10q10k10q10k.net

What changed in Arcellx, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Arcellx, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+577 added−638 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-28)

Top changes in Arcellx, Inc.'s 2024 10-K

577 paragraphs added · 638 removed · 442 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

159 edited+62 added−43 removed344 unchanged
Biggest changeKey highlights from the data presented are as follows: • For the 38 efficacy evaluable patients with median follow-up of 26.5 months, per IMWG criteria: • 100% overall response rate (ORR) achieved; • 29 of 38 (76%) patients achieved complete response (CR) or a stringent complete response (sCR); and • 35 of 38 (92%) patients achieved very good partial response (VGPR) or higher. • Of those evaluable for MRD testing (n=28), 25 (89%) were MRD-negative at a minimum of 10 -5 sensitivity. • Median duration of response, progression free survival (PFS), and overall survival were not reached at the time of the October 15, 2023 data cut with 26.5 months of median follow-up because less than half of all dosed subjects had experienced an event of progression or death. • Using the Kaplan-Meier analysis, which calculates the cumulative survival probability in any given length of time through analysis of subjects who have had an event (death or progression) within specified time intervals: 1 • Progression-free survival (PFS) rates, which reflect the percentage of patients who are alive and have not progressed, at 6, 12, 18 and 24 months were 92%, 76%, 64% and 56%, respectively; • PFS rates of patients with high-risk prognostic features (n=24) at 6, 12, 18 and 24 months were 92%, 74%, 65% and 59%, respectively; and • PFS rates among patients with extra-medullary disease (EMD) (n=13) at 6, 12, 18 and 24 months were 92%, 67%, 67% and 58%, respectively. • While median PFS is yet to be reached, the estimated Kaplan-Meier median PFS for the study population was 28 months at the time of the October 15, 2023 data cut with 26.5 months of median follow-up. • At the dose being used in the pivotal Phase 2 iMMagine-1 trial, 115 (+/- 10) million CAR+ T-cells (i.e., DL1 in this phase 1 trial), anito-cel continues to be well-tolerated. • Adverse events, including cytokine release syndrome (CRS) and immune effector cell-associated neurotoxicity syndrome (ICANS), have been manageable, and each event was resolved with standard management. • No cases of delayed neurotoxicity, cranial nerve palsy, parkinsonian symptoms nor Guillain-Barré syndrome have been observed through October 15, 2023. • No cases of grade 3 (or greater) CRS and only one case (3%) of grade 3 ICANS have been observed with no additional cases observed through October 15, 2023.
Biggest changeKey highlights from the preliminary data presented for iMMagine-1 as of the October 31, 2024 data cutoff date are as follows: • For the 86 efficacy evaluable patients with median follow-up of 9.5 months, per IMWG criteria: • 97% (83 of 86) overall response rate (ORR) achieved; 1 • 53 of 86 (62%) patients achieved complete response (CR) or a stringent complete response (sCR); and • 70 of 86 (81%) patients achieved very good partial response (VGPR) or higher. • Of those evaluable for MRD testing (n=58), 54 (93%) were MRD-negative at a minimum of 10 -5 sensitivity. • Median progression free survival (PFS), and overall survival (OS) were not reached, as less than half of all dosed subjects had experienced an event of progression or death. • Using the Kaplan-Meier analysis, which calculates the cumulative survival probability in any given length of time through analysis of subjects who have had an event (death or progression) within specified time intervals: • PFS rates, which reflect the percentage of patients who are alive and have not progressed, at 6 and 12 months were 93% and 79%, respectively; • OS rates, which reflect the percentage of patients who are alive at 6 and 12 months were 97% and 97%, respectively. • For the 98 safety evaluable patients, anito-cel continues to be well-tolerated. • No delayed or non-ICANS neurotoxicities, including no Parkinsonism, no cranial nerve palsies, and no Guillain-Barré syndrome, have been observed in more than 150 patients dosed with anito-cel. • Cytopenias were the most common Grade ≥3 TEAEs; 53 patients (54%) had Grade ≥3 neutropenia, 20 (20%) had Grade ≥3 thrombocytopenia, and 22 (22%) had Grade ≥3 anemia. • 84 of 98 patients (86%) experienced Grade 1 or lower cytokine release syndrome (CRS), including 17 (17%) with no CRS.
Based on our recent discussions 2 with the FDA, we believe that results from our iMMagine-1 Phase 2 clinical trial, if positive, together with the results from our Phase 1 trial could be sufficient to support the filing of a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA).
Based on our recent discussions with the FDA, we believe that results from our iMMagine-1 Phase 2 clinical trial, if positive, together with the results from our Phase 1 trial could be sufficient to support the filing of a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA).
We have summarized our preclinical and clinical programs in the pipeline chart below and indicated where such programs are subject to the Kite Collaboration Agreement, which is described in “Licenses and Collaborations” below.
We have summarized our preclinical and clinical programs in the pipeline chart below and indicated where such programs are subject to the Kite Collaboration Agreement, which is described in “Licenses and Collaborations” below.
However, Elrexfio is dosed weekly or biweekly, administered under a REMS, and requires hospitalization following administration of the initial doses. • The BCMA-targeting ADC, Blenrep was an approved product, but the manufacturer, GSK, began the withdrawal of the U.S. marketing authorization in November 2022, at the request of the FDA.
However, Elrexfio is dosed weekly or biweekly, and is administered under a REMS, and requires hospitalization following administration of the initial doses. • The BCMA-targeting ADC, Blenrep was an approved product, but the manufacturer, GSK, began the withdrawal of the U.S. marketing authorization in November 2022, at the request of the FDA.
In connection with the amendment to the Kite Collaboration Agreement, in December 2023, we entered into a second common stock purchase agreement with Gilead and amended and restated the standstill and stock restriction agreement, pursuant to which we issued and sold to Gilead 3,242,542 shares of our common stock for an aggregate purchase price of $200.0 million which shares are also subject to certain transfer and standstill restrictions and registration rights.
In connection with the amendment to the Kite Collaboration Agreement, in December 2023, we entered into a second common stock purchase agreement with Gilead and amended and restated the standstill and stock restriction agreement (the Amended Standstill Agreement), pursuant to which we issued and sold to Gilead 3,242,542 shares of our common stock for an aggregate purchase price of $200.0 million which shares are also subject to certain transfer and standstill restrictions and registration rights.
The process generally involves the following: • Completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with good laboratory practice (GLP) requirements; • Submission to the FDA of an IND, which must become effective before human clinical trials may begin; • Approval by an independent institutional review board (IRB), or ethics committee at each clinical trial site before each trial may be initiated; • Performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, GCP requirements and other clinical trial-related regulations to establish the potency, purity and safety of the investigational product for each proposed indication; • Submission to the FDA of a BLA; • A determination by the FDA within 60 days of its receipt of a BLA to accept the filing for review; • Satisfactory completion of a FDA pre-approval inspection of the manufacturing facility or facilities where the biologic will be produced to assess compliance with cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the biologic’s identity, strength, quality and purity; • Potential FDA audit of the preclinical study and/or clinical trial sites that generated the data in support of the BLA; • FDA review and approval of the BLA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the biologic in the United States; and • Compliance with any post-approval requirements, including the potential requirement to implement a REMS, and the potential requirement to conduct post-approval studies.
The process generally involves the following: • Completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with good laboratory practice (GLP) requirements; 36 • Submission to the FDA of an IND, which must become effective before human clinical trials may begin; • Approval by an independent institutional review board (IRB), or ethics committee at each clinical trial site before each trial may be initiated; • Performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, GCP requirements and other clinical trial-related regulations to establish the potency, purity and safety of the investigational product for each proposed indication; • Submission to the FDA of a BLA; • A determination by the FDA within 60 days of its receipt of a BLA to accept the filing for review; • Satisfactory completion of a FDA pre-approval inspection of the manufacturing facility or facilities where the biologic will be produced to assess compliance with cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the biologic’s identity, strength, quality and purity; • Potential FDA audit of the preclinical study and/or clinical trial sites that generated the data in support of the BLA; • FDA review and approval of the BLA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the biologic in the United States; and • Compliance with any post-approval requirements, including the potential requirement to implement a REMS, and the potential requirement to conduct post-approval studies.
Progress reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the investigational product, findings 33 from animal or in vitro testing that suggest a significant risk for human subjects and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.
Progress reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the investigational product, findings from animal or in vitro testing that suggest a significant risk for human subjects and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.
We believe that creating our TAG from a normal human protein will reduce the likelihood of immunogenicity of the TAG and by extension, the SparX protein containing the TAG. 14 • We believe the small size of the SparX protein will allow it to penetrate complex tumor microenvironments with a half-life short enough (estimated to be several hours in humans) that physicians could manage an emerging toxicity by withholding or decreasing the next SparX protein dose thereby causing the ARC-T-cells to deactivate.
We believe that creating our TAG from a normal human protein will reduce the likelihood of immunogenicity of the TAG and by extension, the SparX protein containing the TAG. • We believe the small size of the SparX protein will allow it to penetrate complex tumor microenvironments with a half-life short enough (estimated to be several hours in humans) that physicians could manage an emerging toxicity by withholding or decreasing the next SparX protein dose thereby causing the ARC-T-cells to deactivate.
This will be particularly important as we 15 move beyond B cell malignancies into indications like AML/MDS or solid tumors. We believe our in vivo preclinical studies support the ability of ARC-T-cells to kill heterogeneous tumors through sequential administration of SparX proteins with different target specificity. Custom Logic-Gated Therapeutics to Enable Selectivity and Improve Targeting.
This will be particularly important as we move beyond B cell malignancies into indications like AML/MDS or solid tumors. We believe our in vivo preclinical studies support the ability of ARC-T-cells to kill heterogeneous tumors through sequential administration of SparX proteins with different target specificity. Custom Logic-Gated Therapeutics to Enable Selectivity and Improve Targeting.
The Centralized Procedure is optional for products containing a new active substance not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific or technical innovation or for products that are in the interest of public health in the European Union. • National MAs, which are issued by the competent authorities of the Member States of the EEA and only cover their respective territory, are available for products not falling within the mandatory scope of the Centralized Procedure.
The Centralized Procedure is optional for products containing a new active substance not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific or technical innovation or for products that are in the interest of public health in the European Union. 45 • National MAs, which are issued by the competent authorities of the Member States of the EEA and only cover their respective territory, are available for products not falling within the mandatory scope of the Centralized Procedure.
As shown in the middle panels of the figure below, using size exclusion chromatography, we have demonstrated that a higher level of monomeric protein content can be purified 10 from human embryonic kidney (HEK) 293 cells expressing D-Domain-based SparX proteins compared to scFv, indicating lower levels of aggregation of the D-Domain based SparX proteins and thus greater stability.
As shown in the middle panels of the figure below, using size exclusion chromatography, we have demonstrated that a higher level of monomeric protein content can be purified from human embryonic kidney (HEK) 293 cells expressing D-Domain-based SparX proteins compared to scFv, indicating lower levels of aggregation of the D-Domain based SparX proteins and thus greater stability.
We also intend to employ clinical and translational strategies such as combinations with checkpoint inhibitors to boost activity of ddCAR or ARC-T-cells to further overcome some common immunological barriers to successful CAR-T therapy. Additional Indications and Applications of Our Technology We believe our platform technologies lend themselves to a broad array of potential applications, including: Novel Targets .
We also intend to employ clinical and translational strategies such as combinations with checkpoint inhibitors to boost activity of ddCAR or ARC-T-cells to further overcome some common immunological barriers to successful CAR-T therapy. 31 Additional Indications and Applications of Our Technology We believe our platform technologies lend themselves to a broad array of potential applications, including: Novel Targets .
The dosability of our ARC-SparX platform potentially provides a new way for physicians to manage or prevent severe T cell-associated toxicities, while maintaining the objective to maximize efficacy. We have conducted preclinical studies in which we have observed the ability of SparX proteins to control the killing function of ARC-T-cells in a dose-dependent manner Adaptability of Treatment Regimen.
The dosability of our ARC-SparX platform potentially provides a new way for physicians to manage or prevent severe T cell-associated toxicities, while maintaining the objective to maximize efficacy. We have conducted preclinical studies in which we have observed the ability of SparX proteins to control the killing function of ARC-T-cells in a dose-dependent manner. 16 Adaptability of Treatment Regimen.
Upon completion 24 of the Phase 1 trial, we will leverage the learnings from this trial to advance our AML/MDS programs utilizing ARC-SparX and consider developing additional SparX for rrMM for a broader pipeline in this disease area. Additionally, in December 2023, Kite exercised its option under the Kite Collaboration Agreement to negotiate a license for ACLX-001.
Upon completion of the Phase 1 trial, we will leverage the learnings from this trial to advance our AML/MDS programs utilizing ARC-SparX and consider developing additional SparX for rrMM for a broader pipeline in this disease area. Additionally, in December 2023, Kite exercised its option under the Kite Collaboration Agreement to negotiate a license for ACLX-001.
The FDA does not always meet its PDUFA goal dates for standard and priority BLAs, and the review process is often extended by FDA requests for additional information or clarification. Before approving a BLA, the FDA will conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with cGMP requirements.
The FDA does not always meet its PDUFA goal dates for standard and priority BLAs, and the review process is often extended by FDA requests for additional information or clarification. 39 Before approving a BLA, the FDA will conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with cGMP requirements.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from 42 other countries and bulk purchasing.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Other secondary and/or exploratory endpoints will include progression free survival (PFS), overall survival (OS), assessment of minimal residual disease, further characterization of the safety profile of anito-cel in a larger patient population, and confirmatory correlative biomarker analysis for pharmacology, predictive biomarkers of depth and duration of response, and manufactured anito-cel cell phenotyping.
Other secondary and/or exploratory endpoints will include progression free survival (PFS), OS, assessment of minimal residual disease, further characterization of the safety profile of anito-cel in a larger patient population, and confirmatory correlative biomarker analysis for pharmacology, predictive biomarkers of depth and duration of response, and manufactured anito-cel cell phenotyping.
FDA approval is required before a biosimilar may be marketed in the United States. However, complexities associated with the large and intricate structures of biological products and the process by which such products are manufactured pose significant 37 hurdles to the FDA’s implementation of the law that are still being worked out by the FDA.
FDA approval is required before a biosimilar may be marketed in the United States. However, complexities associated with the large and intricate structures of biological products and the process by which such products are manufactured pose significant hurdles to the FDA’s implementation of the law that are still being worked out by the FDA.
For example, across the clinical trials of Abecma and Carvykti, several poor prognostic factors have been identified including the presence of extra-medullary disease (EMD) and more broadly plasmacytomas, ISS stage 3, high tumor burden, and high-risk cytogenetics. In clinical trials, these patients demonstrated shorter PFS rates.
For example, across the clinical trials of Abecma and Carvykti, several poor prognostic factors have been identified including the presence of extra-medullary disease (EMD) and more broadly plasmacytomas, ISS stage 3, high tumor burden, and high-risk cytogenetics. In clinical trials in rrMM, these patients demonstrated shorter PFS rates.
Any patent issuing from the family is expected to expire in 2042, not including any patent term adjustment and patent term extension. In addition to patent protection, we also rely on trademark registration, trade secrets, know-how, other proprietary information and continuing technological innovation to develop and maintain our competitive position.
Any patent issuing from the family is expected to expire in 2042, not including any patent term adjustment and patent term extension. 35 In addition to patent protection, we also rely on trademark registration, trade secrets, know-how, other proprietary information and continuing technological innovation to develop and maintain our competitive position.
A BLA for a regenerative medicine therapy that has received RMAT designation may be eligible for priority review or accelerated approval through use of surrogate or intermediate endpoints reasonably likely to predict long-term clinical benefit, or 36 reliance upon data obtained from a meaningful number of sites.
A BLA for a regenerative medicine therapy that has received RMAT designation may be eligible for priority review or accelerated approval through use of surrogate or intermediate endpoints reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of sites.
In short, the BLA is a request for approval to market the biologic for one or more specified indications and 34 must contain proof of safety, purity and potency for a biologic. The application may include both negative and ambiguous results of preclinical studies and clinical trials, as well as positive findings.
In short, the BLA is a request for approval to market the biologic for one or more specified indications and must contain proof of safety, purity and potency for a biologic. The application may include both negative and ambiguous results of preclinical studies and clinical trials, as well as positive findings.
Under the Kite Collaboration Agreement, as further described 26 in “Licenses and Collaborations” below, Kite will develop allogeneic/off-the-shelf cell therapies for the treatment of myeloma as another tool in our fight against cancer that includes our autologous ddCARs and ARC-SparX. Indications Beyond Oncology .
Under the Kite Collaboration Agreement, as further described in “Licenses and Collaborations” below, Kite will develop allogeneic/off-the-shelf cell therapies for the treatment of myeloma as another tool in our fight against cancer that includes our autologous ddCARs and ARC-SparX. Indications Beyond Oncology .
We initiated our Phase 1 clinical trial of ACLX-001, the first product candidate developed under our ARC-SparX platform, for the treatment of rrMM in the second quarter of 2022. ACLX-001 is an immunotherapeutic combination composed of our 3 ARC-T-cells and SparX proteins that target BCMA.
We initiated our Phase 1 clinical trial of ACLX-001, the first product candidate developed under our ARC-SparX platform, for the treatment of rrMM in the second quarter of 2022. ACLX-001 is an immunotherapeutic combination composed of our ARC-T-cells and SparX proteins that target BCMA.
The hydrophobic core results in ultrafast folding kinetics of the D-Domain creating a stable structure when expressed in cells. • Stability : D-Domains are highly stable proteins compared to scFvs which facilitates the high expression of CARs on T-cells and manufacturing of SparX proteins.
The hydrophobic core results in ultrafast folding kinetics of the D-Domain creating a stable structure when expressed in cells. 11 • Stability : D-Domains are highly stable proteins compared to scFvs which facilitates the high expression of CARs on T-cells and manufacturing of SparX proteins.
Kite will be responsible for commercialization of anito-cel and such other MM products outside the United States, to the extent they are approved by the applicable regulatory authorities. 28 Licenses and Collaborations Collaboration and License Agreement with Kite Pharma, Inc.
Kite will be responsible for commercialization of anito-cel and such other MM products outside the United States, to the extent they are approved by the applicable regulatory authorities. Licenses and Collaborations Collaboration and License Agreement with Kite Pharma, Inc.
We believe these preliminary results demonstrate the capability of D-Domains not only to effectively bind target antigens and drive CAR-T cell proliferation but also to enable efficient killing of a substantial proportion of tumor cells.
We believe these results demonstrate the capability of D-Domains not only to effectively bind target antigens and drive CAR-T cell proliferation but also to enable efficient killing of a substantial proportion of tumor cells.
The manufacturing process for our ARC-T-cells is consistent with the anito-cel process. However, cells are transduced with a lentiviral vector encoding our universal ARC, which is a CAR with an anti-TAG binding domain, in lieu of a lentiviral vector 27 encoding the CAR construct with an anti-BCMA binding domain.
