trial CSCC .

We expense research

and development costs as incurred.

We recognize external development costs based on an evaluation of the progress to completion

of specific tasks using information provided to us by our service providers.

Payments for these activities are based on the terms

of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our consolidated financial

statements as prepaid or accrued research and development expenses.

Our direct external

research and development expenses are tracked on a program-by-program basis and consist of costs, such as fees paid to consultants,

contractors, CMOs, and CROs in connection with our preclinical and clinical development activities.

We do not allocate personnel

costs, costs associated with our discovery efforts, laboratory supplies, and facilities, including depreciation or other indirect

costs, to specific product development programs because these costs are deployed across multiple product development programs and,

as such, are not separately classified.

All non-employee costs associated with our manufacturing facility have been fully burdened

to our RP1 program.

The table below summarizes

our research and development expenses by product candidate or development program for each of the periods presented:

Three Months Ended

Nine Months Ended

(Amounts in thousands)

Direct research and development expenses by program:

Unallocated research and development expenses:

Personnel related (including stock-based compensation)

Total research and development expenses

Research and development

activities are central to our business model.

Product candidates in later stages of clinical development generally have higher

development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage

clinical trials.

We expect that our research and development expenses will continue to increase for the foreseeable future as we

continue enrollment and initiate additional clinical trials and continue to discover and develop additional product candidates.

The successful development and commercialization of our product candidates is highly uncertain.

This is due to the numerous risks

and uncertainties associated with product development and commercialization, including the following:

● the scope, rate of progress, expense and results of our ongoing clinical trials, as well future

clinical trials or other product candidates and other research and development activities that we may conduct;

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

● our ability to maintain our current research and development programs and to establish new ones;

● uncertainties in clinical trial design;

● the rate of enrollment in clinical trials;

● the successful completion of clinical trials with safety, tolerability, and efficacy profiles that

are satisfactory to the FDA or any comparable foreign regulatory authority;

● the receipt of regulatory approvals from applicable regulatory authorities;

● our success in operating a manufacturing facility, or securing manufacturing supply through relationships

with third parties;

● our ability to obtain and maintain patents, trade secret protection, and regulatory exclusivity,

both in the United States and internationally;

● our ability to protect our rights in our intellectual property portfolio;

● the commercialization of our product candidates, if and when approved;

● the acceptance of our product candidates, if approved, by patients, the medical community, and

third-party payors;

● our ability to successfully develop our product candidates for use in combination with third-party

products or product candidates;

● negative developments in the field of immuno-oncology;

● competition with other products;

● significant and changing government regulation and regulatory guidance.

A change in the outcome

of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and

timing associated with the development of that product candidate.

For example, if the FDA or another regulatory authority were

to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development

of a product candidate, or if we experience significant trial delays due to patient enrollment or other reasons, we would be required

to expend significant additional financial resources and time on the completion of clinical development.

We may never succeed in

obtaining regulatory approval for any of our product candidates.

General and administrative expenses

General and administrative

expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive,

finance, corporate and business development and administrative functions.

General and administrative expenses also include professional

fees for legal, patent, accounting, auditing, tax and consulting services;

travel expenses;

and facility-related expenses, which

include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

We expect that our

general and administrative expenses will increase in the future as we increase our general and administrative headcount to support

our continued research and development and potential commercialization of our product candidates.

We also expect to continue to

incur increased expenses, including accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance

with exchange listing and SEC requirements;

director and officer insurance costs;

and investor and public relations costs.

Other income (expense), net

Research and development incentives

Research and development

incentives consists of reimbursements of research and development expenditures.

We participate, through our subsidiary in the United

Kingdom, in the research and development program provided by the United Kingdom tax relief program, such that a percentage of up

to 14.5% of our qualifying research and development expenditures are reimbursed by the United Kingdom government, and such incentives

are reflected as other income.

Investment income

Investment income consists

of income earned on our cash and cash equivalents and short-term investments.

