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What changed in CytomX Therapeutics, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of CytomX Therapeutics, 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.

+494 added−514 removedSource: 10-K (2024-03-11) vs 10-K (2023-03-27)

Top changes in CytomX Therapeutics, Inc.'s 2023 10-K

494 paragraphs added · 514 removed · 358 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

123 edited+59 added−66 removed212 unchanged
Biggest changeTo date, we have generally been able to successfully manufacture our investigational product candidates including CX-2029, CX-904, praluzatamab ravtansine (CX-2009), and pacmilimab (CX-072), for our ongoing early-stage clinical trials with contract manufacturers. Our partner, Bristol Myers Squibb, has also been successful in independently manufacturing drug product for BMS-986249 and BMS-986288.
Biggest changeWe conduct cell line development and process development both in-house and in collaboration with contract development and manufacturing organizations (“CMO”). CMOs are responsible for manufacturing of drug substance and clinical drug product materials. To date, we have generally been able to successfully manufacture our investigational product candidates including for CX-904, for our ongoing early-stage clinical trials with contract manufacturers.
We call our approach to therapeutic localization of biologics our Probody platform. A Probody therapeutic candidate consists of three components: an active anti-cancer biologic, a mask for the biologic, and a protease-cleavable linker which connects the mask to the biologic.
We call our approach to therapeutic localization of biologics our PROBODY therapeutic platform. A PROBODY therapeutic candidate consists of three components: an active anti-cancer biologic, a mask for the biologic, and a protease-cleavable linker which connects the mask to the biologic.
CytomX will continue to receive research funding and the Company will be eligible to receive future development, regulatory and commercial milestone payments of up to $1.2 billion for all Licensed Products in total under the Moderna Agreement.
CytomX will continue to receive research funding and the Company will be eligible to receive future development, regulatory and commercial milestone payments of up to $1.2 billion for all Moderna Licensed Products in total under the Moderna Agreement.
Moderna will pay the Company tiered royalties on global net sales of Licensed Products from high single digit to low-teen percentages, subject to certain reductions.
Moderna will pay the Company tiered royalties on global net sales of Moderna Licensed Products from high single digit to low-teen percentages, subject to certain reductions.
Regeneron is responsible for funding the cost of preclinical research and discovery activities of both parties for all Licensed Products and for funding the cost of development, manufacture and commercialization of all Licensed Products worldwide. Pursuant to the Regeneron Agreement, Regeneron made an upfront payment of $30.0 million to the Company.
Regeneron is responsible for funding the cost of preclinical research and discovery activities of both parties for all Regeneron Licensed Products and for funding the cost of development, manufacture and commercialization of all Regeneron Licensed Products worldwide. Pursuant to the Regeneron Agreement, Regeneron made an upfront payment of $30.0 million to the Company.
If Regeneron exercises its Additional Collaboration Program Options, the Company would be eligible to receive additional upfront payments, development and regulatory milestones payments, and commercial milestone payments of up to approximately $1.2 billion in aggregate for the additional Collaboration Programs, which amount is exclusive of the $0.8 billion for the initial Collaboration Programs.
If Regeneron exercises its Additional Collaboration Program Options, the Company would be eligible to receive additional upfront payments, development and regulatory milestones payments, and commercial milestone payments of up to approximately $1.2 billion in aggregate for the additional Regeneron Collaboration Programs, which amount is exclusive of the $0.8 billion for the initial Regeneron Collaboration Programs.
A Fast Track product candidate may also be eligible for Rolling Review, where the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA.
A BLA for a Fast Track product candidate may also be eligible for Rolling Review, where the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA.
Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.
Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, generally known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.
BLA Approval Process The process required by the FDA before a biologic may be marketed in the U.S. generally involves the following: • completion of nonclinical laboratory tests, animal studies and formulation studies conducted according to good laboratory practices (“GLPs”), and other applicable regulations; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • approval by an institutional review board (“IRB”) or ethics committee at each clinical site before the trial is commenced; 18 • performance of adequate and well-controlled human clinical trials according to good clinical practices (“GCPs”), to establish the safety, purity and potency of the product candidate for its intended use; • preparation and submission to the FDA of a BLA after completion of all pivotal trials; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the product candidate is produced to assess compliance with current good manufacturing practices (“cGMPs”) to assure that the facilities, methods and controls are adequate to preserve the product candidate’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with GCPs; and • FDA review and approval of the BLA to permit commercial marketing of the product for its particular labeled uses in the United States.
BLA Approval Process The process required by the FDA before a biologic may be marketed in the U.S. generally involves the following: • completion of nonclinical laboratory tests, animal studies and formulation studies conducted according to good laboratory practices (“GLPs”), and other applicable regulations; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • approval by an institutional review board (“IRB”) or ethics committee at each clinical site before the trial is commenced; 18 • performance of adequate and well-controlled human clinical trials according to good clinical practices (“GCPs”), to establish the safety, purity and potency of the product candidate for its intended use; • preparation and submission to the FDA of a BLA after completion of all pivotal trials; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the product candidate is produced to assess compliance with current good manufacturing practices (“cGMPs”) to assure that the facilities, methods and controls are adequate to preserve the product candidate’s continued safety, purity and potency, and of potential inspections of selected clinical investigation sites to assess compliance with GCPs; and • FDA review and approval of the BLA to permit commercial marketing of the product for its particular labeled uses in the United States.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory 24 requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program.
Individual states in the United States have also become increasingly active in passing legislation and implementing 26 regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance. Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance. 24 Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023), and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023), and replaces the Part D coverage gap discount program with a new discounting program (beginning in 26 2025).
See “Risk Factors” for a discussion of the risks and uncertainties associated with our product candidates and our research and development projects. Our Probody Platform Localization of therapeutic activity of biologics within disease tissue is of increasing interest in the biopharmaceutical industry due to the desire to maximize the activity of biologics while reducing their toxicities.
See “Risk Factors” for a discussion of the risks and uncertainties associated with our product candidates and our research and development projects. Our PROBODY Platform Localization of therapeutic activity of potent biologics within disease tissue is of increasing interest in the biopharmaceutical industry due to the desire to maximize the activity of biologics while reducing their toxicities.
Astellas’ royalty obligations continue with respect to each country and each Product until the later of (i) the date on which such Product is no longer covered by certain intellectual property rights, (ii) the 10th anniversary of the first commercial sale of such product in such country, and (iii) the loss of regulatory exclusivity for such Product in such country.
Astellas’ royalty obligations continue with respect to each country and each Product until the later of (i) the date on which such Product is no longer covered by certain intellectual property 12 rights, (ii) the 10th anniversary of the first commercial sale of such product in such country, and (iii) the loss of regulatory exclusivity for such Product in such country.
The ImmunoGen Research Agreement provides us with the right to use ImmunoGen’s ADC technology in combination 13 with our Probody therapeutic technology to create a conditionally activated ADC directed at one specified target under a research license, and to subsequently obtain an exclusive, worldwide development and commercialization license to use ImmunoGen’s ADC technology to develop and commercialize such conditionally activated ADCs.
The ImmunoGen Research Agreement provides us with the right to use ImmunoGen’s ADC technology in combination with our PROBODY therapeutic technology to create a conditionally activated ADC directed at one specified target under a research license, and to subsequently obtain an exclusive, worldwide development and commercialization license to use ImmunoGen’s ADC technology to develop and commercialize such conditionally activated ADCs.
Regeneron's royalty obligations continue with respect to each country and each Product until the later of (i) the date on which such Licensed Product is no longer covered by certain patent rights, (ii) the 10th anniversary of the first commercial sale of such product in such country, and (iii) the loss of regulatory exclusivity for such Licensed Product in such country.
Regeneron's royalty obligations continue with respect to each country and each Regeneron Licensed Product until the later of (i) the date on which such Regeneron Licensed Product is no longer covered by certain patent rights, (ii) the 10th anniversary of the first commercial sale of such product in such country, and (iii) the loss of regulatory exclusivity for such Regeneron Licensed Product in such country.
Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure that the clinical trials were conducted in compliance with GCP requirements. 20 After the FDA evaluates the BLA and the manufacturing facilities, it issues either an approval letter or a complete response letter.
Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure that the clinical trials were conducted in compliance with GCP requirements. After the FDA evaluates the BLA and the manufacturing facilities, it issues either an approval letter or a complete response letter.
An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. A complete response letter generally describes all of the specific deficiencies in the BLA identified by the FDA. The deficiencies identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical trials.
An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. A complete response letter generally describes all of the specific deficiencies in the BLA identified by the FDA. The deficiencies 20 identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical trials.
The following graphic depicts the three components of a Probody therapeutic candidate: Depiction of the structure of a Probody therapeutic candidate and a protease interacting with the Probody to cleave the linker and activate the molecule When a Probody therapeutic candidate enters a tumor, it encounters proteases, which are enzymes that cleave proteins and have increased activity in the tumor microenvironment.
The following graphic depicts the three components of a PROBODY therapeutic candidate: 9 Depiction of the structure of a PROBODY therapeutic candidate and a protease interacting with the PROBODY candidate to cleave the linker and activate the molecule When a PROBODY therapeutic candidate enters a tumor, it encounters proteases, which are enzymes that cleave proteins and have increased activity in the tumor microenvironment.
According to the guidance, if a diagnostic device and a drug or biologic product candidate are to be studied together to support their respective approvals, both products can be studied in the same investigational study, if the study meets both the requirements of the IDE regulations and the IND regulations.
According to FDA guidance, if a diagnostic device and a drug or biologic product candidate are to be studied together to support their respective approvals, both products can be studied in the same investigational study, if the study meets both the requirements of the IDE regulations and the IND regulations.
After a BLA is submitted for a product candidate, including a product candidate with a Fast Track designation and/or Breakthrough Therapy designation, the BLA may be eligible for other types of FDA programs intended to expedite the FDA review and approval process, such as Priority Review and Accelerated Approval.
After a BLA is submitted for a product candidate, including a product candidate with a Fast Track designation and/or Breakthrough Therapy designation, the BLA may be eligible for other types of FDA programs intended to expedite the FDA review and approval process, such as Priority Review.
We are required to make milestone payments to UCSB on the accomplishment of certain milestones totaling up to $1,075 million for each of the first two indications for each licensed product consisting of a molecule or compound covered by the licensed patent rights.
We are required to make milestone payments to UCSB on the accomplishment of certain milestones totaling up to $1.1 million for each of the first two indications for each licensed product consisting of a molecule or compound covered by the licensed patent rights.
Additionally, the complete response letter may include recommended actions that the applicant might take to place the application in a condition for approval. If a complete response letter is issued, the applicant may either resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw the application.
Additionally, the complete response letter may include recommended actions that the applicant might take to place a resubmitted application in a condition for approval. If a complete response letter is issued, the applicant may either resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw the application.
If 12 we opt in, we would be responsible for a pre-determined portion of the costs of such trials, subject to specified caps, deferrals and offsets. We would then have the option to elect to co-commercialize such Products in the United States.
If we opt in, we would be responsible for a pre-determined portion of the costs of such trials, subject to specified caps, deferrals and offsets. We would then have the option to elect to co-commercialize such Products in the United States.
Upon the achievement of certain development and regulatory milestones and commercial milestones, the Company is eligible to receive milestone payments of up to approximately $0.8 billion for the initial Collaboration Programs. In addition, the Company will receive research and development funding for the work related to the collaboration.
Upon the achievement of certain development and regulatory milestones and commercial milestones, the Company is eligible to receive milestone payments of up to approximately $0.8 billion for the initial Regeneron Collaboration Programs. In addition, the Company will receive research and development funding for the work related to the collaboration.
In addition, PMAs for certain devices must generally include the results from extensive pre-clinical and adequate and well-controlled clinical trials to establish the safety and 21 effectiveness of the device for each indication for which FDA approval is sought.
In addition, PMAs for certain devices must generally include the results from extensive pre-clinical and adequate and well-controlled clinical trials to establish the safety and effectiveness of the device for each indication for which FDA approval is sought.
The sponsor of a Fast Track product candidate has opportunities for frequent interactions with the review team during product development and, once a BLA is submitted, the product candidate may be eligible for Priority Review.
The sponsor of a Fast Track product candidate has opportunities for frequent interactions with the review team during product development and, once a BLA is submitted, the application may be eligible for Priority Review.
Since 2013, we have entered into several collaborations, including with AbbVie, Amgen, Astellas, Bristol Myers Squibb, ImmunoGen, Moderna, and Regeneron to enable development of certain Probody therapeutics.
Since 2013, we have entered into several collaborations, including with Amgen, Astellas, Bristol Myers Squibb, ImmunoGen, Moderna, and Regeneron to enable development of certain PROBODY therapeutics.
We face substantial competition from biotechnology and biopharmaceutical companies developing biopharmaceutical products, particularly with respect to ADC and immuno-oncology therapeutics, where competition is intense and rapidly evolving.
We face substantial competition from biotechnology and biopharmaceutical companies developing biopharmaceutical products, particularly with respect to ADC, TCE and immuno-oncology therapeutics, where competition is intense and rapidly evolving.
In particular, for a diagnostic, the applicant must demonstrate that the diagnostic produces reproducible results when the same sample is tested multiple times by multiple users at multiple laboratories.
In particular, for a diagnostic, the applicant must demonstrate that the diagnostic produces reproducible results when the same sample is tested multiple times by multiple users at 21 multiple laboratories.
Consequently, we believe that toxicities that arise from the binding of a biologic therapeutic to a target in healthy tissues can be reduced, while biological activity against the tumor where it is desired can be preserved. We and our partners have demonstrated the potential of our Probody platform across multiple modalities, including ADCs, cancer immunotherapy, TCBs, and cytokines.
Consequently, we believe that toxicities that arise from the binding of a biologic therapeutic to a target in healthy tissues can be reduced, while biological activity against the tumor where it is desired can be preserved. We and our partners have demonstrated the potential of our PROBODY platform across multiple modalities, including ADCs, cancer immunotherapy, TCEs, and cytokines.
Of these employees, 85 were primarily engaged in research and development activities. None of our employees are represented by a labor union or covered by collective bargaining agreements and we consider our employee relations to be good. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees.
Of these employees, 88 were primarily engaged in research and development activities. None of our employees are represented by a labor union or covered by collective bargaining agreements and we consider our employee relations to be good. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees.
Priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date, compared to ten months under standard review. 22 Additionally, product candidates studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive Accelerated Approval upon a determination that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
Priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date, compared to ten months under standard review. 22 Additionally, depending on the design of the applicable clinical trials, product candidates studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive Accelerated Approval upon a determination that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
We believe the therapeutic window and tumor specificity of our drug candidates have the potential to reduce the dose-limiting toxicities observed in combination therapies and thus enable new combinations with other cancer therapies that are difficult or impossible to use. • Molecular tunability and applicability across many targets.
We believe the therapeutic index and tumor specificity of our drug candidates have the potential to reduce the dose-limiting toxicities observed in combination therapies and thus enable new combinations with other cancer therapies that are difficult or impossible to use. • Molecular tunability and applicability across many targets.
Submission of a BLA to the FDA The results of product development, nonclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests and other control mechanisms, proposed labeling and other relevant information are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications.
Submission of a BLA to the FDA The results of product development, including results from nonclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests and other control mechanisms, proposed labeling and other relevant information are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications.
Amgen also has the right to select a total of up to three targets, including the two additional targets discussed below. We and Amgen will collaborate in the research and development of conditionally activated T-cell engaging bispecifics products directed against such targets. Amgen has selected one such target (the “Amgen Other Product”).
Amgen also has the right to select a total of up to three targets, including the two additional targets discussed below. We and Amgen will collaborate in the research and development of conditionally activated T-cell engaging bispecifics therapies directed against such targets. Amgen has selected one such target (the “Amgen Other Product”).
In January 2023, Astellas nominated the first clinical candidate under the collaboration which resulted in a $5 million milestone payment to CytomX.
In January 2023, Astellas nominated the first clinical candidate under the collaboration which resulted in a $5.0 million milestone payment to CytomX.
Under the Collaboration and License Agreement, the Company granted Moderna an exclusive, worldwide, royalty-bearing license under certain Company intellectual property to develop, manufacture, commercialize and otherwise exploit certain products (“Licensed Products”) for all human and non-human diagnostic, prophylactic and therapeutic uses, subject to certain exceptions with respect to Licensed Products within certain Collaboration Programs.
