What changed in this filing

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Item 1. Financial Statements

2022-08-04 compared with 2022-02-03 · 141 added, 247 removed, 354 unchanged (52% of the section changed)

3 unchanged sentences

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

December 31, 2021 March 31, 2021

June 30, 2022 March 31, 2022

Current assets:

5 unchanged sentences

Property, plant and equipment, net 8,267 7,933

Research and development incentives receivable, non-current 821 —

Restricted cash 1,636 1,636

15 unchanged sentences

Common stock, $ 0.001 par value;

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

47,206,316 and 46,566,481 shares issued and outstanding as of December 31, 2021 and March 31, 2021, respectively

150,000,000 shares authorized as of June 30, 2022 and March 31, 2022;

49,298,467 and 47,338,660 shares issued and outstanding as of June 30, 2022 and March 31, 2022, respectively

Additional paid-in capital 763,150 723,359

Accumulated deficit ( 353,457 ) ( 311,204 )

Accumulated other comprehensive loss ( 181 ) ( 394 )

Accumulated other comprehensive income (loss) 520 ( 973 )

Total stockholders' equity 410,262 411,229

4 unchanged sentences

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

Three Months Ended December 31, Nine Months Ended December 31,

2021 2020 2021 2020

Three Months Ended June 30,

Operating expenses:

Research and development $ 29,478 $ 18,554

General and administrative 10,345 5,953 28,517 17,242

Selling, general and administrative 11,398 8,827

Total operating expenses 40,876 27,381

4 unchanged sentences

Interest expense on finance lease liability ( 552 ) ( 558 )

Interest expense on debt obligations — ( 247 ) — ( 817 )

Loss on extinguishment of debt — ( 913 ) — ( 913 )

Other (expense) income ( 2,019 ) ( 252 )

Total other income (expense), net 24 ( 1,508 ) ( 14 ) ( 1,600 )

Total other (expense) income, net ( 1,377 ) 70

Net loss $ ( 42,253 ) $ ( 27,311 )

5 unchanged sentences

(Amounts in thousands)

Three Months Ended December 31, Nine Months Ended December 31,

2021 2020 2021 2020

Three Months Ended June 30,

Net loss $ ( 42,253 ) $ ( 27,311 )

15 unchanged sentences

Balances as of March 31, 2022 47,338,660 $ 47 $ 723,359 $ ( 311,204 ) $ ( 973 ) $ 411,229

Issuance of common stock through ATM sales, net of offering costs 1,686,438 2 31,035 — — 31,037

Foreign currency translation adjustment — — — — 1,737 1,737

1 unchanged sentence

Exercise of stock options 124,028 — 1,562 — — 1,562

Vesting of RSUs 149,341 — — — — —

Stock-based compensation expense — — 7,194 — — 7,194

1 unchanged sentence

Balances as of June 30, 2022 49,298,467 49 763,150 ( 353,457 ) 520 410,262

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

Foreign currency translation adjustment — — — — 161 161

Unrealized loss on short-term investments — — — — ( 351 ) ( 351 )

Exercise of stock options 350,985 — 4,043 — — 4,043

Stock-based compensation expense — — 5,918 — — 5,918

Net loss — — — ( 29,674 ) — ( 29,674 )

Balances as of December 31, 2021 47,206,316 $ 47 $ 717,151 $ ( 279,508 ) $ ( 181 ) $ 437,509

Balances as of March 31, 2021 46,566,481 $ 47 $ 692,243 $ ( 193,168 ) $ ( 394 ) $ 498,728

Issuance of prefunded warrants to purchase common stock, net of $ 2,100 issuance costs

— — 32,900 — — 32,900

Issuance of common stock, net of issuance costs and underwriter fees of $ 5,117

3,478,261 3 74,879 74,882

Foreign currency translation adjustment — — — — 224 224

4 unchanged sentences

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

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

Foreign currency translation adjustment 0 0 0 0 548 548

Unrealized loss on short-term investments — — — — ( 53 ) ( 53 )

Exercise of stock options 447,403 1 3,068 — — 3,069

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

— — 58,750 — — 58,750

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

5,625,000 5 211,220 211,225

Stock-based compensation expense — — 3,049 — — 3,049

Net loss — — — ( 21,783 ) — ( 21,783 )

Balances as of December 31, 2020 46,384,675 $ 46 $ 687,934 $ ( 171,669 ) $ ( 116 ) $ 516,195

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

2 unchanged sentences

(Amounts in thousands)

Nine Months Ended December 31,

Three Months Ended June 30,

Cash flows from operating activities:

2 unchanged sentences

Stock-based compensation expense 7,194 6,250

Depreciation and amortization 1,598 1,217

Depreciation 620 518

Net amortization of premiums and discounts on short-term investments 243 658

Noncash interest expense — 181

Loss on extinguishment of debt — 913

Changes in operating assets and liabilities:

11 unchanged sentences

Proceeds from sales and maturities of short-term investments 67,000 59,515

Net cash provided by (used in) investing activities 2,520 ( 62,503 )

Net cash provided by investing activities 5,315 26,992

Cash flows from financing activities:

Payments of debt issuance costs — ( 100 )

Proceeds from issuance of common stock in follow-on public offering, net of underwriting fees and discounts — 286,107

Proceeds from issuance of prefunded warrants to purchase common stock, net of underwriting fees and discounts — 91,650

Principal payment of long-term debt — ( 10,000 )

Payment of long-term debt extinguishment costs — ( 795 )

Proceeds from issuance of common stock through ATM sales, net of offering costs 31,037 —

Principal payment of finance lease obligation ( 77 ) ( 53 )

2 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,915 212

Net increase (decrease) in cash, cash equivalents and restricted cash ( 50,243 ) 264,975

Net increase in cash, cash equivalents and restricted cash 6,297 10,010

Cash, cash equivalents and restricted cash at beginning of period 107,584 184,154

Cash, cash equivalents and restricted cash at end of period $ 113,881 $ 194,164

Supplemental disclosure of cash flow information:

Cash paid during the period for interest $ — $ 636

Cash paid for income taxes, net $ 55 $ —

Supplemental disclosure of non-cash investing and financing activities:

Purchases of property and equipment included in accounts payable 318 39

Lease assets obtained in exchange for new operating lease liabilities 365 1,580

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

4 unchanged sentences

Replimune Group, Inc.

(the “Company”) is a clinical-stage biotechnology company committed to applying our leading expertise in the field of oncolytic immunotherapy to transform the lives of cancer patients through our novel tumor-directed oncolytic immunotherapies.

Our proprietary tumor-directed oncolytic immunotherapy product candidates are designed and intended to maximally activate the immune system against cancer.

(the “Company”) is a clinical-stage biotechnology company committed to applying its leading expertise in the field of oncolytic immunotherapy to transform the lives of cancer patients through its novel tumor-directed oncolytic immunotherapies.

The Company's proprietary tumor-directed oncolytic immunotherapy product candidates are designed and intended to maximally activate the immune system against cancer.

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

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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 $ 29,674 and $ 21,783 for the three months ended December 31, 2021 and 2020, respectively, and net losses of $ 86,340 and $ 59,371 for the nine months ended December 31, 2021 and 2020, respectively.

In addition, as of December 31, 2021, the Company had an accumulated deficit of $ 279,508 .

The Company has incurred recurring losses since its inception, including net losses of $ 42.3 million and $ 27.3 million for the three months ended June 30, 2022 and 2021, respectively.

In addition, as of June 30, 2022, the Company had an accumulated deficit of $ 353.5 million.

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

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In December 2019, a novel strain of coronavirus, which causes the disease known as COVID-19, was reported to have surfaced in Wuhan, China.

Since then, COVID-19 coronavirus has spread globally and recently identified variants of COVID-19, Delta and Omicron, which appear to be more transmissible and contagious than previous COVID-19 variants, have caused an increase in the number of COVID-19 cases globally.

Since then, COVID-19 coronavirus has spread globally.

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

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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.

While there has been no prolonged material disruption to the Company’s business to date, the impact of the virus, including work-from-home policies, may negatively impact productivity, disrupt the Company’s business, and delay its preclinical research and clinical trial activities and its development program timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on the Company’s ability to conduct its business in the ordinary course.

Other impacts to the Company’s business may include temporary closures of its suppliers and disruptions or restrictions on its employees’ ability to travel.

prolonged material disruption to the Company’s employees or suppliers could adversely impact the Company’s preclinical research and clinical trial activities, financial condition and results of operations, including its ability to obtain financing.

The Company is continuing to monitor the global outbreak and spread of COVID-19 and, throughout the pandemic, has implemented measures designed to comply with applicable federal, state and local guidelines, as well as care for our employee's health and well-being.

The Company will continue to examine its protocols as the pandemic and health guidance evolves.

The COVID-19 pandemic continues to affect the United States and global economies and has affected and may continue to affect the Company's operations and those of third parties on which it relies, including by causing disruptions in our raw material and supply of other materials, the manufacturing of its product candidates and its commercialization processes.

However, the extent of these delays is currently unknown and has and will likely continue to vary.

In addition, the Company may incur unforeseen costs as a result of disruptions in raw material supplies, clinical product supplies, and preclinical studies or clinical trial delays.

The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company's 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, 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.

The Company continues to actively monitor this situation and the possible effects on its financial condition, liquidity, operations, suppliers, supplies, industry and workforce.

Summary of significant accounting policies

5 unchanged sentences

The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances.

The full extent to which the COVID-19 pandemic, including evolving COVID-19 viral strains, will directly or indirectly impact our business, results of operations and financial condition, including, expenses, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19.

