What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-08-03 compared with 2023-02-09 · 107 added, 142 removed, 290 unchanged (46% of the section changed)

14 unchanged sentences

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.

Our proprietary RPx platform is based on a novel, 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 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.

2 unchanged sentences

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 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.

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 establishing a major skin cancer franchise.

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.

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

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

The CERPASS protocol evaluates 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.

In February 2023, we received a response from the FDA following submission of our draft statistical analysis plan in September 2022, which raised a number of points and recommendations requiring further discussion.

We intend to respond promptly to the FDA’s points and recommendations and to engage in any necessary dialog to address the points raised.

Topline data from the CERPASS trial is now expected to be announced in Q3 2023, due primarily to the decision to trigger the primary analysis at 40 weeks from last patient in, or LPI, rather than the minimum follow up of 27 weeks post LPI in accordance with the statistical analysis plan.

This is to allow for responses to be documented and confirmed, including per protocol response confirmation biopsies to be taken, before central reviews take place.

This decision also took account of the time required to process patient data to and through central review.

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.

An additional 20 patients were also dosed with RP1 made at our in-house manufacturing facility.

The CERPASS protocol evaluates complete response, or CR rate, and overall response rate, or ORR, as its two independent 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.

As previously reported, we met with the FDA in the first quarter and discussed the rationale for the changes to the study design we made in 2020 reducing the study size from 240 to 180 patients and adding CR as a dual independent primary endpoint (the study subsequently over enrolled with 211 patients randomized, as reported in November 2022).

No changes were made to the protocol as a result of the meeting.

Topline data from the CERPASS trial is now expected to be announced in early Q4 2023, updated from Q3 2023, as a result of the independent review read rate tracking behind projections.

Assuming positive primary analysis data is generated, including demonstrating overall clinical benefit, we continue to expect to make a Biologics License Application submission for RP1 in Q1/Q2 2024, with the potential to combine the filings for both the CERPASS clinical trial and the IGNYTE anti-PD-1 failed melanoma cohort.

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.

8 unchanged sentences

The data snapshot based on investigator response showed a 20% CR rate and a 36% ORR with activity across all disease stages and strong durability.

In January, we competed target enrollment of 125 patients with patients in screening at that time continuing to be enrolled.

Enrollment is expected to complete this month with a final total study size of approximately 140 patients.

The primary analysis is expected in Q1 2024, 12 months after enrollment of the last patient.

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

In January 2023, we completed target enrollment of 125 patients with patients in screening at that time continuing to be enrolled.

We completed enrollment in this cohort in March 2023, ultimately enrolling 141 patients.

In June 2023, further updated data from the initial 75 patients was presented at the American Society of Clinical Oncology, or ASCO, showing RP1 combined with nivolumab continued to demonstrate deep and durable responses with a well-tolerated safety profile and no progression in responding patients since the prior data snapshot.

The updated data also showed overall response rate (ORR) of 37.4%, with clinically meaningful activity across the range of anti-PD1 failed cutaneous melanoma settings enrolled, including in patients with moderate-high tumor burden and visceral disease.

We remain on track to announce snapshot data for all patients (N=141) in Q4 2023 by which point all patients will have had at least 6 months follow up.

The data snapshot for all 141 patients with a minimum of 6 months follow-up will be evaluated for the potential to align a dual launch with CERPASS, assuming both indications for RP1 are timely approved, however, the per protocol primary analysis continues to be expected 12 months after enrollment of the last patient, March 2024.

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.

2 unchanged sentences

In March 2022, we reported initial data (N=12) 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, with a data update expected in Q3 2023 in at least 30 patients with a minimum of six months follow-up.

Recruitment remains ongoing, with a data update expected from the first 30 patients with at least 6 months follow up in early Q4 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 Q3 2023.

currently enrolling up to 65 patients in the ARTACUS trial to assess the safety and efficacy of RP1 in liver, kidney, heart, lung, and hematopoietic cell transplant patients transplant recipients with skin cancers.

