What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-09 compared with 2022-08-09 · 89 added, 88 removed, 226 unchanged (44% of the section changed)

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As a result of many factors, including those factors set forth in the section entitled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We are a clinical-stage biotechnology company focused on harnessing the immune system to achieve deep and durable clinical responses to improve the lives of patients with cancer.

We have built our geographically precise solutions, or GPS, platform to rapidly engineer novel molecules, including cytokines and other biologics, that are designed to optimize their therapeutic index by geographically localizing their activity inside tumors.

Current immuno-oncology, or I-O, therapies have curative potential for patients with cancer;

however, their potential is significantly curtailed by systemic toxicity that results from activity of the therapeutic molecule outside the tumor microenvironment, or TME.

Our molecules are engineered to localize activity within the TME with minimal systemic effects, resulting in the potential to achieve enhanced anti-tumor activity.

We are advancing a number of geographically precise, or tumor-selective, agents through preclinical and clinical development.

Our most advanced tumor-selective product candidates are the following:

XTX101, an anti-cytotoxic T-lymphocyte-associated protein 4, or anti-CTLA 4, monoclonal antibody, or mAb;

XTX202, an interleukin 2, or IL-2, therapy;

and XTX301, an interleukin 12, or IL-12, therapy.

We are currently evaluating XTX101 and XTX202 in Phase 1 clinical trials for patients with advanced solid tumors, and we plan to submit an investigational new drug application, or IND, to the U.S.

Food and Drug Administration, or FDA, in the fourth quarter of 2022 for XTX301 for evaluation in patients with advanced solid tumors.

In addition to our most advanced product candidates, we are continuing to leverage our GPS platform with the goal of expanding our pipeline and developing additional tumor-selective immunotherapies, including product candidates with a range of tumor targeting approaches.

We are a clinical-stage biotechnology company discovering and developing tumor-activated immuno-oncology, or I-O, therapies with the goal of significantly improving outcomes for people living with cancer without the systemic side effects of current I-O treatments.

We are leveraging our proprietary platform to build a pipeline of novel, tumor-activated molecules, including cytokines and other biologics, which are designed to optimize their therapeutic index and localize anti-tumor activity within the tumor microenvironment.

Our most advanced tumor-activated cytokine product candidates are XTX202, an interleukin 2, or IL-2, therapy and XTX301, an interleukin 12, or IL-12, therapy.

We are currently evaluating XTX202 in monotherapy dose-escalation of an ongoing Phase 1 clinical trial for patients with advanced solid tumors, and we anticipate initiating patient enrollment in a monotherapy expansion cohort of the Phase 1 clinical trial in the fourth quarter of 2022 and initiating patient enrollment in a Phase 2 monotherapy clinical trial in the first half of 2023.

We anticipate reporting preliminary anti-tumor activity and safety data from the Phase 1/2 clinical trial in the third quarter of 2023.

In November 2022, we announced clearance of our investigational new drug application, or IND, by the U.S.

Food and Drug Administration, or FDA, for XTX301 for evaluation in patients with advanced solid tumors.

We anticipate initiating patient enrollment in monotherapy dose-escalation in a Phase 1 clinical trial evaluating XTX301 in patients with advanced solid tumors in the first quarter of 2023, and we anticipate reporting preliminary safety data from the Phase 1 clinical trial in the fourth quarter of 2023.

In addition, we are currently evaluating XTX101, an anti-cytotoxic T-lymphocyte-associated protein 4, or anti-CTLA-4, monoclonal antibody, or mAb, in monotherapy dose-escalation and monotherapy dose expansion of an ongoing Phase 1 clinical trial for patients with advanced solid tumors.

We anticipate completing monotherapy dose-escalation by the end of 2022 and reporting preliminary data from the Phase 1 clinical trial in the second quarter of 2023.

We plan to continue to explore opportunities for strategic collaborations to advance XTX101 and do not plan to initiate an anti-PD-1 combination cohort in the Phase 1 clinical trial or initiate a Phase 2 clinical trial for XTX101 without a partner.

In addition to our clinical-stage product candidates, we are continuing to leverage our platform and expertise in developing tumor-activated I-O therapies to continue to seek to expand our pipeline of discovery-stage programs and develop additional tumor-activated immunotherapies, including product candidates with a range of tumor targeting approaches.

