What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-03 compared with 2022-08-04 · 115 added, 67 removed, 295 unchanged (38% of the section changed)

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We currently have three RPx product candidates in our development pipeline, RP1 (vusolimogene oderparepvec), our lead product candidate, RP2 and RP3.

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

Although our fiscal year ends March 31 st , our programs and program updates are reported on a calendar year basis.

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

We have completed 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.

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 enrolled 211 patients with locally advanced or metastatic CSCC who are naïve to anti-PD1 therapy.

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

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.

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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.

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, 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.

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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.

We recently reported that we have completed enrollment of the first 75 patients in this cohort of the IGNYTE trial and we continue to 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.

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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.

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.

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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.

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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.

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with additional signal finding studies intended to follow.

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

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

We expect to provide an update on our RP2 and RP3 programs before year-end 2022.

RP1, RP2 and RP3 are administered by direct injection into solid tumors, guided either visually or by ultrasound, computerized tomography, or CT, or other imaging methods.

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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 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.

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.

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Since our initial public offering, or IPO, on July 20, 2018, we have raised an aggregate of approximately $606.5 million in net proceeds to fund our operations, of which $101.2 million was from our IPO, $463.4 million was from three separate follow-on offerings, or the Public Offerings, that we closed in November 2019, June 2020 and October 2020, respectively, and $41.9 million was from at-the-market offerings.

We sold 7,407,936 shares of common stock in our IPO, an aggregate of 13,619,822 shares of our common stock and pre-funded warrants to purchase 5,284,238 shares of common stock in the Public Offerings, and 1,973,997 shares of common stock through our at-the-market facility.

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.

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 2,313,997 shares of common stock through our at-the-market facilities.

Our net losses were $43.1 million and $29.4 million for the three months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, we had an accumulated deficit of $396.6 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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• further preclinical development of our platform;

• operate our own in-house manufacturing facility;

• operate our in-house manufacturing facility;

• seek to identify and develop additional product candidates;

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• until our manufacturing facility is fully validated, continued limited manufacturing by third parties for clinical development;

• maintain, expand and protect our intellectual property portfolio;

• maintain, expand, protect and defend our intellectual property portfolio;

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

• acquire or in-license other drugs and technologies;

• acquire or in-license other drugs, technologies or intellectual property rights;

• 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.

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If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

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

As of September 30, 2022, we had cash and cash equivalents and short-term investments of $371.8 million.

We believe that our existing cash and cash equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements through at least 12 months from the issuance of the consolidated financial statements included in this Quarterly Report.

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The COVID-19 pandemic

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 are continuing to generally monitor the 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.

The COVID-19 pandemic 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 developing commercialization processes.

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

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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.

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

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

We expense research and development costs as incurred.

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• our ability to obtain and maintain patents, trade secret protection, and regulatory exclusivity, both in the United States and internationally;

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

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

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

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Other income (expense), net consists primarily of realized and unrealized foreign currency transaction gains and losses.

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.

Since our inception and through September 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 June 30, 2022 and 2021

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

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

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

Three Months Ended

September 30,

2022 2021 Change

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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:

Research and development expenses for the three months ended September 30, 2022 were $28.8 million, compared to $19.9 million for the three months ended September 30, 2021.

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

Three Months Ended

September 30,

2022 2021 Change

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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 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 $1.6 million 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 September 30, 2022, manufacturing increased its focused on the technology transfer and process development of RP3, which is the driver of the change in RP2 and RP3 program costs year over year.

The increase of $4.6 million in our unallocated expenses was due primarily to a $3.5 million increase in personnel-related costs, including a $3.2 million increase in payroll and fringe benefits and a stock-based compensation increase of $0.3 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.

Personnel related costs for the three months ended September 30, 2022 and 2021 included stock-based compensation expense of $2.5 million and $2.2 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.

Selling, general and administrative expenses were $12.7 million for the three months ended September 30, 2022, compared to $9.3 million for the three months ended September 30, 2021.

The increase of $3.4 million is primarily the result of an increase of $1.1 million in personnel related costs, including a stock-based compensation increase of $0.4 million, and an increase of $0.8 million in payroll and fringe benefits.

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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.

Other net expense was $1.5 million for the three months ended September 30, 2022, compared to $0.1 million for the three months ended September 30, 2021.