The manufacturing process for our ARC-T-cells is consistent with the anito-cel process. However, cells are transduced with a lentiviral vector encoding our universal ARC, which is a CAR with an anti-TAG binding domain, in lieu of a lentiviral vector encoding the CAR construct with an anti-BCMA binding domain.
We completed the dose escalation component with 6 patients each enrolled in DL1 (100 19 (+/-20%) x 10 6 cells) and DL2 (300 (+/- 20%) x 10 6 cells) and enrolled additional patients (n=26) at DL1 for further characterization of safety and preliminary efficacy.
We completed the dose escalation component with 6 patients each enrolled in DL1 (100 (+/-20%) x 10 6 cells) and DL2 (300 (+/- 20%) x 10 6 cells) and enrolled additional patients (n=26) at DL1 for further characterization of safety and preliminary efficacy.
In the future, we may apply for restoration of patent term for our currently owned or licensed patents to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant BLA. 39 Government Regulation Outside of the United States In addition to regulations in the United States, we are subject to a variety of regulations in other jurisdictions where we seek to commercialize any of our product candidates, including countries in Europe and Asia.
In the future, we may apply for restoration of patent term for our currently owned or licensed patents to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant BLA. 44 Government Regulation Outside of the United States In addition to regulations in the United States, we are subject to a variety of regulations in other jurisdictions where we seek to commercialize any of our product candidates, including countries in Europe and Asia.
We selected and engineered the TAG for our SparX proteins for the following reasons: • Humans have a pre-established tolerance to hAFP from experiencing high levels in utero and as pregnant mothers.
We selected and engineered the TAG for our SparX proteins for the following reasons: 15 • Humans have a pre-established tolerance to hAFP from experiencing high levels in utero and as pregnant mothers.
If the product has not received a 40 National MA in any Member State at the time of application, it can be approved simultaneously in various Member States through the Decentralized Procedure.
If the product has not received a National MA in any Member State at the time of application, it can be approved simultaneously in various Member States through the Decentralized Procedure.
Thus, new therapies are needed for MDS patients as well. 25 ACLX-002 (CD123): Phase 1 Trial Our first AML/MDS product candidate is ACLX-002, which is an immunotherapeutic combination agent composed of the same ARC-T-cells used in ACLX-001, together with mono-valent SparX proteins that each contain a binding domain directed at CD123.
Thus, new therapies are needed for MDS patients as well. 30 ACLX-002 (CD123): Phase 1 Trial Our first AML/MDS product candidate is ACLX-002, which is an immunotherapeutic combination agent composed of the same ARC-T-cells used in ACLX-001, together with mono-valent SparX proteins that each contain a binding domain directed at CD123.
We believe the low propensity for tonic signaling of D-Domain-based CARs may lower T cell exhaustion. 12 • Engineered D-Domain Scaffolds : The structural features of the D-Domain make it particularly well suited as a scaffold protein that can be modified by inserting selected amino acids to generate diverse libraries of proprietary target-binding domains.
We believe the low propensity for tonic signaling of D-Domain-based CARs may lower T cell exhaustion. 13 • Engineered D-Domain Scaffolds : The structural features of the D-Domain make it particularly well suited as a scaffold protein that can be modified by inserting selected amino acids to generate diverse libraries of proprietary target-binding domains.
However, competitors may receive approval of either a different product for the same indication or the same product for a different indication but that could be 35 used off-label in the orphan indication.
However, competitors may receive approval of either a different product for the same indication or the same product for a different indication but that could be used off-label in the orphan indication.
As shown in the right panel of the figure below, our anito-cel transduced T-cells demonstrated superior transduction efficiency when compared to scFv transduced T-cells derived from multiple normal human donors. 11 • High Cell Surface Expression : Coincident with higher transduction rates, the expression of the CAR on the surface of the T cell is higher with CARs employing a D-Domain compared with an scFv.
As shown in the right panel of the figure below, our anito-cel transduced T-cells demonstrated superior transduction efficiency when compared to scFv transduced T-cells derived from multiple normal human donors. 12 • High Cell Surface Expression : Coincident with higher transduction rates, the expression of the CAR on the surface of the T cell is higher with CARs employing a D-Domain compared with an scFv.
The IMWG criteria for sCR, CR, VGPR, and PR are summarized below. • stringent Complete Response (sCR) : Complete Response (as defined below) plus normal free light chain (FLC) ratio and absence of clonal cells in bone marrow biopsy by immunohistochemistry (kappa to lambda light chain ratio ( k / l ) ≤4:1 or ≥1:2 for k or l patients, respectively, after counting ≥100 plasma cells). • Complete Response (CR) : Negative immunofixation in the serum and urine; and disappearance of any soft tissue plasmacytomas; and • Very Good Partial Response (VGPR) : Serum and urine M protein, detectable by immunofixation but not on electrophoresis; or ≥90% reduction in serum M protein plus urine M protein level • Partial Response (PR) : ≥50% reduction of serum M protein plus reduction in 24-hour urinary M protein by ≥90% or to Overall Response Rate (ORR) includes patients that achieved sCR, CR, VGPR or PR. sCR and CR do not indicate that the patient was cured of the condition, as the disease is currently considered incurable.
The IMWG criteria for sCR, CR, VGPR, and PR are summarized below. • stringent Complete Response (sCR) : Complete Response (as defined below) plus normal free light chain (FLC) ratio and absence of clonal cells in bone marrow biopsy by immunohistochemistry (kappa to lambda light chain ratio ( k / l ) ≤4:1 or ≥1:2 for k or l patients, respectively, after counting ≥100 plasma cells). 20 • Complete Response (CR) : Negative immunofixation in the serum and urine; and disappearance of any soft tissue plasmacytomas; and • Very Good Partial Response (VGPR) : Serum and urine M protein, detectable by immunofixation but not on electrophoresis; or ≥90% reduction in serum M protein plus urine M protein level • Partial Response (PR) : ≥50% reduction of serum M protein plus reduction in 24-hour urinary M protein by ≥90% or to Overall Response Rate (ORR) includes patients that achieved sCR, CR, VGPR or PR. sCR and CR do not indicate that the patient was cured of the condition, as multiple myeloma is currently considered incurable.
Corporate Information We were incorporated in Delaware in December 2014 under the name “Encarta Therapeutics, Inc.” and subsequently changed our name to “Arcellx, Inc.” Our principal executive offices are located at 800 Bridge Parkway, Redwood City, California 94065. Our telephone number is (240) 327-0603. Our website address is www.arcellx.com.
Corporate Information We were incorporated in Delaware in December 2014 under the name “Encarta Therapeutics, Inc.” and subsequently changed our name to “Arcellx, Inc.” Our principal executive offices are located at 800 Bridge Parkway, Redwood City, California 94065. Our telephone number is (240) 327-0630. Our website address is www.arcellx.com.
We believe our preliminary Phase 1 clinical data for anito-cel have demonstrated that D-Domains can potentially provide meaningful clinical benefits. Our D-Domain platform consists of structurally unique binders that are small and stable, which can be consistently manufactured. They can also be modified to generate diverse libraries of proprietary target- binding domains.
We believe our preliminary clinical data for anito-cel have demonstrated that D-Domains can potentially provide meaningful clinical benefits. Our D-Domain platform consists of structurally unique binders that are small and stable, which can be consistently manufactured. They can also be modified to generate diverse libraries of proprietary target- binding domains.
Further, the Company’s references to the URLs for these websites are intended to be inactive textual references only. We have used, and intend to continue to use, our investor relations website, press releases, public conference calls, and webcasts to disclose material non-public information and to comply with our disclosure obligations under Regulation FD. 43
Further, the Company’s references to the URLs for these websites are intended to be inactive textual references only. We have used, and intend to continue to use, our investor relations website, press releases, public conference calls, and webcasts to disclose material non-public information and to comply with our disclosure obligations under Regulation FD. 49
Our ARC-T-cells are dosable, controllable, universal CAR-Ts designed to activate only when combined with a SparX protein that is bound to an antigen on a cell. 8 ddCAR Platform We use our ddCAR platform to generate single infusion therapies where our D-Domain binder replaces the scFvs.
Our ARC-T-cells are dosable, controllable, universal CAR-Ts designed to activate only when combined with a SparX protein that is bound to an antigen on a cell. 9 ddCAR Platform We use our ddCAR platform to generate single infusion therapies where our D-Domain binder replaces the scFvs.
We internally validate expression profiles for all antigens under evaluation to select the best targets. At the same time, all the reagents needed to screen our proprietary D-Domain libraries for specific binders to the antigen are generated and qualified. Over a dozen D-Domain binders to a variety of tumor antigens have already been generated to date.
We internally validate expression profiles for all antigens under evaluation to select the best targets. At the same time, all the reagents needed to screen our proprietary D-Domain libraries for specific binders to the antigen are generated and qualified. D-Domain binders to a variety of tumor antigens have already been generated to date.
In MM, we plan to: • Evaluate the efficacy of our lead product candidate, anito-cel, in our iMMagine-1 Phase 2 pivotal trial in rrMM and seek regulatory approval in collaboration with Kite; • In collaboration with Kite, pursue expanded access to anito-cel through label expansion clinical trials; • Through our ex-U.S. partner, Kite, pursue clinical development of anito-cel in other key geographies, such as Europe and Asia; and • Evaluate the potential of our ARC-SparX technology through our ongoing Phase 1 clinical trial of ACLX-001 in rrMM.
In MM, we plan to: • Evaluate the efficacy of our lead product candidate, anito-cel, in our pivotal Phase 2 iMMagine-1 and Phase 3 iMMagine-3 trials in rrMM and seek regulatory approval in collaboration with Kite; • In collaboration with Kite, pursue expanded access to anito-cel through other label expansion clinical trials, including iMMagine-3 and others; • Through our ex-U.S. partner, Kite, pursue clinical development of anito-cel in other key geographies, such as Europe and Asia; and • Evaluate the potential of our ARC-SparX technology through our ongoing Phase 1 clinical trial of ACLX-001 in rrMM.
In the Phase 1b/2 trial of Carvykti (CARTITUDE-1), patients with plasmacytomas (of which ~2/3 had EMD) demonstrated a mPFS of 13.8 months, patients with ISS stage 3 disease demonstrated a mPFS of 15.0 months, patients with BMPC ≥60% demonstrated a mPFS of 24.1 months, and patients with high risk cytogenetics demonstrated a mPFS of 21.1 months.
For example, in the Phase 1b/2 trial of Carvykti (CARTITUDE-1), patients with plasmacytomas (of which ~2/3 had EMD) demonstrated a mPFS of 13.8 months, patients with ISS stage 3 disease demonstrated a mPFS of 15.0 months, patients with BMPC ≥60% demonstrated a mPFS of 24.1 months, and patients with high risk cytogenetics demonstrated a mPFS of 21.1 months.
However, Tecvayli is dosed weekly or biweekly in some cases, administered under a Risk Evaluation and Mitigation Strategy (REMS) program and requires hospitalization through the initial titration period. • In August 2023, the BCMA-targeting bispecific antibody, Elrexfio, developed by Pfizer, received accelerated approval for treatment of adults with rrMM who have received at least four prior lines of therapy.
However, Tecvayli is dosed weekly or biweekly, and is administered under a Risk Evaluation and Mitigation Strategy (REMS) program and requires hospitalization through the initial titration period. 19 • In August 2023, the BCMA-targeting bispecific antibody, Elrexfio, developed by Pfizer, received accelerated approval for treatment of adults with rrMM who have received at least four prior lines of therapy.
We also are developing two clinical-stage ARC-SparX programs in Phase 1 trials: ACLX-001, which targets BCMA in rrMM and for which Kite has exercised its option to negotiate a license under the Kite Collaboration Agreement; and our wholly-owned ACLX-002, which targets CD123 in relapsed or refractory acute myeloid leukemia (AML) and high-risk myelodysplastic syndrome (MDS).
We also are developing two clinical-stage ARC-SparX programs in Phase 1 trials: ACLX-001, which targets BCMA in rrMM; and our wholly-owned ACLX-002, which targets CD123 in relapsed or refractory acute myeloid leukemia (AML) and high-risk myelodysplastic syndrome (MDS). In November 2023, Kite exercised its option under the Kite Collaboration Agreement to negotiate a license for ACLX-001.
The impact of these regulations and any future healthcare measures and agency rules implemented by the Biden administration on us and the pharmaceutical industry as a whole is currently unknown. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our product candidates if approved.
The impact of these regulations and any future healthcare measures and agency rules implemented by the current presidential administration on us and the pharmaceutical industry as a whole is currently unknown. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our product candidates if approved.
As of December 31, 2023, the two CAR-T therapies targeting BCMA that have been approved by the FDA are Abecma and Carvykti, developed and marketed by 2seventy bio/Bristol Myers Squibb and Legend/Johnson & Johnson, respectively.
As of December 31, 2024, the two CAR-T therapies targeting BCMA that have been approved by the FDA are Abecma and Carvykti, developed and marketed by 2seventy bio/Bristol Myers Squibb and Legend/Johnson & Johnson, respectively.
Risk Factors. 31 Government Regulation Government authorities in the United States at the federal, state and local level and in other countries regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of biopharmaceutical products.
Government Regulation Government authorities in the United States at the federal, state and local level and in other countries regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of biopharmaceutical products.
Supply constraints have been specifically cited as a limiting factor for access to FDA-approved BCMA CAR-Ts since their launches. Further, FDA-approved CAR-Ts are primarily administered and managed in authorized treatment centers, which represent less than 7% of oncology/hematology practices in the United States.
Supply constraints have been specifically cited as a limiting factor for access to FDA-approved BCMA CAR-Ts since their launches. Further, FDA-approved CAR-Ts are primarily administered and managed in authorized treatment centers, which represent approximately 7% of oncology/hematology practices in the United States.
Efficacy data are assessed pursuant to the International Myeloma Working Group (IMWG) criteria on a monthly basis for the first 6 months and then quarterly for up to two years, or upon symptomatic relapse. The IMWG uniform response criteria have been utilized in registration trials of approved myeloma drugs.
Efficacy data are assessed pursuant to the IMWG criteria on a monthly basis for the first 6 months and then quarterly for up to two years, or upon symptomatic relapse. The IMWG uniform response criteria have been utilized in registration trials of approved myeloma drugs.
From our Phase 1 clinical trial of anito-cel, we reported preliminary data that we believe supports efficacy and safety benefits, as well as potential manufacturability advantages associated with our D-Domain technology. The recent availability of cell therapy products, such as CAR-T-cells, introduced an unprecedented “living therapeutic” modality that offers benefits well beyond what previous oncology modalities offered.
From our clinical trials of anito-cel, we reported preliminary data that we believe supports efficacy and safety benefits, as well as potential manufacturability advantages associated with our D-Domain technology. The recent availability of cell therapy products, such as CAR-T-cells, introduced an unprecedented “living therapeutic” modality that offers benefits well beyond what previous oncology modalities offered.
We are currently developing therapies within both our ddCAR and ARC-SparX platforms to treat a broad variety of indications, starting with rrMM and AML/MDS and, in the future, solid tumors. • Potential Advantages from D-Domain Manufacturability and Experienced CAR-T Partner: We believe the manufacturing data from our Phase 1 clinical trial of anito-cel demonstrate the potential manufacturing advantages conferred by D-Domains vs. scFv and biologics-based constructs used in CAR-T therapies.
We are currently developing therapies within both our ddCAR and ARC-SparX platforms to treat a broad variety of indications, starting with rrMM, AML/MDS, gMG and, in the future, solid tumors. • Potential Advantages from D-Domain Manufacturability and Experienced CAR-T Partner: We believe the manufacturing data from our clinical trials of anito-cel demonstrate the potential manufacturing advantages conferred by D-Domains vs. scFv and biologics-based constructs used in CAR-T therapies.
For more information on these risks and other comprehensive risks related to our intellectual property, see “Risks Relating to Our Intellectual Property” under Item 1A.
For more information on these risks and other comprehensive risks related to our intellectual property, see “Risks Relating to Our Intellectual Property” under Item 1A. Risk Factors.
The implementation of the CTR also includes the implementation of the Clinical Trials Information System, a new clinical trial portal and database that will be maintained by the EMA in collaboration with the European Commission and the EU Member States.
The implementation of the CTR also included the implementation of the Clinical Trials Information System (CTIS), a new clinical trial portal and database that will be maintained by the EMA in collaboration with the European Commission and the EU Member States.
As of December 31, 2023, there are six FDA approved CAR-T cell therapies: • Carvykti (ciltacabtagene autoleucel), which has been approved by the FDA for treatment of adult patients with rrMM after four or more prior lines of therapy; • Abecma (idecabtagene vicleucel), which has been approved by the FDA for treatment of adult patients with rrMM after four or more prior lines of therapy; • Breyanzi (lisocabtagene maraleucel), which has been approved by the FDA for treatment of adult patients with large B-cell lymphoma (LBCL) that is refractory to first-line chemoimmunotherapy or relapse after first-line chemoimmunotherapy within 12 months or are also ineligible for stem cell transplantation, and relapsed or refractory LBCL after two or more lines of systemic therapy; • Kymriah (tisagenlecleucel), which has been approved by the FDA for treatment of patients up to 25 years of age with relapsed or refractory B-cell precursor acute lymphoblastic leukemia (ALL) that is refractory or in second or later relapse, and adult patients with relapsed or refractory LBCL after two or more lines of systemic therapy, and adult patients with relapsed or refractory follicular lymphoma after two or more lines of systemic therapy; • Tecartus (brexucabtagene autoleucel), which has been approved by the FDA for treatment of adult patients with relapsed or refractory mantle cell lymphoma and adult patients with relapsed or refractory B-cell precursor ALL; and 6 • Yescarta (axicabtagene ciloleucel), which has been approved by the FDA for treatment of adult patients with LBCL that is refractory to first-line chemoimmunotherapy or relapse within 12 months of first-line chemoimmunotherapy, and relapsed or refractory LBCL after two or more lines of systemic therapy, and adult patients with relapsed or refractory follicular lymphoma after two or more lines of systemic therapy.