Interest expense on finance lease liability

Interest expense on

finance lease liability consists of amortization of finance charges under our financing lease.

Interest expense on debt obligations

Interest expense on

debt obligations consists of the amortization of debt discount and cash paid for interest under the term loan facility with Hercules.

Other income (expense), net

Other income (expense),

net consists primarily of realized and unrealized foreign currency transaction gains and losses.

Since our inception

and through December 31, 2020, we have not recorded any income tax benefits for the net losses we incurred in each jurisdiction

in which we operate, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our

net operating loss carryforwards will not be realized.

Results of operations

Comparison of the three months ended

December 31, 2020 and 2019

The following table

summarizes our results of operations for the three months ended December 31, 2020 and 2019:

Three Months Ended

(Amounts in thousands)

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Research and development incentives

Investment income

Interest expense on finance lease liability

Loss on extinguishment of debt

Interest expense on debt obligations

Other income (expense)

Total other income (expense), net

Research and development expenses

Three Months Ended

(Amounts in thousands)

Direct research and development expenses by program:

Unallocated research and development expenses:

Personnel related (including stock-based compensation)

Total research and development expenses

Research and development

expenses for the three months ended December 31, 2020 were $14.3 million, compared to $11.9 million for the three months ended

December 31, 2019.

The increase of $2.4 million was due primarily to an increase of approximately $3.5 million in direct research

costs, off set by an approximately $1.2 million decrease in our unallocated research and development costs.

The increase in RP1

costs was due primarily to an increase in clinical trial costs in the three months ended December 31, 2020 associated with

our ongoing clinical trials as well as costs associated with operations of our new manufacturing facility for RP1 clinical trial

The increase in costs associated with RP2 and RP3 are primarily associated with the continued clinical trial development

of these product candidates.

The decrease in unallocated

research and development expenses reflected an increase of $1.3 million in personnel-related costs.

The increase in personnel-related

costs largely reflected the hiring of additional personnel in our research and development functions as we expanded the development

plan in multiple indications.

Personnel related costs for the three months ended December 31, 2020 and 2019 included stock-based

compensation expense of $1.5 million and $1.3 million, respectively.

Other costs decreased primarily due to our manufacturing operations

focused on the potential registrational studies associated with our RP1 development plan with multiple cohorts.

General and administrative expenses

General and administrative

expenses were $6.0 million for the three months ended December 31, 2020, compared to $4.7 million for the three months ended

December 31, 2019.

The increase of $1.2 million primarily reflected increases of $0.9 million in personnel related costs,

including stock-based compensation of $0.6 million, and increases of $0.2 million in facility and other variable costs.

in personnel related costs was due to the hiring of additional personnel in our general and administrative functions as we expanded

our operations in the United States.

The increase in facility and other variable costs was due primarily to an increase in costs

associated with our directors and officers insurance.

Total other income (expense), net

Other income (expense)

was $(1.5) million for the three months ended December 31, 2020, compared to $0.5 million for the three months ended December 31,

The decrease of $2.0 million was primarily attributable to a $0.9 million increase associated with the loss from extinguishment

of debt under our term loan facility with Hercules, a $0.2 million increase in interest expense on debt obligations related to

our term loan facility with Hercules, a $0.3 decrease in other income due primarily to the changes in foreign exchange rates of

the Great British Pounds to United States Dollar, a $0.4 million decrease in investment income due to fluctuations in the rate

of return on investments, and a $0.4 million decrease in research and development incentives.

Comparison of the nine months ended

December 31, 2020 and 2019

The following table summarizes our results

of operations for the nine months ended December 31, 2020 and 2019:

Research and development expenses

Nine Months Ended

(Amounts in thousands)

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Research and development incentives

Investment income

Interest expense on finance lease liability

Interest expense on debt obligations

Loss on extinguishment of debt

Other income (expense)

Total other income (expense), net

Nine Months Ended

(Amounts in thousands)

Direct research and development expenses by program:

Unallocated research and development expenses:

Personnel related (including stock-based compensation)

Total research and development expenses

Research and development

expenses for the nine months ended December 31, 2020 were $40.5 million, compared to $27.6 million for the nine months ended

December 31, 2019.