Under the Moderna Agreement, the Company granted Moderna an exclusive, worldwide, royalty-bearing license under certain Company intellectual property to develop, manufacture, commercialize and otherwise exploit certain products (“Moderna Licensed Products”) for all human and non-human diagnostic, prophylactic and therapeutic uses, subject to certain exceptions with respect to Licensed Products within certain Collaboration Programs.
Amgen, Inc. 11 In September 2017, we entered into a Collaboration and License Agreement (the “Amgen Agreement”) with Amgen. Pursuant to the Amgen Agreement, we received an upfront payment of $40.0 million in October 2017. Concurrent with the entry into the Amgen Agreement, Amgen purchased 1,156,069 shares of our common stock for $20.0 million.
In September 2017, we entered into a Collaboration and License Agreement (the “Amgen Agreement”) with Amgen. Pursuant to the Amgen Agreement, we received an upfront payment of $40.0 million in October 2017. Concurrent with the entry into the Amgen Agreement, Amgen purchased 1,156,069 shares of our common stock for $20.0 million.
In December 2022, the “Company entered into a Collaboration and License Agreement (the “Collaboration and License Agreement”) with Moderna, pursuant to which the Company and Moderna will collaborate on the creation of mRNA-based conditionally-activated investigational therapies utilizing the Company's Probody® therapeutic platform and Moderna’s mRNA and lipid nanoparticle technologies.
In December 2022, the “Company entered into a Collaboration and License Agreement (the “Moderna Agreement”) with Moderna, pursuant to which the Company and Moderna will collaborate on the creation of mRNA-based conditionally-activated investigational therapies utilizing the Company's PROBODY® therapeutic platform and Moderna’s mRNA and lipid nanoparticle technologies.
Item 1. Bus iness Overview We are a clinical-stage, oncology-focused biopharmaceutical company focused on developing novel conditionally activated, biologics localized to the tumor microenvironment. We aim to build a commercial enterprise to maximize our impact on the treatment of cancer.
Item 1. Bus iness Overview We are a clinical-stage, oncology-focused biopharmaceutical company focused on developing novel, conditionally activated biologics designed to be localized to the tumor microenvironment. We aim to build a commercial enterprise to maximize our impact on the treatment of cancer.
It further requires the FDA to post the PREA Non- Compliance letter and sponsor’s response. Post-Approval Requirements Once a BLA approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements is not maintained or if problems occur after the biologic product reaches the market.
It further requires the FDA to post the PREA Non- Compliance letter and sponsor’s responses. Post-Approval Requirements Once a BLA approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements is not maintained or if problems occur after the biologic product reaches the market.
While the IND is active and before approval, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.
While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.
The proteases in the tumor cleave the linker, releasing the mask and allowing the 9 biologic to bind to the target on the tumor.
The proteases in the tumor cleave the linker, releasing the mask and allowing the biologic to bind to the target on the tumor.
Our Collaborations We believe that the Probody platform has broad applicability across many cancer types, biological targets and antibody modalities. We have leveraged strategic partnering to (a) extend the reach of our therapeutic opportunity, and (b) bring in significant non-dilutive capital into the Company.
Our Collaborations We believe that the PROBODY platform has broad applicability across many cancer types, biological targets and antibody modalities. We have leveraged strategic partnering to (a) extend the reach of our technology, and (b) bring in significant non-dilutive capital into the Company.
The Company and Regeneron entered into a Collaboration and License Agreement (the “Regeneron Agreement”) in November 2022, to collaborate on the creation of conditionally activated investigational bispecific cancer therapies utilizing the Company’s Probody® 14 therapeutic platform and Regeneron’s Veloci-Bi® bispecific antibody development platform.
Regeneron Pharmaceuticals, Inc . The Company and Regeneron entered into a Collaboration and License Agreement (the “Regeneron Agreement”) in November 2022, to collaborate on the creation of conditionally activated investigational bispecific cancer therapies utilizing the Company’s PROBODY® therapeutic platform and Regeneron’s Veloci-Bi® bispecific antibody development platform.
Under the Collaboration and License Agreement, the Company granted Regeneron an exclusive, worldwide, royalty-bearing license under certain Company intellectual property to develop, manufacture, commercialize and otherwise exploit licensed products (“Licensed Products”) for all human and non-human diagnostic, prophylactic and therapeutic uses in oncology.
Under the Regeneron Agreement, the Company granted Regeneron an exclusive, worldwide, royalty-bearing license under certain Company intellectual property to develop, manufacture, commercialize and otherwise exploit licensed products (“Regeneron Licensed Products”) for all human and non-human diagnostic, prophylactic and therapeutic uses in oncology.
Our management team members have significant experience in oncology with previous experience at Amylin Pharmaceuticals, Catalyst Biosciences, Coherus BioSciences, Elan Phramaceuticals, Eli Lilly and Company, Exelixis, Genentech, Millennium, Novartis, Onyx Pharmaceuticals, Portola Pharmaceuticals, SGX, Xencor and other companies. Human Capital As of December 31, 2022, we had 116 full-time employees and 2 part-time employees.
Our management team members have significant experience in oncology with previous experience at Amylin Pharmaceuticals, Catalyst Biosciences, Coherus BioSciences, Elan Phramaceuticals, Eli Lilly and Company, Exelixis, Genentech, Millennium, Novartis, Onyx Pharmaceuticals, Portola Pharmaceuticals, SGX, Xencor and other companies. Human Capital As of December 31, 2023, we had 120 full-time employees and 2 part-time employees.
The Company and Moderna will collaborate on a specified number of preclinical research and discovery programs (“Collaboration Programs”) within a specified period under the Collaboration and License Agreement.
The Company and Moderna will collaborate on a specified number of preclinical research and discovery programs (“Moderna Collaboration Programs”) within a specified period under the Collaboration and License Agreement.
They must be conducted under protocols detailing the objectives of the trial, dosing procedures, research subject selection and exclusion criteria and the safety and effectiveness criteria to be evaluated. Each protocol, and any subsequent material amendment to the protocol, must be submitted to the FDA as part of the IND.
Clinical trials must be conducted under protocols detailing the objectives of the trial, dosing procedures, research subject selection and exclusion criteria and the safety and effectiveness criteria to be evaluated. Each protocol, and any subsequent material amendment to the protocol, must be submitted to the FDA as part of the IND.
Due to their high potency, TCBs can target normal tissues with low antigen expression, which may result in significant toxicity. We believe these toxicity challenges could be addressed using our Probody platform by localizing the activity of TCBs to the tumor microenvironment thereby increasing the therapeutic window for TCBs in solid tumors.
Due to their high potency, TCEs can target normal tissues with low antigen expression, which may result in significant toxicity. We believe these toxicity challenges could be addressed using our PROBODY platform by localizing the activity of TCEs to the tumor microenvironment thereby increasing the therapeutic index for TCEs in solid tumors.
Conventional TCBs are a highly potent therapeutic modality designed to direct the activity of cytotoxic T cells to tumors. TCBs such as the BiTE® molecule, Blincyto®, a CD19-directed TCB commercialized by Amgen, have shown clinical activity in hematologic malignancies, but development of TCBs for solid tumor indications has been challenging.
Conventional TCEs are a highly potent therapeutic modality designed to direct the activity of cytotoxic T cells to tumors. TCEs such as the BiTE® molecule, Blincyto®, a CD19-directed TCE commercialized by Amgen, have shown clinical activity in hematologic malignancies, but development of TCEs for solid tumor indications has been challenging.
The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov . 29 PART II – OTHER INFORMATION
The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov . 29
CD71 is an example of such target, for which we have developed CX-2029, a conditionally activated ADC. • Deep knowledge of the tumor protease microenvironment. Our extensive protease biology expertise, driven by state-of-the-art experimental and computational methods, allows us to employ multiple approaches to generate novel targeted, multi-selective, and potentially indication-tailored protease-cleavable substrates.
EpCAM is an example of such a target, for which we have developed CX-2051, a conditionally activated PROBODY ADC. • Deep knowledge of the tumor protease microenvironment. Our extensive protease biology expertise, driven by state-of-the-art experimental and computational methods, allows us to employ multiple approaches to generate novel targeted, multi-selective, and potentially indication-tailored protease-cleavable substrates.
These competitors generally fall within the following categories: Masking and conditional activation: Several companies, including AbbVie, Adagene, Amgen, BioAtla, Halozyme Therapeutics, Harpoon Therapeutics, Revitope Oncology, Roche, Sanofi, Seagen, Takeda Pharmaceutical, Werewolf Therapeutics, and Xilio Therapeutic are exploring, researching or developing antibody masking and/or conditional activation strategies, which could compete with our Probody platform.
These competitors generally fall within the following categories: Masking and conditional activation: Several companies, including AbbVie, Adagene, Amgen, BioAtla, Halozyme Therapeutics, Harpoon Therapeutics, Roche, Sanofi, Takeda Pharmaceutical, Werewolf Therapeutics, Janux Therapeutics and Xilio Therapeutics are exploring, researching or developing antibody masking and/or conditional activation strategies, which could compete with our PROBODY platform.
Our Corporate Strategy We are utilizing our industry-leading, proprietary, versatile, and tunable Probody platform to create a robust pipeline of biologic therapeutics to improve the lives of people with cancer and to build a long-term, multi-product, commercial biopharmaceutical company.
Our Corporate Strategy We are utilizing our proprietary, versatile, multi-modality PROBODY platform to create a robust pipeline of biologic therapeutics to improve the lives of people with cancer and to build a long-term, multi-product, commercial biopharmaceutical company.
Our research and development expenses were $111.6 million and $114.2 million for the years ended December 31, 2022 and 2021, respectively. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Research and Development Expenses” for additional detail regarding our research and development activities. We maintain a website at www.cytomx.com , which contains information about us.
Our research and development expenses were $77.7 million and $111.6 million for the years ended December 31, 2023 and 2022, respectively. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Research and Development Expenses” for additional detail regarding our research and development activities. We maintain a website at www.cytomx.com , which contains information about us.
The UCSB Agreement also grants us an exclusive license, with the right to sublicense, under UCSB’s interest in certain patent rights we co-own with UCSB covering Probody antibodies and other pro-proteins in the fields of therapeutics, in vivo diagnostics and prophylactics. We had no upfront payment obligations under the agreement.
The UCSB Agreement also grants us an exclusive license, with the right to sublicense, under UCSB’s interest in certain patent rights we co-own with UCSB covering PROBODY antibodies and other pro-proteins in the fields of therapeutics, in vivo diagnostics and prophylactics.
Under the terms of the Collaboration and License Agreement, Moderna made an upfront payment to the Company of $35 million, including $5 million of pre-paid research funding.
Under the terms of the Moderna Agreement, Moderna made an upfront payment to the Company of $35 million, including $5 million of pre-paid research funding.
The Company and Regeneron will collaborate on preclinical research and discovery activities for initially agreed upon collaboration programs (“Collaboration Program”) with an option to include additional Collaboration Programs (“Additional Collaboration Program Option”).
The Company and Regeneron will collaborate on preclinical research and discovery activities for initially agreed upon collaboration programs (“Regeneron Collaboration Programs”) with an option to include additional Collaboration Programs (“Additional Collaboration Program Option”).
A clinical hold may occur at any time during the life of an IND and may affect one or more specific studies or all studies conducted under the IND. All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCPs.
A clinical hold may occur at any time while an IND is active and may affect one or more specific studies or all studies conducted under the IND. All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCPs.
The mask is a peptide designed to disguise the active binding site of the biologic to prevent it from binding to the target present on healthy tissue. Probody therapeutic candidates are produced as a single protein by standard biologic production methodology.
The mask is a peptide designed to disguise the active binding site of the biologic to prevent it from binding to the target present on healthy tissue. PROBODY therapeutic candidates are produced as a single protein through biologic production technologies.
In addition, as part of the PMA review, the FDA will typically inspect the manufacturer’s facilities for compliance with the Quality System Regulation (“QSR”) which imposes elaborate testing, control, documentation and other quality assurance requirements.
In addition, as part of the PMA review, the FDA will typically inspect the manufacturer’s facilities for compliance with the Quality System Regulation (“QSR”) which currently represents FDA’s GMP requirements for medical devices, and imposes elaborate testing, control, documentation and other quality assurance requirements.
More than 500 patients with diverse tumor types have been treated with our Probody 10 therapeutic candidates in multiple clinical studies, providing clinical proof of concept and a deep knowledge base for translational advancement and optimization of our drug candidates and platform. • A versatile technology for improvement of therapeutic window.
More than 500 patients with diverse tumor types have been treated with our PROBODY therapeutic candidates in multiple clinical studies, providing clinical proof of concept and a deep knowledge base for translational advancement and optimization of our drug candidates and platform. • A broad multi-modality technology for improvement of therapeutic index.
Fee waivers or reductions are available in certain circumstances, such as where a waiver is necessary to protect the public health, where the fee would present a significant barrier to innovation, or where the applicant is a small business submitting its first human therapeutic application for review.
Fee waivers or reductions are available in certain circumstances, such as where a waiver is necessary to protect the public health, where the application seeks an indication covered by an Orphan Drug Designation, where the fee would present a significant barrier to innovation, or where the applicant is a small business submitting its first human therapeutic application for review.
In May 2022, the first patient was dosed in a Phase 1 study in patients with advanced solid tumors. The Phase 1 study continues to enroll patients in the dose escalation phase. We reported in January 2023 that the initial single patient cohort phase of the study was complete and that the “3+3” patient cohort phase had been initiated.
In May 2022, the first patient was dosed in a Phase 1 study in patients with advanced solid tumors. We reported in January 2023 that the initial single patient cohort phase of the study was complete and that the “3+3” patient cohort phase had been initiated. Backfilling of certain dose escalation cohorts has also been initiated and dose ranging continues.
CX-2051’s payload is a camptothecin derivative, a topoisomerase-1 inhibitor, that has a well characterized profile base on the 7 strong clinical activity observed with other topoisomerase-1 inhibiting ADCs. CX-2051 has demonstrated a wide predicted therapeutic index, as well as, strong preclinical activity and tolerability in multiple preclinical models, including colorectal cancer.
CX-2051’s payload is a camptothecin derivative, a topoisomerase-1 inhibitor, which has a well characterized profile base on the strong clinical activity observed with other topoisomerase-1 inhibiting ADCs and is also optimized for bystander effect . 6 Preclinically, CX-2051 has demonstrated a wide predicted therapeutic index, as well as strong activity and tolerability in multiple preclinical models, including in colorectal cancer.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant Orphan Drug Designation to therapeutic candidates intended to treat a rare disease or condition, which is generally a disease or condition that affects either (1) fewer than 200,000 individuals in the U.S., or (2) more than 200,000 individuals in the U.S. and for which there is no reasonable expectation that the cost of developing and making available in the U.S. a product candidate for this type of disease or condition will be recovered from sales in the U.S. for that product candidate. 23 Orphan drug designation entitles the applicant to incentives, which may include grant funding towards clinical study costs, tax advantages, and waivers of FDA user fees.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant Orphan Drug Designation to therapeutic candidates intended to treat a rare disease or condition, which is generally a disease or condition that affects either (1) fewer than 200,000 individuals in the U.S., or (2) more than 23 200,000 individuals in the U.S. and for which there is no reasonable expectation that the cost of developing and making available in the U.S. a product candidate for this type of disease or condition will be recovered from sales in the U.S. for that product candidate.
Namely, the validation of potential new targets for ADCs, opening solid tumor opportunities for TCBs, and increasing the therapeutic window for immune modulators such as cytokines and CPIs. • Ability to combine more effectively with other therapies.
Namely, the validation of potential new targets for ADCs, opening solid tumor opportunities for TCEs, and increasing the therapeutic index for immunotherapies such as cytokines and CPIs. • Ability to combine more effectively with other therapies.
As a condition of Accelerated Approval, the FDA will generally require the sponsor to perform adequate and well-controlled confirmatory clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit.
As a condition of Accelerated Approval, the FDA will generally require the sponsor to perform adequate and well-controlled confirmatory clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit, and may require that such confirmatory trials be underway prior to granting accelerated approval.
Changing the formulation and scale up process is a complicated and difficult task and there can be no assurances that the changes we make to the drug product and manufacturing process will be successful or completed in a timely manner or that the FDA will not require additional development steps or studies. 15 The supply chain for the manufacturing of our product candidates is complicated and can involve many parties.
Changing the formulation and scale up process is a complicated and difficult task and there can be no assurances that the changes we make to the drug product and manufacturing process will be successful or completed in a timely manner or that the FDA will not require additional development steps or studies.
