What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-04 compared with 2021-08-06 · 125 added, 73 removed, 327 unchanged (38% of the section changed)

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We initiated this cohort after completing enrollment in a prior Phase 2 cohort in the same clinical trial of approximately 30 patients with melanoma, which demonstrated the safety and clinical activity of the combination of RP1 and nivolumab in patients with melanoma who failed prior anti-PD-1 when given alone or in combination with CTLA-4 blockade.

In March 2021 we held a Type B meeting with the FDA to discuss the design of this cohort in the IGNYTE trial.

In this meeting, the FDA expressed that while a randomized controlled clinical trial would always be preferred for registration purpose, that in this patient population with no clear standard of care, if the clinical data is sufficiently compelling then the data could be considered for submission by the FDA under the accelerated approval pathway.

The FDA also indicated that a randomized confirmatory trial would also be needed as is required under the accelerated approval pathway.

The design of the confirmatory trial is intended to be discussed with the FDA prior to a BLA submission.

We expect to complete enrollment in mid-year 2022 and release data from this cohort in late 2022.

In order to document sufficient durability of response, an important secondary endpoint of the study, the timing of the primary analysis upon which a filing is intended to be made is expected to be extended by approximately 6 months from year end 2022.

In March 2021 we held a Type B meeting with the United States Federal Drug Administration (the "FDA") to discuss the design of this cohort in the IGNYTE trial.

In this meeting, the FDA expressed its view that while a randomized controlled clinical trial would always be preferred for registration purposes, in this patient population with no clear standard of care, if the clinical data is sufficiently compelling then the data could be considered for submission by the FDA under the accelerated approval pathway.

The FDA also indicated that as is required under the FDA's accelerated approval pathway, we would need to conduct a randomized confirmatory trial.

We intend to discuss the design of the confirmatory trial with the FDA prior to a BLA submission.

We expect to complete enrollment in mid-year 2022 and release initial interim data from this cohort in late 2022.

In connection with a presentation at SITC in October 2020 we announced updated clinical data from the IGNYTE Phase 1/2 clinical trial evaluating RP1 in combination with nivolumab from the cohorts of 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 anti-tumor activity in patients with skin cancers, including in patients with anti-PD-1 failed melanoma, and in patients with CSCC.

In June 2021 we presented a data update from these cohorts of RP1 in combination with nivolumab that showed compelling depth and durability of response and strongly supports these ongoing studies in CSCC and anti-PD-1 failed melanoma.

In June 2021 we presented a data update from these cohorts of RP1 in combination with nivolumab that showed compelling depth and durability of response and which we believe strongly supports these ongoing studies in CSCC and anti-PD-1 failed melanoma.

We continue to enroll patients in other IGNYTE Phase 2 cohorts under our collaboration with BMS in which we are evaluating RP1 in combination with nivolumab.

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skin cancer, or NMSC, (including the recent addition of 30 patients who have failed prior anti-PD-1 therapy);

a 15 patient cohort with MSI-H/dMMR tumors and a 30 patient cohort with anti-PD(L)-1 failed non-small cell lung cancer, or NSCLC.

We have enrolled 29 of the original 30 NMSC patient cohort (anti-PD-1 naïve) of RP1 in combination with nivolumab and continue to enroll patients with anti-PD-1 failed NMSC.

We expect to provide initial data from the anti-PD-1 failed NMSC patients in the first quarter of 2022.

Due to development challenges in the anti-PD-1 naïve setting for our cohort with MSI-H/dMMR tumors we have decided to not pursue RP1 in combination with nivolumab for this cohort but instead enroll patients with anti-PD-1 failed disease, for which a protocol amendment is expected to be made in the third quarter of 2021.

As previously reported, dosing is underway in our 30 patient cohort of RP1 in combination with nivolumab in anti-PD(L)-1 failed NSCLC and we are planning an amendment to the protocol to include modifications to the patient eligibility criteria for this cohort which are expected to enhance enrollment into the trial.

