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

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

+867 added−718 removedSource: 10-K (2023-05-22) vs 10-K (2022-06-08)

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

867 paragraphs added · 718 removed · 555 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

158 edited+168 added−85 removed187 unchanged
Biggest changeOrphan Medicinal Products Regulation: • it must be intended for the treatment, prevention or diagnosis of a disease that is life-threatening or chronically debilitating; • the prevalence of the condition in the E.U. must not be more than 5 in 10,000 or it must be unlikely that marketing of the medicine would generate sufficient returns to justify the investment needed for its development; and • no satisfactory method of diagnosis, prevention or treatment of the condition concerned can be authorized, or, if such a method exists, the medicine must be of significant benefit to those affected by the condition.
Biggest changeIn the E.U., Regulation (EC) No. 141/2000, as implemented by Regulation (EC) No. 847/2000 provides that a medicinal product can be designated as an orphan medicinal product by the European Commission if its sponsor can establish that: (i) the product is intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions; (ii) either (a) such conditions affect not more than 5 in 10,000 persons in the E.U. when the application is made, or (b) the product without the benefits derived from orphan status, would not generate sufficient return in the E.U. to justify the necessary investment in developing the medicinal product; and (iii) there exists no satisfactory authorized method of diagnosis, prevention, or treatment of the condition that has been authorized in the E.U., or even if such method exists, the product will be of significant benefit to those affected by that condition.
The physiologic function of FcRn is to prevent the degradation of IgG antibodies. Inhibition of FcRn, such as through use of an anti-FcRn antibody, has been shown to reduce levels of total IgG and pathogenic IgG antibodies.
The physiologic function of FcRn is to prevent the degradation of IgG antibodies. Inhibition of FcRn, such as through the use of an anti-FcRn antibody, has been shown to reduce levels of total IgG and pathogenic IgG antibodies.
Among the Affordable Care Act provisions of importance to the pharmaceutical and biotechnology industries, in addition to those otherwise described above, are the following: • an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in some government healthcare programs; • an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23% and 13% of the Average Manufacturer Price for most branded and generic drugs, respectively, and capped the total rebate amount for innovator drugs at 100% of the Average Manufacturer Price; • a Medicare Part D coverage gap discount program, in which manufacturers must now agree to offer 70% point-of-sale discounts off negotiated prices of applicable branded drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D; • extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; • expansion of the entities eligible for discounts under the 340B Drug Discount Program; • a Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; • expansion of healthcare fraud and abuse laws, including the FCA and the Anti-Kickback Statute, new government investigative powers, and enhanced penalties for noncompliance; • a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected; • requirements to report certain financial arrangements with certain healthcare providers and teaching hospitals; • a requirement to annually report certain information regarding drug samples that manufacturers and distributors provide to physicians; • establishment of a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending; and • a licensure framework for follow on biologic products. 33 Table of Contents Since its enactment, there have been legal and political challenges to certain aspects of the Affordable Care Act.
Among the Affordable Care Act provisions of importance to the pharmaceutical and biotechnology industries, in addition to those otherwise described above, are the following: • an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in some government healthcare programs; • an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23% and 13% of the Average Manufacturer Price for most branded and generic drugs, respectively, and capped the total rebate amount for innovator drugs at 100% of the Average Manufacturer Price; • a Medicare Part D coverage gap discount program, in which manufacturers must now agree to offer 70% point-of-sale discounts off negotiated prices of applicable branded drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D; • extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; • expansion of the entities eligible for discounts under the 340B Drug Discount Program; • a Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; • expansion of healthcare fraud and abuse laws, including the FCA and the Anti-Kickback Statute, new government investigative powers, and enhanced penalties for noncompliance; • a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected; • requirements to report certain financial arrangements with certain healthcare providers and teaching hospitals; • a requirement to annually report certain information regarding drug samples that manufacturers and distributors provide to physicians; • establishment of a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending; and • a licensure framework for follow on biologic products. 41 Table of Contents Since its enactment, there have been legal and political challenges to certain aspects of the Affordable Care Act.
In a Phase 3 trial evaluating Subcutaneous Efgartigimod for Generalized Myasthenia Gravis, argenx reported noninferiority between subcutaneous efgartigimod and VYVGART™ (efgartigimod alfa-fcab) IV based on total IgG reduction at day 29, in addition to a higher incidence of injection-site reactions compared to the IV formulation and six patients that showed worsening of their MG symptoms over the course of the study.
In a Phase 3 trial evaluating subcutaneous efgartigimod for generalized myasthenia gravis (“gMG”), argenx reported noninferiority between subcutaneous efgartigimod and VYVGART™ (efgartigimod alfa-fcab) IV based on total IgG reduction at day 29, in addition to a higher incidence of injection-site reactions compared to the IV formulation and six patients that showed worsening of their MG symptoms over the course of the study.
In IgG-mediated autoantibody diseases (an important subset of autoimmune diseases), IgG antibodies inappropriately develop against normal proteins found in the body, directing the immune system to attack specific organs or organ systems. Unfortunately, safe and effective treatment options for patients suffering from many autoantibody diseases are lacking.
In IgG-mediated autoimmune diseases (an important subset of autoimmune diseases), IgG antibodies inappropriately develop against normal proteins found in the body, directing the immune system to attack specific organs or organ systems. Unfortunately, safe and effective treatment options for patients suffering from many autoimmune diseases are lacking.
It is also possible that the development of a cure or more effective treatment method for any of our targeted indications by a competitor could render our product candidate non-competitive or obsolete, or reduce the demand for its product candidate before it can recover its development and commercialization expenses.
It is also possible that the development of a cure or more effective treatment method for any of our targeted indications by a competitor could render our product candidates non-competitive or obsolete, or reduce the demand for its product candidate before it can recover its development and commercialization expenses.
These laws may differ from each other in significant ways and may not have the same effect, further complicating compliance efforts. 30 Table of Contents We are subject to the Federal Drug Supply Chain Security Act (“DSCSA”) enacted by the U.S. government, which requires development of an electronic pedigree to track and trace each prescription biologic at the salable unit level through the distribution system, which will be effective incrementally over a 10-year period from its enactment on November 27, 2013.
These laws may differ from each other in significant ways and may not have the same effect, further complicating compliance efforts. 38 Table of Contents We are subject to the Federal Drug Supply Chain Security Act (“DSCSA”) enacted by the U.S. government, which requires development of an electronic pedigree to track and trace each prescription biologic at the salable unit level through the distribution system, which will be effective incrementally over a 10-year period from its enactment on November 27, 2013.
The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and animal studies performed in accordance with applicable regulations and guidance, including the FDA’s current Good Laboratory Practices (“GLP”) regulations, International Council for Harmonisation (“ICH”) guidance, and applicable requirements for the humane use of laboratory animals or other applicable regulations; • submission to the FDA of an IND, which must become effective before clinical trials may begin and must be updated at least annually or when significant changes are made; • approval by an institutional review board (“IRB”) or ethics committee for each clinical site before the trial is commenced; • conduct of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, Good Clinical Practice (“GCP”), and other clinical-trial related regulations and guidance to evaluate the safety, purity and potency of the proposed biologic product candidate for each proposed indication; • preparation of and submission to the FDA of a BLA after completion of all pivotal clinical trials that includes manufacturing information and substantial evidence of safety, purity and potency from results of nonclinical testing and clinical trials; • a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMP and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency; 20 Table of Contents • potential FDA audit of selected clinical investigation sites, preclinical studies, and/or Immunovant as clinical trial sponsor to assess compliance with FDA’s GCP standards; • payment of user fees for FDA review of the BLA (unless a fee waiver applies); • agreement with FDA on the final labeling for the product and the design and implementation of any required Risk Evaluation and Mitigation Strategy (“REMS”); and • FDA review and approval, or licensure, of the BLA, including satisfactory completion of an FDA Advisory Committee review, if applicable, to permit commercial marketing or sale of the product for particular indications for use in the United States.
