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Item 2. Management’s Discussion and Analysis

2024-11-12 compared with 2024-08-08 · 115 added, 64 removed, 304 unchanged (37% of the section changed)

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We are a clinical-stage biotechnology company committed to applying our leading expertise in the field of oncolytic immunotherapy to transform the lives of cancer patients through our novel oncolytic immunotherapies.

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

Our proprietary oncolytic immunotherapy product candidates are intended to maximally activate the immune system against cancer.

Oncolytic immunotherapy is an emerging drug class, which we intend to establish as the second cornerstone of immune-based cancer treatments, alongside checkpoint blockade.

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

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 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.

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Our leading clinical trial of RP1 is our IGNYTE trial, a multi-cohort Phase 1/2 clinical trial being conducted in 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.

The leading tumor specific cohort in the IGNYTE trial is our registration directed Phase 2 expansion cohort enrolling patients with anti-PD-1 failed cutaneous melanoma who are being treated with RP1 in combination with nivolumab.

The leading tumor

specific cohort in the IGNYTE trial is our registration directed Phase 2 expansion cohort enrolling patients with anti-PD-1 failed cutaneous melanoma who are being treated with RP1 in combination with nivolumab.

The anti-PD1 failed melanoma cohort from the IGNYTE clinical trial includes 140 patients who received RP1 plus nivolumab after confirmed progression while being treated with at least 8 weeks of prior anti-PD1 therapy (+/- anti-CTLA-4).

The primary analysis by independent central review was triggered once all patients had been followed for at least 12 months.

The topline results showed the overall response rate was 33.6% by modified RECIST 1.1 criteria, the primary endpoint as defined in the protocol, and 32.9% by RECIST 1.1 criteria, an additional analysis requested by the U.S.

The topline results showed the overall response rate, or ORR, was 33.6% by modified RECIST 1.1 criteria, the primary endpoint as defined in the protocol, and 32.9% by RECIST 1.1 criteria, an additional analysis requested by the U.S.

Food and Drug Administration, or FDA.

Responses from baseline were highly durable, with all responses lasting more than 6 months and median duration of response exceeding 35 months.

Responses from baseline were highly durable with 85% of responses lasting more than 12 months.

The median duration of response from baseline was 27.6 months and the median duration of response from treatment initiation was 21.6 months.

RP1 combined with nivolumab continues to be well-tolerated, with mainly Grade 1-2 “on target” side effects, observed.

The Company plans to submit the full primary analysis data from the anti-PD1 failed melanoma cohort including key secondary endpoint data and subgroups for presentation at an upcoming medical congress.

Following a Type C meeting with the FDA, a confirmatory study design concept consisting of a 2-arm randomized trial with physician’s choice of treatment as a comparator arm in anti-PD1 failed melanoma patients was agreed.

The FDA requested that the Phase 3 confirmatory trial be underway at the time of a BLA submission under the accelerated approval pathway.

In September 2024, we presented the independently reviewed data from the IGNYTE clinical trial, including key secondary endpoints and subgroup analyses as a late-breaking abstract during an oral session at the European Society for Medical Oncology, or ESMO.

Data presented at ESMO showed activity across all subgroups, including patients who had prior anti-PD1 and anti-CTLA-4 treatment had an ORR of 27.7% and patients who had primary resistance to anti-PD1 had an ORR of 35.9% by modified RECIST v1.1.

The FDA requested that the Phase 3 confirmatory IGNYTE-3 trial be underway at the time of a BLA submission under the accelerated approval pathway.

In May 2024, we reported completing a successful Type C meeting with the FDA that confirmed alignment on our Chemistry, Manufacturing and Controls, or CMC, plans to support an IGNYTE anti-PD1 failed melanoma BLA submission.

A pre-BLA meeting with the FDA is planned for September 2024 and a BLA submission for RP1 in combination with nivolumab in anti-PD1 failed melanoma is planned for the second half of 2024.