To date, we have financed our operations primarily from proceeds raised through private placements of preferred units and convertible preferred stock, a debt financing and our initial public offering, or IPO, of common stock in October 2021.

Through June 30, 2022, we have received an aggregate of $350.9 million in net proceeds from such transactions, including aggregate net proceeds of $116.4 million from our IPO, an aggregate of $224.5 million in net proceeds from the sale and issuance of preferred units and convertible preferred stock, and $10.0 million in net proceeds from our debt financing with Pacific Western Bank, or PacWest.

Through September 30, 2022, we have received an aggregate of $350.9 million in net proceeds from such transactions, including aggregate net proceeds of $116.4 million from our IPO, an aggregate of $224.5 million in net proceeds from the sale and issuance of preferred units and convertible preferred stock, and $10.0 million in net proceeds from our debt financing with Pacific Western Bank, or PacWest.

We have not generated any revenue from product sales and do not expect to generate any revenue from product sales for at least the next several years, if at all.

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Since inception, we have incurred significant operating losses.

Our net losses were $46.0 million and $39.8 million for the six months ended June 30, 2022 and 2021, respectively, and $75.8 million for the year ended December 31, 2021.

As of June 30, 2022, we had an accumulated deficit of $206.9 million.

We expect to incur significant expenses and operating losses for the foreseeable future.

Our net losses were $65.8 million and $56.1 million for the nine months ended September 30, 2022 and 2021, respectively, and $75.8 million for the year ended December 31, 2021.

As of September 30, 2022, we had an accumulated deficit of $226.6 million.

We expect to incur significant expenses and operating losses for the foreseeable

We anticipate that our expenses will continue to increase significantly in connection with our ongoing activities, particularly as we:

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

As of June 30, 2022, we had cash and cash equivalents of $159.4 million.

We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the first half of 2024.

Note on the Ongoing COVID-19 Pandemic

The ongoing COVID-19 pandemic continues to have widespread, rapidly-evolving, and unpredictable impacts on global societies, economies, financial markets, supply chains and business practices.

We are closely monitoring the impact of the pandemic, the identification of new variants and related developments, and our focus remains on promoting employee health and safety while continuing to advance the research and development of our product candidates.

However, the extent of the impact of the COVID-19 pandemic, including variants of the COVID-19 virus, on our business, operations, and clinical development timelines and plans remains uncertain and will depend on future developments that cannot be predicted with confidence at this time.

For a discussion regarding risks and uncertainties related to the COVID-19 pandemic and its potential impact on our business and financial results, please refer to our Risk Factors in Part II, Item 1A of this Quarterly Report on Form 10-Q.

As of September 30, 2022, we had cash and cash equivalents of $139.1 million.

We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2024.

Note Regarding the COVID-19 Pandemic

The impact of the COVID-19 pandemic continues to be widespread, rapidly-evolving and unpredictable on global societies, economies, financial markets, supply chains and business practices.

The extent of the impact of the COVID-19 pandemic, including variants of the COVID-19 virus, on our business, operations, and clinical development timelines and plans remains uncertain.

For a discussion regarding risks and uncertainties related to the impact of the COVID-19 pandemic and its potential impact on our business and financial results, please refer to our Risk Factors in Part II, Item 1A of this Quarterly Report on Form 10-Q.

Financial Operations Overview

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● the costs associated with the development of any additional product candidates we develop or acquire through collaborations;

● the effects of the COVID-19 pandemic on our research and development employees, contractors and those who may participate in our planned studies;

● our successful enrollment in and completion of clinical trials;

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● our ability to obtain and maintain patent, trade secret and other intellectual property protection and regulatory exclusivity for our product candidates if and when approved;

● the impact of COVID-19 and its variants on our research and development employees, contractors and those who may participate in our planned studies.

A change in any of these variables with respect to the development of any of our product candidates would significantly change the costs, timing and viability associated with the development of that product candidate.

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General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits, recruiting and equity-based compensation, for personnel in our executive, finance, legal, business development, human resources and other administrative functions.

General and administrative expenses consist primarily of personnel-related costs, including salaries, bonuses, benefits, recruiting and equity-based compensation, for personnel in our executive, finance, legal, business development, human resources and other administrative functions.

General and administrative expenses also include legal fees relating to corporate matters;

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We anticipate that our general and administrative expenses will increase in the future as we increase our headcount and infrastructure to support the expected growth in our research and development activities.

