What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-05-06 compared with 2020-11-05 · 120 added, 158 removed, 146 unchanged (66% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q

The following information should be read in conjunction with our unaudited condensed financial statements and the notes thereto included in this Quarterly Report on Form 10-Q

and the audited financial information and the notes thereto included in our Annual Report on Form 10-K,

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We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

We are a clinical-stage biopharmaceutical company focused on discovering, acquiring, developing and commercializing next generation immuno-oncology platforms that leverage cell- and gene-based therapies to treat patients with cancer.

We are developing two immuno-oncology platform technologies that utilize the immune system by employing innovative cell engineering and novel, controlled gene expression technologies designed to deliver safe, effective, and scalable non-viral

cell- and viral-based gene therapies for the treatment of multiple cancer types.

Our first platform is referred to as Sleeping Beauty

and is based on the genetic engineering of immune cells using a non-viral

transposon/transposase system that is intended to stably reprogram T cells outside of the body for subsequent infusion.

Our second platform is referred to as Controlled IL-12

and is designed to stimulate expression of interleukin 12, or IL-12,

a master regulator of the immune system, in a controlled and safe manner to focus the patient’s immune system to more effectively attack cancer cells.

We intend to use both of our platforms to become a leading immuno-oncology company focused on developing innovative, cost-effective therapies primarily aimed at the large unmet needs in solid tumors.

Using our Sleeping Beauty

platform, we are developing T cell receptor, or TCR, T cell therapies to target solid tumors.

Our program designs and manufactures T cells that are intended to target tumor-specific antigens, thereby delivering personalized therapy that can attack patients’ malignancies.

These genetic changes are referred to as neoantigens as they are only expressed by the tumor, reducing the potential for toxicity upon targeting normal cells.

Under our Cooperative Research and Development Agreement, the National Cancer Institute, or NCI, is conducting a Phase 2 clinical trial to evaluate autologous peripheral blood lymphocytes genetically modified with the Sleeping Beauty

system to express autologous (personalized) TCRs.

In addition, we are currently planning a clinical program to study our TCR approach with The University of Texas MD Anderson Cancer Center, or MD Anderson.

Under this program, we expect to clinically evaluate both our Personalized TCR Approach and our Library TCR Approach.

Our Controlled IL-12 platform uses virotherapy based on an engineered replication-incompetent adenovirus, referred to as Ad-RTS-hIL-12,

plus veledimex as a gene delivery system to conditionally produce IL-12, a potent, naturally occurring anti-cancer protein, to treat patients with solid tumors where a specific target is unknown.

Our Controlled IL-12 platform allows us to deliver IL-12

in a tunable dose as the cytokine is under transcriptional control of the RheoSwitch Therapeutic System ®

We are currently studying our Controlled IL-12 Platform as a monotherapy for the treatment of recurrent glioblastoma multiforme, or rGBM, and for the treatment of glioma in the pontine region of the brain, known as diffuse intrinsic pontine glioma, or DIPG.

We are currently evaluating Ad-RTS-hIL-12 plus veledimex in a Phase 1/2 clinical trial for the treatment of DIPG and expect to dose up to 12 patients in the initial portion of the clinical trial.

We are also developing our Controlled IL-12 platform in combination with immune checkpoint inhibitors.

We have completed dosing in a Phase 1 dose-escalation clinical trial of Ad-RTS-hIL-12 plus veledimex in combination with PD-1 antibody OPDIVO ®

(nivolumab) in patients with rGBM.

We have also completed dosing in a Phase 2 clinical trial evaluating Ad-RTS-hIL-12 plus veledimex in combination with PD-1 antibody Libtayo ®

(cemiplimab) for the treatment of recurrent or progressive glioblastoma multiforme in adults.

We are developing chimeric antigen receptor, or CAR, T cell, or CAR +

T, therapies targeting CD19 on malignant B cells using our Sleeping Beauty

platform in collaboration with MD Anderson.

In a Phase 1 trial, we plan to infuse donor-derived T cells after allogeneic bone marrow transplantation, or BMT, for recipients who have relapsed with CD19 +

leukemias and lymphomas with our CD19-specific CAR +

T therapies manufactured using our rapid personalized manufacturing, or RPM, technology.

RPM enables T cells to be infused as soon as the day after gene transfer which is made possible by the genetic modification of resting T cells to express CAR and membrane bound IL-15,

We are also advancing our RPM technology in Greater China with Eden BioCell, Ltd., or Eden BioCell, our joint venture with TriArm Therapeutics, Ltd.

