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

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Paragraph-level year-over-year comparison of CytomX Therapeutics, 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.

+436 added−455 removedSource: 10-K (2025-03-06) vs 10-K (2024-03-11)

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

436 paragraphs added · 455 removed · 344 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

131 edited+37 added−55 removed208 unchanged
Biggest changeWith regard to biopharmaceutical products, the ACA, among other things, addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees and taxes on manufacturers of certain branded prescription drugs, and a Medicare Part D coverage gap discount program, in which manufacturers had to offer 50% point-of-sale discounts, which, through subsequent legislative amendments, was increased to 70%, off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.
Biggest changeWith regard to biopharmaceutical products, the ACA, among other things, addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, and established annual fees and taxes on manufacturers of certain branded prescription drugs.
In the case of some therapeutic candidates for severe or life-threatening diseases, such as cancer, especially when the product candidate may be inherently too toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients. 19 • Phase 2—The product candidate is administered to a limited patient population with the specified disease or condition to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. • Phase 3—The product candidate is administered to an expanded patient population to further evaluate dosage, clinical efficacy and safety, generally at geographically dispersed clinical study sites.
In the case of some therapeutic candidates for severe or life-threatening diseases, such as cancer, especially when the product candidate may be inherently too toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients. • Phase 2—The product candidate is administered to a limited patient population with the specified disease or condition to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. • Phase 3—The product candidate is administered to an expanded patient population to further evaluate dosage, clinical efficacy and safety, generally at geographically dispersed clinical study sites.
BLA Approval Process The process required by the FDA before a biologic may be marketed in the U.S. generally involves the following: • completion of nonclinical laboratory tests, animal studies and formulation studies conducted according to good laboratory practices (“GLPs”), and other applicable regulations; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • approval by an institutional review board (“IRB”) or ethics committee at each clinical site before the trial is commenced; 18 • performance of adequate and well-controlled human clinical trials according to good clinical practices (“GCPs”), to establish the safety, purity and potency of the product candidate for its intended use; • preparation and submission to the FDA of a BLA after completion of all pivotal trials; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the product candidate is produced to assess compliance with current good manufacturing practices (“cGMPs”) to assure that the facilities, methods and controls are adequate to preserve the product candidate’s continued safety, purity and potency, and of potential inspections of selected clinical investigation sites to assess compliance with GCPs; and • FDA review and approval of the BLA to permit commercial marketing of the product for its particular labeled uses in the United States.
BLA Approval Process The process required by the FDA before a biologic may be marketed in the U.S. generally involves the following: • completion of certain nonclinical laboratory tests, animal studies and formulation studies conducted according to good laboratory practices (“GLPs”), and other applicable regulations; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • approval by an institutional review board (“IRB”) or ethics committee at each clinical site before the trial is commenced; • performance of adequate and well-controlled human clinical trials according to good clinical practices (“GCPs”), to establish the safety, purity and potency of the product candidate for its intended use; • preparation and submission to the FDA of a BLA after completion of all pivotal trials; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the product candidate is produced to assess compliance with current good manufacturing practices (“cGMPs”) to assure that the facilities, methods and controls are adequate to preserve the product candidate’s continued safety, purity and potency; • satisfactory completion of potential inspections of selected clinical investigation sites to assess compliance with GCPs; and • FDA review and approval of the BLA to permit commercial marketing of the product for its particular labeled uses in the United States.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant Orphan Drug Designation to therapeutic candidates intended to treat a rare disease or condition, which is generally a disease or condition that affects either (1) fewer than 200,000 individuals in the U.S., or (2) more than 23 200,000 individuals in the U.S. and for which there is no reasonable expectation that the cost of developing and making available in the U.S. a product candidate for this type of disease or condition will be recovered from sales in the U.S. for that product candidate.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant Orphan Drug Designation to therapeutic candidates intended to treat a rare disease or condition, which is generally a disease or condition that affects either (1) fewer than 200,000 individuals in the U.S., or (2) more than 200,000 individuals in the U.S. and for which there is no reasonable expectation that the cost of developing and making available in the U.S. a product candidate for this type of disease or condition will be recovered from sales in the U.S. for that product candidate.
EpCAM is an example of such a target, for which we have developed CX-2051, a conditionally activated PROBODY ADC. • Deep knowledge of the tumor protease microenvironment. Our extensive protease biology expertise, driven by state-of-the-art experimental and computational methods, allows us to employ multiple approaches to generate novel targeted, multi-selective, and potentially indication-tailored protease-cleavable substrates.
EpCAM is an example of such a target, for which we have developed CX-2051, a masked, conditionally activated PROBODY ADC. • Deep knowledge of the tumor protease microenvironment. Our extensive protease biology expertise, driven by state-of-the-art experimental and computational methods, allows us to employ multiple approaches to generate novel targeted, multi-selective, and potentially indication-tailored protease-cleavable substrates.
Our commercial success may depend in part on our ability to obtain and maintain patent and other proprietary protection for our technology, inventions, and improvements; to preserve the confidentiality of our trade secrets; to maintain our licenses to use intellectual property owned or controlled by third parties; to defend and enforce our proprietary rights, including our patents; to defend against and challenge the assertion by third parties of their purported intellectual property rights; and to operate without the unauthorized infringement of valid and enforceable patents and other proprietary rights of third parties.
Our commercial success may depend in part on our ability to 14 obtain and maintain patent and other proprietary protection for our technology, inventions, and improvements; to preserve the confidentiality of our trade secrets; to maintain our licenses to use intellectual property owned or controlled by third parties; to defend and enforce our proprietary rights, including our patents; to defend against and challenge the assertion by third parties of their purported intellectual property rights; and to operate without the unauthorized infringement of valid and enforceable patents and other proprietary rights of third parties.
On January 2, 2013, the American Taxpayer Relief Act of 2012 (the “ATRA”) was signed into law which, among other things, also reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
On January 2, 2013, the American Taxpayer Relief Act of 2012 (the “ATRA”) was signed into law which, among other things, also reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations 23 period for the government to recover overpayments to providers from three to five years.
A BLA for a Fast Track product candidate may also be eligible for Rolling Review, where the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA.
A BLA for a Fast Track product candidate may also be eligible for Rolling Review, where the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the 19 BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA.
The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards. 28 Corporate Information Our operations commenced in February 2008 when our predecessor entity was formed. We were incorporated in Delaware in September 2010.
The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards. Corporate Information Our operations commenced in February 2008 when our predecessor entity was formed. We were incorporated in Delaware in September 2010.
Later discovery of previously unknown problems with a product candidate may result in restrictions on the product candidate or even complete withdrawal of the product candidate from the market. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further FDA review and approval.
Later discovery of previously unknown problems with a product 21 candidate may result in restrictions on the product candidate or even complete withdrawal of the product candidate from the market. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further FDA review and approval.
Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance. 24 Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance. Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. 27 There has also been a recent trend of increased federal and state regulation of payments made to physicians and other healthcare providers.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. There has also been a recent trend of increased federal and state regulation of payments made to physicians and other healthcare providers.
Astellas’ royalty obligations continue with respect to each country and each Product until the later of (i) the date on which such Product is no longer covered by certain intellectual property 12 rights, (ii) the 10th anniversary of the first commercial sale of such product in such country, and (iii) the loss of regulatory exclusivity for such Product in such country.
Astellas’ royalty obligations continue with respect to each country and each Product until the later of (i) the date on which such Product is no longer covered by certain intellectual property rights, (ii) the 10th anniversary of the first commercial sale of such product in such country, and (iii) the loss of regulatory exclusivity for such Product in such country.
Under the Moderna Agreement, the Company granted Moderna an exclusive, worldwide, royalty-bearing license under certain Company intellectual property to develop, manufacture, commercialize and otherwise exploit certain products (“Moderna Licensed Products”) for all human and non-human diagnostic, prophylactic and therapeutic uses, subject to certain exceptions with respect to Licensed Products within certain Collaboration Programs.
Under the Moderna Agreement, the Company granted Moderna an exclusive, worldwide, royalty-bearing license under certain Company intellectual property to develop, manufacture, commercialize and otherwise exploit certain products (“Moderna Licensed 11 Products”) for all human and non-human diagnostic, prophylactic and therapeutic uses, subject to certain exceptions with respect to Licensed Products within certain Collaboration Programs.
Within 60 days following submission of the application, the FDA reviews a BLA to determine if it is substantially complete before the agency accepts it for filing. The FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional information.
Within 60 days following submission of the application, the FDA reviews a BLA to determine if it is substantially complete before the agency accepts it for filing. The FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of 17 submission and may request additional information.
In December 2022, the “Company entered into a Collaboration and License Agreement (the “Moderna Agreement”) with Moderna, pursuant to which the Company and Moderna will collaborate on the creation of mRNA-based conditionally-activated investigational therapies utilizing the Company's PROBODY® therapeutic platform and Moderna’s mRNA and lipid nanoparticle technologies.
In December 2022, the Company entered into a Collaboration and License Agreement (the “Moderna Agreement”) with Moderna, pursuant to which the Company and Moderna will collaborate on the creation of mRNA-based conditionally-activated investigational therapies utilizing the Company's PROBODY ® therapeutic platform and Moderna’s mRNA and lipid nanoparticle technologies.
An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. A complete response letter generally describes all of the specific deficiencies in the BLA identified by the FDA. The deficiencies 20 identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical trials.
An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. A complete response letter generally describes all of the specific deficiencies in the BLA identified by the FDA. The deficiencies identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical trials.
Our Corporate Strategy We are utilizing our proprietary, versatile, multi-modality PROBODY platform to create a robust pipeline of biologic therapeutics to improve the lives of people with cancer and to build a long-term, multi-product, commercial biopharmaceutical company.
Our Corporate Strategy We are utilizing our proprietary, versatile, multi-modality PROBODY platform to create a pipeline of biologic therapeutics to improve the lives of people with cancer and to build a long-term, multi-product, commercial biopharmaceutical company.
According to FDA guidance, for novel product candidates such as drugs and therapeutic biologics, a companion diagnostic device and its corresponding product candidate should be approved or cleared contemporaneously by FDA for the use indicated in the product labeling.
According to FDA guidance, for 18 novel product candidates such as drugs and therapeutic biologics, a companion diagnostic device and its corresponding product candidate should be approved or cleared contemporaneously by FDA for the use indicated in the product labeling.
Namely, the validation of potential new targets for ADCs, opening solid tumor opportunities for TCEs, and increasing the therapeutic index for immunotherapies such as cytokines and CPIs. • Ability to combine more effectively with other therapies.
Namely, the validation of potential new targets for ADCs, opening solid tumor opportunities for TCEs, and increasing the therapeutic index for immunotherapies such as cytokines. • Ability to combine more effectively with other therapies.
Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe, in their independent professional medical judgment, legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA.
Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe, in their independent professional medical judgment, legally available products for uses that are not described in the product’s labeling and that differ from those approved by the FDA.
In particular, for a diagnostic, the applicant must demonstrate that the diagnostic produces reproducible results when the same sample is tested multiple times by multiple users at 21 multiple laboratories.
In particular, for a diagnostic, the applicant must demonstrate that the diagnostic produces reproducible results when the same sample is tested multiple times by multiple users at multiple laboratories.
Antibody-drug conjugates: Several large pharmaceutical companies, such as AbbVie, Daiichi Sankyo, Gilead Sciences, Pfizer, Roche, Merck and Takeda Pharmaceutical are researching, developing, and in some cases, commercializing ADCs. In addition, numerous smaller companies have ongoing efforts in the space. 16 Cancer immunotherapies: Cancer immunotherapy is one of the most competitive and fastest growing segments of the pharmaceutical industry.
Antibody-drug conjugates: Several large pharmaceutical companies, such as Lilly, AbbVie, Daiichi Sankyo, Gilead Sciences, Pfizer, Roche, Merck and Takeda Pharmaceutical are researching, developing, and in some cases, commercializing ADCs. In addition, numerous smaller companies have ongoing efforts in the space. Cancer immunotherapies: Cancer immunotherapy is one of the most competitive and fastest growing segments of the pharmaceutical industry.
Under the agreement, we are eligible to receive future preclinical, clinical and commercial milestones of approximately $1.6 billion. Astellas will pay us tiered royalties on global net sales of Products from high single-digit to mid-teens percentages, subject to certain reductions.
Under the agreement, we are eligible to receive future preclinical, clinical and commercial milestones of approximately $1.2 billion. Astellas will pay us tiered royalties on global net sales of Products from high single-digit to mid-teens percentages, subject to certain reductions.
The following graphic depicts the three components of a PROBODY therapeutic candidate: 9 Depiction of the structure of a PROBODY therapeutic candidate and a protease interacting with the PROBODY candidate to cleave the linker and activate the molecule When a PROBODY therapeutic candidate enters a tumor, it encounters proteases, which are enzymes that cleave proteins and have increased activity in the tumor microenvironment.
The following graphic depicts the three components of a PROBODY therapeutic candidate: 7 Depiction of the structure of a PROBODY therapeutic candidate and a protease interacting with the PROBODY candidate to cleave the linker and activate the molecule When a PROBODY therapeutic candidate enters a tumor, it encounters proteases, which are enzymes that cleave proteins and have increased activity in the tumor microenvironment.
The Company has had sustained research efforts and continuous innovation around the PROBODY Platform and has invested significant resources to develop the technology. As of January 2024, our fully- and co-owned patent portfolio contains at least 250 granted patents and at least 400 pending patent applications.
The Company has had sustained research efforts and continuous innovation around the PROBODY Platform and has invested significant resources to develop the technology. As of January 2025, our fully- and co-owned patent portfolio contains at least 250 granted patents and at least 400 pending patent applications.
At the end of 2019, as a result of a strategic restructuring by ImmunoGen and its decision to out-license certain programs, we obtained a worldwide, exclusive, sublicensable license to the EpCAM conditionally activated ADC program from ImmunoGen (the “ImmunoGen 2019 License”) and the ImmunoGen 2017 license ended.
At the end of 2019, as a result of a strategic restructuring by ImmunoGen and its decision to out-license certain programs, we obtained a worldwide, exclusive, sublicensable license to the EpCAM conditionally activated ADC program from ImmunoGen (the “ImmunoGen 2019 License”).
Orphan drug exclusivity does not prevent the FDA from approving a different drug for the same disease or condition, or the same drug for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the NDA application user fee.
Orphan drug exclusivity does not prevent the FDA from approving a different drug for the same disease or condition, or the same drug for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the BLA application user fee.
See Note 2 to our audited financial statement included elsewhere in this Annual Report on Form 10-K for additional information. Additional information required by this item is incorporated herein by reference to PART II. Item 6 of this Annual Report on Form 10-K.
See Note 2 and Note 16 to our audited financial statement included elsewhere in this Annual Report on Form 10-K for additional information. Additional information required by this item is incorporated herein by reference to PART II. Item 6 of this Annual Report on Form 10-K.
CX-801, A Conditionally Activated PROBODY Cytokine, Interferon alpha-2b (IFNα2b) With the emergence and impact of checkpoint inhibitors, many patients have benefited from immunotherapy treatment yet significant unmet need remains in patients who either do not respond to immunotherapies or who need additional treatments upon recurrence of their disease.
CX-801, A PROBODY Cytokine, Interferon alpha-2b (IFNα2b) With the emergence and impact of checkpoint inhibitors, many cancer patients have benefited from immunotherapy treatment yet significant unmet need remains in patients who either do not respond to immunotherapies or who need additional treatments upon recurrence of their disease.
If the Company sublicenses its rights under the UCSB Agreement, it must pay UCSB a percentage of our total sublicense revenues ranging from the mid-single to mid-teen percentages, which total amount would be first reduced by the aggregate amount of certain research and development related expenses incurred by the Company and other permitted deductions.
If the Company sublicenses its rights under the UCSB Agreement, it must pay UCSB a percentage of our total sublicense revenues ranging from the mid-single to mid-teen percentages, which total amount would be first reduced by the aggregate amount of certain research and development related expenses incurred by the Company and other permitted deductions. License from ImmunoGen, Inc.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023), and replaces the Part D coverage gap discount program with a new discounting program (beginning in 26 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023), and replaces the Part D coverage gap discount program with a new discounting program (which began in 2025).
In February 2023, BMS advanced BMS-986288 to Phase 2 and prioritized the molecule as its lead next-generation CTLA-4 program over its non-fucosylated CTLA-4 antibody ("BMS-986218") and the PROBODY version of ipilumamab ("BMS-986249"). The Phase 2 study for BMS-986288 included proof-of-concept studies in NSCLC and MSS CRC.
In February 2023, Bristol Myers Squibb advanced BMS-986288 to Phase 2 and prioritized the molecule as its lead next-generation CTLA-4 program over its non-fucosylated CTLA-4 antibody ("BMS-986218") and the PROBODY version of ipilumamab ("BMS-986249"). The Phase 2 study for BMS-986288 included proof-of-concept studies in NSCLC and MSS CRC.
We believe that our multi-modality PROBODY therapeutic platform provides the following key advantages: • A novel biologic therapeutic class enabled by our proprietary platform. By pioneering a novel class of conditionally activated, localized biologic candidates, we are a leader in the field and have established conditional activation as a strategic area of biologics research and development.
We believe that our multi-modality PROBODY therapeutic platform provides the following key advantages: • A novel biologic therapeutic class enabled by our proprietary platform. By pioneering a novel class of conditionally activated, localized biologic candidates, we are a leader in the field and have established masking as a strategic area of biologics research and development.
Since 2013, we have entered into several collaborations, including with Amgen, Astellas, Bristol Myers Squibb, ImmunoGen, Moderna, and Regeneron to enable development of certain PROBODY therapeutics.
Since 2013, we have entered into several collaborations, including with Amgen, Astellas, Bristol Myers Squibb, ImmunoGen, Moderna, and Regeneron to enable the discovery and development of certain PROBODY therapeutics.
As of January 2024, our patent portfolio contains at least 250 granted patents (some of which are co-owned with a third party) and at least 400 pending patent applications (some of which are co-owned with a third party).
As of January 2025, our patent portfolio contains at least 250 granted patents (some of which are co-owned with a third party) and at least 400 pending patent applications (some of which are co-owned with a third party).
CytomX Platform and Pipeline Breadth Including Partnered Pipeline We continue to innovate and improve our platform technology and extend the reach of our science through partnering and internal development of our wholly-owned pipeline.
CytomX Platform and Pipeline Breadth Including Partnered Pipeline We continue to innovate and improve our platform technology and extend the reach of our science through partnering and internal development of our pipeline.
Our management team members have significant experience in oncology with previous experience at Amylin Pharmaceuticals, Catalyst Biosciences, Coherus BioSciences, Elan Phramaceuticals, Eli Lilly and Company, Exelixis, Genentech, Millennium, Novartis, Onyx Pharmaceuticals, Portola Pharmaceuticals, SGX, Xencor and other companies. Human Capital As of December 31, 2023, we had 120 full-time employees and 2 part-time employees.
Our management team members have significant experience in oncology with previous experience at Amylin Pharmaceuticals, Catalyst Biosciences, Coherus BioSciences, Elan Phramaceuticals, Eli Lilly and Company, Exelixis, Genentech, Millennium, Novartis, Onyx Pharmaceuticals, Portola Pharmaceuticals, SGX, Xencor and other companies. Human Capital As of December 31, 2024, we had 119 full-time employees and 2 part-time employees.
The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov . 29
The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov . 26
On March 6, 2024, following a Bristol Myers Squibb corporate portfolio prioritization process, Bristol Myers Squibb notified CytomX that it does not intend to continue the development of BMS-986288 beyond the current Phase 2 study and terminated its work on the CTLA-4 target under the collaboration.
In March 2024, following a Bristol Myers Squibb corporate portfolio prioritization process, Bristol Myers Squibb notified CytomX that it does not intend to continue the development of BMS-986288 beyond the current Phase 2 study and terminated its collaboration license on the CTLA-4 target under the collaboration.
To this end, we have advanced CX-801, a masked interferon alpha-2b program, towards the clinic. Interferon alpha-2b is a validated previously approved immunotherapeutic that has demonstrated clinical activity in multiple cancer types, including in combination with checkpoint inhibitors. Despite the potential and previous validation, previous IFNα2b-based systemic therapies have been limited in their utilization due to systemic toxicities.
To this end, we have advanced CX-801, a masked version of interferon alpha-2b, towards the clinic. Interferon alpha-2b is a validated, previously approved immunotherapeutic that has demonstrated clinical activity in multiple cancer types, including in combination with checkpoint inhibitors. Despite this previous validation, IFNα2b-based systemic therapies have been limited in their utilization due to systemic toxicities.
Item 1. Bus iness Overview We are a clinical-stage, oncology-focused biopharmaceutical company focused on developing novel, conditionally activated biologics designed to be localized to the tumor microenvironment. We aim to build a commercial enterprise to maximize our impact on the treatment of cancer.
Item 1. Business Overview We are a clinical-stage, oncology-focused biopharmaceutical company developing novel, masked, conditionally activated biologics designed to be localized to the tumor microenvironment. We aim to build a commercial enterprise to maximize our impact on the treatment of cancer.
Our currently issued patents will likely expire on dates ranging from 2028 to 2037, unless we receive patent term extension or adjustment as might be available under applicable law. If patents are issued on our pending patent applications, the resulting patents are projected to expire on dates ranging from 2028 to 2041, unless we receive patent term extension or adjustment.
Our currently issued patents will likely expire on dates ranging from 2028 to 2042, unless we receive patent term extension or adjustment as might be available under applicable law. If patents are issued on our pending patent applications, the resulting patents are projected to expire on dates ranging from 2028 to 2045, unless we receive patent term extension or adjustment.
We will continue to collaborate with Bristol Myers Squibb to discover and conduct preclinical development of PROBODY therapeutics against targets selected by Bristol Myers Squibb over the estimated research period, which is projected to end in April 13 2025. Pursuant to Amendment 2, we are eligible to receive contingent payments for development, regulatory and sales milestones.
The Company will continue to collaborate with Bristol Myers Squibb to discover and conduct preclinical development of PROBODY therapeutics against targets selected by Bristol Myers Squibb over the estimated research period, which is projected to end in April 2025. Pursuant to Amendment 2, the Company was eligible to receive contingent payments for development, regulatory and sales milestones.
Our technology platform is supported by more than a decade of 10 research and a strong intellectual property portfolio.
Our technology platform is supported by more than a decade of research and a strong 8 intellectual property portfolio.
These competitors generally fall within the following categories: Masking and conditional activation: Several companies, including AbbVie, Adagene, Amgen, BioAtla, Halozyme Therapeutics, Harpoon Therapeutics, Roche, Sanofi, Takeda Pharmaceutical, Werewolf Therapeutics, Janux Therapeutics and Xilio Therapeutics are exploring, researching or developing antibody masking and/or conditional activation strategies, which could compete with our PROBODY platform.
These competitors generally fall within the following categories: Masking and conditional activation: Several companies, including AbbVie, Adagene, Amgen, BioAtla, Halozyme Therapeutics, Vir Biotechnology, Merck, Roche, Takeda Pharmaceutical, Werewolf Therapeutics, Janux Therapeutics and Xilio Therapeutics are exploring, researching or developing antibody masking and/or conditional activation strategies, which could compete with our PROBODY platform.
In addition, in March 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, beginning January 1, 2024.
In addition, in March 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap, which was previously set at 100% of a drug’s average manufacturer price, beginning January 1, 2024.
We face substantial competition from biotechnology and biopharmaceutical companies developing biopharmaceutical products, particularly with respect to ADC, TCE and immuno-oncology therapeutics, where competition is intense and rapidly evolving.
We face substantial competition from biotechnology and biopharmaceutical companies developing biopharmaceutical products, particularly with respect to ADC, TCE and cytokine therapeutics, where competition is intense and rapidly evolving.
Our research and development expenses were $77.7 million and $111.6 million for the years ended December 31, 2023 and 2022, respectively. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Research and Development Expenses” for additional detail regarding our research and development activities. We maintain a website at www.cytomx.com , which contains information about us.
Our research and development expenses were $83.4 million and $77.7 million for the years ended December 31, 2024 and 2023, respectively. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Research and Development Expenses” for additional detail regarding our research and development activities. We maintain a website at www.cytomx.com , which contains information about us.
Sponsors typically use the meeting at the end of Phase 2 to discuss their Phase 2 clinical results and present their plans for the pivotal Phase 3 clinical trial that they believe will support the approval of the new therapeutic.
Sponsors typically use the meeting at the end of Phase 2 to discuss their Phase 2 clinical results and present their plans for the pivotal Phase 3 clinical trial that they believe will support the approval of the product candidate.
Our current clinical-stage molecules address targets or mechanisms that have been previously validated as having anti-cancer activity but have been limited in their utilization due to systemic toxicities. We have incorporated our significant platform expertise and ongoing clinical learnings to optimize predicted therapeutic index and the clinical potential of these promising agents through tumor localized conditional activation.
Our current clinical-stage molecules address targets or mechanisms that have been previously validated as having anti-cancer activity but that have been limited in their utilization due to systemic toxicities. We have incorporated our broad masking and conditional activation expertise, and ongoing clinical trial learnings, to optimize predicted therapeutic index and the clinical potential of these promising agents through tumor localization.
In constructing each of these collaborations, our primary objectives are to collaborate with leading biopharmaceutical players to realize the potential of PROBODY therapeutics, gain meaningful near-term funding or access technology to enable the advancement of our wholly owned PROBODY therapeutics pipeline, and broaden the number of PROBODY therapeutics that ultimately reach the clinic.
In constructing each of these collaborations, our primary objectives are to collaborate with leading biopharmaceutical players to realize the potential of PROBODY therapeutics, gain meaningful near-term funding or access technology to enable the advancement of our wholly owned PROBODY therapeutics pipeline, potentially broadening the number of PROBODY therapeutics that ultimately reach the clinic. Amgen, Inc.
Astellas Pharma Inc In March 2020, we entered into a Collaboration and License Agreement (the “Astellas Agreement”) with Astellas, pursuant to which we and Astellas will collaborate on the research, development and commercialization of T-cell engaging bispecific antibody products (“Products”) directed to CD3 and selected tumor antigen targets using our PROBODY® platform and other proprietary technology.
Astellas Pharma Inc In March 2020, we entered into a Collaboration and License Agreement (the “Astellas Agreement”) with Astellas, pursuant to which we and Astellas will collaborate on the research, development and commercialization of TCE (“Products”) directed to CD3 and selected tumor antigen targets using our PROBODY ® platform and other proprietary technology.
We do not have any long-term contracts and we do not currently have an alternative to any of our third-party contract manufacturers. Consequently, there can be no assurance that our preclinical and clinical development product supplies will not be limited, interrupted, or of satisfactory quality or continue to be available at acceptable prices.
We do not have any long-term contracts and 12 we do not currently have readily available alternatives for many of our third-party contract manufacturers. Consequently, there can be no assurance that our preclinical and clinical development product supplies will not be limited, interrupted, or of satisfactory quality or continue to be available at acceptable prices.
Our Pipeline of Conditionally Activated, Localized Product Candidates We are leveraging our multi-modality PROBODY platform across to build a robust pipeline of potential therapies that are designed to address high unmet needs. CytomX’s pipeline spans pre-clinical and clinical programs and includes a range of therapeutic formats including T-cell engagers, immunotherapies, antibody drug conjugates, and, most recently, mRNA.
Our Pipeline of Masked, Conditionally Activated Product Candidates We are leveraging our PROBODY platform across multiple modalities to build a robust pipeline of potential therapies that are designed to address high unmet needs. CytomX’s pipeline spans pre-clinical and clinical programs and includes a range of therapeutic formats including antibody drug conjugates, T-cell engagers, immunotherapies, and mRNA.
Consequently, we believe that toxicities that arise from the binding of a biologic therapeutic to a target in healthy tissues can be reduced, while biological activity against the tumor where it is desired can be preserved. We and our partners have demonstrated the potential of our PROBODY platform across multiple modalities, including ADCs, cancer immunotherapy, TCEs, and cytokines.
Consequently, we believe that toxicities that arise from the binding of a biologic therapeutic to a target in healthy tissues can be reduced, while biological activity against the tumor can be preserved. We and our partners are investigating the potential of our PROBODY platform across multiple modalities, including ADCs, cancer immunotherapy, TCEs, and cytokines.
Astellas will lead preclinical and clinical development of and regulatory approval for all Products. Astellas will be responsible for commercializing each Product, provided that we will have the option to elect to co-commercialize certain Products with Astellas in the United States, subject to the terms of a separate commercialization agreement to be entered into between us and Astellas.
Astellas will be responsible for commercializing each Product, provided that we will have the option to elect to co-commercialize certain Products with Astellas in the United States, subject to the terms of a separate commercialization agreement to be entered into between us and Astellas.
Despite the potential and previous validation, previous IFNα2b-based systemic therapies have been limited in their utilization due to systemic toxicities. CX-801 is an investigational, dually masked, conditionally activated version of IFNα2b that is designed to be preferentially active in the tumor microenvironment.
Despite this previous validation, IFNα2b-based systemic therapies have been limited in their utilization due to systemic toxicities and poor tolerability, leading to high discontinuation rates. CX-801 is an investigational, dually masked, conditionally activated version of IFNα2b that is designed to be preferentially active in the tumor microenvironment.
We are also entitled to tiered mid-single- to low double-digit percentage of royalties from potential future sales.
It is also entitled to tiered mid-single to low double-digit percentage of royalties from potential future sales.
Of these employees, 88 were primarily engaged in research and development activities. None of our employees are represented by a labor union or covered by collective bargaining agreements and we consider our employee relations to be good. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees.
None of our employees are represented by a labor union or covered by collective bargaining agreements and we consider our employee relations to be good. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing 25 and additional employees.
CytomX will continue to receive research funding and the Company will be eligible to receive future development, regulatory and commercial milestone payments of up to $1.2 billion for all Moderna Licensed Products in total under the Moderna Agreement.
CytomX will continue to receive research funding based on the aligned scopes of work between the two companies and CytomX will be eligible to receive future development, regulatory and commercial milestone payments of up to $1.2 billion for all Moderna Licensed Products in total under the Moderna Agreement.
Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.
Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic. 20 Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA.
PROBODY IFNα2b also showed synergistic effects with checkpoint inhibitors in preclinical models and the ability to inflame the tumor microenvironment. The preclinical profile of CX-801 was presented at SITC 2023.
In preclinical studies, CX-801 was tolerated at doses more than 100-fold higher than unmasked IFNα2b. PROBODY IFNα2b also showed synergistic effects with checkpoint inhibitors in preclinical models and the ability to inflame the tumor microenvironment. The preclinical profile of CX-801 was presented at SITC 2023.
Interferon alpha-2b is also a validated previously approved immunotherapeutic that has demonstrated clinical activity in multiple cancer types, including in combination with checkpoint inhibitors. Additionally, Adstiladrin ® , a gene therapy encoding interferon alpha-2b locally for BCG-unresponsive non-muscle invasive bladder cancer ("NMIBC"), was approved in 2022 and achieved a 51 percent complete response rate in a clinical study.
Interferon alpha-2b is also a validated, previously approved immunotherapeutic that has demonstrated clinical activity in multiple cancer types, including in combination with checkpoint inhibitors. Additionally, Adstiladrin ® , a gene therapy encoding interferon alpha-2b and used for local treatment of BCG-unresponsive non-muscle invasive bladder cancer ("NMIBC"), was approved for use in 2022.
Priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date, compared to ten months under standard review. 22 Additionally, depending on the design of the applicable clinical trials, product candidates studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive Accelerated Approval upon a determination that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
Additionally, depending on the design of the applicable clinical trials, product candidates studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive Accelerated Approval upon a determination that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.
While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure. 16 Furthermore, an independent IRB for each site proposing to conduct each clinical trial must review and approve the plan for any clinical trial and its informed consent form before the clinical trial begins at that site and must monitor the study until completion.
The U.S. federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), created new federal criminal statutes that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
Given the significant size of actual and potential settlements, it is expected that the government will continue to devote substantial resources to investigating healthcare providers’ and manufacturers’ compliance with applicable fraud and abuse laws. 24 The U.S. federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), created new federal criminal statutes that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
Moderna's royalty obligations continue with respect to each country and each Product until the later of (i) the date on which such Licensed Product is no longer covered by certain patent rights, (ii) the 10th anniversary of the first commercial sale of such product in such country, and (iii) the loss of regulatory exclusivity for such Moderna Licensed Product in such country. 14 The Moderna Agreement also provides Moderna with a one-time option to participate in a future equity financing by the Company subject to certain terms, conditions and regulatory requirements.
Moderna's royalty obligations continue with respect to each country and each Product until the later of (i) the date on which such Licensed Product is no longer covered by certain patent rights, (ii) the 10th anniversary of the first commercial sale of such product in such country, and (iii) the loss of regulatory exclusivity for such Moderna Licensed Product in such country.
The table below depicts the current status of our clinical-stage, conditionally activated product candidates, including both collaboration and wholly owned programs and potential milestones in 2024. Our current lead clinical programs focus on validated targets, for which substantial potential remains if they can be improved by widening the therapeutic index.
The table below depicts the current status of our clinical-stage, conditionally activated product candidates, including potential milestones in 2025. Our current lead clinical programs focus on validated targets, for which substantial potential remains if they can be improved by widening the therapeutic index. By employing tailored masking strategies and choosing an optimal effector function (e.g.
These include the validation of potential new targets for antibody-drug conjugates (“ADCs”), opening therapeutic window for novel T-cell engagers (“TCEs”) targeting solid tumors, and increasing the therapeutic index for immune modulators such as cytokines. We are also exploring the potential of our PROBODY platform in preclinical research in areas outside of oncology, including in our collaboration with Moderna.
We are employing our PROBODY therapeutic platform technology to address some of the biggest challenges in oncology biologics research and development. These include the validation of potential new targets for antibody-drug conjugates (“ADCs”), opening therapeutic window for novel T-cell engagers (“TCEs”) targeting solid tumors, and increasing the therapeutic index for immune modulators such as cytokines.
We conduct cell line development and process development both in-house and in collaboration with contract development and manufacturing organizations (“CMO”). CMOs are responsible for manufacturing of drug substance and clinical drug product materials. To date, we have generally been able to successfully manufacture our investigational product candidates including for CX-904, for our ongoing early-stage clinical trials with contract manufacturers.
CMOs are responsible for manufacturing of drug substance and clinical drug product materials. To date, we have generally been able to successfully manufacture our investigational product candidates for our ongoing early-stage clinical trials with contract manufacturers.
The IRA permits the Secretary of the Department of Health and Human Services (HHS) to implement many of these provisions through guidance, as opposed to regulation, for the initial years. For that and other reasons, it is currently unclear how the IRA will be effectuated.
The IRA permits the Secretary of the Department of Health and Human Services (HHS) to implement many of these provisions through guidance, as opposed to regulation, for the initial years.
Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study.
This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study. The FDA’s issuance of a written request does not obligate the sponsor to conduct the requested study.
By pioneering a novel class of localized biologic drug candidates, powered by our PROBODY® therapeutic technology platform, we lead the field of conditionally activated oncology therapeutics and have established biologics localization as a strategic area of research and development. Our vision is to transform lives with safer, more effective therapies with the goal of addressing major unmet needs in oncology.
By pioneering a novel class of localized biologic drug candidates, powered by our PROBODY ® therapeutic technology platform, we lead the field of masked, conditionally activated oncology therapeutics and have established biologics localization as a strategic area of research and development.
Preclinically, we optimized the predicted therapeutic index by tightly masking the molecule using both a peptide mask to block binding to the receptor in the periphery and an Fc steric mask, both of which are unmasked by protease activity in the tumor tissue. In preclinical studies, CX-801 was tolerated at doses more than 100-fold higher than unmasked IFNα2b.
We believe we have optimized the predicted therapeutic index of CX-801 by masking the molecule using both a peptide mask to block binding to the receptor in the periphery and an Fc steric mask, both of which are unmasked by protease activity in the tumor tissue.
Under the Astellas Agreement, we granted Astellas an exclusive, worldwide, royalty-bearing license to develop and commercialize Products in all fields. Astellas may select up to four targets to develop, and had an option to expand to six targets. We will lead preclinical research and discovery activities up to clinical candidate selection for Products directed against up to four targets.
Under the Astellas Agreement, we granted Astellas an exclusive, worldwide, royalty-bearing license to develop and commercialize Products in all fields. Astellas was able to select up to four targets to develop, and had an option to expand to six targets.
We will be responsible, at our expense, for converting this program to a conditionally activated T-cell Engager product, and thereafter, be responsible for development, manufacturing, and commercialization of the product (“CytomX Product”).
In March 2018, CytomX selected the program and this program is currently in preclinical studies. We have the opportunity, at our expense, to convert this program to a conditionally activated T-cell Engager product, and thereafter, to be responsible for development, manufacturing, and commercialization of the product (“CytomX Product”).
If Amgen exercises all of its options and advances all three of the Amgen Products, we are eligible to receive up to $950.0 million in upfront, development, regulatory, and commercial milestones and tiered high single-digit to low-teen percentage royalties.
If Amgen exercises all of its options and advances all three of the Amgen Products, we are eligible to receive up to $950.0 million in upfront, development, regulatory, and commercial milestones and tiered high single-digit to low-teen percentage royalties. 9 Under the Amgen Agreement, we had the option to select from specified programs, an existing pre-clinical stage T-cell Engager product from the Amgen pre-clinical pipeline.
Our technology has the potential to address many different molecular targets expressed by a wide range of tumor types, including targets that are difficult to address due to their widespread expression on healthy cells.
Our proprietary masking technologies allow for unique customization of large drug candidate pools from which high potential clinical candidates are selected. Our technology has the potential to address many different molecular targets expressed by a wide range of tumor types, including targets that are difficult to address due to their widespread expression on healthy cells.
In January 2023, Astellas nominated the first clinical candidate under the collaboration which resulted in a $5.0 million milestone payment to CytomX.
In January 2023, Astellas nominated the first clinical candidate under the collaboration which resulted in a $5.0 million milestone payment to CytomX. In March 2024, we achieved a clinical candidate milestone for a second collaboration target and a GLP toxicology initiation milestone for the first collaboration target nominated in January 2023 under the Astellas Agreement.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur net loss and other operating results will be affected by numerous factors, including: • variations in the level of expense related to the ongoing development of our PROBODY platform, our product candidates or future development programs; • results of clinical trials, or the addition or termination of clinical trials or funding support by us, or existing or future collaborators or licensing partners; 62 • our execution of any additional collaboration, licensing or similar arrangements, and the timing of payments we may make or receive under existing or future arrangements or the termination or modification of any such existing or future arrangements; • developments or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our products; • any intellectual property infringement lawsuit or opposition, interference or cancellation proceeding in which we may become involved, including the ongoing patent infringement lawsuit brought by Vytacera against us; • additions and departures of key personnel; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; • if any of our product candidates receives regulatory approval, the terms of such approval and market acceptance and demand for such product candidates; • regulatory developments affecting our product candidates or those of our competitors; and • changes in general market and economic conditions.
Biggest changeOur net loss and other operating results will be affected by numerous factors, including: • variations in the level of expense related to the ongoing development of our PROBODY platform, our product candidates or future development programs; • results of clinical trials, or the addition or termination of clinical trials or funding support by us, or existing or future collaborators or licensing partners; • our execution of any additional collaboration, licensing or similar arrangements, and the timing of payments we may make or receive under existing or future arrangements or the termination or modification of any such existing or future arrangements; • developments or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our products; • any intellectual property infringement lawsuit or opposition, interference or cancellation proceeding in which we may become involved; • additions and departures of key personnel; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; • if any of our product candidates receives regulatory approval, the terms of such approval and market acceptance and demand for such product candidates; • regulatory developments affecting our product candidates or those of our competitors; • changes in general market and economic conditions; • a large portion of the revenue recognized relates to up-front payments received in earlier years, so the current cash flows from operations may be significantly different from the net income (loss) reported; and • revenue to be recognized in 2025 and future years may be significantly lower than 2024 as collaboration research terms come to an end.
In addition, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; • the U.S. federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the U.S. federal legislation commonly referred to as Physician Payments Sunshine Act, enacted as part of the ACA, and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the CMS information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists and certified nurse midwives) and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members; and • analogous state laws and regulations, such as state anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; and state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug and therapeutic biologics manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures and pricing information.
In addition, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; • the U.S. federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the U.S. federal legislation commonly referred to as Physician Payments Sunshine Act, enacted as part of the ACA, and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the CMS information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists and certified nurse midwives) and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members; and • analogous state laws and regulations, such as state anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; and state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the 54 federal government in addition to requiring drug and therapeutic biologics manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures and pricing information.
In addition, there can be no assurance that: • Others will not or may not be able to make, use or sell compounds that are the same as or similar to our product candidates but that are not covered by the claims of the patents that we own or license. • We or our licensors, or our collaborators are the first to make the inventions covered by each of our issued patents and pending patent applications that we own or license. • We or our licensors, or our collaborators are the first to file patent applications covering certain aspects of our inventions. • Others will not independently develop similar or alternative technologies or duplicate any of our technologies without infringing, misappropriating or otherwise violating our intellectual property rights. • A third party may not challenge our patents and, if challenged, a court would hold that our patents are valid, enforceable and infringed. • Any issued patents that we own or have licensed will provide us with any competitive advantages, or will not be challenged by third parties. • We may develop additional proprietary technologies that are patentable. • The patents of others will not have a material or adverse effect on our business, financial condition, results of operations and prospects. • Our competitors do not conduct research and development activities in countries where we do not have enforceable patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets.
In addition, there can be no assurance that: • Others will not or may not be able to make, use or sell compounds that are the same as or similar to our product candidates but that are not covered by the claims of the patents that we own or license. • We or our licensors, or our collaborators are the first to make the inventions covered by each of our issued patents and pending patent applications that we own or license. • We or our licensors, or our collaborators are the first to file patent applications covering certain aspects of our inventions. 45 • Others will not independently develop similar or alternative technologies or duplicate any of our technologies without infringing, misappropriating or otherwise violating our intellectual property rights. • A third party may not challenge our patents and, if challenged, a court would hold that our patents are valid, enforceable and infringed. • Any issued patents that we own or have licensed will provide us with any competitive advantages or will not be challenged by third parties. • We may develop additional proprietary technologies that are patentable. • The patents of others will not have a material or adverse effect on our business, financial condition, results of operations and prospects. • Our competitors do not conduct research and development activities in countries where we do not have enforceable patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets.
These provisions include: • a prohibition on actions by our stockholders by written consent; • a requirement that special meetings of stockholders, which our company is not obligated to call more than once per calendar year, be called only by the chairman of our board of directors, our chief executive officer, our board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors, or, subject to certain conditions, by our secretary at the request of the stockholders holding of record, in the aggregate, shares entitled to cast not less than ten percent of the votes at a meeting of the stockholders (assuming all shares entitled to vote at such meeting were present and voted); • advance notice requirements for election to our board of directors and for proposing matters that can be acted upon at stockholder meetings; • division of our board of directors into three classes, serving staggered terms of three years each; and • the authority of the board of directors to issue preferred stock with such terms as the board of directors may determine.
These provisions include: • a prohibition on actions by our stockholders by written consent; • a requirement that special meetings of stockholders, which our company is not obligated to call more than once per calendar year, be called only by the chairman of our board of directors, our chief executive officer, our board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors, or, subject to certain conditions, by our secretary at the request of the stockholders holding of record, in the aggregate, shares entitled to cast not less than ten percent of the votes at a meeting of the stockholders (assuming all shares entitled to vote at such meeting were present and voted); 62 • advance notice requirements for election to our board of directors and for proposing matters that can be acted upon at stockholder meetings; • division of our board of directors into three classes, serving staggered terms of three years each; and • the authority of the board of directors to issue preferred stock with such terms as the board of directors may determine.
Russia’s recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military action against Ukraine have led to substantial expansion of sanction programs imposed by the United States, the European Union, the United Kingdom, Canada, Switzerland, Japan, and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including, among others: • blocking sanctions against some of the largest state-owned and private Russian financial institutions (and their subsequent removal from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system) and certain Russian businesses, some of which have significant financial and trade ties to the European Union; • blocking sanctions against Russian and Belarusian individuals, including the Russian President, other politicians, and those with government connections or involved in Russian military activities; and • blocking of Russia’s foreign currency reserves as well as expansion of sectoral sanctions and export and trade restrictions, limitations on investments and access to capital markets, and bans on various Russian imports.
Russia’s recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military action against Ukraine have led to substantial expansion of sanction programs imposed by the United States, the European Union, the United Kingdom, Canada, Switzerland, Japan, and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including, among others: • blocking sanctions against some of the largest state-owned and private Russian financial institutions (and their subsequent removal from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system) and certain Russian businesses, some of which have significant financial and trade ties to the European Union; • blocking sanctions against Russian and Belarusian individuals, including the Russian President, other politicians, and those with government connections or involved in Russian military activities; and 67 • blocking of Russia’s foreign currency reserves as well as expansion of sectoral sanctions and export and trade restrictions, limitations on investments and access to capital markets, and bans on various Russian imports.
Market acceptance of our product candidates will depend on, among other factors: • the timing of our receipt of any marketing and commercialization approvals; • the terms of any approvals and the countries in which approvals are obtained; • the safety, purity, potency (or efficacy) of our product candidates, including those being developed by our collaborators; • the prevalence and severity of any adverse side effects associated with our product candidates; • limitations or warnings contained in any labeling approved by the FDA or other regulatory authority; • the availability of effective companion diagnostics; • relative convenience and ease of administration of our product candidates; • the willingness of patients to accept any new methods of administration; • the success of our physician education programs; • the availability of coverage and adequate reimbursement from government and third-party payors; • the pricing of our products, particularly as compared to alternative treatments; and • the availability of alternative effective treatments for the disease indications our product candidates are intended to treat and the relative risks, benefits and costs of those treatments.
Market acceptance of our product candidates will depend on, among other factors: • the timing of our receipt of any marketing and commercialization approvals; 36 • the terms of any approvals and the countries in which approvals are obtained; • the safety, purity, potency (or efficacy) of our product candidates, including those being developed by our collaborators; • the prevalence and severity of any adverse side effects associated with our product candidates; • limitations or warnings contained in any labeling approved by the FDA or other regulatory authority; • the availability of effective companion diagnostics; • relative convenience and ease of administration of our product candidates; • the willingness of patients to accept any new methods of administration; • the success of our physician education programs; • the availability of coverage and adequate reimbursement from government and third-party payors; • the pricing of our products, particularly as compared to alternative treatments; and • the availability of alternative effective treatments for the disease indications our product candidates are intended to treat and the relative risks, benefits and costs of those treatments.
The market price for our common stock may be influenced by many factors, including the other risks described in this section titled “Risk Factors” and the following: • results of clinical trials and preclinical studies of our product candidates, or those of our competitors or our collaborators; • regulatory or legal developments in the U.S. and other countries, especially changes in laws or regulations applicable to our products; • the success of competitive products or technologies; • introductions and announcements of new products by us, our future commercialization partners, or our competitors, and the timing of these introductions or announcements; • actions taken by regulatory agencies with respect to our products, clinical studies, manufacturing process or sales and marketing terms; • the extent to which any pandemic and related governmental regulations and restrictions may impact our business, including our research, clinical trials, manufacturing and financial condition, as well as the impact of other natural disasters and other calamities; • actual or anticipated variations in our financial results or those of companies that are perceived to be similar to us; • the success of our efforts to acquire or in-license additional technologies, products or product candidates; • developments concerning any existing or future collaborations, including but not limited to those with our sources of manufacturing supply and our commercialization partners; 64 • market conditions in the pharmaceutical and biotechnology sectors; • announcements by us or our competitors of significant acquisitions, strategic collaborations, joint ventures or capital commitments; • developments or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our products; • our ability or inability to raise additional capital and the terms on which we raise it; • the recruitment or departure of key personnel; • changes in the structure of healthcare payment systems; • actual or anticipated changes in earnings estimates or changes in stock market analyst recommendations regarding our common stock, other comparable companies or our industry generally; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • announcement and expectation of additional financing efforts; • speculation in the press or investment community; • trading volume of our common stock; • sales of our common stock by us or our stockholders; • the concentrated ownership of our common stock; • changes in accounting principles; • terrorist acts, acts of war or periods of widespread civil unrest; • natural disasters and other calamities; and • general economic, industry and market conditions.
The market price for our common stock may be influenced by many factors, including the other risks described in this section titled “Risk Factors” and the following: • results of clinical trials and preclinical studies of our product candidates, or those of our competitors or our collaborators; • regulatory or legal developments in the U.S. and other countries, especially changes in laws or regulations applicable to our products; • the success of competitive products or technologies; • introductions and announcements of new products by us, our future commercialization partners, or our competitors, and the timing of these introductions or announcements; • actions taken by regulatory agencies with respect to our products, clinical studies, manufacturing process or sales and marketing terms; 60 • the extent to which any pandemic and related governmental regulations and restrictions may impact our business, including our research, clinical trials, manufacturing and financial condition, as well as the impact of other natural disasters and other calamities; • actual or anticipated variations in our financial results or those of companies that are perceived to be similar to us; • the success of our efforts to acquire or in-license additional technologies, products or product candidates; • developments concerning any existing or future collaborations, including but not limited to those with our sources of manufacturing supply and our commercialization partners; • market conditions in the pharmaceutical and biotechnology sectors; • announcements by us or our competitors of significant acquisitions, strategic collaborations, joint ventures or capital commitments; • developments or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our products; • our ability or inability to raise additional capital and the terms on which we raise it; • the recruitment or departure of key personnel; • changes in the structure of healthcare payment systems; • actual or anticipated changes in earnings estimates or changes in stock market analyst recommendations regarding our common stock, other comparable companies or our industry generally; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • announcement and expectation of additional financing efforts; • speculation in the press or investment community; • trading volume of our common stock; • sales of our common stock by us or our stockholders; • the concentrated ownership of our common stock; • changes in accounting principles; • terrorist acts, acts of war or periods of widespread civil unrest; • natural disasters and other calamities; and • general economic, industry and market conditions.
The FDA or comparable foreign regulatory authorities can delay, limit or deny approval of a product candidate for many reasons, including: • such authorities may disagree with the design or execution of our clinical trials; • negative or ambiguous results from our clinical trials or results may not meet the level of significance or persuasiveness required by the FDA or comparable foreign regulatory agencies for approval; 53 • serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by individuals using drugs similar to our product candidates; • the population studied in the clinical trial may not be sufficiently broad or representative to assure safety in the full population for which we seek approval; • such authorities may not accept clinical data from trials that are conducted at clinical facilities or in countries where the standard of care is potentially different from that of their own country; • we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; • such authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • such authorities may not agree that the data collected from clinical trials of our product candidates are acceptable or sufficient to support the submission of a BLA or other submission or to obtain regulatory approval in the U.S. or elsewhere, and such authorities may impose requirements for additional preclinical studies or clinical trials; • such authorities may disagree with us regarding the formulation, labeling and/or the product specifications of our product candidates; • approval may be granted only for indications that are significantly more limited than those sought by us, and/or may include significant restrictions on distribution and use; • such authorities may find deficiencies in the manufacturing processes or facilities of the third-party manufacturers with which we contract for clinical and commercial supplies; or • such authorities may not accept a submission due to, among other reasons, the content or formatting of the submission.
The FDA or comparable foreign regulatory authorities can delay, limit or deny approval of a product candidate for many reasons, including: • such authorities may disagree with the design or execution of our clinical trials; • negative or ambiguous results from our clinical trials or results may not meet the level of significance or persuasiveness required by the FDA or comparable foreign regulatory agencies for approval; • serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by individuals using drugs similar to our product candidates; • the population studied in the clinical trial may not be sufficiently broad or representative to assure safety in the full population for which we seek approval; • such authorities may not accept clinical data from trials that are conducted at clinical facilities or in countries where the standard of care is potentially different from that of their own country; • we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; • such authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • such authorities may not agree that the data collected from clinical trials of our product candidates are acceptable or sufficient to support the submission of a BLA or other submission or to obtain regulatory approval in the U.S. or elsewhere, and such authorities may impose requirements for additional preclinical studies or clinical trials; 50 • such authorities may disagree with us regarding the formulation, labeling and/or the product specifications of our product candidates; • approval may be granted only for indications that are significantly more limited than those sought by us, and/or may include significant restrictions on distribution and use; • such authorities may find deficiencies in the manufacturing processes or facilities of the third-party manufacturers with which we contract for clinical and commercial supplies; or • such authorities may not accept a submission due to, among other reasons, the content or formatting of the submission.
These enforcement actions include, among others: • adverse regulatory inspection findings; • warning letters; • voluntary or mandatory product recalls or public notification or medical product safety alerts to healthcare professionals; 58 • restrictions on, or prohibitions against, marketing our products; • restrictions on, or prohibitions against, importation or exportation of our products; • suspension of review or refusal to approve pending applications or supplements to approved applications; • exclusion from participation in government-funded healthcare programs; • exclusion from eligibility for the award of government contracts for our products; • suspension or withdrawal of product approvals; • seizures or administrative detention of products; • injunctions; and • civil and criminal penalties and fines.
These enforcement actions include, among others: • adverse regulatory inspection findings; • warning letters; • voluntary or mandatory product recalls or public notification or medical product safety alerts to healthcare professionals; • restrictions on, or prohibitions against, marketing our products; • restrictions on, or prohibitions against, importation or exportation of our products; • suspension of review or refusal to approve pending applications or supplements to approved applications; • exclusion from participation in government-funded healthcare programs; • exclusion from eligibility for the award of government contracts for our products; • suspension or withdrawal of product approvals; • seizures or administrative detention of products; • injunctions; and • civil and criminal penalties and fines.
Our or a third party’s failure to execute on our manufacturing requirements and comply with cGMPs could adversely affect our business in a number of ways, including: • an inability to initiate or continue clinical trials of product candidates under development; • delay in submitting regulatory applications, or receiving regulatory approvals, for product candidates; • loss of the cooperation of a collaborator; • subjecting third-party manufacturing facilities or our manufacturing facilities to additional inspections by regulatory authorities; • requirements to cease distribution or to recall batches of our product candidates; and • in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products.
Our or a 34 third party’s failure to execute on our manufacturing requirements and comply with cGMPs could adversely affect our business in a number of ways, including: • an inability to initiate or continue clinical trials of product candidates under development; • delay in submitting regulatory applications, or receiving regulatory approvals, for product candidates; • loss of the cooperation of a collaborator; • subjecting third-party manufacturing facilities or our manufacturing facilities to additional inspections by regulatory authorities; • requirements to cease distribution or to recall batches of our product candidates; and • in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “IRC”), if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage points change (by value) in the ownership of its equity over a rolling three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and certain other pre-change tax attributes 47 to offset its post-change income and taxes may be limited.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “IRC”), if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage points change (by value) in the ownership of its equity over a rolling three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and certain other pre-change tax attributes to offset its post-change income and taxes may be limited.
The development programs for our product candidates may also be delayed for a variety of reasons, including delays related to: • recruiting suitable patients to participate in a clinical trial; • developing and validating any companion diagnostic to be used in a clinical trial; • the FDA or other regulatory authorities requiring us to submit additional data or imposing other requirements before permitting us to initiate a clinical trial; • obtaining regulatory authority clearance to commence a clinical trial; • reaching agreement on acceptable terms with prospective contract research organization (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • obtaining institutional review board (“IRB”) approval at each clinical trial site; • having patients complete a clinical trial or return for post-treatment follow-up; • clinical trial sites deviating from trial protocol or dropping out of a trial; • adding new clinical trial sites; • manufacturing our product candidates in sufficient quality and quantity for use in clinical trials; or • collaborators electing to not pursue development and commercialization of our product candidates.
The development programs for our product candidates may also be delayed for a variety of reasons, including delays related to: • recruiting suitable patients to participate in a clinical trial; • developing and validating any companion diagnostic to be used in a clinical trial; • the FDA or other regulatory authorities requiring us to submit additional data or imposing other requirements before permitting us to initiate a clinical trial; • obtaining regulatory authority clearance to commence a clinical trial; • reaching agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • obtaining institutional review board (“IRB”) approval at each clinical trial site; • having patients complete a clinical trial or return for post-treatment follow-up; • clinical trial sites deviating from trial protocol or dropping out of a trial; • adding new clinical trial sites; • manufacturing our product candidates in sufficient quality and quantity for use in clinical trials; or • collaborators electing to not pursue development and commercialization of our product candidates.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, as amended, which prohibits a person who owns in excess of 15 percent of our outstanding voting stock from 66 merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15 percent of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, as amended, which prohibits a person who owns in excess of 15 percent of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15 percent of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
We have a substantial number of issued patents and pending patent applications, some of which are co-owned with a third party, covering our PROBODY platforms and products as well as methods of use and production thereof; we have exclusively licensed UCSB’s interest in the patent family co-owned with UCSB that covers PROBODY and other pro-protein technology in the fields of therapeutics, in vivo diagnostics and prophylactics.
We have a substantial number of issued patents and pending patent applications, some of which are co-owned with a third party, covering our PROBODY platforms and products as well as methods of use and production thereof; we have exclusively licensed UCSB’s interest in the patent family co-owned with UCSB that covers certain PROBODY and other pro-protein technology in the fields of therapeutics, in vivo diagnostics and prophylactics.
Each of our executive officers is entitled to receive a lump sum payment equal to one year or more of his or her base salary as well as continued medical and dental coverage for a period of one year or more plus a prorated portion of his or her target annual bonus for 65 the calendar year in which his or her employment is terminated following his or her termination of employment due to good reason or without cause.
Each of our executive officers is entitled to receive a lump sum payment equal to one year or more of his or her base salary as well as continued medical and dental coverage for a period of one year or more plus a prorated portion of his or her target annual bonus for the calendar year in which his or her employment is terminated following his or her termination of employment due to good reason or without cause.
We may encounter unexpected difficulties, or incur unexpected costs, in connection with transition activities and integration efforts, which include: • high acquisition costs; • the need to incur substantial debt or engage in dilutive issuances of equity securities to pay for acquisitions; • the potential disruption of our historical business and our activities under our collaboration agreements; • the strain on, and need to expand, our existing operational, technical, financial and administrative infrastructure; • our lack of experience in late-stage product development and commercialization; • the difficulties in assimilating employees and corporate cultures; 69 • the difficulties in hiring qualified personnel and establishing necessary development and/or commercialization capabilities; • the failure to retain key management and other personnel; • the challenges in controlling additional costs and expenses in connection with and as a result of the acquisition; • the need to write down assets or recognize impairment charges; • the diversion of our management’s attention to integration of operations and corporate and administrative infrastructures; and • any unanticipated liabilities for activities of or related to the acquired business or its operations, products or product candidates.
We may encounter unexpected difficulties, or incur unexpected costs, in connection with transition activities and integration efforts, which include: • high acquisition costs; • the need to incur substantial debt or engage in dilutive issuances of equity securities to pay for acquisitions; • the potential disruption of our historical business and our activities under our collaboration agreements; 65 • the strain on, and need to expand, our existing operational, technical, financial and administrative infrastructure; • our lack of experience in late-stage product development and commercialization; • the difficulties in assimilating employees and corporate cultures; • the difficulties in hiring qualified personnel and establishing necessary development and/or commercialization capabilities; • the failure to retain key management and other personnel; • the challenges in controlling additional costs and expenses in connection with and as a result of the acquisition; • the need to write down assets or recognize impairment charges; • the diversion of our management’s attention to integration of operations and corporate and administrative infrastructures; and • any unanticipated liabilities for activities of or related to the acquired business or its operations, products or product candidates.
Competitive therapeutic treatments include those that have already been approved 44 and accepted by the medical community and any new treatments that enter the market. We believe that a significant number of products are currently under development, and may become commercially available in the future, for the treatment of conditions for which we may try to develop product candidates.
Competitive therapeutic treatments include those that have already been approved and accepted by the medical community and any new treatments that enter the market. We believe that a significant number of products are currently under development, and may become commercially available in the future, for the treatment of conditions for which we may try to develop product candidates.
On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three 56 to five years.
On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or safety profiles, notwithstanding promising results in earlier trials. Our product candidates are in early stages of development and may fail or suffer delays that materially and adversely affect their commercial viability.
A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or safety profiles, notwithstanding promising results in earlier trials. 29 Our product candidates are in early stages of development and may fail or suffer delays that materially and adversely affect their commercial viability.
Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement 70 adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period.
Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period.
In retaliation against new international sanctions and as part of measures to stabilize and support the volatile Russian financial and currency markets, the Russian authorities also imposed significant currency control measures aimed at restricting the outflow of 71 foreign currency and capital from Russia, imposed various restrictions on transacting with non-Russian parties, banned exports of various products, and imposed other economic and financial restrictions.
In retaliation against new international sanctions and as part of measures to stabilize and support the volatile Russian financial and currency markets, the Russian authorities also imposed significant currency control measures aimed at restricting the outflow of foreign currency and capital from Russia, imposed various restrictions on transacting with non-Russian parties, banned exports of various products, and imposed other economic and financial restrictions.
In the event that our clinical trials or the clinical trials of our collaborators reveal severe adverse side effects, our or our collaborators’ clinical trials could be suspended or terminated and the FDA or comparable foreign regulatory authorities could impose a clinical hold, order us to cease further development of or deny approval of our product candidates for any or all targeted indications.
In the event that our clinical trials or the clinical trials of our collaborators reveal severe adverse side effects, our or our collaborators’ clinical trials could be suspended or terminated and the FDA or comparable foreign regulatory authorities could impose a clinical 31 hold, order us to cease further development of or deny approval of our product candidates for any or all targeted indications.
In the event that we are subject to or affected by HIPAA, the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition. Our operations abroad may also be subject to increased scrutiny or attention from data protection authorities.
In the event that we are subject to or affected by HIPAA, the CCPA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition. Our operations abroad may also be subject to increased scrutiny or attention from data protection authorities.
The FDA requires preclinical studies to be conducted in accordance with good laboratory practices (“GLPs”) and clinical trials to be conducted in accordance with GCPs and other applicable regulations, including for designing, conducting, recording and reporting the results of preclinical studies and clinical 43 trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of clinical trial participants are protected.
The FDA requires preclinical studies to be conducted in accordance with good laboratory practices (“GLPs”) and clinical trials to be conducted in accordance with GCPs and other applicable regulations, including for designing, conducting, recording and reporting the results of preclinical studies and clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of clinical trial participants are protected.
For example, the FDA may require a REMS as a condition of approval of our product candidates, which could include requirements for a medication guide, physician training and communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
For example, the FDA may require a REMS as a condition of approval of our product candidates, which could include requirements for a medication guide, 51 physician training and communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
If a prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
If a prolonged government shutdown occurs, or if renewed global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
For example, when we issue shares of common stock upon exercise of the pre-funded warrants, Tranche 1 warrants and Tranche 2 warrants (collectively, the Tranche 1 warrants and Tranche 2 warrants, the “Tranche Warrants”) issued in our July 2023 private placement, our existing stockholders will suffer dilution and such dilutive impact may be difficult to compute.
For example, when we issue shares of common stock upon exercise of the pre-funded warrants, Tranche 1 warrants and Tranche 2 warrants (collectively, the Tranche 1 warrants and Tranche 2 28 warrants, the “Tranche Warrants”) issued in our July 2023 private placement, our existing stockholders will suffer dilution and such dilutive impact may be difficult to compute.
Further, under current U.S. currency restrictions on payments to entities in Russia, we may be unable in the future to pay for the prosecution of patent applications or the maintenance of existing patents in Russia. As a result of these actions, we may not be able to protect our technology from unlicensed use in Russia.
Further, under current U.S. currency restrictions on payments to entities in 46 Russia, we may be unable in the future to pay for the prosecution of patent applications or the maintenance of existing patents in Russia. As a result of these actions, we may not be able to protect our technology from unlicensed use in Russia.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a material and adverse effect on our business, financial condition, results of operations and prospects, including the imposition of significant fines or other sanctions.
If any such actions are instituted against us, and we 43 are not successful in defending ourselves or asserting our rights, those actions could have a material and adverse effect on our business, financial condition, results of operations and prospects, including the imposition of significant fines or other sanctions.
Furthermore, PROBODY product candidates may not remain stable in the human body for the period of time required for the drug to reach and to bind to the target tissue. In addition, product candidates based on our PROBODY platform may demonstrate different chemical and pharmacological properties in patients than they do in laboratory studies.
Furthermore, PROBODY product candidates may not remain stable in the human body for the period of time required for the drug to reach and to bind to the 35 target tissue. In addition, product candidates based on our PROBODY platform may demonstrate different chemical and pharmacological properties in patients than they do in laboratory studies.
We protect trade secrets and 52 confidential and unpatented know-how, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to such knowledge, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors and other third parties.
We protect trade secrets and confidential and unpatented know-how, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to such knowledge, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors and other third parties.
These claims may be costly to defend and if we do not successfully do so, we may be required to pay monetary damages and may lose valuable intellectual property rights or personnel. Many of our employees were previously employed at universities or biotechnology or biopharmaceutical companies, including our competitors or potential competitors.
These claims may be costly to defend and if we do not successfully do so, we may be required to pay monetary damages and may lose valuable intellectual property rights or personnel. 49 Many of our employees were previously employed at universities or biotechnology or biopharmaceutical companies, including our competitors or potential competitors.
Our future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and 57 distribute our product candidates for which we obtain marketing approval.
Our future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our product candidates for which we obtain marketing approval.
As a result, we might obtain regulatory approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods and negatively impact the revenues we are able to generate from the sale of the product in that country.
As a result, we might obtain regulatory approval for a product in a particular country, but then be subject to price regulations that delay our 56 commercial launch of the product, possibly for lengthy time periods and negatively impact the revenues we are able to generate from the sale of the product in that country.
Furthermore, if we are unable to conclude that our internal control over financial reporting is effective, we could lose investor 63 confidence in the accuracy and completeness of our financial reports, the market price of our securities could decline, and we could be subject to sanctions or investigations by regulatory authorities or litigation.
Furthermore, if we are unable to conclude that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our securities could decline, and we could be subject to sanctions or investigations by regulatory authorities or litigation.
Even if we receive accelerated approval from the FDA, if our confirmatory trials do not verify clinical benefit, or if we do not comply with rigorous post-marketing requirements, the FDA may seek to withdraw any accelerated approval we have obtained. We may in the future seek accelerated approval for one or more of our product candidates.
Even if we receive 57 accelerated approval from the FDA, if our confirmatory trials do not verify clinical benefit, or if we do not comply with rigorous post-marketing requirements, the FDA may seek to withdraw any accelerated approval we have obtained. We may in the future seek accelerated approval for one or more of our product candidates.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. 72 Item 1B. Unresolved Staff Comments None.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Item 1B. Unresolved Staff Comments None.
If we fail to obtain a required license, we or our collaborators may be unable to effectively market product candidates based on our technology, which could limit our ability to generate revenue or achieve profitability and possibly prevent us from generating revenue sufficient to 50 sustain our operations.
If we fail to obtain a required license, we or our collaborators may be unable to effectively market product candidates based on our technology, which could limit our ability to generate revenue or achieve profitability and possibly prevent us from generating revenue sufficient to sustain our operations.
In jurisdictions where we have not obtained patent protection, competitors may use our technology to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but where it is more 49 difficult to enforce a patent as compared to the U.S.
In jurisdictions where we have not obtained patent protection, competitors may use our technology to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but where it is more difficult to enforce a patent as compared to the U.S.
For example, in May 2020, a putative securities class action lawsuit was brought against us (“Class Action Lawsuit”). While the Class Action Lawsuit was voluntarily dismissed without prejudice by the plaintiff and his attorneys in January 2021, a similar lawsuit or another lawsuit could be filed in the future.
For example, in May 2020, a putative securities class action lawsuit was brought against us (“Class Action Lawsuit”). While the Class Action Lawsuit was voluntarily 63 dismissed without prejudice by the plaintiff and his attorneys in January 2021, a similar lawsuit or another lawsuit could be filed in the future.
Conversely, any failure to enter any additional collaboration or other strategic transaction that would be beneficial to us could delay the development and potential commercialization of our product candidates and have a negative impact on the competitiveness of any product candidate that reaches market.
Conversely, any failure to enter any additional collaboration or other strategic transaction that would be beneficial to us could delay 39 the development and potential commercialization of our product candidates and have a negative impact on the competitiveness of any product candidate that reaches market.
Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including 59 the United States, and the efficacy and longevity of current transfer mechanisms between the EEA, and the United States remains uncertain.
Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EEA, and the United States remains uncertain.
As a result of our continued hybrid working environment, we may also face increased cybersecurity risks due to our dependency on remote working technology and electronic monitoring of clinical trial sites, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
As a result 66 of our continued hybrid working environment, we may also face increased cybersecurity risks due to our dependency on remote working technology and electronic monitoring of clinical trial sites, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
If securities or industry analysts do not publish research or reports about our business, or if they issue adverse or misleading opinions regarding our stock, our stock price and trading volume could decline. The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business.
If securities or industry analysts do not publish research or reports about our business, or if they issue adverse or misleading opinions regarding our stock, our stock price and trading volume could decline. 68 The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business.
Patient enrollment, a significant factor in the timing of clinical trials, is affected by many factors, including: • the size and nature of the target patient population; 35 • the severity of the disease or condition under investigation; • the eligibility criteria for the clinical trial; • the design of the clinical trial; • the availability of an appropriate genomic screening test; • the perceived risks and benefits of the product candidate under study; • availability and efficacy of approved therapies for the disease or condition under investigation; • the efforts to facilitate timely enrollment in clinical trials; • the patient referral practices of physicians; • the ability to monitor patients adequately during and after treatment; • the risk that patients enrolled in clinical trials will drop out of a trial; and • the proximity and availability of clinical trial sites for prospective patients.
Patient enrollment, a significant factor in the timing of clinical trials, is affected by many factors, including: • the size and nature of the target patient population; • the severity of the disease or condition under investigation; • the eligibility criteria for the clinical trial; • the design of the clinical trial; • the availability of an appropriate genomic screening test; • the perceived risks and benefits of the product candidate under study; • the availability and efficacy of approved therapies for the disease or condition under investigation; • the efforts to facilitate timely enrollment in clinical trials; 32 • the patient referral practices of physicians; • the ability to monitor patients adequately during and after treatment; • the risk that patients enrolled in clinical trials will drop out of a trial; and • the proximity and availability of clinical trial sites for prospective patients.
Our commercial opportunity and success will be reduced or eliminated if competing products that are safer, more effective, or less expensive than the therapeutics we develop or if we are unable to utilize our PROBODY therapeutic technology to differentiate our PROBODY therapeutics from the products of our competitors.
Our commercial opportunity and success will be reduced or eliminated if competing products 41 that are safer, more effective, or less expensive than the therapeutics we develop or if we are unable to utilize our PROBODY therapeutic technology to differentiate our PROBODY therapeutics from the products of our competitors.
Orphan Drug Designation neither shortens the development time or regulatory review time of a drug or therapeutic biologic nor gives the drug or therapeutic biologic any advantage in the regulatory review or approval process. In addition, while we may seek Orphan Drug Designation for our product candidates, we may never receive such designations.
Orphan Drug Designation neither shortens the development time or regulatory review time of a drug or 58 therapeutic biologic nor gives the drug or therapeutic biologic any advantage in the regulatory review or approval process. In addition, while we may seek Orphan Drug Designation for our product candidates, we may never receive such designations.
Future issuances of our common stock or other equity securities pursuant to the Sales Agreement or otherwise, or the perception that such sales may occur, could adversely affect the trading price of our common stock and impair our ability to raise capital through future offerings of shares or equity securities.
Future issuances of our common stock or other equity securities pursuant to the Sales Agreement or otherwise, or the perception that such sales may occur, could adversely affect the trading price of our common stock and impair our ability to raise capital through future offerings of shares or equity 61 securities.
For each of CX-904, CX-2051 and CX-801 our manufacturing supply chain includes several contract manufacturers, and failure by any of these manufacturers could result in interruptions of our clinical studies. For example, beginning in October 2023, one of our contract manufacturers of CX-2051 experienced production failures.
For each of CX-2051 and CX-801 our manufacturing supply chain includes several contract manufacturers, and failure by any of these manufacturers could result in interruptions of our clinical studies. For example, beginning in October 2023, one of our contract manufacturers of CX-2051 experienced production failures.
If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on one or more of our products or certain aspects of our platform technology.
If a defendant were to prevail 47 on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on one or more of our products or certain aspects of our platform technology.
Depending on the facts and circumstances, we could be subject to significant penalties if we violate HIPAA. Certain states have also adopted comparable privacy and security laws and regulations, some of which may be more stringent than HIPAA.
Depending on the facts and circumstances, we could be subject to significant penalties if we violate HIPAA. Certain states have also adopted 55 comparable privacy and security laws and regulations, some of which may be more stringent than HIPAA.
Additionally, we recently entered into a collaboration with Moderna for the development of mRNA based product candidates. We do not know whether our PROBODY platform will be able to successfully develop product candidates utilizing this mRNA technology.
Additionally, we entered into a collaboration with Moderna for the development of mRNA based product candidates. We do not know whether our PROBODY platform will be able to successfully develop product candidates utilizing this mRNA technology.
The termination of any of our collaboration agreements or individual programs within a collaboration agreement could result in a change 41 to our business plan and may have a material adverse effect on our business, financial condition, results of operations and prospects.
The termination of any of our collaboration agreements or individual programs within a collaboration agreement could result in a change to our business plan and may have a material adverse effect on our business, financial condition, results of operations and prospects.
Our future success will depend in large part on our continued ability to attract and retain other highly qualified scientific, technical and management personnel, as well 45 as personnel with expertise in clinical testing, manufacturing, governmental regulation and commercialization.
Our future success will depend in large part on our continued ability to attract and retain other highly qualified scientific, technical and management personnel, as well as personnel with expertise in clinical testing, manufacturing, governmental regulation and commercialization.
Reimbursement rates may be based on payments allowed for lower-cost drugs or therapeutic biologics that are already reimbursed, may be incorporated into existing 60 payments for other services and may reflect budgetary constraints or imperfections in Medicare data.
Reimbursement rates may be based on payments allowed for lower-cost drugs or therapeutic biologics that are already reimbursed, may be incorporated into existing payments for other services and may reflect budgetary constraints or imperfections in Medicare data.
Furthermore, if one or more of our product candidates or our PROBODY therapeutic technology generally prove to be ineffective, 33 unsafe or commercially unviable, the development of our entire platform and pipeline could be delayed, potentially permanently.
Furthermore, if one or more of our product candidates or our PROBODY therapeutic technology generally prove to be ineffective, unsafe or commercially unviable, the development of our entire platform and pipeline could be delayed, potentially permanently.
Any such collaboration, or other strategic transaction, may 42 require us to incur non-recurring or other charges, increase our near- and long-term expenditures and pose significant integration or implementation challenges or disrupt our management or business.
Any such collaboration, or other strategic transaction, may require us to incur non-recurring or other charges, increase our near- and long-term expenditures and pose significant integration or implementation challenges or disrupt our management or business.
If we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all 37 applicable regulations and guidelines.
If we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines.
If we decide to market our products directly, we will need to commit significant financial and managerial resources to develop a marketing and sales force with technical expertise and supporting distribution, administration and compliance capabilities.
If we decide to market our products directly, we will need to commit significant financial and managerial resources to develop a marketing and sales force with technical expertise 42 and supporting distribution, administration and compliance capabilities.
Additionally, our product candidates, if approved, 54 could be subject to labeling and other restrictions and market withdrawal and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.
Additionally, our product candidates, if approved, could be subject to labeling and other restrictions and market withdrawal and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.
Disruptions at the FDA and other agencies may also slow the time necessary for therapeutic biologics or modifications to approved therapeutic biologics to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
Disruptions at the FDA and other agencies may also slow the time necessary for therapeutic biologics or modifications to approved therapeutic biologics to be reviewed and/or approved by necessary 52 government agencies, which would adversely affect our business.
Our employees and independent contractors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. 46 We are exposed to the risk of fraud or other misconduct by our employees or independent contractors.
Our employees and independent contractors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. We are exposed to the risk of fraud or other misconduct by our employees or independent contractors.
In addition, principal investigators for our clinical trials may be asked to serve as scientific advisors or consultants to us from time to time and may compensation in connection with such services.
In addition, principal investigators for our clinical trials may be asked to serve as scientific advisors or consultants to us from time to time and may receive compensation in connection with such services.
In addition, any delays in completing our clinical trials will increase our costs, slow down our product development and approval process and jeopardize our ability to commence product sales and generate revenues.
In addition, any delays in completing our clinical trials will increase our costs, slow 30 down our product development and approval process and jeopardize our ability to commence product sales and generate revenues.
To date, we have financed our operations primarily through sales of our common stock, sale of our convertible preferred securities prior to our IPO, payments received under our collaboration agreements, including, more recently, the collaboration and license agreements that we entered into with each of Regeneron and Moderna in November and December 2022, respectively, and funding we received in a private placement of our common stock, warrants and pre-funded warrants in July 2023.
To date, we have financed our operations primarily through sales of our common stock, sale of our convertible preferred securities prior to our IPO, payments received under our collaboration agreements, including the collaboration and license agreements that we entered into with each of Regeneron and Moderna in November and December 2022, respectively, and funding we received in a private placement of our common stock, warrants and pre-funded warrants in July 2023.
Although we are taking steps to manage our long-term supply of CX-2051, there can be no assurance that we will not have future production failures, which could affect our ability to conduct our trials for CX-2051 or any other clinical trial drug candidates, including CX-801 and CX-904, on our planned timeline or at all.
Although we are taking steps to manage our long-term supply of CX-2051, there can be no assurance that we will not have future production failures, which could affect our ability to conduct our trials for CX-2051 or any other clinical trial drug candidates, including CX-801, on our planned timeline or at all.
In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing 31 stockholders.
In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders.
In order to conduct clinical trials of our product candidates, including our clinical trials for CX-904, CX-2051 and CX-801 we will need to manufacture them in large quantities.
In order to conduct clinical trials of our product candidates, including our clinical trials for CX-2051 and CX-801 we will need to manufacture them in large quantities.
Any material weaknesses could result in a material misstatement of our annual or quarterly consolidated financial statements or disclosures that may not be prevented or detected.
Any material weaknesses could result in a material misstatement of our annual or quarterly financial statements or disclosures that may not be prevented or detected.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023), and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023), and replaces the Part D coverage gap discount program with a new discounting program (which began in 2025).
The 39 product candidates that we are developing are based on our PROBODY platform, which is a new technology and therapeutic approach.
The product candidates that we are developing are based on our PROBODY platform, which is a new technology and therapeutic approach.
Overall, collaborations involving our product candidates currently pose, and will continue to pose, the following risks to us: • collaborators have significant discretion in determining the amount and timing of efforts and resources that they will apply to these collaborations, including, with respect to Amgen, CX-904; 40 • collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on preclinical or clinical trial results, changes in the collaborators’ strategic focus or available funding or resources, or external factors such as an acquisition that diverts resources or creates competing priorities; • collaborators have significant discretion in designing any clinical trials they operate pursuant to our collaboration agreements and may release data from such clinical trials, including with respect to our PROBODY therapeutics, without consulting us; • 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 and are not necessarily required to give us information about their clinical data; • collaborators may independently develop, or develop with third parties, products that compete directly or indirectly with our product candidate 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; • collaborators with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products; • 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 litigation or potential liability; • collaborators may infringe, misappropriate or otherwise violate the intellectual property rights of third parties, which may expose us to litigation and potential liability; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidate or that result in costly litigation or arbitration that diverts management attention and resources; and • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.
Overall, collaborations involving our product candidates currently pose, and will continue to pose, the following risks to us: • collaborators have significant discretion in determining the amount and timing of efforts and resources that they will apply to these collaborations, including, with respect to Amgen, CX-904 as well as the preclinical collaboration programs with Bristol Myers Squibb, Amgen, Astellas, Regeneron and Moderna; • collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on preclinical or clinical trial results, changes in the collaborators’ strategic focus or available funding or resources, or external factors such as an acquisition that diverts resources or creates competing priorities; • collaborators have significant discretion in designing any clinical trials they operate pursuant to our collaboration agreements and may release data from such clinical trials, including with respect to our PROBODY therapeutics, without consulting us; 37 • 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 and are not necessarily required to give us information about their clinical data; • collaborators may independently develop, or develop with third parties, products that compete directly or indirectly with our product candidate 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; • collaborators with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products; • 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 litigation or potential liability; • collaborators may infringe, misappropriate or otherwise violate the intellectual property rights of third parties, which may expose us to litigation and potential liability; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidate or that result in costly litigation or arbitration that diverts management attention and resources; and • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.
These disruptions and impacts may include: • delays or difficulties in enrolling patients in our clinical trials or the clinical trials of our partners; • delays or difficulties in clinical site initiation for CX-904 or any other clinical trials, including CX-2051 and CX-801, we or our partners decide to initiate, including difficulties in recruiting clinical site investigators and clinical site staff; • diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our or our partners’ clinical trial sites and hospital staff supporting the conduct of our or our partners’ clinical trials; • interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others; • difficulty in interpreting clinical data due to patients being infected by COVID-19 or other pandemic disease; • limitations in employee resources that would otherwise be focused on the conduct of our clinical trials or the clinical trials of our partners, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; • delays in receiving approval from local regulatory authorities to initiate our or our partners’ planned clinical trials; • delays in clinical sites receiving the supplies and materials needed to conduct our or our partners’ clinical trials; • interruption in manufacturing or global shipping that may affect the timely delivery or transport of research materials or clinical trial materials, such as investigational drug product used in our or our partners’ clinical trials; • changes in local regulations as part of a response to the COVID-19 outbreak which may require us or our partners to change the ways in which clinical trials are conducted, which may result in unexpected costs, or cause us or our partners to discontinue the clinical trials altogether; • delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and • refusal of the FDA to accept data from clinical trials in affected geographies outside the United States.
These disruptions and impacts may include: • delays or difficulties in research activities or obtaining necessary supplies to enable research; • delays or difficulties in clinical site initiation for any clinical trials we or our partners decide to initiate, including CX-2051 and CX-801, including difficulties in recruiting clinical site investigators and clinical site staff and clinical trial enrollment; • diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our or our partners’ clinical trial sites and hospital staff supporting the conduct of our or our partners’ clinical trials; • interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others; • difficulty in interpreting clinical data due to patients being infected by pandemic disease; • limitations in employee resources that would otherwise be focused on the conduct of our clinical trials or the clinical trials of our partners, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; • delays in receiving approval from local regulatory authorities to initiate our or our partners’ planned clinical trials; • delays in clinical sites receiving the supplies and materials needed to conduct our or our partners’ clinical trials; • interruption in manufacturing or global shipping that may affect the timely delivery or transport of research materials or clinical trial materials, such as investigational drug product used in our or our partners’ clinical trials; • changes in local regulations as part of a response to a pandemic outbreak which may require us or our partners to change the ways in which clinical trials are conducted, which may result in unexpected costs, or cause us or our partners to discontinue the clinical trials altogether; 64 • delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and • refusal of the FDA to accept data from clinical trials in affected geographies outside the United States.
If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements, and harm our operating results.
If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in 59 material misstatements in our financial statements, and harm our operating results.
The timing and amount of our operating expenditures will depend largely on: • the scope, timing and progress of our ongoing clinical trials as well as any other preclinical and clinical development activities; • the number, size and type of clinical trials and preclinical studies that we may be required to complete for our product candidates, as well as the cost and time of such studies and trials; • the number, scope and prioritization of preclinical and clinical programs we decide to pursue; • the time and cost necessary to produce clinical supplies of our product candidates; • the time and cost necessary to scale our manufacturing capabilities prior to or following regulatory approval and commercial launch of any product candidates; • the progress of the development efforts of parties with whom we have entered or may in the future enter into collaborations and research and development agreements; • the timing and amount of payments we may receive or are obligated to pay under our collaboration agreements and license agreements; • our ability to maintain our current licenses and research and development programs and to establish new collaboration arrangements; • the costs involved in prosecuting and enforcing patent and other intellectual property claims, including the ongoing patent infringement lawsuit brought by Vytacera against us; • the cost of any existing or future litigation to which we are or may become a party; • the cost and timing of regulatory approvals; and • our efforts to enhance operational systems and hire additional personnel, including personnel to support development and commercialization of our product candidates and satisfy our obligations as a public company.
The timing and amount of our operating expenditures will depend largely on: • the scope, timing and progress of our ongoing clinical trials as well as any other preclinical and clinical development activities; • the number, size and type of clinical trials and preclinical studies that we may be required to complete for our product candidates, as well as the cost and time of such studies and trials; • the number, scope and prioritization of preclinical and clinical programs we decide to pursue; • the time and cost necessary to produce clinical supplies of our product candidates; • the time and cost necessary to scale our manufacturing capabilities prior to or following regulatory approval and commercial launch of any product candidates; • the progress of the development efforts of parties with whom we have entered or may in the future enter into collaborations and research and development agreements; • the timing and amount of payments we may receive or are obligated to pay under our collaboration agreements and license agreements; • our ability to maintain our current licenses and research and development programs and to establish new collaboration arrangements; • the costs involved in prosecuting and enforcing patent and other intellectual property claims; • the cost of any existing or future litigation to which we are or may become a party; • the cost and timing of regulatory approvals; and • our efforts to enhance operational systems and hire additional personnel, including personnel to support development and commercialization of our product candidates and satisfy our obligations as a public company.
In addition, even if we submit an IND or a comparable submission in other jurisdictions for our product candidates, the FDA or other regulatory authorities could disagree that we have satisfied their requirements to commence our clinical trials or disagree with our study design, which may require us to complete additional preclinical studies or amend our protocols or impose stricter conditions on the commencement of clinical trials and may delay our ability to begin Phase 1 clinical trials, causing an increase in the amount of time and expense required to develop our product candidates.
In addition, even if we submit an IND or a comparable submission in other jurisdictions for our product candidates, the FDA or other regulatory authorities could disagree that we have satisfied their requirements to commence our clinical trials or disagree with our study design, which may require us to complete additional preclinical studies or amend our protocols or impose stricter conditions on the commencement of clinical trials and may delay our ability to begin clinical trials under such IND, causing an increase in the amount of time and expense required to develop our product candidates.
Any regulatory approvals that we or our collaborators obtain for our product candidates may also be subject to limitations on the approved indicated uses for which a product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including “Phase 4” clinical trials, and surveillance to monitor the safety and efficacy of the product candidate.
Any regulatory approvals that we or our collaborators obtain for our product candidates may also be subject to limitations on the approved indicated uses for which a product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including post-marketing clinical trials and surveillance programs to monitor the safety and efficacy of the product candidate.
For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough FDA employees and stop critical activities. Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points.
For example, in recent years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough FDA employees and stop critical activities. Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points.
We are also aware of several companies that are developing ADCs, such as AbbVie, ADC Therapeutics, Daiichi Sankyo, Gilead, ImmunoGen, Merck & Co., Mersana Therapeutics, Pfizer, Roche Holding Ltd. Seagen and Takeda.
We are also aware of several companies that are developing ADCs, such as AbbVie, ADC Therapeutics, Daiichi Sankyo, Gilead, Merck & Co., Mersana Therapeutics, Pfizer, Roche Holding Ltd., and Takeda.
For example, our understanding of the expression of CD166, CD71 and other drug targets in both healthy and diseased tissues is still developing. As a result, we cannot provide any assurance that we will be able to successfully identify and advance any product candidates to target novel, difficult-to-drug targets.
For example, our understanding of the expression of our drug targets in both healthy and diseased tissues is still developing. As a result, we cannot provide any assurance that we will be able to successfully identify and advance any product candidates to target novel, difficult-to-drug targets.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise information technology environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for service providers, suppliers, and vendors that have access to our critical systems and information.
Biggest changeKey elements of our cybersecurity risk management program includes but are not limited to the following: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, including incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers, suppliers, and vendors based on our assessment of their criticality to our operations and respective risk profiles .
The full Board also receives briefings from management on our cyber risk management program. Board members receive presentations on cybersecurity topics from management and, where applicable, external experts, as part of our efforts to keep the Board updated on topics that impact similarly-sized biopharmaceutical public companies.
The full Board also receives briefings from management on our cyber risk management program. Board members receive presentations on cybersecurity topics 69 from management and, where applicable, external experts, as part of our efforts to keep the Board updated on topics that impact similarly-sized biopharmaceutical public companies.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program is integrated into our overall risk management program, and shares common methodologies, reporting channels and governance processes that apply across the risk management program to other legal, compliance, strategic, operational, and financial risk areas.
For more information, see the section titled “Risk Factor— Our information technology systems, or those of our CROs or other contractors or consultants we may utilize, may fail, suffer disruptions or suffer security breaches, which could result in a material disruption of our product development programs.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the “Committee”) oversight of cybersecurity and other information technology risks.
For more information, see the section titled “Risk Factor— Our information technology systems, or those of our CROs or other contractors or consultants we may utilize, may fail, suffer disruptions or suffer security breaches, which could result in a material disruption of our product development programs.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the “Committee”) oversight of cybersecurity risks, including oversight of management’s implementation of our cybersecurity risk management program.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the information technology environment.
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us ; and alerts and reports produced by security tools deployed in the information technology environment.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information and utilize outside contractors to assist us in building and supporting our program.
Our management team’s experience includes information systems architecture, operations, cybersecurity, data privacy protection, quality, and regulatory compliance experience.
Our Director of Information Technology Infrastructure and Operations' experience includes information systems architecture, operations, cybersecurity, and data privacy protection.
The Committee oversees management’s implementation of our cybersecurity risk management program. The Committee receives quarterly reports from management on our cybersecurity risks. In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Committee reports to the full Board regarding its activities, including those related to cybersecurity.
The Committee receives quarterly reports from management on our cybersecurity risks. In addition, management updates the Committee, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant or potentially significant . The Committee reports to the full Board regarding its activities, including those related to cybersecurity .
Our management team, including our Vice President, Information Technology, and senior information technology staff, collectively have more than 40 years of experience assessing and managing material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our 73 retained external cybersecurity consultants.
Our Director of Information Technology Infrastructure and Operations, who reports to the Chief Financial Officer, is primarily responsible for assessing and managing material risks from cybersecurity threats . Our Director of Information Technology Infrastructure and Operations has primary responsibility for our overall cybersecurity risk management program and supervises our retained external cybersecurity resources.
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We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings On March 4, 2020, Vytacera Bio, LLC filed a patent infringement lawsuit against us in the U.S. District Court for the District of Delaware. The lawsuit alleges that our use, offers to sell, and/or sales of the PROBODY® technology platform for basic research applications constitutes infringement. The complaint seeks unspecified monetary damages.
Biggest changeItem 3. Legal Proceedings On March 4, 2020, Vytacera Bio, LLC (“Vytacera”) filed a patent infringement lawsuit against us in the U.S. District Court for the District of Delaware. The lawsuit alleged that our use, offers to sell, and/or sales of the PROBODY ® technology platform for basic research applications constituted infringement. The complaint sought unspecified monetary damages.
Removed
In September 2022, we filed a motion to dismiss the case and the Court granted the parties’ stipulation to stay all pending case deadlines until that motion is finally resolved. On October 30, 2023, Magistrate Judge Burke issued a Report & Recommendation that recommended granting CytomX’s motion to dismiss all counts of the complaint.
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In September 2022, we filed a motion to dismiss the case. On October 17, 2024, the Court dismissed the case and on October 28, 2024, the Court ordered the case to be closed. Item 4. Mine Safety Disclosures Not applicable. 70 PART II
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In January 2024, the case was transferred to a new Judge and the case will remain stayed pending a ruling by the trial judge on the Magistrate’s Report & Recommendation. We believe that the lawsuit is without merit and intend to vigorously defend ourselves.
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Accordingly, we cannot reasonably estimate any range of potential future charges, and we have not recorded any accrual for a contingent liability associated with these legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 74 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Record As of February 29, 2024, there were approximately 22 stockholders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Biggest changeHolders of Record As of February 28, 2025, there were approximately 20 stockholders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeComparison of Years Ended December 31, 2023 and 2022 Revenue The following table summarizes our revenue by collaboration partner during the respective periods: Year Ended December 31, 2023 2022 Change (in thousands) AbbVie $ 3,688 $ 18,563 $ (14,875 ) Amgen 5,739 4,967 772 Astellas 24,453 20,491 3,962 Bristol Myers Squibb 49,300 9,142 40,158 Regeneron 7,194 — 7,194 Moderna 10,840 — 10,840 Total Revenue $ 101,214 $ 53,163 $ 48,051 The increase in revenue of $48.1 million for 2023 compared to 2022 was primarily due to: • An increase in revenue under the BMS Agreement driven by higher percentage of completion of the existing and new targets selected in 2022; • An increase in revenue under the Regeneron Agreement and Moderna Agreement due to new preclinical studies that commenced during the current year; • An increase in revenue under the Astellas Agreement primarily driven by a $5.0 million clinical candidate milestone achieved in January 2023; • An increase in revenue under the Amgen Agreement driven by higher percentage of completion the CX-904 development in the current year primarily due to an increase in projected hours-to-completion in prior year; • A decrease in revenue under the AbbVie Agreement due to termination of the agreement in March 2023. 79 Operating Costs and Expenses Research and Development Expenses The following table summarizes our research and development expenses by program incurred during the respective periods presented: Year Ended December 31, 2023 2022 Change External costs incurred by product candidate (target): (in thousands) CX-904 (EGFRxCD3) $ 2,790 $ 2,822 $ (32 ) Praluzatamab ravtansine, CX-2009 (CD166) 2,671 15,809 (13,138 ) CX-2029 (CD71) 2,608 9,708 (7,100 ) Pacmilimab, CX-072 (PD-L1) (120 ) 948 (1,068 ) Other wholly owned and partnered programs 25,525 14,024 11,501 General research and development expenses 9,906 13,338 (3,432 ) Total external costs 43,380 56,649 (13,269 ) Internal costs 34,300 55,000 (20,700 ) Total research and development expenses $ 77,680 $ 111,649 $ (33,969 ) Research and development expenses decreased by $34.0 million for 2023, compared to 2022 primarily driven by a decrease in personnel related expenses as a result of the workforce reduction in 2022, as well as winding down of laboratory contract services and clinical study activities related to the CX-2009 and CX-2029 programs, partially offset by an increase in laboratory contract services related to IND enabling activities for CX-2051 and CX-801 programs.
Biggest changeOperating Costs and Expenses Research and Development Expenses The following table summarizes our research and development expenses by program incurred during the respective periods presented: Year Ended December 31, 2024 2023 Change External costs incurred by product candidate (target): (in thousands) CX-904 (EGFRxCD3) $ 7,487 $ 2,790 $ 4,697 CX-2051 (EpCAM) 17,846 9,966 7,880 CX-801 (IFNα2b) 2,505 11,620 (9,115 ) CX-2029 (CD71) 671 2,608 (1,937 ) Other wholly owned and partnered programs 6,404 6,490 (86 ) General research and development expenses 16,288 9,906 6,382 Total external costs 51,201 43,380 7,821 Internal costs 32,181 34,300 (2,119 ) Total research and development expenses $ 83,382 $ 77,680 $ 5,702 Research and development expenses increased by $5.7 million for 2024, compared to 2023 primarily driven by • a $5.0 million milestone payment to AbbVie (formerly ImmunoGen) in the current period, included in the general research and development expenses, for dosing the first patient for CX-2051 in Phase 1 under the ImmunoGen 2019 License Agreement; • increase in manufacturing and clinical related activities for the CX-2051 program and clinical trial activities for the CX-904 program; and • increase in consulting expenses, offset by • decrease in manufacturing activities and laboratory contract services for the CX-801 program and winding down of clinical study activities related to legacy programs, including CX-2029 and • decrease in personnel related expenses. 76 Due to the 2025 Restructuring Plan to streamline the organization and reduce our workforce by approximately 40%, internal research and development costs are expected to be lower in 2025.
These are CX-904, a conditionally activated, PROBODY® TCE, targeting the epidermal growth factor receptor (“EGFR”) on tumor cells and the CD3 receptor on T cells; CX-2051, an investigational, conditionally activated ADC targeting epithelial cell adhesion molecule (“EpCAM”); and CX-801, an investigational, masked version of interferon alpha-2b (“IFNα2b”).
These are CX-2051, an investigational, conditionally activated ADC targeting epithelial cell adhesion molecule (“EpCAM”), CX-801, an investigational, masked version of interferon alpha-2b (“IFNα2b”) and CX-904, a conditionally activated, PROBODY ® TCE, targeting the epidermal growth factor receptor (“EGFR”) on tumor cells and the CD3 receptor on T cells.
If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price in such period of determination. Our collaboration and license agreements may also include contingent payments related to sales-based milestones. Sales-based milestones are typically payable when annual sales of a covered product reach specified levels.
If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price in such period of determination. 80 Our collaboration and license agreements may also include contingent payments related to sales-based milestones. Sales-based milestones are typically payable when annual sales of a covered product reach specified levels.
We determine the estimated costs through discussions with internal personnel and external service providers as to the progress of stage of completion of the services and the agreed-upon fees to be paid for such services. 84 We make significant judgments and estimates in determining the accrual balance in each reporting period. As actual costs become known, we adjust our accruals.
We determine the estimated costs through discussions with internal personnel and external service providers as to the progress of stage of completion of the services and the agreed-upon fees to be paid for such services. We make significant judgments and estimates in determining the accrual balance in each reporting period. As actual costs become known, we adjust our accruals.
We assess whether the promises in our arrangements with 83 customers are considered as distinct performance obligations that should be accounted for separately. Judgment is required to determine whether the license to our intellectual property is distinct from the research and development services or participation on steering committees.
We assess whether the promises in our arrangements with customers are considered as distinct performance obligations that should be accounted for separately. Judgment is required to determine whether the license to our intellectual property is distinct from the research and development services or participation on steering committees.
The actual probability of success for our product candidates may be affected by a variety of factors including: the safety and efficacy of our product candidates, early clinical data, investment in our clinical program, the ability of collaborators to successfully develop our licensed product candidates, competition, manufacturing capability and commercial viability.
The 74 actual probability of success for our product candidates may be affected by a variety of factors including: the safety and efficacy of our product candidates, early clinical data, investment in our clinical program, the ability of collaborators to successfully develop our licensed product candidates, competition, manufacturing capability and commercial viability.
Interest Income Interest income primarily consists of interest income from our cash equivalents and investments, and accretion of discounts or amortization of premiums on our investments. 78 Other Income (Expense), Net Other income (expense), net consists primarily of gains and losses resulting from changes to currency exchange rates.
Interest Income Interest income primarily consists of interest income from our cash equivalents and investments, and accretion of discounts or amortization of premiums on our investments. Other Income (Expense), Net Other income (expense), net consists primarily of gains and losses resulting from changes to currency exchange rates.
Cash Flows from Investing Activities During year ended December 31, 2023, cash provided by investing activities was $150.7 million, which consisted of $424.8 million used in the purchase of short-term investments and $0.8 million of capital expenditures used to purchase property and equipment, partially offset by $275.0 million in proceeds received upon the maturity of marketable securities.
During year ended December 31, 2023, cash provided by investing activities was $150.7 million, which consisted of $424.8 million used in the purchase of short-term investments and $0.8 million of capital expenditures used to purchase property and equipment, partially offset by $275.0 million in proceeds received upon the maturity of marketable securities .
Sublicense fees payable to UCSB for potential milestones that are probable to be earned by the Company in 2024 are not included. (3) We have annual license maintenance fees under the terms of certain license agreement with UCSB and SGEN. See Part II. Item 8.
Sublicense fees payable to UCSB for potential milestones that are probable to be earned by the Company in 2025 are not included. (3) We have annual license maintenance fees under the terms of certain license agreement with UCSB and SGEN. See Part II. Item 8.
Quantitative and Qualitat ive Disclosures about Market Risk We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, or the Exchange Act, and are not required to provide the information under this item. 85
Quantitative and Qualitat ive Disclosures about Market Risk We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, or the Exchange Act, and are not required to provide the information under this item. 82
The lease provides us with one option to extend the lease term for a period of five years at the then fair market rental value. (2) We have royalty obligations under the terms of certain exclusive licensed patent rights.
The lease provides us with one option to extend the lease term for a period of five years at the then fair market rental value. 79 (2) We have minimum royalty obligations under the terms of certain exclusive licensed patent rights.
However, if the anticipated operating results and future financing are not achieved in future periods, our planned expenditures may need to be reduced in order to extend the time period over which the then-available resources would be able to fund the operations.
However, if the anticipated operating results are not achieved in future periods, our planned expenditures may need to be reduced in order to extend the time period over which the then-available resources would be able to fund the operations.
As of December 31, 2023, no sales-based milestones have been recognized. The transaction price in each arrangement is allocated to the identified performance obligations based on the relative standalone selling price (“SSP”) of each distinct performance obligation, which requires judgment.
As of December 31, 2024, no sales-based milestones have been recognized. The transaction price in each arrangement is allocated to the identified performance obligations based on the relative standalone selling price (“SSP”) of each distinct performance obligation, which requires judgment.
Payments to us under these arrangements typically include one or more of the following: nonrefundable upfront and license fees, research funding, milestone and other contingent payments to us for the achievement of defined collaboration objectives and certain preclinical, clinical, regulatory and sales-based events, as well as royalties on sales of any commercialized products.
Payments to us under these arrangements typically include one or more of the following: non-refundable upfront and license fees, research funding, milestone and other contingent payments to us for the achievement of defined collaboration objectives and certain preclinical, clinical, regulatory and sales-based events, as well as royalties on sales of any commercialized products.
Our current clinical-stage molecules address targets or mechanisms that have been previously validated as having anti-cancer activity but have been limited in their utilization due to systemic toxicities. We have incorporated our significant platform expertise and clinical learnings to optimize predicted therapeutic index and the clinical potential of these promising agents through tumor localized conditional activation.
Our current clinical-stage molecules address targets or mechanisms that have been previously validated as having anti-cancer activity but have been limited in their utilization due to systemic toxicities. We have incorporated our significant, multi-modality masking, conditional activation expertise and clinical learnings to optimize predicted therapeutic index and the clinical potential of these promising agents through tumor localized, conditional activation.
CX-2051 has been tailored to optimize the therapeutic index for the systemic treatment of EpCAM-expressing epithelial cancers where previous industry efforts targeting EpCAM have not been successful due to dose-limiting toxicities. CX-2051 has demonstrated a wide predicted therapeutic index and strong preclinical activity and tolerability in multiple preclinical models, including colorectal cancer.
The design of CX-2051 is intended to optimize the therapeutic index for the systemic treatment of EpCAM-expressing epithelial cancers where previous industry efforts targeting EpCAM have not been successful due to dose-limiting toxicities. CX-2051 has demonstrated a wide predicted therapeutic index and strong preclinical activity and tolerability in multiple preclinical models, including colorectal cancer.
Cash Flows from Financing Activities During the year ended December 31, 2023, cash provided by financing activities consisted of $29.7 million of net proceeds from issuance of pre-funded warrants and warrants and $0.6 million of proceeds from the exercise of stock options and employee stock purchases under the employee stock purchase plan (“ESPP”).
During the year ended December 31, 2023, cash provided by financing activities consisted of $29.7 million of net proceeds from issuance of pre-funded warrants and warrants and $0.6 million of proceeds from the exercise of stock options and employee stock purchases under the ESPP.
The non-cash charges primarily consisted of $8.6 million in stock-based compensation, $3.7 million in non-cash lease expense and $2.1 million in depreciation and amortization, offset by $7.4 million in net accretion of discounts on our investments. 81 The change in our net operating assets and liabilities was primarily due to: • a net decrease of $89.0 million in deferred revenue resulting from the continued recognition of deferred revenue from existing and new customers; • a decrease of $8.5 million in accounts payable, accrued and other long-term liabilities primarily due to decrease of payroll-related expenses, restructuring related expenses, and laboratory contract services; offset by • an increase of $32.6 million in cash flows from accounts receivable primarily related to the receipt of the $35.0 million upfront payment and prepaid research under the Moderna agreement entered into in December 2022. • an increase of $2.5 million in cashflows from prepaid and other current assets primarily due to a decrease in advance payments to our third party manufacturing vendors and timing of payments. 2022 During the year ended December 31, 2022, cash used in operating activities was $110.8 million, which consisted of a net loss of $99.3 million and a net decrease of $30.7 million relating to the change of our net operating assets and liabilities, offset by non-cash charges of $19.2 million.
The non-cash charges primarily consisted of $8.6 million in stock-based compensation, $3.7 million in non-cash lease expense and $2.1 million in depreciation, amortization, and impairment charges, offset by $7.4 million in net accretion of discounts on our investments. 78 The change in our net operating assets and liabilities was primarily due to: • a net decrease of $89.0 million in deferred revenue resulting from the continued recognition of deferred revenue from existing and new customers; • a decrease of $8.5 million in accounts payable, accrued and other long-term liabilities primarily due to decrease of payroll-related expenses, restructuring related expenses, and laboratory contract services; offset by • an increase of $32.6 million in cash flows from accounts receivable primarily related to the receipt of the $35.0 million upfront payment and prepaid research under the Moderna agreement entered into in December 2022. • an increase of $2.5 million in cashflows from prepaid and other current assets primarily due to a decrease in advance payments to our third party manufacturing vendors and timing of payments.
Overview We are a clinical-stage, oncology-focused biopharmaceutical company focused on developing novel, conditionally activated biologics designed to be localized to the tumor microenvironment. We aim to build a commercial enterprise to maximize our impact on the treatment of cancer.
Overview We are a clinical-stage, oncology-focused biopharmaceutical company focused on developing novel, conditionally activated, masked biologics designed to be preferentially unmasked and activated in the tumor microenvironment. We aim to build a commercial enterprise to maximize our impact on the treatment of cancer.
We filed a protest to contest the proposed assessment in November 2023. Due to the ongoing nature of the examination and discussions with the state of California, we are unable to estimate a date by which this matter will be resolved. Item 7A.
Due to the ongoing nature of the examination and discussions with the state of California, we are unable to estimate a date by which this matter will be resolved. Item 7A.
For example, changes in our estimated research service period resulted in recognition of higher total revenue of $8.2 million for certain programs in aggregate and lower total revenue of $6.0 million for other programs in aggregate, in the fourth quarter of 2023, as compared to the estimates in place at the end of the third quarter of 2023.
For example, changes in our estimated research service period resulted in recognition of higher total revenue of $27.4 million for certain programs in aggregate and lower total revenue of $9.5 million for other programs in aggregate, for 2024, as compared to the estimates in place at the end of 2023.
The final Phase 2 study data in advanced breast cancer were presented at the San Antonio Breast Cancer Symposium in 2022. We are also continuously engaged in drug discovery efforts towards the generation of new clinical candidates across multiple modalities for the treatment of cancer, including additional ADCs, Cytokines, TCEs, and mRNAs reflecting the versatility of our PROBODY platform.
We are also continuously engaged in drug discovery efforts towards the generation of new clinical candidates across multiple modalities for the treatment of cancer, including additional ADCs, Cytokines, TCEs, and mRNAs reflecting the versatility of our PROBODY platform.
Financial Statements and Supplementary Data, Note 9 - “License Agreement” in the accompanying Notes to the financial statements for more information. (4) We have development milestone payments under the terms of certain license agreements. A development milestone is payable after dosing the first patient in a Phase 1 Clinical Study, which we expect to occur in 2024.
Financial Statements and Supplementary Data, Note 9 - “License Agreement” in the accompanying Notes to the financial statements for more information. (4) We have development milestone payments under the terms of certain license agreements.
These include the validation of potential new targets for antibody-drug conjugates (“ADCs”), opening therapeutic window for novel T-cell engagers (“TCEs”) targeting solid tumors, and increasing the therapeutic index for immune modulators such as cytokines. We are also exploring the potential for our PROBODY platform in preclinical research in areas outside of oncology, including in our collaboration with Moderna.
We are employing our leading, masking platform technology to address some of the biggest challenges in oncology biologics research and development. These include the validation of potential new targets for antibody-drug conjugates (“ADCs”), opening therapeutic window for novel T-cell engagers (“TCEs”) targeting solid tumors, and increasing the therapeutic index for immune modulators such as cytokines.
During year ended December 31, 2022, cash provided by investing activities was $98.3 million, which consisted of $100.0 million in proceeds received upon the maturity of short-term marketable securities, partially offset by $1.7 million of capital expenditures used to purchase property and equipment.
Cash Flows from Investing Activities During year ended December 31, 2024, cash provided by investing activities was $99.7 million, which consisted of $255.5 million of proceeds from the maturities of short term investments partially offset by $155.5 million used in the purchase of short-term investments and $0.3 million of capital expenditures used to purchase property and equipment.
By pioneering a novel class of localized biologic drug candidates, powered by our PROBODY® therapeutic technology platform, we lead the field of conditionally activated oncology therapeutics and have established biologics localization as a strategic area of research and development. Our vision is to transform lives with safer, more effective therapies with the goal to address major unmet needs in oncology.
By pioneering a novel class of localized biologic drug candidates, powered by our PROBODY ® therapeutic technology platform, we are a leader in the field of masked, conditionally activated oncology therapeutics and have established biologics localization as a strategic area of research and development in the biopharmaceutical industry.
We recorded an uncertain tax position of $3.9 million in long term liabilities for the proposed tax assessment, penalties and interest through December 31, 2023. On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law.
We recorded an uncertain tax position of $4.1 million and $3.9 million in long term liabilities for the proposed tax assessment, penalties and interest through December 31, 2024 and 2023, respectively.
Reinforcing our leadership in the field of conditional activation, in 2022 we advanced our first TCE into the clinic. CX-904, partnered with Amgen, is a conditionally activated TCE against EGFR and CD3. In preclinical studies, CytomX’s PROBODY EGFRxCD3 TCE demonstrated anti-tumor activity and better tolerability when compared to TCEs without PROBODY masking.
CX-904, which was partnered with Amgen, is a conditionally activated TCE against EGFR and CD3. In preclinical studies, CytomX’s PROBODY EGFRxCD3 TCE demonstrated anti-tumor activity and better tolerability when compared to TCEs without PROBODY masking. In May 2022, the first patient was dosed in a Phase 1 study evaluating CX-904 as a treatment for patients with advanced solid tumors.
We have utilized our PROBODY therapeutic platform to build a promising, broad pipeline of potential first-in-class and best-in-class clinical-stage molecules.
We are also exploring the potential for our PROBODY platform in preclinical research in areas outside of oncology, including in our collaboration with Moderna. We have utilized our PROBODY therapeutic platform and masking technology to build a promising, broad pipeline of potential first-in-class and best-in-class clinical-stage molecules.
Summary Statement of Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2023 2022 (in thousands) Net cash used in operating activities $ (56,035 ) $ (110,788 ) Net cash (used in) provided by investing activities (150,674 ) 98,260 Net cash provided by financing activities 30,230 648 Net decrease in cash, cash equivalents and restricted cash $ (176,479 ) $ (11,880 ) Cash Flows from Operating Activities 2023 During the year ended December 31, 2023, cash used in operating activities was $56.0 million, which consisted of a net loss of $0.6 million and a net decrease of $62.4 million relating to the change of our net operating assets and liabilities, offset by non-cash charges of $7.0 million.
Summary Statement of Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2024 2023 (in thousands) Net cash used in operating activities $ (86,231 ) $ (56,035 ) Net cash provided by (used in) investing activities 99,700 (150,674 ) Net cash provided by financing activities 7,522 30,230 Net increase (decrease) in cash, cash equivalents and restricted cash $ 20,991 $ (176,479 ) Cash Flows from Operating Activities 2024 During the year ended December 31, 2024, cash used in operating activities was $86.2 million, which consisted of a net income of $31.9 million and non-cash charges of $8.3 million, adjusted by a net decrease of $126.4 million relating to the change of our net operating assets and liabilities, The non-cash charges primarily consisted of $7.7 million in stock-based compensation, $4.1 million in non-cash lease expense, $1.7 million in depreciation and amortization and $0.1 million impairment loss, partially offset by $5.3 million in net accretion of discounts on our investments.
Interest Income and Other Income (Expense), Net Year Ended December 31, 2023 2022 Change (in thousands) Interest income $ 9,837 $ 1,678 $ 8,159 Other income (expense), net (30 ) 340 (370 ) Total interest income and other expense $ 9,807 $ 2,018 $ 7,789 Interest Income Interest income increased by $8.2 million during 2023 compared to 2022, primarily driven by higher interest rates in 2023.
Interest Income and Other Income (Expense), Net Year Ended December 31, 2024 2023 Change (in thousands) Interest income $ 7,136 $ 9,837 $ (2,701 ) Other income (expense), net (38 ) (30 ) (8 ) Total interest income and other expense $ 7,098 $ 9,807 $ (2,709 ) Interest Income Interest income decreased by $2.7 million during 2024 compared to 2023.
The above table also excludes unrecognized tax benefits of $2.3 million as of December 31, 2023 related to uncertain tax position which would affect the Company’s effective tax rate if recognized. Segment Information We have one primary business activity and operate as one reportable segment.
The above table also excludes unrecognized tax benefits and related interest and penalties of $4.1 million as of December 31, 2024. Segment Information We have one primary business activity and operate as one reportable segment.
During the year ended December 31, 2022, cash provided by financing activities consisted of $0.6 million of proceeds from the exercise of stock options and employee stock purchases under the ESPP. 82 Contractual Obligations The following table summarizes our contractual obligations that become due within the next year (in thousands): Payments Due by 2024 Operating leases (1) $ 5,572 Royalty obligations (2) 150 License maintenance fees (3) 1,050 Milestone Payments (4) 5,456 Total contractual obligations $ 12,228 (1) We lease our current facility under a long-term operating lease, which expires in 2026.
Contractual Obligations The following table summarizes our contractual obligations that become due within the next year (in thousands): Payments Due by 2025 Operating leases (1) $ 5,729 Royalty obligations (2) 150 License maintenance fees (3) 1,050 Milestone Payments (4) 225 Total contractual obligations $ 7,154 (1) We lease our current facility under a long-term operating lease, which expires in 2026.
We recognize revenue from upfront payments over the term of our estimated period of performance under the agreement using an input method for the entire performance obligation. In addition to receiving upfront payments, we are entitled to variable payments related to research and development services provided and may be entitled to milestone and other contingent payments upon achieving predefined objectives.
In addition to receiving upfront payments, we are entitled to variable payments related to research and development services provided and may be entitled to milestone and other contingent payments upon achieving predefined objectives.
The state of California contested our tax position on revenue apportionment for upfront and milestone payments resulting from our collaboration and licensing agreements for the years 2017 and 2018. In September 2023, we received a Notice of Proposed Assessment (“NOPA”) from the Franchise Tax Board.
Uncertain Tax Position We file income taxes in the U.S. federal jurisdiction, the state of California and various other U.S. states. The state of California contested our tax position on revenue apportionment for upfront and milestone payments resulting from our collaboration and licensing agreements for the years 2017 and 2018.
We recorded an uncertain tax position of $3.9 million in long term liabilities for the proposed tax assessment, penalties and interest through December 31, 2023. Additional utilization of carryforward attributes and indirect federal tax effects of the assessment would result in a reduction in deferred tax assets of $5.1 million.
Additional utilization of carryforward attributes and indirect federal tax effects of the assessment would result in a reduction in deferred tax assets of $5.1 million. We filed a protest to contest the proposed 81 assessment in November 2023.
Global health authorities, including the FDA, regulate many aspects of a product candidate’s life cycle, including research and development and preclinical and clinical testing. We will need to commit significant time, resources, and funding to develop our wholly-owned and partnered product candidates in clinical trials.
We will need to commit significant time, resources, and funding to develop our wholly-owned and partnered product candidates in clinical trials.
Our proprietary, versatile, multi-modality PROBODY technology platform is designed to enable conditional activation of potent biologic therapeutic candidates within the tumor microenvironment, while minimizing drug activity in healthy tissues and circulation. Our platform is built on a strong foundation of tumor biology expertise, including deep knowledge of tumor-associated enzymes known as proteases.
Our vision is to transform lives with safer, more effective therapies with the goal to address major unmet needs in oncology. Our proprietary, versatile, multi-modality PROBODY technology platform is designed to enable conditional activation of potent masked biologic therapeutic candidates within the tumor microenvironment, while minimizing drug activity in healthy tissues and circulation.
The change in our net operating assets and liabilities was primarily due to: • an increase of $35.2 million in accounts receivable primarily related to the upfront payment and prepaid research under the Moderna Agreement entered into in December 2022; • a decrease of $9.8 million in accrued liabilities and accounts payable primarily due to timing of payments; • a decrease of $2.3 million in cash flows from prepaid expenses and other current assets and other assets primarily due to increase in advance payments to our third-party manufacturing vendors and timing of payments; • a net increase of $16.6 million in deferred revenue consisting of an increase of $69.6 million in deferred revenue related to new agreements with Regeneron and Moderna partially offset by a decrease of $53.0 million resulting from the continued recognition of deferred revenue from existing customers.
The change in our net operating assets and liabilities was primarily due to: • a net decrease of $118.3 million in deferred revenue resulting from the continued recognition of deferred revenue from existing and new customers; • a decrease of $9.9 million in accounts payable, accrued and other long-term liabilities primarily due to timing of payments; offset by • an increase of $1.8 million in cash flows from accounts receivable, prepaid and other current assets primarily due to decrease in advance payments. 2023 During the year ended December 31, 2023, cash used in operating activities was $$56.0 million, which consisted of a net loss of $0.6 million and a net decrease of $62.4 million relating to the change of our net operating assets and liabilities, offset by non-cash charges of $7.0 million.
As such, we are dependent on third parties to supply our product candidates according to our specifications, in sufficient quantities, on time, in compliance with appropriate regulatory standards and at competitive prices. 77 Components of Results of Operations Revenue Our revenue to date has been primarily derived from non-refundable license payments, milestone payments and reimbursements for research and development expenses under our research, collaboration, and license agreements.
Components of Results of Operations Revenue Our revenue to date has been primarily derived from non-refundable license payments, milestone payments and reimbursements for research and development expenses under our research, collaboration, and license agreements.
General and Administrative Expenses Year Ended December 31, 2023 2022 Change (in thousands) General and administrative $ 30,018 $ 42,849 $ (12,831 ) General and administrative expenses decreased by $12.8 million for 2023, compared to 2022 primarily driven by a decrease in personnel related expenses as a result of the workforce reduction in 2022, reduced external vendor services, and lower building rent as a result of a partial sublease of the Company’s headquarters.
General and Administrative Expenses Year Ended December 31, 2024 2023 Change (in thousands) General and administrative $ 29,726 $ 30,018 $ (292 ) General and administrative expenses decreased by $0.3 million for 2024, compared to 2023 primarily due to lower personnel related expenses and lower rent as a result of partial sublease of the Company’s headquarters which started in March 2023, partially offset by higher professional services and consulting spend supporting areas including intellectual property and internal controls.
The IND for CX-801 was cleared by the FDA in January 2024 and initiation of Phase 1 dose escalation in solid tumors including melanoma, renal, and head and neck squamous cell carcinoma is expected in the first half of 2024.
The IND for CX-801 was allowed to proceed by the FDA in January 2024, and in the third quarter of 2024 the first patient was dosed in the CX-801 Phase 1 dose escalation study in solid tumors. The Phase 1 dose escalation study is focused on patients with advanced melanoma.
Proteases are tightly controlled in normal tissues but often dysregulated and active in tumor microenvironments where they play important roles in cancer cell migration, invasion and metastasis. Leveraging our deep scientific knowledge, we conceived of and constructed our PROBODY therapeutic platform which allows us to genetically engineer biologic therapeutic candidates to contain protease-cleavable masks.
Our platform is built on a strong foundation of tumor biology expertise, including deep knowledge of tumor-associated enzymes known as proteases. Proteases are tightly controlled in normal tissues but often dysregulated and active in tumor microenvironments where they play important roles in cancer cell migration, invasion and metastasis.
Our masking strategy is designed to reduce binding of biologic therapeutics to their targets until the mask is removed by proteases in the tumor microenvironment, providing more selective targeting of the tumor. We are employing our leading, conditional activation platform technology to address some of the biggest challenges in oncology biologics research and development.
Leveraging our deep scientific knowledge, we conceived of and constructed our PROBODY therapeutic platform which allows us to genetically engineer biologic therapeutic candidates to contain protease-cleavable masks. Our masking strategy is designed to reduce binding of biologic therapeutics to their targets until the mask is removed by proteases in the tumor microenvironment, providing more selective targeting of the tumor.
We currently have more than 15 active drug discovery and/or development programs. We do not have any products approved for sale, and we continue to incur significant research and development and general administrative expenses related to our operations. As of December 31, 2023 and December 31, 2022, we had an accumulated deficit of $723.4 million and $722.9 million, respectively.
We do not have any products approved for sale, and we continue to incur significant research and development and general administrative expenses related to our operations.
Income Taxes Year Ended December 31, 2023 2022 Change (in thousands) Provision for income taxes $ 3,892 $ — $ 3,892 The $3.9 million tax provision represented the uncertain tax position related to the proposed assessment received from the state of California for the years 2017 and 2018, including penalties and interest through December 31, 2023. 80 Liquidity and Capital Resources Sources of Liquidity As of December 31, 2023, we had cash, cash equivalents and short-term investments of $174.5 million and an accumulated deficit of $723.4 million, compared to cash, cash equivalents and investments of $193.7 million and an accumulated deficit of $722.9 million as of December 31, 2022.
Income Taxes Year Ended December 31, 2024 2023 Change (in thousands) Provision for income taxes $ 224 $ 3,892 $ (3,668 ) The $0.2 million tax provision represented the interest accrued for 2024, related to the proposed assessment received from the state of California for the years 2017 and 2018.
We incurred aggregate restructuring charges of approximately $7.5 million, primarily related to one-time severance payments and other employee-related costs. Based upon our current operating plan, we expect our existing capital resources will be sufficient to fund operations into the second half of 2025.
The restructuring plan will result in a reduction to our workforce by approximately 40% and is expected to be substantially completed in the first quarter of 2025. Based upon our current operating plan, we expect our existing capital resources will be sufficient to fund operations into the second quarter of 2026.
The IND for CX-2051 was cleared by the FDA in January 2024 and we expect Phase 1 clinical initiation in EpCAM expressing solid tumors, including CRC in the first half of 2024.
The IND for CX-2051 was allowed to proceed by the FDA in January 2024 and Phase 1 clinical initiation in EpCAM expressing solid tumors, including a primary initial focus in CRC commenced in April 2024. As o f March 2025, the Phase 1 study has reached the seventh dose escalation cohort.
We currently have no manufacturing capabilities and do not intend to establish any such capabilities in the near term.
We currently have no manufacturing capabilities and do not intend to establish any such capabilities in the near term. As such, we are dependent on third parties to supply our product candidates according to our specifications, in sufficient quantities, on time, in compliance with appropriate regulatory standards and at competitive prices.
The Phase 1 dose escalation design will follow a Bayesian Optimal Interval (BOIN) design and intended to demonstrate rapid clinical proof of concept and potentially move into dose expansion studies in 2025. Another wholly-owned emerging product candidate is CX-801, an interferon ("IFN") alpha-2b PROBODY. IFNα2b provides a potentially superior approach to activating anti-tumor immune responses than other cytokines.
The CX-2051 Phase 1 study has reached the seventh dose level with CX-2051 initial Phase 1 data in advanced metastatic CRC expected in the first half of 2025. CX-801 is our interferon ("IFN") alpha-2b PROBODY. IFNα2b provides a potentially superior approach to activating anti-tumor immune responses than other cytokines.
In Phase 1 dose escalation, we will use a BOIN design to evaluate safety and signs of clinical activity for CX-801 and progress into combinations, where CX-801 has the potential to be cornerstone of therapy, including in combination with checkpoint inhibitors. CX-2029 was previously developed in a global co-development collaboration with AbbVie.
In Phase 1 dose escalation, the study will evaluate safety, translational biomarkers and signs of clinical activity for CX-801 monotherapy and in combination with KEYTRUDA ® . In second quarter of 2024, CytomX announced a clinical collaboration with Merck to supply KEYTRUDA for evaluation of its combination with CX-801 in the Phase 1 study.
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For a discussion related to the results of operations for 2022 compared to 2021, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Comparison of Years Ended December 31, 2022 and 2021" in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 27, 2023.
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CX-2051, a conditionally activated, PROBODY ADC, is directed toward the epithelial cell adhesion molecule (EpCAM). High expression of EpCAM has been documented in many tumor types, including CRC.
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In May 2022, the first patient was dosed in a Phase 1 study evaluating CX-904 as a treatment for patients with advanced solid tumors. Patient enrollment in the Phase 1 dose escalation portion of the study continues to progress.
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The CX-2051 payload, a next generation topoisomerase-1 inhibitor payload licensed from AbbVie (formerly ImmunoGen), is tailored to specific EpCAM-expressing indications, including colorectal cancer, and includes a payload-antibody linker designed to drive bystander effect, contributing to anti-tumor activity.
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We reported in January 2023 that the initial single patient cohort phase of the study was complete and that the “3+3” patient cohort phase had been initiated. Backfilling of certain dose escalation cohorts has also been initiated and dose ranging continues. Initial Phase 1a data in EGFR positive solid tumors is expected in the second half of 2024.
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In Phase 1 dose escalation to date, CX-2051 has demonstrated a favorable tolerability profile and attained doses predicted to be therapeutically active. In the Phase 1 study, EpCAM expression levels are being assessed retrospectively 72 and are anticipated to be high in the majority of CRC patients.
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A decision to potentially expand into Phase 1b is also anticipated in 2024, which will be taken in conjunction with our partner, Amgen. Our pipeline also includes CX-2051, a wholly-owned conditionally activated, PROBODY ADC paired with a next-generation camptothecin payload and directed toward the epithelial cellular adhesion molecule (EpCAM). CX-2051 is licensed from 76 ImmunoGen.
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The Phase 1 study is currently in the fourth monotherapy dose escalation cohort where the dose of CX-801 exceeds the approved dose of the unmasked peginterferon alfa-2b (SYLATRON™). Initial Phase 1a translational data in advanced melanoma is expected in the second half of 2025. In 2022, we advanced our first TCE into the clinic.
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This program is intended to open a therapeutic window for successful targeting of CD71, also known as the transferrin receptor 1 (“TfR1”). CD71 is a cell surface protein essential for iron uptake in dividing cells and is highly expressed in a number of solid and hematologic cancers.
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On May 8, 2024, we reported initial Phase 1a data for CX-904 based on an April 16, 2024 data cutoff.
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However, given its central role in iron metabolism, CD71 is present on most healthy cells and is thought to be an undruggable target with conventional ADCs. CX-2029 is conjugated with the tubulin inhibitor, monomethyl auristatin E (“MMAE”), as the payload.
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As of the data cutoff, the CX-904-101 study had enrolled 35 patients with advanced metastatic solid tumor types that are generally known to express EGFR, including pancreatic, CRC, non-small cell lung cancer (NSCLC), head and neck squamous cell carcinoma (HNSCC), gastric, and esophageal cancers.
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In March 2023, following the completion of the Phase 2 Study in squamous non-small cell lung cancer (“sqNSCLC”), head and neck squamous cell carcinoma (“HNSCC”), esophageal and gastro-esophageal junction (“E/GEJ”) cancers, AbbVie notified CytomX that it would not advance CX-2029 into additional clinical studies and terminated the 2016 CD71 License and Collaboration Agreement.
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Patients enrolled in the study were heavily pre-treated and had a median of 4 prior lines of therapy. 19 patients were enrolled into initial non-step dosing cohorts with target doses ranging from 0.007 mg to 6 mg, and 16 patients were subsequently enrolled into step-dosing cohorts with target doses ranging from 5 mg to 10 mg and with tocilizumab prophylaxis.
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CytomX re-acquired full rights to CX-2029 but does not currently have plans to make further significant investments in the solid tumor program in the near-term but continues to view CD71 as a target of strategic interest, including novel next-generation strategies.
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As of the April 16, 2024 data cutoff, enrollment into a cohort with a target dose of 15 mg was ongoing. As of the cutoff date, CX-904 demonstrated a favorable safety profile. There were no observed cases of cytokine release syndrome (CRS) of any grade in step-dosing cohorts as of the cutoff date.
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Praluzatamab ravtansine is our conditionally activated ADC directed toward CD166 which was previously evaluated in a three-arm Phase 2 study in patients with advanced human epidermal growth factor receptor 2 (“HER2”)-non-amplified breast cancer. Arms A and B examined praluzatamab ravtansine monotherapy in patients with hormone receptor-positive/HER2-non-amplified breast cancer and TNBC, respectively.
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In non-step dosing cohorts, only Grade 1 CRS was observed in patients treated at the highest dose of 6 mg. Overall, the most common treatment-related adverse events (TRAEs) were rash, arthralgia, arthritis, pruritis, and vomiting, the majority of which were low grade, being observed in 14 (40%), 13 (37%), 5 (14%), 5 (14%) and 5 (14%) of patients, respectively.
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Arm C studied praluzatamab ravtansine in combination with pacmilimab (CX-072), our wholly-owned PD-L1 inhibitor, in patients with TNBC. In July 2022, the Company disclosed topline data demonstrating praluzatamab ravtansine met the primary efficacy endpoint of confirmed objective response rate greater than 10 percent in hormone receptor-positive/HER2-non-amplified breast cancer.
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Grade 3 adverse events were tenosynovitis (n=1), arthralgia (n=2), arthritis (n=1), rash (n=1). As of the April 16, 2024 data cutoff, 8 patients had measurable tumor reduction per RECIST 1.1, including 2 of 6 efficacy-evaluable patients (33%) with pancreatic cancer with confirmed partial responses. All 6 efficacy-evaluable patients with pancreatic cancer achieved disease control (objective response or stable disease).
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The confirmed objective response was 15% and demonstrated median progression-free survival of 2.6 months. Ocular and neuropathic toxicities were the most common treatment-related adverse events. Based on these data, the Company announced it would deprioritize further investment in praluzatamab ravtansine.
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For the two patients with a confirmed partial response, one patient (6 mg target dose) achieved an 83% tumor reduction. A second patient (5 mg target dose) with a confirmed response achieved a 51% tumor reduction and remained on study treatment as of the data cutoff.
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Among other changes to the Internal Revenue Code, the IRA imposes a 15% corporate alternative minimum tax on certain corporations and 1% excise tax on public company stock buybacks for tax years beginning after December 31, 2022. The Company does not expect these provisions to have a material impact.
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In addition, a third pancreatic cancer patient maintained stable disease with no evidence of tumor growth through 3.5 months of study treatment, and remained on treatment as of the data cutoff. Preliminary pharmacokinetic and pharmacodynamic data were consistent with the PROBODY TCE mechanism of action, including maintained masking in circulation, and CD8+ T-cell margination and tumor infiltration.
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In November 2022, we entered into a Collaboration and License Agreement with Regeneron Pharmaceuticals, Inc. (the “Regeneron Agreement”) to collaborate on preclinical research activities to discover and develop certain antibody compounds for the treatment of cancer using the Company’s PROBODY therapeutic technology. Pursuant to the Regeneron Agreement, we collected an upfront fee of $30.0 million.
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As of the end of 2024, the Phase 1 study of CX-904 had enrolled over 70 patients. The 15 mg target step-dose level had been cleared and the maximum tolerated dose had not been reached. Patient enrollment in 2025 had prioritized escalation to higher dose levels.
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In December 2022, we entered into a Collaboration and License Agreement with ModernaTX, Inc. (the “Moderna Agreement”) to collaborate on discovery and preclinical research and development activities to create investigational messenger RNA (mRNA) based conditionally activated therapies using the Company’s PROBODY therapeutic technology.
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However, in March 2025, based on CX-904 clinical observations to-date as well as CytomX pipeline priorities, CytomX and Amgen jointly decided to not further develop the CX-904 program.
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Pursuant to the Moderna Agreement, we collected an upfront fee and prepaid research funding of $35.0 million in January 2023.

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