The increase of $13.0 million was due primarily to an increase of approximately $9.5 million in direct

research costs associated with RP1, $1.5 million in direct research costs associated with RP2 and RP3, and approximately $1.9 million

increase in our unallocated research and development costs.

The increase in RP1 costs was due primarily to an increase in clinical

trial costs in the nine months ended December 30, 2020 associated with our ongoing clinical trials as well as costs associated

with operations of our new manufacturing facility for RP1 clinical trial supplies.

The increase in costs associated with RP2 and

RP3 is primarily associated with the continued clinical trial development of these product candidates.

The increase in unallocated

research and development expenses reflected an increase of $5.1 million in personnel-related costs, including stock-based compensation

of $0.8 million, partially offset by a decrease of $3.2 million in other costs.

The increase in personnel-related costs largely

reflected the hiring of additional personnel in our research and development functions as we expanded the development plan in multiple

Personnel related costs for the nine months ended December 31, 2020 and 2019 included stock-based compensation

expense of $3.8 million and $3.0 million, respectively.

Other costs decreased primarily due to our manufacturing operations focused

on the potential registrational studies associated with our RP1 development plan with multiple cohorts.

General and administrative expenses

General and administrative

expenses were $17.2 million for the nine months ended December 31, 2020, compared to $12.2 million for the nine months ended

December 31, 2019.

The increase of $5.0 million primarily reflected increases of $2.8 million in personnel related costs,

including stock-based compensation of $1.6 million, increases of $1.3 million in facility and other variable costs and increases

of $0.8 million in professional fees.

The increase in personnel related costs was due to the hiring of additional personnel in

our general and administrative functions as we expanded our operations in the United States.

The increase in professional fees

was due to costs associated with increased spending to build out our information technology capabilities as well legal and accounting

fees related to ongoing business operations and enhancements to the internal control environment.

The increase in facility and

other variable costs was due primarily to an increase in costs associated with our directors and officers insurance of approximately

$0.4 million and depreciation expense of $0.4 million associated with our corporate headquarters.

Total other income (expense), net

Other income (expense)

was $(1.6) million for the nine months ended December 31, 2020, compared to $3.0 million for the nine months ended December 31,

The decrease of $4.6 million was primarily attributable to a $0.7 million increase in interest expense related to our finance

lease liability, a $0.8 million increase in interest expense on debt obligations related to our term loan facility with Hercules,

a $0.9 million increase associated with the loss from extinguishment of debt under our term loan facility with Hercules a $1.0

million increase in other expense due primarily to the changes in foreign exchange rates of the Great British Pounds to United

States Dollar, a $1.0 million decrease in investment income due to fluctuations in the rate of return on investments, and a $0.2

million decrease in research and development incentives.

Liquidity and capital resources

Since our inception,

we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from

our operations.

We have not yet commercialized any of our product candidates, which are in various phases of preclinical and clinical

development, and we do not expect to generate revenue from sales of any products for the foreseeable future, if at all.

Sources of liquidity

To date, we have financed

our operations primarily with proceeds from the sale of equity securities and, to a lesser extent, proceeds from the issuance of

debt securities.

Through December 31, 2020, we had received gross proceeds of approximately $706.5 million from our sales

of equity instruments and $10.0 million from our incurrence debt under the term loan facility with Hercules, which was repaid in

full in December 2020.

As of December 31, 2020, we had cash and cash equivalents and short-term investments of $493.3

In July 2018,

we completed our IPO and issued and sold 7,407,936 shares of our common stock at a public offering price of $15.00 per share, resulting

in net proceeds of $103.4 million after deducting underwriting discounts and commissions but before deducting offering costs.

the fourth calendar quarter of 2019, we closed a registered public offering for the issuance and sale of 4,516,561 shares of our

common stock at a public offering price of $13.61 per share and pre-funded warrants to purchase 2,200,000 shares of our common

stock at a purchase price of $13.6099 per pre-funded warrant, the public offering price per share of the common stock less the

$0.0001 per share exercise price of each pre-funded warrant.

