What changed in this filing

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Item 1. Financial Statements

2021-11-04 compared with 2021-08-06 · 142 added, 110 removed, 444 unchanged (36% of the section changed)

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(Amounts in thousands, except share and per share amounts)

June 30, 2021 March 31, 2021

September 30, 2021 March 31, 2021

Current assets:

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Common stock, $ 0.001 par value;

150,000,000 shares authorized as of June 30, 2021 and March 31, 2021;

46,730,451 and 46,566,481 shares issued and outstanding as of June 30, 2021 and March 31, 2021, respectively

150,000,000 shares authorized as of September 30, 2021 and March 31, 2021;

46,855,331 and 46,566,481 shares issued and outstanding as of September 30, 2021 and March 31, 2021, respectively

Additional paid-in capital 707,190 692,243

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(Amounts in thousands, except share and per share amounts)

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2021 2020 2021 2020

Operating expenses:

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Total other (expense) income, net ( 108 ) ( 432 ) ( 38 ) ( 92 )

Net loss attributable to common stockholders $ ( 27,311 ) $ ( 17,493 )

Net loss per share attributable to common stockholders, basic and diluted $ ( 0.53 ) $ ( 0.44 )

Net loss $ ( 29,355 ) $ ( 20,095 ) $ ( 56,666 ) $ ( 37,588 )

Net loss per common share, basic and diluted $ ( 0.56 ) $ ( 0.46 ) $ ( 1.09 ) $ ( 0.90 )

Weighted average common shares outstanding, basic and diluted 52,081,325 44,015,786 51,962,795 41,950,401

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(Amounts in thousands)

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2021 2020 2021 2020

Net loss $ ( 29,355 ) $ ( 20,095 ) $ ( 56,666 ) $ ( 37,588 )

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Net loss — — — ( 27,311 ) — ( 27,311 )

Balances as of June 30, 2021 46,730,451 $ 47 $ 699,666 $ ( 220,479 ) $ ( 210 ) $ 479,024

Balances as of Balances as of June 30, 2021 46,730,451 $ 47 $ 699,666 $ ( 220,479 ) $ ( 210 ) $ 479,024

Foreign currency translation adjustment $ — $ — $ — $ — $ 219 $ 219

Unrealized loss on short-term investments — $ — $ — $ — $ — $ —

Exercise of stock options 124,880 $ — $ 1,211 $ — $ — $ 1,211

Stock-based compensation expense — $ — $ 6,313 $ — $ — $ 6,313

Net loss — $ — $ — $ ( 29,355 ) $ — $ ( 29,355 )

Balances as of September 30, 2021 46,855,331 $ 47 $ 707,190 $ ( 249,834 ) $ 9 $ 457,412

Balances as of March 31, 2020 36,668,743 $ 37 $ 296,961 $ ( 112,298 ) $ ( 982 ) $ 183,718

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Net loss — — — ( 17,493 ) — ( 17,493 )

Balances as of June 30, 2020 40,280,420 $ 40 $ 408,755 $ ( 129,791 ) $ ( 1,190 ) $ 277,814

Balances as of Balances as of June 30, 2020 40,280,420 $ 40 $ 408,755 $ ( 129,791 ) $ ( 1,190 ) $ 277,814

Foreign currency translation adjustment — $ — $ — $ — $ 626 $ 626

Unrealized loss on short-term investments — $ — $ — $ — $ ( 47 ) $ ( 47 )

Exercise of stock options 31,852 $ — $ 291 $ — $ — $ 291

Stock-based compensation expense — $ — $ 2,801 $ — $ — $ 2,801

Net loss — $ — $ — $ ( 20,095 ) $ — $ ( 20,095 )

Balances as of September 30, 2020 40,312,272 $ 40 $ 411,847 $ ( 149,886 ) $ ( 611 ) $ 261,390

The accompanying notes are an integral part of these condensed consolidated financial statements.