Eden BioCell will lead the clinical development and commercialization of Sleeping Beauty

-generated CD19-specific RPM CAR +

T therapies using patient-derived (autologous) T cells in order to treat patients with relapsed or refractory CD19 +

leukemias and lymphomas.

We are a clinical-stage biopharmaceutical company focused on discovering, developing and commercializing next generation immuno-oncology platforms that leverage cell- and gene-based therapies to treat patients with cancer.

We are developing platform technologies that utilize the immune system by employing innovative cell engineering and novel, controlled gene expression technologies designed to deliver safe and effective cell and gene therapies for the treatment of multiple cancer types.

Our major platform and priority is referred to as Sleeping Beauty and is based on the non-viral genetic engineering of immune cells using a transposon/transposase system that is intended to stably engineer T cells outside of the body for subsequent infusion.

Our second platform is referred to as Controlled IL-12 and is designed to stimulate expression of interleukin 12, or IL-12, a master regulator of the immune system, in a controlled manner to focus the patient’s immune system to more effectively attack cancer cells.

Using our Sleeping Beauty platform, we are developing T cell receptor, or TCR, T cell therapies to target neoantigens in solid tumors using two approaches, which we refer to as our “Library TCR-T Approach” and our “Personalized TCR-T Approach.” The Library TCR-T Approach uses TCRs identified from third parties that have been prepared before the patient-recipient has been identified (i.e., as off-the-shelf inventory plasmids).

We then genetically modify the recipient’s own T cells to redirect specificity to public, or shared, neoantigens.

The Personalized TCR-T Approach uses recipient-derived (autologous) TCRs to genetically modify the recipient’s own T cells to redirect specificity to the recipient’s private neoantigens.

In our company-sponsored Phase 1/2 clinical trial, we will evaluate TCRs from our library for the investigational treatment of lung, cholangiocarcinoma, pancreatic, colorectal and gynecological cancers.

Initially, six curated TCRs reactive to mutated KRAS and TP53 will be included in the clinical trial;

however, we expect to expand the number of TCRs to be evaluated in this clinical trial.

This clinical trial is being conducted in collaboration with The University of Texas MD Anderson Cancer Center, or MD Anderson, which will be the first site for the clinical trial.

Under our Cooperative Research and Development Agreement, the National Cancer Institute, or NCI, is conducting a Phase 2 Personalized TCR-T clinical trial to evaluate autologous peripheral blood lymphocytes genetically modified with the Sleeping Beauty system to express private neoantigen-specific TCRs.

The trial is designed to enroll patients with a broad range of solid tumors.

Food and Drug Administration, or the FDA, has cleared the investigational new drug, or IND, application submitted by the NCI for this clinical trial.

However, enrollment in this clinical trial has been temporarily suspended due to issues internal to the NCI and unrelated to our technology.

The progress and timeline for this trial, including the timeline for dosing patients, are under the control of the NCI.

We are developing chimeric antigen receptor, or CAR, T cell, or CAR+ T, therapies targeting CD19 on malignant B cells using our Sleeping Beauty platform.

We are advancing our rapid personalized manufacture, or RPM, technology in Greater China with Eden BioCell, Ltd., or Eden BioCell, our joint venture with TriArm Therapeutics, Ltd.

RPM enables small numbers of T cells to be infused as soon as the day after gene transfer which is made possible by the genetic modification of resting T cells to express CAR and membrane bound IL-15, or mbIL15.

Eden BioCell is conducting a Phase 1 clinical trial in Taiwan to evaluate the safety and efficacy of Sleeping Beauty-generated CD19-specific RPM CAR+ T therapies using patient-derived (autologous) T cells in order to treat patients with relapsed or refractory CD19 + leukemias and lymphomas.

Our Controlled IL-12 platform is based on an engineered replication-incompetent adenovirus, referred to as Ad-RTS-hIL-12, plus veledimex as a gene delivery system to conditionally produce IL-12, a potent, naturally occurring anti-cancer protein, to treat patients with solid tumors.

Our Controlled IL-12

platform allows us to deliver IL-12 in a tunable dose as the cytokine is under transcriptional control of the RheoSwitch Therapeutic System ®

We have not generated significant revenue and have incurred significant net losses in each year since our inception.

For the nine months ended September 30, 2020, we had a net loss of $57.2 million, and, as of September 30, 2020, we have incurred approximately $741.3 million of accumulated deficit since our inception in 2003.

