What changed in this filing

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Item 1. Financial Statements

2023-11-07 compared with 2023-08-03 · 167 added, 117 removed, 444 unchanged (39% of the section changed)

3 unchanged sentences

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

June 30, 2023 March 31, 2023

September 30, 2023 March 31, 2023

Current assets:

5 unchanged sentences

Property, plant and equipment, net 8,445 7,479

Restricted cash 1,636 1,636

Research and development incentives receivable, non-current 809 —

Restricted cash 1,636 1,636

Right-to-use asset - operating leases 4,882 5,208

16 unchanged sentences

Common stock, $ 0.001 par value;

150,000,000 shares authorized as of June 30, 2023 and March 31, 2023;

58,976,325 and 56,676,313 shares issued and outstanding as of June 30, 2023 and March 31, 2023, respectively

150,000,000 shares authorized as of September 30, 2023 and March 31, 2023;

59,059,343 and 56,676,313 shares issued and outstanding as of September 30, 2023 and March 31, 2023, respectively

Additional paid-in capital 1,054,712 1,034,994

7 unchanged sentences

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

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2023 2022 2023 2022

Operating expenses:

8 unchanged sentences

Interest expense on debt obligations ( 955 ) — ( 2,070 ) —

Other income (expense) 1,374 ( 2,019 )

Other (expense) income

( 1,409 ) ( 2,659 ) ( 35 ) ( 4,678 )

Total other income (expense), net 3,586 ( 1,523 ) 9,880 ( 2,900 )

Loss before income taxes $ ( 60,245 ) $ ( 43,102 ) $ ( 109,599 ) $ ( 85,355 )

Income tax provision 201 $ —

Income tax (benefit)

( 201 ) $ — $ — $ —

Net loss $ ( 60,044 ) $ ( 43,102 ) $ ( 109,599 ) $ ( 85,355 )

5 unchanged sentences

(Amounts in thousands)

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2023 2022 2023 2022

Net loss $ ( 60,044 ) $ ( 43,102 ) $ ( 109,599 ) $ ( 85,355 )

Other comprehensive loss:

Foreign currency translation (loss) gain ( 1,305 ) 1,737

Foreign currency translation gain

1,308 2,330 3 4,067

Net unrealized loss on short-term investments, net of tax of $ 0

20 unchanged sentences

Balances as of June 30, 2023 58,976,325 57 1,045,049 ( 535,043 ) 3,966 514,029

Balances as of

Foreign currency translation adjustment — — — — 1,308 1,308

Unrealized gain on short-term investments — — — — 214 214

Exercise of stock options 67,210 1 549 — — 550

Vesting of RSUs 15,808 1 — — — 1

Stock-based compensation expense — — 9,114 — — 9,114

Net loss — — — ( 60,044 ) — ( 60,044 )

Balances as of September 30, 2023 59,059,343 59 1,054,712 ( 595,087 ) 5,488 465,172

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

7 unchanged sentences

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

Issuance of common stock through ATM sales, net of offering costs 340,000 1 6,400 — — 6,401

Foreign currency translation adjustment — — — — 2,330 2,330

Unrealized gain on short-term investments — — — — 81 81

Exercise of stock options 88,252 — 1,108 — — 1,108

Vesting of RSUs 12,688 — —

Stock-based compensation expense — — 6,992 — — 6,992

Net loss — — — ( 43,102 ) — ( 43,102 )

Balances as of September 30, 2022 49,739,407 50 777,650 ( 396,559 ) 2,931 384,072

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

2 unchanged sentences

(Amounts in thousands)

Three Months Ended June 30,

Six Months Ended September 30,

Cash flows from operating activities:

14 unchanged sentences

Operating lease liabilities ( 290 ) ( 257 )

Other non-current liabilities 107 —

Net cash used in operating activities ( 92,178 ) ( 66,665 )

Cash flows from investing activities:

Purchases of property, plant and equipment ( 449 ) ( 1,068 )

Purchases of property, plant and equipment and software capitalization ( 2,203 ) ( 1,464 )

Purchase of short-term investments ( 281,246 ) ( 193,685 )

12 unchanged sentences

Cash paid during the period for interest 1,343 —

Cash paid for income taxes

Supplemental disclosure of non-cash investing and financing activities:

6 unchanged sentences

Replimune Group, Inc.

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

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

(the “Company”) is a clinical-stage biotechnology company with the mission to transform cancer treatment by pioneering the development of a novel portfolio of oncolytic immunotherapies.

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

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

10 unchanged sentences

The accompanying consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business.

The Company has incurred recurring losses since its inception, including net losses of $ 49.6 million and $ 42.3 million for the three months ended June 30, 2023 and 2022, respectively.

In addition, as of June 30, 2023, the Company had an accumulated deficit of $ 535.0 million.

The Company has incurred recurring losses since its inception, including net losses of $ 60.0 million and $ 43.1 million for the three months ended September 30, 2023 and 2022, respectively, and net losses of $ 109.6 million and $ 85.4 million for the six months ended September 30, 2023 and 2022, respectively.