We expect to provide initial data from our NSCLC cohort of RP1 in combination with nivolumab in the first quarter of 2022.

We also have open for enrollment a Phase 1b/2 clinical trial of single agent RP1 in solid organ transplant recipients with CSCC, or ARTACUS or the ARTACUS trial, 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).

We are currently enrolling patients in this clinical trial to assess the safety and efficacy of RP1 in liver and kidney transplant recipients with recurrent CSCC.

a 30 patient anti-PD-1 failed cohort with MSI-H/dMMR tumors and a 30 patient cohort with anti-PD(L)-1 failed non-small cell lung cancer, or NSCLC.

We have completed enrollment in the original 30 NMSC patient cohort (anti-PD-1 naïve) of RP1 in combination with nivolumab and continue to enroll patients with anti-PD-1 failed NMSC.

We expect to provide updated data from the NMSC anti-PD-1 naïve patients and initial data from the NMSC anti-PD-1 failed patients in the first quarter of 2022.

As previously reported, dosing is underway in our 30 patient cohort of RP1 in combination with nivolumab in anti-PD(L)-1 failed NSCLC.

A recently filed amendment to the IGNYTE protocol includes modifications to the patient eligibility criteria for this NSCLC cohort which are expected to enhance enrollment into this cohort of the clinical trial.

We had expected to provide initial data from our NSCLC cohort of RP1 in combination with nivolumab in the first quarter of 2022, however, the changes we have made to facilitate enrollment are not expected to take effect in time to meet prior guidance and initial data is now expected to be released later in 2022.

We also have open for enrollment a Phase 1b/2 clinical trial of single agent RP1 in solid organ transplant recipients with skin cancers, including CSCC, or ARTACUS or the ARTACUS trial, 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).

We are currently enrolling patients in this clinical trial to assess the safety and efficacy of RP1 in liver and kidney transplant recipients with recurrent skin cancers.

The protocol has been amended to enroll up to 65 patients with potentially registrational intent.

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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 tumor response in uninjected lesions and 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.

We believe that 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.

In June 2021 we presented a data update from both the RP2 single agent and combination portions of this clinical trial that showed compelling activity in patients with immune insensitive tumors and with anti-PD-1 failed disease.

We have fully enrolled the initial 30 patient cohort evaluating RP2 in combination with nivolumab in difficult to treat cancers and we expect to provide updated data from this program in the second half of 2021.

We also intend to expand this clinical trial to provide further signal confirmation for the treatment of patients with liver metastases from various tumor types.

A protocol amendment to facilitate this expansion is expected to be made in the third quarter of 2021.

We have fully enrolled the initial 30 patient Phase 1 clinical trial evaluating RP2 in combination with nivolumab in difficult to treat cancers and we expect to provide updated data from this program in the second half of 2021.

We have filed a protocol amendment to expand this clinical trial with the intent to enroll patients with liver metastases from various prevalent tumor types, including patients with lung cancers and breast and gastrointestinal cancers including colorectal cancer.

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.

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Initial data from the RP3 single agent cohort is expected to be presented in the first quarter of 2022.

In addition to this cohort, we expect to begin enrolling a cohort evaluating RP3 in combination with anti-PD-1 therapy in solid tumor patients by the end of 2021, with a focus on patients with lung, breast and gastrointestinal cancers including colorectal cancer.

Based on the observation of clinical responses in patients with liver metastases from a range of difficult to treat tumor types following treatment with RP1 in combination with nivolumab and/or with RP2 alone or in combination with nivolumab, and the fact that treating liver metastases is a considerable unmet need in patients with advanced cancer, we plan to initiate a clinical development program with RP2 and/or RP3 with particular focus on patients with liver metastases from a range of prevalent cancer types.

We expect to initiate a multi-tumor type Phase 2 clinical program with RP2 and/or RP3 in these patients around mid-year 2022 with the details of this program, including tumor types and setting, being announced in the first quarter of 2022.