Enrollment in this clinical trial had been impacted by COVID-19, as the patient population is severely immune-compromised and considered very high risk, however, more recently we have seen enrollment increase in the ARTACUS trial.

As reported at the American Transplant Congress (ATC) Meeting in June 2023, the data demonstrated an ORR of 27.3%, with all responders achieving confirmed CR.

RP1 monotherapy was well tolerated in these patients and the safety profile was similar to that observed in our other RP1 clinical trials in patients who are not immune suppressed.

No immune-mediated adverse events or evidence of allograft rejection were observed.

In addition to these ongoing trials with RP1, we are currently evaluating all strategic opportunities for RP1 in skin cancers, including the setting for the confirmatory clinical trial in melanoma which is expected to be required to support a potential accelerated approval of RP1 in anti-PD1 failed melanoma.

4 unchanged sentences

This clinical trial is also being conducted as part of our collaboration with BMS, under which BMS has granted us a non-exclusive, royalty-free license to, and will supply at no cost, nivolumab, for use in combination with RP2.

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.

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.

3 unchanged sentences

In December 2022, we reported that of 14 patients with uveal melanoma for which sufficient follow-up was available for assessment, 4 patients had achieved a response.

A data update from our RP2 expansion trial is expected in H2 2023.

In December 2020, we initiated dosing in a Phase 1 clinical trial designed to evaluate RP3 alone and combined with anti-PD-1 therapy in advanced solid tumor patients.

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.

More recently, at ASCO in June 2023, we reported 17 patients have received RP2 as monotherapy (N=3) or in combination with nivolumab (N=14), completing enrollment of uveal melanoma patients in the Phase 1b trial.

Four of the 14 evaluable patients had responded to treatment (28.6%), including metastatic tumors in the liver and bone.

The final three of 17 patients remained on treatment, but had insufficient follow-up data to determine response outcome as of the cut-off date.

Three of the four responses are ongoing at 9, 12 and 21 months, including for patients with liver and bone metastases, with the fourth patient having progressed at 15 months.

Enrollment continues in our clinical trial designed to evaluate RP3 alone and combined with anti-PD-1 therapy in advanced solid tumor patients, focusing on enrolling patients with gastro-intestinal cancers, breast cancer, lung cancer and head and neck cancer.

In December 2022, the Company presented data from its Phase 1 trial of RP3 in combination with nivolumab (N=5) in patients with multiple soft tissue sarcomas including in leiomyosarcoma, osteosarcoma, chondrosarcoma, and epithelioid sarcomas who have all failed standard of care.

At the data cut-off date, 3 of 5 patients had sufficient follow-up for response assessment, and all three were responding to therapy in settings with no viable alternative treatment option, indicating the potential utility of RP3 in treating this difficult to treat tumor type.

A data update from this RP3 trial is expected in H2 2023.

We are working 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:

Enrollment in the Phase 1 programs with both RP2 and RP3 are expected to materially complete in Q3 2023.

Any additional Phase 2 development programs not already announced which are driven by data from the full Phase 1 data and other opportunistic considerations are expected to be disclosed by year-end 2023.

We continue to plan for, and are initiating, our previously announced Phase 2 development program for RP2 and/or RP3.

As previously announced, our initial signal finding single arm Phase 2 clinical trials are planned in the following tumor types:

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

2 unchanged sentences

with additional studies in other tumor types intended to follow.

As we announced in December 2022, our signal finding studies in HCC and CRC are being developed in combination with atezolizumab and bevacizumab under a supply and cost share clinical collaboration arrangement with Roche.

In HCC we plan to conduct two signal finding cohorts of 30 patients.

The first cohort will enroll 1L patients treated with standard of care, or SOC, atezolizumab combined with bevacizumab and RP3, and the second cohort will enroll patients who have progressed on 1L immunotherapy (including atezolizumab/bevacizumab), and will be treated with atezolizumab combined with bevacizumab and RP3.