We also expect to incur increased expenses associated with operating as a public company, including increased costs of accounting, audit, legal, regulatory and tax-related services attributable to maintaining compliance with exchange listing standards and Securities and Exchange Commission, or SEC, requirements, director and officer insurance costs and investor and public relations costs.

We also expect to continue to incur increased expenses associated with operating as a public company, including increased costs of accounting, audit, legal, regulatory and tax-related services attributable to maintaining compliance with exchange listing standards and Securities and Exchange Commission, or SEC, requirements, director and officer insurance costs and investor and public relations costs.

We also expect to incur additional intellectual property-related expenses as we file patent applications to protect intellectual property arising from our research and development activities.

Other Expense, Net

Other expense, net consists primarily of interest expense principally on the note payable under our debt arrangement with PacWest and gains or losses associated with changes in the fair value of contingent liabilities associated with the consummation of specified transactions, including our IPO.

These expenses are partially offset by interest income earned from our cash and cash equivalents.

Other Income (Expense), Net

Other income (expense), net consists primarily of interest income earned from our cash and cash equivalents.

This interest income is partially offset by interest expense principally on the note payable under our debt arrangement with PacWest and gains or losses associated with changes in the fair value of contingent liabilities associated with the consummation of specified transactions, including our IPO.

Upon completion of our IPO in October 2021, our contingent liability with PacWest and our other contingent derivative liability became due and payable.

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Results of Operations

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

The following tables summarize our results of operations for the three months ended June 30, 2022 and 2021 (in thousands):

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

The following tables summarize our results of operations for the three months ended September 30, 2022 and 2021 (in thousands):

Three Months Ended

September 30,

Operating expenses

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Loss from operations

Other expense, net

Total other expense, net

Other income (expense), net

Total other income (expense), net

Research and Development Expenses

The following tables summarize our research and development expenses for the three months ended June 30, 2022 and 2021 (in thousands):

The following tables summarize our research and development expenses for the three months ended September 30, 2022 and 2021 (in thousands):

Three Months Ended

September 30,

Other early programs and indirect research and development

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Total research and development expenses

Research and development expenses decreased by $1.5 million from $17.7 million for the three months ended June 30, 2021 to $16.2 million for the three months ended June 30, 2022.

The decrease in research and development expenses was primarily due to decreases of approximately $6.0 million in manufacturing expenses, due to a greater amount of manufacturing activities for XTX202 occurring in the comparable prior year period and a decrease of approximately $2.0 million due to a reduction in preclinical development activities for XTX202.

The decrease in research and development expenses was partially offset by the following:

● $ 3.7 million increase in expenses incurred in connection with XTX301, primarily driven by an increase of approximately $ 2.8 million in manufacturing activities and an increase of approximately $ 0.7 million in preclinical development activities;

Research and development expenses increased by $2.6 million from $10.5 million for the three months ended September 30, 2021 to $13.0 million for the three months ended September 30, 2022.

The increase in research and development expenses was primarily due to the following:

● $ 1.4 million increase in personnel-related costs, primarily driven by higher research and development headcount and the corresponding increase of approximately $ 1.0 million in salaries, bonuses and benefits, and an increase of approximately $ 0.2 million in equity-based compensation;

● $ 0.6 million increase in expenses incurred in connection with XTX101, primarily driven by an increase in manufacturing activities and clinical development activities related to our Phase 1 trial for XTX101, partially offset by a decrease in preclinical development activities ;

● $ 0.6 million increase in expenses incurred in connection with XTX301, primarily driven by preclinical development activities, manufacturing activities and clinical development activities related to our planned Phase 1 clinical trial for XTX301;

● $ 0.5 million increase in other early programs and indirect research and development expenses, primarily driven by an increase in external expenses related to preclinical research and development activities.

● $0.4 million increase in clinical development activities related to our Phase 1 clinical trial for XTX202.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the three months ended June 30, 2022 and 2021 (in thousands):

The following table summarizes our general and administrative expenses for the three months ended September 30, 2022 and 2021 (in thousands):

Three Months Ended

September 30,

Personnel-related (including equity-based compensation)

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Total general and administrative expenses

General and administrative expenses increased by $3.0 million from $5.3 million for the three months ended June 30, 2021 to $8.3 million for the three months ended June 30, 2022.