In addition to this cohort, we expect to begin enrolling a cohort evaluating RP3 in combination with anti-PD-1 therapy in solid tumor patients early in 2022, including patients with liver metastases from various prevalent tumor types such as lung cancer, breast cancer, head and neck cancer and gastrointestinal cancers including colorectal cancer.

Based on the observation of clinical responses in patients with liver metastases from a range of difficult to treat tumor types following treatment with RP1 in combination with nivolumab and/or with RP2 alone or in combination with nivolumab, and the fact that treating liver metastases is a considerable unmet need in patients with advanced cancer, we plan to initiate a broad clinical development program with RP2 and/or RP3 intended to include a range of prevalent tumor types around mid-year 2022.

We expect to announce the details of this program in the first quarter of 2022.

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.

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Since our initial public offering, or IPO, on July 24, 2018, we have raised an aggregate of approximately $569.0 million in net proceeds to fund our operations, of which $101.2 million was from our IPO, $463.4 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.

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 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.

Other than as set forth in Notes 8, 9 and 10 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.

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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 $27.3 million and $17.5 million for the three months ended June 30, 2021 and 2020, respectively.

As of June 30, 2021, we had an accumulated deficit o f $220.5 million.

Our net losses were $29.4 million and $20.1 million for the three months ended September 30, 2021 and 2020, respectively, and $56.7 million and $37.6 million for the six months ended September 30, 2021 and 2020, respectively.

As of September 30, 2021, we had an accumulated deficit of $249.8 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.

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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 June 30, 2021, we had cash and cash equivalents and short-term investments of $458.3 million.

As of September 30, 2021, we had cash and cash equivalents and short-term investments of $435.8 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.

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For those employees working from our facilities, including certain essential employees in our laboratory and who perform manufacturing functions, and certain other employees we deem 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.

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 COVID-19 pandemic is affecting the United States and global economies and has affected and may continue to affect our operations and those of third parties on which we rely, including by causing disruptions in our raw material and anti-PD-1 supply, the manufacturing of our product candidates and our commercialization processes.

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In addition, we may incur unforeseen costs as a result of disruptions in clinical supply or preclinical study or clinical trial delays.

The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19, including new viral strains of COVID-19, the actions taken in an effort to contain it or to potentially treat or continue to vaccinate against COVID-19 and the economic impact on local, regional, national and

international markets.

COVID-19, the actions taken in an effort to contain it or to potentially treat or continue to vaccinate against COVID-19 and the economic impact on local, regional, national and international markets.

We continue to actively monitor this situation and the possible effects on our financial condition, liquidity, operations, suppliers, industry and workforce.

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• 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 expenses;

• costs of outside consultants engaged in research and development functions, including their fees, stock-based compensation and related travel expenses;

• the costs of laboratory supplies and acquiring, developing and manufacturing preclinical study and clinical trial materials;

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The table below summarizes our research and development expenses by product candidate or development program for each of the periods presented:

Three months ended June 30,

Three months ended September 30,

Six months ended September 30,

(Amounts in thousands)

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RP1 $ 4,205 $ 7,451 $ 7,907 $ 13,448

RP2 3,707 638 6,786 881

RP3 321 — 559 —

Unallocated research and development expenses:

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• 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;

• our ability to maintain, expand and protect our rights in our intellectual property portfolio;

• the commercialization of our product candidates, if and when approved;

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Interest expense on debt obligations consists of the amortization of debt discount and cash paid for interest under the term loan facility with Hercules.

Loss on extinguishment of debt

Loss on extinguishment of debt consists of the loss from extinguishment of debt obligations 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 June 30, 2021, 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.