In addition, as of September 30, 2023, the Company had an accumulated deficit of $ 595.1 million.

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

8 unchanged sentences

Unaudited interim financial information

The accompanying consolidated balance sheet as of June 30, 2023, the consolidated statements of operations, of comprehensive loss and of stockholders’ equity for the three months ended June 30, 2023 and 2022 and the consolidated statements of cash flows for the three months ended June 30, 2023 and 2022 are unaudited.

The unaudited interim consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the

opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of June 30, 2023 and the results of its operations for the three months ended June 30, 2023 and 2022 and its cash flows for the three months ended June 30, 2023 and 2022.

The financial data and other information disclosed in these consolidated notes related to the three months ended June 30, 2023 and 2022 are unaudited.

The results for the three months ended June 30, 2023 are not necessarily indicative of results to be expected for the year ending March 31, 2024, any other interim periods or any future year or period.

The accompanying consolidated balance sheet as of September 30, 2023, the consolidated statements of operations, of comprehensive loss and of stockholders’ equity for the three and six months ended September 30, 2023 and 2022 and the consolidated statements of cash flows for the six months ended September 30, 2023 and 2022 are unaudited.

The unaudited interim consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial

statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of September 30, 2023 and the results of its operations for the three and six months ended September 30, 2023 and 2022 and its cash flows for the six months ended September 30, 2023 and 2022.

The financial data and other information disclosed in these consolidated notes related to the three and six months ended September 30, 2023 and 2022 are unaudited.

The results for the three and six months ended September 30, 2023 are not necessarily indicative of results to be expected for the year ending March 31, 2024, any other interim periods or any future year or period.

The financial information included herein should be read in conjunction with the financial statements and notes in the Company's Annual Report on Form 10-K for the year ended March 31, 2023, which was filed with the Securities and Exchange Commission on May 18, 2023 (the "Annual Report").

During the three months ended June 30, 2023, there have been no changes to the Company’s significant accounting policies as described in the Annual Report, except as described below.

During the three and six months ended September 30, 2023, there have been no changes to the Company’s significant accounting policies as described in the Annual Report.

Fair value of financial assets and liabilities

1 unchanged sentence

Fair Value Measurements as of

June 30, 2023 Using:

September 30, 2023 Using:

Level 1 Level 2 Level 3 Total

1 unchanged sentence

Money market funds $ — $ 60,837 $ — $ 60,837

US Government Agency bonds — 15,928 — 15,928

Short-term investments

12 unchanged sentences

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

During the three months ended June 30, 2023 and 2022, there were no transfers between levels.

During the three and six months ended September 30, 2023 and 2022, there were no transfers between levels.

Valuation of cash equivalents and short-term investments

2 unchanged sentences

Treasury bonds were valued by the Company using quoted prices in active markets for similar securities, which represent a Level 2 measurement within the fair value hierarchy.

Cash equivalents consisted of money market funds and U.S.

Government Agency bonds at June 30, 2023 and money market funds at March 31, 2023.

Cash equivalents consisted of money market funds at September 30, 2023 and money market funds at March 31, 2023.

Short-term investments

As of June 30, 2023 and March 31, 2023, the Company's available-for-sale investments by type consisted of the following:

June 30, 2023

As of September 30, 2023 and March 31, 2023, the Company's available-for-sale investments by type consisted of the following:

September 30, 2023

cost Gross unrealized

9 unchanged sentences

Total $ 436,859 $ 264 $ ( 327 ) $ — $ 436,796

As of June 30, 2023, available-for-sale securities consisted of investments that mature within one year.

As of September 30, 2023, available-for-sale securities consisted of investments that mature within one year.

As of March 31, 2023, available-for-sale securities consisted of investments that mature within one year, with the exception of certain U.S.

3 unchanged sentences

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

June 30, 2023 March 31, 2023

September 30, 2023 March 31, 2023

Office equipment $ 1,397 $ 1,240

2 unchanged sentences

Leasehold improvements 1,842 1,706

Capitalized software 724 —

Construction in progress 1,447 783

2 unchanged sentences

Property, plant and equipment, net $ 8,445 $ 7,479

Depreciation expense was $ 621 and $ 620 for the three months ended June 30, 2023 and 2022, respectively.

Depreciation expense was $ 0.7 million and $ 1.3 million for the three and six months ended September 30, 2023 and $ 0.6 million and $ 1.2 million for the three and six months ended September 30, 2022, respectively.

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

1 unchanged sentence

Accrued expenses and other current liabilities consisted of the following:

June 30, 2023 March 31, 2023

September 30, 2023 March 31, 2023

Accrued research and development costs $ 19,945 $ 11,261

5 unchanged sentences

Pursuant to the Loan Agreement, the Company can borrow term loans in an aggregate maximum principal amount of up to $ 200.0 million under multiple tranches (the “Term Loan Facility”).