The process required by the FDA before biologic product candidates may be marketed in the U.S. generally involves the following: • completion of preclinical laboratory tests and animal studies performed in accordance with applicable regulations and guidance, including the FDA’s current Good Laboratory Practices (“GLP”) regulations, International Council for Harmonisation (“ICH”) guidance, and applicable requirements for the humane use of laboratory animals or other applicable regulations; • submission to the FDA of an IND, which must become effective before clinical trials may begin and must be updated at least annually or when significant changes are made; • approval by an institutional review board (“IRB”) or ethics committee for each clinical site before the trial is commenced; • conduct of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, Good Clinical Practice (“GCP”), and other clinical-trial related regulations and guidance to evaluate the safety, purity and potency of the proposed biologic product candidate for each proposed indication; • preparation of and submission to the FDA of a BLA after completion of all pivotal clinical trials that includes manufacturing information and substantial evidence of safety, purity and potency from results of nonclinical testing and clinical trials; • a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMP and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency; • potential FDA audit of selected clinical investigation sites, preclinical studies, and/or Immunovant as clinical trial sponsor to assess compliance with FDA’s GCP standards; • payment of user fees for FDA review of the BLA (unless a fee waiver applies); • agreement with FDA on the final labeling for the product and the design and implementation of any required Risk Evaluation and Mitigation Strategy (“REMS”); and 26 Table of Contents • FDA review and approval, or licensure, of the BLA, including satisfactory completion of an FDA Advisory Committee review, if applicable, to permit commercial marketing or sale of the product for particular indications for use in the U.S.
In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date, as the term of a patent granted on a utility patent application filed after June 8, 1995 expires 20 years after the non-provisional U.S. filing date (or any earlier filing date relied upon under 35 U.S.C. 120, 121, or 365(c)), with the timely payment of maintenance fees.
In the U.S., if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date, as the term of a patent granted on a utility patent application filed after June 8, 1995 expires 20 years after the non-provisional U.S. filing date (or any earlier filing date relied upon under 35 U.S.C. 120, 121, or 365(c)), with the timely payment of maintenance fees.
For example, in August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other things, included aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect beginning on April 1, 2013 and will stay in effect through 2031 unless additional Congressional action is taken.
For example, in August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other things, included aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect beginning on April 1, 2013 and will stay in effect through 2032 unless additional Congressional action is taken.
Coverage and reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a therapeutic is: • a covered benefit under its health plan; • safe, effective and medically necessary; • appropriate for the specific patient; 31 Table of Contents • cost-effective; and • neither experimental nor investigational.
Coverage and reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a therapeutic is: • a covered benefit under its health plan; • safe, effective and medically necessary; • appropriate for the specific patient; 39 Table of Contents • cost-effective; and • neither experimental nor investigational.
In addition to pursuing indications with existing anti-FcRn proof of concept data, we are also considering first-in-class indications where the probability of technical success is good even without existing anti-FcRn clinical data based on potential to deliver clinical benefit with targeted IgG reduction. • Rationale for the prioritization of potential indications.
In addition to pursuing indications with existing anti-FcRn proof of concept data, we are also considering first-in-class indications where the probability of technical success is good even without existing anti-FcRn clinical data based on potential to deliver clinical benefit with targeted IgG reduction. • Implement a rationale for the prioritization of potential indications.
Healthcare Laws and Compliance Requirements In the United States, our current and future operations are subject to regulation and oversight by various federal, state and local authorities in addition to the FDA, including but not limited to, Centers for Medicare & Medicaid Services (“CMS”) or other divisions of the U.S.
Healthcare Laws and Compliance Requirements In the U.S., our current and future operations are subject to regulation and oversight by various federal, state and local authorities in addition to the FDA, including but not limited to, Centers for Medicare & Medicaid Services (“CMS”) or other divisions of the U.S.
Manufacturing We do not currently own or operate manufacturing facilities for the production of clinical or commercial quantities of batoclimab, and there are a limited number of manufacturers that operate under the FDA’s current Good Manufacturing Practice (“cGMP”) requirements (particularly for the development of antibodies) that might be capable of manufacturing for us.
Manufacturing We do not currently own or operate manufacturing facilities for the production of clinical or commercial quantities of batoclimab and IMVT-1402, and there are a limited number of manufacturers that operate under the FDA’s current Good Manufacturing Practice (“cGMP”) requirements (particularly for the development of antibodies) that might be capable of manufacturing for us.
The Foreign Corrupt Practices Act The United States Foreign Corrupt Practices Act (“FCPA”) prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business.
Foreign Corrupt Practices Act (“FCPA”) prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business.
Intellectual Property Our commercial success depends in part on our ability to obtain and maintain proprietary protection for batoclimab and any of our future product candidates, novel discoveries, product development technologies and know-how; to operate without infringing on the proprietary rights of others; and to prevent others from infringing our proprietary rights.
Intellectual Property Our commercial success depends in part on our ability to obtain and maintain proprietary protection for batoclimab, IMVT-1402 and any of our future product candidates, novel discoveries, product development technologies and know-how; to operate without infringing on the proprietary rights of others; and to prevent others from infringing our proprietary rights.
Based on our understanding of FDA’s combination device expectations, we do not anticipate that the FDA will require a separate medical device authorization for the syringe, but this could change during the course of its review of any marketing application that we may submit.
Based on our understanding of FDA’s combination device expectations, we do not anticipate that the FDA will require a separate medical device authorization for the syringe or autoinjector, but this could change during the course of its review of any marketing application that we may submit.
The patents of this patent family may expire in 2035, without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal, annuity, or other governmental fees. In addition, the in-licensed patent portfolio includes another patent family that discloses a pharmaceutical formulation for an anti-FcRn antibody.
The patents of this patent family may expire in 2035, without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal, annuity, or other governmental fees. 24 Table of Contents In addition, the in-licensed patent portfolio includes another patent family that discloses a pharmaceutical formulation for an anti-FcRn antibody.
To the extent that our commercial partners, collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. Our commercial success will also depend in part on not infringing upon the proprietary rights of third parties.
To the extent that our commercial partners, collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. 25 Table of Contents Our commercial success will also depend in part on not infringing upon the proprietary rights of third parties.
With respect to these licenses, RSG also received the right to grant a sublicense, with prior written notice to HanAll of such sublicense, to: (1) a third party in any country in the Licensed Territory outside of the United States and E.U.; (2) an affiliate of RSG in any country in the Licensed Territory; and (3) a third party in the United States and E.U. only after submission of a biologics license application (“BLA”) in the United States or a Marketing Authorization Application in the E.U.
With respect to these licenses, RSG also received the right to grant a sublicense, with prior written notice to HanAll of such sublicense, to: (1) a third party in any country in the Licensed Territory outside of the U.S. and E.U.; (2) an affiliate of RSG in any country in the Licensed Territory; and (3) a third party in the U.S. and E.U. only after submission of a biologics license application (“BLA”) in the U.S. or a Marketing Authorization Application in the E.U.
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. 27 Table of Contents The FDA may withdraw 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. The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
For a description of our transactions under agreements with related parties, refer to Part II, Item 8. Financial Statements and Supplementary Data, Note 5 – Related Party Transactions. 16 Table of Contents For a discussion on RSL’s significant ownership of our shares of common stock and related possible risks, please refer to Item 1A.
For a description of our transactions under agreements with related parties, refer to Part II, Item 8. Financial Statements and Supplementary Data, Note 5 – Related Party Transactions. For a discussion on RSL’s significant ownership of our shares of common stock and related possible risks, please refer to Item 1A.
Our product candidate, batoclimab, has been dosed in small volumes (e.g., 2 mL) and with a 27-gauge needle, while still generating therapeutically relevant pharmacodynamic activity, important attributes that we believe will drive patient preference and market adoption. In nonclinical studies and in clinical trials conducted to date, batoclimab has been observed to reduce IgG antibody levels.
Batoclimab, our first product candidate, has been dosed in small volumes (e.g., 2 mL) and with a 27-gauge needle, while still generating therapeutically relevant pharmacodynamic activity, important attributes that we believe will drive patient preference and market adoption. In nonclinical studies and in clinical trials conducted to date, batoclimab has been observed to reduce immunoglobulin G (“IgG”) antibody levels.
Additionally, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent U.S.
Additionally, there has been increasing legislative and enforcement interest in the U.S. with respect to specialty drug pricing practices. Specifically, there have been several recent U.S.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States for which there is no reasonable expectation that the cost of developing and making available in the United States a drug or biologic for this type of disease or condition will be recovered from sales in the United States for that drug or biologic.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the U.S., or more than 200,000 individuals in the U.S. for which there is no reasonable expectation that the cost of developing and making available in the U.S. a drug or biologic for this type of disease or condition will be recovered from sales in the U.S. for that drug or biologic.
We are subject to the informational requirements of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and file or furnish reports, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act, proxy statements and other information with the Securities and Exchange Commission (the “SEC”).
We are subject to the informational requirements of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and file or furnish reports, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act, proxy statements and other information with the U.S.
We believe our completed clinical trials and other clinical trials assessing anti-FcRn antibodies in IgG-mediated autoantibody diseases have generated promising results, suggesting that FcRn is a therapeutically important pharmacologic target to reduce levels of disease-causing IgG antibodies.