Since our inception and through September 30, 2021, 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 June 30, 2021 and 2020

The following chart summarizes our results of operations for the three months ended June 30, 2021 and 2020:

Comparison of the three months ended September 30, 2021 and 2020

The following chart summarizes our results of operations for the three months ended September 30, 2021 and 2020:

Three Months Ended

September 30,

2021 2020 Change

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Three Months Ended

September 30,

2021 2020 Change

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Total research and development expenses $ 19,902 $ 14,050 $ 5,852

Research and development expenses for the three months ended June 30, 2021 were $18.6 million, compared to $12.2 million for the three months ended June 30, 2020.

The increase of $6.4 million was due primarily to an increase of approximately $5.4 million in unallocated research and development costs, as well as a net increase of approximately $1.0 million in direct research costs related to our ongoing clinical trials for RP1, RP2 and RP3.

Research and development expenses for the three months ended September 30, 2021 were $19.9 million, compared to $14.1 million for the three months ended September 30, 2020.

The change in our research and development expense between our product candidates is associated with technology transfer and process development underway in readiness for bringing our manufacturing facility online to support all of our clinical development activities, as our facility focused on the manufacturing of RP2 during the three months ended September 30, 2021, as well as continued clinical trial development of these product candidates.

Furthermore, the increase of $5.9 million was due primarily to an increase of approximately $5.7 million in unallocated research and development costs.

The increase in unallocated research and development costs is mainly attributable to a $3.8 million in personnel-related costs, including a $2.9 million increase in payroll and fringe benefits and a stock-based compensation increase of $0.9 million.

The increase in personnel-related costs largely reflected the hiring of additional personnel in our research and development functions as we expand the development plan in multiple indications.

Personnel related costs for the three months ended June 30, 2021 and 2020 included stock-based compensation expense of $2.5 million and $1.0 million, respectively.

The increase in costs associated with RP2 and RP3 are primarily associated with the continued clinical trial development of these product candidates, in addition to RP2 and RP3 technology transfer and process development work underway in readiness for bringing our manufacturing facility online to support all of our clinical development activities.

Personnel related costs for the three months ended September 30, 2021 and 2020 included stock-based compensation expense of $2.2 million and $1.3 million, respectively.

General and administrative expenses

General and administrative expenses were $8.8 million for the three months ended June 30, 2021, compared to $5.7 million for the three months ended June 30, 2020.

General and administrative expenses were $9.3 million for the three months ended September 30, 2021, compared to $5.6 million for the three months ended September 30, 2020.

The increase of $3.7 million is primarily the result of an increase of $3.4 million in personnel related costs, including stock-based compensation of $2.6 million, and $0.8 million in payroll and fringe.

The increase in personnel related costs was driven by the continued hiring of additional personnel in our general and administrative functions as we expand our operations.

Total other income (expense), net

Other income (expense) was $(0.1) million for the three months ended September 30, 2021, compared to $(0.4) million for the three months ended September 30, 2020.

The net change of $0.3 million is primarily attributable to an increase of $0.3 million in other income as a result of payments made for interest expense on debt obligations in the prior year which were not incurred during the current quarter, as well as an increase of $0.2 million in other income due to the changes in foreign exchange rates of the Great British Pound to United States Dollar.

These increases in other income were partially offset by a $0.1 million decrease in investment income as a result of declining market conditions, which have decreased the rate of return on investments.

Comparison of the six months ended September 30, 2021 and 2020

The following chart summarizes our results of operations for the six months ended September 30, 2021 and 2020:

Six Months Ended

September 30,

2021 2020 Change

(Amounts in thousands)

Operating expenses:

Research and development $ 38,456 $ 26,207 $ 12,249

General and administrative 18,172 11,289 6,883

Total operating expenses 56,628 37,496 19,132

Loss from operations (56,628) (37,496) (19,132)

Other income (expense):

Research and development incentives 1,513 1,441 72

Investment income 172 705 (533)

Interest expense on finance lease liability (1,115) (1,123) 8

Interest expense on debt obligations — (570) 570

Other (expense) income (608) (545) (63)

Total other income (expense), net (38) (92) 54

Net loss $ (56,666) $ (37,588) $ (19,078)

Research and development expenses

Six Months Ended September 30,

2021 2020 Change

Direct research and development expenses by program:

RP1 7,907 13,448 (5,541)

RP2 6,786 881 5,905

RP3 559 — 559

Unallocated research and development expenses:

Personnel related (including stock-based compensation) 18,238 10,225 8,013

Other 4,966 1,653 3,313

Total research and development expenses $ 38,456 $ 26,207 $ 12,249

Research and development expenses for the six months ended September 30, 2021 were $38.5 million, compared to $26.2 million for the six months ended September 30, 2020.