In CRC, we plan to conduct two signal finding cohorts of 30 patients.

The first cohort will enroll 3L patients to be treated with atezolizumab combined with bevacizumab and RP2 and the second cohort with atezolizumab and bevacizumab and RP3.

Replimune believes that data with both RP2 and RP3 in CRC will allow the comparative efficacy of RP2 and RP3 to be evaluated in a particularly difficult to treat patient population.

We are on track to initiate this Phase 2

development work around mid-year 2023.

In addition, the study in SCCHN will be conducted under our collaboration with BMS.

This study is intended to include two cohorts of patients, the first with locally advanced disease is planned to enroll approximately 100 patients randomized 1:1 to either SOC chemotherapy combined with radiation, or SOC combined with RP3 followed by adjuvant nivolumab, and the second cohort of approximately 30 patients with recurrent or metastatic SCCHN with low PD-L1 levels (CPS<20) who will be treated with chemotherapy, nivolumab and RP3.

Our signal finding studies in SCCHN are being developed in combination with nivolumab under our collaboration agreement with BMS.

– In CRC, we have initiated the clinical trial investigating two signal finding cohorts of 30 patients each in collaboration with Roche.

The first cohort will enroll 3L patients to be treated with atezolizumab combined with

bevacizumab and RP2 and the second cohort with atezolizumab and bevacizumab and RP3.

We believe that data with both RP2 and RP3 in CRC will allow the comparative efficacy of RP2 and RP3 to be evaluated in a particularly difficult to treat patient population.

– In HCC, two signal finding cohorts of 30 patients each will be enrolled in collaboration with Roche.

The first cohort will enroll 1L patients treated with SOC atezolizumab combined with bevacizumab and RP3, and the second cohort will enroll patients who have progressed on 1L immunotherapy (including atezolizumab/bevacizumab), and will be treated with atezolizumab combined with bevacizumab and RP3.

This clinical trial is expected to initiate this quarter.

– In SCCHN, the trial will be conducted under our collaboration with BMS.

The second, signal finding cohort, will enroll 30 patients with recurrent or metastatic SCCHN with low PD-L1 levels (CPS<20) who will be treated with chemotherapy, nivolumab and RP3.

Due to the global shortage of cisplatin and carboplatin, initiation of this study is currently on hold until sufficient supplies of these agents are available.

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.

7 unchanged sentences

We sold 7,407,936 shares of common stock in our IPO, an aggregate of 20,430,480 shares of our common stock and pre-funded warrants to purchase 9,484,238 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 $39.7 million and $29.7 million for the three months ended December 31, 2022 and 2021, respectively.

As of December 31, 2022, we had an accumulated deficit of $436.2 million.

Our net losses were $49.6 million and $42.3 million for the three months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, we had an accumulated deficit of $535.0 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.

15 unchanged sentences

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, 2022, we had cash and cash equivalents and short-term investments of $616.4 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.

As of June 30, 2023, we had cash and cash equivalents and short-term investments of $539.1 million.

Based on our current operating plan, w e 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.

See “—Liquidity and capital resources” and “Risk factors—Risks related to our financial position and need for additional capital.”

The COVID-19 pandemic

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 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.

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 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 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.

Components of our results of operations

16 unchanged sentences

Our direct external research and development expenses are tracked on a program-by-program basis and consist of costs, such as fees paid to consultants, contractors, CMOs, and CROs in connection with our preclinical and clinical development activities.

We do not allocate personnel costs, costs associated with our discovery efforts, laboratory supplies, and facilities, including depreciation or other indirect costs, to specific product development programs because these costs are deployed across multiple product development programs and, as such, are not separately classified.

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

We do not allocate personnel costs, costs associated with our discovery efforts, laboratory supplies or other indirect costs, to specific product development programs because these costs are deployed across multiple product development programs and, as such, are not separately classified.

Non-employee costs associated with our manufacturing facility including depreciation, amortization and facility costs are appropriately allocated to development programs based on the percentage of time spent per program.