Under the Loan Agreement, the Company borrowed an initial amount of $ 30.0 million on the Closing Date, and at the Company's sole option, could draw down an additional $ 30.0 million on or prior to September 30, 2023, as well as additional term loan advances in an aggregate principal amount of up to $ 115.0 million during the term of the Term Loan Facility subject to achievement of specified performance milestones, and two additional term loan advances up to an aggregate principal amount of $ 25.0 million subject to certain terms and conditions, on or prior to the end of the interest-only period.

Under the Loan Agreement, the Company borrowed an initial amount of $ 30.0 million on the closing date, and at the Company's sole option, could have drawn, but did not draw, down an additional $ 30.0 million on or prior to September 30, 2023.

The Company can also draw as additional term loan advances in an aggregate principal amount of up to $ 115.0 million during the term of the Term Loan Facility subject to achievement of specified performance milestones, and two additional term loan advances up to an aggregate principal amount of $ 25.0 million subject to certain terms and conditions, on or prior to the end of the interest-only period.

The Company intends to use the proceeds of the Term Loan Facility for working capital and general corporate purposes.

The Loan Agreement was subsequently amended (the "Amendment") on June 28, 2023 and the agreement, as amended, states that the Company agrees to draw an initial term loan advance in an aggregate principal amount not less than $ 30.0 million, provided that the aggregate amount of the term loan advances made under tranche 1 do not exceed $ 30.0 million, which is a decrease of $ 30 million from the $ 60.0 million in the original Loan Agreement.

The total amount of the Loan Agreement, as well as the outstanding balance of the loan, is unchanged, but the option to borrow an additional $ 30.0 million is moved from tranche 1 to tranche 2.

Therefore, the amendment states that the Company can draw down an additional $ 45.0 million on or prior to December 31, 2023, which is an increase of $ 30.0 million from the $ 15.0 million in the original Loan Agreement for tranche 2.

The Loan Agreement was subsequently amended (the "Amendment") on June 28, 2023 pursuant to which the Company agreed to draw an initial term loan advance in an aggregate principal amount not less than $ 30.0 million, provided that the aggregate amount of the term loan advances made under tranche 1 do not exceed $ 30.0 million, which reflects a decrease of $ 30 million from the $ 60.0 million in the original Loan Agreement for tranche 1.

The total amount of the Loan Agreement, as well as the outstanding balance of the loan, is unchanged, but the option to borrow an additional $ 30.0 million moved from tranche 1 to tranche 2.

Therefore, the Amendment provides that the Company can draw down an additional $ 45.0 million on or prior to December 31, 2023, which includes the $ 30.0 million that was moved from tranche 1 to tranche 2, and the $ 15.0 million in the original Loan Agreement for tranche 2.

The impact of this amendment is not a modification, as it does not relate to outstanding debt, but is rather an amendment that provides for a future potential benefit.

There is no material impact to the financial statements.

There is no material impact to the financial statements as a result of the Amendment.

The Term Loan Facility will mature on October 1, 2027 (the “Maturity Date”).

4 unchanged sentences

After the interest-only payment period, borrowings under the Loan Agreement are repayable in equal monthly payments of principal and accrued interest until October 2027.

At the Company's option, the Company may prepay all or a portion of the outstanding borrowings, subject to a prepayment fee of 3.0 % of the principal amount if prepayment occurs during the 12 months following the Closing Date, 2.0 % after 12 months following the Closing Date but prior to 36 months following the Closing Date, and 1.0 % thereafter.

The Loan Agreement contains customary facility fees, events of default and representations, warranties and affirmative and negative covenants, including a financial covenant requiring us to maintain unrestricted cash in an amount not less than 35 % of the aggregate outstanding secured obligations under the Loan Agreement, in accounts subject to a control agreement in favor of the Agent (the “Unrestricted Cash”) at all times commencing on January 1, 2024.

At the Company's option, the Company may prepay all or a portion of the outstanding borrowings, subject to a prepayment fee of 3.0 % of the principal amount if prepayment had occurred during the 12 months following the closing date, 2.0 % after 12 months following the closing date but prior to 36 months following the closing date, and 1.0 % thereafter.

The Loan Agreement contains customary facility fees, events of default and representations, warranties and affirmative and negative covenants, including a financial covenant requiring the Company to maintain unrestricted cash in an amount not less than 35 % of the aggregate outstanding secured obligations under the Loan Agreement in accounts subject to a control agreement in favor of the Agent (the “Unrestricted Cash”) at all times commencing on January 1, 2024.

In addition, the Loan Agreement also contains a financial covenant that beginning on the later of (i) July 1, 2024 and (ii) the date on which the aggregate outstanding principal amount of the Term Loan Facility is equal to or greater than $ 100.0 million, the Company is required to satisfy one of the following requirements:

1 unchanged sentence

The Company paid a $ 0.5 million facility charge and incurred debt issuance costs of $ 1.5 million upon closing of the Loan Agreement.

The Loan Agreement also provides for a final payment, payable upon maturity or the repayment of the obligations in full or in part (on a pro rata basis), equal to 4.95 % of the aggregate principal amount of Term Loans advanced to the Borrower and repaid on such date, which is being accrued on the Company's consolidated balance sheet.