As of January 2023, our patent portfolio contains at least 175 granted patents (some of which are co-owned with a third party) and at least 350 pending patent applications (some of which are co-owned with a third party).
As of January 2024, our patent portfolio contains at least 250 granted patents (some of which are co-owned with a third party) and at least 400 pending patent applications (some of which are co-owned with a third party).
In February 2023, BMS updated its pipeline to prioritize the a-fucosylated Probody anti-CTLA-4 molecule, BMS-986288 as its lead next-generation CTLA-4 program and removed BMS-986249 from its pipeline. In March 2017, we and Bristol Myers Squibb entered into Amendment Number 1 to Extend Collaboration and License Agreement (“Amendment 1”).
In February 2023, BMS updated its pipeline to prioritize the a-fucosylated PROBODY anti-CTLA-4 molecule, BMS-986288 as its lead next-generation CTLA-4 program and removed BMS-986249 from its pipeline. In February 2021, we and Bristol Myers Squibb entered into Amendment Number 2 to amend the BMS Agreement (“Amendment 2”), as amended by Amendment 1.
As in the U.S., we may apply for designation of a product candidate as an orphan drug for the treatment of a specific indication in the European Union before the application for marketing authorization is made. 25 Orphan drugs in the European Union enjoy economic and marketing benefits, including up to ten years of market exclusivity for the approved indication unless another applicant can show that its product is safer, more effective or otherwise clinically superior to the orphan-designated product, the marketing authorization holder is unable to supply sufficient quantity of the medicinal product or the marketing authorization holder has given its consent.
Orphan drugs in the European Union enjoy economic and marketing benefits, including up to ten years of market exclusivity for the approved indication unless another applicant can show that its product is safer, more effective or otherwise clinically superior to the orphan-designated product, the marketing authorization holder is unable to supply sufficient quantity of the medicinal product or the marketing authorization holder has given its consent.
In February 2016, we exercised our option to obtain a development and commercialization license for praluzatamab ravtansine (CX-2009) pursuant to the terms of the ImmunoGen Research Agreement (the “CX-2009 License”). In February 2017, ImmunoGen exercised its option to obtain a development and commercialization license for the first of its two targets.
In February 2016, we exercised our option to obtain a development and commercialization license for praluzatamab ravtansine (CX-2009) (the “CX-2009 License”). In December 2017, ImmunoGen exercised an option to obtain a development and commercialization license pursuant to the ImmunoGen Research Agreement (the “ImmunoGen 2017 License”) for a target, EpCAM.
Moderna's royalty obligations continue with respect to each country and each Product until the later of (i) the date on which such Licensed Product is no longer covered by certain patent rights, (ii) the 10th anniversary of the first commercial sale of such product in such country, and (iii) the loss of regulatory exclusivity for such Licensed Product in such country.
Moderna's royalty obligations continue with respect to each country and each Product until the later of (i) the date on which such Licensed Product is no longer covered by certain patent rights, (ii) the 10th anniversary of the first commercial sale of such product in such country, and (iii) the loss of regulatory exclusivity for such Moderna Licensed Product in such country. 14 The Moderna Agreement also provides Moderna with a one-time option to participate in a future equity financing by the Company subject to certain terms, conditions and regulatory requirements.
By pioneering a novel class of localized biologic drug candidates, powered by our Probody® therapeutic technology platform, we lead the field of conditionally activated oncology therapeutics and have established biologics localization as a strategic area of research and development.
By pioneering a novel class of localized biologic drug candidates, powered by our PROBODY® therapeutic technology platform, we lead the field of conditionally activated oncology therapeutics and have established biologics localization as a strategic area of research and development. Our vision is to transform lives with safer, more effective therapies with the goal of addressing major unmet needs in oncology.
Under the ImmunoGen 2019 License, we gained rights to the EpCAM conditionally activated ADC program and, in return, we made an upfront payment, and we will pay certain clinical development, approval and commercialization milestone payments if achieved and royalties on product sales. Moderna, Inc .
License from ImmunoGen Under the ImmunoGen 2019 License, we gained rights to the EpCAM conditionally activated ADC program and, in return, we made an upfront payment of $7.5 million, and we will pay up to $35.0 million in certain clinical development milestones, and up to $320.0 million in regulatory approval and commercialization milestone payments, if achieved.
Our Pipeline of Conditionally Activated, Localized Product Candidates We are leveraging our Probody platform to build a robust pipeline of potential first-in-class and best-in-class therapies. CytomX’s pipeline spans pre-clinical to Phase 2 and includes a range of therapeutic modalities including T-cell bispecifics, immunotherapies, antibody drug conjugates, and, most recently, mRNA.
Our Pipeline of Conditionally Activated, Localized Product Candidates We are leveraging our multi-modality PROBODY platform across to build a robust pipeline of potential therapies that are designed to address high unmet needs. CytomX’s pipeline spans pre-clinical and clinical programs and includes a range of therapeutic formats including T-cell engagers, immunotherapies, antibody drug conjugates, and, most recently, mRNA.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we, or any manufacturing partners, are unable to successfully scale up the manufacture of our product candidates in sufficient quality and quantity, the development, testing, and clinical trials of that product candidate may be delayed or infeasible, and regulatory approval or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business. 45 We may expend our limited resources to pursue a particular product candidate and fail to capitalize on product candidates that may be more profitable or for which there is a greater likelihood of success.
Biggest changeWe may expend our limited resources to pursue a particular product candidate and fail to capitalize on product candidates that may be more profitable or for which there is a greater likelihood of success. Because we have limited financial and managerial resources, we focus on specific product candidates and indications.
In addition, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; • the U.S. federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the U.S. federal legislation commonly referred to as Physician Payments Sunshine Act, enacted as part of the ACA, and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the CMS information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists and certified nurse midwives) and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members; and 59 • analogous state laws and regulations, such as state anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; and state 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 in addition to requiring drug and therapeutic biologics manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures and pricing information.
In addition, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; • the U.S. federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the U.S. federal legislation commonly referred to as Physician Payments Sunshine Act, enacted as part of the ACA, and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the CMS information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists and certified nurse midwives) and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members; and • analogous state laws and regulations, such as state anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; and state 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 in addition to requiring drug and therapeutic biologics manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures and pricing information.
Our net loss and other operating results will be affected by numerous factors, including: • variations in the level of expense related to the ongoing development of our Probody platform, our product candidates or future development programs; • results of clinical trials, or the addition or termination of clinical trials or funding support by us, or existing or future collaborators or licensing partners; • our execution of any additional collaboration, licensing or similar arrangements, and the timing of payments we may make or receive under existing or future arrangements or the termination or modification of any such existing or future arrangements; • developments or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our products; • any intellectual property infringement lawsuit or opposition, interference or cancellation proceeding in which we may become involved, including the ongoing patent infringement lawsuit brought by Vytacera against us; • additions and departures of key personnel; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; • if any of our product candidates receives regulatory approval, the terms of such approval and market acceptance and demand for such product candidates; • regulatory developments affecting our product candidates or those of our competitors; and • changes in general market and economic conditions.
Our net loss and other operating results will be affected by numerous factors, including: • variations in the level of expense related to the ongoing development of our PROBODY platform, our product candidates or future development programs; • results of clinical trials, or the addition or termination of clinical trials or funding support by us, or existing or future collaborators or licensing partners; 62 • our execution of any additional collaboration, licensing or similar arrangements, and the timing of payments we may make or receive under existing or future arrangements or the termination or modification of any such existing or future arrangements; • developments or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our products; • any intellectual property infringement lawsuit or opposition, interference or cancellation proceeding in which we may become involved, including the ongoing patent infringement lawsuit brought by Vytacera against us; • additions and departures of key personnel; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; • if any of our product candidates receives regulatory approval, the terms of such approval and market acceptance and demand for such product candidates; • regulatory developments affecting our product candidates or those of our competitors; and • changes in general market and economic conditions.
Russia’s recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military action against Ukraine have led to substantial expansion of sanction programs imposed by the United States, the European Union, the United Kingdom, Canada, Switzerland, Japan, and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including, among others: 71 • blocking sanctions against some of the largest state-owned and private Russian financial institutions (and their subsequent removal from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system) and certain Russian businesses, some of which have significant financial and trade ties to the European Union; • blocking sanctions against Russian and Belarusian individuals, including the Russian President, other politicians, and those with government connections or involved in Russian military activities; and • blocking of Russia’s foreign currency reserves as well as expansion of sectoral sanctions and export and trade restrictions, limitations on investments and access to capital markets, and bans on various Russian imports.
Russia’s recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military action against Ukraine have led to substantial expansion of sanction programs imposed by the United States, the European Union, the United Kingdom, Canada, Switzerland, Japan, and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including, among others: • blocking sanctions against some of the largest state-owned and private Russian financial institutions (and their subsequent removal from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system) and certain Russian businesses, some of which have significant financial and trade ties to the European Union; • blocking sanctions against Russian and Belarusian individuals, including the Russian President, other politicians, and those with government connections or involved in Russian military activities; and • blocking of Russia’s foreign currency reserves as well as expansion of sectoral sanctions and export and trade restrictions, limitations on investments and access to capital markets, and bans on various Russian imports.
We may encounter unexpected difficulties, or incur unexpected costs, in connection with transition activities and integration efforts, which include: • high acquisition costs; • the need to incur substantial debt or engage in dilutive issuances of equity securities to pay for acquisitions; • the potential disruption of our historical business and our activities under our collaboration agreements; • the strain on, and need to expand, our existing operational, technical, financial and administrative infrastructure; • our lack of experience in late-stage product development and commercialization; • the difficulties in assimilating employees and corporate cultures; • the difficulties in hiring qualified personnel and establishing necessary development and/or commercialization capabilities; • the failure to retain key management and other personnel; • the challenges in controlling additional costs and expenses in connection with and as a result of the acquisition; • the need to write down assets or recognize impairment charges; • the diversion of our management’s attention to integration of operations and corporate and administrative infrastructures; and • any unanticipated liabilities for activities of or related to the acquired business or its operations, products or product candidates.
We may encounter unexpected difficulties, or incur unexpected costs, in connection with transition activities and integration efforts, which include: • high acquisition costs; • the need to incur substantial debt or engage in dilutive issuances of equity securities to pay for acquisitions; • the potential disruption of our historical business and our activities under our collaboration agreements; • the strain on, and need to expand, our existing operational, technical, financial and administrative infrastructure; • our lack of experience in late-stage product development and commercialization; • the difficulties in assimilating employees and corporate cultures; 69 • the difficulties in hiring qualified personnel and establishing necessary development and/or commercialization capabilities; • the failure to retain key management and other personnel; • the challenges in controlling additional costs and expenses in connection with and as a result of the acquisition; • the need to write down assets or recognize impairment charges; • the diversion of our management’s attention to integration of operations and corporate and administrative infrastructures; and • any unanticipated liabilities for activities of or related to the acquired business or its operations, products or product candidates.
Further, a clinical trial may be suspended or terminated by us, our collaborators, the IRBs of the institutions in which such trials are being conducted, the Data Safety Monitoring Board for such trial or by the FDA or other regulatory authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues 34 or adverse side effects, failure to demonstrate a benefit from using a drug or therapeutic biologic, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
Further, a clinical trial may be suspended or terminated by us, our collaborators, the IRBs of the institutions in which such trials are being conducted, the Data Safety Monitoring Board for such trial or by the FDA or other regulatory authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug or therapeutic biologic, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
These enforcement actions include, among others: • adverse regulatory inspection findings; • warning letters; • voluntary or mandatory product recalls or public notification or medical product safety alerts to healthcare professionals; • restrictions on, or prohibitions against, marketing our products; • restrictions on, or prohibitions against, importation or exportation of our products; • suspension of review or refusal to approve pending applications or supplements to approved applications; • exclusion from participation in government-funded healthcare programs; • exclusion from eligibility for the award of government contracts for our products; • suspension or withdrawal of product approvals; • seizures or administrative detention of products; • injunctions; and • civil and criminal penalties and fines.
These enforcement actions include, among others: • adverse regulatory inspection findings; • warning letters; • voluntary or mandatory product recalls or public notification or medical product safety alerts to healthcare professionals; 58 • restrictions on, or prohibitions against, marketing our products; • restrictions on, or prohibitions against, importation or exportation of our products; • suspension of review or refusal to approve pending applications or supplements to approved applications; • exclusion from participation in government-funded healthcare programs; • exclusion from eligibility for the award of government contracts for our products; • suspension or withdrawal of product approvals; • seizures or administrative detention of products; • injunctions; and • civil and criminal penalties and fines.
As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses cannot be used, or start taking enforcement action, we 61 could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our products and services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses cannot be used, or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our products and services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
Our or a third party’s failure to execute on our manufacturing requirements and comply with cGMPs could adversely affect our business in a number of ways, including: • an inability to initiate or continue clinical trials of product candidates under development; 44 • delay in submitting regulatory applications, or receiving regulatory approvals, for product candidates; • loss of the cooperation of a collaborator; • subjecting third-party manufacturing facilities or our manufacturing facilities to additional inspections by regulatory authorities; • requirements to cease distribution or to recall batches of our product candidates; and • in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products.
Our or a third party’s failure to execute on our manufacturing requirements and comply with cGMPs could adversely affect our business in a number of ways, including: • an inability to initiate or continue clinical trials of product candidates under development; • delay in submitting regulatory applications, or receiving regulatory approvals, for product candidates; • loss of the cooperation of a collaborator; • subjecting third-party manufacturing facilities or our manufacturing facilities to additional inspections by regulatory authorities; • requirements to cease distribution or to recall batches of our product candidates; and • in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “IRC”), if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage points change (by value) in the ownership of its equity over a rolling three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and certain other pre-change tax attributes to offset its post-change income and taxes may be limited.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “IRC”), if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage points change (by value) in the ownership of its equity over a rolling three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and certain other pre-change tax attributes 47 to offset its post-change income and taxes may be limited.
A system interruption or security breach that leads to disclosure or modification of or prevents access to personally 70 identifiable information or other protected information could harm our reputation, compel us to comply with federal and/or state breach notification laws and foreign law equivalents, subject us to mandatory corrective action, require us to verify the correctness of database contents and otherwise subject us to liability under laws and regulations that protect personal data, resulting in increased costs or loss of revenue.
A system interruption or security breach that leads to disclosure or modification of or prevents access to personally identifiable information or other protected information could harm our reputation, compel us to comply with federal and/or state breach notification laws and foreign law equivalents, subject us to mandatory corrective action, require us to verify the correctness of database contents and otherwise subject us to liability under laws and regulations that protect personal data, resulting in increased costs or loss of revenue.
In addition, if a product that has Orphan Drug Designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including a full BLA, to market the same product for the same disease or condition or seven years, except in limited circumstances, such as a showing 63 of clinical superiority to the product with orphan drug exclusivity or where the manufacturer is unable to assure sufficient product quantity.
In addition, if a product that has Orphan Drug Designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including a full BLA, to market the same product for the same disease or condition or seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or where the manufacturer is unable to assure sufficient product quantity.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, as amended, which prohibits a person who owns in excess of 15 percent of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15 percent of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, as amended, which prohibits a person who owns in excess of 15 percent of our outstanding voting stock from 66 merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15 percent of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
As a result, we may not have the financial resources to continue development of, or to modify existing or enter into new collaborations for, a product candidate if we experience any issues that delay or prevent regulatory approval of, or our ability to commercialize, product candidates, including: • negative or inconclusive results from our clinical trials, the clinical trials of our collaborators or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional preclinical testing or clinical trials or abandon a program; • product-related side effects experienced by participants in our clinical trials, the clinical trials of our collaborators or by individuals using drugs or therapeutic biologics similar to our product candidates; • delays in submitting INDs or comparable foreign applications or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial, or a suspension or termination of a clinical trial once commenced; • conditions imposed by the FDA or comparable foreign authorities regarding the scope or design of our clinical trials; • delays in enrolling research subjects in clinical trials; • high drop-out rates of research subjects; • inadequate supply or quality of product candidate components or materials or other supplies necessary for the conduct of our or our collaborators’ clinical trials; • greater than anticipated clinical trial costs; • delay in the development or approval of companion diagnostic tests for our product candidates; • unfavorable FDA or other regulatory agency inspection and review of a clinical trial site; • failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all; • delays and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around clinical testing generally or with respect to our technology in particular; or • varying interpretations of data by the FDA and similar foreign regulatory agencies.