Research and development activities are central to our business model.

41 unchanged sentences

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

Since our inception and through December 31, 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.

During the three months ended June 30, 2023 and 2022, the Company recorded no income tax benefits for the net operating losses incurred in the United Kingdom in each period due to its uncertainty of realizing a benefit from those items.

During the three months ended June 30, 2023, the Company recorded a tax expense of $0.2 million primarily related to the Company’s interest income in the United States, partially offset by discrete share-based compensation items.

The Company’s tax provision and the resulting effective tax rate for interim periods is determined based upon its estimated annual effective tax rate (“AETR”), adjusted for the effect of discrete items arising in that quarter.

The impact of such inclusions could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings or losses versus annual projections.

In each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual tax rate changes, a cumulative adjustment is made in that quarter.

For the three months ended June 30, 2023 and 2022, the Company excluded the United Kingdom from the calculation of the AETR as the Company anticipates an ordinary loss in this jurisdiction for which no tax benefit can be recognized.

The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets both in the United States and United Kingdom, which primarily consist of net operating loss carryforwards.

The Company has considered its history of cumulative net losses, estimated future taxable income and prudent and feasible tax planning strategies and has concluded that it is more likely than not that the Company will not realize the benefits of its deferred tax assets.

As a result, as of June 30, 2023 and March 31, 2023, the Company has recorded a full valuation allowance against its net deferred tax assets.

Results of operations

Comparison of the three months ended December 31, 2022 and 2021

The following chart summarizes our results of operations for the three months ended December 31, 2022 and 2021:

Comparison of the three months ended June 30, 2023 and 2022

The following chart summarizes our results of operations for the three months ended June 30, 2023 and 2022:

Three Months Ended

13 unchanged sentences

Total other income (expense), net 6,294 (1,377) 7,671

Loss before income taxes $ (49,354) $ (42,253) $ (7,101)

Income tax provision $ 201 $ — $ 201

Net loss $ (49,555) $ (42,253) $ (7,302)

Research and development expenses

Research and development expenses for the three months ended December 31, 2022 were $30.3 million, compared to $19.4 million for the three months ended December 31, 2021.

The following table summarizes our research and development expenses for the three months ended December 31, 2022 and 2021:

Research and development expenses for the three months ended June 30, 2023 were $40.4 million, compared to $29.5 million for the three months ended June 30, 2022.

The following table summarizes our research and development expenses for the three months ended June 30, 2023 and 2022:

Three Months Ended

8 unchanged sentences

Total research and development expenses $ 40,437 $ 29,478 $ 10,959

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 a reduction of $1.1 million of costs sharing in the CERPASS trial from Regeneron during the current period as discussed in Note 12 to the consolidated financial statements appearing elsewhere in this Quarterly Report.

During the three months ended December 31, 2022, manufacturing shifted focus from technology transfer and consistency batches for RP2 and RP3 to validation batches for RP1, which is the driver of the change in program costs year over year.

Additionally, during the quarter, the Company focused on RP1 drug substance batches and saw increased clinical development expenses, including primarily data management costs, CRO costs and investigator costs, related to preparation of primary data release and a potential BLA filing.

In addition, the changes in our direct research and development expenses between our product candidates is primarily associated with 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 of $6.3 million in our unallocated expenses was due to a $5.5 million increase in personnel-related costs and $0.8 million increase in other expenses.

1 unchanged sentence

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 December 31, 2022 and 2021 included stock-based compensation expense of $2.6 million and $1.8 million, respectively.

Furthermore, the change in other expenses is primarily driven by an increase of approximately $0.6 million in consulting costs across our platform and a $0.5 million increase in facility, depreciation and amortization costs.

Personnel related costs for the three months ended June 30, 2023 and 2022 included stock-based compensation expense of $3.3 million and $2.6 million, respectively.

Furthermore, the change in other expenses is primarily driven by an increase of approximately $0.3 million in consulting costs across our platform and a $0.3 million increase in medical affairs costs.