As of June 30, 2023 and March 31, 2023, the amount accrued for the final payment is $ 0.2 million.

The Loan Agreement also provides for a final payment, payable upon maturity or the repayment of the obligations in full or in part (on a pro rata basis), equal to 4.95 % of the aggregate principal amount of Term Loans advanced to the Company and repaid on such date, which is being accrued on the Company's consolidated balance sheet.

The amount accrued for the final payment is $ 0.3 million as of September 30, 2023 and $ 0.2 million as of March 31, 2023.

Unamortized debt issuance costs are recorded as a reduction of the carrying amount on the term loan and amortized as interest expense using the effective-interest method.

In addition, unamortized deferred financing costs related to the Company's right to borrow additional amounts from Hercules in the future were recorded in other assets and amortized to interest expense over the relevant draw period on a straight-line basis.

As a result of the Amendment, the Company recorded $ 0.1 million of the remaining unamortized deferred financing costs related to the Tranche 1 delayed draw to interest expense as of June 30, 2023.

Interest expense for the three months ended June 30, 2023 was $ 1.1 million.

The summary of obligations under the term loan as of June 30, 2023 and March 31, 2023 consisted of the following (in thousands):

June 30, 2023 March 31, 2023

As a result of the Amendment, the Company recorded $ 0.1 million of the remaining unamortized deferred financing costs related to the Tranche 1 delayed draw to interest expense as of September 30, 2023.

Interest expense for the three months and six months ended September 30, 2023 was $ 1.0 million and $ 2.1 million.

The summary of obligations under the term loan as of September 30, 2023 and March 31, 2023 consisted of the following (in thousands):

September 30, 2023 March 31, 2023

Principal loan balance $ 30,453 $ 30,222

3 unchanged sentences

Long term debt, net $ 29,161 $ 28,648

The annual principal payments due under the Loan Agreement as of June 30, 2023 and March 31, 2023 were as follows:

June 30, 2023 March 31, 2023

The annual principal payments due under the Loan Agreement as of September 30, 2023 and March 31, 2023 were as follows:

September 30, 2023 March 31, 2023

2027 13,438 13,438

3 unchanged sentences

8 Stockholders’ equity

As of June 30, 2023 and March 31, 2023, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue up to 150,000,000 shares of common stock, par value $ 0.001 per share.

The Company had reserved for common stock for the exercise of outstanding stock options and the vesting of restricted share units, the number of shares remaining available for grant under the Company’s 2018 Omnibus Incentive Compensation Plan and the Company’s Employee Stock Purchase Plan (see Note 10) and the exercise of the outstanding warrants to purchase shares of common stock as follows:

June 30, 2023 March 31, 2023

As of September 30, 2023 and March 31, 2023, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue up to 150,000,000 shares of common stock, par value $ 0.001 per share.

The Company had reserved for common stock for the exercise of outstanding stock options and the vesting of restricted stock units, the number of shares remaining available for grant under the Company’s 2018 Omnibus Incentive Compensation Plan and the Company’s Employee Stock Purchase Plan (see Note 10) and the exercise of the outstanding warrants to purchase shares of common stock as follows:

September 30, 2023 March 31, 2023

Stock options, issued and outstanding 9,155,387 7,454,828

6 unchanged sentences

Undesignated preferred stock

As of June 30, 2023, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue up to 10,000,000 shares of undesignated preferred stock, par value $ 0.001 per share.

There were no undesignated preferred shares issued or outstanding as of June 30, 2023.

As of September 30, 2023, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue up to 10,000,000 shares of undesignated preferred stock, par value $ 0.001 per share.

There were no undesignated preferred shares issued or outstanding as of September 30, 2023.

On August 11, 2020, the Company and the SVB Leerink LLC (the "Agent") entered into a sales agreement, which was subsequently amended on October 21, 2020 (as amended, the “2020 Sales Agreement”), pursuant to which the Company could sell, from time to time, at its option, up to an aggregate of $ 62.5 million of shares of the Company’s common stock, $ 0.001 par value per share, through the Agent, as the Company’s sales agent.

1 unchanged sentence

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

Under the 2022 Sales Agreement, the Company may sell, from time to time, at its option, up to an aggregate of $ 93.3 million of shares of the Company’s common stock, $ 0.001 par value per share (the “Shares”), through the Agent, as the Company’s sales agent.

Any Shares to be offered and sold under the 2022 Sales Agreement will be issued and sold (i) by methods deemed to be an “at the market offering” (“ATM”) as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, or if authorized by the Company, in negotiated transactions or block trades, and (ii) pursuant to a registration statement on Form S-3 filed by the Company with the Securities and Exchange Commission on June 23, 2022 for an offering of up to $ 400.0 million of various securities, including shares of the Company’s common stock, preferred stock, debt securities, warrants and/or units for sale to the public in one or more public offerings.

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

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

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

During the three months ended June 30, 2023, and 2022, the Company did not issue or sell any shares under the 2022 Sales Agreement.