For the three months ended March 31, 2021, we had a net loss of $21.6 million, and, as of March 31, 2021, we have incurred approximately $785.7 million of accumulated deficit since our inception in 2003.

We expect to continue to incur significant operating expenditures and net losses.

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hire additional personnel;

the formulation and manufacturing of our product candidates.

scale-up the formulation and manufacturing of our product candidates.

We continue to seek additional financial resources to fund the further development of our product candidates.

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Recent Developments

The ongoing COVID-19

global pandemic has presented a significant health and economic challenge around the world and is affecting our employees, partners and business operations.

The full extent to which the COVID-19

pandemic will directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted.

We have implemented work-from-home policies for most of our employees in response to the COVID-19

The ongoing COVID-19 global pandemic has presented a significant health and economic challenge around the world and is affecting our employees, partners and business operations.

The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted.

We have implemented work-from-home policies for most of our employees in response to the COVID-19 pandemic.

The effects of our work-from-home policies may negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course.

These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition.

We continue to work with our partners, including the NCI and MD Anderson, to mitigate the impact the COVID-19

pandemic is having on our business and clinical programs.

We continue to work with our partners, including the NCI and MD Anderson, to mitigate the impact the COVID-19 pandemic is having on our business.

Clinical and Regulatory Developments

We expect to initiate our clinical trial with MD Anderson for our Library TCR-T approach in mid-2021.

This study will evaluate treatments using TCR+ T cells expressing third party (allogeneic) TCRs in autologous (patient-derived) T cells to treat several cancers, including gynecologic, colorectal, pancreatic, non-small cell lung cancer and cholangiocarcinoma.

We expect to submit an Investigational New Drug, or IND, application for this clinical trial to the FDA in the first quarter of 2021.

Under our Cooperative Research and Development Agreement, the NCI is undertaking a Phase 2 Personalized TCR-T clinical trial under an IND cleared by the FDA.

In this study, the NCI will test autologous peripheral blood lymphocytes genetically modified with the Sleeping Beauty

system to express TCRs that recognize neoantigens expressed by patients with a broad range of solid tumors.

The NCI’s manufacturing facility is validating our non-viral manufacturing approach, which has been authenticated by the NCI at laboratory scale.

Patient enrollment will be determined by the NCI and is expected to occur after the process validation, the completion of regulatory requirements and the NCI has identified and screened patients for neoantigens and TCRs to render them eligible for the trial.

Eden BioCell has continued to make significant progress preparing for a clinical trial of Sleeping Beauty

-generated CD19-specific RPM CAR+ T therapies using patient-derived (autologous) T cells to treat patients with relapsed or refractory CD19+ leukemias and lymphomas.

Eden BioCell has commenced the filing of its IND for a clinical trial in Taiwan.

In addition, Eden BioCell and our partners in this joint venture have informed us that preliminary observations from several patients dosed under compassionate use requests in Greater China confirm the presence of infused autologous T cells measured weeks after infusion, which appears to support the benefit of genetically modifying T cells with our RPM technology.

In July 2020, we announced the initiation of our U.S.

Phase 1 trial clinical trial infusing donor-derived T cells after allogeneic BMT for recipients who have relapsed with CD19 +

leukemias and lymphomas with our CD19-specific CAR +

T therapies manufactured using our RPM technology.

This clinical trial is being performed in collaboration with MD Anderson.

Each of the clinical trials of our Controlled IL-12 program continues to progress.

We previously completed enrollment in our Phase 1 clinical trial of adult patients with rGBM evaluating Ad-RTS-hIL-12 plus daily veledimex in combination with OPDIVO ®

In June 2020, we completed patient enrollment in our Phase 2 clinical trial evaluating Controlled IL-12 in combination with PD-1 antibody Libtayo ®

for the treatment of rGBM.

In July 2020, we announced the first patient had been dosed in a Phase 1/2 clinical trial evaluating Ad-RTS-hIL-12 plus veledimex for the treatment of DIPG.

Data will be presented from all three trials at the 2020 Society for Neuro-Oncology Annual Meeting (SNO).

In February 2021, the FDA cleared our company-sponsored IND application for a Phase 1/2 clinical trial evaluating TCRs from our library for the investigational treatment of lung, cholangiocarcinoma, pancreatic, colorectal and gynecological cancers.

In April 2021, we announced the infusion of the first patient in the CD19-specific RPM CAR-T Phase 1 clinical trial being conducted in Taiwan by Eden BioCell.