As a result, we may not have the financial resources to continue development of, or to modify existing or enter into new collaborations for, a product candidate if we experience any issues that delay or prevent regulatory approval of, or our ability to commercialize, product candidates, including: • negative or inconclusive results from our clinical trials, the clinical trials of our collaborators or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional preclinical testing or clinical trials or abandon a program; • product-related side effects experienced by participants in our clinical trials, the clinical trials of our collaborators or by individuals using drugs or therapeutic biologics similar to our product candidates; • delays in submitting INDs or comparable foreign applications or delays or failure in obtaining the necessary approvals or allowances from regulators to commence a clinical trial, or a suspension or termination of a clinical trial once commenced; • conditions imposed by the FDA or comparable foreign authorities regarding the scope or design of our clinical trials; • delays in enrolling research subjects in clinical trials; • high drop-out rates of research subjects; • inadequate supply or quality of product candidate components or materials or other supplies necessary for the conduct of our or our collaborators’ clinical trials; • greater than anticipated clinical trial costs; • delay in the development or approval of companion diagnostic tests for our product candidates; • delays or difficulties in the manufacturing of our product candidates • unfavorable FDA or other regulatory agency inspection and review of a clinical trial site; • failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all; • delays and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around clinical testing generally or with respect to our technology in particular; or • varying interpretations of data by the FDA and similar foreign regulatory agencies.
Each of our executive officers is entitled to receive a lump sum payment equal to one year or more of his or her base salary as well as continued medical and dental coverage for a period of one year or more plus a prorated portion of his or her target annual bonus for the calendar year in which his or her employment is terminated following his or her termination of employment due to good reason or without cause.
Each of our executive officers is entitled to receive a lump sum payment equal to one year or more of his or her base salary as well as continued medical and dental coverage for a period of one year or more plus a prorated portion of his or her target annual bonus for 65 the calendar year in which his or her employment is terminated following his or her termination of employment due to good reason or without cause.
In addition, exclusive marketing rights in the United States may be limited if we seek approval for an disease or condition broader than the orphan-designated indication or may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.
In addition, exclusive marketing rights in the United States may be limited if we seek approval for an disease or condition broader than the orphan-designated disease or condition or may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.
Competitive therapeutic treatments include those that have already been approved and accepted by the medical community and any new treatments that enter the market. We believe that a significant number of products are currently under development, and may become commercially available in the future, for the treatment of conditions for which we may try to develop product candidates.
Competitive therapeutic treatments include those that have already been approved 44 and accepted by the medical community and any new treatments that enter the market. We believe that a significant number of products are currently under development, and may become commercially available in the future, for the treatment of conditions for which we may try to develop product candidates.
On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three 56 to five years.
Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period.
Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement 70 adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period.
In retaliation against new international sanctions and as part of measures to stabilize and support the volatile Russian financial and currency markets, the Russian authorities also imposed significant currency control measures aimed at restricting the outflow of foreign currency and capital from Russia, imposed various restrictions on transacting with non-Russian parties, banned exports of various products, and imposed other economic and financial restrictions.
In retaliation against new international sanctions and as part of measures to stabilize and support the volatile Russian financial and currency markets, the Russian authorities also imposed significant currency control measures aimed at restricting the outflow of 71 foreign currency and capital from Russia, imposed various restrictions on transacting with non-Russian parties, banned exports of various products, and imposed other economic and financial restrictions.
For example, our understanding of the expression of CD166 and CD71 in both healthy and diseased tissues is still developing. As a result, we cannot provide any assurance that we will be able to successfully identify and advance any product candidates to target novel, difficult-to-drug targets.
For example, our understanding of the expression of CD166, CD71 and other drug targets in both healthy and diseased tissues is still developing. As a result, we cannot provide any assurance that we will be able to successfully identify and advance any product candidates to target novel, difficult-to-drug targets.
Additionally, in July 2022, we announced that we would cease to continue the praluzatamab ravtansine program without a partner. 41 If we fail to achieve announced milestones in the timeframes we expect, the commercialization of any of our product candidates may be delayed or never attained, and our business and results of operations may be harmed.
Additionally, in July 2022, we announced that we would cease to continue the praluzatamab ravtansine program without a partner. If we fail to achieve announced milestones in the timeframes we expect the commercialization of any of our product candidates may be delayed or never attained, and our business and results of operations may be harmed.
Misconduct by these parties could include intentional failures to comply with FDA regulations, provide accurate information to the FDA, comply with manufacturing standards we may establish, comply with federal and state data privacy, security, fraud and abuse, and other healthcare 48 laws and regulations, report financial information or data accurately or disclose unauthorized activities to us.
Misconduct by these parties could include intentional failures to comply with FDA regulations, provide accurate information to the FDA, comply with manufacturing standards we may establish, comply with federal and state data privacy, security, fraud and abuse, and other healthcare laws and regulations, report financial information or data accurately or disclose unauthorized activities to us.
Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.
Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace factors that are still developing.
We protect trade secrets and confidential and unpatented know-how, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to such knowledge, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors and other third parties.
We protect trade secrets and 52 confidential and unpatented know-how, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to such knowledge, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors and other third parties.
Our future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our product candidates for which we obtain marketing approval.
Our future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and 57 distribute our product candidates for which we obtain marketing approval.
We may seek and fail to obtain fast track or breakthrough therapy designations for our current or future product candidates. If we are successful, these programs may not lead to a faster development or regulatory review process, and they do not guarantee we 62 will receive approval for any product candidate.
We may seek and fail to obtain fast track or breakthrough therapy designations for our current or future product candidates. If we are successful, these programs may not lead to a faster development or regulatory review process, and they do not guarantee we will receive approval for any product candidate.
Furthermore, if we are unable to conclude that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our securities could decline, and we could be subject to sanctions or investigations by regulatory authorities or litigation.
Furthermore, if we are unable to conclude that our internal control over financial reporting is effective, we could lose investor 63 confidence in the accuracy and completeness of our financial reports, the market price of our securities could decline, and we could be subject to sanctions or investigations by regulatory authorities or litigation.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Item 1B. Unresolved Staff Comments None
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. 72 Item 1B. Unresolved Staff Comments None.
Likewise, our clinical trial of CX-904 is also competing with thousands of other anti-cancer clinical trials. Any clinical trials of our product candidates initiated by our collaborators, including 37 Bristol Myers Squibb’s ongoing and planned Phase 2 clinical trials, face similar and additional risks relating to enrollment.
Likewise, our clinical trial of CX-904 is also competing with thousands of other anti-cancer clinical trials. Any clinical trials of our product candidates initiated by our collaborators, including Bristol Myers Squibb’s ongoing and planned Phase 2 clinical trials, face similar and additional risks relating to enrollment.
With respect to our 39 existing collaboration agreements, and what we expect will be the case with any future collaboration agreements, we have and would expect to have limited control over whether such collaborations pursue the development of our product candidates or the amount and timing of resources that such collaborators dedicate to the development or commercialization of our product candidates.
With respect to our existing collaboration agreements, and what we expect will be the case with any future collaboration agreements, we have and would expect to have limited control over whether such collaborations pursue the development of our product candidates or the amount and timing of resources that such collaborators dedicate to the development or commercialization of our product candidates.
In particular, as a result of the COVID-19 pandemic, the ability of employees to engage in a remote working environment has increased the competitive landscape across the country for us in seeking qualified employees. Employees are now able to consider opportunities across the country and it may be more difficult to hire employees.
In particular, as a result of the COVID-19 pandemic, the ability of employees to engage in a remote working environment increased the competitive landscape across the country for us in seeking qualified employees. Employees are now able to consider opportunities across the country and it may be more difficult to hire employees.
If we fail to obtain a required license, we or our collaborators may be unable to effectively market product candidates based on our technology, which could limit our ability to generate revenue or achieve profitability and possibly prevent us from generating revenue sufficient to sustain our operations.
If we fail to obtain a required license, we or our collaborators may be unable to effectively market product candidates based on our technology, which could limit our ability to generate revenue or achieve profitability and possibly prevent us from generating revenue sufficient to 50 sustain our operations.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data, or inappropriate disclosure of confidential or proprietary information, we could incur liability, recovery of our data could take a prolonged period of time, and the development of our research or product candidates could be delayed.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data, or inappropriate disclosure of Confidential Information, we could incur liability, recovery of our data could take a prolonged period of time, and the development of our research or product candidates could be delayed.
However, we cannot provide assurance that it will not later limit drug exposure or cause severe adverse events for pacmilimab or our other drug candidates. Problems that are specific to our Probody platform may have an unfavorable impact on all of our product candidates.
However, we cannot provide assurance that it will not later limit drug exposure or cause severe adverse events for our other drug candidates. Problems that are specific to our PROBODY platform may have an unfavorable impact on all of our product candidates.
If our global clinical trials or 43 foreign third-party suppliers were to experience significant disruption due to these risks or for other reasons, it could have a material adverse effect on our business, financial condition, results of operations and prospects.
If our global clinical trials or foreign third-party suppliers were to experience significant disruption due to these risks or for other reasons, it could have a material adverse effect on our business, financial condition, results of operations and prospects.
In jurisdictions where we have not obtained patent protection, competitors may use our technology to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but where it is more difficult to enforce a patent as compared to the U.S.
In jurisdictions where we have not obtained patent protection, competitors may use our technology to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but where it is more 49 difficult to enforce a patent as compared to the U.S.
For example, in May 2020, a putative securities class action lawsuit was brought against us (“Class Action Lawsuit”). While the Class Action Lawsuit was voluntarily dismissed without prejudice by the plaintiff and his attorneys in January 2021, a similar lawsuit or another lawsuit could be filed in the 68 future.
For example, in May 2020, a putative securities class action lawsuit was brought against us (“Class Action Lawsuit”). While the Class Action Lawsuit was voluntarily dismissed without prejudice by the plaintiff and his attorneys in January 2021, a similar lawsuit or another lawsuit could be filed in the future.
The market price for our common stock may be influenced by many factors, including the other risks described in this section titled “Risk Factors” and the following: 65 • results of clinical trials and preclinical studies of our product candidates, or those of our competitors or our collaborators; • regulatory or legal developments in the U.S. and other countries, especially changes in laws or regulations applicable to our products; • the success of competitive products or technologies; • introductions and announcements of new products by us, our future commercialization partners, or our competitors, and the timing of these introductions or announcements; • actions taken by regulatory agencies with respect to our products, clinical studies, manufacturing process or sales and marketing terms; • the extent to which the COVID-19 pandemic and related governmental regulations and restrictions may impact our business, including our research, clinical trials, manufacturing and financial condition, as well as the impact of other pandemics, natural disasters and other calamities; • actual or anticipated variations in our financial results or those of companies that are perceived to be similar to us; • the success of our efforts to acquire or in-license additional technologies, products or product candidates; • developments concerning any existing or future collaborations, including but not limited to those with our sources of manufacturing supply and our commercialization partners; • market conditions in the pharmaceutical and biotechnology sectors; • announcements by us or our competitors of significant acquisitions, strategic collaborations, joint ventures or capital commitments; • developments or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our products; • our ability or inability to raise additional capital and the terms on which we raise it; • the recruitment or departure of key personnel; • changes in the structure of healthcare payment systems; • actual or anticipated changes in earnings estimates or changes in stock market analyst recommendations regarding our common stock, other comparable companies or our industry generally; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • announcement and expectation of additional financing efforts; • speculation in the press or investment community; • trading volume of our common stock; • sales of our common stock by us or our stockholders; • the concentrated ownership of our common stock; • changes in accounting principles; • terrorist acts, acts of war or periods of widespread civil unrest; • natural disasters and other calamities; and • general economic, industry and market conditions.
The market price for our common stock may be influenced by many factors, including the other risks described in this section titled “Risk Factors” and the following: • results of clinical trials and preclinical studies of our product candidates, or those of our competitors or our collaborators; • regulatory or legal developments in the U.S. and other countries, especially changes in laws or regulations applicable to our products; • the success of competitive products or technologies; • introductions and announcements of new products by us, our future commercialization partners, or our competitors, and the timing of these introductions or announcements; • actions taken by regulatory agencies with respect to our products, clinical studies, manufacturing process or sales and marketing terms; • the extent to which any pandemic and related governmental regulations and restrictions may impact our business, including our research, clinical trials, manufacturing and financial condition, as well as the impact of other natural disasters and other calamities; • actual or anticipated variations in our financial results or those of companies that are perceived to be similar to us; • the success of our efforts to acquire or in-license additional technologies, products or product candidates; • developments concerning any existing or future collaborations, including but not limited to those with our sources of manufacturing supply and our commercialization partners; 64 • market conditions in the pharmaceutical and biotechnology sectors; • announcements by us or our competitors of significant acquisitions, strategic collaborations, joint ventures or capital commitments; • developments or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our products; • our ability or inability to raise additional capital and the terms on which we raise it; • the recruitment or departure of key personnel; • changes in the structure of healthcare payment systems; • actual or anticipated changes in earnings estimates or changes in stock market analyst recommendations regarding our common stock, other comparable companies or our industry generally; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • announcement and expectation of additional financing efforts; • speculation in the press or investment community; • trading volume of our common stock; • sales of our common stock by us or our stockholders; • the concentrated ownership of our common stock; • changes in accounting principles; • terrorist acts, acts of war or periods of widespread civil unrest; • natural disasters and other calamities; and • general economic, industry and market conditions.
We do not have the ability to independently conduct clinical trials. As such, we currently rely and intend to continue to rely on third-party clinical investigators, CROs, clinical data management organizations and consultants to help us design, conduct, supervise and 42 monitor clinical trials of our product candidates.
We do not have the ability to independently conduct clinical trials. As such, we currently rely and intend to continue to rely on third-party clinical investigators, CROs, clinical data management organizations and consultants to help us design, conduct, supervise and monitor clinical trials of our product candidates.
We do not expect to realize revenue from sales of products or royalties from licensed products in the foreseeable 32 future, if at all, and unless and until our product candidates are clinically tested, approved for commercialization and successfully marketed.
We do not expect to realize revenue from sales of products or royalties from licensed products in the foreseeable future, if at all, and unless and until our product candidates are clinically tested, approved for commercialization and successfully marketed.
Additionally, the Phase 2 clinical trial of BMS-986249 being conducted by Bristol Myers Squibb includes, and the planned Phase 2 clinical trial of BMS-986288 may include, the administration of the product candidate at relatively high dosage levels, which could further exacerbate such risks.
Additionally, the Phase 2 clinical trial of BMS-986249 being conducted by Bristol Myers Squibb includes, and the Phase 2 clinical trial of BMS-986288, may include the administration of the product candidate at relatively high dosage levels, which could further exacerbate such risks.
The termination of any of our collaboration agreements or individual programs within a collaboration agreement could result in a change to our business plan and may have a material adverse effect on our business, financial condition, results of operations and prospects.
The termination of any of our collaboration agreements or individual programs within a collaboration agreement could result in a change 41 to our business plan and may have a material adverse effect on our business, financial condition, results of operations and prospects.
Our future success will depend in large part on our continued ability to attract and retain other highly qualified scientific, technical and management personnel, as well as personnel with expertise in clinical testing, manufacturing, governmental regulation and commercialization.
Our future success will depend in large part on our continued ability to attract and retain other highly qualified scientific, technical and management personnel, as well 45 as personnel with expertise in clinical testing, manufacturing, governmental regulation and commercialization.
Reimbursement rates may be based on payments allowed for lower-cost drugs or therapeutic biologics that are already reimbursed, may be incorporated into existing payments for other services and may reflect budgetary constraints or imperfections in Medicare data.
Reimbursement rates may be based on payments allowed for lower-cost drugs or therapeutic biologics that are already reimbursed, may be incorporated into existing 60 payments for other services and may reflect budgetary constraints or imperfections in Medicare data.
Any failure in identifying and managing these risks and uncertainties would have a material adverse effect on our business. 69 In addition, acquisitions create other uncertainties and risks, particularly when the acquisition takes the form of a merger or other business consolidation.
Any failure in identifying and managing these risks and uncertainties would have a material adverse effect on our business. In addition, acquisitions create other uncertainties and risks, particularly when the acquisition takes the form of a merger or other business consolidation.
We believe that such limited experience may increase the complexity, uncertainty and length of the regulatory approval process for 38 our product candidates and may keep us from commencing first-in-human trials in certain countries.
We believe that such limited experience may increase the complexity, uncertainty and length of the regulatory approval process for our product candidates and may keep us from commencing first-in-human trials in certain countries.