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

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

The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company's business, results of operations and financial condition, including, expenses, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19.

The Company has made estimates of the impact of COVID-19 within the Company's financial statements and there may be changes to those estimates in future periods.

On an ongoing basis, management evaluates its estimates in light of reasonable changes in circumstances, facts and experience.

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

1 unchanged sentence

Unaudited interim financial information

The accompanying consolidated balance sheet as of December 31, 2021, the consolidated statements of operations, of comprehensive loss and of stockholders’ equity for the three and nine months ended December 31, 2021 and 2020 and the consolidated statements of cash flows for the nine months ended December 31, 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 December 31, 2021 and the results of its operations for the three and nine months ended December 31, 2021 and 2020 and its cash flows for the nine months ended December 31, 2021 and 2020.

The financial data and other information disclosed in these consolidated notes related to the three and nine months ended December 31, 2021 and 2020 are unaudited.

The results for the three and nine months ended December 31, 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 accompanying consolidated balance sheet as of June 30, 2022, the consolidated statements of operations, of comprehensive loss and of stockholders’ equity for the three months ended June 30, 2022 and 2021 and the consolidated statements of cash flows for the three months ended June 30, 2022 and 2021 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, 2022 and the results of its operations for the three months ended June 30, 2022 and 2021 and its cash flows for the three months ended June 30, 2022 and 2021.

The financial data and other information disclosed in these consolidated notes related to the three months ended June 30, 2022 and 2021 are unaudited.

The results for the three months ended June 30, 2022 are not necessarily indicative of results to be expected for the year ending March 31, 2023, 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, 2022, which was filed with the Securities and Exchange Commission on May 19, 2022 (the "Annual Report").

During the three and nine months ended December 31, 2021, there have been no changes to the Company’s significant accounting policies as described in the Annual Report, except as described below.

During the three months ended June 30, 2022, there have been no changes to the Company’s significant accounting policies as described in the Annual Report, except as described below.

Recently adopted accounting pronouncements

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.

ASU 2019-12 removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

ASU 2019-12 also amends other aspects of the guidance to help simplify and promote consistent application of GAAP.

new standard was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

We adopted ASU 2019-12 effective April 1, 2021.

The adoption of ASU 2019-12 did not have a material impact on our consolidated financial statements.

Recently issued accounting pronouncements

In June 2016, the FASB issued ASU No.

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

In April 2019, the FASB issued ASU No.

2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which clarifies and corrects certain unintended applications of the guidance contained in each of the amended Topics.

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

2019-05, Financial Instruments - Credit Losses (Topic 326), which provides an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost.

The standard is effective for fiscal years and interim periods beginning after December 15, 2022.

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

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

The Company adopted ASU 2016-13 as of April 1, 2022.

The adoption of ASU 2016-13 did not have a material impact on the Company's consolidated financial statements.

Fair value of financial assets and liabilities

1 unchanged sentence

Fair Value Measurements as of

December 31, 2021 Using:

June 30, 2022 Using:

Level 1 Level 2 Level 3 Total

11 unchanged sentences

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

During the three and nine months ended December 31, 2021 and 2020, there were no transfers between levels.

During the three months ended June 30, 2022 and 2021, there were no transfers between levels.

Valuation of cash equivalents and short-term investments

2 unchanged sentences

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 December 31, 2021 and March 31, 2021.

Cash equivalents consisted of money market funds at June 30, 2022 and March 31, 2022.

Short-term investments

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

December 31, 2021

As of June 30, 2022 and March 31, 2022, the Company's available-for-sale investments by type consisted of the following:

June 30, 2022

cost Gross unrealized

gains Gross unrealized

losses Fair value

losses Credit Losses Fair value

US Government agency bonds $ 24,719 $ — $ ( 192 ) $ — $ 24,527

US Treasury bonds 259,644 — ( 1,334 ) — 258,310

$ 288,243 $ — $ ( 346 ) $ 287,897

Total $ 284,363 $ — $ ( 1,526 ) $ — $ 282,837

March 31, 2022

Amortized cost Gross unrealized gains Gross unrealized losses Fair value

Amortized cost Gross unrealized gains Gross unrealized losses Credit Losses Fair value

US Government agency bonds 26,827 — ( 139 ) $ — 26,688

US Treasury bonds 264,162 — ( 1,143 ) — 263,019

$ 293,739 $ 67 $ ( 22 ) $ 293,784

Total $ 290,989 $ — $ ( 1,282 ) $ — $ 289,707

As of June 30, 2022, available-for-sale securities consisted of investments that mature within one year.

As of March 31, 2022, available-for-sale securities consisted of investments that mature within one year, with the exception of certain U.S.

Government agency bonds and U.S.

Treasury bonds which had maturities between one and two years and an aggregate fair value of $ 7.6 million.

