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

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Paragraph-level year-over-year comparison of Dianthus Therapeutics, Inc. /DE/'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.

+255 added−286 removedSource: 10-K (2025-03-11) vs 10-K (2024-03-21)

Top changes in Dianthus Therapeutics, Inc. /DE/'s 2024 10-K

255 paragraphs added · 286 removed · 195 edited across 8 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

125 edited+28 added−26 removed411 unchanged
Biggest changeIn addition, if our product candidates are found to infringe the intellectual property rights of third parties, these third parties may assert infringement claims against our future licensees and other parties with whom we had business relationships and we may be required to indemnify those parties for any damages they suffer as a result of these claims, which may require us to initiate or defend protracted and costly litigation on behalf of licensees and other parties regardless of the merits of such claims.
Biggest changeBecause of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S. federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. 58 Table of Contents In addition, if our product candidates are found to infringe the intellectual property rights of third parties, these third parties may assert infringement claims against our future licensees and other parties with whom we had business relationships and we may be required to indemnify those parties for any damages they suffer as a result of these claims, which may require us to initiate or defend protracted and costly litigation on behalf of licensees and other parties regardless of the merits of such claims.
If approved, DNTH103 or other product candidates will face significant competition and our failure to effectively compete may prevent us from achieving significant market penetration. We compete with a variety of multinational biopharmaceutical companies, specialized biotechnology companies and emerging biotechnology companies, as well as academic institutions, governmental agencies, and public and private research institutions, among others.
If approved, DNTH103 or our other product candidates will face significant competition and our failure to effectively compete may prevent us from achieving significant market penetration. We compete with a variety of multinational biopharmaceutical companies, specialized biotechnology companies and emerging biotechnology companies, as well as academic institutions, governmental agencies, and public and private research institutions, among others.
We or our collaborators also may experience numerous unforeseen events during, or as a result of, any current or future clinical trials that we could conduct that could delay or prevent our ability to receive marketing approval or commercialize DNTH103 or any other product candidates, including: • IRBs, the FDA or other regulators, or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • clinical trial sites deviating from trial protocol or dropping out of a trial; • clinical trials of any product candidates may fail to show safety or efficacy, produce negative or inconclusive results and we may decide, or regulators may require us, to conduct additional preclinical studies or clinical trials or we may decide to abandon product development programs; • the number of subjects required for clinical trials of any of our product candidates may be larger than we anticipate, especially if regulatory bodies require completion of non-inferiority or superiority trials, enrollment in these clinical trials may be slower than we anticipate or subjects may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that we add new clinical trial sites or investigators; • we may elect to, or regulators, IRBs or ethics committees may require that we or our investigators, suspend or terminate clinical research or trials for various reasons, including noncompliance with regulatory requirements or a finding that the participants in our trials are being exposed to unacceptable health risks; • the cost of clinical trials of any of our product candidates may be greater than we anticipate; • the quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be inadequate to initiate or complete a given clinical trial; • our inability to manufacture sufficient quantities of our product candidates for use in clinical trials, or delays in manufacturing or distribution; • reports from clinical testing of other therapies may raise safety or efficacy concerns about our product candidates; • our failure to establish an appropriate safety profile for a product candidate based on clinical or preclinical data for such product candidate as well as data emerging from other therapies in the same class as our product candidates; and • the FDA or other regulatory authorities may require us to submit additional data such as additional toxicology studies, or impose other requirements before permitting us to initiate a clinical trial.
We or our collaborators also may experience numerous unforeseen events during, or as a result of, any current or future clinical trials that we could conduct that could delay or prevent our ability to receive marketing approval or commercialize DNTH103 or any other product candidates, including: • IRBs, the FDA or other regulators, or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • clinical trial sites deviating from trial protocol or dropping out of a trial; • clinical trials of any product candidates may fail to show safety or efficacy, produce negative or inconclusive results and we may decide, or regulators may require us, to conduct additional preclinical studies or clinical trials or we may decide to abandon product development programs; • the number of subjects required for clinical trials of any of our product candidates may be larger than we anticipate, especially if regulatory bodies require completion of non-inferiority or superiority trials, enrollment in these clinical trials may be slower than we anticipate or subjects may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that we add new clinical trial sites or investigators; 42 Table of Contents • we may elect to, or regulators, IRBs or ethics committees may require that we or our investigators, suspend or terminate clinical research or trials for various reasons, including noncompliance with regulatory requirements or a finding that the participants in our trials are being exposed to unacceptable health risks; • the cost of clinical trials of any of our product candidates may be greater than we anticipate; • the quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be inadequate to initiate or complete a given clinical trial; • our inability to manufacture sufficient quantities of our product candidates for use in clinical trials, or delays in manufacturing or distribution; • reports from clinical testing of other therapies may raise safety or efficacy concerns about our product candidates; • our failure to establish an appropriate safety profile for a product candidate based on clinical or preclinical data for such product candidate as well as data emerging from other therapies in the same class as our product candidates; and • the FDA or other regulatory authorities may require us to submit additional data such as additional toxicology studies, or impose other requirements before permitting us to initiate a clinical trial.
Among other things, these provisions: • establish a classified board of directors such that all members of the board are not elected at one time; • allow the authorized number of our directors to be changed only by resolution of our Board of Directors; 61 Table of Contents • limit the manner in which stockholders can remove directors from the Board of Directors; • establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted on at stockholder meetings; • require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; • limit who may call a special meeting of stockholders; • authorize our Board of Directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our Board of Directors; and • require the approval of the holders of at least 66.67% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our charter or bylaws.
Among other things, these provisions: • establish a classified board of directors such that all members of the board are not elected at one time; • allow the authorized number of our directors to be changed only by resolution of our Board of Directors; • limit the manner in which stockholders can remove directors from the Board of Directors; 69 Table of Contents • establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted on at stockholder meetings; • require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; • limit who may call a special meeting of stockholders; • authorize our Board of Directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our Board of Directors; and • require the approval of the holders of at least 66.67% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our charter or bylaws.
Our future capital requirements will depend on many factors, including: • the timing and progress of preclinical and clinical development activities; • the number and scope of preclinical and clinical programs we pursue; • our ability to establish an acceptable safety profile with IND-enabling toxicology studies to enable clinical trials; • successful patient enrollment in, and the initiation and completion of, larger and later-stage clinical trials; • per subject trial costs; • the number and extent of trials required for regulatory approval; • the countries in which the trials are conducted; • the length of time required to enroll eligible subjects in clinical trials; • the number of subjects that participate in the trials; • the drop-out and discontinuation rate of subjects; • potential additional safety monitoring requested by regulatory agencies; • the duration of subject participation in the trials and follow-up; • the extent to which we encounter any serious adverse events in our clinical trials; • the timing of receipt of regulatory approvals from applicable regulatory authorities; • the timing, receipt and terms of any marketing approvals and post-marketing approval commitments from applicable regulatory authorities; • the extent to which we establish collaborations, strategic partnerships, or other strategic arrangements with third parties, if any, and the performance of any such third party; • hiring and retaining research and development personnel; • our arrangements with our contract development and manufacturing organizations (“CDMOs”), and contract research organizations (“CROs”); • development and timely delivery of commercial-grade drug formulations that can be used in our planned clinical trials and for commercial launch; • the impact of any business interruptions to our operations or to those of the third parties with whom we work; and • obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights.
Our future capital requirements will depend on many factors, including: • the timing and progress of preclinical and clinical development activities; • the number and scope of preclinical and clinical programs we pursue; • our ability to establish an acceptable safety profile with IND-enabling toxicology studies to enable clinical trials; • successful patient enrollment in, and the initiation and completion of, larger and later-stage clinical trials; • per subject trial costs; • the number, extent and scope of trials required for regulatory approval; • the countries in which the trials are conducted; • the length of time required to enroll eligible subjects in clinical trials; • the number of subjects that participate in the trials; • the drop-out and discontinuation rate of subjects; • potential additional safety monitoring requested by regulatory agencies; • the duration of subject participation in the trials and follow-up; • the extent to which we encounter any serious adverse events in our clinical trials; • the timing of receipt of regulatory approvals from applicable regulatory authorities; • the timing, receipt and terms of any marketing approvals and post-marketing approval commitments from applicable regulatory authorities; • the extent to which we establish collaborations, strategic partnerships, or other strategic arrangements with third parties, if any, and the performance of any such third party; 39 Table of Contents • hiring and retaining research and development personnel; • our arrangements with our contract development and manufacturing organizations (“CDMOs”), and contract research organizations (“CROs”); • development and timely delivery of commercial-grade drug formulations that can be used in our planned clinical trials and for commercial launch; • the impact of any business interruptions to our operations or to those of the third parties with whom we work; and • obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights.
The enrollment of patients in future trials for DNTH103 or any other product candidates will depend on many factors, including if patients choose to enroll in clinical trials, rather than using approved products, or if our competitors have ongoing clinical trials for product candidates that are under development for the same indications as our product candidates, and patients instead enroll in such clinical trials.
The enrollment of patients in current or future trials for DNTH103 or any other product candidates will depend on many factors, including if patients choose to enroll in clinical trials, rather than using approved products, or if our competitors have ongoing clinical trials for product candidates that are under development for the same indications as our product candidates, and patients instead enroll in such clinical trials.
We cannot predict whether any specific proposals will be enacted, the terms of any such proposals or what effect, if any, such proposals would have on our business if they were to be enacted. For example, the United States recently enacted the IRA, which implements, among other changes, a 1% excise tax on certain stock buybacks.
We cannot predict whether any specific proposals will be enacted, the terms of any such proposals or what effect, if any, such proposals would have on our business if they were to be enacted. For example, the United States enacted the IRA, which implements, among other changes, a 1% excise tax on certain stock buybacks.
If the preliminary, topline or interim data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, DNTH103 or any other product candidate may be harmed, which could harm our business, financial condition, results of operations, cash flows, and prospects. 40 Table of Contents Our current or future clinical trials or those of our future collaborators may reveal significant adverse events or undesirable side effects not seen in our preclinical studies and may result in a safety profile that could halt clinical development, inhibit regulatory approval or limit commercial potential or market acceptance of DNTH103 or any other product candidates or result in potential product liability claims.
If the preliminary, topline or interim data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, DNTH103 or any other product candidate may be harmed, which could harm our business, financial condition, results of operations, cash flows, and prospects. 46 Table of Contents Our current or future clinical trials or those of our current or future collaborators may reveal significant adverse events or undesirable side effects not seen in our preclinical studies and may result in a safety profile that could halt clinical development, inhibit regulatory approval or limit commercial potential or market acceptance of DNTH103 or any of our other product candidates or result in potential product liability claims.
A product candidate could be delayed in receiving, or fail to receive, regulatory approval for many reasons, including: the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication; the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities 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 a product candidate; we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; the data collected from clinical trials of a product candidate may not be acceptable or sufficient to support the submission of a BLA or other submission or to obtain regulatory approval in the United States or elsewhere, and we may be required to conduct additional clinical trials; the FDA or the applicable foreign regulatory authority may disagree regarding the formulation, 54 Table of Contents labeling and/or the specifications of a product candidate; the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
A product candidate could be delayed in receiving, or fail to receive, regulatory approval for many reasons, including: the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication; the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities 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 a product candidate; we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; the data collected from clinical trials of a product candidate may not be acceptable or sufficient to support the submission of a BLA or other submission or to obtain regulatory approval in the United States or elsewhere, and we may be required to conduct additional clinical trials; the FDA or the applicable foreign regulatory authority may disagree regarding the formulation, labeling and/or the specifications of a product candidate; the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals for our product candidates, we will not be able to commercialize, or will be delayed in commercializing, such product candidates, and our ability to generate revenue will be materially impaired; • We may not be able to meet requirements for the chemistry, manufacturing and control of our product candidates; • Our product candidates for which we intend to seek approval as biologics may face competition sooner than anticipated; • The market price of our common stock is expected to be volatile, the market price of our common stock may drop, and an active trading market for our common stock may not be sustained and our stockholders may not be able to sell their shares of common stock for a profit, if at all; • Provisions in our certificate of incorporation and bylaws and under Delaware law could make an acquisition of us more difficult and may discourage any takeover attempts which stockholders may consider favorable, and may lead to entrenchment of management; and • We will incur additional costs and increased demands upon management as a result of complying with the laws and regulations affecting public companies.
If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals for our product candidates, we will not be able to commercialize, or will be delayed in commercializing, such product candidates, and our ability to generate revenue will be materially impaired; • We may not be able to meet requirements for the chemistry, manufacturing and control of our product candidates; • Our product candidates for which we intend to seek approval as biologics may face competition sooner than anticipated; • The market price of our common stock may be volatile, the market price of our common stock may drop, and an active trading market for our common stock may not be sustained and our stockholders may not be able to sell their shares of common stock for a profit, if at all; • Provisions in our certificate of incorporation and bylaws and under Delaware law could make an acquisition of us more difficult and may discourage any takeover attempts which stockholders may consider favorable, and may lead to entrenchment of management; and • We will continue to incur additional costs and increased demands upon management as a result of complying with the laws and regulations affecting public companies.
If the number of our addressable patients is not as significant as we estimate, the indication approved by regulatory authorities is narrower than we expect or the treatment population is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of such products, even if approved. 58 Table of Contents We may become exposed to costly and damaging liability claims, either when testing a product candidate in the clinical or at the commercial stage, and our product liability insurance may not cover all damages from such claims.
If the number of our addressable patients is not as significant as we estimate, the indication approved by regulatory authorities is narrower than we expect or the treatment population is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of such products, even if approved. 66 Table of Contents We may become exposed to costly and damaging liability claims, either when testing a product candidate in the clinical or at the commercial stage, and our product liability insurance may not cover all damages from such claims.
Similarly, rising tensions between China and Taiwan, the ongoing conflict in Israel and surrounding areas, the attacks on marine vessels traversing the Red Sea and the ongoing military conflict between Russia and Ukraine have created volatility in the global capital markets and may have further global economic consequences, including disruptions of the global supply chain.
Similarly, rising tensions between China and Taiwan, the ongoing conflict in Israel and surrounding areas, the attacks on marine vessels traversing the Red Sea and the ongoing military conflict between Russia and Ukraine and in the Middle East have created volatility in the global capital markets and may have further global economic consequences, including disruptions of the global supply chain.
We could also encounter delays if a clinical trial is placed on clinical hold, suspended or terminated by us, the FDA, the competent authorities of the European Union (“EU”), member states or other regulatory authorities or the IRBs or ethics committees 39 Table of Contents of the institutions in which such trials are being conducted, if a clinical trial is recommended for suspension or termination by the data safety monitoring board or equivalent body for such trial, or on account of changes to federal, state, or local laws.
We could also encounter delays if a clinical trial is placed on clinical hold, suspended or terminated by us, the FDA, the competent authorities of the European Union (“EU”), member states or other regulatory authorities or the IRBs or ethics committees of the institutions in which such trials are being conducted, if a clinical trial is recommended for suspension or termination by the data safety monitoring board or equivalent body for such trial, or on account of changes to federal, state, or local laws.
We do not currently lease or own any facility that may be used as our clinical-scale manufacturing and processing facility and currently rely on a CDMO, WuXi Biologics (as defined below), to manufacture our product candidate used in our Phase 1 and planned Phase 2 clinical trials.
We do not currently lease or own any facility that may be used as our clinical-scale manufacturing and processing facility and currently rely on a CDMO, WuXi Biologics (as defined below), to manufacture our product candidate used in our Phase 1, Phase 2 and Phase 3 clinical trials.
Market participants with significant influence over acceptance of new treatments, such as clinicians and third-party payors, may not adopt a biologic with a target product profile such as that of DNTH103 or for its targeted indications, and we may not be able to convince the medical community and third-party payors to accept and use, or to provide favorable reimbursement for, any product 41 Table of Contents candidates developed by us or our existing or future collaborators.
Market participants with significant influence over acceptance of new treatments, such as clinicians and third-party payors, may not adopt a biologic with a target product profile such as that of DNTH103 or for its targeted indications, and we may not be able to convince the medical community and third-party payors to accept and use, or to provide favorable reimbursement for, any product candidates developed by us or our existing or future collaborators.
For these reasons, we do not expect to be able to utilize a material portion of the net operating losses and research and orphan drug tax credit carryforwards. 64 Table of Contents Item 1B. Un resolved Staff Comments. None.
For these reasons, we do not expect to be able to utilize a material portion of the net operating losses and research and orphan drug tax credit carryforwards. 72 Table of Contents Item 1B. Un resolved Staff Comments. None.
We have limited experience as a company in initiating, conducting or completing clinical trials. In part because of this lack of experience, we cannot be certain that our current and planned clinical trials will begin or be completed on time, if at all.
We have limited experience as a company in initiating, conducting or completing clinical trials. In part because of this lack of experience, we cannot be certain that our current and future clinical trials will begin or be completed on time, if at all.
Such changes, among others, may adversely affect our effective tax rate, results of operation and general business conditions. 63 Table of Contents Our ability to utilize our net operating loss carryforwards and certain other tax attributes is expected to be limited.
Such changes, among others, may adversely affect our effective tax rate, results of operation and general business conditions. 71 Table of Contents Our ability to utilize our net operating loss carryforwards and certain other tax attributes is expected to be limited.
Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences. Governments outside the United States tend to impose strict price controls, which may adversely affect our revenue, if any.
Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences. 65 Table of Contents Governments outside the United States tend to impose strict price controls, which may adversely affect our revenue, if any.
Our business could be adversely affected by economic downturns, inflation, increases in interest rates, natural disasters, public health crises such as the COVID-19 pandemic, political crises, geopolitical events, such as the conflict between Russia and Ukraine, or other macroeconomic conditions, which could have a material and adverse effect on our results of operations, cash flows, and financial condition.
Our business could be adversely affected by economic downturns, inflation, increases in interest rates, natural disasters, public health crises, political crises, geopolitical events, such as the conflict between Russia and Ukraine, or other macroeconomic conditions, which could have a material and adverse effect on our results of operations, cash flows, and financial condition.
In addition, we have not yet caused any product candidates to be manufactured on a commercial scale and may not be able to do so for any of our product candidates, if approved. Moreover, our CDMO may experience manufacturing difficulties due to resource constraints, governmental restrictions or as a result of labor disputes or unstable political environments.
In addition, we have not yet caused any product candidates to be manufactured on a commercial scale and may not be able to do so for any of our product candidates, if approved. 49 Table of Contents Moreover, our CDMO may experience manufacturing difficulties due to resource constraints, governmental restrictions or as a result of labor disputes or unstable political environments.
Due to our limited financial resources and the limited experience of our management team working together in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. We are highly dependent on our key personnel, and we anticipate hiring new key personnel.
Due to our limited financial resources and the limited experience of our management team working together in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. 52 Table of Contents We are highly dependent on our key personnel, and we anticipate hiring new key personnel.
If our preclinical studies and clinical trials are not sufficient to support regulatory approval of any of our product candidates, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development of such product candidate; • If we encounter difficulties enrolling patients in our future clinical trials, our clinical development activities could be delayed or otherwise adversely affected; • We have collaborations with third parties, including our existing license and development collaboration with Zenas BioPharma.
If our preclinical studies and clinical trials are not sufficient to support regulatory approval of any of our product candidates, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development of such product candidate; • If we encounter difficulties enrolling patients in our current or future clinical trials, our clinical development activities could be delayed or otherwise adversely affected; • We have collaborations with third parties, including our existing license and development collaboration with Tenacia.
We do not have any committed external sources of funds and adequate additional financing may not be available to us on acceptable terms, or at all. We may be required to seek additional funds sooner than planned through public or private equity 34 Table of Contents offerings, debt financings, collaborations and licensing arrangements or other sources.
We do not have any committed external sources of funds and adequate additional financing may not be available to us on acceptable terms, or at all. We may be required to seek additional funds sooner than planned through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources.
If we fail to maintain the patents and patent applications covering our product candidates, our competitive position would be adversely affected. We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products.
If we fail to maintain the patents and patent applications covering our product candidates, our competitive position would be adversely affected. 60 Table of Contents We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products.
The occurrence of any event or penalty described above may inhibit our ability to commercialize DNTH103 or other product candidates and generate revenue and could require us to expend significant time and resources in response and could generate negative publicity. 56 Table of Contents We may face difficulties from healthcare legislative reform measures.
The occurrence of any event or penalty described above may inhibit our ability to commercialize DNTH103 or other product candidates and generate revenue and could require us to expend significant time and resources in response and could generate negative publicity. We may face difficulties from healthcare legislative reform measures.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management. 51 Table of Contents Changes to patent laws in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management. Changes to patent laws in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.
Some of the factors that may cause the market price of our common stock to fluctuate include: • results of clinical trials and preclinical studies of our product candidates, or those our competitors or our existing or future collaborators; • failure to meet or exceed financial and development projections we may provide to the public; • failure to meet or exceed financial and development projections of the investment community; • if we do not achieve the perceived benefits of the Reverse Merger as rapidly or to the extent anticipated by financial or industry analysts; 59 Table of Contents • announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by us or our competitors; • actions taken by regulatory agencies with respect to our product candidates, clinical studies, manufacturing process or sales and marketing terms; • disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies; • additions or departures of key personnel; • significant lawsuits, including patent or stockholder litigation; • if securities or industry analysts do not publish research or reports about our business, or if they issue adverse or misleading opinions regarding our business and stock; • changes in the market valuations of similar companies; • general market or macroeconomic conditions or market conditions in the pharmaceutical and biotechnology sectors; • sales of securities by us or our securityholders in the future; • if we fail to raise an adequate amount of capital to fund our operations or continued development of our product candidates; • trading volume of our common stock; • announcements by competitors of new commercial products, clinical progress or lack thereof, significant contracts, commercial relationships or capital commitments; • adverse publicity relating to precision medicine product candidates, including with respect to other products in such markets; • the introduction of technological innovations or new therapies that compete with our products and services; and • period-to-period fluctuations in our financial results.
Some of the factors that may cause the market price of our common stock to fluctuate include: • results of clinical trials and preclinical studies of our product candidates, or those our competitors or our existing or future collaborators; • failure to meet or exceed financial and development projections of the investment community or that we may provide to the public; • announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by us or our competitors; 67 Table of Contents • actions taken by regulatory agencies with respect to our product candidates, clinical studies, manufacturing process or sales and marketing terms; • disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies; • additions or departures of key personnel; • significant lawsuits, including patent or stockholder litigation; • if securities or industry analysts do not publish research or reports about our business, or if they issue adverse or misleading opinions regarding our business and stock; • changes in the market valuations of similar companies; • general market or macroeconomic conditions or market conditions in the pharmaceutical and biotechnology sectors; • sales of securities by us or our securityholders in the future; • if we fail to raise an adequate amount of capital to fund our operations or continued development of our product candidates; • trading volume of our common stock; • announcements by competitors of new commercial products, clinical progress or lack thereof, significant contracts, commercial relationships or capital commitments; • adverse publicity relating to precision medicine product candidates, including with respect to other products in such markets; • the introduction of technological innovations or new therapies that compete with our products and services; and • period-to-period fluctuations in our financial results.
Lastly, if our trademarks and trade names are not registered or adequately protected, then we may not be able to build name recognition in markets of interest and our business may be adversely affected. 49 Table of Contents We may not be successful in obtaining or maintaining necessary rights to product candidates through acquisitions and in-licenses.
Lastly, if our trademarks and trade names are not registered or adequately protected, then we may not be able to build name recognition in markets of interest and our business may be adversely affected. We may not be successful in obtaining or maintaining necessary rights to product candidates through acquisitions and in-licenses.
We expect our expenses to increase in connection with our ongoing activities, particularly as we prepare to conduct multiple Phase 2 clinical trials, prepare for additional IND and other regulatory filings, potentially initiate additional clinical trials, and continue to research, develop and conduct preclinical studies of our other potential product candidates.
We expect our expenses to increase in connection with our ongoing activities, particularly as we conduct multiple Phase 2 clinical trials and a Phase 3 clinical trial, prepare for additional IND and other regulatory filings, potentially initiate additional clinical trials, and continue to research, develop and conduct preclinical studies of our other potential product candidates.
As a result, capital appreciation, if any, of our Common Stock will be your sole source of gain, if any, for the foreseeable future. 62 Table of Contents An active trading market for our Common Stock may not be sustained and our stockholders may not be able to sell their shares of Common Stock for a profit, if at all.
As a result, capital appreciation, if any, of our common stock will be your sole source of gain, if any, for the foreseeable future. An active trading market for our common stock may not be sustained and our stockholders may not be able to sell their shares of common stock for a profit, if at all.
We do not maintain “key person” insurance for any of our executives or other employees. The loss of the services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement 45 Table of Contents our business strategy.
We do not maintain “key person” insurance for any of our executives or other employees. The loss of the services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy.
Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors, and other collaborators from authorizing, promising, offering, or providing, directly or indirectly, 57 Table of Contents improper payments or anything else of value to or from recipients in the public or private sector.
Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors, and other collaborators from authorizing, promising, offering, or providing, directly or indirectly, improper payments or anything else of value to or from recipients in the public or private sector.
The success of DNTH103 may depend on having a comparable safety and efficacy profile and a more favorable dosing schedule (i.e., less frequent dosing) and more patient-friendly administration (i.e., S.C. self-administration using a pen or other prefilled device) to products currently approved or in development for the indications we plan to pursue .
The success of DNTH103 may depend on having a comparable safety and efficacy profile and a more favorable dosing schedule (i.e., less frequent dosing) and more patient-friendly administration (i.e., S.C. self-administration using a pen or other prefilled device) to products currently approved or in development for the indications we are pursuing or may in the future pursue .
Supply chain issues, including those resulting from the COVID-19 pandemic and the ongoing military conflicts between Russian and Ukraine and Israel and surrounding areas and the attacks on marine vessels traversing the Red Sea, may affect our third-party vendors and cause delays.
Supply chain issues, including those resulting from the ongoing military conflicts between Russian and Ukraine and Israel and surrounding areas and the attacks on marine vessels traversing the Red Sea, may affect our third-party vendors and cause delays.
We will incur additional costs and increased demands upon management as a result of complying with the laws and regulations affecting public companies.
We will continue to incur additional costs and increased demands upon management as a result of complying with the laws and regulations affecting public companies.
We currently have only 38 Table of Contents preclinical and topline data from our Phase 1 clinical trial regarding properties of DNTH103 and the same results may not be seen in patients in our later stage trials. In addition, product candidates using technologies may demonstrate different chemical and pharmacological properties in patients than they do in laboratory studies.
We currently have only preclinical data and data from our Phase 1 clinical trial regarding properties of DNTH103 and the same results may not be seen in patients in our later stage trials. In addition, product candidates using technologies may demonstrate different chemical and pharmacological properties in patients than they do in laboratory studies.
We may not be successful in such a transition. We will require substantial additional capital to finance our operations in the future. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce or eliminate clinical trials, product development programs or future commercialization efforts.
We may not be successful in such a transition. 38 Table of Contents We will require substantial additional capital to finance our operations in the future. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce or eliminate clinical trials, product development programs or future commercialization efforts.
Any one or a combination of these events could have a material and adverse effect on our results of operations and financial condition. The market price of our common stock is expected to be volatile, and the market price of our common stock may drop.
Any one or a combination of these events could have a material and adverse effect on our results of operations and financial condition. The market price of our common stock may be volatile, and the market price of our common stock may drop.
However, we expect to qualify as a “smaller reporting company,” as such term is defined in Rule 12b-2 under the Exchange Act, in at least the near term, which will allow us to take advantage of many of the same exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
However, we currently qualify as a “smaller reporting company,” as such term is defined in Rule 12b-2 under the Exchange Act, in at least the near term, which allows us to take advantage of many exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
We are highly dependent on our managerial, scientific and medical personnel, including our Chief Executive Officer, Chief Medical Officer, Chief Financial Officer, General Counsel, Chief Accounting Officer and other members of our leadership team. Although we have entered into employment agreements with our executive officers, each of them may terminate their employment with us at any time.
We are highly dependent on our managerial, scientific and medical personnel, including our Chief Executive Officer, executive officers and other members of our leadership team. Although we have entered into employment agreements with our executive officers, each of them may terminate their employment with us at any time.
We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of preclinical and clinical drug development, technical operations, clinical operations, regulatory affairs and, potentially, sales and marketing.
We have experienced and expect to continue to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of preclinical and clinical drug development, technical operations, clinical operations, regulatory affairs and, potentially, sales and marketing.
We anticipate that our expenses will increase substantially if and as we: • advance our existing and future programs through preclinical and clinical development, including expansion into additional indications; • seek to identify additional programs and additional product candidates; • maintain, expand, enforce, defend and protect our intellectual property portfolio; • seek regulatory and marketing approvals for product candidates; • seek to identify, establish and maintain additional collaborations and license agreements; • ultimately establish a sales, marketing and distribution infrastructure to commercialize any drug products for which we may obtain marketing approval, either by ourselves or in collaboration with others; • generate revenue from commercial sales of products for which we receive marketing approval; • hire additional personnel including research and development, clinical and commercial personnel; • add operational, financial and management information systems and personnel, including personnel to support product development; • acquire or in-license products, intellectual property and technologies; and 35 Table of Contents • establish commercial-scale cGMP capabilities through third-parties or our own manufacturing facility.
We anticipate that our expenses will increase substantially if and as we: • advance our existing and future programs through preclinical and clinical development, including expansion into additional indications; • seek to identify additional programs and additional product candidates; • maintain, expand, enforce, defend and protect our intellectual property portfolio; • seek regulatory and marketing approvals for product candidates; 40 Table of Contents • seek to identify, establish and maintain additional collaborations and license agreements; • ultimately establish a sales, marketing and distribution infrastructure to commercialize any drug products for which we may obtain marketing approval, either by ourselves or in collaboration with others; • generate revenue from commercial sales of products for which we receive marketing approval; • hire additional personnel including research and development, clinical and commercial personnel; • add operational, financial and management information systems and personnel, including personnel to support product development; • acquire or in-license products, intellectual property and technologies; • develop and manufacture our clinical supplies and access commercial-scale cGMP capacity and capabilities through third-parties or our own manufacturing facility; and • continue to operate as a public company.
We have also not yet demonstrated our ability to obtain regulatory approvals, manufacture a commercial scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing 36 Table of Contents activities necessary for successful product commercialization.
We have also not yet demonstrated our ability to obtain regulatory approvals, manufacture a commercial scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.
An active trading market for our shares of Common Stock may not be sustained. If an active market for our Common Stock is not sustained, it may be difficult for our stockholders to sell their shares at an attractive price or at all. Future sales of shares by existing stockholders could cause our stock price to decline.
If an active market for our common stock is not sustained, it may be difficult for our stockholders to sell their shares at an attractive price or at all. 70 Table of Contents Future sales of shares by existing stockholders could cause our stock price to decline.
If a third party successfully brings a claim 50 Table of Contents against us, we may be required to pay substantial damages, be forced to abandon any affected product candidate and/or seek a license from the patent holder.
If a third party successfully brings a claim against us, we may be required to pay substantial damages, be forced to abandon any affected product candidate and/or seek a license from the patent holder.
If we are unable to generate sufficient revenue through the sale of any approved products, we may be unable to continue operations without additional funding. We have incurred significant net losses in each period since inception. Our net losses were $43.6 million and $28.5 million for the years ended December 31, 2023 and 2022, respectively.
If we are unable to generate sufficient revenue through the sale of any approved products, we may be unable to continue operations without additional funding. We have incurred significant net losses in each period since inception. Our net losses were $85.0 million and $43.6 million for the years ended December 31, 2024 and 2023, respectively.
As a private company, Former Dianthus has never been required to test its internal controls within a specified period. This will require that we incur substantial professional fees and internal costs to expand our accounting and finance functions and that we expend significant management efforts. We may experience difficulty in meeting these reporting requirements in a timely manner.
As a private company, we were never required to test our internal controls within a specified period. This will require that we incur substantial professional fees and internal costs to expand our accounting and finance functions and that we expend significant management efforts. We may experience difficulty in meeting these reporting requirements in a timely manner.
We conducted our Phase 1 clinical trial for DNTH103 in New Zealand, and we may in the future choose to conduct more of our clinical trials outside the United States. We currently intend to conduct our Phase 2 clinical trials for DNTH103 in the United States and outside the United States.
We conducted our Phase 1 clinical trial for DNTH103 in New Zealand, we are currently conducting our Phase 2 clinical trials and our Phase 3 clinical trial for DNTH103 in the United States and outside the United States, and we may in the future choose to conduct more of our clinical trials outside the United States.
Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of our common stock.
Moreover, the stock markets in general, and the markets for biotechnology and biopharmaceutical companies in particular, have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of our common stock.
In addition, beginning in 2022, the Tax Cuts and Jobs Act eliminates the currently available option to deduct research and development expenditures and requires taxpayers to amortize them generally over five years. The U.S.
In addition, beginning in 2022, the Tax Cuts and Jobs Act eliminated the option to deduct research and development expenditures and requires taxpayers to amortize them generally over five years. The U.S.
In addition, while we initiated a Phase 2 clinical trial of DNTH103 in patients with gMG in the first quarter of 2024, we have not completed a late-stage clinical trial for any product candidate, have no products approved for commercial sale and have not yet demonstrated our ability to successfully complete late-stage clinical trials (including Phase 3 or other pivotal clinical trials), obtain regulatory or marketing approvals, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, or conduct sales, marketing and distribution activities necessary for successful product commercialization.
In addition, while we initiated two Phase 2 clinical trials and one Phase 3 clinical trial with DNTH103 in patients with gMG, MMN and CIDP, respectively, we have not completed a late-stage clinical trial for any product candidate, have no products approved for commercial sale and have not yet demonstrated our ability to successfully complete late-stage clinical trials (including Phase 3 or other pivotal clinical trials), obtain regulatory or marketing approvals, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, or conduct sales, marketing and distribution activities necessary for successful product commercialization.
We have broad discretion in the use of our cash and cash equivalents and the proceeds from the 2024 Private Placement and may invest or spend the proceeds in ways with which you do not agree and in ways that may not increase the value of your investment.
We have broad discretion in the use of our cash and cash equivalents and may invest or spend the proceeds in ways with which you do not agree and in ways that may not increase the value of your investment. We have broad discretion over the use of our cash and cash equivalents.
The trial population must also adequately represent the U.S. population, and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically 55 Table of Contents meaningful.
The trial population must also adequately represent the U.S. population, and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful.
We own six pending patent applications, and we expect to continue to file patent applications in the United States and abroad related to discoveries and technologies that are important to our business.
We additionally expect to continue to file patent applications in the United States and abroad related to discoveries and technologies that are important to our business.
If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain regulatory approval of or successfully commercialize DNTH103 or other product candidates.
If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain regulatory approval of or successfully commercialize DNTH103 or other product candidates. 51 Table of Contents We have collaborations with third parties, including our existing license and development collaboration with Tenacia.
If we are unable to assert that our internal control over financial reporting is effective under Section 404(a) of the Sarbanes-Oxley Act, or, if we become subject to Section 404(b) of the Sarbanes-Oxley Act and our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of the internal control over financial reporting, investors may lose confidence in the accuracy and 48 Table of Contents completeness of our financial reports, the market price of our common stock could be adversely affected and we could become subject to litigation or investigations by Nasdaq, the SEC, or other regulatory authorities, all of which could require additional financial and management resources.
While we believe the remediation efforts both addressed the identified material weaknesses and also enhanced our overall financial control environment, if we are unable to assert that our internal control over financial reporting is effective under Section 404(a) of the Sarbanes-Oxley Act, or, if we become subject to Section 404(b) of the Sarbanes-Oxley Act and our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of the internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected and we could become subject to litigation or investigations by Nasdaq, the SEC, or other regulatory authorities, all of which could require additional financial and management resources.
For example, Former Dianthus could not access its assets held in its account with Silicon Valley Bank for a period in March 2023, which required Former Dianthus to obtain a short-term loan to fund its operations.
For example, we could not access assets held in our account with Silicon Valley Bank for a period in March 2023, which required us to obtain a short-term loan to fund our operations.
Changes to Chinese regulations or government policies affecting biopharmaceutical companies are unpredictable and may have a material adverse effect on our collaborators in China which could have an adverse effect on our business, financial condition, results of operations and prospects.
For example, the biopharmaceutical industry in China is strictly regulated by the Chinese government. Changes to Chinese regulations or government policies affecting biopharmaceutical companies are unpredictable and may have a material adverse effect on our collaborators in China which could have an adverse effect on our business, financial condition, results of operations and prospects.
Despite the implementation of security measures in an effort to protect systems that store our information, given their size and complexity and the increasing amounts of information maintained on our internal information technology systems and those of our third-party CROs, CDMOs, other contractors (including sites performing our clinical trials), third party service providers and supply chain companies, and consultants, as well as other partners, these systems are potentially vulnerable to breakdown or other damage or interruption from service interruptions, system malfunction, natural disasters, terrorism, war and telecommunication and electrical failures, as well as security breaches from inadvertent or intentional actions by employees, contractors, consultants, business partners and/or other third parties, or from cyber-attacks by malicious third parties, which may compromise system infrastructure or lead to the loss, destruction, alteration or dissemination of, or damage to, data.
Despite the implementation of security measures in an effort to protect systems that store our information, given their size and complexity and the increasing amounts of information maintained on our internal information technology systems and those of our third-party CROs, CDMOs, other contractors (including sites performing our clinical trials), third party service providers and supply chain companies, and consultants, as well as other partners, these systems are potentially vulnerable to breakdown or other damage or interruption from service interruptions, system malfunction, natural disasters, terrorism, war and telecommunication and electrical failures, as well as security breaches from inadvertent or intentional actions by employees, contractors, consultants, business partners and/or other third parties, or from cyber-attacks by malicious third parties, which may compromise system infrastructure or lead to the loss, destruction, alteration or dissemination of, or damage to, data. 53 Table of Contents Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.
For example, we depend on the availability of non-human primates (“NHPs”) to conduct certain preclinical studies that we are required to complete prior to submitting an IND or foreign equivalent and initiating clinical development. There is currently a global shortage of NHPs available for drug development.
For example, we depend on the availability of non-human primates (“NHPs”) to conduct certain preclinical studies that we are required to complete prior to submitting an IND or foreign equivalent, initiating clinical development or submitting a marketing application. During the past several years, there was a global shortage of NHPs available for drug development.
If we are unable to maintain these collaborations, or if these collaborations are not successful, our business could be adversely affected; • We have identified material weaknesses in our internal control over financial reporting which, if not corrected, could affect the reliability of our financial statements and have other adverse consequences; • In order to successfully implement our plans and strategies, we will need to grow the size of our organization and we may experience difficulties in managing this growth; • Our ability to protect our patents and other proprietary rights is uncertain, exposing us to the possible loss of competitive advantage; 32 Table of Contents • The regulatory approval processes of the FDA and other comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable.
If we are unable to maintain these collaborations, or if these collaborations are not successful, our business could be adversely affected; 37 Table of Contents • In order to successfully implement our plans and strategies, we will need to grow the size of our organization and we may experience difficulties in managing this growth; • Our ability to protect our patents and other proprietary rights is uncertain, exposing us to the possible loss of competitive advantage; • The regulatory approval processes of the FDA and other comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable.
Even after we receive and incorporate guidance from these regulatory authorities, the FDA or other regulatory authorities could disagree that we have satisfied their requirements to commence any clinical trial or change their position on the acceptability of our trial design or the clinical endpoints selected, which may require us to complete additional preclinical studies or clinical trials, delay the enrollment of our clinical trials or impose stricter approval conditions than we currently expect. 37 Table of Contents There are equivalent processes and risks applicable to clinical trial applications in other countries, including countries in the European Union.
Even after we receive and incorporate guidance from these regulatory authorities, the FDA or other regulatory authorities could disagree that we have satisfied their requirements to commence any clinical trial or change their position on the acceptability of our trial design or the clinical endpoints selected, which may require us to complete additional preclinical studies or clinical trials, delay the enrollment of our clinical trials or impose stricter approval conditions than we currently expect.
We have identified material weaknesses in our internal control over financial reporting that we are currently working to remediate, which relate to: (a) general segregation of duties, including the review and approval of journal entries as well as system access that has not been designed to allow for effective segregation of duties; and (b) our accounting software system has certain system limitations that do not allow for an effective control environment.
We previously identified material weaknesses in our internal control over financial reporting which related to: (a) general segregation of duties, including the review and approval of journal entries as well as system access that had not been designed to allow for effective segregation of duties; and (b) our accounting software system had certain system limitations that did not allow for an effective control environment.
We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices or from disruptions in, or failure or security breach of, our systems or third-party systems where information important to our business operations or commercial development is stored, or that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices or from disruptions in, or failure or security breach of, our systems or third-party systems where information important to our business operations or commercial development is stored, or that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims. 54 Table of Contents We are subject to stringent and changing laws, regulations and standards, and contractual obligations relating to privacy, data protection, and data security.
Our failure to apply these resources effectively could compromise our ability to pursue our growth strategy and we might not be able to yield a significant return, if any, on our investment of these net proceeds. You will not have the opportunity to influence our decisions on how to use our cash resources.
You may not agree with our decisions, and our use of the proceeds may not yield any return on your investment. Our failure to apply these resources effectively could compromise our ability to pursue our growth strategy and we might not be able to yield a significant return, if any, on our investment of these net proceeds.
Evolving changes in China’s public health, economic, political, and social conditions and the uncertainty around China’s relationship with other governments, such as the United States and the U.K., could also negatively impact our ability to manufacture our product candidates for our planned clinical trials or have an adverse effect on our ability to secure government funding, which could adversely affect our financial condition and cause us to delay our clinical development programs.
Evolving changes in China’s public health, economic, political, and social conditions could also negatively impact our ability to manufacture our product candidates for our planned clinical trials or have an adverse effect on our ability to secure government funding, which could adversely affect our financial condition and cause us to delay our clinical development programs.
Our executive officers, directors and principal stockholders, in the aggregate, beneficially own approximately 66% of our outstanding shares of Common Stock as of March 14, 2024.
Our executive officers, directors and principal stockholders, in the aggregate, beneficially own approximately 58% of our outstanding shares of common stock as of March 7, 2025.
This could cause the cost of obtaining NHPs for our future preclinical studies to increase significantly and, if the shortage continues, could also result in delays to our development timelines. Furthermore, a failure of one or more clinical trials can occur at any stage of testing.
If similar shortages occur in the future, the cost of obtaining NHPs for our future preclinical studies may increase significantly and the availability of NHPs may decrease. A shortage could result in delays to our development timelines. 44 Table of Contents Furthermore, a failure of one or more clinical trials can occur at any stage of testing.
The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the trial until its conclusion.
We may experience difficulties in patient enrollment in our future clinical trials for a variety of reasons. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the trial until its conclusion.
Foreign CDMOs may be subject to U.S. legislation, including the proposed BIOSECURE Act, sanctions, trade restrictions and other foreign regulatory requirements, which could increase the cost or reduce the supply of material available to us, delay the procurement or supply of such material or have an adverse effect on our ability to secure significant commitments from governments to purchase our potential therapies. 43 Table of Contents For example, the biopharmaceutical industry in China is strictly regulated by the Chinese government.
Foreign CDMOs may be subject to U.S. legislation, including the act proposed in 2024 known as the BIOSECURE Act, sanctions, trade restrictions and other foreign regulatory requirements, which could increase the cost or reduce the supply of material available to us, delay the procurement or supply of such material or have an adverse effect on our ability to secure significant commitments from governments to purchase our potential therapies.
For additional information related to the risks and uncertainties of our compliance with the Sarbanes-Oxley Act, see the section above titled “ Risks Related to Our Business and Operations—We have identified material weaknesses in our internal control over financial reporting which, if not corrected, could affect the reliability of our financial statements and have other adverse consequences. ” In addition to the material weaknesses described above, we may discover additional weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our financial statements.
For additional information related to the risks and uncertainties of our compliance with the Sarbanes-Oxley Act, see the section above titled “ Risks Related to Our Business and Operations—We previously identified material weaknesses in our internal control over financial reporting, which have been remediated, and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which could affect the reliability of our financial statements, our investors' confidence and have other adverse consequences. ” We may discover weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our financial statements.
As such, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations, cash flows, and prospects.
As such, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations, cash flows, and prospects. 59 Table of Contents In addition, the patent positions of companies in the development and commercialization of biologics and pharmaceuticals are particularly uncertain.
As a result, we expect it will be many years before we commercialize any product candidate, if any. Our ability to achieve and sustain profitability depends on obtaining regulatory approvals for, and successfully commercializing, DNTH103 or other product candidates either alone or with third parties, and we cannot guarantee that we will ever obtain regulatory approval for any product candidates.
Our ability to achieve and sustain profitability depends on obtaining regulatory approvals for, and successfully commercializing, DNTH103 or other product candidates either alone or with third parties, and we cannot guarantee that we will ever obtain regulatory approval for any product candidates.
Changes to tax laws (which changes may have retroactive application) could adversely affect us or our stockholders. We will assess the impact of various tax reform proposals and modifications to existing tax treaties in all jurisdictions where we have operations to determine the potential effect on our business and any assumptions we will make about our future taxable income.
We will assess the impact of various tax reform proposals and modifications to existing tax treaties in all jurisdictions where we have operations to determine the potential effect on our business and any assumptions we will make about our future taxable income.
We will incur significant legal, accounting and other expenses as a public company that Former Dianthus did not incur as a private company, including costs associated with public company reporting obligations under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).
We will continue to incur significant legal, accounting and other expenses as a public company that we did not incur as a private company, including costs associated with public company reporting obligations under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Some of our executive officers have not previously managed and operated a public company.
If we do not achieve our projected development goals in the time frames we announce and expect, the commercialization of DNTH103 or any other product candidates may be delayed and our expenses may increase and, as a result, our stock price may decline.
If we are not successful in commercializing DNTH103, or we are significantly delayed in doing so, our business will be materially harmed. 43 Table of Contents If we do not achieve our projected development goals in the time frames we announce and expect, the commercialization of DNTH103 or any other product candidates may be delayed and our expenses may increase and, as a result, our stock price may decline.
Additionally, the number of patients required for clinical trials of DNTH103 or any other product candidates may be larger than we anticipate, especially if regulatory bodies require the completion of non-inferiority or superiority trials.
Additionally, the number of patients required for clinical trials of DNTH103 or any other product candidates may be larger than we anticipate, especially if regulatory bodies require the completion of non-inferiority or superiority trials. Even if we are able to enroll a sufficient number of patients for our clinical trials, we may have difficulty maintaining patients in our clinical trials.
Our ability to raise additional capital may be adversely impacted by global macroeconomic conditions and volatility in the credit and financial markets in the United States and worldwide, over which we may have no or little control.
Our ability to raise additional capital may be adversely impacted by global macroeconomic conditions and volatility in the credit and financial markets in the United States and worldwide, including resulting from public health crises, the conflict between Russia and Ukraine or the conflicts in the Middle East, over which we may have no or little control.
We cannot be sure that submission of an IND, a CTA, or similar application will result in the FDA or comparable foreign regulatory authorities, as applicable, allowing clinical trials to begin in a timely manner, if at all. Moreover, even if these trials begin, issues may arise that could cause regulatory authorities to suspend or terminate such clinical trials.
We cannot be sure that submission of an IND, a Clinical Trial Application (“CTA”), or similar application will result in the FDA or comparable foreign regulatory authorities, as applicable, allowing clinical trials to begin in a timely manner, if at all.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn the last fiscal year, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, but we face certain ongoing cybersecurity risks threats that, if realized, are reasonably likely to materially affect us.
Biggest changeIn the last fiscal year, we have not identified risks from known cybersecurity threats , including as a result of any prior cybersecurity incidents, that have materially affected us, but we face certain ongoing cybersecurity risks threats that, if realized, are reasonably likely to materially affect us. See “ Item 1A.
Senior management is directly involved with our efforts to prevent, detect, and mitigate cybersecurity incidents by overseeing preparation of cybersecurity policies and procedures, testing incident response plans and engaging vendors to conduct penetration tests. Senior management participates in cybersecurity incident response efforts by being part of the incident response team and helping direct our response to cybersecurity incidents.
S enior management is directly involved with our efforts to prevent, detect, and mitigate cybersecurity incidents by overseeing preparation of cybersecurity policies and procedures, testing incident response plans and engaging vendors to conduct penetration tests. Senior management participates in cybersecurity incident response efforts by being part of the incident response team and helping direct our response to cybersecurity incidents.
To augment internal knowledge, we have engaged a virtual Chief Information Security Officer (“vCISO”) from a third-party firm that has provided IT and security services for over 17 years and utilizes industry expertise to recommend and implement best practice solutions for operational needs.
To augment internal knowledge, we have engaged a virtual Chief Information Security Officer (“vCISO”) from a third-party firm that has provided IT and security services for over 18 years and utilizes industry expertise to recommend and implement best practice solutions for operational needs.
To that end, we rely on a multidisciplinary team (including from our IT function, senior management, and third-party service providers, as described further below) to assess how identified cybersecurity threats could impact our business. These assessments may leverage, among other processes, industry tools and metrics designed to assist in the assessment of risks from such cybersecurity threats.
To that end, w e rely on a multidisciplinary team (including from our IT function, senior management, and third-party service providers, as described further below) to assess how identified cybersecurity threats could impact our business. These assessments may leverage, among other processes, industry tools and metrics designed to assist in the assessment of risks from such cybersecurity threats.
While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured. 65 Table of Contents
While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured. 73 Table of Contents
See “Risk Factors” in this Annual Report on Form 10-K for additional information on cybersecurity risks we face. Information from the risk management process is managed by the Information Security Team and is reported to the Board of Directors on a regular basis. We provide cybersecurity updates to our Audit Committee on a quarterly basis.
Risk Factors ” in this Annual Report on Form 10-K for additional information on cybersecurity risks we face. Information from the risk management process is managed by the Information Security Team and is reported to the Board of Directors on a regular basis. We provide cybersecurity updates to our Audit Committee on a quarterly basis.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur space in Waltham is approximately 2,750 square feet under a lease that expires in January 2025, our space in New York is approximately 3,367 square feet under a lease that expires in August 2025 and our space in Watertown varies monthly based on our needs but does not exceed 1,000 square feet under a lease that expires in August 2025.
Biggest changeOur space in Waltham is approximately 2,750 square feet under a lease that expires in January 2026, our space in New York is approximately 3,367 square feet under a lease that expires in February 2031 and our space in Watertown varies monthly based on our needs but does not exceed 1,000 square feet under a lease that expires in August 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 4. Mine Safety Disc losures. Not applicable. 66 Table of Contents PART II
Biggest changeItem 4. Mine Safety Disc losures. Not applicable. 74 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 66 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 67 Item 6. [Reserved] 67 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 68 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 81 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 74 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 75 Item 6. [Reserved] 75 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 76 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 87 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities We did not repurchase any of our equity securities during the quarter ended December 31, 2023.
Biggest changeRecent Sales of Unregistered Equity Securities There were no unregistered sales of our common stock during the quarter ended December 31, 2024. Issuer Purchases of Equity Securities We did not repurchase any of our equity securities during the quarter ended December 31, 2024.
Item 5. Market for Registrant’s Commo n Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on The Nasdaq Capital Market under the symbol “DNTH”. Common Stockholders As of March 14, 2024, there were approximately 50 stockholders of record of our common stock based on information provided by our transfer agent.
Item 5. Market for Registrant’s Commo n Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on The Nasdaq Capital Market under the symbol “DNTH”. Common Stockholders As of March 7, 2025, there were approximately 5 stockholders of record of our common stock based on information provided by our transfer agent.
Removed
Recent Sales of Unregistered Equity Securities Except as previously disclosed in a Current Report on Form 8-K filed with the SEC on September 12, 2023, no other unregistered sales of our common stock were made during the year ended December 31, 2023.

Item 7. Management's Discussion & Analysis

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

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Biggest changeWe maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is more likely than not that the deferred assets will not be utilized. 73 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations and other comprehensive loss for the periods indicated: Year Ended December 31, 2023 2022 (in thousands) Revenues: License revenue - related party $ 2,826 $ 6,417 Operating expenses: Research and development 32,841 29,379 General and administrative 18,159 6,743 Total operating expenses 51,000 36,122 Loss from operations (48,174 ) (29,705 ) Other income/(expense): Interest income 4,764 1,145 (Loss)/gain on currency exchange, net (85 ) 136 Other expense (60 ) (52 ) Total other income 4,619 1,229 Net loss $ (43,555 ) $ (28,476 ) Comprehensive loss: Net loss $ (43,555 ) $ (28,476 ) Other comprehensive income/(loss): Change in unrealized gains/(losses) related to available-for-sale debt securities 208 (161 ) Total other comprehensive income/(loss) 208 (161 ) Total comprehensive loss $ (43,347 ) $ (28,637 ) License Revenue—Related Party Under the terms of the Zenas Agreements, we recognized related party license revenue of $2.8 million and $6.4 million for the years ended December 31, 2023 and 2022, respectively.
Biggest changeComparison of the Years Ended December 31, 2024 and 2023 The following table summarizes our results of operations and other comprehensive loss for the periods indicated: Year Ended December 31, 2024 2023 (in thousands) Revenues: License revenue - related party $ 5,909 $ 2,826 License revenue 326 — Total revenues 6,235 2,826 Operating expenses: Research and development 83,105 32,841 General and administrative 24,994 18,159 Total operating expenses 108,099 51,000 Loss from operations (101,864 ) (48,174 ) Other income/(expense): Interest income 17,365 4,764 Gain on investment in related party 148 — Loss on currency exchange, net (64 ) (85 ) Other expense (554 ) (60 ) Total other income 16,895 4,619 Net loss $ (84,969 ) $ (43,555 ) Revenues Under the terms of the Zenas Agreements, we recognized related party license revenue of $5.9 million and $2.8 million during the years ended December 31, 2024 and 2023, respectively.
We believe our lead novel and proprietary monoclonal antibody product candidate, DNTH103, has the potential to address a broad array of complement-dependent diseases as currently available therapies or those in development leave room for improvements in efficacy, safety, and/or dosing convenience.
We believe our lead novel and proprietary monoclonal antibody product candidate, DNTH103, has the potential to address a broad array of complement-dependent diseases as currently available therapies and those in development leave room for improvements in efficacy, safety, and/or dosing convenience.
The duration, costs and timing of development of DNTH103 or any future product candidates are subject to numerous uncertainties and will depend on a variety of factors, including: • the timing and progress of our preclinical and clinical development activities; • the number and scope of preclinical and clinical programs we pursue; • our ability to establish a favorable safety profile with IND-enabling toxicology studies to enable clinical trials; • successful patient enrollment in, and the initiation and completion of, larger and later-stage clinical trials; • per subject trial costs; • the number and extent of our clinical trials required for regulatory approval; • the countries in which our clinical trials are conducted; • the length of time required to enroll eligible subjects in our clinical trials; • the number of subjects that participate in our clinical trials; • the drop-out and discontinuation rate of subjects in our clinical trials; • potential additional safety monitoring requested by regulatory agencies; • the duration of subject participation in our clinical trials and follow-up; • the extent to which we encounter any serious adverse events in our clinical trials; • the timing of receipt of regulatory approvals from applicable regulatory authorities; • the timing, receipt and terms of any marketing approvals and post-marketing approval commitments from applicable regulatory authorities; 72 Table of Contents • the extent to which we establish collaborations, strategic partnerships, or other strategic arrangements with third parties, if any, and the performance of any such third party; • hiring and retaining research and development personnel; • our arrangements with our CDMOs and CROs; • development and timely delivery of commercial-grade drug formulations that can be used in our planned clinical trials and for commercial launch; • the impact of any business interruptions to our operations or to those of the third parties with whom we work; and • obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights.
The duration, costs and timing of development of DNTH103 or any future product candidates are subject to numerous uncertainties and will depend on a variety of factors, including: • the timing and progress of our preclinical and clinical development activities; • the number and scope of preclinical and clinical programs we pursue; • our ability to establish a favorable safety profile with IND-enabling toxicology studies to enable clinical trials; • successful patient enrollment in, and the initiation and completion of, larger and later-stage clinical trials; • per subject trial costs; • the number and extent of our clinical trials required for regulatory approval; • the countries in which our clinical trials are conducted; • the length of time required to enroll eligible subjects in our clinical trials; • the number of subjects that participate in our clinical trials; • the drop-out and discontinuation rate of subjects in our clinical trials; • potential additional safety monitoring requested by regulatory agencies; • the duration of subject participation in our clinical trials and follow-up; • the extent to which we encounter any serious adverse events in our clinical trials; • the timing of receipt of regulatory approvals from applicable regulatory authorities; • the timing, receipt and terms of any marketing approvals and post-marketing approval commitments from applicable regulatory authorities; • the extent to which we establish collaborations, strategic partnerships, or other strategic arrangements with third parties, if any, and the performance of any such third party; • hiring and retaining research and development personnel; • our arrangements with our CDMOs and CROs; 79 Table of Contents • development and timely delivery of commercial-grade drug formulations that can be used in our planned clinical trials and for commercial launch; • the impact of any business interruptions to our operations or to those of the third parties with whom we work; and • obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights.
Our future funding requirements will depend on many factors, including: • the scope, timing, progress, results, and costs of researching and developing DNTH103, and conducting larger and later-stage clinical trials; • the scope, timing, progress, results, and costs of researching and developing other future product candidates that we may pursue; • the costs, timing, and outcome of regulatory review of our product candidates; • the costs of future activities, including product sales, medical affairs, marketing, manufacturing, and distribution, for any of our product candidates for which we receive marketing approval; • the costs of manufacturing commercial-grade products and sufficient inventory to support commercial launch; • the revenue, if any, received from commercial sale of our products, should any of product candidates receive marketing approval; • the cost and timing of attracting, hiring, and retaining skilled personnel to support our operations and continued growth; • the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; 76 Table of Contents • our ability to establish, maintain, and derive value from collaborations, partnerships or other marketing, distribution, licensing, or other strategic arrangements with third parties on favorable terms, if at all; • the extent to which we acquire or in-license other product candidates and technologies, if any; and • the costs associated with operating as a public company.
Our future funding requirements will depend on many factors, including: • the scope, timing, progress, results, and costs of researching and developing DNTH103, and conducting larger and later-stage clinical trials; • the scope, timing, progress, results, and costs of researching and developing other future product candidates that we may pursue; • the costs, timing, and outcome of regulatory review of our product candidates; • the costs of future activities, including product sales, medical affairs, marketing, manufacturing, and distribution, for any of our product candidates for which we receive marketing approval; • the costs of manufacturing commercial-grade products and sufficient inventory to support commercial launch; • the revenue, if any, received from commercial sale of our products, should any of product candidates receive marketing approval; 83 Table of Contents • the cost and timing of attracting, hiring, and retaining skilled personnel to support our operations and continued growth; • the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; • our ability to establish, maintain, and derive value from collaborations, partnerships or other marketing, distribution, licensing, or other strategic arrangements with third parties on favorable terms, if at all; • the extent to which we acquire or in-license other product candidates and technologies, if any; and • the costs associated with operating as a public company.
Most of these developments and factors are outside of our control and could exist for an extended period of time. We will continue to evaluate the nature and extent of the potential impacts to Dianthus’ business, results of operations, liquidity and capital resources. For additional information, see the section titled Item 1A.
Most of these developments and factors are outside of our control and could exist for an extended period of time. We will continue to evaluate the nature and extent of the potential impacts to Dianthus’ business, results of operations, liquidity and capital resources. For additional information, see the section titled “ Item 1A.
The decrease in net operating assets and liabilities was primarily attributable to a decrease in receivable from Zenas BioPharma of $4.4 million, a decrease in unbilled receivable from Zenas BioPharma of $0.8 million, an increase in accounts payable, accrued expenses and lease liabilities of $0.7 million and a decrease in prepaid expenses and other current assets of $0.1 million, partially offset by an increase in other assets of $1.0 million and a decrease in deferred revenue of $0.1 million.
The decrease in net operating assets and liabilities was primarily attributable to a decrease in receivable from Zenas of $4.4 million, a decrease in unbilled receivable from Zenas of $0.8 million, an increase in accounts payable, accrued expenses and lease liabilities of $0.7 million and a decrease in prepaid expenses and other current assets of $0.1 million, partially offset by an increase in other assets of $1.0 million and a decrease in deferred revenue of $0.1 million.
We enter consulting, research, and other agreements with commercial firms, researchers, and others for the provision of goods and services. Under such agreements, we may pay for services on a monthly, quarterly, project or other basis. Such arrangements are generally cancelable upon reasonable notice and payment of costs incurred.
We enter into consulting, research, and other agreements with commercial firms, researchers, and others for the provision of goods and services. Under such agreements, we may pay for services on a monthly, quarterly, project or other basis. Such arrangements are generally cancelable upon reasonable notice and payment of costs incurred.
Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from recent bank failures, other general macroeconomic conditions and otherwise.
Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from bank failures, other general macroeconomic conditions and otherwise.
The preparation of the financial statements and related disclosures requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements.
GAAP”). The preparation of the financial statements and related disclosures requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements.
As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources. See the section titled Item 1A. “Risk Factors ” found elsewhere in this Annual Report on Form 10-K for additional risks associated with our substantial capital requirements.
As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources. See the section titled “ Item 1A. Risk Factors ” found elsewhere in this Annual Report on Form 10-K for additional risks associated with our substantial capital requirements.
We have purposefully engineered DNTH103 to selectively bind to only the active form of the C1s complement protein and to exhibit improved potency and an extended half-life.
We have purposefully engineered DNTH103 to selectively bind to only the active form of the C1s complement protein (“C1s”) and to exhibit improved potency and an extended half-life.
License and Collaboration Agreements In August 2019, Former Dianthus entered into a license agreement with Alloy Therapeutics, LLC (“Alloy”) for (i) a worldwide, non-exclusive license to use the Alloy technology solely to generate Alloy antibodies and platform assisted antibodies for internal, non-clinical research purposes, and (ii) with respect to Alloy antibodies and platform assisted antibodies that are selected by us for inclusion into a partnered antibody program, a worldwide, assignable license to make, have made, use, offer for sale, sell, import, develop, manufacture, and commercialize products comprising partnered antibody programs selected from Alloy antibodies and platform assisted antibodies in any field of use.
License and Collaboration Agreements In August 2019, we entered into a license agreement with Alloy Therapeutics, LLC (“Alloy”) for (i) a worldwide, non-exclusive license to use the Alloy technology solely to generate Alloy antibodies and platform assisted antibodies for internal, non-clinical research purposes, and (ii) with respect to Alloy antibodies and platform assisted antibodies that are selected by us for inclusion into a partnered antibody program, a worldwide, assignable license to make, have made, use, offer for sale, sell, import, develop, manufacture, and commercialize products comprising partnered antibody programs selected from Alloy antibodies and platform assisted antibodies in any field of use.
In addition to annual license fees, we are obligated to pay development and commercial milestone payments of up to $18.1 million for a second partnered antibody, if and when selected. In September 2022, Former Dianthus entered into a commercial platform license agreement and services agreement with two subsidiaries of Ligand Pharmaceuticals Incorporated (“Ligand”).
In addition to annual license fees, we are obligated to pay development and commercial milestone payments of up to $18.1 million for a second partnered antibody, if and when selected. In September 2022, we entered into a commercial platform license agreement and services agreement with two subsidiaries of Ligand Pharmaceuticals Incorporated (“Ligand”).
Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those set forth under the section titled “ Risk Factors ” included elsewhere in this Annual Report on Form 10-K.
Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those set forth under the section titled “ Item 1A. Risk Factors ” included elsewhere in this Annual Report on Form 10-K.
“Risk Factors ” found elsewhere in this Annual Report on Form 10-K. Components of Results of Operations Revenue Since inception, we have not generated any revenue from product sales, and we do not expect to generate any revenue from the sales of products in the foreseeable future.
Risk Factors ” found elsewhere in this Annual Report on Form 10-K. Components of Results of Operations Revenue Since inception, we have not generated any revenue from product sales, and we do not expect to generate any revenue from the sales of products in the foreseeable future.
The non-cash operating expenses consisted mainly of stock-based compensation expense of $2.9 million and amortization of right-of-use lease assets of $0.3 million, partially offset by accretion of discount on short-term investments of $1.4 million.
The non-cash operating expenses consisted mainly of stock-based compensation expense of $2.9 million and amortization of right-of-use lease assets of $0.3 million, partially offset by accretion of discount on investments of $1.4 million.
We are subject to all the risks incident in the development of new biopharmaceutical products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may harm our business. 75 Table of Contents In order to complete the development of DNTH103 or any future product candidates and to build the sales, marketing and distribution infrastructure that we believe will be necessary to commercialize product candidates, if approved, we will require substantial additional capital.
We are subject to all the risks involved in the development of new biopharmaceutical products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may harm our business. 82 Table of Contents In order to complete the development of DNTH103 or any future product candidates and to build the sales, marketing and distribution infrastructure that we believe will be necessary to commercialize product candidates, if approved, we will require substantial additional capital.
Cash Flows from Financing Activities For the year ended December 31, 2023, net cash provided by financing activities primarily consisted of $67.8 million of net proceeds from the sale of shares of Former Dianthus common stock in the pre-closing financing and net cash acquired in connection with the reverse recapitalization of $69.7 million, partially offset by $3.9 million of reverse recapitalization transactions costs.
For the year ended December 31, 2023, net cash provided by financing activities primarily consisted of $67.8 million of net proceeds from the sale of shares of our common stock in the pre-closing financing and net cash acquired in connection with the reverse recapitalization of $69.7 million, partially offset by $3.9 million of reverse recapitalization transactions costs.
In addition to annual license fees, we are obligated to pay development milestones payments of up to $12.2 million and to pay royalties in the low to mid-single digits. In July 2020, Former Dianthus entered into a collaborative research agreement with IONTAS Limited (“IONTAS”) to perform certain milestone-based research and development activities under our first development program.
In addition to annual license fees, we are obligated to pay development milestones payments of up to $12.2 million and to pay royalties in the low to mid-single digit percentages. In July 2020, we entered into a collaborative research agreement with IONTAS Limited (“IONTAS”) to perform certain milestone-based research and development activities under our first development program.
We intend to deliver our product candidate through a lower dose, less frequent, self-administered, convenient subcutaneous injection suitable for a pre-filled pen.
We intend to deliver our product candidate through a lower dose, less frequent, self-administered, convenient subcutaneous (“S.C.”) injection suitable for a pre-filled pen.
To the extent that we raise additional capital through equity financings or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
To the extent that we raise additional capital through equity financings, such as our ATM offering program, or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
Operating Expenses Research and Development Research and development expenses account for a significant portion of our operating expenses and consist primarily of external and internal expenses incurred in connection with the discovery and development of DNTH103 or any future product candidates.
Operating Expenses Research and Development Research and development expenses account for a significant portion of our operating expenses and consist primarily of external and internal expenses incurred in connection with the discovery and development of DNTH103 and other potential product candidates.
We do not expect to generate any meaningful product revenue unless and until we obtain regulatory approval of and commercialize DNTH103 or any future product candidates, and we do not know when, or if, that will occur.
Future Capital Requirements Since inception, we have not generated any revenue from product sales. We do not expect to generate any meaningful product revenue unless and until we obtain regulatory approval of and commercialize DNTH103 or any future product candidates, and we do not know when, or if, that will occur.
We cannot predict if, when, or to what extent we will generate revenue from the commercialization and sale of DNTH103 or any future product candidates or from license or collaboration agreements. We may never succeed in obtaining regulatory approval for DNTH103 or any future product candidates.
We cannot predict if, when, or to what extent we will generate revenue from the commercialization and sale of DNTH103 or any future product candidates or from license or collaboration agreements. We may never succeed in obtaining regulatory approval for DNTH103 or any future product candidates. Licensing Agreements In June 2022, we executed a license agreement with Zenas BioPharma, Inc.
Research and Development Expenses Research and development expenses were $32.8 million for the year ended December 31, 2023, as compared to $29.4 million for the year ended December 31, 2022, an increase of $3.4 million.
Research and Development Expenses Research and development expenses were $83.1 million for the year ended December 31, 2024, as compared to $32.8 million for the year ended December 31, 2023, an increase of $50.3 million.
Based on our current operating plan, we believe that our existing cash, cash equivalents and short-term investments, together with the proceeds from our 2024 Private Placement, should be sufficient to fund our operations into the second half of 2027.
Based on our current operating plan, we believe that our existing cash, cash equivalents and investments should be sufficient to fund our operations into the second half of 2027.
The increase in net operating assets and liabilities was primary attributable to increases in receivable from related party of $4.2 million and prepaid expenses and other current assets of $0.7 million, partially offset by increases in accounts payable, accrued expenses and lease liabilities of $2.3 million and deferred revenue of $0.9 million.
The increase in net operating assets and liabilities was primarily attributable to increases in other assets of $8.2 million, prepaid expenses and other current assets of $1.6 million, and a related party receivable from Zenas of $0.5 million, partially offset by increases in accounts payable, accrued expenses and operating lease liabilities of $8.2 million and deferred revenue of $1.5 million and a decrease in unbilled receivable from Zenas of $0.2 million.
Our most advanced product candidate, DNTH103, is a clinical-stage, highly potent, highly selective and fully human monoclonal immunoglobulin G4 with picomolar binding affinity that is designed to selectively bind only to the active form of the C1s complement protein. The active form of C1s is generated during complement activation by cleavage of the inactive proenzyme C1s.
Our Pipeline-in-a-Product Potential for DNTH103, a Next-Generation Complement Therapeutic Our most advanced product candidate, DNTH103, is a clinical-stage, highly potent, highly selective and fully human monoclonal immunoglobulin G4 with picomolar binding affinity that is designed to selectively bind only to the active form of C1s.
As a validated complement target in the autoimmune and inflammatory field, C1s inhibition prevents further progression of the classical pathway cascade. DNTH103 is engineered with YTE half-life extension technology, a specific three amino acid change in the Fc domain, and has a pharmacokinetic profile designed to support less frequent, lower dose, self-administration as a convenient S.C. injection.
DNTH103 is engineered with YTE half-life extension technology, a specific three amino acid change in the Fc domain, and has a pharmacokinetic (“PK”) profile designed to support less frequent, lower dose, self-administration as a convenient S.C. injection.
We recognize research and development expenses in the periods in which they are incurred. Our internal resources, employees and infrastructure are not directly tied to any one research or drug discovery program and are typically deployed across multiple programs.
Our internal resources, employees and infrastructure are not directly tied to any one research or drug discovery program and are typically deployed across multiple programs.
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 $ (36,861 ) $ (29,070 ) Net cash provided by/(used in) investing activities 20,253 (59,819 ) Net cash provided by financing activities 133,574 96,676 Increase in cash, cash equivalents and restricted cash $ 116,966 $ 7,787 Cash Flows from Operating Activities For the year ended December 31, 2023, net cash used in operating activities consisted of a net loss of $43.6 million, partially offset by a decrease in net operating assets and liabilities of $4.9 million and net non-cash operating expenses of $1.8 million.
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 $ (78,180 ) $ (36,861 ) Net cash (used in)/provided by investing activities (286,812 ) 20,253 Net cash provided by financing activities 255,623 133,574 (Decrease)/increase in cash, cash equivalents and restricted cash $ (109,369 ) $ 116,966 Cash Flows from Operating Activities For the year ended December 31, 2024, net cash used in operating activities consisted of a net loss of $85.0 million and an increase in net operating assets and liabilities of $0.4 million, partially offset by net non-cash operating expenses of $7.1 million.
Other Income, Net Other income, net, consists primarily of interest income generated from earnings on invested cash equivalents and short-term investments.
Other Income/(Expense) Other income/(expense) consists primarily of interest income generated from earnings on invested cash equivalents and investment securities.
For the year ended December 31, 2022, net cash used in operating activities consisted of a net loss of $28.5 million and an increase in net operating assets and liabilities of $1.7 million, partially offset by net non-cash operating expenses of $1.1 million.
For the year ended December 31, 2023, net cash used in operating activities consisted of a net loss of $43.6 million, partially offset by a decrease in net operating assets and liabilities of $4.9 million and net non-cash operating expenses of $1.8 million.
External expenses include: • payments to third parties in connection with research and development, including agreements with third parties such as contract research organizations (“CROs”), clinical trial sites and consultants; • the cost of manufacturing products for use in our clinical trials and preclinical studies, including payments to contract development and manufacturing organizations (“CDMOs”) and consultants; and • payments to third parties in connection with the preclinical development of future product candidates, including for outsourced professional scientific development services, consulting research and collaborative research. 71 Table of Contents Internal expenses include: • personnel-related costs, including salaries, bonuses, related benefits and stock-based compensation expenses for employees engaged in research and development functions; and • facilities-related expenses, depreciation, supplies, travel expenses and other allocated expenses.
External expenses include: • payments to third parties in connection with research and development, including agreements with third parties such as contract research organizations (“CROs”), clinical trial sites and consultants; • the cost of manufacturing products for use in our clinical trials and preclinical studies, including payments to contract development and manufacturing organizations (“CDMOs”) and consultants; and • payments to third parties in connection with the preclinical development of other potential product candidates, including for outsourced professional scientific development services, consulting research and collaborative research.
This increase was due to a $5.3 million increase in internal research and development costs, consisting of personnel and related costs, share-based compensation, and other costs, partially offset by a $1.9 million decrease in external research and development costs, consisting of preclinical study costs, CMC activities, third-party consulting services, clinical operation activities, license and milestone payments and discovery activities.
This increase was due to: (1) a $37.1 million increase in external research and development costs, consisting of clinical operation activities, CMC activities, preclinical study costs, discovery expenses and license and milestone payments; and (2) a $13.2 million increase in internal research and development costs, consisting of personnel and related costs, stock-based compensation expense and other costs.
Further, determining the standalone selling price for performance obligations requires significant judgment, and when an observable price of a promised good or service is not readily available, we consider relevant assumptions to estimate the standalone selling price, including, as applicable, market conditions, development timelines, probabilities of technical and regulatory success and forecasted revenues.
Further, determining the standalone selling price for performance obligations requires significant judgment, and when an observable price of a promised good or service is not readily available, we consider relevant assumptions to estimate the standalone selling price, including, as applicable, market conditions, development timelines, probabilities of technical and regulatory success and forecasted revenues. 86 Table of Contents We evaluate the performance obligations promised in the contract that are based on goods and services that will be transferred to the customer and determined whether those obligations are both (i) capable of being distinct and (ii) distinct in the context of the contract.
The non-cash operating expenses consisted mainly of stock- based compensation expense of $1.5 million and amortization of right-of-use lease assets of $0.1 million, partially offset by accretion on short-term investments of $0.6 million.
The non-cash operating expenses consisted primarily of stock-based compensation expense of $12.9 million and amortization of right-of-use operating lease assets of $0.3 million, partially offset by accretion of discount on investment securities of $6.0 million and a gain on an investment in related party of $0.1 million.
We estimate the transaction price based on the amount expected to be received for transferring the promised goods or services in the contract. The consideration may include fixed consideration or variable consideration. At the inception of each arrangement that includes variable consideration, we evaluate the amount of potential transaction price and the likelihood that the transaction price will be received.
At the inception of each arrangement that includes variable consideration, we evaluate the amount of potential transaction price and the likelihood that the transaction price will be received. We utilize either the most likely amount method or expected value method to estimate the amount expected to be received based on which method best predicts the amount expected to be received.
For the year ended December 31, 2022, net cash used in investing activities consisted of $61.7 million of purchases of short-term investments and $0.1 million of capital expenditures, partially offset by $2.0 million of proceeds from maturities of short-term investments .
Cash Flows from Investing Activities For the year ended December 31, 2024, net cash used in investing activities consisted primarily of $413.7 million of purchases of investment securities, partially offset by $127.0 million of proceeds from maturities of investment securities.
The Zenas Option and Zenas License Agreement are collectively referred to as the “Zenas Agreements.” The Zenas License Agreement provides Zenas BioPharma with a license in the People’s Republic of China, including Hong Kong, Macau, and Taiwan (collectively, “greater China”), for the development and commercialization of sequences and products under the first antibody sequence. 70 Table of Contents Under the Zenas Agreements, the consideration payable by Zenas Biopharma includes the following: (i) a $1.0 million upfront payment upon execution of the Zenas License Agreement; (ii) an approximate $1.1 million payment representing reimbursement for a portion of development costs previously incurred by us; (iii) reimbursement of a portion of costs related to CMC and expenses for the first antibody sequence through the manufacture of the first two batches of drug product; (iv) reimbursement of a portion of non-CMC-related costs and expenses for the development of the first antibody sequence through the first regulatory approval; (v) development milestones totaling up to $11.0 million; and (vi) royalties on net sales ranging from mid-single digits to low teen percentages.
The Zenas License Agreement included the following payments from Zenas: (i) a non-refundable upfront payment of $1.0 million; (ii) an approximate $1.1 million payment representing reimbursement for a portion of development costs previously incurred by us; (iii) reimbursement of a portion of all CMC-related costs and expenses for the first antibody sequence through the manufacture of the first two batches of drug product; (iv) reimbursement of a portion of all non-CMC-related costs and expenses for the development of the first antibody sequence through the first regulatory approval; (v) development milestones totaling up to $11.0 million; and (vi) royalties on net sales ranging from the mid-single digits to the low teens. 77 Table of Contents On October 21, 2024, Zenas assigned the Zenas License Agreement to its affiliated entity, Zenas BioPharma (HK) Limited (“Zenas HK”).
We believe that the following accounting policies are critical to understanding our historical and future performance, as the policies relate to the more significant areas involving management’s judgments and estimates used in the preparation of our financial statements. 78 Table of Contents Research and Development Expenses Research and development expenses are recorded as an expense, as incurred.
While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this Annual Report on 10-K, we believe that the following accounting policies are critical to understanding our historical and future performance, as the policies relate to the more significant areas involving management’s judgments and estimates used in the preparation of our financial statements.
Cash Flows from Investing Activities For the year ended December 31, 2023, net cash provided by investing activities consisted of $77.8 million of proceeds from maturities of short-term investments, partially offset by $57.4 million of purchases of short-term investments and $0.1 million of capital expenditures.
For the year ended December 31, 2023, net cash provided by investing activities consisted primarily of $77.8 million of proceeds from maturities of investments, partially offset by $57.4 million of purchases of investments. 84 Table of Contents Cash Flows from Financing Activities For the year ended December 31, 2024, net cash provided by financing activities consisted of $215.3 million of net proceeds from the private placement, $39.2 million of net proceeds from the ATM offering program and $1.1 million of proceeds from the exercise of stock options.
We are subject to continuing risks and uncertainties in connection with the current macroeconomic environment, including increases in inflation, rising interest rates, general economic slowdown or a recession, changes in foreign currency exchange rates, recent bank failures, the prospect of a shutdown of the U.S. federal government, geopolitical factors, including rising tensions between China and Taiwan, the ongoing conflict in Israel and surrounding areas, the attacks on marine vessels traversing the Red Sea and the conflict between Russia and Ukraine and the responses thereto, pandemics or other public health crises, such as the COVID-19 pandemic, and supply chain disruptions.
We are subject to continuing risks and uncertainties in connection with legislative, regulatory, political, geopolitical and macroeconomic developments beyond our control, including inflationary pressures, general economic slowdown or a recession, high interest rates, changes in monetary policy or foreign currency exchange rates, changes in U.S. trade policies, including tariffs and other trade restrictions or the threat of such actions, instability in financial institutions, the prospect of a shutdown of the U.S. federal government, the ongoing conflict in Ukraine, conflict in the Middle East, rising tensions between China and Taiwan, the attacks on marine vessels traversing the Red Sea and the responses thereto, and supply chain disruptions.
In November 2022, Ligand spun-off these subsidiaries into a separate legal entity, OmniAb, Inc. (“OmniAb”), for (i) a worldwide, non-exclusive, non-sublicensable license under the OmniAb technology to use chicken animals for generation of OmniAb antibodies for research purposes and (ii) a worldwide, non-exclusive license under the OmniAb technology to use rodent animals for generation of OmniAb antibodies for research purposes.
The platform license agreement and services agreement with OmniAb grants us (i) a worldwide, non-exclusive, non-sublicensable license under the OmniAb technology to use chicken animals for generation of OmniAb antibodies for research purposes and (ii) a worldwide, non-exclusive license under the OmniAb technology to use rodent animals for generation of OmniAb antibodies for research purposes.
We are obligated to pay development and commercial milestone payments of up to £5.4 million (approximately $6.9 million based on the December 31, 2023 exchange rate) with the first development program and of up to £2.5 million (approximately $3.2 million based on the December 31, 2023 exchange rate) with the second development program.
We are obligated to pay development and commercial milestone payments of up to £5.4 million (approximately $6.8 million based on the December 31, 2024 exchange rate) with the first development program and of up to £2.5 million (approximately $3.1 million based on the December 31, 2024 exchange rate) with the second development program. 85 Table of Contents Critical Accounting Policies and Estimates Our financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.
We will re-evaluate the estimate of expected costs to satisfy the performance obligation each reporting period and will make adjustments for any significant changes. 80 Table of Contents Upfront payments and fees are recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until we perform our obligations under these arrangements.
Upfront payments and fees are recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until we perform our obligations under these arrangements. Where applicable, amounts are recorded as unbilled revenue when our right to consideration is unconditional.
To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses. Stock-Based Compensation We account for stock-based compensation awards in accordance with ASC Topic 718, Compensation—Stock Compensation , (“ASC 718”).
To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses. Revenue Recognition - Licensing Agreements We analyze our licensing agreements pursuant to ASC 606 Revenue from Contracts with Customers (“ASC 606”).
For the years ended December 31, 2023 and 2022, we recognized related party license revenue totaling $2.8 million and $6.4 million, respectively, associated with the Zenas Agreements. If our development efforts for DNTH103 or any future product candidates are successful and result in regulatory approval, we may generate revenue from future product sales.
We have recognized revenues attributable to upfront payments and cost reimbursements under our license agreements. If our development efforts for DNTH103 or any future product candidates are successful and result in regulatory approval, we may generate revenue from future product sales.
To date, we have funded our operations primarily with proceeds from the sale of capital stock and have raised aggregate gross proceeds of $423.5 million from private placements. As of December 31, 2023, we had cash, cash equivalents and short-term investments of $173.7 million.
We cannot provide assurance that we will ever generate positive cash flow from operating activities. To date, we have funded our operations primarily with proceeds from the sale of capital stock and have raised aggregate gross proceeds of $423.5 million from private placements and net proceeds of $39.2 million from our ATM offering program.
The $0.2 million increase in discovery expenses related to development activities of potential molecules beyond DNTH103 in 2023. General and Administrative Expenses General and administrative expenses were $18.2 million for the year ended December 31, 2023, as compared to $6.7 million for the year ended December 31, 2022, an increase of $11.5 million.
The increases were due to the buildout of our internal research and development function to support our Phase 2 and Phase 3 clinical trials. General and Administrative Expenses General and administrative expenses were $25.0 million for the year ended December 31, 2024, as compared to $18.2 million for the year ended December 31, 2023, an increase of $6.8 million.
For the year ended December 31, 2022, net cash provided by financing activities consisted of $96.7 million of net proceeds from the issuance of the Dianthus Series A convertible preferred stock . 77 Table of Contents Contractual Obligations and Commitments Lease Obligations We lease space under operating leases agreements for administrative offices in New York, New York, and Waltham, Massachusetts and wet laboratory space in Watertown, Massachusetts, which expire in August 2025, January 2025 and August 2025, respectively.
Contractual Obligations and Commitments Lease Obligations We lease space under operating leases agreements for administrative offices in New York, New York, and Waltham, Massachusetts and wet laboratory space in Watertown, Massachusetts, which expire in February 2031, January 2026 and August 2025, respectively.
The increases were primarily due to the expansion of our research and development function with additional headcount to support the Phase 1 clinical trial activities of our lead product candidate, DNTH103. 74 Table of Contents The $1.9 million decrease in external research and development costs was due to a $2.1 million decrease in expenses related to our lead product candidate, DNTH103, partially offset by a $0.2 million increase in discovery activities.
The $37.1 million increase in external research and development costs was due to a $36.4 million increase in expenses related to our lead product candidate, DNTH103, and a $0.7 million increase related to discovery expenses.
However, we may be unable to raise additional capital from these sources on favorable terms, or at all. Our failure to obtain sufficient capital on acceptable terms when needed could have a material adverse effect on our business, results of operations or financial condition, including requiring us to delay, reduce or curtail our research, product development or future commercialization efforts.
Our failure to obtain sufficient capital on acceptable terms when needed could have a material adverse effect on our business, results of operations or financial condition, including requiring us to seek other alternatives which may include, among others, a delay or termination of our clinical trials or the development of our product candidates, temporary or permanent curtailment of our operations, a sale of our assets, or other alternatives with strategic or financial partners.
The failure to obtain sufficient capital on acceptable terms when needed could have a material adverse effect on our business, results of operations or financial condition, including requiring us to delay, reduce or curtail our research, product development or future commercialization efforts. We cannot provide assurance that we will ever generate positive cash flow from operating activities.
Our failure to obtain sufficient capital on acceptable terms when needed could have a material adverse effect on our business, results of operations or financial condition, including requiring us to seek other alternatives which may include, among others, a delay or termination of our clinical trials or the development of our product candidates, temporary or permanent curtailment of our operations, a sale of our assets, or other alternatives with strategic or financial partners.
The $2.1 million decrease in expenses related to DNTH103 resulted from decreases of $3.9 million in CMC activity costs, $1.3 million in preclinical study costs and $1.2 million in license and milestone payments, partially offset by increases of $4.1 in clinical operations activity costs and $0.2 million in third-party consulting costs.
For the year ended December 31, 2024, as compared to the year ended December 31, 2023, there were increases in expenses related to DNTH103 of $20.9 million in clinical operations activities, $13.5 million in CMC activities, $1.5 million in preclinical study costs and $0.5 million in license and milestone payments.
The $5.3 million increase in internal research and development costs was due to a $4.5 million increase in personnel and related costs, a $0.5 million increase in share-based compensation, and a $0.3 million increase in other costs.
The increase was primarily due to increases of $5.3 million in stock-based compensation expense, $1.5 million in professional services costs, $1.0 million in third-party consulting services costs and $0.4 million in facilities costs.
We evaluate the performance obligations promised in the contract that are based on goods and services that will be transferred to the customer and determined whether those obligations are both (i) capable of being distinct and (ii) distinct in the context of the contract. Goods or services that meet these criteria are considered distinct performance obligations.
Goods or services that meet these criteria are considered distinct performance obligations. We estimate the transaction price based on the amount expected to be received for transferring the promised goods or services in the contract. The consideration may include fixed consideration or variable consideration.
To date, we have funded our operations primarily with proceeds from the sale of capital stock and have raised aggregate gross proceeds of $423.5 million. However, we have incurred significant recurring losses. We had an accumulated deficit of $89.4 million as of December 31, 2023.
However, we have incurred significant recurring losses. We had an accumulated deficit of $174.4 million as of December 31, 2024. As of December 31, 2024, we had cash, cash equivalents and investments of $357.0 million.
Removed
Data reported from DNTH103’s Phase 1 clinical trial in 60 healthy volunteers across eight dose cohorts validates the extended half-life and potent classical pathway inhibition and supports a potentially differentiated safety profile of DNTH103.
Added
The active form of C1s is generated during complement activation by cleavage of the inactive proC1s. As a validated complement target in the autoimmune and inflammatory field, C1s inhibition prevents further progression of the classical pathway cascade.
Removed
The topline data confirmed its approximately 60-day half-life and highly potent classical pathway inhibition with every two weeks S.C. dosing of 300mg/2mL surpassing the calculated IC90 of 87ug/mL, establishing DNTH103’s best-in-class potential to be the first self-administered subcutaneous injection dosed as infrequently as every two weeks to treat a range of autoimmune disorders.
Added
We are currently enrolling patients in three mid- to late-stage clinical trials with DNTH103 in generalized Myasthenia Gravis (“gMG”), Chronic Inflammatory Demyelinating Polyneuropathy (“CIDP”), and Multifocal Motor Neuropathy (“MMN”). MAGIC The MaGic trial is a global, randomized, double-blind, placebo-controlled Phase 2 study of DNTH103 in up to 60 patients with gMG who are acetylcholine receptor antibody positive.
Removed
Based on the clinical data available to date, DNTH103 was generally well tolerated with no serious adverse events or complement-related infections. DNTH103 is designed to selectively target the active form of C1s, inhibiting only the classical pathway, while leaving the lectin and alternative pathways intact.
Added
Following an initial loading dose, DNTH103 will be administered every two weeks (“Q2W”) via S.C. injection. The S.C. treatment duration will initially be 12 weeks with a 52-week open label extension. The primary endpoint of the study is safety and tolerability. Secondary endpoints include Myasthenia Gravis Activities of Daily Living Scale (“MG-ADL”) and Quantitative Myasthenia Gravis (“QMG”) score assessments.
Removed
As a result, DNTH103 may have a reduced risk of infections from encapsulated bacteria when compared to C5 terminal inhibitors, thus potentially avoiding a U.S. Food and Drug Administration Boxed Warning and associated REMS.
Added
Initial top-line results from this trial are anticipated to be available in the second half of 2025. CAPTIVATE The CAPTIVATE trial is a single, two-part, randomized withdrawal global Phase 3 trial of DNTH103 in patients with CIDP.
Removed
We believe that DNTH103 has the potential to yield therapeutic benefit in multiple autoimmune and inflammatory disease indications where inappropriate activation of the classical pathway cascade drives or exacerbates the disease pathology by inhibiting the ability of activated C1s to effect downstream complement activity, ameliorating complement mediated cell death and disruption of normal cellular function. 2024 Private Placement On January 24, 2024, in order to provide us with additional capital for our development programs, we completed a private placement of shares of Common Stock and the 2024 Pre-Funded Warrants pursuant to the Securities Purchase Agreement.
Added
In the open label Part A of this trial, participants will be administered a loading dose followed by 300mg DNTH103 administered Q2W via S.C. injection for up to 13 weeks. Part A includes an interim responder analysis of the first 40 participants enrolled in Part A.
Removed
Pursuant to and subject to the terms and conditions of the Securities Purchase Agreement, we issued and sold, and Selling Stockholders named in the Securities Purchase Agreement purchased 14,500,500 shares of Common Stock and 4,666,332 2024 Pre-Funded Warrants, exercisable for 4,666,332 shares of Common Stock, at a purchase price of $12.00 per share or $11.999 per 2024 Pre-Funded Warrant, which represents the per share purchase price of the shares of Common Stock less the $0.001 per share exercise price for each 2024 Pre-Funded Warrant, for an aggregate purchase price of approximately $230.0 million.
Added
Only participants who respond to DNTH103 in Part A, as measured as greater than or equal to one point decrease (improvement) in adjusted Inflammatory Neuropathy Cause and Treatment (“INCAT”) disability score compared to Part A baseline, will be randomized into Part B, a double-blind, placebo-controlled treatment period of up to 52 weeks, where they will be assessed for prevention of relapse, safety and tolerability, followed by an open-label extension period.
Removed
Completion of the Reverse Merger and Pre-Closing Financing On September 11, 2023, we completed a business combination with Former Dianthus pursuant to which, among other matters, Former Dianthus became as a wholly owned subsidiary of ours (the “Reverse Merger”).
Added
We believe that this single pivotal trial will support a BLA filing in adult patients with CIDP.
Removed
In connection with the completion of the Reverse Merger, we changed our name from “Magenta Therapeutics, Inc.” to “Dianthus Therapeutics, Inc.,” and the business conducted by us became primarily the business conducted by Former Dianthus. 68 Table of Contents Concurrently with the execution and delivery of the Merger Agreement, and in order to provide Former Dianthus with additional capital for its development programs, Former Dianthus entered into a subscription agreement, as amended (the “Subscription Agreement”), with certain investors named therein (the “Investors”).
Added
We anticipate completing an interim responder analysis of the first 40 participants in Part A in the second half of 2026. 76 Table of Contents MOMENTUM The MoMeNtum trial is a global, randomized, double-blind, placebo-controlled Phase 2 study designed to evaluate the safety, tolerability, and efficacy of DNTH103 in 36 patients with MMN.
Removed
Pursuant to and subject to the terms and conditions of the Subscription Agreement, immediately prior to the effective time of the Reverse Merger, Former Dianthus issued and sold, and the Investors purchased, 2,873,988 shares of Former Dianthus common stock and 210,320 pre-funded warrants, exercisable for 210,320 shares of Former Dianthus common stock, at a purchase price of approximately $23.34 per share or $23.34 per warrant, for an aggregate purchase price of approximately $72.0 million (the “pre-closing financing”).
Added
Following determination of Ig dependency and responsiveness, patients will be randomized to receive placebo or DNTH103 administered Q2w via S.C. injection. The initial S.C. treatment duration is expected to be 17 weeks followed by a 52-week open label extension. The primary endpoint of this study is safety and tolerability.
Removed
See Item 8. “ Financial Statements and Supplementary Data––Note 1––Organization, Description of Business and Liquidity ” for additional information.
Added
Secondary endpoints include time to intravenous immunoglobulin (“IVIg”) retreatment, time to relapse, and assessments of muscle and grip strength. We anticipate initial top-line results from this trial to be available in the second half of 2026. Global and Macroeconomic Developments Uncertainty in the global economy presents significant risks to our business.
Removed
Background Since our inception in 2019, we have devoted substantially all of our resources to conducting research and development activities (including with respect to the DNTH103 program) and undertaking preclinical studies, conducting a clinical trial and the manufacturing of the product used in our clinical trials and preclinical studies, business planning, developing and maintaining our intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these activities.
Added
(formerly Zenas BioPharma Limited) (“Zenas”), a related party, which provided Zenas with a license in Greater China for the development and commercialization of certain sequences and products under an identified antibody sequence (the “Zenas License Agreement”).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitati ve and Qualitative Disclosures About Market Risk. We are a smaller reporting company, as defined by Rule 12b-2 under the Exchange Act and in Item 10(f)(1) of Regulation S-K, and are not required to provide the information under this item. 81 Table of Contents
Biggest changeItem 7A. Quantitati ve and Qualitative Disclosures About Market Risk. We are a smaller reporting company, as defined by Rule 12b-2 under the Exchange Act and in Item 10(f)(1) of Regulation S-K, and are not required to provide the information under this item. 87 Table of Contents

Other DNTH 10-K year-over-year comparisons