Several companies, including Adagene, Amgen, Sanofi, BioAtla, Halozyme, Harpoon Therapeutics, Revitope, Roche, Seagen, Takeda, Werewolf Therapeutics, and Xilio are exploring antibody masking and/or conditional activation strategies, which could compete with our Probody platform.
Several companies, including Adagene, Amgen, Sanofi, BioAtla, Halozyme, Harpoon Therapeutics, Roche, Seagen, Takeda, Werewolf Therapeutics, and Xilio are exploring antibody masking and/or conditional activation strategies, which could compete with our PROBODY platform.
Our assignment 54 agreements may not be self‑executing or may be breached, and we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property.
Our assignment agreements may not be self‑executing or may be breached, and we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property.
Any such collaboration, or other strategic transaction, may require us to incur non-recurring or other charges, increase our near- and long-term expenditures and pose significant integration or implementation challenges or disrupt our management or business.
Any such collaboration, or other strategic transaction, may 42 require us to incur non-recurring or other charges, increase our near- and long-term expenditures and pose significant integration or implementation challenges or disrupt our management or business.
In addition, we or our licensors, or any future strategic partners may choose to seek, or be required to seek, a license from a third party, which may not 52 be available on acceptable terms, if at all.
In addition, we or our licensors, or any future strategic partners may choose to seek, or be required to seek, a license from a third party, which may not be available on acceptable terms, if at all.
These disruptions and impacts may include: • delays or difficulties in enrolling patients in our clinical trials or the clinical trials of our partners; • delays or difficulties in clinical site initiation for CX-2029, CX-904 or any other clinical trials we or our partners decide to initiate, including difficulties in recruiting clinical site investigators and clinical site staff; • diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our or our partners’ clinical trial sites and hospital staff supporting the conduct of our or our partners’ clinical trials; • interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others; • difficulty in interpreting clinical data due to patients being infected by COVID-19; • limitations in employee resources that would otherwise be focused on the conduct of our clinical trials or the clinical trials of our partners, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; • delays in receiving approval from local regulatory authorities to initiate our or our partners’ planned clinical trials; • delays in clinical sites receiving the supplies and materials needed to conduct our or our partners’ clinical trials; • interruption in manufacturing or global shipping that may affect the timely delivery or transport of research materials or clinical trial materials, such as investigational drug product used in our or our partners’ clinical trials; • changes in local regulations as part of a response to the COVID-19 outbreak which may require us or our partners to change the ways in which clinical trials are conducted, which may result in unexpected costs, or cause us or our partners to discontinue the clinical trials altogether; • delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and • refusal of the FDA to accept data from clinical trials in affected geographies outside the United States.
These disruptions and impacts may include: • delays or difficulties in enrolling patients in our clinical trials or the clinical trials of our partners; • delays or difficulties in clinical site initiation for CX-904 or any other clinical trials, including CX-2051 and CX-801, we or our partners decide to initiate, including difficulties in recruiting clinical site investigators and clinical site staff; • diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our or our partners’ clinical trial sites and hospital staff supporting the conduct of our or our partners’ clinical trials; • interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others; • difficulty in interpreting clinical data due to patients being infected by COVID-19 or other pandemic disease; • limitations in employee resources that would otherwise be focused on the conduct of our clinical trials or the clinical trials of our partners, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; • delays in receiving approval from local regulatory authorities to initiate our or our partners’ planned clinical trials; • delays in clinical sites receiving the supplies and materials needed to conduct our or our partners’ clinical trials; • interruption in manufacturing or global shipping that may affect the timely delivery or transport of research materials or clinical trial materials, such as investigational drug product used in our or our partners’ clinical trials; • changes in local regulations as part of a response to the COVID-19 outbreak which may require us or our partners to change the ways in which clinical trials are conducted, which may result in unexpected costs, or cause us or our partners to discontinue the clinical trials altogether; • delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and • refusal of the FDA to accept data from clinical trials in affected geographies outside the United States.
If we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines.
If we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all 37 applicable regulations and guidelines.
Additionally, our product candidates, if approved, could be subject to labeling and other restrictions and market withdrawal and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.
Additionally, our product candidates, if approved, 54 could be subject to labeling and other restrictions and market withdrawal and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.
Our employees and independent contractors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. We are exposed to the risk of fraud or other misconduct by our employees or independent contractors.
Our employees and independent contractors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. 46 We are exposed to the risk of fraud or other misconduct by our employees or independent contractors.
Our testing, or the subsequent testing (if required) by our independent registered public accounting firm, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses.
Our testing, or the testing (if required) by our independent registered public accounting firm, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses.
In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our 67 board of directors.
In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors.
Given our limited experience in developing companion diagnostic tests, we could seek to rely on third parties to design, manufacture, obtain regulatory approval for any companion diagnostic tests for our product candidates.
Given our limited experience in developing companion diagnostic tests, we could seek to rely on third parties to design, manufacture, and obtain regulatory approval for any companion diagnostic tests for our product candidates.
In the event that any of our product candidates receives regulatory approval and we, our collaborators or others identify undesirable side effects caused by such product or any other Probody therapeutics, any of the following adverse events could occur, which could result in the loss of significant revenue to us and materially and adversely affect our results of operations and business: • regulatory authorities may withdraw their approval of the product or seize the product; 36 • we or our collaborators may be required to recall the product or change the way the product is administered to patients; • additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof; • we may be subject to fines, injunctions or the imposition of civil or criminal penalties; • regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication; • we may be required to create a Medication Guide outlining the risks of such side effects for distribution to patients; • we could be sued and held liable for harm caused to patients; • the product may become less competitive; and • our reputation may suffer.
In the event that any of our product candidates receives regulatory approval and we, our collaborators or others identify undesirable side effects caused by such product or any other PROBODY therapeutics, any of the following adverse events could occur, which could result in the loss of significant revenue to us and materially and adversely affect our results of operations and business: • regulatory authorities may withdraw their approval of the product or seize the product; • we or our collaborators may be required to recall the product or change the way the product is administered to patients; • additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof; • we may be subject to fines, injunctions or the imposition of civil or criminal penalties; • regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication; • we may be required to create a Medication Guide outlining the risks of such side effects for distribution to patients, or to conduct post-marketing studies; • we could be sued and held liable for harm caused to patients; • the product may become less competitive; and • our reputation may suffer.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or systems, or inappropriate disclosure of confidential or proprietary or personal information, we could incur liability, including litigation exposure, penalties and fines, we could become the subject of regulatory action or investigation, our competitive position could be harmed and the further development and commercialization of our products and services could be delayed.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or systems, or inappropriate disclosure of Confidential Information, we could incur liability, including litigation exposure, penalties and fines, we could become the subject of regulatory action or investigation, our competitive position could be harmed and the further development and commercialization of our products and services could be delayed.
In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders.
In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing 31 stockholders.
If a prolonged government shutdown occurs, or if global health 57 concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
If a prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
The timing and amount of our operating expenditures will depend largely on: • the scope, timing and progress of our ongoing clinical trials as well as any other preclinical and clinical development activities which may be affected by, among other things, the COVID-19 pandemic; • the number, size and type of clinical trials and preclinical studies that we may be required to complete for our product candidates, as well as the cost and time of such studies and trials; • the number, scope and prioritization of preclinical and clinical programs we decide to pursue; • the time and cost necessary to produce clinical supplies of our product candidates; • the time and cost necessary to scale our manufacturing capabilities prior to or following regulatory approval and commercial launch of any product candidates; • the progress of the development efforts of parties with whom we have entered or may in the future enter into collaborations and research and development agreements; • the timing and amount of payments we may receive or are obligated to pay under our collaboration agreements and license agreements; • our ability to maintain our current licenses and research and development programs and to establish new collaboration arrangements; • the costs involved in prosecuting and enforcing patent and other intellectual property claims, including the ongoing patent infringement lawsuit brought by Vytacera against us; • the cost of any existing or future litigation to which we are or may become a party; • the cost and timing of regulatory approvals; and • our efforts to enhance operational systems and hire additional personnel, including personnel to support development and commercialization of our product candidates and satisfy our obligations as a public company.
The timing and amount of our operating expenditures will depend largely on: • the scope, timing and progress of our ongoing clinical trials as well as any other preclinical and clinical development activities; • the number, size and type of clinical trials and preclinical studies that we may be required to complete for our product candidates, as well as the cost and time of such studies and trials; • the number, scope and prioritization of preclinical and clinical programs we decide to pursue; • the time and cost necessary to produce clinical supplies of our product candidates; • the time and cost necessary to scale our manufacturing capabilities prior to or following regulatory approval and commercial launch of any product candidates; • the progress of the development efforts of parties with whom we have entered or may in the future enter into collaborations and research and development agreements; • the timing and amount of payments we may receive or are obligated to pay under our collaboration agreements and license agreements; • our ability to maintain our current licenses and research and development programs and to establish new collaboration arrangements; • the costs involved in prosecuting and enforcing patent and other intellectual property claims, including the ongoing patent infringement lawsuit brought by Vytacera against us; • the cost of any existing or future litigation to which we are or may become a party; • the cost and timing of regulatory approvals; and • our efforts to enhance operational systems and hire additional personnel, including personnel to support development and commercialization of our product candidates and satisfy our obligations as a public company.
The product candidates that we are developing are based on our Probody platform, which is a new technology and therapeutic approach.
The 39 product candidates that we are developing are based on our PROBODY platform, which is a new technology and therapeutic approach.
We are a clinical-stage biopharmaceutical company with a limited operating history, developing a novel class of therapeutic antibody product candidates, based on our proprietary biologic Probody technology platform. Since our inception, we have devoted our resources to the development of Probody therapeutics. We have had significant operating losses since our inception.
We are a clinical-stage biopharmaceutical company with a limited operating history, developing a novel class of therapeutic antibody product candidates, based on our proprietary biologic PROBODY® conditionally activated technology platform. Since our inception, we have devoted our resources to the development of PROBODY therapeutics. We have had significant operating losses since our inception.
Further, government shutdowns, such as the partial U.S. federal government shutdown in late 2018 or the United Kingdom’s departure from the European Union may impact our ability to access government agencies in a timely manner or otherwise impact our ability to move our product candidates through the regulatory process.
Further, government shutdowns, such as the partial U.S. federal government shutdown that occurred in late 2018 or the United Kingdom’s departure from the European Union may impact our ability to access government agencies in a timely manner or otherwise impact our ability to move our product candidates through the regulatory process.
The extent to which the COVID-19 pandemic continues to impact our business, including our clinical trials, research and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.
The extent to which the COVID-19 or other pandemics impact our business, including our clinical trials, research and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.
We are currently conducting and will continue to conduct clinical trials and will contract with third-party manufacturers in foreign countries, which could expose us to risks that could have a material adverse effect on the success of our business.
We are currently conducting and will continue to conduct clinical trials and will contract with third-party manufacturers in foreign countries, including China, which could expose us to risks that could have a material adverse effect on the success of our business.
In cases where data from foreign clinical trials are intended to serve as the sole basis for marketing approval in the U.S., the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice; (ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.
In cases where data from foreign clinical trials are intended to serve as the sole basis for marketing approval in the U.S., the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice; (ii) the trials were performed by clinical investigators of recognized competence and pursuant to good clinical practices (“GCPs”) regulations; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.
In addition, even if we submit an IND or a comparable submission in other jurisdictions for CX-801 and CX-2051 or other product candidates, the FDA or other regulatory authorities could disagree that we have satisfied their requirements to commence our clinical trials or disagree with our study design, which may require us to complete additional preclinical studies or amend our protocols or impose stricter conditions on the commencement of clinical trials and may delay our ability to begin Phase 1 clinical trials, causing an increase in the amount of time and expense required to develop our product candidates, including CX-801 and CX-2051.
In addition, even if we submit an IND or a comparable submission in other jurisdictions for our product candidates, the FDA or other regulatory authorities could disagree that we have satisfied their requirements to commence our clinical trials or disagree with our study design, which may require us to complete additional preclinical studies or amend our protocols or impose stricter conditions on the commencement of clinical trials and may delay our ability to begin Phase 1 clinical trials, causing an increase in the amount of time and expense required to develop our product candidates.
The development programs for our product candidates may also be delayed for a variety of reasons, including delays related to: • recruiting suitable patients to participate in a clinical trial, particularly in light of the COVID-19 pandemic; • developing and validating any companion diagnostic to be used in a clinical trial; • the FDA or other regulatory authorities requiring us to submit additional data or imposing other requirements before permitting us to initiate a clinical trial; • obtaining regulatory clearance to commence a clinical trial; • reaching agreement on acceptable terms with prospective contract research organization (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • obtaining institutional review board (“IRB”) approval at each clinical trial site; • having patients complete a clinical trial or return for post-treatment follow-up; • clinical trial sites deviating from trial protocol or dropping out of a trial; • adding new clinical trial sites; 33 • manufacturing our product candidates in sufficient quality and quantity for use in clinical trials; or • collaborators electing to not pursue development and commercialization of our product candidates.
The development programs for our product candidates may also be delayed for a variety of reasons, including delays related to: • recruiting suitable patients to participate in a clinical trial; • developing and validating any companion diagnostic to be used in a clinical trial; • the FDA or other regulatory authorities requiring us to submit additional data or imposing other requirements before permitting us to initiate a clinical trial; • obtaining regulatory authority clearance to commence a clinical trial; • reaching agreement on acceptable terms with prospective contract research organization (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • obtaining institutional review board (“IRB”) approval at each clinical trial site; • having patients complete a clinical trial or return for post-treatment follow-up; • clinical trial sites deviating from trial protocol or dropping out of a trial; • adding new clinical trial sites; • manufacturing our product candidates in sufficient quality and quantity for use in clinical trials; or • collaborators electing to not pursue development and commercialization of our product candidates.
General Risk Factors Adverse U.S. and multi-national financial market conditions may adversely affect our business and financial position. The Company maintains the majority of its cash and cash equivalents in accounts with major U.S. and multi-national financial institutions, and our deposits at certain of these institutions may exceed insured limits. Market conditions can impact the viability of these institutions.
Adverse U.S. and multi-national financial market conditions may adversely affect our business and financial position. The Company maintains the majority of its cash and cash equivalents in accounts with major U.S. and multi-national financial institutions, and our deposits at certain of these institutions may exceed insured limits. Market conditions can impact the viability of these institutions.
In addition, even where the foreign study data are not intended to serve as the sole basis for approval, the FDA will not accept the data as support for an application for marketing approval unless the study is well-designed and well-conducted in accordance with GCP requirements and the FDA is able to validate the data from the study through an onsite inspection if deemed necessary.
In addition, even where the foreign study data are not intended to serve as the sole basis for approval, if the trial was not subject to an IND, the FDA will not accept the data as support for an application for marketing approval unless the study was well-designed and well-conducted in accordance with GCP requirements and the FDA is able to validate the data from the study through an onsite inspection, if deemed necessary.
In future periods, if our management is unable to conclude that we have effective internal control over financial reporting, or to certify the effectiveness of such controls, or if additional material weaknesses in our internal control over financial reporting are identified, or such material weaknesses are not remediated on a timely basis, our ability to record, process, and report financial information accurately, and to prepare financial statements within the time periods specified by the rules and forms of the SEC, could be adversely affected which, in turn, may adversely affect our business and the market price of our securities.
In future periods, if our management is unable to conclude that we have effective internal control over financial reporting, or to certify the effectiveness of such controls, or if additional material weaknesses in our internal control over financial reporting are identified, our ability to record, process, and report financial information accurately, and to prepare financial statements within the time periods specified by the rules and forms of the SEC, could be adversely affected which, in turn, may adversely affect our business and the market price of our securities.
As there is limited historical precedent for the regulatory clearance of Probody-based therapeutics in oncology, there is a higher degree of risk that the FDA or other regulatory authorities could disagree that we or our collaborators have satisfied their requirements to commence clinical trials for some product candidates or disagree with our study designs, which may require us to complete additional preclinical studies or amend our protocols or impose stricter conditions on the commencement of clinical trials.
As there is limited historical precedent for the regulatory approval of conditionally activated therapeutics in oncology, there is a higher degree of risk that the FDA or other regulatory authorities could disagree that we or our collaborators have satisfied their requirements to commence clinical trials for some product candidates or disagree with our study designs, which may require us to complete additional preclinical studies or amend our protocols or impose stricter conditions on the commencement of clinical trials.