We believe our completed clinical trials and other clinical trials assessing anti-FcRn antibodies in IgG-mediated autoimmune diseases have generated promising results, suggesting that FcRn is a therapeutically important and validated pharmacologic target to reduce levels of disease-causing IgG antibodies.
There are also requirements governing the reporting of ongoing clinical studies and clinical study results to public registries. Information about most clinical trials must be submitted within specific timeframes for publication on the www.clinicaltrials.gov website.
There are also requirements governing the reporting of ongoing clinical studies and clinical study results to public registries. 29 Table of Contents Information about most clinical trials must be submitted within specific timeframes for publication on the www.clinicaltrials.gov website.
The vast majority of MG patients demonstrate elevated serum levels of acetylcholine receptor (“AChR”) antibodies which disrupt signal transmission between nerve fibers and muscle fibers. These antibodies ultimately lead to fluctuating muscle weakness and fatigue. The prevalence of MG is estimated to be 17.8 per 100,000, with up to 59,000 cases in the U.S.
The vast majority of MG patients demonstrate elevated serum levels of acetylcholine receptor (“AChR”) antibodies which disrupt signal transmission between nerve fibers and muscle fibers. These antibodies ultimately lead to fluctuating muscle weakness and fatigue. The prevalence of MG is estimated to be 18 per 100,000 people, with up to 59,000 cases in the U.S.
In December 2018, we obtained and assumed all rights, title, interest and obligations under the HanAll Agreement from RSG, including all rights to batoclimab from RSG in the Licensed Territory, pursuant to an assignment and assumption agreement between RSG and its wholly owned subsidiary, Immunovant Sciences GmbH, or ISG, for an aggregate purchase price of $37.8 million.
In December 2018, we obtained and assumed all rights, title, interest and obligations under the HanAll Agreement from RSG, including all rights to batoclimab and IMVT-1402 in the Licensed Territory, pursuant to an assignment and assumption agreement between RSG and our wholly owned subsidiary, Immunovant Sciences GmbH, or ISG, for an aggregate purchase price of $37.8 million.
If we were to enter into a “business associate” relationship with a “covered entity” (“covered entities” being group health plans, certain healthcare providers, and “healthcare clearinghouses”), we would be subject to the HHS regulations related to data privacy, security and security breach notification under the Administrative Simplification provisions of HIPAA (Title II, Subtitle F of HIPAA), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”).
If we were to enter into a “business associate” relationship with a “covered entity” (“covered entities” being group health plans, certain healthcare providers, and “healthcare s”) or other “business associates”, we would be subject to the HHS regulations related to data privacy, security and security breach notification under the Administrative Simplification provisions of HIPAA (Title II, Subtitle F of HIPAA), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”).
There can be no assurance that the FDA will accept the BLA for filing and, even if filed, that any approval will be granted on a timely basis, if at all. Once a BLA has been submitted, the FDA reviews the BLA within 60 days to determine if it is substantially complete before the agency accepts it for filing.
There can be no assurance that the FDA will accept the BLA for filing and, even if filed, that any approval will be granted on a timely basis, if at all. 30 Table of Contents Once a BLA has been submitted, the FDA reviews the BLA within 60 days to determine if it is substantially complete before the agency accepts it for filing.
Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.
Among policy makers and payors in the U.S. and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the U.S., the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.
Government Regulation The FDA and other regulatory health authorities at federal, state, and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring, and post-approval reporting of biologics such as those we are developing.
Government Regulation The FDA and other regulatory authorities at federal, state, supranational, national and local levels, including in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring, and post-approval reporting of biologics such as those we are developing.
HanAll also reserves the right to conduct discovery or research activities with the batoclimab antibody, and certain back-up and next-generation antibodies, with or through a contract research organization or service provider in the Licensed Territory.
HanAll also reserves the right to conduct discovery or research activities with the batoclimab antibody, and certain back-up and next-generation antibodies (including IMVT-1402), with or through a contract research organization or service provider in the Licensed Territory.
The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring us to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations.
The FCPA also obligates companies whose securities are listed in the U.S. to comply with accounting provisions requiring us to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations.
The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses and misbranding. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties, including monetary penalties.
The FDA and other foreign regulatory authorities actively enforce the laws and regulations prohibiting the promotion of off-label uses and misbranding. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties, including monetary penalties.
This in-licensed patent family discloses anti-FcRn antibodies, pharmaceutical compositions thereof, methods of treating autoimmune disease using the same, polynucleotides encoding such antibodies, expression vectors including such polynucleotides, host cells transfected with such recombinant expression vectors, methods of manufacturing such antibodies and methods of detecting FcRn in vivo or in vitro using such antibodies.
This in-licensed patent family was filed in 2015 and discloses anti-FcRn antibodies, including batoclimab, pharmaceutical compositions thereof, methods of treating autoimmune disease using the same, polynucleotides encoding such antibodies, expression vectors including such polynucleotides, host cells transfected with such recombinant expression vectors, methods of manufacturing such antibodies and methods of detecting FcRn in vivo or in vitro using such antibodies.
We, along with third-party contractors, will be required to navigate the various nonclinical, clinical and commercial approval requirements of the governing regulatory agencies and health authorities of the countries in which we wish to conduct studies or seek approval or licensure of batoclimab or any future product candidate.
We, along with third-party contractors, will be required to navigate the various nonclinical, clinical and commercial approval requirements of the governing regulatory authorities of the countries in which we wish to conduct studies or seek approval or licensure of batoclimab, IMVT-1402 or any future product candidate.
In addition, exclusive marketing rights in the United States 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 U.S. 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.
Of these employees, approximately 52% have advanced degrees including but not limited to Ph.D., M.D., M.B.A., and approximately 75% were engaged in research and development activities. More than half of our workforce, as well as our senior management team, is comprised of women.
Of these employees, approximately 70% have advanced degrees including but not limited to Ph.D., M.D., and M.B.A., and approximately 82% were engaged in research and development activities. More than half of our workforce, as well as our senior management team, is comprised of women.
In the United States, third-party payors include federal and state healthcare programs, private managed care providers, health insurers and other organizations. Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid in the United States, and commercial payors are critical to new product acceptance.
In the U.S., third-party payors include federal and state healthcare programs, private managed care providers, health insurers and other organizations. Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid in the U.S., and commercial payors are critical to new product acceptance.
Many of our existing or potential competitors have substantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of product candidates, as well as in obtaining regulatory approvals of those product candidates in the United States and in foreign countries.
Many of our existing or potential competitors have substantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of product candidates, as well as in obtaining regulatory approvals of those product candidates in the U.S. and in foreign countries.
In the United States and in foreign markets, sales of any products for which Immunovant receives regulatory approval for commercial sale will depend, in part, on the extent to which third-party payors provide coverage and establish adequate reimbursement levels for such products.
In the U.S. and in foreign markets, sales of any products for which Immunovant receives regulatory approval for commercial sale will depend, in part, on the extent to which third-party payors provide coverage and establish adequate reimbursement levels for such products.
We intend to develop batoclimab in autoimmune diseases for which there is robust evidence that pathogenic IgG antibodies drive disease manifestation and for which reduction of IgG antibodies should lead to clinical benefit. Autoimmune diseases are conditions where an immune response is inappropriately directed against the body’s own healthy cells and tissues.
We are developing batoclimab and IMVT-1402 in autoimmune diseases for which there is robust evidence that pathogenic IgG antibodies drive disease manifestation and for which reduction of IgG antibodies should lead to clinical benefit. Autoimmune diseases are conditions where an immune response is inappropriately directed against the body’s own healthy cells and tissues.
VYVGART™ is administered intravenously and represents the first-and-only FDA-approved neonatal Fc receptor blocker; and the first approved therapy designed to reduce pathogenic IgGs, an underlying driver of gMG. Batoclimab, if approved, may also face competition from agents with different mechanisms of action. In January 2020, the FDA approved Horizon Therapeutics’ Tepezza (teprotumumab), an anti-IGF-1R antibody, for the treatment of TED.
VYVGART™ is administered intravenously and represents the first-and-only FDA-approved FcRn blocker; and the first approved therapy designed to reduce pathogenic IgGs, an underlying driver of gMG. Batoclimab and IMVT-1402, if approved, may also face competition from agents with different mechanisms of action. In January 2020, the FDA approved Horizon Therapeutics’ Tepezza (teprotumumab), an anti-IGF-1R antibody, for the treatment of TED.
Business Strategy Our goal is to become a leading biopharmaceutical company in the development and commercialization of innovative therapies for autoimmune diseases with significant unmet need. To execute our strategy, we plan to: • Maximize the probability of success of batoclimab.