During the year ended March 31, 2023, pursuant to the 2022 Sales Agreement, the Company issued and sold an aggregate of 340,000 shares of its common stock, resulting in gross proceeds of $ 6.7 million, before deducting fees of $ 0.3 million.

Under the 2022 Sales Agreement, the Company could sell, from time to time, at its option, up to an aggregate of $ 100.0 million of shares of the Company’s common stock, $ 0.001 par value per share, through the Agent, as the Company’s sales agent.

During the three and six months ended September 30, 2022, pursuant to the 2022 Sales Agreement, the Company issued and sold an aggregate of 340,000 shares of its common stock, resulting in gross proceeds of $ 6.7 million, before deducting fees of $ 0.3 million.

On August 3, 2023, the 2022 Sales Agreement was terminated by the execution by the Company and Leerink Partners LLC (formerly known as SVB Securities LLC) (the "Current Agent") of a new sales agreement (the "2023 Sales Agreement").

Under the 2023 Sales Agreement, the Company may sell, from time to time, at its option, up to an aggregate of $ 250.0 million of share of the Company's common stock, $ 0.001 par value shares (the "Shares"), through the Current Agent, as the Company's sales agent.

Any Shares to be offered and sold under the 2023 Sales Agreement will be issued and sold (i) by methods deemed to be an “at the market offering” (“ATM”) as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, or if authorized by the Company, in negotiated transactions or block trades, and (ii) pursuant to an automatically effective registration statement on Form S-3 filed by the Company with the Securities and Exchange Commission on August 3, 2023 for an offering of various securities, including shares of the Company’s common stock, preferred stock, debt securities, warrants and/or units for sale to the public in one or more public offerings.

Subject to the terms of the 2023 Sales Agreement, the Current Agent will use reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose).

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

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

During the three and six months ended September 30, 2023, the Company did not issue or sell any shares under the 2023 Sales Agreement.

The Company cannot provide any assurances that it will issue any additional Shares pursuant to the 2023 Sales Agreement.

Equity offerings

In November 2019, the Company completed a public offering of (a) 4,516,561 shares of the Company's common stock at a public offering price of $ 13.61 per share, inclusive of the underwriter's partially exercised 30-day option to purchase an additional 838,530 shares of the Company's common stock, and (b) pre-funded warrants to purchase 2,200,000 shares of the Company's common stock at a public offering price of $ 13.6099 per warrant.

The Company received aggregate net proceeds of approximately $ 85.6 million after deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $ 5.8 million.

In June 2020, the Company completed a public offering of (a) 3,478,261 shares of the Company’s common stock, inclusive of the June 2020 Underwriters fully exercised 30-day option to purchase 652,173 shares of the Company's common stock at a public offering price of $ 23.00 per share, and (b) pre-funded warrants to purchase 1,521,738 shares of the Company’s common stock at a public offering price of $ 22.9999 per warrant.

The Company received aggregate net proceeds of approximately $ 107.8 million after deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $ 7.2 million.

In October 2020, the Company completed a public offering of (a) 5,625,000 shares of the Company’s common stock, inclusive of the underwriters 30-day option to purchase up to an additional 937,500 shares of the Company’s common stock, at a public offering price of $ 40.00 per share and (b) pre-funded warrants to purchase 1,562,500 shares of the Company’s common stock at a public offering price of $ 39.9999 per warrant.

The Company received aggregate net proceeds of approximately $ 270.0 million after deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $ 17.5 million.

In December 2022, the Company completed a public offering of (a) 6,810,658 shares of the Company’s common stock, inclusive of the underwriters 30-day option to purchase up to an additional 1,436,172 shares of the Company’s common stock, at a public offering price of $ 23.50 per share and (b) pre-funded warrants to purchase 4,200,000 shares of the Company’s common stock at a public offering price of $ 23.4999 per warrant.

The Company received aggregate net proceeds of

approximately $ 242.6 million after deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $ 16.1 million.

The Company received aggregate net proceeds of approximately $ 242.6 million after deducting underwriting discounts, commissions and other offering expenses payable by the Company of approximately $ 16.1 million.

9 Pre-funded Warrants

2 unchanged sentences

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

The 7,561,583 shares of the Company's common stock underlying the above described pre-funded warrants, are not included in the number of issued and outstanding shares of the Company’s common stock outstanding as reported on the consolidated balance sheet, though they are included in the Company's annual pool increase calculation as well as the weighted average outstanding common stock in the calculation of basic and diluted net loss per share, as noted below in Note 11.

During the three months ended June 30, 2023, a holder of the Company's pre-funded warrants exercised 1,922,655 of its pre-funded warrants and the Company issued 1,922,655 shares of common stock.

The 7,561,583 shares of the Company's common stock underlying the above-described pre-funded warrants are not included in the number of issued and outstanding shares of the Company’s common stock outstanding as reported on the consolidated balance sheet, though they are included in the Company's annual pool increase calculation as well as the weighted average outstanding common stock in the calculation of basic and diluted net loss per share, as described below in Note 11.