The increase of $12.2 million was due primarily to an increase of approximately 11.3 million in unallocated research and development costs, as well as a net increase of approximately $0.9 million in direct research costs related to our ongoing clinical trials for RP1, RP2 and RP3.

The change in our research and development expense between our product candidates is associated with technology transfer and process development underway in readiness for bringing our manufacturing facility online to support all of our clinical development activities, as our facility focused on the manufacturing of RP2 during the six months ended September 30, 2021, as well as continued clinical trial development of these product candidates.

The increase in unallocated research and development costs is mainly attributable to a $8.0 million in personnel-related costs, including a $5.7 million increase in payroll and fringe benefits and a stock-based compensation increase of $2.4 million.

The increase in personnel-related costs largely reflected the hiring of additional personnel in our research and development functions as we expand the development plan in multiple indications during the first half of the year.

Personnel related costs for the six months ended September 30, 2021 and 2020 included stock-based compensation expense of $4.7 million and $2.3 million, respectively.

General and administrative expenses

General and administrative expenses were $18.2 million for the six months ended September 30, 2021, compared to $11.3 million for the six months ended September 30, 2020.

The increase of $6.9 million is primarily the result of an increase of $6.6 million in personnel related costs, including stock-based compensation of $4.9 million, and an increase of $1.6 million in payroll and fringe.

The increase in personnel related costs was driven by the hiring of additional personnel, including the Company's Chief Commercial Officer, as a result of pre-launch commercial planning and initial build of the Company's commercial infrastructure.

The increase in personnel related costs was driven by the hiring of additional personnel, including the Company's initial expenses related to commercial personnel associated with pre-launch commercial planning and initial build of the Company's commercial infrastructure.

Personnel related costs for the six months ended September 30, 2021 and 2020 included stock-based compensation expense of $7.9 million and $3.0 million, respectively.

Total other income (expense), net

Other income (expense) was $0.1 million for the three months ended June 30, 2021, compared to $0.3 million for the three months ended June 30, 2020.

The decrease of $0.2 million is primarily attributable to a $0.4 million decrease in investment income as a result of declining market conditions, which have decreased the rate of return on investments, as well as a decrease of $0.2 million in other income due to the changes in foreign exchange rates of the Great British Pound to United States Dollar.

These decreases are somewhat offset by an increase of $0.3 million in other income as a result of paying interest expense on debt obligations in the prior year which did not recur during the current quarter.

Other income (expense) was $(38.0) thousand for the six months ended September 30, 2021, compared to $(0.1) million for the six months ended September 30, 2020.

The net change in expense of $0.1 million is primarily attributable to an increase of $0.6 million in other income as a result of payments made for interest expense on debt obligations in the prior year which were not incurred during the current year.

This increase is offset by a $0.5 million decrease in investment income as a result of declining market conditions, which have decreased the rate of return on investments during the first six months of the year, as well as a decrease of 0.1 million in other income due to the changes in foreign exchange rates of the Great British Pound to United States Dollar.

Liquidity and capital resources

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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 June 30, 2021, we had received gross proceeds of $655.8 million from our sales of equity instruments and $10.0 million from our incurrence of debt under the term loan facility with Hercules, which was repaid in full in December 2020.

As of June 30, 2021, we had cash and cash equivalents and short-term investments of $458.3 million.