Business Strategy Our goal is to become a leading biopharmaceutical company in the development and commercialization of innovative therapies for autoimmune diseases with significant unmet need. To execute our strategy, we plan to: • Maximize the probability of success of our anti-FcRn franchise.
To date, a number of biosimilars have been licensed under the BPCIA, and numerous biosimilars have been approved in Europe, but no interchangeable biologic has been approved in the United States. The FDA has issued several guidance documents outlining its approach to the review and approval of biosimilars.
To date, a number of biosimilars have been licensed under the BPCIA, and numerous biosimilars have been approved in Europe, but no interchangeable biologic has been approved in the U.S. The FDA has issued several guidance documents outlining its approach to the review and approval of biosimilars.
The most recent agents approved for MG are eculizumab and ravulizumAb-cwvz, two complement C5 inhibitors, the use of which are l imited to patients refractory to available therapy with anti-AChR-positive MG. Efgartigimod, an anti-FcRn antibody fragment, was recently approved for the treatment of MG in adult patients who are anti-acetylcholine receptor (AChR) antibody positive.
The most recent agents approved for MG are eculizumab and ravulizumAb-cwvz, two complement C5 inhibitors, the use of which are limited to patients refractory to available therapy with anti-AChR-positive MG. Efgartigimod, an anti-FcRn antibody fragment, was recently approved for the treatment of MG in adult patients who are anti-AChR antibody positive.
However, upon termination of the HanAll Agreement, we must assign to HanAll all right, title and interest in and to any and all trademarks we use in the development, manufacture or commercialization of the licensed products. 19 Table of Contents Furthermore, we rely upon trade secrets and know-how and continuing technological innovation to develop and maintain our competitive position.
However, upon termination of the HanAll Agreement, we must assign to HanAll all rights, title and interest in and to any and all trademarks we use in the development, manufacture or commercialization of the licensed products. Furthermore, we rely upon trade secrets and know-how and continuing technological innovation to develop and maintain our competitive position.
Under the Best Pharmaceuticals for Children Act (“BPCA”), a drug or biologic product can also obtain pediatric market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms.
Under the Best Pharmaceuticals for Children Act (“BPCA”), a drug or biologic product can also obtain pediatric market exclusivity in the U.S. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms.
If third parties prepare and file patent applications in the United States that also claim technology to which we have rights, we may have to participate in interference or derivation proceedings in the USPTO to determine priority of invention.
If third parties prepare and file patent applications in the U.S. that also claim technology to which we have rights, we may have to participate in interference or derivation proceedings in the USPTO to determine priority of invention.
Even if such data and information are submitted, the FDA may determine that the BLA does not satisfy the criteria for approval. FDA approval of a BLA must be obtained before a biologic may be marketed in the United States.
Even if such data and information are submitted, the FDA may determine that the BLA does not satisfy the criteria for approval. FDA approval of a BLA must be obtained before a biologic may be marketed in the U.S.
Additionally, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024. It is unclear how the U.S.
Additionally, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.
In order to commercialize batoclimab or any future product candidate, if approved for commercial sale, we would have to develop a sales and marketing infrastructure. We intend to build a small, targeted sales organization in the United States, targeting specialist physicians that treat high numbers of patients with autoimmune conditions.
In order to commercialize batoclimab, IMVT-1402 or any future product candidate, if approved for commercial sale, we would have to develop a sales and marketing infrastructure. We intend to build a small, targeted sales organization in the U.S., targeting specialist physicians that treat high numbers of patients with autoimmune conditions.
We believe these physicians treat a majority of patients with the autoimmune indications that we intend to target and most often serve as the diagnosing and treating physicians for such indications. We may opportunistically seek strategic collaborations to maximize the commercial opportunities for batoclimab or any future product candidates inside and outside the United States.
We believe these physicians treat a majority of patients with the autoimmune indications that we intend to target and most often serve as the diagnosing and treating physicians for such indications. We may opportunistically seek strategic collaborations to maximize the commercial opportunities for batoclimab, IMVT-1402 or any future product candidates inside and outside the U.S.
Annual progress reports detailing the results of the clinical studies must be submitted to the FDA, and IND safety reports must be submitted to the FDA, other regulators, and investigators within a regulated timeframe for serious and unexpected adverse events, any findings from other studies, tests in laboratory animals or in vitro testing that suggest a significant risk for human subjects, or any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.
Annual progress reports detailing the results of the clinical studies must be submitted to the FDA, and IND safety reports must be submitted to the FDA, other regulators, and investigators within a regulated timeframe for serious and unexpected adverse events, any findings from other studies, tests in laboratory animals or in vitro testing that suggest a significant risk for human subjects, or any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure or adverse events reported by anti-FcRn product candidates developed by others.
In addition, emphasis on managed care, the increasing influence of health maintenance organizations, and additional legislative changes in the United States has increased, and we expect will continue to increase, the pressure on healthcare pricing.
In addition, emphasis on managed care, the increasing influence of health maintenance organizations, and additional legislative changes in the U.S. has increased, and we expect will continue to increase, the pressure on healthcare pricing.
All of our activities are potentially subject to federal and state consumer protection and unfair competition laws. Additionally, to the extent that we have business operations in foreign countries or sell any of our products in foreign countries and jurisdictions, including Canada or the E.U., we may be subject to additional regulation.
All of our activities are potentially subject to federal and state consumer protection and unfair competition laws. Additionally, to the extent that we have business operations in foreign countries, sell any of our products in foreign countries and jurisdictions, or engage with physicians from other countries, including Canada or the E.U., we may be subject to additional, comparable, regulation.
The principal purpose of our equity incentive plan is to attract, retain, and motivate our employees, non-employee directors, and consultants through the granting of stock-based compensation and performance cash awards. Our cash bonus awards are based on Company and departmental progress toward key annual goals and employee performance.
The principal purpose of our equity incentive plan is to attract, retain, and motivate our employees, non-employee directors, and consultants through the granting of stock-based compensation and performance cash awards. Our cash bonus awards are based on Company and departmental progress toward key annual goals and employee performance. Available Information Our website is www.immunovant.com.
According to the 2020 Report of the American Autoimmune Related Diseases Association, approximately 50 million people in the United States suffer from one of more than 100 diagnosed autoimmune diseases. Predisposing factors may include genetic susceptibility, environmental triggers and other factors not yet known.
According to the American Autoimmune Related Diseases Association, more than 50 million people in the United States (“U.S.”) suffer from one of more than 100 diagnosed autoimmune diseases. Predisposing factors may include genetic susceptibility, environmental triggers and other factors not yet known.
Later discovery of previously unknown problems with a product, including AEs of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program.
Later discovery of previously unknown problems with a product, including AEs of unanticipated severity or frequency involving our product candidates or anti-FcRn product candidates developed by others, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program.
On June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress. Thus, the Affordable Care Act will remain in effect in its current form. Further, prior to the U.S.
On June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress. Further, prior to the U.S.
Furthermore, another U.S. patent was issued in this in-licensed patent family on January 28, 2020, with claims directed to an isolated anti-FcRn antibody or antigen-binding fragment thereof, a pharmaceutical composition comprising such antibody or antigen-binding fragment thereof, as well as methods of treating various autoimmune diseases using such antibody or antigen-binding fragment thereof, polynucleotides and expression vectors encoding the same, host cells transfected with such expression vectors and methods of producing such antibody or antigen-binding fragment.
Furthermore, another U.S. patent was issued in this in-licensed patent family on January 28, 2020, with claims directed to batoclimab as defined by its CDRs or antigen-binding fragment thereof, a pharmaceutical composition comprising such antibody or antigen-binding fragment thereof, as well as methods of treating various autoimmune diseases using such antibody or antigen-binding fragment thereof, polynucleotides and expression vectors encoding the same, host cells transfected with such expression vectors and methods of producing such antibody or antigen-binding fragment.
Under the HanAll Agreement, RSG received (1) the non-exclusive right to manufacture and (2) the exclusive, royalty-bearing right to develop, import and use the antibody referred to as batoclimab and certain back-up and next-generation antibodies, and products containing such antibodies, and to commercialize such products, in the United States, Canada, Mexico, the E.U., the U.K., Switzerland, the Middle East, North Africa and Latin America, or the Licensed Territory, for all human and animal uses, during the term of the agreement.
Under the HanAll Agreement, RSG received (1) the non-exclusive right to manufacture and (2) the exclusive, royalty-bearing right to (a) develop, import and use (i) the antibody referred to as batoclimab, (ii) certain back-up and next-generation antibodies (including IMVT-1402), and (iii) products containing such antibodies, and (b) to commercialize such products, in the U.S., Canada, Mexico, the E.U., the U.K., Switzerland, the Middle East, North Africa and Latin America, or the Licensed Territory, for all human and animal uses, during the term of the agreement.