During the six months ended September 30, 2023, a holder of the Company's pre-funded warrants exercised 1,922,655 of its pre-funded warrants and the Company issued 1,922,655 shares of common stock in exchange thereof.

10 Stock-based compensation

2 unchanged sentences

Three Months Ended

September 30, Six Months Ended

September 30,

2023 2022 2023 2022

Research and development $ 4,447 $ 2,529 $ 7,745 $ 5,143

1 unchanged sentence

$ 9,114 $ 6,992 $ 17,961 $ 14,186

The following table summarizes stock-based compensation expense by award type for the three months ended June 30, 2023 and 2022:

The following table summarizes stock-based compensation expense by award type for the three and six months ended September 30, 2023 and 2022:

Three Months Ended

September 30, Six Months Ended September 30,

2023 2022 2023 2022

Stock options $ 5,688 $ 4,845 $ 11,302 $ 10,004

12 unchanged sentences

Restricted stock awards and non-statutory stock options were granted under the 2017 Plan to employees, officers, members of the board of directors, advisors and consultants of the Company.

The maximum number of common shares that may be issued under the 2017 Plan was 2,659,885 , of which no ne remained available for future grants as of June 30, 2023.

The maximum number of common shares that may be issued under the 2017 Plan was 2,659,885 , of which no ne remained available for future grants as of September 30, 2023.

Shares with respect to which awards have expired, terminated, surrendered or cancelled under the 2017 Plan without having been fully exercised will be available for future awards under the 2018 Plan referenced below.

7 unchanged sentences

On April 1, 2023, the number of shares reserved for issuance under the 2018 Plan automatically increased by 2,646,422 shares pursuant to the terms of the 2018 Plan and based on total number of shares of common stock outstanding on March 31, 2023.

On April 1, 2022, the number of shares reserved for issuance under the 2018 Plan automatically increased by 2,104,915 shares pursuant to the terms of the 2018 Plan.

As of June 30, 2023, 2,148,050 shares remained available for future grants under the 2018 Plan.

As of September 30, 2023, 2,064,858 shares remained available for future grants under the 2018 Plan.

The 2015 Plan, the 2017 Plan and the 2018 Plan are administered by the board of directors or, at the discretion of the board of directors, by a committee of the board of directors.

10 unchanged sentences

In addition, as of the first trading day of each fiscal year during the term of the ESPP (excluding any extensions), an additional number of shares of the Company’s common stock equal to 1 % of the total number of shares outstanding on the last trading day in the immediately preceding fiscal year, which includes for these purposes, the 9,484,238 shares issuable upon exercise of those pre-funded warrants described in Note 9 to these consolidated financial statements, or 697,224 shares, whichever is less (or such lesser amount as determined by the Company’s board of directors) will be added to the number of shares authorized under the ESPP.

In accordance with the terms of the ESPP, on April 1, 2023 and 2022, the number of shares reserved for issuance under the ESPP automatically increased by 661,605 and 526,228 shares respectively, for a total of 2,738,208 shares reserved for the ESPP.

In accordance with the terms of the ESPP, on April 1, 2023, the number of shares reserved for issuance under the ESPP automatically increased by 661,605 , for a total of 2,738,208 shares reserved for the ESPP.

If the total number of shares of common stock to be purchased pursuant to outstanding purchase rights on any particular date exceed the number of shares then available for issuance under the ESPP, then the plan administrator will allocate the available shares pro-rata and refund any excess payroll deductions or other contributions to participants.

4 unchanged sentences

The inducement grant included a nonqualified stock option to purchase up to 125,000 shares of the Company's common stock, as well as a restricted stock unit grant representing 88,333 shares of the Company's common stock.

These stock option and restricted stock unit inducement grants have terms and conditions consistent with those set forth under the 2018 Plan and vest under the same respective vesting schedules as stock option and restricted stock unit awards granted under the 2018 Plan.

These stock option

and restricted stock unit inducement grants have terms and conditions consistent with those set forth under the 2018 Plan and vest under the same respective vesting schedules as stock option and restricted stock unit awards granted under the 2018 Plan.

The inducement grant is included in the stock option and RSU award tables below.

4 unchanged sentences

The inducement grant is included in the stock option and RSU award tables below.

In September 2023, the Company granted an equity award to a newly hired executive as a material inducement to enter into employment with the Company.

The grant constitutes an "employment inducement grant" in accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules and was issued outside of the 2018 Plan and each of the other stock incentive plans described above.

The inducement grant included a nonqualified stock option to purchase up to 125,000 shares of the Company's common stock, as well as a restricted stock unit grant representing 83,330 shares of the Company's common stock.

The inducement grant is included in the stock option and RSU award tables below.