Property, plant and equipment, net

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

December 31, 2021 March 31, 2021

June 30, 2022 March 31, 2022

Office equipment $ 941 $ 937

3 unchanged sentences

Construction in progress 1,277 1,619

11,658 10,090

Accumulated depreciation and amortization ( 4,246 ) ( 2,648 )

$ 7,412 $ 7,442

Depreciation and amortization expense was $ 548 and $ 1,598 for the three and nine months ended December 31, 2021, respectively, and $ 402 and $ 1,217 for the three and nine months ended December 31, 2020, respectively.

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

Total property, plant and equipment 13,682 12,728

Accumulated depreciation ( 5,415 ) ( 4,795 )

Property, plant and equipment, net $ 8,267 $ 7,933

Depreciation expense was $ 620 and $ 518 for the three months ended June 30, 2022 and 2021, respectively.

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

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following:

December 31, 2021 March 31, 2021

June 30, 2022 March 31, 2022

Accrued research and development costs $ 7,591 $ 5,882

3 unchanged sentences

Total accrued expenses and other current liabilities $ 12,215 $ 13,392

Long-term debt

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

Hercules Loan Agreement

On August 8, 2019, (the “Closing Date”) the Company and certain of its affiliates entered into a Loan and Security Agreement (as amended, the “Hercules Loan Agreement”) with Hercules Capital, Inc.

(“Hercules”) pursuant to which Hercules agreed to make available to the Company a secured term loan facility in the amount of $ 30,000 (the “Term Loan Facility”), subject to certain terms and conditions.

The Company borrowed $ 10,000 under the Hercules Loan Agreement in one advance as a single tranche term loan on the Closing Date upon which the Company paid a $ 225 facility charge and incurred $ 130 in additional closing and legal fees.

On June 1, 2020, the Company entered into the First Amendment to the Hercules Loan Agreement (the “Hercules First Amendment”), to, among other things, increase the aggregate principal amount of the secured term loan facility from $ 30,000 to $ 40,000 .

Pursuant to the Hercules First Amendment, subject to the achievement of certain milestones, the Company could have borrowed three tranches of up to $ 10,000 between October 1, 2020 and December 15, 2020, July 1, 2020 and June 30, 2021, and July 1, 2021 and December 15, 2021, respectively.

The Company incurred $ 100 in additional closing and legal fees in connection with Hercules First Amendment which were capitalized and 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 and $ 44 in accrued interest.

In connection with the execution of the Payoff Letter and the repayment of the Company’s outstanding obligations under the Hercules Loan Agreement, the Hercules Loan Agreement and the related loan documents were terminated.

The Term Loan Facility was secured by substantially all of the Company’s assets, but excluding its intellectual property, and subject to certain exceptions and exclusions.

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

In connection with entering into the Hercules Loan Agreement 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 nine months ended December 31, 2021.

During the three and nine months ended December 31, 2020, the Company recognized aggregate interest expense under the Hercules Loan Agreement of $ 247 and $ 817 , respectively, which included non-cash interest expense of $ 55 and $ 181 , respectively.

Non-cash interest expense related to the amortization of the debt discount was $ 0 during the three and nine months ended December 31, 2021 and $ 26 and $ 82 , respectively, during the three and nine months ended December 31, 2020.

The accretion of the final payment was $ 0 for the three and nine months ended December 31, 2021 and $ 29 and $ 99 for the three and nine months ended December 31, 2020, respectively.

Stockholders’ equity

As of December 31, 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 December 31, 2021 and March 31, 2021, the Company had reserved 16,524,815 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 June 30, 2022 and March 31, 2022, 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, 2022 and March 31, 2022, the Company had reserved 18,963,578 and 16,605,804 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 8) and the exercise of the outstanding warrants to purchase shares of common stock, respectively.

Undesignated preferred stock

As of December 31, 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 December 31, 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.

In June 2020, the 2019 Sales Agreement was amended to reduce the aggregate offering amount under the 2019 Sales Agreement from $ 75,000 of shares to $ 30,000 of shares.

On August 11, 2020, the 2019 Sales Agreement was terminated by the execution by the Company and the Agent of a new sales agreement, which was subsequently amended on October 21, 2020 (as amended, the “2020 Sales Agreement”).

As of June 30, 2022, 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, 2022.

On August 11, 2020, the Company and the SVB Leerink LLC (the "Agent") entered into a sales agreement, which was subsequently amended on October 21, 2020 (as amended, the “2020 Sales Agreement”), pursuant to which the Company could sell, from time to time, at its option, up to an aggregate of $ 62,500 of shares of the Company’s common stock, $ 0.001 par value per share, through the Agent, as the Company’s sales agent.

During the three months ended June 30, 2022, the Company settled transactions that occurred pursuant to the 2020 Sales Agreement, whereby the Company issued and sold an aggregate of 1,686,438 shares of its common stock, resulting in gross proceeds of $ 32.0 million, before deducting fees of $ 1.0 million.