None of our employees are represented by a labor union or covered by collective bargaining agreements, and we have not had any work stoppages. We believe our relationship with our employees is good.
None of our employees are represented by a labor union or covered by collective bargaining agreements, and we have not had any work stoppages.
Such reforms could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and for which we may obtain regulatory approval and may affect our overall financial condition and ability to develop product candidates.
Such reforms could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and for which we may obtain regulatory approval and may affect our overall financial condition and ability to develop product candidates. The Foreign Corrupt Practices Act The U.S.
As the clinical development of our product candidates progresses, we also expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of clinical development, quality, regulatory affairs and, if any of our product candidates receives marketing approval, sales, marketing, reimbursement and distribution.
We believe our relationship with our employees is good. 43 Table of Contents As the clinical development of our product candidates progresses, we also expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of clinical development, quality, regulatory affairs and, if any of our product candidates receives marketing approval, sales, marketing, reimbursement and distribution.
If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize any product candidate that we successfully develop. Different pricing and reimbursement schemes exist in other countries.
If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize any product candidate that we successfully develop. Different pricing and reimbursement schemes exist in other countries. In the E.U., pricing and reimbursement schemes vary widely from country to country.
However, as the disease progresses, symptom-free periods become less frequent and disease exacerbations can last for months or remain chronic. After 15 to 20 years, some weakness often becomes fixed, with the most severely affected muscles frequently becoming atrophic.
The symptoms of the disease can be transient and in the early stages of the disease can remit spontaneously. However, as the disease progresses, symptom-free periods become less frequent and disease exacerbations can last for months or remain chronic. After 15 to 20 years, some weakness often becomes fixed, with the most severely affected muscles frequently becoming atrophic.
Additionally, as of June 3, 2022, independent of the licensed patent portfolio, ISG owns patent families directed to methods of treating thyroid eye disease (Graves’ ophthalmopathy) and methods of treating warm autoimmune hemolytic anemia using anti-FcRn antibodies that include patent applications in the United States as well as foreign counterparts in certain jurisdictions.
Additionally, as of May 17, 2023, independent of the licensed patent portfolio, ISG owns patent families directed to methods of treating thyroid eye disease (Graves’ ophthalmopathy) and methods of treating warm autoimmune hemolytic anemia using anti-FcRn antibodies that include patent applications in the U.S. as well as foreign counterparts in certain jurisdictions.
We plan to leverage batoclimab’s differentiated profile in indications where the anti-FcRn mechanism has already established clinical proof-of-concept, including MG and TED. • Maximize the breadth of indications for batoclimab.
We plan to leverage the differentiated profiles of our FcRn inhibitors in indications where the anti-FcRn mechanism has already established clinical proof-of-concept, including MG and TED. • Maximize the breadth of indications for our anti-FcRn franchise.
Any patent issued from these patent families may expire in 2039 and 2040, respectively, without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal, annuity, or other governmental fees.
Any patent issued from this patent family may expire in 2044, without taking into account any possible patent term adjustment or extension and assuming payment of all appropriate maintenance renewal, annuity, or other governmental fees.
ISG owns a trademark for IMMUNOVANT, the corporate logo, and a composite trademark for its corporate logo with the IMMUNOVANT mark. As of May 20, 2022, this trademark portfolio includes pending trademark applications and/or registered trademarks in the United States and foreign jurisdictions.
ISG owns a trademark for IMMUNOVANT, the corporate logo, and a composite trademark for its corporate logo with the IMMUNOVANT mark. As of May 17, 2023, this trademark portfolio includes pending trademark applications and/or registered trademarks in the U.S. and/or foreign jurisdictions.
As of March 31, 2022, the minimum purchase commitment related to this agreement is estimated to be approximately $36.0 million. We are a Member of the Roivant Family of Companies We are a majority-owned subsidiary of RSL and have benefited from our ability to leverage the Roivant model and the greater Roivant platform.
As of March 31, 2023, the minimum purchase commitment related to this agreement was estimated to be approximately $33.3 million. 21 Table of Contents We are a Member of the Roivant Family of Companies We are a majority-owned subsidiary of RSL and have benefited from our ability to leverage the Roivant model and the greater Roivant platform.
FDA Drug Approval Process In the United States, the FDA regulates biologics under both the Federal Food, Drug and Cosmetic Act and the Public Health Services Act and their implementing regulations.
FDA Drug Approval Process In the U.S., the FDA regulates biologics under both the Federal Food, Drug and Cosmetic Act and the Public Health Service Act and their implementing regulations.
Either party may terminate the HanAll Agreement upon 60 days’ written notice for uncured material breach (or 30 days in the case of non-payment), or immediately upon written notice if the other party files a voluntary petition, is subject to a substantiated involuntary petition or for certain other solvency events. 15 Table of Contents HanAll may terminate the HanAll Agreement if we or our affiliates challenge the validity or enforceability of any of the licensed patents.
Either party may terminate the HanAll Agreement upon 60 days’ written notice for uncured material breach (or 30 days in the case of non-payment), or immediately upon written notice if the other party files a voluntary petition, is subject to a substantiated involuntary petition or for certain other solvency events.
We expect to engage additional third-party manufacturers to support any pivotal clinical trials for batoclimab as well as commercialization of batoclimab, if approved, in the United States or other jurisdictions.
We expect to engage additional third-party manufacturers to support any pivotal clinical trials for our product candidates as well as commercialization of our product candidates, if approved, in the U.S. or other jurisdictions.
We plan to initiate this Phase 3 trial by the end of June 2022. We expect top-line data from this Phase 3 trial to be available in the second half of calendar year 2024. Our trial is designed to address unmet patient needs and differentiate batoclimab from other treatments.
We expect top-line data from this trial to be available in the second half of calendar year 2024. Our trial is designed to address unmet patient needs and differentiate batoclimab from other treatments for MG.
For each of the two Phase 3 trials of batoclimab in TED, we expect that approximately 100 subjects will enter the trial and be randomized to either a treatment arm or placebo arm.
For each of two Phase 3 trials of batoclimab in TED, we expect that approximately 100 subjects will enter the trial and be randomized to either a treatment arm or placebo arm. Subjects randomized to the treatment arm will be dosed with 680 mg of batoclimab QW for 12 weeks followed by 340 mg of batoclimab QW for 12 weeks.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe commencement and completion of clinical trials may be delayed by several factors, including: • failure to obtain regulatory authorization to commence a clinical trial or reach a consensus with regulatory authorities regarding the design or implementation of our studies; • unforeseen safety issues or subjects experiencing severe or unexpected AEs; • continuation of previously identified safety issues, despite our program-wide safety strategy to characterize the safety profile of batoclimab in response to the previously reported change in albumin and lipids; • occurrence of AEs in trials of the same class of agents conducted by other sponsors; • lack of effectiveness during clinical trials; • resolving any dosing issues or limitations, including those raised by the FDA or other regulatory authorities; • inability to reach agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • slower than expected rates of patient recruitment or failure to recruit suitable patients to participate in a trial; • failure to add a sufficient number of clinical trial sites; • unanticipated impact from changes in or modifications to protocols or clinical trial design, including those that may be required by the FDA or other regulatory authorities; • inability or unwillingness of clinical investigators or study participants to follow our clinical and other applicable protocols or applicable regulatory requirements; • an institutional review board or IRB, refusing to approve, suspending, or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trial; 39 Table of Contents • premature discontinuation of study participants from clinical trials or missing data at a level that impacts study integrity; • failure to manufacture or release sufficient quantities of our product candidate or placebo or failure to obtain sufficient quantities of active comparator medications for our clinical trials, if applicable, that in each case meet our and global quality standards for use in clinical trials; • inability to monitor patients adequately during or after treatment; or • inappropriate unblinding of trial results.