Stock option valuation

8 unchanged sentences

Three Months Ended

September 30, Six Months Ended

September 30,

2023 2022 2023 2022

Risk-free interest rate 4.34 % 3.08 % 3.69 % 2.61 %

11 unchanged sentences

Cancelled ( 200,611 ) $ 24.73

Outstanding as of June 30, 2023 9,067,305 $ 17.35 6.94 $ 69,685

Options exercisable as of June 30, 2023 5,254,968 $ 15.03 5.77 $ 52,342

Options vested and expected to vest as of June 30, 2023 9,067,305 $ 17.35 6.94 $ 69,685

As of June 30, 2023, there was $ 49.6 million of unrecognized compensation cost related to unvested common stock options, which is expected to be recognized over a weighted average period of 2.7 years.

The weighted average grant-date fair value of stock options granted during the three months ended June 30, 2023 and 2022 was $ 12.09 and $ 12.15 , respectively.

The aggregate intrinsic value of stock options exercised during the three months ended June 30, 2023 was $ 0.5 million.

Outstanding as of September 30, 2023 9,155,387 $ 17.38 6.78 $ 27,858

Options exercisable as of September 30, 2023 5,400,346 $ 15.28 5.60 $ 26,556

Options vested and expected to vest as of September 30, 2023 9,155,387 $ 17.38 6.78 $ 27,858

As of September 30, 2023, there was $ 46.4 million of unrecognized compensation cost related to unvested common stock options, which is expected to be recognized over a weighted average period of 2.7 years.

The weighted average grant-date fair value of stock options granted during the six months ended September 30, 2023 and 2022 was $ 12.19 and $ 12.20 , respectively.

The aggregate intrinsic value of stock options exercised during the six months ended September 30, 2023 was $ 1.3 million.

Restricted stock units

A summary of the changes in the Company's RSUs during the three months ended June 30, 2023 is as follows:

A summary of the changes in the Company's RSUs during the three months ended September 30, 2023 is as follows:

Number of Restricted Shares Weighted

4 unchanged sentences

Cancelled ( 80,940 ) 21.70

Outstanding as of June 30, 2023 2,069,415 21.06

As of June 30, 2023, there was $ 40.3 million of unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted average period of 3.2 years.

Outstanding as of September 30, 2023 2,189,837 20.86

As of September 30, 2023, there was $ 39.4 million of unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted average period of 3.0 years.

11 Net loss per share

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

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2023 2022 2023 2022

Net loss $ ( 60,044 ) $ ( 43,102 ) $ ( 109,599 ) $ ( 85,355 )

5 unchanged sentences

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect:

Three Months Ended June 30,

Three and Six Months Ended September 30,

Options to purchase common stock 9,155,387 7,413,466

18 unchanged sentences

Pursuant to the agreement, the Company 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 tiral testing RP1 in combination with cemiplimab versus cemiplimab alone in patients with CSCC.

The first of which, agreed in June 2018, is our ongoing Phase 2 clinical trial testing RP1 in combination with cemiplimab versus cemiplimab alone in patients with CSCC.

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

12 unchanged sentences

The Company does not expect any further reimbursements from Regeneron related to the initial study plan of June 2018.

During the three months ended June 30, 2023 and 2022, the Company did not make any payments to Regeneron under the terms of the agreement.

The Company did not record any costs as an offset to research and development expenses during the three months ended June 30, 2023 and 2022.

During the three months ended June 30, 2023 and 2022, the Company received payments under the terms of the agreement from Regeneron of $ 0.0 million and $ 2.0 million, respectively.

No receivables from Regeneron were booked in connection with this agreement as of June 30, 2023 or March 31, 2023.

The Company did no t record any costs as an offset to research and development expenses during the six months ended September 30, 2023, and recorded $ 1.1 million during the six months ended September 30, 2022.

During the six months ended September 30, 2023 and 2022, the Company received payments under the terms of the agreement from Regeneron of $ 0.0 million and $ 2.0 million, respectively.

No receivables from Regeneron were booked in connection with this agreement as of September 30, 2023 or March 31, 2023.

13 Collaboration and other arrangements

In December 2022, the Company announced that it had entered into a Master Clinical Trial Collaboration and Supply Agreement with Roche in relation to its RP2 and RP3 programs in colorectal cancer, or CRC, and hepatocellular carcinoma, or HCC.

Under the agreement, the companies will collaborate in two 30 patient cohort signal finding studies in third-line, or 3L, CRC and two 15 patient cohort signal finding studies in second-line, or 2L, HCC.

Under the terms of the agreement, the companies will share costs and Roche will supply its currently approved drugs, atezolizumab and bevacizumab for 2L HCC and 3L CRC combined with RP3.

Roche will also supply atezolizumab and bevacizumab for 2L HCC and 3L CRC combined with RP2.

The Company has retained the responsibility of operating the clinical trials as well as retaining all the rights to the development and commercialization of the Company's product candidates.

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

The agreement with Roche is accounted for under ASC 808, Collaborative Arrangements (“ASC 808”), as both parties are active participants and each party pays its own compound costs and shares equally in development costs in accordance with and up to the amount in the agreed upon first study plan.

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

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

During the three and six months ended September 30, 2023 and 2022, the Company did not make any payments to Roche under the terms of the agreement.

The Company recorded $ 1.0 million and $ 1.7 million as an offset to research and development expenses during the three and six months ended September 30, 2023, respectively.

