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What changed in MACROGENICS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MACROGENICS INC's 2024 and 2025 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 2025 report.

+367 added−362 removedSource: 10-K (2026-03-09) vs 10-K (2025-03-20)

Top changes in MACROGENICS INC's 2025 10-K

367 paragraphs added · 362 removed · 276 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

107 edited+29 added−24 removed135 unchanged
Biggest changeAny patients with PROC or CCGC who have primary platinum-refractory disease are excluded from study participation. The study’s primary endpoint is ORR, with multiple secondary endpoints. We expect to commence the LINNET study by mid-2025. MGC026 MGC026 is an investigational ADC incorporating a B7-H3-targeting antibody and a novel TOP1i-based linker-payload, SYNtecan E™.
Biggest changeIn addition, the LINNET study will evaluate up to 20 patients with clear cell gynecologic cancer (CCGC) who have received at least one prior line of therapy. Any patients with PROC or CCGC who have primary platinum-refractory disease are excluded from study participation. The study’s primary endpoint is objective response rate (ORR), with multiple secondary endpoints.
The processes for obtaining regulatory approvals in the United States and in foreign countries, along with subsequent compliance with applicable statutes and regulations, require the expenditure of substantial time and financial resources. FDA Regulation All of our current product candidates are subject to regulation in the United States by the FDA as biological products (biologics).
The processes for obtaining regulatory approvals in the United States and in foreign countries, along with subsequent compliance with applicable statutes and regulations, require the expenditure of substantial time and financial resources. FDA Regulation All our current product candidates are subject to regulation in the United States by the FDA as biological products (biologics).
For example, on August 16, 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law, 16 which among other things, (i) extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025, (ii) authorizes HHS to negotiate the price of certain high-expenditure, single-source drugs covered under Medicare that have been on the market for at least 7 years, and (iii) imposes rebates with respect to certain drugs and biologics covered under Medicare Part B or Medicare Part D to penalize price increases that outpace inflation.
For example, on August 16, 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law, which among other things, (i) extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025, (ii) authorizes HHS to negotiate the price of certain high-expenditure, single-source drugs covered under Medicare that have been on the market for at least 7 years, and (iii) imposes rebates with respect to certain drugs and biologics covered under Medicare Part B or Medicare Part D to penalize price increases that outpace inflation.
Noncompliance with post-marketing requirements can result in one or more of the following consequences: 14 • Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • Warning letters; • 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 license approvals; • Product seizure or detention, or refusal to permit the import or export of products; or • Injunctions or the imposition of civil or criminal penalties.
Noncompliance with post-marketing requirements can result in one or more of the following consequences: • Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • Warning letters; • 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 license approvals; • Product seizure or detention, or refusal to permit the import or export of products; or • Injunctions or the imposition of civil or criminal penalties.
MGD024 was designed to minimize cytokine-release syndrome, while maintaining anti-tumor cytolytic activity, and permitting intermittent dosing through a longer half-life. CD123, the interleukin-3 receptor alpha chain, is widely overexpressed in various hematologic malignancies, including AML and myelodysplastic syndrome (MDS), making it an attractive therapeutic target.
MGD024 was designed to minimize cytokine-release syndrome, while maintaining anti-tumor cytolytic activity, and permitting intermittent dosing through a longer half-life. CD123, the interleukin-3 receptor alpha chain, is widely overexpressed in various hematologic malignancies, including AML and MDS, making it an attractive therapeutic target.
Cancer cells that arise in other tissues or organs are referred to as solid 6 tumors. Cancer can arise in virtually any part of the body, with the most common types arising in the prostate gland, breast, lung, colon and skin. Cancer is the second leading cause of death in the United States, exceeded only by heart disease.
Cancer cells that arise in other tissues or organs are referred to as solid tumors. Cancer can arise in virtually any part of the body, with the most common types arising in the prostate gland, breast, lung, colon and skin. Cancer is the second leading cause of death in the United States, exceeded only by heart disease.
Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending BLAs, withdrawal of approvals, clinical holds, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, or criminal penalties. Preclinical Studies .
Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to file or approve pending BLAs, withdrawal of approvals, clinical holds, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, or criminal penalties. Preclinical Studies .
Early Bispecific Research Program In September 2023, Gilead nominated the first of two potential research programs under the Research Program Option as part of the Gilead Agreement, leveraging our DART and TRIDENT platforms for generating bispecific antibodies. This nomination granted Gilead an exclusive option to license worldwide rights to the research program, upon achievement of a pre-defined preclinical milestone.
Early Bispecific Research Programs In September 2023, Gilead nominated the first of two potential research programs under the Research Program Option as part of the Gilead Agreement, leveraging our DART and TRIDENT platforms for generating bispecific antibodies. This 3 nomination granted Gilead an exclusive option to license worldwide rights to the research program, upon achievement of a pre-defined preclinical milestone.
There is therefore a possibility that such laws may apply and our practices might be challenged under such anti-kickback laws. False claims laws prohibit anyone from knowingly and willingly presenting, or causing to be presented, any claims for payment for reimbursed drugs or services to third-party payors (including Medicare and Medicaid) that are false or fraudulent.
There is therefore a possibility that such laws may apply and our practices might be challenged under such anti-kickback laws. False claims laws prohibit anyone from knowingly and willingly presenting, or causing to be presented, any claims for payment for reimbursed drugs or services to third-party payors (including Medicare and Medicaid) that are false or 14 fraudulent.
The FDA subjects biologics to extensive pre- and post-market regulation. The Public Health Service Act, the Federal Food, Drug, and Cosmetic Act (FDCA) and other federal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of biologics.
The FDA subjects biologics to extensive pre- and post-market regulation. The Public Health Service Act, the 11 Federal Food, Drug, and Cosmetic Act (FDCA) and other federal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of biologics.
An approval letter authorizes commercial marketing of the drug for the approved indication or indications and the other conditions of use set out in the approved prescribing information. Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing.
An approval letter authorizes commercial marketing of the drug for the approved indication or indications and the other conditions of use set out in the approved prescribing information. Once granted, product approvals may be withdrawn or modified if compliance with regulatory standards is not maintained or problems are identified following initial marketing.
These include three products approved by the FDA: MARGENZA ® (margetuximab-cmkb), an anti-HER2 monoclonal antibody (mAb) that we recently sold to a partner, ZYNYZ ® (retifanlimab-dlwr), an anti-PD-1 mAb that we out-licensed; and TZIELD ® (teplizumab-mzwv), an anti-CD3 mAb that we sold to a partner. We are also collaborating with Gilead Sciences, Inc.
These include three products approved by the FDA: ZYNYZ ® (retifanlimab-dlwr), an anti-PD-1 monoclonal antibody (mAb) that we out-licensed; MARGENZA ® (margetuximab-cmkb), an anti-HER2 mAb that we sold to a partner; and TZIELD ® (teplizumab-mzwv), an anti-CD3 mAb that we sold to a partner. We are also collaborating with Gilead Sciences, Inc.
Moreover, we may have to participate in interference proceedings declared by the USPTO to determine priority of invention. In the ordinary course of 8 business we participate in post-grant challenge proceedings, such as oppositions, that challenge the patentability of third party patents. Such proceedings could result in substantial cost, even if the eventual outcome is favorable to us.
Moreover, we may have to participate in interference proceedings declared by the USPTO to determine priority of invention. In the ordinary course of business we participate in post-grant challenge proceedings, such as oppositions, that challenge the patentability of third party patents. Such proceedings could result in substantial cost, even if the eventual outcome is favorable to us.
A BLA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewing BLA supplements as it does in reviewing BLAs. Manufacturers are subject to requirements for adverse event reporting and submission of periodic reports following FDA approval of a BLA.
A BLA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA generally uses the same procedures and actions in reviewing BLA supplements as it does in reviewing BLAs. Manufacturers are subject to requirements for adverse event reporting and submission of periodic reports following FDA approval of a BLA.
This is designed to provide a structure with enhanced manufacturability, long-term structural stability and the ability to tailor the half-lives of the DART molecules to their clinical needs. This engineered antibody-like protein has a compact and stable structure and enables the targeting of two different antigens with a single recombinant molecule.
This is designed to provide a structure with enhanced manufacturability, long-term structural stability and the ability 6 to tailor the half-lives of the DART molecules to their clinical needs. This engineered antibody-like protein has a compact and stable structure and enables the targeting of two different antigens with a single recombinant molecule.
The BLA must include the results of preclinical, clinical and other testing and a compilation of data relating to the product's chemistry, manufacture and controls. The cost of preparing and submitting a BLA is substantial. Under federal law, the submission of most BLAs is additionally subject to a substantial application user fee, and annual program user fees also apply.
The BLA must include the results of preclinical, clinical and other testing and a compilation of data relating to the product's chemistry, manufacture and controls. The cost of preparing and submitting a BLA is substantial. Under federal law, the submission of most BLAs is 12 additionally subject to a substantial application user fee, and annual program user fees also apply.
Consequently, we do not know whether any of our product candidates will be protectable or remain protected by enforceable patents. We cannot predict whether the patent applications we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient proprietary protection from competitors.
Consequently, we do not know whether any of our product candidates will be protectable or remain protected by enforceable patents. We cannot predict whether the patent applications we are currently pursuing will be issued as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient proprietary protection from competitors.
There have been persistent proposals to repeal or modify the ACA and it is uncertain how any of those proposals, if in the future approved, would affect these provisions. 9 Trade Secrets We also rely on trade secret protection for our confidential and proprietary information.
There have been persistent proposals to repeal or modify the ACA and it is uncertain how any of those proposals, if in the future approved, would affect these provisions. Trade Secrets We also rely on trade secret protection for our confidential and proprietary information.
In Europe, for example, a CTA must be submitted to the competent national health authority and to independent ethics committees in each country in which a company intends to conduct clinical trials. Once the CTA is approved in accordance with a country’s requirements, clinical trial 15 development may proceed in that country.
In Europe, for example, a CTA must be submitted to the competent national health authority and to independent ethics committees in each country in which a company intends to conduct clinical trials. Once the CTA is approved in accordance with a country’s requirements, clinical trial development may proceed in that country.
Eversana received a co-exclusive right 10 to conduct approved commercialization activities. Eversana utilized its internal capabilities to support marketing, channel management services, medical affairs and other commercial and patient access related services; we booked MARGENZA sales. We and Eversana equally shared in funding Eversana’s commercialization expenses.
Eversana received a co-exclusive right to conduct approved commercialization activities. Eversana utilized its internal capabilities to support marketing, channel management services, medical affairs and other commercial and patient access related services; we booked MARGENZA sales. We and Eversana equally shared in funding Eversana’s commercialization expenses.
Additionally, the FDA will typically inspect the facility or the facilities at which the drug is 13 manufactured. The FDA will not approve the product unless compliance with current Good Manufacturing Practices (cGMPs) is satisfactory. The FDA also reviews the proposed labeling submitted with the BLA and typically requires changes in the labeling text.
Additionally, the FDA will typically inspect the facility or the facilities at which the drug is manufactured. The FDA will not approve the product unless compliance with current Good Manufacturing Practices (cGMPs) is satisfactory. The FDA also reviews the proposed labeling submitted with the BLA and typically requires changes in the labeling text.
In addition, there is cost and risk to our business in defending and enforcing our patents, maintaining our licenses to use intellectual property owned by third parties and preserving the confidentiality of our trade secrets and operating without infringing the valid and enforceable patents and other proprietary rights of third parties.
In addition, there is cost and risk to our 7 business in defending and enforcing our patents, maintaining our licenses to use intellectual property owned by third parties and preserving the confidentiality of our trade secrets and operating without infringing the valid and enforceable patents and other proprietary rights of third parties.
In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the IND application is cleared and the clinical trial can begin. As a result, submission of an IND application may not result in the FDA allowing clinical trials to commence. 12 Clinical Development .
In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the IND application is cleared and the clinical trial can begin. As a result, submission of an IND application may not result in the FDA allowing clinical trials to commence. Clinical Development .
However, there is no guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions.
However, there is no guarantee that the applicable authorities, including the 8 FDA in the United States, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions.
Third-party payors are increasingly examining the medical necessity and cost effectiveness of medical products and services in addition to safety and efficacy and, accordingly, significant uncertainty exists as to the reimbursement status of newly approved therapeutics.
Third- 15 party payors are increasingly examining the medical necessity and cost effectiveness of medical products and services in addition to safety and efficacy and, accordingly, significant uncertainty exists as to the reimbursement status of newly approved therapeutics.
Product candidates using this technology are currently in preclinical development. 7 Licensed ADC Platforms We have licensed ADC platforms from collaboration partners to leverage their past investment in proprietary linker-toxin technology and know-how.
Product candidates using this technology are currently in preclinical development. Licensed ADC Platforms We have licensed ADC platforms from collaboration partners to leverage their past investment in proprietary linker-toxin technology and know-how.
Each protocol involving testing of a new drug in the United States (whether in patients or healthy volunteers) must be included in the IND application submission, and the FDA must be notified of subsequent protocol amendments.
Each protocol involving testing of a new drug in the United States (whether in patients or healthy volunteers) must be included in an IND application submission, and the FDA must be notified of subsequent protocol amendments.
Clinical trials must be conducted: (i) in compliance with all applicable federal regulations and guidance, including those pertaining to good clinical practice (GCP) standards that are meant to protect the rights, safety, and welfare of human subjects and to define the roles of clinical trial sponsors, investigators, and monitors; as well as (ii) under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated.
Clinical trials must be conducted: (i) in compliance with all applicable federal regulations and guidance, including those pertaining to good clinical practice (GCP) standards that are meant to protect the rights, safety, and welfare of human participants and to define the roles of clinical trial sponsors, investigators, and monitors; as well as (ii) under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated.
We are also actively developing multiple preclinical-stage ADC and next generation T-cell engager programs. We and our partners are developing or commercializing product candidates for which we retain certain economic rights.
We are also actively developing preclinical-stage ADC and next generation T-cell engager programs. We and our partners are developing or commercializing product candidates for which we retain certain economic rights.
The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion for uses not consistent with the approved labeling, and a company that is found to have improperly promoted off-label uses or otherwise not to have met applicable promotion rules may be subject to significant liability under both the FDCA and other statutes, including the False Claims Act.
The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion for uses not consistent with the approved labeling, and a company found to have improperly promoted off-label uses or otherwise not to have met applicable promotion rules may be subject to significant liability under both the FDCA and other statutes, including the False Claims Act.
However, assuming no adjustments or extensions, the primary composition of matter patent for each of our clinical pipeline product candidates is expected to expire in the following timeframes: Product or Product Candidate Expiration Date retifanlimab 2036 lorigerlimab 2036 vobramitamab duocarmazine 2037 MGD024 2039 MGC026 2044* MGC028 2045* * pending Patent Term Extension and Reference Product Exclusivity The Hatch-Waxman Act permits a patent term extension for FDA-approved drugs, including biological products, of up to five years beyond the expiration of the patent.
However, assuming no adjustments or extensions, the primary composition of matter patent for each of our clinical pipeline product candidates is expected to expire in the following timeframes: Product or Product Candidate Expiration Date retifanlimab 2036 lorigerlimab 2036 MGD024 2039 MGC026 2044* MGC028 2045* * pending Patent Term Extension and Reference Product Exclusivity The Hatch-Waxman Act permits a patent term extension for FDA-approved drugs, including biological products, of up to five years beyond the expiration of the patent.
FDA approved TZIELD (teplizumab-mzwv) to delay the onset of Stage 3 type 1 diabetes (T1D) in adult and pediatric patients aged 8 years and older with Stage 2 T1D, which triggered a $60.0 million milestone payment to us.
In November 2022, the FDA approved TZIELD (teplizumab-mzwv) to delay the onset of Stage 3 type 1 diabetes (T1D) in adult and pediatric patients aged 8 years and older with Stage 2 T1D, which triggered a $60.0 million milestone payment to us.
In addition, the protocol must be reviewed and approved by an institutional review board (IRB) and all study subjects must provide informed consent prior to participating in the study. Typically, each institution participating in the clinical trial will require review of the protocol before any clinical trial commences at that institution.
In addition, the protocol must be reviewed and approved by an institutional review board (IRB) and all study participants must provide informed consent prior to participating in the study. Typically, each institution participating in the clinical trial will require review of the protocol before any clinical trial commences at that institution.
In Phase 3, the drug is given to a large group of subjects with the target disease or condition (several hundred to several thousand), often at multiple geographical sites, to confirm its effectiveness, monitor side effects, and collect data to support drug approval.
In Phase 3, the drug is given to a large group of participants with the target disease or condition (several hundred to several thousand), often at multiple geographical sites, to confirm its effectiveness, monitor side effects, and collect data to support drug approval.
In Phase 1, testing is conducted in a small group of subjects who may be patients with the target disease or condition or healthy volunteers, to evaluate its safety, determine a safe dosage range, and identify side effects.
In Phase 1, testing is conducted in a small group of participants who may be patients with the target disease or condition or healthy volunteers, to evaluate its safety, determine a safe dosage range, and identify side effects.
Manufacturing We currently manufacture drug substance for most of our clinical trials at our manufacturing facility located in Rockville, Maryland. We also rely on our licensees and contract manufacturers, including Byondis, Synaffix and Millipore Sigma, for producing components of our ADC candidates.
Manufacturing We currently manufacture drug substance for most of our clinical trials at our manufacturing facility located in Rockville, Maryland. We also rely on our licensees and contract manufacturers, including, Synaffix, Sterling and Millipore Sigma, for producing components of our ADC candidates.
In addition, the FDA may impose a temporary or permanent clinical hold, or other sanctions, if it believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical trial subjects.
In addition, the FDA may impose a temporary or permanent clinical hold, or other sanctions, if it believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical trial participants.
All such filings are available through our website free of charge. In addition, the SEC makes available at its website (www.sec.gov), free of charge, reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 18
All such filings are available through our website free of charge. In addition, the SEC makes available at its website (www.sec.gov), free of charge, reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 17
We are currently advancing three proprietary product candidates in clinical development: lorigerlimab, a bispecific DART molecule that targets checkpoint inhibitors PD-1 and CTLA-4; MGC026, an ADC that targets B7-H3 and delivers a novel topoisomerase I inhibitor (TOP1i)-based linker-payload, and MGC028, an ADC that targets ADAM9 and delivers a novel TOP1i-based linker-payload.
We currently have three proprietary product candidates in clinical development: lorigerlimab, a bispecific DART molecule that targets checkpoint inhibitors PD-1 and CTLA-4; MGC026, an ADC that targets B7-H3 and delivers a novel topoisomerase I inhibitor (TOP1i)-based linker-payload, and MGC028, an ADC that targets ADAM9 and delivers a novel TOP1i-based linker-payload.
TZIELD In 2018, we entered into an asset purchase agreement (Provention APA) with Provention Bio, Inc., subsequently acquired by Sanofi S.A. (Sanofi), pursuant to which they acquired our interest in teplizumab, a mAb we had been developing for the treatment of type 1 diabetes.
Partnered Marketed Products TZIELD In 2018, we entered into an asset purchase agreement (Provention APA) with Provention Bio, Inc., subsequently acquired by Sanofi S.A. (Sanofi), pursuant to which they acquired our interest in teplizumab, a mAb we had been developing for the treatment of type 1 diabetes.
We conducted a Phase 2 study, which we refer to as the TAMARACK study, of vobra duo in a total of 177 mCRPC patients and four patients with other cancer types.
We conducted a Phase 2 study, which we referred to as the TAMARACK study, of vobra duo in a total of 177 mCRPC patients and four patients with other cancer types.
Under the terms of the agreements, we receive payments in accordance with the manufacturing schedule and are reimbursed for materials used to manufacture product, as well as other costs incurred to provide manufacturing services. TerSera In November 2024, we sold global rights to MARGENZA to TerSera.
Under the terms of the agreement, we receive payments in accordance with the manufacturing schedule and are reimbursed for materials used to manufacture product, as well as other costs incurred to provide development and manufacturing services. TerSera In November 2024, we sold global rights to MARGENZA to TerSera.
Third-party reimbursement adequate to enable us to realize an appropriate return on our investment in research and product development may not be available or optimal for our products. Further, coverage policies and third-party payor reimbursement rates may change at any time.
Adequate third-party reimbursement that enables us to realize an appropriate return on our investment in research and product development may not be available or optimal for our products. Further, coverage policies and third-party payor reimbursement rates may change at any time.
The DART platform has been specifically engineered to accommodate virtually any variable region sequence with predictable expression, folding and antigen recognition. We believe our multi-specific platforms may provide a significant advantage over current biological interventions in cancer, autoimmune disorders and infectious disease by enabling a range of modalities.
The DART platform has been specifically engineered to accommodate virtually any variable region sequence with predictable expression and antigen recognition. We believe our multi-specific platforms may provide a significant advantage over current biological interventions in cancer, autoimmune disorders and infectious diseases by enabling a range of different modalities.
Information about certain clinical trials must be submitted within specific timeframes to NIH for public dissemination on their ClinicalTrials.gov website. Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and there are additional, more frequent reporting requirements for suspected unexpected serious adverse events.
Information about certain clinical trials must be submitted within specific timeframes to NIH for public dissemination on their ClinicalTrials.gov website. Progress reports detailing the results of the clinical trials and any changes to the manufacturing must be submitted at least annually to the FDA and there are additional, more frequent reporting requirements exist for suspected unexpected serious adverse events.
In Phase 2, the drug is given to a larger group of subjects with the target condition to further evaluate its safety and gather preliminary evidence of efficacy. Phase 3 studies typically last multiple years for oncology indications.
In Phase 2, the drug is given to a larger group of participants with the target condition to further evaluate the safety of the drug and gather preliminary evidence of efficacy. Phase 3 studies typically last multiple years for oncology indications.
In cancerous tissues, this balance is disrupted as a result of mutations, causing unregulated cell division or proliferation that leads to tumor formation and growth. While tumors can grow slowly or rapidly, the dividing cells will nevertheless accumulate, and the normal organization of the tissue will become disrupted.
In cancerous tissues, this balance is disrupted as a result of mutations and/or other genetic or epigenetic modifications, causing unregulated cell division or proliferation that leads to tumor formation and growth. While tumors can grow slowly or rapidly, the dividing cells will nevertheless accumulate, and the normal organization of the tissue will become disrupted.
(Gilead) on the development of MGD024, a bispecific DART antibody targeting CD123 and CD3 that utilizes our next-generation T-cell engager technology, as well as two additional undisclosed pre-clinical DART development programs.
(Gilead) on the development of MGD024, a bispecific DART molecule targeting CD123 and CD3 that utilizes our next-generation T-cell engager technology, as well as two additional undisclosed pre-clinical DART and TRIDENT molecule development programs.
Certain preclinical tests, such as animal tests of reproductive toxicity and carcinogenicity, may continue even after the IND application is submitted.
Certain preclinical tests, such as animal tests of reproductive toxicity and carcinogenicity, may commence or continue even after the IND application is submitted.
Clinical trials involve the administration of the investigational drug to human subjects (healthy volunteers or patients) under the supervision of a qualified investigator.
Clinical trials involve the administration of the investigational drug to human participants (healthy volunteers or patients) under the supervision of a qualified investigator.
While the timelines for approval under these pathways may be shorter, there are requirements and conditions associated with each pathway, and there can be no assurance that any of our investigational products will be able to meet the conditions or requirements necessary to receive any such designation or be able to receive the review or approval benefits associated with such designations.
While the timelines for approval under these designations and pathway may be shorter, requirements and conditions are associated with each, and no assurance can be given that any of our investigational products will be able to meet the conditions or requirements necessary to receive any such designation or approval or be able to receive the benefits associated with such designations.
The challenges in creating such molecules have been the instability of the resulting bispecific molecules and their inherently short half-lives, as well as the inefficiencies in manufacturing these compounds. We believe our DART platform has overcome these engineering challenges by incorporating proprietary covalent di-sulfide linkages and particular amino acid sequences that efficiently pair the chains of the DART molecule.
The challenges in creating such molecules have been the instability of the resulting bispecific molecules sometimes associated with short half-lives, as well as the inefficiencies in manufacturing these compounds. We believe our DART platform has overcome these engineering challenges by incorporating proprietary covalent di-sulfide linkages and particular amino acid sequences that efficiently pair the chains of the DART molecule.
These companies have significantly greater resources than we do. Further, several companies are also developing therapeutics that work by targeting multiple specificities using a single recombinant molecule.
These companies have significantly greater resources than we do. Further, several companies are also developing t-cell engager therapeutics that work by targeting multiple specificities using a single recombinant molecule.
Drug manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA during which the FDA inspects manufacturing facilities to assess compliance with cGMPs. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented.
Drug manufacturers and certain subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic 13 unannounced inspections by the FDA during which the FDA inspects manufacturing facilities to assess compliance with cGMPs. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before implementation.
With the inclusion of a third targeting arm, TRIDENT molecules enable a broader range of mechanisms of action than bispecific targeting, allowing, for instance, the engagement of multiple antigens on a single or on different cells or enabling enhanced target selectivity by modulating the avidity of one of two antigens.
With the inclusion of a third targeting arm, TRIDENT molecules enable a broader range of mechanisms of action than simpler bispecific targeting, allowing, for instance, the engagement of up to three antigens on a single or on different cells or enabling enhanced target selectivity by modulating the avidity of one of two antigens.
Our Platforms and Technology Expertise We apply our understanding of disease biology, immune-mediated mechanisms and next-generation antibody technologies to design specifically targeted antibody-based product candidates based on our DART and licensed ADC platforms.
Our Platforms and Technology Expertise We apply our understanding of disease biology, immune-mediated mechanisms and next-generation antibody technologies to design specifically targeted antibody-based product candidates focused on our DART, TRIDENT, T-cell engager, and licensed ADC platforms.
Additional Wholly Owned Programs Vobramitamab Duocarmazine Vobra duo is an investigational ADC with a cleavable peptide linker designed to deliver a DNA-alkylating duocarmycin payload to dividing and non-dividing cells on solid tumors that express B7-H3. The underlying ADC technology was licensed from Byondis B.V. (Byondis).
Discontinued Program Vobramitamab Duocarmazine Vobra duo was an investigational ADC with a cleavable peptide linker designed to deliver a DNA-alkylating duocarmycin payload to dividing and non-dividing cells on solid tumors that express B7-H3. The underlying ADC technology was licensed from Byondis B.V. (Byondis).
Through these platforms, we have designed antibody-based product candidates that have the potential to improve on standard treatments by having one or more of the following attributes: (1) multiple specificities; (2) increased abilities to interact with the body's immune system to fight tumors; (3) capacity to bind more avidly to antigen targets; (4) increased potency; (5) reduced immunogenicity or (6) the ability to target and kill cancer cells that are resistant to standard treatments.
Through these platforms, we have designed antibody-based product candidates that have the potential to improve on standard treatments by having one or more of the following attributes: (1) recognition of multiple antigens; (2) increased abilities to leverage the body's immune system to fight tumors; (3) capacity to bind more avidly or more selectively to specific antigen targets; (4) increased therapeutic windows; (5) reduced immunogenicity or (6) the ability to target and kill cancer cells that are resistant to standard treatments.
In addition, the FDA has developed approaches intended to make certain qualifying products available to patients rapidly - Priority Review, Breakthrough Therapy, Accelerated Approval, and Fast Track.
In addition, the FDA has developed approaches intended to make certain qualifying products available to patients rapidly - Priority Review, Breakthrough Therapy, Accelerated Approval, Fast Track Designation, and the Commissioners National Priority Review Voucher Pilot Program.
Amgen Inc. has obtained marketing approval for one product that works by targeting antigens both on immune effector cell populations and those expressed on certain cancer cells, and has other product candidates in development that use this mechanism.
Amgen Inc. has obtained marketing approval for one such t-cell engager product in a solid tumor indication that works by targeting antigens both on immune effector cell populations and those expressed on certain 10 cancer cells, and has other product candidates in development that use this mechanism.
However, we obtain certain raw materials principally from only one source. In the event one of these suppliers was unable to provide the materials or product, we generally seek to maintain sufficient inventory to supply the market until an alternative source of supply can be implemented.
In the event one of these suppliers was unable to 9 provide the materials or product, we generally seek to maintain sufficient inventory to supply the market until an alternative source of supply can be implemented.
Teplizumab was granted Breakthrough Therapy Designation by the FDA and PRIority MEdicines (PRIME) designation by the European Medicines Agency (EMA). In November 2022, the U.S.
Teplizumab was granted Breakthrough Therapy Designation by the FDA and PRIority MEdicines (PRIME) designation by the European Medicines Agency (EMA).
Other U.S. Post-Marketing Regulatory Requirements . Once a BLA is approved, a product will be subject to certain post-approval requirements, including those relating to advertising, promotion, adverse event reporting, recordkeeping, and cGMPs, as well as registration, listing, and inspection.
Other U.S. Post-Marketing Regulatory Requirements . Once a BLA is approved, a product will be subject to certain post-approval requirements, including those relating to advertising, promotion, adverse event reporting, recordkeeping, and cGMPs, as well as registration, listing, and inspection. There also are continuing, annual program user fee requirements for marketed products.
To that end, we maintain a Speak Up Culture where all employees are encouraged to raise issues, report concerns, and ask questions. We also maintain an anonymous hotline that is available to all of our employees, contractors and vendors to report any matter of concern.
The Code requires reporting any actual or suspected misconduct, illegal activities or fraud. To that end, we maintain a Speak Up Culture where all employees are encouraged to raise issues, report concerns, and ask questions. We also maintain an anonymous hotline that is available to all of our employees, contractors and vendors to report any matter of concern.
Human Capital Management As of December 31, 2024, we had 341 full-time employees, 273 of whom were primarily engaged in research, development and manufacturing activities, and 71 of whom had an M.D. and/or Ph.D. Our employees are critically important to the achievement of our company’s mission and goals.
Human Capital Management As of February 28, 2026, we had 293 full-time employees, 245 of whom were primarily engaged in research, development and manufacturing activities, an d 61 of whom had an M.D. and/or Ph.D. Our employees are critically important to the achievement of our company’s mission and goals.
We continue to enroll patients in a Phase 1 dose-escalation study of MGD024 in patients with CD123-positive neoplasms, including acute myeloid leukemia and myelodysplastic syndromes.
We continue to enroll patients in a Phase 1 dose-escalation study of MGD024 in patients with CD123-positive neoplasms, including AML and MDS.
The bispecific immuno-oncology field targeting PD-1 and CTLA-4 has several competitors, with treatments currently approved in China or in development for various tumor types and patient populations. Akeso, Inc., AstraZeneca plc (AstraZeneca), Jiangsu Alphamab Biopharmaceuticals Co., Ltd., and Xencor, Inc.
The bispecific immuno-oncology field targeting PD-1 and CTLA-4 has several competitors, with treatments currently approved in China or in development for various tumor types and patient populations.
Product Candidates in Development under Collaborations MGD024 MGD024 is an investigational, next-generation, bispecific CD123 × CD3 DART molecule designed to engage CD3 expressed on immune effector cells, such as T cells, to kill CD123-expressing cancer cells for the potential treatment of certain hematologic malignancies, including AML.
MGD024 MGD024 is an investigational, next-generation, bispecific CD123 × CD3 DART molecule designed to engage CD3 expressed on immune effector cells, such as T cells, to kill CD123-expressing cancer cells for the potential treatment of certain hematologic malignancies, including acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS).
The two variable regions of an antibody are mono-specific and are able to target only a single type structural component of an antigen. For many years, researchers have sought to create recombinant molecules that are capable of targeting two antigens or epitopes (i.e., specific part of an antigen bound by the antibody) within the same molecule.
For many years, researchers have sought to create recombinant molecules that are capable of targeting two antigens or epitopes (i.e., specific part of an antigen bound by the antibody) within the same molecule.
In addition, other companies are developing new treatments for cancer that utilize multi-specific approaches, including Abbvie, Affimed N.V., AstraZeneca, BioNTech, Eli Lilly and Company, F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc., particularly through its affiliate, Genentech, Inc., Genmab A/S, Johnson & Johnson Services, Inc., Merus B.V., Regeneron Pharmaceuticals, Inc., Xencor and Zymeworks, Inc.
In addition, other companies are developing new t-cell engager treatments for cancer that utilize multi-specific approaches, including Abbvie, Amgen, AstraZeneca, F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc., particularly through its affiliate, Genentech, Inc., Genmab A/S, Janux Therapeutics, Johnson & Johnson Services, Inc., Regeneron Pharmaceuticals, Inc., Xencor and Zymeworks, Inc.
Approved mAbs that target the immune checkpoints PD-1 and CTLA-4 have shown enhanced clinical antitumor activity when given in combination in various cancers, including renal cell carcinoma, melanoma, non-small cell lung cancer (NSCLC), esophageal cancer and microsatellite instability-high (MSI-H) colorectal cancer. We initiated the randomized Phase 2 LORIKEET study in the second half of 2023.
Approved mAbs that target the immune checkpoints PD-1 and CTLA-4 have shown enhanced clinical antitumor activity when given in combination in various cancers, including renal cell carcinoma, melanoma, non-small cell lung cancer (NSCLC), esophageal cancer and microsatellite instability-high (MSI-H) colorectal cancer. We initiated the LINNET study in patients with platinum-resistant ovarian cancer (PROC) in mid-2025.
Assuming exercise of the CD123 Option, we will also be eligible to receive tiered, low double-digit royalties on worldwide net sales of MGD024 (or other CD123 products developed under the agreement) and assuming 5 exercise of the Research Program Option, a flat royalty on worldwide net sales of any products resulting from the two research programs.
In addition, upon exercise of the CD123 Option, we are eligible to receive tiered, low double-digit royalties on worldwide net sales of MGD024 and any other CD123 products developed under the agreement, and upon exercise of the applicable Research Program Options, a flat royalty on worldwide net sales of any products resulting from the additional research programs.
These molecules provide potential sources of future cash flow and platform validation and are identified below: Partnered Marketed Products MARGENZA In October 2024, we announced that we had entered into an agreement in which TerSera Therapeutics LLC (TerSera), a privately-held biopharmaceutical company with a focus in oncology and non-opioid pain management, would acquire global rights to MARGENZA® (margetuximab-cmkb).
MARGENZA In October 2024, we announced that we had entered into an agreement in which TerSera Therapeutics LLC (TerSera), a privately-held biopharmaceutical company with a focus in oncology and non-opioid pain management, would acquire global rights to MARGENZA® (margetuximab-cmkb).
While we don’t necessarily believe there is a single best linker-toxin technology capable of addressing all targets and indications, we have selected what we believe are best-in-class technologies for construction of each of our ADC product candidates. For example, to date we have utilized linker-toxin payloads developed by Byondis for vobra duo and by Synaffix B.V.
While we don’t necessarily believe there is a single best linker-toxin technology capable of addressing all targets and indications, we have selected what we believe are best-in-class technologies for construction of each of our ADC product candidates. For example, we are currently utilizing linker payload technologies developed by Synaffix for multiple molecules, including MGC026, MGC028 and MGC030.
Pipeline Patent Protection As of December 31, 2024, we held 73 patents in the United States with 35 patent applications pending and 891 patents in other countries of the world with 410 patent applications pending.
Pipeline Patent Protection As of December 31, 2025, we held 58 patents in the United States with 24 patent applications pending and 681 patents in other countries of the world with 283 patent applications pending.
In addition, we operate a 5 × 2,000 liter commercial-scale cGMP antibody manufacturing facility in our Maryland headquarters to support our clinical programs. We also provide outsourced contract development and manufacturing services to our collaborators and other third parties for commercial and clinical products to offset a portion of the operating costs of this facility.
We have utilized the facility to support our clinical programs and we also provide outsourced contract development and manufacturing services to our collaborators and other third parties for commercial and clinical products to offset a significant portion of the operating costs of this facility.
This cleavable linker-payload is based on exatecan, a clinically validated and potent camptothecin, and is site-specifically conjugated using the GlycoConnect® technology developed by our collaboration partner, Synaffix (a Lonza company). A Phase 1 dose escalation study of MGC026 in patients with advanced solid tumors is ongoing. We expect to initiate dose expansion in selected indications in 2025.
This cleavable linker-payload is based on exatecan, a clinically validated and potent camptothecin, and is site-specifically conjugated using the GlycoConnect® technology developed by our collaboration partner, Synaffix B.V., a Lonza company (Synaffix). An ongoing Phase 1 dose escalation study of MGC026 was initiated in 2024.
On July 30, 2024, we reported that after a review of accumulated study data though a July 9, 2024 data cut-off, at which time there had been an aggregate of eight investigator-reported, treatment-related deaths on the TAMARACK study, we agreed with the study’s IDMC recommendation that study treatment be discontinued for the remaining mCRPC study participants who potentially could have received additional doses.
On July 30, 2024, we reported that after a review of accumulated study data though a July 9, 2024 data cut-off, we agreed with the study’s Independent Safety Monitoring Committee recommendation that study treatment be discontinued, for safety reasons, for the remaining mCRPC study participants who potentially could have received additional doses.
In November 2024, we received $7.0 million in fulfillment of an approval milestone from Zai Lab. ZYNYZ In 2017, we licensed retifanlimab (previously known as MGA012), a mAb targeting PD-1, to Incyte Corporation (Incyte) under a global collaboration and license agreement (Incyte Agreement); we retain the right to develop the molecule in combination with product candidates from our pipeline.
ZYNYZ In 2017, we licensed retifanlimab, a mAb targeting PD-1, to Incyte Corporation (Incyte) under a global collaboration and license agreement (Incyte License Agreement); we retain the right to develop the molecule in combination with product candidates from our pipeline.
This positive study outcome triggered payment of a $50.0 million milestone to us by Sanofi. We retain the right to receive a 50% share of the royalty on global net sales above a certain annual threshold. In addition, we are eligible to receive $50.0 million if TZIELD achieves a certain level of net sales.
We retain the right to receive a 50% share of the royalty on global net sales above a certain annual threshold and are also eligible to receive an additional $50.0 million milestone if TZIELD achieves a specified level of net sales.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFederal false claims laws, including the federal civil False Claims Act, prohibit, among other things, any person or entity from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, or causing to be made, a false statement to get a claim paid. 46 The federal healthcare program anti-kickback statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for, purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare programs.
Biggest changeThe federal healthcare program anti-kickback statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for, purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare programs.
We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success. • Our product candidates, if approved, may fail to achieve or maintain market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success. • The manufacture of our product candidates, for ourselves and our collaborators, is complex, and we may encounter difficulties in production.
We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success. • Our product candidates, if approved, may fail to achieve or maintain market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success. • The manufacture of our product candidates, for ourselves and our collaborators, is complex, and we may encounter difficulties in production for ourselves or our collaborators.
Further, we have limited experience in large-scale commercial manufacturing, and there can be no assurance that we will be able to effectively manufacture commercial quantities of our products or product candidates for ourselves or our collaborators, if and when approved. • Our manufacturing facility is subject to significant government regulations and approvals, which are often costly and could result in adverse consequences to our business if we fail to comply with the regulations or maintain the approvals. • We have limited experience in launching and marketing biopharmaceutical products.
Further, we have limited experience in large-scale commercial manufacturing, and there can be no assurance that we will be able to effectively manufacture commercial quantities of products or product candidates for ourselves or our collaborators, if and when approved. • Our manufacturing facility is subject to significant government regulations and approvals, which are often costly and could result in adverse consequences to our business if we fail to comply with the regulations or maintain the approvals. • We have limited experience in launching and marketing biopharmaceutical products.
For example, the California Consumer Privacy Act of 2018 (the “CCPA”) applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights.
For example, the California Consumer Privacy Act of 2018 (“CCPA”) applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights.
For example, the European Union’s General Data Protection Regulation (EU GDPR), companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros under the EU GDPR, 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
For example, under the European Union’s General Data Protection Regulation (EU GDPR), companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros under the EU GDPR, 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
Any future commercialization collaborations we enter into may pose a number of risks, including the following: • collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue commercialization our products or any product candidates that achieve regulatory approval or may elect not to continue commercialization based on clinical trial results, changes in the collaborators' strategic focus or other factors that divert resources or create competing priorities; • collaborators could independently commercialize products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully commercialized under terms that are more economically attractive than ours; • collaborators with marketing and distribution rights to our products or our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with collaborators, including disagreements on contract interpretation, commercialization strategy or tactics, might cause delays or termination of the commercialization of products or product candidates, might lead to additional responsibilities for us with respect to our products or product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly utilize our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may violate, or be investigated for potentially violating, health care compliance and related laws and regulations, which may expose us to litigation, enforcement actions or inquiries, or other potential liability; and • collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further commercialization of our products or applicable product candidates.
Any future commercialization collaborations we enter into may pose a number of risks, including the following: • collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue commercialization our products or any product candidates that achieve regulatory approval or may elect not to continue commercialization based on clinical trial results, changes in the collaborators' strategic focus or other factors that divert resources or create competing priorities; 38 • collaborators could independently commercialize products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully commercialized under terms that are more economically attractive than ours; • collaborators with marketing and distribution rights to our products or our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with collaborators, including disagreements on contract interpretation, commercialization strategy or tactics, might cause delays or termination of the commercialization of products or product candidates, might lead to additional responsibilities for us with respect to our products or product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly utilize our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may violate, or be investigated for potentially violating, health care compliance and related laws and regulations, which may expose us to litigation, enforcement actions or inquiries, or other potential liability; and • collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further commercialization of our products or applicable product candidates.
Some of the factors that may cause the market price of our common stock to fluctuate include: • results and timing of our clinical trials and clinical trials of our competitors’ products; • failure or discontinuation of any of our development programs; • issues in manufacturing our product candidates or future approved products; • regulatory developments or enforcement in the United States and foreign countries with respect to our product candidates or our competitors’ products; • competition from existing products or new products that may emerge; • developments or disputes concerning patents or other proprietary rights; • introduction of technological innovations or new commercial products by us or our competitors; • announcements by us, our collaborators or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; • changes in estimates or recommendations by securities analysts, if any cover our common stock; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • public concern over our product candidates or any future approved products; 51 • threatened or actual litigation; • future or anticipated sales of our common stock; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • additions or departures of key personnel; • changes in the structure of health care payment systems in the United States or overseas; • failure of any of our product candidates, if approved, to achieve commercial success; • economic and other external factors or other disasters or crises; • period-to-period fluctuations in our financial condition and results of operations, including the timing of receipt of any milestone or other payments under commercialization or licensing agreements; • general market conditions and market conditions for biopharmaceutical stocks; and • overall fluctuations in U.S. equity markets.
Some of the factors that may cause the market price of our common stock to fluctuate include: • results and timing of our clinical trials and clinical trials of our competitors’ products; • failure or discontinuation of any of our development programs; • issues in manufacturing our product candidates or future approved products; • regulatory developments or enforcement in the United States and foreign countries with respect to our product candidates or our competitors’ products; • competition from existing products or new products that may emerge; • developments or disputes concerning patents or other proprietary rights; • introduction of technological innovations or new commercial products by us or our competitors; • announcements by us, our collaborators or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; • changes in estimates or recommendations by securities analysts, if any cover our common stock; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • public concern over our product candidates or any future approved products; • threatened or actual litigation; • future or anticipated sales of our common stock; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • additions or departures of key personnel; • changes in the structure of health care payment systems in the United States or overseas; • failure of any of our product candidates, if approved, to achieve commercial success; • economic and other external factors or other disasters or crises; • period-to-period fluctuations in our financial condition and results of operations, including the timing of receipt of any milestone or other payments under commercialization or licensing agreements; • general market conditions and market conditions for biopharmaceutical stocks; and • overall fluctuations in U.S. equity markets.
Our existing therapeutic collaborations, and any future collaborations we enter into, may pose a number of risks, including the following: • collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators' strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays in payment, or non-payment, of royalties, milestones or other monies owed, delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and 36 • collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
Our existing therapeutic collaborations, and any future collaborations we enter into, may pose a number of risks, including the following: • collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators' strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; 35 • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays in payment, or non-payment, of royalties, milestones or other monies owed, delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and • collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
The types of situations in which we may become a party to such litigation or proceedings include: • we or our collaborators may initiate litigation or other proceedings against third parties seeking to invalidate the patents held by those third parties or to obtain a judgment that our products or processes do not infringe those third parties' patents; • if our competitors file patent applications that claim technology also claimed by us or our licensors, we or our licensors may be required to participate in interference, opposition or other proceedings to determine the priority of invention, which could jeopardize our patent rights and potentially provide a third party with a dominant patent position; • if third parties initiate litigation claiming that our processes or products infringe their patent or other intellectual property rights, we and our collaborators will need to defend against such proceedings; and • if a license to necessary technology is terminated, the licensor may initiate litigation claiming that our processes or products infringe or misappropriate their patent or other intellectual property rights and/or that we breached our obligations under the license agreement, and we and our collaborators would need to defend against such proceedings.
The types of situations in which we may become a party to such litigation or proceedings include: • we or our collaborators may initiate litigation or other proceedings against third parties seeking to invalidate the patents held by those third parties or to obtain a judgment that our products or processes do not infringe those third parties' patents; • if our competitors file patent applications that claim technology also claimed by us or our licensors, we or our licensors may be required to participate in interference, opposition or other proceedings to determine the priority of invention, which could jeopardize our patent rights and potentially provide a third party with a dominant patent position; • if third parties initiate litigation claiming that our processes or products infringe their patent or other intellectual property rights, we and our collaborators will need to defend against such proceedings; and 41 • if a license to necessary technology is terminated, the licensor may initiate litigation claiming that our processes or products infringe or misappropriate their patent or other intellectual property rights and/or that we breached our obligations under the license agreement, and we and our collaborators would need to defend against such proceedings.
The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) which prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private), willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious or fraudulent statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.
The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) which prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private), willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious or fraudulent statements in connection with the 46 delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.
If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive information (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms.
If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience material adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive information (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms.
The success of our product candidates depends on many factors, including but not limited to: • successful and timely patient enrollment in, and completion of, clinical trials, as well as completion of nonclinical studies; • the acceptability and adequacy of safety, tolerability and efficacy data from our clinical trials and other studies; • the sufficiency of our financial resources and ability to obtain additional funding for the development of our product candidates; • receipt of regulatory approvals; 23 • the performance by clinical research organizations (CROs) or other third parties we may retain of their duties to us in a manner that complies with our protocols and applicable laws and that protects the integrity of the resulting data; • obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity; • ensuring we do not infringe, misappropriate or otherwise violate the valid patent, trade secret or other intellectual property rights of third parties; • successfully launching our product candidates if and when approved; • maintaining commercial manufacturing capabilities, either by utilizing our current manufacturing facilities or making arrangements with third-party manufacturers; • manufacturing or obtaining sufficient supplies of our product candidates that may be necessary for use in clinical trials for evaluation of our product candidates and commercialization of our products; • obtaining favorable reimbursement from third-party payors for product candidates; • competition with other products; • post-marketing commitments to regulatory agencies following regulatory approval; and • continued acceptable safety profile following regulatory approval.
The success of our product candidates depends on many factors, including but not limited to: • successful and timely patient enrollment in, and completion of, clinical trials, as well as completion of nonclinical studies; • the acceptability and adequacy of safety, tolerability and efficacy data from our clinical trials and other studies; • the sufficiency of our financial resources and ability to obtain additional funding for the development of our product candidates; • receipt of regulatory approvals; 22 • the performance by clinical research organizations (CROs) or other third parties we may retain of their duties to us in a manner that complies with our protocols and applicable laws and that protects the integrity of the resulting data; • obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity; • ensuring we do not infringe, misappropriate or otherwise violate the valid patent, trade secret or other intellectual property rights of third parties; • successfully launching our product candidates if and when approved; • maintaining commercial manufacturing capabilities, either by utilizing our current manufacturing facilities or making arrangements with third-party manufacturers; • manufacturing or obtaining sufficient supplies of our product candidates that may be necessary for use in clinical trials for evaluation of our product candidates and commercialization of our products; • obtaining and maintaining favorable reimbursement from third-party payors for product candidates; • competition with other products; • post-marketing commitments to regulatory agencies following regulatory approval; and • continued acceptable safety profile following regulatory approval.
Several states have enacted legislation requiring pharmaceutical companies to establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, track, and report gifts, compensation and other remuneration made to physicians and other healthcare providers, clinical trials and other activities, and/or register their sales 47 representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical companies for use in sales and marketing, and to prohibit certain other sales and marketing practices.
Several states have enacted legislation requiring pharmaceutical companies to establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, track, and report gifts, compensation and other remuneration made to physicians and other healthcare providers, clinical trials and other activities, and/or register their sales representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical companies for use in sales and marketing, and to prohibit certain other sales and marketing practices.
Failure of third-party contractors to successfully perform their obligations could harm our ability to develop or commercialize our product or product candidates. • If our information technology systems or those third parties upon which we rely for our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences. • Our success depends significantly on our ability to operate without infringing the valid patents and other proprietary rights of third parties. • If we are unable to obtain and enforce patent protection for our products and our product candidates and related technology, our business could be materially harmed. • We have been and may in the future be subject to securities litigation, which is expensive and could divert management attention and adversely impact our business. 20 • Failure to successfully develop and commercialize companion diagnostics with third party contractors for use with our product candidates could harm our ability to commercialize our product candidates. • If any product liability lawsuits are successfully brought against us or any of our collaborators, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.
Failure of third-party contractors to successfully perform their obligations could harm our ability to develop our products or product candidates. • If our information technology systems or those third parties upon which we rely for our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences. • Our success depends significantly on our ability to operate without infringing the valid patents and other proprietary rights of third parties. • If we are unable to obtain and enforce patent protection for our products and our product candidates and related technology, our business could be materially harmed. • We have been and may in the future be subject to securities litigation, which is expensive and could divert management attention and adversely impact our business. 19 • Failure to successfully develop and commercialize companion diagnostics with third party contractors for use with our product candidates could harm our ability to commercialize our product candidates. • If any product liability lawsuits are successfully brought against us or any of our collaborators, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.
The continuation, modification, or commencement of existing or new clinical trials could be substantially delayed or prevented by several factors, including: • further discussions with the FDA or other regulatory agencies regarding the scope or design of our clinical trials; • the limited number of, and competition for, suitable sites to conduct our clinical trials, many of which may already be engaged in other clinical trial programs, including some that may be for the same indication as our product candidates; • any delay or failure in patient recruitment or enrollment in our or our collaborators’ trials for any reason; • any delay or failure to obtain regulatory approval or agreement to commence a clinical trial in any of the countries where enrollment is planned; • inability to obtain sufficient funds required for a clinical trial; • clinical holds on, or other regulatory objections to, a new or ongoing clinical trial; • delay or failure to manufacture sufficient supplies of the product candidate for our clinical trials; 25 • delay or failure to reach agreement on acceptable clinical trial terms or clinical trial protocols with prospective sites or CROs the terms of which can be subject to extensive negotiation and may vary significantly among different sites or CROs; • delay or failure to obtain IRB approval to conduct a clinical trial at a prospective site; • significant competition of product candidates that are expected to be more effective or have a more favorable safety profile; and • approval of potential therapies by competitors.
The continuation, modification, or commencement of existing or new clinical trials could be substantially delayed or prevented by several factors, including: • further discussions with the FDA or other regulatory agencies regarding the scope or design of our clinical trials; • the limited number of, and competition for, suitable sites to conduct our clinical trials, many of which may already be engaged in other clinical trial programs, including some that may be for the same indication as our product candidates; • any delay or failure in patient recruitment or enrollment in our or our collaborators’ trials for any reason; • any delay or failure to obtain regulatory approval or agreement to commence a clinical trial in any of the countries where enrollment is planned; • inability to obtain sufficient funds required for a clinical trial; • clinical holds on, or other regulatory objections to, a new or ongoing clinical trial; • delay or failure to manufacture sufficient supplies of the product candidate for our clinical trials; 24 • delay or failure to reach agreement on acceptable clinical trial terms or clinical trial protocols with prospective sites or CROs the terms of which can be subject to extensive negotiation and may vary significantly among different sites or CROs; • delay or failure to obtain IRB approval to conduct a clinical trial at a prospective site; • significant competition of product candidates that are expected to be more effective or have a more favorable safety profile; and • approval of potential therapies by competitors.
In addition, failure to comply with FDA and non-U.S. regulatory requirements may, either before or after product approval, subject our company or our collaborators to administrative or judicially imposed sanctions, including: • restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials; • restrictions on the products, manufacturers, manufacturing facilities or manufacturing process; • fines, warning letters or untitled letters; • civil and criminal penalties; • injunctions; • suspension or withdrawal of regulatory approvals; • product seizures, detentions or import bans; • voluntary or mandatory product recalls; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; • total or partial suspension of production; 24 • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • imposition of restrictions on marketing or operations, including costly new manufacturing requirements; and • refusal to approve pending BLAs or supplements to approved BLAs or analogous marketing approvals outside the United States.
In addition, failure to comply with FDA and non-U.S. regulatory requirements may, either before or after product approval, subject our company or our collaborators to administrative or judicially imposed sanctions, including: • restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials; • restrictions on the products, manufacturers, manufacturing facilities or manufacturing process; • fines, warning letters or untitled letters; • civil and criminal penalties; • injunctions; • suspension or withdrawal of regulatory approvals; • product seizures, detentions or import bans; • voluntary or mandatory product recalls; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; • total or partial suspension of production; 23 • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • imposition of restrictions on marketing or operations, including costly new manufacturing requirements; and • refusal to approve pending BLAs or supplements to approved BLAs or analogous marketing approvals outside the United States.
The process of commercial or clinical biotechnology manufacturing for ourselves and our collaborators is highly susceptible to delays or product loss due to a variety of factors, including but not limited to contamination, equipment failure, improper installation or operation of equipment, vendor or operator error, inconsistency in yields, variability in product characteristics, difficulties in scaling the production process, and vendor supply chain disruptions or fluctuations.
The process of commercial or clinical biotechnology manufacturing for ourselves and our collaborators is highly susceptible to delays or product loss due to a variety of factors, including but not limited to contamination, equipment failure, improper installation or operation of equipment, vendor or 29 operator error, inconsistency in yields, variability in product characteristics, difficulties in scaling the production process, and vendor supply chain disruptions or fluctuations.
Our future funding requirements will depend on many factors, including but not limited to: • the number and characteristics of other product candidates and indications that we pursue; • the scope, progress, timing, cost and results of research, nonclinical development, and clinical trials; • the costs, timing and outcome of seeking and obtaining FDA and non-U.S. regulatory approvals; • the costs associated with manufacturing our product candidates as well as the costs of operation of our manufacturing facility; • the economic and other terms, timing of and success of our existing collaborations, and any collaboration, licensing, or other arrangements into which we may enter in the future, including the timing of receipt of any milestone or royalty payments under these agreements; • the costs of establishing sales, marketing, and distribution capabilities; • our ability to maintain, expand, and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make in connection with the licensing, filing, defense and enforcement of any patents or other intellectual property rights; • our need and ability to hire additional management, scientific, and medical personnel; • the effect of competing products that may limit market potential of our product candidates; • our need to implement additional internal systems and infrastructure, including financial and reporting systems; • the economic and other terms, timing of and success of our existing collaborations, and any collaboration, licensing, or other arrangements into which we may enter in the future, including the timing of receipt of any milestone or royalty payments under these agreements; and • the costs of establishing sales, marketing, and distribution capabilities. 21 Until we can generate a sufficient amount of product revenue to finance our cash requirements, which we may never do, we expect to finance future cash needs primarily through a combination of public or private equity offerings, debt financings, strategic collaborations, and grant funding.
Our future funding requirements will depend on many factors, including but not limited to: • the number and characteristics of other product candidates and indications that we pursue; • the scope, progress, timing, cost and results of research, nonclinical development, and clinical trials; • the costs, timing and outcome of seeking and obtaining FDA and non-U.S. regulatory approvals; • the costs associated with manufacturing our product candidates as well as the costs of operation of our manufacturing facility; • the economic and other terms, timing of and success of our existing collaborations, and any collaboration, licensing, or other arrangements into which we may enter in the future, including the timing of receipt of any milestone or royalty payments under these agreements; • the costs of establishing sales, marketing, and distribution capabilities; • our ability to maintain, expand, and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make in connection with the licensing, filing, defense and enforcement of any patents or other intellectual property rights; • our need and ability to hire additional management, scientific, and medical personnel; • the effect of competing products that may limit market potential of our product candidates; • our need to implement additional internal systems and infrastructure, including financial and reporting systems; • the economic and other terms, timing of and success of our existing collaborations, and any collaboration, licensing, contract manufacturing, or other arrangements into which we may enter in the future, including the timing of receipt of any milestone or royalty payments under these agreements; and • the costs of establishing sales, marketing, and distribution capabilities. 20 Until we can generate a sufficient amount of product revenue to finance our cash requirements, which we may never do, we expect to finance future cash needs primarily through a combination of strategic collaborations, public or private equity offerings, debt financings, and grant funding.
We could incur substantial costs defending these similar lawsuits, as well as diversion of the time and attention of our management, any or all of which could seriously harm our business. Provisions of our charter, bylaws, third-party agreements and Delaware law may make an acquisition of us or a change in our management more difficult.
We could incur substantial costs defending these similar lawsuits, as well as diversion of the time and attention of our management, any or all of which could seriously harm our business. 51 Provisions of our charter, bylaws, third-party agreements and Delaware law may make an acquisition of us or a change in our management more difficult.
Additionally, there is inherent risk, based on the complex relationships among the United States and the countries in which we plan to conduct business in, that political, diplomatic, and national security factors can lead to global trade restrictions 35 and changes in trade policies and export regulations that may adversely affect our business and operations.
Additionally, there is inherent risk, based on the complex relationships among the United States and the countries in which we plan to conduct business in, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations.
Such assignment or license may not be available on commercially reasonable terms or at all. Adequate remedies may not exist in the event of unauthorized use or disclosure of our proprietary information. The disclosure of our trade secrets would impair our competitive position and may materially harm our business, financial condition and results of operations.
Such assignment or license may not be available on commercially reasonable terms or at all. 44 Adequate remedies may not exist in the event of unauthorized use or disclosure of our proprietary information. The disclosure of our trade secrets would impair our competitive position and may materially harm our business, financial condition and results of operations.
Further, the United State and foreign governments regularly consider additional reform measures that affect healthcare coverage and costs. Such reforms may include changes to the coverage and reimbursement of healthcare services and products. In particular, there have been executive, judicial and Congressional challenges and amendments to the ACA.
Further, the United State and foreign governments regularly consider additional reform measures that affect healthcare coverage and costs. Such reforms may include changes to the coverage and reimbursement of healthcare services and products. In particular, there have been executive, judicial and Congressional challenges and 30 amendments to the ACA.
If reimbursement for our products is not available or is available on a limited basis, or if the reimbursement amount for our products is inadequate to support a product’s price, we may not be able to successfully commercialize any of our approved products. There is uncertainty related to third-party payor coverage and reimbursement of newly approved products.
If reimbursement for our products is not available or is available on a limited basis, or if the reimbursement amount for our products is inadequate to support a product’s price, we may not be able to successfully commercialize any of our approved products. 31 There is uncertainty related to third-party payor coverage and reimbursement of newly approved products.
Failure to comply with applicable FDA and other regulatory requirements may subject us to administrative or judicially imposed sanctions, including: • issuance of Form FDA 483 notices or Warning Letters by the FDA or other regulatory agencies; • imposition of fines and other civil penalties; • criminal prosecutions; • injunctions, suspensions or revocations of regulatory approvals; • suspension of any ongoing clinical trials; • total or partial suspension of manufacturing; • delays in commercialization; 34 • refusal by the FDA to approve pending applications or supplements to approved applications submitted by us; • refusals to permit drugs to be imported into or exported from the United States; • restrictions on operations, including costly new manufacturing requirements; and • product recalls or seizures.
Failure to comply with applicable FDA and other regulatory requirements may subject us to administrative or judicially imposed sanctions, including: • issuance of Form FDA 483 notices or Warning Letters by the FDA or other regulatory agencies; • imposition of fines and other civil penalties; 33 • criminal prosecutions; • injunctions, suspensions or revocations of regulatory approvals; • suspension of any ongoing clinical trials; • total or partial suspension of manufacturing; • delays in commercialization; • refusal by the FDA to approve pending applications or supplements to approved applications submitted by us; • refusals to permit drugs to be imported into or exported from the United States; • restrictions on operations, including costly new manufacturing requirements; and • product recalls or seizures.
Clinical drug development involves a lengthy and expensive process, with a highly uncertain outcome. We expect to incur significant additional costs related to the development of our product candidates and may experience delays in completing, or ultimately be unable to complete, the development and commercialization of our other product candidates.
Drug development involves a lengthy and expensive process, with a highly uncertain outcome. We expect to incur significant additional costs related to the development of our product candidates and may experience delays in completing, or ultimately be unable to complete, the development and commercialization of our other product candidates.
However, one third-party payor’s determination to provide coverage for a product candidate does not assure that other payors 32 will also provide coverage for the product candidate. Further, no uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor.
However, one third-party payor’s determination to provide coverage for a product candidate does not assure that other payors will also provide coverage for the product candidate. Further, no uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor.
Additionally, the facilities used by any contract manufacturer to manufacture any of 37 our product candidates must be the subject of a satisfactory inspection before the FDA and other regulatory authorities approve a BLA or marketing authorization for the product candidate manufactured at that facility.
Additionally, the facilities used by any contract manufacturer to manufacture any of our product candidates must be the subject of a satisfactory inspection before the FDA and other regulatory authorities approve a BLA or marketing authorization for the product candidate manufactured at that facility.
Certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive information. Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents.
Certain data privacy and security obligations may require us to implement and maintain 40 specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive information. Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents.
Third parties could possess patents that we may ultimately be found to infringe, or such third-party patents could issue in the future. Third parties may have or may obtain valid and enforceable patents or proprietary rights that could block us from 41 developing product candidates using our technology.
Third parties could possess patents that we may ultimately be found to infringe, or such third-party patents could issue in the future. Third parties may have or may obtain valid and enforceable patents or proprietary rights that could block us from developing product candidates using our technology.
Our employees and personnel may integrate generative AI technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations. 48 Governments have passed and are likely to pass additional laws regulating generative AI.
Our employees and personnel may integrate generative AI technologies to perform their work, and the disclosure and use of personal data in AI technologies is subject to various privacy laws and other privacy obligations. Governments have passed and are likely to pass additional laws regulating AI.
If we are unable to maintain any of these collaborations, or if these collaborations are not successful, our business could be adversely affected. • If clinical trials for our product candidates are prolonged, delayed or stopped for any reason, including for safety reasons or lack of efficacy, we may be unable to obtain regulatory approval and commercialize our product candidates on a timely basis, which would require us to incur additional costs and delay our receipt of any product revenue. • The results of previous clinical trials may not be predictive of future results, and interim, immature, or top line data may be subject to change or qualification based the complete analysis of data.
If we are unable to maintain any of these collaborations, or if these collaborations are not successful, our business could be adversely affected. • If clinical trials for our product candidates are prolonged, delayed or stopped for any reason, including for safety reasons or lack of efficacy, we may be unable to obtain regulatory approval and commercialize our product candidates on a timely basis, which would require us to incur additional costs and delay our receipt of any product revenue. • The results of previous clinical trials or pre-clinical research may not be predictive of future results, and interim, immature, or top-line data may be subject to change or qualification based the complete analysis of data.
Public health crises such as pandemics or similar outbreaks may have a significant negative impact on our clinical trials, nonclinical studies, development, manufacturing and commercialization of our product candidates and other aspects of our business, staff, and operations. 30 Public health crises such as pandemics or similar outbreaks may have a material impact our business.
Public health crises such as pandemics or similar outbreaks may have a significant negative impact on our clinical trials, nonclinical studies, development, manufacturing and commercialization of our product candidates and other aspects of our business, staff, and operations. Public health crises such as pandemics or similar outbreaks may have a material impact our business.
We continue to have limited internal commercialization capabilities, and the commercialization of any future l products or product candidates that we may develop or in-license, will require building, or contracting for, capabilities, which will require significant capital expenditures, management resources and time.
We continue to have limited internal commercialization capabilities, and the commercialization of any future products or product candidates that we may develop or in-license, will require building, or contracting for, capabilities, which will require significant capital expenditures, management resources and time.
Regardless of their merit or eventual outcome, liability claims may result in: • decreased demand for our future approved products; • injury to our reputation; • withdrawal of clinical trial participants; • termination of clinical trial sites or entire trial programs; • increased regulatory scrutiny; • significant litigation costs; • substantial monetary awards to or costly settlement with patients or other claimants; • product recalls or a change in the indications for which they may be used; • loss of revenue; • diversion of management and scientific resources from our business operations; and 33 • the inability to commercialize our product candidates.
Regardless of their merit or eventual outcome, liability claims may result in: • decreased demand for our future approved products; • injury to our reputation; • withdrawal of clinical trial participants; • termination of clinical trial sites or entire trial programs; • increased regulatory scrutiny; 32 • significant litigation costs; • substantial monetary awards to or costly settlement with patients or other claimants; • product recalls or a change in the indications for which they may be used; • loss of revenue; • diversion of management and scientific resources from our business operations; and • the inability to commercialize our product candidates.
At least in some cases, the FDA and similar regulatory authorities outside the United States may request or require the development and regulatory approval of a companion diagnostic as a condition to approving one or more of our product candidates.
At least in some cases, the FDA and similar regulatory authorities outside the United States may request or require the development and regulatory approval of a companion diagnostic as a condition to approving one or more of our product 37 candidates.
Termination of the license agreements or reduction or elimination of our licensed rights may result in our having to negotiate 44 new or reinstated licenses with less favorable terms, which could adversely affect our competitive business position and harm our business.
Termination of the license agreements or reduction or elimination of our licensed rights may result in our having to negotiate new or reinstated licenses with less favorable terms, which could adversely affect our competitive business position and harm our business.
Furthermore, we may discover security issues that were not found during due diligence of such 40 acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights. 27 Our product candidates, if approved, may fail to achieve or maintain market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.
If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights. 26 Our product candidates, if approved, may fail to achieve or maintain market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.
We expect to incur significant additional costs related to the development of our product candidates and may experience delays in completing, or ultimately be unable to complete, the development and commercialization of our other product candidates. • Our product candidates may have undesirable side effects which may delay or prevent further clinical development or marketing approval, or, if approval is received, require them to be taken off the market, require them to include safety warnings or otherwise limit their sales. • Our existing therapeutic collaborations are important to our business, and future collaborations may also be important to us.
We expect to incur significant additional costs related to the development of our product candidates and we or our collaborators may experience delays in completing, or ultimately be unable to complete, the development and commercialization of our other product candidates. • Our product candidates may have undesirable side effects which may delay or prevent further clinical development or marketing approval, or, if approval is received, require them to be taken off the market, require them to include safety warnings or otherwise limit their sales. • Our existing collaborations are important to our business, and future collaborations may also be important to us.
If we elect to fund and undertake development or commercialization activities on our own, we may need to obtain additional expertise and additional capital, which may not be available to us on acceptable terms or at all.
If we elect to fund and undertake development or commercialization activities on our own, we may need to obtain additional expertise and additional capital, which may not be available to us on acceptable 36 terms or at all.
Regulatory agencies can delay, limit or deny approval of a product candidate for many reasons, including: • a product candidate may not be deemed safe or effective; • the results may not confirm the positive results from earlier nonclinical studies or clinical trials; • regulatory agencies may not find the data from nonclinical studies and clinical trials sufficient or meaningful; • regulatory agencies might not approve or might require changes to our manufacturing processes or facilities; or • regulatory agencies may change their approval policies or adopt new regulations.
Regulatory agencies can delay, limit or halt development or deny approval of a product candidate for many reasons, including: • a product candidate may not be deemed safe or effective; • the results may not confirm the positive results from earlier nonclinical studies or clinical trials; • regulatory agencies may not find the data from nonclinical studies and clinical trials sufficient or meaningful; • regulatory agencies might not approve or might require changes to our manufacturing processes or facilities; or • regulatory agencies may change their approval policies or adopt new regulations.
Data privacy and security have become significant issues in the United States, Europe, and in many other jurisdictions where we or our partners may in the future conduct our operations.
Data privacy and 47 security have become significant issues in the United States, Europe, and in many other jurisdictions where we or our partners may in the future conduct our operations.
As of December 31, 2024, we hold $20.0 million in product liability insurance coverage in the aggregate, with a per incident limit of $20.0 million, which may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage when we begin the commercialization of product candidates. Insurance coverage is becoming increasingly expensive.
As of December 31, 2025, we hold $20.0 million in product liability insurance coverage in the aggregate, with a per incident limit of $20.0 million, which may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage when we begin the commercialization of product candidates. Insurance coverage is becoming increasingly expensive.
There is no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws.
There is no 45 assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws.
In order to commercialize any additional product candidates, we will need to be successful in a range of challenging activities for which we are only in the preliminary stages, including developing product candidates, obtaining regulatory approval for them, and manufacturing, marketing and selling approved products and product candidates for which we may obtain regulatory approval.
In order to develop or commercialize any additional product candidates, we will need to be successful in a range of challenging activities for which we are only in the preliminary stages, including developing product candidates, obtaining regulatory approval for them, and manufacturing, marketing and selling approved products and product candidates for which we may obtain regulatory approval.
District Court for the District of Maryland against our company and Scott Koenig, M.D., Ph.D., our President, Chief Executive Officer and a member of our Board of Directors, alleging violations of securities laws during 2024. On December 20, 2024, the District Court issued an Order dismissing the case, without prejudice.
District Court for the District of Maryland against our company and Scott Koenig, M.D., Ph.D., our former President and Chief Executive Officer and a current member of our Board of Directors, alleging violations of securities laws during 2024. On December 20, 2024, the District Court issued an Order dismissing the case, without prejudice.
The results of previous clinical trials may not be predictive of future results, and interim or top line data may be subject to change or qualification, based on several factors, including a complete analysis of data, or in the case of interim analysis, 26 the continued or ongoing accrual of data.
The results of previous clinical trials may not be predictive of future results, and interim or top line data may be subject to change or qualification, based on several factors, including a complete analysis of data, or in the case of interim analysis, 25 the continued or ongoing accrual of data.
We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes and the use of Artificial Intelligence (AI)), which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats.
We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes and the use of Artificial Intelligence (AI), which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats.
Increased inflation rates can adversely affect us by increasing our costs, including labor and employee benefit costs. 22 Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish substantial rights.
Increased inflation rates can adversely affect us by increasing our costs, including labor and employee benefit costs. 21 Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish substantial rights.
From time to time, we may undertake internal restricting activities, including associated workforce reductions, as we continue to evaluate and attempt to optimize our cost and operating structure in light of developments in our business strategy and long-term operating plans.
From time to time, we may undertake internal restructuring activities, including associated workforce reductions, as we continue to evaluate and attempt to optimize our cost and operating structure in light of developments in our business strategy and long-term operating plans.
If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, product candidates, or future revenue streams, or grant licenses on terms that are not favorable to us. We cannot assure you that we will be able to obtain additional funding if and when necessary.
If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, product candidates, or future revenue streams, or grant licenses on terms that are not favorable to us. We cannot guarantee we will be able to obtain additional funding if and when necessary.
In addition, the results of our current or planned clinical trials may not satisfy the requirements of the FDA or non-U.S. regulatory authorities for product approval. • We face significant competition and if our competitors continue to develop and market products that are more effective, safer or less expensive than our product candidates, our current or future commercial opportunities may be negatively impacted. • We use novel technologies in the development of our product candidates and the FDA and other regulatory authorities have not approved or may not approve products that utilize these technologies. 19 • We may not be successful in our efforts to use and expand our technology platforms to build a pipeline of product candidates.
In addition, the results of our current or planned clinical trials may not satisfy the requirements of the FDA or non-U.S. regulatory authorities for product approval. • We face significant competition and if our competitors continue to develop and market products that are more effective, safer or less expensive than our product candidates or if they are ahead of us in development, our product development or current or future commercial opportunities may be negatively impacted. • We use novel technologies in the development of our product candidates and the FDA and other regulatory authorities have not approved or may not approve products that utilize these technologies. 18 • We may not be successful in our efforts to use and expand our technology platforms to build a pipeline of product candidates.
Our manufacturing facilities are subject to significant government regulations and approvals, which are often costly and could result in adverse consequences to our business if we fail to comply with the regulations or maintain the approvals. We must comply with the FDA’s cGMP requirements, as set out in statute, regulations and interpreted through guidance.
Our manufacturing facility is subject to significant government regulations and approvals, which are often costly and could result in adverse consequences to our business if we fail to comply with the regulations or maintain the approvals. We must comply with the FDA’s cGMP requirements, as set out in statute, regulations and interpreted through guidance.
We may never achieve or sustain profitability. We have incurred significant losses since our inception. As of December 31, 2024, our accumulated deficit was approximately $1.2 billion.
We may never achieve or sustain profitability. We have incurred significant losses since our inception. As of December 31, 2025, our accumulated deficit was approximately $1.2 billion.
If our products achieve regulatory approval and we are unable to further develop marketing and sales capabilities or enter into agreements with third parties to market and sell our products we may not be able to generate substantial product sales revenue. We have limited experience in commercializing products.
We have limited experience in launching and marketing approved products. If our products achieve regulatory approval and we are unable to further develop marketing and sales capabilities or enter into agreements with third parties to market and sell our products we may not be able to generate substantial product sales revenue.
If sufficient funds on acceptable terms are not available when needed, or at all, we could be forced to significantly reduce operating expenses and delay, scale back or eliminate one or more of our development programs or our business operations. We have incurred significant losses since inception and anticipate that we will continue to incur losses for the foreseeable future.
If sufficient funds on acceptable terms are not available when needed, or at all, we could be forced to significantly reduce operating expenses and delay, scale back or eliminate one or more of our development programs or our business operations. We have incurred significant losses since inception and anticipate continuing to incur losses for the foreseeable future.
If we are unable to successfully complete clinical development, obtain additional regulatory approvals and commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed and we may not be able to generate sufficient revenues and cash flows to continue our operations. • Clinical drug development involves a lengthy and expensive process, with a highly uncertain outcome.
If we or our collaborators are unable to successfully progress product candidate clinical development, obtain additional regulatory approvals, commercialize product candidates, or experience delays in doing so, our business will be materially harmed and we may not be able to generate sufficient revenues and cash flows to continue our operations. • Drug development involves a lengthy and expensive process, with a highly uncertain outcome.
We have competitors both in the United States and internationally, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities and other research institutions. Many of our competitors have significantly greater financial, manufacturing, marketing, drug development, technical and human resources than we do.
We have competitors both in the United States and internationally, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities and other research institutions and including in China where research and development capabilities have expanded significantly. Many of our competitors have significantly greater financial, manufacturing, marketing, drug development, technical and human resources than we do.
The following are examples of litigation and other adversarial proceedings or disputes that we could become a party to involving our patents or patents licensed to us: 43 • we or our collaborators may initiate litigation or other proceedings against third parties to enforce our patent rights; • third parties may initiate litigation or other proceedings seeking to invalidate patents owned by or licensed to us or to obtain a declaratory judgment that their product or technology does not infringe our patents or patents licensed to us; • third parties may initiate opposition, reexamination or inter partes review proceedings challenging the validity or scope of our patent rights, requiring us or our collaborators and/or licensors to participate in such proceedings to defend the validity and scope of our patents; • there may be a challenge or dispute regarding inventorship or ownership of patents currently identified as being owned by or licensed to us; • the USPTO may initiate an interference between patents or patent applications owned by or licensed to us and those of our competitors, requiring us or our collaborators and/or licensors to participate in an interference proceeding to determine the priority of invention, which could jeopardize our patent rights; or • third parties may seek approval to market biosimilar versions of our future approved products prior to expiration of relevant patents owned by or licensed to us, requiring us to defend our patents, including by filing lawsuits alleging patent infringement.
The following are examples of litigation and other adversarial proceedings or disputes that we could become a party to involving our patents or patents licensed to us: • we or our collaborators may initiate litigation or other proceedings against third parties to enforce our patent rights; • third parties may initiate litigation or other proceedings seeking to invalidate patents owned by or licensed to us or to obtain a declaratory judgment that their product or technology does not infringe our patents or patents licensed to us; • third parties may initiate opposition, reexamination or inter partes review proceedings challenging the validity or scope of our patent rights, requiring us or our collaborators and/or licensors to participate in such proceedings to defend the validity and scope of our patents; • there may be a challenge or dispute regarding inventorship or ownership of patents currently identified as being owned by or licensed to us; • the USPTO may initiate an interference between patents or patent applications owned by or licensed to us and those of our competitors, requiring us or our collaborators and/or licensors to participate in an interference proceeding to determine the priority of invention, which could jeopardize our patent rights; or • third parties may seek approval to market biosimilar versions of our future approved products prior to expiration of relevant patents owned by or licensed to us, requiring us to defend our patents, including by filing lawsuits alleging patent infringement. 43 These lawsuits and proceedings would be costly and could affect our results of operations and divert the attention of our managerial and scientific personnel.
A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our products. We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents.
A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our products. We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents.
Accordingly, we may never achieve or sustain profitability. • We depend substantially on the success of the clinical development of our product candidates, through our own efforts or those of our collaborators.
Accordingly, we may never achieve or sustain profitability. • We depend substantially on the development potential of our product candidates, through our own efforts or those of our collaborators.
We face significant competition and if our competitors continue to develop and market products that are more effective, safer or less expensive than our product candidates, our current or future commercial opportunities may be negatively impacted. The life sciences industry is highly competitive and subject to rapid and significant technological change.
We face significant competition and if our competitors continue to develop and market products that are more effective, safer or less expensive than our product candidates or if they are ahead of us in development, our current or future commercial opportunities may be negatively impacted. The life sciences industry is highly competitive and subject to rapid and significant technological change.
During times of war and other major conflicts, we, the third parties upon which we rely, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.
During times of war and other major conflicts, we, the third parties with whom we work, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.
Our business could be adversely affected by economic downturns, inflation, increases in interest rates, disruption in global supply chains, natural disasters, political crises, geopolitical events, such as the ongoing military conflict in Ukraine, or other macroeconomic conditions, which have in the past and may in the future negatively impact our business and financial performance.
Our business could be adversely affected by economic downturns, inflation, increases in interest rates, disruption in global supply chains, natural disasters, political crises, geopolitical events, or other macroeconomic conditions, which have in the past and may in the future negatively impact our business and financial performance.
If we are unable to continue to attract and retain high quality personnel, motivate existing employees, or maintain our corporate culture in a hybrid or remote work environment and in the midst of higher turnover, our ability to pursue our growth strategy will be limited. Additionally, in January 2023, the U.S.
If we are unable to continue to attract and retain high 49 quality personnel, motivate existing employees, or maintain our corporate culture in a hybrid or remote work environment and in the midst of higher turnover, our ability to pursue our growth strategy will be limited.
Discovering, developing and commercializing pharmaceutical products, including conducting nonclinical studies and clinical trials, is expensive. In order to obtain regulatory approval of product candidates, we will be required to conduct clinical trials for each indication for each of our product candidates.
Pharmaceutical product development, including conducting nonclinical studies and clinical trials, is expensive. In order to obtain regulatory approval of product candidates, we will be required to conduct clinical trials for each indication for each of our product candidates.
As of December 31, 2024, we had federal and state NOL carryforwards of approximately $554.0 million and federal research and development tax credits of approximately $109.0 million available. Future changes in stock ownership may also trigger an ownership change and, consequently, another Section 382 limitation. Similar rules may apply under state tax laws.
As of December 31, 2025, we had federal and state NOL carryforwards of approximately $650.0 million and federal research and development tax credits of approximately $108.5 million available. Future changes in stock ownership may also trigger an ownership change and, consequently, another Section 382 limitation. Similar rules may apply under state tax laws.
If our product candidates achieve regulatory approval and we are unable to develop marketing and sales capabilities or enter into agreements with third parties to market and sell our products, we may not be able to generate substantial product sales revenue. • Our future success depends on our ability to attract or retain key executives and to attract, retain and motivate qualified personnel. • Actual or anticipated changes to the laws, regulations, policies and governmental priorities, governing the health care system may have a negative impact on cost and access to health insurance coverage and reimbursement of health care items and services. • Reimbursement decisions by third-party payors, including government payors, may have an adverse effect on pricing and market acceptance. • Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish substantial rights. • We contract with, and may in the future contract with, third parties for components of the manufacturing of our product candidates, including our antibody drug conjugate candidates.
If our product candidates achieve regulatory approval and we are unable to develop marketing and sales capabilities or enter into agreements with third parties to market and sell our products, we may not be able to generate substantial product sales revenue. • Our future success depends on our ability to attract or retain key executives and to attract, retain and motivate qualified personnel. • Actual or anticipated changes to the laws, regulations, policies and governmental priorities, governing the health care system may have a negative impact on cost and access to health insurance coverage and reimbursement of health care items and services, which could impact the pricing and profitability of biopharmaceuticals and adversely affect the commercial potential of our or our collaborators' products and product candidates.. • Reimbursement decisions by third-party payors, including government payors, may have an adverse effect on pricing and market acceptance. • Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish substantial rights. • We contract with, and may in the future contract with, third parties to perform or provide services associated with or critical to our product discovery and development as well as for components of the manufacturing of our product candidates, including but not limited to our antibody drug conjugate candidates.
Due to the inherent uncertainties in legal proceedings, we cannot accurately predict the ultimate outcome of any such proceedings. Any securities litigation brought by private parties or government enforcement agencies could result in substantial costs and diversion of management’s attention and resources, which could adversely impact our business. Any adverse determination in litigation could also subject us to significant liabilities.
Due to the inherent uncertainties in legal proceedings, we cannot accurately predict the ultimate outcome of any such proceedings. Any securities litigation brought by private parties or government enforcement agencies could result in substantial 50 costs and diversion of management’s attention and resources, which could adversely impact our business.
Failure to comply with these current and future laws, policies, industry standards or legal obligations or any security incident resulting in the unauthorized access to, or acquisition, release or transfer of personal information may result in governmental enforcement actions, litigation, fines and penalties or adverse publicity and could cause our customers to lose trust in us, which could have a material adverse effect on our business and results of operations.
Failure to comply with these current and future laws, policies, industry standards or legal obligations or any security incident resulting in the unauthorized access to, or acquisition, release or transfer of personal information may result in governmental enforcement actions, litigation, fines and penalties or adverse publicity and could cause our customers to lose trust in us, which could have a material adverse effect on our business and results of operations. 48 We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations.
These patient deaths occurred between 87 days and 339 days after commencing treatment with vobra duo. 28 Even if our product candidates are approved for marketing, and we or others later identify undesirable or unacceptable side effects potentially caused by such products: • regulatory authorities may require us to take our approved product off the market; • regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication or field alerts to physicians and pharmacies; • we may be required to change the way the product is administered, impose other risk-management measures, conduct additional clinical trials or change the labeling of the product; • we may be subject to limitations on how we may promote the product; • sales of the product may decrease significantly; • we may be subject to litigation or product liability claims; and • our reputation may suffer.
Even if our product candidates are approved for marketing, and we or others later identify undesirable or unacceptable side effects potentially caused by such products: • regulatory authorities may require us to take our approved product off the market; • regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication or field alerts to physicians and pharmacies; • we may be required to change the way the product is administered, impose other risk-management measures, conduct additional clinical trials or change the labeling of the product; • we may be subject to limitations on how we may promote the product; • sales of the product may decrease significantly; • we may be subject to litigation or product liability claims; and • our reputation may suffer.
Any negative impact public health crises could adversely affect our ability to seek and obtain regulatory approval for and to commercialize any approved product candidates, increase our operating expenses and have a material adverse effect on our business and financial results. We have limited experience in launching and marketing approved products.
Any negative impact public health crises could adversely affect our ability to seek and obtain regulatory approval for and to commercialize any approved product candidates, increase our operating expenses and have a material adverse effect on our business and financial results.
(collectively, sensitive information). Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties upon which we rely.
(collectively, sensitive information). Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties with whom we work.
These provisions: • allow the authorized number of directors to be changed only by resolution of our board of directors; • establish a classified board of directors, providing that not all members of the board of directors be elected at one time; • authorize our board of directors to issue without stockholder approval blank check preferred stock that, if issued, could operate as a "poison pill" to dilute the stock ownership of a potential hostile acquirer to prevent an acquisition that is not approved by our board of directors; • require that stockholder actions must be effected at a duly called stockholder meeting and prohibit stockholder action by written consent; • establish advance notice requirements for stockholder nominations to our board of directors or for stockholder proposals that can be acted on at stockholder meetings; • limit who may call stockholder meetings; and • require the approval of the holders of 75% of the outstanding shares of our capital stock entitled to vote in order to amend certain provisions of our restated certificate of incorporation and restated bylaws. 52 Furthermore, in the ordinary course of our business, from time to time we discuss and enter into collaborations, licenses and other transactions with various third parties, including other pharmaceutical companies and biotechnology companies.
These provisions: • allow the authorized number of directors to be changed only by resolution of our board of directors; • establish a classified board of directors, providing that not all members of the board of directors be elected at one time; • authorize our board of directors to issue without stockholder approval blank check preferred stock that, if issued, could operate as a "poison pill" to dilute the stock ownership of a potential hostile acquirer to prevent an acquisition that is not approved by our board of directors; • require that stockholder actions must be effected at a duly called stockholder meeting and prohibit stockholder action by written consent; • establish advance notice requirements for stockholder nominations to our board of directors or for stockholder proposals that can be acted on at stockholder meetings; • limit who may call stockholder meetings; and • require the approval of the holders of 75% of the outstanding shares of our capital stock entitled to vote in order to amend certain provisions of our restated certificate of incorporation and restated bylaws.
Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.
Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. Patent litigation and other proceedings may also absorb significant management time.
The market price of our stock may fluctuate unpredictably in response to factors unrelated to our operating performance. The stock market has recently experienced significant volatility, particularly with respect to pharmaceutical, biotechnology, and other life sciences company stocks.
Any adverse determination in litigation could also subject us to significant liabilities. The market price of our stock may fluctuate unpredictably in response to factors unrelated to our operating performance. The stock market has recently experienced significant volatility, particularly with respect to pharmaceutical, biotechnology, and other life sciences company stocks.
When we deem it appropriate, our agreements with such third parties may include standstill provisions. These standstill provisions, several of which may be in force from time-to-time, typically prohibit such parties from acquiring our securities for a period of time, which may discourage such parties from acquiring MacroGenics even if doing so would be beneficial to our stockholders.
These standstill provisions, several of which may be in force from time-to-time, typically prohibit such parties from acquiring our securities for a period of time, which may discourage such parties from acquiring MacroGenics even if doing so would be beneficial to our stockholders.
We may need to grow or contract our organization, and we may experience difficulties in managing this growth or contraction, which could disrupt our operations. As of December 31, 2024, we had 341 full-time employees.
We may need to grow or contract our organization, and we may experience difficulties in managing this growth or contraction, which could disrupt our operations. As of February 28, 2026, we had 293 full-time employees.
If our third-party contractors fail to commercialize such companion diagnostic, we may not be able to enter into arrangements with another diagnostic company to obtain supplies of an alternative diagnostic test for use in connection with such product candidate or do so on commercially reasonable terms, which could adversely affect and delay the development or commercialization of such product candidate. 38 Independent clinical investigators and CROs that we engage to conduct our clinical trials may not devote sufficient time or attention to our clinical trials or be able to repeat their past success.
If our third-party contractors fail to commercialize such companion diagnostic, we may not be able to enter into arrangements with another diagnostic company to obtain supplies of an alternative diagnostic test for use in connection with such product candidate or do so on commercially reasonable terms, which could adversely affect and delay the development or commercialization of such product candidate.
Due to worsening and highly uncertain global economic conditions, including high rates of inflation, fluctuating interest rates and concerns of a recession or economic volatility in the United States or other major markets, the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide, and geopolitical instability, including but not limited to resulting from the ongoing conflicts between Russia and Ukraine, the regional conflict in the Middle East and increasing tensions between China and Taiwan, such funding may not be available on acceptable terms or at all.
Due to worsening and highly uncertain global economic conditions, including high rates of inflation, fluctuating interest rates and concerns of a recession or economic volatility in the United States or other major markets, the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide, and geopolitical instability, such funding may not be available on acceptable terms or at all.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCYBERSECURITY Risk Management and Strategy We have implemented and maintain various information security processes designed to identify, assess, and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature, and clinical trial data (Information Systems and Data).
Biggest changeCYBERSECURITY Risk Management and Strategy We have implemented and maintain various information security processes designed to identify, assess, and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature, and clinical trial data (Information Systems and Data). 52 Our information security function is led by our Vice President of Information Technology and supported by the Associate Director of Information Security.
Depending on the nature of the services provided, the sensitivity of the Information 53 Systems and Data at issue, and the identity of the provider, our vendor management process may involve different levels of assessment designed to help identify and mitigate cybersecurity risks associated with a provider.
Depending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider, our vendor management process may involve different levels of assessment designed to help identify and mitigate cybersecurity risks associated with a provider.
In addition, the Company’s incident response process includes reporting to the audit and technology steering committees of the board of directors for certain cybersecurity incidents. The board of directors’ Audit Committee receives periodic reports from our Vice President Information Technology concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to address them.
In addition, the Company’s incident response process includes reporting to the audit committee of the board of directors for certain cybersecurity incidents. 53 The board of directors’ Audit Committee receives periodic reports from our Vice President Information Technology concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to address them.
Our cybersecurity incident response processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances and incident severity, including our Executive Director Information Technology who works with the Company’s incident response team to help the Company mitigate and remediate cybersecurity incidents.
Our cybersecurity incident response processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances and incident severity, including our Vice President Information Technology who works with the Company’s incident response team to help the Company mitigate and remediate cybersecurity incidents.
Specifically, (1) cybersecurity risk is addressed as a component of our enterprise risk management program and identified in our risk register; (2) the information security function works with management to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business; (3) our Technology Steering Committee 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.
Specifically, (1) cybersecurity risk is addressed as a component of our enterprise risk management program and reflected in our risk register; (2) the information security function works with management to prioritize cybersecurity risks that are more likely to have a material impact on our business; and (3) our Technology Steering Committee evaluates material cybersecurity risks against our overall business objectives and reports to the Audit Committee of the Board of Directors, which evaluates our overall enterprise risk.
Our assessment and management of material risks from cybersecurity threats are integrated into our overall risk management processes.
Our assessment and management of material risks from cybersecurity threats are integrated into our overall enterprise risk management program.
Our Senior Information Security Manager holds CISSP certification, an MSc. in Information Security, and has over 20 years government and industry cybersecurity experience. Company management is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel.
Our Associate Director of Information Security holds the CISSP and CCSP certifications, has an MSc. in Information Security and has over 20 years government and industry cybersecurity experience. Company management is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Executive Director, Information Technology, who has fourteen years of information security experience and holds a Certified Information Systems Security Professional (CISSP) certification.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Vice President, Information Technology, who has 15 years of information security experience and holds a Certified Information Systems Security Professional (CISSP) certification.
Our information security function is led by our Executive Director of Information Technology and supported by the Senior Information Security Manager, our legal team, a management-level Technology Steering Committee, and the Audit Committee of the Board of Directors. This function is responsible for identifying, assessing, and managing the Company’s cybersecurity threats and risks.
They are supported by our legal team, a management-level Technology Steering Committee, and the Audit Committee of the Board of Directors. This function is responsible for identifying, assessing, and managing the Company’s cybersecurity threats and risks.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOn March 20, 2025, the parties filed a stipulation of dismissal without prejudice.
Biggest changeDistrict Court for the District of Maryland against the same defendants and alleging similar claims as the Gregora derivative action. On March 20, 2025, the parties filed a stipulation of dismissal without prejudice. On March 24, 2025, the Court entered an Order approving the stipulation and closing the case.
On December 9, 2024, a shareholder derivative suit, entitled Gregora v. Heiden et al. (Case No. 24-cv-03546), was filed in the U.S. District Court for the District of Maryland against certain of the Company’s officers and directors and naming 54 the Company as a nominal defendant.
On December 9, 2024, a shareholder derivative suit, entitled Gregora v. Heiden et al. (Case No. 24-cv-03546), was filed in the U.S. District Court for the District of Maryland against certain of the Company’s officers and directors and naming the Company as a nominal defendant.
District Court for the District of Maryland against the Company and Scott Koenig, M.D., Ph.D., the Company’s President, Chief Executive Officer and a member of the Company’s Board of Directors, alleging violations of securities laws during 2024.
District Court for the District of Maryland against the Company and Scott Koenig, M.D., Ph.D., the Company’s former President and Chief Executive Officer and a current member of the Company’s Board of Directors, alleging violations of securities laws during 2024.
On March 10, 2025, the plaintiff filed a notice of voluntary dismissal. On December 11, 2024, a shareholder derivative suit, entitled Cottle v. MacroGenics, Inc., et al. (Case No. 8:24-cv-03578), was filed in the U.S. District Court for the District of Maryland against the same defendants and alleging similar claims as the Gregora derivative action.
On March 10, 2025, the plaintiff filed a notice of voluntary dismissal. On March 11, 2025, the Court entered an Order dismissing the case without prejudice. On December 11, 2024, a shareholder derivative suit, entitled Cottle v. MacroGenics, Inc., et al. (Case No. 8:24-cv-03578), was filed in the U.S.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeInstead, we will retain our earnings, if any, for the future operation and expansion of our business. Performance Graph The following graph compares the five-year cumulative total return of our common stock with the Nasdaq Composite Index (U.S.) and the Nasdaq Biotechnology Index.
Biggest changeInstead, we will retain our earnings, if any, for the future operation and expansion of our business.
As of March 14, 2025, we had 63,090,323 shares of common stock outstanding held by approximately 52 holders of record, which include shares held by a broker, bank or other nominee. We have never declared or paid any cash dividends. We do not anticipate declaring or paying cash dividends for the foreseeable future.
As of March 5, 2026, we had 63,555,837 shares of common stock outstanding held by approximately 51 holders of record, which include shares held by a broker, bank or other nominee. We have never declared or paid any cash dividends. We do not anticipate declaring or paying cash dividends for the foreseeable future.
Removed
The comparison assumes a $100 investment on December 31, 2019 in our common stock, the stocks comprising the Nasdaq Composite Index, and the stocks comprising the Nasdaq Biotechnology Index, and assumes reinvestment of the full amount of all dividends, if any. Historical stockholder return is not necessarily indicative of the performance to be expected for any future periods.
Removed
The information set forth under the heading "Performance Graph" shall not be deemed to be "soliciting material" or to be "filed" with the SEC or subject to liabilities of Section 18 of the Exchange Act, except to the extent that we specifically request that such information be treated as soliciting material or specifically be incorporated by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act.

Item 7. Management's Discussion & Analysis

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

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Biggest changeRecent Accounting Pronouncements See Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements for information under the caption "Recent Accounting Pronouncements." 63 Results of Operations Revenue The following represents a comparison of our revenue for the years ended December 31, 2024 and 2023 (dollars in millions): Year Ended December 31, Increase/(Decrease) 2024 2023 Collaborative and other agreements $ 118.9 $ 29.4 $ 89.5 304 % Product sales, net 16.4 17.9 (1.5) (8) % Contract manufacturing 13.1 9.8 3.3 34 % Government agreements 1.6 1.6 — — % Total revenue $ 150.0 $ 58.7 $ 91.3 156 % The increase of $89.5 million in revenue from collaborative and other agreements for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to a net increase of $85.0 million in revenue recognized from milestones achieved under the Incyte License Agreement.
Biggest changeRecent Accounting Pronouncements See Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements for information under the caption "Recent Accounting Pronouncements." Results of Operations Revenue The following represents a comparison of our revenue for the years ended December 31, 2025 and 2024 (dollars in millions): Year Ended December 31, Increase/(Decrease) 2025 2024 Collaborative and other agreements $ 87.2 $ 119.9 $ (32.7) (27) % Contract manufacturing 52.6 13.1 39.5 302 % Product sales, net — 16.4 (16.4) (100) % Royalty revenue 9.7 0.6 9.1 NM Total revenue $ 149.5 $ 150.0 $ (0.5) — % NM: Not Meaningful The decrease of $32.7 million in revenue from collaborative and other agreements for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily due to $100.0 million recognized from milestones under the Incyte License Agreement in 2024 compared to $50.0 million recognized from milestones under the Provention (Sanofi) Asset Purchase Agreement and $25.0 million from the Gilead Agreement in 2025.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 includes proceeds from stock option exercises and ESPP purchases, offset by taxes paid related to net share settlement of equity awards.
Net cash provided by financing activities for the year ended December 31, 2024 includes proceeds from stock option exercises and ESPP purchases, offset by taxes paid related to net share settlement of equity awards.
These include three products approved by the FDA: MARGENZA ® (margetuximab-cmkb), an anti-HER2 monoclonal antibody (mAb) that we recently sold to a partner, ZYNYZ ® (retifanlimab-dlwr), an anti-PD-1 mAb that we out-licensed; and TZIELD ® (teplizumab-mzwv), an anti-CD3 mAb that we sold to a partner. We are also collaborating with Gilead Sciences, Inc.
These include three products approved by the FDA: ZYNYZ ® (retifanlimab-dlwr), an anti-PD-1 monoclonal antibody (mAb) that we out-licensed; MARGENZA ® (margetuximab-cmkb), an anti-HER2 mAb that we sold to a partner; and TZIELD ® (teplizumab-mzwv), an anti-CD3 mAb that we sold to a partner. We are also collaborating with Gilead Sciences, Inc.
We evaluate the measure 61 of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. The measure of progress, and thereby periods over which revenue should be recognized, are subject to estimates by management and may change over the course of the research and development and licensing agreement.
We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. The measure of progress, and thereby periods over which revenue should be recognized, are subject to estimates by management and may change over the course of the research and development and licensing agreement.
We allocate the transaction price to material rights based on the relative standalone selling price, which is determined using assumptions regarding estimated costs, discount rates, post-option development timeline, the probability of technical and regulatory success and the probability that the customer will exercise the option.
We allocate the transaction price to material rights based on the relative standalone selling price, which is 60 determined using assumptions regarding estimated costs, discount rates, post-option development timeline, the probability of technical and regulatory success and the probability that the customer will exercise the option.
We received an upfront payment of $150.0 million and milestone payments totaling $215.0 million from Incyte through December 31, 2024, including $100.0 million received in August 2024 . We are eligible to receive up to an additional $210.0 million in development and regulatory milestones and $330.0 million in commercial milestones.
We received an upfront payment of $150.0 million and milestone payments totaling $215.0 million from Incyte through December 31, 2025, including $100.0 million received in August 2024 . We are eligible to receive up to an additional $210.0 million in development and regulatory milestones and $330.0 million in commercial milestones.
Clinical trial expenses are a significant component of research and development expense, and we outsource a significant portion of these costs to third parties. Third party clinical trial expenses include investigator fees, site and patient costs, CRO costs, costs for central laboratory testing, data management and CMO costs.
Clinical trial expenses are a significant component of research and development expense, and we outsource a significant portion of these costs to third parties. Third party clinical trial expenses include investigator fees, site and patient 61 costs, CRO costs, costs for central laboratory testing, data management and CMO costs.
In January 2024, the parties amended the Gilead Agreement to revise certain matters related to intellectual property in the performance of the research plans under the agreement. In 58 June 2024, Gilead paid us variable consideration totaling $3.3 million upon achievement of a research plan milestone.
In January 2024, the parties amended the Gilead Agreement to revise certain matters related to intellectual property in the performance of the research plans under the agreement. In June 2024, Gilead paid us variable consideration totaling $3.3 million upon achievement of a research plan milestone.
(Gilead) on the development of MGD024, a bispecific DART antibody targeting CD123 and CD3 that utilizes our next-generation T-cell engager technology, as well as two additional undisclosed pre-clinical DART development programs.
(Gilead) on the development of MGD024, a bispecific DART antibody targeting CD123 and CD3 that utilizes our next-generation T-cell engager technology, as well as two additional undisclosed pre-clinical DART and TRIDENT development programs.
We have an exclusive global collaboration and license agreement with Incyte for retifanlimab, an investigational monoclonal antibody that inhibits PD-1 (Incyte License Agreement). Under this agreement, as amended, Incyte has obtained exclusive worldwide rights for the development and commercialization of retifanlimab in all indications, while we retain the right to develop our pipeline assets in combination with retifanlimab.
We have an exclusive global collaboration and license agreement with Incyte for retifanlimab, a monoclonal antibody that inhibits PD-1 (Incyte License Agreement). Under this agreement, as amended, Incyte has obtained exclusive worldwide rights for the development and commercialization of retifanlimab in all indications, while we retain the right to develop our pipeline assets in combination with retifanlimab.
As part of the Gilead Agreement, Gilead paid us a non-refundable upfront payment of $60.0 million and we will be eligible to receive up to $1.7 billion in target nomination, option fees, and development, regulatory and commercial milestones, assuming Gilead exercises the CD123 Option and Research Program Option, successfully develops and commercializes MGD024 or other CD123 products developed under the agreement, and products result from the two additional research programs .
As part of the Gilead Agreement, Gilead paid us a non-refundable upfront payment of $60.0 million and we are eligible to receive up to $1.7 billion in target nomination, option fees, and development, regulatory and commercial milestones, assuming Gilead exercises the CD123 Option and Research Program Option, successfully develops and commercializes MGD024 or other CD123 products developed under the agreement, and products result from the two additional research programs .
Actual results and experiences may differ from these estimates. We did not make any material changes to these assumptions during the year ended December 31, 2024, and do not expect any material changes in the near term to the underlying assumptions.
Actual results and experiences may differ from these estimates. We did not make any material changes to these assumptions during the year ended December 31, 2025, and do not expect any material changes in the near term to the underlying assumptions.
Investing Activities Net cash provided by investing activities during the year ended December 31, 2024 is primarily due to proceeds from the sale of MARGENZA to TerSera and maturities of marketable securities, partially offset by purchases of marketable 66 securities.
Net cash provided by investing activities during the 64 year ended December 31, 2024 is primarily due to proceeds from the sale of MARGENZA to TerSera and maturities of marketable securities, partially offset by purchases of marketable securities.
Under t he Gilead Agreement, we will continue the ongoing phase 1 trial for MGD024 accordi ng to a development plan , during which Gilead will have the right to exercise an option granted to Gilead to obtain an exclusive license to develop and commercialize MGD024 and other bispecific antibodies of ours that bind CD123 and CD3 (CD123 Option).
Under t he Gilead Agreement, we are continuing the ongoing phase 1 trial for MGD024 accordi ng to a development plan , during which Gilead will have the right to exercise an option granted to Gilead to obtain an exclusive license to develop and commercialize MGD024 and other bispecific antibodies of ours that bind CD123 and CD3 (CD123 Option).
For the discussion of our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 7, 2024.
For the discussion of our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 20, 2025.
Our primary uses of cash relate to paying salaries and benefits, administering clinical trials and providing the technology and facilities necessary to support our operations. The most significant contractual obligations are the operating leases at our facilities in Maryland.
Our primary uses of cash relate to paying salaries and benefits, conducting research activities, administering clinical trials and providing the technology and facilities necessary to support our operations. The most significant contractual obligations are the operating leases at our facilities in Maryland.
In October 2022, we and Gilead entered into an exclusive option and collaboration agreement (Gilead Agreement) to develop and commercialize MGD024 and create bispecific cancer antibodies using our DART platform and undertake their early development under a maximum of two separate bispecific cancer target research programs.
In 2022, we and Gilead entered into an exclusive option and collaboration agreement (Gilead Agreement) to develop and commercialize MGD024 and create bispecific cancer antibodies using our DART and TRIDENT platforms and undertake their early development under a maximum of two separate bispecific cancer target research programs.
There are uncertainties associated with our research and development expenses for future periods which are impacted by multiple variables, including timing of wind down activities for recently closed studies and current and expected expenditures associated with our ongoing clinical studies. 65 Selling, General and Administrative Expense Selling, general and administrative expenses were $71.0 million and $52.2 million for the years ended December 31, 2024 and 2023, respectively.
There are uncertainties associated with our research and development expenses for future periods which are impacted by multiple variables, including timing of wind down activities for recently closed studies and current and expected expenditures associated with our ongoing clinical studies. 63 Selling, General and Administrative Expense Selling, general and administrative expenses were $39.2 million and $71.0 million for the years ended December 31, 2025 and 2024, respectively.
Our future minimum lease payments as of December 31, 2024 totaled $5.2 million related to short-term lease liabilities, and $65.3 million related to long-term lease liabilities. See Note 6, Commitments and Contingencies, in the Notes to the Financial Statements in this Annual Report on Form 10-K for additional information about our contractual obligations.
Our future minimum lease payments as of December 31, 2025 totaled $5.5 million related to short-term lease liabilities, and $59.8 million related to long-term lease liabilities. See Note 5, Commitments and Contingencies, in the Notes to the Financial Statements in this Annual Report on Form 10-K for additional information about our contractual obligations.
Financial Operations Overview Revenue Our revenue consists of the following: • revenue from collaborative and other agreements which includes amounts recognized relating to upfront nonrefundable payments for licenses or options to obtain future licenses, amounts earned by performing development and manufacturing services, research and development funding and milestone payments earned under our collaboration and license agreements with our strategic collaborators; • product sales, net which reflects sales of MARGENZA which was launched in 2021.
Financial Operations Overview Revenue Our revenue consists of the following: • revenue from collaborative and other agreements which includes amounts recognized relating to upfront nonrefundable payments for licenses or options to obtain future licenses, amounts earned by performing development and manufacturing services, research and development funding and milestone payments earned under our collaboration and license agreements with our strategic collaborators; • contract manufacturing revenue which is earned from providing development and manufacturing services to third parties and manufacturing their drug substance; • product sales, net which reflects sales of MARGENZA.
The terms of these arrangements typically include payment to us of one or more of the following: non-refundable, upfront license fees; reimbursement of certain costs; customer option exercise fees; development, regulatory and commercial milestone payments; and royalties on net sales of licensed products. We may also enter into development and manufacturing service agreements with our collaborators.
The terms of these arrangements typically include payment to us of one or more of the following: non-refundable, upfront license fees; reimbursement of certain costs; customer option exercise fees; development, regulatory and commercial milestone payments; and royalties on net sales of licensed products.
For each arrangement that results in revenues, we identify all performance obligations, which may include a license to intellectual property and know-how, research and development activities, transition activities and/or manufacturing services.
We may also enter into development and manufacturing service agreements with our collaborators. 59 For each arrangement that results in revenues, we identify all performance obligations, which may include a license to intellectual property and know-how, research and development activities, transition activities and/or manufacturing services.
The following are items we include in research and development expense: • employee-related expenses, such as salaries and benefits; • employee-related overhead expenses, such as facilities and other allocated items; • stock-based compensation expense to employees engaged in research and development activities; • depreciation of laboratory and manufacturing equipment, computers and leasehold improvements; • fees paid to consultants, subcontractors, clinical research organizations (CROs) and other third party vendors for work performed under our preclinical and clinical trials including, but not limited to, investigator grants, laboratory work and analysis, database management, statistical analysis, and other items; 59 • amounts paid to vendors and suppliers for laboratory supplies; • internal and third party costs related to manufacturing clinical trial materials, including vialing, packaging and testing; • license fees and other third party vendor payments related to in-licensed product candidates and technology; and • costs related to compliance with regulatory requirements.
The following are items we include in research and development expense: • employee-related expenses, such as salaries and benefits; • employee-related overhead expenses, such as facilities and other allocated items; • stock-based compensation expense to employees engaged in research and development activities; • depreciation of laboratory and manufacturing equipment, computers and leasehold improvements; • fees paid to consultants, subcontractors, clinical research organizations (CROs) and other third party vendors for work performed under our preclinical and clinical trials including, but not limited to, investigator grants, laboratory work and analysis, database management, statistical analysis, and other items; • amounts paid to vendors and suppliers for laboratory supplies; • internal and third party costs related to manufacturing clinical trial materials, including vialing, packaging and testing; • license fees and other third party vendor payments related to in-licensed product candidates and technology; and • costs related to compliance with regulatory requirements. 58 It is difficult to determine with certainty the duration and completion costs of our current or future preclinical programs and clinical trials of our product candidates, or if, when or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval.
Liquidity and Capital Resources Cash Flows The following table represents a summary of our cash flows for the years ended December 31, 2024 and 2023 (dollars in millions): Year Ended December 31, Increase/(Decrease) 2024 2023 Net cash provided by (used in): Operating activities $ (68.4) $ (78.2) $ 9.8 13 % Investing activities 149.3 (80.1) 229.4 286 % Financing activities 1.0 150.4 (149.4) (99) % Net increase (decrease) in cash and cash equivalents $ 81.9 $ (7.9) $ 89.8 NM NM: Not Meaningful Operating Activities Net cash used in operating activities consists of our net loss adjusted for non-cash items such as depreciation and amortization expense and stock-based compensation, gain on royalty monetization arrangement which is classified as a financing activity, gain on sale of MARGENZA which is classified as an investing activity, and changes in working capital.
Liquidity and Capital Resources Cash Flows The following table represents a summary of our cash flows for the years ended December 31, 2025 and 2024 (dollars in millions): Year Ended December 31, Increase/(Decrease) 2025 2024 Net cash provided by (used in): Operating activities $ (81.0) $ (68.4) $ (12.6) (18) % Investing activities (114.1) 149.3 (263.4) (176) % Financing activities 69.5 1.0 68.5 NM Net (decrease) increase in cash and cash equivalents $ (125.6) $ 81.9 $ (207.5) (253) % NM: Not Meaningful Operating Activities Net cash used in operating activities consists of our net loss adjusted for non-cash items such as depreciation and amortization expense and stock-based compensation, gain on royalty monetization arrangement which is classified as a financing activity, gain on sale of MARGENZA which is classified as an investing activity, and changes in working capital.
Research and Development Expense The following represents a comparison of our research and development expense for the years ended December 31, 2024 and 2023 (dollars in millions): Year Ended December 31, Increase/(Decrease) 2024 2023 Vobramitamab duocarmazine $ 39.8 $ 39.2 $ 0.6 2 % Lorigerlimab 36.8 27.7 9.1 33 % MGC028 24.1 14.4 9.7 67 % Preclinical antibody-drug conjugates (ADCs) 18.1 11.2 6.9 62 % MGC026 14.1 13.5 0.6 4 % Margetuximab 10.8 16.1 (5.3) (33) % MGD024 9.7 7.0 2.7 39 % Next-generation T-cell engagers (a) 8.4 10.5 (2.1) (20) % Retifanlimab 2.1 3.5 (1.4) (40) % Enoblituzumab 1.9 5.3 (3.4) (64) % Other programs (a) (b) 11.4 18.2 (6.8) (37) % Total research and development expense $ 177.2 $ 166.6 $ 10.6 6 % (a) Includes research and discovery projects, as well as early preclinical molecules and molecules not advanced to clinical development.
Research and Development Expense The following represents a comparison of our research and development expense for the years ended December 31, 2025 and 2024 (dollars in millions): Year Ended December 31, Increase/(Decrease) 2025 2024 Lorigerlimab $ 33.9 $ 36.8 $ (2.9) (8) % MGC030 21.0 10.1 10.9 108 % MGC028 18.7 24.1 (5.4) (22) % Vobramitamab duocarmazine 17.5 39.8 (22.3) (56) % MGC026 17.1 14.1 3.0 21 % Next-generation T-cell engagers (a) 12.4 8.4 4.0 48 % MGD024 9.6 9.7 (0.1) (1) % Preclinical antibody-drug conjugates (ADCs) 4.8 8.0 (3.2) (40) % Margetuximab 0.7 10.9 (10.2) (94) % Other programs (a) (b) 11.5 15.3 (3.8) (25) % Total research and development expense $ 147.2 $ 177.2 $ (30.0) (17) % (a) Includes research and discovery projects, as well as early preclinical molecules and molecules not advanced to clinical development.
(b) Includes discontinued projects. Research and development expense for the year ended December 31, 2024 increased by $10.6 million compared to the year ended December 31, 2023.
(b) Includes discontinued projects. Research and development expense for the year ended December 31, 2025 decreased by $30.0 million compared to the year ended December 31, 2024.
We recognized a gain of $36.3 million related to the ASA with TerSera during the year ended December 31, 2024. Critical Accounting Estimates Our management's discussion and analysis of financial conditions and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).
Critical Accounting Estimates Our management's discussion and analysis of financial conditions and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).
In addition, we operate a 5 × 2,000 liter commercial-scale cGMP antibody manufacturing facility in our Maryland headquarters to support our clinical programs. We also provide outsourced contract development and manufacturing services to our collaborators and other third parties for commercial and clinical products to offset a portion of the operating costs of this facility.
We also provide outsourced contract development and manufacturing services to our collaborators and other third parties for commercial and clinical products to offset a significant portion of the operating costs of this facility.
Net cash used in operating activities for the year ended December 31, 2024 benefited from a $100.0 million milestone payment received from Incyte under the Incyte License Agreement.
Net cash used in operating activities for the year ended December 31, 2024 benefited from a $100.0 million milestone payment received from Incyte under the Incyte License Agreement. Investing Activities Net cash used in investing activities during the year ended December 31, 2025 is primarily due to purchases of marketable securities, partially offset by maturities of marketable securities.
Net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital, and accordingly, our ability to execute our future operating plans.
We have devoted substantially all of our financial resources and efforts to research and development and general and administrative expenses to support such research and development. Net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital, and accordingly, our ability to execute our future operating plans.
We expect cost of manufacturing services to vary from period to period based on the agreed-upon manufacturing schedule.
The increase in the cost of manufacturing services is due to increased production for external clients in 2025. We expect cost of manufacturing services to vary from period to period based on the agreed-upon manufacturing schedule.
Overview We are a clinical-stage biopharmaceutical company focused on discovering, developing, manufacturing and commercializing innovative antibody-based therapeutics for the treatment of cancer. We generate our pipeline of product candidates from our proprietary suite of antibody technology platforms.
Overview We are a clinical-stage biopharmaceutical company focused on developing innovative antibody-based therapeutics for the treatment of cancer. We generate our pipeline of product candidates from our proprietary suite of antibody technology platforms. We are currently developing therapeutics utilizing multiple modalities, including antibody-drug conjugates (ADCs) and multi-specific antibodies (which we refer to as DART and TRIDENT molecules).