Biggest changeThe commencement and completion of clinical trials may be delayed by several factors, including: • failure to obtain regulatory authorization to commence a clinical trial or reach a consensus with regulatory authorities regarding the design or implementation of our studies; • unforeseen safety issues or subjects experiencing severe or unexpected AEs; • continuation of previously identified safety issues, despite our program-wide safety strategy to characterize the safety profile of batoclimab in response to the previously reported change in albumin and lipids; • occurrence of AEs in trials of the same class of agents conducted by other sponsors or AEs reported by anti-FcRn product candidates developed by others; • lack of effectiveness during clinical trials; • resolving any dosing issues or limitations, including those raised by the FDA or other foreign regulatory authorities; • inability to reach agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • slower than expected rates of patient recruitment or failure to recruit suitable patients to participate in a trial; • failure to add a sufficient number of clinical trial sites; • unanticipated impact from changes in or modifications to protocols or clinical trial design, including those that may be required by the FDA or other foreign regulatory authorities; • inability or unwillingness of clinical investigators or study participants to follow our clinical and other applicable protocols or applicable regulatory requirements; • an institutional review board (“IRB”), refusing to approve, suspending, or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trial; • ethics committees issuing negative opinions regarding a clinical trial or requiring substantial modifications of a proposed clinical trial; • premature discontinuation of study participants from clinical trials or missing data at a level that impacts study integrity; • failure to manufacture or release sufficient quantities of our product candidates or placebo or failure to obtain sufficient quantities of active comparator medications for our clinical trials, if applicable, that in each case meet our and global quality standards for use in clinical trials; • inability to monitor patients adequately during or after treatment; or • inappropriate unblinding of trial results. 48 Table of Contents In addition, we, the FDA or another foreign regulatory authority may suspend our clinical trials in an entire country at any time, or an IRB may suspend its clinical trial sites within any country, if it appears that we or our collaborators are failing to conduct a trial in accordance with regulatory requirements, including good clinical practice (“GCP”), or that we are exposing participants to unacceptable health risks, or if the FDA or other foreign regulatory authority, as the case may be, finds deficiencies in our investigational new drug application (“IND”) or equivalent applications for other countries or the manner in which the clinical trials are conducted.
Many geographic regions have imposed, or in the future may impose or re-impose, “shelter-in-place” orders, quarantines or similar orders or restrictions to control the spread of COVID-19 and its variants. Our headquarters is located in New York City, we have business operations in North Carolina and our contract manufacturers are located in the U.S. and in South Korea.
Many geographic regions imposed, or in the future may impose or re-impose, “shelter-in-place” orders, quarantines or similar orders or restrictions to control the spread of COVID-19 and its variants. Our headquarters is located in New York City, we have business operations in North Carolina and our contract manufacturers are located in the U.S. and in South Korea.
Separately, in response to the COVID-19 pandemic, the FDA adopted a risk-based approach to the inspection of foreign and domestic manufacturing facilities and similar restrictions. The use of alternative regulatory tools may delay FDA or regulatory authority actions.
Separately, in response to the COVID-19 pandemic, the FDA adopted a risk-based approach to the inspection of foreign and domestic manufacturing facilities and similar restrictions. The use of alternative regulatory tools may delay FDA or foreign regulatory authority actions.
Also, the patent term may be extended for a period of time to compensate for at least a portion of the time a product candidate was undergoing FDA regulatory review. However, the life of a patent and the protection it affords is limited.
Also, the patent term may be extended for a period of time to compensate for at least a portion of the time a product candidate was undergoing FDA regulatory review. However, the life of a patent and the protection it affords is limited.
We cannot guarantee that any of our or our licensors’ patent searches or analyses, including the identification of relevant patents, the scope of patent claims or the expiration of relevant patents are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the U.S. and abroad that is or may be relevant to or necessary for the commercialization of our product candidate or any future product candidates in any jurisdiction.
We cannot guarantee that any of our or our licensors’ patent searches or analyses, including the identification of relevant patents, the scope of patent claims or the expiration of relevant patents are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the U.S. and abroad that is or may be relevant to or necessary for the commercialization of our product candidates or any future product candidates in any jurisdiction.
Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace, including compromising our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties or enter into development collaborations that would help us commercialize our product candidate or any future product candidates, if approved.
Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace, including compromising our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties or enter into development collaborations that would help us commercialize our product candidates or any future product candidates, if approved.
Our future funding requirements, both near- and long-term, will depend on many factors, including, but not limited to: • the timing, progress, costs and results of our clinical trials for batoclimab; • the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities; • the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; • the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against us or any of our current or future product candidates; • the cost of future product candidates or technologies that we may acquire or in-license; • the effect of competing market developments; • the cost and timing of completion of commercial-scale and other manufacturing activities; • the cost of establishing sales, marketing and distribution capabilities for batoclimab or any future product candidate in regions where we choose to commercialize such product candidate on our own; and • the initiation, progress, timing and results of our commercialization of our product candidate, if approved for commercial sale.
Our future funding requirements, both near- and long-term, will depend on many factors, including, but not limited to: • the timing, progress, costs and results of our clinical trials for batoclimab and IMVT-1402; • the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities; • the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; • the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against us or any of our current or future product candidates; • the cost of future product candidates or technologies that we may acquire or in-license; • the effect of competing market developments; • the cost and timing of completion of commercial-scale and other manufacturing activities; • the cost of establishing sales, marketing and distribution capabilities for batoclimab, IMVT-1402 or any future product candidate in regions where we choose to commercialize such product candidate, if approved, on our own; and • the initiation, progress, timing and results of our commercialization of our product candidates, if approved for commercial sale.
Other companies may also design around our patents. Third parties may have blocking patents that could prevent us from marketing our product candidate, if approved, or practicing our own patented technology. Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product candidate while under patent protection could be reduced.
Other companies may also design around our patents. Third parties may have blocking patents that could prevent us from marketing our product candidates, if approved, or practicing our own patented technology. Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product candidate while under patent protection could be reduced.
Further, our reliance on third-party manufacturers entails risks, including: • inability to meet our product specifications and quality requirements consistently; • delay or inability to procure or expand sufficient manufacturing capacity; • manufacturing and product quality issues related to scale-up of manufacturing, which can be difficult for a biologic product; • costs and validation of new equipment and facilities required for scale-up; • failure to comply with applicable laws, regulations and standards, including cGMP and similar foreign standards; • deficient or improper record-keeping; • inability to negotiate manufacturing agreements with third parties under commercially reasonable terms; • potential disputes with third parties that might delay work under third-party contracts; • termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us; • reliance on a limited number of sources, and in some cases, single sources for product components, such that if we are unable to secure a sufficient supply of these product components, we will be unable to manufacture and sell any product candidate, if approved, in a timely fashion, in sufficient quantities or under acceptable terms; • lack of qualified backup suppliers for those components that are currently purchased from a sole or single source supplier; • operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier or other regulatory sanctions related to the manufacture of another company’s products; • carrier disruptions or increased costs that are beyond our control; and • failure to deliver our products under specified storage conditions and in a timely manner.
Further, our reliance on third-party manufacturers entails risks, including: • inability to meet our product specifications and quality requirements consistently; • delay or inability to procure or expand sufficient manufacturing capacity; • manufacturing and product quality issues related to scale-up of manufacturing, which can be difficult for a biologic product; • costs and validation of new equipment and facilities required for scale-up; • failure to comply with applicable laws, regulations and standards, including cGMP and similar foreign standards; • deficient or improper record-keeping; • inability to negotiate manufacturing agreements with third parties under commercially reasonable terms; 77 Table of Contents • potential disputes with third parties that might delay work under third-party contracts; • termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us; • reliance on a limited number of sources, and in some cases, single sources for product components, such that if we are unable to secure a sufficient supply of these product components, we will be unable to manufacture and sell any product candidate, if approved, in a timely fashion, in sufficient quantities or under acceptable terms; • lack of qualified backup suppliers for those components that are currently purchased from a sole or single source supplier; • operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier or other regulatory sanctions related to the manufacture of another company’s products; • carrier disruptions or increased costs that are beyond our control; and • failure to deliver our products under specified storage conditions and in a timely manner.
In addition, the regulation of data transfers between the EU and U.K. remains subject to post-Brexit uncertainty. On June 28, 2021, the European Commission issued an adequacy decision under the GDPR which allows transfers of personal information from the EEA to the U.K. to continue without restriction for a period of four years ending June 27, 2025.
In addition, the regulation of data transfers between the EEA and U.K. remains subject to post-Brexit uncertainty. On June 28, 2021, the European Commission issued an adequacy decision under the GDPR which allows transfers of personal information from the EEA to the U.K. to continue without restriction for a period of four years ending June 27, 2025.
As previously disclosed, we voluntarily paused dosing in our early phase clinical studies to evaluate batoclimab-induced elevations in total cholesterol and LDL levels observed in some trial subjects. Our failure to successfully complete our clinical trials of batoclimab and to demonstrate the efficacy and safety necessary to obtain regulatory approval to market batoclimab would significantly harm our business.