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(Amounts in thousands)

Three Months Ended June 30,

Six Months Ended September 30,

Cash flows from operating activities:

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Cash flows from financing activities:

Proceeds from long-term debt, net of debt issuance costs — ( 100 )

Proceeds from issuance of common stock in follow-on public offering, net of underwriting fees and discounts — 74,883

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Cash paid during the period for interest $ — $ 445

Cash paid for income taxes, net $ 43 $ —

Supplemental disclosure of non-cash investing and financing activities:

Net unrealized (loss) on short-term investments ( 40 ) ( 196 )

Issuance costs included in accounts payable — 317

Purchases of property and equipment included in accounts payable 177 79

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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 $ 27,311 and $ 17,493 for the three months ended June 30, 2021 and 2020, respectively.

In addition, as of June 30, 2021, the Company had an accumulated deficit of $ 220,479 .

The Company has incurred recurring losses since its inception, including net losses of $ 29,355 and $ 20,095 for the three months ended September 30, 2021 and 2020, respectively and net losses of $ 56,666 and $ 37,588 for the six months ended September 30, 2021 and 2020, respectively.

In addition, as of September 30, 2021, the Company had an accumulated deficit of $ 249,834 .

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

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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.

The impact of this pandemic has been, and may continue to be, extensive in many aspects of society, which has resulted, and may 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 continues to evolve its work-from-home policies toward return-to-office policies, as applicable under the circumstances while following local, state and federal guidelines and safety practices.

The Company has taken these and other precautionary steps while maintaining business continuity in order to continue to progress its programs.

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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.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("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

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Unaudited interim financial information

The accompanying consolidated balance sheet as of June 30, 2021, the consolidated statements of operations, of comprehensive loss and of stockholders’ equity for the three months ended June 30, 2021 and 2020 and the consolidated statements of cash flows for the three months ended June 30, 2021 and 2020 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 June 30, 2021 and the results of its operations for the three months ended June 30, 2021 and 2020 and its cash flows for the three months ended June 30, 2021 and 2020.

The financial data and other information disclosed in these consolidated notes related to the three months ended June 30, 2021 and 2020 are unaudited.

The results for the three months ended June 30, 2021 are not necessarily indicative of results to be expected for the year ending March 31, 2022, 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, 2021.

During the three months ended June 30, 2021, 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, 2021 which was filed with the Securities and Exchange Commission on May 20, 2021, except as described below.

The accompanying consolidated balance sheet as of September 30, 2021, the consolidated statements of operations, of comprehensive loss and of stockholders’ equity for the three and six months ended September 30, 2021 and 2020 and the consolidated statements of cash flows for the six months ended September 30, 2021 and 2020 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, 2021 and the results of its operations for the three and six months ended September 30, 2021 and 2020 and its cash flows for the six months ended September 30, 2021 and 2020.

The financial data and other information disclosed in these consolidated notes related to the three and six months ended September 30, 2021 and 2020 are unaudited.

The results for the three and six months ended September 30, 2021 are not necessarily indicative of results to be expected for the year ending March 31, 2022, 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, 2021, which was filed with the Securities and Exchange Commission on May 20, 2021.

During the three and six months ended September 30, 2021, 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, 2021 which was filed with the Securities and Exchange Commission on May 20, 2021, except as described below.

Recently adopted accounting pronouncements

In December 2019, the FASB issued ASU No.

In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU No.

2019-12 Income Taxes (Topic 740)-Simplifying the Accounting for Income Taxes (ASU 2019-12) , which is intended to simplify the accounting for income taxes.

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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.

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.

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Fair Value Measurements as of

June 30, 2021 Using:

September 30, 2021 Using:

Level 1 Level 2 Level 3 Total

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The underlying securities held in the money market funds held by the Company are all government backed securities.

During the three months ended June 30, 2021 and 2020, there were no transfers between levels.

During the three and six months ended September 30, 2021 and 2020, there were no transfers between levels.

Valuation of cash equivalents and short-term investments

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Treasury bonds were valued by the Company using quoted prices in active markets for similar securities, which represent a Level 2 measurement within the fair value hierarchy.

Cash equivalents consisted of money market funds at June 30, 2021 and March 31, 2021.

Cash equivalents consisted of money market funds at September 30, 2021 and March 31, 2021.

Short-term investments

Short-term investments by investment type consisted of the following:

June 30, 2021

September 30, 2021

cost Gross unrealized

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Property, plant and equipment, net consisted of the following:

June 30, 2021 March 31, 2021

September 30, 2021 March 31, 2021

Office equipment $ 834 $ 830

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$ 7,178 $ 7,442

Depreciation and amortization expense was $ 518 and $ 391 for the three months ended June 30, 2021 and 2020, respectively.

