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

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Paragraph-level year-over-year comparison of Zenas BioPharma, 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.

+915 added−725 removedSource: 10-K (2025-12-31) vs 10-K (2024-12-31)

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

915 paragraphs added · 725 removed · 562 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

248 edited+160 added−86 removed382 unchanged
Biggest changeOur product candidates are early-stage and have not been approved for marketing in the U.S. 39 Table of Contents An applicant seeking approval to market and distribute a new biologic in the U.S. must satisfactorily complete each of the following steps: ● preclinical laboratory tests, animal studies and formulation studies performed in accordance with the FDA’s GLPs; ● manufacture of the drug substance and drug product in accordance with the FDA’s cGMPs, along with required analytical and stability testing; ● submission to the FDA of an Investigational New Drug Application (“IND”) for human clinical testing, which must become effective before human clinical trials may begin; ● approval by an independent IRB, representing each clinical trial site before each clinical trial may be initiated; ● performance of adequate and well-controlled human clinical trials, in accordance with current Good Clinical Practice requirements (“cGCPs”), necessary to establish the safety, potency and purity of the product candidate for each proposed indication; ● preparation and submission to the FDA of a BLA, requesting marketing approval for one or more proposed indications, including submission of detailed information on the manufacture and composition of the product and proposed labeling; ● satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities, including those of third parties, at which the product, or components thereof, are produced to assess compliance with cGMPs and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; ● satisfactory completion of any FDA audits of the preclinical studies and clinical trial sites to assure compliance with GLPs and cGCPs, as applicable, and the integrity of clinical data in support of the BLA; ● payment of user fees under the Prescription Drug User Fee Act (“PDUFA”), unless exempted; ● the FDA’s review and approval of the BLA, including consideration of the views of any FDA advisory committee, if applicable; and ● if approved, compliance with any post-approval requirements, including the potential requirement to implement a REMS and any post-approval studies or other post-marketing commitments required by the FDA.
Biggest changeAn applicant seeking approval to market and distribute a new biologic or small molecule drug in the U.S. must satisfactorily complete each of the following steps: ● preclinical laboratory tests, animal studies and formulation studies performed in accordance with the FDA’s Good Laboratory Practices (“GLPs”); ● manufacture of the drug substance and drug product in accordance with the FDA’s current Good Manufacturing Practices (“cGMPs”), along with required analytical and stability testing; ● submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials may begin and must be updated annually or when significant changes are made; ● approval by an independent IRB, representing each clinical trial site before each clinical trial may be initiated; ● performance of adequate and well-controlled human clinical trials, in accordance with current Good Clinical Practice requirements (“cGCPs”), necessary to establish the safety, efficacy, potency and purity of the product candidate for each proposed indication; ● preparation and submission to the FDA of a New Drug Application (“NDA”) or BLA, requesting marketing approval for one or more proposed indications, including submission of detailed information on the manufacture and composition of the product and proposed labeling; ● a determination by the FDA within 60 days of its receipt of the BLA or NDA to file the application for review; ● satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities, including those of third parties, at which the product, or components thereof, are produced to assess compliance with cGMPs and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; ● satisfactory completion of any FDA audits of the preclinical studies and clinical trial sites to assure compliance with GLPs and cGCPs, as applicable, and the integrity of clinical data in support of the BLA or NDA; ● payment of user fees under the Prescription Drug User Fee Act (“PDUFA”), unless exempted; 48 Table of Contents ● the FDA’s review and approval of the BLA or NDA, including consideration of the views of any FDA advisory committee, if applicable; prior to any commercial marketing or sale of drug or biologic in the U.S. and ● if approved, compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (“REMS”) and any post-approval studies or other post-marketing commitments required by the FDA.
The one (7%) patient who did not meet clinical response criteria had a RI score of two at baseline and a score of one before withdrawing from the trial after the Day 71 dose due to lack of efficacy (an IgG4-RD RI score reduction of less than two).
One (7%) patient who did not meet clinical response criteria had a RI score of two at baseline and a score of one before withdrawing from the trial after the Day 71 dose due to lack of efficacy (an IgG4-RD RI score reduction of less than two).
Obexelimab for the Treatment of MS We believe obexelimab’s differentiated mechanism of action as an inhibitor of B cell lineage supports its potential for the treatment of MS.
Obexelimab for the Treatment of MS We believe obexelimab’s differentiated mechanism of action as an inhibitor of the B cell lineage supports its potential for the treatment of MS.
In consideration for these licenses, Xencor is obligated to pay us (a) mid-single digits royalty on net sales of the terminated assets or products if Xencor commercializes such terminated assets or products and (b) low double digits percentage of all payments receives from sublicensees if Xencor sublicenses the licenses granted by us.
In consideration for these licenses, Xencor is obligated to pay us (a) mid-single digits royalty on net sales of the terminated assets or products if Xencor commercializes such terminated assets or products and (b) low double digits percentage of all payments receives from sublicensees if Xencor sublicenses the licenses granted by us.
A sixth patent family is directed to the clinical use and dosing regimen of obexelimab for treating forms of MS, including RMS, and currently including a pending PCT application and a pending U.S. application, and a pending Taiwanese application.
A sixth patent family is directed to the clinical use and dosing regimen of obexelimab for treating forms of MS, including RMS, and currently including a pending PCT application, a pending U.S. application, and a pending Taiwanese application.
These consist of ZB002 (an anti-TNFα monoclonal antibody) and ZB004 (a CTLA-4-Ig fusion). We retain global rights for both assets. In addition, we hold the development and commercialization rights to one regional program, ZB001 (also known as VRDN-001, an insulin-like growth factor-1 receptor (“IGF-1R”) monoclonal antibody and related programs, which were recently exclusively sublicensed to a partner in greater China.
These consist of ZB002 (an anti-TNFα monoclonal antibody) and ZB004 (a CTLA-4-Ig fusion). We retain global rights for both assets. In addition, we hold the development and commercialization rights to one regional program, ZB001 (also known as VRDN-001, an insulin-like growth factor-1 receptor (“IGF-1R”) monoclonal antibody and related programs, which were exclusively sublicensed to a partner in greater China.
In particular, in 2010, the ACA was enacted, which, among other things, subjected biologic products to potential competition by lower-cost biosimilars; addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program; extended the Medicaid Drug Rebate program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations; subjected manufacturers to new annual fees and taxes for certain branded prescription drugs; created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.
For example, in 2010, the ACA was enacted, which, among other things, subjected biologic products to potential competition by lower-cost biosimilars; addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program; extended the Medicaid Drug Rebate program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations; subjected manufacturers to new annual fees and taxes for certain branded prescription drugs; created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.
After approval, if there are any modifications to the approved product, including changes in the indications, dosage forms, labeling, or manufacturing processes or facilities, the sponsor may be required to submit and obtain FDA approval of a new BLA or BLA supplement, which may require the generation of additional data or the conduct of additional preclinical studies and clinical trials.
After approval, if there are any modifications to the approved product, including changes in the indications, dosage forms, labeling, or manufacturing processes or facilities, the sponsor may be required to submit and obtain FDA approval of a new BLA/NDA or BLA/NDA supplement, which may require the generation of additional data or the conduct of additional preclinical studies and clinical trials.
For products with fast track designation, sponsors may have more frequent interactions with the FDA, the product is potentially eligible for accelerated approval and priority review, if relevant criteria are met, and the BLA may be eligible for “rolling review,” under which the FDA may consider sections of the BLA for review on a rolling basis before the complete application is submitted.
For products with fast track designation, sponsors may have more frequent interactions with the FDA, the product is potentially eligible for accelerated approval and priority review, if relevant criteria are met, and the BLA/NDA may be eligible for “rolling review,” under which the FDA may consider sections of the BLA for review on a rolling basis before the complete application is submitted.
Development in Pediatric Patients Under the Pediatric Research Equity Act of 2003, a BLA or BLA supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
Development in Pediatric Patients Under the Pediatric Research Equity Act of 2003, a BLA, NDA or BLA supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
Serious Adverse Events The only SAEs considered by the investigator to be related to obexelimab or placebo across the five clinical studies completed to date were: two IV infusion related reactions, one in each of two obexelimab treated patients, one venous thrombosis in an obexelimab treated patient, one herpes zoster in a placebo treated patient and a post herpetic neuralgia in a placebo treated patient.
Serious Adverse Events The only SAEs considered by the investigator to be related to obexelimab or placebo across the clinical studies completed to date were: two IV infusion related reactions, one in each of two obexelimab treated patients, one venous thrombosis in an obexelimab treated patient, one herpes zoster in a placebo treated patient and a post herpetic neuralgia in a placebo treated patient.
These regulations include, among other things, standards and regulations for direct-to-consumer advertising, communications regarding unapproved uses, industry-sponsored scientific and educational activities and promotional activities involving the internet and social media. Promotional claims about a drug’s safety or effectiveness are prohibited before the BLA is approved.
These regulations include, among other things, standards and regulations for direct-to-consumer advertising, communications regarding unapproved uses, industry-sponsored scientific and educational activities and promotional activities involving the internet and social media. Promotional claims about a drug’s safety or effectiveness are prohibited before the BLA/NDA is approved.
Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the products do not undergo unacceptable deterioration over their shelf life. Before approving a BLA, the FDA will typically inspect the facility or facilities where the product is manufactured.
Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the products do not undergo unacceptable deterioration over their shelf life. Before approving a BLA or NDA, the FDA will typically inspect the facility or facilities where the product is manufactured.
Review and Approval of a BLA The results of clinical trials and preclinical studies, together with detailed information regarding the manufacturing processes, chemistry and composition of the product, the proposed labeling and other relevant information, are submitted to the FDA as part of a BLA requesting approval to market the product for one or more specified indications.
Review and Approval of a BLA/NDA The results of clinical trials and preclinical studies, together with detailed information regarding the manufacturing processes, chemistry and composition of the product, the proposed labeling and other relevant information, are submitted to the FDA as part of a BLA or NDA requesting approval to market the product for one or more specified indications.
Certain patients also experienced mild to moderate IV infusion-related GI symptoms. The most common TEAEs were abdominal pain and nausea (4/20, 20.0%), vomiting (3/20, 15.0%), and diarrhea, chills, headache, nasal congestion and upper respiratory tract infection (2/20, 10.0%).
Certain patients also experienced mild to moderate and transient IV infusion-related GI symptoms. The most common TEAEs were abdominal pain and nausea (4/20, 20.0%), vomiting (3/20, 15.0%), and diarrhea, chills, headache, nasal congestion and upper respiratory tract infection (2/20, 10.0%).
In some cases, the FDA may approve a BLA for a product but require the sponsor to conduct additional clinical trials to further assess the product’s safety and effectiveness after approval. Such post-approval trials are typically referred to as confirmatory studies, or Phase 4 clinical trials.
In some cases, the FDA may approve a BLA or NDA for a product but require the sponsor to conduct additional clinical trials to further assess the product’s safety and effectiveness after approval. Such post-approval trials are typically referred to as confirmatory studies, or Phase 4 clinical trials.
Our China-based employees support clinical operations and regulatory matters related to obexelimab in the Asia-Pacific region and technical operations, with all functions in China reporting to management in the U.S. We also have dedicated medical and commercial personnel located in Europe to advance our obexelimab strategy in that region.
Our China-based employees support clinical operations and regulatory matters related to obexelimab in the Asia-Pacific region and technical operations, with all functions in China reporting to management in the U.S. We also have 4 dedicated medical and commercial personnel located in Europe to advance our obexelimab strategy in that region.
Foreign Corrupt Practices Act of 1977, as amended, which prohibits, among other things, U.S. companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations and foreign government owned or affiliated entities, candidates for foreign political office, and foreign political parties or officials thereof; and ● analogous state and foreign laws and regulations, such as state anti-bribery, anti-kickback and false claims laws, which may apply to healthcare items or services that are reimbursed by non-governmental third-party payors, including private insurers.
Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), which prohibits, among other things, U.S. companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations and foreign government owned or affiliated entities, candidates for foreign political office, and foreign political parties or officials thereof; and ● analogous state and foreign laws and regulations, such as state anti-bribery, anti-kickback and false claims laws, which may apply to healthcare items or services that are reimbursed by non-governmental third-party payors, including private insurers.
On the basis of the FDA’s evaluation of the application and accompanying information, including the results of the inspection of the manufacturing facilities and any FDA audits of preclinical and clinical trial sites to assure compliance with GLPs or GCPs, the FDA may approve the BLA or issue a complete response letter.
On the basis of the FDA’s evaluation of the application and accompanying information, including the results of the inspection of the manufacturing facilities and any FDA audits of preclinical and clinical trial sites to assure compliance with GLPs or GCPs, the FDA may approve the BLA/NDA or issue a complete response letter.
Clinical and preclinical data may come from company-sponsored trials or from a number of alternative sources, including studies initiated by investigators, and the BLA must include any negative and ambiguous results, as well as positive findings.
Clinical and preclinical data may come from company-sponsored trials or from a number of alternative sources, including studies initiated by investigators, and the BLA or NDA must include any negative and ambiguous results, as well as positive findings.
Post-Approval Regulation Upon FDA approval of a BLA, the sponsor will be required to comply with all post-approval regulatory requirements for biologics, as well as any specific post-approval requirements that the FDA has imposed as part of the product or indication’s approval process.
Post-Approval Regulation Upon FDA approval of a BLA or NDA, the sponsor will be required to comply with all post-approval regulatory requirements for biologics, as well as any specific post-approval requirements that the FDA has imposed as part of the product or indication’s approval process.
In addition, we have selected new CMOs in the U.S., which are not affiliated with Wuxi Biologics, to establish additional sources of supply for drug substance and drug product for both commercial and clinical use.
In addition, we have selected new CMOs in the U.S., which are not affiliated with Wuxi Biologics, to establish additional sources of supply for obexelimab drug substance and drug product for both commercial and clinical use.
In addition, we have selected new CMOs in the U.S., which are not affiliated with WuXi Biologics, to establish additional sources of supply for drug substance and drug product for both commercial and clinical use.
In addition, we have selected new CMOs in the U.S., which are not affiliated with WuXi Biologics, to establish additional sources of supply for obexelimab drug substance and drug product for both commercial and clinical use.
Restrictions under applicable federal and state healthcare laws and regulations, some of which will apply only if and when we receive marketing approval for a product candidate, include the following: ● federal healthcare program anti-kickback law, which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid; ● federal false claims, false statements and civil monetary penalties laws which prohibit, among other activities, any person from knowingly presenting, or causing to be presented, a false claim for payment of government funds or knowingly making, or causing to be made, a false statement to get a false claim paid and may be implicated if claims are submitted that result from a violation of the federal anti-kickback statute; ● HIPAA, which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; 57 Table of Contents ● the FDCA, which among other things, strictly regulates drug marketing, prohibits manufacturers from marketing such products for off-label use and regulates the distribution of samples; ● federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs; ● the so-called “federal sunshine” law, which requires pharmaceutical and medical device companies to monitor and report certain financial interactions with physicians, certain non-physician practitioners and teaching hospitals to the federal government for re-disclosure to the public; ● the U.S.
Restrictions under applicable federal and state healthcare laws and regulations, some of which will apply only if and when we receive marketing approval for a product candidate, include the following: ● federal healthcare program anti-kickback law, which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid; ● federal false claims, false statements and civil monetary penalties laws which prohibit, among other activities, any person from knowingly presenting, or causing to be presented, a false claim for payment of government funds or knowingly making, or causing to be made, a false statement to get a false claim paid and may be implicated if claims are submitted that result from a violation of the federal anti-kickback statute; 66 Table of Contents ● HIPAA, which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; ● the FDCA, which among other things, strictly regulates drug marketing, prohibits manufacturers from marketing such products for off-label use and regulates the distribution of samples; ● federal laws that require pharmaceutical manufacturers to calculate, certify and report certain complex calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs; ● the so-called “federal sunshine” law, which requires pharmaceutical and medical device companies to monitor and report certain financial interactions with physicians, certain non-physician practitioners and teaching hospitals to the federal government for re-disclosure to the public; ● the U.S.
The FDA does not always meet its PDUFA goal dates for standard and priority BLAs and the review process may be significantly extended by FDA requests for additional information or clarification.
The FDA does not always meet its PDUFA goal dates for standard and priority BLAs or NDAs and the review process may be significantly extended by FDA requests for additional information or clarification.
Once a BLA is approved, the sponsor can make only those claims relating to safety, efficacy, purity and potency that are in accordance with the provisions of the approved label.
Once a BLA/NDA is approved, the sponsor can make only those claims relating to safety, efficacy, purity and potency that are in accordance with the provisions of the approved label.
Pursuant to Regulation (EC) No 726/2004, the centralized procedure is compulsory for specific products, including for medicines developed by means of certain biotechnological processes (including, recombinant DNA technology, controlled expression of genes coding for biologically active proteins in prokaryotes and eukaryotes including transformed mammalian cells, and hybridoma and monoclonal antibody methods), products designated as orphan medicinal products, advanced therapy medicinal products (gene-therapy, somatic cell-therapy or tissue-engineered medicines) and products containing a new active substance indicated for the treatment of certain diseases, including products for the treatment of 51 Table of Contents cancer, HIV / AIDS, neurodegenerative disorders, diabetes, auto-immune diseases and other immune dysfunctions, and viral diseases.
Pursuant to Regulation (EC) No 726/2004, the centralized procedure is compulsory for specific products, including for medicines developed by means of certain biotechnological processes (including, recombinant DNA technology, controlled expression of genes coding for biologically active proteins in prokaryotes and eukaryotes including transformed mammalian cells, and hybridoma and monoclonal antibody methods), products designated as orphan medicinal products, advanced therapy medicinal products (gene-therapy, somatic cell-therapy or tissue-engineered medicines) and products containing a new active substance indicated for the treatment of certain diseases, including products for the treatment of cancer, HIV / AIDS, neurodegenerative disorders, diabetes, auto-immune diseases and other immune dysfunctions, and viral diseases.
The sponsor must also provide, and the FDA must approve, a schedule for the submission of the remaining sections of the BLA, and the sponsor must pay any required user fees upon submission of the first section of the BLA.
The sponsor must also provide, and the FDA must approve, a schedule for the submission of the remaining sections of the BLA/NDA, and the sponsor must pay any required user fees upon submission of the first section of the BLA/NDA.
While these other therapies have not been shown to be effective, and carry significant side effects, their off-label use could reduce or delay treatment in the addressable patient population for obexelimab. MS: ● approved monoclonal antibody biologic therapies including anti-CD20 antibodies such as Ocrevus marketed by F.
While these other therapies have not been shown to be effective, and carry significant side effects, their off-label use could reduce or delay treatment in the addressable patient population for obexelimab. RMS: ● approved monoclonal antibody biologic therapies including anti-CD20 antibodies such as Ocrevus ® marketed by F.
For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation Program (SIP) proposal to import certain drugs from Canada for specific state healthcare programs. It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the U.S. or Canada.
For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation Program (“SIP”) proposal to import certain drugs from Canada for specific state healthcare programs. It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the U.S. or Canada.
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 or HITECH, and their regulations, including the final omnibus rule published on January 25, 2013, also imposes certain obligations on the business associates of covered entities and their covered subcontractors that obtain protected health information in providing services to or on behalf of covered entities or business associates.
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and their regulations, including the final omnibus rule published on January 25, 2013, also imposes certain obligations on the business associates of covered entities and their covered subcontractors that obtain protected health information in providing services to or on behalf of covered entities or business associates.
Regulatory Data Protection in Europe In the EU and the UK, new chemical entities (including both small molecules and biological medicinal products) and new biological substances approved on the basis of a complete independent data package consisting of quality, preclinical testing results and clinical trial data qualify for eight years of RDP upon grant of a marketing authorization and two years of marketing protection.
Regulatory Data Protection in Europe In the EU and the UK, new chemical entities (including both small molecules and biological medicinal products) and new biological substances approved on the basis of a complete independent data package consisting of quality, preclinical testing results and clinical trial data qualify for eight years of Regulatory Data Protection (“RDP”) upon grant of a marketing authorization and two years of marketing protection.
Human Clinical Trials Clinical trials involve the administration of an investigational drug product to healthy volunteers or patients with the disease or condition to be treated under the supervision of qualified investigators. Clinical trials must be conducted in accordance with GCPs, which establish ethical and data integrity standards for clinical testing, as well as the requirements for informed consent.
Human Clinical Trials Clinical trials involve the administration of an investigational drug product to healthy volunteers or patients with the disease or condition to be treated under the supervision of qualified investigators. Clinical trials must be conducted in accordance with cGCPs, which establish ethical and data integrity standards for clinical testing, as well as the requirements for informed consent.
In the 41 Table of Contents case of some products designed to address severe or life-threatening diseases, initial human testing is often conducted in patients with the disease, especially when the product may be too inherently toxic to ethically administer to healthy volunteers. ● Phase 2 trials are generally conducted in a limited patient population to identify possible adverse effects and safety risks, evaluate the preliminary efficacy of the product candidate for specific targeted indications and determine dose tolerance and recommended dosage.
In the case of some products designed to address severe or life-threatening diseases, initial human testing is often conducted in patients with the disease, especially when the product may be too inherently toxic to ethically administer to healthy volunteers. ● Phase 2 trials are generally conducted in a limited patient population to identify possible adverse effects and safety risks, evaluate the preliminary efficacy of the product candidate for specific targeted indications and determine dose tolerance and recommended dosage.
The study was not powered for statistical significance. ● Trial in Rheumatoid Arthritis: XmAb5871-02 was a Phase 1b/2a, randomized, placebo-controlled, double-blind, ascending multiple-IV dose trial of the safety, tolerability, PK, and PD of obexelimab in 56 patients with RA, with 40 receiving study drug.
The study was not powered for statistical significance. ● Trial in Rheumatoid Arthritis: XmAb5871-02 was a Phase 1b/2a, randomized, placebo-controlled, double-blind, ascending multiple-IV dose trial of the safety, tolerability, PK, and PD of obexelimab in 56 patients with rheumatoid arthritis (“RA”), with 40 receiving study drug.
We were obligated to 30 Table of Contents make development milestone payments of up to $10.0 million, at Xencor’s option either in cash or fully-paid newly issued shares, which milestone payment was paid in Series B Preferred Shares in June 2023. We are obligated to make regulatory milestone payments up to $75.0 million.
We were obligated to make development milestone payments of up to $10.0 million, at Xencor’s option either in cash or fully-paid newly issued shares, which milestone payment was paid in Series B Preferred Shares in June 2023. 35 Table of Contents We are obligated to make regulatory milestone payments up to $75.0 million.
Any U.S. or foreign patents issued from national stage filings of our owned, or exclusively in-licensed PCT patent applications, any U.S. patents issued from our exclusively in-licensed non-provisional applications, and any U.S. patents or foreign patents issued from non-provisional applications we may file in connection with our provisional patent applications would be scheduled to expire on various dates from 2027 through 2045.
Any U.S. or foreign patents issued from national stage filings of our owned, or exclusively in-licensed PCT patent applications, any U.S. patents issued from our exclusively in-licensed non-provisional applications, and any U.S. patents or foreign patents issued from non-provisional applications we may file in connection with our provisional patent applications would be scheduled to expire on various dates from 2027 through 2047.
In the 12 Table of Contents primary efficacy analysis, in patients receiving 5 mg/kg, the IgG4-related disease RI score at Day 169 had decreased by two or more points versus baseline in 12 (80%) patients, eight (67%) of whom had a score of zero (complete remission).
In the primary efficacy analysis, in patients receiving 5 mg/kg, the IgG4-related disease RI score at Day 169 had decreased by two or more points versus baseline in 12 (80%) patients, eight (67%) of whom had a score of zero (complete remission).
We subsequently relinquished rights to the third product candidate back to Xencor and that asset is no longer a 2020 Licensed Asset. Xencor obtained the rights to some of the intellectual property licensed to us pursuant to license agreements between Xencor and a third party (each such agreement, an “Upstream License Agreement”).
We subsequently relinquished rights to the third product candidate back to Xencor and that asset is no longer a 2020 Licensed Asset. Xencor obtained the rights to some of the intellectual property licensed to us pursuant to license agreements between Xencor and a third party (each such agreement, an “Upstream License Agreement” and collectively, the “Upstream License Agreements”).
Assuming the provisional application is converted to a non-provisional application at the 12-month from priority deadline, the 20-year statutory term for any patents issued in this family would expire in June 2045, excluding any extension of patent term that may be available.
Assuming the provisional application is converted to a non-provisional application at the 12-month from priority deadline, the 20-year statutory term for any patents issued in this family would expire in June 2046, excluding any extension of patent term that may be available.
A biosimilar is a biological product that is highly similar to an existing FDA-licensed “reference product.” Under the BPCIA, a manufacturer may submit an application for licensure of a biologic product that is “biosimilar to” or “interchangeable with” a previously approved biological product or “reference product.” In order for the FDA to approve a biosimilar product, it must find that there are no clinically meaningful differences between the reference product and proposed biosimilar product in terms of safety, purity and potency.
A biosimilar is a biological product that is highly similar to an existing FDA-licensed “reference product.” Under the BPCIA, a manufacturer may submit an application for licensure of a biologic product that is “biosimilar to” or “interchangeable with” a previously approved biological product or “reference product.” 56 Table of Contents In order for the FDA to approve a biosimilar product, it must find that there are no clinically meaningful differences between the reference product and proposed biosimilar product in terms of safety, purity and potency.
In addition, on October 21, 2024, we entered into the Tenacia Agreement, under which we transferred to Tenacia our rights and obligations under our agreements with Dianthus for ZB005. As partial consideration for the Tenacia Agreement, we received an upfront fee of $5.0 million from Tenacia.
In addition, in October 2024, we entered into the Tenacia Agreement, under which we transferred to Tenacia our rights and obligations under our agreements with Dianthus for ZB005. As partial consideration for the Tenacia Agreement, we received an upfront fee of $5.0 million from Tenacia.
A sponsor who is planning to submit a marketing application for a product that includes a new active ingredient, new indication, new 47 Table of Contents dosage form, new dosing regimen or new route of administration must submit a Pediatric Study Plan (“PSP”) that contains an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objectives and design, any deferral or waiver requests and other information required by regulation.
A sponsor who is planning to submit a marketing application for a product that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration must submit a Pediatric Study Plan (“PSP”) that contains an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objectives and design, any deferral or waiver requests and other information required by regulation.
A second patent family is directed to obexelimab’s mechanism of action and includes one issued patent and one pending application in the U.S., five pending applications in Canada, Europe, Hong Kong and Japan, and 20 issued patents in Japan and European countries including Austria, Belgium, Denmark, France, Finland, Germany, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Spain, Switzerland, Sweden, Turkey and UK.
A second patent family is directed to obexelimab’s mechanism of action and formulation, which includes two issued patents and one pending application in the U.S., five pending applications in Canada, Europe, Hong Kong and Japan, and 20 issued patents in Japan and European countries including Austria, Belgium, Denmark, France, Finland, Germany, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Spain, Switzerland, Sweden, Turkey and UK.
Obexelimab is a bifunctional, non-depleting, humanized monoclonal antibody designed to bind CD19 and FcγRIIb to inhibit B-lineage cell activity. The antibody variable region of obexelimab has been engineered to bind CD19, whereas the constant region has been engineered to enhance affinity for the inhibitory FcγRIIb receptor.
Obexelimab is a bifunctional, humanized monoclonal antibody designed to bind CD19 and FcγRIIb to inhibit B-lineage cell activity. The antibody variable region of obexelimab has been engineered to bind CD19, whereas the constant region has been engineered to enhance affinity for the inhibitory FcγRIIb receptor.
Across these five trials obexelimab was well-tolerated and demonstrated clinical activity that we believe provides POC for obexelimab as a B cell inhibitor for the treatment of patients living with certain autoimmune diseases.
Across these eight trials obexelimab was well-tolerated and demonstrated clinical activity that we believe provides POC for obexelimab as a B cell inhibitor for the treatment of patients living with certain autoimmune diseases.
A separate submission to an existing IND must also be made for each successive clinical trial conducted, and the FDA must grant permission, either explicitly or implicitly, by not objecting before each clinical trial can begin.
A separate submission to an existing IND must also be made for each successive clinical trial conducted, and the FDA must grant authorization, either explicitly or implicitly, by not objecting before each clinical trial can begin.
The ten-year protection period can be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to authorization, is 52 Table of Contents held to bring a significant clinical benefit in comparison with existing therapies.
The ten-year protection period can be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to authorization, is held to bring a significant clinical benefit in comparison with existing therapies.
The results of these studies are further described below. ** Primary endpoint did not achieve statistical significance. ● Study in Healthy Adult Volunteers: XmAb5871-01 was a Phase 1, randomized, blinded, placebo-controlled, SAD IV study of the safety, tolerability and PK of obexelimab in 48 healthy adult volunteers, with 36 receiving study drug, conducted in the United Kingdom.
The results of these studies are further described below. ** Primary endpoint did not achieve statistical significance. ● Study in Healthy Adult Volunteers: XmAb5871-01 was a Phase 1, randomized, blinded, placebo-controlled, SAD IV study of the safety, tolerability and pharmacokinetics (“PK”) of obexelimab in 48 healthy adult volunteers, with 36 receiving study drug, conducted in the United Kingdom.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMPs and 42 Table of Contents adequate to assure consistent production of the product within required specifications. The PHSA emphasizes the importance of manufacturing controls for products like biologics whose attributes cannot be precisely defined.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMPs and adequate to assure consistent production of the product within required specifications. The PHSA emphasizes the importance of manufacturing controls for products like biologics whose attributes cannot be precisely defined.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our product candidates. Historically, products launched in the EU do not follow price structures of the U.S. and generally prices tend to be significantly lower.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for 64 Table of Contents any of our product candidates. Historically, products launched in the EU do not follow price structures of the U.S. and generally prices tend to be significantly lower.
Other anti-CD19 and CD20 targeting antibodies rely on antibody-dependent cell-mediated cytotoxicity (“ADCC”), complement-dependent cytotoxicity (“CDC”) and/or apoptosis or programmed cell death as a key component of their mechanism of action. ADCC, CDC and apoptosis activity are generally lower in disease-relevant tissue than the peripheral blood.
Other anti-CD19 and CD20 targeting antibodies rely on antibody-dependent cell- 8 Table of Contents mediated cytotoxicity (“ADCC”), complement-dependent cytotoxicity (“CDC”) and/or apoptosis or programmed cell death as a key component of their mechanism of action. ADCC, CDC and apoptosis activity are generally lower in disease-relevant tissue than the peripheral blood.
We intend to leverage the experience and capabilities of our executive management team and our established networks throughout the biopharmaceutical industry to identify, acquire, develop and, if approved, commercialize product candidates that we believe can offer enhanced efficacy, safety and/or convenience over existing therapies and thereby provide superior benefits to patients.
We intend to leverage the experience and capabilities of our executive management team and our established networks throughout the biopharmaceutical industry to identify, acquire, develop and, if approved, commercialize product candidates that we 10 Table of Contents believe can offer enhanced efficacy, safety and/or convenience over existing therapies and thereby provide superior benefits to patients.
Eight subjects (8/36, 22.2%) who had received 0.2 to 10 mg/kg obexelimab had their IV infusion temporarily interrupted as a result of the GI-related symptoms. In all cases, symptoms leading to infusion interruption were transient and subjects were able to continue the infusion after a short break without recurrence of symptoms.
Eight subjects (8/36, 22.2%) who had received 0.2 to 10 mg/kg obexelimab had their IV infusion temporarily interrupted as a result of the GI-related symptoms. In all cases, symptoms leading to infusion 25 Table of Contents interruption were transient and subjects were able to continue the infusion after a short break without recurrence of symptoms.
Failure to conduct required post-approval studies, confirm a clinical benefit during post-marketing studies may result in the FDA’s withdrawal of the product from the market on an 46 Table of Contents expedited basis. All promotional materials for therapeutic candidates approved under accelerated regulations are subject to prior review by the FDA.
Failure to conduct required post-approval studies, confirm a clinical benefit during post-marketing studies may result in the FDA’s withdrawal of the product from the market on an expedited basis. All promotional materials for therapeutic candidates approved under accelerated regulations are subject to prior review by the FDA.
There was one case of pneumonia accounting for two SAEs (initial and recurrence due to non-compliance with therapy) in one patient and a second patient experienced one SAE (chronic inflammation demyelinating 25 Table of Contents polyradiculoneuropathy in the setting of small lymphocytic lymphoma (pre-existing)). None of the SAEs were considered to be related to obexelimab.
There was one case of pneumonia accounting for two SAEs (initial and recurrence due to non-compliance with therapy) in one patient and a second patient experienced one SAE (chronic inflammation demyelinating polyradiculoneuropathy in the setting of small lymphocytic lymphoma (pre-existing)). None of the SAEs were considered to be related to obexelimab.
A third patent family is directed to the use of biomarkers for treating autoimmune diseases (e.g., SLE) and includes one pending U.S. application, and 13 pending applications in Australia, Brazil, Canada, China, Eurasia, Europe, Hong Kong, Israel, Japan, South Korea, Mexico, South Africa and Taiwan.
A third patent family is directed to the use of biomarkers for treating autoimmune diseases (e.g., SLE) and includes one pending U.S. application, and 12 pending applications in Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, Japan, South Korea, Mexico, South Africa and Taiwan and one issued patent in Eurasia.
While we believe that the preliminary results from the SApHiAre Trial in patients with warm autoimmune hemolytic anemia 13 Table of Contents (“wAIHA”) patients established proof of mechanism through an increase in Hgb and a positive effect on other clinical markers, we have determined not to progress to a registration-directed trial of obexelimab for the wAIHA indication based on several factors, including the expected length and expense of a potential Phase 3 trial.
While we believe that the results from the SApHiAre Trial in patients with warm autoimmune hemolytic anemia (“wAIHA”) patients established proof of mechanism through an increase in Hgb and a positive effect on other clinical markers, we have determined not to progress to a registration-directed trial of obexelimab for the wAIHA indication based on several factors, including the expected length and expense of a potential Phase 3 trial.
If the investigator suspected an IgG4-RD flare, based on reappearance of previous signs/symptoms or appearance of new signs/symptoms of IgG4-RD, organ-specific diagnostic assessments were conducted, including a physical examination, imaging and/or testing of biochemical parameters specific to the involved organ(s), to correlate symptoms and to document disease activity.
If the investigator suspected an IgG4-RD flare, based on reappearance of previous signs/symptoms or appearance of new signs/symptoms of IgG4-RD, organ-specific diagnostic assessments were conducted, including a physical examination, imaging and/or testing of 17 Table of Contents biochemical parameters specific to the involved organ(s), to correlate symptoms and to document disease activity.
An SPC may extend the term of a basic patent for up to five years after its originally scheduled expiration date in order to provide up to a maximum of fifteen years of exclusivity from the time the medicinal product in question first obtains an MA for it to be placed on the market.
An SPC may extend the 61 Table of Contents term of a basic patent for up to five years after its originally scheduled expiration date in order to provide up to a maximum of fifteen years of exclusivity from the time the medicinal product in question first obtains an MA for it to be placed on the market.
The first three indications we are pursuing include IgG4-RD through an ongoing registration-directed Phase 3 trial; and RMS and SLE through ongoing Phase 2, double-blind, randomized, placebo-controlled trials. ● Build our operational capabilities to develop and potentially commercialize our products in key regions.
The first three indications we are pursuing include IgG4-RD through a successful registration-directed Phase 3 trial; and RMS and SLE through ongoing Phase 2, double-blind, randomized, placebo-controlled trials. ● Build our operational capabilities to develop and potentially commercialize our products in key regions.
During its review of a BLA, the FDA may refer applications for novel biological products or biological products that present difficult questions of safety or efficacy to an advisory committee.
During its review of a BLA/NDA, the FDA may refer applications for novel drug or biological products, or drug or biological products that present difficult questions of safety or efficacy to an advisory committee.
The UK GDPR and the UK Data Protection Act 2018 set out the UK’s data protection regime, which is independent from but aligned to the EU’s data protection regime. Non-compliance with the UK GDPR may result in monetary penalties of up to £17.5 million or 4% of worldwide revenue, whichever is higher.
The UK GDPR and the UK Data Protection Act 2018 set out the UK’s data protection regime, which is independent from but 63 Table of Contents aligned to the EU’s data protection regime. Non-compliance with the UK GDPR may result in monetary penalties of up to £17.5 million or 4% of worldwide revenue, whichever is higher.
All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law. ​ ​ 59 Table of Contents
All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.
These points may be prior to submission of an IND, at the end of Phase 2, and before a BLA is submitted. Meetings at other times may be requested.
These points may be prior to submission of an IND, at the end of Phase 2, and before a BLA or NDA is submitted. Meetings at other times may be requested.
This six-month exclusivity may be granted if a BLA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data.
This six-month exclusivity may be granted if a BLA or NDA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data.
SLE commonly affects the central nervous system, kidneys, gastrointestinal system, mucous membranes, heart, skin, hematologic system, musculoskeletal system and lungs. 21 Table of Contents Figure 8: SLE Disease Characteristics Increased B cell activity and survival mediated through BCR abnormalities is a classic feature of SLE. BCR signals are impacted by several regulatory surface proteins, including CD19 and FcγRIIb.
SLE commonly affects the central nervous system, kidneys, gastrointestinal system, mucous membranes, heart, skin, hematologic system, musculoskeletal system and lungs. 22 Table of Contents Figure 7: SLE Disease Characteristics Increased B cell activity and survival mediated through BCR abnormalities is a classic feature of SLE. BCR signals are impacted by several regulatory surface proteins, including CD19 and FcγRIIb.
Since the passage of the BPCIA, many states have passed laws or amendments to laws, including laws governing pharmacy practices, which are state regulated, to regulate the use of biosimilars. U.S.
Since the passage of the BPCIA, many states have passed laws or amendments to laws, including laws governing pharmacy practices, which are state regulated, to regulate the use of biosimilars.
Fifteen patients received obexelimab 5 mg/kg IV every two weeks for 24 weeks. 15 Table of Contents The protocol was later amended to also provide for the enrollment of an additional five patients who would receive a fixed dose of obexelimab of 90 mg IV or 180 mg IV every two weeks for 24 weeks.
Fifteen patients received obexelimab 5 mg/kg IV every two weeks for 24 weeks. The protocol was later amended to also provide for the enrollment of an additional five patients who would receive a fixed dose of obexelimab of 90 mg IV or 180 mg IV every two weeks for 24 weeks.
The expected termination of the royalty obligations will depend on factors such as the filing of additional patents covering the products during the term of the 2020 Xencor Agreement, the availability and application of patent term extensions and/or expiration of regulatory exclusivity for the products in the applicable region.
The expected termination of the royalty obligations will depend on factors such as the filing of additional patents covering the products during the term of the 2020 Xencor Agreement, the availability and application 34 Table of Contents of patent term extensions and/or expiration of regulatory exclusivity for the products in the applicable region.
A first patent family specifically covers the composition of matter of obexelimab and includes six issued patents and two pending applications in the U.S., and 21 issued foreign patents in Australia, Hong Kong, India, Israel and various European countries including Belgium, Denmark, France, Germany, Ireland, Italy, Latvia, Lithuania, Luxembourg, Monaco, Netherlands, Spain, Sweden, Switzerland, and UK.
A first patent family specifically covers the composition of matter of obexelimab and includes seven issued patents and one pending applications in the U.S., and 21 issued foreign patents in Australia, Hong Kong, India, Israel and various European countries including Belgium, Denmark, France, Germany, Ireland, Italy, Latvia, Lithuania, Luxembourg, Monaco, Netherlands, Spain, Sweden, Switzerland, and UK.
Accordingly, we 58 Table of Contents use a mix of competitive base salary, cash-based annual incentive compensation, performance-based equity compensation awards and other employee benefits. ● Health and safety : We value the health and safety of our employees and provide comprehensive insurance benefits, an employee assistance program, paid holidays, a personal time-off program, and other benefits which are intended to assist employees to manage their well-being. ● Inclusion and diversity : We are committed to efforts to increase diversity and foster an inclusive professional environment that supports our workforce.
Accordingly, we use a mix of competitive base salary, cash-based annual incentive compensation, performance-based equity compensation awards and other employee benefits. ● Health and safety : We value the health and safety of our employees and provide comprehensive insurance benefits, an employee assistance program, paid holidays, a personal time-off program, and other benefits which are intended to assist employees to manage their well-being. ● Inclusion : We are committed to efforts to foster an inclusive professional environment that supports our workforce.
The last-to-expire patent under the 2020 Xencor Agreement will have an expiration 29 Table of Contents date of December 22, 2028 for ZB002 and February 22, 2031 for ZB004, provided the latest application in each of these countries is allowed.
The last-to-expire patent under the 2020 Xencor Agreement will have an expiration date of December 22, 2028 for ZB002 and February 22, 2031 for ZB004, provided the latest application in each of these countries is allowed.
If a product candidate is considered a biologic-device combination product, the sponsor will also need to comply with post-marketing regulatory requirements, including adverse event reporting and applicable portions of the FDA’s Quality System regulation, applicable to combination products.
If a product candidate is considered a combination product, the sponsor will also need to comply with post-marketing regulatory requirements, including adverse event reporting and applicable portions of the FDA’s Quality Management System regulation, applicable to combination products.
Targeting B and plasma cells may have positive results in the overall treatment of SLE because of the role autoantibodies play in the pathogenesis of the disease. 22 Table of Contents Current treatments include non-steroidal anti-inflammatory drugs (NSAIDs), glucocorticoids, hydroxychloroquine, Benlysta (belimumab) (FDA approved for SLE in 2011), and Saphnelo (anifrolumab) (FDA approved for SLE in 2021).
Targeting B and plasma cells may have positive results in the overall treatment of SLE because of the role autoantibodies play in the pathogenesis of the disease. 23 Table of Contents Current treatments include non-steroidal anti-inflammatory drugs (“NSAIDs”), glucocorticoids, hydroxychloroquine, Benlysta (belimumab) (FDA approved for SLE in 2011), and Saphnelo (anifrolumab) (FDA approved for SLE in 2021).
Assuming grant of the patent for which the extension is sought, the restoration period for a patent covering a product is typically one-half the time between the effective date of the IND and the submission date of the BLA, plus the time between the submission date of the BLA and 48 Table of Contents the ultimate approval date, except that the review period is reduced by any time during which the applicant failed to exercise due diligence.
Assuming grant of the patent for which the extension is sought, the restoration period for a patent covering a product is typically one-half the time between the effective date of the IND and the submission date of the BLA/NDA, plus the time between the submission date of the BLA/NDA and the ultimate approval date, except that the review period is reduced by any time during which the applicant failed to exercise due diligence.
Importantly, an EMA contact and rapporteur from the Committee for Human Medicinal Products (“CHMP”), or Committee for Advanced Therapies are appointed early in the PRIME scheme facilitating increased understanding of the product at the EMA’s Committee level.
Importantly, an EMA contact and rapporteur from the Committee for Human Medicinal 59 Table of Contents Products (“CHMP”), or Committee for Advanced Therapies are appointed early in the PRIME scheme facilitating increased understanding of the product at the EMA’s Committee level.
License Agreement with Bristol-Myers Squibb On August 30, 2023 (the “BMS Effective Date”), we entered into a strategic license and collaboration agreement with BMS (the “BMS Agreement”) under which we provided (a) an exclusive (even as to us) license under certain of our patents and joint patents to be developed under the BMS Agreement, and (b) a non-exclusive license under certain of our know-how.
License Agreement with Bristol-Myers Squibb In August 2023 (the “BMS Effective Date”), we entered into a strategic license and collaboration agreement (the “BMS Agreement”) with Bristol-Myers Squibb (“BMS”) under which we provided (a) an exclusive (even as to us) license under certain of our patents and joint patents to be developed under the BMS Agreement, and (b) a non-exclusive license under certain of our know-how.
These designations are not mutually exclusive, and a product candidate may qualify for one or more of these programs. While 45 Table of Contents these programs are intended to expedite product development and approval, they do not alter the standards for FDA approval.
These designations are not mutually exclusive, and a product candidate may qualify for one or more of these programs. While these programs are intended to expedite product development and approval, they do not alter the standards for FDA approval.
While we are not currently subject to laws such as the CCPA, some observers note that the CCPA and similar legislation could mark the beginning of a trend toward more stringent privacy legislation in the U.S., which could increase our potential liability and adversely affect our business.
While we are not currently subject to laws such as the California Consumer Privacy Act (“CCPA”), some observers note that the CCPA and similar legislation could mark the beginning of a trend toward more stringent privacy legislation in the U.S., which could increase our potential liability and adversely affect our business.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRestrictions under applicable federal and state healthcare laws and regulations, some of which will apply only if and when we receive marketing approval for a product candidate, include the following: ● federal healthcare program anti-kickback law, which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid; ● federal false claims, false statements and civil monetary penalties laws which prohibit, among other activities, any person from knowingly presenting, or causing to be presented, a false claim for payment of government funds or knowingly making, or causing to be made, a false statement to get a false claim paid and may be implicated if claims are submitted that result from a violation of the federal anti- kickback statute; ● the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; ● the federal Food, Drug, and Cosmetic Act (“FDCA”), which among other things, strictly regulates drug marketing, prohibits manufacturers from marketing such products for off-label use and regulates the distribution of samples; ● federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs; ● the so-called “federal sunshine” law, which requires pharmaceutical and medical device companies to monitor and report certain financial interactions with physicians, certain non-physician healthcare practitioners and teaching hospitals to the federal government, as well as certain ownership and investment interests held by these physicians and their immediate family members for re-disclosure to the public; ● the U.S.
Biggest changeRestrictions under applicable federal and state healthcare laws and regulations, some of which will apply only if and when we receive marketing approval for a product candidate, include the following: ● federal healthcare program anti-kickback law, which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid; ● federal false claims, false statements and civil monetary penalties laws which prohibit, among other activities, any person from knowingly presenting, or causing to be presented, a false claim for payment of government funds or knowingly making, or causing to be made, a false statement to get a false claim paid and may be implicated if claims are submitted that result from a violation of the federal anti- kickback statute; ● HIPAA, which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; ● the FDCA, which among other things, strictly regulates drug marketing, prohibits manufacturers from marketing such products for off-label use and regulates the distribution of samples; ● federal laws that require pharmaceutical manufacturers to calculate, certify and report certain complex calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs; ● the so-called “federal sunshine” law, which requires pharmaceutical and medical device companies to monitor and report certain financial interactions with physicians, certain non-physician healthcare practitioners and teaching hospitals to the federal government, as well as certain ownership and investment interests held by these physicians and their immediate family members for re-disclosure to the public; ​ 115 Table of Contents ● the FCPA, as amended, which prohibits, among other things, U.S. companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations and foreign government owned or affiliated entities, candidates for foreign political office, and foreign political parties or officials thereof; and ● analogous state and foreign laws and regulations, such as state anti-bribery, anti-kickback and false claims laws, which may apply to healthcare items or services that are reimbursed by non-governmental third-party payors, including private insurers.
Item 1A. Risk Factors Investors should carefully consider the risks described below, together with the other information contained in this Annual Report, including in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our audited consolidated financial statements and the related notes contained in this Annual Report.
Item 1A. Risk Factors Investors should carefully consider the risks described below, together with the other information contained in this Annual Report, including in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our audited consolidated financial statements and related notes contained in this Annual Report.
Under the BPCIA, reference biological product is granted 12 years of non-patent data exclusivity from the time of first licensure of the product, and the FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product.
Under the BPCIA, a reference biological product is granted 12 years of non-patent data exclusivity from the time of first licensure of the product, and the FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product.
For example: ● others may be able to make product candidates that are similar to ours but that are not covered by the pending patent applications that we own or the patents or patent applications that we license; ● we or our licensors or future collaborators might not have been the first to make the inventions covered by the pending patent application that we own or have exclusively licensed; ● we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our or their inventions; 87 Table of Contents ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing or otherwise violating our owned or licensed intellectual property rights; ● it is possible that noncompliance with the USPTO and foreign governmental patent agencies requirement for a number of procedural, documentary, fee payment and other provisions during the patent process can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; ● it is possible that our pending owned or licensed patent applications or those that we may own or license in the future will not lead to issued patents; ● issued patents that we either own or have exclusively licensed may be revoked, modified, or held invalid or unenforceable, as a result of legal challenges by our competitors; ● others may have access to the same intellectual property rights licensed to us in the future on a non-exclusive basis; ● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● we may not develop additional proprietary technologies that are patentable; ● we cannot predict the scope of protection of any patent issuing based on our and our licensors’ patent applications, including whether the patent applications that we own, presently in-license, or, in the future, in-license will result in issued patents with claims that directed to our product candidates or uses thereof in the U.S. or in other foreign countries; ● there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the U.S. for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; ● countries other than the U.S. may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates; ● the claims of any patent issuing based on our patent applications may not provide protection against competitors or any competitive advantages, or may be challenged by third parties; ● if enforced, a court may not hold that our patents, if they issue in the future, are valid, enforceable and infringed; ● we may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; ● we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application covering such intellectual property; ● we may fail to adequately protect and police our trademarks and trade secrets; and ● the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving that covered by our patent applications.
For example: ● others may be able to make product candidates that are similar to ours but that are not covered by the pending patent applications that we own or the patents or patent applications that we license; ● we or our licensors or future collaborators might not have been the first to make the inventions covered by the pending patent application that we own or have exclusively licensed; ● we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our or their inventions; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing or otherwise violating our owned or licensed intellectual property rights; ● it is possible that noncompliance with the USPTO and foreign governmental patent agencies requirement for a number of procedural, documentary, fee payment and other provisions during the patent process can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; ● it is possible that our pending owned or licensed patent applications or those that we may own or license in the future will not lead to issued patents; ● issued patents that we either own or have exclusively licensed may be revoked, modified, or held invalid or unenforceable, as a result of legal challenges by our competitors; ● others may have access to the same intellectual property rights licensed to us in the future on a non-exclusive basis; ● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● we may not develop additional proprietary technologies that are patentable; ● we cannot predict the scope of protection of any patent issuing based on our and our licensors’ patent applications, including whether the patent applications that we own, presently in-license, or, in the future, in-license will result in issued patents with claims that directed to our product candidates or uses thereof in the U.S. or in other foreign countries; ● there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the U.S. for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; ● countries other than the U.S. may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates; ● the claims of any patent issuing based on our patent applications may not provide protection against competitors or any competitive advantages, or may be challenged by third parties; ● if enforced, a court may not hold that our patents, if they issue in the future, are valid, enforceable and infringed; 100 Table of Contents ● we may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; ● we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application covering such intellectual property; ● we may fail to adequately protect and police our trademarks and trade secrets; and ● the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving that covered by our patent applications.
Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our product candidates, termination of clinical trial sites or entire trial programs, withdrawal of clinical trial participants or inability to enroll participants, injury to our reputation and significant negative media attention, significant costs to defend the related litigation, a diversion of management’s time and our resources from our business operations, substantial monetary awards to trial participants or patients, loss of revenue, the inability to commercialize and products that we may develop, and a decline in our stock price.
Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our product candidates, termination of clinical trial sites or entire trial programs, withdrawal of clinical trial participants or inability to enroll participants, injury to our reputation and significant negative media attention, significant costs to defend the related litigation, a diversion of management’s time and our resources from our business operations, substantial monetary awards to trial participants or patients, loss of revenue, the inability to commercialize any products that we may develop, and a decline in our stock price.
In view of the potential changes and development in the implementation rules in PTE, PTA, patent linkage and data exclusivity in China, a lower-cost generic drug can emerge onto the market much more quickly, which would result in weaker protection for us against generic competition in China than could be available to us in the U.S., and would materially harm our business, financial condition, results of operations, and prospects.
In view of the potential changes and development in the implementation rules in PTE, PTA, patent linkage and data exclusivity in China, a lower-cost generic drug could emerge onto the market much more quickly, which would result in weaker protection for us against generic competition in China than could be available to us in the U.S., and would materially harm our business, financial condition, results of operations, and prospects.
Our Restated Charter and Restated 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; ● create a classified board of directors whose members serve staggered three-year terms; ● specify that special meetings of our stockholders can be called only by our board of directors; ● prohibit stockholder action by written consent; ● 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; 113 Table of Contents ● provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; ● provide that our directors may be removed only for cause; ● 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 Restated Bylaws; and ● require supermajority votes of the holders of our common stock to amend specified provisions of our Restated Charter and Restated Bylaws.
Our Restated Charter and Restated 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; ● create a classified board of directors whose members serve staggered three-year terms; ● specify that special meetings of our stockholders can be called only by our board of directors; ● prohibit stockholder action by written consent; ● 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 vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; 130 Table of Contents ● provide that our directors may be removed only for cause; ● 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 Restated Bylaws; and ● require supermajority votes of the holders of our common stock to amend specified provisions of our Restated Charter and Restated Bylaws.
If approved for marketing by applicable regulatory authorities, our ability to generate revenue from our product candidates will depend on our ability to: ● receive regulatory approval for the targeted patient populations and claims that are necessary or desirable for successful marketing and maintain an acceptable safety profile for the products following approval; ● price our products competitively such that third-party and government reimbursement permits broad product adoption; ● obtain and maintain healthcare coverage and adequate reimbursement; 75 Table of Contents ● achieve market acceptance of our products by patients, the medical community and third-party payors; ● demonstrate the superiority of our products compared to the standard of care, as well as other therapies in development; ● create market demand for our product candidates through our own marketing and sales activities or any co-promotion or other arrangements that we may otherwise establish; ● manufacture product candidates through CMOs in sufficient quantities and at acceptable quality and cost to meet commercial demand at launch and thereafter; ● establish sales and marketing capabilities, whether alone or through a collaboration, to support commercialization of our product candidates; ● establish and maintain agreements with wholesalers, distributors, pharmacies and group purchasing organizations on commercially reasonable terms; ● obtain, maintain, protect and enforce patent and other intellectual property protection and regulatory exclusivity for our products; ● maintain compliance with applicable laws, regulations and guidance including interactions with healthcare professionals, patient advocacy groups and communication of healthcare economic information to payors and formularies; ● maintain a distribution and logistics network capable of product storage within our specifications and regulatory guidelines, and capable of timely product delivery; and ● assure that our product will be used as directed and that additional unexpected safety risks will not arise.
If approved for marketing by applicable regulatory authorities, our ability to generate revenue from our product candidates will depend on our ability to: ● receive regulatory approval for the targeted patient populations and claims that are necessary or desirable for successful marketing and maintain an acceptable safety profile for the products following approval; ● price our products competitively such that third-party and government reimbursement permits broad product adoption; ● obtain and maintain healthcare coverage and adequate reimbursement; ● achieve market acceptance of our products by patients, the medical community and third-party payors; ● demonstrate the superiority of our products compared to the standard of care, as well as other therapies in development; ● create market demand for our product candidates through our own marketing and sales activities or any co-promotion or other arrangements that we may otherwise establish; ● manufacture product candidates through CMOs in sufficient quantities and at acceptable quality and cost to meet commercial demand at launch and thereafter; ● establish sales and marketing capabilities, whether alone or through a collaboration, to support commercialization of our product candidates; ● establish and maintain agreements with wholesalers, distributors, pharmacies and group purchasing organizations on commercially reasonable terms; ● obtain, maintain, protect and enforce patent and other intellectual property protection and regulatory exclusivity for our products; ● maintain compliance with applicable laws, regulations and guidance including interactions with healthcare professionals, patient advocacy groups and communication of healthcare economic information to payors and formularies; ● maintain a distribution and logistics network capable of product storage within our specifications and regulatory guidelines, and capable of timely product delivery; and ● assure that our product will be used as directed and that additional unexpected safety risks will not arise.
We have relied on, and continue to rely on, our licensing partners, such as Xencor, to have (i) conducted research and development in accordance with the applicable protocol, legal, regulatory and scientific standards, (ii) accurately reported the results of all clinical trials conducted prior to our acquisition of the relevant product candidates and (iii) correctly collected and interpreted the data from these trials.
We have relied on, and continue to rely on, our licensing partners, such as Xencor and InnoCare, to have (i) conducted research and development in accordance with the applicable protocol, legal, regulatory and scientific standards, (ii) accurately reported the results of all clinical trials conducted prior to our acquisition of the relevant product candidates and (iii) correctly collected and interpreted the data from these trials.
Our future funding requirements will depend on, and could increase significantly as a result of, many factors, including: ● the scope, timing and progress of our ongoing obexelimab clinical studies and other research and development activities associated with the development of other and future product candidates; ● the number and scope of preclinical and clinical programs we decide to pursue; ● our ability to maintain our current research and development programs and to establish new programs; ● the timing of and successful patient enrollment in, and the initiation and completion of, clinical trials; ● the successful completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA, or any comparable foreign regulatory authority; ● the timing, receipt and terms of any marketing approvals from applicable regulatory authorities; ● our ability to establish new licensing or collaboration arrangements; ● the performance of our future collaborators, if any; ● our ability to establish arrangements with third-party manufacturers for the commercial supply of products that receive marketing approval, if any; ● development and timely delivery of commercial-grade drug formulations that can be used in our planned clinical trials and for commercialization; ● obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights; ● our ability to hire additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, chemistry, manufacturing and controls, quality and commercial personnel; ● commercializing product candidates, if approved, whether alone or in collaboration with others; ● the costs and timing of establishing or securing sales and marketing capabilities for our product candidates, if 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; and ● maintaining a continued acceptable safety profile of the product candidates following approval.
Our future funding requirements will depend on, and could increase significantly as a result of, many factors, including: ● the scope, timing and progress of our ongoing obexelimab and orelabrutinib clinical studies and other research and development activities associated with the development of other and future product candidates; ● the number and scope of preclinical and clinical programs we decide to pursue; ● our ability to maintain our current research and development programs and to establish new programs; ● the timing of and successful patient enrollment in, and the initiation and completion of, clinical trials; ● the successful completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA, or any comparable foreign regulatory authority; ● the timing, receipt and terms of any marketing approvals from applicable regulatory authorities; ● our ability to establish new licensing or collaboration arrangements; ● the performance of our future collaborators, if any; ● our ability to establish arrangements with third-party manufacturers for the commercial supply of products that receive marketing approval, if any; ● development and timely delivery of commercial-grade drug formulations that can be used in our planned clinical trials and for commercialization; ● obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights; ● our ability to retain personnel and hire additional personnel and consultants as our business grows, including additional officers and clinical development, regulatory, chemistry, manufacturing and controls, quality and commercial personnel; ● commercializing product candidates, if approved, whether alone or in collaboration with others; ● the costs and timing of establishing or securing sales and marketing capabilities for our product candidates, if 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; and ● maintaining a continued acceptable safety profile of the product candidates following approval.
For example, recent actions and statements by the governments of the U.S. and China, including those relating to the imposition or threatened imposition of tariffs, or increases to tariffs, affecting certain products manufactured in China, have impacted, and may continue to impact, companies like us who rely on suppliers and other commercial partners with significant operations in China.
For example, recent actions and statements by the governments of the U.S. and China, including those relating to the imposition or threatened imposition of tariffs, or potential increases to tariffs, affecting certain products manufactured in China, have impacted, and may continue to impact, companies like us who rely on suppliers and other commercial partners with significant operations in China.
As a result, we are subject to risks associated with doing business abroad, including: ● geopolitical tensions, political unrest, terrorism, labor disputes and economic instability resulting in the disruption of trade from foreign countries in which our products are manufactured, particularly China; ● the imposition of new laws and regulations, including those relating to labor conditions and safety standards, information and data transfer, imports, duties, taxes, and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds, particularly new or increased tariffs imposed on imports, and as a result supply-related costs, from countries where our suppliers operate, including China, pursuant to our master services or commercial supply agreements with WuXi Biologics, as well as tariffs that impact the biopharmaceutical industry generally; ● greater challenges and increased costs with enforcing and periodically auditing or reviewing our suppliers’ and manufacturers’ compliance with cGMPs or status acceptable to the FDA or comparable foreign regulatory authorities; ● reduced protection for intellectual property rights, including trade secret protection, in some countries, particularly China; ● disruptions in operations due to global, regional, or local epidemics, pandemics and other public health crises, or other emergencies or natural disasters; ● disruptions or delays in shipments; and ● changes in local economic conditions in countries where our manufacturers or suppliers are located.
As a result, we are subject to risks associated with doing business abroad, including: ● geopolitical tensions, political unrest, terrorism, labor disputes and economic instability resulting in the disruption of trade from foreign countries in which our products are manufactured, particularly China; ● the imposition of new laws and regulations, including those relating to labor conditions and safety standards, information and data transfer, imports, duties, taxes, and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds, particularly new or increased tariffs imposed on imports, and as a result supply-related costs, from countries where our suppliers operate, including China, pursuant to our master services or commercial supply agreements with WuXi Biologics, or our clinical supply arrangement with InnoCare, as well as tariffs that impact the biopharmaceutical industry generally; ● greater challenges and increased costs with enforcing and periodically auditing or reviewing our suppliers’ and manufacturers’ compliance with cGMPs or status acceptable to the FDA or comparable foreign regulatory authorities; ● reduced protection for intellectual property rights, including trade secret protection, in some countries, particularly China; ● disruptions in operations due to global, regional, or local epidemics, pandemics and other public health crises, or other emergencies or natural disasters; ● disruptions or delays in shipments; and ● changes in local economic conditions in countries where our manufacturers or suppliers are located.
If our licensors, including Xencor, fail to prosecute, maintain, enforce, and defend such patents, or lose rights to those patents, the rights we have licensed may be reduced or eliminated, and our right to develop and commercialize our current or future product candidates that are or may be the subject of such licensed rights could be adversely affected.
If our licensors, including Xencor or InnoCare, fail to prosecute, maintain, enforce, and defend such patents, or lose rights to those patents, the rights we have licensed may be reduced or eliminated, and our right to develop and commercialize our current or future product candidates that are or may be the subject of such licensed rights could be adversely affected.
In spite of our efforts, Xencor or any future licensors might conclude that we are in material breach of obligations under our license agreements and may therefore have the right to terminate the license agreements, thereby removing our ability to develop and commercialize product candidates and technology covered by such license agreements.
In spite of our efforts, Xencor or InnoCare or any future licensors might conclude that we are in material breach of obligations under our license agreements and may therefore have the right to terminate the license agreements, thereby removing our ability to develop and commercialize product candidates and technology covered by such license agreements.
However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider the subject product candidate to be a reference product for competing products, potentially creating the opportunity for biosimilar competition sooner than anticipated.
However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider the subject product candidate to be a reference product for competing products, potentially creating the opportunity for competition sooner than anticipated.
Further, the FDA and its foreign counterparts may respond to any BLA that we may submit by requesting additional data or studies that we do not anticipate. Such responses could delay clinical development of our product candidates or any future product candidates.
Further, the FDA and its foreign counterparts may respond to any BLA or NDA that we may submit by requesting additional data or studies that we do not anticipate. Such responses could delay clinical development of our product candidates or any future product candidates.
Such changes could delay approval or necessitate withdrawal of our BLA submissions. Any delay or failure in obtaining required approvals would adversely affect our ability to generate revenue from the particular product candidate for which we are seeking approval.
Such changes could delay approval or necessitate withdrawal of our BLA or NDA submissions. Any delay or failure in obtaining required approvals would adversely affect our ability to generate revenue from the particular product candidate for which we are seeking approval.
We have never submitted a BLA for our product candidates to the FDA, or a similar marketing application to a comparable foreign regulatory authority, and our current or any future product candidates may not be successful in clinical trials or receive regulatory approval.
We have never submitted a BLA or NDA for our product candidates to the FDA, or a similar marketing application to a comparable foreign regulatory authority, and our current or any future product candidates may not be successful in clinical trials or receive regulatory approval.
Any elongation or de-prioritization of preclinical studies or clinical trials or delay in regulatory review resulting from such disruptions could materially affect the development and study of obexelimab or any of our other product candidates or any future product candidates.
Any elongation or de-prioritization of preclinical studies or clinical trials or delay in regulatory review resulting from such disruptions could materially affect the development and study of obexelimab, orelabrutinib or any of our other product candidates or any future product candidates.
Furthermore, if we or others later identify undesirable side effects caused by any product candidate that we obtain marketing approval for, several potentially significant negative consequences could result, including: ● regulatory authorities may limit, suspend or withdraw approvals of such product, or may refuse to approve supplemental applications for such product; ● regulatory authorities may require additional warnings on the label, such as a “Boxed Warning,” contraindications or precautions, or otherwise limit the approved use of such product; ● regulatory authorities may impose additional restrictions on the marketing of, or the manufacturing processes for, the particular product, including requiring a REMS; ● we may be required to recall the product or change the way it is administered in patients; ● we may be required to conduct additional clinical trials; ● we may decide to remove such product from the market; ● we could be sued and held liable for harm caused to patients; and ● our reputation may suffer.
Furthermore, if we or others later identify undesirable side effects caused by any product candidate that we obtain marketing approval for, several potentially significant negative consequences could result, including: ● regulatory authorities may limit, suspend or withdraw approvals of such product, or may refuse to approve supplemental applications for such product; ● regulatory authorities may require additional warnings on the label, such as a “Boxed Warning,” contraindications or precautions, or otherwise limit the approved use of such product; ● regulatory authorities may impose additional restrictions on the marketing of, or the manufacturing processes for, the particular product, including requiring a REMS; ● we may be required to recall the product or change the way it is administered in patients; ● we may be required to conduct additional clinical trials; ● we may decide to remove such product from the market; 77 Table of Contents ● we could be sued and held liable for harm caused to patients; and ● our reputation may suffer.
We have incurred, and will incur, increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices.
We have incurred, and will continue to incur, increased costs as a result of operating as a public company, and our management will continue to be required to devote substantial time to new compliance initiatives and corporate governance practices.
Our clinical trial results may not support approval and our product candidates could fail to receive regulatory approval for many reasons, including the following: ● the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; ● we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and effective for any of their proposed indications; ● the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval, including due to the heterogeneity of patient populations, or apparent improvement in trial participants receiving placebo; ● we may be unable to demonstrate that our product candidates’ clinical and other benefits outweigh their safety risks; ● the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; ● the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of a BLA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the U.S. or elsewhere; ● the FDA or comparable foreign regulatory authorities may not approve our CMOs’ manufacturing process or facilities; ● the FDA may not accept clinical data from trials conducted by individual investigators or in countries where the standard of care is potentially different from the U.S.; and ● the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
Our clinical trial results may not support approval and our product candidates could fail to receive regulatory approval for many reasons, including the following: ● the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; 81 Table of Contents ● we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and effective for any of their proposed indications; ● the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval, including due to the heterogeneity of patient populations, or apparent improvement in trial participants receiving placebo; ● we may be unable to demonstrate that our product candidates’ clinical and other benefits outweigh their safety risks; ● the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; ● the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of a BLA or NDA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the U.S. or elsewhere; ● the FDA or comparable foreign regulatory authorities may not approve our CMOs’ manufacturing process or facilities; ● the FDA may not accept clinical data from trials conducted by individual investigators or in countries where the standard of care is potentially different from the U.S.; and ● the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
Any disagreement could result in one or more of the following, each of which could delay or prevent the development or commercialization of our product candidates, and in turn prevent us from generating revenue: disputes regarding milestone payments or royalties; uncertainty regarding ownership of intellectual property rights arising from our collaborative activities, which could prevent us from entering into 107 Table of Contents additional collaborations; unwillingness by the collaborator to cooperate in the development or manufacture of a product candidate, including providing us with data or materials; unwillingness on the part of a collaborator to keep us informed regarding the progress of its development and commercialization activities or to permit public disclosure of the results of those activities; initiating of litigation or alternative dispute resolution options by either party to resolve the dispute; or attempts by either party to terminate the agreement.
Any disagreement could result in one or more of the following, each of which could delay or prevent the development or commercialization of our product candidates, and in turn prevent us from generating revenue: disputes regarding milestone payments or royalties; uncertainty regarding ownership of intellectual property rights arising from our collaborative activities, which could prevent us from entering into additional collaborations; unwillingness by the collaborator to cooperate in the development or manufacture of a product candidate, including providing us with data or materials; unwillingness on the part of a collaborator to keep us informed regarding the progress of its development and commercialization activities or to permit public disclosure of the results of those activities; initiating of litigation or alternative dispute resolution options by either party to resolve the dispute; or attempts by either party to terminate the agreement.
Commencing any future clinical trials is subject to finalizing the trial design and submitting an application, such as an IND or BLA, to the FDA or a comparable foreign regulatory authority.
Commencing any future clinical trials is subject to finalizing the trial design and submitting an application, such as an IND, to the FDA or a comparable foreign regulatory authority.
Our rights to develop and commercialize our product candidates are subject, in large part, to the terms and conditions of licenses granted to us by others, such as Xencor.
Our rights to develop and commercialize our product candidates are subject, in large part, to the terms and conditions of licenses granted to us by others, such as Xencor and InnoCare.
If there is no lawful manner for us to transfer personal data from the 102 Table of Contents EEA, the UK or other jurisdictions to the U.S., or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the U.S., or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
Our or a third party’s failure to execute on our manufacturing requirements, comply with cGMPs or maintain a compliance status acceptable to the FDA or comparable foreign regulatory authorities could adversely affect our business in a number of ways, including: ● an inability to initiate or continue preclinical studies or clinical trials of product candidates; ● delay in submitting regulatory applications, or receiving regulatory approvals, for product candidates; ● loss of the cooperation of existing or future collaborators; ● requirements to cease distribution or to recall batches of our product candidates; and ● in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products.
Our or a third party’s failure to execute on our manufacturing requirements, comply with cGMPs or maintain a compliance status acceptable to the FDA or comparable foreign regulatory authorities could adversely affect our business in a number of ways, including: ● an inability to initiate or continue preclinical studies or clinical trials of product candidates; ● delay in submitting regulatory applications, or receiving regulatory approvals, for product candidates; ● loss of the cooperation of existing or future collaborators; 122 Table of Contents ● requirements to cease distribution or to recall batches of our product candidates; and ● in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products.
In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments which could adversely effect the market price of our common stock and harm our reputation. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities.
In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments which could adversely affect the market price of our common stock and harm our reputation. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: ● the scope of rights granted under the license agreement and other interpretation-related issues; ● our financial or other obligations under the license agreement; ● the extent to which our processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; ● the sublicensing of patent and other rights under our collaborative development relationships; ● our diligence obligations under the license agreement and what activities satisfy those obligations; 108 Table of Contents ● the inventorship or ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and ● the priority of invention of patented technology.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: ● the scope of rights granted under the license agreement and other interpretation-related issues; ● our financial or other obligations under the license agreement; ● the extent to which our processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; ● the sublicensing of patent and other rights under our collaborative development relationships; ● our diligence obligations under the license agreement and what activities satisfy those obligations; ● the inventorship or ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and ● the priority of invention of patented technology.
We are currently party to license and collaboration agreements with Xencor and BMS, and we expect to enter into similar strategic transactions in the future.
We are currently party to license and collaboration agreements with Xencor, InnoCare and BMS, and we expect to enter into similar strategic transactions in the future.
As a result, we expect to incur substantial operating losses and negative operating cash flows for the foreseeable future. 61 Table of Contents Because of the numerous risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements.
As a result, we expect to incur substantial operating losses and negative operating cash flows for the foreseeable future. ​ 70 Table of Contents Because of the numerous risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements.
We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.
We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements in the future. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.
In 2012, the European Union Patent Package (EU Patent Package) regulations were passed with the goal of providing a single pan-European Unitary Patent and a new European Unified Patent Court (UPC) for litigation involving European patents. The EU Patent Package was implemented on June 1, 2023.
In 2012, the European Union Patent Package (“EU Patent Package”) regulations were passed with the goal of providing a single pan-European Unitary Patent and a new European Unified Patent Court (UPC) for litigation involving European patents. The EU Patent Package was implemented on June 1, 2023.
While the Delaware courts have determined that such choice of forum provisions are facially valid, it is possible that a court of law in another jurisdiction could rule that the choice of forum provisions contained in our Restated Charter are inapplicable or unenforceable if they 114 Table of Contents are challenged in a proceeding or otherwise, which could cause us to incur additional costs associated with resolving such action in other jurisdictions.
While the Delaware courts have determined that such choice of forum provisions are facially valid, it is possible that a court of law in another jurisdiction could rule that the choice of forum provisions contained in our Restated Charter are inapplicable or unenforceable if they are challenged in a proceeding or otherwise, which could cause us to incur additional costs associated with resolving such action in other jurisdictions.
MSN Laboratories (No. 24-1061) that could shorten or eliminate an extended patent term awarded under Patent Term Adjustment (“PTA”) in certain patent family members if challenged on the basis of Obvious-Type Double Patenting. Furthermore, the U.S. Supreme Court and Federal Circuits have repeatedly held that the use of biomarkers in diagnosis or monitoring therapeutic treatment is not patent eligible.
MSN Laboratories that could shorten or eliminate an extended patent term awarded under Patent Term Adjustment (“PTA”) in certain patent family members if challenged on the basis of Obvious-Type Double Patenting. Furthermore, the U.S. Supreme Court and Federal Circuits have repeatedly held that the use of biomarkers in diagnosis or monitoring therapeutic treatment is not patent eligible.
Consequently, we may not be able to prevent third parties from using our technology that is in the public domain. Composition of matter patents for biological and pharmaceutical product candidates often provide a strong form of intellectual property protection for those types of products, as such patents provide protection without regard to any method of use.
Consequently, we may not be able to prevent third parties from using our technology that is in the public domain. 95 Table of Contents Composition of matter patents for biological and pharmaceutical product candidates often provide a strong form of intellectual property protection for those types of products, as such patents provide protection without regard to any method of use.
As a result, our results of operations and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed. If any of our relationships with these third parties terminate, we may not be able to enter into alternative arrangements or do so on commercially reasonable terms.
As a result, our results of operations and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed. 123 Table of Contents If any of our relationships with these third parties terminate, we may not be able to enter into alternative arrangements or do so on commercially reasonable terms.
Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities. We rely on third-party service providers and technologies to operate critical business systems to process sensitive information in a variety of contexts, including cloud-based infrastructure, encryption and authentication technology, employee email and other functions.
Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities. 93 Table of Contents We rely on third-party service providers and technologies to operate critical business systems to process sensitive information in a variety of contexts, including cloud-based infrastructure, encryption and authentication technology, employee email and other functions.
Regulatory authorities enforce these requirements through periodic inspections (including pre-approval inspections once a BLA is submitted to the FDA) of trial sponsors, clinical investigators, trial sites and certain third parties including CROs.
Regulatory authorities enforce these requirements through periodic inspections (including pre-approval inspections once a BLA or NDA is submitted to the FDA) of trial sponsors, clinical investigators, trial sites and certain third parties including CROs.
Collaborations are subject to numerous risks, which may include that: ● collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations; ● collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on trial or test results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; ● agreements with collaborators may not provide exclusive rights to use their intellectual property and technology in all relevant fields of use and in all territories in which we may wish to develop or commercialize our technology and product candidates in the future; ● collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates; ● a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; ● the grant of exclusive rights to our collaborators would prevent us from collaborating with others; ● collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or 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 liability; ● disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our future product candidates or that result in costly litigation or arbitration that diverts management attention and resources; ● collaborations may be terminated, and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable future product candidates; ● collaborators may own or co-own intellectual property covering our product candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; and ● a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.
Collaborations are subject to numerous risks, which may include that: ● collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations; ● collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on trial or test results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; ● agreements with collaborators may not provide exclusive rights to use their intellectual property and technology in all relevant fields of use and in all territories in which we may wish to develop or commercialize our technology and product candidates in the future; ● collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates; 80 Table of Contents ● a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; ● the integration of any business or assets, including the InnoCare programs, may be disruptive, complex, risky and costly; ● the grant of exclusive rights to our collaborators would prevent us from collaborating with others; ● collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or 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 liability; ● disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our future product candidates or that result in costly litigation or arbitration that diverts management attention and resources; ● collaborations may be terminated, and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable future product candidates; ● collaborators may own or co-own intellectual property covering our product candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; and ● a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.
Any disclosure 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.
Any disclosure 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. ​ 135 Table of Contents 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.
If reimbursement of our products, if approved, is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be materially harmed. We are subject to stringent and evolving U.S. and foreign laws, regulations, rules, contractual obligations, and policies related to data privacy and security.
If reimbursement of our products, if approved, is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be materially harmed. 116 Table of Contents We are subject to stringent and evolving U.S. and foreign laws, regulations, rules, contractual obligations, and policies related to data privacy and security.
As a result, capital appreciation, if any, of our common stock will be investors’ sole source of gain on an investment in our common stock in the foreseeable future. We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.
As a result, capital appreciation, if any, of our common stock will be investors’ sole source of gain on an investment in our common stock in the foreseeable future. 129 Table of Contents We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.
As a result, increasingly high barriers are being erected to the entry of new products. 73 Table of Contents We may not be able to obtain or maintain orphan drug designations for certain of our product candidates, and we may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity.
As a result, increasingly high barriers are being erected to the entry of new products. We may not be able to obtain or maintain orphan drug designations for certain of our product candidates, and we may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity.
Moreover, even if we obtain approval of our product candidates and ultimately commercialize our product candidates in foreign markets, we would be subject to the risks and uncertainties, including the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements and reduced protection of intellectual property rights in some foreign countries.
Moreover, even if we obtain approval of our product candidates and ultimately commercialize our product candidates in foreign markets, we would be subject to risks and uncertainties, including the changing trade policies and tariffs, burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements and reduced protection of intellectual property rights in some foreign countries.
Differences in trial design between early-stage clinical trials and later-stage clinical trials raise challenges for extrapolating the results of earlier clinical trials to later clinical trials. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unfavorable safety profiles, notwithstanding promising results in earlier trials.
Differences in trial design between early-stage clinical trials and later-stage clinical trials raise challenges for extrapolating the results of earlier clinical trials to later clinical trials. 73 Table of Contents A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unfavorable safety profiles, notwithstanding promising results in earlier trials.
If microbial, viral or other contaminations are discovered at our third-party manufacturers’ facilities, such facilities may need to be closed for an extended period of time to investigate and remedy the contamination, which could delay clinical trials and adversely affect our business.
If microbial, viral or other contaminations are discovered at our third-party manufacturers’ facilities, such facilities may need to be closed for an extended period of time to investigate and remedy the contamination, which could delay clinical trials or the availability of commercial supply and adversely affect our business.
Because of this reliance, we have less control over the timing, quality and other aspects of preclinical studies 106 Table of Contents and clinical trials than if we conduct them ourselves. Third parties are not our employees and we have limited control over the amount of time and resources that they dedicate to our programs.
Because of this reliance, we have less control over the timing, quality and other aspects of preclinical studies and clinical trials than if we conduct them ourselves. Third parties are not our employees and we have limited control over the amount of time and resources that they dedicate to our programs.
Coverage and adequate reimbursement in the U.S. or elsewhere may not be available for any product that we may develop, and any coverage or reimbursement that may be obtained could be reduced or eliminated in the future. There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved products.
Coverage and adequate reimbursement in the U.S. or elsewhere may not be available for any product that we may develop, and any coverage or reimbursement that may be obtained could be reduced or eliminated in the future. 83 Table of Contents There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved products.
In the Phase 1 pharmacokinetic (“PK”) and relative bioavailability study of obexelimab administered either intravenously or subcutaneously, the most common related treatment emergent adverse events (“TEAEs”) across all SC dose regimens were headache and injection site reactions. GI-related events seen with IV infusions were not observed in subjects who received SC formulation, but future studies may reveal similar issues.
In the Phase 1 PK and relative bioavailability study of obexelimab administered either intravenously or subcutaneously, the most common related treatment emergent adverse events across all SC dose regimens were headache and injection site reactions. GI-related events seen with IV infusions were not observed in subjects who received SC formulation, but future studies may reveal similar issues.
The degree of market acceptance of any of our product candidates will depend on a number of factors, some of which are beyond our control, including: ● the safety, efficacy, tolerability and ease of administration of our product candidates; ● the prevalence and severity of side effects and AEs associated with our product candidates, and how the safety and tolerability profile of our product candidates compares to those of existing or emerging therapies; ● the clinical indications for which the products are approved and the approved claims that we may make for the products; ● limitations or warnings contained in the product’s FDA-approved labeling, including potential limitations or warnings that may be more restrictive than competitive products; ● distribution and use restrictions imposed by the FDA with respect to such product candidates or to which we agree as part of a mandatory REMS or voluntary risk management plan; ● changes in the standard of care for the targeted indications for such product candidates; ● cost of treatment as compared to the clinical benefit in relation to alternative treatments or therapies; ● the availability of adequate coverage and reimbursement by third parties, such as insurance companies and other healthcare payors, and by government healthcare programs, including Medicare and Medicaid; 78 Table of Contents ● the extent and strength of our marketing and distribution of such product candidates; ● the safety, efficacy and other potential advantages of, and availability of, alternative treatments already used or that may later be approved for any of our intended indications; ● the timing of market introduction of such product candidates, as well as competitive products; ● the reluctance of physicians to switch their patients’ current standard of care; ● the reluctance of patients to switch from their existing therapy regardless of the safety and efficacy of newer products; ● our ability to offer such product candidates for sale at competitive prices; ● the extent and strength of our third-party manufacturer and supplier support; ● adverse publicity about our product or favorable publicity about competitive products; and ● potential product liability claims.
The degree of market acceptance of any of our product candidates will depend on a number of factors, some of which are beyond our control, including: ● the safety, efficacy, tolerability and ease of administration of our product candidates; ● the prevalence and severity of side effects and AEs associated with our product candidates, and how the safety and tolerability profile of our product candidates compares to those of existing or emerging therapies; ● the clinical indications for which the products are approved and the approved claims that we may make for the products; ● limitations or warnings contained in the product’s FDA-approved labeling, including potential limitations or warnings that may be more restrictive than competitive products; ● distribution and use restrictions imposed by the FDA with respect to such product candidates or to which we agree as part of a mandatory REMS or voluntary risk management plan; ● changes in the standard of care for the targeted indications for such product candidates; ● cost of treatment as compared to the clinical benefit in relation to alternative treatments or therapies; ● the availability of adequate coverage and reimbursement by third parties, such as insurance companies and other healthcare payors, and by government healthcare programs, including Medicare and Medicaid; ● the extent and strength of our marketing and distribution of such product candidates; ● the safety, efficacy and other potential advantages of, and availability of, alternative treatments already used or that may later be approved for any of our intended indications; ● the timing of market introduction of such product candidates, as well as competitive products; ● the reluctance of physicians to switch their patients’ current standard of care; ● the reluctance of patients to switch from their existing therapy regardless of the safety and efficacy of newer products; ● our ability to offer such product candidates for sale at competitive prices; ● the extent and strength of our third-party manufacturer and supplier support; ● adverse publicity about our product or favorable publicity about competitive products; and ● potential product liability claims. 90 Table of Contents Our efforts to educate the medical community and third-party payors as to the benefits of our product candidates may require significant resources and may never be successful.
As a result, the issuance, inventorship, scope, validity, enforceability and commercial value of our or our licensors’ patent rights are highly uncertain. 84 Table of Contents The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability and our or our licensors’ pending patent applications may be challenged in patent offices in the U.S. and abroad.
As a result, the issuance, inventorship, scope, validity, enforceability and commercial value of our or our licensors’ patent rights are highly uncertain. The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability and our or our licensors’ pending patent applications may be challenged in patent offices in the U.S. and abroad.
It is possible that none of our product candidates will obtain the regulatory approvals necessary for us to begin selling them. Our company has no prior experience in conducting and managing the clinical trials necessary to obtain regulatory approvals, including approval by the FDA.
It is possible that none of our product candidates will obtain the regulatory approvals necessary for us to begin selling them. 110 Table of Contents Our company has no prior experience in conducting and managing the clinical trials necessary to obtain regulatory approvals, including approval by the FDA.
For additional information on risks related to our current reliance on a sole manufacturer, please see “— Risks Related to Our Reliance on Third Parties — We currently rely on a single third-party manufacturer, WuXi Biologics, to supply our product candidates, including certain drug substances and drug products used in our product candidates.
For additional information on risks related to our current reliance on a sole manufacturer, please see “— Risks Related to Our Reliance on Third Parties — We currently rely on a single third-party manufacturer, WuXi Biologics, and our collaboration partner, InnoCare, to supply our product candidates, including certain drug substances and drug products used in our product candidates.
As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty of any litigation in the UPC. We may become subject to claims challenging the inventorship or ownership of our or our licensors’ patents and other intellectual property.
As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty of any litigation in the UPC. ​ 105 Table of Contents We may become subject to claims challenging the inventorship or ownership of our or our licensors’ patents and other intellectual property.
See “Special Note Regarding Forward-Looking Statements.” Risks Related to Our Financial Position and Need for Capital We are a clinical stage biopharma company with a limited operating history and no products approved for commercial sale; we have incurred substantial losses since our inception, and we anticipate incurring substantial and increasing losses for the foreseeable future.
See “Special Note Regarding Forward-Looking Statements.” 68 Table of Contents Risks Related to Our Financial Position and Need for Capital We are a clinical stage biopharma company with a limited operating history and no products approved for commercial sale; we have incurred substantial losses since our inception, and we anticipate incurring substantial and increasing losses for the foreseeable future.
Many potential product candidates developed in the biotechnology industry that initially showed promise in early-stage trials have later been found to cause side effects that prevented their further development and 66 Table of Contents approval. Even if side effects do not preclude the product candidate from obtaining or maintaining marketing approval, undesirable side effects may inhibit market acceptance.
Many potential product candidates developed in the biotechnology industry that initially showed promise in early-stage trials have later been found to cause side effects that prevented their further development and approval. Even if side effects do not preclude the product candidate from obtaining or maintaining marketing approval, undesirable side effects may inhibit market acceptance.
Please see “—Risks Related to Our Reliance on Third Parties—The operations of our suppliers, many of which are located outside of the U.S., including our current sole CMO for drug substance and drug product, WuXi Biologics, which is located in China, are subject to additional risks that are beyond our control and that could harm our business, financial condition, results of operations and prospects.” Furthermore, any of the sole source and limited source suppliers upon whom we rely could stop producing our supplies, cease operations or be acquired by, or enter into exclusive arrangements with, our competitors.
Please see “—Risks Related to Our Reliance on Third Parties—The operations of our suppliers, many of which are located outside of the U.S., including our current sole CMO for obexelimab drug substance and drug product, WuXi Biologics, and our collaboration partner, InnoCare, both of which are located in China, are subject to additional risks that are beyond our control and that could harm our business, financial condition, results of operations and prospects.” Furthermore, any of the sole source and limited source suppliers upon whom we rely could stop producing our supplies, cease operations or be acquired by, or enter into exclusive arrangements with, our competitors.
We have never declared or paid any cash dividends on our common stock. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash 112 Table of Contents dividends in the foreseeable future.
We have never declared or paid any cash dividends on our common stock. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends in the foreseeable future.
If we are not able to attract, integrate, retain and motivate personnel 76 Table of Contents necessary to accomplish our business objectives, we may experience constraints that significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.
If we are not able to attract, integrate, retain and motivate personnel necessary to accomplish our business objectives, we may experience constraints that significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.
If 92 Table of Contents we fail to defend any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could adversely affect our business.
If we fail to defend any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could adversely affect our business.
Any significant spending reductions 99 Table of Contents affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented and/or any significant taxes or fees that may be imposed on us could have an adverse impact on our results of operations.
Any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented and/or any significant taxes or fees that may be imposed on us could have an adverse impact on our results of operations.
In the U.S., federal, state, and local governments have enacted numerous data privacy and security laws, 101 Table of Contents including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).
In the U.S., federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).
Although we have not experienced any significant disruption as a result of our reliance on limited or sole source suppliers, we have a limited 105 Table of Contents operating history and we could experience disruptions in our supply chain in the future as a result of such reliance or otherwise.
Although we have not experienced any significant disruption as a result of our reliance on limited or sole source suppliers, we have a limited operating history and we could experience disruptions in our supply chain in the future as a result of such reliance or otherwise.
Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, we expect these rules and regulations to substantially increase our legal and financial compliance costs and to make some activities more time consuming and costly.
Our management and other personnel will continue to need to devote a substantial amount of time to these compliance initiatives. Moreover, we expect these rules and regulations have and we expect them to continue to substantially increase our legal and financial compliance costs and to make some activities more time consuming and costly.
Even after the submission of an IND or BLA, the FDA or comparable foreign regulatory authorities could disagree that their requirements to commence a clinical trial have been satisfied or disagree with the study design, which may require the completion of additional trials or the amendment of the 63 Table of Contents trial’s protocols or the imposition of stricter conditions on the commencement of the clinical trial.
Even after the submission of an IND, the FDA or comparable foreign regulatory authorities could disagree that their requirements to commence a clinical trial have been satisfied or disagree with the study design, which may require the completion of additional trials or the amendment of the trial’s protocols or the imposition of stricter conditions on the commencement of the clinical trial.
For example, the federal government, including the FDA, may implement legislative, regulatory, or policy changes regarding the standards for approving biologic products that we may be unable to satisfy. It is difficult to predict how executive actions that may be taken under the current Trump administration may affect the FDA’s ability to exercise its regulatory authority.
For example, the federal government, including the FDA, may implement legislative, regulatory, or policy changes regarding the standards for approving drug or biologic products that we may be unable to satisfy. It is difficult to predict how future executive actions that may be taken under the current presidential administration may affect the FDA’s ability to exercise its regulatory authority.
Delays and increased costs in our clinical development programs would harm our business, financial condition, results of operations and prospects. Delays or difficulties in the enrollment and dosing of patients in clinical trials, delay or prevent receipt of necessary regulatory approvals.
Delays and increased costs in our clinical development programs would harm our business, financial condition, results of operations and prospects. 75 Table of Contents Delays or difficulties in the enrollment and dosing of patients in clinical trials, delay or prevent receipt of necessary regulatory approvals.
Even if we successfully develop a product candidate and it receives marketing approval, the FDA could require us to adopt a Risk Evaluation and Mitigation Strategy (“REMS”) to ensure that the benefits of treatment outweigh the risks for each potential patient, which may include, among other things, a medication guide outlining the risks of the product for distribution to patients, a communication plan to healthcare practitioners, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive, and more costly than what is typical for the industry.
Even if we successfully develop a product candidate and it receives marketing approval, the FDA could require us to adopt a REMS to ensure that the benefits of treatment outweigh the risks for each potential patient, which may include, among other things, a medication guide outlining the risks of the product for distribution to patients, a communication plan to healthcare practitioners, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive, and more costly than what is typical for the industry.
As a result, the top-line or preliminary results may differ from 68 Table of Contents future results of the same studies or trials, or different conclusions or considerations may qualify such results once additional data have been received and fully evaluated.
As a result, the top-line or preliminary results may differ from future results of the same studies or trials, or different conclusions or considerations may qualify such results once additional data have been received and fully evaluated.
For example, there may be prior art not considered by the patent office that is raised by a third party to challenge the validity of any patents that issue 86 Table of Contents from our or our licensors' patent applications.
For example, there may be prior art not considered by the patent office that is raised by a third party to challenge the validity of any patents that issue from our or our licensors' patent applications.
We will need to grow our organization, and we may experience difficulties in managing our growth and expanding our operations, which could adversely affect our business. As our development and commercialization plans and strategies develop, and as we transition into operating as a public company, we expect to expand our employee base for managerial, operational, financial and other resources.
We will need to grow our organization, and we may experience difficulties in managing our growth and expanding our operations, which could adversely affect our business. As our development and commercialization plans and strategies develop, and as we continue operating as a public company, we expect to expand our employee base for managerial, operational, financial, commercial and other resources.
We may choose to challenge a third party’s patent in patent opposition proceedings in the European Patent Office (“EPO”), or other foreign patent office. The costs of these 90 Table of Contents opposition proceedings could be substantial and may consume our time or other resources.
We may choose to challenge a third party’s patent in patent opposition proceedings in the European Patent Office (“EPO”), or other foreign patent office. The costs of these opposition proceedings could be substantial and may consume our time or other resources.
We seek to protect our proprietary position by filing and licensing patent applications in the U.S. and abroad related to our novel discoveries and technologies that are important to our business. 83 Table of Contents Although we in-license issued patents, we do not own any issued patents and our pending and future patent applications may not result in patents being issued.
We seek to protect our proprietary position by filing and licensing patent applications in the U.S. and abroad related to our novel discoveries and technologies that are important to our business. Although we in-license issued patents, we do not own any issued patents and our pending and future patent applications may not result in patents being issued.
For example, while we have selected new CMOs in the U.S. to establish additional sources of supply, currently we import from China certain drug substance, drug product and 104 Table of Contents other components, and such imports are subject to existing tariffs and may be impacted by additional tariffs.
For example, while we have selected new CMOs in the U.S. to establish additional sources of supply for obexelimab, currently we import from China certain drug substance, drug product and other components, and such imports are subject to existing tariffs and may be impacted by additional tariffs.
We might be required to litigate or obtain licenses from third parties in order to develop or market obexelimab or future product candidates. Such litigation or licenses could be costly or not available on commercially reasonable terms.
We might be required to litigate or obtain licenses from third parties in order to develop or market our current or future product candidates. Such litigation or licenses could be costly or not available on commercially reasonable terms.
The Budget Control Act, as amended, resulted in the imposition of reductions in Medicare (but not Medicaid) payments to providers in 2013 that remain in effect through 2032 unless additional Congressional action is taken.
As another example, the Budget Control Act resulted in the imposition of reductions in Medicare (but not Medicaid) payments to providers in 2013 that remain in effect through 2032 unless additional Congressional action is taken.
Kite , the Federal Circuit held broad antibody claims supported by few examples invalid for lack of written description. Recently, the Federal Circuit issued precedential decisions in In re Cellect (No. 22-1293) and Allergan v.
Kite , the Federal Circuit held broad antibody claims supported by few examples invalid for lack of written description. Recently, the Federal Circuit issued precedential decisions in In re Cellect and Allergan v.
In addition to experiencing a security incident, third parties may gather, collect or infer sensitive information 81 Table of Contents about us from public sources, data brokers or other means that reveals competitively sensitive details about our organization and could be used against us.
In addition to experiencing a security incident, third parties may gather, collect or infer sensitive information about us from public sources, data brokers or other means that reveals competitively sensitive details about our organization and could be used against us.
If any future prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting 98 Table of Contents their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
If the current government shutdown continues or any future prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe individual currently serving in the role of Executive Director of IT has over thirty years of experience in cybersecurity, information security, data protection, privacy, regulatory compliance and risk management within complex and international business verticals such as pharmaceutical/biotech, technology, semiconductor and telecom.
Biggest changeThe Head of IT, reporting to our Chief Human Resources Officer, has over thirty years of experience in cybersecurity, information security, data protection, privacy, regulatory compliance and risk management within complex and international pharmaceutical and biotech companies. The Head of IT provides periodic cybersecurity updates to the Audit Committee and our Board of Directors on at least an annual basis.
Our practice is to perform due diligence, including the completion of security questionnaires and risk assessments, as appropriate, on third parties who maintain material data or information to help us evaluate and verify third party information security capabilities. ​ Our process designed to detect and respond to cybersecurity incidents that may represent a threat to the confidentiality, integrity or availability of our information assets is based on industry standards and best practices of peer companies.
Our practice is to perform due diligence, including the completion of security questionnaires and risk assessments, as appropriate, on third-parties who maintain material data or information to help us evaluate and verify third-party information security capabilities. ​ ​ 137 Table of Contents Our process is designed to detect and respond to cybersecurity incidents that may represent a threat to the confidentiality, integrity or availability of our information assets is based on industry standards and best practices of peer companies.
In addition, we have implemented a cybersecurity third party risk management process to assess mission and business critical third parties for cyber risks and to assist the business in making risk-informed technology product and services decisions.
In addition, we have implemented a cybersecurity third-party risk management process to assess mission and business critical third-party vendors for cyber risks and to assist the business in making risk-informed technology product and services decisions.
We have not identified risks from known cybersecurity threats or past incidents that have materially affected or are reasonably likely to materially affect us. ​ 117 Table of Contents For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part 1. Item 1A.
We have not identified risks from known cybersecurity threats or past incidents that have materially affected or are reasonably likely to materially affect us. ​ For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part 1. Item 1A.
Our Audit Committee has specific oversight of risk management, including risks from cybersecurity threats. ​ Our Executive Director of IT is responsible for developing, implementing, and maintaining our cybersecurity risk management policies and procedures.
Our Audit Committee has specific oversight of risk management, including risks from cybersecurity threats. ​ Our Head of IT is responsible for developing, implementing, and maintaining our cybersecurity risk management policies and procedures.
Our technology, procedures and key vendors with security responsibilities are designed to help contain, eradicate and recover from cybersecurity incidents in a timely manner. Senior management is informed about incidents that may have a significant impact on the business. Incidents are reviewed once they are resolved, and policies and controls are updated to help mitigate gaps.
Our technology, procedures and key vendors with security responsibilities are designed to help contain, eradicate and recover from cybersecurity incidents in a timely manner. Senior management is informed about incidents that may have a significant impact on the business. Cybersecurity risks are reviewed by management through cross-functional collaboration among IT, Legal and Finance, with oversight by the Audit Committee.
The Executive Director of IT reports to our Chief Human Resources Officer and provides periodic cybersecurity updates to the Audit Committee of our Board of Directors on at least an annual basis. Our incident response process contemplates that the executive team will notify the Audit Committee of our Board of Directors of any material cybersecurity incident. ​
Our incident response process contemplates that the executive team will notify the Audit Committee of our Board of Directors of any material cybersecurity incident. ​
Item 1C. Cyber Security ​ Risk Management and Strategy ​ We have developed and maintain an information security program designed to assess, identify, and manage risks from cybersecurity threats. As part of this program, we conduct periodic assessments of our assets to evaluate the effectiveness of applicable security controls.
As part of this program, we conduct periodic assessments of our assets to evaluate the effectiveness of applicable security controls.
Added
Item 1C. Cyber Security ​ Risk Management and Strategy ​ We use, store, and process data related to research programs, clinical trials, intellectual property, employees and third-party partners. We have developed and maintain an information security program designed to assess, identify, and manage risks from cybersecurity threats.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties ​ Our headquarters are located in Waltham, Massachusetts, and consists of 30,102 square feet of leased office space under a lease that expires on April 30, 2026. On June 28, 2022, we entered into a lease agreement for 5,127 square feet of office space in Shanghai, PRC.
Biggest changeItem 2. Properties ​ Our headquarters are located in Waltham, Massachusetts, and consists of 30,305 square feet of leased office space. In December 2025, we extended the Waltham lease, which expires on January 31, 2027. We also lease 5,127 square feet of office space in Shanghai, PRC, which expires on September 9, 2027.
On January 13, 2025, we extended the Shanghai lease, which expires on September 9, 2027. To meet future needs of our business, we may lease additional or alternate space and we believe suitable additional or alternate space will be available in the future on commercially reasonable terms. ​
To meet future needs of our business, we may lease additional or alternate space and we believe suitable additional or alternate space will be available in the future on commercially reasonable terms. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity and reputational harm and other factors. ​ Item 4. Mine Safety Disclosures Not applicable. ​ 118 Table of Contents PART II ​
Biggest changeRegardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity and reputational harm and other factors. ​ Item 4. Mine Safety Disclosures Not applicable. PART II ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePrior to that time, there was no public market for our common stock. ​ Holders of Record ​ As of February 28, 2025, we had approximately 53 holders of record of our common stock. Certain shares are held in “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.
Biggest changeCertain shares are held in “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.
LLC, Jefferies LLC, Citigroup Global Markets Inc. and Guggenheim Securities, LLC acted as underwriters for the IPO. ​ We received aggregate gross proceeds from our IPO of $258.7 million, or aggregate net proceeds of $234.3 million after deducting underwriting discounts, commissions and other offering costs.
LLC, Jefferies LLC (“Jefferies”), Citigroup Global Markets Inc. and Guggenheim Securities, LLC acted as underwriters for the IPO. ​ We received aggregate gross proceeds from our IPO of $258.7 million, or aggregate net proceeds of $234.3 million after deducting underwriting discounts, commissions and other offering costs.
The number of holders of record also does not include stockholders whose shares may be held in trust by other entities. ​ Dividend Policy ​ We have not paid cash dividends on our common stock and do not have a current intention to pay cash dividends, we continually review our capital allocation strategies, including, amount other things, payment of cash dividends, share repurchase and acquisitions. ​ Securities Authorized for Issuance Under Equity Compensation Plans ​ The information required by this item will be included in our proxy statement with respect to our 2025 Annual Meeting of Stockholders, which we intend to file with the SEC within 120 days after the end of our fiscal 2024 year ended and is incorporated herein by reference. ​ ​ Use of Proceeds from our Initial Public Offering ​ On September 16, 2024, the Company completed its IPO, in which the Company issued and sold 15,220,588 shares of its common stock, including 1,985,294 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares.
The number of holders of record also does not include stockholders whose shares may be held in trust by other entities. ​ Dividend Policy ​ We have not paid cash dividends on our common stock and do not have a current intention to pay cash dividends, we continually review our capital allocation strategies, including, amount other things, payment of cash dividends, share repurchase and acquisitions. ​ Securities Authorized for Issuance Under Equity Compensation Plans ​ The information required by this item will be included in our proxy statement with respect to our 2026 Annual Meeting of Stockholders, which we intend to file with the SEC within 120 days after the end of our fiscal 2025 year ended and is incorporated herein by reference. ​ Recent Sales of Unregistered Equity Securities ​ None ​ 139 Table of Contents Use of Proceeds from our Initial Public Offering ​ On September 16, 2024, the Company completed its IPO, in which the Company issued and sold 15,220,588 shares of its common stock, including 1,985,294 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares.
None of the underwriting discounts and commissions or other offering costs were incurred or paid, directly or indirectly, to directors or officers of ours or their associates or to persons owning 10% or more of our common stock or to any of our affiliates. ​ There has been no material change in the planned use of proceeds from the IPO from that described in the Prospectus. ​ ​ Item 6.
None of the underwriting discounts and commissions or other offering costs were incurred or paid, directly or indirectly, to directors or officers of ours or their associates or to persons owning 10% or more of our common stock or to any of our affiliates. ​ There has been no material change in the planned use of proceeds from the IPO from that described in the Prospectus. ​ Issuer Purchases of Equity Securities ​ We did not purchase any of our registered equity securities during the period from September 30, 2025 to December 31, 2025.
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Prior to that time, there was no public market for our common stock. ​ 138 Table of Contents Holders of Record ​ As of February 28, 2026, we had approximately 58 holders of record of our common stock.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. Reserved 119 ​ ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 120 ​ ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk 133 ​ ​ Item 8. Financial Statements and Supplementary Data 134 ​ ​
Biggest changeItem 6. Reserved 140 ​ ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 140 ​ ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk 159 ​ ​ Item 8. Financial Statements and Supplementary Data 159 ​ ​

Item 7. Management's Discussion & Analysis

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

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Biggest changeFood and Drug Administration (“FDA”), or any comparable foreign regulatory authority; ● the timing, receipt and terms of any marketing approvals from applicable regulatory authorities; ● our ability to establish new licensing or collaboration arrangements; ● the performance of our future collaborators, if any; ● our ability to establish and maintain arrangements with third-party manufacturers for the commercial supply of products that receive marketing approval, if any; ● development and timely delivery of commercial-grade drug formulations that can be used in our planned clinical trials and for commercialization; ● obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights; ● our ability to hire additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, chemistry, manufacturing and controls (“CMC”), quality and commercial personnel; ● commercializing product candidates, if approved, whether alone or in collaboration with others; ● the costs and timing of establishing or securing sales and marketing capabilities for our product candidates if 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; and ● maintaining a continued acceptable safety profile of the product candidates following approval.
Biggest changeThis is due to the numerous risks and uncertainties associated with product development, including the uncertainty of: ● the scope, timing and progress of our ongoing clinical studies and other research and development activities associated with the development of our current and future product candidates; ● the number and scope of preclinical and clinical programs we decide to pursue; ● our ability to maintain our current research and development programs and to establish new programs; ● the timing of and successful patient enrollment in, and the initiation and completion of, clinical trials; ● the successful completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA, or any comparable foreign regulatory authority; ● the timing, receipt and terms of any marketing approvals from applicable regulatory authorities; ● our ability to establish new licensing or collaboration arrangements; ● the performance of our future collaborators, if any; ● our ability to establish and maintain arrangements with third-party manufacturers for the commercial supply of products that receive marketing approval, if any; ● development and timely delivery of commercial-grade drug formulations that can be used in our planned clinical trials and for commercialization; ● obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights; ● our ability to hire additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, chemistry, manufacturing and controls, quality and commercial personnel; ● commercializing product candidates, if approved, whether alone or in collaboration with others; ● the costs and timing of establishing or securing sales and marketing capabilities for our product candidates if approved; 147 Table of Contents ● the imposition of new laws and regulations, including those relating to labor conditions and safety standards, information and data transfer, imports, duties, taxes, and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds, particularly new or increased tariffs imposed on imports, and as a result supply-related costs, from countries where our suppliers operate, as well as tariffs that impact the biopharmaceutical industry generally; ● 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; and ● maintaining a continued acceptable safety profile of the product candidates following approval.
Further, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans. We have no products approved for commercial sale and have not generated any product revenues from product sales to date.
Further, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans. We have no products approved for commercial sale and have not generated any revenues from product sales to date.
We anticipate that we will continue to incur significant losses for at least the next several years. We expect our research and development, general and administrative expenses will continue to increase.
We anticipate that we will continue to incur significant losses for at least the next several years. We expect our research and development, and general and administrative expenses will continue to increase.
Net Cash Used in Investing Activities Net cash used in investing activities for the year ended December 31, 2024 was $30.6 million and was due to the purchase of $36.4 million of investments, partially offset by $6.0 million in proceeds from the maturities of investments.
Net cash used in investing activities for the year ended December 31, 2024 was $30.6 million and was due to the purchase of $36.4 million of investments, partially offset by $6.0 million in proceeds from the maturities of investments.
Net Cash Provided by Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 was $413.0 million, resulting from $178.4 million in net proceeds received from the issuance and sale of shares of our Series C Preferred Stock, proceeds of $240.6 million from our IPO, net of underwriting discounts and commissions, and $0.3 million of proceeds received from the exercise of stock options, partially offset by a $6.3 million payment of offering costs related to our IPO.
Net cash provided by financing activities for the year ended December 31, 2024 was $413.0 million, resulting from $178.4 million in net proceeds received from the issuance and sale of shares of our Series C Preferred Stock, proceeds of $240.6 million from our IPO, net of underwriting discounts and commissions, and $0.3 million of proceeds received from the exercise of stock options, partially offset by a $6.3 million payment of offering costs related to our IPO.
The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows and expense recognition. Payments under some of these contracts depend on factors out of our control, as such as the successful enrollment of patients and the completion of clinical trial milestones.
The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows and expense recognition. Payments under some of these contracts depend on factors out of our control such as the successful enrollment of patients and the completion of clinical trial milestones.
Our future funding requirements will depend on, and could increase significantly as a result of, many factors, including: ● the scope, timing, progress results and costs of our ongoing obexelimab clinical studies and other research and development activities associated with the development of our other and future product candidates; ● the costs, timing and outcome of regulatory review of product candidates; ● the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for any product candidates for which we receive marketing approval; ● the costs of establishing and maintaining arrangements with third-party manufacturers for the commercial supply of products that receive marketing approval, if any; ● the costs and timing of manufacturing for obexelimab and other product candidates, including commercial manufacturing at sufficient scale, if any product candidate is approved, including as a result of inflation, any supply chain issues or component shortages; ● the revenue, if any, received from commercial sale of our products, should any product candidates receive marketing approval; ● the cash requirements of any future acquisitions or discovery of product candidates; ● the cost and timing of attracting, hiring and retaining skilled personnel to support our operations and continued growth; ● the cost of implementing operational, financial and management systems; ● the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; 129 Table of Contents ● our ability to establish and maintain collaborations, strategic partnerships or marketing, distribution, licensing or other strategic arrangements with third parties on favorable terms, if at all; ● 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; ● the timing, receipt and amount of sales of, or milestone payments related to or royalties on, current or future product candidates, if any; and ● the costs associated with operating as a public company, including legal, accounting or other expenses in operating our business.
Our future funding requirements will depend on, and could increase significantly as a result of, many factors, including: ● the scope, timing, progress results and costs of our ongoing clinical studies and other research and development activities associated with the development of our other and future product candidates; ● the costs, timing and outcome of regulatory review of product candidates; ● the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for any product candidates for which we receive marketing approval; ● the costs of establishing and maintaining arrangements with third-party manufacturers for the commercial supply of products that receive marketing approval, if any; ● the costs and timing of manufacturing for obexelimab, orelabrutinib and other product candidates, including commercial manufacturing at sufficient scale, if any product candidate is approved, including as a result of inflation, any supply chain issues or component shortages; ● the revenue, if any, received from commercial sale of our products, should any product candidates receive marketing approval; ● the cash requirements of any future acquisitions or discovery of product candidates; ● the cost and timing of attracting, hiring and retaining skilled personnel to support our operations and continued growth; ● the cost of implementing operational, financial and management systems; ● the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; ● our ability to establish and maintain collaborations, strategic partnerships or marketing, distribution, licensing or other strategic arrangements with third parties on favorable terms, if at all; 152 Table of Contents ● 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; ● the timing, receipt and amount of sales of, or milestone payments related to or royalties on, current or future product candidates, if any; and ● the costs associated with operating as a public company, including legal, accounting or other expenses in operating our business.
Our primary uses of capital are, and we expect to continue to be, compensation and related expenses, third-party clinical research and development services, clinical costs, legal and other regulatory expenses and general overhead costs. We have based our estimates on assumptions that may prove to be incorrect, and we could use our capital resources sooner than we currently expect.
Our primary uses of capital are, and we expect to continue to be, third-party clinical research and development services, manufacturing costs, compensation and related expenses, legal and other regulatory expenses and general overhead costs. We have based our estimates on assumptions that may prove to be incorrect, and we could use our capital resources sooner than we currently expect.
If we raise additional funds through license, strategic alliances or collaboration arrangements in the future, we may have to relinquish valuable rights to our technologies, future revenue streams or drug candidates or grant licenses on terms that may not be favorable to us.
If we raise additional funds through licenses, strategic alliances or collaboration arrangements in the future, we may have to relinquish valuable rights to our technologies, future revenue streams or drug candidates, or grant licenses on terms that may not be favorable to us.
A change in the outcome of any of these or other variables with respect to the development of obexelimab or any other product candidate could significantly change the costs and timing associated with our operating plans.
A change in the outcome of any of these or other variables with respect to the development of obexelimab, orelabrutinib or any other product candidate could significantly change the costs and timing associated with our operating plans.
On September 16, 2024, we completed our IPO in which we issued and sold an aggregate of 15,220,588 shares of our common stock, including 1,985,294 shares of common stock sold pursuant to the full exercise of the underwriter’s option to purchase additional shares, at a public offering price of $17.00 per share, for aggregate gross proceeds of $258.7 million.
In September 2024, we completed our IPO in which we issued and sold an aggregate of 15,220,588 shares of our common stock, including 1,985,294 shares of common stock sold pursuant to the full exercise of the underwriter’s option to purchase additional shares, at a public offering price of $17.00 per share, for aggregate gross proceeds of $258.7 million.
We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies. Therefore, the reported results of operations contained in our financial statements may not be directly comparable to those of other public companies.
We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted. Therefore, the reported results of operations contained in our financial statements may not be directly comparable to those of other public companies.
Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financing and additional funding from license, strategic alliances and collaboration arrangements.
Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financing and additional funding from licenses, strategic alliances and collaboration arrangements.
On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experiences.
On an ongoing basis, we evaluate our judgments, assumptions and estimates in light of changes in circumstances, facts and experiences.
We anticipate that our general and administrative expenses will increase in the next few years as we increase our headcount to support our continued research and development activities of our product candidates. These increases will likely include 125 Table of Contents increased costs related to the hiring of additional personnel and fees to outside consultants, among other expenses.
We anticipate that our general and administrative expenses will increase in the next few years as we increase our headcount to support our continued research and development activities of our product candidates. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, among other expenses.
Based on existing clinical data generated to date, we believe that targeting B cell lineage via CD19 and FcγRIIb can inhibit B cells and has been shown to be well-tolerated. We are developing obexelimab as a potential I&I franchise for patients in several autoimmune diseases, representing substantial commercial opportunities individually and in the aggregate.
Based on existing clinical data generated to date, we believe that targeting B cell lineage via CD19 and FcγRIIb can inhibit B cells and has been shown to be well-tolerated. 140 Table of Contents We are developing obexelimab as a potential I&I franchise for patients in several autoimmune diseases, representing substantial commercial opportunities individually and in the aggregate.
In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual 132 Table of Contents accordingly.
In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual accordingly.
With the evolving understanding of the pathogenesis of autoimmune diseases, along with the expansion of promising immunology-based pharmacologic targets, we are building an immunology and inflammation (“I&I”) focused biopharmaceutical company. Our core business strategy combines disciplined product candidate acquisition with strategic deployment of internal expertise and effective use of external resources.
With the evolving understanding of the pathogenesis of autoimmune diseases, along with the expansion of promising immunology-based pharmacologic targets, we are building an I&I focused biopharmaceutical company. Our core business strategy combines disciplined product candidate acquisition with strategic deployment of internal expertise and effective use of external resources.
GAAP”), requires us to make judgments, assumptions and estimates that may affect the reported amounts of assets and liabilities, equity and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses during the reported periods.
The preparation of these consolidated financial statements requires us to make judgments, assumptions and estimates that may affect the reported amounts of assets and liabilities, equity and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses during the reported periods.
For example, if the FDA or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently anticipate would be required for the completion of clinical development, or if we experience significant delays in enrollment in any clinical trials following the FDA’s acceptance and clearance of an Investigational New Drug Application (“IND”), we could be required to expend significant additional financial resources and time to complete clinical development than we currently expect.
For example, if the FDA or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently anticipate would be required for the completion of clinical development, or if we experience significant delays in enrollment in any clinical trials following the FDA’s acceptance and clearance of an IND, we could be required to expend significant additional financial resources and time to complete clinical development than we currently expect.
We expect that our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly if and as we: ● continue clinical development of obexelimab and our other programs; ● advance our obexelimab program and our other product candidates through preclinical development and clinical trials; ● identify additional product candidates and acquire rights from third parties to those product candidates through licenses or acquisitions and conduct development activities, including preclinical studies and clinical trials; ● make royalty, milestone or other payments under current, and any future, license or collaboration agreements; ● procure the manufacturing of preclinical, clinical and commercial supply of our current or any future product candidates; ● seek marketing regulatory approvals for our current or any future product candidates that successfully complete clinical trials; ● commercialize our current or any future product candidates, if approved; ● take steps toward our goal of being an integrated biopharma company capable of supporting commercial activities, including establishing sales, marketing and distribution infrastructure; ● continue to develop, maintain and defend our intellectual property portfolio, including against third-party interference, infringement and other intellectual property claims, if any; ● seek to attract, hire and retain qualified clinical, scientific, operations and management personnel; ● add and maintain operational, financial and information management systems; ● attempt to address any competing therapies and market developments; ● experience delays in our preclinical studies, clinical trials or regulatory approval for our current or any future product candidates, including with respect to failed studies, inconclusive results, safety issues or other regulatory challenges; ● establish agreements with contract research organizations (“CROs”) and contract manufacturing organizations (“CMOs”), and ● incur additional costs associated with being a public company, including audit, legal, regulatory, and tax-related services associated with maintaining compliance with an exchange listing and the SEC requirements, director and officer insurance premiums and investor relations costs. 121 Table of Contents We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for a product candidate, and we cannot assure investors that we will ever generate significant revenue or profits.
We expect that our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly if and as we: ● continue clinical development of obexelimab, orelabrutinib and our other programs; ● advance our obexelimab and orelabrutinib programs and our other product candidates through preclinical development and clinical trials; ● identify additional product candidates and acquire rights from third parties to those product candidates through licenses or acquisitions and conduct development activities, including preclinical studies and clinical trials; ● make royalty, milestone or other payments under current, and any future, license or collaboration agreements; ● procure the manufacturing of preclinical, clinical and commercial supply of our current or any future product candidates; ● seek marketing regulatory approvals for our current or any future product candidates that successfully complete clinical trials; ● commercialize our current or any future product candidates, if approved; ● take steps toward our goal of being an integrated biopharma company capable of supporting commercial activities, including establishing sales, marketing and distribution infrastructure; ● continue to develop, maintain and defend our intellectual property portfolio, including against third-party interference, infringement and other intellectual property claims, if any; ● seek to attract, hire and retain qualified clinical, scientific, operations and management personnel; ● add and maintain operational, financial and information management systems; ● attempt to address any competing therapies and market developments; 143 Table of Contents ● experience delays in our preclinical studies, clinical trials or regulatory approval for our current or any future product candidates, including with respect to failed studies, inconclusive results, safety issues or other regulatory challenges; ● establish agreements with CROs and CMOs; and ● incur additional costs associated with being a public company, including audit, legal, regulatory, and tax-related services associated with maintaining compliance with an exchange listing and SEC requirements, director and officer insurance premiums and investor relations costs.
Research and Development Expenses Research and development expenses account for a significant portion of our operating expenses and consist primarily of external and internal costs incurred in connection with the preclinical and clinical development of obexelimab, ZB002, ZB004, ZB001 and ZB005, and include: Direct Costs: ● external research and development expenses incurred under agreements with CROs and consultants that conduct our clinical studies and other scientific development services; ● costs incurred under agreements with CMOs for manufacturing material for our preclinical studies and clinical trials; ● costs to obtain and maintain licenses to intellectual property, and related future payments should milestones described in those agreements be achieved; and 123 Table of Contents ● costs related to compliance with regulatory requirements.
Research and Development Expenses Research and development expenses account for a significant portion of our operating expenses and consist primarily of external and internal costs incurred in connection with the preclinical and clinical development of our product candidates and include: Direct Costs: ● external research and development expenses incurred under agreements with CROs and consultants that conduct our clinical studies and other scientific development services; ● costs incurred under agreements with CMOs for manufacturing material for our preclinical studies and clinical trials; ● costs to obtain and maintain licenses to intellectual property, and related future payments should milestones described in those agreements be achieved; and ● costs related to compliance with regulatory requirements.
Where we share costs with our collaboration partners, such as in our BMS Agreement, research and development expenses may include cost sharing reimbursements from our partner. Research and development activities are central to our business model.
Where we share costs with our collaboration partners, such as in our BMS Agreement, research and development expenses may include cost sharing reimbursements from our partners. 146 Table of Contents Research and development activities are central to our business model.
We may continue to be a smaller reporting company until the fiscal year following the determination that we no longer meet the requirements necessary to be considered a smaller reporting company.
We may continue to be a smaller reporting company until the fiscal year following the determination that we no longer meet the requirements necessary to be considered a smaller reporting company. 158 Table of Contents
As of December 31, 2024 and 2023, we were unable to estimate the timing or likelihood of achieving these milestones or generating future product sales. For additional information on our license and option agreements, please see Note 8, License and Option Agreements , to these consolidated financial statements.
As of December 31, 2025 and 2024, we were unable to estimate the timing or likelihood of achieving these milestones or generating future product sales. For additional information on our license and option agreements, for additional information, see Note 8, License Agreements to our consolidated financial statements included elsewhere in this Annual Report.
The increase of $12.6 million was primarily attributable to the following: ● a $8.8 million increase in personnel costs, including a $4.9 million increase in stock-based compensation expense, a $3.8 million increase in salary and benefit related expense, primarily due to an increase in headcount, and a $0.1 million increase in recruiting expense, partially offset by a $0.1 million decrease in external contractor expense; ● a $1.7 million increase in professional fees, including legal, audit and tax expenses, primarily attributable to operating as a public company; and ● a $1.6 million increase in other expenses, including insurance and other variable costs related to operating as a public company.
The increase of $23.6 million was primarily attributable to the following: ● a $17.1 million increase in personnel costs, including a $10.8 million increase in stock-based compensation expense, a $5.3 million increase in salary and benefit related expense, primarily due to an increase in headcount, a $0.8 million increase in recruiting expense, and a $0.2 million increase in external contractor expense and other personnel costs; ● a $4.2 million increase in professional fees, including legal, audit and tax expenses, primarily attributable to operating as a public company and business development efforts; and ● a $2.3 million increase in facilities and other expenses, including insurance and other variable costs related to operating as a public company.
Actual results may differ from these estimates under different assumptions or conditions. The effects of material revisions in estimates, if any, will be reflected in the consolidated financial statements prospectively from the date of change in estimates. Other significant accounting policies are outlined in Note 2, Summary of Significant Accounting Policies , to our consolidated financial statements.
Actual results may differ from these estimates under different assumptions or conditions. The effects of material revisions in estimates, if any, will be reflected in the consolidated financial statements prospectively from the date of change in estimates.
In addition, we hold the development and commercialization rights to one regional program, ZB001, and related programs, which were recently exclusively sublicensed to a partner in greater China.
We retain global rights for both assets. In addition, we hold the development and commercialization rights to one regional program, ZB001, and related programs, which were exclusively sublicensed to a partner in China, as discussed below.
Since inception, our operations have focused on research and development activities with respect to our product candidates as described above, as well as raising capital, business planning, organizing and staffing our company, establishing our intellectual property portfolio, establishing arrangements with third parties for the manufacture of our product candidates 120 Table of Contents and related raw materials, and providing general and administrative support for these operations.
In addition, we may be obligated to pay royalties on net sales at rates ranging from high-single digits to high-teens for orelabrutinib, and mid-single digits to mid-teens for the preclinical compounds. ​ 142 Table of Contents Since inception, our operations have focused on research and development activities with respect to our product candidates as described above, as well as raising capital, business planning, organizing and staffing our company, establishing our intellectual property portfolio, establishing arrangements with third parties for the manufacture of our product candidates and related raw materials, and providing general and administrative support for these operations.
Critical Accounting Policies and Significant Judgments and Estimates The preparation of our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S.
Critical Accounting Policies and Significant Judgments and Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).
We retain exclusive rights to commercialize the licensed products containing obexelimab outside of the BMS Territory. The revenue recognized to date pursuant to this arrangement relates to the license of obexelimab and the related technology transfer, which was recognized upon delivery of the license.
The revenue recognized to date pursuant to this arrangement relates to the license of obexelimab and the related technology transfer, which was recognized upon delivery of the license.
Acquired In-Process Research and Development Expenses We expense acquisition costs for assets purchased for use in research and development activities that have no alternative future use as in-process research and development (“IPR&D”) expense as of the acquisition date.
We will also incur pre-commercialization expenses to facilitate commercial readiness, as we prepare for a potential product candidate approval. Acquired In-Process Research and Development Expenses We expense acquisition costs for assets purchased for use in research and development activities that have no alternative future use as in-process research and development (“IPR&D”) expenses as of the acquisition date.
The increase of $79.1 million was primarily attributable to the following: ● a $69.1 million increase in costs related to the development of obexelimab, our lead product candidate, driven by a $36.6 million increase in manufacturing costs for clinical trial materials and also a $32.0 million increase clinical trial costs; ● a $4.1 million decrease in costs related to our other programs, including a $2.3 million decrease related to ZB002 and a $1.8 million decrease related to ZB004; and ● a $13.9 million increase in personnel costs, including a $9.5 million increase in salary and benefit related expense, primarily due to an increase in headcount, a $2.5 million increase in stock-based compensation expense, and a $1.9 million increase in external contractor expense and other personnel costs.
The increase of $29.0 million was primarily attributable to the following: ● a $10.0 million increase in costs related to the development of obexelimab, our lead product candidate, driven by a $13.1 million increase in clinical trial, development and regulatory costs, partially offset by a $3.1 million decrease in manufacturing costs for clinical trial materials; ● a $7.2 million increase in costs related to the development of orelabrutinib, a recently acquired product candidate, primarily driven by clinical trial and regulatory costs; ● a $6.6 million decrease in costs related to our partnered regional programs, including a $5.1 million decrease related to ZB005 and a $1.5 million decrease related to ZB001, as a result of transitioning these programs to Tenacia and Zai, respectively; and ● a $15.7 million increase in personnel costs, including a $10.3 million increase in salary and benefit related expense, primarily due to an increase in headcount, a $4.8 million increase in stock-based compensation expense, and a $0.6 million increase in external contractor expense and other personnel costs.
Although we do not expect our estimates to be materially different from amounts actually incurred, if our estimates of the status and timing of services performed differ from the actual status and timing of services performed, we may report amounts that are too high or too low in any particular period.
Although we do not expect our estimates to be materially different from amounts actually incurred, if our estimates of the status and timing of services performed differ from the actual status and timing of services performed, we may report amounts that are too high or too low in any particular period. ​ 157 Table of Contents Royalty Obligation We have entered into a royalty financing arrangement, which has been recognized as debt on our consolidated balance sheet.
Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. Our net losses for the years ended December 31, 2024 and 2023 were $157.0 million and $37.1 million, respectively. As of December 31, 2024, we had an accumulated deficit of $387.4 million.
We have incurred significant operating losses and negative cash flows since inception. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. Our net losses for the years ended December 31, 2025 and 2024 were $377.7 million and $157.0 million, respectively.
For additional information on our lease obligations, please see Note 6, Leases , to these consolidated financial statements. 131 Table of Contents License and Option Agreements We have entered into license agreements under which we may be obligated to make milestone and royalty payments, which are contingent upon future events, such as achieving certain development, regulatory, and commercial milestones or generating product sales.
License Agreements We have entered into license agreements under which we may be obligated to make milestone and royalty payments, which are contingent upon future events, such as achieving certain development, regulatory, and commercial milestones or generating product sales.
Through December 31, 2024, we have financed our operations primarily with the proceeds from the issuance of Preferred Stock and convertible notes, payments received from our license and collaboration agreement and from the sale of common stock in our IPO completed in September 2024. We have incurred significant operating losses and negative cash flows since inception.
Through December 31, 2025, we have financed our operations primarily with the proceeds from the issuance of convertible preferred stock, convertible notes, payments received under our license and collaboration agreements, and from the sale of common stock in our IPO completed in September 2024 as well as other public and private equity offerings.
Accrued Research and Development Expenses As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses.
Our assumptions, judgments and estimates relative to our critical accounting estimates have not differed materially from actual results. Accrued Research and Development Expenses As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses.
These costs may also be negatively impacted due to supply chain constraints, global geopolitical tensions, worsening macroeconomic conditions and employee availability and wage increases, which may result in additional stress on our working capital. We import from China drug product and other components for use in our clinical studies, and such products are subject to tariffs.
Our operating and labor costs and research and development costs may also be negatively impacted due to supply chain constraints, global geopolitical tensions, worsening macroeconomic conditions and employee availability and wage increases, which may result in additional stress on our working capital.
In addition, we are eligible to receive up to $86.0 million upon the achievement of certain future regulatory and commercial milestones.
As partial consideration for the Tenacia Agreement, we received a non-creditable, non-refundable upfront fee of $5.0 million from Tenacia. In addition, we are eligible to receive up to $86.0 million upon the achievement of certain future regulatory and commercial milestones.
See section titled “Liquidity and Capital Resources.” Significant Risks and Uncertainties The current inflationary environment may materially affect our business and operating results by increasing the costs of our clinical trial materials and supplies, driving the U.S. Federal Reserve system to increase interest rates, which in turn increase our overhead costs.
See section titled “Liquidity and Capital Resources.” 144 Table of Contents Significant Risks and Uncertainties The current geopolitical, trade, regulatory and economic environment, including, but not limited to imposition of new tariffs or increases in tariff rates and other trade measures, may materially affect our business and operating results by increasing the costs of our clinical trial materials and supplies, which in turn increase our overhead costs.
The first three indications we are pursuing include IgG4-RD through an ongoing registration-directed Phase 3 trial, RMS and SLE through ongoing Phase 2, double-blind, randomized, placebo-controlled trials, each of which are currently enrolling.
The first three indications we are pursuing include IgG4-RD through a registration-directed Phase 3 trial, which reported topline data in January 2026, RMS through an ongoing Phase 2, double-blind, randomized, placebo-controlled trial which reported topline data in October 2025 and SLE through an ongoing Phase 2, double-blind, randomized, placebo-controlled trial, for which we expect to report topline results, including biomarker data, in the fourth quarter 2026.
Additionally, we are subject to other challenges and risk specific to our business and our ability to execute on our strategy, as well as risks and uncertainties common to companies in the clinical stage biopharmaceutical industry. 122 Table of Contents Components of Our Results of Operations Revenue To date, we have no product candidates approved for commercial sale in any country, and we have not generated any revenues from the sale of products.
Additionally, we are subject to other challenges and risk specific to our business and our ability to execute on our strategy, as well as risks and uncertainties common to companies in the clinical stage biopharmaceutical industry.
Research and Development Expenses The following table summarizes our research and development expenses for each of the periods presented (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ Increase (Decrease) ​ ​ 2024 ​ 2023 ​ ​ $ Direct research and development expenses by program: ​ ​ ​ ​ ​ ​ ​ ​ ​ Obexelimab $ 94,563 $ 25,446 $ 69,117 Other programs (ZB002 & ZB004) ​ ​ 2,115 ​ ​ 6,242 ​ ​ (4,127) Partnered regional programs (ZB001 & ZB005) ​ ​ 6,737 ​ ​ 6,738 ​ ​ (1) Unallocated research and development expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel expenses (including stock-based compensation) ​ ​ 34,364 ​ ​ 20,458 ​ ​ 13,906 Other expenses ​ ​ 1,360 ​ ​ 1,149 ​ ​ 211 Total research and development expenses ​ $ 139,139 ​ $ 60,033 ​ $ 79,106 ​ 127 Table of Contents Research and development expenses were $139.1 million for the year ended December 31, 2024, compared to $60.0 million for the year ended December 31, 2023.
For the year ended December 31, 2024, we recognized revenue of $5.0 million, related to the upfront payment under the Tenacia Agreement. 149 Table of Contents Research and Development Expenses The following table summarizes our research and development expenses for each of the periods presented (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ 2025 ​ 2024 ​ ​ Increase (Decrease) Direct research and development expenses by program: ​ ​ ​ ​ ​ ​ ​ ​ ​ Obexelimab ​ ​ ​ $ 104,605 ​ ​ ​ $ 94,563 ​ ​ ​ $ 10,042 Orelabrutinib ​ ​ 7,208 ​ ​ — ​ ​ 7,208 Other programs (ZB002, ZB004, ZB021 & ZB022) ​ ​ 3,677 ​ ​ 2,115 ​ ​ 1,562 Partnered regional programs (ZB001 & ZB005) ​ ​ 159 ​ ​ 6,737 ​ ​ (6,578) Unallocated research and development expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel related expenses (including stock-based compensation) ​ ​ 50,089 ​ ​ 34,364 ​ ​ 15,725 Other expenses ​ ​ 2,325 ​ ​ 1,360 ​ ​ 965 Total research and development expenses ​ $ 168,063 ​ $ 139,139 ​ $ 28,924 ​ Research and development expenses were $168.1 million for the year ended December 31, 2025, compared to $139.1 million for the year ended December 31, 2024.
General and Administrative Expense The following table summarizes our general and administrative expenses for each of the periods presented (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ Increase ​ ​ 2024 ​ 2023 ​ ​ $ Personnel related expenses (including stock-based compensation) $ 18,613 $ 9,859 $ 8,754 Legal and professional fees ​ 6,318 ​ 4,626 ​ ​ 1,692 Facilities and supplies ​ 2,375 ​ 1,825 ​ ​ 550 Other expenses ​ 2,443 ​ 804 ​ ​ 1,639 Total general and administrative expenses ​ $ 29,749 ​ $ 17,114 ​ $ 12,635 ​ General and administrative expenses were $29.7 million for the year ended December 31, 2024, compared to $17.1 million for the year ended December 31, 2023.
General and Administrative Expenses The following table summarizes our general and administrative expenses for each of the periods presented (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ ​ 2025 ​ 2024 ​ ​ Increase (Decrease) Personnel related expenses (including stock-based compensation) ​ ​ ​ $ 36,556 ​ ​ ​ $ 19,421 ​ ​ ​ $ 17,135 Legal and professional fees ​ 10,474 ​ 6,318 ​ ​ 4,156 Facilities ​ 3,282 ​ 2,315 ​ ​ 967 Other expenses ​ 3,010 ​ 1,695 ​ ​ 1,315 Total general and administrative expenses ​ $ 53,322 ​ $ 29,749 ​ $ 23,573 ​ 150 Table of Contents General and administrative expenses were $53.3 million for the year ended December 31, 2025, compared to $29.7 million for the year ended December 31, 2024.
We expect to continue to incur significant and increasing losses for the foreseeable future.
As of December 31, 2025, we had an accumulated deficit of $765.1 million. We expect to continue to incur significant and increasing losses for the foreseeable future.
Rising interest rates could make it more difficult to obtain traditional financing on acceptable terms, if at all. Additionally, the ongoing recession risk together with the foregoing, could result in further economic uncertainty and volatility in the capital markets in the near term and, as a result could negatively affect our operations.
Additionally, the ongoing recession risk together with the foregoing, could result in further economic uncertainty and volatility in the capital markets in the near term and, as a result could negatively affect our operations. Furthermore, such economic conditions have produced downward pressure on share prices.
Recent Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2, Summary of Significant Accounting Policies, in our consolidated financial statements included elsewhere in this Annual Report.
Although we do not expect our estimates to be materially different from amounts currently assumed, they are based on long-term projection of cash flows, which are inherently uncertain and may change, and the impact could be material in future periods. ​ Recent Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2, Summary of Significant Accounting Policies, in our consolidated financial statements included elsewhere in this Annual Report.
Net cash used in operating activities for the year ended December 31, 2023 was $30.5 million, and was primarily due to our net loss of $37.1 million, adjusted for non-cash items including acquired in-process research and development expense related to a milestone payment of $10.0 million, stock-based compensation of $3.5 million and non-cash operating lease of $0.7 million, offset by a decrease in assets and liabilities of $8.0 million.
Net changes in our working capital during the year resulted in a $1.0 million cash inflow. ​ 155 Table of Contents Net cash used in operating activities for the year ended December 31, 2024 was $119.7 million, and was primarily due to our net loss of $157.0 million adjusted for non-cash charges principally related to stock-based compensation.
On October 21, 2024, we entered into the Novation Agreement with Tenacia, under which we transferred our rights and obligations under our agreements with Dianthus to Tenacia for ZB005. As partial consideration for the Tenacia Agreement, we received a non-creditable, non-refundable upfront fee of $5.0 million from Tenacia.
We received $234.3 million in net proceeds after deducting underwriting discounts, commissions and other offering costs. In October 2024, we entered into the Novation Agreement with Tenacia, under which we transferred our rights and obligations under our agreements with Dianthus to Tenacia for ZB005.
Payments due upon cancellation consist of payments for services provided or expenses incurred, including non-cancelable obligations of our service provided up to one year after the date of cancellation. As of December 31, 2024, our total clinical manufacturing contract payment obligations are $15.3 million of which the full obligation is payable within 12 months.
As of December 31, 2025, our total clinical manufacturing contract payment obligations are $17.7 million of which the full obligation is payable within 12 months.
Beyond our lead product candidate, obexelimab, we have two other programs for the potential treatment of other I&I indications that we may continue to advance and ultimately commercialize with partners. These consist of ZB002 and ZB004. We retain global rights for both assets.
Subject to the results of IND-enabling studies, we expect to submit an IND application for ZB022, and if cleared, initiate a Phase 1 clinical study in 2026. In addition, we have two other programs for the potential treatment of other I&I indications that we may continue to advance and ultimately commercialize with partners. These consist of ZB002 and ZB004.
For a more detailed description of this agreement, see Note 7, License and Collaboration Revenue , to our consolidated financial statements included elsewhere in this Annual Report. Operating Expenses Our operating expenses consist of (i) research and development expenses, (ii) general and administrative expenses and (iii) acquired in-process research and development expenses.
Operating Expenses Our operating expenses consist of (i) research and development expenses, (ii) general and administrative expenses and (iii) acquired in-process research and development expenses.
We have listed below our critical accounting estimates that we believe to have the greatest potential impact on our consolidated financial statements. Our assumptions, judgements and estimates relative to our critical accounting estimates have not differed materially from actual results.
Other significant accounting policies are outlined in Note 2, Summary of Significant Accounting Policies , to our consolidated financial statements included elsewhere in this Annual Report. We have listed below our critical accounting estimates that we believe to have the greatest potential impact on our consolidated financial statements.
Our revenue has been derived from collaboration arrangements and license fees. License and Collaboration Revenue License and collaboration revenue is generated from our Bristol-Myers Squibb (“BMS”) Agreement and our Tenacia Agreement. Pursuant to the BMS Agreement, we sublicensed the rights to develop and commercialize obexelimab in Japan, South Korea, Taiwan, Singapore, Hong Kong and Australia (the “BMS Territory”).
License and Collaboration Revenue License and collaboration revenue is generated from our BMS Agreement, our Tenacia Agreement and our Zai License Agreement. Pursuant to the BMS Agreement, we sublicensed the rights to develop and commercialize obexelimab in the BMS Territory. We retain exclusive rights to commercialize the licensed products containing obexelimab outside of the BMS Territory.
If we are unable to raise funds through equity or debt financings when needed, we may be required to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to develop and market drug candidates that we would otherwise prefer to develop and market ourselves. 130 Table of Contents Cash Flows The following table provides information regarding our cash flows for each of the periods presented (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ ​ 2024 ​ 2023 Net cash used in operating activities $ (119,674) $ (30,529) Net cash used in investing activities ​ (30,552) ​ (17) Net cash provided by financing activities ​ 412,958 ​ 20,116 Effect of exchange rate changes on cash and restricted cash ​ 157 ​ 78 Net increase (decrease) in cash, cash equivalents and restricted cash ​ $ 262,889 ​ $ (10,352) ​ Net Cash Used in Operating Activities Net cash used in operating activities for the year ended December 31, 2024 was $119.7 million, and was primarily due to our net loss of $157.0 million adjusted for non-cash items including stock-based compensation of $10.8 million, an investment accretion of $0.6 million and non-cash operating lease of $0.7 million, and an increase in assets and liabilities of $25.3 million.
Cash Flows The following table provides information regarding our cash flows for each of the periods presented (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2025 ​ 2024 ​ Net cash used in operating activities ​ ​ $ (172,333) ​ ​ $ (119,674) ​ Net cash used in investing activities ​ (251,886) ​ (30,552) ​ Net cash provided by financing activities ​ 215,280 ​ 412,958 ​ Effect of exchange rate changes on cash and restricted cash ​ (252) ​ 157 ​ Net (decrease) increase in cash, cash equivalents and restricted cash ​ $ (209,191) ​ $ 262,889 ​ ​ Net Cash Used in Operating Activities Net cash used in operating activities for the year ended December 31, 2025 was $172.3 million, and was primarily due to our net loss of $377.7 million, which included non-cash charges principally related to the InnoCare license agreement, stock-based compensation and interest charges on our agreement with Royalty Pharma.
Income Taxes Since our inception, we have not recorded income tax benefits for any of our deferred tax assets, including the net operating losses (“NOLs”) incurred or the research and development tax credits generated in each year, as we have concluded that it is more likely than not that these deferred tax assets will not be realized. 126 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table summarizes our results of operations for each of the periods presented (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ Increase (Decrease) ​ ​ 2024 ​ 2023 ​ ​ $ Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ License and collaboration revenue $ 5,000 $ 50,000 ​ $ (45,000) Total revenue ​ ​ 5,000 ​ ​ 50,000 ​ ​ (45,000) Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ $ 139,139 ​ $ 60,033 ​ $ 79,106 General and administrative ​ ​ 29,749 ​ ​ 17,114 ​ ​ 12,635 Acquired in-process research and development ​ ​ — ​ ​ 10,000 ​ ​ (10,000) Total operating expenses ​ ​ 168,888 ​ ​ 87,147 ​ ​ 81,741 Loss from operations ​ ​ (163,888) ​ ​ (37,147) ​ ​ (126,741) Other income, net: ​ ​ ​ ​ ​ ​ ​ Fair value adjustments to convertible notes ​ ​ (846) ​ ​ (300) ​ ​ (546) Other income (expense), net ​ ​ 8,175 ​ ​ 624 ​ ​ 7,551 Total other income (expense), net ​ ​ 7,329 ​ ​ 324 ​ ​ 7,005 Loss before income taxes ​ ​ (156,559) ​ ​ (36,823) ​ ​ (119,736) Income tax provision ​ ​ (429) ​ ​ (301) ​ ​ (128) Net loss ​ $ (156,988) ​ $ (37,124) ​ $ (119,864) ​ Revenue For the year ended December 31, 2024, we recognized revenue of $5.0 million, related to the upfront payment under the Tenacia Agreement.
Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 The following table summarizes our results of operations for each of the periods presented (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ ​ 2025 ​ 2024 ​ ​ Increase (Decrease) Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ License and collaboration revenue ​ ​ $ 10,000 ​ ​ $ 5,000 ​ $ 5,000 Total revenue ​ ​ 10,000 ​ ​ 5,000 ​ ​ 5,000 Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ $ 168,063 ​ $ 139,139 ​ $ 28,924 General and administrative ​ ​ 53,322 ​ ​ 29,749 ​ ​ 23,573 Acquired in-process research and development ​ ​ 171,672 ​ ​ — ​ ​ 171,672 Total operating expenses ​ ​ 393,057 ​ ​ 168,888 ​ ​ 224,169 Loss from operations ​ ​ (383,057) ​ ​ (163,888) ​ ​ (219,169) Other income (expense), net: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value adjustments to convertible notes ​ ​ — ​ ​ (846) ​ ​ 846 Interest expense on royalty obligation ​ ​ (7,327) ​ ​ — ​ ​ (7,327) Interest income ​ ​ 12,151 ​ ​ 7,973 ​ ​ 4,178 Other income, net ​ ​ 417 ​ ​ 202 ​ ​ 215 Total other income (expense), net ​ ​ 5,241 ​ ​ 7,329 ​ ​ (2,088) Loss before income taxes ​ ​ (377,816) ​ ​ (156,559) ​ ​ (221,257) Income tax (benefit) provision ​ ​ (79) ​ ​ 429 ​ ​ (508) Net loss ​ $ (377,737) ​ $ (156,988) ​ $ (220,749) ​ Revenue For the year ended December 31, 2025, we recognized revenue of $10.0 million, related to the one-time non-refundable upfront cash payment under the Zai License Agreement that was recognized upon delivery of the license and related technology transfer.
We have not yet commercialized any product candidates, and we do not expect to generate revenue from sales of any product candidates or from other sources for several years, if at all. As of December 31, 2024, we had $350.8 million in cash, cash equivalents and short-term investments and we had an accumulated deficit of $387.4 million.
Liquidity and Capital Resources Overview We have incurred significant operating losses since inception. We have not yet commercialized any product candidates, and we do not expect to generate revenue from sales of any product candidates or from other sources until 2027 at the earliest, if at all.
Net cash provided by financing activities for the year ended December 31, 2023 was $20.1 million, resulting from $20.0 million in proceeds received from the sale of the BMS Note and $0.1 million in proceeds received from the exercise of stock options.
Net Cash Provided by Financing Activities Net cash provided by financing activities for the year ended December 31, 2025 was $215.3 million, resulting from $75.0 million in gross proceeds received in connection with royalty obligation, proceeds of $120.0 million and $28.6 million received from the sale and issuance of common stock under the PIPE and ATM offerings, net of commissions, respectively, and $4.4 million of proceeds received for the issuance of common stock from the exercise of stock options and the employee stock purchase plan, partially offset by $12.7 million of payments related to placement agent fees and other offering costs related to the PIPE and ATM offerings.
Acquired In-Process Research and Development Expenses There was no acquired IPR&D expense recorded for the year ended December 31, 2024. Acquired IPR&D for the year ended December 31, 2023 was comprised of a $10.0 million development milestone expense related to obexelimab.
Acquired In-Process Research and Development Expenses For the year ended December 31, 2025, acquired IPR&D expenses were $171.7 million, which included $35.0 million, related to the upfront cash payment for the exclusive rights to develop and manufacture product candidates under the InnoCare License Agreement.
Purchase and Other Obligations We enter into contracts in the normal course of business with CROs, CMOs, and other third-party vendors for clinical trials and testing and manufacturing services. These contracts do not contain minimum purchase commitments and are cancellable by us upon written notice.
These contracts do not contain minimum purchase commitments and are cancellable by us upon written notice. Payments due upon cancellation consist of payments for services provided or expenses incurred, including non-cancelable obligations of our service provided up to one year after the date of cancellation.
Removed
We received $234.3 million in net proceeds after deducting underwriting discounts, commissions and other offering costs payable by us. In connection with the IPO, all outstanding shares of convertible preferred stock (“Preferred Stock”) converted into an aggregate of 24,978,715 shares of common stock.
Added
In January 2026, we reported positive results from the Phase 3 trial of obexelimab in patients with IgG4-RD.
Removed
As of December 31, 2024, we had $350.8 million in cash, cash equivalents and short-term investments. We believe that our cash, cash equivalents and short-term investments as of December 31, 2024 will be sufficient to fund our operations and capital expenditure requirements into the fourth quarter of 2026.
Added
Obexelimab met the primary endpoint, demonstrating a highly statistically significant and clinically meaningful 56% reduction in the risk of IgG4-RD flare compared to placebo (Hazard Ratio 0.44, p=0.0005) and also met and demonstrated highly statistically significant activity compared to placebo on all four key secondary endpoints.
Removed
Furthermore, such economic conditions have produced downward pressure on share prices. Although we do not believe that inflation has had a material impact on our financial positions or results of operations to date, additional high inflation could increase our operating costs, including our labor costs and research and development costs.
Added
Obexelimab was well tolerated with a safety profile consistent with that observed in previously completed clinical trials. Based on these results, we plan to submit the obexelimab BLA to the FDA for the treatment of IgG4-RD in the second quarter of 2026. We also intend to submit an MAA to the EMA in the second half of 2026.
Removed
Increases in tariffs could result in increased costs.
Added
In October 2025, we announced topline data from the MoonStone trial. Obexelimab met the primary endpoint, demonstrating a statistically significant 95% relative reduction in the cumulative number of new gadolinium-enhancing T1 hyperintense lesions, which are markers of active inflammation, over week 8 and week 12 compared with placebo (p=0.0009).
Removed
This is due to the numerous risks and uncertainties associated with product development, including the uncertainty of: ● the scope, timing and progress of our ongoing obexelimab clinical studies and other research and development activities associated with the development of our other and future product candidates; ● the number and scope of preclinical and clinical programs we decide to pursue; ● our ability to maintain our current research and development programs and to establish new programs; 124 Table of Contents ● the timing of and successful patient enrollment in, and the initiation and completion of, clinical trials; ● the successful completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the U.S.
Added
In February 2026, we reported the 24-week data from the MoonStone trial which confirmed the reductions in total GdE T1 hyperintense lesions observed with obexelimab over weeks 8 and 12 were maintained through week 24; unadjusted mean of new lesions per scan were 0.87 at baseline, 0.08 at week 12 and 0.04 at week 24 for obexelimab indicating a 95% reduction.
Removed
Total Other Income, Net Other Income, Net Other income, net primarily consists of interest income generated from cash equivalents and investments, and realized and unrealized gains and losses on foreign currency transactions.
Added
The 24-week data from additional secondary and exploratory endpoints may inform obexelimab’s potential impact on disability progression and help the Company determine next steps for future development of obexelimab in RMS.
Removed
Change in Fair Value of Convertible Notes In August 2023, we issued a convertible note to BMS (the “BMS Note”) in connection with the BMS Agreement, (see Note 7, License and Collaboration Revenue to our audited consolidated financial statements).
Added
As we continue to evaluate the MoonStone data and consider next steps for clinical development in this indication, we will consider, among other items, the evolving treatment landscape in RMS, including existing therapies, current pivotal trial endpoints and prioritization of capital.
Removed
We elected to record the BMS Note at fair value upon issuance and to subsequently remeasure the note at fair value at the end of each reporting period with the change in fair value being recorded as a component of other expense in our consolidated statement of operations and comprehensive loss.
Added
We expect to report topline results, including biomarker data, from the SunStone trial, including biomarker data, in the fourth quarter of 2026. Based on the outcome of the SunStone trial, and considering other factors, we may initiate a Phase 3 program in patients with SLE in the first half of 2027.
Removed
In May 2024, in connection with our Series C convertible preferred stock (“Series C Preferred Stock”) financing, the BMS Note plus accrued interest was automatically converted into 12,284,686 shares of Series C Preferred Stock.
Added
In October 2025, we entered into a License Agreement with InnoCare Pharma Inc. pursuant to which we were granted exclusive rights to develop, manufacture and commercialize orelabrutinib, a BTK inhibitor, for multiple sclerosis worldwide, and in all non-oncology indications worldwide excluding greater China, and Southeast Asia, as well as two early-development product candidates: ZB021, an IL-17AA/AF inhibitor, in all fields of use worldwide excluding greater China and Southeast Asia, and ZB022, a TYK2 inhibitor, in all fields of use worldwide.
Removed
We reassessed the estimated fair value of the BMS Note immediately prior to the conversion utilizing the fair value of the shares of Series C Preferred Stock for which the note subsequently converted into and recorded the change in fair value as a component of other income (expense), net in our consolidated statement of operations and comprehensive loss during the years ended December 31, 2024 and 2023.

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