As previously disclosed, we voluntarily paused dosing in our early phase clinical studies of batoclimab to evaluate treatment-induced elevations in total cholesterol and LDL levels observed in some trial subjects. Our failure to successfully complete our clinical trials of batoclimab and to demonstrate the efficacy and safety necessary to obtain regulatory approval to market batoclimab would significantly harm our business.
Additionally, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our product candidate or any future product candidates, including the use thereof, provided such pending patent applications result in issued patents, our ability to develop and market our product candidate or any future product candidates can be adversely affected in jurisdictions where such patents issue.
Additionally, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our product candidates or any future product candidates, including the use thereof, provided such pending patent applications result in issued patents, our ability to develop and market our product candidates or any future product candidates can be adversely affected in jurisdictions where such patents issue.
To compete successfully in this market, we will have to demonstrate that the relative cost, safety and efficacy of our product, if approved, provide an attractive alternative to existing and other new therapies to gain a share of some patients’ discretionary budgets and to gain physicians’ attention within their clinical practices.
To compete successfully in this market, we will have to demonstrate that the relative cost, safety and efficacy of our product candidates, if approved, provide an attractive alternative to existing and other new therapies to gain a share of some patients’ discretionary budgets and to gain physicians’ attention within their clinical practices.
If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of our product candidate, any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents or until such patents expire.
If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of our product candidates, any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents or until such patents expire.
Our Certificate of Incorporation and Bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights and preferences determined by our board of directors that may be senior to our common stock; • specify that the holder of our Series A preferred stock, RSL, has the right to appoint a certain number of Series A Preferred Directors to our board of directors; • require that, from and after such time as we are no longer a “controlled company” within the meaning of Nasdaq rules, any action to be taken by our holders of common stock be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by the chairperson of our board of directors, our chief executive officer or our board of directors; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; 90 Table of Contents • provide that, subject to the rights of our Series A preferred stockholder, our directors may be removed only upon the vote of at least 66 2/3% of our outstanding shares of voting stock; • require the approval of our board of directors or, from and after such time as we are no longer a “controlled company” within the meaning of Nasdaq rules, the holders of at least 66 2/3% of our outstanding shares of voting stock to amend our Bylaws and certain provisions of our Certificate of Incorporation; • provide that the number of directors is set at seven and may only be changed by resolution of the board of directors, including a majority of Series A Preferred Directors then serving; • prohibit cumulative voting in the election of directors; and • provide that, subject to the rights of our Series A preferred stockholder, vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum.
Our Certificate of Incorporation and Bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights and preferences determined by our board of directors that may be senior to our common stock; • specify that the holder of our Series A preferred stock, RSL, has the right to appoint a certain number of Series A Preferred Directors to our board of directors; • require that, from and after such time as we are no longer a “controlled company” within the meaning of Nasdaq rules, any action to be taken by our holders of common stock be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by the chairperson of our board of directors, our chief executive officer or our board of directors; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • provide that, subject to the rights of our Series A preferred stockholder, our directors may be removed only upon the vote of at least 66 2/3% of our outstanding shares of voting stock; • require the approval of our board of directors or, from and after such time as we are no longer a “controlled company” within the meaning of Nasdaq rules, the holders of at least 66 2/3% of our outstanding shares of voting stock to amend our Bylaws and certain provisions of our Certificate of Incorporation; • provide that the number of directors is set at seven and may only be changed by resolution of the board of directors, including a majority of Series A Preferred Directors then serving; • prohibit cumulative voting in the election of directors; and • provide that, subject to the rights of our Series A preferred stockholder, vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum.
Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA or other regulatory authorities.
Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA or other foreign regulatory authorities.
The market price of shares of our common stock has been and is likely to continue to be highly volatile and may be subject to wide fluctuations in response to a variety of factors, including the following: • results of clinical trials for batoclimab or any future product candidate or those of our competitors; • sales of shares of our common stock by us or sales or purchases of our common stock by our stockholders in the future, including RSL; • any delay in the commencement, enrollment and ultimate completion of our clinical trials; • any delay in filing a BLA or similar application for batoclimab or any future product candidate and any adverse development or perceived adverse development with respect to the FDA or other regulatory authority’s review of that BLA or similar application, as the case may be; • failure to successfully develop and commercialize batoclimab or any future product candidate; • inability to obtain additional funding; • regulatory or legal developments in the U.S. or other countries or jurisdictions applicable to batoclimab or any future product candidate; • adverse regulatory decisions; • changes in the structure of healthcare payment systems; • inability to obtain adequate product supply for batoclimab or any future product candidate or the inability to do so at acceptable prices; • introduction of new products, services or technologies by our competitors; • failure to meet or exceed financial projections we provide to the public; • failure to meet or exceed the estimates and projections of the investment community; • changes in the market valuations of similar companies; • market conditions in the pharmaceutical and biotechnology sectors and the issuance of new or changed securities analysts’ reports or recommendations; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • variations in our financial results or the financial results of companies that are perceived to be similar to us; • changes in estimates of financial results or investment recommendations by securities analysts; • significant lawsuits, including patent or stockholder litigation and disputes or other developments relating to our proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • additions or departures of key scientific or management personnel; • short sales of shares of our common stock; • sales of a substantial number of shares of shares of our common stock in the public market or the perception in the market that the holders of a large number of shares intend to sell shares; • sales or purchases of shares of our common stock by our directors or officers subject to Section 16 of the Exchange Act; • negative coverage in the media or analyst reports, whether accurate or not; • issuance of subpoenas or investigative demands or the public fact of an investigation by a government agency, whether meritorious or not; • the size of our public float; • trading liquidity of shares of our common stock; • investors’ general perception of our company and our business; • general economic, industry and market conditions; and • the other factors described in this “Risk Factors” section. 86 Table of Contents In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock.
The market price of shares of our common stock has been and is likely to continue to be highly volatile and may be subject to wide fluctuations in response to a variety of factors, including the following: • results of clinical trials for batoclimab, IMVT-1402 or any future product candidate or those of our competitors; • sales of shares of our common stock by us or sales or purchases of our common stock by our stockholders in the future, including RSL; • any delay in the commencement, enrollment and ultimate completion of our clinical trials; • any delay in filing a BLA or similar application for batoclimab, IMVT-1402 or any future product candidate and any adverse development or perceived adverse development with respect to the FDA or other foreign regulatory authority’s review of that BLA or similar application, as the case may be; • failure to successfully develop and commercialize batoclimab, IMVT-1402 or any future product candidate; • inability to obtain additional funding; • regulatory or legal developments in the U.S. or other countries or jurisdictions applicable to batoclimab or any future product candidate; • adverse regulatory decisions; • changes in the structure of healthcare payment systems; • inability to obtain adequate product supply for batoclimab, IMVT-1402 or any future product candidate or the inability to do so at acceptable prices; • introduction of new products, services or technologies by our competitors; • failure to meet or exceed financial projections we provide to the public; • failure to meet or exceed the estimates and projections of the investment community; • changes in the market valuations of similar companies; • market conditions in the pharmaceutical and biotechnology sectors and the issuance of new or changed securities analysts’ reports or recommendations; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • variations in our financial results or the financial results of companies that are perceived to be similar to us; • changes in estimates of financial results or investment recommendations by securities analysts; • significant lawsuits, including patent or stockholder litigation and disputes or other developments relating to our proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • additions or departures of key scientific or management personnel; • short sales of shares of our common stock; • sales of a substantial number of shares of shares of our common stock in the public market or the perception in the market that the holders of a large number of shares intend to sell shares; • sales or purchases of shares of our common stock by our directors or officers subject to Section 16 of the Exchange Act; • negative coverage in the media or analyst reports, whether accurate or not; • issuance of subpoenas or investigative demands or the public fact of an investigation by a government agency, whether meritorious or not; • the size of our public float; • trading liquidity of shares of our common stock; • investors’ general perception of our company and our business; • general economic, industry and market conditions; and • the other factors described in this “Risk Factors” section. 93 Table of Contents In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock.
In addition, U.S. patent applications filed before November 29, 2000 and certain U.S. patent applications filed after that date that will not be filed outside the U.S. remain confidential until patents issue. Therefore, patent applications covering our product candidate or any future product candidates could have been filed by others without our knowledge.
In addition, U.S. patent applications filed before November 29, 2000 and certain U.S. patent applications filed after that date that will not be filed outside the U.S. remain confidential until patents issue. Therefore, patent applications covering our product candidates or any future product candidates could have been filed by others without our knowledge.
Rituximab (Roche), a monoclonal antibody that binds to an antigen specific to antibody-producing B cells, may also be used as a treatment for TED, WAIHA and other IgG-mediated autoimmune diseases. Johnson & Johnson is developing its hypersialylated IVIg, M254, in a variety of autoimmune indications.