The net change of $1.4 million is primarily attributable to an increase in expense of $2.3 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 British Pound Sterling 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 $1.0 million.

Comparison of the six months ended September 30, 2022 and 2021

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

Six Months Ended

September 30,

2022 2021 Change

(Amounts in thousands)

Operating expenses:

Research and development $ 58,312 $ 38,456 $ 19,856

General and administrative 24,143 18,172 5,971

Total operating expenses 82,455 56,628 25,827

Loss from operations (82,455) (56,628) (25,827)

Other income (expense):

Research and development incentives 1,425 1,513 (88)

Investment income 1,455 172 1,283

Interest expense on finance lease liability (1,102) (1,115) 13

Other (expense) income (4,678) (608) (4,070)

Total other income (expense), net (2,900) (38) (2,862)

Net loss $ (85,355) $ (56,666) $ (28,689)

Research and development expenses

Six Months Ended September 30,

2022 2021 Change

Direct research and development expenses by program:

RP1 15,492 7,907 7,585

RP2 2,420 6,786 (4,366)

RP3 7,490 559 6,931

Unallocated research and development expenses:

Personnel related (including stock-based compensation) 25,000 18,238 6,762

Other 7,910 4,966 2,944

Total research and development expenses $ 58,312 $ 38,456 $ 19,856

Research and development expenses for the six months ended September 30, 2022 were $58.3 million, compared to $38.5 million for the six months ended September 30, 2021.

The increase of $19.9 million was due primarily to an increase of approximately $10.2 million in direct research costs related to our ongoing clinical trials for RP1, RP2 and RP3, as well as approximately $9.7 million in unallocated research and development costs.

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.

Furthermore, 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, as well as a $1.8 million reduction of cost sharing in the CERPASS trial from Regeneron during the six months ended September 30, 2022 as discussed in Note 10 to the consolidated financial statements appearing elsewhere in this Quarterly Report.

In addition, manufacturing continued to advance the RP2 and RP3 technology transfer and studies necessary to qualify the in-house manufactured RP2 and RP3 product candidates for use in clinical trials during the six months ended September 30, 2022, as well as continued clinical trial development of our product candidates.

The increase in unallocated research and development costs is mainly attributable to a $6.8 million increase in personnel-related costs, including a $6.3 million increase in payroll and fringe benefits and a stock-based compensation increase of $0.5 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 six months ended September 30, 2022 and 2021 included stock-based compensation expense of $5.1 million and $4.7 million, respectively.

Selling, general and administrative expenses

Selling, general and administrative expenses were $24.1 million for the six months ended September 30, 2022, compared to $18.2 million for the six months ended September 30, 2021.

The increase of $6.0 million is primarily the result of an increase of $2.5 million in personnel related costs, including a stock-based compensation increase of $1.2 million, and an increase of $1.4 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 six months ended September 30, 2022 and 2021 included stock-based compensation expense of $9.0 million and $7.9 million, respectively.

Total other (expense) income, net

Other net expense was $2.9 million for the six months ended September 30, 2022, compared to $37.8 thousand for the six months ended September 30, 2021.

The net change of $2.9 million is primarily driven by increases in expense of $4.1 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 British Pound Sterling to the United States Dollar, specifically on intercompany and other non-functional currency transactions.

This increase in expense is somewhat offset by an increase in investment income of approximately $1.3 million compared to the prior year.

Liquidity and capital resources

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations.

We have not yet commercialized any of our product candidates, which are in various phases of preclinical and clinical development, and we do not expect to generate revenue from sales of any products for the foreseeable future, if at all.

We have not yet commercialized any of our product candidates, which are

in various phases of preclinical and clinical development, and we do not expect to generate revenue from sales of any products for the foreseeable future, if at all.

Sources of liquidity

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

Through September 30, 2022, we had received net proceeds of $693.3 million through the sale of shares of common stock and warrants exercisable for common stock in public offerings and at-the-market offerings.

As of September 30, 2022, we had cash and cash equivalents and short-term investments of $371.8 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.

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

Three Months Ended June 30, 2022

Six Months Ended September 30, 2022

(Amounts in thousands)

Net cash used in operating activities $ (66,665) $ (41,275)

Net cash provided by (used in) investing activities 5,315 26,992

Net cash provided by investing activities 5,351 15,940

Net cash provided by financing activities 39,945 2,270

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Operating activities

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.