In August 2024, we announced the dosing of the first patient in our IGNYTE-3 trial and in September 2024, we announced completion of a successful pre-BLA meeting with the FDA that supports our plans to submit a BLA for RP1 for the treatment of anti-PD1 failed melanoma under the accelerated approval pathway before the end of the year.

In our non-melanoma skin cancer, or NMSC, cohort of the IGNYTE clinical trial, we provided a data update in December 2023 from the first 30 patients with at least 6 months of follow up including patients with cutaneous squamous cell carcinoma, or CSCC, Merkel cell carcinoma, or MCC, basal cell carcinoma, and angiosarcoma in this cohort.

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The median DOR at the data cutoff was 11.47 months (range of 2.78 to 21.22 with responses ongoing).

Nearly all patients (15 of 17, or 88.2%) in the study had progressed on or after immunotherapy with

12 of 17 patients (70.6%) having previously received both anti-PD1 and anti-CTLA-4 therapies, including four of the responding patients.

Nearly all patients (15 of 17, or 88.2%) in the study had progressed on or after immunotherapy with 12 of 17 patients (70.6%) having previously received both anti-PD1 and anti-CTLA-4 therapies, including four of the responding patients.

RP2 was generally well tolerated both as monotherapy and in combination with nivolumab with no additive adverse events observed.

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In June 2024, we presented that the disease control rate for this cohort of patients was 58.8%.

We have finalized the protocol based on FDA input and begun trial initiation activities for a registration-directed study of RP2 in metastatic uveal melanoma in patients who are immune checkpoints inhibitor-naïve.

We are initiating our registration-directed study of RP2 in metastatic uveal melanoma in patients who are immune checkpoints inhibitor-naïve.

The study is a randomized trial of RP2 in combination with nivolumab vs.

ipilimumab and nivolumab, or nivolumab for those ineligible for ipilimumab.

ipilimumab and nivolumab, or nivolumab for those ineligible for ipilimumab and we anticipate dosing initiation in the first quarter of 2025.

The Company continues its signal finding trial of RP2 in combination with atezolizumab and bevacizumab in the 2L setting of patients with hepatocellular carcinoma (HCC) in collaboration with Roche.

This Phase 2 clinical trial is expected to dose its first patient in the second half of 2024.

This Phase 2 clinical trial is currently open for enrollment and is actively screening patients.

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

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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, 5,668,937 shares of our common stock and pre-funded warrants to purchase 5,669,578 shares of common stock through our private investment in a public entity in June 2024, and 2,313,997 shares of common stock through our at-the-market facilities.

Our net losses were $53.8 million and $49.6 million for the three months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, we had an accumulated deficit of $755.1 million.

Our net losses were $53.1 million and $60.0 million for the three months ended September 30, 2024 and 2023, respectively and $106.8 million and $109.6 million for the six months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, we had an accumulated deficit of $808.1 million.

These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations.

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

As of June 30, 2024, we had cash and cash equivalents and short-term investments of $469.1 million.

As of September 30, 2024, we had cash and cash equivalents and short-term investments of $432.1 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.

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

During the three months ended June 30, 2024 and 2023, 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 and six months ended September 30, 2024 and 2023, 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.

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.

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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, 2024 and 2023, 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.

For the six months ended September 30, 2024 and 2023, 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, 2024 and March 31, 2024, the Company has recorded a full valuation allowance against its net deferred tax assets.

As a result, as of September 30, 2024 and March 31, 2024, the Company has recorded a full valuation allowance against its net deferred tax assets.

Results of operations

Comparison of the three months ended June 30, 2024 and 2023

The following chart summarizes our results of operations for the three months ended June 30, 2024 and 2023:

Comparison of the three months ended September 30, 2024 and 2023

The following chart summarizes our results of operations for the three months ended September 30, 2024 and 2023:

Three Months Ended

September 30,

2024 2023 Change

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Interest expense on debt obligations (1,438) (955) (483)

Other income 406 1,374 (968)

Other income (expense) 2,028 (1,409) 3,437

Total other income (expense), net 5,861 3,586 2,275

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Research and development expenses

Research and development expenses for the three months ended June 30, 2024 were $43.0 million, compared to $40.4 million for the three months ended June 30, 2023.