Depreciation and amortization expense was $ 532 and $ 1,050 for the three and six months ended September 30, 2021, respectively, and $ 425 and $ 816 for the three and six months ended September 30, 2020, respectively.

Depreciation and amortization expense are recorded within research and development and general and administrative expenses in the consolidated statement of operations.

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Accrued expenses and other current liabilities consisted of the following:

June 30, 2021 March 31, 2021

September 30, 2021 March 31, 2021

Accrued research and development costs $ 5,004 $ 3,862

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Long-term debt

For the periods ended June 30, 2021 and March 31, 2021, there are no debt balances outstanding as the Company entered a payoff letter in the prior fiscal year.

For the periods ended September 30, 2021 and March 31, 2021, there are no debt balances outstanding.

Hercules Loan Agreement

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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.

The Company incurred $ 100 in additional closing and legal fees in connection with Hercules First Amendment which were capitalized and were 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 (the "Payoff Letter"), 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.

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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 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 Company recognized aggregate interest expense under the Hercules Loan Agreement of $ 0 and $ 284 during the three months ended June 30, 2021 and June 30, 2020, respectively, which included non-cash interest expense of $ 0 and $ 63 .

Non-cash interest expense related to the amortization of the debt discount of $ 0 and $ 27 , and the accretion of the final payment of $ 0 and $ 36 for the three months ended June 30, 2021 and June 30, 2020, respectively.

In connection with entering into the Hercules Loan Agreement and the Hercules First Amendment,, the Company paid Hercules $ 355 and $ 100 of upfront fees, respectively.

Such upfront fees included closing costs and legal fees associated with entering into the respective agreements, and were recorded as a debt discount.

The Company did not recognize any aggregate interest expense under the Hercules Loan Agreement during the three and six months ended September 30, 2021.

During the three and six months ended September 30, 2020, the Company recognized aggregate interest expense under the Hercules Loan Agreement of $ 286 and $ 570 , respectively, which included non-cash interest expense of $ 63 and $ 126 , respectively.

Non-cash interest expense related to the amortization of the debt discount was $ 0 during the three and six months ended September 30, 2021 and $ 29 and $ 56 , respectively, during the three and six months ended September 30, 2020.

The accretion of the final payment was $ 0 for the three and six months ended September 30, 2021 and $ 34 and $ 70 for the three and six months ended September 30, 2020, respectively.

8 Stockholders’ equity

As of June 30, 2021 and March 31, 2021, 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 June 30, 2021 and March 31, 2021, the Company had reserved 14,408,145 and 14,572,115 shares of common stock for the exercise of outstanding stock options and the vesting of restricted share units, 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.

As of September 30, 2021 and March 31, 2021, 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, 2021 and March 31, 2021, the Company had reserved 16,875,800 and 14,572,115 shares of common stock for the exercise of outstanding stock options and the vesting of restricted share units, 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.

Undesignated preferred stock

As of June 30, 2021, 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 June 30, 2021.

As of September 30, 2021, 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, 2021.

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.

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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 did not issue or sell any shares under the 2020 Sales Agreement during the quarter ended June 30, 2021 or during the year ended March 31, 2021.

The Company did not issue or sell any shares under the 2020 Sales Agreement during the quarter ended September 30, 2021 or during the year ended March 31, 2021.

Equity offerings

In November 2019, pursuant to 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”), the Company issued and sold to the November 2019 Underwriters (a) 4,516,561 shares of the Company’s common stock (the “November 2019 Shares”), inclusive of the November 2019 Underwriters partially exercised 30-day option and purchased an additional 838,530 shares of the Company’s common stock, and (b) pre-funded warrants to purchase 2,200,000 shares of the Company’s common stock (the “November 2019 Pre-Funded Warrants”).

The November 2019 shares were sold to the November 2019 Underwriters (the “November 2019 Offering”) at the public offering price of $ 13.61 per share

and 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.