The Company did no t issue or sell any shares under the 2020 Sales Agreement during the year ended March 31, 2022.

On June 23, 2022, the 2020 Sales Agreement was terminated by the execution by the Company and the Agent of a new sales agreement (the “2022 Sales Agreement”).

Under the 2022 Sales Agreement, the Company may sell, from time to time, at its option, up to an aggregate of $ 100,000 of shares of the Company’s common stock, $ 0.001 par value per share (the “Shares”), through the Agent, as the Company’s sales agent.

Any Shares to be offered and sold under the 2020 Sales Agreement will be issued and sold (i) by methods deemed to be an “at the market offering” (“ATM”) as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended or in negotiated transactions, if authorized by the Company, and (ii) pursuant to, and only upon the effectiveness of, a registration statement on Form S-3 filed by the Company with the Securities and Exchange Commission on August 11, 2020 for an offering of up to $ 350,000 of various securities, including shares of the Company’s common stock, preferred stock, debt securities, warrants and/or units for sale to the public in one or more public offerings.

Any Shares to be offered and sold under the 2022 Sales Agreement will be issued and sold (i) by methods deemed to be an “at the market offering” (“ATM”) as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, or if authorized by the Company, in negotiated transactions or block trades, and (ii) pursuant to a registration statement on Form S-3 filed by the Company with the Securities and Exchange Commission on June 23, 2022 for an offering of up to $ 400,000 of various securities, including shares of the Company’s common stock, preferred stock, debt securities, warrants and/or units for sale to the public in one or more public offerings.

Subject to the terms of the 2022 Sales Agreement, the Agent will use reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose).

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

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

The Company cannot provide any assurances that it will issue any additional Shares pursuant to the 2022 Sales Agreement.

The Company will pay the Agent a commission of up to 3.0 % of the gross proceeds from the sale of the Shares.

The Company has also agreed to provide the Agent with customary indemnification rights.

The Company did not issue or sell any shares under the 2020 Sales Agreement during the three and nine months ended December 31, 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 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 .

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

The November 2019 Pre-Funded Warrants are exercisable at any time after the date of issuance.

A holder of November 2019 Pre-Funded Warrants may not exercise the November 2019 Pre-Funded Warrant if the holder, together with its affiliates, would beneficially own more than 9.99 % of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise.

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 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.

In June 2020, the Company completed a public offering of (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 at a public offering price of $ 23.00 per share,, and (b) pre-funded warrants to purchase 1,521,738 shares of the Company’s common stock at a public offering price of $ 22.9999 per 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 .

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

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

A holder of June 2020 Pre-Funded Warrants may not exercise the June 2020 Pre-Funded Warrants if the holder, together with its affiliates, would beneficially own more than 9.99 % of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise.

A holder of June 2020 Pre-Funded Warrants may increase or decrease this percentage up to 19.99 % by providing at least 61 days’ prior notice to the Company.

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 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.

In October 2020, the Company completed a public offering of (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, at a public offering price of $ 40.00 per share and (b) pre-funded warrants to purchase 1,562,500 shares of the Company’s common stock at a public offering price of $ 39.9999 per 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 .

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

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

A holder of October 2020 Pre-Funded Warrants may not exercise the October 2020 Pre-Funded Warrants if the holder, together with its affiliates, would beneficially own more than 9.99 % of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise.

A holder of October 2020 Pre-Funded Warrants may increase or decrease this percentage up to 19.99 % by providing at least 61 days’ prior notice to the Company.

Other than as set forth in Note 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 December 31, 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.

The pre-funded warrants described above are exercisable at any time after the date of issuance.

Unless otherwise modified by a holder of a pre-funded warrant, no holder may exercise a pre-funded warrant if such holder, together with its affiliates, would beneficially own more than 9.99 % of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise.

A holder a pre-funded warrant may increase or decrease this percentage up to 19.99 % by providing at least 61 days’ prior notice to the Company.

Certain holders have decreased the 9.99 % threshold to a 4.99 % threshold.

Other than as set forth in Note 8 and Note 9 to these consolidated financial statements, the 3,084,238 shares of the Company's common stock underlying the above described pre-funded warrants, and the 2,200,000 shares of the Company's common stock underlying pre-funded warrants that were issued by the Company in 2019, are not included in the number of issued and outstanding shares of the Company’s common stock set forth herein.

As of June 30, 2022, no pre-funded warrants had been exercised.

Stock-based compensation

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Three Months Ended

December 31, Nine Months Ended

2021 2020 2021 2020

Research and development $ 2,614 $ 2,458

General and administrative 4,089 1,595 11,967 4,568

Selling, general and administrative 4,580 3,792

$ 7,194 $ 6,250

The following table summarizes stock-based compensation expense by award type for the three months ended December 31, 2021 and 2020:

The following table summarizes stock-based compensation expense by award type for the three months ended June 30, 2022 and 2021:

Three Months Ended

December 31, Nine Months Ended December 31,

2021 2020 2021 2020

Stock options $ 5,159 $ 5,175

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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 December 31, 2021.