Selling, general and administrative expenses

Selling, general and administrative expenses were $11.4 million for the three months ended December 31, 2022, compared to $10.3 million for the three months ended December 31, 2021.

Selling, general and administrative expenses were $15.2 million for the three months ended June 30, 2023, compared to $11.4 million for the three months ended June 30, 2022.

The increase of $3.8 million is primarily the result of an increase of $2.8 million in personnel related costs, including a stock-based compensation increase of $1.0 million, and an increase of $1.8 million in payroll and fringe benefits.

The increase in personnel related costs was driven by the continued hiring of additional personnel in our selling, general and administrative functions, focusing on additional pre-launch planning and initial build of the Company's commercial infrastructure, which accounts for approximately $0.3 million of the increase.

Total other income (expense), net

Other net expense was $1.9 million for the three months ended December 31, 2022, compared to $24 thousand for the three months ended December 31, 2021.

The net change of $1.9 million is primarily attributable to an increase in investment income of $2.6 million as a result of higher interest rates during the quarter combined with increased securities in our portfolio quarter over quarter from the proceeds of the December 2022 stock offering, as well as a decrease in expense of $0.4 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 income is partially offset by an increase in interest expense of approximately $0.9 million on debt obligations related to the Hercules Loan Agreement which was entered into during the quarter.

Comparison of the nine months ended December 31, 2022 and 2021

The following chart summarizes our results of operations for the nine months ended December 31, 2022 and 2021:

Nine Months Ended

2022 2021 Change

(Amounts in thousands)

Operating expenses:

Research and development $ 88,573 $ 57,809 $ 30,764

Selling, general and administrative 35,512 28,517 6,995

Total operating expenses 124,085 86,326 37,759

Loss from operations (124,085) (86,326) (37,759)

Other income (expense):

Research and development incentives 2,032 2,246 (214)

Investment income 4,130 259 3,871

Interest expense on finance lease liability (1,650) (1,670) 20

Interest expense on debt obligations (941) — (941)

Other (expense) income (4,531) (849) (3,682)

Additionally, there is an increase of $1.3 million in other variable costs which is driven by approximately $0.9 million in external spend increases in building and preparation for sales and marketing programs, and market research.

Total other income (expense), net

Net loss $ (125,045) $ (86,340) $ (38,705)

Research and development expenses

Nine Months Ended

2022 2021 Change

Direct research and development expenses by program:

RP1 25,669 11,976 13,693

RP2 3,008 10,426 (7,418)

RP3 10,006 877 9,129

Unallocated research and development expenses:

Personnel related (including stock-based compensation) 38,048 27,380 10,668

Other 11,842 7,150 4,692

Total research and development expenses $ 88,573 $ 57,809 $ 30,764

Research and development expenses for the nine months ended December 31, 2022 were $88.6 million, compared to $57.8 million for the nine months ended December 31, 2021.

The increase of $30.8 million was due primarily to an increase of approximately $15.4 million in direct research costs related to our ongoing clinical trials for RP1, RP2 and RP3, as well as an additional $15.4 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 $3.7 million reduction of cost sharing in the CERPASS trial from Regeneron during the nine months ended December 31, 2022 as discussed in Note 12 to the consolidated financial statements appearing elsewhere in this Quarterly Report.

In addition, manufacturing focused on the advancement of 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 first two quarters, with a shifted focus to validation batches for RP1 during the third quarter, as well as continued clinical trial development of our product candidates during the nine months ended December 31, 2022.

The increase in unallocated research and development costs is mainly attributable to a $10.7 million increase in personnel-related costs, including a $9.4 million increase in payroll and fringe benefits and a stock-based compensation increase of $1.2 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, 2022 and 2021 included stock-based compensation expense of $7.7 million and $6.5 million, respectively.