We received aggregate net proceeds of approximately $85.6 million

after deducting underwriting discounts, commissions and other offering expenses of approximately $5.8 million.

In June 2020,

we closed a second public offering for the issuance and sale of 3,478,261 shares of our common stock at a public offering price

of $23.00 per share and pre-funded warrants to purchase 1,521,738 shares of our common stock at a purchase price of $22.9999 per

pre-funded warrant, the public offering price per share of common stock less the $0.0001 per share exercise price of each pre-funded

We received aggregate net proceeds of approximately $107.8 million after deducting underwriting discounts, commissions

and other offering expenses of approximately $7.2 million.

On October 26, 2020, we closed a third public offering for the

issuance and sale of 5,625,000 shares of our common stock at a public offering price of $40.00 per share and pre-funded warrants

to purchase 1,562,500 shares of our common stock at a purchase price of $39.99 per pre-funded warrant, the public offering price

per share of common stock less the $0.0001 per share exercise price of each pre-funded warrant.

We received aggregate net proceeds

of approximately $270.0 million after deducting underwriting discounts, commissions and other offering expenses of approximately

$17.5 million.

In addition to registered

public equity offerings, we also established an at-the-market offering program pursuant to a sales agreement that we entered into

with SVB Leerink LLC, or the Agent, on August 8, 2019, or the 2019 Sales Agreement.

Under the 2019 Sales Agreement, and prior

to its amendment in June 2020, we could sell from time to time, at our option, up to an aggregate of $75.0 million of shares

of our common stock.

In June 2020, we amended the 2019 Sales Agreement to reduce the aggregate offering amount thereunder

from $75.0 million to $30.0 million We sold 287,559 shares of our common stock under the 2019 Sales Agreement for net proceeds

of approximately $4.4 million.

On August 11, 2020, in connection with our entry into separate sales agreement with the Agent,

or the 2020 Sales Agreement, we and the Agent mutually agreed to terminate the 2019 Sales Agreement.

Under the 2020 Sales Agreement,

and prior to its amendment in October 2020, we could sell from time to time, at our option, up to an aggregate of $75.0 million

of shares of our common stock.

In October 2020, we amended the 2020 Sales Agreement to reduce the aggregate offering amount

thereunder from $75.0 million to $62.5 million.

We have not sold any shares of our common stock under the 2020 Sales Agreement.

Our incurrence of debt

was conducted entirely under the Hercules Loan Agreement, as amended, pursuant to which we borrowed $10.0 million of a maximum

of $40.0 million.

On December 15, 2020, we entered into a Payoff Letter with Hercules and paid a total of $10.8 million to

Hercules representing the outstanding principal, accrued and unpaid interest, fees, costs and expense due and owed to Hercules,

thereby terminating the Hercules Loan Agreement and the related loan documents.

The following table

summarizes our cash flows for each of the periods presented:

Nine Months Ended

(Amounts in thousands)

Net cash used in operating activities

Net cash provided by (used in) investing activities

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Operating activities

During the nine months

ended December 31, 2020, net cash used in operating activities was $45.3 million, primarily resulting from our net loss of

$ 59.4 million, partially offset by the net cash provided by changes in our operating assets and liabilities of $2.6 million

and non-cash charges of $11.4 million.

Net cash used by our changes in our operating assets and liabilities for the nine months

ended December 31, 2020 consisted primarily of a $1.1 million decrease in research and development incentive receivables,

partially from the United Kingdom government due to the timing and amount of our qualifying expenditures, $1.2 million increase

in prepaid expenses and other current assets and $1.0 million decrease in accounts payable, partially offset by $1.9 million increase

in accrued expenses and other current liabilities and $1.9 million net decrease related to ASC 842 (including changes in operating

lease liabilities, operating lease, right-of-use asset and financing lease, right-of-use asset).