Furthermore, the COVID-19 pandemic and government limitations on activities may continue to impact our ability to conduct research, including limiting our ability to obtain research materials and equipment, limiting access to our laboratories to conduct research, limiting the ability or willingness of employees to work at our facilities and limiting our ability to complete research and 30 experiments in a timely basis or at all.
Furthermore, future pandemic and government limitations on activities may continue to impact our ability to conduct research, including limiting our ability to obtain research materials and equipment, limiting access to our laboratories to conduct research, limiting the ability or willingness of employees to work at our facilities and limiting our ability to complete research and experiments in a timely basis or at all.
These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMPs and good clinical practices for any clinical trials that we conduct post-approval.
These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMPs and GCPs for any clinical trials that we conduct post-approval.
As a result of the COVID-19 pandemic and continued hybrid working environment, we may also face increased cybersecurity risks due to our dependency on remote working technology and electronic monitoring of clinical trial sites, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
As a result of our continued hybrid working environment, we may also face increased cybersecurity risks due to our dependency on remote working technology and electronic monitoring of clinical trial sites, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
Overall, collaborations involving our product candidates currently pose, and will continue to pose, the following risks to us: • collaborators have significant discretion in determining the amount and timing of efforts and resources that they will apply to these collaborations, including, with respect to Bristol Myers Squibb, BMS-986249 and BMS-986288 and with respect to AbbVie, CX-2029; • collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on preclinical or clinical trial results, changes in the collaborators’ strategic focus or available funding or resources, or external factors such as an acquisition that diverts resources or creates competing priorities; • collaborators have significant discretion in designing any clinical trials they operate pursuant to our collaboration agreements, including Bristol Myers Squibb’s ongoing Phase 2 cohort expansion of BMS-986249 and its Phase 1/2 clinical trial of BMS-986288, and may release data from such clinical trials, including with respect to our Probody therapeutics, without consulting us; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing and are not necessarily required to give us information about their clinical data; • collaborators may independently develop, or develop with third parties, products that compete directly or indirectly with our product candidate if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • collaborators with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to litigation or potential liability; • collaborators may infringe, misappropriate or otherwise violate the intellectual property rights of third parties, which may expose us to litigation and potential liability; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidate or that result in costly litigation or arbitration that diverts management attention and resources; and • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.
Overall, collaborations involving our product candidates currently pose, and will continue to pose, the following risks to us: • collaborators have significant discretion in determining the amount and timing of efforts and resources that they will apply to these collaborations, including, with respect to Amgen, CX-904; 40 • collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on preclinical or clinical trial results, changes in the collaborators’ strategic focus or available funding or resources, or external factors such as an acquisition that diverts resources or creates competing priorities; • collaborators have significant discretion in designing any clinical trials they operate pursuant to our collaboration agreements and may release data from such clinical trials, including with respect to our PROBODY therapeutics, without consulting us; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing and are not necessarily required to give us information about their clinical data; • collaborators may independently develop, or develop with third parties, products that compete directly or indirectly with our product candidate if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • collaborators with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to litigation or potential liability; • collaborators may infringe, misappropriate or otherwise violate the intellectual property rights of third parties, which may expose us to litigation and potential liability; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidate or that result in costly litigation or arbitration that diverts management attention and resources; and • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.
The supply chain for the manufacturing of our product candidates is complicated and can involve many parties. This is especially the case for our clinical-stage conditionally activated ADCs, praluzatamab ravtansine and CX-2029. If we were to experience any supply chain issues, our product supply could be seriously disrupted.
The supply chain for the manufacturing of our product candidates is complicated and can involve many parties. This is especially the case for our clinical-stage conditionally activated ADCs. If we were to experience any supply chain issues, our product supply could be seriously disrupted.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn September 2022, we filed a motion to dismiss the case and the Court granted the parties’ stipulation to stay all pending case deadlines until that motion is finally resolved. We believe that the lawsuit is without merit and intend to vigorously defend ourselves.
Biggest changeIn September 2022, we filed a motion to dismiss the case and the Court granted the parties’ stipulation to stay all pending case deadlines until that motion is finally resolved. On October 30, 2023, Magistrate Judge Burke issued a Report & Recommendation that recommended granting CytomX’s motion to dismiss all counts of the complaint.
Accordingly, we cannot reasonably estimate any range of potential future charges, and we have not recorded any accrual for a contingent liability associated with these legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 73 PART II
Accordingly, we cannot reasonably estimate any range of potential future charges, and we have not recorded any accrual for a contingent liability associated with these legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 74 PART II
Added
In January 2024, the case was transferred to a new Judge and the case will remain stayed pending a ruling by the trial judge on the Magistrate’s Report & Recommendation. We believe that the lawsuit is without merit and intend to vigorously defend ourselves.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePayment of cash dividends, if any, in the future will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant. 74 Stock Performance Graph The following graph shows the total stockholder’s return on an investment of $100 in cash at market close on December 31, 2017 through December 31, 2022 for (i) our common stock, (ii) the Nasdaq Composite Index and (iii) the Nasdaq Biotechnology Index.
Biggest changePayment of cash dividends, if any, in the future will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant.
Holders of Record As of January 31, 2023, there were approximately 26 stockholders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Holders of Record As of February 29, 2024, there were approximately 22 stockholders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Item 12 of this Annual Report on Form 10-K. Use of Proceeds from Registered Securities None. Recent Sales of Unregistered Equity Securities None. Issuer Purchases of Equity Securities None. Item 6. [ R eserved] 76
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this Item regarding equity compensation plans is incorporated by reference to the information set forth in PART III. Item 12 of this Annual Report on Form 10-K. Use of Proceeds from Registered Securities None. Recent Sales of Unregistered Equity Securities None. Issuer Purchases of Equity Securities None.
Removed
Pursuant to applicable Securities and Exchange Commission rules, all values assume reinvestment of pre-tax amount of all dividends; however, no dividends have been declared on our common stock to date. The stockholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder return.
Removed
This graph shall not be deemed “soliciting material” or be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended (the “Securities Act”), whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. *$100 investment in stock or index December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 CytomX (CTMX) $ 100.00 $ 71.53 $ 39.37 $ 31.03 $ 20.51 $ 7.58 Nasdaq Composite Index (IXIC) $ 100.00 $ 96.12 $ 129.97 $ 186.69 $ 226.63 $ 151.61 Nasdaq Biotech Index (^NBI) $ 100.00 $ 90.68 $ 112.81 $ 141.78 $ 140.88 $ 125.52 75 Securities Authorized for Issuance Under Equity Compensation Plans The information required by this Item regarding equity compensation plans is incorporated by reference to the information set forth in PART III.

Item 7. Management's Discussion & Analysis

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

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Biggest changeComparison of Years Ended December 31, 2022 and 2021 Revenue The following table summarizes our revenue by collaboration partner during the respective periods: Year Ended December 31, 2022 2021 Change (in thousands) AbbVie $ 18,563 $ 11,546 $ 7,017 Amgen 4,967 8,488 (3,521 ) Astellas 20,491 17,278 3,213 Bristol Myers Squibb 9,142 - 9,142 Total Revenue $ 53,163 $ 37,312 $ 15,851 The increase in revenue of $15.9 million for 2022 compared to 2021 was primarily due to: • An increase in revenue from AbbVie primarily driven by a higher percentage of project completion under the CD71 Agreement and a cumulative adjustment from a change in estimate of $4.4 million due to completion of performance obligation of the second target under the Discovery Agreement in the current year; • An increase in revenue from Astellas under the Astellas Agreement primarily driven by a higher percentage of completion for existing targets and initiation of pre-clinical research and development on a new target selected in current year; • An increase in revenue from Bristol Myers Squibb under the BMS Agreement due to initiation and progress of pre-clinical research for new targets selected in current year, offset by; • A decrease in revenue from Amgen under the Amgen Agreement driven by lower percentage of completion of the CX-904 program in the current year due to an increase in projected hours-to-completion. 81 Operating Costs and Expenses Research and Development Expenses The following table summarizes our research and development expenses by program incurred during the respective periods presented: Year Ended December 31, 2022 2021 Change External costs incurred by product candidate (target): (in thousands) Praluzatamab ravtansine, CX-2009 (CD166) $ 15,809 $ 18,516 $ (2,707 ) CX-2029 (CD71) 9,708 11,556 (1,848 ) Pacmilimab, CX-072 (PD-L1) 948 3,535 (2,587 ) CX-904 (EGFRxCD3) 2,822 3,522 (700 ) Other wholly owned and partnered programs 14,024 13,831 193 General research and development expenses 13,338 13,534 (196 ) 56,649 64,494 (7,845 ) Internal costs 55,000 49,700 5,300 Total research and development expenses $ 111,649 $ 114,194 $ (2,545 ) Research and development expenses decreased by $2.5 million for 2022, compared to 2021 primarily driven by a decrease in clinical trial and lab contract services for CX-2009, CX-072, CX-2029, CX-904 and pre-clinical programs, offset by $5.3 million restructuring expenses which are primarily included in internal costs.
Biggest changeComparison of Years Ended December 31, 2023 and 2022 Revenue The following table summarizes our revenue by collaboration partner during the respective periods: Year Ended December 31, 2023 2022 Change (in thousands) AbbVie $ 3,688 $ 18,563 $ (14,875 ) Amgen 5,739 4,967 772 Astellas 24,453 20,491 3,962 Bristol Myers Squibb 49,300 9,142 40,158 Regeneron 7,194 — 7,194 Moderna 10,840 — 10,840 Total Revenue $ 101,214 $ 53,163 $ 48,051 The increase in revenue of $48.1 million for 2023 compared to 2022 was primarily due to: • An increase in revenue under the BMS Agreement driven by higher percentage of completion of the existing and new targets selected in 2022; • An increase in revenue under the Regeneron Agreement and Moderna Agreement due to new preclinical studies that commenced during the current year; • An increase in revenue under the Astellas Agreement primarily driven by a $5.0 million clinical candidate milestone achieved in January 2023; • An increase in revenue under the Amgen Agreement driven by higher percentage of completion the CX-904 development in the current year primarily due to an increase in projected hours-to-completion in prior year; • A decrease in revenue under the AbbVie Agreement due to termination of the agreement in March 2023. 79 Operating Costs and Expenses Research and Development Expenses The following table summarizes our research and development expenses by program incurred during the respective periods presented: Year Ended December 31, 2023 2022 Change External costs incurred by product candidate (target): (in thousands) CX-904 (EGFRxCD3) $ 2,790 $ 2,822 $ (32 ) Praluzatamab ravtansine, CX-2009 (CD166) 2,671 15,809 (13,138 ) CX-2029 (CD71) 2,608 9,708 (7,100 ) Pacmilimab, CX-072 (PD-L1) (120 ) 948 (1,068 ) Other wholly owned and partnered programs 25,525 14,024 11,501 General research and development expenses 9,906 13,338 (3,432 ) Total external costs 43,380 56,649 (13,269 ) Internal costs 34,300 55,000 (20,700 ) Total research and development expenses $ 77,680 $ 111,649 $ (33,969 ) Research and development expenses decreased by $34.0 million for 2023, compared to 2022 primarily driven by a decrease in personnel related expenses as a result of the workforce reduction in 2022, as well as winding down of laboratory contract services and clinical study activities related to the CX-2009 and CX-2029 programs, partially offset by an increase in laboratory contract services related to IND enabling activities for CX-2051 and CX-801 programs.
Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. 80 We also account for uncertain tax positions in accordance with the provisions of ASC 740 .
Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. We also account for uncertain tax positions in accordance with the provisions of ASC 740 .
Revenue from variable payments related to research and development or milestones and other contingent payments, when it is probable that there will not be a significant revenue reversal, are also recognized over the performance period based on a similar method.
Revenue from variable payments related to research and development or milestones and other contingent payments, when it is probable that there will not be a significant revenue reversal, is also recognized over the performance period based on a similar method.
Interest Income Interest income primarily consists of interest income from our cash equivalents and investments, and accretion of discounts or amortization of premiums on our investments. Other Income (Expense), Net Other income (expense), net consists primarily of gains and losses resulting from changes to currency exchange rates.
Interest Income Interest income primarily consists of interest income from our cash equivalents and investments, and accretion of discounts or amortization of premiums on our investments. 78 Other Income (Expense), Net Other income (expense), net consists primarily of gains and losses resulting from changes to currency exchange rates.
We expect that any revenue we generate in the foreseeable future will fluctuate from year to year as a result of the timing and amount of milestones and other 79 payments from our collaboration agreements with AbbVie, Amgen, Astellas, Bristol Myers Squibb, Regeneron, Moderna and any other collaboration partners, and as a result of the fluctuations in the research and development expenses we incur in the performance of assigned activities under these agreements.
We expect that any revenue we generate in the foreseeable future will fluctuate from year to year as a result of the timing and amount of milestones and other payments from our collaboration agreements with Amgen, Astellas, Bristol Myers Squibb, Regeneron, Moderna and any other collaboration partners, and as a result of the fluctuations in the research and development expenses we incur in the performance of assigned activities under these agreements.
We determine the estimated costs through discussions with internal personnel and external service providers as to the progress of stage of completion of the services and the agreed-upon fees to be paid for such services. 88 We make significant judgments and estimates in determining the accrual balance in each reporting period. As actual costs become known, we adjust our accruals.
We determine the estimated costs through discussions with internal personnel and external service providers as to the progress of stage of completion of the services and the agreed-upon fees to be paid for such services. 84 We make significant judgments and estimates in determining the accrual balance in each reporting period. As actual costs become known, we adjust our accruals.
Cash Flows from Investing Activities During year ended December 31, 2022, cash provided by investing activities was $98.3 million, which consisted of $100.0 million in proceeds received upon the maturity of short-term marketable securities, partially offset by $1.7 million of capital expenditures used to purchase property and equipment.
During year ended December 31, 2022, cash provided by investing activities was $98.3 million, which consisted of $100.0 million in proceeds received upon the maturity of short-term marketable securities, partially offset by $1.7 million of capital expenditures used to purchase property and equipment.
We evaluate the measure of progress each reporting period and, if necessary, we adjust the measure of performance and related revenue recognition. There have been changes in estimates of research service periods and/or the related estimated FTE hours-to-completion of certain of our research development programs in 2022 and 2021.
We evaluate the measure of progress each reporting period and, if necessary, we adjust the measure of performance and related revenue recognition. There have been changes in estimates of research service periods and/or the related estimated FTE hours-to-completion of certain of our research development programs in each reporting period.
Such adjustments have impacted and may continue to impact the amounts and timing of our revenue recognized. Any consideration payable to our customers is treated as a reduction to the transaction price and revenue, unless the payment to the customer is in exchange for distinct good and services.
Such adjustments have impacted and will continue to impact the amounts and timing of our revenue recognized. Any consideration payable to our customers is treated as a reduction to the transaction price and revenue, unless the payment to the customer is in exchange for distinct good and services.
As of December 31, 2022, no sales-based milestones have been recognized. The transaction price in each arrangement is allocated to the identified performance obligations based on the relative standalone selling price (“SSP”) of each distinct performance obligation, which requires judgment.
As of December 31, 2023, no sales-based milestones have been recognized. The transaction price in each arrangement is allocated to the identified performance obligations based on the relative standalone selling price (“SSP”) of each distinct performance obligation, which requires judgment.
Overview We are a clinical-stage, oncology-focused biopharmaceutical company focused on developing novel conditionally activated, biologics localized to the tumor microenvironment. We aim to build a commercial enterprise to maximize our impact on the treatment of cancer.
Overview We are a clinical-stage, oncology-focused biopharmaceutical company focused on developing novel, conditionally activated biologics designed to be localized to the tumor microenvironment. We aim to build a commercial enterprise to maximize our impact on the treatment of cancer.
(the “Regeneron Agreement”) to collaborate on preclinical research activities to discover and develop certain antibody compounds for the treatment of cancer using the Company’s Probody therapeutic technology. Pursuant to the Regeneron Agreement, we collected an upfront fee of $30.0 million. In December 2022, we entered into a Collaboration and License Agreement with ModernaTX, Inc.
In November 2022, we entered into a Collaboration and License Agreement with Regeneron Pharmaceuticals, Inc. (the “Regeneron Agreement”) to collaborate on preclinical research activities to discover and develop certain antibody compounds for the treatment of cancer using the Company’s PROBODY therapeutic technology. Pursuant to the Regeneron Agreement, we collected an upfront fee of $30.0 million.