General and administrative expenses increased by $1.7 million from $5.5 million for the three months ended September 30, 2021 to $7.2 million for the three months ended September 30, 2022.

The increase in general and administrative expenses was primarily due to the following:

● $2.8 million increase in personnel-related costs, primarily driven by higher general and administrative headcount and the corresponding increase of approximately $1.2 million in salaries, bonuses and benefits, and an increase of approximately $1.4 million in equity-based compensation, which includes approximately $0.6 million in non-recurring compensation expense resulting from the modification of previously issued stock options;

● $1.0 million increase in personnel-related costs, primarily driven by higher general and administrative headcount and the corresponding increase of approximately $0.6 million in salaries, bonuses and benefits, and an increase of approximately $0.6 million in equity-based compensation;

● $0.7 million increase in facility-related and other general and administrative expenses, primarily driven by increases in costs incurred as a result of becoming a publicly traded company, including directors’ and officers’ liability insurance and other corporate related costs associated with increased overall corporate headcount.

These increases were partially offset by a $0.8 million decrease in professional and consulting fees.

Other Expense, Net

Other expense, net, decreased by $0.1 million from $0.2 million for the three months ended June 30, 2021 to $0.1 million for the three months ended June 30, 2022.

The decrease in other expense, net was primarily due to an increase in interest income earned from higher average cash balances as a result of the net proceeds received from our IPO.

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

The following tables summarize our results of operations for the six months ended June 30, 2022 and 2021 (in thousands):

Six Months Ended

Other Income (Expense), Net

Other income (expense), net, changed by $0.7 million from other expense of $0.3 million for the three months ended September 30, 2021 to other income of $0.4 million for the three months ended September 30, 2022.

The change in other income (expense), net was primarily due to an increase in interest income earned from higher interest rates earned on higher average cash balances as a result of the net proceeds received from our IPO.

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

The following tables summarize our results of operations for the nine months ended September 30, 2022 and 2021 (in thousands):

Nine Months Ended

September 30,

Operating expenses

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Loss from operations

Other expense, net

Total other expense, net

Other income (expense), net

Total other income (expense), net

Research and Development Expenses

The following tables summarize our research and development expenses for the six months ended June 30, 2022 and 2021 (in thousands):

Six Months Ended

The following tables summarize our research and development expenses for the nine months ended September 30, 2022 and 2021 (in thousands):

Nine Months Ended

September 30,

Other early programs and indirect research and development

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Total research and development expenses

Research and development expenses increased by $1.8 million from $29.4 million for the six months ended June 30, 2021 to $31.2 million for the six months ended June 30, 2022.

Research and development expenses increased by $4.4 million from $39.8 million for the nine months ended September 30, 2021 to $44.2 million for the nine months ended September 30, 2022.

The increase in research and development expenses was primarily due to the following:

● $ 6.5 million increase in expenses incurred in connection with XTX301, primarily driven by an increase of approximately $ 4.4 million in manufacturing activities and an increase of approximately $ 2.0 million related to preclinical development activities;

● $ 7.1 million increase in expenses incurred in connection with XTX301, primarily driven by an increase of approximately $ 4.6 million in manufacturing activities, an increase of approximately $ 2.1 million related to preclinical development activities and an increase of approximately $0.4 million in clinical development activities related to our planned Phase 1 clinical trial for XTX301;

● $ 4.3 million increase in personnel-related costs, primarily driven by higher research and development headcount and the corresponding increase of approximately $ 3.1 million in salaries, bonuses and benefits, and an increase of approximately $ 1.0 million in equity-based compensation;

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● $1.7 million increase in clinical development activities related to our Phase 1 clinical trial for XTX202.

These increases were partially offset by a decrease of approximately $7.6 million in manufacturing expenses due to a greater amount of manufacturing activities for XTX202 occurring in the comparable prior year period and a decrease of approximately $3.0 million due to a reduction in preclinical development activities for XTX202.

These increases were partially offset by a decrease of approximately $6.8 million in manufacturing expenses for XTX202 due to a greater amount of manufacturing activities occurring in the comparable prior year period and a decrease of approximately $4.0 million due to a reduction in preclinical development activities for XTX202.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the six months ended June 30, 2022 and 2021 (in thousands):

Six Months Ended

The following table summarizes our general and administrative expenses for the nine months ended September 30, 2022 and 2021 (in thousands):

Nine Months Ended

September 30,

Personnel-related (including equity-based compensation)

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Total general and administrative expenses

General and administrative expenses increased by $4.4 million from $10.2 million for the six months ended June 30, 2021 to $14.6 million for the six months ended June 30, 2022.