The changes in accounts payable

were primarily due to the timing of vendor invoicing and payments.

During the nine months

ended December 31, 2019, net cash used in operating activities was $49.3 million, primarily resulting from our net loss of

$36.8 million and net cash used by changes in our operating assets and liabilities of $17.8 million, partially offset by net non-

cash charges of $5.3 million.

Net cash used by changes in our operating assets and liabilities for the nine months ended December 31,

2019 consisted primarily of a $14.1 million increase in long-term prepaid rent, a $2.6 million decrease in accounts payable, a

$2.2 million increase in research and development incentives receivable, partially from the United Kingdom government due to the

timing and amount of our qualifying expenditures, a $1.5 million increase in prepaid expenses and other current assets and a $0.3

million decrease in operating lease liabilities offset by a $1.8 million increase in accrued expenses and other current liabilities,

$0.7 million decrease in operating lease, right-of-use asset and $0.4 million decrease in financing lease, right-of-use-asset.

Investing activities

During the nine months

ended December 31, 2020, net cash used in investing activities was $62.5 million, consisting of $225.0 million in purchases

of available for sale securities and $1.6 million in purchases of property, plant and equipment, partially offset by $164.1 million

in proceeds from sales and maturities of short-term investments.

During the nine months

ended December 31, 2019, net cash used in investing activities was $13.1 million, consisting of $119.6 million in purchases

of available for sale securities and $5.2 million in purchases of property, plant and equipment, partially offset by $111.7 million

in proceeds from sales and maturities of short-term investments.

Financing Activities

During the nine months

ended December 31, 2020, net cash provided by financing activities was $371.7 million, consisting of $286.1 million from the

issuance of common stock, $91.7 million from the issuance of pre-funded warrants to purchase common stock, $4.9 million in proceeds

from the exercise of stock options, partially offset by $10.0 million in debt payments under the Hercules Loan Agreement and $0.8

million of fees associated with the extinguishment of the obligations under the Hercules Loan Agreement.

During the nine months

ended December 31, 2019, net cash provided by financing activities was $100.1 million, consisting of $57.5 million in proceeds

from the issuance of common stock, $28.1 million in proceeds from issuance of pre-funded warrants to purchase common stock, $10.0

million in proceeds from the long-term debt, $4.4 million in proceeds from the issuance of common stock through sales under the

2019 Sales Agreement and $0.5 million in proceeds from the exercise of stock options, partially offset by $0.4 million in payments

of issuance costs and $22,000 in principal payments of finance lease obligations.

Hercules Loan Agreement

On August 8, 2019

and as amended on June 1, 2020, we and certain of our affiliates entered into the Hercules Loan Agreement with Hercules, which

provided for aggregate borrowings of up to $40.0 million in the form of term loans.

We borrowed $10.0 million at closing under

the Hercules Loan Agreement and, subject to the achievement of certain milestones, had the ability to borrow the unused $30.0 million

available thereunder in three separate $10.0 million advances between October 1, 2020 and December 15, 2020, July 1,

2020 and June 30, 2021, and July 1, 2021 and December 15, 2021, respectively.

On December 15,

2020, we entered into a Payoff Letter with respect to the Hercules Loan Agreement.

Pursuant to the Payoff Letter, we paid a total

of $10.8 million to Hercules, representing the outstanding principal, accrued and unpaid interest, fees, costs and expenses due

and owed to Hercules under the Hercules Loan Agreement.

Upon the execution of the Payoff Letter, in repayment of all of our outstanding

obligations thereunder, the Hercules Loan Agreement and the related loan documents were terminated.

Borrowings under the

Hercules Loan Agreement bore interest at a rate per annum equal to 8.75%.

Under the Hercules Loan Agreement, we were required to

make monthly interest-only payments through September 1, 2022.

As of December 31, 2020, there was no amount of outstanding

principal under the Hercules Loan Agreement due and owing.

The term loan facility

with Hercules was secured by substantially all of our assets, excluding our intellectual property, and subject to certain exceptions

and exclusions.

All liens on our assets held by Hercules were released in connection with the our execution of the Payoff Letter.

Funding requirements

Our plan of operation

is to continue implementing our business strategy, continue research and development of RP1 and our other product candidates and

continue to expand our research pipeline and our internal research and development capabilities.

We expect our expenses to increase

substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials

of our product candidates and if and as we:

● conduct our current and future clinical trials with RP1, RP2 and RP3;

● further preclinical development of our platform;

● operate our own in-house manufacturing facility;

● seek to identify and develop additional product candidates;

● seek marketing approvals for any of our product candidates that successfully complete clinical

trials, if any;

● establish a sales, marketing and distribution infrastructure to commercialize any products for

which we may obtain marketing approval;

● until our planned manufacturing facility is fully validated, continued limited manufacturing by

third parties for clinical development.

● maintain, expand and protect our intellectual property portfolio;

● acquire or in-license other drugs and technologies;

● add operational, financial and management information systems and personnel, including personnel

to support our research and development programs, any future commercialization efforts and operations as a public company.

As of December 31,

2020, we had cash and cash equivalents and short-term investments of $493.3 million.

We believe that our existing cash, cash equivalents

and short-term investments as of December 31, 2020, will enable us to fund our overall operations into the second half of

We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources

sooner than we expect.

Because of the numerous

risks and uncertainties associated with the development of RP1 and other product candidates and programs, and because the extent

to which we may enter into collaborations with third parties for development of our product candidates is unknown, we are unable

to estimate the timing and amounts of increased capital outlays and operating expenses associated with completing the research

and development of our product candidates.

Our future capital requirements will depend on many factors, including those described

in this section and above under “—Operating expenses—Research and development expenses.”

Developing novel biopharmaceutical

products, including conducting preclinical studies and clinical trials, is a time-consuming, expensive and uncertain process that

takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval for any

product candidates or generate revenue from the sale of any products for which we may obtain marketing approval.

In addition, our

product candidates, if approved, may not achieve commercial success.

Our commercial revenues, if any, will be derived from sales

of therapies that we do not expect to be commercially available for many years, if ever.

Accordingly, we will need to obtain substantial

additional funds to achieve our business objectives.

Adequate additional

funds may not be available to us on acceptable terms, or at all.

We do not currently have any committed external source of funds.

To the extent that we raise additional capital through the sale of our equity or convertible debt securities, our shareholders’

interest may be diluted, and the terms of these securities may include liquidation or other preferences and anti-dilution protections

that could adversely affect the rights of our common stockholder.

Additional debt or preferred equity financing, if available,

may involve agreements that include restrictive covenants that may limit our ability to take specific actions, such as incurring

debt adversely impact our ability to conduct our business, and may require the issuance of warrants, which could potentially dilute

your ownership interest.

If we raise additional

funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable

rights to our technology, future revenue streams, research programs, or product candidates or grant licenses on terms that may

not be favorable to us.

If we are unable to raise additional funds through equity or debt financings or collaborations, strategic

alliances or licensing arrangements with third parties when needed, we may be required to delay, limit, reduce and/or terminate

our product development programs or any future commercialization efforts or grant rights to develop and market product candidates

that we would otherwise prefer to develop and market ourselves.

Contractual obligations and commitments

During the nine months

ended December 31, 2020, there were no material changes to our contractual obligations and commitments from those described

under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual

Obligations and Commitments”

in our Annual Report on Form 10-K for the year ended March 31, 2020, which was filed

with the SEC on June 3, 2020.

Collaborations

On February 26,

2018, we entered into a Clinical Trial Collaboration and Supply Agreement with Bristol-Myers Squibb Company, or BMS.

the agreement, BMS is providing to us, at no cost, nivolumab, its anti-PD-1 therapy, for use in combination with RP1 in our ongoing

Phase 1/2 clinical trial.

