What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-04 compared with 2022-02-03 · 126 added, 225 removed, 236 unchanged (60% of the section changed)

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Oncolytic immunotherapy exploits the ability of certain viruses to selectively replicate in and directly kill tumors, as well as induce a potent, patient-specific, anti-tumor immune response.

Our product candidates incorporate multiple mechanisms of action into a practical “off-the-shelf” approach that is intended to maximize the immune response against a patient’s cancer and to offer significant advantages over personalized vaccine approaches.

We believe that the bundling of multiple approaches for the treatment of cancer into single therapies will simplify the development path of our product candidates, while also improving patient outcomes at a lower cost to the healthcare system than the use of multiple different drugs.

We believe that the bundling of multiple approaches for the treatment of cancer into single therapies will increase clinical efficacy and simplify the development path of our product candidates, while also improving patient outcomes at a lower cost to the healthcare system than the use of multiple different drugs.

Our proprietary RPx platform is based on a proprietary, engineered strain of herpes simplex virus 1, or HSV-1, backbone with payloads added to maximize immunogenic cell death and the induction of a systemic anti-tumor immune response.

The RPx platform has a unique dual local and systemic mechanism of action, or MOA, consisting of direct selective virus-mediated killing of the tumor resulting in the release of tumor derived antigens and altering of the tumor microenvironment, or TME, to ignite a strong and durable systemic response.

The RPx platform has a dual local and systemic mechanism of action, or MOA, consisting of direct selective virus-mediated killing of the tumor resulting in the release of tumor-derived antigens and altering of the tumor microenvironment to ignite a strong and durable systemic response.

This MOA is expected to be synergistic with most established and experimental cancer treatment modalities, and, with an attractive safety profile the RPx platform is expected to have the versatility to be developed alone or combined with a variety of other treatment options.

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Although our fiscal year runs from April 1 st - March 31 st , our programs and program updates are reported on a calendar year basis.

Our current product candidate pipeline is summarized in the table below:

We are conducting a number of clinical trials of RP1, both as a monotherapy and in combination with anti-PD-1 therapy, with a focus on immune-responsive tumors, including anti-PD-1 failed patients with these tumor types.

We are actively enrolling patients in the CERPASS trial, a global randomized, Phase 2 clinical trial of RP1 in cutaneous squamous cell carcinoma, or CSCC, RP1’s lead indication in collaboration with our partner Regeneron.

We are conducting a number of clinical trials of RP1, both as a monotherapy and in combination with anti-PD-1 therapy, with a focus on immune-responsive tumors.

We are actively enrolling patients in a randomized, controlled Phase-2 clinical trial of RP1 with cutaneous squamous cell carcinoma, or CSCC, RP1’s lead indication, which is referred to herein as CERPASS or the CERPASS trial, under an agreement with our partner Regeneron Pharmaceuticals, Inc., or Regeneron.

CERPASS is a registration directed clinical trial evaluating RP1 in combination with cemiplimab, an anti-PD-1 therapy developed by Regeneron, versus cemiplimab alone.

CERPASS includes two independent primary endpoints, complete response (CR) rate and overall response rate (ORR), and a sample size of 180 patients.

Regeneron has granted to us a non-exclusive royalty-free license to cemiplimab for use in this trial, is funding one-half of the clinical trial costs, and is supplying cemiplimab at no cost.

If this clinical trial generates compelling clinical data demonstrating the benefits of the combined treatment, we believe the data could support a filing with regulatory authorities seeking marketing approval.

We currently expect to complete enrollment in mid-year 2022 and for the primary data analysis to be triggered six months thereafter.

We continue our collaboration with BMS under which it has granted us a non-exclusive, royalty-free license to, and is supplying at no cost, its anti-PD-1 therapy, nivolumab, for use in combination with RP1 in our multi-cohort Phase 1/2 IGNYTE clinical trial.

This trial includes a registration directed Phase 2 cohort enrolling 125 patients with anti-PD-1 failed cutaneous melanoma who are being treated with RP1 in combination with nivolumab.

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 United States Federal Drug Administration, or 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 release initial directional data from this cohort in late 2022.

CERPASS is enrolling approximately 180 evaluable patients with locally advanced or metastatic CSCC who are naïve to anti-PD1 therapy.

The CERPASS trial will evaluate complete response, or CR rate, and overall response rate, or ORR, as its two primary efficacy endpoints as assessed by independent review, as well as duration of response, progression-free survival, or PFS, and overall survival, or OS, as secondary endpoints.

Regeneron has granted to us a non-exclusive royalty-free license to cemiplimab for use in this trial, is funding one-half of the clinical trial costs up to the amount agreed in the first study plan, and is supplying cemiplimab at no cost.

We are currently in communication with Regeneron 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.

If the CERPASS trial generates compelling clinical data demonstrating the benefits of the combined treatment, we believe the data could support a filing with regulatory authorities seeking marketing approval.

We have enrolled the pre-specified target of 180 patients in the CERPASS trial and additional patients screened in August will also be enrolled with the last patient expected to initiate dosing this quarter.

Topline primary analysis data from the CERPASS trial is expected in the first half of 2023.

We continue our collaboration with Bristol Myers Squibb Company, or BMS, under which BMS has granted us a non-exclusive, royalty-free license to, and is supplying at no cost, its anti-PD-1 therapy, nivolumab, for use in combination with RP1 in a multi-cohort Phase 1/2 clinical trial which is referred to herein as IGNYTE, or the IGNYTE trial.

There are four tumor specific cohorts currently enrolling in the IGNYTE trial including a registration directed Phase 2 expansion cohort enrolling 125 patients with anti-PD-1 failed cutaneous melanoma who are being treated with RP1 in combination with nivolumab.

The additional three cohorts are in non-melanoma skin cancers, or NMSC, which includes patients with both naïve and anti-PD-1 failed disease, in anti-PD-1 failed microsatellite instability high, or MSI-H/dMMR tumors (which we recently changed by protocol amendment from anti-PD1 naïve disease), and in anti-PD(L)-1 failed non-small cell lung cancer, or NSCLC.

We initiated the registration directed Phase 2 expansion cohort in the IGNYTE trial enrolling 125 patients with anti-PD-1 failed cutaneous melanoma after completing enrollment in a prior Phase 2 cohort in the same clinical trial of approximately 30 patients with melanoma, which demonstrated the tolerability and clinical activity of the combination of RP1 and nivolumab in patients with melanoma, including those who had 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 the 125 patient expansion 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.

In March 2022, we released updated data showing that RP1 combined with nivolumab continues to demonstrate deep and durable responses in patients with melanoma, including a 37.5% overall response rate in anti-PD-1 failed disease.

We have completed enrollment of the first 75 patients in this cohort of the IGNYTE trial and expect to release a data snapshot from these patients with six months follow-up in late 2022.

The data snapshot from these first 75 patients will be investigator assessed as compared to the primary endpoint of ORR for all patients in this cohort which is to be assessed by central review.

In order to document sufficient durability of response, an important secondary endpoint of the study, the primary analysis upon which a filing is intended to be made, is expected to be triggered 12 months following the last patient being enrolled.

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 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.

Currently, enrollment is ongoing in a 60 patient cohort with non-melanoma skin cancer, or NMSC, (including the recent addition of 30 patients who have failed prior anti-PD-1 therapy);

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 late 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 was made in the third quarter of 2021.

As previously reported, enrollment is open 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 late 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 skin cancers.

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

While enrollment in this clinical trial has been impacted by COVID-19, as the patient population is severely immune-compromised and considered very high risk, we expect to present initial data from this clinical trial late in the first quarter of 2022.

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

In NMSC, enrollment in the anti-PD-1 naïve NMSC cohort has completed, included patients with cutaneous squamous cell carcinoma, or CSCC, basal cell carcinoma, or BCC, merkel cell carcinoma, or MCC, and angiosarcoma.

Updated data from the CSCC patients in the anti-PD-1 naïve NMSC cohort, presented in March 2022, continued to show nearly half of the patients achieving a complete response and nearly 65% achieving a complete or partial response.

We are currently enrolling 30 patients in an extension of the NMSC cohort of RP1 in combination with nivolumab in NMSC patients who have failed prior treatment with anti-PD(L)-1.

In March 2022, we reported initial data from this extension cohort where responses had been observed in anti-PD(L)-1 failed CSCC, MCC and angiosarcoma tumors.

We believe the activity of RP1 combined with nivolumab in this anti-PD(L)-1 failed cohort represents a new potential therapeutic option for these patients and supports the broad potential for RP1 in anti-PD(L)-1 failed disease beyond melanoma.

Recruitment remains ongoing into the cohorts of patients with anti-PD1 failed NMSC, including CSCC, anti-PD1 failed NSCLC, and anti-PD1 failed MSI-H/dMMR cancers, with a data update expected in the first half of 2023.

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, which is referred to herein as 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 up to 65 patients in the ARTACUS trial to assess the safety and efficacy of RP1 in liver and kidney transplant recipients with skin cancers.

Enrollment in this clinical trial has been impacted by COVID-19, as the patient population is severely immune-compromised and considered very high risk.

Even though the patient numbers are currently

small, as reported in March 2022, we have observed responses in these patients with RP1as monotherapy with a similar safety profile to that observed in our other RP1 clinical trials in patients who are not immune suppressed.

Enrollment continues in the ARTACUS trial and we expect to provide a data update in the first half of 2023.

In addition to these ongoing trials with RP1, we are developing a protocol for testing RP1 along and combined with an anti-PD1 therapy for the neoadjuvant treatment of CSCC.

We expect to initiate this clinical trial in the first half of 2023.

We are also developing additional product candidates, RP2 and RP3, that have been further engineered to enhance anti-tumor immune responses and are intended to address additional tumor types, including traditionally less immune responsive tumor types.

In addition to the expression of GALV-GP R(-) and human GM-CSF as in RP1, RP2 has been engineered to express an antibody-like molecule intended to block the activity of CTLA-4, a protein that inhibits the full activation of an immune response, including to tumors.

RP3, which does not include the expression of GM-CSF, has been engineered with the intent to further stimulate an anti-tumor immune response through activation of immune co-stimulatory pathways through expression of the ligands for CD40 and 4-1BBL, in addition to anti-CTLA-4 and GALV-GP R(-).

RP3 has been engineered with the intent to further stimulate an anti-tumor immune response through activation of immune co-stimulatory pathways through the additional expression of the ligands for CD40 and 4-1BBL, as well as anti-CTLA-4 and GALV-GP R(-), but without the expression of GM-CSF.

We initiated a Phase-1 clinical trial of RP2 alone and in combination with nivolumab in the second half of 2019.

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In November 2020, we and BMS agreed to increase the number of patients in the combination part of the clinical trial from 12 to 30 patients.

In October 2020, we presented positive data from the single agent RP2 portion of the clinical trial that showed deep and durable responses, including demonstration of tumor response in uninjected lesions and in patients with difficult to treat advanced cancers.

We have presented data from the single agent RP2 portion of this 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.

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 Phase 1 clinical trial evaluating RP2 in combination with nivolumab in difficult to treat cancers and provided updated data from this program in the second half of 2021.

Also in the second half of 2021, we 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, breast and gastrointestinal cancers including colorectal cancer, and also additional patients with uveal melanoma.

We expect to release initial data from this expanded clinical trial in late 2022.

In November 2021, we presented further updated data from this RP2 clinical trial, with RP2 as single agent and in combination with nivolumab that demonstrated the potential clinical utility of RP2 in patients with hard-to-treat, anti-PD1 failed cancers, including durability of response, together with biomarker data demonstrating the ability of RP2 to turn immunologically ‘cold’ tumors ‘hot'.

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.

We have also presented combination data from both the clinical trial that showed compelling activity in patients with immune insensitive tumors and with anti-PD-1 failed disease.

In the second half of 2021, we reported full enrollment in the initial 30 patient combination with nivolumab part of the Phase 1 clinical trial following which a protocol amendment was made to expand this clinical trial to enroll additional patients who are required to have specific tumor types of interest, including gastro-intestinal cancers, breast cancer, lung cancer, head and neck cancer and uveal melanoma, rather than any type of tumor as were eligible for the initial 30 patient group.

Initial data from this expanded cohort of RP2 Phase 1 patients is expected toward the end of 2022.

We have obtained clearance from the Medicines and Healthcare products Regulatory Agency in the United Kingdom to enter clinical development with RP3 and in December 2020 we initiated dosing in this clinical trial.

This Phase 1 clinical trial is designed to evaluate RP3 alone and combined with anti-PD-1 therapy in advanced solid tumor patients.

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

In addition to this cohort, we plan to open a cohort to evaluate RP3 in combination with nivolumab in solid tumor patients by the end of the first quarter of 2022, with the nivolumab being supplied under agreement with BMS.

We plan to include, in this new expansion cohort, patients with various prevalent tumor types such as lung cancer, breast cancer, head and neck cancer and gastrointestinal

cancers including colorectal cancer, following the recent determination of the recommended phase 2 dose, or RP2D.

We expect to present initial data from these expansion patients in late 2022.

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.

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, this development plan will have a focus on tumor types where liver metastases are particularly common.

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

In March 2022, we reported initial data from the single agent monotherapy cohort of RP3 in superficial and deep tumors exploring two dose levels of RP3, including injections into deep tumors.

The higher dose level has been confirmed as the recommended Phase 2 dose and no new safety signals have been observed as compared to RP1 or RP2.

Enrollment of the combination part of this study has begun, combining RP3 with nivolumab under a collaboration and supply agreement with BMS.

This cohort is focusing on enrolling patients with gastro-intestinal cancers, breast cancer, lung cancer and head and neck cancer.

Additional monotherapy patients will also be enrolled.

Initial data from this expanded cohort of RP3 Phase 1 patients is expected toward the end of 2022.

We intend to initiate a Phase 2 development plan for RP2 and/or RP3 to target a range of tumor types with un-met need, including where liver tumors are common and in patients with early disease where the objective of treatment would be to increase the proportion of patients achieving cure.

This includes the development of RP2 and/or RP3 in combination with the current standard of care, including immunotherapy, chemotherapy and radiation, and in settings following the current standard of care.

We are planning for initial signal finding single arm Phase 2 clinical trials in the following tumor types:

squamous cell carcinoma of the head and neck, or SCCHN, locally advanced and recurrent/metastatic;

hepatocellular carcinoma, or HCC, both first and second line;

and colorectal cancer, or CRC, third line;

with additional signal finding studies intended to follow.

We expect to initiate this Phase 2 development work in the first quarter of 2023.

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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Activation of systemic immunity through local administration is intended to lead to the induction of anti-tumor immune responses leading to clinical response of tumors that have not themselves been injected.

Since our inception, we have devoted substantially all of our resources to developing our proprietary RPx platform, building our intellectual property portfolio, conducting research and development of our product candidates, business planning, raising capital and providing general and administrative support for our operations.

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

raising capital and providing general and administrative support for our operations.

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

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.

We do not have any products approved for sale and have not generated any revenue from product sales.

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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 1,973,997 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 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.

The Hercules Loan Agreement was subsequently amended on June 1, 2020, in order to, among other things, increase the secured term loan facility from $30.0 million to $40.0 million.

On December 15, 2020, we paid a total of $10.8 million, representing the outstanding principal, accrued and unpaid interest, fees, costs and expenses due and owing under the Hercules Loan Agreement and related loan documents, in repayment of all of our outstanding obligations thereunder, and thereby terminated the Hercules Loan Agreement and the related loan documents.

Since our inception, we have incurred significant operating losses.

Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our product candidates.

Our net losses were $29.7 million and $21.8 million for the three months ended December 31, 2021 and 2020, respectively, and $86.3 million and $59.4 million for the nine months ended December 31, 2021 and 2020, respectively.

As of December 31, 2021, we had an accumulated deficit of $279.5 million.

Our net losses were $42.3 million and $27.3 million for the three months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022, we had an accumulated deficit of $353.5 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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• 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.

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for RP1 or our other product candidates.

If we obtain regulatory approval for any of our product candidates and do not enter into a commercialization partnership in any jurisdiction, we expect to incur significant expenses related to developing our internal commercialization capability to support product sales, marketing, and distribution.

As a result, we will need additional funding to support our continuing operations and pursue our growth strategy.

Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, lines of credit, collaborations, strategic alliances, and marketing, distribution, or licensing arrangements.

We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all.

If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back, or discontinue the development and commercialization of one or more of our product candidates.

Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability.

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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 December 31, 2021, we had cash and cash equivalents and short-term investments of $420.2 million.

As of June 30, 2022, we had cash and cash equivalents and short-term investments of $395.1 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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The COVID-19 pandemic

We are continuing to monitor the global outbreak and spread of COVID-19, including evolving COVID-19 variants, most notably to date being the Delta variant and the Omicron variant, and have taken steps to identify and mitigate the adverse impacts on, and risks to, our business posed by its spread and actions taken by governmental and health authorities to address the COVID-19 pandemic.

For example, we have implemented a global work-from-home policy for certain employees who are able to perform their duties remotely.

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

We continue to evolve our work-from-home policies toward return-to-office policies, as applicable under the circumstances while following local, state and federal guidelines and safety practices.

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.

In addition, timing of patient enrollment and treatment in certain of our ongoing clinical studies has been, and may continue to be, impacted by the pandemic, which in turn has caused a delay to our development times for certain of our clinical trials.

For example, the enrollment of our clinical trial of RP1 in liver and kidney transplant patients with CSCC, representing highly immunocompromised patient populations, has been slower than expected for reasons we attribute to the COVID-19 pandemic.

Many of the clinical investigators with whom we work have encountered resource constraints, including limited labor resources, scheduling difficulties, and reduced access to equipment and supplies, which has impacted and may continue to impact the timely execution of their clinical studies, including our clinical studies being conducted at these sites.

We continue to evolve our business to be reactive and supportive to our clinical investigation site needs and work collaboratively to continue to advance our clinical trials.

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

We will continue to examine our protocols as the pandemic and health guidance evolves.

The COVID-19 pandemic We continues to affect 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.

In addition, timing of patient enrollment and treatment in certain of our ongoing clinical studies has been impacted by the pandemic.

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

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.

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

In addition, we 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 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, 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, supplies, industry and workforce.

For additional information, see “Risk Factors—Our financial condition and results of operations could be adversely affected by the coronavirus disease-2019, or COVID-19, outbreak.” in Part II, Item 1A of this Quarterly Report.

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• facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

These costs will be partially offset by our agreement with Regeneron related to our CERPASS trial.

These costs may be partially offset by cost-sharing arrangements under collaboration agreements from time to time.

We expense research and development costs as incurred.

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All non-employee costs associated with our manufacturing facility have been fully burdened to our RP1 program.

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

Three months ended December 31,

Nine months ended December 31,

(Amounts in thousands)

Direct research and development expenses by program:

RP1 $ 4,025 $ 6,737 $ 11,976 $ 20,185

RP2 3,639 1,263 10,426 2,143

RP3 362 — 877 —

Unallocated research and development expenses:

Personnel related (including stock-based compensation) 9,143 5,664 27,380 15,889

Other 2,184 658 7,150 2,312

Total research and development expenses $ 19,353 $ 14,322 $ 57,809 $ 40,529

Research and development activities are central to our business model.

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We may never succeed in obtaining regulatory approval for any of our product candidates.

General and administrative expenses

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance, corporate and business development and administrative functions.

General and administrative expenses also include professional fees for legal, patent, accounting, auditing, tax and consulting services;

travel expenses;

and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

We expect that our general and administrative expenses will increase in the future as we increase our general and administrative headcount to support our continued research and development and potential commercialization of our product candidates.

Selling, general and administrative expenses

Selling, general and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance, corporate, commercial and business development and administrative functions.

Selling, general and administrative expenses also include professional fees for legal, patent, accounting, auditing, tax and consulting services, pre-commercial planning, travel expenses, and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

We expect that our selling, general and administrative expenses will continue to increase in the future as we increase our selling, general and administrative headcount to support our continued research and development and pre-launch activities to prepare for potential commercialization of our product candidates.

We also expect to continue to incur increased expenses, including accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements;

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Interest expense on finance lease liability consists of amortization of finance charges under our financing lease.

Interest expense on debt obligations

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

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 December 31, 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 June 30, 2022, we have not recorded any income tax benefits for the net losses we incurred in each jurisdiction in which we operate, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss carryforwards will not be realized.

Results of operations

Comparison of the three months ended December 31, 2021 and 2020

The following chart summarizes our results of operations for the three months ended December 31, 2021 and 2020:

Comparison of the three months ended June 30, 2022 and 2021

The following chart summarizes our results of operations for the three months ended June 30, 2022 and 2021:

Three Months Ended

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Interest expense on finance lease liability (552) (558) 6

Loss on extinguishment of debt — (913) 913

Interest expense on debt obligations — (247) 247

Other (expense) income (2,019) (252) (1,767)

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Research and development expenses

Research and development expenses for the three months ended June 30, 2022 were $29.5 million, compared to $18.6 million for the three months ended June 30, 2021.

The following table summarizes our research and development expenses for the three months ended June 30, 2022 and 2021:

Three Months Ended

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Total research and development expenses $ 29,478 $ 18,554 $ 10,924

Research and development expenses for the three months ended December 31, 2021 were $19.4 million, compared to $14.3 million for the three months ended December 31, 2020.

The change in our direct 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 our clinical development and prepare for commercial launch.

Manufacturing continued to focus on RP2 and RP3 technology transfers during the three months ended December 31, 2021, as well as continued clinical trial development of these product candidates.

Furthermore, the increase of $5.0 million in our unallocated expenses was due primarily to a $3.5 million increase in personnel-related costs, including a $3.0 million increase in payroll and fringe benefits and a stock-based compensation increase of $0.4 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.

Personnel related costs for the three months ended December 31, 2021 and 2020 included stock-based compensation expense of $1.8 million and $1.5 million, respectively.

General and administrative expenses

General and administrative expenses were $10.3 million for the three months ended December 31, 2021, compared to $6.0 million for the three months ended December 31, 2020.

The increase of $4.4 million is primarily the result of an increase of $3.4 million in personnel related costs, including a stock-based compensation increase of $2.5 million, and an increase of $0.8 million in payroll and fringe benefits.

The increase in personnel related costs was driven by the continued hiring of additional personnel in our general and administrative functions, including the addition of commercial personnel associated with pre-launch commercial planning and initial build of the Company's commercial infrastructure, which accounts for approximately $0.5 million of the increase compared to prior year, as we expand our operations.

Total other income (expense), net

Other income (expense) was $24 thousand for the three months ended December 31, 2021, compared to $(1.5) million for the three months ended December 31, 2020.

The net change of $1.5 million is primarily attributable to a decrease in expense of $0.9 million as a result of a loss related to the extinguishment of debt in the prior year which did not recur in the current year, as well as a decrease in expense of $0.2 million as a result of interest expense on the aforementioned debt obligations in the prior year which did not recur during the current year.

Furthermore, there is a decrease in expense of $0.2 million in the current year compared to the prior year due to the changes in foreign exchange rates of the Great British Pound to United States Dollar.

Comparison of the nine months ended December 31, 2021 and 2020

The following chart summarizes our results of operations for the nine months ended December 31, 2021 and 2020:

Nine Months Ended

2021 2020 Change

(Amounts in thousands)

Operating expenses:

Research and development $ 57,809 $ 40,529 $ 17,280

General and administrative 28,517 17,242 11,275

Total operating expenses 86,326 57,771 28,555

Loss from operations (86,326) (57,771) (28,555)

Other income (expense):

Research and development incentives 2,246 1,991 255

Investment income 259 821 (562)

Interest expense on finance lease liability (1,670) (1,683) 13

Loss on extinguishment of debt — (913) 913

Interest expense on debt obligations — (817) 817

Other (expense) income (849) (999) 150

Total other income (expense), net (14) (1,600) 1,586

Net loss $ (86,340) $ (59,371) $ (26,969)

Research and development expenses

Nine Months Ended December 31,

2021 2020 Change

Direct research and development expenses by program:

RP1 11,976 20,185 (8,209)

RP2 10,426 2,143 8,283

RP3 877 — 877

Unallocated research and development expenses:

Personnel related (including stock-based compensation) 27,380 15,889 11,491

Other 7,150 2,312 4,838

Total research and development expenses $ 57,809 $ 40,529 $ 17,280

Research and development expenses for the nine months ended December 31, 2021 were $57.8 million, compared to $40.5 million for the nine months ended December 31, 2020.

The increase of $17.3 million was due primarily to an increase of approximately 16.3 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.

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 our clinical development and prepare for commercial launch.

Manufacturing continued to focus on the RP2 and RP3 technology transfer during the nine months ended December 31, 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 $11.5 million in personnel-related costs, including a $8.6 million increase in payroll and fringe benefits and a stock-based compensation increase of $2.8 million.

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

Personnel related costs for the nine months ended December 31, 2021 and 2020 included stock-based compensation expense of $6.5 million and $3.8 million, respectively.

General and administrative expenses

General and administrative expenses were $28.5 million for the nine months ended December 31, 2021, compared to $17.2 million for the nine months ended December 31, 2020.

The change in our direct research and development expenses between our product candidates is associated with technology transfer, process development, qualification and comparability of our in-house manufactured materials compared to our third-party manufactured materials in readiness for utilizing our product candidates made at our in-house manufacturing facility in our clinical development programs and preparation for potential commercial manufacture, if approved.

The increase in RP1 is primarily the result of an increase in our number of clinical trial sites and patient enrollment as compared to the prior year, and reduction of costs sharing in the CERPASS trial from Regeneron during the current period as discussed in Note 10 to the consolidated financial statements appearing elsewhere in this Quarterly Report.

During the three months ended June 30, 2022, manufacturing specifically focused on the technology transfers and process development from RP2 to RP3, which is the driver of the change in RP2 and RP3 program costs year over year.

The increase of $5.1 million in our unallocated expenses was due primarily to a $3.3 million increase in personnel-related costs, including a $3.1 million increase in payroll and fringe benefits and a stock-based compensation increase of $0.2 million.

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

Personnel related costs for the three months ended June 30, 2022 and 2021 included stock-based compensation expense of $2.6 million and $2.5 million, respectively.

Selling, general and administrative expenses

Selling, general and administrative expenses were $11.4 million for the three months ended June 30, 2022, compared to $8.8 million for the three months ended June 30, 2021.

The increase of $2.6 million is primarily the result of an increase of $1.4 million in personnel related costs, including a stock-based compensation increase of $0.8 million, and an increase of $0.6 million in payroll and fringe benefits.

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

Personnel related costs for the nine months ended December 31, 2021 and 2020 included stock-based compensation expense of $12.0 million and $4.6 million, respectively.

Total other income (expense), net

Other income (expense) was $(14) thousand for the nine months ended December 31, 2021, compared to $(1.6) million for the nine months ended December 31, 2020.

The net change of $1.6 million is primarily attributable to a decrease in expense of $0.9 million as a result of a loss related to the extinguishment of debt in the prior year which did not recur in the current year, as well as a decrease in expense of $0.8 million as a result of interest expense on the aforementioned debt obligations in the prior year which did not recur during the current year.

Additionally, there is an increase in income of $0.3 million in the current year compared to the prior year due to an increase in research and development incentives.

These were partially offset by a $0.6 million decrease in investment income as a result of declining market conditions, which have decreased the rate of return on investments during the first nine months of the year as compared to the prior year.

In addition, there is an increase of approximately $0.6 million related to outside services and external expenses related to commercial planning and initial commercial activities compared to prior year, as we expand our operations.

Total other (expense) income, net

Other (expense) income was $(1.4) million for the three months ended June 30, 2022, compared to $0.1 million for the three months ended June 30, 2021.

The net change of $1.4 million is primarily attributable to an increase in expense of $1.8 million in the current year compared to the prior year due to exchange rate fluctuations related to the changes in foreign exchange rates of the Great British Pound to the United States Dollar, specifically on intercompany and other non-functional currency transactions.

This increased expense is somewhat offset by an increase in investment income of approximately $0.3 million.

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 incurrence of debt.

Through December 31, 2021, we had received net 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 December 31, 2021, we had cash and cash equivalents and short-term investments of $420.2 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 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.

Under the 2019 Sales Agreement, and prior to its amendment in June 2020, we could sell from time to time, at our option, up to an aggregate of $75.0 million of shares of our common stock.

In June 2020, we amended the 2019 Sales Agreement to reduce

the aggregate offering amount thereunder from $75.0 million to $30.0 million.

We sold 287,559 shares of our common stock under the 2019 Sales Agreement for net proceeds of approximately $4.4 million.

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

In October 2020, we amended the 2020 Sales Agreement to reduce the aggregate offering amount thereunder from $75.0 million to $62.5 million.

We have not sold any shares of our common stock under the 2020 Sales Agreement.

Our incurrence of debt was conducted entirely under the Hercules Loan Agreement, as amended, pursuant to which we borrowed $10.0 million of a maximum of $40.0 million.

On December 15, 2020, we entered into a Payoff Letter with Hercules and paid a total of $10.8 million to Hercules in connection therewith, representing the outstanding principal, accrued and unpaid interest, fees, costs and expense due and owed to Hercules, thereby terminating the Hercules Loan Agreement and the related loan documents.

To date, we have financed our operations primarily with proceeds from the sale of equity securities and, to a lesser extent, proceeds from borrowing under a secured loan facility.

Through June 30, 2022, we had received net proceeds of $686.8 million through the sale of shares of common stock in public offerings and at-the-market offerings.

As of June 30, 2022, we had cash and cash equivalents and short-term investments of $395.1 million.

On June 23, 2022, in connection with our entry into a new sales agreement with the SVB Securities LLC, or the Agent, we and the Agent mutually agreed to terminate a previous sales agreement.

Under the new sales agreement, we may sell, from time to time, at our option, up to an aggregate of $100 million of shares of our common stock by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, or if authorized by us, in negotiated transactions or block trade, in each case, pursuant to a registration statement on Form S-3 filed by us with the Securities and Exchange Commission on June 23, 2022.

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

Nine Months Ended December 31, 2021

Three Months Ended June 30, 2022

(Amounts in thousands)

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Operating activities

During the nine months ended December 31, 2021, net cash used in operating activities was $59.6 million, primarily resulting from our net loss of $86.3 million, partially offset by non-cash charges of $21.9 million, primarily consisting of stock-based compensation expense of $18.5 million, and an increase in cash of $4.8 million related to changes in our operating assets and liabilities.

Changes in our operating assets and liabilities for the nine months ended December 31, 2021 consisted primarily of a $2.0 million increase in accrued expenses and other current liabilities, a net $1.8 million change in operating and financing right-of-use assets and lease liabilities, a $1.2 million increase in accounts payable and a $0.7 million decrease in research and development incentives receivable from the United Kingdom government due to the timing of vendor invoicing and payments, as well as a $0.9 million increase in prepaid expenses and other current assets.

During the nine months ended December 31, 2020, net cash used in operating activities was $45.3 million, primarily resulting from our net loss of $59.4 million and net cash used by changes in our operating assets and liabilities of $2.6 million, partially offset by non-cash charges of $11.5 million.

Changes in our operating assets and liabilities for the nine months ended December 31, 2020 consisted primarily of a $1.1 million decrease in research and development incentive receivables, partially from the United Kingdom government due to the timing and amount of our qualifying expenditures, $1.2 million increase in prepaid expenses and other current assets and $1.0 million decrease in accounts payable, partially offset by $1.9 million increase in accrued expenses and other current liabilities and $1.9 million net decrease related to ASC 842 (including changes in operating lease liabilities, operating lease, right-of-use asset and financing lease, right-of-use asset).

The changes in accounts payable were primarily due to the timing of vendor invoicing and payments.

During the three months ended June 30, 2022, net cash used in operating activities was $33.5 million, primarily resulting from our net loss of $42.3 million, partially offset by non-cash charges of $8.1 million, primarily consisting of stock-based compensation expense of $7.2 million, and an increase in cash of $0.7 million related to changes in our operating assets and liabilities.

Changes in our operating assets and liabilities for the three months ended June 30, 2022 consisted primarily of a $1.1 million decrease in accrued expenses and other current liabilities, a $0.9 million increase in accounts payable, a $0.9 million decrease in research and development incentives receivable from the United Kingdom government due to the timing and amount of our qualifying expenditures, a net $0.6 million change in operating and financing right-of-use assets and lease liabilities, and as well as a $1.2 million increase in prepaid expenses and other current assets.

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 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 and amount of our qualifying expenditures, 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.

Investing activities

During the nine months ended December 31, 2021, net cash provided by investing activities was $2.5 million, consisting of $196.3 million in proceeds from sales and maturities of short-term investments, partially offset by $192.5 million in purchases of available for sale securities and $1.2 million in purchases of property, plant and equipment.

During the nine months ended December 31, 2020, net cash used in investing activities was $62.5 million, consisting of $225.0 million in purchases of available for sale securities and $1.6 million in purchases of property, plant and equipment, partially offset by $164.1 million in proceeds from sales and maturities of short-term investments.

During the three months ended June 30, 2022, net cash provided by investing activities was $5.3 million, consisting of $67.0 million in proceeds from sales and maturities of short-term investments, partially offset by $60.6 million in purchases of available for sale securities and $1.1 million in purchases of property, plant and equipment.

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.

Financing Activities

During the nine months ended December 31, 2021, net cash provided by financing activities was $6.2 million, consisting primarily of $6.4 million in proceeds from the exercise of stock options.

During the nine months ended December 31, 2020, net cash provided by financing activities was $371.7 million, consisting of $286.1 million from the issuance of common stock, $91.7 million from the issuance of pre-funded warrants to purchase common stock, $4.9 million in proceeds from the exercise of stock options, partially offset by $10.0 million in debt payments under the Hercules Loan Agreement and $0.8 million of fees associated with the extinguishment of the obligations under the Hercules Loan Agreement.

Hercules Loan Agreement

On August 8, 2019 and as amended on June 1, 2020, we and certain of our affiliates entered into the Hercules Loan Agreement with Hercules, which provided for aggregate borrowings of up to $40.0 million in the form of term loans.

We borrowed $10.0 million at closing under the Hercules Loan Agreement in August 2019 and subject to the achievement of certain milestones, had the ability to borrow the unused $30.0 million available in three separate $10.0 million advances between October 1, 2020 and December 15, 2020, July 1, 2020 and June 30, 2021, and July 1, 2021 and December 15, 2021, respectively.

On December 15, 2020, we entered into a Payoff Letter with respect to the Hercules Loan Agreement.

Pursuant to the Payoff Letter, we paid a total of $10.8 million to Hercules, representing the outstanding principal, accrued and unpaid interest, fees, costs and expenses due and owed to Hercules under the Hercules Loan Agreement.

Upon the execution of the Payoff Letter, in repayment of all of our outstanding obligations thereunder, the Hercules Loan Agreement and the related loan documents were terminated.

Borrowings under the Hercules Loan Agreement bore interest at a rate per annum equal to 8.75%.

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

As of December 31, 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.

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

During the three months ended June 30, 2022, net cash provided by financing activities was $32.5 million, consisting primarily of $31.0 million from the issuance of common stock through ATM sales, as well as approximately $1.6 million in proceeds from the exercise of stock options.

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.

Funding requirements

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• conduct our current and future clinical trials with RP1, RP2 and RP3;

• further preclinical development of our platform;

• operate our own in-house manufacturing facility;

• further preclinical development of our RPx platform;

• operate, qualify and maintain our own in-house manufacturing facility;

• seek to identify and develop additional product candidates;

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As of December 31, 2021, we had cash and cash equivalents and short-term investments of $420.2 million.

We believe that our existing cash, cash equivalents and short-term investments as of December 31, 2021, will enable us to fund our operations into the second half of 2024, excluding any confirmatory trial required by the FDA or other regulatory body.

As of June 30, 2022, we had cash and cash equivalents and short-term investments of $395.1 million.

We believe that our existing cash, cash equivalents and short-term investments as of June 30, 2022, will enable us to fund our operations into the second half of calendar 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 nine months ended December 31, 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 three months ended June 30, 2022, 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, 2022, which was filed with the SEC on May 20, 2021.

Collaborations

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Pursuant to the agreement, BMS is providing to us, at no cost, nivolumab, its anti-PD-1 therapy, for use in combination with RP1 in our ongoing Phase 1/2 clinical trial.

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

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.

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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In May 2018, we entered into a Master Clinical Trial Collaboration and Supply Agreement with Regeneron Pharmaceuticals, Inc., or Regeneron.

Pursuant to the agreement we agreed to undertake one or more clinical trials with Regeneron for the administration of our product candidates in combination with cemiplimab, an anti-PD-1 therapy developed by Regeneron, across multiple solid tumor types, the first of which is our ongoing Phase 2 clinical trial testing RP1 in combination with cemiplimab versus cemiplimab alone in patients with CSCC.

Pursuant to the agreement we agreed to undertake one or more clinical trials with Regeneron for the administration of our product candidates in combination with cemiplimab, an anti-PD-1 therapy developed by Regeneron, across multiple solid tumor types, the first of which, agreed in June 2018, is our ongoing Phase 2 clinical trial testing RP1 in combination with cemiplimab versus cemiplimab alone in patients with CSCC.

Each clinical trial will be conducted pursuant to an agreed study plan which, among other things, will identify the name of the sponsor and which party will manage the particular study, and include the protocol, the budget and a schedule of clinical obligations.

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

Development costs of a particular clinical trial will be split equally.

Development costs of an agreed study plan will be split equally.

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 agreement contains representations, warranties, undertakings and indemnities customary for a transaction of this nature.

The agreement also contains certain time-based covenants that restrict us from entering into a third-party arrangement with respect to the use of our product candidates in combination with an anti-PD-1 therapy and that restrict Regeneron from entering into a third-party arrangement with respect to the use of cemiplimab in combination with an HSV-1 virus, in each case, for the treatment of a tumor type that is the subject of a clinical trial to which the covenants apply.

Unless otherwise mutually agreed in a future study plan, these covenants are only applicable to our ongoing Phase 2 clinical trial in CSCC, and expire upon the one-year anniversary of the commencement of the applicable study plan.

Unless otherwise mutually agreed in a future study plan, these covenants are only applicable to our ongoing Phase 2 clinical trial in CSCC.

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.

Critical accounting policies and significant judgments and estimates

Critical accounting policies and estimates

Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States.

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We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

We evaluate our estimates and assumptions on an ongoing basis.

We evaluate our

estimates and assumptions on an ongoing basis.

Our actual results may differ from these estimates under different assumptions or conditions.

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We classify stock-based compensation expense in our consolidated statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

Off-balance sheet arrangements

We did not have any off-balance sheet arrangements during the periods presented, and we do not currently have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Recently issued accounting pronouncements

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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