Morgan Securities LLC and SVB Leerink LLC, as representatives of the several underwriters named therein (the “November 2019 Underwriters”), the Company issued and sold to the November 2019 Underwriters (a) 4,516,561 shares of the Company’s common stock (the “November 2019 Shares”), inclusive of the November 2019 Underwriters partially exercised 30-day option to purchase 838,530 shares of the Company’s common stock, and (b) pre-funded warrants to purchase 2,200,000 shares of the Company’s common stock (the “November 2019 Pre-Funded Warrants”).

The November 2019 shares were sold to the November 2019 Underwriters (the “November 2019 Offering”) at the public offering price of $ 13.61 per share and 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.

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 .

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In June 2020, pursuant to an 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”), the Company sold to the June 2020 Underwriters (a) 3,478,261 shares of the Company’s common stock (the “June 2020 Shares”), inclusive of the underwriters 30-day option to purchase up to an additional 652,173 shares of the Company's common stock, and (b) pre-funded warrants to purchase 1,521,738 shares of the Company’s common stock (the “June 2020 Pre-Funded Warrants”).

The June 2020 Shares of the Company's common stock were sold to the June 2020 Underwriters at the public offering price of $ 23.00 per share and 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.

Morgan Securities LLC and SVB Leerink LLC, as representatives of the several underwriters named therein (the "June 2020 Underwriters”), the Company sold to the June 2020 Underwriters (a) 3,478,261 shares of the Company’s common stock (the “June 2020 Shares”), inclusive of the June 2020 Underwriters fully exercised 30-day option to purchase 652,173 shares of the Company's common stock, and (b) pre-funded warrants to purchase 1,521,738 shares of the Company’s common stock (the “June 2020 Pre-Funded Warrants”).

The June 2020 Shares were sold to the June 2020 Underwriters at the public offering price of $ 23.00 per share and 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 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 .

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In 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 October 2020 Pre-Funded Warrants were sold at a public offering price of $ 39.9999 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 October 2020 Pre-Funded Warrant.

Morgan Securities LLC and SVB Leerink LLC, as representatives of the several underwriters named therein, the Company issued and sold to such underwriters (a) 5,625,000 shares of the Company’s common stock, inclusive of the underwriters fully exercised 30-day option to purchase 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”).

Such shares of the Company’s common stock were sold to such underwriters at the public offering price of $ 40.00 per share and the October 2020 Pre-Funded Warrants were sold at a public offering price of $ 39.9999 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 October 2020 Pre-Funded Warrant.

The Company 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 .

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Other than as set forth in Note 9 and Note 10 to these consolidated financial statements, the 5,284,238 Pre-Funded Warrants are not included in the number of issued and outstanding shares of the Company’s common stock set forth herein.

As of June 30, 2021, none of the November 2019 Pre-Funded Warrants, the June 2020 Pre-Funded Warrants, or the October 2020 Pre-Funded Warrants had been exercised.

As of September 30, 2021, none of the November 2019 Pre-Funded Warrants, the June 2020 Pre-Funded Warrants, or the October 2020 Pre-Funded Warrants had been exercised.

9 Stock-based compensation

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Three Months Ended

September 30, Six Months Ended

September 30,

2021 2020 2021 2020

Research and development $ 2,227 $ 1,298 $ 4,685 $ 2,297

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$ 6,313 $ 2,801 $ 12,563 $ 5,269

The following table summarizes stock-based compensation expense by award type for the three months ended June 30, 2021 and 2020:

The following table summarizes stock-based compensation expense by award type for the three months ended September 30, 2021 and 2020:

Three Months Ended

September 30, Six Months Ended September 30,

2021 2020 2021 2020

Stock options $ 5,093 $ 2,801 $ 10,268 $ 5,269

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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 Company.

Incentive stock options were granted under the 2015 Plan only to the Company’s employees, including officers and directors who were also employees.

Non-statutory stock options were granted under the 2015 Plan to employees, members of the board of directors, outside advisors and consultants of the Company.

2017 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.

In July 2017, in conjunction with reorganization by Replimune Limited, pursuant to which each shareholder thereof exchanged their outstanding shares in Replimune Limited for shares in Replimune Group, Inc., on a one-for-one basis (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 have been or will be made under the 2015 Plan and any outstanding awards under the 2015 Plan have continued, and 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.