During the six months ended September 30, 2022, net cash used in operating activities was $66.7 million, primarily resulting from our net loss of $85.4 million, partially offset by non-cash charges of $15.3 million, primarily consisting of stock-based compensation expense of $14.2 million, and an increase in cash of $3.4 million related to changes in our operating assets and liabilities.

Changes in our operating assets and liabilities for the six months ended September 30, 2022 consisted primarily of a $2.8 million increase in accrued expenses and other current liabilities, a $1.4 million increase in research and development incentives receivable from the United Kingdom government due to the timing and amount of our qualifying expenditures, a net $1.2 million change in operating and financing right-of-use assets and lease liabilities, a $0.7 million increase in accounts payable, as well as a $0.2 million decrease in prepaid expenses and other current assets.

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

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

Investing activities

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.

During the six months ended September 30, 2022, net cash provided by investing activities was $5.4 million, consisting of $200.5 million in proceeds from sales and maturities of short-term investments, partially offset by $193.7 million in purchases of available for sale securities and $1.5 million in purchases of property, plant and equipment.

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

Financing Activities

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.

During the six months ended September 30, 2022, net cash provided by financing activities was $39.9 million, consisting primarily of $37.4 million from the issuance of common stock through sales under our at-the-market facilities, as well as approximately $2.7 million in proceeds from the exercise of stock options.

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

Funding requirements

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• further preclinical development of our RPx platform;

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

• operate, qualify and maintain our in-house manufacturing facility and qualify and maintain our product candidates made therein for use in our clinical trials;

• seek to identify and develop additional product candidates;

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• until our planned manufacturing facility is fully validated, continued limited manufacturing by third parties for clinical development.

• maintain, expand and protect our intellectual property portfolio;

• maintain, expand, protect and defend our intellectual property portfolio;

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

• acquire or in-license other drugs and technologies;

• acquire or in-license other drugs, technologies or third-party intellectual property;

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.

As of September 30, 2022, we had cash and cash equivalents and short-term investments of $371.8 million.

In addition, in October 2022, the Company completed a $200 million non-dilutive debt financing with Hercules Capital, Inc.

We believe that our existing cash, cash equivalents and short-term investments as of September 30, 2022, together with unrestricted proceeds available to be drawn under the Hercules Term Loan Facility, will enable us to fund our operations into calendar 2025, inclusive of the costs of funding commercial infrastructure and running a confirmatory clinical trial to support a potential filing for FDA approval in anti-PD1 failed melanoma under the accelerated approval pathway.

We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

Because of the numerous risks and uncertainties associated with the development of RP1 and other product candidates and programs, and because the extent to which we may enter into collaborations with third parties for development of our product candidates is unknown, we are unable to estimate the timing and amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates.

Refer to Note 13, subsequent events, of the "Notes to Condensed Consolidated Financial Statements" contained in Part I, Item I of this Quarterly Report on Form 10-Q for additional details of the agreement with Hercules.

expenses associated with completing the research and development of our product candidates.

Our future capital requirements will depend on many factors, including those described in this section and above under “—Operating expenses—Research and development expenses.”

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Contractual obligations and commitments

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.

During the three months ended September 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

In February 2018, we entered into a Clinical Trial Collaboration and Supply Agreement with Bristol-Myers Squibb Company, or BMS.

In February 2018, we entered into a Clinical Trial Collaboration and Supply Agreement with BMS.

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.

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.

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In April 2019, we entered into a separate agreement with BMS on terms similar to the terms set forth in the agreement described above, pursuant to which BMS will provide, at no cost to us, nivolumab for use in our Phase 1 clinical trial of RP2 in combination with nivolumab.

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

In May 2018, we entered into a Master Clinical Trial Collaboration and Supply Agreement with 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, agreed in June 2018, is our ongoing Phase 2 clinical trial testing RP1 in combination with cemiplimab versus cemiplimab alone in patients with CSCC.

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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.

As a result of this notice from, and the ongoing communications with, Regeneron, we have not recorded any cost-sharing reimbursements from Regeneron 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 since Regeneron informed us that Regeneron’s reimbursement of CERPASS study costs have completed.

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

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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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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