Under the agreement, we will sponsor, fund and conduct the clinical trial in accordance with an agreed-upon

BMS granted us a non-exclusive, non-transferrable, royalty-free license (with a right to sublicense) under its intellectual

property to use nivolumab in the clinical trial and has agreed to supply nivolumab, at no cost to us, for use in the clinical trial.

Both parties will own the study data produced in the clinical trial, other than study data related solely to nivolumab, which will

belong solely to BMS, or study data related solely to RP1, which will belong solely to us.

In January 2020, this agreement

was expanded to cover an additional cohort of 125 patients with anti-PD-1 failed melanoma.

Unless earlier terminated,

the agreement will remain in effect until (i) the completion of the clinical trial, (ii) all related clinical trial data

have been delivered to both parties and (iii) the completion of any statistical analyses and bioanalyses contemplated by the

clinical trial protocol or any analysis otherwise agreed upon by the parties.

The agreement may be terminated by either party (i) in

the event of an uncured material breach by the other party, (ii) in the event the other party is insolvent or in bankruptcy

proceedings or (iii) for safety reasons.

Upon termination, the licenses granted to us to use nivolumab in the clinical trial

will terminate.

The agreement contains representations, warranties, undertakings and indemnities customary for a transaction of

On April 12, 2019,

we entered into a separate agreement with BMS on terms similar to the terms set forth in the agreement described above, pursuant

to which BMS will provide, at no cost to us, nivolumab for use in our Phase 1 clinical trial of RP2 in combination with nivolumab.

On May 29, 2018,

we entered into a Master Clinical Trial Collaboration and Supply Agreement with Regeneron Pharmaceuticals, Inc., or Regeneron.

Pursuant to the agreement we agreed to undertake one or more clinical trials with Regeneron for the administration of our product

candidates in combination with cemiplimab, an anti-PD-1 therapy developed by Regeneron, across multiple solid tumor types, the

first of which is our ongoing Phase 2 clinical trial testing RP1 in combination with cemiplimab versus cemiplimab alone in

patients with CSCC.

Each clinical trial will be conducted pursuant to an agreed study plan which, among other things, will identify

the name of the sponsor and which party will manage the particular study, and include the protocol, the budget and a schedule of

clinical obligations.

The first study plan related to the Phase 2 clinical trial in CSCC has been agreed.

Pursuant to the terms

of the agreement, each party granted the other party a non-exclusive license of their respective intellectual property and agreed

to contribute the necessary resources needed to fulfill their respective obligations, in each case, under the terms of agreed

Development costs of a particular clinical trial will be split equally.

The agreement contains representations, warranties,

undertakings and indemnities customary for a transaction of this nature.

The agreement also contains certain covenants that restrict

us from entering into a third-party arrangement with respect to the use of our product candidates in combination with an anti-PD-1

therapy and that restrict Regeneron from entering into a third-party arrangement with respect to the use of cemiplimab in combination

with an HSV-1 virus, in each case, for the treatment of a tumor type that is the subject of a clinical trial to which the covenants

Unless otherwise mutually agreed in a future study plan, these covenants are only applicable to our ongoing Phase 2

clinical trial in CSCC, and expire upon the one-year anniversary of the commencement of the applicable study plan.

The agreement may be

terminated by either party if (i) there is no active study plan for which a final study report has not been completed, (ii) the

parties have not entered into a study plan for an additional clinical trial within a period of time after the delivery of the most

recent final study report or (iii) in the event of a material breach.

Critical accounting policies and significant

judgments and estimates

Our management’s

discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which

have been prepared in accordance with generally accepted accounting principles in the United States.

The preparation of our consolidated

financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of

assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our consolidated financial

We base our estimates on historical experience, known trends and events and various other factors that we believe are

reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets

and liabilities that are not readily apparent from other sources.

We evaluate our estimates and assumptions on an ongoing basis.

Our actual results may differ from these estimates under different assumptions or conditions.