We expect to close our CD19 RPM CAR-T Allogeneic Phase I clinical trial in the second or third quarter of 2021.

In this trial, we had planned to infuse donor-derived T cells after allogeneic bone marrow transplantation for recipients who have relapsed with CD19+ leukemias and lymphomas.

We have begun winding down our existing Controlled IL-12 clinical program for the treatment of recurrent glioblastoma multiforme.

These trials examine the effect of Controlled IL-12 as a monotherapy and in combination with blockade of the immune checkpoint protein PD-1.

We will continue seeking a partner for this program and have also begun exploring potential synergies between this technology and our cell therapy programs.

We anticipate headcount reduction of approximately 15% related to this realignment of resources.

Appointment of Personnel

In September 2020, our Board of Directors appointed J.

Kevin Buchi to our Board to fill the vacancy created by the resignation of Douglas Pagán.

Buchi was Chief Executive Officer of Cephalon, Inc., which was acquired by Teva Pharmaceutical Industries Limited in October 2011.

Following the acquisition of Cephalon by Teva in 2011, Mr.

Buchi served as corporate vice president of global branded products at Teva.

Following Teva, he was Chief Executive Officer of TetraLogic Pharmaceuticals and Biospecifics Technologies.

In June 2020, we announced the appointment of Carl June, M.D., as Chairman of our newly formed Scientific Advisory Board, or SAB.

June is recognized in the oncology field for his groundbreaking work in the development and commercialization of gene therapy and T-cell therapies.

In September 2020, we announced Adi Barzel, Ph.D., Gavin Dunn, M.D., Ph.D., Matthew Porteus, M.D., Ph.D., and Kole Roybal, Ph.D had joined the SAB.

The SAB will provide strategic counsel to guide the efficient development of our innovative technologies and pipeline of immunotherapies.

In February 2021, Heidi Hagen was appointed our Interim Chief Executive Officer, replacing Dr.

Laurence Cooper, MD., Ph.D.

Hagen, formerly the lead independent director on our Board of Directors, or the Board, remains a member of the Board.

In connection with his departure as Chief Executive Officer, Dr.

Cooper resigned as a director of the Company and remains a consultant to the Company.

In connection with Ms.

Hagen’s appointment, James Huang was appointed as the executive chair of the Board.

In February 2021, Robert W.

Postma was appointed to the Board to serve an initial term expiring at our 2021 annual meeting of stockholders.

Postma was added to the Board pursuant to a settlement agreement between us, WaterMill Asset Management Corp.

In February 2021, Timothy Cunningham was appointed our Interim Chief Financial Officer and principal financial officer.

Cunningham is a consultant to the Company, providing services pursuant to a consulting agreement between us and Danforth Advisors, LLC, a financial consultancy firm specializing in working with life sciences companies.

In March 2021, Kevin Buchi notified the Board of his intention not to stand for re-election as a director when his term expires at our 2021 annual meeting of stockholders.

The size of the Board will decrease from eight to seven directors effective as of the date of Mr.

Buchi’s resignation.

Financial Overview

Overview of Results of Operations

Three and Nine Months Ended September 30, 2020 Compared to Three and Nine Months Ended September 30, 2019

Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020

Research and development expenses.

Research and development expenses during the three and nine months ended September 30, 2020 and 2019 were as follows:

Research and development expenses during the three months ended March 31, 2021 and 2020 were as follows:

Three months ended

September 30,

Nine months ended

September 30,

($ in thousands)

Research and development

Research and development expenses for the three months ended September 30, 2020 increased by $5.3 million when compared to the three months ended September 30, 2019.

The increase in research and development expenses for the three months ended September 30, 2020, is primarily due to $3.9 million in increased gene therapy manufacturing costs and $2.0 million related to increased headcount and facilities costs, offset by $0.6 million of decreased manufacturing technology initiatives and preclinical costs.

Research and development expenses for the nine months ended September 30, 2020 increased by $10.6 million when compared to the nine months ended September 30, 2019.

The increase in research and development expenses for the nine months ended September 30, 2020, is primarily due to $7.1 million in increased gene therapy manufacturing costs and $5.1 million related to increased headcount and facilities costs, offset by $1.3 million of decreased cell therapy costs and $0.3 million in travel and other.

Research and development expenses for the three months ended March 31, 2021 increased by $0.6 million when compared to the three months ended March 31, 2020.