While a summary of significant accounting policies is described fully in Note 2 in our consolidated financial statements, we believe that the following accounting policies are the most critical to assist you in fully understanding and evaluating our financial results and the effect of the estimates and judgments we used in preparing our consolidated financial statements. 60 Revenue Recognition We recognize revenue under Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customer s, (ASC 606) when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.
Revenue Recognition We recognize revenue under Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customer s, (ASC 606) when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.
We receive tiered royalties of 15% to 24% on any global net sales and we have the option to co-promote retifanlimab with Incyte. We retain the right to develop our pipeline assets in combination with retifanlimab, with Incyte commercializing retifanlimab and us commercializing our asset(s), if any such potential combinations are approved.
We retain the right to develop our pipeline assets in combination with retifanlimab, with Incyte commercializing retifanlimab and us commercializing our asset(s), if any such potential combinations are approved. We also have an agreement with Incyte under which we are entitled to manufacture a portion of Incyte’s global commercial supply of retifanlimab (Incyte Commercial Supply Agreement). • Gilead .
Selling, general and administrative expense also includes costs incurred under the arrangement with our commercialization partner, Eversana Life Science Services, LLC, and other legal and professional fees. Gain on Sale of MARGENZA On October 17, 2024, we entered into an Asset Purchase and Sale Agreement (ASA) with TerSera, which closed in November 2024.
Selling, general and administrative expense also includes legal and professional fees and included costs incurred under the arrangement with our commercialization partner, Eversana Life Science Services, LLC in 2023 and 2024.
Food and Drug Administration (FDA) – and to enter into several strategic collaborations with global biopharmaceutical companies. These collaborations have provided us with over $1.4 billion of non-dilutive funding since our inception in 2000, and have enabled us to leverage the additional expertise of our collaborators to advance the development of multiple partnered product candidates.
These collaborations have provided us with over $1.6 billion of non-dilutive funding since our inception in 2000, and have enabled us to leverage the additional expertise of our collaborators to advance the development of multiple partnered product candidates. In addition, we operate a commercial-scale cGMP antibody manufacturing facility in our Maryland headquarters to support our clinical programs.
We expect that over the next several years this deficit will increase as we continue to incur research and development expense in connection with our ongoing activities and several clinical trials. 57 Macroeconomic Conditions The global economy, credit markets and financial markets have and may continue to experience significant volatility as a result of significant worldwide events, including, fluctuating interest rates, and geopolitical upheaval (collectively, the Macroeconomic Conditions).
We expect that over the next several years this deficit will increase as we continue to incur research and development expense in connection with our ongoing activities and several clinical trials.
We are currently developing therapeutics utilizing multiple modalities, including antibody-drug conjugates (ADCs) and multi-specific antibodies (which we refer to as DART and TRIDENT molecules). The combination of our technology platforms and antibody engineering expertise has allowed us to generate promising product candidates – three of which have received marketing approval by the U.S.
The combination of our technology platforms and antibody engineering expertise has allowed us to generate promising product candidates – three of which have received marketing approval by the U.S. Food and Drug Administration (FDA) – and to enter into several strategic collaborations with global biopharmaceutical companies.
Although it is difficult to predict our funding requirements, we anticipate that our cash, cash equivalents and marketable securities as of December 31, 2024, combined with anticipated and potential collaboration payments, contract manufacturing revenue, and royalties, should enable us to fund our operations into the second half of 2026.
Although it is difficult to predict our funding requirements, we anticipate that our cash, cash equivalents and marketable securities as of December 31, 2025, combined with projected and anticipated future payments from our partners, and anticipated savings from our cost-reduction initiatives, supports our cash runway into late 2027.
Although it is difficult to predict our funding requirements, we anticipate that our cash, cash equivalents and marketable securities as of December 31, 2024, combined with anticipated and potential collaboration payments, contract manufacturing revenue, and royalties, should enable us to fund our operations into the second half of 2026.
Although it is difficult to predict our funding requirements, we anticipate that our cash, cash equivalents and marketable securities as of December 31, 2025, combined with projected and anticipated future payments from our partners, and anticipated savings from our cost-reduction initiatives, will support our cash runway into late 2027.
Net cash used in operating activities for the year ended December 31, 2023 benefited from $45.0 million in milestone payments received from Provention and a $15.0 million milestone payment received from Incyte under the Incyte License Agreement.
Net cash used in operating activities for the year ended December 31, 2025 benefited from $50.0 million in milestones from Sanofi and a $25.0 million payment related to the nomination and option exercise from Gilead.
These increases were partially offset by: • decreased development, manufacturing and clinical trial costs related to discontinued projects; • decreased development and clinical trial costs related to margetuximab; • decreased development and clinical trial costs related to enoblituzumab; • decreased development costs related to t-cell engagers; and • decreased manufacturing costs related to retifanlimab.
These decreases were partially offset by • increased clinical trial costs related to MGC026 and MGC028; and • increased development costs related to MGC030.
The increase is primarily due to an amendment fee paid to Eversana pursuant to the sale of MARGENZA in November 2024 and increased stock-based compensation expense and accrued severance related to the separation agreement with our Chief Executive Officer. Gain on Sale of MARGENZA In October 2024, we entered into an ASA with TerSera which closed in November 2024.
Gain on Sale of MARGENZA In October 2024, we entered into an Asset Purchase and Sale Agreement (ASA) with TerSera Therapeutics, LLC (TerSera) which closed in November 2024.
Net cash provided by financing activities for the year ended December 31, 2023 includes net cash proceeds from our Royalty Purchase Agreement with DRI of $149.7 million. Our multiple product candidates currently under development will require significant additional research and development efforts that include extensive preclinical studies and clinical testing, and regulatory approval prior to commercial use.
Our multiple product candidates currently under development will require significant additional research and development efforts that include extensive preclinical studies and clinical testing, and regulatory approval prior to commercial use. Our future success is dependent on our ability to identify and develop our product candidates, and ultimately upon our ability to attain profitable operations.
The historical clinical accrual estimates have not been materially different from the actual costs.
The historical clinical accrual estimates have not been materially different from the actual costs. Liability related to the sale of future royalties and related interest expense The liability related to future royalties is presented net of unamortized issuance costs on our consolidated balance sheets.
The decrease in product sales, net is due to the fact that we sold the global rights to MARGENZA to TerSera in November 2024. Revenue from product sales is recorded net of applicable provisions for rebates, chargebacks and discounts, distribution-related fees and other sales-related deductions.
Contract manufacturing revenue increased by $39.5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, reflecting increased production for external clients in 2025. 62 The decrease in product sales, net is due to the fact that we sold the global rights to MARGENZA to TerSera in November 2024, and accordingly, no longer have product sales.
Removed
Our expected funding requirements reflect anticipated expenditures related to the ongoing Phase 2 LORIKEET study of lorigerlimab in mCRPC as well as our other clinical and preclinical studies currently ongoing. Through December 31, 2024, we had an accumulated deficit of $1.2 billion.
Added
We have implemented, and will continue to evaluate and execute, various cost-saving measures that are intended to extend our financial runway while continuing to progress our pipeline. Through December 31, 2025, we had an accumulated deficit of $1.2 billion.
Removed
We also have an agreement with Incyte under which we performed development and manufacturing services for Incyte's clinical needs of retifanlimab (Incyte Clinical Supply Agreement) and another agreement under which we are entitled to manufacture a portion of Incyte’s global commercial supply of retifanlimab (Incyte Commercial Supply Agreement). • Gilead .
Added
Macroeconomic Conditions The global economy, credit markets and financial markets have and may continue to experience significant volatility as a result of significant worldwide events, including, fluctuating interest rates, and geopolitical upheaval and tariffs or other 56 restrictions imposed by the United States government or governments of other nations (collectively, the Macroeconomic Conditions).
Removed
In November 2024, we sold global rights to MARGENZA to TerSera Therapeutics, LLC (TerSera) for an upfront payment of $40.0 million; • contract manufacturing revenue which is earned from providing development and manufacturing services to third parties and manufacturing their drug substance; and • government agreements revenue which reflects amounts earned through grants and/or contracts with the U.S. government and other research institutions on behalf of the U.S. government, primarily with respect to research and development activities related to infectious disease product candidates.
Added
We are eligible for tiered royalties of 15% to 24% on any global net sales (see Note 10, Royalty Monetization Arrangement, in our consolidated financial statements for further information about ZYNYZ royalties), and we have the option to co-promote retifanlimab with Incyte.
Removed
Cost of Product Sales Cost of product sales relates to sales of MARGENZA. These costs include materials and manufacturing costs, as well as royalties payable on net sales of MARGENZA and inventory reserves. All product costs incurred prior to FDA approval of MARGENZA in December 2020 were expensed as research and development expense.
Added
In November 2025, Gilead nominated the second of the two research programs contemplated in the 57 Gilead Agreement (Second Research Program) and we granted Gilead a research license. Gilead also exercised their exclusive option to obtain a license to exploit the research molecule and research product with respect to the Second Research Program.
Removed
As a result, cost of product sales was positively impacted as we sold through inventory that was expensed prior to FDA approval of MARGENZA. In November 2024, we sold global rights to MARGENZA to TerSera.
Added
Gilead paid us a total of $25.0 million related to the nomination and option exercise in December 2025.
Removed
It is difficult to determine with certainty the duration and completion costs of our current or future preclinical programs and clinical trials of our product candidates, or if, when or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval.
Added
In November 2024, we sold global rights to MARGENZA to TerSera Therapeutics, LLC (TerSera) for an upfront payment of $40.0 million, and accordingly, no longer have product sales; and • sales-based royalty revenue that is recognized when the related sales occur or when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied.
Removed
Product Sales, Net Prior to the sale of MARGENZA to TerSera in November 2024, we entered into a limited number of arrangements with specialty distributors in the United States to distribute MARGENZA.
Added
While a summary of significant accounting policies is described fully in Note 2 in our consolidated financial statements, we believe that the following accounting policies are the most critical to assist you in fully understanding and evaluating our financial results and the effect of the estimates and judgments we used in preparing our consolidated financial statements.
Removed
The delivery of our product represents a single performance obligation for these transactions and we record net product revenue when control is transferred to the customer, generally upon receipt by the customer.
Added
Interest expense on the liability related to future royalties is recognized using the effective interest rate method over the life of the arrangement. We calculate an effective interest rate which will amortize our related obligation to zero over the anticipated repayment period.
Removed
The transaction price for net product revenue represents the amount we expect to 62 receive, which is net of estimated government-mandated rebates and chargebacks, distribution fees, estimated product returns, and other deductions. Accruals are established for these deductions, and actual amounts incurred are offset against applicable accruals.
Added
The liability related to future royalties and the related interest expense are based on our current estimates of future royalties expected to be received over the life of the arrangement, which we determine by using internal sales projections and external information from market data sources, which are considered Level 3 inputs.
Removed
Customer discounts are recorded as reductions of accounts receivable on the consolidated balance sheets. Allowance for product returns, provider chargebacks, government and other rebates and service fees are recorded as a component of accrued expenses and other current liabilities on the consolidated balance sheets.
Added
We periodically assess the expected payments and to the extent our estimates of future royalty payments are greater or less than previous estimates or the estimated timing of such payments is materially different than previous estimates, we will adjust the effective interest rate and recognize related non-cash interest expense on a prospective basis.
Removed
Sales deductions are based on management's estimates that consider payor mix in target markets and experience to-date. These estimates involve a substantial degree of judgment, in particular, for government-mandated rebates and chargebacks, such as for the Medicaid and 340B programs.
Added
Royalty revenue increased by $9.1 million for the year ended December 31, 2025 compared to December 31, 2024 due to higher sales of ZYNYZ. During 2025, $7.9 million of the royalty revenue was non-cash due to the sale of our royalty rights to Sagard Healthcare Partners (Sagard) in June 2025.
Removed
The table below includes a reconciliation of the accounts associated with these deductions (in millions): Rebates and chargebacks Distribution fees, product returns and other Total Balance as of December 31, 2022 $ 0.4 $ 1.3 $ 1.7 Provisions 2.8 1.2 4.0 Adjustments related to prior year sales (0.1) (0.7) (0.8) Payments/credits (2.9) (1.0) (3.9) Balance as of December 31, 2023 0.2 0.8 1.0 Provisions 2.3 1.0 3.3 Adjustments related to prior year sales 0.4 (0.8) (0.4) Payments/credits (2.7) (0.9) (3.6) Balance as of December 31, 2024 $ 0.2 $ 0.1 $ 0.3 Contract manufacturing revenue increased by $3.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 due to increased manufacturing under the Incyte Manufacturing and Clinical Supply Agreement and the revenue recognized under the Emergent BioSolutions Manufacturing and Clinical Supply Agreements executed in the second half of 2023.
Added
See Note 10, Royalty Monetization Arrangemen t, to the consolidated financial statements for additional information. Cost of Manufacturing Services Cost of manufacturing services was $36.0 million and $11.5 million for the years ended December 31, 2025 and 2024, respectively. Cost of manufacturing services includes the costs to provide manufacturing services to our customers.
Removed
Cost of Product Sales Cost of product sales was $0.8 million and $0.6 million for the years ended December 31, 2024 and 2023, respectively. Cost of product sales includes product royalties and fill finish costs for both years, and cost of product sales for 2023 also includes reserves for unsaleable inventory.
Added
This decrease was primarily attributable to: • decreased vobra duo costs due to the decision to discontinue further internal development of that program; • decreased development costs related to the wind down of margetuximab activities after the sale of MARGENZA to TerSera; and • decreased development, manufacturing and IND-enabling costs related to MGC028.
Removed
Product sold during both periods consisted of drug product that was previously charged to research and development expense prior to FDA approval of MARGENZA, which favorably impacted our gross margin. 64 Cost of Manufacturing Services Cost of manufacturing services was $11.5 million and $7.6 million for the years ended December 31, 2024 and 2023, respectively.
Added
The decrease is primarily due to lower stock-based compensation expense and reduced professional fees. The decrease in stock-based compensation expense was largely driven by additional stock-based compensation expense and accrued severance related to the separation agreement with our Chief Executive Officer recorded in 2024. The reduction in professional fees was largely driven by the cessation of commercialization activities for MARGENZA.
Removed
Cost of manufacturing services includes the costs to provide manufacturing services to produce certain Incyte bulk drug substance under the Incyte Manufacturing and Clinical Supply Agreement for both years. Cost of manufacturing services for the year ended December 31, 2024 also includes costs to provide manufacturing services under the Emergent BioSolutions Manufacturing and Clinical Supply Agreement.
Added
Interest and Other Expense In June 2025, we entered into a Purchase and Sale Agreement (Royalty Purchase Agreement) with Sagard, pursuant to which we sold to Sagard our right to receive royalties on global net sales of ZYNYZ (retifanlimab-dlwr) occurring on and after July 1, 2025 under our Incyte License Agreement, dated as of October 24, 2017, as amended.
Removed
This increase was primarily attributable to: • increased development, manufacturing and IND-enabling costs related to MGC028; • increased clinical trial costs related to lorigerlimab ; • increased development costs for preclinical ADCs; and • increased clinical costs related to MGD024.
Added
We are recognizing non-cash interest expense over the life of the Royalty Purchase Agreement, $8.3 million of which was recognized during the year ended December 31, 2025.
Removed
Under the terms of the ASA, we sold the global rights to MARGENZA, inclusive of our business of researching, developing, commercializing, manufacturing, packaging, distributing, promoting, marketing and selling the MARGENZA product, as well as using and licensing the intellectual property relating to MARGENZA. In addition to MARGENZA’s intellectual property, TerSera also acquired all existing MARGENZA inventory.
Added
The increase in Interest and Other Expense of $7.4 million from the year ended December 31, 2024 to the year ended December 31, 2025 is primarily due to this non-cash interest expense, partially offset by a decrease in other expense. See Note 10, Royalty Monetization Arrangement, for more information.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Removed
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our primary objective when considering our investment activities is to preserve capital in order to fund our operations. We also seek to maximize income from our investments without assuming significant risk.
Added
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K. As a result, pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information required by this Item 7A.
Removed
Our current investment policy is to invest principally in deposits and securities issued by the U.S. government and its agencies, Government Sponsored Enterprise agency debt obligations, corporate debt obligations and money market instruments. As of December 31, 2024, we had cash, cash equivalents and marketable securities of $201.7 million.
Removed
Our primary exposure to market risk is related to changes in interest rates.
Removed
Due to the short-term maturities of our cash equivalents and marketable securities and the low risk profile of our marketable securities, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our cash equivalents and marketable securities.
Removed
We have the ability to hold our marketable securities 67 until maturity, and we therefore do not expect a change in market interest rates to affect our operating results or cash flows to any significant degree.

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