We incurred aggregate restructuring charges of approximately $7.7 million, primarily related to one-time severance payments and other employee-related costs. Based upon our current operating plan, we expect our existing capital resources will be sufficient to fund operations into 2025.
We incurred aggregate restructuring charges of approximately $7.5 million, primarily related to one-time severance payments and other employee-related costs. Based upon our current operating plan, we expect our existing capital resources will be sufficient to fund operations into the second half of 2025.
Sublicense fees payable to UCSB for potential milestones that are probable to be earned by the Company in 2023 are not included. (3) We have annual license maintenance fees under the terms of certain license agreement with UCSB. See Part II. Item 8.
Sublicense fees payable to UCSB for potential milestones that are probable to be earned by the Company in 2024 are not included. (3) We have annual license maintenance fees under the terms of certain license agreement with UCSB and SGEN. See Part II. Item 8.
For a discussion related to the results of operations for 2021 compared to 2020, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Comparison of Years Ended December 31, 2021 and 2020" in Amendment No.1 to our Annual Report on Form 10-K/A for the year ended December 31, 2021 filed with the SEC on March 27, 2023.
For a discussion related to the results of operations for 2022 compared to 2021, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Comparison of Years Ended December 31, 2022 and 2021" in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 27, 2023.
To date, we have financed our operations primarily through sales of our common stock in conjunction with the IPO, subsequent stock offerings and through our at-the-market offering, sales of our convertible preferred securities prior to our IPO and payments received under our collaboration agreements.
To date, we have financed our operations primarily through sales of our common stock in conjunction with the IPO, subsequent stock offerings and through our at-the-market offering, sales of our convertible preferred securities prior to our IPO, payments received under our collaboration agreements and proceeds from private placements of our common stock, warrants and pre-funded warrants.
On July 13, 2022, we announced a restructuring plan to prioritize resources on our emerging pre-clinical and early clinical pipeline as well as our existing collaboration partnerships. The restructuring plan resulted in a reduction to our workforce by approximately 40%, and is substantially completed by the fourth quarter of 2022.
We received gross proceeds of approximately $30.0 million. On July 13, 2022, we announced a restructuring plan to prioritize resources on our emerging pre-clinical and early clinical pipeline as well as our existing collaboration partnerships. The restructuring plan resulted in a reduction to our workforce by approximately 40%, and was substantially completed by the fourth quarter of 2022.
Praluzatamab ravtansine is our conditionally activated ADC directed toward CD166 and is being evaluated in a three-arm study in patients with advanced human epidermal growth factor receptor 2 (“HER2”)-non-amplified breast cancer. Arms A and B examined praluzatamab ravtansine monotherapy in patients with hormone receptor-positive/HER2-non-amplified breast cancer and triple-negative breast cancer (“TNBC”), respectively.
Praluzatamab ravtansine is our conditionally activated ADC directed toward CD166 which was previously evaluated in a three-arm Phase 2 study in patients with advanced human epidermal growth factor receptor 2 (“HER2”)-non-amplified breast cancer. Arms A and B examined praluzatamab ravtansine monotherapy in patients with hormone receptor-positive/HER2-non-amplified breast cancer and TNBC, respectively.
Changes in these estimates that result in material changes to our accruals could materially affect our financial condition and results of operations. Uncertain Tax Position We file income taxes in the U.S. federal jurisdiction, the state of California and various other U.S. states. We are currently under examination by the state of California for the years 2017 and 2018.
Changes in these estimates that result in material changes to our accruals could materially affect our financial condition and results of operations. Uncertain Tax Position We file income taxes in the U.S. federal jurisdiction, the state of California and various other U.S. states.
Cash Flows from Financing Activities During the year ended December 31, 2022, cash provided by financing activities consisted of $0.6 million of proceeds from the exercise of stock options and employee stock purchases under the employee stock purchase plan (“ESPP”).
Cash Flows from Financing Activities During the year ended December 31, 2023, cash provided by financing activities consisted of $29.7 million of net proceeds from issuance of pre-funded warrants and warrants and $0.6 million of proceeds from the exercise of stock options and employee stock purchases under the employee stock purchase plan (“ESPP”).
The non-cash charges primarily consisted of $13.2 million in stock-based compensation, $3.1 million in non-cash lease expense, $2.7 million in depreciation and amortization and $0.3 million in net accretion of discounts on our investments.
The non-cash charges primarily consisted of $13.1 million in stock-based compensation, $3.4 million in non-cash lease expense and $2.7 million in depreciation, amortization, and impairment charges.
The non-cash charges primarily consisted of $13.1 million in stock-based compensation, $3.4 million in non-cash lease expense and $2.7 million in depreciation, amortization, and impairment charges. 85 The change in our net operating assets and liabilities was primarily due to: • an increase of $35.2 million in accounts receivable primarily related to the upfront payment and prepaid research under the Moderna Agreement entered into in December 2022; • a decrease of $9.8 million in accrued liabilities and accounts payable primarily due to timing of payments; • a decrease of $2.3 million in cash flows from prepaid expenses and other current assets and other assets primarily due to increase in advance payments to our third-party manufacturing vendors and timing of payments; • a net increase of $16.6 million in deferred revenue consisting of an increase of $69.6 million in deferred revenue related to new agreements with Regeneron and Moderna partially offset by a decrease of $53.0 million resulting from the continued recognition of deferred revenue from existing customers. 2021 During the year ended December 31, 2021, cash used in operating activities was $119.0 million, which consisted of a net loss of $115.9 million, adjusted by non-cash charges of $19.3 million and a net decrease of $22.4 million relating to the changes in our net operating assets and liabilities.
The non-cash charges primarily consisted of $8.6 million in stock-based compensation, $3.7 million in non-cash lease expense and $2.1 million in depreciation and amortization, offset by $7.4 million in net accretion of discounts on our investments. 81 The change in our net operating assets and liabilities was primarily due to: • a net decrease of $89.0 million in deferred revenue resulting from the continued recognition of deferred revenue from existing and new customers; • a decrease of $8.5 million in accounts payable, accrued and other long-term liabilities primarily due to decrease of payroll-related expenses, restructuring related expenses, and laboratory contract services; offset by • an increase of $32.6 million in cash flows from accounts receivable primarily related to the receipt of the $35.0 million upfront payment and prepaid research under the Moderna agreement entered into in December 2022. • an increase of $2.5 million in cashflows from prepaid and other current assets primarily due to a decrease in advance payments to our third party manufacturing vendors and timing of payments. 2022 During the year ended December 31, 2022, cash used in operating activities was $110.8 million, which consisted of a net loss of $99.3 million and a net decrease of $30.7 million relating to the change of our net operating assets and liabilities, offset by non-cash charges of $19.2 million.
Summary Statement of Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2022 2021 (in thousands) Net cash provided by (used in) operating activities $ (110,788 ) $ (119,031 ) Net cash provided by (used in) by investing activities 98,260 22,489 Net cash provided by financing activities 648 110,213 Net increase (decrease) in cash, cash equivalents and restricted cash $ (11,880 ) $ 13,671 Cash Flows from Operating Activities 2022 During the year ended December 31, 2022, cash used in operating activities was $110.8 million, which consisted of a net loss of $99.3 million and a net decrease of $30.7 million relating to the change of our net operating assets and liabilities, offset by non-cash charges of $19.2 million.
Summary Statement of Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2023 2022 (in thousands) Net cash used in operating activities $ (56,035 ) $ (110,788 ) Net cash (used in) provided by investing activities (150,674 ) 98,260 Net cash provided by financing activities 30,230 648 Net decrease in cash, cash equivalents and restricted cash $ (176,479 ) $ (11,880 ) Cash Flows from Operating Activities 2023 During the year ended December 31, 2023, cash used in operating activities was $56.0 million, which consisted of a net loss of $0.6 million and a net decrease of $62.4 million relating to the change of our net operating assets and liabilities, offset by non-cash charges of $7.0 million.
During the year ended December 31, 2021, cash provided by investing activities was $22.5 million, which consisted of $124.0 million in proceeds received upon the maturity of short-term marketable securities, partially offset by $99.9 million used in the purchase of long-term investments and $1.6 million of capital expenditures used to purchase property and equipment.
Cash Flows from Investing Activities During year ended December 31, 2023, cash provided by investing activities was $150.7 million, which consisted of $424.8 million used in the purchase of short-term investments and $0.8 million of capital expenditures used to purchase property and equipment, partially offset by $275.0 million in proceeds received upon the maturity of marketable securities.
By pioneering a novel class of localized biologic drug candidates, powered by our Probody® therapeutic technology platform, we lead the field of conditionally activated oncology therapeutics and have established biologics localization as a strategic area of research and development.
By pioneering a novel class of localized biologic drug candidates, powered by our PROBODY® therapeutic technology platform, we lead the field of conditionally activated oncology therapeutics and have established biologics localization as a strategic area of research and development. Our vision is to transform lives with safer, more effective therapies with the goal to address major unmet needs in oncology.
During the year ended December 31, 2021, cash provided by financing activities was $110.2 million, which consisted of $107.7 million of net proceeds from the follow-on public offering in January and February 2021 and $2.5 million of proceeds from the exercise of stock options and employee stock purchases under the employee stock purchase plan. 86 Contractual Obligations The following table summarizes our contractual obligations that become due within the next twelve months (in thousands): Payments Due by 2023 Operating leases (1) $ 5,420 Royalty obligations (2) 150 License maintenance fees (3) 750 Total contractual obligations $ 6,320 (1) We lease our current facility under a long-term operating lease, which expires in 2026.
During the year ended December 31, 2022, cash provided by financing activities consisted of $0.6 million of proceeds from the exercise of stock options and employee stock purchases under the ESPP. 82 Contractual Obligations The following table summarizes our contractual obligations that become due within the next year (in thousands): Payments Due by 2024 Operating leases (1) $ 5,572 Royalty obligations (2) 150 License maintenance fees (3) 1,050 Milestone Payments (4) 5,456 Total contractual obligations $ 12,228 (1) We lease our current facility under a long-term operating lease, which expires in 2026.
Interest Income and Other Expense, Net Year Ended December 31, 2022 2021 Change (in thousands) Interest income $ 1,678 $ 255 $ 1,423 Other expense, net 340 (83 ) 423 Total interest income and other expense $ 2,018 $ 172 $ 1,846 Interest Income Interest income increased by $1.4 million during 2022 compared to 2021, primarily driven by higher interest rates in 2022.
Interest Income and Other Income (Expense), Net Year Ended December 31, 2023 2022 Change (in thousands) Interest income $ 9,837 $ 1,678 $ 8,159 Other income (expense), net (30 ) 340 (370 ) Total interest income and other expense $ 9,807 $ 2,018 $ 7,789 Interest Income Interest income increased by $8.2 million during 2023 compared to 2022, primarily driven by higher interest rates in 2023.
For example, changes in our estimated research service period resulted in recognition of higher total revenue of $0.5 million in 2022 and lower total revenue of $9.3 million in 2021, as compared to the estimates in place at the end of the prior period.
For example, changes in our estimated research service period resulted in recognition of higher total revenue of $8.2 million for certain programs in aggregate and lower total revenue of $6.0 million for other programs in aggregate, in the fourth quarter of 2023, as compared to the estimates in place at the end of the third quarter of 2023.
The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic.
The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.
Due to the ongoing nature of the examination and discussions with the state of California, we are unable to estimate a date by which this matter will be resolved or reasonably estimate the potential impact should the tax position be revised.
We filed a protest to contest the proposed assessment in November 2023. Due to the ongoing nature of the examination and discussions with the state of California, we are unable to estimate a date by which this matter will be resolved. Item 7A.
IFNa2b provides a potentially superior approach to activating anti-tumor immune responses than other cytokines. CX-801 is a dually masked, conditionally activated version of IFNa2b that has the potential to become a unique centerpiece of combination therapy for a wide range of tumor types.
CX-801 is a dually masked, conditionally activated version of IFNα2b that has the potential to become a cornerstone of combination therapy for a wide range of tumor types.
The change of our net operating assets and liabilities was primarily due to: • a net decrease of $33.9 million in deferred revenue resulting from the continued recognition of deferred revenue from existing customers; • an increase of $7.4 million in accrued liabilities and accounts payable primarily due to timing of payments and an increase in research and clinical expenses • an increase of $4.1 million in cash flows from prepaid expenses and other current assets and other assets primarily due to reduced advance payments to our third-party manufacturing vendors and timing of payments.
The change in our net operating assets and liabilities was primarily due to: • an increase of $35.2 million in accounts receivable primarily related to the upfront payment and prepaid research under the Moderna Agreement entered into in December 2022; • a decrease of $9.8 million in accrued liabilities and accounts payable primarily due to timing of payments; • a decrease of $2.3 million in cash flows from prepaid expenses and other current assets and other assets primarily due to increase in advance payments to our third-party manufacturing vendors and timing of payments; • a net increase of $16.6 million in deferred revenue consisting of an increase of $69.6 million in deferred revenue related to new agreements with Regeneron and Moderna partially offset by a decrease of $53.0 million resulting from the continued recognition of deferred revenue from existing customers.
The above table also excludes unrecognized tax benefits of $9.3 million as of December 31, 2022 because these uncertain tax positions, if recognized, would be an adjustment to our deferred tax assets, which are subject to a valuation allowance. Segment Information We have one primary business activity and operate as one reportable segment.
The above table also excludes unrecognized tax benefits of $2.3 million as of December 31, 2023 related to uncertain tax position which would affect the Company’s effective tax rate if recognized. Segment Information We have one primary business activity and operate as one reportable segment.
Arm C studied praluzatamab ravtansine in combination with pacmilimab (CX-072), our wholly-owned PD-L1 inhibitor, in patients with TNBC. In July 2022, Phase 2 topline results were disclosed for Arms A and B as of the data cut-off date of May 2022. Arm A met the primary endpoint of confirmed objective response rate greater than 10% by central radiology review.
Arm C studied praluzatamab ravtansine in combination with pacmilimab (CX-072), our wholly-owned PD-L1 inhibitor, in patients with TNBC. In July 2022, the Company disclosed topline data demonstrating praluzatamab ravtansine met the primary efficacy endpoint of confirmed objective response rate greater than 10 percent in hormone receptor-positive/HER2-non-amplified breast cancer.
We currently have more than 15 active drug discovery and/or development programs. We do not have any products approved for sale, and we continue to incur significant research and development and general administrative expenses related to our operations. We are not profitable and have incurred losses in each year since our founding in 2008.
We currently have more than 15 active drug discovery and/or development programs. We do not have any products approved for sale, and we continue to incur significant research and development and general administrative expenses related to our operations. As of December 31, 2023 and December 31, 2022, we had an accumulated deficit of $723.4 million and $722.9 million, respectively.
We assess whether the promises in our arrangements with customers are considered as distinct performance obligations that should be accounted for separately.
We assess whether the promises in our arrangements with 83 customers are considered as distinct performance obligations that should be accounted for separately. Judgment is required to determine whether the license to our intellectual property is distinct from the research and development services or participation on steering committees.
An IND submission for CX-801 is planned in the second half of 2023. 78 We are also continuously engaged in drug discovery efforts towards the generation of new clinical candidates across multiple modalities for the treatment of cancer, including additional ADCs, Cytokines, TCBs, and most recently, mRNAs reflecting the versatility of our Probody platform.
The final Phase 2 study data in advanced breast cancer were presented at the San Antonio Breast Cancer Symposium in 2022. We are also continuously engaged in drug discovery efforts towards the generation of new clinical candidates across multiple modalities for the treatment of cancer, including additional ADCs, Cytokines, TCEs, and mRNAs reflecting the versatility of our PROBODY platform.
Patient enrollment in the Phase 1 dose escalation portion of the study continues to progress. We reported in January 2023 that the initial single patient cohort phase of the study was complete and that the “3+3” patient cohort phase had been initiated.
We reported in January 2023 that the initial single patient cohort phase of the study was complete and that the “3+3” patient cohort phase had been initiated. Backfilling of certain dose escalation cohorts has also been initiated and dose ranging continues. Initial Phase 1a data in EGFR positive solid tumors is expected in the second half of 2024.
Components of Results of Operations Revenue Our revenue to date has been primarily derived from non-refundable license payments, milestone payments and reimbursements for research and development expenses under our research, collaboration, and license agreements.
As such, we are dependent on third parties to supply our product candidates according to our specifications, in sufficient quantities, on time, in compliance with appropriate regulatory standards and at competitive prices. 77 Components of Results of Operations Revenue Our revenue to date has been primarily derived from non-refundable license payments, milestone payments and reimbursements for research and development expenses under our research, collaboration, and license agreements.
(the “Moderna Agreement”) to collaborate on discovery and preclinical research and development activities to create investigational messenger RNA (mRNA) based conditionally activated therapies using the Company’s Probody therapeutic technology. Pursuant to the Moderna Agreement, we recorded a receivable for an upfront fee and prepaid research funding of $35.0 million, which has been collected in January 2023.
In December 2022, we entered into a Collaboration and License Agreement with ModernaTX, Inc. (the “Moderna Agreement”) to collaborate on discovery and preclinical research and development activities to create investigational messenger RNA (mRNA) based conditionally activated therapies using the Company’s PROBODY therapeutic technology.
These include the validation of potential new targets for antibody-drug conjugates (“ADCs”), opening solid tumor opportunities for T-cell engaging bispecific antibodies (“TCBs”), and increasing the therapeutic window for immune modulators such as cytokines and checkpoint inhibitors (“CPIs”). Additionally, we have recently initiated a research collaboration with our Probody platform beyond cancer into other therapeutic areas.
These include the validation of potential new targets for antibody-drug conjugates (“ADCs”), opening therapeutic window for novel T-cell engagers (“TCEs”) targeting solid tumors, and increasing the therapeutic index for immune modulators such as cytokines. We are also exploring the potential for our PROBODY platform in preclinical research in areas outside of oncology, including in our collaboration with Moderna.
Our pipeline also includes CX-2051, a wholly-owned conditionally activated ADC paired with a next-generation camptothecin payload and directed toward the epithelial cellular adhesion molecule (EpCAM). CX-2051 has been tailored to optimize the therapeutic index for the systemic treatment of EpCAM-expressing epithelial cancers where previous industry efforts targeting EpCAM have not been successful due to dose-limiting toxicities.
CX-2051 has been tailored to optimize the therapeutic index for the systemic treatment of EpCAM-expressing epithelial cancers where previous industry efforts targeting EpCAM have not been successful due to dose-limiting toxicities. CX-2051 has demonstrated a wide predicted therapeutic index and strong preclinical activity and tolerability in multiple preclinical models, including colorectal cancer.
Judgment is required to determine whether the license to our intellectual property is distinct from the research and development services or participation on steering committees. 87 Our collaboration and license agreements may include contingent payments related to specified research, development and regulatory milestones.
Our collaboration and license agreements may include contingent payments related to specified research, development and regulatory milestones.
In preclinical studies, CytomX’s Probody EGFRxCD3 bispecific therapeutics demonstrated anti-tumor activity and better tolerability when compared to EGFRxCD3 bispecifics without Probody masking. In May 2022, the first patient was dosed in a Phase 1 study evaluating CX-904 as a treatment for patients with advanced solid tumors.
In May 2022, the first patient was dosed in a Phase 1 study evaluating CX-904 as a treatment for patients with advanced solid tumors. Patient enrollment in the Phase 1 dose escalation portion of the study continues to progress.
Leveraging our deep scientific knowledge, we conceived of and constructed our Probody therapeutic platform which allows us to genetically engineer biologic therapeutic candidates to contain protease-cleavable masks. Our masking strategy is designed to reduce binding of biologic therapeutics to their targets until the mask is removed by proteases in the tumor microenvironment, providing more selective targeting of the tumor.
Our masking strategy is designed to reduce binding of biologic therapeutics to their targets until the mask is removed by proteases in the tumor microenvironment, providing more selective targeting of the tumor. We are employing our leading, conditional activation platform technology to address some of the biggest challenges in oncology biologics research and development.
The examination contests our tax position on revenue apportionment for upfront and milestone payments resulting from our collaboration and licensing agreements. As of the date of this filing, the state of California has not proposed adjustments to the tax returns.
The state of California contested our tax position on revenue apportionment for upfront and milestone payments resulting from our collaboration and licensing agreements for the years 2017 and 2018. We received a proposed assessment in September 2023 and filed a protest to contest the proposed assessment in November 2023.
Our goal is to transcend the limits of current cancer treatments by successfully leveraging therapeutic targets and strategies that were once thought to be inaccessible. Our proprietary and versatile Probody technology platform is designed to enable conditional activation of biologic therapeutic candidates within the tumor microenvironment, while minimizing drug activity in healthy tissues and circulation.
Our proprietary, versatile, multi-modality PROBODY technology platform is designed to enable conditional activation of potent biologic therapeutic candidates within the tumor microenvironment, while minimizing drug activity in healthy tissues and circulation. Our platform is built on a strong foundation of tumor biology expertise, including deep knowledge of tumor-associated enzymes known as proteases.
We currently have no manufacturing capabilities and do not intend to establish any such capabilities in the near term. As such, we are dependent on third parties to supply our product candidates according to our specifications, in sufficient quantities, on time, in compliance with appropriate regulatory standards and at competitive prices.
We currently have no manufacturing capabilities and do not intend to establish any such capabilities in the near term.
Our industry-leading platform is built on a strong foundation of tumor biology expertise, including deep knowledge of tumor-associated enzymes known as proteases. Proteases are tightly controlled in normal tissues but often poorly regulated and active in tumor microenvironments where they play important roles in cancer cell migration, invasion and metastasis.
Proteases are tightly controlled in normal tissues but often dysregulated and active in tumor microenvironments where they play important roles in cancer cell migration, invasion and metastasis. Leveraging our deep scientific knowledge, we conceived of and constructed our PROBODY therapeutic platform which allows us to genetically engineer biologic therapeutic candidates to contain protease-cleavable masks.
In the molecular design of CX-2051, an ADC, and CX-801, a masked cytokine, we have incorporated our platform expertise and clinical learnings to optimize predicted therapeutic index in order to potentially broaden the clinical utility of these promising targets through tumor localized conditional activation.
Our current clinical-stage molecules address targets or mechanisms that have been previously validated as having anti-cancer activity but have been limited in their utilization due to systemic toxicities. We have incorporated our significant platform expertise and clinical learnings to optimize predicted therapeutic index and the clinical potential of these promising agents through tumor localized conditional activation.
In February 2023, BMS prioritized BMS-986288 as its lead next-generation anti-CTLA-4 program over two other anti-CTLA-4 programs including BMS-986249. Reinforcing our leadership in the field of conditional activation, we recently advanced our first T-cell engaging bispecific antibody (TCB) into the clinic. CX-904, partnered with Amgen, is a conditionally activated TCB against EGFR and CD3.
Reinforcing our leadership in the field of conditional activation, in 2022 we advanced our first TCE into the clinic. CX-904, partnered with Amgen, is a conditionally activated TCE against EGFR and CD3. In preclinical studies, CytomX’s PROBODY EGFRxCD3 TCE demonstrated anti-tumor activity and better tolerability when compared to TCEs without PROBODY masking.
Financial Statements and Supplementary Data, Note 9 - “License Agreement” in the accompanying Notes to the financial statements for more information.
Financial Statements and Supplementary Data, Note 9 - “License Agreement” in the accompanying Notes to the financial statements for more information. (4) We have development milestone payments under the terms of certain license agreements. A development milestone is payable after dosing the first patient in a Phase 1 Clinical Study, which we expect to occur in 2024.
General and Administrative Expenses Year Ended December 31, 2022 2021 Change (in thousands) General and administrative $ 42,849 $ 39,160 $ 3,689 General and administrative expenses increased by $3.7 million for 2022, compared to 2021 primarily driven by $2.4 million of restructuring expenses and a $1.0 million increase in professional expenses related to new collaboration agreements.
General and Administrative Expenses Year Ended December 31, 2023 2022 Change (in thousands) General and administrative $ 30,018 $ 42,849 $ (12,831 ) General and administrative expenses decreased by $12.8 million for 2023, compared to 2022 primarily driven by a decrease in personnel related expenses as a result of the workforce reduction in 2022, reduced external vendor services, and lower building rent as a result of a partial sublease of the Company’s headquarters.
Having demonstrated favorable tolerability and encouraging anti-tumor activity in Phase 1 studies, CX-2029 entered into a four-cohort Phase 2 expansion study initially designed to enroll twenty-five efficacy evaluable patients per cohort 77 in the following malignancies: squamous non-small cell lung cancer (“sqNSCLC”), head and neck squamous cell carcinoma (“HNSCC”), esophageal and gastro-esophageal junction (“E/GEJ”) cancers, and diffuse large B-cell lymphoma (“DLBCL”).
In March 2023, following the completion of the Phase 2 Study in squamous non-small cell lung cancer (“sqNSCLC”), head and neck squamous cell carcinoma (“HNSCC”), esophageal and gastro-esophageal junction (“E/GEJ”) cancers, AbbVie notified CytomX that it would not advance CX-2029 into additional clinical studies and terminated the 2016 CD71 License and Collaboration Agreement.
We record the effect of an enacted change in a tax law in the period that includes the enactment date in accordance with ASC 740. On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law.
We recorded an uncertain tax position of $3.9 million in long term liabilities for the proposed tax assessment, penalties and interest through December 31, 2023. On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law.
We have utilized our multi-modality Probody platform to build a promising, broad pipeline of potential first-in-class and best-in-class therapeutics that includes four molecules in clinical testing including: CX-2029, a Probody ADC targeting CD71; CX-904, a conditionally activated TCB, targeting the epidermal growth factor receptor (“EGFR”) on tumor cells and the CD3 receptor on T cells and BMS-986288, a Probody version of a non-fucosylated anti-CTLA-4 antibody.
We have utilized our PROBODY therapeutic platform to build a promising, broad pipeline of potential first-in-class and best-in-class clinical-stage molecules.
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We believe this innovative approach has the potential to improve cancer treatment in three ways: 1. Allowing the pursuit of high potential targets that were previously considered “undruggable” due to their ubiquitous expression on normal tissues; 2. Enhancing a potential product’s “therapeutic window,” the balance between tolerability and anti-tumor activity; and 3.
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These are CX-904, a conditionally activated, PROBODY® TCE, targeting the epidermal growth factor receptor (“EGFR”) on tumor cells and the CD3 receptor on T cells; CX-2051, an investigational, conditionally activated ADC targeting epithelial cell adhesion molecule (“EpCAM”); and CX-801, an investigational, masked version of interferon alpha-2b (“IFNα2b”).
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Enabling the development of new combination therapies, including immunotherapies, by improving tolerability. We are employing our leading, conditional activation platform technology to address some of the biggest challenges today in oncology biologics research and development.
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A decision to potentially expand into Phase 1b is also anticipated in 2024, which will be taken in conjunction with our partner, Amgen. Our pipeline also includes CX-2051, a wholly-owned conditionally activated, PROBODY ADC paired with a next-generation camptothecin payload and directed toward the epithelial cellular adhesion molecule (EpCAM). CX-2051 is licensed from 76 ImmunoGen.
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We also have a broad pre-clinical pipeline across our collaborations and internally, including two wholly-owned next-generation molecules in investigational new drug application (“IND”) enabling studies. For our next generation molecules, we have selected the previously validated anti-cancer targets, the epithelial cell adhesion molecule (EpCAM) and interferon alpha-2b (IFNa2b), that have been limited in their potential due to systemic toxicities.
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The IND for CX-2051 was cleared by the FDA in January 2024 and we expect Phase 1 clinical initiation in EpCAM expressing solid tumors, including CRC in the first half of 2024.
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CX-2029, which was partnered with Abbvie until March 2023, is a conditionally activated ADC directed toward the previously undruggable target CD71.
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The Phase 1 dose escalation design will follow a Bayesian Optimal Interval (BOIN) design and intended to demonstrate rapid clinical proof of concept and potentially move into dose expansion studies in 2025. Another wholly-owned emerging product candidate is CX-801, an interferon ("IFN") alpha-2b PROBODY. IFNα2b provides a potentially superior approach to activating anti-tumor immune responses than other cytokines.
Removed
The DLBCL cohort was later deprioritized due to strategic and competitive reasons and did not enroll any patients. In January 2023, a data update for the Phase 2 expansion was disclosed which included data across all fully enrolled cohorts. The study results reflected an August 5, 2022 full data cut-off and an October 4, 2022 data snapshot for efficacy.
Added
The IND for CX-801 was cleared by the FDA in January 2024 and initiation of Phase 1 dose escalation in solid tumors including melanoma, renal, and head and neck squamous cell carcinoma is expected in the first half of 2024.
Removed
The data demonstrated encouraging clinical activity in unselected, heavily pre-treated patients with tumors of squamous histology including a 21% objective response rate (ORR) in squamous esophageal cancer and a 10% ORR in squamous non-small cell lung cancer (sqNSCLC).
Added
In Phase 1 dose escalation, we will use a BOIN design to evaluate safety and signs of clinical activity for CX-801 and progress into combinations, where CX-801 has the potential to be cornerstone of therapy, including in combination with checkpoint inhibitors. CX-2029 was previously developed in a global co-development collaboration with AbbVie.
Removed
The adverse event (AE) profile was consistent with Phase 1 observations with anemia (82.6%) being the most common treatment related adverse event (TRAE). Anemia was managed with transfusions, dose delays, and dose reductions. The treatment discontinuation rate due to AEs was 3.3% as a result of anemia.
Added
This program is intended to open a therapeutic window for successful targeting of CD71, also known as the transferrin receptor 1 (“TfR1”). CD71 is a cell surface protein essential for iron uptake in dividing cells and is highly expressed in a number of solid and hematologic cancers.
Removed
In March 2023, CytomX announced that it will evaluate the potential next steps for CX-2029 following the decision from its collaboration partner, AbbVie, Inc., to not advance CX-2029 into additional clinical studies. As a result of AbbVie’s decision, the 2016 CD71 License and Collaboration Agreement has been terminated and CytomX has an exclusive option to re-acquire full rights to CX-2029.
Added
However, given its central role in iron metabolism, CD71 is present on most healthy cells and is thought to be an undruggable target with conventional ADCs. CX-2029 is conjugated with the tubulin inhibitor, monomethyl auristatin E (“MMAE”), as the payload.
Removed
The safety profile in Arm A was generally consistent with Phase 1 observations and the DM4 payload, with high-grade toxicities or toxicities resulting in dose modification predominantly ocular or neuropathic in nature. Specifically, 30% of patients in Arm A discontinued treatment for an adverse event. Grade 3 or greater ocular and neuropathic toxicities were 15% and 10%, respectively.
Added
CytomX re-acquired full rights to CX-2029 but does not currently have plans to make further significant investments in the solid tumor program in the near-term but continues to view CD71 as a target of strategic interest, including novel next-generation strategies.
Removed
All patients in Arm A were treated at the initial starting dose of 7 mg/kg administered every three weeks. Arm B did not pass the protocol-defined futility boundary in patients with advanced TNBC and enrollment into Arms B and C was discontinued. Arm B evaluated patients at starting doses of 7 mg/kg or 6 mg/kg.
Added
The confirmed objective response was 15% and demonstrated median progression-free survival of 2.6 months. Ocular and neuropathic toxicities were the most common treatment-related adverse events. Based on these data, the Company announced it would deprioritize further investment in praluzatamab ravtansine.
Removed
The toxicity profile of the 7 mg/kg starting dose in Arm B was consistent with the 7 mg/kg starting dose in Arm A. In the 6 mg/kg cohort in Arm B, no patients discontinued treatment for an adverse event as of the data cut-off date and Grade 3 or greater ocular or neuropathic related events were 3% and 0%, respectively.
Added
Income Taxes Year Ended December 31, 2023 2022 Change (in thousands) Provision for income taxes $ 3,892 $ — $ 3,892 The $3.9 million tax provision represented the uncertain tax position related to the proposed assessment received from the state of California for the years 2017 and 2018, including penalties and interest through December 31, 2023. 80 Liquidity and Capital Resources Sources of Liquidity As of December 31, 2023, we had cash, cash equivalents and short-term investments of $174.5 million and an accumulated deficit of $723.4 million, compared to cash, cash equivalents and investments of $193.7 million and an accumulated deficit of $722.9 million as of December 31, 2022.
Removed
Based on these results, the Company deprioritized further investment and seek a partnership to further develop praluzatamab ravtansine. Our partner, Bristol Myers Squibb, is conducting a randomized Phase 2 study evaluating BMS-986249, a Probody version of ipilimumab, the anti-CTLA-4 antibody, in combination with nivolumab, the anti-PD-1 antibody, in patients with metastatic melanoma.
Added
Pursuant to the Moderna Agreement, we collected an upfront fee and prepaid research funding of $35.0 million in January 2023.

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