In addition to the increase in personnel-related costs, other expenses increased by $4.7 million.

change is primarily due to an increase of $1.5 million in consulting costs across our platform, with remaining increases in costs related to facilities, depreciation and amortization, and general variable costs.

Selling, general and administrative expenses

Selling, general and administrative expenses were $35.5 million for the nine months ended December 31, 2022, compared to $28.5 million for the nine months ended December 31, 2021.

The increase of $7.0 million is primarily the result of an increase of $3.5 million in personnel related costs, including a stock-based compensation increase of $1.5 million, and an increase of $2.0 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, 2022 and 2021 included stock-based compensation expense of $13.5 million and $12.0 million, respectively.

Total other (expense) income, net

Other net expense was $0.9 million for the nine months ended December 31, 2022, compared to a net expense of $13.8 thousand for the nine months ended December 31, 2021.

The net change of $0.9 million is primarily driven by increases in expense of $3.7 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.

Additionally, there is a year over year increase in interest expense of approximately $0.9 million on debt obligations related to the Hercules Loan Agreement which was entered into during the third quarter This increase in expense is somewhat offset by an increase in investment income of approximately $3.9 million compared to the prior year.

Other net income was $6.3 million for the three months ended June 30, 2023, compared to a net expense of $1.4 million for the three months ended June 30, 2022.

The net change of $7.7 million is primarily attributable to an increase in investment income of $5.8 million as a result of higher interest rates during the quarter, as well as a decrease in expense of $3.4 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 income is partially offset by an increase in interest expense of approximately $1.1 million on debt obligations related to the Hercules Loan Agreement which we did not incur in the prior year.

Income tax provision

Income tax provision for the three months ended June 30, 2023 was $0.2 million compared to $0.0 million for the three months ended June 30, 2022.

The income tax provision is primarily attributable to related to the Company’s interest income in the United States, partially offset by discrete share-based compensation items.

Liquidity and capital resources

3 unchanged sentences

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 December 31, 2022, we had received net proceeds of $935.9 million through the sale of shares of common stock and warrants exercisable for common stock in public offerings and at-the-market offerings, as well as $30.0 million from our incurrence of debt under the term loan agreement with Hercules.

As of December 31, 2022, we had cash and cash equivalents and short-term investments of $616.4 million.

Through June 30, 2023, we had received net proceeds of $935.9 million through the sale of shares of common stock and warrants exercisable for common stock in public offerings and at-the-market offerings, as well as net $27.8 million from our incurrence of debt under the term loan agreement with Hercules.

As of June 30, 2023, we had cash and cash equivalents and short-term investments of $539.1 million.

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

Nine Months Ended December 31, 2022

Three Months Ended June 30, 2023

(Amounts in thousands)

5 unchanged sentences

Operating activities

During the nine months ended December 31, 2022, net cash used in operating activities was $95.3 million, primarily resulting from our net loss of $125.0 million, partially offset by non-cash charges of $21.6 million, primarily consisting of stock-based compensation expense of $21.2 million, and an increase in cash of $8.2 million related to changes in our operating assets and liabilities.

Changes in our operating assets and liabilities for the nine months ended December 31, 2022 consisted primarily of a $5.6 million increase in accrued expenses and other current liabilities, 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 $1.8 million change in operating and financing right-of-use assets and lease liabilities, a $0.4 million decrease in accounts payable, as well as a $0.4 million increase in prepaid expenses and other current assets.

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 an increase in non-cash charges of $21.9 million, primarily consisting of an increase in 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 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 and amount of our qualifying expenditures, as well as a $0.9 million increase in prepaid expenses and other current assets.

During the three months ended June 30, 2023, net cash used in operating activities was $48.6 million, primarily resulting from our net loss of $49.6 million, partially offset by non-cash charges of $4.3 million, which primarily consist of stock-based compensation expense of $8.8 million, and a decrease in cash of $3.4 million related to changes in our operating assets and liabilities.