General and administrative expenses increased by $6.1 million from $15.7 million for the nine months ended September 30, 2021 to $21.8 million for the nine months ended September 30, 2022.

The increase in general and administrative expenses was primarily due to the following:

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These increases were partially offset by a $1.3 million decrease in professional and consulting fees.

Other Expense, Net

Other expense, net, decreased by $0.1 million from $0.3 million for the six months ended June 30, 2021 to $0.2 million for the six months ended June 30, 2022.

The decrease in other expense, net was primarily due to an increase in interest income earned from higher average cash balances as a result of the net proceeds received from our IPO.

Other Income (Expense), Net

Other income (expense), net, changed by $0.8 million from other expense of $0.6 million for the nine months ended September 30, 2021 to other income of $0.2 million for the nine months ended September 30, 2022.

Liquidity and Capital Resources

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To date, we have financed our operations primarily from proceeds raised through private placements of preferred units and convertible preferred stock, a debt financing and our IPO.

As of June 30, 2022, we had cash and cash equivalents of $159.4 million.

in net proceeds from the sale and issuance of preferred units and convertible preferred stock, and $10.0 million in net proceeds from our debt financing with PacWest.

As of September 30, 2022, we had cash and cash equivalents of $139.1 million.

The following table provides information regarding our cash flows for each period presented (in thousands):

Six Months Ended

Nine Months Ended

September 30,

Net cash provided by (used in):

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The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges, which are generally due to equity-based compensation, depreciation and amortization, as well as changes in components of operating assets and liabilities, which are generally due to increased expenses and timing of vendor payments.

During the six months ended June 30, 2022, net cash used in operating activities of $37.6 million was primarily due to our net loss of $46.0 million, partially offset by changes in operating assets and liabilities of $2.6 million and net non-cash expenses of $5.7 million.

During the six months ended June 30, 2021, net cash used in operating activities of $42.9 million was primarily due to our net loss of $39.8 million and changes in operating assets and liabilities of $5.7 million, partially offset by net non-cash expenses of $2.7 million.

During the nine months ended September 30, 2022, net cash used in operating activities of $57.5 million was primarily due to our net loss of $65.8 million, partially offset by changes in operating assets and liabilities of $0.1 million and net non-cash expenses of $8.1 million.

During the nine months ended September 30, 2021, net cash used in operating activities of $63.6 million was primarily due to our net loss of $56.1 million and changes in operating assets and liabilities of $11.8 million, partially offset by net non-cash expenses of $4.3 million.

Investing Activities

During the six months ended June 30, 2022 and 2021, net cash used in investing activities of $1.0 million and $0.6 million, respectively, was primarily due to purchases of property and equipment.

During the nine months ended September 30, 2022 and 2021, net cash used in investing activities of $1.4 million and $0.7 million, respectively, was primarily due to purchases of property and equipment.

Financing Activities

During the six months ended June 30, 2022, net cash used in financing activities of less than $0.1 million consisted of payments on our finance lease for certain lab equipment, partially offset by proceeds received from the exercise of stock options.

During the six months ended June 30, 2021, net cash provided by financing activities of $144.5 million consisted primarily of proceeds from the sale and issuance of our Series B and Series C convertible preferred stock.

During the nine months ended September 30, 2022, net cash used in financing activities of less than $0.1 million consisted of payments on our finance lease for certain lab equipment, partially offset by proceeds received from the exercise of stock options.

During the nine months ended September 30, 2021, net cash provided by financing activities of $144.8 million consisted primarily of proceeds from the sale and issuance of our Series B and Series C convertible preferred stock.

Loan and Security Agreement

In November 2019, we entered into a loan and security agreement with PacWest, as amended, under which we borrowed $10.0 million under a term loan, which amount remains outstanding.

We have the ability to request one or more additional term loans in an aggregate principal amount of $10.0 million prior to December 31, 2022.

Borrowings under the loan and security agreement are collateralized by substantially all of our assets, excluding intellectual property.