The maximum number of common shares that may be issued under the 2017 Plan was 2,659,885 , of which no ne remained available for future grants as of June 30, 2021.

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.

Incentive stock options were granted under the 2017 Plan only to the Company’s employees, including officers and directors who were also employees.

Restricted stock awards and non-statutory stock options were granted under the 2017 Plan 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 no ne remained available for future grants as of September 30, 2021.

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 2018 Plan referenced below.

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 of awards.

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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.

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.

number of shares of common stock 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.

The number of shares reserved for issuance under the 2018 Plan will increase automatically on the first day of each April equal to 4.0 % of the total number of shares of Company stock outstanding on the last trading day in the immediately preceding fiscal year, or such lesser amount as determined by the Board.

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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.

As of June 30, 2021, 1,587,935 shares remained available for future grants under the 2018 Plan.

As of September 30, 2021, 1,846,546 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.

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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 .

In 2021 the board of directors initiated the award of restricted stock units, or RSUs, under the 2018 Plan in addition to stock option awards available as part of the Company's equity incentive for employees, officers, advisors and consultants of the Company.

The RSUs typically vest over four roughly equal installments on the anniversary date of the designated vesting date that is in closest proximity to the date of grant.

In 2021 the board of directors initiated the award of restricted stock units ("RSUs"), under the 2018 Plan in addition to stock option awards available as part of the Company's equity incentive for employees, officers, advisors and consultants of the Company.

The RSUs typically vest over four approximately equal annual installments with the first such installment occurring on a designated vesting date that is in closest proximity to the one year anniversary of the date of grant.

Employee Stock Purchase Plan

6 unchanged sentences

Out-of-Plan Inducement Grant

In May 2021, the Company granted an equity award to a newly hired executive as an inducement material to enter into employment with the Company.

The grant constitutes an "employment inducement grant" in accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, and the grant was not issued under the Replimune Group, Inc.

2018 Omnibus Incentive Compensation Plan or any of the other stock incentive plans described above.

The inducement grant included a nonqualified stock option to purchase up to 125,000 shares of the Company's common stock, as well as a restricted stock unit grant representing 88,333 shares of its common stock.

In May 2021, the Company granted an equity award to a newly hired executive as a material inducement to enter into employment with the Company.

The grant constitutes an "employment inducement grant" in accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules and was issued outside of the 2018 Plan and each of the other stock incentive plans described above.

These stock option and restricted stock unit inducement grants have terms and conditions consistent with those set forth under the 2018 Plan and vest under the same respective vesting schedules as stock option and restricted stock unit awards granted under the 2018 Plan.

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The fair value of stock option grants is estimated using the Black-Scholes option-pricing model.

As the Company has limited company-specific historical and implied volatility information, the expected stock volatility is based on a combination

of Replimune volatility and the historical volatility of a set of publicly traded peer companies.

As the Company has limited company-specific historical and implied volatility information, the expected stock volatility is based on a combination of Replimune volatility and the historical volatility of a set of publicly traded 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.

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Three Months Ended

September 30, Six Months Ended

September 30,

2021 2020 2021 2020

Risk-free interest rate 0.96 % 0.33 % 1.11 % 1.08 %

11 unchanged sentences

Cancelled ( 482,324 ) $ 23.10

Outstanding as of June 30, 2021 7,411,680 $ 16.39 7.93 $ 164,305

Outstanding as of September 30, 2021 6,998,097 $ 16.38 7.63 $ 100,863

Options exercisable as of March 31, 2021 2,698,708 $ 8.38 6.79 $ 59,717

Options exercisable as of June 30, 2021 3,340,279 $ 8.97 6.82 $ 98,367

As of June 30, 2021, there was $ 55.5 million of unrecognized compensation cost related to unvested common stock options, which is expected to be recognized over a weighted average period of 2.82 years.

The weighted average grant-date fair value of stock options granted during the three months ended June 30, 2021 and 2020 was $ 22.29 and $ 6.94 , respectively.

The aggregate intrinsic value of stock options exercised during the three months ended June 30, 2021 was $ 4.2 million.