To date, we have financed our operations primarily with proceeds from the sale of equity securities and, to a lesser extent, proceeds from the incurrence of debt.

Through September 30, 2021, we had received gross proceeds of $655.8 million from our sales of equity instruments and $10.0 million from our incurrence of debt under the term loan facility with Hercules, which was repaid in full in December 2020.

As of September 30, 2021, we had cash and cash equivalents and short-term investments of $435.8 million.

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 $101.2 million after deducting underwriting discounts, commissions and other offering expenses of approximately $9.9 million.

In 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, which was equal to 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 registered 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, which was equal to 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 $107.8 million after deducting underwriting discounts, commissions and other offering expenses of approximately $7.2 million.

In October 2020, we closed a third registered 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 $39.9999 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 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.

We received aggregate net proceeds from the offering 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 registered 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, which was equal to 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 from the offering of approximately $107.8 million after deducting underwriting discounts, commissions and other offering expenses of approximately $7.2 million.

In October 2020, we closed a third registered 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 $39.9999 per pre-funded warrant, which was equal to 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 from the offering 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.

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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.

On August 11, 2020, in connection with our entry into a 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.

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The following table summarizes our cash flows for each of the periods presented:

Three Months Ended

Six Months Ended September 30, 2021

(Amounts in thousands)

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Effect of exchange rate changes on cash and cash equivalents 516 540

Net increase in cash and cash equivalents $ 10,010 $ 45,297

Net decrease in cash and cash equivalents $ (22,549) $ (16,174)

Operating activities

During the three months ended June 30, 2021, net cash used in operating activities was $18.3 million, primarily resulting from our net loss of $27.3 million, partially offset by an increase in non-cash charges of $7.4 million, primarily consisting of an increase in stock-based compensation expense of $3.8 million, and an increase in cash of $1.6 million related to changes in our operating assets and liabilities.

Net cash used by our changes in our operating assets and liabilities for the three months ended June 30, 2021 consisted primarily of a $1.2 million increase in prepaid expenses and other current assets, a $0.8 million decrease in research and development incentives receivable from the United Kingdom government due to the timing of vendor invoicing and payments, a net $0.6 million increase in cash related to changes in operating and financing right-of-use assets and lease liabilities and a $0.5 million increase in accrued expenses and other current liabilities.

During the three months ended June 30, 2020, net cash used in operating activities was $15.1 million, primarily resulting from our net loss of $17.5 million and net cash used by changes in our operating assets and liabilities of $0.6 million, partially offset by non-cash charges of $3.0 million.

Net cash used by our changes in our operating assets and liabilities for the three months ended June 30, 2020 consisted primarily of a $0.7 million increase in research and development incentive receivables, partially from the United Kingdom government due to the timing and amount of our qualifying expenditures, $0.3 million increase in prepaid expenses and other current assets and $0.2 million decrease in accounts payable, partially offset by $0.6 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).

During the six months ended September 30, 2021, net cash used in operating activities was $41.3 million, primarily resulting from our net loss of $56.7 million, partially offset by an increase in non-cash charges of $14.9 million, primarily consisting of an increase in stock-based compensation expense of $7.3 million, and an increase in cash of $0.5 million related to changes in our operating assets and liabilities.

Net cash used by our changes in our operating assets and liabilities for the six months ended September 30, 2021 consisted primarily of a $1.5 million increase in research and development incentives receivable from the United Kingdom government due to the timing of vendor invoicing and payments, a $1.3 million increase in prepaid expenses and other current assets, a $1.3 million increase in accrued expenses and other current liabilities, and net $1.2 million change in operating and financing right-of-use assets and lease liabilities.

During the six months ended September 30, 2020, net cash used in operating activities was $32.3 million, primarily resulting from our net loss of $37.6 million and net cash used by changes in our operating assets and liabilities of $1.3 million,

partially offset by non-cash charges of $6.6 million.