The increase in research and development expenses for the three months ended March 31, 2021 is primarily due to a $5.0 million increase in headcount, stock compensation, and facilities costs and $0.9 million in increased cell therapy program costs offset by $5.3 million of decreased Controlled IL-12

program costs.

Our research and development expense consists primarily of salaries and related expenses for personnel, costs of contract manufacturing services, costs of facilities and equipment, fees paid to professional service providers in conjunction with our clinical trials, fees paid to contract research organizations in conjunction with preclinical animal studies, costs of materials used in research and development, consulting, license and milestone payments and sponsored research fees paid to third parties.

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As a result, we cannot state the costs incurred for each of our programs on a program-by-program

For the nine months ended September 30, 2020, our clinical stage projects included a Phase 1 clinical trial with Ad-RTS-IL-12

basis related to personnel and personnel related costs.

We do track our accumulated costs by program for costs incurred by outside vendors conducting research for our named clinical candidates.

For the three months ended March 31, 2021, our clinical stage projects included a Phase 1 clinical trial with Ad-RTS-IL-12

plus veledimex in progressive glioblastoma;

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T cells in patients with advanced lymphoid malignancies;

and a Phase 1/2 clinical trial of Ad-RTS-hIL-12

a Phase 1/2 clinical trial of Ad-RTS-hIL-12

with veledimex for the treatment of pediatric brain tumors;

and a Phase 2 clinical trial of Ad-RTS-hIL-12 with veledimex in combination with cemiplimab-rwlc in progressive glioblastoma.

The expenses incurred by us to third parties for our Phase 1 clinical trial with Ad-RTS-IL-12

plus veledimex in progressive glioblastoma were $2.5 million for the nine months ended September 30, 2020 and $13.8 million from the project’s inception in September 2015 through September 30, 2020.

plus veledimex in progressive glioblastoma were $0.9 million for the three months ended March 31, 2021 and $14.7 million from the project’s inception in September 2015 through March 31, 2021.

The expenses incurred by us to third parties for our Phase 1 clinical trial infusing our 2nd generation CD19-specific CAR +

T cells in patients with advanced lymphoid malignancies were $0.1 million for the nine months ended September 30, 2020 and $6.2 million from the project’s inception in December 2015 through September 30, 2020.

The expenses incurred by us to third parties for our Phase 1/2 clinical trial of Ad-RTS-hIL-12 with veledimex for the treatment of pediatric brain tumors were $0.1 million for the nine months ended September 30, 2020 and $2.1 million from the project’s inception in October 2017 through September 30, 2020.

The expense incurred by us to third parties for our investigator-led

Phase 2 clinical trial of Ad-RTS-hIL-12

with veledimex in combination with cemiplimab-rwlc in progressive glioblastoma were $3.8 million for the nine months ended September 30, 2020 and $5.4 million from the projects inception in June 2019 through September 30, 2020.

T cells in patients with advanced lymphoid malignancies were zero for the three months ended March 31, 2021 and $6.2 million from the project’s inception in December 2015 through March 31, 2021.

The expenses incurred by us to third parties for our Phase 1/2 clinical trial of Ad-RTS-hIL-12

with veledimex for the treatment of pediatric brain tumors were $0.4 million for the three months ended March 31, 2021 and $2.5 million from the project’s inception in October 2017 through March 31, 2021.

The expense incurred by us to third parties for our Phase 2 clinical trial of Ad-RTS-hIL-12

with veledimex in combination with cemiplimab-rwlc in progressive glioblastoma were $1.3 million for the three months ended March 31, 2021 and $6.7 million from the projects inception in June 2019 through March 31, 2021.

Our future research and development expenses in support of our current and future programs will be subject to numerous uncertainties in timing and cost to completion.

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General and administrative expenses.

General and administrative expenses during the three and nine months ended September 30, 2020 and 2019 were as follows:

General and administrative expenses during the three months ended March 31, 2021 and 2020 were as follows:

Three months ended

September 30,

Nine months ended

September 30,

($ in thousands)

General and administrative

General and administrative expenses for the three months ended September 30, 2020 increased by $1.5 million as compared to three months ended September 30, 2019.

The increase during the three months ended September 30, 2020 was primarily due to an increase of $0.8 million of legal expenses incurred as a result of our expanded patent portfolio and an increase of $0.7 million of salary and employee related expenses, including stock compensation expense.

General and administrative expenses for the nine months ended September 30, 2020 increased by $5.2 million as compared to nine months ended September 30, 2019.

The increase during the nine months ended September 30, 2020 was primarily due to an increase of $2.5 million of salary and employee related expenses, including stock compensation expense, along with an increase of $2.0 million of legal expenses incurred as a result of our expanded patent portfolio, and an increase of $1.4 million in facilities expenses, offset by a decrease of $0.7 million of business development expenses.

General and administrative expenses for the three months ended March 31, 2021 increased by $2.3 million as compared to three months ended March 31, 2020.

The increase during the three months ended March 31, 2021 was primarily due to an increase of $0.7 million related to employee related expenses, $0.6 million related to expenses incurred pursuant to our separation agreement with our former Chief Executive Officer., and $1 million expenses incurred related to our expanded patent portfolio and advisory fees.

Other income, (net).

Other income, net for the three and nine months ended September 30, 2020 and 2019 was as follows:

Other income, net for the three months ended March 31, 2021 and 2020 was as follows:

Three months ended

September 30,

Nine months ended

September 30,

($ in thousands)

Other income, net

Noncash inducement warrants

Other income for the three months ended September 30, 2020 decreased by $0.2 million as compared to the three months ended September 30, 2019 because interest rates decreased due to market fluctuations.

Other income for the nine months ended September 30, 2020 decreased by $0.1 million as compared to the nine months ended September 30, 2019 because interest rates decreased due to market fluctuations.

On July 26, 2019 and September 12, 2019, we entered into agreements with existing investors for the exercise of previously issued 2018 warrants.

Pursuant to the terms of the agreements, we issued the investors new warrants to purchase an aggregate of 17,803,031 shares of common stock, as an inducement to exercise their 2018 warrants early.

The 2019 warrants became exercisable six months following the date of issuance, will expire on the fifth anniversary of the initial exercise date, and have an exercise price of $7.00.

The Black-Scholes valuation of the 2019 warrants resulted in a non-cash

charge to the statement of operations of $60.8 million for the three and nine months ended September 30, 2019.

Other income for the three months ended March 31, 2021 decreased by $358 thousand as compared to the three months ended March 31, 2020 due to a decrease in our cash balance and a decline in interest rates due to market fluctuations.

Liquidity and Capital Resources

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Since inception, we have incurred net losses and negative cash flows from our operations.

As of September 30, 2020, we have approximately $135.5 million of cash and cash equivalents.

During the nine months ended September 30, 2020, we completed an underwritten public offering of 29,110,111 shares of common stock, which includes a partial exercise by the underwriters of its over-allotment option of 1,284,025 shares from us at a price to the public of $3.25, less underwriting discounts.

Our net proceeds from the sale of the shares, after deducting the underwriting discounts and offering expenses of $5.9 million, were $88.7 million.

To date, we have financed our operations primarily through public offerings of our common stock, private placements of our convertible equity securities and collaborations.

Through March 31, 2021, we have received an aggregate of $714.1 from public offerings and through sales under our “at-the

market” offering program.

February 2020 Public Offering

On February 5, 2020, we entered into an underwriting agreement with Jefferies LLC, or Jefferies, as representative of the several underwriters named therein, relating to the issuance and sale of 27,826,086 shares of our common stock.

The price to the public in the offering was $3.25 per share, and the underwriters agreed to purchase the shares from us pursuant to the underwriting agreement at a purchase price of $3.055 per share.

The offering was made pursuant to our effective registration statement on Form S-3ASR

previously filed with the SEC, and a prospectus supplement thereunder.

The net proceeds from the offering were approximately $84.8 million after deducting underwriting discounts and offering expenses paid by us.

On March 10, 2020, the underwriters exercised their option to purchase an additional 1,284,025 shares.

The net proceeds were approximately $3.9 million after deducting underwriting discounts and offering expenses paid by the us.

At-the-Market

offering program

In June 2019, we entered into an Open Market Sale Agreement, or Sales Agreement, with Jefferies LLC, or Jefferies, as a sale agent pursuant to which we may offer and sell, from time to time through Jefferies, shares of our common stock having an aggregate offering value of up to $100.0 million.

Shares will be sold pursuant to the Company’s effective registration statement on Form S-3ASR

Shares will be sold pursuant to our effective registration statement on Form S-3ASR

as previously filed with the Securities and Exchange Commission.

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The compensation to Jefferies for sales of our common stock pursuant to the sales agreement will be an amount equal to 3% of the gross proceeds of any shares of common stock sold under the sales agreement.

During the nine months ended September 30, 2020, we issued and sold 2,814,673 shares of common stock under the sales agreement for aggregate net proceeds of $13.0 million, after deducting commission and offering expenses of $0.4 million.

During the nine months ended September 30, 2019, we issued and sold 639,442 shares of common stock under the sales agreement for aggregate net proceeds of $3.0 million, after deducting commission and offering expenses of $0.1 million.

During the three months ended March 31, 2020, we sold an aggregate of 2,814,673 shares of its common stock.

The offering was made pursuant to the Company’s effective registration statement on Form S-3ASR

previously filed with the SEC, and a prospectus supplement thereunder.

The net proceeds from the offering were approximately $13.0 million after deducting underwriting discounts and offering expenses payable by the Company.

We did not sell any shares of its common stock under the at-the-market facility during the three months ended March 31, 2021.

Funding Requirements

Given our current development plans, we expect that our existing cash and cash equivalents will be sufficient to fund our current operations into mid-2022.

Given our current development plans, we expect that our existing cash and cash equivalents will be sufficient to fund our current operations into the second quarter of 2022.

We currently do not have any committed sources of additional capital at this time.

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If we exhaust our capital reserves more quickly than anticipated, regardless of the reason, and we are unable to obtain additional financing on terms acceptable to us or at all, we will be unable to proceed with development of some or all of our product candidates on expected timelines and will be forced to prioritize among them.

The following table summarizes our net decrease in cash, cash equivalents, and restricted cash for the nine months ended September 30, 2020:

Nine months ended September 30,

The following table summarizes our net decrease in cash, cash equivalents, and restricted cash for the three months ended March 31, 2021 and 2020:

Three months ended

($ in thousands)

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Changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in results of operations.

Net cash used in operating activities for the nine months ended September 30, 2020 was $40.0 million, as compared to net cash used in operating activities of $29.2 million for the nine months ended September 30, 2019.

The net cash used in operating activities for the nine months ended September 30, 2020 was primarily due to our net loss of $57.2 million, the change in receivables of $2.1 million, other noncurrent assets of $0.6 million, offset by the change in prepaid and other current assets of $8.2 million primarily related to the use of our funds at MD Anderson, the change in accrued expenses of $3.8 million, the change in accounts payable of $1.7 million and non-cash

stock-based compensation on $5.4 million.

Net cash used in investing activities was $6.0 million for the nine months ended September 30, 2020 compared to $0.2 million for the nine months ended September 30, 2019.

Net cash provided by financing activities the nine months ended September 30, 2020 was $101.7 million.

The net cash was provided by $88.7 million from the issuance of common stock in our follow-on

public offering, net and $13.0 million from the issuance of common stock pursuant to our ATM facility.

Net cash provided by financing activities for the nine months ended September 30, 2019 was $56.1 million.

During the quarter, we received $52.5 million in proceeds from the exercise of warrants (Note 2), $3.0 million in proceeds through ATM offerings (Note 2) and $1.0 million in proceeds from the exercise of stock options.

Net cash used in operating activities for the three months ended March 31, 2021 was $15.3 million, as compared to net cash used in operating activities of $9.9 million for the three months ended March 31, 2020.

The net cash used in operating activities for the three months ended March 31, 2021 was primarily due to our net loss of $21.6 million, the change in prepaid and other current assets of $3.2 million primarily related to the use of our funds at MD Anderson, the change in accounts payable of $2.7 million, the change in non-cash

stock-based compensation of $2.2 million, other noncurrent assets of $0.6 million, offset by the change in accrued expenses of $3.1 million and the change in receivables of $0.3 million.

Net cash used in investing activities was $0.7 million for the three months ended March 31, 2021 compared to $0.5 million for the three months ended March 31, 2020.

Net cash provided by financing activities the three months ended March 31, 2021 was $1.0 million related to proceeds from the exercise of stock options.

Net cash provided by financing activities the three months ended March 31, 2020 was $101.7 million, which included $88.7 million from the issuance of common stock in our public offering, net and $13.0 million from the issuance of common stock in our at the market offerings, net.

Operating capital and capital expenditure requirements

We anticipate that losses will continue for the foreseeable future.

At September 30, 2020, our accumulated deficit was approximately $741.3 million.

At March 31, 2021, our accumulated deficit was approximately $785.7 million.

Our actual cash requirements will depend on and could increase significantly as a result of a number of factors, including:

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“Risk Factors.”