Options exercisable as of September 30, 2021 3,573,726 $ 9.54 6.54 $ 71,819

As of September 30, 2021, there was $ 47.2 million of unrecognized compensation cost related to unvested common stock options, which is expected to be recognized over a weighted average period of 2.65 years.

The weighted average grant-date fair value of stock options granted during the six months ended September 30, 2021 and 2020 was $ 22.25 and $ 8.28 , respectively.

The aggregate intrinsic value of stock options exercised during the six months ended September 30, 2021 was $ 7.1 million.

Restricted stock units

A summary of the changes in the Company's RSUs during the three months ended June 30, 2021 is as follows:

A summary of the changes in the Company's RSUs during the three months ended September 30, 2021 is as follows:

Number of Restricted Shares Weighted

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Cancelled ( 30,346 ) 31.66

Outstanding as of June 30, 2021 669,108 32.88

As of June 30, 2021, there was $ 20.9 million of unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted average period of 3.86 years.

As of June 30, 2020, there was no unrecognized compensation cost related to unvested restricted stock units .

Outstanding as of September 30, 2021 699,200 32.84

As of September 30, 2021, there was $ 20.7 million of unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted average period of 3.63 years.

As of March 31, 2021, there was $ 0.5 million of unrecognized compensation cost related to unvested restricted stock units .

10 Net loss per share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows:

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2021 2020 2021 2020

Net loss attributable to common stockholders $ ( 29,355 ) $ ( 20,095 ) $ ( 56,666 ) $ ( 37,588 )

2 unchanged sentences

The November 2019 Pre-Funded Warrants, the June 2020 Pre-Funded Warrants and the 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 Company’s potentially dilutive securities, which include stock options and warrants to purchase shares of common stock that resulted from the conversion of warrants to purchase shares of series seed preferred stock existing before the Company's IPO, 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 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 Months Ended June 30,

Three and Six Months Ended September 30,

Options to purchase common stock 6,998,097 6,665,346

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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

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.

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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.

The agreement may be terminated by either party (x) in the event of an uncured material breach by the other party, (y) in the event the other party is insolvent or in bankruptcy proceedings or (z) for safety reasons.

Upon termination, the licenses granted to the Company to use BMS’s compound in the clinical trial will terminate.

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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 months ended June 30, 2021 and 2020, the Company did not make any payments under the terms of the agreement from Regeneron.

As of June 30, 2021 and March 31, 2021, the Company recorded $ 1.4 million and $ 1.3 million of receivables from Regeneron in connection with this agreement in prepaid expenses and other current assets in the consolidated balance sheet, respectively.

During the three and six months ended September 30, 2021 and 2020, the Company did not make any payments to Regeneron under the terms of the agreement.

As of September 30, 2021 and March 31, 2021, the Company recorded $ 1.6 million and $ 1.3 million of receivables from Regeneron in connection with this agreement in prepaid expenses and other current assets in the consolidated balance sheet, respectively.

12 Commitments and contingencies

The Company leases real estate assets and equipment, and determination if an arrangement is a lease occurs at inception.

For leases with terms greater than 12 months, the Company records a related right-of-use (“ROU”) asset and lease liability at the present value of lease payments over the term.

For leases with terms greater than 12 months, the Company records a related right-of-use (“ROU”) asset and lease

liability at the present value of lease payments over the term.

Many leases include fixed rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate.

The Company’s

leases do not provide an implicit rate, and thus the Company estimated the incremental borrowing rate in calculating the present value of the lease payments.

The Company’s leases do not provide an implicit rate, and thus the Company estimated the incremental borrowing rate in calculating the present value of the lease payments.

The Company has elected not to record a ROU asset and lease obligation for short-term leases (with terms less than 12 months) or separate non-lease components from associated lease components for its real estate lease assets.

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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 table below presents the lease-related assets and liabilities recorded on the consolidated balance sheet as of June 30, 2021:

Three Months Ended June 30,

The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheet as of September 30, 2021:

Three Months Ended September 30, Six Months Ended September 30,

2021 2020 2021 2020

Finance lease costs:

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Total lease cost $ 1,409 $ 1,406 $ 2,816 $ 2,804

The Company incurred finance lease amortization costs of $ 607 for both the three months ended June 30, 2021 and 2020, respectively, of which $ 518 and $ 517 are recognized in research and development expenses.