Net cash used by our changes in our operating assets and liabilities for the six months ended September 30, 2020 consisted primarily of a $1.4 million increase in research and development incentive receivables, partially from the United Kingdom government due to the timing and amount of our qualifying expenditures, $1.9 million increase in prepaid expenses and other current assets and $1.2 million decrease in accounts payable, partially offset by $2.0 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.

Investing activities

During the three months ended June 30, 2021, net cash used in investing activities was $27.0 million, consisting of $59.5 million in proceeds from sales and maturities of short-term investments, partially offset by $32.2 million in purchases of available for sale securities and $0.3 million in purchases of property, plant and equipment.

During the three months ended June 30, 2020, net cash used in investing activities was $49.1 million, consisting of $125.8 million in purchases of available for sale securities and $0.9 million in purchases of property, plant and equipment, partially offset by $77.6 million in proceeds from sales and maturities of short-term investments.

During the six months ended September 30, 2021, net cash used in investing activities was $15.9 million, consisting of $128.0 million in proceeds from sales and maturities of short-term investments, partially offset by $111.4 million in purchases of available for sale securities and $0.7 million in purchases of property, plant and equipment.

During the six months ended September 30, 2020, net cash used in investing activities was $93.9 million, consisting of $196.5 million in purchases of available for sale securities and $1.0 million in purchases of property, plant and equipment, partially offset by $103.6 million in proceeds from sales and maturities of short-term investments.

Financing Activities

During the three months ended June 30, 2021, net cash provided by financing activities was $1.1 million, consisting of primarily $1.2 million in proceeds from the exercise of stock options.

During the three months ended June 30, 2020, net cash provided by financing activities $109.5 million, consisting of $75.2 million from the issuance of common stock, $32.9 million in net proceeds from the issuance of pre-funded warrants to purchase common stock in connection with our follow-on public offering in June 2020, $1.5 million in proceeds from the exercise of stock options, partially offset by $0.1 million of issuance costs.

During the six months ended September 30, 2021, net cash provided by financing activities was $2.3 million, consisting of primarily $2.4 million in proceeds from the exercise of stock options.

During the six months ended September 30, 2020, net cash provided by financing activities was $109.5 million, consisting of $74.9 million from the issuance of common stock and $32.9 million in net proceeds from the issuance of pre-funded warrants to purchase common stock in connection with our follow-on public offering in June 2020, and $1.8 million in proceeds from the exercise of stock options.

Hercules Loan Agreement

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Under the Hercules Loan Agreement, we were required to make monthly interest-only payments through September 1, 2022.

As of June 30, 2021, there was no amount of outstanding principal under the Hercules Loan Agreement due and owing.

As of September 30, 2021, 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.

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• maintain, expand and protect our intellectual property portfolio;

• hire and retain additional clinical, quality control, scientific and general and administration personnel;

• 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 June 30, 2021, we had cash and cash equivalents and short-term investments of $458.3 million.

We believe that our existing cash, cash equivalents and short-term investments as of June 30, 2021, will enable us to fund our overall operations into the second half of 2024, excluding any confirmatory trial required by the FDA or other regulatory body.

As of September 30, 2021, we had cash and cash equivalents and short-term investments of $435.8 million.

We believe that our existing cash, cash equivalents and short-term investments as of September 30, 2021, will enable us to fund our overall operations into the second half of 2024, excluding any confirmatory trial required by the FDA or other regulatory body.

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.

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Contractual obligations and commitments

During the three months ended June 30, 2021, 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, 2021, which was filed with the SEC on May 20, 2021.

During the six months ended September 30, 2021, 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, 2021, which was filed with the SEC on May 20, 2021.

Collaborations

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

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.

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.

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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 us to use nivolumab in the clinical trial will terminate.

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We measure such stock-based awards in accordance with ASC 718, Compensation — Stock Compensation, which requires all stock-based awards to be recognized in the consolidated statements of operations and comprehensive loss based on their fair value on the date of the grant and the related compensation expense for those awards is recognized 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.

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.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis