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

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

+709 added−798 removedSource: 10-K (2025-03-19) vs 10-K (2024-03-28)

Top changes in Immunome Inc.'s 2024 10-K

709 paragraphs added · 798 removed · 509 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

156 edited+76 added−185 removed160 unchanged
Biggest changeOne piece of evidence for this is the concentration of current ADC development activity, with 54% of active ADC clinical programs focused on the same ten targets as of November 2023. ​ We believe there are several downsides to pursuing these targets, including: ● Potential difficulty in overcoming limitations of existing ADCs against these targets due to heterogeneity of target expression on tumor cells and/or the likelihood that changes in payload and/or linker technology will yield only incremental gains in efficacy. ​ ● Challenging development and commercialization pathways ​ ● Lower unmet patient need ​ Given these downsides, we are systematically evaluating novel targets that we believe will have first-in-class potential using multiple target and antibody sources.
Biggest changeOne downside is the potential difficulty in overcoming limitations of existing ADCs against these targets due to considerations like the heterogeneity of target expression on tumor cells and the likelihood that changes in payload or linker technology will yield only incremental gains in efficacy. Another is their challenging development and commercialization pathways.
Nonclinical and Clinical Development Nonclinical studies include laboratory evaluation of product chemistry and formulation and may involve in vitro testing or in vivo animal studies to assess the potential for toxicity, adverse events, and other safety characteristics of the program or development candidate, and in some cases to establish a rationale for therapeutic use.
Nonclinical and Clinical Development Nonclinical studies include laboratory evaluation of product chemistry and formulation and may involve in vitro testing or in vivo animal studies to assess the potential for toxicity, adverse events, and other safety characteristics of the program or product candidate, and in some cases to establish a rationale for therapeutic use.
BLA Submission and Review Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies and clinical trials, along with information relating to the product’s chemistry, manufacturing, and controls and proposed labeling, are submitted to the FDA as part of an NDA or BLA requesting approval to market the product for one or more indications.
BLA and NDA Submission and Review Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies and clinical trials, along with information relating to the product’s chemistry, manufacturing, and controls and proposed labeling, are submitted to the FDA as part of an NDA or BLA requesting approval to market the product for one or more indications.
Thus, orphan drug exclusivity could block the approval of one of our potential products for seven years if a competitor obtains approval of the same product as defined by the FDA and we are not able to show the clinical superiority of our program or development candidate or if our program or development candidate’s indication is determined to be contained within the competitor’s product orphan indication.
Thus, orphan drug exclusivity could block the approval of one of our potential products for seven years if a competitor obtains approval of the same product as defined by the FDA and we are not able to show the clinical superiority of our program or product candidate or if our program or product candidate’s indication is determined to be contained within the competitor’s product orphan indication.
Additionally, the FDA will typically inspect one or more clinical trial sites to assure that the clinical trials were conducted in compliance with good clinical practices, or GCP. To assure cGMP and GCP compliance, an applicant must incur significant expenditure of time, money and effort in the areas of training, record keeping, production, and quality control.
Additionally, the FDA will typically inspect one or more clinical trial sites to assure that the clinical trials were conducted in compliance with good clinical practices, or GCP. To assure cGMP and cGCP compliance, an applicant must incur significant expenditure of time, money and effort in the areas of training, record keeping, production, and quality control.
Some long-term nonclinical testing as well as manufacturing process development and product quality evaluation, continues after the IND is submitted. Human clinical trials in support of an NDA or BLA Prior to beginning the first clinical trial with a program or development candidate, the sponsor must submit an IND to the FDA.
Some long-term nonclinical testing as well as manufacturing process development and product quality evaluation, continues after the IND is submitted. Human clinical trials in support of an NDA or BLA Prior to beginning the first clinical trial with a product candidate, the sponsor must submit an IND to the FDA.
For other early-stage activities and for all later stage work, such as IND-enabling studies and safety assessment and clinical assessment, we use third-party manufacturers to produce necessary antibodies, linkers, payloads, ADCs, small molecules, and, in the case of radioligand therapies, cold and chelated forms of the compound.
For other early-stage activities and for all later stage work, such as IND-enabling studies and safety assessment and clinical assessment, we use third-party manufacturers to produce antibodies, linkers, payloads, ADCs, small molecules, and, in the case of radioligand therapies, cold and chelated forms of the compound.
On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
Additionally, on December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
The manufacturing facilities for our programs and development candidates must meet cGMP requirements and satisfy the FDA or comparable foreign regulatory authorities before any product is approved and our commercial products can be manufactured.
The manufacturing facilities for our programs and product candidates must meet cGMP requirements and satisfy the FDA or comparable foreign regulatory authorities before any product is approved and our commercial products can be manufactured.
During the period commencing on the date of first commercial sale of a licensed product and ending upon the date of expiration of the last valid claim of the licensed patents covering such licensed product in a country, referred to as the royalty term, Morphimmune will pay PRF an earned unit royalty of a low single-digit percentage on gross receipts from sale of the licensed product, and beginning with the first sale of a licensed product, a tiered minimum annual royalty from the low to mid six-digit figure range less the unit royalties due for the annual period.
During the period commencing on the date of first commercial sale of a licensed product and ending upon the date of expiration of the last valid claim of the licensed patents covering such licensed product in a country, referred to as the royalty term, we will pay PRF an earned unit royalty of a low single-digit percentage on gross receipts from sale of the licensed product, and beginning with the first sale of a licensed product, a tiered minimum annual royalty from the low to mid six-digit figure range less the unit royalties due for the annual period.
Patent applications covering IM-1021, if issued, are expected to expire in 2042, absent any patent term extensions or adjustments and without accounting for terminal disclaimers. Patent applications covering IM-3050, if issued, are expected to expire in 2045, absent any patent term extensions or adjustments and without accounting for terminal disclaimers.
Patent or Patent applications covering IM-1021, if issued, are expected to expire in 2045, absent any patent term extensions or adjustments and without accounting for terminal disclaimers. Patent applications covering IM-3050, if issued, are expected to expire in 2045, absent any patent term extensions or adjustments and without accounting for terminal disclaimers.
In addition, we expect to compete with large, multinational pharmaceutical companies that discover, develop and commercialize antibodies, ADCs, small molecules, targeted radiotherapies, and other therapeutics for use in treating cancer such as Immunogen (acquired by AbbVie Inc.), AstraZeneca; Amgen; Bayer AG, BMS; Eli Lilly and Company; Genentech, Inc. (a member of Roche group); Merck & Co.
In addition, we expect to compete with large, multinational pharmaceutical companies that discover, develop and commercialize antibodies, ADCs, small molecules, targeted radiotherapies, and other therapeutics for use in treating cancer such as Immunogen (acquired by AbbVie Inc.); AstraZeneca; Amgen; Bayer AG; BMS; Daiichi Sankyo; Eli Lilly and Company; Genentech, Inc. (a member of Roche group); Merck & Co.
Health Care Reform In the United States and some jurisdictions outside the United States, there have been, and continue to be, proposed legislative and regulatory changes to the current health care systems that could prevent or delay marketing approval of programs and development candidates, restrict or regulate post-approval activities, and affect the ability to profitably sell programs and development candidates for which marketing approval is obtained.
Health Care Reform In the United States and some jurisdictions outside the United States, there have been, and continue to be, proposed legislative and regulatory changes to the current health care systems that could prevent or delay marketing approval of programs and product candidates, restrict or regulate post-approval activities, and affect the ability to profitably sell programs and product candidates for which marketing approval is obtained.
To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost effectiveness of a particular program or development candidate to currently available therapies. Other member states allow companies to fix their own prices for medicines but monitor and control company profits.
To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost effectiveness of a particular program or product candidate to currently available therapies. Other member states allow companies to fix their own prices for medicines but monitor and control company profits.
We, along with our third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of our programs and development candidates. U.S.
We, along with our third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of our programs and product candidates. U.S.
We cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents, or any patents granted to us in the future will be commercially useful in protecting our targeted therapeutics, current programs and processes.
We cannot be sure that patents will be granted with respect to the subject matter of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents, or any patents granted to us in the future, will be commercially useful in protecting our targeted therapeutics, current programs and processes.
The duration of treatment is often extended to mimic the actual use of a product during marketing. ​ 32 Table of Contents In some cases, the FDA may require, or companies may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product.
The duration of treatment is often extended to mimic the actual use of a product during marketing. 30 Table of Contents In some cases, the FDA may require, or companies may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product.
Manufacturers, including third-party manufacturers, and other entities involved in the manufacture and distribution of approved biologics are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws.
Manufacturers, including third-party manufacturers, and other entities involved in the manufacture and distribution of approved products are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws.
Use or display by us of other parties’ trademarks, trade dress, or products in this Annual Report is not intended to, and does not, imply a relationship with, or endorsements or sponsorship of, us by the trademark or trade dress owners. 46 Table of Contents
Use or display by us of other parties’ trademarks, trade dress, or products in this Annual Report is not intended to, and does not, imply a relationship with, or endorsements or sponsorship of, us by the trademark or trade dress owners. 42 Table of Contents
The Purdue License Agreement expires on a licensed product-by-licensed product and country-by-country basis, upon expiration of the royalty term for such licensed product for the applicable country. Morphimmune may terminate the Purdue License Agreement upon at least one month’s prior written notice to PRF.
The Purdue License Agreement expires on a licensed product-by-licensed product and country-by-country basis, upon expiration of the royalty term for such licensed product for the applicable country. We may terminate the Purdue License Agreement upon at least one month’s prior written notice to PRF.
IM-3050 is designed to deliver radioactive 177 Lu directly to FAP-expressing cells, where the “bystander” effect of the radiation may damage or kill nearby tumor cells. We believe this RLT approach could overcome the limitations, such as poor internalization and low expression on tumor cells, that make FAP an unsuitable target for ADCs.
IM-3050 is designed to deliver radioactive 177Lu directly to FAP- expressing cells, where the “bystander” effect of the radiation may damage or kill nearby tumor cells. We believe this RLT approach could overcome the limitations, such as poor internalization and low expression on tumor cells, that make FAP an unsuitable target for ADCs.
The sponsor must submit the results of the preclinical studies, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, as well as other information, to the FDA as part of the IND application.
The sponsor must submit the results of the nonclinical studies, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, as well as other information, to the FDA as part of the IND application.
More than one program or development candidate may receive an orphan drug designation for the same indication. Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.
More than one program or product candidate may receive an orphan drug designation for the same indication. Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.
The marketability of any programs or development candidates for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide coverage and adequate reimbursement.
The marketability of any programs or product candidates for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide coverage and adequate reimbursement.
Upon the achievement of specified development and commercialization milestones, Morphimmune will pay PRF the milestone payments as specified in the Purdue License Agreement, which may be up to $3.75 million in the aggregate.
Upon the achievement of specified development and commercialization milestones, we will pay PRF the milestone payments as specified in the Purdue License Agreement, which may be up to $3.75 million in the aggregate.
With respect to AL102, we expect to compete with companies advancing treatment of desmoid tumors, including but not limited to, SpringWorks Therapeutics, Inc. In November 2023, Springworks received FDA approval for its oral gamma secretase inhibitor, OGSIVEO ® (nirogacestat), for the treatment of adult patients with progressing tumors who require systemic treatment.
With respect to varegacestat, we expect to compete with companies advancing treatments for desmoid tumors, including, but not limited to, SpringWorks Therapeutics, Inc. In November 2023, Springworks received FDA approval for its oral gamma secretase inhibitor, OGSIVEO ® (nirogacestat), for the treatment of adult patients with progressing desmoid tumors who require systemic treatment.
In addition, the FDA will not recognize 36 Table of Contents orphan drug exclusivity if a sponsor fails to demonstrate upon approval that the product is clinically superior to a previously approved product containing the same active moiety for the same orphan condition, regardless of whether or not the previously approved product was designated an orphan drug or had orphan drug exclusivity.
In addition, the FDA will not recognize orphan drug exclusivity if a sponsor fails to demonstrate upon approval that the product is clinically superior to a previously approved product containing the same active moiety for the same orphan condition, regardless of whether or not the previously approved product was designated an orphan drug or had orphan drug exclusivity.
The FDA may also review 34 Table of Contents sections of the NDA or BLA for a fast track product on a rolling basis before the complete application is submitted, if the sponsor and the FDA agree on a schedule for the submission of the application sections and the sponsor pays any required user fees upon submission of the first section of the application.
The FDA may also review sections of the NDA or BLA for a fast track product on a rolling basis before the complete application is submitted, if the sponsor and the FDA agree on a schedule for the submission of the application sections and the sponsor pays any required user fees upon submission of the first section of the application.
As a condition of approval, the FDA will require that a sponsor of a drug receiving accelerated approval perform post-marketing clinical trials to verify and describe the predicted effect on IMM or other clinical endpoint, and the product may be subject to expedited withdrawal procedures.
As a condition of approval, the FDA will require that a sponsor of a drug receiving accelerated approval perform post-marketing clinical trial(s) to verify and describe the predicted effect on IMM or other clinical endpoint, and the product may be subject to expedited withdrawal procedures.
Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products. In addition, quality control and manufacturing procedures must continue to conform to applicable manufacturing requirements after approval to ensure the quality and long-term stability of the product.
Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products. 34 Table of Contents In addition, quality control and manufacturing procedures must continue to conform to applicable manufacturing requirements after approval to ensure the quality and long-term stability of the product.
In addition, emphasis on managed care, the increasing influence of health maintenance organizations, 43 Table of Contents and additional legislative changes in the United States has increased, and we expect will continue to increase, the pressure on health care pricing. The downward pressure on the rise in health care costs has become very intense.
In addition, emphasis on managed care, the increasing influence of health maintenance organizations, and additional legislative changes in the United States has increased, and we expect will continue to increase, the pressure on health care pricing. The downward pressure on the rise in health care costs has become very intense.
Coverage, Pricing and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any programs or development candidates for which we may obtain regulatory approval.
Coverage, Pricing and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any programs or product candidates for which we may obtain regulatory approval.
The PCT International Searching Authority performs a patentability search and issues a non-binding 29 Table of Contents patentability opinion which can be used to evaluate the chances of success for the national applications in foreign countries prior to having to incur the filing fees.
The PCT International Searching Authority performs a patentability search and issues a non-binding patentability opinion which can be used to evaluate the chances of success for the national applications in foreign countries prior to having to incur the filing fees.
Coverage may also be 42 Table of Contents more limited than the purposes for which the product is approved by the FDA or comparable foreign regulatory authorities. Limited coverage and less than adequate reimbursement may reduce the demand for, or the price of, any product for which we obtain regulatory approval.
Coverage may also be more limited than the purposes for which the product is approved by the FDA or comparable foreign regulatory authorities. Limited coverage and less than adequate reimbursement may reduce the demand for, or the price of, any product for which we obtain regulatory approval.
If third parties prepare and file patent 30 Table of Contents applications in the United States that also claim technology to which we have rights, we may have to participate in interference or derivation proceedings in the USPTO to determine priority of invention.
If third parties prepare and file patent applications in the United States that also claim technology to which we have rights, we may have to participate in interference or derivation proceedings in the USPTO to determine priority of invention.
Failure to conduct required post-approval studies, or to confirm the predicted clinical benefit of the product during post-marketing studies, may allow the FDA to withdraw approval of the drug. The FDA may require the sponsor of a product granted accelerated approval to have a confirmatory trial underway prior to approval.
Failure to conduct required post-approval studies, or to confirm the predicted clinical benefit of the product during post-marketing studies, may allow the FDA to withdraw approval of the drug. The FDA may require the sponsor of a product granted accelerated approval to have a confirmatory trial underway and substantially completed prior to approval.
Morphimmune is also required to pay PRF an annual maintenance fee ranging from a low five-digit figure to a low six-digit figure prior to first sale of a licensed product and a low double-digit percentage of sublicense income received for sublicenses of licensed intellectual property, with such percentage depending upon the timing of execution of the sublicense.
We are also required to pay PRF an annual maintenance fee ranging from a low five-digit figure to a low six-digit figure prior to first sale of a licensed product and a low double-digit percentage of sublicense income received for sublicenses of licensed intellectual property, with such percentage depending upon the timing of execution of the sublicense.
Failure to comply with the applicable U.S. requirements may subject an applicant to administrative or judicial sanctions, such as FDA refusal to approve pending new drug applications, or NDAs, or biologics license applications, or BLAs, or the agency's issuance of warning letters, or the imposition of fines, civil penalties, product recalls, product seizures, total or partial suspension of production or distribution, injunctions and/or criminal prosecution brought by the FDA and the U.S.
Failure to comply with the applicable U.S. requirements may subject an applicant to administrative or judicial sanctions, such as FDA refusal to approve pending NDAs or BLAs, or the agency's issuance of warning letters, or the imposition of fines, civil penalties, product recalls, product seizures, total or partial suspension of production or distribution, injunctions and/or criminal prosecution brought by the FDA and the U.S.
The increase in circulating half-life is correlated with an increase in tumor-specific uptake and retention. 14 Table of Contents We selected IM-3050 as a lead candidate following evaluation of factors like binding affinity, specificity for FAP, radiostability, in vivo tumor retention, preclinical activity and preclinical tolerability.
The increase in circulating half-life is correlated with an increase in tumor-specific uptake and retention. We selected IM-3050 as a lead candidate following an evaluation of factors like binding affinity, specificity for FAP, radiostability, in vivo tumor retention, preclinical activity, biodistribution and preclinical tolerability.
A drug is a new chemical entity if the FDA has not 38 Table of Contents previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance.
A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance.
Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical studies, conducting clinical studies, obtaining regulatory approvals and marketing approved 27 Table of Contents products than we have.
Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical studies, conducting clinical studies, obtaining regulatory approvals and marketing approved products than we have.
In connection with the Merger, on October 2, 2023, we issued and sold 21,690,871 shares of our common stock pursuant to the subscription agreements in a Private Investment in Public Equity, or PIPE, transaction which provided us with gross proceeds of $125.0 million. Acquisition of Assets from Atreca, Inc.
In connection with the Merger, on October 2, 2023, we issued and sold 21,690,871 shares of our common stock pursuant to the subscription agreements in a private investment in public equity, or PIPE, transaction which provided us with gross proceeds of $125.0 million.
Among eleven patients with advanced or metastatic solid tumors treated with 177 Lu-FAP-2286, one patient achieved a PR after six treatments, and that patient’s disease did not progress for more than 12 months after their first dose. However, most patients did not achieve a PR , highlighting the potential for FAP-targeted therapies with improved activity.
Among eleven patients with advanced or metastatic solid tumors treated with 177 Lu-FAP-2286, one patient achieved a PR after six treatments, and that patient’s disease did not progress for more than 12 months after their first dose. However, most patients did not achieve a response, highlighting the need for FAP-target ed therapies with improved activity.
Unless an exemption applies, diagnostic tests require marketing clearance or approval from the FDA prior to commercial distribution. The two primary types of FDA marketing authorization applicable to a medical device are premarket notification, also called 510(k) clearance, and premarket approval, or PMA. Most companion diagnostics for oncology product candidates utilize the PMA pathway.
Unless an exemption applies, diagnostic tests require marketing clearance or approval from the FDA prior to commercial distribution. The two primary types of FDA marketing authorization applicable to a medical device are premarket notification, also called 510(k) clearance, and premarket approval, or PMA. Most companion diagnostics for oncology product candidates utilize the PMA pathway. 36 Table of Contents Other U.S.
In addition, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022, or the IRA, into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
For example, on August 16, 2022, the Inflation Reduction Act of 2022, or the IRA, was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
For example, we seek a variety of patents to protect our inventions including, for example, compositions of matter and uses in treatment and diagnostic and methods for novel antibodies, including methods of treatment for diseases expressing novel targets.
For example, we seek a variety of patents to protect our inventions including coverage areas such as compositions of matter and uses in treatment and diagnostic and methods for novel antibodies, including methods of treatment for diseases expressing novel targets.
We seek to protect and enhance proprietary technology, inventions, and improvements that are commercially important to the development of our business by seeking, maintaining, and defending patent rights, whether developed internally, acquired or licensed from third parties.
We seek to protect and enhance proprietary technology, inventions, and improvements that are important to the advancement of our pipeline and growth of our business by seeking, maintaining, and defending patent rights, whether developed internally, or acquired or licensed from third parties.
As a result, a program or 35 Table of Contents development candidate approved on this basis is typically subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to establish the effect on the clinical endpoint.
As a result, a program or product candidate approved on this basis is typically subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to establish the effect on the clinical endpoint.
To be eligible for a fast track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need for such diseases or condition.
Fast Track, Breakthrough Therapy and Priority Review Designations To be eligible for a fast track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need for such disease or condition.
RINGSIDE Part A enrolled 42 patients at three different dosing regimens of AL102: 2 mg once a day for two days every week, 4 mg once a day for two days every week or 1.2 mg once a day daily.
RINGSIDE Part A enrolled 42 patients at three different dosing regimens of varegacestat: 2 mg once a day for two days every week, 4 mg once a day for two days every week and 1.2 mg once a day daily.
In addition, the IRA has multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the United States.
For example, the IRA has multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the United States.
The US composition of matter patent covering AL102 will expire in 2038, which includes 5 years of expected patent term extension. Patent applications covering AL102 and various derivatives, if issued, are expected to expire between 2033-2043, absent any patent term extensions or adjustments and without accounting for terminal 28 Table of Contents disclaimers.
The US composition of matter patent covering varegacestat will expire in 2038, which includes 5 years of expected patent term extension. Patent applications covering varegacestat and various derivatives, if issued, are expected to expire between 2033-2045, absent any patent term extensions or adjustments and without accounting for terminal disclaimers.
PRF may terminate the Purdue License Agreement and the licenses granted thereunder if Morphimmune fails to cure a payment default or other material breach of the Purdue License Agreement after written notice from PRF, or if Morphimmune becomes insolvent. Manufacturing For certain early research and development activities, we may produce materials at the laboratory scale necessary to support those activities.
PRF may terminate the Purdue License Agreement and the licenses granted thereunder if we fail to cure a payment default or other material breach of the Purdue License Agreement after written notice from PRF, or if we become insolvent. 24 Table of Contents Manufacturing For certain early research and development activities, we may produce materials at the laboratory scale necessary to support those activities.
Additionally, the federal Physician Payments Sunshine Act, or the Sunshine Act, within the Patient Protection and Affordable Care Act, or ACA, and its implementing regulations, require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) report annually to CMS information related to certain payments or other transfers of value made or distributed to physicians, as broadly defined by such law, certain advanced non-physician health care practitioners, and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, 41 Table of Contents such individuals or entities, and to report annually certain ownership and investment interests held by physicians and their immediate family members.
Among other things, the passage of HITECH made HIPAA’s privacy and security standards directly applicable to business associates and their covered subcontractors. 37 Table of Contents Additionally, the federal Physician Payments Sunshine Act, or the Sunshine Act, within the Patient Protection and Affordable Care Act, or ACA, and its implementing regulations, require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) report annually to CMS information related to certain payments or other transfers of value made or distributed to physicians, as broadly defined by such law, certain advanced non-physician health care practitioners, and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, such individuals or entities, and to report annually certain ownership and investment interests held by physicians and their immediate family members.
Our principal executive offices are located at 18702 North Creek Parkway, Suite 100, Bothell WA 98011, and our telephone number is (610) 321 3700. Our corporate website is www.immunome.com and we regularly post copies of our press releases as well as additional information about us on our website.
Our principal executive offices are located at 18702 North Creek Parkway, Suite 100, Bothell, Washington 98011, and our telephone number is (425) 939 7410. Our corporate website is www.immunome.com and we regularly post copies of our press releases as well as additional information about us on our website.
We compete in the segments of the pharmaceutical, biotechnology and other related markets that develop therapies for the treatment of cancer, which is highly competitive with rapidly changing standards of care.
Competition The development and commercialization of new product candidates is highly competitive. We compete in the segments of the pharmaceutical, biotechnology and other related markets that develop therapies for the treatment of cancer, which is highly competitive with rapidly changing standards of care.
To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the investigational product to the satisfaction of the FDA.
To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the investigational drug (or safety, purity and potency of the investigational biologic product) to the satisfaction of the FDA.
Employees and Human Capital Resources As of December 31, 2023, we had 55 full-time employees, including 38 who hold advanced degrees. Of these 55 employees, 26 were engaged in research and development activities and 29 were engaged in general and administrative activities. None of our employees are represented by labor unions or covered by collective bargaining agreements.
Employees and Human Capital Resources As of December 31, 2024, we had 118 full-time employees, including 71 who hold advanced degrees. Of these 118 employees, 87 were engaged in research and development activities and 31 were engaged in general and administrative activities. None of our employees are represented by labor unions or covered by collective bargaining agreements.
Examples of these consequences include, without limitation, the following: may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program; complete withdrawal of the product from the market or other limits on marketing or manufacture of the product; imposition of civil or criminal penalties. 37 Table of Contents The FDA closely regulates the marketing, labeling, advertising and promotion of biopharmaceutical products.
Examples of these consequences include, without limitation, the following: may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program; complete withdrawal of the product from the market or other limits on marketing or manufacture of the product; imposition of civil or criminal penalties.
Enrollment was completed in February of 2024. RINGSIDE Part B is a registrational Phase 3, global, double-blind, randomized, placebo-controlled clinical trial, conducted at 61 clinical sites in North America, Europe, Asia and Australia. It will evaluate the efficacy, safety and tolerability of AL102 compared to placebo in patients with progressing desmoid tumors.
RINGSIDE Part B is a registrational Phase 3, global, double-blind, randomized, placebo-controlled clinical trial, conducted at clinical sites in North America, Europe, Asia and Australia. It is designed to evaluate the efficacy, safety and tolerability of varegacestat compared to placebo in patients with progressing desmoid tumors.
Failure to timely register a covered clinical study or to submit study results as provided for in the law can give rise to civil monetary penalties and also prevent the non-compliant party from receiving future grant funds from the federal government.
Failure to timely register an applicable clinical trial or to submit study results as provided for in the law can give rise to civil monetary penalties and also prevent the non-compliant party from receiving future grant funds from the federal government as well as prevent publication of the results in a scholarly journal.
We also expect to compete with companies pursuing targeted radiotherapies, including, but not limited to, RayzeBio, Fusion Pharmaceuticals, POINT Biopharma, Aktis Oncology, Actinium Pharmaceuticals, and Yantai LNC Biotechnology.
We also expect to compete with companies pursuing targeted radiotherapies, including, but not limited to, RayzeBio, (acquired by BMS), Fusion Pharmaceuticals (acquired by AstraZeneca), Point Biopharma (acquired by Eli Lilly and Company), Aktis Oncology, Actinium Pharmaceuticals, and Yantai LNC Biotechnology.
We expect that changes or additions to the ACA, the Medicare and Medicaid programs, and changes stemming from other health care reform measures, especially with regard to health care access, financing or other legislation in individual states, could have a material adverse effect on the health care industry in the United States. 44 Table of Contents In addition, other legislative changes have been proposed and adopted in the United States since the ACA that affect health care expenditures.
We expect that changes or additions to the ACA, the Medicare and Medicaid programs, and changes stemming from other health care reform measures, especially with regard to health care access, financing or other legislation in individual states, could have a material adverse effect on the health care industry in the United States.
For more information regarding the risks related to our intellectual property, see the section titled “Risk Factors — Risks Related to Our Intellectual Property.” Government Regulation The FDA and other regulatory authorities at federal, state, and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring, and post-approval reporting of drugs and biologics.
Government Regulation The FDA and other regulatory authorities at federal, state, and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring, and post-approval reporting of drugs and biologics.
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad, particularly in light of the recent U.S. Presidential and Congressional elections.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities comply with cGMP requirements and are adequate to assure consistent production of the product within required specifications.
Before approving an NDA or BLA, the FDA will typically inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities comply with cGMP requirements and are adequate to assure consistent production of the product within required specifications.
The central focus of an IND submission is on the general investigational plan and the protocol(s) for clinical trials. An IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises concerns or questions related to the proposed clinical trial and places the IND on a clinical hold.
An IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises concerns or questions related to the proposed clinical trial and places the IND on a clinical hold.
Coverage and reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a therapeutic is a covered benefit under its health plan, safe, effective and medically necessary, appropriate for the specific patient, cost-effective and neither experimental nor investigational.
Coverage and reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a therapeutic is a covered benefit under its health plan, safe, effective and medically necessary, appropriate for the specific patient, cost-effective and neither experimental nor investigational. 38 Table of Contents We cannot be sure that reimbursement will be available for any product that we commercialize and, if coverage and reimbursement are available, we cannot be sure that the level of reimbursement will be adequate.
Food & Drug Administration, or FDA, approval of the GSI nirogacestat for the treatment of adult patients with progressing desmoid tumors who require systemic treatment, the treatment landscape for desmoid tumors included watchful waiting, surgery, radiation therapy, low-dose or conventional chemotherapy, or tyrosine kinase inhibitors.
Prior to the November 2023 FDA approval of the GSI OGSIVEO ® (nirogacestat) for the treatment of adult patients with progressing desmoid tumors who require systemic treatment, the treatment landscape for desmoid tumors included active surveillance, surgery, radiation therapy, low-dose or conventional chemotherapy, or tyrosine kinase inhibitors.
On February 5, 2024, we entered into the Ayala Purchase Agreement with Ayala, pursuant to which we acquired Ayala’s AL101 and AL102 programs and assumed certain of Ayala’s liabilities associated with the acquired assets, or the Ayala Asset Purchase. The Ayala Asset Purchase closed on March 25, 2024, or the Ayala Closing.
In March 2024, we completed an asset purchase, or the Ayala Closing, pursuant to an asset purchase agreement, or the Ayala Purchase Agreement, initially entered into with Ayala in February 2024, pursuant to which we acquired Ayala’s AL101 and varegacestat programs and assumed certain liabilities associated with the acquired assets.
Based on these data and responses demonstrated with other GSIs, Ayala designed a seamless Phase 2/3 study called RINGSIDE to specifically evaluate the activity of AL102 in patients with progressing desmoid tumors who required therapy.
In this trial, one patient with desmoid fibromatosis was enrolled. This patient demonstrated tumor shrinkage of 16.5% while on study. Based on these data and responses demonstrated with other GSIs, Ayala designed a seamless Phase 2/3 study called RINGSIDE to specifically evaluate the activity of varegacestat in patients with progressing desmoid tumors who required therapy.
Our commercial success will depend in significant part upon obtaining and maintaining patent protection and trade secret protection for our targeted therapeutics and the methods used to develop and manufacture them, as well as successfully defending these patents against third-party challenges and operating without infringing on the proprietary rights of others.
Our ability to obtain and maintain patent protection and/or trade secret protection for our targeted therapeutics and the methods used to develop and manufacture them, as well as successfully defending these patents against third-party challenges and operating without infringing on the proprietary rights of others.
IM-3050 (FAP Radioligand Therapy) Through our merger with Morphimmune, we acquired IM-3050, a FAP-targeted Lu-177 RLT development candidate for the treatment of solid tumors. FAP, or fibroblast activation protein, serves as a tumor-specific marker due to its broad expression on cancer associated fibroblasts. Cancer-associated fibroblasts are the most common tumor stromal cell, with expression in 75% of solid tumors.
IM-3050 (FAP Radioligand Therapy) IM-3050 is a FAP-targeted lutetium-177, Lu-177 or 177Lu, RLT product candidate for the treatment of solid tumors. FAP, or fibroblast activation protein, is a cell surface protease that serves as a tumor-specific marker due to its broad expression on cancer associated fibroblasts, the most common tumor stromal cell. FAP is expressed in 75% of solid tumors.
It incorporates a ROR1 antibody that is designed to promote internalization; a cleavable, undisclosed linker is used to conjugate the payload to the ROR1 antibody via cysteine conjugation; and a proprietary camptothecin derivative (a topoisomerase I inhibitor) that is designed to maximize the potential bystander effect and supports a drug-antibody ratio, or DAR, of 8.
IM-1021 embodies our approach to overcoming these challenges: it incorporates a ROR1 antibody that is designed to promote internalization; it utilizes a cleavable, undisclosed linker to conjugate the payload to the ROR1 antibody via cysteine conjugation; and it includes a proprietary camptothecin derivative, HC74, a TOP1 inhibitor, that is designed to maximize the potential bystander effect and that supports a drug-antibody ratio, or DAR, of 8.
In December 2023, Eli Lilly and Company acquired POINT Biopharma, which is developing a FAP-targeted radioligand therapy (PNT2004) that is currently in Phase 1. Yantai LNC Biotechnology has also initiated a Phase 1 trial for another FAP-targeted radioligand therapy (LNC1004.) Additionally, our IM-3050 program faces competition from competitors who may have superior access to a consistent supply of radioactive isotopes.
Novartis is advancing a FAP-targeted radioligand therapy (177Lu-FAP-2286) that was acquired from Clovis Oncology and is currently in Phase 2. Yantai LNC Biotechnology has also initiated a Phase 1 trial for another FAP-targeted radioligand therapy (LNC1004). Additionally, our IM-3050 program faces competition from competitors who may have superior access to a consistent supply of radioactive isotopes.
Health Care Laws and Compliance Requirements Although we currently do not have any products on the market, our business operations and current and future arrangements with investigators, health care professionals, consultants, third-party payors and customers may be subject to regulation and enforcement by various federal, state and local authorities in addition to the FDA, including but not limited to, the Centers for Medicare and Medicaid Services, or CMS, other divisions of the U.S.
Health Care Laws and Compliance Requirements Although we currently do not have any products on the market, our business operations and current and future arrangements with investigators, health care professionals, consultants, third-party payors and customers may be subject to regulation and enforcement by various federal, state and local authorities.
Symptoms largely depend on the location of the tumor and the extent of invasion or compression of surrounding tissue. The pain and physical limitations associated with desmoid tumors lead to high clinical burdens and reduced quality of life.
While some people with desmoid tumors do not experience symptoms, others may experience pain, swelling, difficulty sleeping and reduced mobility. Symptoms largely depend on the location of the tumor and the extent of invasion or compression of surrounding tissue. The pain and physical limitations associated with desmoid tumors can lead to high clinical burdens and reduced quality of life.
Lechleider was most recently the Chief Medical Officer of OncoResponse, Inc. and previously worked with Dr. Siegall at Seagen, where he was responsible for directing the development of early and late-stage portfolios. Phil Roberts serves as our Chief Technical Officer. Mr.
Lechleider was most recently the Chief Medical Officer of OncoResponse, Inc. and previously worked with Dr. Siegall at Seagen, where he was responsible for directing the development of early and late-stage portfolios. Jack Higgins, Ph.D., is our Chief Scientific Officer. Most recently, he was Chief Scientific Officer at Morphimmune.
Desmoid tumors may also result from germline mutation of the APC gene, which is also associated with familial adenomatous polyposis, that leads to accumulation of β-catenin in the nucleus and drives overexpression of its target genes.
Desmoid tumors may also result from germline mutation of the APC gene, which is also associated with familial adenomatous polyposis, that leads to accumulation of β-catenin in the nucleus and drives overexpression of its target genes. Risk factors for developing desmoid tumors in patients with these mutations include trauma (especially abdominal surgery), estrogen, and pregnancy.
FAP is a membrane-bound serine protease that promotes tumor development and metastasis by influencing extracellular matrix remodeling, intracellular signaling, angiogenesis, epithelial-to-mesenchymal transition, and immunosuppression.
Many CAFs differ from normal fibroblasts by their expression of FAP. 13 Table of Contents FAP is a membrane-bound serine protease that promotes tumor development and metastasis by influencing extracellular matrix remodeling, intracellular signaling, angiogenesis, epithelial-to-mesenchymal transition, and immunosuppression.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur development programs may be delayed for a variety of reasons, including delays related to: ● inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation of clinical trials; ​ ● delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for clinical trials; ​ ● delays in developing suitable assays for screening participants for eligibility for trials with respect to certain development candidates; ​ ● delays in reaching agreement with the FDA, European Medicines Agency or other regulatory authorities as to the design or implementation of our clinical trials; ​ ● reaching agreement on acceptable terms with prospective CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; ● obtaining institutional review board, or IRB, approval at each clinical trial site; ​ ● recruiting suitable participants to participate in a clinical trial and having participants complete a clinical trial or return for post-treatment follow-up; ​ ● clinical trial sites, CROs or other third parties deviating from trial protocol or dropping out of a trial; ​ ​ 54 Table of Contents ● failure to perform in accordance with the FDA’s good clinical practice, or GCP requirements, or applicable regulatory guidelines in other countries; ​ ● any unresolved ethical issues associated with enrolling patients in clinical trials in lieu of prescribing existing treatments that have established safety and efficacy profiles; ​ ● addressing participant safety concerns that arise during the course of a trial, including occurrence of adverse events that are viewed to outweigh potential benefits; ​ ● external factors such as an epidemic or pandemic which prevent execution of the study(ies) or recruitment of subjects to a trial or trials; or ​ ● having inadequate supply or quality of components or materials or other supplies necessary for the conduct of our preclinical studies or clinical trials. ​ Furthermore, we expect to rely on CROs, clinical trial sites and other vendors to ensure the proper and timely conduct of our clinical trials and, while we expect to enter into agreements governing their committed activities, we have limited influence over their actual performance.
Biggest changeOur development programs may be delayed or otherwise adversely affected due to a variety of reasons, including: ● inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation of clinical trials; ● delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for clinical trials; ● delays in developing suitable assays for screening participants for eligibility for trials with respect to certain product candidates; ● delays in reaching agreement with the FDA, European Medicines Agency or other regulatory authorities as to the design or implementation of our clinical trials; ● reaching agreement on acceptable terms with prospective CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; ● obtaining institutional review board, or IRB, approval at each clinical trial site; ● recruiting suitable participants to participate in a clinical trial and having participants complete a clinical trial or return for post-treatment follow-up; ● clinical trial sites, CROs or other third parties deviating from trial protocol or dropping out of a trial or other vendors supporting a trial not performing as planned; ● failure to perform in accordance with the FDA’s good clinical practice, or GCP, requirements, or applicable regulatory guidelines in other countries; ● patients who enroll in clinical trials may later drop out due to adverse events, a perception they are not benefiting from participating in the study, fatigue with the clinical study process or personal issues; 50 Table of Contents ● any unresolved ethical issues associated with enrolling patients in clinical trials in lieu of prescribing existing treatments that have established safety and efficacy profiles; ● addressing participant safety concerns that arise during the course of a trial, including occurrence of adverse events that are viewed to outweigh potential benefits; ● external factors such as an epidemic or pandemic which prevent execution of the study(ies) or recruitment of subjects to a trial or trials; or ● having inadequate supply or quality of components, materials, diagnostics or other supplies necessary for the conduct of our preclinical studies or clinical trials.
As an organization, we have not yet demonstrated an ability to successfully complete clinical development, obtain regulatory approvals, manufacture a commercial-scale product, conduct sales and marketing activities necessary for successful commercialization, or arrange for a third party to do any of the foregoing on our behalf.
As an organization, we have not yet demonstrated an ability to successfully complete clinical development, obtain regulatory approvals for marketing, manufacture a commercial-scale product, conduct sales and marketing activities necessary for successful commercialization, or arrange for a third party to do any of the foregoing on our behalf.
If we experience delays in the completion of, or termination of, any clinical trial of any of our programs, the commercial prospects will be harmed, and our ability to generate product revenue will be delayed.
If we experience delays in the completion of, or termination of, any clinical trial of any of our programs, the commercial prospects will be harmed, and our ability to generate product revenue, if any, will be delayed.
Our competitors also may obtain marketing approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. We expect to compete with oncology companies advancing antibodies, ADCs, small molecules, targeted radiotherapies, and other therapeutic modalities.
Our competitors also may obtain marketing approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. We expect to compete with oncology companies advancing small molecules, ADCs, targeted radiotherapies, antibodies, and other therapeutic modalities.
As applicable, such rights may include the right to access, correct, or delete certain personal information, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide our products and services.
As applicable, such rights include the right to access, correct, or delete certain personal information, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide our products and services.
Starting in 2023, the Centers for Medicare & Medicaid Services, or CMS, began to implement the program in which a manufacturer of a drug or biological product covered by Medicare Parts B or D must pay a rebate to the federal government if the drug product’s price increases faster than the rate of inflation.
Starting in 2023, the Centers for Medicare & Medicaid Services, or CMS, began to implement the program in which a manufacturer of a drug or biological product covered by Medicare Parts B or D must pay a rebate to the federal government if the product’s price increases faster than the rate of inflation.
Because we may rely on third parties for manufacturing, supply and testing, some of which may be sole source vendors, for preclinical and clinical development materials and commercial supplies, our supply may become limited or interrupted or may not be of satisfactory quantity or quality.
Because we rely on third parties for manufacturing, supply and testing, some of which may be sole source vendors, for preclinical and clinical development materials and commercial supplies, our supply may become limited or interrupted or may not be of satisfactory quantity or quality.
If we or our manufacturing partners are unable to successfully scale the manufacture at any stage, in sufficient quality and quantity, the development, testing and clinical trials of that program or development candidate may be delayed or infeasible, and regulatory approval or commercial launch of any potential resulting product may be delayed or not obtained, which could significantly harm our business.
If we or our manufacturing partners are unable to successfully scale the manufacture at any stage, in sufficient quality and quantity, the development, testing and clinical trials of that program or product candidate may be delayed or infeasible, and regulatory approval or commercial launch of any potential resulting product may be delayed or not obtained, which could significantly harm our business.
The Court further wrote that because the patent claims defined the claimed class of antibodies only by their function of binding to a particular antigen, a skilled artisan would have to use significant trial and error to identify and make all of the molecules in that class. The Court ultimately held that Amgen failed to properly enable its patent claims.
The Court further wrote that because the patent claims defined the claimed class of antibodies only by their function of binding to a particular antigen, a skilled artisan would have to use significant trial and error to identify and make all the molecules in that class. The Court ultimately held that Amgen failed to properly enable its patent claims.
In some cases we may not have control over the prosecution, maintenance or enforcement of the patents that we license, and may not have sufficient ability to provide input into the patent prosecution, maintenance and defense process with respect to such patents, and potential future licensors may fail to take the steps that we believe are necessary or desirable in order to obtain, maintain, defend and enforce the licensed patents.
In some cases we may not have control over the prosecution, maintenance, defense or enforcement of the patents that we license, and may not have sufficient ability to provide input into the patent prosecution, maintenance and defense process with respect to such patents, and potential future licensors may fail to take the steps that we believe are necessary or desirable in order to obtain, maintain, defend and enforce the licensed patents.
Even if we are successful in building our pipeline, the development candidates that we identify may not be suitable for clinical development or generate acceptable clinical data, including as a result of being shown to have unacceptable effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval from regulatory authorities or achieve market acceptance.
Even if we are successful in building our pipeline, the product candidates that we identify may not be suitable for clinical development or generate acceptable clinical data, including as a result of being shown to have unacceptable effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval from regulatory authorities or achieve market acceptance.
Any regulatory approvals that we receive for our development candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the program and development candidate.
Any regulatory approvals that we receive for our product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the program and product candidate.
If we do not accurately evaluate the commercial potential or target market for a program or development candidate, we may relinquish valuable rights to it through partnership, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights.
If we do not accurately evaluate the commercial potential or target market for a program or product candidate, we may relinquish valuable rights to it through partnership, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights.
We expect that significant additional capital may be needed in the future to continue our planned operations, including further development of our programs and development candidates, preparing IND filings, conducting clinical trials, commercialization efforts, expanded research and development activities and costs associated with operating a public company.
We expect that significant additional capital may be needed in the future to continue our planned operations, including further development of our programs and product candidates, preparing IND filings, conducting clinical trials, commercialization efforts, expanded research and development activities and costs associated with operating a public company.
Our or a third party’s failure to execute on our manufacturing requirements and comply with cGMP could adversely affect our business in a number of ways, including: ● an inability to initiate or continue clinical trials; ​ ● delay in submitting regulatory applications, or receiving regulatory approvals; ​ ● loss of the cooperation of a potential future partner; ​ 74 Table of Contents ● subjecting third-party manufacturing facilities or our potential future manufacturing facilities to additional inspections by regulatory authorities; ​ ● requirements to cease distribution or to recall batches; and ​ ● in the event of approval to market and commercialize a product, an inability to meet commercial demands. ​ We may be unable to successfully scale manufacturing in sufficient quality and quantity, which would delay or prevent us from completing our development and commercialization efforts, if any.
Our or a third party’s failure to execute on our manufacturing requirements and comply with cGMP could adversely affect our business in a number of ways, including: ● an inability to initiate or continue clinical trials; ● delay in submitting regulatory applications, or receiving regulatory approvals; ● loss of the cooperation of a potential future partner; ● subjecting third-party manufacturing facilities or our potential future manufacturing facilities to additional inspections by regulatory authorities; ● requirements to cease distribution or to recall batches; and ● in the event of approval to market and commercialize a product, an inability to meet commercial demands. 72 Table of Contents We may be unable to successfully scale manufacturing in sufficient quality and quantity, which would delay or prevent us from completing our development and commercialization efforts, if any.
Because of the numerous risks and uncertainties associated with the development and commercialization of our development candidates and the extent to which we may enter into collaborations with third parties to participate in their development and commercialization, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated preclinical studies and clinical trials.
Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates and the extent to which we may enter into collaborations with third parties to participate in their development and commercialization, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated preclinical studies and clinical trials.
Additionally, because our other development candidates are based on new technologies and discovery approaches, we expect that they will require extensive research and development and have substantial manufacturing and processing costs. In addition, costs to treat study participants and to treat potential side effects that may result from our development candidates may be significant.
Additionally, because our other product candidates are based on new technologies and discovery approaches, we expect that they will require extensive research and development and have substantial manufacturing and processing costs. In addition, costs to treat study participants and to treat potential side effects that may result from our product candidates may be significant.
These provisions include: ● a prohibition on actions by our stockholders by written consent; ​ ● a requirement that special meetings of stockholders, which our company is not obligated to call more than once per calendar year, be called only by the chairman of our board of directors, our chief executive officer, or our board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors; ​ ● advance notice requirements for election to our board of directors and for proposing matters that can be acted upon at stockholder meetings; ​ ● division of our board of directors into three classes, serving staggered terms of three years each; and ​ ● the authority of the board of directors to issue preferred stock with such terms as the board of directors may determine. ​ Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, as amended, or the DGCL, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
These provisions include: ● a prohibition on actions by our stockholders by written consent; ● a requirement that special meetings of stockholders, which our company is not obligated to call more than once per calendar year, be called only by the chairman of our board of directors, our chief executive officer, or our board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors; ● advance notice requirements for election to our board of directors and for proposing matters that can be acted upon at stockholder meetings; ● division of our board of directors into three classes, serving staggered terms of three years each; and ● the authority of the board of directors to issue preferred stock with such terms as the board of directors may determine. 95 Table of Contents Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, as amended, or the DGCL, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
We cannot be sure that coverage and reimbursement will be available for, or accurately estimate the potential revenue from, our development candidates or assure that coverage and reimbursement will be available for any product that we may develop. The regulations that govern marketing approvals, pricing and reimbursement for new drug and biological products vary widely from country to country.
We cannot be sure that coverage and reimbursement will be available for, or accurately estimate the potential revenue from, our product candidates or assure that coverage and reimbursement will be available for any product that we may develop. The regulations that govern marketing approvals, pricing and reimbursement for new drug and biological products vary widely from country to country.
These investigators, CROs and consultants will not be our employees and we will have limited control over the amount of time and resources that they dedicate to our programs. These third parties may have contractual relationships with other entities, some of which may be our competitors, which may draw time and resources from our programs.
These investigators, CROs and consultants are not our employees and we will have limited control over the amount of time and resources that they dedicate to our programs. These third parties may have contractual relationships with other entities, some of which may be our competitors, which may draw time and resources from our programs.
To the extent that we raise additional capital through additional collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights, future revenue streams or research programs or to grant licenses on terms that may not be as favorable to us.
To the extent that we raise additional capital through further collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights, future revenue streams or research programs or to grant licenses on terms that may not be as favorable to us.
Conversely, any failure to enter into any collaboration or other strategic transaction that would be beneficial to us could delay the development and potential commercialization of our development candidates and have a negative impact on the competitiveness of any program or development candidate that reaches market.
Conversely, any failure to enter into any collaboration or other strategic transaction that would be beneficial to us could delay the development and potential commercialization of our product candidates and have a negative impact on the competitiveness of any program or product candidate that reaches market.
Some of our candidates are in the early stages of development efforts and we will need to continue to progress our development candidates through preclinical studies and submit INDs to the FDA or appropriate regulatory documents to applicable foreign authorities prior to initiating their clinical development.
Some of our candidates are in the early stages of development efforts, and we will need to continue to progress our product candidates through preclinical studies and submit INDs to the FDA or appropriate regulatory documents to applicable foreign authorities prior to initiating their clinical development.
Furthermore, we may not generate any revenue from product sales for the foreseeable future, and we expect to continue to incur significant operating losses for the foreseeable future due to the cost of research and development activities and the regulatory approval process for our development candidates.
Furthermore, we may not generate any revenue from product sales for the foreseeable future, and we expect to continue to incur significant operating losses for the foreseeable future due to the cost of research and development activities and the regulatory approval process for our programs and product candidates.
The research and development of biotechnology products is capital-intensive. If our development candidates continue to advance through preclinical studies and clinical trials, we will need substantial additional funds to expand our development, regulatory, manufacturing, marketing and sales capabilities.
The research and development of biotechnology products is capital-intensive. If our product candidates continue to advance through preclinical studies and clinical trials, we will need substantial additional funds to expand our development, regulatory, manufacturing, marketing and sales capabilities.
In such an event, our trials could be suspended or terminated, and the FDA or other regulatory authorities could order us to cease further development of or deny approval of a development candidate for any or all targeted indications.
In such an event, our trials could be suspended or terminated, and the FDA or other regulatory authorities could order us to cease further development of or deny approval of a product candidate for any or all targeted indications.
The market may not be receptive to our development candidates, and we may not generate any revenue from their sale, partnering or licensing. Even if regulatory marketing approval is obtained, we may not generate or sustain revenue from sales of the corresponding product.
The market may not be receptive to our product candidates, and we may not generate any revenue from their sale, partnering or licensing. Even if regulatory marketing approval is obtained, we may not generate or sustain revenue from sales of the corresponding product.
Our ability to achieve or sustain profitability, if ever, will depend on, among other things, successfully identifying and developing our development candidates, obtaining regulatory approvals for marketing and commercialization, manufacturing on commercially reasonable terms, performance as anticipated by our vendors, entering into additional potential future strategic partnerships and performing and meeting milestones on strategic partnerships, establishing a sales and marketing organization or suitable third-party alternatives for any approved product and raising sufficient funds to finance business activities.
Our ability to achieve or sustain profitability, if ever, will depend on, among other things, successfully identifying and developing our programs and product candidates, obtaining regulatory approvals for marketing and commercialization, manufacturing on commercially reasonable terms, performance as anticipated by our vendors, entering into additional potential future strategic partnerships and performing and meeting milestones on strategic partnerships, establishing a sales and marketing organization or suitable third-party alternatives for any approved product and raising sufficient funds to finance business activities.
In order to conduct our research and development efforts, including clinical trials, for our development candidates, we will need to manufacture large quantities. If any programs or development candidates are commercialized, we will need to scale up manufacturing efforts even further.
In order to conduct our research and development efforts, including clinical trials, for our product candidates, we will need to manufacture large quantities. If any programs or product candidates are commercialized, we will need to scale up manufacturing efforts even further.
We or our collaborators may also experience delays in developing a sustainable, reproducible and scalable manufacturing process for the companion diagnostic or in transferring that process to commercial partners or negotiating insurance reimbursement plans, all of which may prevent us from completing our clinical trials or commercializing our product candidates, if approved, on a timely or profitable basis, if at all. 61 Table of Contents Additional regulatory burdens and other risks and uncertainties in foreign markets may limit our growth.
We or our collaborators may also experience delays in developing a sustainable, reproducible and scalable manufacturing process for the companion diagnostic or in transferring that process to commercial partners or negotiating insurance reimbursement plans, all of which may prevent us from completing our clinical trials or commercializing our product candidates, if approved, on a timely or profitable basis, if at all. 57 Table of Contents Additional regulatory burdens and other risks and uncertainties in foreign markets may limit our growth.
We cannot be certain of the timely completion or outcome of our research and development activities or our planned clinical studies and cannot predict if the FDA or other regulatory authorities will ultimately support the further advancement of our development candidates.
We cannot be certain of the timely completion or outcome of our research and development activities or our planned clinical studies and cannot predict if the FDA or other regulatory authorities will ultimately support the further advancement of our product candidates.
In such a situation, any exclusivity for which our development candidates may be eligible under the BPCIA would not prevent the competitor from marketing its biological product as soon as it is approved.
In such a situation, any exclusivity for which our product candidates may be eligible under the BPCIA would not prevent the competitor from marketing its biological product as soon as it is approved.
The results of our operations could be adversely affected by general conditions in the global economy, the global financial markets and the global political conditions. The United States and global economies are facing growing inflation, higher interest rates and potential recession.
The results of our operations could be adversely affected by general conditions in the global economy, the global financial markets and the global political conditions. The United States and global economies are facing inflation, higher interest rates and potential recession.
This calculation is made on a drug product by drug product basis and the amount of the rebate owed to the federal government is directly dependent on the volume of a drug product that is paid for by Medicare Parts B or D.
This calculation is made on a product by product basis and the amount of the rebate owed to the federal government is directly dependent on the volume of a product that is paid for by Medicare Parts B or D.
However, determining whether protected health information has been handled in compliance with applicable privacy standards and our contractual obligations can be complex and may be subject to changing interpretation.
However, determining whether protected health information has been handled in compliance with applicable privacy standards and our contractual obligations can be complex and subject to changing interpretation.
Under currently applicable U.S. law, certain therapeutic products that are not usually self-administered (such as most injectable drugs and biologics) may be eligible for coverage under the Medicare Part B program if: ● they are incident to a physician’s services; ​ ● they are reasonable and necessary for the diagnosis or treatment of the illness or injury for which they are administered according to accepted standards of medical practice; and ​ ● they have been approved by the FDA and meet other requirements of the statute. ​ There may be significant delays in obtaining coverage for newly approved biologics, and coverage may be more limited than the indications for which the biologic is approved by the FDA or comparable foreign regulatory authorities.
Under currently applicable U.S. law, certain therapeutic products that are not usually self-administered (such as most injectable drugs and biologics) may be eligible for coverage under the Medicare Part B program if: ● they are incident to a physician’s services; ● they are reasonable and necessary for the diagnosis or treatment of the illness or injury for which they are administered according to accepted standards of medical practice; and ● they have been approved by the FDA and meet other requirements of the statute. 68 Table of Contents There may be significant delays in obtaining coverage for newly approved biologics, and coverage may be more limited than the indications for which the biologic is approved by the FDA or comparable foreign regulatory authorities.
If we or any of our licensors are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position in the relevant jurisdiction may be impaired and our business prospects may be materially adversely affected. 81 Table of Contents Proceedings to enforce our patent rights, whether successful or not, could result in substantial costs and divert our efforts and resources from other aspects of our business.
If we or any of our licensors are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position in the relevant jurisdiction may be impaired and our business prospects may be materially adversely affected. 79 Table of Contents Proceedings to enforce our patent rights, whether successful or not, could result in substantial costs and divert our efforts and resources from other aspects of our business.
Any of the aforementioned events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to: interruptions or stoppages in our business operations (including, as relevant, clinical trials); inability to process personal information or to operate in certain jurisdictions; limited ability to develop or commercialize our products; expenditure of time and resources to defend any claim or inquiry; adverse publicity; or substantial changes to our business model or operations.
Any of the aforementioned events could have a material adverse effect on our reputation, business, or financial condition, including: interruptions or stoppages in our business operations (including, as relevant, clinical trials); inability to process personal information or to operate in certain jurisdictions; limited ability to develop or commercialize our products; expenditure of time and resources to defend any claim or inquiry; adverse publicity; or substantial changes to our business model or operations.
Clinical trials may be suspended or terminated by us, our partners, the IRBs of the institutions in which such trials are being conducted, the Data Safety Monitoring Board for such trials or by the FDA or other regulatory authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, inability to recruit appropriate subjects or an adequate number of subjects, failure to demonstrate a benefit from using a drug or therapeutic biologic, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
Clinical trials may be suspended or terminated by us, our partners, the IRBs of the institutions in which such trials are being conducted, the Data Safety Monitoring Board for such trials or by the FDA or other regulatory authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, inability to recruit appropriate subjects or an adequate number of subjects, failure to demonstrate a benefit from using a drug or therapeutic biologic, changes in governmental regulations or administrative actions, lack of adequate funding to continue the clinical trial and other factors beyond our control.
If we, or our present or potential future partners, are unable to commercialize one or more of our programs or development candidates, or if sales revenue from any program or development candidate that receives approval is insufficient, we will not achieve or sustain profitability, which could have a material and adverse effect on our business, financial condition, results of operations and prospects.
If we, or our present or potential future partners, are unable to commercialize one or more of our programs or product candidates, or if sales revenue from any program or product candidate that receives approval is insufficient, we will not achieve or sustain profitability, which could have a material and adverse effect on our business, financial condition, results of operations and prospects.
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad.
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.
In particular, the treatable population for various oncology indications may further be reduced if our estimates of addressable populations are erroneous or sub-populations of patients do not derive benefit from our development candidates. Further, there are several factors that could contribute to making the actual number of participants in clinical studies less than the potentially addressable market.
In particular, the treatable population for various oncology indications may further be reduced if our estimates of addressable populations are erroneous or sub-populations of patients do not derive benefit from our product candidates. Further, there are several factors that could contribute to making the actual number of participants in clinical studies less than the potentially addressable market.
However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider our development candidates to be reference biological products pursuant to its interpretation of the exclusivity provisions of the BPCIA for competing products, potentially creating the opportunity for generic follow-on biosimilar competition sooner than anticipated.
However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider our product candidates to be reference biological products pursuant to its interpretation of the exclusivity provisions of the BPCIA for competing products, potentially creating the opportunity for generic follow-on biosimilar competition sooner than anticipated.
The FDA may also require a REMS program as a condition of approval of our development candidates, which could entail requirements for long-term patient follow-up, a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
The FDA may also require a REMS program as a condition of approval of our product candidates, which could entail requirements for long-term patient follow-up, a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
In addition, if the FDA or a comparable foreign regulatory authority approves our development candidates, we will have to comply with requirements, including submissions of safety and other post-marketing information and reports, and registration, as well as continued compliance with cGMP and GCP for any clinical trials that we conduct post-approval.
In addition, if the FDA or a comparable foreign regulatory authority approves our product candidates, we will have to comply with requirements, including submissions of safety and other post-marketing information and reports, and registration, as well as continued compliance with cGMP and GCP for any clinical trials that we conduct post-approval.
If we are unable to make arrangements with a vendor for a particular need, or maintain our relationship with that vendor, on commercially reasonable terms, we may not be able to develop and commercialize our programs or development candidates successfully or operate our business as we intend, which could harm our business, result of operations, financial condition and prospects.
If we are unable to make arrangements with a vendor for a particular need, or maintain our relationship with that vendor, on commercially reasonable terms, we may not be able to develop and commercialize our programs or product candidates successfully or operate our business as we intend, which could harm our business, result of operations, financial condition and prospects.
If we obtain approval of any of our programs or development candidates and ultimately commercialize any such program or development candidate in foreign markets, we would be subject to risks and uncertainties, including the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements and the reduced protection of intellectual property rights in some foreign countries.
If we obtain approval of any of our programs or product candidates and ultimately commercialize any such program or product candidate in foreign markets, we would be subject to risks and uncertainties, including the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements and the reduced protection of intellectual property rights in some foreign countries.
For example, the European Union’s General Data Protection Regulation, or EU GDPR, and the United Kingdom’s GDPR, or UK GDPR, and collectively, GDPR, impose strict requirements for processing personal information.
For example, the European Union’s General Data Protection Regulation, or EU GDPR, and the United Kingdom’s GDPR, or UK GDPR, (GDPR) impose strict requirements for processing personal information.
Our current and future arrangements with third-party payors, providers and customers, among others, may expose us to broadly applicable fraud and abuse and other health care laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our development candidates for which we obtain marketing approval.
Our current and future arrangements with third-party payors, providers and customers, among others, may expose us to broadly applicable fraud and abuse and other health care laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our product candidates for which we obtain marketing approval.
Other potential consequences include, among other things: ● restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; ​ ● fines, warning letters or other enforcement-related letters or clinical holds on post-approval clinical trials; ​ ● refusal of the FDA to approve pending BLAs or supplements to approved BLAs, or suspension or revocation of product approvals; ​ ● product seizure or detention, or refusal to permit the import or export of products; ​ ● injunctions or the imposition of civil or criminal penalties; and ​ ● consent decrees, corporate integrity agreements, debarment, or exclusion from federal health care programs; or mandated modification of promotional materials and labeling and the issuance of corrective information. ​ The policies of the FDA and of other regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our development candidates.
Other potential consequences include, among other things: ● restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; ● fines, warning letters or other enforcement-related letters or clinical holds on post-approval clinical trials; ● refusal of the FDA to approve pending BLAs or supplements to approved BLAs, or suspension or revocation of product approvals; ● product seizure or detention, or refusal to permit the import or export of products; ● injunctions or the imposition of civil or criminal penalties; and ● consent decrees, corporate integrity agreements, debarment, or exclusion from federal health care programs; or mandated modification of promotional materials and labeling and the issuance of corrective information. 67 Table of Contents The policies of the FDA and of other regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates.
Prior to obtaining approval to commercialize a product candidate in the United States or elsewhere, we or our collaborators must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses.
Prior to obtaining approval to commercialize a product candidate in the United States or elsewhere, we must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses.
In addition, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown circumstances. As we advance our drug candidates, including AL102, we will need to transition from a company with a research focus to a company capable of supporting clinical development and if successful, commercial activities. We may not be successful in such a transition.
In addition, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown circumstances. As we advance our drug candidates, we will need to transition from a company with a research focus to a company capable of supporting clinical development and, if successful, commercial activities. We may not be successful in such a transition.
Regulatory authorities in some jurisdictions, including the United States, may designate biologics or drugs designed to address relatively small patient populations as “orphan drugs.” Under the Orphan Drug Act, the FDA may grant 60 Table of Contents orphan drug designation to a drug or biologic intended to treat a rare disease or condition, which is defined as one occurring in a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the United States, where there is no reasonable expectation that the cost of developing the drug or biologic will be recovered from sales in the United States.
Regulatory authorities in some jurisdictions, including the United States, may designate biologics or drugs designed to address relatively small patient populations as “orphan drugs.” Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug or biologic intended to treat a rare disease or condition, which is defined as one occurring in a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the United States, where there is no reasonable expectation that the cost of developing the drug or biologic will be recovered from sales in the United States.
To obtain separate regulatory approval in foreign markets, we generally must comply with numerous and varying regulatory requirements of such countries regarding safety and efficacy and governing, among other things, clinical trials and commercial sales, pricing and distribution of a program or development candidate, and we cannot predict success in these jurisdictions.
To obtain separate regulatory approval in foreign markets, we generally must comply with numerous and varying regulatory requirements of such countries regarding safety and efficacy and governing, among other things, clinical trials and commercial sales, pricing and distribution of a program or product candidate, and we cannot predict success in these jurisdictions.
In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act; ​ ● HIPAA, which prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, of any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless or the payor (e.g., public or private), willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services; like the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ​ ● HIPAA, as amended by HITECH, and their respective implementing regulations, including the Final Omnibus Rule which impose requirements relating to the privacy, security and transmission of individually identifiable 66 Table of Contents health information on certain health care providers, health care clearinghouses, and health plans, known as covered entities, as well as independent contractors, or agents of covered entities that create, receive or obtain individually identifiable health information in connection with providing a service on behalf of a covered entity, known as a business associates, and their covered subcontractors; ​ ● the federal transparency requirements known as the federal Physician Payments Sunshine Act, created as part of the ACA, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and ​ ● analogous local, state and foreign laws and regulations such as state anti-kickback and false claims laws, that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; some state laws that require biotechnology companies to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; some state laws that require biotechnology companies to report information on the pricing of certain drug products; and some state and local laws require the registration or pharmaceutical sales representatives. ​ Ensuring that our future business arrangements with third parties comply with applicable health care laws and regulations could involve substantial costs.
In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act; ● HIPAA, which prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, of any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless or the payor (e.g., public or private), willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services; like the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ● HIPAA, as amended by HITECH, and their respective implementing regulations, including the Final Omnibus Rule which impose requirements relating to the privacy, security and transmission of individually identifiable health information on certain health care providers, health care clearinghouses, and health plans, known as covered entities, as well as independent contractors, or agents of covered entities that create, receive or obtain individually identifiable health information in connection with providing a service on behalf of a covered entity, known as a business associates, and their covered subcontractors; 63 Table of Contents ● the federal transparency requirements known as the federal Physician Payments Sunshine Act, created as part of the ACA, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and ● analogous local, state and foreign laws and regulations such as state anti-kickback and false claims laws, that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; some state laws that require biotechnology companies to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; some state laws that require biotechnology companies to report information on the pricing of certain products; and some state and local laws require the registration or pharmaceutical sales representatives.
As a result, our assumptions about AL102's development potential are based in large part on the data generated from clinical trials conducted by Ayala and we may observe materially and adversely different results in ongoing or future clinical trials. In addition, results from nonclinical studies and clinical trials can be interpreted in different ways.
As a result, our assumptions about varegacestat’s development potential are based in large part on the data generated from clinical trials conducted by Ayala and we may observe materially and adversely different results in ongoing or future clinical trials. In addition, results from nonclinical studies and clinical trials can be interpreted in different ways.
Our understanding of the number of people who suffer from certain types of medical conditions that may be able to be treated by our current and future potential development candidates is based on estimates. These estimates may prove to be incorrect, and new studies may reduce the estimated incidence or prevalence of these diseases.
Our understanding of the number of people who suffer from certain types of medical conditions that may be able to be treated by our current and future potential product candidates is based on estimates. These estimates may prove to be incorrect, and new studies may reduce the estimated incidence or prevalence of these diseases.
We are monitoring these regulations as several of our programs move into later stages of development, including AL102 which is in Phase 3 clinical development; however, a majority of our programs are currently in the earlier stages of development and we will not be able to assess the impact of price regulations for a number of years.
We are monitoring these regulations as several of our programs move into later stages of development, including varegacestat which is in Phase 3 clinical development; however, a majority of our programs are currently in the earlier stages of development and we will not be able to assess the impact of price regulations for a number of years.
We currently expect to continue to use third parties for our manufacturing needs, as we do not currently have, nor do we currently intend to establish, our own manufacturing capacity. Our manufacturing partners may be unable to successfully increase the manufacturing capacity for any program or development candidate in a timely or cost-effective manner, or at all.
We currently expect to continue to use third parties for our manufacturing needs, as we do not currently have, nor do we currently intend to establish, our own manufacturing capacity. Our manufacturing partners may be unable to successfully increase the manufacturing capacity for any program or product candidate in a timely or cost-effective manner, or at all.
Undesirable side effects caused by any development candidates could cause regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of these side effects.
Undesirable side effects caused by any product candidates could cause regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of these side effects.
The relationships that our key management team members have cultivated within our industry make us particularly dependent upon their continued employment with us. We are dependent on the continued service of our technical personnel because of the highly technical nature of our programs, development candidates and technologies and the specialized nature of the regulatory approval process.
The relationships that our key management team members have cultivated within our industry make us particularly dependent upon their continued employment with us. We are dependent on the continued service of our technical personnel because of the highly technical nature of our programs, product candidates and technologies and the specialized nature of the regulatory approval process.
We may not be able to initiate or continue clinical trials for our programs or development candidates if we are unable to locate and enroll a sufficient number of eligible participants to participate in these trials as required by the FDA or other regulatory authorities.
We may not be able to initiate or continue clinical trials for our programs or product candidates if we are unable to locate and enroll a sufficient number of eligible participants to participate in these trials as required by the FDA or other regulatory authorities.
A Fast Track Designation from the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive regulatory approval. The FDA has granted Fast Track designation for AL102 for progressing desmoid tumors.
A Fast Track Designation from the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive regulatory approval. The FDA has granted Fast Track designation for varegacestat for progressing desmoid tumors.
If competitors are able to obtain marketing approval for biosimilars referencing our development candidates, if approved, our future products may become subject to competition from such biosimilars, whether or not they are designated as interchangeable, with the attendant competitive pressure and potential adverse consequences.
If competitors are able to obtain marketing approval for biosimilars referencing our product candidates, if approved, our future products may become subject to competition from such biosimilars, whether or not they are designated as interchangeable, with the attendant competitive pressure and potential adverse consequences.
In particular, any replacement of our manufacturers could require significant effort and expertise because there may be a limited number of qualified replacements. The manufacturing process for a program or development candidate is subject to FDA and other regulatory authority review.
In particular, any replacement of our manufacturers could require significant effort and expertise because there may be a limited number of qualified replacements. The manufacturing process for a program or product candidate is subject to FDA and other regulatory authority review.
Any business interruption may have a material and adverse effect on our business and financial condition. 77 Table of Contents Risks Related to Our Intellectual Property It is difficult and costly to protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection.
Any business interruption may have a material and adverse effect on our business and financial condition. 75 Table of Contents Risks Related to Our Intellectual Property It is difficult and costly to protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection.
Further, our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
Further, some of our contracts do not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
In addition, we have had limited interactions with the FDA or other comparable foreign regulatory authorities and cannot be certain how many additional clinical trials of our development candidates will be required or how such additional trials should be designed.
In addition, we have had limited interactions with the FDA or other comparable foreign regulatory authorities and cannot be certain how many additional clinical trials of our product candidates will be required or how such additional trials should be designed.
The results of preclinical studies and early clinical trials of any of our development candidates may not be predictive of the results of later-stage clinical trials. In addition, development candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials.
The results of preclinical studies and early clinical trials of any of our product candidates may not be predictive of the results of later-stage clinical trials. In addition, product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials.
Remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations.
Remote work has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations.
We rely on third parties and technologies to operate critical business systems to process sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, and other functions.
We rely on third parties and technologies to operate critical business systems to process sensitive data in a variety of contexts, including cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, and other functions.
We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners and agents, even if we do not explicitly authorize or have actual knowledge of such activities. We adopted a Code of Business Conduct and Ethics and implemented training programs, policies and procedures to ensure compliance with such code.
We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners and agents, even if we do not explicitly authorize or have actual knowledge of such activities. 69 Table of Contents We adopted a Code of Business Conduct and Ethics and implemented training programs, policies and procedures to ensure compliance with such code.
Additionally, we or our collaborators may develop companion diagnostic tests for use with our current and future potential development candidates. We or our collaborators will be required to obtain coverage and reimbursement for these tests separately and apart from the coverage and reimbursement we may seek for our current and future potential development candidates.
Additionally, we or our collaborators may develop companion diagnostic tests for use with our current and future potential product candidates. We or our collaborators will be required to obtain coverage and reimbursement for these tests separately and apart from the coverage and reimbursement we may seek for our current and future potential product candidates.
A weak or declining economy or political disruption, including any international trade disputes, could also strain our manufacturers or suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our potential products.
A weak or declining economy or political disruption, including any international trade disputes, could also strain our manufacturers or suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our potential products, if approved.
Future guidance from the Internal Revenue Service and other tax authorities with respect to such legislation may affect us, and certain aspects of such legislation could be repealed or modified in future legislation. The Biden administration and the U.S.
Future guidance from the Internal Revenue Service and other tax authorities with respect to such legislation may affect us, and certain aspects of such legislation could be repealed or modified in future legislation. The Trump administration and the U.S.
These include the lack of widespread availability of, and limited reimbursement for, new therapies in many underdeveloped markets. If we or others identify undesirable side effects caused by any of our current or future development candidates undergoing clinical trials, our ability to market and derive revenue from the program or development candidate could be compromised.
These include the lack of widespread availability of, and limited reimbursement for, new therapies in many underdeveloped markets. If we or others identify undesirable side effects caused by any of our current or future product candidates undergoing clinical trials, our ability to market and derive revenue from the product candidate could be compromised.
Additionally, because we anticipate that some of our oncology clinical trials will be in patients with advanced solid tumors, the patients are typically in the late stages of the disease and may experience disease progression or adverse events independent from our development candidates, making them unevaluable for purposes of the trial and requiring additional enrollment.
Additionally, because we anticipate that some of our oncology clinical trials will be in patients with advanced solid tumors or lymphomas, the patients are typically in the late stages of the disease and may experience disease progression or adverse events independent from our product candidates, making them unevaluable for purposes of the trial and requiring additional enrollment.
Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on our business, results of operations and financial condition and could cause a decline in the trading price of our common stock. Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on our business, results of operations and financial condition and could cause a decline in the trading price of our common stock. 98 Table of Contents Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
Health care providers and third-party payors, among others, will play a primary role in the prescription and recommendation of any programs or development candidates for which we obtain marketing approval.
Health care providers and third-party payors, among others, will play a primary role in the prescription and recommendation of any programs or product candidates for which we obtain marketing approval.
In the United States, our antibody-based programs and development candidates are expected to be regulated by the FDA as biological products, and we intend to seek approval for these development candidates pursuant to the BLA pathway.
In the United States, our antibody-based programs and product candidates are expected to be regulated by the FDA as biological products, and we intend to seek approval for these programs and product candidates pursuant to the BLA pathway.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRosett, our Interim Chief Financial Officer and Executive Vice President, Operations, works with management and our third-party service providers to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business; and (2) our senior management, in consultation with our information technology department and third-party service providers, evaluates material risks from cybersecurity threats against our overall business objectives and reports to the audit committee of the board of directors, which evaluates our overall enterprise risk.
Biggest changeRosett, our Chief Financial Officer, works with management and our third-party service providers to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business; and (2) our senior management, in consultation with our information technology department and third-party service providers, evaluates material risks from cybersecurity threats against our overall business objectives and reports to the audit committee of the board of directors, which evaluates our overall enterprise risk. 100 Table of Contents We use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example: professional service firms, including legal counsel, cybersecurity consultants and cybersecurity software providers.
Additionally, we are in the process of developing an incident response plan and response policy. Our assessment and management of material risks from cybersecurity threats are integrated into our overall risk management processes. For example, (1) our Vice President, Technology Enablement, who leads our information technology department and reports to Mr.
Additionally, we are in the process of developing an incident response plan and response policy. Our assessment and management of material risks from cybersecurity threats are integrated into our overall risk management processes. For example, (1) our Head of Information Technology, who leads our information technology department and reports to Mr.
Our cybersecurity incident response and vulnerability management processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including our Mr. Rosett. Mr. Rosett and our VP, Technology Enablement work with our incident response team to help us mitigate and remediate cybersecurity incidents of which they are notified.
Our cybersecurity incident response and vulnerability management processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including Mr. Rosett. Mr. Rosett and our Head of Information Technology work with our incident response team to help us mitigate and remediate cybersecurity incidents of which they are notified.
Rosett and our VP, Technology Enablement are responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel. Mr. Rosett is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Rosett and our Head of Information Technology are responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel. Mr. Rosett is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Mr. Rosett has over 10 years of experience in the biotech and technology industry, including serving as a software engineer at Google. Our VP, Technology Enablement has over 25 years of experience in information technology in the biotech industry and has served in various roles of increasing importance related to information technology. Mr.
Rosett has over 10 years of experience in the biotech and technology industry, including serving as a software engineer at Google. Our Head of Information Technology has over 30 years of experience in information technology in the biotech industry and has served in various roles of increasing importance related to information technology. Mr.
The board of directors’ audit committee is responsible for overseeing our cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats. 101 Table of Contents Our cybersecurity risk assessment and management processes are implemented and maintained by certain of our management, including Mr. Rosett, our Interim Chief Operating Officer and EVP, Operations, and our VP, Technology Enablement.
The board of directors’ audit committee is responsible for overseeing our cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain of our management, including Mr. Rosett, our Chief Financial Officer, and our Head of Information Technology. Mr.
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We use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example: professional service firms, including legal counsel, cybersecurity consultants and cybersecurity software providers.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe our leased space is sufficient to meet our immediate facility needs, and that any additional space we may require will be available on commercially reasonable terms.
Biggest changeItem 2. Properties We currently lease approximately 39,000 square feet of office and laboratory space in Bothell, Washington under a lease that expires on March 31, 2033. We believe our leased space is sufficient to meet our immediate facility needs, and that any additional space we may require will be available on commercially reasonable terms. 101 Table of Contents
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Item 2. Properties We currently lease approximately 11,000 square feet of office and laboratory space in Exton, Pennsylvania under a lease that expires on March 31, 2025. We currently lease approximately 14,000 square feet of office and laboratory space in Bothell, Washington, under a lease that expires on October 31, 2028.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeA substantially greater number of holders are beneficial owners whose shares are held of record by banks, brokers and other nominees. Dividends The Company has not declared or paid any dividends since its inception, nor does it expect to pay dividends in the foreseeable future.
Biggest changeA substantially greater number of holders are beneficial owners whose shares are held of record by banks, brokers and other nominees. Dividends We have not declared or paid any dividends since our inception, nor do we expect to pay dividends in the foreseeable future. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock has been publicly traded on The Nasdaq Capital Market under the symbol “IMNM” since October 2, 2020. Holders As of March 25, 2024, the Company had approximately 99 record holders of its common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock has been publicly traded on The Nasdaq Capital Market under the symbol “IMNM” since October 2, 2020. Holders As of March 14, 2025, there were approximately 63 record holders of our common stock.
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S ecurities Authorized for Issuance Under Equity Compensation Plans Information about securities authorized for issuance under our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None. Item 6. [Reserved]. ​ ​ 103 Table of Contents
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Item 6. [Reserved]. ​ ​ 103 Table of Contents

Item 7. Management's Discussion & Analysis

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

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Biggest changeResults of operations Comparison of the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2023 2022 Change ​ ​ (in thousands) Collaboration Revenue ​ $ 14,018 ​ $ — ​ ​ 14,018 Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ In-process research and development ​ ​ 80,802 ​ ​ — ​ ​ 80,802 Research and development ​ ​ 23,089 ​ ​ 23,272 ​ ​ (183) General and administrative ​ 19,657 ​ 13,629 ​ 6,028 Total operating expenses ​ 123,548 ​ 36,901 ​ 86,647 Loss from operations ​ (109,530) ​ (36,901) ​ (72,629) Interest income ​ 2,724 ​ 5 ​ 2,719 Net loss ​ $ (106,806) ​ $ (36,896) ​ $ (69,910) ​ Collaboration revenue In January 2023, we entered into the Collaboration Agreement with AbbVie and recognized collaboration revenue of $14.0 million for the year ended December 31, 2023.
Biggest changeInterest income Interest income consists of interest earned on our marketable securities and on our cash and cash equivalent balances held with financial institutions. 108 Table of Contents Results of operations Comparison of the years ended December 31, 2024 and 2023: The following table summarizes our results of operations for the periods presented (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2024 2023 Change Collaboration revenue ​ $ 9,041 $ 14,018 $ (4,977) Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ In-process research and development ​ ​ 152,344 ​ ​ 80,802 ​ ​ 71,542 Research and development (1) ​ ​ 129,542 ​ ​ 23,089 ​ ​ 106,453 General and administrative (1) ​ 32,955 ​ 19,657 ​ 13,298 Total operating expenses ​ 314,841 ​ 123,548 ​ 191,293 Loss from operations ​ (305,800) ​ (109,530) ​ (196,270) Interest income ​ 12,837 ​ 2,724 ​ 10,113 Net loss ​ $ (292,963) ​ $ (106,806) ​ $ (186,157) (1) Amounts include non-cash share-based compensation expense as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2024 2023 Change Research and development ​ $ 5,146 ​ $ 1,981 ​ $ 3,165 General and administrative ​ ​ 10,602 ​ ​ 4,242 ​ ​ 6,360 Total share-based compensation expense ​ $ 15,748 ​ $ 6,223 ​ $ 9,525 Collaboration revenue Collaboration revenue decreased by $5.0 million, from $14.0 million for the year ended December 31, 2023 to $9.0 million for the year ended December 31, 2024.
If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market programs and development candidates that we would otherwise prefer to develop and market ourselves.
If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market programs and product candidates that we would otherwise prefer to develop and market ourselves.
If we cannot obtain the necessary funding to support these activities on favorable terms, if at all, we will need to delay, scale back or eliminate some or all of our research and development programs, including our clinical and preclinical development of our product candidates.
If we cannot obtain the necessary funding to support these activities on favorable terms, or at all, we will need to delay, scale back or eliminate some or all of our research and development programs, including our clinical and preclinical development of our product candidates.
General and administrative expenses also include legal fees relating to intellectual property and corporate matters, professional fees for accounting, auditing, tax and consulting services, insurance costs, travel, direct and allocated facility related expenses, Merger costs and other operating costs.
General and administrative expenses also include legal fees relating to intellectual property and corporate matters, professional fees for accounting, auditing, tax and consulting services, insurance costs, travel, direct and allocated facility related expenses and other operating costs.
Because of the numerous risks and uncertainties associated with the development of our programs, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the research and development of our programs and development candidates.
Because of the numerous risks and uncertainties associated with the development of our programs, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the research and development of our programs and product candidates.
When consideration is received prior to us completing our performance obligation under the terms of a contract, a contract liability is recorded as deferred revenue. Deferred revenue expected to be recognized as revenue within the twelve months following the balance sheet date is classified as a current liability.
When consideration is received prior to us completing our performance obligation under the terms of a contract, a contract liability is recorded as deferred revenue. Deferred revenue expected to be recognized as revenue within the 12 months following the balance sheet date is classified as a current liability.
As a result of the war between Russia and Ukraine, conflict in the Middle East, bank failures, inflationary pressures on the economy and monetary policy responses taken by government agencies and other macroeconomic and political factors, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth and uncertainty about economic stability.
As a result of the war between Russia and Ukraine, conflicts in the Middle East, trade wars, bank failures, inflationary pressures on the economy and monetary policy responses taken by government agencies and other macroeconomic and political factors, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth and uncertainty about economic stability.
Our future funding requirements will depend on many factors including: ● the extent to which we acquire or in-license products, intellectual property , and other technologies, and the terms on which we acquire or in-license those assets; ● the scope, progress, results and costs of discovery, preclinical development, manufacturing and clinical trials for programs and development candidates that we currently own and those that we may acquire rights to in the future; ● the costs of continuing to operate and advance our discovery and ADC platforms; ● the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights, and defending intellectual property-related claims and the success of our intellectual property portfolio; 111 Table of Contents ● the costs, timing, and outcome of regulatory review of the programs and development candidates we may develop; ● the costs of future activities, including product sales, medical affairs, marketing, manufacturing, distribution, coverage and reimbursement for any programs or development candidates for which we receive regulatory approval; ● t he success of our existing and any future license agreements, collaborations and other strategic transactions and the achievement of milestones or occurrence of other developments that trigger payments to or from us under any such agreements and transactions and ; ● the costs of operating as a public company.
Our future funding requirements will depend on many factors including: ● the extent to which we acquire or in-license products, intellectual property and other technologies and the terms on which we acquire or in-license those assets; ● the scope, progress, results and costs of discovery, preclinical development, manufacturing and clinical trials for programs and product candidates that we currently own and those that we may discover or acquire rights to in the future; ● the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights, and defending intellectual property-related claims and the success of our intellectual property portfolio; 112 Table of Contents ● the costs, timing and outcome of regulatory review of the programs and product candidates we may develop; ● the costs of future activities, including product sales, medical affairs, marketing, manufacturing, distribution, coverage and reimbursement for any programs or product candidates for which we receive regulatory approval; ● the success of our existing and any future license agreements, collaborations and other strategic transactions and the achievement of milestones or occurrence of other developments that trigger payments to or from us under any such agreements and transactions; and ● the costs of operating as a public company.
Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.
Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed may vary from our estimates and could result in us reporting amounts that are too high or too low in any particular period.
We expense research and development costs as incurred. Advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the benefits are consumed. 107 Table of Contents Research and development activities are central to our business model.
We expense research and development costs as incurred. Advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the benefits are consumed. Research and development activities are central to our business model.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of any purchaser 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 the sale of equity, including pursuant to the 2024 ATM Agreement, or convertible debt securities, the ownership interest of any purchaser 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.
Research and development expenses Research and development expenses consist of costs incurred in performing research and development activities, which include: ● personnel-related expenses, including salaries, bonuses, benefits and share-based compensation for employees engaged in research and development functions; ● expenses incurred in connection with the advancement of our programs and development candidates, including under agreements with consultants, contractors, contract research organizations and other third-party vendors and suppliers; ● expenses to conduct clinical trials including regulatory and quality assurance; ● the cost of developing and validating our manufacturing process for use in our preclinical studies and clinical trials; ● laboratory supplies and research materials and other infrastructure-related expenses; and ● facilities, depreciation and amortization and other expenses which include direct and allocated expenses.
Research and development expenses Research and development expenses consist of costs incurred in performing research and development activities, which include: ● personnel-related expenses, including salaries, bonuses, benefits and share-based compensation for employees engaged in research and development functions; ● expenses incurred in connection with the advancement of our programs and product candidates, including under agreements with consultants, contractors, contract research organizations, or CROs, and other third-party vendors and suppliers; ● expenses to conduct clinical trials including regulatory and quality assurance; 107 Table of Contents ● the cost of process development, validation, and the manufacturing of drug supplies for use in our preclinical studies and clinical trials; ● laboratory supplies and research materials and other infrastructure-related expenses; and ● facilities, depreciation and amortization and other expenses which include direct and allocated expenses.
Funding requirements We expect our expenses to increase substantially in connection with our ongoing and future activities, particularly as we advance and expand our clinical development of AL102, seek regulatory approval for AL102, continue the preclinical and potential clinical development of IM-1021, IM -4320, IM-3050, and any other future product candidates, and continue to pursue our business development strategy.
Funding requirements We expect our expenses to increase substantially in connection with our ongoing and future activities, particularly as we advance and expand our clinical development of varegacestat, seek regulatory approval for varegacestat, advance the clinical development of IM-1021, continue the development of IM-3050 and any other current and future product candidates, and continue to pursue our business development strategy.
Zentalis Pharmaceuticals, Inc License Agreement In January 2024, we entered into a license agreement with Zentalis Pharmaceuticals, Inc., or the Zentalis Agreement, pursuant to which we received an exclusive, worldwide, royalty-bearing, sublicensable license under certain intellectual property relating to Zentalis’ proprietary antibody-drug conjugate, or ADC, platform technology, ROR1 antibodies and ADCs targeting ROR1 to exploit products covered by or incorporating the licensed intellectual property rights.
Zentalis Pharmaceuticals License and Purchase Agreements In January 2024, we entered into a license agreement with Zentalis, or the Zentalis License Agreement, pursuant to which we received an exclusive, worldwide, royalty-bearing, sublicensable license under certain intellectual property relating to Zentalis’ proprietary ADC platform technology, ROR1 antibodies and ADCs targeting ROR1 to exploit products covered by or incorporating the licensed intellectual property rights or, collectively, the Zentalis Licensed Assets.
Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, and licensing arrangements.
Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, including pursuant to the 2024 ATM Agreement, debt financings, collaborations, strategic alliances and licensing arrangements.
Components of our results of operations Collaboration revenue We have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products for the foreseeable future. To date, we have generated our revenue through the Collaboration Agreement with AbbVie.
Components of our results of operations Collaboration revenue We have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products for the foreseeable future. To date, we have generated our revenue through a Collaboration and Option Agreement, or the Collaboration Agreement, with AbbVie Global Enterprises Ltd., or AbbVie.
If we are an active participant and are exposed to significant risks and rewards with respect to the arrangement, we account for the arrangement as a collaboration under ASC 808.
If we are an active participant and are exposed to significant risks and rewards with respect to the arrangement, we account for the arrangement as a collaboration under ASC 808. If we are not exposed to significant risks and rewards and the contract is with a customer, we account for the collaboration under ASC 606.
We expect that our existing cash, cash equivalents and marketable securities as of December 31, 2023, in combination with the proceeds from the 2024 Financing, will enable us to fund our current and planned operating expenses and capital expenditures for at least 12 months from the filing date of this Annual Report on Form 10-K.
We expect that our existing cash, cash equivalents and marketable securities as of December 31, 2024, together with the proceeds from the 2025 Financing, will be sufficient to fund our current and planned operating expenses and capital expenditures for at least 12 months from the filing date of this Annual Report on Form 10-K.
In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under a collaboration arrangement, we apply the five-step model of ASC 606: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract, including whether they are capable of being distinct; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under a collaboration arrangement, we apply the five-step model of ASC 606: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract, including whether they are capable of being distinct; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. 114 Table of Contents We apply significant judgment when evaluating whether contractual obligations represent distinct performance obligations, allocating transaction price to performance obligations within a contract, determining when performance obligations have been met, and assessing the recognition of variable consideration.
The fair value of stock options 113 Table of Contents is estimated at the time of grant using the Black-Scholes option pricing model, which requires the use of inputs and assumptions such as the fair value of the underlying common stock, exercise price of the option, expected term, risk-free interest rate, expected volatility and dividend yield.
The fair value of stock options is estimated at the time of grant using the Black-Scholes option pricing model, which requires the use of subjective assumptions such as the expected volatility, expected term, risk-free interest rate, and dividend yield.
Collaboration revenue In January 2023, we entered into the Collaboration Agreement with AbbVie, which was determined to be within the scope of ASC 606, Revenue from Contracts with Customers, or ASC 606. We evaluate our collaborative arrangements pursuant to ASC 808, Collaborative Arrangements, or ASC 808, and ASC 606.
Collaboration revenue In January 2023, we entered into a research discovery collaboration arrangement, which was determined to be within the scope of Accounting Standards Codification, or ASC, 606, Revenue from Contracts with Customers , or ASC 606. We evaluate our collaborative arrangements pursuant to ASC 808, Collaborative Arrangements , or ASC 808, and ASC 606.
We base our estimates on historical experience, known 112 Table of Contents trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
For further details on the potential contingent payments related to asset acquisitions and license agreements, see Notes 10 and 16 of the notes of our audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. ​ Critical accounting policies and significant judgments Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States.
For further details on the potential contingent payments related to asset acquisitions and license agreements, see Note 7 to our audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. 113 Table of Contents Critical accounting policies and estimates Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable. 116 Table of Contents
In-process research and development expenses, or IPR&D Intangible assets acquired in an asset acquisition for use in research and development, or R&D, activities which have no alternative future use are expensed as IPR&D on the acquisition date. In-process research and development expenses for the year ended December 31, 2023 relate to the acquisition of Morphimmune’s assets.
In-process research and development expenses Intangible assets acquired in an asset acquisition for use in research and development activities which have no alternative future use are expensed as in-process research and development, or IPR&D, expense on the acquisition date.
No collaboration revenue was recognized for the year ended December 31, 2022. In-process research and development expenses In-process research and development expense for the year ended December 31, 2023 was related to the write-off of in-process research and development assets that were acquired in the Merger and determined to have no alternative future use .
In-process research and development expenses IPR&D expense for the year ended December 31, 2024 primarily related to the write-off of acquired IPR&D assets that were determined to have no alternative future use .
Ayala Asset Purchase Agreement In February 2024, we and Ayala Pharmaceuticals, Inc., or Ayala, entered into an Asset Purchase Agreement, or the Ayala Purchase Agreement, pursuant to which we acquired Ayala’s AL101 and AL102 programs and assumed certain of Ayala’s liabilities associated with the acquired assets. The Ayala Asset Purchase closed on March 25, 2024, or the Ayala Closing.
Recent Events Ayala Purchase Agreement In March 2024, we completed an asset purchase pursuant to an asset purchase agreement, or the Ayala Purchase Agreement, initially entered into with Ayala Pharmaceuticals, Inc., or Ayala, in February 2024, pursuant to which we acquired Ayala’s AL101 and varegacestat (then known as AL102) programs and assumed certain liabilities associated with the acquired assets.
The preparation of these consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements.
The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods.
We anticipate that our general and administrative expenses will increase in the future to support increased and progressed research and development activities and to operate as a public company. Interest income Interest income consists of interest earned on our marketable securities and on our cash and cash equivalent balances held with financial institutions.
We anticipate that our general and administrative expenses will increase in the future to support increased and progressed research and development activities and to operate as a public company.
If we are not exposed to significant risks and rewards and the contract is with a customer, we account for the collaboration under ASC 606. ​ Payments pursuant to collaborative arrangements may include non-refundable upfront payments, research option and license option payments, milestone payments upon the achievement of significant regulatory and development events, commercial sales milestones, and royalties on product sales.
Payments pursuant to collaborative arrangements may include non-refundable upfront payments, research option and license option payments, milestone payments upon the achievement of significant regulatory and development events, commercial sales milestones, and royalties on product sales.
Financing activities During the year ended December 31, 2023, financing activities provided $116.4 million consisting of gross proceeds of $125.4 million from the PIPE transaction, the exercise of options, and the issuance of common stock under the ATM, partially offset by the payment of $9.0 million for offering costs related to the PIPE transaction.
Net cash provided by financing activities for the year ended December 31, 2023 was $116.4 million, consisting of gross proceeds of $125.4 million from the private investment in public equity, or PIPE, transaction held concurrently with the closing of the Morphimmune merger in October 2023, the exercise of options, and the issuance of common stock under our prior ATM sales agreement that we terminated in November 2023, partially offset by the payment of $9.0 million for offering costs related to the PIPE transaction.
Our expected material cash requirements do not include potential contingent payments upon the achievement by us of development, regulatory or commercial milestones that we may be required to make under the terms of the Ayala Purchase Agreement or Atreca purchase agreement, nor do they include potential contingent payments upon the achievement by us of development, regulatory and commercial milestones or royalty payments that we may be required to make under license agreements we have entered into or may enter into with various entities pursuant to which we have in-licensed certain intellectual property.
Except for the $5.8 million in developmental milestones accrued as of December 31, 2024, as further described in Note 7 to our audited consolidated financial statements, our expected material cash requirements do not include potential contingent payments that we may be required to pay upon the achievement of development, regulatory or commercial milestones pursuant to asset acquisitions and license agreements to which we are a party, nor do they include potential contingent payments upon the achievement of development, regulatory and commercial milestones or royalty payments that we may be required to make under license agreements we have entered into or may enter into with various entities pursuant to which we have in-licensed certain intellectual property.
The clinical asset is AL102, an investigational gamma secretase inhibitor, currently under evaluation in a Phase 3 trial for the treatment of desmoid tumors.
We are advancing a pipeline comprising two clinical assets and four preclinical assets. Varegacestat, formerly AL102, is an investigational gamma secretase inhibitor, or GSI, currently under evaluation in a Phase 3 clinical trial for the treatment of desmoid tumors.
We record direct research and development expenses , consisting principally of external costs, such as fees paid to investigators, consultants, central laboratories and CROs in connection with our clinical trials, and costs related to manufacturing, to specific product development programs.
We record direct research and development expenses which consist primarily of external costs related to manufacturing, outsourced research, product development, and clinical trial costs, including fees paid to investigators, consultants, central laboratories and CROs, to specific product candidates.
In connection with the closing of the public offering, we issued and sold 11,500,000 shares of our common stock. Financial Overview Since our inception in 2006, we have devoted substantially all our resources to research and development, raising capital, building our management team, building our intellectual property portfolio and entering and executing on collaborations and strategic transactions.
The increase was primarily a result of higher cash and cash equivalent and marketable security balances. Liquidity and capital resources Sources of liquidity Since our inception in 2006, we have devoted substantially all our resources to research and development, raising capital, building our management team, building our intellectual property portfolio and entering and executing on collaborations and strategic transactions.
Investing activities Net cash used in investing activities for the year ended December 31, 2023 was $30.5 million, consisting primarily of $38.9 million used to purchase marketable securities and $0.8 million to purchase property and equipment, offset by $9.3 million received in connection with the Morphimmune merger.
The change in operating assets and liabilities primarily consisted of an increase in deferred revenue of $16.0 million, partially offset by an increase in prepaid expenses and other assets of $4.1 million. 111 Table of Contents Investing activities Net cash used in investing activities for the year ended December 31, 2024 was $85.1 million, consisting primarily of $186.6 million of purchases of marketable securities, $46.3 million of purchases of IPR&D assets and $7.2 million of purchases of property and equipment, partially offset by $155.0 million from maturities of marketable securities Net cash used in investing activities for the year ended December 31, 2023 was $30.5 million, consisting primarily of $38.9 million of purchases of marketable securities and $0.8 million of purchases of property and equipment, offset by $9.3 million received in connection with the Morphimmune merger.
We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material.
Cash flows The following table summarizes our sources and uses of cash for the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ 2023 2022 ​ ​ (in thousands) Cash used in operating activities ​ $ (7,568) ​ $ (28,690) Cash used in investing activities ​ (30,484) ​ (248) Cash provided by financing activities ​ 116,408 ​ 32 Net increase (decrease) in cash and cash equivalents and restricted cash ​ $ 78,356 ​ $ (28,906) Operating activities Net cash used in operating activities for the year ended December 31, 2023 was $7.6 million, consisting primarily of our net loss of $106.8 million, increases in prepaid expenses and other assets of $4.1 million, offset by a noncash charge of $80.8 million for the purchase of in-process research and development assets, a noncash charge of $6.2 million for share-based compensation expense, and a $16.0 million increase in deferred revenue.
Cash flows The following table summarizes our sources and uses of cash for the years ended December 31, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Cash used in operating activities ​ $ (110,794) ​ $ (7,568) Cash used in investing activities ​ (85,063) ​ (30,484) Cash provided by financing activities ​ 240,529 ​ 116,408 Net increase in cash and cash equivalents and restricted cash ​ $ 44,672 ​ $ 78,356 Operating activities Net cash used in operating activities for the year ended December 31, 2024 was $110.8 million, consisting primarily of our net loss of $293.0 million, partially offset by noncash charges of $167.3 million and a net change in operating assets and liabilities of $14.9 million.
While our significant accounting policies are described in more detail in Note 2 to our audited consolidated financial statements appearing elsewhere in this Annual Report, we believe that the following accounting policies are the most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
While our significant accounting policies are described in more detail in Note 2 to our audited consolidated financial statements appearing elsewhere in this Annual Report, we believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas that involve management’s judgement and estimates and are reasonably likely to have a material impact on our financial condition or results of operations.
Net cash used in operating activities for the year ended December 31, 2022 was $28.7 million, consisting primarily of our net loss of $36.9 million and decreases in accrued expenses and other liabilities, accounts payable, and other long- 110 Table of Contents term liabilities of $2.8 million, offset by noncash charges of $5.3 million for share-based compensation expense and a $5.1 million decrease in prepaids expenses and other assets.
Net cash used in operating activities for the year ended December 31, 2023 was $7.6 million, consisting primarily of our net loss of $106.8 million, partially offset by noncash charges of $87.2 million and a net change in operating assets and liabilities of $12.0 million.
To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses. ​ 114 Table of Contents Item 7A. Quantitative and Qualitative Disclosures About Market Risk Not required. Item 8. Financial Statements and Supplementary Data The information required by this Item 8 is set forth on pages 119 through 145 hereto. Item 9.
Therefore, the reported results of operations contained in our financial statements may not be directly comparable to those of other public companies. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Not required. Item 8. Financial Statements and Supplementary Data The information required by this Item 8 is set forth on pages 126 to 153 hereto. Item 9.
Our net losses were $106.8 million, including non-cash write off of in-process research and development of $80.8 million acquired in the Merger, and $36.9 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had cash, cash equivalents and marketable securities of $138.1 million.
Since inception, we have incurred significant operating losses and negative cash flows from operations. Our net losses were $293.0 million and $106.8 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had cash, cash equivalents and marketable securities of $217.3 million and an accumulated deficit of $515.8 million.
There were no similar transactions for the year ended December 31, 2022. 108 Table of Contents Research and development expenses Research and development expenses were $23.1 million and $23.3 million for the years ended December 31, 2023 and 2022, respectively.
Research and development expenses Research and development expenses increased by $106.5 million, from $23.1 million for the year ended December 31, 2023 to $129.5 million for the year ended December 31, 2024.
Please also see the section entitled “Special Note Regarding Forward-Looking Statements.” Overview We are a biopharmaceutical company focused on the development of targeted oncology therapies. We believe that the pursuit of novel or underexplored targets will be central to the next generation of transformative therapies. For that reason, we pursue therapeutics that we believe have best-in-class or first-in-class potential.
Please also see the section entitled “Special Note Regarding Forward-Looking Statements.” Overview We are a clinical-stage targeted oncology company committed to developing targeted therapies designed to improve outcomes for cancer patients.
The increase of $6.1 million is primarily a result of a $3.0 million increase in personnel-related costs including increases of $1.1 million in salary and benefits costs due to increased headcount associated with the Merger and supporting the AbbVie Collaboration Agreement, $1.1 million in severance costs, and $0.8 million in share-based compensation.
The increase was primarily a result of a $10.1 million increase in personnel-related costs from an increase in headcount, including a $6.4 million increase in share-based compensation. Interest income Interest income increased by $10.1 million from $2.7 million for the year ended December 31, 2023 to $12.8 million for the year ended December 31, 2024.
Under the Zentalis Agreement, we paid to Zentalis upfront consideration totaling $15 million in cash and $20 million in shares of our common stock with the shares valued at the trailing 30-day volume-weighted average price.
Under the Zentalis License Agreement, we paid Zentalis $15.0 million in cash and issued Zentalis 2,298,586 shares of our common stock with an aggregate fair value of $23.4 million on the date of issuance.
Pursuant to the Ayala Purchase Agreement, we are obligated to pay Ayala up to $37.5 million in development and commercial milestones.
Under the Ayala Purchase Agreement, we paid Ayala approximately $20.0 million in cash and issued 2,175,489 shares of our common stock with an aggregate fair value of $50.6 million on the date of issuance. We are also obligated to pay Ayala up to $37.5 million in the aggregate upon the achievement of certain development, regulatory and commercial milestones.
To date, we have financed our operations primarily through sales of our equity securities, and strategic partnerships and transactions. In addition, we received $17.6 million in expense reimbursement from the Department of Defense, or the DoD, under the Other Transaction Authority for Prototype Agreement, or the OTA Agreement, from inception through 2022.
To date, we have financed our operations primarily through sales of our equity securities, collaboration arrangements, strategic partnerships and transactions and to a lesser extent, through expense reimbursements received from a governmental contract that ended in 2022. 110 Table of Contents To date, we have not generated any revenue from commercial sale of products and do not expect to generate revenue from commercial sales for the foreseeable future.
Expected volatility is a subjective assumption based on the historical stock volatility of several of our comparable publicly traded companies over a period of time equal to the expected term. Accrued research and development expenses As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses.
Research and development costs are expensed as incurred. As part of preparing our financial statements, we are required to estimate and accrue expenses.
(2) The decrease in 2023 compared to 2022 for IM-4320 was due primarily to decreased development and manufacturing activities as we shifted available resources to the AbbVie Collaboration.
The decrease was primarily due to a decrease in certain research and development activities allocated to AbbVie during the year ended December 31, 2024 compared to the year ended December 31, 2023.
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Our goal is to establish a broad pipeline of preclinical and clinical assets which we can efficiently develop through successive value inflection points. To support that goal, we pair business development activity with significant investment in our internal discovery programs. We are advancing a named pipeline comprising one clinical and three preclinical assets.
Added
We are advancing an innovative portfolio of therapeutics, drawing on leadership that previously played key roles in the design, development, and commercialization of cutting-edge targeted cancer therapies, including antibody-drug conjugate therapies, or ADCs.
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The preclinical assets are IM-1021, a receptor tyrosine kinase-like orphan receptor 1, or ROR1, antibody-drug conjugate, or ADC; IM-3050, a fibroblast activation protein, or FAP, targeted radioligand therapy, or RLT, candidate; and IM-4320, an anti-IL-38 immunotherapy candidate.
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We believe that the pursuit of novel or underexplored targets will be central to the next generation of transformative therapies, and we are dedicated to developing targeted cancer therapies with first-in-class and best-in-class potential. Our goal is to establish a broad pipeline of preclinical and clinical assets and develop these assets into approved products for commercialization.
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We anticipate submitting investigational new drug applications, or INDs, for IM-3050 and IM-1021 in the first quarter of 2025 and for IM-4320 at a later date. We believe that each of these drugs has the potential to improve outcomes for patients across multiple indications.
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Our investigational new drug application, or IND, for IM-1021, a receptor tyrosine kinase-like orphan receptor 1, or ROR1, antibody-drug conjugate, received FDA clearance in December 2024, and the Phase 1 trial is ongoing with the first patient dosed in February 2025.
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Recent Events Collaboration with AbbVie In January 2023, we entered into a collaboration and option agreement, or the Collaboration Agreement, with AbbVie.
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Our other preclinical assets include IM-3050, a fibroblast activation protein, or FAP, targeted radioligand therapy, or RLT, for which we submitted an IND in March 2025, and three solid tumor ADC drug candidates: IM-1617, IM-1340, and IM-1335, all of which are in IND-enabling activities. We have six additional ADCs currently undergoing lead optimization in advance of future development decisions.
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As part of the agreement, we will use our discovery platform to discover and validate targets derived from patients with three specified tumor types, and antibodies that bind to such targets, which may be the subject of further development and commercialization by AbbVie.
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At present, our internal discovery efforts center on designing ADCs against novel or underexplored targets. We believe that pursuing differentiated targets provides a path to significant clinical benefit and meaningful market opportunities.
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The research term is at least 66 months, subject to extension in certain circumstances by specified extension periods.
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This strategy is supported by HC74, the differentiated, novel topoisomerase 1, or TOP1, inhibitor payload we exclusively licensed from Zentalis Pharmaceuticals, Inc., or Zentalis, in January 2024 and subsequently purchased from Zentalis in October 2024.
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Under the Collaboration Agreement, AbbVie paid us an upfront payment of $30.0 million in January 2023 and may pay us certain additional platform access payments in the aggregate amount of up to $70.0 million based on our use of our discovery platform in connection with activities under each stage of the research plan, and delivery of VTPs (as defined in the Collaboration Agreement) to AbbVie.
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We have efforts underway to develop additional linkers and payloads and believe that a broad toolbox of linkers and payloads supports our mission to design and develop a diverse pipeline of ADCs.
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AbbVie will also pay an option exercise fee in the low single digit millions for each of the up to 10 VTPs for which it exercises an option.
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To expand and advance our innovative portfolio of therapeutics, we draw on leadership that previously played key roles in the design, development, and commercialization of cutting-edge targeted cancer therapies, including the first ADCs commercialized for Hodgkin and T-cell lymphoma, urothelial cancer and cervical cancer.
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If AbbVie progresses development and commercialization of a Product (as defined in the Collaboration Agreement), AbbVie will pay us development and first commercial sale milestones of up to $120.0 million per target, and sales milestones based on achievement of specified levels of net sales of Products of up to $150.0 million in the aggregate per target, in each case, subject to specified deductions in certain circumstances.
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Our current programs Varegacestat (formerly AL102) Our lead clinical asset is varegacestat, an oral, once daily GSI therapy that is being evaluated for the treatment of desmoid tumors.
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On a Product-by-Product basis, AbbVie will pay us tiered royalties on net sales of Products at a percentage in the low single digits, subject to specified reductions and offsets in certain circumstances.
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In the Phase 2 RINGSIDE study Part A, varegacestat demonstrated objective response rates, or ORR, of 75% of evaluable patients and 64% in the intent-to-treat population; median reduction in tumor volume of 88%; and an 85% reduction in T2 imaging, which is suggestive of a reduction in cellularity.
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We are potentially eligible to receive up to approximately $2.8 billion from AbbVie under the Collaboration Agreement from the sources described above. 104 Table of Contents Merger In October 2023, we completed the merger with Morphimmune Inc., or Morphimmune a preclinical biotechnology company focused on developing targeted oncology therapeutics.
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The Phase 2 data also show that varegacestat has a safety profile consistent with other GSI therapies. Enrollment in a Phase 3 registrational trial was completed in February 2024, and we expect to report topline data from this trial in the second half of 2025.
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Under the terms of the Agreement and Plan of Merger and Reorganization dated as of June 28, 2023, or the Merger Agreement, among the Company, Morphimmune and Ibiza Merger Sub, Inc., a wholly owned subsidiary of us, or Merger Sub, Morphimmune merged with and into Merger Sub, with Morphimmune surviving as a wholly-owned subsidiary of us, or the Merger.
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We acquired varegacestat from Ayala Pharmaceuticals, Inc., or Ayala, in March 2024. 104 Table of Contents IM-1021 (Solid Tumor and B-Cell Lymphoma ADC) IM-1021 is a ROR1 ADC that incorporates HC74, our proprietary TOP1i payload. ROR1 is expressed in both hematologic malignancies and solid tumors with limited normal tissue expression, and previous ADCs targeting ROR1 have demonstrated clinical activity.
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In connection with the Merger, on October 2, 2023, we issued and sold 21,690,871 shares of our common stock pursuant to the subscription agreements in a Private Investment in Public Equity, or PIPE, transaction which provided us with gross proceeds of $125.0 million. Atreca, Inc.
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In preclinical studies, IM-1021 showed sustained tumor regression in preclinical models, including a mouse model of triple-negative breast cancer, or TNBC, and a mouse model of mantle cell lymphoma, or MCL We believe that IM-1021 may provide improved therapeutic index as compared to other ROR1-targeted ADCs in development.
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Asset Purchase Agreement In December 2023, we entered into an asset purchase agreement, or the Atreca Purchase Agreement, with Atreca, Inc., or Atreca, pursuant to which we will acquire certain antibody-related assets and materials for an upfront payment of $5.5 million and up to $7.0 million in clinical development milestones.
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IM-1021 received IND clearance in December 2024, and the phase 1 clinical trial is ongoing with a starting dose of 2 mg/kg of adjusted ideal body weight. We expect dose escalation to include patients both with solid tumors and with B-cell lymphoma.
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The closing of the transaction is subject to customary conditions, including the approval of Atreca’s stockholders. We expect the closing to occur in the second quarter of 2024.
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IM-3050 (FAP Radioligand Therapy) IM-3050 is a FAP-targeted lutetium-177, Lu-177 or 177Lu, RLT product candidate for the treatment of solid tumors. FAP, or fibroblast activation protein, is a cell surface protease that serves as a tumor-specific marker due to its broad expression on cancer associated fibroblasts, the most common tumor stromal cell. FAP is expressed in 75% of solid tumors.

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Other IMNM 10-K year-over-year comparisons