In addition, the Company incurred interest expense on finance leases of $ 558 and $ 561 , of which $ 468 and $ 471 are recognized in research and development for the three months ended June 30, 2021 and 2020, respectively.

For both the three months ended June 30, 2021 and 2020, the Company recognized $ 89 of operating lease costs within general and administrative expenses.

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 June 30, 2021:

June 30, 2021

The Company incurred finance lease amortization costs of $ 607 and $ 1,214 for the three and six months ended September 30, 2021, respectively, of which $ 517 and $ 1,035 are recognized in research and development expenses.

For the three and six months ended September 30, 2020, the Company incurred finance lease amortization costs of $ 607 and $ 1,214 , respectively, of which $ 518 and $ 1,035 are recognized in research and development costs.

In addition, the Company incurred interest expense on finance leases of $ 557 and $ 1,115 , respectively, for the three and six months ended September 30, 2021, of which $ 468 and $ 936 are recognized in research and development.

For the three and six months ended September 30, 2020, the Company incurred $ 562 and $ 1,123 of interest expense on finance leases, of which $ 471 and $ 942 are recognized in research and development.

For the three and six months ended September 30, 2021, the Company recognized $ 89 and $ 178 of operating lease costs within general and administrative expenses.

For the three and six months ended September 30, 2020, the Company recognized $ 89 and 179 of operating lease costs within general and administrative expenses.

September 30, 2021

Operating leases Financing lease Total

2022 (remaining three months) $ 731 $ 1,876 $ 2,607

2022 (remaining six months) $ 482 $ 1,259 $ 1,741

2023 971 2,562 3,533

6 unchanged sentences

Total lease liabilities $ 5,789 $ 27,118 $ 32,907

The following table provides lease disclosure as of June 30, 2021 and March 31, 2021:

June 30, 2021 March 31, 2021

The following table provides lease disclosure as of September 30, 2021 and March 31, 2021:

September 30, 2021 March 31, 2021

Right-to-use operating lease asset $ 5,491 $ 5,751

6 unchanged sentences

Total lease liabilities $ 32,907 $ 33,280

The following table provides lease disclosure for the three months ended June 30, 2021 and 2020:

Three Months Ended June 30,

The following table provides lease disclosure for the six months ended September 30, 2021 and 2020:

Six Months Ended September 30,

Other information

8 unchanged sentences

Weighted-average discount rate - financing leases 8.3 % 8.3 %

The variable lease costs and short-term lease costs were insignificant for three months ended June 30, 2021 and 2020.

The variable lease costs and short-term lease costs were insignificant for three and six months ended September 30, 2021 and 2020.

Manufacturing commitments

The Company has entered into an agreement with a contract manufacturing organization to provide clinical trial products.

As of June 30, 2021 and March 31, 2021, the Company had committed to minimum payments under these arrangements totaling $ 1,600 and $ 1,651 , respectively, through June 30, 2021.

As of September 30, 2021 and March 31, 2021, the Company had committed to minimum payments under these arrangements totaling $ 1,266 and $ 1,651 , respectively, through March 31, 2022.

Indemnification agreements

3 unchanged sentences

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 June 30, 2021 or March 31, 2021.

Legal proceedings

4 unchanged sentences

Information about the Company’s long-lived assets held in different geographic regions is presented in the tables below:

June 30, 2021 March 31, 2021

September 30, 2021 March 31, 2021

United States $ 6,514 $ 6,610

1 unchanged sentence

$ 7,178 $ 7,166

14 Subsequent Events

On November 2, 2021, Replimune Limited entered into a lease agreement with MEPC Milton Park No.

1 Limited and MEPC Milton Park No.

2 Limited for the lease of approximately 2,951 rentable square feet located at 71 Innovation Drive, Milton Park, Abingdon, Oxfordshire, United Kingdom.

The Premises are adjacent to the Company’s existing facility in Oxfordshire, United Kingdom and will be used for research and development, laboratory and office space.

The lease commenced on November 1, 2021, with rental payments scheduled to commence on February 1, 2022 and to continue for approximately 4 years and 9 months thereafter.

The Company’s base rent obligation will be eighty-two thousand pounds (£ 82,000 ) per annum.

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