The following table summarizes our research and development expenses for the three months ended June 30, 2024 and 2023:

Research and development expenses for the three months ended September 30, 2024 were $43.4 million, compared to $49.1 million for the three months ended September 30, 2023.

The following table summarizes our research and development expenses for the three months ended September 30, 2024 and 2023:

Three Months Ended

September 30,

2024 2023 Change

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Total research and development expenses $ 43,448 $ 49,101 $ (5,653)

The total increase of $2.5 million was driven by an increase of approximately $5.0 million in our unallocated expenses, including $3.8 million in personnel-related costs and $1.3 million in other costs.

The increase in personnel-related costs is attributable to a $2.8 million increase in payroll and fringe benefits and a stock-based compensation increase of $0.9 million.

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

Personnel related costs for the three months ended June 30, 2024 and 2023 included stock-based compensation expense of $4.2 million and $3.3 million, respectively.

Furthermore, other costs increased primarily as a result of increased facility costs, consultants and other variable costs.

The overall decrease of $2.5 million in direct research costs is a result of the Company's reprioritization spending during the first quarter of the fiscal year.

The overall decrease of $5.7 million in total research and development expenses was driven by a decrease of $9.4 million in direct research costs as a result of the wind down of the CERPASS and IGNYTE phase II studies, as well as the Company's reprioritization spending during the first half of the fiscal year.

More specifically, the decrease of $5.3 million in costs related to RP1 is the result of decreased enrollment as patients come off the CERPASS and IGNYTE phase II studies, whereas the Company has not yet ramped up costs for IGNYTE phase III.

The decrease of $3.0 million in costs related to RP3 is a reflection of the deprioritization of development efforts on this product candidate, which the Company began to taper in the second half of the prior fiscal year.

Spending for RP1 and RP2 remained relatively consistent during the first quarter, as the Company continued preparations for the primary data analysis and readout for the anti-PD-1 failed melanoma cohort of the IGNYTE trial and preparations for a potential BLA submission for this cohort in the second half of 2024.

Spending for RP2 decreased by approximately $1.1 million primarily as a result of allocated costs which were focused on both RP1 and RP2 in the prior year that are not allocated directly to trials in the current year, as the manufacturing team was focused on pre-approval inspections and BLA preparedness.

Moreover, the increase of approximately $3.7 million in our unallocated expenses is driven by a $3.6 million increase in other costs attributable to increased facility costs, consultants and medical affairs, some of which were previously allocated to RP1 and RP2.

As noted above, during the second quarter, these costs were not allocated directly to trials, as the manufacturing team was focused on pre-approval inspections and BLA preparedness.

Selling, general and administrative expenses

Selling, general and administrative expenses were $14.4 million for the three months ended June 30, 2024, compared to $15.2 million for the three months ended June 30, 2023.

The decrease of $0.8 million is primarily the result of a decrease of $0.8 million in personnel related costs, including a decrease of $0.5 million in payroll and fringe benefits and $0.3 million in stock compensation.

The decrease in personnel related costs during the quarter was driven by a slower hiring process as the Company was reprioritizing spending and managing the cash runway, coupled with lower stock prices decreasing stock-based compensation on a year over year basis.

Selling, general and administrative expenses were $15.5 million for the three months ended September 30, 2024, compared to $14.7 million for the three months ended September 30, 2023.

The increase of $0.7 million is primarily the result of an increase of $0.5 million in personnel related costs, including an increase of $0.6 million in payroll and fringe benefits, slightly offset by a $0.1 million decrease in stock compensation.

The increase in personnel related costs during the quarter was driven by additional hiring in our selling, general and administrative functions, focusing on additional pre-launch planning and initial build of the Company's commercial infrastructure.

Total other income (expense), net

Other income (expense), net was $3.6 million for the three months ended June 30, 2024, compared to a net income of $6.3 million for the three months ended June 30, 2023.

The net change of $2.7 million is primarily attributable to an decrease in investment income of $1.5 million as a result of a lower investment balance year over year , as well as an increase in expense of $1.0 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.

Other income (expense), net was $5.9 million for the three months ended September 30, 2024, compared to a net income of $3.6 million for the three months ended September 30, 2023.

The net change of $2.3 million is primarily attributable to a decrease in expense of $3.4 million in the current quarter 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 is somewhat offset by a decrease in investment income of approximately $0.7 million as a result of a lower investment balance year over year.

Income tax provision

The income tax provision for the three months ended June 30, 2024 and June 30, 2023, was $0.0 million and $0.2 million, respectively.

There was no income tax provision booked during the three months ended June 30, 2024 as a result of a forecasted U.S.

The income tax provision for the three months ended September 30, 2024 and September 30, 2023, was $0.0 million and $(0.2) million, respectively.

There was no income tax provision booked during the three months ended September 30, 2024 as a result of a forecasted U.S.

loss for the year.

The income tax provision booked for the three months ended June 30, 2023 was primarily due to forecasted U.S.

The income tax provision booked for the three months ended September 30, 2023 was primarily due to forecasted U.S.

taxable income for the year that was not fully offset by available net operating loss carryforwards.

Comparison of the six months ended September 30, 2024 and 2023

The following chart summarizes our results of operations for the six months ended September 30, 2024 and 2023:

Six Months Ended

September 30,

2024 2023 Change

(Amounts in thousands)

Operating expenses:

Research and development $ 86,420 $ 89,538 $ (3,118)

Selling, general and administrative 29,863 $ 29,941 (78)

Total operating expenses 116,283 119,479 (3,196)

Loss from operations (116,283) (119,479) 3,196

Other income (expense):

Research and development incentives 846 836 10

Investment income 10,106 12,235 (2,129)

Interest expense on finance lease liability (1,065) (1,086) 21

Interest expense on debt obligations (2,864) (2,070) (794)

Other income (expense) 2,433 (35) 2,468

Total other income (expense), net 9,456 9,880 (424)

Net loss $ (106,827) $ (109,599) $ 2,772

Research and development expenses

Research and development expenses for the six months ended September 30, 2024 were $86,420, compared to $89.5 million for the six months ended September 30, 2023.

The following table summarizes our research and development expenses for the six months ended September 30, 2024 and 2023:

Six Months Ended September 30,

2024 2023 Change

Direct research and development expenses by program:

RP1 23,010 28,919 (5,909)

RP2 3,913 4,181 (268)

RP3 2,422 8,096 (5,674)

Unallocated research and development expenses:

Personnel related (including stock-based compensation) 42,603 38,704 3,899

Other 14,472 9,638 4,834

Total research and development expenses $ 86,420 $ 89,538 $ (3,118)

The total decrease of $3.1 million in research and development expenses was driven by a decrease of approximately $11.9 million in our direct research and development costs as a result of a decrease of $5.9 million in RP1 as a result of the wind down of the CERPASS and IGNYTE phase II studies, as a result of declining enrollment in the CERPASS and IGNYTE phase II studies as these studies wind down, whereas the Company has not yet ramped up costs for the IGNYTE phase III study.

In addition, in the first half of the prior year, the Company incurred costs related to manufacturing batches for RP1, as well as significant costs in the areas of CROs, investigators and imaging costs in preparation of the primary data release and potential BLA filing, which did not recur in the current year.

The decrease of $5.7 million in RP3 is a reflection of the deprioritization of development efforts on this product candidate, which the Company began to taper in the second half of the prior fiscal year.

The increase in unallocated expenses is $8.7 million, including $4.8 million in other costs and $3.9 million in other personnel-related costs.

The increase in other costs is driven primarily by an increase in consulting costs, facility costs and medical affairs, combined with additional allocated expenses which were focused on both RP1 and RP2 in the prior year that are not allocated directly to trials in the current year as a result of manufacturing's focus on BLA preparedness and pre-approval inspections.

The increase in personnel-related costs is attributable to a $3.3 million increase in payroll and fringe benefits and a stock-based compensation increase of $0.6 million.

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

Selling, general and administrative expenses

Selling, general and administrative expenses were $29.9 million for the six months ended September 30, 2024, compared to $29.9 million for the six months ended September 30, 2023.

Sales, general and administrative costs are relatively flat year over year with an overall decrease of $0.1 million.

This overall decrease includes an increase of $1.8 million in sales and marketing and consulting costs, offset by a decrease of $1.4 million in facility, recruitment and other variable costs and a decrease of $0.3 million in personnel related costs, driven by lower stock prices decreasing stock-based compensation on a year over year basis.

Total other income (expense), net

Other income (expense), net was $9.5 million for the six months ended September 30, 2024, compared to a net income of $9.9 million for the six months ended September 30, 2023.

The net change of $0.4 million is primarily attributable to a decrease in expense of $2.5 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, offset by a decrease in investment income of $2.1 million as a result of a lower investment balance year over year, and an increase in interest expense on debt obligations in the amount of $0.8 million as a result of a higher debt balance during the current year vs.

the first half of the prior year as the additional draw down occurred during the third quarter of the prior year.

Liquidity and capital resources

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

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

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

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

Sources of liquidity

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

Through June 30, 2024, we had received net proceeds of $945.7 million through the sale of shares of common stock and pre-funded warrants exercisable for common stock in public offerings, a private investment in a public entity, and at-the-market offerings, as well as net $42.8 million from our incurrence of debt under the term loan agreement with Hercules.

As of June 30, 2024, we had cash and cash equivalents and short-term investments of $469.1 million.

Through September 30, 2024, we had received net proceeds of $945.7 million through the sale of shares of common stock and pre-funded warrants exercisable for common stock in public offerings, a private investment in a public entity, and at-the-market offerings, as well as net $42.8 million from our incurrence of debt under the term loan agreement with Hercules.

As of September 30, 2024, we had cash and cash equivalents and short-term investments of $432.1 million.

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

Three Months Ended June 30,

Six Months Ended September 30,

(Amounts in thousands)

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Net cash provided by investing activities

30,224 20,044

Net cash provided by financing activities 96,598 1,543

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Operating activities

During the three months ended June 30, 2024, net cash used in operating activities was $49.2 million, primarily resulting from our net loss of $53.8 million partially offset by non-cash charges of $7.4 million, which primarily consist of stock-based compensation expense of $9.5 million, somewhat offset by net amortization of premiums and discounts on short-term investments of $2.8 million, and an increase in cash of $2.8 million related to changes in our operating assets and liabilities.

Changes in our operating assets and liabilities for the three months ended June 30, 2024 consisted primarily of a $3.2 million decrease in accrued expenses and other current liabilities, a $1.8 million increase in prepaid expenses and other current assets, a $1.6 million decrease in accounts payable, a net $0.6 million change in operating and financing right-of-use assets and lease liabilities, 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, 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 six months ended September 30, 2024, net cash used in operating activities was $87.8 million, primarily resulting from our net loss of $106.8 million partially offset by non-cash charges of $12.9 million, which primarily consist of stock-based compensation expense of $18.1 million, somewhat offset by net amortization of premiums and discounts on short-term investments of $5.2 million, and an increase in cash of $6.1 million related to changes in our operating assets and

Changes in our operating assets and liabilities for the six months ended September 30, 2024 consisted primarily of a $5.8 million increase in accounts payable, a $2.8 million decrease in accrued expenses and other current liabilities, a $2.2 million decrease in research and development incentives receivable from the United Kingdom government due to the timing and amount of our qualifying expenditures, and a net $1.2 million change in operating and financing right-of-use assets and lease liabilities.

During the six months ended September 30, 2023, net cash used in operating activities was $92.2 million, primarily resulting from our net loss of $109.6 million, partially offset by non-cash charges of $13.3 million, which primarily consist of stock-based compensation expense of $18.0 million, somewhat offset by net amortization of premiums and discounts on short-term investments of $6.5 million, and an increase in cash of $4.1 million related to changes in our operating assets and liabilities.

Changes in our operating assets and liabilities for the six months ended September 30, 2023 consisted primarily of a $7.0 million increase in accrued expenses and other current liabilities, a $2.2 million increase in prepaid expenses and other current assets, a net $1.2 million change in operating and financing right-of-use assets and lease liabilities, a $1.0 million decrease in accounts payable, and a $0.8 million increase in research and development incentives receivable from the United Kingdom government due to the timing and amount of our qualifying expenditures.

Investing activities

During the three months ended June 30, 2024, net cash provided by investing activities was $29.8 million, consisting of $136.9 million in proceeds from sales and maturities of short-term investments, partially offset by $105.5 million in purchases of available for sale securities, and $1.7 million in purchases of property, plant and equipment and capitalized software.

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 six months ended September 30, 2024, net cash provided by investing activities was $30.2 million, consisting of $228.9 million in proceeds from sales and maturities of short-term investments, partially offset by $194.9 million in purchases of available for sale securities, and $3.8 million in purchases of property, plant and equipment and capitalized software.

During the six months ended September 30, 2023, net cash provided by investing activities was $20.0 million, consisting of $303.5 million in proceeds from sales and maturities of short-term investments, partially offset by $281.2 million in purchases of available for sale securities, and $2.2 million in purchases of property, plant and equipment and capitalized software.

Financing Activities

During the three months ended June 30, 2024, net cash provided by financing activities was $96.6 million, consisting primarily of $96.7 million in proceeds from the Company's private investment in a public entity in June 2024.

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 six months ended September 30, 2024, net cash provided by financing activities was $96.6 million, consisting primarily of $96.7 million in proceeds from the Company's private investment in a public entity in June 2024.

During the six months ended September 30, 2023, net cash provided by financing activities was $1.5 million, consisting primarily of $1.8 million in proceeds from the exercise of stock options.

Funding requirements

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

As of June 30, 2024, we had cash and cash equivalents and short-term investments of $469.1 million.

Based on our current operating plan, we believe that our existing cash, cash equivalents and short-term investments as of June 30, 2024, will enable us to fund operations into the second half of 2026 which includes scale up for the commercialization of RP1 in skin cancers and for working capital and general corporate purposes.

As of September 30, 2024, we had cash and cash equivalents and short-term investments of $432.1 million.

Based on our current operating plan, we believe that our existing cash, cash equivalents and short-term investments as of September 30, 2024, will enable us to fund operations into the second half of 2026 which includes scale up for the commercialization of RP1 in skin cancers and for working capital and general corporate purposes.

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

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Contractual obligations and commitments

During the three months ended June 30, 2024, 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, 2024, which was filed with the SEC on May 18, 2023.

During the six months ended September 30, 2024, 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, 2024, which was filed with the SEC on May 16, 2024.

Collaborations

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

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

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

agreed-upon protocol.

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

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

Pursuant to the agreement we agreed to undertake one or more clinical trials with Regeneron for the administration of our product

candidates in combination with cemiplimab, an anti-PD-1 therapy developed by Regeneron, across multiple solid tumor types, the first of which, agreed in June 2018, is our ongoing Phase 2 clinical trial testing RP1 in combination with cemiplimab versus cemiplimab alone in patients with CSCC.

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

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

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

We have retained the responsibility of operating the clinical trials as well as retaining all the rights to the development and commercialization of our product candidates.

We have retained the responsibility of operating the clinical trials as well as retaining all the rights to the development and

commercialization of our product candidates.

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

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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

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.

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We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CMOs and CROs that supply, conduct and manage preclinical studies and clinical trials on our behalf.

The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows.

The financial terms of these agreements are subject to negotiation, vary from contract to

contract and may result in uneven payment flows.

There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense.

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The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and our expected dividend yield.

See Note 10 to our consolidated financial statements appearing elsewhere in this Quarterly Report for

more information.

See Note 10 to our consolidated financial statements appearing elsewhere in this Quarterly Report for more information.

Forfeitures are accounted for as they occur.

6 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