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, 2022.

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.

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2018 Omnibus Incentive Compensation Plan

On July 9, 2018, the Company’s board of directors adopted, and the Company’s stockholders approved the 2018 Omnibus Incentive Compensation Plan (the “2018 Plan”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s initial public offering.

The 2018 Plan provides for the issuance of incentive stock options, non-qualified stock options, stock awards, stock units, stock appreciation rights and other stock-based awards.

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.

On April 1, 2021, the number of shares reserved for issuance under the 2018 Plan automatically increased by 2,074,028 shares pursuant to the terms of the 2018 Plan and based on total number of shares of Company stock outstanding on March 31, 2021, including the November 2019 Pre-Funded Warrants, the June 2020 Pre-Funded Warrants and the October 2020 Pre-Funded Warrants.

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

The number of shares of common stock initially reserved for issuance under the 2018 Plan is 3,617,968 shares.

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, which includes for these purposes, the 5,284,238 shares issuable upon exercise of those pre-funded warrants described in Note 7 to these consolidated financial statements, or such lesser amount as determined by the Board.

On April 1, 2022, the number of shares reserved for issuance under the 2018 Plan automatically increased by 2,104,915 shares pursuant to the terms of the 2018 Plan and based on total number of shares of Company stock outstanding on March 31, 2022.

On April 1, 2021, the number of shares reserved for issuance under the 2018 Plan automatically increased by 2,074,028 shares pursuant to the terms of the 2018 Plan.

As of December 31, 2021, 1,715,467 shares remained available for future grants under the 2018 Plan.

As of June 30, 2022, 2,337,711 shares remained available for future grants under the 2018 Plan.

The 2015 Plan, the 2017 Plan and the 2018 Plan are 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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Employee Stock Purchase Plan

On July 9, 2018, the Company’s board of directors adopted and the Company’s stockholders approved the Employee Stock Purchase Plan (the “ESPP”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO.

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

In addition, as of the first trading day of each fiscal year during the term of the ESPP (excluding any extensions), an additional number of shares of the Company’s common stock equal to 1 % of the total number of shares outstanding on the last trading day in the immediately preceding fiscal year, including the November 2019 Pre-Funded Warrants, the June 2020 Pre-Funded Warrants, and the October 2020 Pre-Funded Warrants, or 697,224 shares, whichever is less (or such lesser amount as determined by the Company’s board of directors) will be added to the number of shares authorized under the ESPP.

In addition, as of the first trading day of each fiscal year during the term of the ESPP (excluding any extensions), an additional number of shares of the Company’s common stock equal to 1 % of the total number of shares outstanding on the last trading day in the immediately preceding fiscal year, which includes for these purposes, the 5,284,238 shares issuable upon exercise of those pre-funded warrants described in Note 7 to these consolidated financial statements, or 697,224 shares, whichever is less (or such lesser amount as determined by the Company’s board of directors) will be added to the number of shares authorized under the ESPP.

In accordance with the terms of the ESPP, on April 1, 2022 and 2021, the number of shares reserved for issuance under the ESPP automatically increased by 526,228 and 518,507 shares respectively, for a total of 2,076,603 shares reserved for the ESPP.

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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.

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

December 31, Nine Months Ended

2021 2020 2021 2020

Risk-free interest rate 2.59 % 1.12 %

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Cancelled ( 144,256 ) $ 19.82

Outstanding as of December 31, 2021 6,695,387 $ 16.55 7.44 $ 81,838

Outstanding as of June 30, 2022 7,511,559 $ 17.01 7.47 $ 31,884

Options exercisable as of March 31, 2022 3,645,749 $ 10.85 6.31 $ 24,875

Options exercisable as of December 31, 2021 3,492,076 $ 9.96 6.47 $ 60,493

As of December 31, 2021, there was $ 42.8 million of unrecognized compensation cost related to unvested common stock options, which is expected to be recognized over a weighted average period of 2.5 years.

The weighted average grant-date fair value of stock options granted during the nine months ended December 31, 2021 and 2020 was $ 21.95 and $ 10.06 , respectively.

The aggregate intrinsic value of stock options exercised during the nine months ended December 31, 2021 was $ 14.6 million.

Options exercisable as of June 30, 2022 4,144,044 $ 13.15 6.36 $ 26,859

As of June 30, 2022, there was $ 46.3 million of unrecognized compensation cost related to unvested common stock options, which is expected to be recognized over a weighted average period of 2.7 years.

The weighted average grant-date fair value of stock options granted during the three months ended June 30, 2022 and 2021 was $ 12.15 and $ 22.29 , respectively.

The aggregate intrinsic value of stock options exercised during the three months ended June 30, 2022 was $ 0.5 million.

Restricted stock units

A summary of the changes in the Company's RSUs during the nine months ended December 31, 2021 is as follows:

A summary of the changes in the Company's RSUs during the three months ended June 30, 2022 is as follows:

Number of Restricted Shares Weighted

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Granted 616,902 18.01

Vested ( 149,341 ) 32.92

Cancelled ( 37,651 ) 27.79

Outstanding as of December 31, 2021 782,004 32.40

As of December 31, 2021, there was $ 21.6 million of unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted average period of 3.4 years.

As of December 31, 2020, there was no unrecognized compensation cost related to unvested restricted stock units .

Outstanding as of June 30, 2022 1,256,123 24.74

As of June 30, 2022, there was $ 29.0 million of unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted average period of 3.4 years.

As of June 30, 2021, there was $ 20.9 million unrecognized compensation cost related to unvested restricted stock units .

Net loss per share

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

Three Months Ended December 31, Nine Months Ended December 31,

2021 2020 2021 2020

Net loss attributable to common stockholders $ ( 29,674 ) $ ( 21,783 ) $ ( 86,340 ) $ ( 59,371 )

Three Months Ended June 30,

Net loss $ ( 42,253 ) $ ( 27,311 )

Weighted average common shares outstanding, basic and diluted 54,211,446 51,910,331

Net loss per share attributable to common stockholders, basic and diluted $ ( 0.57 ) $ ( 0.44 ) $ ( 1.66 ) $ ( 1.34 )

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 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 and Nine Months Ended December 31,

Net loss per share, basic and diluted $ ( 0.78 ) $ ( 0.53 )

The Company’s potentially dilutive securities, which include stock options and warrants to purchase common stock have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share.

Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share 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 for the periods indicated because including them would have had an anti-dilutive effect:

Three Months Ended June 30,

Options to purchase common stock 7,511,559 7,411,680

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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.

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

BMS granted the Company a non-exclusive, non-transferrable, royalty-free license (with a right to sublicense) under its intellectual property to its compound in the clinical trial and agreed to supply its compound, at no cost to the Company, for use in the clinical trial.

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

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

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

Pursuant to the terms of the agreement, each party granted the other party a non-exclusive license under its respective intellectual property and agreed to contribute the necessary resources needed to fulfill its respective obligations, in each case, under the terms of the agreed-upon or to-be agreed upon study plans.

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The agreement may be terminated by either party if (i) there is no active study plan for which a final study report has not been completed and the parties have not entered into a study plan for an additional clinical trial within a period of time after the delivery of the most recent final study report or (ii) in the event of a material breach.

The agreement with Regeneron is accounted for under ASC 808, Collaborative Arrangements (“ASC 808”), as both parties are active participants and each party pays its own compound costs and share equally in development costs.

The Company will account for costs incurred as part of the study, including costs to supply compounds for use in the study, as research and development expenses within the consolidated statement of operations.

The Company will recognize any amounts received from Regeneron in connection with this agreement as an offset to research and development expense within the consolidated statement of operations.

Under the terms of the agreement, on a quarterly basis the Company and Regeneron true-up costs of the study and make corresponding payments to the party that incurred the majority of the costs.

During the three and nine months ended December 31, 2021 and 2020, the Company did not make any payments to Regeneron under the terms of the agreement.

As of December 31, 2021 and March 31, 2021, the Company recorded $ 1.9 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.

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 up to the amount in the study plan or modified version thereof agreed by the Joint Development Committee established to govern the collaboration.

In July 2022, Regeneron informed the Company that the costs of the study have reached the initial budget for the initial study plan of June 2018 and that Regeneron's reimbursement of CERPASS study costs to the Company have completed in the period ending June 30, 2022 in relation to the initial study budget.

The Company and Regeneron are in communication regarding receiving Regeneron's acknowledgement of the sharing of the study costs according to the current budget that superseded that of the initial study plan and initial budget.

The true-up cost in discussion for the period ending June 30, 2022 is $ 1.4 million to the Company, which have not been recorded in prepaid expenses and other current assets in the consolidated balance sheet or as an offset to research and development expense within the consolidated statement of operations.

During the three months ended June 30, 2022 and 2021, the Company did not make any payments to Regeneron under the terms of the agreement.

During the three months ended June 30, 2022 and 2021, the Company received payments under the terms of the agreement from Regeneron of $ 2.0 million and $ 1.3 million, respectively.

As of June 30, 2022 and March 31, 2022, the Company recorded $ 1.1 million and $ 2.0 million of receivables from Regeneron in connection with this agreement in prepaid expenses and other current assets in the consolidated balance sheet, respectively.

Commitments and contingencies

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.

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 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.

As a result, all contract consideration is allocated to the single lease component.