In November 2019, we entered into a loan and security agreement with PacWest, as amended, which we refer to as the loan agreement, under which we borrowed $10.0 million under a term loan, which amount remains outstanding.

Under the loan agreement, we have the ability to request one or more additional term loans in an aggregate principal amount of $10.0

million prior to December 31, 2022.

Borrowings under the loan agreement are collateralized by substantially all of our assets, excluding intellectual property.

Interest on amounts outstanding accrues at a variable annual rate equal to the greater of (i) the prime rate plus 0.25% or (ii) 4.75%.

As of June 30, 2022, the interest rate on the term loan is 5.0%.

As of September 30, 2022, the interest rate on the term loan is 6.5%.

We are required to make interest-only payments on any outstanding balances through December 31, 2022.

Subsequent to the interest-only period, we will be required to make equal monthly payments of principal plus interest until the term loan matures on June 30, 2024.

In addition, under the loan and security agreement, as amended, we paid a one-time success fee of $0.8 million to PacWest in October 2021 upon the closing of the IPO.

Additionally, we are obligated to pay PacWest a fee of 1.0% of the aggregate principal amounts then outstanding if any term loans are repaid prior to September 17, 2022.

The loan and security agreement, as amended, contains customary representations, warranties and covenants and also include customary events of default, including payment defaults, breaches of covenants, a change of control and occurrence of a material adverse effect.

We have the following minimum aggregate future loan payments under the loan and security agreement, as amended, at June 30, 2022 (in thousands):

Under the loan agreement, we paid a one-time success fee of $0.8 million to PacWest in October 2021 upon the closing of our IPO.

The loan agreement contains customary representations, warranties and covenants and also include customary events of default, including payment defaults, breaches of covenants, a change of control and occurrence of a material adverse effect.

We have the following minimum aggregate future loan payments under the loan agreement at September 30, 2022 (in thousands):

Total future principal payments

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Additionally, the United States is experiencing a workforce shortage, which in turn has created a competitive wage environment that may also increase our operating costs in the future.

As of June 30, 2022, we had cash and cash equivalents of $159.4 million.

We believe that our existing cash and cash equivalents will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into the first half of 2024.

As of September 30, 2022, we had cash and cash equivalents of $139.1 million.

We believe that our existing cash and cash equivalents will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2024.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

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Our funding requirements and timing and amount of our operating expenditures will depend on many factors, including, but not limited to:

● the scope, progress, results and costs of research and development for our current and future product candidates, including our current and planned clinical trials for our most advanced product candidates, XTX101 and XTX202, and ongoing preclinical development for our current and future product candidates;

● the scope, progress, results and costs of research and development for our current and future product candidates, including our current and planned clinical trials for our clinical-stage cytokine product candidates, XTX202 and XTX301, and ongoing preclinical development for our current and future product candidates;

● the scope, prioritization and number of our research and development programs;

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● the costs of securing manufacturing materials for use in preclinical studies, clinical trials and, for any product candidates for which we receive regulatory approval, if any, use as commercial supply;

● our ability to seek, establish and maintain a collaboration to develop XTX101 with a collaborator, including the financial terms and any cost-sharing arrangements of any such collaboration;

● the costs and timing of future commercialization activities for any of our product candidates for which we receive regulatory approval;

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● the extent to which we may acquire or in-license other products, product candidates, technologies or intellectual property, as well as the terms of any such arrangements;

● the impacts of the COVID-19 pandemic;

● our ability to seek, establish and maintain a collaboration to develop XTX101, our tumor-activated mAb product candidate, with a collaborator, including the financial terms and any cost-sharing arrangements of any such collaboration;

● the costs of continuing to expand our operations and operating as a public company.

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Adequate additional capital may not be available to us on acceptable terms, or at all.

Market volatility resulting from the COVID-19 pandemic, adverse changes in international policies and political relations, regional or global conflicts, uncertainty around global economic conditions, or other factors could also adversely impact our ability to access capital as and when needed.

Market volatility resulting from the COVID-19 pandemic, adverse changes in domestic and international fiscal, monetary and other policies and political relations, regional or global conflicts, uncertainty around global economic conditions, or other factors could also adversely impact our ability to access capital as and when needed.

To the extent that we raise additional capital through the sale of equity or securities convertible into or exchangeable for equity, the ownership interest of our existing stockholders may be diluted, and the terms of such securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis