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What changed in Syndax Pharmaceuticals Inc's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Syndax Pharmaceuticals Inc's 2022 and 2023 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 2023 report.

+396 added−347 removedSource: 10-K (2024-02-27) vs 10-K (2023-02-28)

Top changes in Syndax Pharmaceuticals Inc's 2023 10-K

396 paragraphs added · 347 removed · 260 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

86 edited+40 added−35 removed146 unchanged
Biggest changeOur owned axatilimab patent portfolio includes one pending U.S. patent application and six non-U.S. patent applications directed to combinations of entinostat and axatilimab. If any one of these applications were to issue as one or more patents, these patents would expire in May 2038 or later should patent term extension be granted.
Biggest changeIf any one of these applications were to issue as one or more patents, these patents would expire in May 2038 or later should patent term extension be granted. Our owned axatilimab patent portfolio also consists of patent applications directed to the treatment regimens and methods of using axatilimab includes one pending U.S. patent application and 18 non-U.S. patent applications.
Biopharmaceutical Product Development Process The process required by the FDA before biopharmaceutical products may be marketed in the United States generally involves the following: • completion of extensive preclinical laboratory tests and animal studies in accordance with applicable regulations, including the FDA’s good laboratory practice, or GLP regulations; • submission of an IND application which must become effective before clinical trials may begin; • performance of adequate and well-controlled human clinical trials in accordance with applicable regulations, including the FDA’s current good clinical practice, or GCP, regulations to establish the safety and efficacy of the proposed drug for its intended use or uses; 13 • submission to the FDA of an NDA for a new drug product or a Biologics License Application, or BLA, for biologics; • a determination by the FDA within 60 days of its receipt of an NDA or BLA to accept the application for filing and review; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the drug or biologic is produced to assess compliance with the FDA’s current Good Manufacturing Practices, or cGMP, regulations to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; • potential FDA audit of the preclinical and/or clinical trial sites that generated the data in support of an NDA or BLA; and • FDA review and approval of an NDA or BLA prior to any commercial marketing or sale of the biopharmaceutical product in the United States.
Biopharmaceutical Product Development Process The process required by the FDA before biopharmaceutical products may be marketed in the United States generally involves the following: • completion of extensive preclinical laboratory tests and animal studies in accordance with applicable regulations, including the FDA’s good laboratory practice, or GLP regulations; • submission of an Investigational New Drug, or IND, application which must become effective before clinical trials may begin; • performance of adequate and well-controlled human clinical trials in accordance with applicable regulations, including the FDA’s current good clinical practice, or GCP, regulations to establish the safety and efficacy of the proposed drug for its intended use or uses; • submission to the FDA of an NDA for a new drug product or a Biologics License Application, or BLA, for biologics; • a determination by the FDA within 60 days of its receipt of an NDA or BLA to accept the application for filing and review; 13 • satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the drug or biologic is produced to assess compliance with the FDA’s current Good Manufacturing Practices, or cGMP, regulations to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; • potential FDA audit of the preclinical and/or clinical trial sites that generated the data in support of an NDA or BLA; and • FDA review and approval of an NDA or BLA prior to any commercial marketing or sale of the biopharmaceutical product in the United States.
If the FDA designates a drug as a breakthrough therapy, it must take actions appropriate to expedite the development and review of the application, which may include holding meetings with the sponsor and the review team throughout the development of the drug; providing timely advice to, and interactive communication with, the sponsor regarding the development of the drug to ensure that the development program to gather the nonclinical and clinical data necessary for approval is as efficient as practicable; involving senior managers and experienced review staff, as appropriate, in a collaborative, cross-disciplinary review; assigning a cross-disciplinary project lead for the FDA review team to facilitate an efficient review of the development program and to serve as a scientific liaison between the review team and the sponsor; and taking steps to ensure that the design of the clinical trials is as efficient as practicable, when scientifically appropriate, such as by minimizing the number of patients exposed to a potentially less efficacious treatment.
If the FDA designates a drug as a breakthrough therapy, it may take actions appropriate to expedite the development and review of the application, which may include holding meetings with the sponsor and the review team throughout the development of the drug; providing timely advice to, and interactive communication with, the sponsor regarding the development of the drug to ensure that the development program to gather the nonclinical and clinical data necessary for approval is as efficient as practicable; involving senior managers and experienced review staff, as appropriate, in a collaborative, cross-disciplinary review; assigning a cross-disciplinary project lead for the FDA review team to facilitate an efficient review of the development program and to serve as a scientific liaison between the review team and the sponsor; and taking steps to ensure that the design of the clinical trials is as efficient as practicable, when scientifically appropriate, such as by minimizing the number of patients exposed to a potentially less efficacious treatment.
To obtain a patent extension in the United States, the term of the relevant patent must not have expired before the extension application, the patent cannot have been extended previously under this law, an application for extension must be submitted, the product must be subject to regulatory review prior to its commercialization, and the permission for the commercial marketing or use of the product after such regulatory review period is the first permitted commercial marketing or use of the product.
To obtain a patent extension in the United States, the term of the relevant patent must not have expired before the extension application, the patent cannot have been extended previously under this law, an application for extension must be submitted, the product must be subject to regulatory review prior to its commercialization, and the permission for the commercial 12 marketing or use of the product after such regulatory review period is the first permitted commercial marketing or use of the product.
We are continuing to leverage the collective talent within our organization and network of advisors to guide our pipeline expansion and development plans. 1 Our Pipeline Revumenib Our first clinical-stage product candidate, revumenib, is a potent, orally active inhibitor of the high affinity interaction site on menin with the protein MLL1.
We are continuing to leverage the collective talent within our organization and network of advisors to guide our pipeline expansion and development plans. 1 Our Pipeline Revumenib 2 Our first clinical-stage product candidate, revumenib, is a potent, orally active inhibitor of the high affinity interaction site on menin with the protein MLL1.
The UCB license agreement permits us to use axatilimab or other licensed products for all human uses, including treatment, prevention and diagnostic uses, in all indications, diseases, conditions or disorders, and we are obligated to use commercially reasonable efforts to develop, obtain regulatory approval and commercialize a certain licensed product.
The UCB license agreement permits us to use axatilimab or other licensed products for all human uses, including treatment, 8 prevention and diagnostic uses, in all indications, diseases, conditions or disorders, and we are obligated to use commercially reasonable efforts to develop, obtain regulatory approval and commercialize a certain licensed product.
The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of equity-based compensation awards and cash-based compensation awards, in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.
The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees and directors through the granting of equity-based compensation awards and cash-based compensation awards, in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.
We are solely responsible for the development and commercialization of the Menin Assets. Subject to the achievement of certain milestone events, we may be required to pay Vitae up to an aggregate of $99 million in one-time development and regulatory milestone payments over the term of the AbbVie License Agreement.
We are solely responsible for the development and commercialization of the Menin Assets. Subject to the achievement of certain milestone events, we may be required to pay Vitae up to an aggregate of $99.0 million in one-time development and regulatory milestone payments over the term of the AbbVie License Agreement.
In pre-clinical animal models, small molecule inhibitors of the menin-MLL interaction have demonstrated deep and durable single agent treatment effects in multiple leukemic xenografts harboring MLL fusions. Inhibiting the menin-MLL1 interaction represents a novel targeted strategy for the treatment of MLLr leukemias.
In pre-clinical animal models, small molecule inhibitors of the menin-MLL interaction have demonstrated deep and durable single agent treatment effects in multiple leukemic xenografts harboring MLL fusions. Inhibiting the menin-MLL1 interaction represents a novel 4 targeted strategy for the treatment of MLLr leukemias.
IPF is a rare disease, with an estimated prevalence of 281,000 people among the seven major market countries. IPF incidence and prevalence increase with age and are higher 6 among males. Although rare, the incidence of IPF is increasing, likely due to an increasing understanding of the disease and the recent development of uniform diagnostic criteria.
IPF is a rare disease, with an estimated prevalence of 281,000 people among the seven major market countries. IPF incidence and prevalence increase with age and are higher among males. Although rare, the incidence of IPF is increasing, likely due to an increasing understanding of the disease and the recent development of uniform diagnostic criteria.
We have a license agreement with Vitae Pharmaceuticals, Inc., a subsidiary of AbbVie plc, or the AbbVie License Agreement, under which Vitae granted us an exclusive, sublicensable, worldwide license to, preclinical, orally-available, small molecule inhibitors of the interaction of menin with the MLL protein, or the Menin Assets.
License Agreements Vitae Pharmaceuticals, Inc. We have a license agreement with Vitae Pharmaceuticals, Inc., a subsidiary of AbbVie plc, or the AbbVie License Agreement, under which Vitae granted us an exclusive, sublicensable, worldwide license to, preclinical, orally-available, small molecule inhibitors of the interaction of menin with the MLL protein, or the Menin Assets.
All employees must adhere to a code of business conduct and ethics and our employee handbook, which combined, define standards for appropriate behavior and are annually trained to help prevent, identify, report, and stop any type of discrimination and harassment.
All employees must adhere to a code of business conduct and ethics and our employee handbook, which combined, define standards for appropriate behavior and are annually trained to help 21 prevent, identify, report, and stop any type of discrimination and harassment.
The approval process varies from country to country 20 and the time may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country.
The approval process varies from country to country and the time may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country.
Nearly all colorectal tumors, harbor genetic mutations that lead to the hyperactivation of b -catenin signaling, which in turn initiate the expression of various downstream targets that promote proliferation and maintain a stem cell state, highlighting the potential value of developing treatments that target b -catenin signaling in cancer. b -catenin itself, however, is an intractable drug target and the mechanisms underlying b -catenin–driven transcription remain largely elusive, underscoring the need to identify therapeutically tractable components of b -catenin transcriptional output.
Nearly all colorectal tumors, harbor genetic mutations that lead to the hyperactivation of b -catenin signaling, which in turn initiate the expression of various downstream targets that promote proliferation and maintain a stem cell state, highlighting the potential value of developing treatments that target b -catenin signaling in cancer. b -catenin itself, however, is an intractable drug target and the mechanisms underlying b -catenin–driven transcription remains largely elusive, underscoring the need to identify therapeutically tractable components of b -catenin transcriptional output.
We expect that our targeted sales force will focus on a well-defined group of medical oncologists, primarily in the non-hospital and academic settings, who are responsible for the care and treatment of cancer patients. For revumenib, we expect to manage sales, marketing and distribution through internal resources and third-party relationships.
We expect that our targeted sales force will focus on a well-defined group of medical oncologists, and transplant physicians, primarily in the non-hospital and academic settings, who are responsible for the care and treatment of cancer patients. For revumenib, we expect to manage sales, marketing and distribution through internal resources and third-party relationships.
Today, physicians can choose from a number of approved chemotherapies ( Stivarga ,® Lonsurf® ), immunotherapies ( Yervoy® , Keytruda® , Opdivo® ) and targeted agents ( Avastin® , Cyramza® , Zaltrap® , Erbitux® , Vectibix® , Braftovi® ) to treat CRC. Despite these advancements, there remains a critical need for more effective therapies to address metastatic CRC.
Today, physicians can choose from a number of approved chemotherapies ( Stivarga ,® Lonsurf® ), immunotherapies ( Yervoy® , Keytruda® , Opdivo® ) and targeted agents ( Avastin® , Cyramza® , Zaltrap® , Erbitux® , Vectibix® , Braftovi®, FRUZAQLA TM )) to treat CRC. Despite these advancements, there remains a critical need for more effective therapies to address metastatic CRC.
While doctors are free to prescribe any drug approved by the FDA for any use based on the doctor’s independent medical judgement, a company can only make claims relating to safety and efficacy of a drug that are consistent with FDA approval, and the company is allowed to actively market a drug only for the particular use and treatment approved by the FDA.
While doctors are free to prescribe any drug approved by the FDA for any use based on the doctor’s independent medical judgment, a company can only make claims relating to safety and efficacy of a drug that are consistent with FDA approval, and a company is allowed to actively market a drug only for the particular use and treatment approved by the FDA.
We are developing revumenib, a potent, selective, small molecule inhibitor of the menin-MLL binding interaction for the treatment of KMT2A rearranged, or KMT2Ar, also known as mixed lineage leukemia rearranged or MLLr, acute leukemias including acute lymphoblastic leukemia, or ALL, and acute myeloid leukemia, or AML, and NPM1 mutant AML.
We are developing revumenib, a potent, selective, small molecule inhibitor of the menin-MLL binding interaction for the treatment of KMT2A rearranged, or KMT2Ar, also known as mixed lineage leukemia rearranged or MLLr, acute leukemias including acute lymphoblastic leukemia, or ALL, and acute myeloid leukemia, or AML, and necleophosmin 1, also known as NPM1, mutant AML.
This specific interaction is a key driver for two genetically defined acute leukemias: (i) KMT2Ar and (ii) NPM1c AML. The R/R settings of both diseases have a poor prognosis. In preclinical testing, revumenib has demonstrated benefit in leukemic models of disease.
This specific interaction is a key driver for two genetically defined acute leukemias: (i) KMT2Ar and (ii) mNPM1 AML. The R/R settings of both diseases have a poor prognosis. In preclinical testing, revumenib has demonstrated benefit in leukemic models of disease.
Outside the United States, we plan to rely on our current partners and may seek additional pharmaceutical partners for sales and marketing activities. Manufacturing We do not own or operate manufacturing facilities for the production of axatilimab, revumenib or entinostat, and we do not have plans to develop our own manufacturing operations in the foreseeable future.
Outside the United States, we plan to rely on our current partners and may seek additional pharmaceutical partners for development as well as sales and marketing activities. Manufacturing We do not own or operate manufacturing facilities for the production of axatilimab, revumenib or entinostat, and we do not have plans to develop our own manufacturing operations in the foreseeable future.
In accordance with our agreement, Incyte will lead the commercialization of axatilimab globally and we will elect whether to co-promote axatilimab in the United States. While we may commit significant financial and management resources to commercial activities, we would also consider collaborating with one or more pharmaceutical companies to enhance our commercial capabilities.
In accordance with our agreement, Incyte will lead the commercialization of axatilimab globally and we have elected to co-promote axatilimab in the United States. While we may commit significant financial and management resources to commercial activities, we would also consider collaborating with one or more pharmaceutical companies to enhance our commercial capabilities.
As of December 31, 2022, our portfolio included four owned pending U.S. non-provisional patent applications, three owned granted U.S. patents, U.S.
As of December 31, 2023, our portfolio included four owned pending U.S. non-provisional patent applications, three owned granted U.S. patents, U.S.
We are solely responsible for the development and commercialization of axatilimab. Subject to the achievement of certain milestone events, we may be required to pay UCB up to $119.5 million in one-time development and regulatory milestone payments over the term of the UCB license agreement.
We are solely responsible for the development and commercialization of axatilimab, subject to our collaboration with Incyte. Subject to the achievement of certain milestone events, we may be required to pay UCB up to $119.5 million in one-time development and regulatory milestone payments over the term of the UCB license agreement.
Item 1. B USINESS Our Company We are a clinical-stage biopharmaceutical company developing an innovative pipeline of cancer therapies. Our two lead product candidates are revumenib (SNDX-5613), and axatilimab (SNDX-6352).
Item 1. B USINESS Our Company We are a clinical-stage biopharmaceutical company developing an innovative pipeline of cancer therapies. Our two lead product candidates are revumenib, and axatilimab.
We currently operate in one segment. Our principal office is located in Waltham, Massachusetts, where we lease approximately 12,000 square feet of office space pursuant to a lease that expires in February 2025. We also lease approximately 4,000 square feet of office space in New York, NY pursuant to a lease that expires in August 2025.
We currently operate in one segment. Our principal office is located in Waltham, Massachusetts, where we lease approximately 12,000 square feet of office space pursuant to a lease that expires in February 2025. We also lease approximately 16,000 square feet of office space in New York, New York pursuant to leases that expires in August 2025.
Our Strategy We are developing revumenib in acute leukemias and axatilimab for use in cGVHD and potentially other fibrotic-macrophage driven diseases, such as IPF, as single agents and in combination with approved drugs. Key elements of our strategy include: • Develop revumenib for the treatment of genetically defined leukemias.
Our Strategy We are developing revumenib for the treatment of acute leukemias and as a treatment for solid tumors, and axatilimab for use in cGVHD and other fibrotic-macrophage driven diseases, such as IPF, as single agents and in combination with approved drugs. Key elements of our strategy include: • Develop and commercialize revumenib for the treatment of genetically defined leukemias.
We believe that revumenib has the potential to treat at least two genetically defined acute leukemias: (i) KMT2Ar and (ii) mutations in NPM1, or NPM1c, AML. Our Phase 1/2 open-label AUGMENT-101 trial is ongoing.
We believe that revumenib has the potential to treat at least two genetically defined acute leukemias: (i) KMT2Ar and (ii) mutations in NPM1, or mNPM1, AML. Our Phase 1/2 open-label AUGMENT-101 trial is nearing completion.
Our in-licensed patent portfolio also includes pending U.S. and non-U.S. patent applications directed to methods for the treatment and/or prophylaxis of fibrotic disease by administration of an inhibitor of CSF-1R activity, methods for the treatment and/or prophylaxis of inflammatory bowel disease, or IBD, by administration of an inhibitor of CSF-1R activity, and liquid pharmaceutical compositions of anti-CSF-1R antibodies.
Our in-licensed patent portfolio also includes patents and patent applications directed to methods for the treatment and/or prophylaxis of fibrotic disease by administration of an inhibitor of CSF-1R activity, methods for the treatment and/or prophylaxis of inflammatory bowel disease, or IBD, by administration of an inhibitor of CSF-1R activity, and liquid pharmaceutical compositions of anti-CSF-1R antibodies.
Menin Asset Patent Portfolio We in-licensed from Vitae Pharmaceuticals, Inc., a subsidiary of AbbVie plc, a patent portfolio directed to a series of selective preclinical inhibitors targeting the binding interaction of menin with MLL-r. As of December 31, 2022, the in-licensed portfolio includes three granted U.S. patents, U.S.
Menin Asset Patent Portfolio We in-licensed from Vitae Pharmaceuticals, LLC (formerly Vitae Pharmaceuticals, Inc., "Vitae") a subsidiary of AbbVie Inc., a patent portfolio directed to a series of selective preclinical inhibitors targeting the binding interaction of menin with MLL-r. As of December 31, 2023, the in-licensed portfolio includes four granted U.S. patents, U.S.
Under certain circumstances, we may be required to share a percentage of non-royalty income from sublicensees, subject to certain deductions, with Vitae. Since the inception of the agreement, we achieved certain development and regulatory milestones resulting in $8.0 million in milestone payments to Vitae, which included a $2.0 million payment in 2022.
Under certain circumstances, we may be required to share a percentage of non-royalty income from sublicensees, subject to certain deductions, with Vitae. Since the inception of the agreement, we achieved certain development and regulatory milestones resulting in $8.0 million in milestone payments to Vitae, which includes $2.0 million paid in the first quarter of 2023.
Patent Nos. 11,479,557, 10,683,302 and 10,899,758, 13 granted non-U.S patents, including a granted European patent, which was validated in 30 member states, four allowed non-U.S patent applications, two pending U.S. applications and 20 non-U.S. pending patent applications covering composition of matter and methods of treating, e.g., MLL.
Patent Nos. 11,479,557, 10,683,302, 11,739,085 and 10,899,758, 20 granted non-U.S patents, including a granted European patent, which was validated in 30 member states and another granted European patent which was validated in 15 member states, two pending U.S. applications and 25 non-U.S. pending patent applications covering composition of matter and methods of treating, e.g., MLL.
Patent Nos. 10,226,472, 11,324,822, and 11,397,184 which expire in August 2032, March 2036 and September 2036, respectively, or later should patent term extension be granted, directed to methods of treating a patient with combinations of entinostat and pembrolizumab or other therapeutic agents, nine granted non-U.S. patents (including two European patents validated in at least 5 countries), three allowed non-U.S. patent applications, and 39 owned non-U.S. pending patent applications.
Patent Nos. 10,226,472, 11,324,822, and 11,397,184 which expire in August 2032, March 2036 and October 2036, respectively, or later should patent term extension be granted, directed to methods of treating a patient with combinations of entinostat and pembrolizumab or other therapeutic agents, 19 granted non-U.S. patents (including one European patent validated in countries), and 39 owned non-U.S. pending patent applications.
Some of the initiatives that we were most proud of in 2022 included continuing support for the scientific, medical, patient and local communities in which we operate, including disease awareness and supporting community needs through both participation in events as well 21 as charitable giving to the community at large. We are committed to reducing our environmental footprint.
Some of the initiatives that we were most proud of in 2023 included continuing support for the scientific, medical, patient and local communities in which we operate, including disease awareness and supporting community needs through participation in events within the community at large. We are committed to reducing our environmental footprint.
We have deprioritized the development of entinostat, but maintain a license, development and commercialization agreement with Eddingpharm International Company Limited, or Eddingpharm, under which we granted Eddingpharm an exclusive license under our intellectual property rights to develop and commercialize entinostat in China and certain other Asian countries.
We have deprioritized the development of entinostat, but maintain a license, development and commercialization agreement with Eddingpharm International Company Limited, or Eddingpharm, under which we granted Eddingpharm an exclusive license under our intellectual property rights to develop and commercialize entinostat in China and certain other Asian countries. 7 Collaborations Incyte Collaboration and License Agreement In September 2021, we entered into a collaboration and license agreement, or the Incyte Collaboration Agreement, with Incyte for the development and commercialization of axatilimab.
If this PCT application were to issue as one or more patents, these patents would expire in December 2040 or later should patent term extension be granted.
If any one of these applications were to issue as one or more patents, these patents would expire in December 2040 or later should patent term extension be granted.
Axatilimab in GVHD cGVHD, an immune response of the donor-derived hematopoietic cells against recipient tissues, is a serious, potentially life-threatening complication of allogeneic hematopoietic stem cell transplantation, or HSCT, that can last for years. cGVHD is estimated to develop in approximately 40% of transplant recipients and affects approximately 14,000 patients in the United States. cGVHD typically manifests across multiple organ systems, with the skin and mucosa being commonly involved, and is characterized by the development of fibrotic tissue.
Additionally, Incyte plans to initiate two combination trials with axatilimab in cGVHD in mid-2024, including both a Phase 2 combination trial with ruxolitinib and a Phase 3 combination trial with steroids. 6 Axatilimab in GVHD cGVHD, an immune response of the donor-derived hematopoietic cells against recipient tissues, is a serious, potentially life-threatening complication of allogeneic hematopoietic stem cell transplantation, or HSCT, that can last for years. cGVHD is estimated to develop in approximately 40% of transplant recipients and affects approximately 14,000 patients in the United States. cGVHD typically manifests across multiple organ systems, with the skin and mucosa being commonly involved, and is characterized by the development of fibrotic tissue.
Further, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
Further, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions take effect progressively starting in fiscal year 2023.
Employees and Human Capital Resources As of February 22, 2023, we had 107 full-time employees. Of the full-time employees, 68 were primarily engaged in research and development activities and 24 have an M.D. or Ph.D degree. None of our employees are represented by labor unions or covered by collective bargaining agreements.
Employees and Human Capital Resources As of February 19, 2024, we had 184 full-time employees. Of the full-time employees, 112 were primarily engaged in research and development activities and 44 have an M.D., Ph.D., or PharmD degree. None of our employees are represented by labor unions or covered by collective bargaining agreements.
We also expect to complete enrollment of the NPM1 AML cohort in the second half of 2023. Revumenib Rationale for Targeting MLLr MLLr leukemias arise by rare, spontaneous translocations at the MLL1 locus (11q23). It is estimated that approximately 10% of AML and ALL harbor this MLL-re-arrangement with a worldwide incidence of approximately 5,000 to 7,000 cases per year.
We expect to provide an update on the trial in the second quarter of 2024. Rationale for Targeting MLLr MLLr leukemias arise by rare, spontaneous translocations at the MLL1 locus (11q23). It is estimated that approximately 10% of AML and ALL harbor this MLL-re-arrangement with a worldwide incidence of approximately 5,000 to 7,000 cases per year.
Our owned menin patent portfolio consists of eleven pending non-U.S. patent applications and one U.S. patent application, directed to combinations of a menin inhibitor and a CYP3A inhibitor for the treatment of various cancers. Our owned menin patent portfolio also consists of two U.S. provisional applications directed to menin inhibitors and combinations with various other compounds.
Our owned menin patent portfolio consists of twelve pending non-U.S. patent applications and one pending U.S. patent application, directed to combinations of a menin inhibitor and a CYP3A inhibitor for the treatment of various cancers.
We are also exploring the use of axatilimab to treat other fibrotic diseases where monocyte-derived macrophages have been shown to play a role, such as IPF. • Leverage the technical, clinical, regulatory and business expertise of our management team and scientific collaborators to license, acquire and develop additional cancer therapies to expand our pipeline.
We are further exploring the use of axatilimab to treat other fibrotic diseases where monocyte-derived macrophages have been shown to play a role, and have initiated a Phase 2 trial to assess the efficacy, safety and tolerability of axatilimab in patients with IPF. • Leverage the technical, clinical, regulatory and business expertise of our management team and scientific collaborators to license, acquire and develop additional cancer therapies to expand our pipeline.
In 2019, we commenced AUGMENT-101, a clinical trial consisting initially of a Phase 1 dose escalation portion to determine the maximum tolerated dose, or MTD, and recommended Phase 2 dose of revumenib in patients with R/R KMT2Ar or NPM1c acute leukemia. We are conducting the trial at multiple centers globally.
In 2019, we commenced AUGMENT-101, a global clinical trial consisting initially of a Phase 1 dose escalation portion to determine the maximum tolerated dose, or MTD, and recommended Phase 2 dose of revumenib in patients with R/R KMT2Ar or mNPM1 acute leukemia. As discussed below, we completed the Phase 1 portion of the trial.
In 2022, over 150,000 new CRC cases arose, and 52,000 deaths were reported, accounting for nearly 10% of new cancer cases and deaths in the U.S. Meanwhile, the five-year survival rate for CRC is approximately 65% and drops to 15% for metastatic CRC.
In 2023, over 153,000 new CRC estimated cases arose, resulting in 52,500 estimated deaths, accounting for nearly 8% of new cancer cases and 9% of cancer deaths in the U.S. Meanwhile, the five-year survival rate for CRC is approximately 65% and drops to 15% for metastatic CRC.
We believe that by inhibiting CSF-1R activation on monocytes and macrophages, axatilimab has the potential to be used to treat cGVHD as well as other fibrotic diseases where monocyte-derived macrophages have been shown to play a significant role. 5 Our near-term focus is to rapidly establish that axatilimab can provide meaningful clinical benefit in patients with advanced cGVHD where prior therapies are no longer effective and to establish proof-of-concept of using axatilimab to treat other fibrotic diseases where monocyte-derived macrophages have been shown to play a role.
Our near-term focus is to rapidly establish that axatilimab can provide meaningful clinical benefit in patients with advanced cGVHD where prior therapies are no longer effective and to establish proof-of-concept of using axatilimab to treat other fibrotic diseases where monocyte-derived macrophages have been shown to play a role.
If any applications arising from the provisional applications were to issue as one or more patents, these patents would expire between April 2041 and May 2043 or later should patent term extension be granted.
If any of these pending applications were to issue as one or more patents, these patents would expire between April 2041 and November 20244 or later should patent term extension be granted.
Axatilimab Patent Portfolio We in-licensed from UCB a patent portfolio directed to axatilimab. As of December 31, 2022, the axatilimab composition-of-matter patent portfolio included two granted U.S. patents, 27 granted non-U.S. patents, including a granted EP patent which has been validated in 37 countries, and 16 non-U.S. pending patent applications.
As of December 31, 2023, the in-licensed axatilimab composition-of-matter patent portfolio included two granted U.S. patents, 27 granted non-U.S. patents, including a granted Eurasian patent which has been validated in 3 countries and two granted EP patent which have been validated in 37 countries each, and 22 non-U.S. pending patent applications.
We currently rely on third-party contract manufacturers as well as Incyte for all of our required raw materials, active pharmaceutical ingredients and finished product for our preclinical research and clinical trials. We do not have any current contractual relationship for the manufacture of commercial supplies.
We currently rely on third-party contract manufacturers as well as Incyte for all of our required raw materials, active pharmaceutical ingredients and finished product for our preclinical research, clinical trials, and anticipated commercial supply.
We are also developing axatilimab, a monoclonal antibody that blocks the colony stimulating factor 1, or CSF-1 receptor, in chronic graft-versus-host disease, or cGVHD, as well as idiopathic pulmonary fibrosis, or IPF.
We are also exploring the use of revumenib as a treatment in solid tumors, specifically its activity in metastatic colorectal cancer. We are developing axatilimab, a monoclonal antibody that blocks the colony stimulating factor 1 receptor, or CSF-1R, in chronic graft-versus-host disease, or cGVHD, as well as idiopathic pulmonary fibrosis, or IPF.
As discussed below, we have completed the Phase 1 portion of the trial, and the pivotal Phase 2 portion of the trial is ongoing, enrolling R/R patients across each of three distinct trial populations: patients with NPM1 mutant AML, patients with KMT2Ar AML, and patients with KMT2Ar ALL to determine the efficacy, safety, and tolerability of revumenib.
The three cohorts of the pivotal Phase 2 portion of the trial, enrolled R/R patients across each of three distinct trial populations: patients with NPM1 mutant AML, patients with KMT2Ar AML, and patients with KMT2Ar ALL to determine the efficacy, safety, and tolerability of revumenib. We completed enrollment of the KMT2Ar cohorts and the NPM1 cohort continues to accrue patients.
Our policy is to actively seek to protect our proprietary position by, among other things, filing patent applications in the United States and abroad claiming our proprietary technologies that are important to the development of our business.
Our policy is to actively seek to protect our proprietary position by, among other things, filing patent applications in the United States and abroad claiming our proprietary technologies that are important to the development of our business. We also rely on trade secrets, know-how, continuing technological innovation and in-licensing opportunities to develop and maintain our proprietary position.
We have initiated the pivotal Phase 2 portion of the trial with relapsed/refractory, or R/R, patients to be enrolled in three indication-specific expansion cohorts to determine the efficacy, short- and long-term safety, and tolerability of revumenib in KMT2Ar ALL, KMT2Ar AML and NPM1c AML.
The pivotal Phase 2 portion of the trial enrolled relapsed/refractory, or R/R, patients in three indication-specific expansion cohorts to determine the efficacy, short- and long-term safety, and tolerability of revumenib in KMT2Ar ALL, KMT2Ar AML and mNPM1 AML. We have submitted a New Drug Application, or NDA, for revumenib for the treatment of R/R KMT2Ar acute leukemia under the U.S.
RE39,754 is a composition of matter patent having an initial term which expired in September 2017. The portfolio we licensed from Bayer also includes U.S. Patent 7,973,166, or the ’166- patent, which covers a crystalline polymorph of entinostat which is referred to as crystalline polymorph- B, the crystalline polymorph used in the clinical development of entinostat.
The portfolio we licensed from Bayer also includes U.S. Patent 7,973,166, or the ’166- patent, which covers a crystalline polymorph of entinostat which is referred to as crystalline polymorph- B, the crystalline polymorph used in the clinical development of entinostat. Many compounds can exist in different crystalline forms.
We also rely on trade secrets, know-how, continuing technological innovation and in-licensing opportunities to develop and maintain our proprietary position. 10 We cannot be sure that patents will be granted with respect to any of our owned or licensed pending patent applications or with respect to any patent applications filed by us or our licensors in the future, nor can we be sure that any of our existing owned or licensed patents or any patents that may be granted to us or to our licensors in the future will protect our technology.
We cannot be sure that patents will be granted with respect to any of our owned or licensed pending patent applications or with respect to any patent applications filed by us or our licensors in the future, nor can we be sure that any of our existing owned or licensed patents or any patents that may be granted to us or to our licensors in the future will protect our technology.
The granted patents based on the in-licensed applications are expected to expire June 2037 or later should patent term extension be granted. If the in-licensed application were to issue as one or more patents, these patents would expire between June 2037 and September 2037.
The in-licensed granted patents, and any pending application should they issue, are expected to expire between June 2037 and September 2037 or later should patent term extension be granted.
Collaborations Incyte Collaboration and License Agreement In September 2021, we entered into a collaboration and license agreement, or the Incyte Collaboration Agreement, with Incyte for the development and commercialization of axatilimab. Additionally, in September 2021 we entered into a share purchase agreement with Incyte, or the Incyte Share Purchase Agreement.
Additionally, in September 2021 we entered into a share purchase agreement with Incyte, or the Incyte Share Purchase Agreement.
The granted European patent comprises 37 national countries that have all been validated, and the granted Eurasian patent comprises nine countries that have all been validated. Likewise, there are 3 pending foreign counterparts of the ‘166 crystalline polymorph B patent.
Of the unexpired foreign-granted patents we licensed from Bayer, there are 33 granted foreign counterparts of the ‘166 patent (now RE45,499) that cover crystalline polymorph B, including the European patent and Eurasian patent. The granted European patent comprises 37 national countries that have all been validated, and the granted Eurasian patent comprises nine countries that have all been validated.
We also co-own with Vitae and Syngene International Limited two pending non-U.S. patent applications, one pending U.S. patent application, and one pending PCT, covering composition of matter and methods of treating cancer and other diseases mediated by the menin-MLL interaction. 11 Entinostat Patent Portfolio We strive to protect entinostat with multiple layers of patents.
We co-own with Vitae and/or Syngene International Limited seventeen pending non-U.S. patent applications, two pending U.S. patent application, and two pending U.S. provisional applications, covering composition of matter and methods of treating cancer and other diseases mediated by the menin-MLL interaction. Syngene International Limited is obligated to assign their rights to us.
There are several additional clinical stage agents currently advancing as potential treatments for NPM1c AML. Rational for Targeting CRC 4 CRC is the second most lethal cancer, the third most prevalent malignant tumor worldwide, and the fourth most common cancer diagnosed in the United States each year.
Rational for Targeting CRC CRC is the second most lethal cancer, the third most prevalent malignant tumor worldwide, and the fourth most common cancer diagnosed in the United States each year.
We consider our relationship with our employees to be good. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees.
We consider our relationship with our employees to be good. To allow us flexibility in meeting varying workflow demands, we also engage consultants and temporary workers when needed. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees.
The patent portfolio we licensed from Bayer contains a number of issued U.S. and foreign patents as well as patent applications pending outside the United States. A number of the patents and patent applications we licensed from Bayer are directed to entinostat while other patents and patent applications are directed to compounds other than entinostat.
A number of the patents and patent applications we licensed from Bayer are directed to entinostat while other patents and patent applications are directed to compounds other than entinostat. As of December 31, 2023, the portfolio we licensed from Bayer included seven issued U.S. patents, 62 granted non-U.S. patents and 17 patent applications pending in non-U.S. patent offices.
Many compounds can exist in different crystalline forms. A compound which in the solid state may exhibit multiple different crystalline forms is called polymorphic, and each crystalline form of the same chemical compound is termed a polymorph.
A compound which in the solid state may exhibit multiple different crystalline forms is called polymorphic, and each crystalline form of the same chemical compound is termed a polymorph. A new crystalline form of a compound may arise, for example, due to a change in the chemical process or the introduction of an impurity.
Bayer may terminate the Bayer license agreement if we seek to revoke or challenge the validity of any patent licensed to us by Bayer under the Bayer license agreement or if we procure or assist a third party to take any such action.
Bayer may terminate the Bayer license agreement if we seek to revoke or challenge the validity of any patent licensed to us by Bayer under the Bayer license agreement or if we procure or assist a third party to take any such action. 9 Sales and Marketing Given our stage of development, we have recently started building a commercial infrastructure to support sales of our product candidates in the United States.
Additionally, in the fourth quarter 2022, we achieved certain development and regulatory milestones resulting in a $2.0 million accrued expense at December 31, 2022. The amount was paid in the first quarter of 2023.
In the fourth quarter of 2023, we achieved certain development and regulatory milestones, resulting in a $10.0 million expense, which has been recorded in accrued expenses as of December 31, 2023.
Axatilimab binds with high affinity to CSF-1R and blocks the binding of the two known CSF-1R ligands CSF-1 and IL-34. CSF-1R is expressed on the surface of specific immune cells known as macrophages and their precursor cells known as monocytes.
CSF-1R is expressed on the surface of specific immune cells known as macrophages and their precursor cells known as monocytes.
Mutations in NPM1, or NPM1c, lead to the aberrant cytoplasmic localization of the mutants. NPM1c lead to its aberrant cytoplasmic localization. Recent preclinical research has demonstrated that NPM1c works directly with the menin-MLL complex to induce a leukemic transcription program . As a result, NPM1c harboring cells are sensitive to menin-MLL interaction inhibitors.
Recent preclinical research has demonstrated that mNPM1 works directly with the menin-MLL complex to induce a leukemic transcription program . As a result, mNPM1 harboring cells are sensitive to menin-MLL interaction inhibitors. In mNPM1 cells, inhibition of the menin-MLL interaction suppresses the leukemic transcription program, causing growth arrest, terminal differentiation and cell death.
In most countries in which we file, the patent term is 20 years from the date of filing the earliest non-provisional application or PCT application.
In most countries in which we file, the patent term is 20 years from the date of filing the earliest non-provisional application or PCT application. In the United States, a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the U.S.
Additionally, in connection with its most recent amendment of the UCB License Agreement, in the second quarter of 2022 we paid UCB $5.8 million, which was recognized as a milestone expense. 8 Each party may terminate the UCB license agreement for the other party’s uncured material breach or insolvency; and we may terminate the UCB license agreement at will at any time upon advance written notice to UCB.
Additionally, in connection with its most recent amendment of the UCB license agreement, in the second quarter of 2022 we paid UCB $5.8 million, which was recognized as a milestone expense.
BEAT-AML is a front-line combination trial of revumenib with venetoclax and azacitidine being conducted as part of the Leukemia & Lymphoma Society’s Beat AML ® Master Clinical Trial. AUGMENT-102 is a trial assessing revumenib in combination with chemotherapy in patients with R/R mNPM1 or KMT2Ar acute leukemias.
This trial is being conducted as part of the Leukemia & Lymphoma Society's Beat AML® Master Clinical Trial. • SAVE: Evaluating the all-oral combination of revumenib with venetoclax and decitabine/cedazuridine in R/R AML or mixed phenotype acute leukemias.
Based on these findings, blocking the menin-MLL1 interaction represents a novel targeted strategy for the treatment of NPM1c AML. Like MLLr, NPM1 is readily diagnosed as part of the standard AML patient work-up today, and yet there are no targeted therapies specifically approved to treat patients with NPM1c AML.
Like MLLr, NPM1 is readily diagnosed as part of the standard AML patient work-up today, and yet there are no targeted therapies specifically approved to treat patients with mNPM1 AML. There are several additional clinical stage agents currently advancing as potential treatments for mNPM1 AML.
A new crystalline form of a compound may arise, for example, due to a change in the chemical process or the introduction of an impurity. Such new crystalline forms may be patented. By comparison, the U.S. Patent RE39,754, which expired in September 2017, covers the chemical entity of entinostat and any crystalline or non-crystalline form of entinostat.
Such new crystalline forms may be patented. By comparison, the U.S. Patent RE39,754, which expired in September 2017, covers the chemical entity of entinostat and any crystalline or non-crystalline form of entinostat. On March 7, 2014, our licensor Bayer applied for reissue of the ‘166 patent. The reissue application sought to add three additional inventors to the ‘166 patent.
The full impact on our business of the Affordable Care Act and other new laws is uncertain but may result in additional reductions in Medicare and other healthcare funding. Nor is it clear whether other legislative changes will be adopted, if any, or how such changes would affect the demand for our products once commercialized.
Nor is it clear whether other legislative changes will be adopted, if any, or how such changes would affect the demand for our products once commercialized.
If our owned pending U.S. applications and non-U.S. applications were to issue as one or more patents, these patents would expire between August 2032 and May 2039 or later should patent term extension be granted.
The granted patents, and any pending applications should they issue as one or more patents, these patents would expire between August 2032 and May 2039 or later should patent term extension be granted. The patent portfolio we licensed from Bayer contains a number of issued U.S. and foreign patents as well as patent applications pending outside the United States.
In December 2021, we received an upfront cash payment of $117 million and we issued 1,421,523 shares of common stock for an aggregate purchase price of $35 million, or $24.62 per share. 7 License Agreements Vitae Pharmaceuticals, Inc.
In addition, we are eligible to receive tiered royalties on potential net sales of the licensed product comprising axatilimab ranging from the low to mid double-digit percentages. In December 2021, we received an upfront cash payment of $117 million and we issued 1,421,523 shares of common stock for an aggregate purchase price of $35 million, or $24.62 per share.
In the United States, a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the USPTO in granting a patent, or may be shortened if a patent is terminally disclaimed over an earlier-filed patent.
Patent and Trademark Office, or USPTO in granting a patent, or may be shortened if a patent is terminally disclaimed over an earlier-filed patent.
Targeting KMT2A using menin inhibitors has been shown to selectively reduce the viability of b -catenin–active cells and CRC organoids, but not b -catenin–inactive cells and normal organoids. Axatilimab We are also developing axatilimab a monoclonal antibody targeting the colony stimulating factor-1 receptor, or CSF-1R, a cell surface protein thought to control the survival and function of monocytes and macrophages.
Axatilimab We are also developing axatilimab a monoclonal antibody targeting the colony stimulating factor-1 receptor, or CSF-1R, a cell surface protein thought to control the survival and function of monocytes and macrophages. Axatilimab binds with high affinity to CSF-1R and blocks the binding of the two known CSF-1R ligands CSF-1 and IL-34.
If these pending applications were to issue as one or more patents, these patents would expire between November 2024 and February 2036 or later should patent term extension be granted. Further, the in-licensed portfolio includes three non-U.S. patents directed to methods of treating solid tumors by administration of an inhibitor of CSF-1R activity. The three patents expired in October 2020.
These in-licensed granted patents covering axatilimab, and any non-U.S. pending applications should they issue, will expire between November 2024 and February 2036 or later should patent term extension be granted. Our owned axatilimab patent portfolio includes one pending U.S. patent application and six non-U.S. patent applications directed to combinations of entinostat and axatilimab.
In the first half of 2023, we plan to initiate a Phase 2b trial to assess the efficacy, safety and tolerability of axatilimab in patients with IPF. This 52-week, randomized, double-blind and placebo-controlled trial is expected to enroll approximately 170 patients.
We also announced the randomized, double-blind and placebo-controlled Phase 2 trial to assess the efficacy, safety and tolerability of axatilimab in patients with idiopathic pulmonary fibrosis, or IPF, is open for enrollment.
In NPM1c cells, inhibition of the menin-MLL interaction suppresses the leukemic transcription program, causing growth arrest, terminal differentiation and cell death. In animal models, small molecule inhibitors of the menin-MLL interaction have demonstrated deep and durable single agent treatment effects in multiple NPM1c xenografts.
In animal models, small molecule inhibitors of the menin-MLL interaction have demonstrated deep and durable single agent treatment effects in multiple mNPM1 xenografts. Based on these findings, blocking the menin-MLL1 interaction represents a novel targeted strategy for the treatment of mNPM1 AML.
We are also concurrently expanding into the frontline and maintenance settings with new trials. • Develop axatilimab for the treatment of cGVHD. We have completed enrollment in the pivotal AGAVE-201 trial for the treatment of patients with cGVHD and, together with Incyte, plan to commence a clinical trial testing axatilimab in combination with ruxolitinib in steroid naive cGVHD.
We completed enrollment in the pivotal AGAVE-201 trial for the treatment of patients with cGVHD and, together with Incyte, have submitted a Biologics License Application, or BLA to the FDA.
Initial clinical evidence with revumenib also supports the hypothesis that disruption of the menin-MLL interaction can lead to responses in acute leukemias. Our near-term focus is to rapidly establish proof-of-concept that revumenib is a targeted therapy that can potentially provide meaningful clinical benefit to adult and pediatric R/R patients with mNPM1 and KMT2Ar, ALL 2 or AML.
Clinical evidence with revumenib also supports the hypothesis that disruption of the menin-MLL interaction can lead to responses in acute leukemias.

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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, include, but are not limited to, the following: • the federal Anti-Kickback Statute prohibits persons from, among other things, knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, the referral of an individual for the furnishing or arranging for the furnishing, or the purchase, lease or order, or arranging for or recommending purchase, lease or order, or any good or service for which payment may be made under a federal healthcare program such as Medicare and Medicaid; • the federal false claims, including the federal civil False Claims Act, impose criminal and civil penalties, including through civil whistleblower or qui tam actions, and civil monetary penalties laws, which prohibit knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private), willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious or fraudulent statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, also imposes obligations on covered entities, including certain health care providers, health plans and health care clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information for or on behalf of such covered entities, and their covered subcontractors, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; • the federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to CMS information related to “payments or other transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals and applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by physicians (as defined above) and their immediate family members; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require 37 drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; state laws that require manufacturers to report pricing information regarding certain drugs; state and local laws that require the registration of pharmaceutical sales representatives; state and foreign laws that govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; and federal, state, and foreign laws that govern the privacy and security of other personal information, including federal and state consumer protection laws, state data security laws, and data breach notification laws (a data breach affecting sensitive personal information, including health information, could result in significant legal and financial exposure and reputational damages).
Biggest changeRestrictions under applicable federal and state healthcare laws and regulations, include, but are not limited to, the following: • the federal Anti-Kickback Statute prohibits persons from, among other things, knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, the referral of an individual for the furnishing or arranging for the furnishing, or the purchase, lease or order, or arranging for or recommending purchase, lease or order, or any good or service for which payment may be made under a federal healthcare program such as Medicare and Medicaid; • the federal Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand, and prescribers, purchasers and formulary managers on the other.; • the Affordable Care Act amended the intent requirement of the federal Anti-Kickback Statute so that a person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation; • the federal false claims, including the federal civil False Claims Act, impose criminal and civil penalties, including through civil whistleblower or qui tam actions, and civil monetary penalties laws, which prohibit knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private), willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious or fraudulent statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, also imposes obligations on covered entities, including certain health care providers, health plans and health care clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information for or on behalf of such covered entities, and their covered subcontractors, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; • the federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to CMS information related to “payments or other transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals and applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by physicians (as defined above) and their immediate family members; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws 38 that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; state laws that require manufacturers to report pricing information regarding certain drugs; state and local laws that require the registration of pharmaceutical sales representatives; state and foreign laws that govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; and federal, state, and foreign laws that govern the privacy and security of other personal information, including federal and state consumer protection laws, state data security laws, and data breach notification laws (a data breach affecting sensitive personal information, including health information, could result in significant legal and financial exposure and reputational damages).
Interim top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data. From time to time, we may publish interim top-line or preliminary data from our clinical trials.
Interim top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes to the final data. From time to time, we may publish interim top-line or preliminary data from our clinical trials.
In addition, our license with Incyte may be unsuccessful due to other factors, including, without limitation, the following: 25 • Incyte may terminate the agreement for convenience upon 90 or 180 days’ notice depending on whether or not the parties have commercialized axatilimab in an indication in the respective territory; • Incyte may change the focus of its development and commercialization efforts or prioritize other programs more highly and, accordingly, reduce the efforts and resources allocated to axatilimab • Incyte may, within its commercially reasonable discretion, choose not to develop and commercialize axatilimab in all relevant markets or for one or more indications, if at all; and • if Incyte is acquired during the term of our collaboration, the acquirer may have competing programs or different strategic priorities that could cause it to reduce its commitment to our collaboration or to terminate the collaboration.
In addition, our license with Incyte may be unsuccessful due to other factors, including, without limitation, the following: • Incyte may terminate the agreement for convenience upon 90 or 180 days’ notice depending on whether or not the parties have commercialized axatilimab in an indication in the respective territory; • Incyte may change the focus of its development and commercialization efforts or prioritize other programs more highly and, accordingly, reduce the efforts and resources allocated to axatilimab • Incyte may, within its commercially reasonable discretion, choose not to develop and commercialize axatilimab in all relevant markets or for one or more indications, if at all; and • if Incyte is acquired during the term of our collaboration, the acquirer may have competing programs or different strategic priorities that could cause it to reduce its commitment to our collaboration or to terminate the collaboration.
Many factors affect patient enrollment, including: • the impact of public health crises, or geopolitical tensions, such as the ongoing war between Russia and Ukraine; • perception about the relative efficacy of our product candidates versus other compounds in clinical development or commercially available; • evolving standard of care in treating cancer patients; • the size and nature of the patient population, especially in the case of an orphan indication, we are pursuing; • the number and location of clinical trial sites enrolled; • competition with other organizations or our own clinical trials for clinical trial sites or patients; • the eligibility and exclusion criteria for the trial; • the design of the trial; • ability to obtain and maintain patient consent; and • risk that enrolled subjects will drop out before completion.
Many factors affect patient enrollment, including: • the impact of public health crises, or geopolitical tensions, such as the ongoing war between Russia and Ukraine and the war in Israel; • perception about the relative efficacy of our product candidates versus other compounds in clinical development or commercially available; • evolving standard of care in treating cancer patients; • the size and nature of the patient population, especially in the case of an orphan indication, we are pursuing; • the number and location of clinical trial sites enrolled; • competition with other organizations or our own clinical trials for clinical trial sites or patients; • the eligibility and exclusion criteria for the trial; • the design of the trial; • ability to obtain and maintain patient consent; and • risk that enrolled subjects will drop out before completion.
If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant fines or other sanctions, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, individual imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings and curtailment of operations, any of which could adversely affect our ability to operate our business and our results of operations.
If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant fines or other sanctions, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, individual 33 imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings and curtailment of operations, any of which could adversely affect our ability to operate our business and our results of operations.
Our collaborations, including any future strategic collaborations we enter into, could subject us to a number of risks, including: • we may be required to undertake the expenditure of substantial operational, financial and management resources; • we may be required to issue equity securities that would dilute our existing stockholders’ percentage of ownership; • we may be required to assume substantial actual or contingent liabilities; • we may not be able to control the amount and timing of resources that our strategic collaborators devote to the development or commercialization of our product candidates; 26 • strategic collaborators may delay clinical trials, provide insufficient funding, terminate a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new version of a product candidate for clinical testing; • strategic collaborators may not pursue further development and commercialization of products resulting from the strategic collaboration arrangement or may elect to discontinue research and development programs; • strategic collaborators may not commit adequate resources to the marketing and distribution of our product candidates, limiting our potential revenues from these products; • disputes may arise between us and our strategic collaborators that result in the delay or termination of the research, development or commercialization of our product candidates or that result in costly litigation or arbitration that diverts management’s attention and consumes resources; • strategic collaborators may experience financial difficulties; • strategic collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in a manner that could jeopardize or invalidate our proprietary information or expose us to potential litigation; • business combinations or significant changes in a strategic collaborator’s business strategy may also adversely affect a strategic collaborator’s willingness or ability to complete its obligations under any arrangement; • strategic collaborators could decide to move forward with a competing product candidate developed either independently or in collaboration with others, including our competitors; and • strategic collaborators could terminate the arrangement or allow it to expire, which would delay the development and may increase the cost of developing, our product candidates.
Our collaborations, including any future strategic collaborations we enter into, could subject us to a number of risks, including: • we may be required to undertake the expenditure of substantial operational, financial and management resources; • we may be required to issue equity securities that would dilute our existing stockholders’ percentage of ownership; • we may be required to assume substantial actual or contingent liabilities; • we may not be able to control the amount and timing of resources that our strategic collaborators devote to the development or commercialization of our product candidates; • strategic collaborators may delay clinical trials, provide insufficient funding, terminate a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new version of a product candidate for clinical testing; • strategic collaborators may not pursue further development and commercialization of products resulting from the strategic collaboration arrangement or may elect to discontinue research and development programs; • strategic collaborators may not commit adequate resources to the marketing, sales and distribution of our product candidates, limiting our potential revenues from these products; • disputes may arise between us and our strategic collaborators that result in the delay or termination of the research, development or commercialization of our product candidates or that result in costly litigation or arbitration that diverts management’s attention and consumes resources; • strategic collaborators may experience financial difficulties; • strategic collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in a manner that could jeopardize or invalidate our proprietary information or expose us to potential litigation; • business combinations or significant changes in a strategic collaborator’s business strategy may also adversely affect a strategic collaborator’s willingness or ability to complete its obligations under any arrangement; • strategic collaborators could decide to move forward with a competing product candidate developed either independently or in collaboration with others, including our competitors; and • strategic collaborators could terminate the arrangement or allow it to expire, which would delay the development and may increase the cost of developing, our product candidates.
The degree of market acceptance will depend on a number of factors, including: • the efficacy and safety profile as demonstrated in trials; • the timing of market introduction as well as competitive products; • the clinical indications for which the product candidate is approved; • acceptance of the product candidate as a safe and effective treatment by physicians, clinics and patients; • the potential and perceived advantages of our product candidates over alternative treatments; • the cost of treatment in relation to alternative treatments; • pricing and the availability of coverage and adequate reimbursement by third-party payors, including government authorities; 28 • relative convenience and ease of administration; • the frequency and severity of adverse events; • the effectiveness of sales and marketing; and • unfavorable publicity relating to our product candidates.
The degree of market acceptance will depend on a number of factors, including: • the efficacy and safety profile as demonstrated in trials; • the timing of market introduction as well as competitive products; • the clinical indications for which the product candidate is approved; • acceptance of the product candidate as a safe and effective treatment by physicians, clinics and patients; • the potential and perceived advantages of our product candidates over alternative treatments; • the cost of treatment in relation to alternative treatments; • pricing and the availability of coverage and adequate reimbursement by third-party payors, including government authorities; • relative convenience and ease of administration; • the frequency and severity of adverse events; • the effectiveness of sales and marketing; and • unfavorable publicity relating to our product candidates.
We believe that our ability to successfully compete will depend on, among other things: • the efficacy and safety profile of our product candidates relative to marketed products and product candidates in development by third parties; • the time it takes for our product candidates to complete clinical development and receive marketing approval; • our ability to commercialize our product candidates if they receive regulatory approval; • the price of our product candidates, including in comparison to branded or generic competitors; • whether coverage and adequate levels of reimbursement are available under private and governmental health insurance plans, including Medicare; • our ability to manufacture commercial quantities of our product candidates if they receive regulatory approval; and • our ability to negotiate preferential formulary status for our product candidates.
We believe that our ability to successfully compete will depend on, among other things: • the efficacy and safety profile of our product candidates relative to marketed products and product candidates in development by third parties; • the time it takes for our product candidates to complete clinical development and receive marketing approval; • our ability to commercialize our product candidates if they receive regulatory approval; • the price of our product candidates, including in comparison to branded or generic competitors; • whether coverage and adequate levels of reimbursement are available under private and governmental health insurance plans, including Medicare; • our ability to manufacture commercial quantities of our product candidates if they receive regulatory approval; and 32 • our ability to negotiate preferential formulary status for our product candidates.
In the United States, engaging in the impermissible promotion of our products for off-label uses can also subject us to false claims litigation under federal and state statutes, which can lead to administrative, civil and criminal penalties, damages, monetary fines, disgorgement, individual imprisonment, exclusion from participation in Medicare, Medicaid and other federal healthcare programs, curtailment or restructuring of our operations and agreements that materially restrict the manner in which a company promotes or distributes drug products.
In the United States, engaging in the impermissible promotion of our products for off-label uses can also subject us to false claims litigation under federal and state statutes, which can lead to administrative, civil and 30 criminal penalties, damages, monetary fines, disgorgement, individual imprisonment, exclusion from participation in Medicare, Medicaid and other federal healthcare programs, curtailment or restructuring of our operations and agreements that materially restrict the manner in which a company promotes or distributes drug products.
Our future funding requirements, both short- and long-term, will depend on many factors, including: • the initiation, progress, timing, costs and results of clinical trials of our product candidates; • the outcome, timing and cost of seeking and obtaining regulatory approvals from the FDA and comparable foreign regulatory authorities, including the potential for such authorities to require that we perform more trials than we currently expect; • the cost to establish, maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecuting, defending and enforcing any patents or other intellectual property rights; • market acceptance of our product candidates; • the cost and timing of selecting, auditing and developing manufacturing capabilities, and potentially validating manufacturing sites for commercial-scale manufacturing; • the cost and timing for obtaining pricing, and coverage and reimbursement by third-party payors, which may require additional trials to address pharmacoeconomic benefit; • the cost of establishing sales, marketing and distribution capabilities for our product candidates if any candidate receives regulatory approval and we determine to commercialize it ourselves; • the costs of acquiring, licensing or investing in additional businesses, products, product candidates and technologies; • the effect of competing technological and market developments; • our need to implement additional internal systems and infrastructure, including financial and reporting systems, as we grow our company; and 41 • business interruptions resulting from geo-political actions, including war or the perception that hostilities may be imminent (such as the ongoing war between Russia and Ukraine), terrorism, natural disasters, including earthquakes, typhoons, floods and fires, or public health crises.
Our future funding requirements, both short- and long-term, will depend on many factors, including: • the initiation, progress, timing, costs and results of clinical trials of our product candidates; • the outcome, timing and cost of seeking and obtaining regulatory approvals from the FDA and comparable foreign regulatory authorities, including the potential for such authorities to require that we perform more trials than we currently expect; • the cost to establish, maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecuting, defending and enforcing any patents or other intellectual property rights; • market acceptance of our product candidates; • the cost and timing of selecting, auditing and developing manufacturing capabilities, and potentially validating manufacturing sites for commercial-scale manufacturing; • the cost and timing for obtaining pricing, and coverage and reimbursement by third-party payors, which may require additional trials to address pharmacoeconomic benefit; • the cost of establishing sales, marketing and distribution capabilities for our product candidates if any candidate receives regulatory approval and we determine to commercialize it ourselves; • the costs of acquiring, licensing or investing in additional businesses, products, product candidates and technologies; 45 • the effect of competing technological and market developments; • our need to implement additional internal systems and infrastructure, including financial and reporting systems, as we grow our company; and • business interruptions resulting from geo-political actions, including war or the perception that hostilities may be imminent (such as the ongoing war between Russia and Ukraine and the war in Israel), terrorism, natural disasters, including earthquakes, typhoons, floods and fires, or public health crises.
We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively. 31 Even if any of our product candidates received regulatory approval, such product candidates would face competition from other therapies in the relevant indication. For example, chronic graft versus host disease has historically been managed by off-label treatments.
We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively. Even if any of our product candidates received regulatory approval, such product candidates would face competition from other therapies in the relevant indication. For example, chronic graft versus host disease has historically been managed by off-label treatments.
In the event that we or any of our affiliates or sublicensees commercializes revumenib, we will also be obligated to pay AbbVie low single to low double-digit royalties on sales, subject to reduction in certain circumstances, as well as up to an aggregate of $70 million in potential one-time sales-based milestone payments based on achievement of certain annual sales thresholds.
In the event that we or any of our affiliates or sublicensees commercializes revumenib, we will also be obligated to pay AbbVie low single to low double-digit royalties on sales, subject to reduction in certain circumstances, as well as up to an aggregate of $70.0 million in potential one-time sales-based milestone payments based on achievement of certain annual sales thresholds.
We are unable to predict when, if ever, we will enter into any additional strategic collaborations because of the numerous risks and uncertainties associated with establishing them. The regulatory approval processes of the FDA and foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable. Our inability to obtain regulatory approval for our product candidates would harm our business.
We are unable to predict when, if ever, we will enter into any additional strategic collaborations because of the numerous risks and uncertainties associated with establishing them. 27 The regulatory approval processes of the FDA and foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable. Our inability to obtain regulatory approval for our product candidates would harm our business.
Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products. 35 We are in the process of building our sales, marketing and distribution infrastructure.
Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products. We are in the process of building our sales, marketing and distribution infrastructure.
If we or any of our affiliates or sublicensees commercializes axatilimab, we will also be obligated to pay UCB low double-digit royalties on sales, subject to reduction in certain circumstances, as well as up to an aggregate of $250 million in potential one-time sales-based milestone payments based on achievement of certain annual sales thresholds.
If we or any of our affiliates or sublicensees commercializes axatilimab, we will also be obligated to pay UCB low double-digit royalties on sales, subject to reduction in certain circumstances, as well as up to an aggregate of $250.0 million in potential one-time sales-based milestone payments based on achievement of certain annual sales thresholds.
As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
As a result, the 34 coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
In addition, we may discover that we need to conduct additional activities that exceed our current budget to achieve appropriate rates of patient enrollment, which would increase our development costs. 40 In any event, we will require additional capital to continue the development of, obtain regulatory approval for, and to commercialize our existing product candidates and any future product candidates.
In addition, we may discover that we need to conduct additional activities that exceed our current budget to achieve appropriate rates of patient enrollment, which would increase our development costs. In any event, we will require additional capital to continue the development of, obtain regulatory approval for, and to commercialize our existing product candidates and any future product candidates.
Our strategy for developing revumenib is to conduct a Phase 1/2 clinical trial in r/r patients with KMT2Ar and NPM1 mutant acute leukemias and determine if the observed clinical efficacy supports further development. The Phase 1 portion of the trial is assessing the safety, tolerability and pharmacokinetics of revumenib, and seeks to establish a recommended Phase 2 dose.
Our strategy for developing revumenib is to conduct a Phase 1/2 clinical trial in r/r patients with KMT2Ar and NPM1 mutant acute leukemias and determine if the observed clinical efficacy supports further development. The Phase 1 portion of the trial is assessing the safety, tolerability and 24 pharmacokinetics of revumenib, and seeks to establish a recommended Phase 2 dose.
Proceedings to enforce our and our licensors’ patent rights in foreign jurisdictions could result in substantial costs and divert our attention from other aspects of our business, could put our and our licensors’ patents 44 at risk of being invalidated or interpreted narrowly and our and our licensors’ patent applications at risk of not issuing and could provoke third parties to assert claims against us or our licensors.
Proceedings to enforce our and our licensors’ patent rights in foreign jurisdictions could result in substantial costs and divert our attention from other aspects of our business, could put our and our licensors’ patents at risk of being invalidated or interpreted narrowly and our and our licensors’ patent applications at risk of not issuing and could provoke third parties to assert claims against us or our licensors.
As a result of the above factors, there is a risk that our or our collaborators’ clinical trials may not be completed on a timely basis or at all. We may be required to relinquish important rights to and control over the development and commercialization of our product candidates to our current or future collaborators.
As a result of the above factors, there is a risk that our or our collaborators’ clinical trials may not be completed on a timely basis or at all. 26 We may be required to relinquish important rights to and control over the development and commercialization of our product candidates to our current or future collaborators.
If the FDA or a foreign regulatory agency does not approve these facilities for the manufacture of our product candidates, or if it withdraws its approval in the future, we may need to find alternative manufacturing facilities, which would impede or delay our ability to develop, obtain regulatory approval for or market our product candidates, if approved.
If the FDA or a foreign regulatory agency does not approve these facilities for the manufacture of our product candidates, or if it withdraws its approval in the future, 29 we may need to find alternative manufacturing facilities, which would impede or delay our ability to develop, obtain regulatory approval for or market our product candidates, if approved.
If we or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory agency may impose restrictions on that product, the manufacturing facility or us, including withdrawal of the 29 product from the market or suspension of manufacturing, or we may recall the product from distribution.
If we or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory agency may impose restrictions on that product, the manufacturing facility or us, including withdrawal of the product from the market or suspension of manufacturing, or we may recall the product from distribution.
Our success depends in significant part on our and our licensors’ and licensees’ ability to establish, maintain and protect patents and other intellectual property rights and operate without infringing the intellectual property rights of others. We have filed patent applications both in the United States and in foreign jurisdictions to obtain patent rights to inventions we have discovered.
Our success depends in significant part on our and our licensors’ and licensees’ ability to establish, maintain and protect patents and other intellectual property rights and operate without infringing the intellectual property 46 rights of others. We have filed patent applications both in the United States and in foreign jurisdictions to obtain patent rights to inventions we have discovered.
The occurrence of any of these events could adversely affect the development and commercialization of axatilimab, and materially harm our business. 32 Our employees, consultants and collaborators may engage in misconduct or other improper activities, including insider trading and non-compliance with regulatory standards and requirements.
The occurrence of any of these events could adversely affect the development and commercialization of axatilimab, and materially harm our business. Our employees, consultants and collaborators may engage in misconduct or other improper activities, including insider trading and non-compliance with regulatory standards and requirements.
Following our end of Phase 1 meeting with the FDA, we have aligned on a regulatory path for axatilimab for the treatment of cGVHD and commenced a pivotal Phase 2 clinical trial, AGAVE-201, to assess the safety and efficacy of different doses and schedules of axatilimab for the treatment of patients with cGVHD.
Following our end of Phase 1 meeting with the FDA, we aligned on a regulatory path for axatilimab for the treatment of cGVHD and commenced a pivotal Phase 2 clinical trial, AGAVE-201, to assess the safety and efficacy of different doses and schedules of axatilimab for the treatment of patients with cGVHD.
The size of our future net losses will depend, in part, on the rate of future growth of our 39 expenses and our ability to generate revenues, if any. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.
The size of our future net losses will depend, in part, on the rate of growth of our expenses and our ability to generate revenues, if any. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.
The actual term of any patents granted based on the pending applications that we licensed from AbbVie can only be determined after such patents are actually granted. We may not be able to protect our intellectual property rights throughout the world.
The actual term of any patents granted based on the pending applications that we licensed from AbbVie can only be determined after such patents are granted. We may not be able to protect our intellectual property rights throughout the world.
The USPTO recently developed new regulations and procedures to govern administration of the American Invents Act, and many of the substantive changes to patent law associated with the America Invents Act and in particular, the first to file provisions, only became effective on March 16, 2013.
The USPTO recently developed new regulations and procedures to govern administration of the America Invents Act, and many of the substantive changes to patent law associated with the America Invents Act and in particular, the first to file provisions, only became effective on March 16, 2013.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this report, these factors include: • the success of competitive products or technologies; • regulatory actions with respect to our products or our competitors’ products; • actual or anticipated changes in our growth rate relative to our competitors; • announcements by us or our competitors of significant acquisitions, strategic collaborations, joint ventures, collaborations or capital commitments; • results of trials of our product candidates or those of our competitors; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; 49 • the level of expenses related to our product candidates or clinical development programs; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • announcement or expectation of additional financing efforts; • sales of our common stock by us, our insiders or our other stockholders; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; and • general economic, industry, political and market conditions, including, but not limited to new or ongoing public health crises and the war between Russia and Ukraine.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Annual Report, these factors include: • the success of competitive products or technologies; • regulatory actions with respect to our products or our competitors’ products; • actual or anticipated changes in our growth rate relative to our competitors; • announcements by us or our competitors of significant acquisitions, strategic collaborations, joint ventures, collaborations or capital commitments; • results of trials of our product candidates or those of our competitors; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; 52 • the recruitment or departure of key personnel; • the level of expenses related to our product candidates or clinical development programs; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • announcement or expectation of additional financing efforts; • sales of our common stock by us, our insiders or our other stockholders; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; and • general economic, industry, political and market conditions, including, but not limited to new or ongoing public health crises and the war between Russia and Ukraine and the war in Israel.
There have been executive, judicial and Congressional challenges to certain aspects of the Affordable Care Act. 34 While Congress has not passed comprehensive repeal legislation, several bills affecting the implementation of certain taxes under the Affordable Care Act have been signed into law.
There have been executive, judicial and Congressional challenges to certain aspects of the Affordable Care Act. While Congress has not passed comprehensive repeal legislation, several bills affecting the implementation of certain taxes under the Affordable Care Act have been signed into law.
If we breach the UCB license agreement related to axatilimab or if the UCB license agreement is otherwise terminated, we could lose the ability to continue the development and commercialization of axatilimab. Our commercial success depends upon our ability to develop, manufacture, market and sell axatilimab.
If we breach the UCB license agreement related to axatilimab or if the UCB license agreement is otherwise terminated, we could lose the ability to continue the development and commercialization of axatilimab. 48 Our commercial success depends upon our ability to develop, manufacture, market and sell axatilimab.
We rely on third-party suppliers as well as Incyte to manufacture and distribute our clinical drug supplies for our product candidates, we intend to rely on these parties for commercial manufacturing and distribution of our product candidates and we expect to rely on third parties for manufacturing and distribution of preclinical, clinical and commercial supplies of any future product candidates.
We rely on third-party suppliers as well as Incyte to manufacture and distribute our clinical drug supplies for our product candidates, we intend to rely on third parties for commercial manufacturing and distribution of our product candidates and we expect to rely on third parties for manufacturing and distribution of preclinical, clinical and commercial supplies of any future product candidates.
The proceedings can be expensive and time-consuming and many of our or our licensors’ adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions 47 than we or our licensors can.
The proceedings can be expensive and time-consuming and many of our or our licensors’ adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we or our licensors can.
Based on the priority date and filing date of the applications in the portfolio we licensed from UCB, we expect that additional patents, if any, granted based on the currently pending applications would expire in 2036.
Based on the priority date and filing date of the applications in the portfolio we licensed from UCB, we expect that additional patents, if any, granted based on the currently pending applications would 47 expire in 2036.
In the future, we or our licensors may initiate legal proceedings to enforce or defend our or our licensors’ intellectual property rights, to protect our or our licensors’ trade secrets or to determine the validity or scope of intellectual property rights we own or control.
In the future, we or our licensors may initiate legal proceedings to enforce or defend our or our licensors’ intellectual property rights, to protect our or our licensors’ trade secrets or to determine 50 the validity or scope of intellectual property rights we own or control.
We believe that our existing cash, cash equivalents and short-term investments will fund our projected operating expenses and capital expenditure requirements for at least the next 12 months.
We believe that our existing cash, cash equivalents and short-term investments will fund our projected operating expenses and capital expenditure requirements for at least the next 12 44 months.
In order to commercialize our product candidates, we will be required to obtain regulatory approvals by establishing that each of them is sufficiently safe and effective.
In order to commercialize our product candidates, we will be required to obtain regulatory 23 approvals by establishing that each of them is sufficiently safe and effective.
The actual term of any patents granted based on the pending applications we licensed from UCB can only be determined after such patents are actually granted.
The actual term of any patents granted based on the pending applications we licensed from UCB can only be determined after such patents are granted.
Department of Health and Human Services that would require pharmaceutical manufacturers to charge a negotiated "maximum fair price" for certain selected drugs or pay an excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers under Medicare Parts B and D to penalize price increases that outpace inflation, and a redesign of the Part D benefit, as part of which manufacturers are required to provide discounts on Part D drugs and Part D beneficiaries' annual out-of-pocket spending will be capped at $2,000 beginning in 2025.
Department of Health and Human Services that would require pharmaceutical manufacturers to charge a negotiated “maximum fair price” for certain selected drugs or pay an excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers under Medicare Parts B and D to penalize price increases that outpace inflation, and a redesign of the Part D benefit, as part of which manufacturers are required to provide discounts on Part D drugs and Part D beneficiaries’ annual out-of-pocket spending will be capped at $2,000 beginning in 2025.
To develop our internal sales, distribution and marketing capabilities, we must invest significant amounts of financial and management resources in the future.
To develop our internal sales, distribution and 36 marketing capabilities, we must invest significant amounts of financial and management resources in the future.
Any provision of our amended and restated certificate of incorporation or amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change of control could limit the opportunity 52 for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.
Any provision of our amended and restated certificate of incorporation or amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change of control could limit the opportunity 55 for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.
In additional, public health crises, may impact the ability of our existing or future manufacturers to perform their obligations to us. We are dependent on our third-party manufacturers and Incyte for compliance with cGMPs and for manufacture of both active drug substances and finished drug products.
In addition, public health crises, may impact the ability of our existing or future manufacturers to perform their obligations to us. We are dependent on our third-party manufacturers and Incyte for compliance with cGMPs and for manufacture of both active drug substances and finished drug products.
While all information technology operations are inherently vulnerable to inadvertent or intentional security breaches, incidents, attacks and exposures, the accessibility and distributed nature of our information technology systems, and the sensitive information stored on those systems, make such systems potentially vulnerable to unintentional or malicious, internal and external attacks on our technology environment.
While all information technology operations are inherently vulnerable to inadvertent or intentional security breaches, incidents, attacks and exposures, the accessibility and distributed nature of our information technology systems, and the sensitive data stored on those systems, make such systems vulnerable to unintentional or malicious, internal and external attacks on our technology environment.
Subject to the achievement of certain milestone events, we may be required to pay Vitae, which is now a subsidiary of AbbVie, up to $99 million in one-time development and regulatory milestone payments over the term of the 45 AbbVie license agreement.
Subject to the achievement of certain milestone events, we may be required to pay Vitae, which is now a subsidiary of AbbVie, up to $99.0 million in one-time development and regulatory milestone payments over the term of the AbbVie license agreement.
Axatilimab has undergone limited clinical testing and we may fail to show that it is well tolerated and provides a clinical benefit for patients. 24 Preclinical studies suggest that CSF-1/CSF-1R signaling may be the key regulatory pathway involved in the expansion and infiltration of donor derived macrophages that mediate the disease processes involved in cGVHD and other fibrotic or inflammatory diseases.
Axatilimab has undergone limited clinical testing and we may fail to show that it is well tolerated and provides sufficient clinical benefit for patients. Preclinical studies suggest that CSF-1/CSF-1R signaling may be the key regulatory pathway involved in the expansion and infiltration of donor derived macrophages that mediate the disease processes involved in cGVHD and other fibrotic or inflammatory diseases.
Section 404 of the Sarbanes-Oxley Act also generally requires an attestation from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. 51 We are required to get an attestation from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting.
Section 404 of the 54 Sarbanes-Oxley Act also generally requires an attestation from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. We are required to get an attestation from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting.
Any failure or perceived failure by us or our vendors or business partners to comply with our privacy, confidentiality or data security-related legal or other obligations to third parties, or any further security incidents or other inappropriate access events resulting in the unauthorized access, release or transfer of sensitive information, which could include personally identifiable information, may result in governmental investigations, enforcement actions, regulatory fines, litigation, or public statements against us by advocacy groups or others, and could cause third parties, including clinical sites, regulators or current and potential partners, to lose trust in us or we could be subject to claims by third parties that we have breached our privacy- or confidentiality-related obligations, which could materially and adversely affect our business and prospects.
Any failure or perceived failure by us or our vendors or business partners to comply with 42 our privacy, confidentiality or data security-related legal or other obligations to third parties, or any further security incidents or other inappropriate access events resulting in the unauthorized access, release or transfer of sensitive data, may result in governmental investigations, enforcement actions, regulatory fines, litigation, or public statements against us by advocacy groups or others, and could cause third parties, including clinical sites, regulators or current and potential partners, to lose trust in us or we could be subject to claims by third parties that we have breached our privacy or confidentiality-related obligations, which could materially and adversely affect our business and prospects.
The clinical and commercial success of our product candidates will depend on a number of factors, including the following: • the initiation, cost, timing, progress and results of our research and development activities, clinical trials and preclinical studies; • timely completion of any future clinical trials of revumenib and axatilimab; • interruption of key clinical trial activities, in connection with public health threats or any future geopolitical tensions, such as the ongoing war between Russia and Ukraine; 23 • whether we are required by the FDA or foreign regulatory authorities to conduct additional clinical trials prior to receiving marketing approval; • the prevalence and severity of adverse drug reactions in any of our clinical trials; • the ability to demonstrate safety and efficacy of our product candidates for their proposed indications and the timely receipt of necessary marketing approvals from the FDA and foreign regulatory authorities; • successfully meeting the endpoints in the clinical trials of our product candidates; • achieving and maintaining compliance with all applicable regulatory requirements; • the potential use of our product candidates to treat various cancer indications and fibrotic diseases; • the availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing treatments; • the effectiveness of our own or our potential strategic collaborators’ marketing, sales and distribution strategy and operations in the United States and abroad; • the ability of our collaboration partner and of third-party contract manufacturers to produce trial supplies and to develop, validate and maintain a commercially viable manufacturing process that is compliant with cGMP; • our ability to successfully commercialize our product candidates in the United States and abroad, whether alone or in collaboration with others; and • our ability to enforce our intellectual property rights in and to our product candidates.
The clinical and commercial success of our product candidates will depend on a number of factors, including the following: • the initiation, cost, timing, progress and results of our research and development activities, clinical trials and preclinical studies; • timely completion of any future clinical trials of revumenib and axatilimab; • interruption of key clinical trial activities, in connection with public health threats or any future geopolitical tensions, such as the ongoing war between Russia and Ukraine and the war in Israel; • whether we are required by the FDA or foreign regulatory authorities to conduct additional clinical trials prior to receiving marketing approval; • the prevalence and severity of adverse drug reactions in any of our clinical trials; • the ability to demonstrate safety and efficacy of our product candidates for their proposed indications and the timely receipt of necessary marketing approvals from the FDA and foreign regulatory authorities; • successfully meeting the endpoints in the clinical trials of our product candidates; • achieving and maintaining compliance with all applicable regulatory requirements; • the potential use of our product candidates to treat various cancer indications and fibrotic diseases; • the availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing treatments; • the effectiveness of our own or our potential strategic collaborators’ marketing, sales and distribution strategy and operations in the United States and abroad; • the ability of our collaboration partner and of third-party contract manufacturers to produce trial supplies and to develop, validate and maintain a commercially viable manufacturing process that is compliant with cGMP; • our ability to successfully commercialize our product candidates in the United States and abroad, whether alone or in collaboration with others; • our ability to prevent any significant disruptions of our information technology systems and protect the security of our data; and • our ability to enforce our intellectual property rights in and to our product candidates.
This approval process generally requires, at minimum, testing of any product candidate in preclinical studies and clinical trials to establish its safety and effectiveness, and confirmation by the FDA and comparable foreign regulatory authorities that any such product candidate, and any parties involved in its manufacturing, testing and development, complied with current Good Manufacturing Practices, or GMP, current Good Laboratory Practices, or GLP, and current Good Clinical Practices, or GCP, regulations, standards and guidelines during such manufacturing, testing and development.
This approval process generally requires, at minimum, testing of any product candidate in preclinical studies and clinical trials to establish its safety and effectiveness, and confirmation by the FDA and comparable foreign regulatory authorities that any such product candidate, and any parties involved in its manufacturing, testing and development, complied with current Good Manufacturing Practices, or cGMP, current Good Laboratory Practices and current Good Clinical Practices, regulations, standards and guidelines during such manufacturing, testing and development.
These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which began in 2013, and due to subsequent legislative amendments to the statute, will remain in effect through 2031 unless additional Congressional action is taken.
These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which began in 35 2013, and due to subsequent legislative amendments to the statute, will remain in effect through 2032 unless additional Congressional action is taken.
We have not obtained regulatory approval for any of our product candidates and it is possible that we will never obtain regulatory approval for our existing product candidates or any future product candidates. 27 In addition, our product candidates could fail to receive regulatory approval from the FDA or foreign regulatory authorities for other reasons, including but not limited to: • failure to demonstrate that our product candidates are effective for their proposed indication and have an acceptable safety profile; • failure of clinical trials to meet the primary endpoints or level of statistical significance required for approval; • failure to demonstrate that the clinical and other benefits of a product candidate outweigh any of its safety risks; • disagreement with our interpretation of data from preclinical studies or clinical trials; • disagreement with the design, size, conduct or implementation of our or our collaborators’ trials; • the insufficiency of data collected from trials of our product candidates to support the submission and filing of an NDA, BLA or other submission or to obtain regulatory approval; • failure to obtain approval of the manufacturing and testing processes or facilities of third-party manufacturers with whom we contract for clinical and commercial supplies; • receipt of a negative opinion from an advisory committee due to a change in the standard of care regardless of the outcome of the clinical trials; or • changes in the approval policies or regulations that render our preclinical and clinical data insufficient for approval.
In addition, our product candidates could fail to receive regulatory approval from the FDA or foreign regulatory authorities for other reasons, including but not limited to: • failure to demonstrate that our product candidates are effective for their proposed indication and have an acceptable safety profile; • failure of clinical trials to meet the primary endpoints or level of statistical significance required for approval; • failure to demonstrate that the clinical and other benefits of a product candidate outweigh any of its safety risks; • disagreement with our interpretation of data from preclinical studies or clinical trials; • disagreement with the design, size, conduct or implementation of our or our collaborators’ trials; • the insufficiency of data collected from trials of our product candidates to support the submission and filing of an NDA, BLA or other submission or to obtain regulatory approval; • failure to obtain approval of the manufacturing and testing processes or facilities of third-party manufacturers with whom we contract for clinical and commercial supplies; • receipt of a negative opinion from an advisory committee due to a change in the standard of care regardless of the outcome of the clinical trials; or • changes in the approval policies or regulations that render our preclinical and clinical data insufficient for approval.
The issuance of these shares of our common stock resulted, and any future issuance pursuant to the exercise of the outstanding pre-funded warrants or sales under the 2021 ATM Program will result, in dilution to our stockholders. 50 We may also seek additional funding through government or other third-party funding and other collaborations, strategic alliances and licensing arrangements.
The issuance of these shares of 53 our common stock resulted, and any future issuance pursuant to the exercise of the outstanding pre-funded warrants or sales under the 2023 ATM Program will result, in dilution to our stockholders. We may also seek additional funding through government or other third-party funding and other collaborations, strategic alliances and licensing arrangements.
If we are unable to successfully complete clinical development of, obtain regulatory approval for and commercialize our product candidates, our business prospects will be significantly harmed. • Revumenib has undergone limited clinical testing and we may fail to show that it is well tolerated and provides sufficient clinical benefit for patients. • Axatilimab has undergone limited clinical testing and we may fail to show that it is well tolerated and provides a sufficient clinical benefit for patients. • Interim top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data becomes available and are subject to audit and verification procedures that could result in material changes in the final data. 22 • Incyte may fail to perform its obligations as expected under the collaboration or may deprioritize its investment to further develop and commercialize axatilimab. • If we are or our collaborators are unable to enroll patients in clinical trials, these clinical trials may not be completed on a timely basis or at all. • The regulatory approval processes of the FDA and foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable.
If we are unable to successfully complete clinical development of, obtain regulatory approval for and commercialize our product candidates, our business prospects will be significantly harmed. 22 • Revumenib and axatilimab has undergone limited clinical testing and we may fail to show that it is well tolerated and provides sufficient clinical benefit for patients. • Interim top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes to the final data. • We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of any of our product candidates. • Incyte may fail to perform its obligations as expected under the collaboration or may deprioritize its investment to further develop and commercialize axatilimab. • If we are or our collaborators are unable to enroll patients in clinical trials, these clinical trials may not be completed on a timely basis or at all. • The regulatory approval processes of the FDA and foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable.
For example, in April and December 2021 and in November 2022, we announced interim data from our Phase 1/2 clinical trial of revumenib. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.
For example, in each of November 2022 and 2023, we announced interim data from our Phase 1/2 clinical trial of revumenib. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.
Even if we obtain regulatory approval of our product candidates, the availability and price of our competitors’ products could limit the demand and the price we are able to charge.
Even if we obtain regulatory approval of our product candidates, the availability, commercial formulary placement, and price of our competitors’ products could limit the demand and the price we are able to charge.
Moreover, data security incidents and other inappropriate access can be difficult to detect. Any delay in identifying them may lead to increased harm of the type described above. While we have implemented security measures to protect our information technology systems and infrastructure, there can be no assurance that such measures will successfully prevent service interruptions or security incidents.
Moreover, data security incidents and other inappropriate access can be difficult to detect and any delay in identifying them may lead to increased harm of the type described above. While we have implemented security measures to protect our information technology systems and infrastructure, there can be no assurance that such measures will be effective.
While we believe that we have established sufficient efficacy to warrant continued development in this indication, we have not yet sufficiently demonstrated a favorable risk-benefit of axatilimab in patients.
While we believe that we have established sufficient efficacy to warrant a BLA submission and continued development in this indication, we may not yet have sufficiently demonstrated a favorable risk-benefit of axatilimab in patients.
Private payors often follow decisions by CMS, regarding coverage and reimbursement to a substantial degree. However, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage for the drug product.
Private payors often follow decisions by Center for Medicare & Medicaid Services, or CMS, regarding coverage and reimbursement to a substantial degree. However, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage for the drug product.
The prevalent use of mobile devices further increases the risk of data security incidents. 38 Significant disruptions of our, our third-party vendors’ and/or business partners’ information technology systems or other similar data security incidents could adversely affect our business operations and/or result in the loss, misappropriation and/or unauthorized access, use or disclosure of, or the prevention of access to, sensitive information, which could result in financial, legal, regulatory, business and reputational harm to us.
Significant disruptions of our, our third-party vendors’ and/or business partners’ information technology systems or other similar data security incidents could adversely affect our business operations and/or result in the loss, misappropriation and/or unauthorized access, use or disclosure of, or the prevention of access to, sensitive data, which could result in financial, legal, regulatory, business and reputational harm to us.
There can be no assurance that our product candidates, if they are approved for sale in the United States or in other countries, will be considered medically reasonable and necessary for a specific indication, that it will be considered cost effective by third-party payors, that coverage and an adequate level of reimbursement will be available, or that third-party payors’ reimbursement policies will not adversely affect our ability to sell our product candidates profitably Current and future legislation may increase the difficulty and cost for us to commercialize our product candidates and affect the prices we may obtain.
There can be no assurance that our product candidates, if they are approved for sale in the United States or in other countries, will be considered medically reasonable and necessary for a specific indication, that it will be considered cost effective by third-party payors, that coverage and an adequate level of reimbursement will be available, or that third-party payors’ reimbursement policies will not adversely affect our ability to sell our product candidates profitably.
As a result, we are not and have never been profitable and have incurred losses in each period since our inception in 2005, except in 2021. For the year ended December 31, 2022, we reported a net loss of $149.3 million.
As a result, we are not and have never been profitable and have incurred losses in each period since our inception in 2005, except in 2021. 43 For the year ended December 31, 2023, we reported a net loss of $209.4 million.
Increased inflation may result in increased operating costs (including labor costs) and may affect our operating budgets. In addition, the U.S. Federal Reserve has raised and is expected to further raise, interest rates in response to concerns about inflation.
Furthermore, inflation rates have increased recently to levels not seen in decades. Increased inflation may result in increased operating costs (including labor costs) and may affect our operating budgets. In addition, the U.S. Federal Reserve has raised and is expected to further raise, interest rates in response to concerns about inflation.
Therefore, we hypothesize that a CSF-1R signal inhibitor such as axatilimab may play a meaningful role as a monotherapy agent in the treatment of cGVHD. Our approach is to conduct a Phase 1/2 clinical trial with axatilimab in subjects with active cGVHD who have failed at least two prior lines of therapy.
Therefore, we hypothesize that a CSF-1R signal inhibitor such as axatilimab may play a meaningful role as a monotherapy agent in the treatment of cGVHD. In 2018, we commenced a Phase 1/2 clinical trial with axatilimab in subjects with active cGVHD who had failed at least two prior lines of therapy.
Our product candidates may not achieve adequate market acceptance among physicians, patients, healthcare payors and others in the medical community to be commercially successful . Even if our product candidates receive regulatory approval, they may not gain sufficient market acceptance among physicians, patients, healthcare payors and others in the medical community.
Even if our product candidates receive regulatory approval, they may not gain sufficient market acceptance among physicians, patients, healthcare payors and others in the medical community.
As of December 31, 2022, we had an accumulated deficit of $693.0 million, which included non-cash charges for stock-based compensation, preferred stock accretion and historical extinguishment charges.
As of December 31, 2023, we had an accumulated deficit of $902.4 million, which included non-cash charges for stock-based compensation, preferred stock accretion and historical extinguishment charges.
We have also outsourced elements of our operations (including elements of our information technology infrastructure) to third parties, and as a result, we manage a number of third-party vendors who may or could have access to our computer networks, our confidential information or the confidential information of third parties that is in our possession.
We have also outsourced elements of our operations (including elements of our information technology infrastructure) to third parties, and as a result, we manage a number of third-party vendors who may or could have access to our computer networks and our sensitive data.
Research suggests that certain acute leukemias, such as KMT2Ar leukemias and nucleophosmin 1, or NPM1, mutant acute myeloid leukemia, or AML, are driven by the interaction of menin, a nuclear protein involved in transcription, with the N-terminus of MLL1 protein, a histone methyl transferase.
Research suggests that certain acute leukemias, such as lysine methyltransferase 2A rearranged, or KMT2Ar, acute myeloid or lymphoid leukemia, AML or ALL, and nucleophosmin 1, or NPM1, mutant AML, are driven by the interaction of menin, a nuclear protein involved in transcription, with the N-terminus of KMT2A protein.
Patent and Trademark Office, or USPTO, the laws and regulations governing patents could change in unpredictable ways that may weaken our and our licensors’ ability to obtain new patents or to enforce existing patents and patents we and our licensors or collaborators may obtain in the future.
Depending on decisions by Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that may weaken our and our licensors’ ability to obtain new patents or to enforce existing patents and patents we and our licensors or collaborators may obtain in the future.
In addition to increasing uncertainty with regard to our and our licensors’ ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by Congress, the federal courts, and the U.S.
In addition to increasing uncertainty with regard to our and our licensors’ ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.
We may not obtain foreign regulatory approvals on a timely basis, or at all. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval.
We may not obtain foreign regulatory approvals on a timely basis, or at all. The approval procedure varies among countries and 31 can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain FDA approval.
The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, increases in inflation rates and uncertainty about economic stability. For example, the COVID-19 pandemic resulted in widespread unemployment, economic slowdown and extreme volatility in the capital markets.
The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, bank failures, declines in consumer confidence, declines in economic growth, increases in unemployment rates, increases in inflation rates and uncertainty about economic stability.
Limitation on coverage and reimbursement may impact the demand for, or the price of, and our ability to successfully commercialize any product candidates that we develop.
We cannot be sure that coverage and reimbursement will be available for any product that we commercialize and, if reimbursement is available, what the level of reimbursement will be. Limitation on coverage and reimbursement may impact the demand for, or the price of, and our ability to successfully commercialize any product candidates that we develop.
At the federal level, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs.
At the federal level, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs. In response to President Biden’s executive order, on September 9, 2021, the U.S.
Many of our existing or potential competitors have substantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of products and the commercialization of those products.
Existing or potential competitors have substantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of products and the commercialization of those products. Our competitors may be more successful than us in obtaining FDA approval for drugs and achieving widespread market acceptance.
Attacks of this nature are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives (including, but not limited to, industrial espionage) and expertise, including organized criminal groups, “hacktivists,” nation states and others.
Cyberattacks, malicious internet-based activity, online and offline fraud, and other similar activities are increasing in their frequency, levels of persistence, sophistication and intensity, and are also being conducted by sophisticated and organized groups and individuals with a wide range of motives (including, but not limited to, industrial espionage) and expertise, including organized criminal groups, “hacktivists,” nation states and others.
As a result, our ability to use our pre-change NOLs to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us.
We may also experience ownership changes in the future as a result of shifts in our stock ownership, some of which may be outside of our control. As a result, our ability to use our pre-change NOLs to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us.
In response to President Biden’s executive order, on September 9, 2021, HHS, released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.
Department of Health and Human Services, or HHS, released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.
A failure of one or more trials can occur at any stage of testing. The outcome of preclinical studies and early clinical trials may not accurately predict the success of later trials, and interim results of a trial do not necessarily predict final results.
A failure of one or more trials can occur at any stage of testing. The outcome of preclinical studies and early clinical trials may not accurately predict the success of later trials, and interim results of a trial do not necessarily predict final results. 25 We are dependent upon our collaboration with Incyte to further develop and commercialize axatilimab.
Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial scope of their approved use, or result in significant negative consequences following any marketing approval. 30 Undesirable side effects caused by our product candidates could cause the interruption, delay or halting of the trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other foreign regulatory authorities.
Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial scope of their approved use, or result in significant negative consequences following any marketing approval.
In pre-clinical animal models, small molecule inhibitors of the menin-MLLr interaction, such as revumenib, which bind to, and block the interaction of menin with either MLLr or MLL1, have demonstrated deep and durable single agent treatment effects in multiple leukemic xenograft models harboring MLL fusions or NPM1 mutations.
This fusion produces an aberrant transcription program that drives leukemic transformation. In pre-clinical animal models, small molecule inhibitors of the menin-KMT2Ar interaction, such as revumenib, which bind to, and block the interaction of menin with either KMT2A rearranged or wildtype, have demonstrated deep and durable single agent treatment effects in multiple leukemic xenograft models harboring KMT2A fusions or NPM1 mutations.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Pr operties Our headquarters is located in Waltham, Massachusetts, and consists of 12,207 square feet of leased office space under a lease that expires on February 28, 2025. We also have 4,039 square feet of leased office space in New York, New York, under a lease that expires on August 31, 2025.
Biggest changeItem 2. Pr operties Our headquarters is located in Waltham, Massachusetts, and consists of 12,000 square feet of leased office space under a lease that expires on February 28, 2025. We also have 16,000 square feet of leased office space in New York, New York, under a lease that expires on August 31, 2025.
Mine Safe ty Disclosures Not applicable. 53 PART II
Mine Safe ty Disclosures Not applicable. 57 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following performance graph and related information shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission, or SEC, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, nor shall such information be incorporated by reference into any future filing under the Exchange Act or Securities Act, except to the extent that we specifically incorporate it by reference into such filing. 54 55 Ite m 6. [Reserved] 56
Biggest changeThe following performance graph and related information shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission, or SEC, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, nor shall such information be incorporated by reference into any future filing under the Exchange Act or Securities Act, except to the extent that we specifically incorporate it by reference into such filing. 58 59 Ite m 6. [Reserved] 60
The graph assumes an investment of $100 on December 31, 2017 in our common shares, the Nasdaq Composite Index and the Nasdaq Biotechnology Index and assumes that any dividends are reinvested. All index values are weighted by the capitalization of the companies included in the index. The comparisons shown in the graph below are based upon historical data.
The graph assumes an investment of $100 on December 31, 2018 in our common shares, the Nasdaq Composite Index and the Nasdaq Biotechnology Index and assumes that any dividends are reinvested. All index values are weighted by the capitalization of the companies included in the index. The comparisons shown in the graph below are based upon historical data.
Holders of Record As of February 22, 2023, we had approximately 18 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.
Holders of Record As of February 19, 2024, we had approximately 20 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.
Performance Graph The performance graph shown below compares the annual change in cumulative total shareholder return on our common shares with the Nasdaq Composite Index and the Nasdaq Biotechnology Index from December 31, 2017, through the year ended December 31, 2022.
Performance Graph The performance graph shown below compares the annual change in cumulative total stockholder return on our common shares with the Nasdaq Composite Index and the Nasdaq Biotechnology Index from December 31, 2018, through the year ended December 31, 2023.

Item 7. Management's Discussion & Analysis

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

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Biggest changeTo date, we have not experienced any significant adjustments to our estimates. 61 Results of Operations The following table summarizes our results of operations for the years ended December 31, 2022, 2021 and 2020: Comparison of the years ended December 31, 2022 and 2021: Years Ended December 31, 2022 - 2021 Increase (Decrease) 2021 - 2020 Increase (Decrease) (in thousands) 2022 2021 2020 $ % $ % Revenues: License fees $ - $ 139,709 $ 1,517 $ (139,709 ) (100 )% $ 138,192 9110 % Total revenues - 139,709 1,517 (139,709 ) (100 )% 138,192 9110 % Operating expenses: Research and development 118,499 88,248 50,435 30,251 34 % 37,813 75 % General and administrative 33,258 25,241 22,505 8,017 32 % 2,736 12 % Total operating expenses 151,757 113,489 72,940 38,268 34 % 40,549 56 % (Loss) Income from operations (151,757 ) 26,220 (71,423 ) 177,977 (679 )% (97,643 ) (137 )% Other income (expense): Interest expense (3,137 ) (1,899 ) (2,357 ) (1,238 ) 65 % 458 (19 )% Interest income 5,872 403 841 5,469 1357 % (438 ) (52 )% Other (expense) income (316 ) 202 (219 ) (518 ) 256 % 421 192 % Total other income (expense) 2,419 (1,294 ) (1,735 ) 3,713 (287 )% 441 (25 )% Net (loss) income $ (149,338 ) $ 24,926 $ (73,158 ) $ 181,690 (729 )% $ (98,084 ) (134 )% License Fees For the year ended December 31, 2022 no license fees were recognized.
Biggest changeTo date, we have not experienced any significant adjustments to our estimates. 65 Results of Operations Comparison of the years ended December 31, 2023, 2022 and 2021: Years Ended December 31, 2023 - 2022 Increase (Decrease) 2022 - 2021 Increase (Decrease) (in thousands) 2023 2022 2021 $ % $ % Revenues: License fees $ - $ - $ 139,709 $ — 0 % $ (139,709 ) (100 )% Total revenues - - 139,709 — 0 % (139,709 ) (100 )% Operating expenses: Research and development 163,032 118,499 88,248 44,533 38 % 30,251 34 % Selling, general and administrative 66,922 33,258 25,241 33,664 101 % 8,017 32 % Total operating expenses 229,954 151,757 113,489 78,197 52 % 38,268 34 % (Loss) income from operations (229,954 ) (151,757 ) 26,220 (78,197 ) 52 % (177,977 ) (679 )% Other income (expense): Interest expense (208 ) (3,137 ) (1,899 ) 2,929 (93 )% (1,238 ) 65 % Interest income 21,163 5,872 403 15,291 260 % 5,469 1357 % Other (expense) income (361 ) (316 ) 202 (45 ) 14 % (518 ) (256 )% Total other income (expense) 20,594 2,419 (1,294 ) 18,175 751 % 3,713 (287 )% Net (loss) income $ (209,360 ) $ (149,338 ) $ 24,926 $ (60,022 ) 40 % $ (174,264 ) (699 )% Research and Development The following table summarizes the research and development expenses for the full years ended December 31, 2023, 2022 and 2021: Years Ended December 31, 2023 - 2022 Increase (Decrease) 2022 - 2021 Increase (Decrease) (in thousands) 2023 2022 2021 $ % $ % Revumenib-related costs $ 64,122 $ 47,315 $ 31,054 $ 16,807 36 % $ 16,261 52 % Axatilimab-related costs 32,114 33,318 27,925 (1,204 ) (4 )% 5,393 19 % Other R&D programs 5,441 6,328 8,873 (887 ) (14 )% (2,545 ) (29 )% Personnel cost and other expenses 47,208 25,522 15,998 21,686 85 % 9,524 60 % Stock-based compensation 14,147 6,016 4,398 8,131 135 % 1,618 37 % Total research and development expenses $ 163,032 $ 118,499 $ 88,248 $ 44,533 38 % $ 30,251 34 % For the year ended December 31, 2023, our total research and development expenses increased by $44.5 million or 38 % from the prior year.
The amount of research and development expenses allocated to external spending will continue to grow, while we expect our internal spending to grow at a slower and more controlled pace. It is difficult to determine, with certainty, the duration and completion costs of our current or future preclinical programs, clinical studies and clinical trials of our product candidates.
The amount of research and development expenses allocated to external spending will continue to grow, while we expect our internal spending to grow at a slower and more controlled pace. It is difficult to determine, with certainty, the duration and completion costs of our current or future preclinical programs, research studies and clinical trials of our product candidates.
In addition to our existing cash, cash equivalents, short-term and long-term investments, we are eligible to receive research and development funding and to earn milestone and other contingent payments for the achievement of defined collaboration objectives and certain development, regulatory and commercial milestones, and royalty payments under our collaboration agreements.
In addition to our existing cash, cash equivalents, short and long-term investments, we are eligible to receive research and development funding and to earn milestone and other contingent payments for the achievement of defined collaboration objectives and certain development, regulatory and commercial milestones, and royalty payments under our collaboration agreements.
Net Cash (Used in) Investing Activities Net cash used in investing activities for the year ended December 31, 2022, was $186.2 million and was primarily due to the purchase of $495.3 million of available-for-sale marketable securities partially offset by $308.9 million in proceeds from the maturities of available-for-sale marketable securities.
Net cash used in investing activities for the year ended December 31, 2022, was $186.2 million and was primarily due to the purchase of $495.3 million of available-for-sale marketable securities partially offset by $308.9 million in proceeds from the maturities of available-for-sale marketable securities.
Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available. We assessed the promises to determine if they are distinct performance obligations.
Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available. 64 We assessed the promises to determine if they are distinct performance obligations.
We expect that our research and development and general and administrative expenses will continue to increase. As a result, we will need additional capital to fund our operations, which we may raise through a combination of the sale of equity, debt financings, or other sources, including potential collaborations.
We expect that our research and development and selling, general and administrative expenses will continue to increase. As a result, we will need additional capital to fund our operations, which we may raise through a combination of the sale of equity, debt financings, or other sources, including potential collaborations.
For additional details on our Amended Loan Agreement, see Note 14 to our consolidated financial statements in this Annual Report. Future Funding Requirements We believe that our available cash, cash equivalents, short-term and long-term investments are sufficient to fund existing and planned cash requirements.
For additional details on our Amended Loan Agreement, see "Loan Payable" (Note 14) to our consolidated financial statements in this Annual Report. Future Funding Requirements We believe that our available cash, cash equivalents, short-term and long-term investments are sufficient to fund existing and planned cash requirements.
Research and development expenses consist primarily of costs incurred for the development of our product candidates and include: • expenses incurred under agreements related to our clinical trials, including the costs for investigative sites and contract research organizations, or CROs, that conduct our clinical trials; 58 • employee-related expenses associated with our research and development activities, including salaries, benefits, travel and non-cash stock-based compensation expenses; • manufacturing process-development, clinical supplies and technology-transfer expenses; • license fees and milestone payments under our license agreements; • consulting fees paid to third parties; • allocated facilities and overhead expenses; and • costs associated with regulatory operations and regulatory compliance requirements.
Research and development expenses consist primarily of costs incurred for the development of our product candidates and include: • expenses incurred under agreements related to our clinical trials, including the costs for investigative sites and contract research organizations, or CROs, that conduct our clinical trials; • employee-related expenses associated with our research and development activities, including salaries, benefits, travel and non-cash stock-based compensation expenses; • manufacturing process-development, clinical supplies and technology-transfer expenses; • license fees and milestone payments under our license agreements; 62 • consulting fees paid to third parties; • allocated facilities and overhead expenses; and • costs associated with regulatory operations and regulatory compliance requirements.
The duration, costs and timing of clinical studies and clinical trials of our product candidates will depend on a variety of factors that include, but are not limited to, the following: • per patient costs; • the number of patients that participate; • the number of sites; • the countries in which the studies and trials are conducted; • the length of time required to enroll eligible patients; • the potential additional safety monitoring or other studies requested by regulatory agencies; • the duration of patient monitoring; • the efficacy and safety profile of the product candidates; and • timing and receipt of any regulatory approvals.
The duration, costs and timing of research studies and clinical trials of our product candidates will depend on a variety of factors that include, but are not limited to, the following: • per patient costs; • the number of patients that participate; • the number of clinical trial sites; • the countries in which the trials are conducted; • the length of time required to enroll eligible patients; • the potential additional safety monitoring or other studies requested by regulatory agencies; • the duration of patient monitoring; • the efficacy and safety profile of the product candidates; and • timing and receipt of any regulatory approvals.
Our future capital requirements will depend on many factors, including: • the initiation, progress, timing, costs and results of clinical trials of our product candidates; • the outcome, timing and cost of seeking and obtaining regulatory approvals from the FDA and comparable foreign regulatory authorities, including the potential for such authorities to require that we perform more trials than we currently expect; • the cost to establish, maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecuting, defending and enforcing any patents or other intellectual property rights; • market acceptance of our product candidates; • the cost and timing of selecting, auditing and developing manufacturing capabilities, and potentially validating manufacturing sites for commercial-scale manufacturing; • the cost and timing for obtaining pricing and reimbursement, which may require additional trials to address pharmacoeconomic benefit; • the cost of establishing sales, marketing and distribution capabilities for our product candidates if any product candidate receives regulatory approval and we determine to commercialize it ourselves; • the costs of acquiring, licensing or investing in additional businesses, products, product candidates and technologies; • the interruption of key clinical trial activities, such as clinical trial site monitoring; • the cost of disruption to our supply chain and operations, and associated delays in the manufacturing and supply of our products, which would adversely impact our ability to continue our clinical trial operations; • the effect of competing technological and market developments; and • our need to implement additional internal systems and infrastructure, including financial and reporting systems, as we grow our company.
Our future capital requirements will depend on many factors, including: • the initiation, progress, timing, costs and results of clinical trials of our product candidates; • the outcome, timing and cost of seeking and obtaining regulatory approvals from the FDA and comparable foreign regulatory authorities, including the potential for such authorities to require that we perform more trials than we currently expect; • the cost to establish, maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecuting, defending and enforcing any patents or other intellectual property rights; • market acceptance of our product candidates; • the cost and timing of selecting, auditing and developing manufacturing capabilities, and potentially validating manufacturing sites for commercial-scale manufacturing; • the cost and timing for obtaining pricing and reimbursement, which may require additional trials to address pharmacoeconomic benefit; • the cost of establishing sales, marketing and distribution capabilities for our product candidates if either candidate receives regulatory approval and we determine, in the case of revumenib to commercialize it ourselves, or in the case of axatilimab to co-commercialize it with Incyte; • the costs of acquiring, licensing or investing in additional businesses, products, product candidates and technologies; • the interruption of key clinical trial activities, such as clinical trial site monitoring; • the cost of disruption to our supply chain and operations, and associated delays in the manufacturing and supply of our products, which would adversely impact our ability to continue our clinical trial operations; • the effect of competing technological and market developments; and • our need to implement additional internal systems and infrastructure, including financial and reporting systems, as we grow our company.
In addition, we are subject to other challenges and risks specific to our business and our ability to execute on our strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry with development and commercial operations, including, without limitation, risks and uncertainties associated with: obtaining regulatory approval of our late-stage product candidate; identifying; acquiring or in-licensing additional products or product candidates; pharmaceutical product development and the inherent uncertainty of clinical success; and the challenges of protecting and enhancing our intellectual property rights; complying with applicable regulatory requirements.
Additionally, we are subject to other challenges and risks specific to our business and our ability to execute on our strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry with 61 development and commercial operations, including, without limitation, risks and uncertainties associated with: obtaining regulatory approval of our late-stage product candidate; identifying, acquiring or in-licensing additional products or product candidates; pharmaceutical product development and the inherent uncertainty of clinical success; the challenges of protecting and enhancing our intellectual property rights; and complying with applicable regulatory requirements.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with “Selected Financial Data” and our consolidated financial statements and related notes included elsewhere in this Annual Report.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report.
Clinical development timelines, the probability of success and development costs can differ materially from expectations. General and Administrative General and administrative expenses consist primarily of employee-related expenses, including salaries, benefits, non-cash stock-based compensation and travel expenses, for our employees in executive, finance, business development and support functions.
Clinical development timelines, the probability of success and development costs can differ materially from expectations. Selling, General and Administrative Selling, general and administrative expenses consist primarily of employee-related expenses, including salaries, benefits, non-cash stock-based compensation and travel expenses, for our employees in executive, finance, human resources, business development and support functions.
We are developing revumenib, a potent, selective, small molecule inhibitor of the menin-MLL binding interaction for the treatment of KMT2A rearranged, also known as mixed lineage leukemia rearranged or MLLr, acute leukemias including acute lymphoblastic leukemia, ALL, and acute myeloid leukemia, AML, and NPM1 mutant AML.
We are developing revumenib, a potent, selective, small molecule inhibitor of the menin-MLL binding interaction for the treatment of KMT2A rearranged, or KMT2Ar, also known as mixed lineage leukemia rearranged or MLLr, acute leukemias including acute lymphoblastic leukemia, or ALL, and acute myeloid leukemia, or AML, and necleophosmin 1, also known as NPM1, mutant AML.
We plan to continue to spend a significant amount of our resources on research and development activities for the foreseeable future as we continue to advance the development of our product candidates.
We plan to continue to spend a significant amount of our resources on research and development activities for the foreseeable future as we continue to advance the development of our drug candidates.
Unless otherwise discussed in Note 3 to our audited consolidated financial statements included in this Annual Report, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.
Unless otherwise discussed in "Summary of Significant Accounting Policies" (Note 3) to our audited consolidated financial statements included in this Annual Report, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.
We believe that our cash, cash equivalents and short-term investments as of December 31, 2022, will fund our projected operating expenses and capital expenditure requirements for at least the next 12 months.
We believe that our cash, cash equivalents and short and long-term investments as of December 31, 2023, will fund our projected operating expenses and capital expenditure requirements for at least the next 12 months.
Loan and Security Agreement In February 2020, we entered into a loan and security agreement, with Hercules Capital, Inc., or Hercules, as amended in December 2021, which we refer to as the Amended Loan Agreement. We terminated the Amended Loan Agreement in September 2022.
Loan and Security Agreement In February 2020, we entered into a loan and security agreement, with Hercules, as amended in December 2021, which we refer to as the Amended Loan Agreement. We terminated the Amended Loan Agreement in September 2022.
Please also see the section entitled “Special Note Regarding Forward-Looking Statements.” For the discussion of the financial condition and results of operations for the year ended December 31, 2021 compared to the year ended December 31, 2020, refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations" and "—Liquidity and Capital Resources" included in the Annual Report on Form 10-K filed with the SEC on March 1, 2022.
Please also see the section entitled “Special Note Regarding Forward-Looking Statements.” For the discussion of the financial condition and results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021, refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations" and "—Liquidity and Capital Resources" included in the Annual Report on Form 10-K filed with the SEC on February 28, 2023.
Overview We are a clinical-stage biopharmaceutical company developing an innovative pipeline of cancer therapies. Our two lead product candidates are revumenib (SNDX-5613), and axatilimab (SNDX-6352).
Overview We are a clinical-stage biopharmaceutical company developing an innovative pipeline of cancer therapies. Our two lead product candidates are revumenib, and axatilimab.
Our revenues for the years ended December 31, 2021 and 2020 have been solely derived from our license, development and commercialization agreements with Kyowa Kirin Co., Ltd., or KKC, and with Incyte Pharmaceuticals, Inc, or Incyte. We generated no revenue during the year ended December 31, 2022.
Our revenues for the year ended December 31, 2021, have been solely derived from our license, development and commercialization agreements with Kyowa Kirin Co., Ltd., or KKC, and with Incyte Corporation, or Incyte. We generated no revenue during the years ended December 31, 2023 and 2022.
At-the-Market Offering Program In March 2021, we entered into a sales agreement with Cowen and Company, LLC, or Cowen, under which we may issue and sell shares of our common stock having aggregate sales proceeds of up to $75.0 million from time to time through Cowen, acting as agent, in a series of one or more at-the-market equity offerings, or the 2021 ATM Program.
At-the-Market Offering Program In March 2021, we entered into a sales agreement with Cowen and Company, LLC, or TD Cowen, under which we could, from time to time, issue and sell shares of our common stock having aggregate sales proceeds of up to $75.0 million, in a series of one or more at-the-market, or ATM, equity offerings, or the 2021 ATM Program.
Net Cash Provided by Financing Activities Net cash provided by financing activities for the year ended December 31, 2022, was $172.3 million and was primarily due to proceeds of $162.0 million from issuance of common stock, $19.4 million of proceeds from an at-the-market offering, and $11.9 million of proceeds from stock option exercises and ESPP purchases, partially offset by payment of the term loan of $21.0 million.
Net cash provided by financing activities for the year ended December 31, 2022, was $172.3 million and was primarily due proceeds of $162.0 million from the issuance of common stock in a public offering, $19.4 million of proceeds from at-the-market offerings, and $11.9 million of proceeds from the stock option exercises and ESPP purchases, partially offset by payment on the term loan of $21.0 million.
At December 31, 2022, we had available income tax credits of approximately $8.9 million, with $5.7 million attributable to Federal R&D credits and $3.2 million attributable to state R&D credits, which are available to reduce future income taxes, if any. These income tax credits began to expire in 2022.
At December 31, 2023, we had available income tax credits of approximately $12.7 million, with $8.9 million attributable to Federal R&D Credits and $3.8 million attributable to state R&D Credits, which are available to reduce future income taxes, if any. These income tax credits began to expire in 2024.
Such evaluation required judgment since it was made from the customer’s perspective. We determined that the transfer of the license to Incyte was a distinct performance obligation, separate from the ongoing collaboration activities.
We evaluated whether our contractual obligations represented distinct performance obligations. Such evaluation required judgment since it was made from the customer’s perspective. We determined that the transfer of the license to Incyte was a distinct performance obligation, separate from the ongoing collaboration activities.
Actual results may differ from these estimates under different assumptions or conditions. In making estimates and judgments, management employs critical accounting policies. Our critical accounting policies are described in greater detail in Note 3 to our audited consolidated financial statements included in this Annual Report.
Actual results may differ from these estimates under different assumptions or conditions. In making estimates and judgments, management employs critical accounting policies. Other significant accounting policies are outlined in "Summary of Significant Accounting Policies" (Note 3) to our consolidated financial statements included in this Annual Report.
Our material cash requirements include the following contractual obligations as of December 31, 2022, and the effects that such obligations are expected to have on our liquidity and cash flows in future periods.
Our material cash requirements include the following contractual obligations as of December 31, 2023, and the effects that such obligations are expected to have on our liquidity and cash flows in future periods. For additional information, see our consolidated financial statements.
The leased assets are included in property and equipment, net. We have incurred losses and cumulative negative cash flows from operations since our inception, excluding year ending December 31, 2022. As of December 31, 2022, we had an accumulated deficit of $693.0 million. We anticipate that we will continue to incur significant losses for at least the next several years.
We have incurred losses and cumulative negative cash flows from operations since our inception, excluding year ending December 31, 2021. As of December 31, 2023, we had an accumulated deficit of $902.4 million. We anticipate that we will continue to incur significant losses for at least the next several years.
We are also developing axatilimab, a monoclonal antibody that blocks the colony stimulating factor 1, or CSF-1 receptor, in chronic graft-versus-host disease, or cGVHD, as well as idiopathic pulmonary fibrosis, or IPF.
We are also exploring the use of revumenib as a treatment in solid tumors, specifically its activity in metastatic colorectal cancer. We are developing axatilimab, a monoclonal antibody that blocks the colony stimulating factor 1 receptor, or CSF-1, in chronic graft-versus-host disease, or cGVHD, as well as idiopathic pulmonary fibrosis, or IPF.
For license fee revenues as of December 31, 2021, we recorded revenues of $126.6 million relating to the Incyte Collaboration Agreement and $13.3 million relating to the KKC Agreement. For the year ended December 31, 2022, no revenue has been recognized. We applied significant judgment to our Incyte Collaboration Agreement. We evaluated whether our contractual obligations represented distinct performance obligations.
As of December 31, 2021, we recorded revenue of $126.6 million relating to the Incyte Collaboration Agreement and $13.3 million relating to the KKC Agreement. For the years ended December 31, 2023 and 2022, no revenue has been recognized relating to either agreement. We applied significant judgment to our Incyte Collaboration Agreement.
Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.
To the extent that the transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing the most likely amount method. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.
Cash Flows The following is a summary of cash flows: Years Ended December 31, (in thousands) 2022 2021 2020 Net cash (used in) provided by operating activities $ (133,675 ) $ 29,131 $ (71,260 ) Net cash (used in) investing activities (186,188 ) (40,873 ) (142,530 ) Net cash provided by financing activities 172,254 118,464 304,424 Net (decrease) increase in cash and cash equivalents $ (147,609 ) $ 106,722 $ 90,634 65 Net Cash (Used in) Provided by Operating Activities Net cash used in operating activities for the year ended December 31, 2022, was $133.7 million and primarily consisted of our net loss of $149.3 million adjusted for non-cash items including stock-based compensation of $16.0 million, non-cash operating lease expense of $0.4 million, an investment increase of $3.4 million, a net increase in operating assets and liabitiies of $1.7 million, and an increase in non-cash interest expense associated with the term loan of $1.1 million.
Cash Flows The following is a summary of cash flows: Years Ended December 31, (in thousands) 2023 2022 2021 Net cash (used in) provided by operating activities $ (160,601 ) $ (133,675 ) $ 29,131 Net cash provided by (used in) investing activities 117,609 (186,188 ) (40,873 ) Net cash provided by financing activities 264,132 172,254 118,464 Net increase (decrease) in cash and cash equivalents $ 221,140 $ (147,609 ) $ 106,722 Net Cash (Used in) Provided by Operating Activities Net cash used in operating activities for the year ended December 31, 2023, was $160.6 million and primarily consisted of our net loss of $209.4 million adjusted for non-cash items including stock-based compensation of $31.0 million, an investment increase of $14.8 million, a net increase in operating assets and liabilities of $32.0 million and non-cash operating lease expense of $0.7 million.
Net cash used in investing activities for the year ended December 31, 2021, was $40.9 million and was primarily due to the purchase of $294.7 million of available-for-sale marketable securities partially offset by $254.0 million in proceeds from the maturities of available-for-sale marketable securities.
Net Cash Provided by (Used in) Investing Activities Net cash provided by in investing activities for the year ended December 31, 2023 was $117.6 million and was due to $472.2 million in proceeds from the maturities of available-for-sale marketable securities, partially offset by the purchase of $354.6 million of available-for-sale marketable securities.
Additionally, the process of testing drug candidates in clinical trials is costly, and the timing of progress in these trials is uncertain. We cannot estimate the actual amounts necessary to successfully complete the development and commercialization of our product candidates or whether, or when, we may achieve profitability.
We cannot estimate the actual amounts necessary to successfully complete the development and commercialization of our product candidates or whether, or when, we may achieve profitability.
Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical research and development services, clinical costs, legal and 63 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 will 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 generated federal NOLs of $77.5 million that have an indefinite carryforward period. The remaining $22.1 million of federal NOLs and the state NOLs will begin to expire at various dates starting in 2026.
The remaining $22.1 million of federal NOLs and the $62.6 million of state NOLs will begin to expire at various dates starting in 2026.