As of December 31, 2024, there are seven FDA approved CAR-T cell therapies: • Carvykti (ciltacabtagene autoleucel), which has been approved by the FDA for treatment of adult patients with rrMM after four or more prior lines of therapy; • Abecma (idecabtagene vicleucel), which has been approved by the FDA for treatment of adult patients with rrMM after four or more prior lines of therapy; • Breyanzi (lisocabtagene maraleucel), which has been approved by the FDA for treatment of adult patients with large B-cell lymphoma (LBCL) that is refractory to first-line chemoimmunotherapy or relapse after first-line chemoimmunotherapy within 12 months or are also ineligible for stem cell transplantation, and relapsed or refractory LBCL after two or more lines of systemic therapy; • Kymriah (tisagenlecleucel), which has been approved by the FDA for treatment of patients up to 25 years of age with relapsed or refractory B-cell precursor acute lymphoblastic leukemia (ALL) that is refractory or in second or later relapse, and adult patients with relapsed or refractory LBCL after two or more lines of systemic therapy, and adult patients with relapsed or refractory follicular lymphoma after two or more lines of systemic therapy; • Tecartus (brexucabtagene autoleucel), which has been approved by the FDA for treatment of adult patients with relapsed or refractory mantle cell lymphoma and adult patients with relapsed or refractory B-cell precursor ALL; 7 • Yescarta (axicabtagene ciloleucel), which has been approved by the FDA for treatment of adult patients with LBCL that is refractory to first-line chemoimmunotherapy or relapse within 12 months of first-line chemoimmunotherapy, and relapsed or refractory LBCL after two or more lines of systemic therapy, and adult patients with relapsed or refractory follicular lymphoma after two or more lines of systemic therapy; and • Aucatzyl (obecabtagene autoleucel), which has been approved by the FDA for treatment of adults with relapsed or refractory B-cell precursor ALL.
Per the Kite Collaboration Agreement, Kite will manufacture anito-cel following completion of the technical transfer of our manufacturing process to Kite, which was initiated in 2023, and Kite will bear the CMC commercial readiness costs and associated capital expenses. The parties will continue to split manufacturing costs for clinical material.
Per the Kite Collaboration Agreement, Kite will manufacture anito-cel following completion of the technical transfer of our manufacturing process to Kite, which was completed in 2024, and Kite will bear the CMC commercial readiness costs and associated capital expenses. The parties will continue to split manufacturing costs for clinical material.
Any patent issuing from the second family is expected to expire in 2038, not including any patent term adjustment and patent term extension. • The third patent family is directed to proprietary D-Domain binding domains that bind commercially relevant target antigens and fusion polypeptides containing these domains.
Issued patents from the second family are expected to expire in 2038, not including any patent term adjustment and patent term extension. • The third patent family is directed to proprietary D-Domain binding domains that bind commercially relevant target antigens and fusion polypeptides containing these domains.
No delayed neurotoxicities, Guillain-Barré syndrome, cranial nerve palsies, nor Parkinsonian symptoms were observed in the entire population through the follow-up period. The rate of AEs of grade 3 or higher CRS and ICANS are of special interest (AESIs). A potential difference was observed in the incidence of AESIs in DL2 compared with DL1.
No delayed or non-ICANS neurotoxicities were observed, including no Parkinsonism, no cranial nerve palsies, and no Guillain-Barré syndrome in the entire population through the follow-up period. The rate of AEs of grade 3 or higher CRS and ICANS are of special interest (AESIs). A potential difference was observed in the incidence of AESIs in DL2 compared with DL1.
Any patent issuing from the first family is expected to expire in 2036, not including any patent term adjustment and patent term extension. • The second patent family is directed to proprietary D-Domain binding domains that bind commercially relevant target antigens and fusion polypeptides containing these domains.
Patents in this first family are expected to expire in 2036, not including any patent term adjustment and patent term extension. • The second patent family is directed to proprietary D-Domain binding domains that bind commercially relevant target antigens and fusion polypeptides containing these domains.
A high proportion of CAR+ cells lowers the total number of T-cells required to be administered which we believe may yield a therapy with an improved toxicity profile, consistent with currently available results of the Phase 1 trial of anito-cel.
A high proportion of CAR+ cells lowers the total number of T-cells required to be administered which we believe may yield a therapy with an improved toxicity profile, consistent with currently available results of the clinical trials of anito-cel.
We believe we have built a broad and scalable pipeline that positions us to capitalize on the potential of our proprietary platform technologies and potentially achieve long-term growth and sustainability within the field of cell therapy.
Our Pipeline We have built a broad and scalable pipeline that has positioned us to capitalize on the potential of our proprietary platform technologies and achieve long-term growth and sustainability within the field of cell therapy.
In several of our preclinical and discovery projects, we have engineered D-Domains into SparX proteins that bind to these targets, including for ACLX-003, which continues to progress toward IND-enabling studies.
In several of our preclinical and discovery projects, we have engineered D-Domains into SparX proteins that bind to these targets, including for ACLX-003, which continues to progress towards IND filing.
According to the FDA’s FY 2024 fee schedule, effective through September 30, 2024, the user fee for an application requiring clinical data, such as a BLA, is approximately $4 million. PDUFA also imposes an annual program fee for each marketed human biologic ($416,734 in FY 2023) and an annual establishment fee on facilities used to manufacture prescription biologics.
According to the FDA’s FY 2025 fee schedule, effective through September 30, 2025, the user fee for an application requiring clinical data, such as a BLA, is approximately $4.3 million. PDUFA also imposes an annual program fee for each marketed human biologic ($403,889 in FY 2025) and an annual establishment fee on facilities used to manufacture prescription biologics.
High cell surface expression and low propensity for tonic signaling of D-Domains may enable more effective interactions between the CAR and the antigen as well as reduced T-cell exhaustion, which may explain the rapid and long-term responses currently observed in our Phase 1 clinical trial, despite a highly pre-treated, refractory patient population. 7 • Potentially Differentiated Safety Profile: We believe the small and stable structure of the D-Domain enables a high transduction rate, resulting in a high proportion of cells expressing the CAR construct on the cell surface (CAR+ cells), as we observed in our Phase 1 trial of anito-cel.
High cell surface expression and low propensity for tonic signaling of D-Domains may enable more effective interactions between the CAR and the antigen as well as reduced T-cell exhaustion, which may explain the rapid and long-term responses currently observed in our Phase 1 and iMMagine-1 clinical trials. 8 • Potentially Differentiated Safety Profile: We believe the small and stable structure of the D-Domain enables a high transduction rate, resulting in a high proportion of cells expressing the CAR construct on the cell surface (CAR+ cells), as we observed in our clinical trials of anito-cel.
The median dose administered in DL1 was 115 million cells (range, 112-120 million cells), and the recommended Phase 2 dose (RP2D) is 115 (+/- 10) x 10 6 CAR+ cells. The preliminary data from the dose escalation were most recently presented at the 2023 Annual Meeting of the American Society of Hematology (ASH).
The median dose administered in DL1 was 115 million cells (range, 112-120 million cells), and the recommended Phase 2 dose (RP2D) is 115 (+/- 10) x 10 6 CAR+ cells. The data from the dose escalation and expansion were most recently presented at the 2024 Annual Meeting of the ASH.
We plan to achieve this goal by maximizing the impact of our proprietary D-Domain binders, which may enable CAR-Ts to have distinct advantages that address these limitations, including achieving promising preliminary clinical data with high ORR and durable responses, potentially differentiated safety profile, opportunity to treat a broader group of patients, and potential manufacturability advantages through our D-Domain technology and the partnership with an experienced CAR-T company (see Kite Collaboration Agreement), as detailed in the section entitled “Cell Therapy Background & Current Limitations” below. 4 The foundation of our competitive advantage is our proprietary technology, clinical evidence, track record of execution, manufacturing success, and assembly of a proven management team.
We plan to achieve this goal by maximizing the impact of our proprietary D-Domain binders, which may enable CAR-Ts to have distinct advantages that address these limitations, including achieving promising preliminary clinical data with high ORR and durable responses, potentially differentiated safety profile, opportunity to treat a broader group of patients, and potential manufacturability advantages through our D-Domain technology and the partnership with an experienced CAR-T company (see Kite Collaboration Agreement), as detailed in the section entitled “Cell Therapy Background & Current Limitations” below.
Our method of generating D-Domains, and the individual binders themselves are protected in our patent portfolio, which as of December 31, 2023, includes 28 U.S. and foreign patents and over 860 U.S. and foreign pending applications.
Our method of generating D-Domains, and the individual binders themselves are protected in our patent portfolio, which as of December 31, 2024, includes 34 U.S. and foreign patents and over 90 U.S. and foreign pending applications.
In 2023, the size of the global MM market was greater than $20 billion. We estimate the current total addressable CAR-T market for rrMM to be $12 billion or more based on the number of patients who are receiving second line treatments and beyond.
We estimate that the size of the global MM market was approximately $25 billion in 2024 and that the current total addressable global CAR-T market for rrMM to be $12 billion or more based on the number of patients who are receiving second line treatments and beyond.
In connection with the Kite Collaboration Agreement, we also entered into a common stock purchase agreement (the Purchase Agreement) and a standstill and stock restriction agreement (the Standstill Agreement) with Gilead Sciences (Gilead) in December 2022, pursuant to which, upon closing in January 2023, we issued and sold to Gilead 3,478,261 shares of our common stock for an aggregate purchase price of approximately $100.0 million and Gilead agreed to certain transfer and standstill restrictions and received certain registration rights.
The Kite Collaboration Agreement contains customary representations, warranties, covenants, and terms governing the prosecution and enforcement of intellectual property. 34 In connection with the Kite Collaboration Agreement, we also entered into a common stock purchase agreement (the Purchase Agreement) and a standstill and stock restriction agreement (the Standstill Agreement) with Gilead Sciences (Gilead) in December 2022, pursuant to which, upon closing in January 2023, we issued and sold to Gilead 3,478,261 shares of our common stock for an aggregate purchase price of approximately $100.0 million and Gilead agreed to certain transfer and standstill restrictions and received certain registration rights.
In collaboration with Kite, we are advancing our anito-cel product through our iMMagine-1 Phase 2 pivotal trial in patients with rrMM, which we initiated in the fourth quarter of 2022 and thereafter plan to pursue U.S. regulatory approval. anito-cel has been granted Fast Track and Orphan Drug by the FDA.
In collaboration with Kite, we are advancing our anito-cel product through our pivotal Phase 2 iMMagine-1 trial in patients with rrMM, which we initiated in the fourth quarter of 2022 and thereafter plan to pursue U.S. regulatory approval.
Tecvayli has reported an ORR of 63% and a CR/sCR rate of 45%, with a mPFS of 11.3 months.
Tecvayli has reported an ORR of 63% and a CR/sCR rate of 46%, with a mPFS of 11.4 months.
Any patent issuing from the family is expected to expire in 2038, not including any patent term adjustment and patent term extension. • A second patent family is directed to dosing regimens for employing the proprietary ARC-SparX platform technology in therapeutic methods.
Any patent issuing from the family is expected to expire in 2038, not including any patent term adjustment and patent term extension. • A second patent family is directed to dosing regimens for employing the proprietary ARC-SparX platform technology in therapeutic methods. The family includes pending applications in the U.S. and in 15 foreign jurisdictions.
Hematologic cancers represent a robust and growing market opportunity for CAR-T cell therapies. These cancers, which include leukemia, lymphoma and myeloma, account for approximately 10% of all cancer incidence in 2020. Sales of CAR-T therapies in hematologic cancers exceeded $3.5 billion in 2023, representing YoY growth of 38%.
Hematologic cancers represent a robust and growing market opportunity for CAR-T cell therapies. These cancers, which include leukemia, lymphoma and myeloma, account for approximately 10% of all cancer incidence in 2020. Sales of CAR-T therapies in hematologic cancers exceeded $4.5 billion in 2024, representing year over year growth of 22%.
We estimate the current total addressable global CAR-T market for rrMM to be $12 billion or more based on the number of patients who are receiving second line treatments and beyond.
We estimate that the size of the global MM market was approximately $25 billion in 2024 and that the current total addressable CAR-T market for rrMM to be $12 billion or more based on the number of patients who are receiving second line treatments and beyond.
Our lead program is a BCMA-targeting ddCAR product candidate called anitocabtagene autoleucel or “anito-cel” (formerly, CART-ddBCMA), which is currently being evaluated in our pivotal Phase 2 “iMMagine-1” trial in patients with relapsed or refractory multiple myeloma (rrMM).
Our lead program is a BCMA-targeting ddCAR product candidate called anitocabtagene autoleucel or “anito-cel” (formerly, CART-ddBCMA), which is currently being evaluated in our pivotal Phase 2 iMMagine-1 and the Phase 3 iMMagine-3 trials in patients with relapsed or refractory multiple myeloma (rrMM).
Pursuant to the Kite Collaboration Agreement, following the completion of technical transfer of our cell manufacturing process to Kite, which was initiated in 2023, Kite will be responsible for manufacturing activities for future clinical trials and commercial supply of anito-cel. anito-cel Cell and ARC-T Cell We currently rely on third parties for the manufacture and release testing of viral vectors and product candidates for clinical testing.
In May 2024, we announced the completion of technical transfer of our cell manufacturing process to Kite, which was initiated in 2023, and Kite is responsible pursuant to the Kite Collaboration Agreement for manufacturing activities for future clinical trials, including the ongoing iMMagine-3 trial, and for commercial supply of anito-cel. anito-cel Cell and ARC-T Cell We currently rely on third parties for the manufacture and release testing of viral vectors and product candidates for clinical testing.
As of the October 15, 2023 data cutoff date, the ORR was 100%, the CR/sCR rate was 76%, the VGPR rate was 16%, and the PR rate was 8%. As previously presented (ASH Presentation 2022), the likelihood of achieving CR/sCR increased with longer follow-up.
As of the October 3, 2024 data cutoff date, the ORR was 100%, the CR/sCR rate was 79%, the VGPR rate was 13%, and the PR rate was 8%. As previously presented (ASH Presentation 2022), the likelihood of achieving CR/sCR increased with longer follow-up.
Additionally, a 2022 cross-trial safety analysis on CAR-Ts by the FDA supports this concept, finding lower transduction frequency in the CAR-T product was significantly associated with higher rates of severe CRS. • Opportunity to Treat a Broader Group of Cancer Patients: We believe the preliminary positive results of our Phase 1 clinical trial of anito-cel underscores the advantages conferred by our D-Domain binders, which may be applicable across a wide variety of tumor antigen targets in the future.
Additionally, a 2022 cross-trial safety analysis on CAR-Ts by the FDA supports this concept, finding lower transduction frequency in the CAR-T product was significantly associated with higher rates of severe CRS. • Opportunity to Treat a Broader Group of Patients: We believe the preliminary positive results of our clinical trials of anito-cel underscores the advantages conferred by our D-Domain binders.
Although changes in the treatment landscape for MM have increased the rates of and depth of response (antitumor activity), MM is currently considered incurable; and patients typically have a life expectancy of just over five years. In 2023, the size of the global MM market was greater than $20 billion.
Although changes in the treatment landscape for MM have increased the rates of and depth of response (antitumor activity), MM is currently considered incurable; and patients typically have a life expectancy of just over five years.

… 184 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

206 edited+45 added−75 removed585 unchanged
Biggest changeSimilarly, supply chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems (including our products/services) or the third-party information technology systems that support us and our services. 64 Any disruption or security breach or incident could compromise our networks and systems, or those of our current or future CROs or other contractors or consultants, could result in a loss or unavailability of, or damage to, our data or applications, or unauthorized access to or use, modification, unavailability, disclosure, loss, acquisition, or other processing of, or the public exposure of, personal information (including sensitive personal information) of our employees, customers and others, or confidential information of ourselves or of third parties that we maintain, and could result in legal claims or proceedings, regulatory investigations or other proceedings, liability under laws that protect the privacy of personal information, mandatory notification and reporting obligations, additional regulatory oversight, significant regulatory penalties and remediation expenses.
Biggest changeAny disruption or security breach or incident could compromise our networks and systems, or those of our current or future CROs or other contractors or consultants, could result in a loss or unavailability of, or damage to, our data or applications, or unauthorized access to or use, modification, unavailability, disclosure, loss, acquisition, or other processing of, or the public exposure of, personal information (including sensitive personal information) of our employees, customers and others, or confidential information of ourselves or of third parties that we maintain, and could result in legal claims or proceedings, regulatory investigations or other proceedings, liability under laws that protect the privacy of personal information, mandatory notification and reporting obligations, additional regulatory oversight, significant regulatory penalties and remediation expenses. 69 In addition, these breaches and incidents and other inappropriate access can be difficult to detect, remediate, and otherwise address, and may remain undetected or not fully addressed for an extended period.
Although the FDA has previously issued and lifted one partial clinical hold, there is no assurance that the FDA will not issue another clinical hold in the future.
Although the FDA has previously issued and lifted one partial clinical hold, there is no assurance that the FDA will not issue another clinical hold in the future.
To the extent the FDA issues another clinical hold, addressing a clinical hold takes considerable time and expense and there can be no assurance that the FDA will remove a clinical hold in a timely manner, or at all, in which case our business and prospects for development and approval of anito-cel would be materially harmed.
To the extent the FDA issues another clinical hold, addressing a clinical hold takes considerable time and expense and there can be no assurance that the FDA will remove a clinical hold in a timely manner, or at all, in which case our business and prospects for development and approval of anito-cel would be materially harmed.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to privacy, data protection, or data security.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to privacy, data protection, or security.
We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy, data protection, or data security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy, data protection, or security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
We do not have any product candidates approved for sale in any jurisdiction, including international markets, and we do not have experience in obtaining regulatory approval in international markets.
We do not have any product candidates approved for sale in any jurisdiction, including international markets, and we do not have experience in obtaining regulatory approval in international markets.
We may be subject to or affected by data protection laws and regulations, such as laws and regulations that address privacy and data security.
We may be subject to or affected by data protection laws and regulations, such as laws and regulations that address privacy and security.
The following examples are illustrative: • Pending patent applications that we own or may license may not lead to issued patents; • Patents, should they issue, that we own or may license, may not provide us with any competitive advantages, or may be challenged and held invalid or unenforceable; • Others may be able to develop and/or practice technology that is similar to our technology or aspects of our technology but that is not covered by the claims of any patents that we own or may license, should any such patents issue; • Third parties may compete with us in jurisdictions where we do not pursue and obtain patent protection; • We (or any licensors) might not have been the first to make the inventions covered by a pending patent application that we own or may license; • We (or any licensors) might not have been the first to file patent applications covering a particular invention; • Others may independently develop similar or alternative technologies without infringing our intellectual property rights; • We may not be able to obtain necessary licenses on reasonable terms or at all; • Third parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights, or any rights at all, over that intellectual property; • We may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights, which will be costly whether we win or lose; • We may not be able to maintain the confidentiality of our trade secrets or other proprietary information; • We may not develop or in-license additional proprietary technologies that are patentable; and • The patents of others may have an adverse effect on our business.
The following examples are illustrative: • Pending patent applications that we own or may license may not lead to issued patents; • Patents, should they issue, that we own or may license, may not provide us with any competitive advantages, or may be challenged and held invalid or unenforceable; • Others may be able to develop and/or practice technology that is similar to our technology or aspects of our technology but that is not covered by the claims of any patents that we own or may license, should any such patents issue; • Third parties may compete with us in jurisdictions where we do not pursue and obtain patent protection; • We (or any licensors) might not have been the first to make the inventions covered by a pending patent application that we own or may license; • We (or any licensors) might not have been the first to file patent applications covering a particular invention; • Others may independently develop similar or alternative technologies without infringing our intellectual property rights; • We may not be able to obtain necessary licenses on reasonable terms or at all; 84 • Third parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights, or any rights at all, over that intellectual property; • We may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights, which will be costly whether we win or lose; • We may not be able to maintain the confidentiality of our trade secrets or other proprietary information; • We may not develop or in-license additional proprietary technologies that are patentable; and • The patents of others may have an adverse effect on our business.
In addition, a new manufacturer would have to be educated in, or develop substantially equivalent processes for, the production of our product candidates. • Third-party manufacturers may have little or no experience with our product candidates, and therefore may require a significant amount of support from us in order to implement and maintain the infrastructure and processes required to manufacture our product candidates. • Third-party manufacturers might be unable to timely manufacture our product candidates or produce the quantity and quality required to meet our clinical and commercial needs, if any. • Third-party manufacturers may not be able to execute our manufacturing procedures and other logistical support requirements appropriately. • Third-party manufacturers may not perform as agreed, may not devote sufficient resources to our product candidates or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store, and distribute our products, if any. • Manufacturers are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards.
In addition, a new manufacturer would have to be educated in, or develop substantially equivalent processes for, the production of our product candidates. 76 • Third party manufacturers may have little or no experience with our product candidates, and therefore may require a significant amount of support from us in order to implement and maintain the infrastructure and processes required to manufacture our product candidates. • Third party manufacturers might be unable to timely manufacture our product candidates or produce the quantity and quality required to meet our clinical and commercial needs, if any. • Third party manufacturers may not be able to execute our manufacturing procedures and other logistical support requirements appropriately. • Third party manufacturers may not perform as agreed, may not devote sufficient resources to our product candidates or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store, and distribute our products, if any. • Manufacturers are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards.
The FDA can delay, limit or deny approval of our product candidates for many reasons, including: • Our inability to satisfactorily demonstrate that the product candidates have acceptable safety and efficacy profiles for the requested indication; • The FDA’s disagreement with our trial designs or the interpretation of data from preclinical studies or clinical trials; • The population studied in the clinical trial may not be sufficiently broad or representative to assess safety in the full population for which we seek approval; 85 • Our inability to demonstrate that clinical or other benefits of our product candidates outweigh any safety or other perceived risks; • The FDA’s determination that additional preclinical or clinical trials are required; • The FDA’s non-approval of the formulation, labeling or the specifications of our product candidates; • The FDA’s failure to accept the manufacturing processes, drug product characteristics or facilities of third-party manufacturers with which we contract; or • The potential for approval policies or regulations of the FDA to significantly change in a manner rendering our clinical data insufficient for approval.
The FDA can delay, limit or deny approval of our product candidates for many reasons, including: • Our inability to satisfactorily demonstrate that the product candidates have acceptable safety and efficacy profiles for the requested indication; • The FDA’s disagreement with our trial designs or the interpretation of data from preclinical studies or clinical trials; • The population studied in the clinical trial may not be sufficiently broad or representative to assess safety in the full population for which we seek approval; • Our inability to demonstrate that clinical or other benefits of our product candidates outweigh any safety or other perceived risks; • The FDA’s determination that additional preclinical or clinical trials are required; • The FDA’s non-approval of the formulation, labeling or the specifications of our product candidates; • The FDA’s failure to accept the manufacturing processes, drug product characteristics or facilities of third-party manufacturers with which we contract; or • The potential for approval policies or regulations of the FDA to significantly change in a manner rendering our clinical data insufficient for approval.
Any future collaborations we might enter into may pose a number of risks, including the following: • Collaborators may not perform their obligations as expected; • Collaborators may not pursue development and commercialization of product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities; • Collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • Collaborators could fail to make timely regulatory submissions for a product candidate; • Collaborators may not comply with all applicable regulatory requirements or may fail to report safety data in accordance with all applicable regulatory requirements, which could subject them or us to regulatory enforcement actions; • Collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; 75 • Product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • A collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product candidate or product; • Disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time consuming and expensive; • Collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; and • Collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability.
Any future collaborations we might enter into may pose a number of risks, including the following: • Collaborators may not perform their obligations as expected; • Collaborators may not pursue development and commercialization of product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities; 79 • Collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • Collaborators could fail to make timely regulatory submissions for a product candidate; • Collaborators may not comply with all applicable regulatory requirements or may fail to report safety data in accordance with all applicable regulatory requirements, which could subject them or us to regulatory enforcement actions; • Collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • Product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • A collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product candidate or product; • Disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time consuming and expensive; • Collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; and • Collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability.
Some of these provisions include: • A board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time, which could delay the ability of stockholders to change the membership of a majority of our board of directors; • The exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death, disqualification or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • A prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at an annual or special meeting of our stockholders; • A requirement that special meetings of stockholders be called only by the chairperson of our board of directors, our Chief Executive Officer, our President, or our board of directors acting pursuant to a resolution adopted by a majority of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • Advance notice requirements for stockholder proposals and nominations for election to our board of directors, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us; • A requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than a majority of the shares present in person or by proxy at the meeting and entitled to vote, which could delay the ability of stockholders to change the membership of our board of directors; 103 • A requirement of approval of not less than two-thirds of all outstanding shares of our voting stock to amend any bylaws by stockholder action or to amend specific provisions of our certificate of incorporation, which may inhibit the ability of an acquirer to affect such amendments to facilitate an unsolicited takeover attempt; and • The authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval (except as required by Nasdaq rules), which preferred stock may include rights superior to the rights of the holders of common stock and could be used to significantly dilute the ownership of a hostile acquirer.
Some of these provisions include: • A board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time, which could delay the ability of stockholders to change the membership of a majority of our board of directors; • The exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death, disqualification or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • A prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at an annual or special meeting of our stockholders; 106 • A requirement that special meetings of stockholders be called only by the chairperson of our board of directors, our Chief Executive Officer, our President, or our board of directors acting pursuant to a resolution adopted by a majority of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • Advance notice requirements for stockholder proposals and nominations for election to our board of directors, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us; • A requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than a majority of the shares present in person or by proxy at the meeting and entitled to vote, which could delay the ability of stockholders to change the membership of our board of directors; • A requirement of approval of not less than two-thirds of all outstanding shares of our voting stock to amend any bylaws by stockholder action or to amend specific provisions of our certificate of incorporation, which may inhibit the ability of an acquirer to affect such amendments to facilitate an unsolicited takeover attempt; and • The authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval (except as required by Nasdaq rules), which preferred stock may include rights superior to the rights of the holders of common stock and could be used to significantly dilute the ownership of a hostile acquirer.
Our clinical trials may fail to demonstrate adequate safety and/or efficacy of any of our product candidates. • We may encounter substantial delays, including difficulties enrolling patients, in our clinical trials. • Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, require expansion of the trial size, limit their commercial potential, or result in significant negative consequences. • Interim, preliminary or topline data from our clinical trials that we announce or publish from time to time may change as more patient data become available. • Manufacturing genetically engineered products is complex and subject to both human and systemic risks.
Our clinical trials may fail to demonstrate adequate safety and/or efficacy of any of our product candidates. • We may encounter substantial delays, including difficulties enrolling patients, in our clinical trials. • Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, require expansion of the trial size, limit their commercial potential, or result in significant negative consequences. • Interim, preliminary or topline data from our clinical trials that we announce or publish from time to time may change as more patient data become available. 50 • Manufacturing genetically engineered products is complex and subject to both human and systemic risks.
Later discovery of previously unknown problems with our product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • Restrictions on the marketing or manufacturing of our product candidates, withdrawal of the product from the market or voluntary or mandatory product recalls; • Fines, warning letters or holds on clinical trials; • Refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals; • Withdrawal of the drug from the market or voluntary or mandatory product recalls; • Adverse publicity, fines, warning letters or holds on clinical trials; • Product seizure or detention, or refusal to permit the import or export of our product candidates; and • Injunctions or the imposition of civil or criminal penalties.
Later discovery of previously unknown problems with our product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • Restrictions on the marketing or manufacturing of our product candidates, withdrawal of the product from the market or voluntary or mandatory product recalls; • Fines, warning letters or holds on clinical trials; • Refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals; • Withdrawal of the drug from the market or voluntary or mandatory product recalls; • Adverse publicity, fines, warning letters or holds on clinical trials; 94 • Product seizure or detention, or refusal to permit the import or export of our product candidates; and • Injunctions or the imposition of civil or criminal penalties.
We anticipate substantial direct competition from other organizations developing advanced CAR-T or other types of genetically modified cell therapies due to their promising clinical therapeutic effect in clinical trials, including, among others, 2seventy bio, Abbvie, Allogene, Amgen, AstraZeneca , Autolus, Bristol Myers Squibb, Caribou Biosciences, CARsgen, Cartesian, Cellectis, Cellular Biomedicine Group, Celyad, Crispr, Gilead, Gracell, GSK, Immix, Innovent, Johnson & Johnson, Legend, Nanjing 61 IASO Biotherapeutics Ltd., Novartis, Pfizer, Poseida Therapeutics, Precision BioSciences, Pregene, Regeneron, and Roche.
We anticipate substantial direct competition from other organizations developing advanced CAR-T or other types of genetically modified cell therapies due to their promising clinical therapeutic effect in clinical trials, including, among others, 2seventy bio, Abbvie, Allogene, Amgen, AstraZeneca, Autolus, Bristol Myers Squibb, Caribou Biosciences, CARsgen, Cartesian, Cellectis, Cellular Biomedicine Group, Celyad, Crispr, Gilead, Gracell, GSK, Immix, Innovent, Johnson & Johnson, Legend, Nanjing IASO Biotherapeutics Ltd., Novartis, Pfizer, Poseida Therapeutics, Precision BioSciences, Pregene, Regeneron, and Roche.
Regardless of the merits or eventual outcome, liability claims may result in: • Decreased demand for our product candidates or products that we may develop; • Impairment of our business reputation; • Withdrawal of clinical trial participants; • Initiation of investigations by regulators; • Costs to defend the related litigation; • A diversion of management’s time and our resources; • Substantial monetary awards to trial participants or patients; • Product recalls, withdrawals or labeling, marketing or promotional restrictions; • Loss of revenue; • Exhaustion of any available insurance and our capital resources; • The inability to commercialize any product candidate; and • A decline in our share price.
Regardless of the merits or eventual outcome, liability claims may result in: • Decreased demand for our product candidates or products that we may develop; • Impairment of our business reputation; • Withdrawal of clinical trial participants; • Initiation of investigations by regulators; • Costs to defend the related litigation; • A diversion of management’s time and our resources; • Substantial monetary awards to trial participants or patients; 72 • Product recalls, withdrawals or labeling, marketing or promotional restrictions; • Loss of revenue; • Exhaustion of any available insurance and our capital resources; • The inability to commercialize any product candidate; and • A decline in our share price.
The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including: • The clinical indications for which our product candidates are approved; • The willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • Physicians, hospitals, cancer treatment centers and patients considering our product candidates as a safe, pure and effective treatment; • The potential and perceived advantages of our product candidates over alternative treatments; • Our ability to demonstrate the advantages of our product candidates over other conventional CAR-T therapies; • The perceived prevalence and severity of any side effects for our product candidates compared to the prevalence and severity of any side effects for conventional CAR-T products and other cell therapies; • Product labeling, limitations, warnings or product insert requirements of the FDA or foreign health authorities, including FDA’s requirement for manufacturers of approved CAR-T therapies to include boxed warning regarding T cell malignancies associated with such therapies; • The timing of market introduction of our product candidates as well as competitive products; 92 • The cost of treatment in relation to alternative treatments; • Factors that impact access to apheresis, including but not limited to availability of facilities that offer apheresis, additional costs associated with apheresis and administration of CAR-T therapies, and other hospital infrastructure and bottlenecks; • The availability of adequate coverage, reimbursement and pricing by third-party payors and government authorities; • The willingness of patients to pay out-of-pocket in the absence of coverage by third-party payors and government authorities; • Relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies; and • The effectiveness of our sales and marketing efforts.
The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including: • The clinical indications for which our product candidates are approved; • The willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • Physicians, hospitals, cancer treatment centers and patients considering our product candidates as a safe, pure and effective treatment; • The potential and perceived advantages of our product candidates over alternative treatments; • Our ability to demonstrate the advantages of our product candidates over other conventional CAR-T therapies; • The perceived prevalence and severity of any side effects for our product candidates compared to the prevalence and severity of any side effects for conventional CAR-T products and other cell therapies; • Product labeling, limitations, warnings or product insert requirements of the FDA or foreign health authorities, including FDA’s requirement for manufacturers of approved CAR-T therapies to include boxed warning regarding T cell malignancies; • The timing of market introduction of our product candidates as well as competitive products; • The cost of treatment in relation to alternative treatments; • Factors that impact access to apheresis, including but not limited to availability of facilities that offer apheresis, additional costs associated with apheresis and administration of CAR-T therapies, and other hospital infrastructure and bottlenecks; • The availability of adequate coverage, reimbursement and pricing by third-party payors and government authorities; • The willingness of patients to pay out-of-pocket in the absence of coverage by third-party payors and government authorities; • Relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies; and • The effectiveness of our sales and marketing efforts.
Because of the clinical stage of development of our product candidates, our ability to eventually generate significant revenues from product sales will depend on a number of factors, including: • Identification of additional target antigens for desired indications; • Identification and development of D-Domain-based binding regions that bind to the desired target antigens; • Successful completion of preclinical studies; 49 • Submission of INDs or other regulatory applications for our planned clinical trials or future clinical trials and authorizations from regulators to initiate clinical trials; • Successful enrollment in, and completion of, clinical trials; • Achieving favorable results from clinical trials; • Receipt of marketing approvals from applicable regulatory authorities; • Establishing and maintaining sufficient manufacturing capabilities, whether internally or with third parties, for clinical and commercial supply, including procurement of raw materials; • Establishing sales, marketing and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in combination with other products; • Sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials and commercialization activities; • Effectively competing with other therapies; • Developing and implementing successful marketing and reimbursement strategies; • Obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity for our product candidates; and • Maintaining a continued acceptable safety profile of any product following approval, if any.
Because of the clinical stage of development of our product candidates, our ability to eventually generate significant revenues from product sales will depend on a number of factors, including: • Identification of additional target antigens for desired indications; • Identification and development of D-Domain-based binding regions that bind to the desired target antigens; • Successful completion of preclinical studies; • Submission of INDs or other regulatory applications for our planned clinical trials or future clinical trials and authorizations from regulators to initiate clinical trials; • Successful enrollment in, and completion of, clinical trials; • Achieving favorable results from clinical trials; • Receipt of marketing approvals from applicable regulatory authorities; • Establishing and maintaining sufficient manufacturing capabilities, whether internally or with third parties, for clinical and commercial supply, including procurement of raw materials; • Establishing sales, marketing and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in combination with other products; • Sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials and commercialization activities; • Effectively competing with other therapies; • Developing and implementing successful marketing and reimbursement strategies; 54 • Obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity for our product candidates; and • Maintaining a continued acceptable safety profile of any product following approval, if any.
There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare, including proposals aimed at lowering prescription drug prices and increasing competition for prescription drugs, as well as additional regulation on pharmaceutical 91 transparency and reporting requirements, any of which could negatively impact our future profitability and increase our compliance burden.
There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare, including proposals aimed at lowering prescription drug prices and increasing competition for prescription drugs, as well as additional regulation on pharmaceutical transparency and reporting requirements, any of which could negatively impact our future profitability and increase our compliance burden.
We plan to seek regulatory approval of our product candidates outside of the United States and, accordingly, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including: • Differing regulatory requirements in foreign countries, including constraints on manufacturing; • Additional trials in foreign countries; • Requirement to secure and validate region-specific manufacturing and clinical and commercial supply; 96 • Unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements; • Economic weakness, including inflation, or political instability in particular foreign economies and markets; • Compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • Foreign taxes, including withholding of payroll taxes; • Foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • Difficulties staffing and managing foreign operations; • Workforce uncertainty in countries where labor unrest is more common than in the United States; • Potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign regulations; • Challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; • Production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and • Business interruptions resulting from geo-political actions, including war (including ongoing geopolitical tensions related to Russia’s actions in Ukraine, resulting sanctions imposed by the United States and other countries, retaliatory actions taken by Russia in response to such sanctions, and war in the Middle East), armed conflict, terrorist activities, global pandemics and terrorism.
We plan to seek regulatory approval of our product candidates outside of the United States and, accordingly, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including: • Differing regulatory requirements in foreign countries, including constraints on manufacturing; • Additional trials in foreign countries; • Requirement to secure and validate region-specific manufacturing and clinical and commercial supply; • Unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements; • Economic weakness, including inflation, or political instability in particular foreign economies and markets; • Compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • Foreign taxes, including withholding of payroll taxes; • Foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • Difficulties staffing and managing foreign operations; • Workforce uncertainty in countries where labor unrest is more common than in the United States; • Potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign regulations; • Challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; • Production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and 101 • Business interruptions resulting from geo-political actions, including war (including ongoing geopolitical tensions related to the Russia and Ukraine conflict, resulting sanctions imposed by the United States and other countries and retaliatory actions taken by Russia in response to such sanctions, and the war in the Middle East), armed conflict, terrorist activities, global pandemics and terrorism.
Our business could be harmed if those third parties fail to provide us with sufficient quantities of product supplies or product candidates or fail to do so at acceptable quality levels or prices or if we terminate our relationship for any reason including due to a change in ownership, operating strategy or financial standing. • We depend on Kite for certain development and commercialization activities with respect to certain of our product candidates pursuant to our collaboration with Kite.
Our business could be harmed if those third parties fail to provide us with sufficient quantities of product supplies or product candidates or fail to do so at acceptable quality levels or prices or if we terminate our relationship for any reason including due to a change in ownership, operating strategy or financial standing. • We depend on Kite for certain development, manufacturing and commercialization activities with respect to certain of our product candidates pursuant to our collaboration with Kite.
Although we require all of our employees to assign their inventions to us, and require all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information, or technology 79 to enter into confidentiality agreements, we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
Although we require all of our employees to assign their inventions to us, and require all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information, or technology to enter into confidentiality agreements, we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product will be shortened and our competitors may obtain 82 approval of competing products following our patent expiration to launch their product earlier than might otherwise be the case, and our revenue could be reduced, possibly materially.
If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product will be shortened and our competitors may obtain approval of competing products following our patent expiration to launch their product earlier than might otherwise be the case, and our revenue could be reduced, possibly materially.
Kite also exercised its option to negotiate a license for ACLX-001. Pursuant to the Kite Collaboration Agreement, we and Kite will jointly develop anito-cel and any next-generation autologous CAR-T cell therapy product for which we may exercise our option to co-promote with Kite (collectively, the Co-Promote 74 Products) in accordance with mutually agreed development plans and development budgets.
Kite also exercised its option to negotiate a license for ACLX-001. Pursuant to the Kite Collaboration Agreement, we and Kite will jointly develop anito-cel and any next-generation autologous CAR-T cell therapy product for which we may exercise our option to co-promote with Kite (collectively, the Co-Promote Products) in accordance with mutually agreed development plans and development budgets.
Inadequate funding for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely 97 manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
Inadequate funding for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
If the FDA or other comparable foreign regulatory authorities do not approve or revoke their approval of other therapies used in combination therapies, or if safety, efficacy, commercial adoption, manufacturing or supply issues 58 arise with such therapies we choose to evaluate in combination with any of our product candidates, we may be unable to obtain approval of or successfully market any one or all of the product candidates we develop.
If the FDA or other comparable foreign regulatory authorities do not approve or revoke their approval of other therapies used in combination therapies, or if safety, efficacy, commercial adoption, manufacturing or supply issues arise with such therapies we choose to evaluate in combination with any of our product candidates, we may be unable to obtain approval of or successfully market any one or all of the product candidates we develop.
It is possible that a court could find these types of provisions to be inapplicable or unenforceable, and if a court 104 were to find either exclusive-forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business.
It is possible that a court could find these types of provisions to be inapplicable or unenforceable, and if a court were to find either exclusive-forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business.
Based on these and other factors, hospitals and payors may decide that the benefits of this new therapy do not or will not outweigh its costs. Additionally, in developing our product candidates, we have not exhaustively explored different options in the design and method for manufacturing ddCARs, ARC-T-cells and SparX proteins.
Based on these and other factors, hospitals and payors may decide that the benefits of this new therapy do not or will not outweigh its costs. 56 Additionally, in developing our product candidates, we have not exhaustively explored different options in the design and method for manufacturing ddCARs, ARC-T-cells and SparX proteins.
These and other risks associated with our international operations, including relating to data privacy and security, may materially adversely affect our ability to attain or maintain profitable operations. The European Union system for authorization of medicinal products for human use offers several routes: the centralized procedure, the decentralized procedure, and the mutual recognition procedure, as well as domestic national routes.
These and other risks associated with our international operations, including relating to privacy and security, may materially adversely affect our ability to attain or maintain profitable operations. The European Union system for authorization of medicinal products for human use offers several routes: the centralized procedure, the decentralized procedure, and the mutual recognition procedure, as well as domestic national routes.
As an example, we may not be able to identify D-Domain binders that can recognize 50 certain antigen targets that we would like to pursue, or the development of the applicable D-Domain, ddCAR or SparX protein targeting such antigens may be too challenging or expensive to be commercially viable. We do not currently have any approved or commercialized products.
As an example, we may not be able to identify D-Domain binders that can recognize certain antigen targets that we would like to pursue, or the development of the applicable D-Domain, ddCAR or SparX protein targeting such antigens may be too challenging or expensive to be commercially viable. We do not currently have any approved or commercialized products.
Any of the foregoing events could have a material adverse effect on our business, financial condition, results of operations, and prospects. We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products.
Any of the foregoing events could have a material adverse effect on our business, financial condition, results of operations, and prospects. 82 We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products.
As our development and commercialization plans and strategies develop, and as we continue our transition into operating as a public company, we expect to need additional research, development, clinical, quality assurance, statistical analysis, managerial, operational, sales, marketing, financial and other personnel, as well as additional facilities to expand our operations, including for 63 in-house manufacturing capabilities.
As our development and commercialization plans and strategies develop, and as we continue our transition into operating as a public company, we expect to need additional research, development, clinical, quality assurance, statistical analysis, managerial, operational, sales, marketing, financial and other personnel, as well as additional facilities to expand our operations, including for in-house manufacturing capabilities.
We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of 84 interest. During trademark registration proceedings, we may receive rejections of our applications by the USPTO or in other foreign jurisdictions.
We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest. During trademark registration proceedings, we may receive rejections of our applications by the USPTO or in other foreign jurisdictions.
Due to the high 93 costs associated with cell therapies, patients are unlikely to use our product candidates unless coverage is provided or reimbursement is adequate to cover a significant portion of the cost of our product candidates. In the United States, no uniform policy of coverage and reimbursement for products exists among third- party payors.
Due to the high costs associated with cell therapies, patients are unlikely to use our product candidates unless coverage is provided or reimbursement is adequate to cover a significant portion of the cost of our product candidates. In the United States, no uniform policy of coverage and reimbursement for products exists among third party payors.
There can be no assurance that the ARC-T-cells, the SparX 52 proteins, the TAG, anti-TAG and other parts of ACLX-001 and ACLX-002 will not trigger an adverse response, cause unintended off-target recognition, limit the expected activity of the product candidates or result in other negative outcomes.
There can be no assurance that the ARC-T-cells, the SparX proteins, the TAG, anti-TAG and other parts of ACLX-001 and ACLX-002 will not trigger an adverse response, cause unintended off-target recognition, limit the expected activity of the product candidates or result in other negative outcomes.
If these third parties do not properly and successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of or commercialize our product candidates. We do not have the ability to conduct all aspects of our preclinical testing or clinical trials ourselves.
If these third parties do not properly and successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of or commercialize our product candidates. 75 We do not have the ability to conduct all aspects of our preclinical testing or clinical trials ourselves.
Drugs designated as breakthrough therapies by the FDA are also eligible for priority review if supported by clinical data at the time of the submission of the BLA. Although Breakthrough Designation or access to any other expedited program may expedite the development or approval process, it does not change the standards for approval.
Drugs designated as breakthrough therapies by the FDA are also eligible for priority review if supported by clinical data at the time of the submission of the BLA. 93 Although Breakthrough Designation or access to any other expedited program may expedite the development or approval process, it does not change the standards for approval.
Moreover, the extent to which a biosimilar, once licensed, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biologic products 89 is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.
Moreover, the extent to which a biosimilar, once licensed, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biologic products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.
Patients could also have received prior therapies that target the same target antigen on the cancer cells as our intended product candidate and 60 thereby these patients may have cancer cells with low or no expression of the target antigen. As a result, our product candidates may not recognize the cancer cell and may fail to achieve clinical activity.
Patients could also have received prior therapies that target the same target antigen on the cancer cells as our intended product candidate and thereby these patients may have cancer cells with low or no expression of the target antigen. As a result, our product candidates may not recognize the cancer cell and may fail to achieve clinical activity.
In the event of litigation or administrative proceedings, we cannot be certain that the claims in any of our issued patents will be considered valid by courts or administrative tribunals in the United States or foreign countries. The strength of patents in the biotechnology and cell therapy fields involve complex legal and scientific questions and can be uncertain.
In the event of litigation or administrative proceedings, we cannot be certain that the claims in any of our issued patents will be considered valid by courts or administrative tribunals in the United States or foreign countries. 83 The strength of patents in the biotechnology and cell therapy fields involve complex legal and scientific questions and can be uncertain.
The denial or delay of any such approval would delay commercialization and have a material adverse effect on our potential to generate revenue, our business and our results of operations. • We will face increasing regulation as we advance our product candidates through clinical trials and pursue commercialization, if approved.
The denial or delay of any such approval would delay commercialization and have a material adverse effect on our potential to generate revenue, our business and our results of operations. 51 • We will face increasing regulation as we advance our product candidates through clinical trials and pursue commercialization, if approved.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be 83 commercially meaningful. Accordingly, our efforts to enforce our intellectual property and proprietary rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or may license.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property and proprietary rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or may license.
These and any additional sanctions and export controls, as well as any economic countermeasures by the governments of Russia or other jurisdictions, could adversely impact our ability to continue activities at clinical trial sites within regions covered by such sanctions or directly or 98 indirectly disrupt our supply chain.
These and any additional sanctions and export controls, as well as any economic countermeasures by the governments of Russia or other jurisdictions, could adversely impact our ability to continue activities at clinical trial sites within regions covered by such sanctions or directly or indirectly disrupt our supply chain.
Such changes carry the risk that they will not achieve these intended objectives. Any of 59 these changes could cause our product candidates to perform differently and could affect planned or other clinical trials conducted with product candidates produced using the modified manufacturing methods, materials, and processes.
Such changes carry the risk that they will not achieve these intended objectives. Any of these changes could cause our product candidates to perform differently and could affect planned or other clinical trials conducted with product candidates produced using the modified manufacturing methods, materials, and processes.
These measures could reduce the demand for our products, if approved, or impose additional pricing pressures on how much we can charge for our products if approved. Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.
These measures could reduce the demand for our products, if approved, or impose additional pricing pressures on how much we can charge for our products if approved. 99 Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.
The patent application process is subject to numerous risks and uncertainties, 77 and there can be no assurance that we or any of our potential future development partners will be successful in protecting our product candidates by obtaining and defending patents.
The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our potential future development partners will be successful in protecting our product candidates by obtaining and defending patents.
Department of Health and Human Services (“HHS”) information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), non-physician healthcare professionals (such as physician assistants and nurse practitioners, among others) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. • Additional requirements and regulations applicable to the distribution of pharmaceutical products, including extensive record-keeping, licensing, price reporting, storage and security requirements intended to prevent the unauthorized sale of pharmaceutical products.
Department of Health and Human Services (HHS) information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), non-physician healthcare professionals (such as physician assistants and nurse practitioners, among others) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. • Additional requirements and regulations applicable to the distribution of pharmaceutical products, including extensive record-keeping, licensing, price reporting, storage and security requirements intended to prevent the unauthorized sale of pharmaceutical products.
If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit 67 commercialization of our product candidates. Even successful defense would require significant financial and management resources.
If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even successful defense would require significant financial and management resources.
We may discover 70 weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our consolidated financial statements. Our internal controls over financial reporting will not prevent or detect all errors and all fraud.
We may discover weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our consolidated financial statements. Our internal controls over financial reporting will not prevent or detect all errors and all fraud.
We may not be able to prevent, alone 81 or with any licensors, misappropriation of our trade secrets or confidential information, particularly in countries where the laws may not protect those rights as fully as in the United States.
We may not be able to prevent, alone or with any licensors, misappropriation of our trade secrets or confidential information, particularly in countries where the laws may not protect those rights as fully as in the United States.
Our failure or any failure by these third parties to comply with these regulations or to recruit a sufficient number of patients may require us to repeat clinical trials, which 71 would delay the regulatory approval process.
Our failure or any failure by these third parties to comply with these regulations or to recruit a sufficient number of patients may require us to repeat clinical trials, which would delay the regulatory approval process.
In response to this executive order, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and potential legislative policies that Congress could pursue to advance these 94 principles.
In response to this executive order, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and potential legislative policies that Congress could pursue to advance these principles.
Under Sections 382 and 383 of the Internal Revenue Code, if a corporation undergoes an “ownership change” (generally defined as a greater than 50% change (by value) by 5-percent shareholders in its equity ownership over a three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes (including tax credit carryforwards) to offset its post-change taxable income may be limited.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change” (generally defined as a greater than 50% change (by value) by 5-percent shareholders in its equity ownership over a three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes (including tax credit carryforwards) to offset its post-change taxable income may be limited.
Although in the future we may develop our own manufacturing facilities, we may also continue to use third parties as part of our manufacturing 72 processes and may, in any event, never be successful in developing our own manufacturing facilities.
Although in the future we may develop our own manufacturing facilities, we may also continue to use third parties as part of our manufacturing processes and may, in any event, never be successful in developing our own manufacturing facilities.
Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, establishing and protecting our intellectual property portfolio, developing our D-Domain, ddCAR and ARC-SparX technologies, identifying potential new target antigens, developing product candidates and undertaking research and development, including preclinical studies and clinical trials of our product candidates, all of which are biologics or biopharmaceuticals and require approval under a Biologics License Application (“BLA”).
Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, establishing and protecting our intellectual property portfolio, developing our D-Domain, ddCAR and ARC-SparX technologies, identifying potential new target antigens, developing product candidates and undertaking research and development, including preclinical studies and clinical trials of our product candidates, all of which are biologics or biopharmaceuticals and require approval under a Biologics License Application (BLA).
The criminal FCA provides for criminal penalties for submitting false claims, including imprisonment and criminal fines. • The Civil Monetary Penalty Act of 1981 and implementing regulations, which impose penalties against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to a federal healthcare program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent, or offered or transferred remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier. • The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization. • The federal Physician Payment Sunshine Act, created under the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010, collectively, the Affordable Care Act (“ACA”), and its implementing regulations, which require applicable manufacturers of covered drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare & Medicaid Services (“CMS”) of the U.S.
The criminal FCA provides for criminal penalties for submitting false claims, including imprisonment and criminal fines. • The Civil Monetary Penalty Act of 1981 and implementing regulations, which impose penalties against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to a federal healthcare program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent, or offered or transferred remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier. • The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization. • The federal Physician Payment Sunshine Act, created under the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010, collectively, the Affordable Care Act (ACA), and its implementing regulations, which require applicable manufacturers of covered drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare & Medicaid Services (CMS) of the U.S.
Any disclosure to or misappropriation by 78 third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive position in our market.
Any disclosure to or misappropriation by third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive position in our market.
The laws that may affect our ability to operate include, but are not limited to the following: • The federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. • The federal civil and criminal false claims laws, including the civil False Claims Act (“FCA”), that can be enforced by private citizens through civil whistleblower or qui tam actions, prohibit individuals or entities from, among other 65 things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
The laws that may affect our ability to operate include, but are not limited to the following: • The federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. 70 • The federal civil and criminal false claims laws, including the civil False Claims Act (FCA), that can be enforced by private citizens through civil whistleblower or qui tam actions, prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
Logistical and shipment delays and problems caused by us, our vendors or other factors not in our control, including the pandemic, geopolitical tensions related to Russia’s actions in Ukraine, the resulting sanctions imposed by the United States and other countries, and retaliatory actions taken by Russia in response to such sanctions, business interruptions, global supply chain issues, and weather, could prevent or delay the delivery of product candidates to patients.
Logistical and shipment delays and problems caused by us, our vendors or other factors not in our control, including the pandemic, geopolitical tensions related to the Russia and Ukraine conflict, the resulting sanctions imposed by the United States and other countries, and retaliatory actions taken by Russia in response to such sanctions, business interruptions, global supply chain issues, and weather, could prevent or delay the delivery of product candidates to patients.
The TAG is a novel protein sequence derived from the 26kDA C-terminal fragment of human alpha fetoprotein (“hAFP”) and also had never been previously tested in humans prior to the initiation of our Phase 1 trial of ACLX-001. The ARC-T-cells are designed to have a binding domain that recognizes the TAG, which we refer to as anti-TAG.
The TAG is a novel protein sequence derived from the 26kDA C-terminal fragment of human alpha fetoprotein (hAFP) and also had never been previously tested in humans prior to the initiation of our Phase 1 trial of ACLX-001. The ARC-T-cells are designed to have a binding domain that recognizes the TAG, which we refer to as anti-TAG.
We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our novel discoveries and technologies that are important to our 76 business.
We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our novel discoveries and technologies that are important to our business.
RMAT designation provides potential benefits that include more frequent meetings with FDA to discuss the development plan for the product candidate, and potential eligibility for rolling review and 88 priority review.
RMAT designation provides potential benefits that include more frequent meetings with FDA to discuss the development plan for the product candidate, and potential eligibility for rolling review and priority review.
While we are not aware of any downgrades, material losses, or other significant deterioration in the fair value of our cash equivalents and marketable securities since December 31, 2023, no assurance can be given that further deterioration of the global credit and financial markets would not negatively impact our current portfolio of cash equivalents and marketable securities or our ability to meet our financing objectives.
While we are not aware of any downgrades, material losses, or other significant deterioration in the fair value of our cash equivalents and marketable securities since December 31, 2024, no assurance can be given that further deterioration of the global credit and financial markets would not negatively impact our current portfolio of cash equivalents and marketable securities or our ability to meet our financing objectives.
If approved, our investigational products regulated as biologics may face competition from biosimilars approved through an abbreviated regulatory pathway. The ACA includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), which created an abbreviated approval pathway for biologic products that are biosimilar to or interchangeable with an FDA-licensed reference biologic product.
If approved, our investigational products regulated as biologics may face competition from biosimilars approved through an abbreviated regulatory pathway. The ACA includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (BPCIA), which created an abbreviated approval pathway for biologic products that are biosimilar to or interchangeable with an FDA-licensed reference biologic product.
There is no guarantee that our product candidates will not have side effects similar to those seen in other genetically modified cell therapies or that we will be able to prevent side effects from escalating to an unsafe level for our patients. Additionally, our initial product candidates are directed at treating patients with rrMM and AML/MDS.
There is no guarantee that our product candidates will not have side effects similar to those seen in other genetically modified cell therapies or that we will be able to prevent side effects from escalating to an unsafe level for our patients. Additionally, our initial product candidates have been directed at treating patients with rrMM and AML/MDS.
Additionally, many countries, including the United States, and organizations such as the 68 Organization for Economic Cooperation and Development are also actively considering changes to existing tax laws or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate our business.
Additionally, many countries, including the United States, and organizations such as the Organization for Economic Cooperation and Development are actively considering changes to existing tax laws or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate our business.
Events that may prevent successful or timely completion of clinical development include: • Delays associated with events out of our control such as global pandemics or geopolitical uncertainty and instability, as further described under Risks Related to Our Business; 54 • Delays in reaching a consensus with regulatory agencies on trial design; • Delays in reaching agreement on acceptable terms with prospective CROs, and clinical trial sites and obtaining required institutional review board (“IRB”), approval at each clinical trial site; • Delays in recruiting and enrolling suitable patients to participate in our clinical trials; • Failure to collect sufficiently viable white blood cells from patients, adequately expand or successfully transduce sufficient number of patient T-cells for infusion or otherwise manufacture product candidates, or infuse patients in a timely manner with product candidate; • Failure by our CROs, other third parties or us to adhere the trial protocol or the FDA’s good clinical practices (“GCPs”) or applicable regulatory guidelines in other countries; • Third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or foreign health authorities for violations of applicable regulatory requirements; • Delays in the testing, validation, manufacturing and delivery of our product candidates to the clinical trial sites, including due to a facility manufacturing any of our product candidates or any of their components being ordered by the FDA or foreign health authorities to temporarily or permanently shut down due to violations of current good manufacturing practices (“cGMPs”) regulations or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process; • Delays in the technology transfer and scale up of our manufacturing process to support late-stage clinical trials; • Delays in having patients complete their participation in a trial or return for post-treatment follow-up visits; • Clinical trial sites or patients dropping out of a trial or experiencing changing health or other conditions that require removing them from the trial; • Discovering that product candidates have unforeseen safety issues, undesirable side effects or other unexpected characteristics; • To the extent that we conduct clinical trials in foreign countries, the failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries; • Receiving untimely or unfavorable feedback from applicable regulatory authorities regarding the trial or requests from regulatory authorities to modify the design of a trial; • Suspensions or terminations by IRBs or Data Safety Monitoring Boards (“DSMBs”) or internal clinical holds and/or clinical holds from or by regulatory authorities; • Lack of adequate funding to continue operations; or • Changes in regulatory requirements and guidance that require amending or submitting new clinical protocols and/or amendments to INDs.
Events that may prevent successful or timely completion of clinical development include: • Delays associated with events out of our control such as global pandemics or geopolitical uncertainty and instability, as further described under Risks Related to Our Business; • Delays in reaching a consensus with regulatory agencies on trial design; • Delays in reaching agreement on acceptable terms with prospective CROs, and clinical trial sites and obtaining required institutional review board (IRB), approval at each clinical trial site; • Delays in recruiting and enrolling suitable patients to participate in our clinical trials; • Failure to collect sufficiently viable white blood cells from patients, adequately expand or successfully transduce sufficient number of patient T-cells for infusion or otherwise manufacture product candidates, or infuse patients in a timely manner with product candidate; • Failure by our CROs, other third parties or us to adhere the trial protocol or the FDA’s good clinical practices (GCPs) or applicable regulatory guidelines in other countries; • Third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or foreign health authorities for violations of applicable regulatory requirements; • Delays in the testing, validation, manufacturing and delivery of our product candidates to the clinical trial sites, including due to a facility manufacturing any of our product candidates or any of their components being ordered by the FDA or foreign health authorities to temporarily or permanently shut down due to violations of current good manufacturing practices (cGMPs) regulations or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process; • Delays in the technology transfer and scale up of our manufacturing process to support late-stage clinical trials; • Delays in having patients complete their participation in a trial or return for post-treatment follow-up visits; • Clinical trial sites or patients dropping out of a trial or experiencing changing health or other conditions that require removing them from the trial; • Discovering that product candidates have unforeseen safety issues, undesirable side effects or other unexpected characteristics; • To the extent that we conduct clinical trials in foreign countries, the failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries; • Receiving untimely or unfavorable feedback from applicable regulatory authorities regarding the trial or requests from regulatory authorities to modify the design of a trial; 59 • Suspensions or terminations by IRBs or Data Safety Monitoring Boards (DSMBs) or internal clinical holds and/or clinical holds from or by regulatory authorities; • Lack of adequate funding to continue operations; or • Changes in regulatory requirements and guidance that require amending or submitting new clinical protocols and/or amendments to INDs.
Patent reform legislation in the United States and other countries, including the Leahy-Smith America Invents Act (the “Leahy-Smith Act”), signed into law on September 16, 2011, could increase those uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
Patent reform legislation in the United States and other countries, including the Leahy-Smith America Invents Act (the Leahy-Smith Act), signed into law on September 16, 2011, could increase those uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
Initially, the aggregate number of shares of our common stock that was able to be issued pursuant to equity awards under the 2022 Plan was 4,296,875 shares, plus the number of shares subject to awards granted under our 2017 Equity Incentive Plan (the “2017 Plan”) that expire or otherwise terminate without having been exercised in full or are forfeited to or repurchased by us 102 (provided that the maximum number of shares that could (and can) be added to the 2022 Plan pursuant to awards under the 2017 Plan is 6,269,300).
Initially, the aggregate number of shares of our common stock that was able to be issued pursuant to equity awards under the 2022 Plan was 4,296,875 shares, plus the number of shares subject to awards granted under our 2017 Equity Incentive Plan (the 2017 Plan) that expire or otherwise terminate without having been exercised in full or are forfeited to or repurchased by us (provided that the maximum number of shares that could (and can) be added to the 2022 Plan pursuant to awards under the 2017 Plan is 6,269,300).
These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations, or market research and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these cancers.
These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations, or market research and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these diseases.
If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business, operating results, or financial condition. 105 Item 1B. Unreso lved Staff Comments. None.
If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business, operating results, or financial condition. 108 Item 1B. Unreso lved Staff Comments. None.
Additionally, it can be difficult to determine if the serious adverse or unexpected side effects were caused by the product candidate or another factor, especially in oncology subjects who may suffer from other medical conditions and be taking other medications. In June 2023, the FDA issued a partial clinical hold on our IND for anito-cel.
Additionally, it can be difficult to determine if the serious adverse or unexpected side effects were caused by the product candidate or another factor, especially in oncology subjects, autoimmune or non-autoimmune patients who may suffer from other medical conditions and be taking other medications. In June 2023, the FDA issued a partial clinical hold on our IND for anito-cel.
Additionally, our projections of both the number of people who have the cancers we are targeting, as well as the size of the subset patient population who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates.
Additionally, our projections of both the number of people who have the diseases we are targeting, as well as the size of the subset patient population who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates.
Depending on the facts and circumstances, we could be subject to criminal penalties if we knowingly obtain, use, or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA. In addition, the California Consumer Privacy Act (“CCPA”) took effect in January 2020 and became enforceable in July 2020.
Depending on the facts and circumstances, we could be subject to criminal penalties if we knowingly obtain, use, or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA. 100 In addition, the California Consumer Privacy Act (CCPA) took effect in January 2020 and became enforceable in July 2020.
Patent and Trademark Office (“USPTO”), or by patent offices in foreign countries, or that the claims in any of our issued patents will be considered valid and enforceable by courts or administrative tribunals in the United States or foreign countries.
Patent and Trademark Office (USPTO), or by patent offices in foreign countries, or that the claims in any of our issued patents will be considered valid and enforceable by courts or administrative tribunals in the United States or foreign countries.
The centralized procedure provides for the grant of a single marketing authorization that is valid for all European Union Member States as well as the European Economic Area (“EEA”) countries of Iceland, Liechtenstein and Norway.
The centralized procedure provides for the grant of a single marketing authorization that is valid for all European Union Member States as well as the European Economic Area (EEA) countries of Iceland, Liechtenstein and Norway.
In addition to the factors discussed in this Risk Factors section, and elsewhere in this Annual Report on Form 10-K, these factors include: • Our decision to initiate a clinical trial, not to initiate a clinical trial, or to terminate an existing clinical trial; • The commencement, enrollment, or results of the clinical trials of our product candidates or any future clinical trials we may conduct, or changes in the development status of our product candidates; • Results from ongoing clinical trials and future clinical trials of our competitors; • Any delay in our regulatory filings for our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information; • Our failure to achieve product development goals in the time frames we announce; • Adverse results or delays in clinical trials; • Adverse regulatory decisions, including failure to receive regulatory approval of our product candidates; • Changes in laws or regulations applicable to our product candidates, including, but not limited to, clinical trial requirements for approvals; • Adverse developments concerning our manufacturers; • Our inability to obtain adequate supply for any product candidate, or any component thereof, or approved product or inability to do so at acceptable prices; • Our inability to establish collaborations if needed; • Our failure to commercialize our product candidates; 99 • Unanticipated serious safety concerns related to the use of our product candidates; • Introduction of new products or other therapies offered by us or our competitors; • Announcements of significant acquisitions, strategic partnerships, joint ventures, or capital commitments by us or our competitors; • Additions or departures of key scientific or management personnel; • Our ability to effectively manage our growth; • The size and growth of our initial cancer target markets; • Our ability to successfully treat additional types of cancers or at different stages; • Actual or anticipated variations in quarterly operating results; • Our cash position; • Our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • Publication of research reports about us or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • Changes in the market valuations of similar companies; • Our operating performance and the performance of other similar companies; • Overall performance of the equity markets; • The expiration of contractual lock-up agreements; • Sales of our common stock by us or our stockholders in the future; • Trading volume of our common stock; • Changes in accounting practices; • Ineffectiveness of our internal controls; • Disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies; • Significant lawsuits, including patent or stockholder litigation; • General political and economic conditions, such as global pandemics or geopolitical uncertainty and instability, including ongoing geopolitical tensions related to Russia’s actions in Ukraine, resulting sanctions imposed by the United States and other countries, and retaliatory actions taken by Russia in response to such sanctions; and • Other events or factors, many of which are beyond our control.
In addition to the factors discussed in this Risk Factors section, and elsewhere in this Annual Report on Form 10-K, these factors include: • Our decision to initiate a clinical trial, not to initiate a clinical trial, or to terminate an existing clinical trial; • The commencement, enrollment, or results of the clinical trials of our product candidates or any future clinical trials we may conduct, or changes in the development status of our product candidates; • Results from ongoing clinical trials and future clinical trials of our competitors; • Any delay in our regulatory filings for our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information; 103 • Our failure to achieve product development goals in the time frames we announce; • Adverse results or delays in clinical trials; • Adverse regulatory decisions, including failure to receive regulatory approval of our product candidates; • Changes in laws or regulations applicable to our product candidates, including, but not limited to, clinical trial requirements for approvals; • Adverse developments concerning our manufacturers; • Our inability to obtain adequate supply for any product candidate, or any component thereof, or approved product or inability to do so at acceptable prices; • Our inability to establish collaborations if needed; • Our failure to commercialize our product candidates; • Unanticipated serious safety concerns related to the use of our product candidates; • Introduction of new products or other therapies offered by us or our competitors; • Announcements of significant acquisitions, strategic partnerships, joint ventures, or capital commitments by us or our competitors; • Additions or departures of key scientific or management personnel; • Our ability to effectively manage our growth; • The size and growth of our initial cancer or autoimmune target markets and the markets of any other indications that we choose to target; • Our ability to successfully treat additional types of cancers or at different stages; • Our ability to successfully treat the indications outside of cancer, such as autoimmune indications, that we pursue; • Actual or anticipated variations in quarterly operating results; • Our cash position; • Our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • Publication of research reports about us or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • Changes in the market valuations of similar companies; • Our operating performance and the performance of other similar companies; • Overall performance of the equity markets; • The expiration of contractual lock-up or standstill agreements; • Sales of our common stock by us or our stockholders in the future; • Trading volume of our common stock, which may be limited; 104 • Changes in accounting practices; • Ineffectiveness of our internal controls; • Disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies; • Significant lawsuits, including patent or stockholder litigation; • General political and economic conditions, such as global pandemics or geopolitical uncertainty and instability, including ongoing geopolitical tensions related to the Russia and Ukraine conflict, resulting sanctions imposed by the United States and other countries, and retaliatory actions taken by Russia in response to such sanctions, and also those related to military conflicts in the Middle East; and • Other events or factors, many of which are beyond our control.
On January 1, 2022, a provision of the legislation commonly known as the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) went into effect, eliminating the option to deduct domestic research and development costs in the year incurred and instead requiring taxpayers to amortize such costs over five years.
On January 1, 2022, a provision of the legislation commonly known as the Tax Cuts and Jobs Act of 2017 (the TCJA) went into effect, eliminating the option to deduct domestic research and development costs in the year incurred and instead requiring taxpayers to amortize such costs over five years.
Risks Related to Development of Our Product Candidates • Although FDA has previously issued and lifted one partial clinical hold on anito-cel, there is no assurance that the protocol amendments we have made will be effective at mitigating the risk of future serious adverse events or that the FDA or DSMB will not issue another clinical hold in the future. • We have no products approved for commercial sale and have only recently begun clinical trials to test our first product candidates in humans, which may make it difficult for you to evaluate our current business and predict our future success and viability. • Our ddCAR and ARC-SparX platforms represent novel and unproven approaches to treatment, which makes it difficult to predict the timing, results and costs of product candidate development and the likelihood of obtaining regulatory approval.
Risks Related to Development of Our Product Candidates • Although the FDA has previously issued and lifted one partial clinical hold on anito-cel, there is no assurance that the safety measures included in our clinical protocols will be effective at mitigating the risk of future serious adverse events or that the FDA or DSMB will not issue another clinical hold in the future. • We have no products approved for commercial sale and have only recently begun clinical trials to test our first product candidates in humans, which may make it difficult for you to evaluate our current business and predict our future success and viability. • Our ddCAR and ARC-SparX platforms represent novel and unproven approaches to treatment, which makes it difficult to predict the timing, results and costs of product candidate development and the likelihood of obtaining regulatory approval.
Compliance with data protection laws and regulations could require us to take on more onerous obligations in our contracts, increase our costs of legal compliance, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions.
Compliance with laws and regulations relating to privacy, data protection and security could require us to take on more onerous obligations in our contracts, increase our costs of legal compliance, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions.

… 246 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+2 added−0 removed10 unchanged
Biggest changeTo oversee and identify risks from cybersecurity threats associated with our use of third-party service providers, we require each third-party service provider to certify that it has the ability to implement and maintain appropriate security measures, consistent with all applicable laws, to implement and maintain reasonable security measures in connection with their work with us, and to promptly report any suspected breach of its security measures that may affect our company. 106 For additional information regarding whether any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect our company, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” in this annual report on Form 10-K.
Biggest changeTo oversee and identify risks from cybersecurity threats associated with our use of third-party service providers, we require each third-party service provider to certify that it has the ability to implement and maintain appropriate security measures, consistent with all applicable laws, to implement and maintain reasonable security measures in connection with its work with us, and to promptly report any suspected breach of its security measures that may affect our company.
The processes by which our Director of Information Technology and members of our cybersecurity committee are informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents includes the following: Security Awareness Training, Patch Management Process, Endpoint Detection and Response, Managed Detection and Response, Incident Response Plan, Data Encryption, Access Control, Network Security, Vulnerability Management.
The processes by which our Director of Information Technology and members of our cybersecurity committee are informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents includes the following: Security Awareness Training, Patch Management Process, Endpoint Detection and Response, Managed Detection and Response, Incident Response Plan, Data Encryption, Access Control, Network Security, and Vulnerability Management.
Our Director of Information Technology, Controller and members of our cybersecurity committee provide quarterly briefings to the audit committee regarding our company’s cybersecurity risks and activities, including any recent cybersecurity incidents and related responses, cybersecurity systems testing, activities of third parties, and the like.
Our Director of Information Technology, our Controller, and members of our cybersecurity committee provide quarterly briefings to the audit committee regarding our company’s cybersecurity risks and activities, including any recent cybersecurity incidents and related responses, cybersecurity systems testing, activities of third parties, and the like.
This program includes: • Robust Firewalls and Intrusion Detection Systems: The company has invested in state-of-the-art firewalls and intrusion detection systems to prevent unauthorized access to its networks. • Regular Security Assessments: The company conducts regular security assessments to identify vulnerabilities and address them promptly.
This program includes: • Robust Firewalls and Intrusion Detection Systems: The company has invested in state-of-the-art firewalls and intrusion detection systems designed to prevent unauthorized access to its networks. • Regular Security Assessments: The company conducts regular security assessments to identify vulnerabilities and address them promptly.
By implementing these risk management strategies, the company aims to minimize the likelihood and impact of a cybersecurity breach, thereby safeguarding its assets and maintaining the trust of its stakeholders.
By implementing these risk management strategies, we aim to minimize the likelihood and impact of a cybersecurity breach, thereby safeguarding our assets and maintaining the trust of our stakeholders.
Our Director of Information Technology has expertise in security frameworks and standards (NIST), proficiency in security tools such as Security Information and Event Management) systems, Intrusion Detection Systems (IDS) and vulnerability scanners, and has experience with threat intelligence, threat modeling, risk assessment, and risk management practices as well as analyzing logs, investigating security incidents, and performing forensic analysis.
Department of Commerce), proficiency in security tools such as security information and event management systems, intrusion detection systems and vulnerability scanners, and has experience with threat intelligence, threat modeling, risk assessment, and risk management practices, as well as analyzing logs, investigating security incidents, and performing forensic analysis.
Our board of directors administers its cybersecurity risk oversight function primarily through the audit committee. Our Director of Information Technology and members of our cybersecurity committee (a management committee), which includes legal and privacy representatives, are primarily responsible to assess and manage our material risks from cybersecurity threats with assistance from third-party service providers.
Our Director of Information Technology and members of our cybersecurity committee (a management committee), which includes legal and privacy representatives, are primarily responsible to assess and manage our material risks from cybersecurity threats with assistance from third-party service providers.
Governance One of the key functions of our board of directors is informed oversight of our risk management process, including risks from cybersecurity threats. Our board of directors is responsible for monitoring and assessing strategic risk exposure, and our executive officers are responsible for the day-to-day management of the material risks we face.
Our board of directors is responsible for monitoring and assessing strategic risk exposure, and our executive officers are responsible for the day-to-day management of the material risks we face. Our board of directors administers its cybersecurity risk oversight function primarily through the audit committee.
Added
For additional information regarding whether any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect our company, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” in this annual report on Form 10-K. 109 Governance One of the key functions of our board of directors is informed oversight of our risk management process, including risks from cybersecurity threats.
Added
Our Director of Information Technology has expertise in security frameworks and standards (such as the Cybersecurity Framework established by the National Institute of Standards and Technology at the U.S.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeItem 3. Legal Proceedings. From time to time, we may become involved in litigation or other legal proceedings. As of December 31, 2023 we were not a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business.
Biggest changeItem 3. Legal Proceedings. From time to time, we may become involved in litigation or other legal proceedings. As of December 31, 2024 we were not a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

68 edited+26 added−78 removed69 unchanged
Biggest changeThe primary difference between the effective tax rate and the statutory tax rate relates to change in state deferred income tax rate. 112 Results of Operations The following table summarizes our results of operations (in thousands): Year Ended December 31, Change 2023 2022 2023 vs 2022 Collaboration revenue $ 110,319 $ — $ — — % Operating expenses: Research and development 133,849 149,555 (15,706 ) -11 % General and administrative 66,350 41,704 24,646 59 % Total operating expenses 200,199 191,259 8,940 5 % Loss from operations (89,880 ) (191,259 ) (8,940 ) 5 % Interest and other income (expense), net 23,695 4,300 19,395 451 % Interest expense (3,842 ) (1,720 ) (2,122 ) 123 % Total other income, net 19,853 2,580 17,273 669 % Income tax (expense) benefit (663 ) — — — Net loss $ (70,690 ) $ (188,679 ) $ 8,333 -4 % Collaboration Revenue Collaboration Revenue was $110.3 million for the year ended December 31, 2023 compared to zero for the year ended December 31, 2022, as we began recognizing collaboration revenue in 2023 under the Kite Collaboration Agreement and its amendment.
Biggest changeResults of Operations The following table summarizes our results of operations (in thousands, except percentages): Year Ended December 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 Collaboration revenue $ 107,936 $ 110,319 $ — $ (2,383 ) -2 % $ 110,319 100% Operating expenses: Research and development 157,093 133,849 149,555 23,244 17 % (15,706 ) -11 % General and administrative 88,414 66,350 41,704 22,064 33 % 24,646 59 % Total operating expenses 245,507 200,199 191,259 45,308 23 % 8,940 5 % Loss from operations (137,571 ) (89,880 ) (191,259 ) (47,691 ) 53 % 101,379 -53 % Interest and other income (expense), net 33,322 23,695 4,300 9,627 41 % 19,395 451 % Interest expense (1,030 ) (3,842 ) (1,720 ) 2,812 -73 % (2,122 ) 123 % Total other income, net 32,292 19,853 2,580 12,439 63 % 17,273 669 % Income tax expense (2,069 ) (663 ) — (1,406 ) 212 % (663 ) 100 % Net loss $ (107,348 ) $ (70,690 ) $ (188,679 ) $ (36,658 ) 52 % $ 117,989 -63 % Collaboration Revenue Collaboration revenue was $107.9 million for the year ended December 31, 2024 compared to $110.3 million for the year ended December 31, 2023.
General and Administrative Expenses General and administrative expenses were $66.4 million for the year ended December 31, 2023 compared to $41.7 million for the year ended December 31, 2022, an increase of $24.6 million.
General and administrative expenses were $66.4 million for the year ended December 31, 2023 compared to $41.7 million for the year ended December 31, 2022, an increase of $24.6 million.
Financing Activities Net cash provided by financing activities of $279.2 million during the year ended December 31, 2023 consisted of $299.7 million proceeds from issuance of common stock to related party, $7.8 million proceeds from exercise of stock options, offset by payments under our finance lease totaling $29.4 million.
Net cash provided by financing activities of $279.2 million during the year ended December 31, 2023 consisted of $299.7 million proceeds from issuance of common stock to related party, $7.8 million proceeds from exercise of stock options, offset by payments under our finance lease totaling $29.4 million.
Our ability to eventually generate significant revenues from product sales will depend on a number of factors, including: • Successful enrollment in, and completion of, clinical trials; • Sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials; • Achieving favorable results from clinical trials; • Receipt of marketing approvals from applicable regulatory authorities; 111 • Establishing and maintaining sufficient manufacturing capabilities, whether internally or with third parties, including securing raw material supply; • Existence of, and our ability to identify, an addressable patient population for our product candidates; • Effectively competing with other therapies; • Maintaining a continued acceptable safety profile of any product following approval, if any; • Submission of INDs or other regulatory applications for our planned clinical trials or future clinical trials and authorizations from regulators to initiate clinical trials; • Identification of additional target antigens for desired indications; • Identification and engineering of D-Domain-based binding regions that bind to the desired target antigens; • Developing and implementing successful marketing and reimbursement strategies; and • Obtaining and maintaining patent, trade secret, and other intellectual property protection and regulatory exclusivity for our product candidates; and • The market opportunities for certain of our product candidates may be limited to those patients who are ineligible for or have failed prior treatments and may be small, and our projections regarding the size of the addressable market may be incorrect.
Our ability to eventually generate significant revenues from product sales will depend on a number of factors, including: • Successful enrollment in, and completion of, clinical trials; • Sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials; • Achieving favorable results from clinical trials; • Receipt of marketing approvals from applicable regulatory authorities; • Establishing and maintaining sufficient manufacturing capabilities, whether internally or with third parties, including securing raw material supply; • Existence of, and our ability to identify, an addressable patient population for our product candidates; • Effectively competing with other therapies; • Maintaining a continued acceptable safety profile of any product following approval, if any; • Submission of INDs or other regulatory applications for our planned clinical trials or future clinical trials and authorizations from regulators to initiate clinical trials; • Identification of additional target antigens for desired indications; • Identification and engineering of D-Domain-based binding regions that bind to the desired target antigens; • Developing and implementing successful marketing and reimbursement strategies; • Obtaining and maintaining patent, trade secret, and other intellectual property protection and regulatory exclusivity for our product candidates; and • The market opportunities for certain of our product candidates may be limited to those patients who are ineligible for or have failed prior treatments and may be small, and our projections regarding the size of the addressable market may be incorrect.
We will reconsider the use of the Black-Scholes model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that prevent their value from being reasonably estimated using this model. The Black-Scholes option pricing model requires inputs based on certain subjective assumptions.
We will reconsider the use of the Black-Scholes model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that prevent their value from being reasonably estimated using this model. 121 The Black-Scholes option pricing model requires inputs based on certain subjective assumptions.
Expected Equity Volatility —Due to the lack of a public market for our common stock (prior to the Company’s IPO) and the lack of company-specific historical and implied volatility data, we have based our computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to us (e.g., public entities of similar size, complexity, stage of development and industry focus).
Expected Equity Volatility —Due to the lack of a public market for our common stock (prior to our IPO) and the lack of company-specific historical and implied volatility data, we have based our computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to us (e.g., public entities of similar size, complexity, stage of development and industry focus).
To determine revenue recognition for arrangements within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) 115 with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy each performance obligation.
To determine revenue recognition for arrangements within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy each performance obligation.
Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments are primarily in short-term securities. Our available-for-sale securities are subject to interest rate risk and will 120 fall in value if market interest rates increase.
Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments are primarily in short-term securities. Our available-for-sale securities are subject to interest rate risk and will fall in value if market interest rates increase.
We only apply the five-step model to contracts when it is probable that we will collect the consideration to which we are entitled in exchange for the goods or services we transfer to the customer. We evaluate the promised goods or services in these agreements to determine which ones represent distinct performance obligations.
We only apply the five-step model to contracts when it is probable that we will collect the consideration to which we are entitled in exchange for the goods or services we transfer to the customer. 120 We evaluate the promised goods or services in these agreements to determine which ones represent distinct performance obligations.
Executive Compensation. The information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference. It em 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
It em 11. Executive Compensation. The information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference. It em 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
We may also be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. 109 The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our development efforts.
We may also be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our development efforts.
To the extent we identify multiple performance obligations in a contract, the Company must develop assumptions that require judgment to determine the estimated standalone selling price for each performance obligation in order to allocate the transaction price among the identified performance obligations. The transaction price is allocated on a relative standalone selling price basis.
To the extent we identify multiple performance obligations in a contract, we must develop assumptions that require judgment to determine the estimated standalone selling price for each performance obligation in order to allocate the transaction price among the identified performance obligations. The transaction price is allocated on a relative standalone selling price basis.
Our methodology for developing the assumptions used in the valuation model are as follows: Fair Value of Common Stock —See the subsection titled “Determination of the fair value of our common stock and fair value of total equity” below. Expected Dividend Yield —The expected dividend yield is based on the Company’s historical and expected dividend payouts.
Our methodology for developing the assumptions used in the valuation model are as follows: Fair Value of Common Stock —See the subsection titled “Determination of the fair value of our common stock and fair value of total equity” below. Expected Dividend Yield —The expected dividend yield is based on our historical and expected dividend payouts.
Changes in operating assets and liabilities increased cash by $4.5 million, primarily due to increases of accounts payable and other current 114 liabilities and accrued liabilities of $7.0 million, and increases in operating lease liabilities of $3.1 million, offset by decreases in prepaid assets and other current and non-current assets of $5.7 million.
Changes in operating assets and liabilities increased cash by $4.5 million, primarily due to increases of accounts payable and other current liabilities and accrued liabilities of $7.0 million, and increases in operating lease liabilities of $3.1 million, offset by decreases in prepaid assets and other current and non-current assets of $5.7 million.
Other Income, net Other income, net consists primarily of interest earned on our cash and cash equivalents, restricted cash, and marketable securities, net accretion and amortization on marketable securities and interest expense related to our finance lease obligations.
Other Income, net 116 Other income, net consists primarily of interest earned on our cash and cash equivalents, restricted cash, and marketable securities, net accretion and amortization on marketable securities and interest expense related to our finance lease obligations.
In applying the Monte Carlo methodology, the total equity value on various measurement dates were simulated and allocated to the various classes of equity in the Company’s capital structure according to the characteristics of that capital structure, such as the number of shares of each class of equity, seniority levels, liquidation preferences and conversion values for redeemable convertible preferred stock, and participation thresholds for common stock and each series of redeemable convertible preferred stock.
In applying the Monte Carlo methodology, the total equity value on various measurement dates were simulated and allocated to the various classes of equity in our capital structure according to the characteristics of that capital structure, such as the number of shares of each class of equity, seniority levels, liquidation preferences and conversion values for redeemable convertible preferred stock, and participation thresholds for common stock and each series of redeemable convertible preferred stock.
For performance obligations satisfied over time, we estimate the efforts needed to complete the performance obligations and recognizes revenue by measuring the progress towards complete satisfaction of the performance obligations using an input measure. The estimated period of performance and level of effort, including third-party costs, are reviewed quarterly and adjusted, as needed, to reflect our current expectations.
For performance obligations satisfied over time, we estimate the efforts needed to complete the performance obligations and recognize revenue by measuring the progress towards complete satisfaction of the performance obligations using an input measure. The estimated period of performance and level of effort, including third-party costs, are reviewed quarterly and adjusted, as needed, to reflect our current expectations.
Item 4. Mine Sa fety Disclosures. Not applicable. 107 PART II It em 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock trades under the symbol “ACLX” on the Nasdaq Global Select Market.
Item 4. Mine Sa fety Disclosures. Not applicable. 110 PART II It em 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock trades under the symbol “ACLX” on the Nasdaq Global Select Market.
Recent Sales of Unregistered Equity Securities There were no sales of unregistered securities by us during the year ended December 31, 2023 that were not previously reported in our quarterly reports on Form 10-Q and current reports on Form 8-K filed with the SEC.
Recent Sales of Unregistered Equity Securities There were no sales of unregistered securities by us during the year ended December 31, 2024 that were not previously reported in our quarterly reports on Form 10-Q and current reports on Form 8-K filed with the SEC.
The discount period is the period between the valuation date and the assumed change in control event date, with the assumption that all equity shares in the capital structure are paid out in cash. Expected Dividend Yield —The expected dividend yield is based on the Company’s historical and expected dividend payouts.
The discount period is the period between the valuation date and the assumed change in control event date, with the assumption that all equity shares in the capital structure are paid out in cash. Expected Dividend Yield —The expected dividend yield is based on our historical and expected dividend payouts.
Internal costs had an increase of $9.1 million in personnel related costs due to an increase in headcount ($4.0 million of which was due to non-cash stock-based compensation expense), an increase of $4.1 million in facilities costs, an increase of $2.1 million in consulting fees, and an increase of $1.2 million in depreciation expenses.
Internal costs had an increase of $9.1 million in personnel related costs due to an increase in headcount ($4.0 million of which was due to non-cash stock-based compensation expense), an increase of $4.1 million in facilities costs, and an increase of $1.2 million in depreciation expenses.
We do not expect to generate any meaningful revenue from product sales unless and until we obtain regulatory approval of, and commercialize any of, our product candidates, except that we recognize revenue under the Kite Collaboration Agreement and its amendment on a cost-to-cost percentage of completion basis applied to the total estimated transaction price of $310.5 million.
We do not expect to generate any meaningful revenue from product sales unless and until we obtain regulatory approval of, and commercialize any of, our product candidates, except that we recognize revenue under the Kite Collaboration Agreement and its amendment on a cost-to-cost percentage of completion basis applied to the total estimated transaction price.
Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal year on December 31, 2023, as such term is defined in Rules 13a-15I and 15d-15(e) under the Exchange Act.
Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal year on December 31, 2024, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.
As of December 31, 2023, we were unable to estimate the timing or likelihood of achieving the milestones or making future product sales. Our operating lease obligations primarily consist of lease payments on our research, lab and office facilities in Rockville and Gaithersburg, Maryland and Redwood City, California.
As of December 31, 2024, we were unable to estimate the timing or likelihood of achieving the milestones or making future product sales. Our operating lease obligations primarily consist of lease payments on our research, lab and office facilities in Rockville, Maryland and Redwood City, California.
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2024.
Moreover, we expect to incur additional costs associated with operating as a public company, particularly relating to our loss of EGC and smaller reporting company status. Adequate funding may not be available to us on acceptable terms or at all.
Moreover, we expect to incur additional costs associated with operating as a public company, particularly relating to our loss of emerging growth company and smaller reporting company status. Adequate funding may not be available to us on acceptable terms or at all.
If we make any substantive amendments to, or grant any waivers from, the code of business conduct and ethics for our principal executive officer, principal financial officer, principal accounting officer, controller or persons performing similar functions, or any officer or director, we will disclose the nature of such amendment or waiver on our website or in a current report on Form 8-K. 124 It em 11.
If we make any substantive amendments to, or grant any waivers from, the code of business conduct and ethics for our principal executive officer, principal financial officer, principal accounting officer, controller or persons performing similar functions, or any officer or director, we will disclose the nature of such amendment or waiver on our website or in a current report on Form 8-K.
We are exposed to market risk related to changes in interest rates. As of December 31, 2023 and 2022, we had cash, cash equivalents and marketable securities of $729.2 million and $254.8 million, respectively, primarily invested in U.S. government agency securities and treasuries, certificate of deposit, corporate bonds, commercial paper and money market accounts.
We are exposed to market risk related to changes in interest rates. As of December 31, 2024 and 2023, we had cash, cash equivalents and marketable securities of $625.7 million and $729.2 million, respectively, primarily invested in U.S. government agency securities and treasuries, certificate of deposit, corporate bonds, commercial paper and money market accounts.
A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Internal control over financial reporting includes those policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer; provide reasonable assurance that transactions are recorded as necessary for to permit preparation of our consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.
We expect our operating expenses and capital requirements will increase substantially in connection with our ongoing activities, as we: • Advance the clinical program for anito-cel and subsequent clinical trials focused on earlier lines of therapy in collaboration with our partners at Kite; • Grow our supply and contract manufacturing infrastructure to support the continued development of anito-cel and our other product candidates; • Initiate or continue to advance clinical trials to evaluate our clinical-stage ARC-SparX product candidates, ACLX-001 and ACLX-002, and other preclinical pipeline programs; • Expand our pipeline of product candidates, including through our own product discovery and development efforts or through acquisition or in-licensing; • Continue to develop our proprietary platforms to extend their use; • Attract, hire, and retain additional clinical, scientific, manufacturing, management and administrative personnel; • Add operational, financial, and management information systems and personnel, including personnel to support our product development, as well as to support us as a public reporting company; • Determine and execute our long-term manufacturing strategy for anito-cel in collaboration with our partners at Kite; • Pursue regulatory approval of product candidates that successfully complete clinical trials; • Establish a sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain regulatory approval; • Obtain, maintain, expand and protect our intellectual property portfolio; and • Incur costs associated with being a public company, including legal, accounting and auditing, investor relations, and compliance.
We expect our operating expenses and capital requirements will increase substantially in connection with our ongoing activities, as we: • Advance the clinical program for anito-cel and subsequent clinical trials focused on earlier lines of therapy in collaboration with our partner Kite; 113 • Grow our supply and contract manufacturing infrastructure to support the continued development of anito-cel and our other product candidates; • Initiate clinical trials to evaluate anito-cel in other indications outside of oncology, such as generalized myasthenia gravis; • Initiate or continue to advance clinical trials to evaluate our clinical-stage ARC-SparX product candidates, ACLX-001 and ACLX-002, and other preclinical pipeline programs; • Expand our pipeline of product candidates, including through our own product discovery and development efforts or through acquisition or in-licensing; • Continue to develop our proprietary platforms to extend their use; • Attract, hire, and retain additional clinical, scientific, manufacturing, management and administrative personnel; • Add operational, financial, and management information systems and personnel, including personnel to support our product development, as well as to support us as a public reporting company; • Determine and execute our long-term manufacturing strategy for anito-cel in collaboration with our partner Kite; • Pursue regulatory approval of product candidates that successfully complete clinical trials; • Establish a sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain regulatory approval; and • Obtain, maintain, expand and protect our intellectual property portfolio.
Based on the evaluation of our disclosure controls and procedures as of December 31, 2023, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, disclosure controls and procedures were effective at a reasonable assurance level.
Based on the evaluation of our disclosure controls and procedures as of December 31, 2024, our principal executive officer and principal financial and accounting officer concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.
The fair value of the RSU Award is the average of the discounted proceeds to the common stock across all simulated paths.
The fair value of each such award is the average of the discounted proceeds to the common stock across all simulated paths.
The Company has historically paid no dividends and does not anticipate dividends to be paid in the future. Expected Time to Achievement of a Performance Condition —The time to the achievement of a performance condition is based on the Company’s best estimate of the period of time to achievement of a performance condition that attains the established market capitalization thresholds.
We have historically paid no dividends and does not anticipate dividends to be paid in the future. Expected Time to Achievement of a Performance Condition —The time to the achievement of a performance condition is based on our best estimate of the period of time to achievement of a performance condition that attains the established market capitalization thresholds.
Holders of Our Common Stock As of February 23, 2024, there were approximately 17 holders of record of shares of our common stock. This number does not include stockholders for whom shares are held in “nominee” or “street” name.
Holders of Our Common Stock As of February 21, 2025, there were approximately 16 holders of record of shares of our common stock. This number does not include stockholders for whom shares are held in “nominee” or “street” name.
Based on the available objective evidence during the year ended December 31, 2023, the Company believes it is not more likely than not that the tax benefits of its net deferred income tax assets may be realized. Accordingly, the Company did not record the tax benefits of net deferred income tax assets previously incurred as of December 31, 2023.
Based on the available objective evidence during the year ended December 31, 2024, we believe it is not more likely than not that the tax benefits of our net deferred income tax assets may be realized. Accordingly, we did not record the tax benefits of net deferred income tax assets previously incurred as of December 31, 2024.
Net cash used in investing activities of $117.7 million during the year ended December 31, 2022 consists of $273.7 million in purchases of marketable securities, offset by $158.3 million in proceeds from maturities of marketable securities and $2.3 million in purchases of lab equipment used in the development of our cell therapies.
Net cash used in investing activities of $154.5 million during the year ended December 31, 2023 consists of $442.4 million in purchases of marketable securities and $21.4 million in purchases of property and equipment, offset by $309.3 million in proceeds from maturities of marketable securities. 119 Net cash used in investing activities of $117.7 million during the year ended December 31, 2022 consists of $273.7 million in purchases of marketable securities, offset by $158.3 million in proceeds from maturities of marketable securities and $2.3 million in purchases of lab equipment used in the development of our cell therapies.
Internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with U.S. generally accepted accounting principles.
Internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
In the future, we may generate revenue from payments received under the Kite Collaboration Agreement and its amendment, including payments of upfront fees, license fees, milestone-based payments, and reimbursements for research and development efforts.
In the future, we may generate revenue from payments received under the Kite Collaboration Agreement and its amendment, including payments of upfront fees, license fees, milestone-based payments, and reimbursements for research and development efforts. Operating Expenses Research and Development Expenses We expense research and development costs in the periods in which they are incurred.
A 10% change in the interest rates in effect on December 31, 2023 would not have a material effect on the fair market value of our cash equivalents and available-for-sale securities. It em 8. Financial Statements and Supplementary Data. The information required by this Item 8 is contained in the Consolidated Financial Statements of this Annual Report on Form 10-K.
A 10% change in the interest rates in effect on December 31, 2024 would not have a material effect on the fair market value of our cash equivalents and available-for-sale securities. It em 8. Financial Statements and Supplementary Data.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not purchase any of our registered equity securities during the period covered by this Annual Report on Form 10-K. It em 6. Reserved. It em 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not purchase any of our registered equity securities during the period covered by this Annual Report on Form 10-K.
Research and Development Expenses The detail of our external and internal research and development costs is as follows (in thousands): Year Ended December 31, Change 2023 2022 2023 vs 2022 External costs: anito-cel $ 73,530 $ 96,513 $ (22,983 ) -24 % ACLX-001 2,939 8,764 (5,825 ) -66 % ACLX-002 5,667 6,458 (791 ) -12 % Other research and development costs 3,701 5,467 (1,766 ) -32 % Total external costs 85,837 117,202 (31,365 ) -27 % Internal costs 48,012 32,353 15,659 48 % Total research and development expenses $ 133,849 $ 149,555 $ (15,706 ) -11 % Research and development expenses were $133.8 million for the year ended December 31, 2023 compared to $149.6 million for the year ended December 31, 2022, a decrease of $15.7 million.
Research and Development Expenses The detail of our external and internal research and development costs is as follows (in thousands, except percentages): Year Ended December 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 External costs: anito-cel in rrMM $ 50,141 $ 73,530 $ 96,513 $ (23,389 ) -32 % $ (22,983 ) -24 % ACLX-001 1,975 2,939 8,764 (964 ) -33 % (5,825 ) -66 % ACLX-002 14,294 5,667 6,458 8,627 152 % (791 ) -12 % Other research and development costs 21,364 3,701 5,467 17,663 477 % (1,766 ) -32 % Total external costs 87,774 85,837 117,202 1,937 2 % (31,365 ) -27 % Internal costs 69,319 48,012 32,353 21,307 44 % 15,659 48 % Total research and development expenses $ 157,093 $ 133,849 $ 149,555 $ 23,244 17 % $ (15,706 ) -11 % 117 Research and development expenses were $157.1 million for the year ended December 31, 2024 compared to $133.8 million for the year ended December 31, 2023, an increase of $23.2 million.
Investing Activities Net cash used in investing activities of $154.5 million during the year ended December 31, 2023 consists of $442.4 million in purchases of marketable securities and $21.4 million in purchases of property and equipment, offset by $309.3 million in proceeds from maturities of marketable securities.
Investing Activities Net cash used in investing activities of $183.0 million during the year ended December 31, 2024 consists of $597.3 million in purchases of marketable securities and $13.4 million in purchases of property and equipment, offset by $427.7 million in proceeds from maturities of marketable securities.
This increase was driven primarily by an increase of $19.3 million in personnel related costs due to an increase in headcount ($16.2 million of which was due to non-cash stock-based compensation expense), $3.2 million in facilities costs, and $1.4 million in consulting fees. 113 Other income, net Other income, net was $19.9 million for the year ended December 31, 2023 compared to $2.6 million for the year ended December 31, 2022, an increase of $17.3 million.
This increase was driven primarily by an increase of $19.3 million in personnel related costs due to an increase in headcount ($16.2 million of which was due to non-cash stock-based compensation expense), $3.2 million in facilities costs, and $1.4 million in consulting fees.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. 123 Management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
The Company has historically paid no dividends and does not anticipate dividends to be paid in the future.
We have historically paid no dividends and do not anticipate dividends to be paid in the future.
We do not track internal costs by program because these costs are deployed across multiple programs, and as such, are not separately classified. 110 Research and development expenses account for a significant portion of our operating expenses and consist primarily of external and internal costs incurred in connection with our anito-cel program, the development of our ARC-SparX product candidates, and the ongoing discovery and development efforts for additional product candidates.
Research and development expenses account for a significant portion of our operating expenses and consist primarily of external and internal costs incurred in connection with our anito-cel program, the development of our ARC-SparX product candidates, and the ongoing discovery and development efforts for additional product candidates.
Internal expenses include employee-related costs, including salaries, related benefits, and share-based compensation expense for employees engaged in research and development functions.
Internal expenses include employee-related costs, including salaries, related benefits, and share-based compensation expense for employees engaged in research and development functions. Our Manufacturing Services Agreement with Lonza Houston, Inc. (Lonza) expired in December 2024.
Recent Financings In May 2023, we entered into a sales agreement (Sales Agreement) with Stifel, Nicolaus & Company (Stifel) with respect to an at-the-market offering program under which we may issue and sell, from time to time and at our sole discretion, shares of our common stock, in an aggregate offering amount of up to $350.0 million.
Based on our expected operating cash requirements and capital expenditures, we believe our current cash and cash equivalents and investments in marketable securities are adequate to fund operations into 2027. 118 In May 2023, we entered into a sales agreement (Sales Agreement) with Stifel, Nicolaus & Company (Stifel) with respect to an at-the-market offering program under which we may issue and sell, from time to time and at our sole discretion, shares of our common stock, in an aggregate offering amount of up to $350.0 million.
Revisions to contractual payment obligations are charged to expense in the period in which the facts that give rise to the revision become reasonably certain.
Revisions to contractual payment obligations are charged to expense in the period in which the facts that give rise to the revision become reasonably certain. Share-based compensation We account for share-based compensation in accordance with ASC 718, Compensation—Stock Compensation (ASC 718).
As a result, we expect that our research and development expenses will increase substantially in the foreseeable future as we continue to advance anito-cel through clinical development, the regulatory approval process and, if approved, commercial launch activities; initiate or continue to advance our ARC-SparX product candidates, including expanding ACLX-001 and ACLX-002; continue to discover and develop additional product candidates to expand our pipeline; maintain, expand, protect, and enforce our intellectual property portfolio; and hire additional personnel.
As a result, we expect that our research and development expenses will increase substantially in the foreseeable future as we continue to advance anito-cel, in multiple myeloma and other indications outside of oncology, through clinical development, the regulatory approval process and, if approved, commercial launch activities; initiate or continue to advance our ARC-SparX product candidates, including expanding ACLX-001 and ACLX-002; continue to discover and develop additional product candidates to expand our pipeline; maintain, expand, protect, and enforce our intellectual property portfolio; and hire additional personnel. 115 The successful development of our product candidates is highly uncertain, and we do not believe it is possible at this time to accurately project the nature, timing, and estimated costs of the efforts necessary to complete the development of, and obtain regulatory approval for, any of our product candidates.
We have incurred significant operating losses to date. Our net losses were $70.7 million and $188.7 million for the years ended December 31, 2023 and 2022. Our accumulated deficit totaled $389.5 million as of December 31, 2023.
Since our formation, we have devoted substantially all our resources to discovering and developing our product candidates. We have incurred significant operating losses to date. Our net losses were $107.3 million, $70.7 million, and $188.7 million for the years ended December 31, 2024, 2023 and 2022. Our accumulated deficit totaled $496.8 million as of December 31, 2024.
Management conducted an evaluation of the effectiveness, as of December 31, 2023, of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2023.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Management conducted an evaluation of the effectiveness, as of December 31, 2024, of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.
Cash Flows The following table sets forth a summary of the primary sources and uses of cash for each of the periods presented below (in thousands): Year Ended December 31, 2023 2022 Net cash provided by (used in) operating activities $ 207,573 $ (99,303 ) Net cash used in investing activities (154,512 ) (117,674 ) Net cash provided by financing activities 279,163 252,625 Net increase in cash, cash equivalents, and restricted cash $ 332,224 $ 35,648 Operating Activities Net cash provided by operating activities during the year ended December 31, 2023 of $207.6 million was attributable to our net loss of $70.7 million, partially offset by adjustments to net loss of $52.8 million, primarily consisting of expensing of a right-of-use asset of $18.9 million, share-based compensation of $41.8 million, and depreciation and amortization of $2.0 million, offset by net amortization and accretion on marketable securities of $11.0 million.
Cash Flows The following table sets forth a summary of the primary sources and uses of cash for each of the periods presented below (in thousands): Year Ended December 31, 2024 2023 2022 Net cash provided by (used in) operating activities $ (83,467 ) $ 207,573 $ (99,303 ) Net cash used in investing activities (183,045 ) (154,512 ) (117,674 ) Net cash provided by (used in) financing activities (24,087 ) 279,163 252,625 Net increase (decrease) in cash, cash equivalents, and restricted cash $ (290,599 ) $ 332,224 $ 35,648 Operating Activities Net cash used in operating activities during the year ended December 31, 2024 of $83.5 million was attributable to our net loss of $107.3 million, partially offset by adjustments to net loss of $54.7 million.
Attestation Report of the Registered Public Accounting Firm The effectiveness of our internal control over financial reporting has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their attestation report herein, which expresses an unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2023.
Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2024. The effectiveness of our internal control over financial reporting has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
Income Tax Provision The Company has recorded an income tax expense of $663 thousand and zero for the year ended December 2023 and 2022, respectively.
Income Tax Provision We have recorded an income tax expense of $2.1 million, $663 thousand and zero for the years ended December 31, 2024, 2023 and 2022, respectively.
We also are developing two clinical-stage ARC-SparX programs in Phase 1 trials, ACLX-001, which targets BCMA in rrMM, and our wholly-owned ACLX-002, which targets CD123 in relapsed or refractory acute myeloid leukemia (AML) and high-risk myelodysplastic syndrome (MDS). Since our formation, we have devoted substantially all our resources to discovering and developing our product candidates.
We also are developing two clinical-stage ARC-SparX programs in Phase 1 trials, ACLX-001, which targets BCMA in rrMM, and our wholly-owned ACLX-002, which targets CD123 in relapsed or refractory acute myeloid leukemia (AML) and high-risk myelodysplastic syndrome (MDS). In November 2023, Kite exercised its option under the Kite Collaboration Agreement to negotiate a license for ACLX-001.
Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting that occurred during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 121 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Arcellx, Inc.
Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting that occurred during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 124 It em 9B. Other Information.
The Company’s share-based compensation related to stock options subject to service conditions are recognized as expense ratably over the required service period based on their grant date fair values. 117 The fair value of restricted stock awards, unrestricted stock awards, and restricted stock units (collectively, awards), unless a market condition exists, is determined based on the fair value of our common stock on the grant date.
Our share-based compensation related to stock options subject to service conditions are recognized as expense ratably over the required service period based on their grant date fair values.
We believe we can address these limitations by engineering a new class of D-Domain powered cell therapies, including classical single infusion CAR-Ts called “ddCARs” and dosable and controllable universal CAR-Ts called “ARC-SparX”, to address hematologic cancers, solid tumors, and indications outside of oncology, such as autoimmune diseases. 108 Our lead program is a BCMA-targeting ddCAR product candidate called “anito-cel”, which is currently being evaluated in our pivotal Phase 2 “iMMagine-1” trial in patients with relapsed or refractory multiple myeloma (rrMM).
We believe we can address these limitations by engineering a new class of D-Domain powered cell therapies, including classical single infusion CAR-Ts called “ddCARs” and dosable and controllable universal CAR-Ts called “ARC-SparX”, to address hematologic cancers, solid tumors, and indications outside of oncology, such as autoimmune diseases.
Application of the Monte Carlo simulation model required various subjective assumptions that represent management’s best estimates of the fair value of common stock, expected equity volatility, risk-free interest rate, discount period, expected dividend yield, and time to achievement of a performance condition: Fair Value of Common Stock and Fair Value of Total Equity —See the subsection titled “Determination of the fair value of our common stock and fair value of total equity” below.
Application of the Monte Carlo simulation model required various subjective assumptions that represent management’s best estimates of the fair value of common stock, expected equity volatility, risk-free interest rate, discount period, expected dividend yield, and time to achievement of a performance condition: Fair Value of Common Stock and Fair Value of Total Equity —See the subsection titled “Determination of the fair value of our common stock and fair value of total equity” below. 122 Expected Equity Volatility —Due to the lack of a public market for our common stock (prior to our IPO) and the lack of company-specific historical and implied volatility data, we have based our computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to us (e.g., public entities of similar size, complexity, stage of development, and industry focus).
Operating Expenses Research and Development Expenses We expense research and development costs in the periods in which they are incurred. We track external costs on a program-by-program basis beginning with lead candidate selection. External costs that are not allocated to a program are classified as preclinical and discovery costs.
We track external costs on a program-by-program basis beginning with lead candidate selection. External costs that are not allocated to a program are classified as preclinical and discovery costs. We do not track internal costs by program because these costs are deployed across multiple programs, and as such, are not separately classified.
We granted restricted stock units (RSU Awards) to the chief executive officer (CEO) subject to service, performance, and market conditions and used the Monte Carlo simulation model approach to estimate the fair value of the RSU Award on the date of grant.
We used the Monte Carlo simulation model approach to estimate the fair value of such award on the date of grant.
It em 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. Not applicable. I tem 9A. Controls and Procedures.
The information required by this Item 8 is included in Part IV, Item 15 of this Annual Report on Form 10-K and is incorporated herein by reference. It em 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. Not applicable. I tem 9A. Controls and Procedures.
This increase was driven primarily by higher overall cash and cash equivalents and marketable securities balances and a corresponding increase in the interest earned. Liquidity and Capital Resources Since inception, we have incurred net losses and negative cash flows from operations and we expect to incur substantial additional losses in future periods.
Liquidity and Capital Resources Since inception, we have incurred net losses and negative cash flows from operations and we expect to incur substantial additional losses in future periods. As of December 31, 2024, we had cash and cash equivalents and marketable securities of $625.7 million. To date, we have not generated any product revenue.
Except as set forth below, the information required by this item will be contained in our definitive proxy statement to be filed with the SEC in connection with the Annual Meeting of Stockholders within 120 days after the conclusion of our fiscal year ended December 31, 2023, or the Proxy Statement, and is incorporated in this Annual Report on Form 10-K by reference.
Only those sections of the Proxy Statement that specifically address the items set forth herein are incorporated by reference. It em 10. Directors, Executive Officers and Corporate Governance. Except as set forth below, the information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
On December 18, 2023 , Michelle Gilson , Chief Financial Officer , adopted a trading plan intended to satisfy the affirmative defense of Rule 10b5-1(c) to sell up to 47,252 shares of Arcellx, Inc. common stock between March 18, 2024 and March 122 31, 2025 , subject to certain conditions.
On January 8, 2025 , Michelle Gilson , Chief Financial Officer , terminated a trading plan intended to satisfy the affirmative defense of Rule 10b5-1(c), which was adopted as of December 18, 2023 . It em 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Components of Results of Operations Revenue We have not generated any revenue from product sales and do not expect to do so in the near future.
In November 2024, we announced with Kite that the first patients have been dosed in the global iMMagine-3 randomized control trial evaluating anito-cel in patients with rrMM exposed to an immunomodulatory (IMiD) drug and an anti-CD38 monoclonal antibody. 114 Components of Results of Operations Revenue We have not generated any revenue from product sales and do not expect to do so in the near future.
In September 2023, the Company signed Amendment 1 to the Lonza SOW, allowing the Company to gain exclusive use and control over additional space and equipment, which resulted in an additional right-of-use asset that was expensed as research and development expenses as the additional right-of-use asset had no alternative future use.
Previously, we had identified embedded leases within the agreement, which had resulted in right-of-use assets that were expensed as research and development expenses in 2022 and 2023 as the right-of-use assets had no alternative future use.
Removed
Recent Developments On November 2, 2023, we announced the publication of an abstract for an oral presentation at the American Society of Hematology (ASH) Annual Meeting and Exposition which took place December 9-12, 2023 in San Diego, CA. The abstract contained updated data from the ongoing Phase 1 trial of anito-cel in patients with relapsed or refractory multiple myeloma.
Added
Performance Graph The following graph shows the total stockholder’s return on an initial investment of $100 in cash at market close on February 4, 2022 (the first day of trading of our common stock), through December 31, 2024 for (i) our common stock, (ii) the Nasdaq Composite Index and (iii) the Nasdaq Biotechnology Index.
Removed
On November 15, 2023, we announced an amendment to the Kite Collaboration Agreement, which expanded the scope of the collaboration to include lymphomas, and Kite’s exercise of its option to negotiate a license for ACLX-001.
Added
Pursuant to applicable Securities and Exchange Commission rules, all values assume reinvestment of pre-tax amount of all dividends; however, no dividends have been declared on our common stock to date. The stockholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns.
Removed
On December 8, 2023, we announced new interim clinical data from its Phase 1 expansion study of anito-cel, in patients with relapsed or refractory multiple myeloma based on results from an October 15, 2023 data cut.
Added
This graph shall not be deemed “soliciting material” or be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. 111 $100 investment in stock or index Ticker 2/4/2022 12/31/2022 12/31/2023 12/31/2024 Arcellx ACLX $ 100 $ 75 $ 292 $ 404 NASDAQ Composite Index IXIC $ 100 $ 75 $ 108 $ 138 NASDAQ Biotech Index NBI $ 100 $ 104 $ 107 $ 106 It em 6. [Reserved.] 112 It em 7.
Removed
No sales of our common stock have been made under this arrangement as of December 31, 2023. In January 2023, we issued and sold 3,478,261 shares of our common stock to Gilead Sciences, Inc. (Gilead) for an aggregate purchase price of $100.0 million pursuant to a Common Stock Purchase Agreement (Gilead SPA) executed in connection with the Kite Collaboration Agreement.
Added
Our lead program is a BCMA-targeting ddCAR product candidate called “anito-cel”, which is currently being evaluated in our pivotal Phase 2 iMMagine-1 and the Phase 3 iMMagine-3 trials in patients with relapsed or refractory multiple myeloma (rrMM).
Removed
In December 2023, we issued and sold 3,242,542 shares of our common stock to Gilead for an aggregate purchase price of $200.0 million pursuant to a second Common Stock Purchase Agreement (Second Gilead SPA) executed in connection with the December 2023 amendment to the Kite Collaboration Agreement.
Added
Recently, Kite initiated a global Phase 3 randomized controlled clinical trial (iMMagine-3) of anito-cel in patients with second through fourth line rrMM. Kite will manufacture anito-cel for iMMagine-3.
Removed
As previously noted, we have executed a collaboration agreement with Kite and anticipate generating revenue under the arrangement subject to the total estimated transaction price as discussed in Note 8 - Collaboration Agreement in the notes to our consolidated financial statements.
Added
This follows the completion of the technical transfer to Kite, which was announced in May 2024, as well as the transfer to Kite of the Investigational New Drug (IND) application for anito-cel in rrMM, which has been cleared by the U.S. Food and Drug Administration (FDA).

… 92 more changes not shown on this page.

Other ACLX 10-K year-over-year comparisons