Working capital as of September 30, 2020 was $135.8 million, consisting of $155.1 million in current assets and $19.3 million in current liabilities.

Our working capital as of March 31, 2021 was $93.7 million, consisting of $112.7 million in current assets and $19.0 million in current liabilities.

Working capital as of December 31, 2020 was $112.2 million, consisting of $130.6 million in current assets and $18.4 million in current liabilities.

In May 2021, as a result of our review of our research and development portfolio, we announced the realigning of resources behind our Sleeping Beauty program.

Resources currently deployed towards our Controlled IL-12 clinical program are currently being reduced, and we anticipate the realignment of resources will reduce cash expenditures on the Controlled IL-12 program.

Contractual Obligations

The following table summarizes our outstanding obligations as of September 30, 2020 and the effect those obligations are expected to have on our liquidity and cash flows in future periods:

The following table summarizes our outstanding obligations as of March 31, 2021 and the effect those obligations are expected to have on our liquidity and cash flows in future periods:

($ in thousands)

Less than 1 year

More than 5 years

Operating leases

Royalty and license fees

Our commitments for operating leases relate to the lease for our corporate headquarters in Boston, Massachusetts, and office and laboratory space in Houston, Texas.

On December 21, 2015 and April 15, 2016, we renewed the sublease for our corporate headquarters in Boston, Massachusetts through August 31, 2021.

Strategic advisory fees

Our commitments for operating leases relate to the lease for our corporate headquarters in Boston, Massachusetts, and laboratory and office space in Houston, Texas.

On December 21, 2015 and April 15, 2016, we renewed the sublease for our corporate headquarters in Boston, MA through August 31, 2021.

On January 30, 2018, we entered into a lease agreement for office space in Houston, TX at MD Anderson through April 2021.

On March 12, 2019, we entered into a lease agreement for additional office space in Houston through April 2021.

On October 15, 2019, we entered into another lease agreement for additional office and laboratory space in Houston through February 2027.

On October 15, 2019, we entered into another lease agreement for additional office space in Houston through February 2027.

On April 13, 2020, we entered into another lease agreement for additional office and laboratory space in Houston through February 2027.

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On September 1, 2020, we entered an additional short-term lease in Houston for additional office and laboratory space.

On January 10, 2017, we announced the signing of the CRADA with the NCI for the development of ACT-based

immunotherapies genetically modified using the Sleeping Beauty

transposon/transposase system for the treatment of solid tumors.

On December 15, 2020, we entered into another lease for additional office and laboratory space in Houston through April 2028.

On January 10, 2017, we announced the signing of a Cooperative Research and Development Agreement, or CRADA with the NCI for the development of ACT-based

immunotherapies genetically modified using the Sleeping Beauty transposon/transposase system for the treatment of solid tumors.

In February 2019, we extended the CRADA with the NCI until January 9, 2022.

On October 5, 2018, we entered into the License Agreement with PGEN.

Under the License Agreement, we are obligated to pay PGEN an annual licensing fee of $0.1 million expected to be paid through the term of the agreement.

On May 28, 2019, we entered into a patent license agreement, or the Patent License, with the NCI.

The terms of the Patent License require us to pay the NCI minimum annual royalties in the amount of $0.3 million, which amount will be reduced to $0.1 million once the aggregate minimum annual royalties paid by us equals $1.5 million.

The first minimum annual royalty payment is payable on the date that is eighteen months following the date of the Patent License.

On January 8, 2020, we entered into an amendment of Patent License agreement.

Under this agreement, we paid $0.6 million.

On September 28, 2020, we entered into a second amendment of the Patent License with the NCI.

The terms of the second Amendment require us to pay the NCI a one-time

payment of $0.4 million, which is included in the “less than 1-year” category in the chart above.

On October 5, 2018, we entered into the License Agreement with PGEN Therapeutics, Inc.

or PGEN, a wholly owned subsidiary of Precigen Inc., or Precigen, which was formerly known as Intrexon Corporation.

Under the License Agreement, we are obligated to pay PGEN an annual licensing fee of $0.1 million expected to be paid through the term of the agreement.

On November 27, 2020, we entered into two agreements for strategic advisory services that require us to pay $1.1 million through September 30, 2021.

Sheet Arrangements

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and income taxes.

We reviewed our policies and determined that those policies remain our most critical accounting policies for the nine months ended September 30, 2020.

We reviewed our policies and determined that those policies remain our most critical accounting policies for the three months ended March 31, 2021.

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