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What changed in Nkarta, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Nkarta, 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.

+400 added−364 removedSource: 10-K (2026-03-25) vs 10-K (2025-03-26)

Top changes in Nkarta, Inc.'s 2025 10-K

400 paragraphs added · 364 removed · 317 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

72 edited+9 added−11 removed239 unchanged
Biggest changeOf these full-time employees, 125 employees are engaged in research and development activities and 32 employees are engaged in finance, business development, human resources, operations and other general and administrative functions. We have no collective bargaining agreements with our employees and we have not experienced any work stoppages. We consider our relations with our employees to be good.
Biggest changeAs of December 31, 2025, we had 108 full-time employees, 28 of whom have advanced degrees including but not limited to Ph.D., M.D. and J.D. degrees. Of these full-time employees, 87 employees are engaged in research and development activities and 21 employees are engaged in finance, business development, human resources, operations and other general and administrative functions.
Due to general uncertainty in the current regulatory and healthcare policy environment, and specifically regarding positions that the new Presidential administration may take with respect to these issues, we are unable to predict the impact of any legislative, regulatory, third-party payer or policy actions, including potential cost containment and healthcare reform measures.
Due to general uncertainty in the current regulatory and healthcare policy environment, and specifically regarding positions that the new Presidential administration may take with respect to these issues, we are unable to predict the impact of any legislative, regulatory, third-party payer or policy actions, including potential cost containment and healthcare reform measures.
The steps required before a product candidate may be approved for marketing in the United States generally include: • preclinical laboratory tests and animal tests conducted under Good Laboratory Practices ("GLP"); • the submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials commence; • approval by an independent institutional review board ("IRB") representing each clinical site before each clinical trial may be initiated; • adequate and well-controlled human clinical trials to establish the safety and efficacy of the product for each indication and conducted in accordance with Good Clinical Practices ("GCP"); • the preparation and submission to the FDA of a BLA; • FDA acceptance, review and approval of the BLA, which might include an advisory committee review; and • satisfactory completion of an FDA inspection of the manufacturing facilities at which the product, or components thereof, are made to assess compliance with cGMPs and in the case of cell-based advanced therapy, additionally, current Good Tissue Practices.
The steps required before a product candidate may be approved for marketing in the United States generally include: • preclinical laboratory tests and animal tests conducted under Good Laboratory Practices; • the submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials commence; • approval by an independent institutional review board ("IRB") representing each clinical site before each clinical trial may be initiated; • adequate and well-controlled human clinical trials to establish the safety and efficacy of the product for each indication and conducted in accordance with Good Clinical Practices ("GCP"); • the preparation and submission to the FDA of a BLA; • FDA acceptance, review and approval of the BLA, which might include an advisory committee review; and • satisfactory completion of an FDA inspection of the manufacturing facilities at which the product, or components thereof, are made to assess compliance with cGMPs and in the case of cell-based advanced therapy, additionally, current Good Tissue Practices.
Generally, if a product that has orphan drug designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same active moiety for the same indication for seven years, except in limited circumstances, such as another drug’s showing of clinical superiority over the drug with orphan exclusivity.
Generally, if a product that has ODD subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same active moiety for the same indication for seven years, except in limited circumstances, such as another drug’s showing of clinical superiority over the drug with orphan exclusivity.
Due to the broad expression of CD19 on B cells, the targeting and depletion of CD19-positive B cells has been proposed as a mechanism by which long-term drug-free remissions may be achieved in B-cell mediated autoimmune diseases. Autologous CAR T cell therapies have transformed the treatment landscape for certain blood cancers by targeting cancerous B cells via CD19.
Due to the broad expression of CD19 on B cells, the targeting and depletion of CD19-positive 2 B cells has been proposed as a mechanism by which long-term drug-free remissions may be achieved in B-cell mediated autoimmune diseases. Autologous CAR T cell therapies have transformed the treatment landscape for certain blood cancers by targeting cancerous B cells via CD19.
Based on our preclinical data, we are able to freeze and subsequently thaw individual doses of engineered NK cells without significant loss of cancer cell killing potency of our engineered NK cells. Cryopreservation of our allogeneic CAR NK cells will enable their off-the-shelf use in medical centers around the world, for administration to a patient at any time.
Based on our preclinical data, we are able to freeze and subsequently thaw individual doses of engineered NK cells without significant loss of cell killing potency of our engineered NK cells. Cryopreservation of our allogeneic CAR NK cells will enable their off-the-shelf use in medical centers around the world, for administration to a patient at any time.
Payments to the Licensors pursuant to the license agreement include single-digit royalty payments on commercial sales, a portion of any sublicensing revenue, patent expenses, license maintenance fees and milestone payments upon completion of certain regulatory and commercial milestones related to the clinical development and commercialization of our product candidates, in an aggregate amount of up to 5 million Singapore Dollars ("SGD").
Payments to the Licensors pursuant to the license agreement include single-digit royalty payments on commercial sales, a portion of any sublicensing revenue, patent expenses, license maintenance fees and milestone payments upon completion of certain regulatory and commercial milestones related to the clinical development and commercialization of our product candidates, in an aggregate amount of up to 5 million Singapore Dollars.
In addition, autologous T cell therapy requires specialized infrastructure to maintain a strict chain of custody and identity of patient cells throughout collection, manufacturing and delivery, adding significant cost to the process and limiting the ability to scale. These limitations are difficult to address as many are inherent to fundamental aspects of T cell biology.
In addition, autologous T cell therapy requires specialized infrastructure to maintain a strict chain of custody and identity of patient cells throughout collection, manufacturing and delivery, adding significant cost to the process and limiting the ability to scale. 5 These limitations are difficult to address as many are inherent to fundamental aspects of T cell biology.
Expedited Approval Programs A sponsor may seek approval of its drug candidate under programs designed to accelerate FDA’s review of INDs and BLA. For example, the FDA may grant Fast Track Designation to a drug intended for treatment of a serious or life-threatening disease or condition that has potential to address unmet medical needs for the disease or condition.
Expedited Approval Programs A sponsor may seek approval of its drug candidate under programs designed to accelerate FDA’s review of INDs and BLA. For example, the FDA may grant fast track designation ("FTD") to a drug intended for treatment of a serious or life-threatening disease or condition that has potential to address unmet medical needs for the disease or condition.
Because the targeting of CD19 has demonstrated clinical activity with CAR T and CAR NK cell therapies, we believe that NKX019 presents an opportunity to treat a variety of autoimmune diseases while addressing the limitations of CAR T cell therapies. We are evaluating NKX019 in clinical trials for the treatment of LN, scleroderma, myositis, and AAV.
Because the targeting of CD19 has demonstrated clinical activity with CAR T and CAR NK cell therapies, we believe that NKX019 presents an opportunity to treat a variety of autoimmune diseases while addressing the limitations of CAR T cell therapies. We are evaluating NKX019 in clinical trials for the treatment of LN, pMN, scleroderma, myositis, and AAV.
The second graph below shows the increased number and persistence in mice of NK cells engineered with mbIL-15, as compared to unmodified NK cells, as a percentage of total peripheral blood mononuclear cells ("PBMCs"). 8 Source: Imamura et al., Blood. 2014 Aug 14;124(7):1081-8 9 Targeting and Signaling.
The second graph below shows the increased number and persistence in mice of NK cells engineered with mbIL-15, as compared to unmodified NK cells, as a percentage of total peripheral blood mononuclear cells. 8 Source: Imamura et al., Blood. 2014 Aug 14;124(7):1081-8 9 Targeting and Signaling.
CRS, which accounts for many of the adverse events which in part limit availability, is believed to be a consequence of the 5 exponential expansion of T cells upon detection of a target antigen. Manufacturing time, product variability, and cost are due in great part to the autologous nature of approved CAR-T therapies.
CRS, which accounts for many of the adverse events which in part limit availability, is believed to be a consequence of the exponential expansion of T cells upon detection of a target antigen. Manufacturing time, product variability, and cost are due in great part to the autologous nature of approved CAR-T therapies.
When immune tolerance is lost, activation of autoreactive immune cells including T and B cells occurs, resulting in T and B cells being unable to recognize the body as “self”. The leads to the body’s own T cells directly attacking target self-antigens and causes B cells to produce autoantibodies that lead to inflammation and tissue damage.
When immune tolerance is lost, activation of autoreactive immune cells including T and B cells occurs, resulting in T and B cells being unable to recognize the body as “self”. This leads to the body’s own T cells directly attacking target self-antigens and causes B cells to produce autoantibodies that lead to inflammation and tissue damage.
For off-the-shelf administration, clinical sites will thaw the CAR NK product candidate for administration to patients at the clinical site. We believe that establishing our own internal cGMP manufacturing capabilities will facilitate clinical product supply, lower the risk of manufacturing disruptions, and enable more cost-effective manufacturing for clinical and commercial supply of our product candidates.
For off-the-shelf administration, clinical sites will thaw the CAR NK product candidate for administration to patients at the clinical site. 13 We believe that establishing our own internal cGMP manufacturing capabilities will facilitate clinical product supply, lower the risk of manufacturing disruptions, and enable more cost-effective manufacturing for clinical and commercial supply of our product candidates.
Orphan Drugs Under the Orphan Drug Act, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition affecting fewer than 200,000 individuals in the United States, or in other limited cases. Orphan drug designation must be requested before submitting a BLA.
Orphan Drugs Under the Orphan Drug Act, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition affecting fewer than 200,000 individuals in the United States, or in other limited cases. Orphan drug designation ("ODD") must be requested before submitting a BLA.
Mergers and acquisitions 27 in the biopharmaceutical industry may result in even greater resource concentration among a smaller number of competitors. Smaller or early-stage companies may also prove to be significant competitors, either alone or through collaborative arrangements with large and established companies.
Mergers and acquisitions in the biopharmaceutical industry may result in even greater resource concentration among a smaller number of competitors. Smaller or early-stage companies may also prove to be significant competitors, either alone or through collaborative arrangements with large and established companies.
Many of our current or potential competitors have significantly greater financial, technical and human resources, as well as more expertise in research and development, manufacturing, preclinical testing, conducting clinical studies and trials and commercializing and marketing approved products, than us.
Many of our current or potential competitors have significantly greater financial, technical and human resources, as well as more expertise in research and development, manufacturing, preclinical testing, conducting 27 clinical studies and trials and commercializing and marketing approved products, than us.
At least 15 of the issued utility patents and at least 15 of the pending utility patent applications in our portfolio are related to our NK cell engineering platform, and include manufacturing process, method-of-use and composition-of-matter claims relating to NK cell expansion and/or NK cell persistence.
At least 20 of the issued utility patents and at least 15 of the pending utility patent applications in our portfolio are related to our NK cell engineering platform, and include manufacturing process, method-of-use and composition-of-matter claims relating to NK cell expansion and/or NK cell persistence.
However, in autoimmune diseases, the immune system targets the body’s own cells and tissues. This occurs due to the loss of immune tolerance, a mechanism that prevents the immune system from reacting against the body’s own 3 tissues and self-antigens.
However, in autoimmune diseases, the immune system targets the body’s own cells and tissues. This occurs due to the loss of immune tolerance, a mechanism that prevents the immune system from reacting against the body’s own tissues and self-antigens.
The explosive growth of T cells is believed to be the basis of both their activity and the risk of CRS and immune effector cell-associated neurotoxicity syndrome ("ICANS") associated with CAR T cell therapy. • Disease-tailored LD.
The explosive growth of T cells is believed to be the basis of both their activity and the risk of CRS and immune effector cell-associated neurotoxicity syndrome associated with CAR T cell therapy. • Disease-tailored LD.
These issued utility patents include patents in the United States, Europe, Japan, and other jurisdictions outside the United States and are solely owned by us or licensed from Licensors. These pending utility patent applications include applications in the United States, Europe, Japan, the Patent Cooperation Treaty ("PCT"), and other jurisdictions outside the United States.
These issued utility patents include patents in the United States, Europe, Japan, and other jurisdictions outside the United States and are solely owned by us or licensed from Licensors. These pending utility patent applications include applications in the United States, Europe, Japan, the Patent Cooperation Treaty, and other jurisdictions outside the United States.
In one published report, five patients with highly refractory LN had remarkable improvements in clinical symptoms and normalization of autoantibodies following a 2 course of treatment with CD19 CAR T cells.
In one published report, five patients with highly refractory LN had remarkable improvements in clinical symptoms and normalization of autoantibodies following a course of treatment with CD19 CAR T cells.
We have a 2,700-square foot clinical cGMP facility at our original 13 corporate location in South San Francisco, California, which we have used to produce clinical supply.
We have a 2,700-square foot clinical cGMP facility at our original corporate location in South San Francisco, California, which we have used to produce clinical supply.
In order to maintain such trade secrets and other proprietary information, we rely in part on confidentiality agreements with our employees, consultants, contractors, outside scientific collaborators and other advisors. We also protect our brand through trademark rights. As of December 31, 2024, we are the listed owner of the U.S. registered trademark, NKARTA, and 15 related foreign registered trademarks.
In order to maintain such trade secrets and other proprietary information, we rely in part on confidentiality agreements with our employees, consultants, contractors, outside scientific collaborators and other advisors. We also protect our brand through trademark rights. As of December 31, 2025, we are the listed owner of the U.S. registered trademark, NKARTA, and 15 related foreign registered trademarks.
A number of companies are seeking to harness the biology of immune cells through engagers designed to direct a patient’s own NK or T cells to eliminate B cells. Companies developing cell engagers which compete directly with NKX019 include Affimed, Amgen, Candid, Cullinan, Dragonfly Therapeutics, GlaxoSmithKline, GT Biopharma, Innate Pharma, Merck, Roche, Servier, Xencor, and Zenas.
A number of companies are seeking to harness the biology of immune cells through engagers designed to direct a patient’s own NK or T cells to eliminate B cells. Companies developing cell engagers which compete directly with NKX019 include Amgen, Candid, Cullinan, Dragonfly Therapeutics, GlaxoSmithKline, GT Biopharma, Innate Pharma, Merck, Ouro, Roche, Servier, Xencor, and Zenas.
Companies developing autologous cell therapies for autoimmune diseases which compete directly with NKX019 include but are not limited to AstraZeneca, Autolus, Bioray, Bristol-Myers Squibb, Cabaletta, Cartesian, Gilead, iCell, Juventas, JW Therapeutics, Kyverna, Miltenyi, Novartis, Rui Therapeutics, and Synthekine.
Companies developing autologous cell therapies for autoimmune diseases which compete directly with NKX019 include but are not limited to AstraZeneca, Autolus, Bristol-Myers Squibb, Cabaletta, Cartesian, Gilead, iCell, Juventas, JW Therapeutics, Kyverna, Miltenyi, Novartis, Roche, Rui Therapeutics, and Synthekine.
Genome Editing. The fourth component of our platform is the ability to edit our NK cells using CRISPR-Cas9 technology. We have identified a number of genomic modifications that serve to further enhance the cytotoxicity and resistance to tumor-mediated immune suppression.
The fourth component of our platform is the ability to edit our NK cells using CRISPR-Cas9 technology. We have identified a number of genomic modifications that serve to further enhance the cytotoxicity and resistance to tumor-mediated immune suppression.
Companies developing allogeneic cell therapies intended to treat autoimmune diseases which compete directly with NKX019 include but are not limited to Adicet, Allogene, Artiva, Atara, Caribou, Century, CRISPR Therapeutics, Fate Therapeutics, TG Therapeutics, and Sana Biotechnology.
Companies developing allogeneic cell therapies intended to treat autoimmune diseases which compete directly with NKX019 include but are not limited to Adicet, Allogene, Artiva, Atara, CRISPR Therapeutics, Fate Therapeutics, TG Therapeutics, and Sana Biotechnology.
We believe that the modular nature of our platform and the proprietary technologies we use for the multiplex engineering of NK cells are advantages that can support the generation of new INDs for product candidates with enhanced properties.
We believe that the modular nature of our platform and the proprietary technologies we use for the multiplex engineering of NK cells are advantages that can support the generation of new Investigational New Drugs ("INDs") for product candidates with enhanced properties.
For both NKX019 and NKX101, we have found that using the OX40 costimulatory domain enhances the ability of the engineered NK cells to kill cancerous cells repeatedly in several in vitro models, as compared to CAR NK cells that include other costimulatory domains commonly used for CAR T cells. We confirmed these findings in animal models for both product candidates.
For NKX019, we have found that using the OX40 costimulatory domain enhances the ability of the engineered NK cells to kill cancerous cells repeatedly in several in vitro models, as compared to CAR NK cells that include other costimulatory domains commonly used for CAR T cells. We confirmed these findings in animal models for both product candidates. Genome Editing.
Among these issued utility patents and pending utility patent applications, we have two issued US patents and one pending US patent application with composition-of-matter claims directed to our NKX019 product candidate, all of which are solely owned by us and are estimated to expire in 2040, subject to any patent term adjustments or extensions.
Among these issued utility patents and pending utility patent applications, we have three issued US patents and one pending U.S. patent application with composition-of-matter claims directed to our NKX019 product candidate, all of which are solely owned by us and are estimated to expire in 2040, subject to any patent term adjustments or extensions.
Specifically, the early peak exposure and mbIL-15 engineering of NKX019 allow evaluation of single agent LD with Cy. A Flu-sparing LD regimen would eliminate potential toxicities of this agent, including cytopenias and MDS.
Specifically, the early peak exposure and mbIL-15 engineering of NKX019 allow evaluation of single-agent LD with Cy. A Flu-sparing LD regimen would eliminate potential toxicities of this agent, including cytopenias and myelodysplastic syndromes.
We believe that internal cGMP manufacturing capabilities will facilitate clinical product supply, lower the risk of manufacturing disruptions, and enable more cost-effective manufacturing for clinical and commercial supply of our product candidates. We currently manufacture our clinical drug supply at one of our two cGMP facilities in South San Francisco, California.
We believe that internal cGMP manufacturing capabilities will facilitate clinical product supply, lower the risk of manufacturing disruptions, and enable more cost-effective manufacturing for both clinical and, if successfully developed, commercial supply of our product candidates. We currently manufacture our clinical drug supply at one of our two cGMP facilities in South San Francisco, California.
At least 20 of the issued utility patents and at least 55 of the pending utility patent applications in our portfolio are related to our NKX019 product candidate, and include composition-of-matter, manufacturing process, and method-of-use claims (e.g., targeting CD19-expressing cells, including monotherapies and combination therapies).
At least 30 of the issued utility patents and at least 50 of the pending utility patent applications in our portfolio are related to our NKX019 product candidate, and include composition-of-matter, manufacturing process, and method-of-use claims (e.g., targeting CD19-expressing cells, including monotherapies and combination therapies).
This enables us to generate an abundant supply of NK cells, engineer enhanced NK cell recognition of tumor targets, improve the persistence of these cells for sustained activity in the body, and freeze, transport and store our engineered NK cells for off-the-shelf use for the treatment of autoimmune diseases.
This enables us to generate an abundant supply of NK cells, engineer enhanced NK cell recognition of target antigens, improve the persistence of these cells for sustained activity in the body, and freeze, transport and store our engineered NK cells for off-the-shelf use for the treatment of autoimmune diseases.
Of these pending patent applications, at least 50 are solely owned by us, with the remaining licensed from Licensors.
Of these pending patent applications, at least 45 are solely owned by us, with the remaining licensed from Licensors.
The estimated expiration dates of the issued utility patents are between approximately 2024 and 2035, and the estimated expiration dates of the pending utility patent applications, to the extent they issue as patents or are used to establish nonprovisional patent applications that issue as patents, are between approximately 2024 and 2045, with estimated expiration dates subject to any patent term adjustments or extensions.
The estimated expiration dates of the issued utility patents are between approximately 2024 and 2040, and the estimated expiration dates of the pending utility patent applications, to the extent they issue as patents or are used to establish nonprovisional patent applications that issue as patents, are between approximately 2024 and 2046, with estimated expiration dates subject to any patent term adjustments or extensions.
Item 1. B usiness. Overview We are a clinical-stage biopharmaceutical company pioneering the development of allogeneic, off-the-shelf engineered natural killer ("NK") cell therapies.
Item 1. Business. Overview We are a clinical-stage biopharmaceutical company pioneering the development of allogeneic, off-the-shelf engineered natural killer ("NK") cell therapies.
Challenges with Developing NK Cell Therapies We believe that the emerging data from our clinical trials of NK cell products along with the prior academic experience with NK cells validate the opportunity for NK cells for the treatment of different cancers.
Challenges with Developing NK Cell Therapies We believe that the emerging data from our clinical trials of NK cell products along with the prior academic experience with NK cells validate the opportunity for NK cells for the treatment of autoimmune diseases.
The key benefits of fast track designation are the eligibility for Priority Review, rolling review (submission of portions of an application before the complete marketing application is submitted) and accelerated approval, if the application meets relevant criteria.
The key benefits of FTD are the eligibility for priority review, rolling review (submission of portions of an application before the complete marketing application is submitted) and accelerated approval, if the application meets relevant criteria.
The second, called a costimulatory domain, is found in the most recent generation of CARs under development today and provides an additional activating signal. Together, these signals trigger lymphocyte activation, resulting in proliferation of the CAR cells and killing of the diseased cells.
The second, called a costimulatory domain, is found in the more recent generations of CARs under development and provides an additional activating signal. Together, these signals trigger lymphocyte activation, resulting in proliferation of the CAR cells and killing of the diseased cells.
NKX019 is currently being studied in an ongoing Phase 1 clinical trial for lupus nephritis ("LN") and a Phase 1 clinical trial for systemic sclerosis ("scleroderma"), idiopathic inflammatory myopathy ("myositis"), and antineutrophil cytoplasmic antibody (ANCA)-associated vasculitis ("AAV").
NKX019 is currently being studied in an ongoing Phase 1 clinical trial ("Ntrust-1") for lupus nephritis ("LN") and primary membranous nephropathy ("pMN") and a Phase 1 clinical trial ("Ntrust-2") for systemic sclerosis ("scleroderma"), idiopathic inflammatory myopathy ("myositis"), and antineutrophil cytoplasmic antibody (ANCA)-associated vasculitis ("AAV").
As of December 31, 2024, our patent portfolio includes at least 45 issued utility patents and at least 190 pending utility patent applications, which are solely owned by us, jointly owned with others, or licensed to us.
As of December 31, 2025, our patent portfolio includes at least 55 issued utility patents and at least 200 pending utility patent applications, which are solely owned by us, jointly owned with others, or licensed to us.
These issued utility patents include patents in the United States, Europe, Japan, and other jurisdictions outside the United States and are licensed from Licensors. These pending utility patent applications include applications in the United States, Europe, Japan, and other jurisdictions outside the United States.
These issued utility patents include patents in the United States, Europe, Japan, and other jurisdictions outside the United States and are solely owned by us or licensed from Licensors. These pending utility patent applications include applications in the United States, Europe, Japan, and other jurisdictions outside the United States.
The single-arm, open-label Phase 1 IST is designed to enroll patients with MG and will evaluate safety and clinical outcomes. Translational and biomarker studies, including autoantibodies, cytokine profiles and pharmacokinetics are also planned. Patients will receive NKX019 on Days 0, 3 and 7 following LD with single-agent cyclophosphamide.
The single-arm, open-label Phase 1 IST is designed to enroll patients with MG and will evaluate safety and clinical outcomes. Translational and biomarker studies, including autoantibodies, cytokine profiles and pharmacokinetics are also planned.
Compensation, Benefits and Well-being We strive to offer fair, market-competitive compensation and benefits that support our employees’ overall well-being. To ensure alignment with our short- and long-term objectives, our compensation programs for all employees include base pay, short-term incentives, and opportunities for long-term incentives. Our well-being and benefit programs focus on four key pillars: physical, emotional, financial and community.
To ensure alignment with our short- and long-term objectives, our compensation programs for all employees include base pay, short-term incentives, and opportunities for long-term incentives. Our well-being and benefit programs focus on four key pillars: physical, emotional, financial and community.
This observation, in addition to recent reported studies of patients with autoimmune diseases who had considerable clinical benefit following treatment with CD19-directed cell therapies, support our belief that NKX019 has the potential to be a disease-modifying therapy for autoimmune diseases.
This observation, in addition to recent reported studies of patients with autoimmune diseases who had considerable clinical benefit following treatment with CD19-directed cell therapies, support our belief that NKX019 has the potential to be a disease-modifying therapy for autoimmune diseases. Ntrust-1 is a multi-center, open-label, dose-escalation Phase 1 clinical trial of NKX019 for LN and pMN.
In 2024, the FDA required that a boxed warning be added on all approved CAR T therapies for B-cell malignances to reflect the risk of secondary T-cell malignancies occurring after CAR T treatment. • Availability restricted to select centers.
In 2024, the FDA required that a boxed warning be added on all approved CAR T therapies for B-cell malignances to reflect the risk of secondary T-cell malignancies occurring after CAR T treatment. • Availability restricted to select centers. Administration of CAR T therapies is concentrated at specialized treatment centers due to safety considerations, infrastructure requirements, and logistical complexity.
Manufacturing Our process for the generation of an allogeneic, off-the-shelf NK cell therapy requires multiple steps. To achieve a commercially viable product, we believe that each of these steps must be scalable, reproducible and cost-effective and must provide consistent cancer cell killing potency of our CAR NK cells once these cells are frozen and then thawed.
To achieve a commercially viable product, we believe that each of these steps must be scalable, reproducible and cost-effective and must provide consistent cell killing potency of our CAR NK cells once these cells are frozen and then thawed.
Lastly, a number of companies are developing therapeutic monoclonal antibodies that directly target surface proteins on B cells. Companies developing therapeutic monoclonal antibodies which compete directly with NKX019 include Climb Bio, GlaxoSmithKline, Roche, and Zenas.
Lastly, a number of companies are developing therapeutic monoclonal antibodies that directly target surface proteins on B cells. Companies developing therapeutic monoclonal antibodies which compete directly with NKX019 include Amgen, Climb Bio, GlaxoSmithKline, Roche, and Zenas. Companies developing in vivo chimeric antigen receptor approaches targeting autoimmune diseases which compete directly with NKX019 include Abbvie, BMS, and Lilly.
We have developed proprietary technologies that enable us to generate an abundant supply of NK cells, increase NK-cell recognition of target antigens, enhance NK-cell fitness, and freeze, store, and thaw our engineered NK cells for off-the-shelf administration.
We have developed proprietary technologies designed to generate an abundant supply of NK cells, increase NK cell recognition of target antigens, and enhance NK cell fitness to support scalable, off the shelf administration.
A frequently used approach for cellular immunotherapy involves engineering CARs on the surface of a lymphocyte that enable the cell to recognize specific proteins or antigens that are present on the surface of diseased cells.
This balance of inhibition and activation spares healthy cells from the surveillance and killing effects of the innate immune system. A frequently used approach for cellular immunotherapy involves engineering CARs on the surface of a lymphocyte that enable the cell to recognize specific proteins or antigens that are present on the surface of diseased cells.
Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process, though companies developing orphan drugs may be eligible for certain incentives, including tax credits for qualified clinical testing.
If the FDA grants ODD, the identity of the biological product and its potential orphan disease use are disclosed publicly by the FDA. ODD does not convey any advantage in or shorten the duration of the regulatory review and approval process, though companies developing orphan drugs may be eligible for certain incentives, including tax credits for qualified clinical testing.
The hinge domain, which extends to the exterior of the cell, connects the 4 transmembrane domain to the receptor and provides structural flexibility to facilitate binding to the target antigen on the surface of the cancer cell. • Activating domains.
In addition, the transmembrane domain may also interact with other transmembrane proteins that enhance CAR function. The hinge domain, which extends to the exterior of the cell, connects the 4 transmembrane domain to the receptor and provides structural flexibility to facilitate binding to the target antigen on the surface of the target cell. • Activating domains.
Ntrust-1 Clinical Trial for Lupus Nephritis 11 In October 2023, we announced the clearance of an IND application by the FDA to evaluate NKX019 for the treatment of LN, and in June 2024, we announced the initiation of Ntrust-1, our multi-center, open-label, Phase 1 clinical trial to assess the safety and clinical activity of NKX019 in patients with refractory LN.
Ntrust-1 Clinical Trial for Lupus Nephritis and Primary Membranous Nephropathy 11 In October 2023, we announced the clearance of an IND application by the FDA to evaluate NKX019 for the treatment of LN in our Ntrust-1 clinical trial, and in May 2025, we announced the addition of pMN as an indication to our Ntrust-1 clinical trial, which is a multi-center, open-label, dose-escalation Phase 1 clinical trial that evaluates the safety and clinical activity of NKX019 in patients with refractory LN.
CAR NK Platform and Other Programs We have prioritized the development of NKX019 for B-cell mediated autoimmune diseases. We plan to continue assessing opportunities for further expansion of NKX019 into additional indications with supportive data 12 for our mechanism. While the further development of our oncology programs has been deprioritized, we continue to monitor enrolled patients.
Patients will receive NKX019 on Days 0, 3 and 7 following LD with single-agent cyclophosphamide. 12 CAR NK Platform and Other Programs We have prioritized the development of NKX019 for B-cell mediated autoimmune diseases. We plan to continue assessing opportunities for further expansion of NKX019 into additional indications with supportive data for our mechanism.
Human Capital We believe that our values – patient first, data driven, intellectually honest, transparent, diverse, inclusive, work/life balance, respectful, humble, creative, and ethical – are the foundations for our team and our behaviors for promoting creativity, innovation and productivity. As of December 31, 2024, we had 157 full-time employees, 31 of whom have Ph.D., M.D. or J.D. degrees.
Human Capital We believe that our values – patient first, data driven, intellectually honest, transparent, diverse, inclusive, work/life balance, respectful, humble, creative, and ethical – are the foundations for our team and our behaviors for promoting creativity, innovation and productivity.
In addition, a BLA for a product that has received orphan drug designation is not subject to a prescription drug user fee unless the application includes an indication other than the rare disease or condition for which the drug was designated.
In addition, a BLA for a product that has received ODD is not subject to a prescription drug user fee unless the application includes an indication other than the rare disease or condition for which the drug was designated. In December 2021, we announced that the FDA granted ODD to our product candidate NKX101 for treatment of acute myeloid leukemia.
Ntrust-2 Clinical Trial for Additional Autoimmune Diseases In June 2024, we announced the clearance of an IND application by the FDA to evaluate NKX019 for the treatment of scleroderma, myositis, and AAV, and in December 2024, we announced the opening of enrollment of Ntrust-2.
Ntrust-2 Clinical Trial for Additional Autoimmune Diseases In June 2024, we announced the clearance of an IND application by the FDA to evaluate NKX019 for the treatment of scleroderma, myositis, and AAV. Ntrust-2 is enrolling patients with scleroderma, myositis, and AAV into parallel cohorts, and NKX019 will be dosed on Days 0, 3, and 7.
Median follow up in the group was 15 months with some patients having up to 29 months of remission. As we pursue our goal of developing innovative and broadly accessible cell therapies, manufacturing capabilities and technology are a significant focus of our efforts.
As we pursue our goal of developing innovative and broadly accessible cell therapies, manufacturing capabilities and technology are a significant focus of our efforts.
The target binding domain may be based upon a binder derived from a monoclonal antibody against a target antigen, such as the CD19 binder for NKX019, or a naturally occurring receptor, such as the NKG2D receptor for NKX101. • Transmembrane domain and hinge.
The target binding domain may be based upon a binder derived from a monoclonal antibody against a target antigen, such as the CD19 binder for NKX019. • Transmembrane domain and hinge. This middle portion of the CAR links the target binding domain to the activating elements inside the cell. This transmembrane domain anchors the CAR in the cell’s membrane.
All patients showed significant clinical improvement in symptoms, including drug-free remissions after approximately three months. The CAR T cells expanded in all patients, with peak levels occurring around day 9, followed by a rapid decline. There was no high-grade cytokine release syndrome ("CRS"), no neurotoxicity, and no substantial elevation of serum IL-6 levels.
Five patients with severe refractory SLE with LN received an autologous CD19 CAR T-cell therapy following LD with Flu and Cy. All patients showed significant clinical improvement in symptoms, including drug-free remissions after approximately three months. The CAR T cells expanded in all patients, with peak levels occurring around day 9, followed by a rapid decline.
The therapeutic benefit of targeting CD19-positive B cells in patients with SLE has been reported in a recent academic study published in Nature Medicine in September 2022 (Mackensen et al. (2022) Nat. Med. 28:2124-2132). Five patients with severe refractory SLE with LN received an autologous CD19 CAR T-cell therapy following lymphodepleting conditioning ("LD") with fludarabine ("Flu") and cyclophosphamide ("Cy").
Food and Drug Administration (“FDA”) and authorization by the iDSMB to initiate enrollment in the second dose-escalation cohort. The therapeutic benefit of targeting CD19-positive B cells in patients with SLE has been reported in a recent academic study published in Nature Medicine in September 2022 (Mackensen et al. (2022) Nat. Med. 28:2124-2132).
Despite the limited persistence of CAR T cells and short-term B-cell suppression, all patients had seroconversion of anti-double-stranded DNA antibodies and ongoing disease control, even after B-cell recovery. A subsequent publication expanded this dataset to eight patients with SLE, all of whom had seroconversion and disease remission (Müller et al. (2024) N Engl J Med 390: 687-700).
A subsequent publication expanded this dataset to eight patients with SLE, all of whom had seroconversion and disease remission (Müller et al. (2024) N Engl J Med 390: 687-700). Median follow up in the group was 15 months with some patients having up to 29 months of remission.
Ntrust-2 will enroll patients with scleroderma, myositis, and AAV into parallel cohorts, and NKX019 will be dosed on Days 0, 3, and 7. The study is designed to initially enroll up to 12 patients. The dosing schema for the clinical trial is shown in the graphic below.
The study is designed to initially enroll up to 12 patients. The dosing schema for the clinical trial is shown in the graphic below.
As part of our comprehensive approach to inclusion at Nkarta, we rely on data to identify gaps, set priorities and enable ongoing assessment of our progress against these principles. We foster an open and collaborative culture based on merit, where talented candidates are considered for opportunities based on their skills, abilities and performance.
We believe that a performance-based, inclusive work environment is critical for driving innovation and the development of new cell therapies. As part of our comprehensive approach to inclusion at Nkarta, we rely on data to identify gaps, set priorities and enable ongoing assessment of our progress against these principles.
Our second facility is designed to manufacture additional clinical supply, including for pivotal clinical trials, and potential commercial supply of NKX019 or future product candidates. We believe our current facilities will supply our anticipated non-pivotal and pivotal clinical trial needs, as well as our potential commercial launch needs Continue to advance our CAR NK platform.
Based on our current operating plans and assumptions regarding manufacturing scaling and facility performance, we believe our current facilities will be sufficient to meet our anticipated requirements for non-pivotal and pivotal clinical trials, as well as our potential commercial launch. Continue to advance our CAR NK platform.
To facilitate the advancement of our engineering and manufacturing platforms, we routinely engage in partnering and licensing discussions with a range of biotechnology or pharmaceutical companies and academic institutions. The Immune System and Autoimmune Diseases The normal role of the immune system is to defend the body’s own tissues against harmful pathogens.
We may also pursue licenses, strategic collaborations, or other partnerships with biotechnology and pharmaceutical companies, academic institutions, or technology providers where such arrangements could accelerate development, broaden our platform capabilities, or support the advancement of our pipeline. 3 The Immune System and Autoimmune Diseases The normal role of the immune system is to defend the body’s own tissues against harmful pathogens.
In November 2024, we announced the first patient was dosed in our Ntrust-1 clinical trial ("Ntrust-1"), a multi-center, open-label, dose-escalation Phase 1 clinical trial of NKX019 for LN and the first patient was dosed in the IST of NKX019 for SLE at Columbia University Irving Medical Center.
Ntrust-2 is a multi-center, open-label, dose-escalation Phase 1 clinical trial of NKX019 for scleroderma, myositis, and AAV, which we believe maximizes the potential success of our clinical trials.
Depletion of circulating B cells was rapid yet transient, with B cell numbers returning to normal within two to four months. This transience of depletion contrasts sharply with the CD19 CAR T-cell experience in B-cell malignancies, where B-cell suppression typically exceeds 18 months.
This transience of depletion contrasts sharply with the CD19 CAR T-cell experience in B-cell malignancies, where B-cell suppression typically exceeds 18 months. Despite the limited persistence of CAR T cells and short-term B-cell suppression, all patients had seroconversion of anti-double-stranded DNA antibodies and ongoing disease control, even after B-cell recovery.
However, in March 2025, we executed a reduction in workforce, which may negatively impact our relationship with our employees going forward. We believe that a performance-based, inclusive work environment is critical for driving innovation and the development of new cell therapies.
We have no collective bargaining agreements with our employees and we have not experienced any work stoppages. We consider our relations with our employees to be good. However, in March 2025, we executed a reduction in workforce, which may negatively impact our relationship with our employees going forward.
We will continue to evaluate technologies and collaboration opportunities that may enable or enhance our various product candidates, and we will maintain awareness of those that may provide a broader cell therapy engineering or manufacturing platform for us.
We continue to evaluate enabling, adjacent, and potentially competing technologies that may enhance our NK cell platform and expand the potential applications of our product candidates.
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In December 2024, we announced the opening to enrollment of our Ntrust-2 clinical trial ("Ntrust-2"), a multi-center, open-label, 1 dose-escalation Phase 1 clinical trial of NKX019 for scleroderma, myositis, and AAV and the clearance of an Investigational New Drug ("IND") application for an IST led by researchers at the University of California, Irvine and the University of Kansas Medical Center to evaluate NKX019 in patients with MG.
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In May 2025, we announced the modification of the lymphodepleting conditioning ("LD") prior to administration of 1 NKX019 to use a combination of fludarabine ("Flu") and cyclophosphamide ("Cy"), with the option for patients with cytopenias to continue to receive Cy alone as modified LD, in both our Ntrust-1 clinical trial and our Ntrust-2 clinical trial.
Removed
We have been engaged in discovery and preclinical stage activities directed at expanding our pipeline of product candidates.
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At that time, we also announced that researchers at the University of California, Irvine initiated an IST of NKX019 in patients with MG. In November 2025, we announced that deep B-cell depletion was observed in all patients treated to date who received NKX019 with LD using Flu and Cy versus partial B-cell depletion in patients receiving only Cy.
Removed
As part of our collaboration with CRISPR Therapeutics AG ("CRISPR"), we began development of an allogeneic, off-the-shelf CAR NK product candidate targeting the CD70 tumor antigen ("NKX070") for the treatment of solid and liquid tumors, and conducted discovery efforts for an allogeneic, off-the-shelf product candidate that comprises both engineered NK cells and engineered T cells ("NK+T") to take advantage of both the innate and adaptive immune systems.
Added
At the same time, we reported the implementation of a streamlined enrollment process that allows participant data from both the Ntrust-1 and Ntrust-2 clinical trials to be reviewed by a combined independent Data Safety Monitoring Board (“iDSMB”) to inform dose-escalation decisions. This update followed engagement with the U.S.
Removed
This NK+T program was designed to harness multiple aspects of human immunology to treat a variety of cancers. Additionally, our agreement with CRISPR includes licenses for five CRISPR-Cas9 gene editing targets that can be engineered into an unlimited number of its own NK-cell products. CRISPR also has an option to co-develop and co-commercialize a future CAR NK-cell program.
Added
There was no high-grade cytokine release syndrome ("CRS"), no neurotoxicity, and no substantial elevation of serum IL-6 levels. Depletion of circulating B cells was rapid yet transient, with B cell numbers returning to normal within two to four months.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, we will be required to have our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting in the later of our second Annual Report on Form 10-K or the first Annual Report on Form 10-K following the date on which we are no longer an emerging growth company unless we are a smaller reporting company and do not otherwise also qualify as an “accelerated filer” or “large accelerated filer” for SEC reporting purposes.
Biggest changeIn addition, for as long as we are a “smaller reporting company” and are not classified as an “accelerated filer” or “large accelerated filer,” our independent registered public accounting firm will not be required to attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. .Our compliance with Section 404 of the Sarbanes-Oxley Act will require that we incur substantial accounting expense and expend significant management efforts.
For example, certain of our clinical trial protocols require the use of Flu and/or Cy, agents which are routinely used in oncology studies, and which we use in certain of our clinical trial protocols to condition patients for treatment with our product candidates.
For example, our clinical trial protocols require the use of Flu and/or Cy, agents which are routinely used in oncology studies, and which we use in certain of our clinical trial protocols to condition patients for treatment with our product candidates.
Regardless of merit or eventual outcome, liability claims may result in: • decreased demand for any product candidate that we may develop; • loss of revenue; • substantial monetary awards to trial participants or patients; • significant time and costs to defend the related litigation; • withdrawal of clinical trial participants; • increased insurance costs; • the inability to commercialize any product candidate that we may develop; and • injury to our reputation and significant negative media attention.
Regardless of merit or eventual outcome, liability claims may result in: • decreased demand for any product candidate that we may develop; • loss of revenue; • substantial monetary awards to clinical trial participants or patients; • significant time and costs to defend the related litigation; • withdrawal of clinical trial participants; • increased insurance costs; • the inability to commercialize any product candidate that we may develop; and • injury to our reputation and significant negative media attention.
Factors affecting the trading price of our common stock may include, but are not limited to: • our decision to initiate a clinical study, not to initiate a clinical study or to terminate an existing clinical study; • changes in our strategy, including decisions to deprioritize certain product candidates or change our pipeline focus in the future, as well as cost-containment or cost-optimization initiatives we may undertake; • delays in the announcement of initial data or clinical results from our clinical trials or expectations that such delays may occur; • data or clinical results from our clinical trials; • adverse regulatory decisions, including failure to receive regulatory approval for our products; • success or failure of competitive products, immunotherapy drugs or cellular therapies more generally; • adverse developments concerning our manufacturers or our strategic partnerships; • adverse safety or other clinical results, such as those that have occurred in the past or that may occur in the future, related to cellular therapies being developed by other companies that are or may be perceived to be similar to our cellular therapies; • operating and stock price performance of other companies that investors deem comparable to us; • sales of substantial amounts of common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; • general economic and political conditions such as military conflicts, political unrest, recessions, inflationary pressures, interest rates, fuel prices, elections, tariffs and trade policies, drug pricing policies, international currency fluctuations, acts of war or terrorism, and other public health crises, illnesses, epidemics or pandemics; and • other factors discussed in these risk factors.
Factors affecting the trading price of our common stock may include, but are not limited to: • our decision to initiate a clinical study, not to initiate a clinical study or to terminate an existing clinical study; • changes in our strategy, including decisions to deprioritize certain product candidates or change our pipeline focus in the future, as well as cost-containment or cost-optimization initiatives we may undertake; • delays in the announcement of initial data or clinical results from our clinical trials or expectations that such delays may occur; • data or clinical results from our clinical trials; • adverse regulatory decisions, including failure to receive regulatory approval for our products; 82 • success or failure of competitive products, immunotherapy drugs or cellular therapies more generally; • adverse developments concerning our manufacturers or our strategic partnerships; • adverse safety or other clinical results, such as those that have occurred in the past or that may occur in the future, related to cellular therapies being developed by other companies that are or may be perceived to be similar to our cellular therapies; • operating and stock price performance of other companies that investors deem comparable to us; • sales of substantial amounts of common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; • general economic and political conditions such as military conflicts, political unrest, recessions, inflationary pressures, interest rates, fuel prices, elections, tariffs and trade policies, drug pricing policies, international currency fluctuations, acts of war or terrorism, and other public health crises, illnesses, epidemics or pandemics; and • other factors discussed in these risk factors.
The degree of market acceptance of cell therapy products and, in particular, our product candidates, if approved for commercial sale, will depend on several factors, including: • the efficacy and safety of such product candidates as demonstrated in clinical trials; • the potential and perceived advantages of product candidates over alternative treatments; 72 • the cost of treatment relative to alternative treatments, and the availability of coverage or reimbursements by government and private payors to enable patients to afford our product candidates; • the clinical indications for which the product candidate is approved by the FDA; • the willingness of physicians to refer patients and prescribe new therapies; • the willingness of the target patient population to try new therapies; • the nature, prevalence and severity of any side effects; • product labeling or product insert requirements imposed by the FDA or other regulatory authorities, including any limitations or warnings contained in a product’s approved labeling; • relative convenience and ease of administration; • the timing of market introduction of competitive products; • adverse publicity concerning our product candidates or favorable publicity about competing products and treatments; • sufficient third-party payor coverage, any limitations in terms of center or personnel training requirement imposed by third parties and adequate reimbursement; • limitations or warnings contained in the FDA-approved labeling for our product candidates; • any FDA requirement to undertake a REMS; • the effectiveness of our sales, marketing and distribution efforts; and • potential product liability claims.
The degree of market acceptance of cell therapy products and, in particular, our product candidates, if approved for commercial sale, will depend on several factors, including: • the efficacy and safety of such product candidates as demonstrated in clinical trials; • the potential and perceived advantages of product candidates over alternative treatments; • the cost of treatment relative to alternative treatments, and the availability of coverage or reimbursements by government and private payors to enable patients to afford our product candidates; • the clinical indications for which the product candidate is approved by the FDA; • the willingness of physicians to refer patients and prescribe new therapies; • the willingness of the target patient population to try new therapies; • the nature, prevalence and severity of any side effects; • product labeling or product insert requirements imposed by the FDA or other regulatory authorities, including any limitations or warnings contained in a product’s approved labeling; • relative convenience and ease of administration; • the timing of market introduction of competitive products; • adverse publicity concerning our product candidates or favorable publicity about competing products and treatments; • sufficient third-party payor coverage, any limitations in terms of center or personnel training requirement imposed by third parties and adequate reimbursement; • limitations or warnings contained in the FDA-approved labeling for our product candidates; • any FDA requirement to undertake a REMS; • the effectiveness of our sales, marketing and distribution efforts; and • potential product liability claims.
If we market approved products outside the United States, we expect that we will be subject to additional risks in commercialization, including: • different regulatory requirements for approval of therapies in foreign countries; • reduced protection for intellectual property rights; 77 • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; • foreign reimbursement, pricing and insurance regimes; • workforce uncertainty in countries where labor unrest is more common than in the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and • business interruptions resulting from geopolitical actions, including war and terrorism, natural disasters including earthquakes, typhoons, floods and fires, and other public health crises, illnesses, epidemics or pandemics.
If we market approved products outside the United States, we expect that we will be subject to additional risks in commercialization, including: • different regulatory requirements for approval of therapies in foreign countries; • reduced protection for intellectual property rights; • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; • foreign reimbursement, pricing and insurance regimes; • workforce uncertainty in countries where labor unrest is more common than in the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and • business interruptions resulting from geopolitical actions, including war and terrorism, natural disasters including earthquakes, typhoons, floods and fires, and other public health crises, illnesses, epidemics or pandemics.
Any potential acquisition or strategic partnership may entail numerous risks, including, but not limited to: • scrutiny by the Federal Trade Commission ("FTC") and the Department of Justice ("DOJ"), including the potential challenge of a proposed merger or acquisition by the FTC or DOJ; • increased operating expenses and cash requirements; • the assumption of indebtedness or contingent or unknown liabilities; • assimilation of operations, intellectual property and drugs of an acquired company, including difficulties associated with integrating new personnel; • adequately prosecuting and maintaining protection of any acquired intellectual property rights; • the diversion of our management’s attention from our existing drug programs and initiatives in pursuing such a strategic partnership, merger or acquisition; 87 • retention of key employees, the loss of key personnel, and uncertainties about our ability to maintain key business relationships; • risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing drugs or product candidates and regulatory approvals; and • our inability to generate revenue from acquired drugs, intellectual property rights, technologies, and/or businesses sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.
Any potential acquisition or strategic partnership may entail numerous risks, including, but not limited to: • scrutiny by the Federal Trade Commission ("FTC") and the Department of Justice ("DOJ"), including the potential challenge of a proposed merger or acquisition by the FTC or DOJ; • increased operating expenses and cash requirements; • the assumption of indebtedness or contingent or unknown liabilities; • assimilation of operations, intellectual property and drugs of an acquired company, including difficulties associated with integrating new personnel; • adequately prosecuting and maintaining protection of any acquired intellectual property rights; • the diversion of our management’s attention from our existing drug programs and initiatives in pursuing such a strategic partnership, merger or acquisition; • retention of key employees, the loss of key personnel, and uncertainties about our ability to maintain key business relationships; • risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing drugs or product candidates and regulatory approvals; and • our inability to generate revenue from acquired drugs, intellectual property rights, technologies, and/or businesses sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.
The Tax Cuts and Jobs Act of 2017 includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandates,” and the Bipartisan Budget Act of 2018 (the "BBA") among other things, amends the ACA to increase from 50 percent to 70 percent the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole.” Further, the 2020 federal spending package eliminated, effective January 1, 2020, the ACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminated the health insurer.
The Tax Cuts and Jobs Act of 2017 includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandates,” and the Bipartisan Budget Act of 2018 among other things, amends the ACA to increase from 50 percent to 70 percent the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole.” Further, the 2020 federal spending package eliminated, effective January 1, 2020, the ACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminated the health insurer.
While the interim data reported to date from our NKX019 Phase 1 clinical trials indicate that NK cell-based therapies may be better-tolerated as compared to T-cell-based therapies due to biologic differences between these cell types, there can be no assurance that patients will not experience CRS, neurotoxicity, Graft-versus-host disease ("GvHD"), or other serious adverse events associated with NKX019, any other product candidates we may advance in clinical studies in the future, or the LD administered to patients prior to administration of NKX019 or other product candidates.
While the interim data reported to date from our NKX019 Phase 1 clinical trials indicate that NK cell-based therapies may be better-tolerated as compared to T-cell-based therapies due to biologic differences between these cell types, there can be no assurance that patients will not experience CRS, neurotoxicity, Graft-versus-host disease, or other serious adverse events associated with NKX019, any other product candidates we may advance in clinical studies in the future, or the LD administered to patients prior to administration of NKX019 or other product candidates.
The provisions of the ACA of importance to the pharmaceutical and biotechnology industry are, among others, the following: • an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drug agents or biologic agents, which is apportioned among these entities according to their market share in certain government healthcare programs; • a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; • a Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct, comparative clinical effectiveness research, along with funding for such research; and • establishment of a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. 75 Since its enactment, there have been legislative, judicial, and executive challenges to certain aspects of the ACA, including efforts to repeal or replace all or part of the ACA.
The provisions of the ACA of importance to the pharmaceutical and biotechnology industry are, among others, the following: • an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drug agents or biologic agents, which is apportioned among these entities according to their market share in certain government healthcare programs; • a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; • a Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct, comparative clinical effectiveness research, along with funding for such research; and • establishment of a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. 76 Since its enactment, there have been legislative, judicial, and executive challenges to certain aspects of the ACA, including efforts to repeal or replace all or part of the ACA.
For further details about such reasons, see “— Clinical development involves a lengthy and expensive process with an uncertain outcome, and we may encounter substantial delays due to a variety of reasons outside our control. ” Any delay in obtaining, or inability to obtain, applicable regulatory approval will delay or harm our ability to successfully commercialize NKX019 or any of our other product candidates, especially and could materially adversely affect our business, financial condition, results of operations and growth prospects.
For further details about such reasons, see “— Clinical development involves a lengthy and expensive process with an uncertain outcome, and we may encounter substantial delays due to a variety of reasons outside our control. ” Any delay in obtaining, or inability to obtain, applicable regulatory approval will delay or harm our ability to successfully commercialize NKX019 or any of our other product candidates and could materially adversely affect our business, financial condition, results of operations and growth prospects.
The commencement and rate of completion of preclinical studies and clinical trials for a product candidate may be delayed by many factors, including, for example: 43 • inability to generate sufficient preclinical or other in vivo or in vitro data to support the initiation of clinical trials; • delays in reaching a consensus with regulatory agencies on acceptable clinical trial design or manufacturing process; and • the FDA not allowing us to rely on previous findings of safety and efficacy for other similar but approved products and published scientific literature.
The commencement and rate of completion of preclinical studies and clinical trials for a product candidate may be delayed by many factors, including, for example: • inability to generate sufficient preclinical or other in vivo or in vitro data to support the initiation of clinical trials; • delays in reaching a consensus with regulatory agencies on acceptable clinical trial design or manufacturing process; and • the FDA not allowing us to rely on previous findings of safety and efficacy for other similar but approved products and published scientific literature.
Our certificate of incorporation and bylaws include provisions that: • authorize “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock; 84 • establish a classified board of directors such that not all members of the board are elected at one time, which may delay the ability of our stockholders to change the membership of a majority of our board of directors; • specify that only our board of directors, the Chairperson of our board of directors, our Chief Executive Officer or the President, or holders of greater than 10% of our common stock can call special meetings of our stockholders; • establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors; • provide that a majority of directors then in office, even though less than a quorum, may fill vacancies on our board of directors; • specify that no stockholder is permitted to cumulate votes at any election of directors; • expressly authorize our board of directors to modify, alter or repeal our bylaws; and • require supermajority votes of the holders of our common stock to amend specified provisions of our Certificate of Incorporation and bylaws.
Our certificate of incorporation and bylaws include provisions that: • authorize “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock; 85 • establish a classified board of directors such that not all members of the board are elected at one time, which may delay the ability of our stockholders to change the membership of a majority of our board of directors; • specify that only our board of directors, the Chairperson of our board of directors, our Chief Executive Officer or the President, or holders of greater than 10% of our common stock can call special meetings of our stockholders; • establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors; • provide that a majority of directors then in office, even though less than a quorum, may fill vacancies on our board of directors; • specify that no stockholder is permitted to cumulate votes at any election of directors; • expressly authorize our board of directors to modify, alter or repeal our bylaws; and • require supermajority votes of the holders of our common stock to amend specified provisions of our Certificate of Incorporation and bylaws.
If NKX019 is shown to not be sufficiently effective against LN, scleroderma, myositis, AAV, or other B-cell mediated autoimmune diseases in clinical trials, we experience delays in our ability to advance NKX019 through clinical development for LN, scleroderma, myositis, AAV, or other B-cell mediated autoimmune diseases, or we are unable to successfully compete against other companies in the development and commercialization of NKX019, the commercial prospects of NKX019, as well as our business, financial condition and growth prospects, would be materially adversely affected.
If NKX019 is shown to not be sufficiently effective against LN, pMN, scleroderma, myositis, AAV, or other B-cell mediated autoimmune diseases in clinical trials, we experience delays in our ability to advance NKX019 through clinical development for LN, pMN, scleroderma, myositis, AAV, or other B-cell mediated autoimmune diseases, or we are unable to successfully compete against other companies in the development and commercialization of NKX019, the commercial prospects of NKX019, as well as our business, financial condition and growth prospects, would be materially adversely affected.
Whenever we enter into collaborations with third parties, we could face the following risks: • collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; 44 • collaborators could independently develop, or develop with third parties, products and processes that compete directly or indirectly with our products or product candidates; • collaborators may not properly enforce, maintain or defend our intellectual property rights or may use our proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation, or other intellectual property proceedings; • disputes may arise between a collaborator and us that cause the delay or termination of the research, development or commercialization of the product candidate, or that result in costly litigation or arbitration that diverts management attention and resources; • if a present or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program under such collaboration could be delayed, diminished or terminated; and • collaboration agreements may restrict our right to independently pursue new product candidates.
Whenever we enter into collaborations with third parties, we could face the following risks: • collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators could independently develop, or develop with third parties, products and processes that compete directly or indirectly with our products or product candidates; • collaborators may not properly enforce, maintain or defend our intellectual property rights or may use our proprietary information in a way that gives rise to actual or threatened litigation that could 45 jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation, or other intellectual property proceedings; • disputes may arise between a collaborator and us that cause the delay or termination of the research, development or commercialization of the product candidate, or that result in costly litigation or arbitration that diverts management attention and resources; • if a present or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program under such collaboration could be delayed, diminished or terminated; and • collaboration agreements may restrict our right to independently pursue new product candidates.
The failure of our third-party manufacturers to comply with applicable requirements could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and/or criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates. 58 If the third parties that we engage to supply any materials or to manufacture any product candidates for our preclinical tests and clinical trials should cease to continue to do so for any reason, including due to the effects of a pandemic, epidemic, or outbreak of infectious disease, such as a future outbreak of a COVID-19 variant, and the actions undertaken by governments and private enterprises to contain such health event, we likely would experience delays in advancing these tests and trials while we identify and qualify replacement suppliers or manufacturers and we may be unable to obtain replacement supplies on terms that are favorable to us.
The failure of our third-party manufacturers to comply with applicable requirements could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and/or criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates. 59 If the third parties that we engage to supply any materials or to manufacture any product candidates for our preclinical tests and clinical trials should cease to continue to do so for any reason, including due to the effects of a pandemic, epidemic, or outbreak of infectious disease, such as a future outbreak of a COVID-19 variant, and the actions undertaken by governments and private enterprises to contain such health event, we likely would experience delays in advancing these tests and trials while we identify and qualify replacement suppliers or manufacturers and we may be unable to obtain replacement supplies on terms that are favorable to us.
There have also been a number of proposals in the United States, at both the federal and state level, to control the escalating cost of healthcare, including the cost of drug treatments, patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and we expect that 76 coverage and reimbursement for new therapies will be increasingly restricted.
There have also been a number of proposals in the United States, at both the federal and state level, to control the escalating cost of healthcare, including the cost of drug treatments, patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and we expect that coverage and reimbursement for new therapies will be increasingly restricted.
To the extent that any disruption, security breach or other cyber incident were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed and the further development and commercialization of our product candidates could be delayed, any of which could materially adversely affect our business, financial condition, results of operations and growth prospects. 86 Furthermore, federal, state and international laws and regulations, such as the GDPR, which took effect in May 2018, and the CCPA which took effect on January 1, 2020, as well as the CPRA, which took effect on January 1, 2023 and made a number of significant amendments to the CCPA, can expose us to enforcement actions and investigations by regulatory authorities, and potentially result in regulatory penalties and significant legal liability, if our information systems security efforts fail or if our privacy practices do not meet the requirements of such laws.
To the extent that any disruption, security breach or other cyber incident were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed and the further development and commercialization of our product candidates could be delayed, any of which could materially adversely affect our business, financial condition, results of operations and growth prospects. 87 Furthermore, federal, state and international laws and regulations, such as the GDPR, which took effect in May 2018, and the CCPA which took effect on January 1, 2020, as well as the CPRA, which took effect on January 1, 2023 and made a number of significant amendments to the CCPA, can expose us to enforcement actions and investigations by regulatory authorities, and potentially result in regulatory penalties and significant legal liability, if our information systems security efforts fail or if our privacy practices do not meet the requirements of such laws.
If we are not successful in commercializing any product approved in the future, if any, either on our own or through third parties, our business, financial condition, results of operations and growth prospects could be materially adversely affected. 70 Our product candidates, including NKX019, could be subject to regulatory limitations following approval, if and when such approval is granted.
If we are not successful in commercializing any product approved in the future, if any, either on our own or through third parties, our business, financial condition, results of operations and growth prospects could be materially adversely affected. Our product candidates, including NKX019, could be subject to regulatory limitations following approval, if and when such approval is granted.
However, there is no guarantee that product candidates we develop, even if approved for later lines of therapy, would be approved for earlier lines of therapy, and, prior to any such approvals, we will have to conduct additional clinical trials. The number of patients who have the specific diseases we are targeting may turn out to be lower than expected.
However, there is no guarantee that product candidates we develop, even if approved for later lines of therapy, would be approved for earlier lines of therapy, and, prior to any such approvals, we will have to conduct additional clinical trials. 73 The number of patients who have the specific diseases we are targeting may turn out to be lower than expected.
We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. 89 These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
For example, we continue to partner with Lupus Therapeutics, the clinical research affiliate of the Lupus Research Alliance, to accelerate development of NKX019 through select sites of the Lupus Clinical Investigators Network ("LuCIN"). We cannot guarantee that such collaborations will be successful and, in the event they are not, we may lose our competitive advantage and/or incur additional costs.
For example, we continue to partner with Lupus Therapeutics, the clinical research affiliate of the Lupus Research Alliance, to accelerate development of NKX019 through select sites of the Lupus Clinical Investigators Network. We cannot guarantee that such collaborations will be successful and, in the event they are not, we may lose our competitive advantage and/or incur additional costs.
During a seven-year transitional period, patent owners may remove patents, patent applications, and supplementary protection certificates ("SPCs") from the jurisdiction of the UPC, provided that no action has been filed before the UPC, by filing a request to opt out of the jurisdiction of the UPC. Such “opted-out” patents will remain or issue as national patents in the UPC countries.
During a seven-year transitional period, patent owners may remove patents, patent applications, and supplementary protection certificates from the jurisdiction of the UPC, provided that no action has been filed before the UPC, by filing a request to opt out of the jurisdiction of the UPC. Such “opted-out” patents will remain or issue as national patents in the UPC countries.
We may experience disruptions as a result of a pandemic, epidemic, or outbreak of infectious disease that could severely impact our business, preclinical studies and clinical trials, including: • delays or difficulties in enrolling patients in our clinical trials, including our ongoing NKX019 clinical trial for LN and planned NKX019 clinical trial for scleroderma, myositis, and AAV; • delays or difficulties in clinical site initiation, including difficulties in recruiting and training clinical site investigators and clinical site staff; • delays or difficulties in recruitment of key personnel; • diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; • interruption of key clinical trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures, which may impact the integrity of subject data and clinical study endpoints; • interruption or delays in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines, including the review of IND or other regulatory submissions for our product candidates; • interruption of, or delays in receiving, supplies of our product candidates, or materials necessary for production of our product candidates, from our vendors or contract manufacturing organizations due to staffing shortages, production slowdowns or stoppages and disruptions in delivery or supply systems; • interruption of or delays in manufacturing of our product candidates at our in-house manufacturing facility due to staffing shortages, production slowdowns and disruptions, or inability to procure critical raw materials or other supplies in a timely fashion; • delays or disruptions in the qualification of our cGMP facility for commercial-scale manufacture of our product candidates; • interruptions in preclinical studies due to restricted or limited operations at our laboratory facility; • interruptions, or delays in receiving supplies and materials necessary for our business operations, and research and development activities; • increases in the cost of services or supplies necessary for our research and development activities; and • interruption or delays to our discovery and clinical activities.
We may experience disruptions as a result of a pandemic, epidemic, or outbreak of infectious disease that could severely impact our business, preclinical studies and clinical trials, including: 52 • delays or difficulties in enrolling patients in our clinical trials, including our ongoing NKX019 clinical trial for LN and pMN and NKX019 clinical trial for scleroderma, myositis, and AAV; • delays or difficulties in clinical site initiation, including difficulties in recruiting and training clinical site investigators and clinical site staff; • delays or difficulties in recruitment of key personnel; • diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; • interruption of key clinical trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures, which may impact the integrity of subject data and clinical study endpoints; • interruption or delays in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines, including the review of IND or other regulatory submissions for our product candidates; • interruption of, or delays in receiving, supplies of our product candidates, or materials necessary for production of our product candidates, from our vendors or contract manufacturing organizations due to staffing shortages, production slowdowns or stoppages and disruptions in delivery or supply systems; • interruption of or delays in manufacturing of our product candidates at our in-house manufacturing facility due to staffing shortages, production slowdowns and disruptions, or inability to procure critical raw materials or other supplies in a timely fashion; • delays or disruptions in the qualification of our cGMP facility for commercial-scale manufacture of our product candidates; • interruptions in preclinical studies due to restricted or limited operations at our laboratory facility; • interruptions, or delays in receiving supplies and materials necessary for our business operations, and research and development activities; • increases in the cost of services or supplies necessary for our research and development activities; and • interruption or delays to our discovery and clinical activities.
We must be able to overcome these challenges in order for us to develop, commercialize and manufacture our product candidates utilizing CAR NK cells. Clinical development involves a lengthy and expensive process with an uncertain outcome, and we may encounter substantial delays due to a variety of reasons outside our control.
We must be able to overcome these challenges in order for us to develop, commercialize and manufacture our product candidates utilizing CAR NK cells. 33 Clinical development involves a lengthy and expensive process with an uncertain outcome, and we may encounter substantial delays due to a variety of reasons outside our control.
In December 2020, the U.S. Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate pharmaceutical benefit managers ("PBMs") and other members of the health care and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area.
In December 2020, the U.S. Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate pharmaceutical benefit managers and other members of the health care and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area.
Similar laws have been passed in Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kentucky, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Rhode Island, Tennessee, Texas, Utah and Virginia, and have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States.
Similar laws have been passed in Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kentucky, Maine, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Rhode Island, Tennessee, Texas, Utah and Virginia, and have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States.
While it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing an enforceable agreement with each party who in fact conceives or develops intellectual property that we regard as our own.
While it is our policy to require our employees, consultants and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing an enforceable agreement with each party who in fact conceives or develops intellectual property that we regard as our own.
If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions, or incur other harm to our business. Our insurance policies may be inadequate, may not cover all of our potential liabilities and may potentially expose us to unrecoverable risks.
If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions, or incur other harm to our business. 55 Our insurance policies may be inadequate, may not cover all of our potential liabilities and may potentially expose us to unrecoverable risks.
The qualification, regulatory approvals and maintenance of such facilities require substantial capital and technical expertise and any delay would limit our development activities and our opportunities for growth. Furthermore, our manufacturing facilities will be subject to ongoing, periodic inspection by the FDA and other comparable regulatory agencies to ensure compliance with cGMP.
The qualification, regulatory approvals and maintenance of such facilities require substantial capital and technical expertise and any delay would limit our development activities and our opportunities for growth. 60 Furthermore, our manufacturing facilities will be subject to ongoing, periodic inspection by the FDA and other comparable regulatory agencies to ensure compliance with cGMP.
As a result, we may not be able to prevent competitors from developing and commercializing competitive products in territories included in all of our licenses. We also engage in collaborations with scientists at academic and non-profit institutions to access technologies and materials that are not otherwise available to us.
As a result, we may not be able to prevent competitors from developing and commercializing competitive products in territories included in all of our licenses. 65 We also engage in collaborations with scientists at academic and non-profit institutions to access technologies and materials that are not otherwise available to us.
To date, no cell therapies have been approved by the FDA for the treatment of autoimmune diseases. We cannot guarantee that Ntrust-1, our clinical trial for NKX019 in LN, Ntrust-2, our clinical trial for NKX019 in scleroderma, myositis, and AAV, or any other future clinical development of NKX019 for the treatment of autoimmune diseases will be successful.
To date, no cell therapies have been approved by the FDA for the treatment of autoimmune diseases. We cannot guarantee that Ntrust-1, our clinical trial for NKX019 in LN and pMN, Ntrust-2, our clinical trial for NKX019 in scleroderma, myositis, and AAV, or any other future clinical development of NKX019 for the treatment of autoimmune diseases will be successful.
Even if we receive regulatory approval to market NKX019 for the treatment of LN, scleroderma, myositis, AAV, or any additional indications, NKX019 for any of these indications may not be successfully commercialized, widely accepted in the marketplace or more effective than other commercially available alternatives.
Even if we receive regulatory approval to market NKX019 for the treatment of LN, pMN, scleroderma, myositis, AAV, or any additional indications, NKX019 for any of these indications may not be successfully commercialized, widely accepted in the marketplace or more effective than other commercially available alternatives.
Even if clinical trials do begin for our preclinical programs, our clinical trials or development efforts may not be successful. We have entered into, and we may in the future enter into, research collaborations with third parties to develop or commercialize potential product candidates.
Even if clinical trials do begin for our preclinical programs, our clinical trials or development efforts may not be successful. 44 We have entered into, and we may in the future enter into, research collaborations with third parties to develop or commercialize potential product candidates.
We cannot guarantee that our development of NKX019 for the treatment of LN, scleroderma, myositis, or AAV will be successful. We may also choose to develop NKX019 for additional autoimmune or other indications, but we may not be able to advance NKX019 through the development process for any of these additional indications.
We cannot guarantee that our development of NKX019 for the treatment of LN, pMN, scleroderma, myositis, or AAV will be successful. We may also choose to develop NKX019 for additional autoimmune or other indications, but we may not be able to advance NKX019 through the development process for any of these additional indications.
We do not have employment agreements with our senior management team. 53 Competition for qualified personnel in the biotechnology and pharmaceuticals field is intense due to the limited number of individuals who possess the skills and experience required by our industry.
We do not have employment agreements with our senior management team. Competition for qualified personnel in the biotechnology and pharmaceuticals field is intense due to the limited number of individuals who possess the skills and experience required by our industry.
If we are unable to manufacture sufficient supply of our product candidates, or sufficient supply of our product candidates with the desired parameters, for our current, planned, or future clinical trials, the clinical development and potential eventual commercialization of may be delayed, and we may be materially harmed as a result.
If we are unable to manufacture sufficient supply of our product candidates, or sufficient supply of our product candidates with the desired parameters, for our 61 current, planned, or future clinical trials, the clinical development and potential eventual commercialization of may be delayed, and we may be materially harmed as a result.
Given the limited enforcement of the GDPR to date, we face uncertainty as to the exact interpretation of the new requirements on our trials and we may be unsuccessful in implementing all measures required by data protection authorities or courts in interpretation of the new law.
Given the limited enforcement of the GDPR to date, 81 we face uncertainty as to the exact interpretation of the new requirements on our trials and we may be unsuccessful in implementing all measures required by data protection authorities or courts in interpretation of the new law.
If we are unable to successfully develop and commercialize NKX019 for LN, scleroderma, myositis, AAV, or these additional autoimmune indications, our commercial opportunity will be limited, and our business, financial condition and growth prospects will be materially adversely affected.
If we are unable to successfully develop and commercialize NKX019 for LN, pMN, scleroderma, myositis, AAV, or these additional autoimmune indications, our commercial opportunity will be limited, and our business, financial condition and growth prospects will be materially adversely affected.
Outside parties may: • have staffing difficulties; • fail to comply with contractual obligations; • experience regulatory compliance issues; • undergo changes in priorities or become financially distressed; or • form relationships with other entities, some of which may be our competitors.
Outside parties may: • have staffing difficulties; 51 • fail to comply with contractual obligations; • experience regulatory compliance issues; • undergo changes in priorities or become financially distressed; or • form relationships with other entities, some of which may be our competitors.
Moreover, we may not be able to locate suitable acquisition opportunities, and this inability could impair our growth or limit access to technology or drugs that may be important to the development of our business. We could be subject to securities class action litigation.
Moreover, we may not be able to locate suitable acquisition opportunities, and this inability could impair our growth or limit access to technology or drugs that may be important to the development of our business. 89 We could be subject to securities class action litigation.
There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate posts or comments about us on any social networking website, or a risk that a post on a social networking website by any of our employees may be construed 54 as inappropriate promotion.
There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate posts or comments about us on any social networking website, or a risk that a post on a social networking website by any of our employees may be construed as inappropriate promotion.
Our failure to follow and document our adherence to these regulations or other regulatory requirements may lead to significant 59 delays in the availability of product candidates for clinical use or may result in the termination of or a hold on a clinical study.
Our failure to follow and document our adherence to these regulations or other regulatory requirements may lead to significant delays in the availability of product candidates for clinical use or may result in the termination of or a hold on a clinical study.
In July 2024, we announced that researchers at Columbia University Irving Medical Center initiated an IST of NKX019 in patients with systemic lupus erythematosus ("SLE"), and in November 2024, we announced that the first patient had been dosed in the IST.
In July 2024, we announced that researchers at Columbia University Irving Medical Center initiated an IST of NKX019 in patients with systemic lupus erythematosus, and in November 2024, we announced that the first patient had been dosed in the IST.
Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could materially adversely affect our business, financial condition, results of operations and growth prospects. 69 The U.S. government could choose to exercise certain rights in technology developed under government-funded research, which could eliminate our exclusive use of such technology or require us to commercialize our product candidates in a way we consider sub-optimal.
Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could materially adversely affect our business, financial condition, results of operations and growth prospects. 70 The U.S. government could choose to exercise certain rights in technology developed under government-funded research, which could eliminate our exclusive use of such technology or require us to commercialize our product candidates in a way we consider sub-optimal.
While copay assistance programs are common within the industry, the Office of Inspector General at the U.S. Department of Health and Human Services has taken the position that such programs may violate the Anti-Kickback Statute.
While copay assistance programs are common within the industry, the Office of Inspector General at the U.S. Department of Health and Human Services ("HHS") has taken the position that such programs may violate the Anti-Kickback Statute.
If the Licensors terminate or narrow the license agreement, we could lose the use of intellectual property rights that may be material to or necessary for the development or production of our current and future product candidates, including NKX019, which could impede or prevent our successful commercialization of such product candidates and materially adversely affect our business, financial condition, results of operations and growth prospects. 61 Furthermore, our license agreement with the Licensors is field-specific and has been granted to us in the field of therapeutics.
If the Licensors terminate or narrow the license agreement, we could lose the use of intellectual property rights that may be material to or necessary for the development or production of our current and future product candidates, including NKX019, which could impede or prevent our successful commercialization of such product candidates and materially adversely affect our business, financial condition, results of operations and growth prospects. 62 Furthermore, our license agreement with the Licensors is field-specific and has been granted to us in the field of therapeutics.
In such circumstances the trading price of our common stock may not recover and may experience a further decline. 81 In addition, broad market and industry factors could materially adversely affect the market price of our common stock, irrespective of our operating performance.
In such circumstances the trading price of our common stock may not recover and may experience a further decline. In addition, broad market and industry factors could materially adversely affect the market price of our common stock, irrespective of our operating performance.
Further, many other cell therapies are in development, including NK cells derived from induced pluripotent stem cells ("iPSCs"), and negative results from those therapies may affect perception of NK-cell therapy derived from adult healthy donors.
Further, many other cell therapies are in development, including NK cells derived from induced pluripotent stem cells, and negative results from those therapies may affect perception of NK-cell therapy derived from adult healthy donors.
Our operations, as well as the operations of some of our contract research organizations ("CROs"), contract development and manufacturing organizations ("CDMOs"), and clinical trial sites, may be impacted by future pandemics, epidemics, or outbreaks of infectious disease.
Our operations, as well as the operations of some of our CROs, contract development and manufacturing organizations ("CDMOs"), and clinical trial sites, may be impacted by future pandemics, epidemics, or outbreaks of infectious disease.
For example, certain states, including California, have implemented state-level cost containment strategies, which could adversely impact adoption of higher-cost medicines that are new to the market.
For example, certain states, including 77 California, have implemented state-level cost containment strategies, which could adversely impact adoption of higher-cost medicines that are new to the market.
We also continue to analyze donor characteristics that correlate with clinical activity and we may decide to select for donors to enhance activity of our product candidates in the clinic.
We also continue to analyze donor characteristics that correlate with clinical activity and we may decide to select for donors to 41 enhance activity of our product candidates in the clinic.
If the required additional approvals cannot be obtained, additional delays may occur as manufacturing would need to 56 be restarted, enrollment may be delayed, and/or patients may be unable to remain in the study.
If the required additional approvals cannot be obtained, additional delays may occur as manufacturing would need to be restarted, enrollment may be delayed, and/or patients may be unable to remain in the study.
We, our licensors, or our collaborators may be subject to third-party claims that could cause us to incur substantial expenses to defend, and these claims, if successful, could require us to pay substantial damages and/or limit our ability to commercialize our product candidates if we, our licensors, or our collaborators are found to be infringing a third party’s intellectual property rights. 62 We are aware of third-party patents and patent applications that may relate to the areas in which we are developing product candidates.
We, our licensors, or our collaborators may be subject to third-party claims that could cause us to incur substantial expenses to defend, and these claims, if successful, could require us to pay substantial damages and/or limit our ability to commercialize our product candidates if we, our licensors, or our collaborators are found to be infringing a third party’s intellectual property rights. 63 We are aware of third-party patents and patent applications that may relate to the areas in which we are developing product candidates.
This exclusive forum provision will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations. 85 Our certificate of incorporation further provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
This exclusive forum provision will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations. 86 Our certificate of incorporation further provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
Generally, if a drug with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the drug is entitled to a period of marketing exclusivity, which precludes the EMA or the FDA from approving another marketing application for the same drug and indication for that time period, except in limited circumstances (“sameness”).
Generally, if a drug with an ODD subsequently receives the first marketing approval for the indication for which it has such designation, the drug is entitled to a period of marketing exclusivity, which precludes the EMA or the FDA from approving another marketing application for the same drug and indication for that time period, except in limited circumstances (“sameness”).
As of December 31, 2024, the patent portfolio that is assigned to us, jointly owned with others or licensed to us includes issued patents in the United States, Europe, Japan, and other jurisdictions outside the United States, and pending patent applications in the United States, Europe, Japan, and other jurisdictions outside the United States, including issued patents and patent applications related to NKX019 and our NK cell engineering platform.
As of December 31, 2025, the patent portfolio that is assigned to us, jointly owned with others or licensed to us includes issued patents in the United States, Europe, Japan, and other jurisdictions outside the United States, and pending patent applications in the United States, Europe, Japan, and other jurisdictions outside the United States, including issued patents and patent applications related to NKX019 and our NK cell engineering platform.
The America Invents Act and its implementation could increase the uncertainties and/or costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could materially adversely affect our business, financial condition, results of operations and growth prospects. 68 In addition, the Federal Circuit and U.S.
The America Invents Act and its implementation could increase the uncertainties and/or costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could materially adversely affect our business, financial condition, results of operations and growth prospects. 69 In addition, the Federal Circuit and U.S.
Even after an orphan 48 drug is approved, the FDA can subsequently approve another drug for the same condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.
Even after an orphan drug is approved, the FDA can subsequently approve another drug for the same condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to 49 patient care.
For instance, inflation has negatively impacted us and could continue to negatively impact us by increasing our cost of labor (through higher wages), commercial support, construction, manufacturing and clinical supply expenditures. Current inflationary pressures, if sustained, could have a negative impact on our operations.
Inflation has negatively impacted us and could continue to negatively impact us by increasing our cost of labor (through higher wages), commercial support, construction, manufacturing and clinical supply expenditures. Current inflationary pressures, if sustained, could have a negative impact on our operations.
In order to obtain FDA or other regulatory authority approval to market a new biological product we must demonstrate safety, purity, potency and efficacy in humans. To meet these requirements, we will have to conduct adequate and well-controlled clinical trials.
In order to obtain FDA or other regulatory authority approval to market a new biological product we must demonstrate safety, manufacturing comparability, purity, potency and efficacy in humans. To meet these requirements, we will have to conduct adequate and well-controlled clinical trials.
The FDA or EMA, as applicable, may rescind any granted designations if it believes that the designation is no longer supported by data from our clinical development program. 47 In addition, changes in regulatory frameworks may impact our clinical development programs.
The FDA or EMA, as applicable, may rescind any granted designations if it believes that the designation is no longer supported by data from our clinical development program. 48 In addition, changes in regulatory frameworks may impact our clinical development programs.
Our portfolio, including issued patents, and including pending applications, to the extent they issue as patents or are used to establish nonprovisional patent applications that issue as patents, is expected to have estimated expiration dates between 2024 and 2045, subject to any patent terms adjustments or extensions.
Our portfolio, including issued patents, and including pending applications, to the extent they issue as patents or are used to establish nonprovisional patent applications that issue as patents, is expected to have estimated expiration dates between 2024 and 2046, subject to any patent terms adjustments or extensions.
We may fail to obtain or enforce assignments of intellectual property rights from our employees and contractors.
We may fail to obtain or enforce assignments of intellectual property rights from our employees, consultants and contractors.
Changes to those rules or the questioning of current practices may materially adversely affect our financial results, including those contained in this filing, or the way we conduct our business. 90 Item 1B. Unresolve d Staff Comments. Not applicable.
Changes to those rules or the questioning of current practices may materially adversely affect our financial results, including those contained in this filing, or the way we conduct our business. 91 Item 1B. Unresolve d Staff Comments. Not applicable.
This could harm our competitive position, and our business. 65 Duration of patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time, and the expiration of our patents may subject us to increased competition.
This could harm our competitive position, and our business. 66 Duration of patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time, and the expiration of our patents may subject us to increased competition.
We are also a “smaller reporting company” as defined by applicable rules of the SEC.
We are a “smaller reporting company” as defined by applicable rules of the SEC.
However, the applicable authorities, including the FDA and the United States Patent and Trademark Office (the "USPTO") in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request.
However, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request.
Following an interim evaluation of response data in our NKX101 clinical trial for the treatment of relapsed or refractory acute myeloid leukemia ("r/r AML") or higher risk myelodysplastic syndromes ("MDS"), we decided to deprioritize our NKX101 program. In November 2024, we announced clinical data from our NKX019 clinical trial in B-cell malignancies.
Following an interim evaluation of response data in our NKX101 clinical trial for the treatment of relapsed or refractory acute myeloid leukemia or higher risk myelodysplastic syndromes, we decided to deprioritize our NKX101 program. In November 2024, we announced clinical data from our NKX019 clinical trial in B-cell malignancies.
If such post-approval clinical trials fail to confirm the drug’s clinical benefit, the FDA may withdraw its approval of the drug. 46 We may seek approval from the FDA or comparable regulatory authorities through the use of other expedited approval program, such as Regenerative Medicine Advanced Therapy ("RMAT") designation, Breakthrough Therapy designation, Fast Track designation, or PRIority MEdicine ("PRIME"), from regulatory authorities, for certain product candidates that we develop.
If such post-approval clinical trials fail to confirm the drug’s clinical benefit, the FDA may withdraw its approval of the drug. 47 We may seek approval from the FDA or comparable regulatory authorities through the use of other expedited approval program, such as regenerative medicine advanced therapy ("RMAT") designation, breakthrough therapy designation ("BTD"), fast track designation ("FTD"), or PRIority MEdicine ("PRIME"), from regulatory authorities, for certain product candidates that we develop.
The rates of patient enrollment, a significant component in the timing of clinical trials, are affected by many factors, including: • our ability to open clinical trial sites; • the size and nature of the patient population; • the design and eligibility criteria of the clinical trial; • the proximity of patients to clinical sites; 38 • the patient referral practices of physicians, including as a result of their assessment of the clinical trial parameters; • changing medical practice patterns or guidelines related to the indications we are investigating; • competing clinical trials or approved therapies which present an attractive alternative to patients and their physicians; • perceived risks and benefits of the product candidate under study, including as a result of adverse effects observed in similar or competing therapies; • our ability to obtain and maintain patient consents due to various reasons; • the risk that enrolled patients will drop out or die before completion of the trial; • patients failing to complete a clinical trial or returning for post-treatment follow-up; • our ability to manufacture the requisite supply of our product candidates for our clinical trials; and • any failure or any delay by us or by our clinical sites to obtain sufficient quantities of components and supplies necessary for the conduct of our clinical trials, including any inability to obtain agents such as Cy, Flu, or other agents administered to patients prior to treatment or in combination with our product candidates.
The rates of patient enrollment, a significant component in the timing of clinical trials, are affected by many factors, including: • our ability to open clinical trial sites; • the size and nature of the patient population; • the design and eligibility criteria of the clinical trial; • the proximity of patients to clinical sites; • availability of resources at clinical sites; • the patient referral practices of physicians, including as a result of their assessment of the clinical trial parameters; • changing medical practice patterns or guidelines related to the indications we are investigating; • competing clinical trials or approved therapies which present an attractive alternative to patients and their physicians; • perceived risks and benefits of the product candidate under study, including as a result of adverse effects observed in similar or competing therapies; • our ability to obtain and maintain patient consents due to various reasons; • the risk that enrolled patients will drop out or die before completion of the trial; • patients failing to complete a clinical trial or returning for post-treatment follow-up; • our ability to manufacture the requisite supply of our product candidates for our clinical trials; and • any failure or any delay by us or by our clinical sites to obtain sufficient quantities of components and supplies necessary for the conduct of our clinical trials, including any inability to obtain agents such as Cy, Flu, or other agents administered to patients prior to treatment or in combination with our product candidates. 39 We need to compete with many ongoing clinical trials and approved therapies to recruit patients into our clinical trials.
Orphan drug designation is intended to promote the development of drugs that are intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions affecting not more than 5 in 10,000 persons in Europe and for which no satisfactory method of diagnosis, prevention, or treatment has been authorized (or the product would be a significant benefit to those affected).
ODD is intended to promote the development of drugs that are intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions affecting not more than 5 in 10,000 persons in Europe and for which no satisfactory method of diagnosis, prevention, or treatment has been authorized (or the product would be a significant benefit to those affected).
The applicable period is seven years in the United States and ten years in Europe. The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable such that market exclusivity is no longer justified.
The applicable period is seven years in the United States and ten years in Europe. The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for ODD or if the drug is sufficiently profitable such that market exclusivity is no longer justified.
Our belief that NKX019 may be effective as a treatment for autoimmune diseases is based largely on our understanding of the mechanism behind the positive clinical data reported by certain academic groups for the use of a CD19 CAR T-cell therapy in a limited number of patients with autoimmune diseases, as well as on our own in vitro studies showing that NKX019 can kill B-cells in peripheral blood mononuclear cells ("PBMCs") obtained from patients with autoimmune diseases and observations regarding the effect of NKX019 on B cells from our ongoing NKX019 Phase 1 clinical trial in patients with non-Hodgkin lymphoma ("NHL").
Our belief that NKX019 may be effective as a treatment for autoimmune diseases is based largely on our understanding of the mechanism behind the positive clinical data reported by certain academic groups and other companies studying CAR NK-cell therapies for the use of a CD19 CAR T-cell therapy in a limited number of patients with autoimmune diseases, as well as on our own in vitro studies showing that NKX019 can kill B-cells in peripheral blood mononuclear cells obtained from patients with autoimmune diseases and observations regarding the effect of NKX019 on B cells from our ongoing NKX019 Phase 1 clinical trial in patients with non-Hodgkin lymphoma ("NHL").
We cannot predict if investors will find our common stock less attractive if we rely on emerging growth company or smaller reporting company exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
We cannot predict if investors will find our common stock less attractive if we rely on smaller reporting company exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process. While we may seek orphan drug designation for applicable indications for our product candidates, we may never receive such designations.
ODD neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process. While we may seek ODD for applicable indications for our product candidates, we may never receive such designations.
In the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers. On December 16, 2021, we announced that the FDA granted orphan drug designation to NKX101 for the treatment of AML.
In the United States, orphan drug designation ("ODD") entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers. On December 16, 2021, we announced that the FDA granted ODD to NKX101 for the treatment of acute myeloid leukemia ("AML").
In Europe, orphan drug designation entitles a party to a number of incentives, such as protocol assistance and scientific advice specifically for designated orphan medicines, and potential fee reductions depending on the status of the sponsor.
In Europe, ODD entitles a party to a number of incentives, such as protocol assistance and scientific advice specifically for designated orphan medicines, and potential fee reductions depending on the status of the sponsor.
The market opportunities for our product candidates, if and when approved, may be limited, and if such market opportunities are smaller than we expect, our revenues could be materially adversely affected and our business could suffer. Our Ntrust-1 clinical trial has been evaluating NKX019 in patients with refractory LN.
The market opportunities for our product candidates, if and when approved, may be limited, and if such market opportunities are smaller than we expect, our revenues could be materially adversely affected and our business could suffer. Our Ntrust-1 clinical trial is evaluating NKX019 in patients with refractory LN and pMN.
This reduction makes retention of our current personnel both more important and more challenging and may require the reallocation and the combination of certain roles and responsibilities across the organization, all of which could adversely affect our operations. We may need to hire additional personnel if we expand our clinical development and manufacturing activities, or if we initiate commercial activities.
This reduction makes retention of our current personnel, including our senior management team, both more important and more challenging and may require the reallocation and the combination of certain roles and responsibilities across the organization, all of which could adversely affect our operations. 54 We may need to hire additional personnel if we expand our clinical development and manufacturing activities, or if we initiate commercial activities.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Chief Financial and Business Officer oversees our information technology department which monitors the prevention, detection, mitigation, and remediation of cyber incidents , if any, and reports all potential incidents and an initial assessment of such incident to the IRT. Our Chief Financial and Business Officer has over 7 years of experience with overseeing risk, compliance, and information technology functions.
Biggest changeOur President oversees our information technology department which monitors the prevention, detection, mitigation, and remediation of cyber incidents , if any, and reports all potential incidents and an initial assessment of such incident to the IRT and has over 5 years of experience with overseeing risk, compliance, and information technology functions.
The Audit Committee receives quarterly updates from management regarding investigated incidents and periodic updates from management regarding cybersecurity matters (including the current threat landscape and cybersecurity risks). The Audit Committee may provide updates to the Board on the substance of these reports and any recommendations for improvements that the Audit Committee deems appropriate. 91
The Audit Committee receives quarterly updates from management regarding investigated incidents and periodic updates from management regarding cybersecurity matters (including the current threat landscape and cybersecurity risks). The Audit Committee may provide updates to the Board on the substance of these reports and any recommendations for improvements that the Audit Committee deems appropriate. 92

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur lease covering multiple suites at this site expires in July 2030, with certain suites expiring in July 2025, and our subleases expire in November 2027 and July 2030. The second site, located at 750 Gateway Boulevard, South San Francisco, California, consists of 510 square feet of vivarium and laboratory space, and is primarily used for preclinical research.
Biggest changeOur lease covering multiple suites at this site expires in July 2030, and our subleases expire in November 2027 and July 2030. The second site, located at 750 Gateway Boulevard, South San Francisco, California, consists of 510 square feet of vivarium and laboratory space, and is primarily used for preclinical research.
Our agreement that provides for our use of these vivarium and laboratory spaces expires in December 2025. The third site, located at 1150 Veterans Boulevard, South San Francisco, California, consists of 88,000 square feet of office and laboratory space and is primarily used for research, clinical, manufacturing and corporate activities. This lease expires in 2034.
Our agreement that provides for our use of these vivarium and laboratory spaces expires in December 2028. The third site, located at 1150 Veterans Boulevard, South San Francisco, California, consists of 88,000 square feet of office and laboratory space and is primarily used for research, clinical, manufacturing and corporate activities. This lease expires in 2034.
Item 2. Pro perties. Our facilities are located at three leased sites. The first site, located at 6000 Shoreline Court, South San Francisco, California, consists of approximately 36,544 square feet of office and laboratory space and is primarily used for manufacturing activities. Of this office and laboratory space, approximately 14,697 square feet was subleased as of December 31, 2024.
Item 2. Pro perties. Our facilities are located at three leased sites. The first site, located at 6000 Shoreline Court, South San Francisco, California, consists of approximately 28,469 square feet of office and laboratory space and is primarily used for manufacturing activities. Of this office and laboratory space, approximately 14,697 square feet was subleased as of December 31, 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThere are currently no claims or actions pending against us that, in the opinion of our management, are likely to have a material adverse effect on our business, results of operations, financial condition or growth prospects. Item 4. Mine Safety Disclosures. Not applicable. 92 PART II
Biggest changeThere are currently no claims or actions pending against us that, in the opinion of our management, are likely to have a material adverse effect on our business, results of operations, financial condition or growth prospects. Item 4. Mine Safety Disclosures. Not applicable. 93 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed5 unchanged
Biggest changeHolders of Common Stock As of March 21, 2025, there were approximately 16 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Biggest changeHolders of Common Stock As of March 18, 2026, there were approximately 16 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this Item regarding equity compensation plans is incorporated by reference to the information set forth in Part III, Item 12 of this Annual Report on Form 10-K. Item 6. [Reserved] 93
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this Item regarding equity compensation plans is incorporated by reference to the information set forth in Part III, Item 12 of this Annual Report on Form 10-K. Item 6. [Reserved] 94

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe decrease of $0.1 million was attributable primarily to the following: • a $9.5 million decrease in program costs primarily from lower manufacturing, materials, and clinical expenses related to NKX101 as the program was deprioritized and reduced manufacturing and materials expenses related to programs under the CRISPR partnership, which were partially offset by higher manufacturing, materials, and clinical spending related to NKX019 to support Phase I clinical trials in autoimmune diseases; • a $2.4 million increase in research supplies purchased due to fewer purchases in 2023 from lab facility relocation; • a $2.6 million increase in other research costs, primarily consisting of consulting expenses, and facility expenses; • a $1.5 million decrease in partner cost sharing reimbursable expenses related to a decrease in activities performed under our collaboration with CRISPR; and • a $2.9 million increase in depreciation expense due to the timing of when assets were placed in-service during the year in 2023.
Biggest changeThe decrease of $6.3 million was attributable primarily to the following: • a $9.3 million decrease in personnel costs primarily from lower salaries and wages, bonus expense, and share-based compensation expense recognized due to lower headcount as a result of the reduction in force in March 2025; • a $0.9 million decrease in other research costs, primarily consisting of research supplies and facility expenses as a result of reduction in headcount; • a $1.8 million increase in program costs primarily from higher clinical spending related to NKX019 to support Phase I clinical trials in autoimmune diseases, which were partially offset by lower manufacturing, materials, and clinical expenses related to NKX101 as the program was deprioritized and reduced manufacturing and materials expenses related to NKX019; and • a $2.1 million increase in consulting expenses, partially as a result of the reduction in force.
Investing Activities Net cash used by investing activities was $129.6 million for the year ended December 31, 2024 comprised of the purchase of marketable securities of $406.4 million and the purchase of property and equipment of $4.4 million, partially offset by proceeds from the maturities of marketable securities of $281.2 million.
Net cash used by investing activities was $129.6 million for the year ended December 31, 2024 comprised of the purchase of marketable securities of $406.4 million and the purchase of property and equipment of $4.4 million, partially offset by proceeds from the maturities of marketable securities of $281.2 million.
We may not be able to raise additional capital on terms 99 acceptable to us, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back, or discontinue the development and commercialization of our drug candidates or delay our efforts to expand our product pipeline.
We may not be able to raise additional capital on terms acceptable to us, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back, or discontinue the development and commercialization of our drug candidates or delay our efforts to expand our product pipeline.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the 101 rights of our common stockholders.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
The pre-funded warrants can be exercised at any time after issuance for an exercise price of $0.0001 per share, subject to certain ownership limitations. As of December 31, 2024, none of the pre-funded warrants have been exercised. We raised $240.1 million in gross proceeds before underwriting discounts, commissions and other expenses of $15.0 million.
The pre-funded warrants can be exercised at any time after issuance for an exercise price of $0.0001 per share, subject to certain ownership limitations. As of December 31, 2025, none of the pre-funded warrants have been exercised. We raised $240.1 million in gross proceeds before underwriting discounts, commissions and other expenses of $15.0 million.
Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed. The following table summarizes our research and development expenses for the years ended December 31, 2024 and 2023.
Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed. The following table summarizes our research and development expenses for the years ended December 31, 2025 and 2024.
Our future capital requirements will depend on many factors, including: • the type, number, scope, progress, enrollment rate, expansions, results, costs and timing of our clinical trials and preclinical studies for our product candidates or other potential product candidates or indications which we are pursuing or may choose to pursue in the future; • the outcome, timing and costs of regulatory review of our product candidates; • the costs and timing of manufacturing for our product candidates, including commercial manufacturing; • our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting; • the costs associated with the continuation of our preclinical and clinical activities, including as a result of any delays or an increase in development activities; • the costs and timing of establishing or securing sales and marketing capabilities if any product candidate is approved; • our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; • patients’ willingness or ability to pay out-of-pocket for any approved products in the absence of coverage and/or adequate reimbursement from third-party payors; • the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements, including payments required for meeting regulatory and commercial milestones or sales based royalties; • the costs of obtaining, maintaining and enforcing our patent and other intellectual property rights; • costs associated with any product candidates, products or technologies that we may in-license or acquire; and • our ability to closely monitor our expenditures, including subleasing portions of our leased corporate office space in South San Francisco.
Additionally, the process of testing therapeutic product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain. 100 Our future capital requirements will depend on many factors, including: • the type, number, scope, progress, enrollment rate, expansions, results, costs and timing of our clinical trials and preclinical studies for our product candidates or other potential product candidates or indications which we are pursuing or may choose to pursue in the future; • the outcome, timing and costs of regulatory review of our product candidates; • the costs and timing of manufacturing for our product candidates, including commercial manufacturing; • our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting; • the costs associated with the continuation of our preclinical and clinical activities, including as a result of any delays or an increase in development activities; • the costs and timing of establishing or securing sales and marketing capabilities if any product candidate is approved; • our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; • patients’ willingness or ability to pay out-of-pocket for any approved products in the absence of coverage and/or adequate reimbursement from third-party payors; • the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements, including payments required for meeting regulatory and commercial milestones or sales based royalties; • the costs of obtaining, maintaining and enforcing our patent and other intellectual property rights; • costs associated with any product candidates, products or technologies that we may in-license or acquire; and • our ability to implement cost containment measures, including subleasing portions of our leased corporate office space in South San Francisco.
Financial Operations Overview Operating Expenses Research and Development Research and development costs consist primarily of costs incurred for the discovery and clinical development of our drug candidates, which include: • employee-related expenses, including salaries, related benefits, travel and share-based compensation expenses for employees engaged in research and development functions; • expenses incurred in connection with research, laboratory consumables, sponsored research, and preclinical studies; • expenses incurred in connection with conducting clinical trials including investigator grants and site payments for time and pass-through expenses and expenses incurred under agreements with CROs, other vendors or central laboratories and service providers engaged to conduct our trials; • the cost of consultants engaged in research and development related services; • the cost to manufacture drug product candidates for use in our preclinical studies and clinical trials; • facilities, depreciation and other expenses, which include allocated expenses for rent and maintenance of facilities, insurance and supplies; • costs related to regulatory compliance; and • the cost of annual license fees under our third-party licensing agreements. 95 We typically have various early-stage research and drug discovery projects as well as various product candidates undergoing clinical trials.
Financial Operations Overview Operating Expenses Research and Development Research and development costs consist primarily of costs incurred for the discovery and clinical development of our drug candidates, which include: • employee-related expenses, including salaries, related benefits, travel and share-based compensation expenses for employees engaged in research and development functions; • expenses incurred in connection with research, laboratory consumables, sponsored research, and preclinical studies; • expenses incurred in connection with conducting clinical trials including investigator grants and site payments for time and pass-through expenses and expenses incurred under agreements with CROs, other vendors or central laboratories and service providers engaged to conduct our trials; • the cost of consultants engaged in research and development related services; • the cost to manufacture drug product candidates for use in our preclinical studies and clinical trials; • facilities, depreciation and other expenses, which include allocated expenses for rent and maintenance of facilities, insurance and supplies; • costs related to regulatory compliance; and • the cost of annual license fees under our third-party licensing agreements.
Liquidity and Capital Resources Sources of Liquidity As of December 31, 2024, we had cash, cash equivalents, restricted cash and short-term and long-term investments of $380.5 million. We estimate that all $265.1 million in net proceeds from our July 2020 initial public offering have been spent.
Liquidity and Capital Resources Sources of Liquidity As of December 31, 2025, we had cash, cash equivalents, restricted cash and short-term and long-term investments of $295.1 million. We estimate that all $265.1 million in net proceeds from our July 2020 initial public offering have been spent.
While we continue to closely manage our expenditures, we still expect our general and administrative expenses will increase in the future in support of increased research and development activities and to reflect increased costs associated with operating as a public company.
While we continue to closely manage our expenditures, including following our cost containment measures, we still expect our general and administrative expenses will increase in the future in support of increased research and development activities and to reflect increased costs associated with operating as a public company.
Indemnification As permitted under Delaware law and in accordance with our bylaws, we indemnify our officers and directors for certain events or occurrences while the officer or director is or was serving in such capacity. We are also party to indemnification agreements with our officers and directors.
Indemnification As permitted under Delaware law and in accordance with our bylaws, we indemnify our officers and directors for certain events or occurrences while the officer or director is or was serving in such capacity. We are also party to indemnification agreements with our officers and directors. We believe the fair value of the indemnification rights and agreements is minimal.
A change in the outcome of any of a number of variables with respect to the development of our drug candidates may significantly impact the costs and timing associated with the development of our drug candidates.
The successful development of our drug candidates is highly uncertain. A change in the outcome of any of a number of variables with respect to the development of our drug candidates may significantly impact the costs and timing associated with the development of our drug candidates.
We have incurred net losses and negative cash flows from operations since our inception. As of December 31, 2024, we had an accumulated deficit of $544.2 million and anticipate that we will continue to incur net losses for the foreseeable future.
We have incurred net losses and negative cash flows from operations since our inception. As of December 31, 2025, we had an accumulated deficit of $648.3 million and anticipate that we will continue to incur net losses for the foreseeable future.
Total undiscounted aggregate future operating lease obligations under all of our operating leases as of December 31, 2024 are $123.1 million. We enter into contracts in the normal course of business for clinical trials, preclinical studies, manufacturing and other services and products for operating purposes.
Total undiscounted aggregate future operating lease obligations under all of our operating leases as of December 31, 2025 are $111.8 million. 101 We enter into contracts in the normal course of business for clinical trials, preclinical studies, manufacturing and other services and products for operating purposes.
The increase of $5.2 million was primarily due to higher average investment balances and higher yields in the current period. Interest income includes interest earned from investments, partially offset by amortization of purchase premiums and accretion of discounts of investments.
The decrease of $3.8 million was primarily due to lower average investment balances and lower yields in the current period. Interest income includes interest earned from investments, partially offset by amortization of purchase premiums and accretion of discounts of investments.
Our CAR NK platform enables an on-demand, off-the-shelf approach involving scaled manufacturing to broaden patient access. We have developed proprietary technologies that enable us to generate an abundant supply of NK cells, increase NK-cell recognition of target antigens, enhance NK-cell fitness and freeze, store, and thaw our engineered NK cells for off-the-shelf administration.
Our CAR NK platform enables an on-demand, off-the-shelf approach involving scaled manufacturing to broaden patient access. We have developed proprietary technologies designed to generate an abundant supply of NK cells, increase NK cell recognition of target antigens, and enhance NK cell fitness to support scalable, off the shelf administration.
However, we expect that our research and development expenses will increase substantially in connection with our planned preclinical and clinical development activities in the future, including as a result of Ntrust-1, our clinical trial of NKX019 for the treatment of LN, and Ntrust-2, our planned clinical trial of NKX019 for the treatment of scleroderma, myositis, and AAV. 96 The successful development of our drug candidates is highly uncertain.
However, we expect that our research and development expenses will increase substantially in connection with our planned preclinical and clinical development activities in the future, including as a result of Ntrust-1, our clinical trial of NKX019 for the treatment of LN and pMN, Ntrust-2, our clinical trial of NKX019 for the treatment of scleroderma, myositis, and AAV, and the ISTs for the treatment of MG and SLE.
General and administrative expenses General and administrative expenses were $31.5 million and $34.9 million for the years ended December 31, 2024 and 2023, respectively.
General and administrative expenses General and administrative expenses were $31.6 million and $31.5 million for the years ended December 31, 2025 and 2024, respectively.
We believe the fair value of the indemnification rights 102 and agreements is minimal. Accordingly, we have not recorded any liabilities for these indemnification rights and agreements as of December 31, 2024 and 2023. Segment Information We have one business activity and operate in one reportable segment.
Accordingly, we have not recorded any liabilities for these indemnification rights and agreements as of December 31, 2025 and 2024. Segment Information We have one business activity and operate in one reportable segment.
Cash Flows The following table sets forth a summary of our cash flows for the periods indicated (in thousands): Year Ended December 31, 2024 2023 Net cash used in operating activities $ (99,696 ) $ (86,160 ) Net cash (used in) provided by investing activities (129,555 ) 79,015 Net cash provided by financing activities 226,084 691 Net decrease in cash and cash equivalents $ (3,167 ) $ (6,454 ) Operating Activities Net cash used in operating activities for the year ended December 31, 2024 of $99.7 million was primarily due to a net loss of $108.8 million, adjusted for a decrease in net change in operating assets and liabilities of $12.2 million, which was offset by an increase in net non-cash charges of $21.3 million.
Cash Flows The following table sets forth a summary of our cash flows for the periods indicated (in thousands): Year Ended December 31, 2025 2024 Net cash used in operating activities $ (88,699 ) $ (99,696 ) Net cash provided by (used in) investing activities 100,319 (129,555 ) Net cash provided by financing activities 141 226,084 Net increase (decrease) in cash and cash equivalents $ 11,761 $ (3,167 ) Operating Activities Net cash used in operating activities for the year ended December 31, 2025 of $88.7 million was primarily due to a net loss of $104.1 million, adjusted for a decrease in net change in operating assets and liabilities of $0.4 million, which was offset by an increase in net non-cash charges of $15.8 million.
We believe that our current cash, cash equivalents, restricted cash and short-term and long-term investments as of December 31, 2024 will be sufficient to meet our cash needs for at least 12 months following the issuance date of this Annual Report on Form 10-K.
We may also be required to sell or license to other parties’ rights to develop or commercialize our drug candidates that we would prefer to retain. 99 We believe that our current cash, cash equivalents, restricted cash and short-term and long-term investments as of December 31, 2025 will be sufficient to meet our cash needs for at least 12 months following the issuance date of this Annual Report on Form 10-K.
We have also incurred increased operating expenses since becoming a public company, which we expect will further increase when we are no longer able to rely on certain “emerging growth company” exemptions we are afforded under the Jumpstart Our Business Startups Act (the "JOBS Act") as further described under “—JOBS Act” below.
We have also incurred increased operating expenses since becoming a public company, which we expect will further increase when we are no longer able to rely on certain “smaller reporting company” exemptions we are afforded as further described below. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year.
Even after we no longer qualify as an emerging growth company, we may still qualify as a smaller reporting company or a non-accelerated filer, which would allow us to take advantage of many of the same exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our prospectuses and in our periodic reports and proxy statements.
As a smaller reporting company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our prospectuses and in our periodic reports and proxy statements.
As part of our October 2023 announcement of cost containment measures, early discovery and preclinical programs have been deprioritized with less personnel and funding allocated to advancing these programs. We expense research and development costs as they are incurred.
As such, we do not maintain information regarding the costs incurred for these early-stage research and drug discovery programs on a project-specific basis. As part of cost containment measures undertaken by us, early discovery and preclinical programs have been deprioritized with less personnel and funding allocated to advancing these programs. We expense research and development costs as they are incurred.
Net cash used in operating activities for the year ended December 31, 2023 of $86.2 million was primarily due to our net loss of $117.5 million, adjusted for net non-cash charges of $20.4 million and a change in operating assets and liabilities of $10.9 million.
Net cash used in operating activities for the year ended December 31, 2024 of $99.7 million was primarily due to our net loss of $108.8 million, adjusted for a decrease in net change in operating assets and liabilities of $12.2 million, which was offset by an increase in net non-cash charges of $21.3 million.
The net non-cash charges of $20.4 million consisted primarily of share-based compensation of $17.2 million, depreciation and amortization of $5.9 million, impairment of right-of-use assets of $4.1 million, and non-cash lease expense of $2.2 million, offset by investment accretion and amortization of $8.9 million.
The non-cash charges primarily consisted of stock-based compensation of $8.6 million, depreciation and amortization of $9.2 million, which was offset by investment accretion and amortization of $4.6 million.
We consider future taxable income, ongoing tax planning strategies and our historical financial performance in assessing the need for a valuation allowance. If we expect to realize deferred tax assets for which we have previously recorded a valuation allowance, we will reduce the valuation allowance in the period in which such determination is first made.
We consider future taxable income, ongoing tax planning strategies and our historical financial performance in assessing the need for a valuation allowance.
Our internal resources, employees and infrastructure are generally not directly tied to any one research or drug discovery project and are typically deployed across multiple projects. As such, we do not maintain information regarding the costs incurred for these early-stage research and drug discovery programs on a project-specific basis.
We typically have various early-stage research and drug discovery projects as well as various product candidates undergoing clinical trials. Our internal resources, employees and infrastructure are generally not directly tied to any one research or drug discovery project and are typically deployed across multiple projects.
These contracts generally provide for termination following a certain period after notice and therefore we believe that non-cancelable obligations under these agreements are not material. Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. GAAP.
Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP").
Net cash provided by investing activities was $79.0 million for the year ended December 31, 2023 comprised of proceeds from sales and maturities of investments of $367.4 million, offset by purchases of investments of $260.2 million and purchases of property and equipment of $28.1 million, primarily related to the construction of our manufacturing facility. 100 Financing Activities Net cash provided by financing activities of $226.1 million for the year ended December 31, 2024, which primarily consisted of net proceeds from our underwritten public offering of $225.1 million that closed in March 2024.
Financing Activities There was immaterial cash provided by financing activities for the year ended December 31, 2025. Net cash provided by financing activities of $226.1 million for the year ended December 31, 2024, which primarily consisted of net proceeds from our underwritten public offering of $225.1 million that closed in March 2024.
The decrease of $3.4 million was primarily due to the following: • a $4.1 million decrease due to an impairment of right-of-use assets in 2023 and no impairment expense in 2024; • a $1.6 million decrease in personnel-related expenses, including a $1.2 million decrease due to severance and other termination expenses related to the reduction in force completed in October 2023; • a $1.7 million increase in rent, depreciation and other facilities expense; and • a $0.6 million increase in professional services related to accounting services, corporate legal fees, other consulting and patent legal fees. 98 Interest income Interest income was $19.3 million and $14.1 million for the years ended December 31, 2024 and 2023, respectively.
The increase of $0.1 million was primarily due to the following: • a $4.9 million increase in severance expenses resulting from the March 2025 reduction in force; • a $0.8 million increase due to an impairment of right-of-use assets in 2025 and no impairment expense in 2024; • a $4.2 million decrease in personnel-related expenses primarily from lower salaries and wages, bonus expense, and share-based compensation expense recognized due to lower headcount as a result of the reduction in force; and • a $1.4 million decrease in rent and other facilities expense primarily due to the termination of the lease for one of our suites in July 2025. 98 Interest income Interest income was $15.5 million and $19.3 million for the years ended December 31, 2025 and 2024, respectively.
Year Ended December 31, 2024 2023 Direct external development program expenses: (in thousands) NKX019 $ 16,215 $ 11,410 NKX101 5,239 18,659 NKX070 73 896 NK+T — 108 Unallocated internal research and development costs: Personnel related (including share-based compensation) 39,866 40,052 Others 35,446 27,203 Partner cost sharing (95 ) (1,555 ) Total research and development costs $ 96,744 $ 96,773 Research and development activities are central to our business model.
The unallocated internal research and development costs include personnel, facility costs, laboratory consumables and discovery and research related activities associated with our pipeline. 96 Year Ended December 31, 2025 2024 Direct external development program expenses: (in thousands) NKX019 $ 22,146 $ 16,215 NKX101 1,156 5,239 Unallocated internal research and development costs: Personnel related (including share-based compensation) 30,565 39,866 Others 36,562 35,424 Total research and development costs $ 90,429 $ 96,744 Research and development activities are central to our business model.
Based on these data and the highly competitive landscape for treatments of B-cell malignancies, we will refocus our research and development activities on autoimmune diseases and plan for no further investment in the clinical development of NKX019 for the treatment of B-cell malignancies. 94 Since the commencement of our operations in 2015, we have devoted substantially all our resources in support of our product development efforts, hiring personnel, raising capital to support and expand such activities and providing general and administrative support for these operations.
Food and Drug Administration ("FDA") and authorization by the iDSMB to initiate enrollment in the second dose-escalation cohort. 95 Since the commencement of our operations in 2015, we have devoted substantially all our resources in support of our product development efforts, hiring personnel, raising capital to support and expand such activities and providing general and administrative support for these operations.
In December 2024, we announced the opening to enrollment of our Ntrust-2 clinical trial ("Ntrust-2"), a multi-center, open-label, dose-escalation Phase 1 clinical trial of NKX019 for systemic sclerosis ("scleroderma"), idiopathic inflammatory myopathy ("myositis") and antineutrophil cytoplasmic antibody (ANCA)-associated vasculitis ("AAV") and the clearance of an Investigational New Drug ("IND") application for an IST led by researchers at the University of California, Irvine and the University of Kansas Medical Center to evaluate NKX019 in patients with myasthenia gravis ("MG").
Our Ntrust-1 clinical trial ("Ntrust-1") is a multi-center, open-label, dose-escalation Phase 1 clinical trial of NKX019 for lupus nephritis ("LN") and primary membranous nephropathy ("pMN"). Our Ntrust-2 clinical trial ("Ntrust-2") is a multi-center, open-label, dose-escalation Phase 1 clinical trial of NKX019 for systemic sclerosis ("scleroderma"), idiopathic inflammatory myopathy ("myositis") and antineutrophil cytoplasmic antibody (ANCA)-associated vasculitis ("AAV").
In November 2024, we announced the first patient was dosed in our Ntrust-1 clinical trial ("Ntrust-1"), a multi-center, open-label, dose-escalation Phase 1 clinical trial of NKX019 for lupus nephritis ("LN") and the first patient was dosed in an investigator-sponsored trial ("IST") of NKX019 in patients with systemic lupus erythematosus ("SLE") at Columbia University Irving Medical Center.
At that time, we also announced that researchers at the University of California, Irvine initiated an investigator-sponsored trial ("IST") of NKX019 in patients with myasthenia gravis ("MG"). NKX019 is also being studied in an IST at Columbia University Irving Medical Center in patients with systemic lupus erythematosus ("SLE").
We record liabilities related to uncertain tax positions in accordance with the guidance that clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. 97 Results of Operations The following table summarizes our results of operations for the periods indicated (in thousands): Year Ended December 31, 2024 2023 Change Operating expenses: Research and development 96,744 96,773 (29 ) General and administrative 31,450 34,877 (3,427 ) Total operating expenses 128,194 131,650 (3,456 ) Loss from operations (128,194 ) (131,650 ) 3,456 Other income, net: Interest income 19,317 14,107 5,210 Other income, net 87 42 45 Total other income, net 19,404 14,149 5,255 Net loss $ (108,790 ) $ (117,501 ) $ 8,711 Research and development expenses Research and development expenses were $96.7 million and $96.8 million for the years ended December 31, 2024 and 2023, respectively.
Results of Operations The following table summarizes our results of operations for the periods indicated (in thousands): Year Ended December 31, 2025 2024 Change Operating expenses: Research and development 90,429 96,744 (6,315 ) General and administrative 31,568 31,450 118 Total operating expenses 121,997 128,194 (6,197 ) Loss from operations (121,997 ) (128,194 ) 6,197 Other income, net: Interest income 15,494 19,317 (3,823 ) Other income, net 2,419 87 2,332 Total other income, net 17,913 19,404 (1,491 ) Net loss $ (104,084 ) $ (108,790 ) $ 4,706 Research and development expenses Research and development expenses were $90.4 million and $96.7 million for the years ended December 31, 2025 and 2024, respectively.
The net change in operating assets and liabilities of $10.9 million was related to the decrease in prepaid and other current assets of $1.7 million, an increase in accounts payable and accrued and other liabilities of $4.2 million as we continued to increase our research and development related activities and an increase in operating lease liabilities of $5.0 million.
The change in net operating assets and liabilities was primarily due to an increase in prepaid expenses for the maintenance of laboratory equipment and interest receivable, and a decrease in accounts payable, accruals, and operating lease liability.
Removed
NKX019 is also being studied in a multi-center Phase 1 clinical trial for the treatment of a variety of B-cell malignancies, which evaluates the safety, pharmacology, and preliminary anti-tumor activity of NKX019.
Added
In March 2025, we approved a reduction in workforce as a result of a review of current strategic priorities and resource allocation with the intent to decrease our costs and create a more streamlined organization to support our operations and reprioritized product pipeline.
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In November 2024, we announced clinical data from a cohort of heavily pretreated patients with large B-cell lymphoma ("LBCL") whose disease had already progressed following treatment with a CD19 CAR T cell therapy.
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In order to maximize the potential success of both our Ntrust-1 clinical trial and our Ntrust-2 clinical trial, in May 2025, we announced the modification of the lymphodepleting conditioning ("LD") prior to administration of NKX019 to use a combination of fludarabine ("Flu") and cyclophosphamide ("Cy"), with the option for patients with cytopenias to continue to receive Cy alone as modified LD.
Removed
Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year. On March 27, 2024, we sold an aggregate of (i) 21,010,000 shares of its common stock at a price of $10.00 per share, and (ii) pre-funded warrants to purchase 3,000,031 shares of common stock at a price of $9.9999 per pre-funded warrant in an underwritten public offering.
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In November 2025, we announced that deep B-cell depletion was observed in all patients treated to date who received NKX019 with LD using Flu and Cy versus partial B-cell depletion in patients receiving only Cy.
Removed
The pre-funded warrants can be exercised at any time after issuance for an exercise price of $0.0001 per share, subject to certain ownership limitations. The total net proceeds from the offering were approximately $225.1 million, after deducting underwriting discounts and commissions and offering expenses.
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At the same time, we reported the implementation of a streamlined enrollment process that allows participant data from both the Ntrust-1 and Ntrust-2 clinical trials to be reviewed by a combined independent Data Safety Monitoring Board ("iDSMB") to inform dose-escalation decisions. This update followed engagement with the U.S.
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The unallocated internal research and development costs include personnel, facility costs, laboratory consumables and discovery and research related activities associated with our pipeline. The partner cost sharing represents reimbursable research and development expenses from the CRISPR Agreement.
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If we expect to realize deferred tax assets for which we have previously recorded a valuation allowance, we will reduce the valuation allowance in the period in which such determination is first made. 97 We record liabilities related to uncertain tax positions in accordance with the guidance that clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
Removed
Effective August 27, 2024, the Company and Cowen and Company, LLC mutually terminated the sales agreement entered into on August 12, 2021 related to the Company’s $150.0 million “at-the-market” equity offering program, pursuant to the terms of the sales agreement. Prior to the termination of the sales agreement, $1.8 million of shares of common stock had been sold.
Added
Other income, net Other income, net was $2.4 million for the year ended December 31, 2025 and immaterial for the year ended December 31, 2024. The increase of $2.3 million was primarily due to $1.5 million of recognition of employee retention tax credits received under the CARES Act and $0.8 million from sublease income which commenced in December 2024.
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We may also be required to sell or license to other parties’ rights to develop or commercialize our drug candidates that we would prefer to retain.
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Investing Activities Net cash used by investing activities was $100.3 million for the year ended December 31, 2025 comprised of the purchase of marketable securities of $238.6 million and the purchase of property and equipment of $1.2 million, partially offset by proceeds from the maturities of marketable securities of $340.1 million.
Removed
Net cash provided by financing activities of $0.7 million for the year ended December 31, 2023 was mainly due to the proceeds from ESPP purchases of $0.5 million and exercise of stock options of $0.2 million.
Added
These contracts generally provide for termination following a certain period after notice and therefore we believe that non-cancelable obligations under these agreements are not material.
Removed
Additionally, the process of testing therapeutic product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain.
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Smaller Reporting Company Status We are a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act, meaning that the market value of our common stock held by non-affiliates is less than $700 million and our annual revenue is less than $100 million during the most recently completed fiscal year.
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JOBS Act We are an “emerging growth company” as described under the JOBS Act, and we could have taken advantage of an extended transition period for complying with new or revised accounting standards. This would have allowed us to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
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We may continue to be a smaller reporting company if either (i) the market value of our common stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our common stock held by non-affiliates is less than $700 million.
Removed
We have chosen irrevocably to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.
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We intend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of The Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act").
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We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the consummation of our IPO, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.