While our significant

accounting policies are described in greater detail in Note 2 to our consolidated financial statements appearing elsewhere

in this Quarterly Report, we believe that the following accounting policies are those most critical to the judgments and estimates

used in the preparation of our consolidated financial statements.

research and development expenses

As part of the process

of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses.

This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that

have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service

when we have not yet been invoiced or otherwise notified of actual costs.

The majority of our service providers invoice us in arrears

for services performed, on a pre-determined schedule or when contractual milestones are met;

however, some require advanced payments.

We make estimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on facts

and circumstances known to us at that time.

Examples of estimated accrued research and development expenses include fees paid to:

● CROs in connection with performing research activities and conducting preclinical studies and clinical

trials on our behalf;

● CMOs in connection with the production of preclinical and clinical trial materials;

● investigative sites or other service providers in connection with clinical trials;

● vendors in connection with preclinical and clinical development activities;

● vendors related to product manufacturing and development and distribution of preclinical and clinical

We base our expenses

related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to

quotes and contracts with multiple CMOs and CROs that supply, conduct and manage preclinical studies and clinical trials on our

The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven

payment flows.

There may be instances in which payments made to our vendors will exceed the level of services provided and result

in a prepayment of the expense.

Payments under some of these contracts depend on factors such as the successful enrollment of

patients and the completion of clinical trial milestones.

In accruing service fees, we estimate the time period over which services

will be performed and the level of effort to be expended in each period.

If the actual timing of the performance of services or

the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly.

do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing

of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts

that are too high or too low in any particular period.

To date, there have not been any material adjustments to our prior estimates

of accrued research and development expenses.

Stock-based compensation

We measure stock-based

awards granted to employees and directors based on their fair value on the date of the grant and recognize compensation expense

for those awards over the requisite service period, which is generally the vesting period of the respective award.

We have to date

only issued stock-based awards with service-based vesting conditions and record the expense for these awards using the straight-line

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model,

which requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term

of the option, the risk-free interest rate for a period that approximates the expected term of the option, and our expected dividend

See Note 9 to our consolidated financial statements appearing elsewhere in this Quarterly Report

for more information.

Forfeitures are accounted for as they occur.

The fair value of each stock-based award is estimated on the

date of grant based on the fair value of our common stock on that same date.

Prior to the adoption

of ASC 2018-07 on April 1, 2019, for stock-based awards granted to consultants and non-employees, we recognize compensation

expense over the period during which services are rendered by such non-employees and consultants until completed.

At the end of

each financial reporting period prior to completion of the service, the fair value of these awards is remeasured using the then-current

fair value of our common stock and updated assumption inputs in the Black-Scholes option pricing model.

After the adoption

of ASC 2018-07, for stock-based awards granted to consultants and non-employees, we measure stock-based these awards based on their

fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which

is generally the vesting period of the respective award.

We have to date only issued stock-based awards with service-based vesting

conditions and record the expense for these awards using the straight-line method.

The fair value of each stock option grant is

estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective

assumptions, including the expected stock price volatility, the expected term of the option, the risk-free interest rate for a

period that approximates the expected term of the option, and our expected dividend yield.

We classify stock-based

compensation expense in our consolidated statements of operations in the same manner in which the award recipient’s payroll

costs are classified or in which the award recipient’s service payments are classified.

Off-balance sheet arrangements

We did not have any

off-balance sheet arrangements during the periods presented, and we do not currently have any off-balance sheet arrangements,

as defined in the rules and regulations of the SEC.

Recently issued accounting pronouncements

A description of recently

issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2

to our consolidated financial statements appearing elsewhere in this Quarterly Report.

Emerging growth company status

As an “emerging

growth company,”

the Jumpstart Our Business Startups Act of 2012 permits us to take advantage of an extended transition period

to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to

private companies.

We have irrevocably elected to “opt out”

of this provision and, as a result, we will comply with

new or revised accounting standards when they are required to be adopted by public companies that are not emerging growth companies.

Quantitative and Qualitative

Disclosures about Market Risks.

Not applicable.

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

What changed 10-Q

Item 1. Financial Statements