The Company did no t record any costs as an offset to research and development expenses during the three and six months ended September 30, 2022.

the six months ended September 30, 2023 and 2022, the Company received payments under the terms of the agreement from Roche of $ 0.9 million and $ 0.0 million , respectively.

As of September 30, 2023 and March 31, 2023, the Company recorded $ 1.7 million and $ 0.9 million as receivables from Roche in connection with this agreement, respectively.

In July 2023, the Company 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, the Company 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) the discontinuation of development of its clinical drug candidate;

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

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

In addition, the Company may terminate the agreement upon the inappropriate or unsafe use of the RP1 product candidate.

During the three and six months ended September 30, 2023, the Company did not make any payments to, or receive any payments from, Inctye under the terms of the agreement.

Additionally, no costs were recorded to research and development expenses during the three and six months ended September 30, 2023 related to this agreement.

In August 2023 the Company entered into a Settlement Agreement with Amgen and mutually agreed to terminate the Company's challenges to Amgen's patents.

In connection with the Settlement Agreement, the Company entered into a License and Covenant Agreement with Amgen in which the Company agreed to pay Amgen low single-digit royalty payments on net sales of its products that, but for the license, could be found to infringe a valid Amgen patent on a country-by-country and product-by-product basis.

14 Commitments and contingencies

The table below presents the lease-related costs which are included in the consolidated statements of operations for the three months ended June 30, 2023 and 2022:

Three Months Ended June 30,

The table below presents the lease-related costs which are included in the consolidated statements of operations for the three and six months ended September 30, 2023 and 2022:

Three Months Ended September 30, Six Months Ended September 30,

2023 2022 2023 2022

Finance lease costs:

3 unchanged sentences

Total lease cost $ 1,430 $ 1,409 $ 2,861 $ 2,827

The following table summarizes the classification of lease costs in the consolidated statement of operations for the three months ended June 30, 2023 and 2022 as follows:

Three Months Ended June 30,

The following table summarizes the classification of lease costs in the consolidated statement of operations for the three and six months ended September 30, 2023 and 2022 as follows:

Three Months Ended September 30, Six Months Ended September 30,

2023 2022 2023 2022

Finance Lease Costs

6 unchanged sentences

Total lease cost $ 1,430 $ 1,409 $ 2,861 $ 2,827

The following table summarizes the maturity of the Company's lease liabilities on an undiscounted cash flow basis and a reconciliation to the operating and financing lease liabilities recognized on its balance sheet as of June 30, 2023:

June 30, 2023

September 30, 2023

Operating leases Financing lease Total

2024 (remaining nine months) $ 848 $ 1,990 $ 2,838

2024 (remaining six months) $ 568 $ 1,335 $ 1,903

2025 1,143 2,718 3,861

6 unchanged sentences

Total lease liabilities $ 5,190 $ 26,387 $ 31,577

The following table provides lease disclosure as of June 30, 2023 and March 31, 2023:

June 30, 2023 March 31, 2023

The following table provides lease disclosure as of September 30, 2023 and March 31, 2023:

September 30, 2023 March 31, 2023

Right-to-use operating lease asset $ 4,882 $ 5,208

6 unchanged sentences

Total lease liabilities $ 31,577 $ 32,111

The following table provides lease disclosure for the three months ended June 30, 2023 and 2022:

Three Months Ended June 30,

The following table provides lease disclosure for the three months ended September 30, 2023 and 2022:

Six Months Ended September 30,

Other information

8 unchanged sentences

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

The variable lease costs and short-term lease costs were insignificant for the three months ended June 30, 2023 and 2022.

The variable lease costs and short-term lease costs were insignificant for the three and six months ended September 30, 2023 and 2022.

Manufacturing commitments

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

As of June 30, 2023 and March 31, 2023, the Company had committed to minimum payments under these arrangements totaling $ 0.9 million and $ 1.0 million, respectively.

As of September 30, 2023 and March 31, 2023, the Company had committed to minimum payments under these arrangements totaling $ 1.0 million and $ 1.0 million, respectively.

Indemnification agreements

3 unchanged sentences

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

The Company is not aware of any claims under indemnification arrangements, and therefore it has not accrued any liabilities related to such obligations in its consolidated financial statements as of June 30, 2023 or March 31, 2023.

Legal proceedings

1 unchanged sentence

15 Income taxes

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.

The income tax (benefit) for the three months ended September 30, 2023 was $( 0.2 ) million compared to $ 0.0 million for the three months ended September 30, 2022.

The income tax (benefit) booked during the three months ended September 30, 2023 directly offsets the income tax provision booked during the three months ended June 30, 2023 primarily due to a decrease in forecasted income in the United States.

The Company has not recorded any income tax provision (benefit) for the losses incurred based upon the weight of available evidence, that it is more likely than not that our losses will not be realized.

16 Geographic information

2 unchanged sentences

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

June 30, 2023 March 31, 2023

September 30, 2023 March 31, 2023

United States $ 6,559 $ 5,836

2 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 1. Financial Statements