Changes in our operating assets and liabilities for the three months ended June 30, 2023 consisted primarily of a $1.2 million decrease in accrued expenses and other current liabilities, a $1.6 million decrease in prepaid expenses and other current assets, a net $0.6 million change in operating and financing right-of-use assets and lease liabilities, a $0.8 million decrease in accounts payable, and a $0.4 million decrease in research and development incentives receivable from the United Kingdom government due to the timing and amount of our qualifying expenditures.

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.

Investing activities

During the nine months ended December 31, 2022, net cash used in investing activities was $119.8 million, consisting of $433.9 million in purchases of available for sale securities, partially offset by $316.2 million in proceeds from sales and maturities of short-term investments, and $2.0 million in purchases of property, plant and equipment.

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 three months ended June 30, 2023, net cash provided by investing activities was $7.4 million, consisting of $177.1 million in proceeds from sales and maturities of short-term investments, partially offset by $169.3 million in purchases of available for sale securities, and $0.4 million in purchases of property, plant and equipment.

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.

Financing Activities

During the nine months ended December 31, 2022, net cash provided by financing activities was $311.4 million, consisting primarily of $150.1 million in proceeds from the issuance of common stock, $92.8 million from the issuance of pre-funded warrants to purchase common stock, $37.4 million from the issuance of common stock through sales under our at-the-market facilities, $30.0 million in proceeds from the issuance of debt under the Hercules Loan Agreement, as well as approximately $3.2 million in proceeds from the exercise of stock options.

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

During the three months ended June 30, 2023, net cash provided by financing activities was $1.1 million, consisting primarily of $1.2 million in proceeds from the exercise of stock options.

During the Three Months Ended June 30, 2022, net cash provided by financing activities was $32.5 million, consisting of primarily $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.

Funding requirements

12 unchanged sentences

• add operational, financial and management information systems and personnel, including personnel to support our research and development programs, any future commercialization efforts and operations as a public company.

As of December 31, 2022, we had cash and cash equivalents and short-term investments of $616.4 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 December 31, 2022, together with unrestricted proceeds available to be drawn under the Hercules Term Loan Facility, will enable us to fund our operations into the second half of 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.

As of June 30, 2023, we had cash and cash equivalents and short-term investments of $539.1 million.

Based on our current operating plan, we believe that our existing cash, cash equivalents and short-term investments as of June 30, 2023, will enable us to fund operations into the second half of 2025.

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.

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

Our future capital requirements

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

Developing novel biopharmaceutical products, including conducting preclinical studies and clinical trials, is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval for any product candidates or generate revenue from the sale of any products for which we may obtain marketing approval.

9 unchanged sentences

Contractual obligations and commitments

During the three months ended December 31, 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 June 30, 2023, 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, 2023, which was filed with the SEC on May 18, 2023.

Collaborations

29 unchanged sentences

The agreement may be terminated by either party upon sixty (60) days prior written notice to the other party.

In July 2023, we entered into a Clinical Trial Collaboration and Supply Agreement with Incyte Corporation, or Incyte.

Under the agreement, the companies will collaborate in a signal finding study in which Incyte will initiate and sponsor a clinical trial of INCB99280 (oral PD-L1 inhibitor) and RP1 in approximately 40 patients with unresectable, high risk CSCC in the neoadjuvant setting.

Under the terms of the agreement, Replimune will supply Incyte with RP1 for the study and share costs of the study equally with Incyte.

The agreement may be terminated by either party upon (i) a material breach not reasonably cured within thirty (30) days;

(ii) by Replimune upon the inappropriate or unsafe use of the RP1 product candidate;

(iii) the discontinuation of development of its clinical drug candidate;

(iv) the unethical or illegal business practices of the other party;

or (v) if the parties have not agreed on the protocol or budget within ninety (90) days of the effective date of the agreement.

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.

The preparation of our consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements.

and liabilities in our consolidated financial statements.

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.

20 unchanged sentences

If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly.

Although we do not expect our estimates to be materially different from amounts actually

incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.

Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.

To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.

16 unchanged sentences

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