Net cash provided by operating activities for the year ended December 31, 2021 was $29.1 million and primarily consisted of our net income of $24.9 million adjusted for non-cash items including stock-based compensation of $13.3 million, non-cash operating lease expense of $0.4 million, an investment amortization of $0.6 million, a decrease in non-cash interest expense associated with the term loan of $0.2 million, a decrease of the derivative liability associated with the Incyte Collaboration Agreement of $0.4 million, and a net decrease in operating assets and liabilities of $9.6 million.
Net cash used in operating activities for the year ended December 31, 2022 was $133.7 million and primarily consisted of our net loss of $149.3 million adjusted for non-cash items including stock-based compensation of $16.0 million, an investment increase of $3.4 million, a net increase in operating assets and liabilities of $1.7 million, an increase in interest expense associated with the term loan of $1.1 million, and non-cash operating lease expense of $0.4 million.
In August 2022, we signed a 36-month extension of the lease for the office space in New York, New York. The minimum lease payments above do not include any related common area maintenance charges or real estate taxes. (2) In January 2022, we entered into two four-year non-cancelable leases for office equipment, which are accounted for as capital leases.
In August 2022, we signed a 36-month extension of the lease for the office space in New York, NY. In May 2023, we 69 signed a 27-month lease for an additional space in New York, NY. The minimum lease payments above do not include any related common area maintenance charges or real estate taxes.
As of December 31, 2022, we had an accumulated deficit of $693.0 million, which included non-cash charges for stock-based compensation, preferred stock accretion and extinguishment charges. As of December 31, 2022, we had cash, cash equivalents and short-term and long-term investments of $481.3 million.
For the year ended December 31, 2021, we reported a net profit of $24.9 million. As of December 31, 2023, we had an accumulated deficit of $902.4 million, which included non-cash charges for stock-based compensation, preferred stock accretion and extinguishment charges. As of December 31, 2023, we had cash, cash equivalents and short-term and long-term investments of $600.5 million.
Other general and administrative expenses include facility-related costs not otherwise allocated to research and development expenses and accounting, tax, legal and consulting services. We 59 anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research and development and potential commercialization of our product candidates.
We anticipate that our selling, general and administrative expenses will further increase in the future as we continue to increase our headcount to support our continued research and development and anticipated commercialization of our product candidates.
For additional information, see our consolidated financial statements. 64 (in thousands) Total Less than 1 Year 1 to 3 Years 3 to 5 Years More than 5 Years Operating leases for office space (1) $ 1,351 $ 567 $ 784 $ — $ — Capital lease for office equipment (2) 22 7 13 2 — $ 1,373 $ 574 $ 797 $ 2 $ — (1) In August 2021, we signed a 36-month extension of the lease for the office space in Waltham, Massachusetts.
(in thousands) Total Less than 1 Year 1 to 3 Years 3 to 5 Years More than 5 Years Operating leases for office space (1) $ 1,802 $ 1,196 $ 606 $ — $ — Capital lease for office equipment (2) 26 14 12 — — $ 1,828 $ 1,210 $ 618 $ — $ — (1) In August 2021, we signed a 36-month extension of the lease for the office space in Waltham, MA.
We continue to incur significant research and development and other expenses related to our ongoing operations. We have generated minimal license revenue, except for in 2021. Other than in 2021, we have never been profitable and have incurred losses in each period since our inception in 2005.
We continue to incur significant research and development and other expenses related to our ongoing operations. Except for 2021, we have not been profitable and have incurred losses in each period since our inception in 2005. For the years ended December 31, 2023 and 2022, we reported a net loss of $209.4 million and $149.3 million, respectively.
Interest expense Interest expense consists primarily of interest expense on our term loan, operational and capital leases. Interest Income Interest income consists of income earned on our cash, cash equivalents and short and long-term investment balances.
Interest Income Interest income consists of income earned on our cash, cash equivalents and short and long-term investment balances. Other (Expense) Income, net Other (expense) income net includes income (expense), net consisting of revaluation of foreign currency related to trade payables.
The significant items in the decrease in operating assets and liabilities include a decrease in prepaid expenses and other assets of $1.4 million, an increase in accounts payable of $2.1 million, and a decrease in deferred revenue of $13.1 million partially offset by an increase in accrued expenses and other liabilities of $2.8 million.
The significant items in the increase in operating assets and 70 liabilities include an increase in accrued expenses and other liabilities of $14.9 million, an increase in collaboration payable of $10.7 million, an increase in accounts payable of $5.7 million, and an increase in prepaid expenses and other assets of $0.7 million.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in our financial statements.
Critical Accounting Estimates The preparation of our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenue and expense and related disclosure of contingent assets and liabilities.
Cowen is not required to sell any specific amount but acts as our sales agent using commercially reasonable efforts consistent with its normal trading and sales practices. Shares sold pursuant to the sales agreement will be sold pursuant to a shelf registration statement on Form S-3 ASR (Registration No. 333-254661), which became automatically effective upon filing on March 24, 2021.
Pursuant to the sales agreement, shares will be sold under the shelf registration statement on Form S-3ASR (Registration No. 333-254661), which became automatically effective upon the filing on March 24, 2021. Our common stock will be sold at prevailing market prices at the time of the sale, and as a result, prices may vary.
Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates remain high or begin to rise again) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, the global geopolitical tension as a 57 result of the ongoing war between Russia and Ukraine, worsening global macroeconomic conditions and employee availability and wage increases, which may result in additional stress on our working capital resources.
These costs may also be negatively impacted due to supply chain constraints, global geopolitical tensions as a result of the ongoing war between Russia and Ukraine and the war in Israel, worsening macroeconomic conditions and employee availability and wage increases, which may result in additional stress on our working capital.
Rising interest rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future.
Rising interest rates could make it more difficult for us 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.
Our common stock will be sold at prevailing market prices at the time of the sale; and as a result, prices may vary. As of December 31, 2022, we sold 1,111,111 shares of common stock under the 2021 ATM Program for net proceeds of approximately $19.4 million.
As of December 31, 2023, we sold 2,719,744 shares of common stock under the 2023 ATM Program for net proceeds of approximately $42.1 million.
Net cash provided by financing activities for the year ended December 31, 2021, was $118.5 million and was primarily due proceeds of $24.8 million from sales of common stock to Incyte Agreement, proceeds of $81.2 million from sale of common stock in a follow-on offering, $6.7 million of proceeds from stock option exercises and ESPP purchases, $5.1 million of proceeds from our ATM Program and, $0.6 million of proceeds from the Incyte Collaboration Agreement allocated to the derivate liability in connection with the side letter. 66 Net Operating Loss and Research and Development Tax Credit Carryforwards December 31, 2022, we had federal and state tax net operating loss carryforwards of approximately $99.6 million and $42.8 million, respectively.
Net Cash Provided by Financing Activities Net cash provided by financing activities for the year ended December 31, 2023, was $264.1 million and was primarily due to proceeds of $215.9 million from the issuance of common stock in a follow-up offering, $42.1 million from the issuance of common in at-the-market offering, and $6.0 million of proceeds from the stock option exercises and ESPP purchases.
The resulting high inflation rates may materially affect our business and corresponding financial position and cash flows. Inflationary factors, such as increases in the cost of our clinical trial materials and supplies, interest rates and overhead costs may adversely affect our operating results.
Significant Risks and Uncertainties The current inflationary environment may materially affect our business and operating results by increasing the cost of our clinical trial materials and supplies, driving the U.S. Federal Reserve system to increase interest rates, which in turn increased our overhead costs.
The increase in other expense is due to an increase of $1.1 million for travel and entertainment and $0.2 million for rent and utilities. Interest Income and Interest Expense For the year ended December 31, 2022, interest income, increased by $5.5 million from the prior year. This increase was primarily due to higher interest rates on our investments.
The decrease is primarily due to the elimination of interest expense related to the amended loan agreement by and between the Company and Hercules, which was terminated in September 2022. For the year ended December 31, 2023, interest income increased by $15.3 million, or 260%, from the prior year.
Additionally, if and when we believe a regulatory approval of the first product candidate appears likely, we anticipate an increase in payroll and related expenses as a result of our preparation for commercial operations, especially as it relates to the sales and marketing of our product candidates.
Additionally, in anticipation of expected regulatory approvals of the our drug candidates, we expect an increase in employee-related expenses and other commercial expenses in 2024 as a result of our preparation for the commercial launch, especially as it relates to the sales and marketing of our drug product candidates. 63 Interest Expense Interest expense consists primarily of interest expense on our operational and capital leases and in prior years consisted of our term loan, which was paid off in 2022.
Since our inception, our operations have been primarily financed by net proceeds from our IPO, and follow-on stock offerings, our term loan, sale of convertible preferred stock and convertible debt securities and proceeds from our license agreements.
Liquidity and Capital Resources Overview As of December 31, 2023, we had cash, cash equivalents and short-term and long-term investments totaling $600.5 million. Since our inception, our operations have been primarily financed by net proceeds from our public stock offerings, and revenue from our license agreements.
Removed
For the years ended December 31, 2022 and 2020, we reported a net loss of $149.3 million and $73.2 million, respectively. For the year ended December 31, 2021, we reported a net profit of $24.9 million.
Added
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 position or results of operations to date, additional high inflation could increase our operating costs, including our labor costs and research and development costs.
Removed
Significant Risks and Uncertainties The global economic slowdown, the overall disruption of global healthcare systems and other risks and uncertainties associated with the public health crises and the ongoing war between Russia and Ukraine may have a material adverse effect on our business, financial condition, results of operations and growth prospects.
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Other selling, general and administrative expenses include facility-related costs not otherwise allocated to research and development expenses and accounting, tax, legal, information technology and consulting services.
Removed
Additionally, the general consensus among economists suggests that we should expect a higher recession risk to continue, which, together with the foregoing, could result in further economic uncertainty and volatility in the capital markets in the near term, and could negatively affect our operations. Furthermore, such economic conditions have produced downward pressure on share prices.
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On an ongoing basis we evaluate our estimates, judgments and assumptions.
Removed
Other Income (Expense) Other income (expense) includes income recorded for the change in fair value of derivative liability established based on the terms under of the Letter Agreement with connection with the share purchase agreement.
Added
The increase is primarily due to: • An increase in $16.8 million in revumenib related costs due to increases in expenses associated with registrational trials, the initiation of frontline/combination trials, clinical diagnostic test development costs, and regulatory expenses associated with New Drug Applications, or NDA, submission. • A decrease of $1.2 million in axatilimab-related costs is due to lower registrational trial costs, lower costs for the IPF trial that were driven by start-up costs in 2022, and lower CMC-related expenses, net of expense reimbursement from Incyte, our co-development partner, of $12.3 million in 2023 and $25.9 million in 2022. 66 • An increase of $29.8 million in personnel costs, including non-cash stock-based compensation, and other expenses related to increases in headcount to support of on-going clinical trials and regulatory expenses, NDA activities and related expenses and overhead expenses (e.g. information technology and facilities).
Removed
Critical Accounting Estimates Our management’s discussion and analysis of financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.
Added
The following table summarizes the internal and external research and development expenses for the full years ended December 31, 2023 and 2022: Years Ended December 31, Increase (Decrease) (in thousands) 2023 2022 $ % External research and development expenses $ 105,978 $ 89,788 $ 16,190 18 % Internal research and development expenses 57,054 28,711 28,343 99 % Total research and development expenses $ 163,032 $ 118,499 $ 44,533 38 % We expect research and development expenses to fluctuate from quarter to quarter depending on the timing of clinical trial activities, clinical manufacturing, and other development activities.
Removed
To the extent that the transaction price includes variable consideration, we estimate the amount of variable consideration 60 that should be included in the transaction price utilizing the most likely amount method.
Added
Selling, General and Administrative The following table summarizes the selling, general and administrative expenses for the full years ended December 31, 2023, 2022 and 2021: Years Ended December 31, 2023 - 2022 Increase (Decrease) 2022 - 2021 Increase (Decrease) (in thousands) 2023 2022 2021 $ % $ % Commercial related expenses $ 13,115 $ 2,116 $ 356 $ 10,999 520 % $ 1,760 494 % Other SG&A expenses 14,105 9,838 9,697 4,267 43 % 141 1 % Personnel cost and other expenses 22,898 11,301 6,269 11,597 103 % 5,032 80 % Stock-based compensation 16,804 10,003 8,919 6,801 68 % 1,084 12 % Total selling, general and administrative expenses $ 66,922 $ 33,258 $ 25,241 $ 33,664 101 % $ 8,017 32 % For the year ended December 31, 2023, our total selling, general and administrative expenses increased by $33.7 million , or 101%, from the prior year.
Removed
For year ended December 31, 2021, we recognized license fees of $139.7 million, derived from the Incyte and KKC license agreements. The KKC license agreement was terminated in September 2021.
Added
The increase primarily is due to: • An increase of $11.0 million in commercialization activities for the revumenib and axatilimab programs. • An increase of $4.3 million related to increases in rent, information technology, human resources and legal related expenses. • An increase of $18.4 million in personnel costs, including non-cash stock-based compensation, and related costs related to increases in headcount to support a growing research and development organization and preparation for commercial launch. 67 Interest Expense and Income For the year end December 31, 2023, interest expense decreased by $2.9 million, or 93%, from the prior year.
Removed
Research and Development For the year ended December 31, 2022, our total research and development expenses increased by $30.3 million or 34 %, to $118.5 million from $88.2 million for the prior year due to increases in clinical trial activities expenses of $19.0 million, employee related expenses of $9.5 million, professional expenses of $1.5 million, and other expenses of $0.3 million.
Added
This increase was primarily due to higher interest rates and increased average balance on cash equivalents and short and long-term investments.
Removed
The increase in clinical activities expenses was due to increased study activities related to axatilimab of $27.1 million, revumenib of $9.7 million, and an increase in license fees of $5.5 million, which were offset by the collaboration cost reimbursement of $22.2 million and a reduction in the entinostat program of $1.1 million.
Added
Other (Expense) Income, net For the year ended December 31, 2023, the total other (expense) income, net increased from the comparable period in the prior year primarily due to an increase in revaluation of foreign currency related to trade payables.
Removed
The increase in employee-related expense is primarily due to salary and benefits of $7.9 million and increase in stock-based compensation of $1.6 million due to increase in headcount. The increase in other expenses of $0.3 million is primarily due to travel and entertainment.
Added
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. 68 Additionally, the process of testing drug candidates in clinical trials is costly, and the timing of progress in these trials is uncertain.
Removed
We expect research and development expenses to fluctuate from quarter to quarter depending on the timing of clinical trial activities, clinical manufacturing, and other development activities.
Added
(2) In January 2022, we entered into two four-year non-cancelable leases for office equipment. In June 2023, we entered into one two-year non-cancelable lease for office equipment. All three leases are accounted for as a capital lease. The leased assets are included in property, plant and equipment, at cost.
Removed
Research and development expenses consisted of the following: Years Ended December 31, Increase (Decrease) (in thousands) 2022 2021 $ % External research and development expenses $ 89,788 $ 68,468 $ 21,320 31 % Internal research and development expenses 28,711 19,780 8,931 45 % Total research and development expenses $ 118,499 $ 88,248 $ 30,251 34 % 62 General and Administrative For the year ended December 31, 2022, our total general and administrative expenses increased by $8.0 million , or 32 %, to $33.3 million, from $25.2 million for the prior year.
Added
On May 26, 2023, we terminated the 2021 ATM Program. Prior to termination, we sold shares under the 2021 ATM Program for aggregate net proceeds of approximately $25.0 million.
Removed
The increase in general and administrative expenses was primarily due to increased employee-related expenses of $5.3 million, professional fees of $1.4 million and other expenses of $1.3 million. The increase in employee-related expenses is due to an increase of $4.3 million for salary and benefits due to increased headcount and stock compensation expense of $1.0 million.
Added
In May 2023, we entered into a new sales agreement with TD Cowen under which we could, from time to time, issue and sell shares of our common stock having aggregate sales proceeds of up to $200.0 million, in a series of one or more ATM equity offerings, or the 2023 ATM Program.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2022, we had cash, cash equivalents and short-term and long-term investments of $481.3 million, consisting of overnight investments, interest-bearing money market funds and highly rated federal bonds and short and long-term investments including commercial paper, highly rated corporate bonds and treasuries.
Biggest changeAs of December 31, 2023, we had cash, cash equivalents and short-term and long-term investments of $600.5 million, consisting of overnight investments, interest-bearing money market funds and highly rated federal bonds and short and long-term investments including commercial paper, highly rated corporate bonds and treasuries.
Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. The primary objectives of our investment activities are to ensure liquidity and to preserve principal while at the same time maximizing the interest income, we receive from our marketable securities without significantly increasing risk.
Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. The primary objectives of our investment activities are 71 to ensure liquidity and to preserve principal while at the same time maximizing the interest income, we receive from our marketable securities without significantly increasing risk.
We do not believe that inflation and changing prices had a significant impact on our results of operations for any periods presented herein. 67
We do not believe that inflation and changing prices had a significant impact on our results of operations for any periods presented herein.

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