In October 2021, the Company entered into an agreement to lease approximately 2,951 square feet of research and development, office and laboratory space in Abingdon, Oxfordshire, United Kingdom.

Pursuant to the lease agreement, the lease term commenced on November 1, 2021 with rental payments scheduled to commence on February 1, 2022.

The lease term is for five years with no option for renewal.

Annual lease payments are approximately $ 0.1 million.

The Company recorded a right-of-use asset and a lease liability of approximately $ 0.4 million upon commencement of the lease and the lease is classified as an operating lease.

The Company’s leases have remaining lease terms of eight years to eighteen years .

Some of our leases include one or more options to renew with renewal terms that can extend the lease for additional years, or options to terminate the leases, both at the Company’s discretion.

The Company’s lease terms include options to extend or terminate leases when the Company concludes it is reasonably certain that it would exercise those options.

Lease expense for minimum lease payments is recognized on a straight-line basis based on the fixed components of a lease arrangement.

The Company amortizes this expense over the term of the lease beginning with the date of initial possession, which is the date the Company can enter the leased space and begin to make improvements in preparation for its intended use.

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

The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheet as of December 31, 2021:

Three Months Ended December 31, Nine Months Ended December 31,

2021 2020 2021 2020

The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheet as of June 30, 2022:

Three Months Ended June 30,

Finance lease costs:

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Total lease cost $ 1,418 $ 1,407

The Company incurred finance lease amortization costs of $ 607 and $ 1,821 for the three and nine months ended December 31, 2021, respectively, of which $ 518 and $ 1,553 are recognized in research and development expenses.

For the three and nine months ended December 31, 2020, the Company incurred finance lease amortization costs of $ 607 and $ 1,821 , respectively, of which $ 518 and $ 1,553 are recognized in research and development costs.

In addition, the Company incurred interest expense on finance leases of $ 555 and $ 1,670 , respectively, for the three and nine months ended December 31, 2021, of which $ 466 and $ 1,402 are recognized in research and development.

For the three and nine months ended December 31, 2020, the Company incurred $ 560 and $ 1,683 of interest expense on finance leases, of which $ 470 and $ 1,412 are recognized in research and development.

For the three and nine months ended December 31, 2021, the Company recognized $ 89 and $ 267 of operating lease costs within general and administrative expenses.

For the three and nine months ended December 31, 2020, the Company recognized $ 90 and $ 268 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 December 31, 2021:

December 31, 2021

The following table summarizes the classification of lease costs in the consolidated statement of operations for the three months ended June 30, 2022 and 2021 as follows:

Three Months Ended June 30,

Finance Lease Costs

Research and development $ 518 $ 518

Selling, general and administrative 89 89

Other income (expense) 552 558

Operating Lease Costs

Research and development 110 94

Selling, general and administrative 149 148

Total lease cost $ 1,418 $ 1,407

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 its balance sheet as of June 30, 2022:

June 30, 2022

Operating leases Financing lease Total

2022 (remaining three months) $ 260 $ 629 $ 889

2023 (remaining nine months) $ 777 $ 1,932 $ 2,709

2024 1,044 2,639 3,683

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Total lease liabilities $ 5,577 $ 26,891 $ 32,468

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

December 31, 2021 March 31, 2021

The following table provides lease disclosure as of June 30, 2022 and March 31, 2022:

June 30, 2022 March 31, 2022

Right-to-use operating lease asset $ 5,269 $ 5,552

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Total lease liabilities $ 32,468 $ 32,839

The following table provides lease disclosure for the nine months ended December 31, 2021 and 2020:

Nine Months Ended December 31,

The following table provides lease disclosure for the three months ended June 30, 2022 and 2021:

Three Months Ended June 30,

Other information

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Financing cash flows from finance leases $ 77 $ 53

Right-to-use asset obtained in exchange for new operating lease liabilities $ 365 $ 1,580

Weighted-average remaining lease term - operating leases 7.6 years 8.6 years

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

The variable lease costs and short-term lease costs were insignificant for three and nine months ended December 31, 2021 and 2020.

The variable lease costs and short-term lease costs were insignificant for three months ended June 30, 2022 and 2021.

Manufacturing commitments

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

As of December 31, 2021 and March 31, 2021, the Company had committed to minimum payments under these arrangements totaling $ 1,190 and $ 1,651 , respectively, through March 31, 2022.

As of June 30, 2022 and March 31, 2022, the Company had committed to minimum payments under these arrangements totaling $ 1,631 and $ 1,951 , respectively, through June 30, 2022.

Indemnification agreements

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

The Company is not aware of any claims under indemnification arrangements, and therefore it has not accrued any liabilities related to such obligations in its consolidated financial statements as of December 31, 2021 or March 31, 2021.

Legal proceedings

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

December 31, 2021 March 31, 2021

June 30, 2022 March 31, 2022

United States $ 6,601 $ 6,318

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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 1. Financial Statements