Rituximab (Roche), a monoclonal antibody that binds to an antigen specific to antibody-producing B cells, may also be used as a treatment for TED and other IgG-mediated autoimmune diseases. Johnson & Johnson is developing its hypersialylated IVIg, M254, in a variety of autoimmune indications.
Further, competitors who are developing product candidates in the autoimmune disease field, including IgG-mediated autoimmune indications, or that target the same indications or use the same mechanism of action as us may experience problems with their product candidates that could suggest problems with our product candidate that would potentially harm our business.
Further, competitors who are developing product candidates in the autoimmune disease field, including IgG-mediated autoimmune indications, or that target the same indications or use the same mechanism of action as us may experience problems with their product candidates that could suggest problems with our product candidates that would potentially harm our business.
Despite our efforts, there is a risk that neither we nor our independent registered public accounting firm, if an auditor attestation regarding our internal controls over financial reporting is applicable, will be able to conclude that our internal control over financial reporting is effective as required by Section 404. 88 Table of Contents If we are unable to conclude that our internal controls over financial reporting are effective, or if our independent registered public accounting firm, if applicable, determines we have a material weakness or significant deficiency in our internal controls over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of shares of our common stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.
Despite our efforts, there is a risk that neither we nor our independent registered public accounting firm, if an auditor attestation regarding our internal controls over financial reporting is applicable, will be able to conclude that our internal control over financial reporting is effective as required by Section 404. 95 Table of Contents If we are unable to conclude that our internal controls over financial reporting are effective, or if our independent registered public accounting firm, if applicable, determines we have a material weakness or significant deficiency in our internal controls over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of shares of our common stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.
For example, any failure by such parties to adequately report safety signals to us in a timely manner from any such trials may also affect the approvability of our product candidate or cause delays and disruptions for the approval of our product candidate, if at all.
For example, any failure by such parties to adequately report safety signals to us in a timely manner from any such trials may also affect the approvability of our product candidates or cause delays and disruptions for the approval of our product candidate, if at all.
Our determination of the expiration date of any patent in the U.S. or abroad that we consider relevant may be incorrect, and our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our product candidate or any future product candidates, if approved.
Our determination of the expiration date of any patent in the U.S. or abroad that we consider relevant may be incorrect, and our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our product candidates or any future product candidates, if approved.
For example, the Tax Cuts and Jobs Act of 2017 ("TCJA") was enacted, which included a provision that repealed, effective January 1, 2019, the tax-based shared responsibility payment imposed by the Affordable Care Act on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” In addition, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the Affordable Care Act-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminated the health insurer tax.
For example, the Tax Cuts and Jobs Act of 2017 (“TCJA”) was enacted, which included a provision that repealed, effective January 1, 2019, the tax-based shared responsibility payment imposed by the Affordable Care Act on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” In addition, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the Affordable Care Act-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminated the health insurer tax.
If our product candidate or any future product candidate is approved for commercialization outside of the U.S., we expect that we will be subject to additional risks related to entering into international business relationships, including: • different post-approval regulatory requirements for drug approvals and rules governing drug commercialization in foreign countries; • reduced or no protection of intellectual property rights; • unexpected changes in tariffs, trade barriers and regulatory requirements; • workforce uncertainty, economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign tax, reimbursement, pricing and insurance regimes; • any foreign partners or collaborators not fulfilling their respective regulatory reporting requirements and any foreign regulatory authorities taking actions with respect to such failures, which would be reportable to the FDA; • any foreign partners or collaborators not informing us of any new post-marketing safety signals in a timely manner; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • potential noncompliance with the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the United Kingdom Bribery Act 2010 (the “U.K.
If our product candidates or any future product candidate is approved for commercialization outside of the U.S., we expect that we will be subject to additional risks related to entering into international business relationships, including: • different post-approval regulatory requirements for drug approvals and rules governing drug commercialization in foreign countries; • reduced or no protection of intellectual property rights; • unexpected changes in tariffs, trade barriers and regulatory requirements; • workforce uncertainty, economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign tax, reimbursement, pricing and insurance regimes; • any foreign partners or collaborators not fulfilling their respective regulatory reporting requirements and any foreign regulatory authorities taking actions with respect to such failures, which would be reportable to the FDA; • any foreign partners or collaborators not informing us of any new post-marketing safety signals in a timely manner; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; 59 Table of Contents • potential noncompliance with the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the United Kingdom Bribery Act 2010 (the “U.K.
Moreover, disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our product candidate, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights under our third-party relationships; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us as well as our partners; and • the priority of invention of patented technology.
Moreover, disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our product candidates, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights under our third-party relationships; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us as well as our partners; and • the priority of invention of patented technology.
Violations of the federal Anti-Kickback Statute also may constitute a false or fraudulent claim for purposes of the False Claims Act ("FCA"); • the federal criminal and civil false claims laws, including the FCA, through civil whistleblower or “qui tam” actions, and the Civil Monetary Penalties Law, which impose criminal and civil penalties against individuals or entities for, among other things, causing false or fraudulent claims to be presented for payment to the federal government; 51 Table of Contents • the 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 making false or fraudulent statements relating to healthcare matters; 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 to have committed a violation; • the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare & Medicaid Services ("CMS"), information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually the ownership and investment interests held by such physicians and their immediate family members; • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to our business practices; • 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, state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures or drug pricing and state and local laws that require the registration of pharmaceutical sales representatives; and • federal, state and foreign laws governing the privacy and security of personal information, including health information, such as HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act ("HITECH"), and their implementing regulations, which may require us to, among other data protection measures, provide notices, obtain individual consents to use and disclose information, give individuals rights with respect to their information and keep the information secure.
Violations of the federal Anti-Kickback Statute also may constitute a false or fraudulent claim for purposes of the False Claims Act (“FCA”); • the federal criminal and civil false claims laws, including the FCA, through civil whistleblower or “qui tam” actions, and the Civil Monetary Penalties Law, which impose criminal and civil penalties against individuals or entities for, among other things, causing false or fraudulent claims to be presented for payment to the federal government; • the 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 making false or fraudulent statements relating to healthcare matters; 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 to have committed a violation; • the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare & Medicaid Services ("CMS"), information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually the ownership and investment interests held by such physicians and their immediate family members; • 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, state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures or drug pricing and state and local laws that require the registration of pharmaceutical sales representatives; • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to our business practices; and • federal, state and foreign laws governing the privacy and security of personal information, including health information, such as HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their implementing regulations, which may require us to, among other data protection measures, provide notices, obtain individual consents to use and disclose information, give individuals rights with respect to their information and keep the information secure.
In addition, intellectual property litigation, regardless of its outcome, may cause negative publicity, adversely impact prospective customers, cause product shipment delays or prohibit us from manufacturing, importing, marketing or otherwise commercializing our product candidate or any future product candidates.
In addition, intellectual property litigation, regardless of its outcome, may cause negative publicity, adversely impact prospective customers, cause product shipment delays or prohibit us from manufacturing, importing, marketing or otherwise commercializing our product candidates or any future product candidates.
Other product candidates in development for the treatment of MG include zilucoplan (UCB), a peptide inhibitor of C5, and inebilizumab (Horizon Therapeutics), a CD19-targeted humanized monoclonal antibody, both of which are currently in Phase 3 trials.
Other product candidates in development for the treatment of MG include zilucoplan (UCB), a peptide inhibitor of C5, and inebilizumab (Horizon Therapeutics), a CD19-targeted humanized monoclonal antibody, both of which are currently in Phase 3 development.
There are numerous federal, state, local and foreign laws, regulations and guidance regarding privacy, data protection, information security and Processing (“Data Protection Laws”), the number and scope of which is changing, subject to differing applications and interpretations, and which may be inconsistent among jurisdictions, or in conflict with other rules, laws or Data Protection Obligations (as defined below). 64 Table of Contents For example, U.S. states have increasingly begun to introduce comprehensive privacy legislation.
There are numerous federal, state, local and foreign laws, regulations and guidance regarding privacy, data protection, information security and Processing (“Data Protection Laws”), the number and scope of which is changing, subject to differing applications and interpretations, and which may be inconsistent among jurisdictions, or in conflict with other rules, laws or Data Protection Obligations (as defined below). 71 Table of Contents For example, U.S. states have increasingly begun to introduce comprehensive privacy legislation.
In November 2021, we entered into an agreement with Samsung Biologics Co., Ltd. to manufacture and supply us with batoclimab drug substance for commercial sale and perform other manufacturing-related services with respect to batoclimab.
For example, in November 2021, we entered into an agreement with Samsung Biologics Co., Ltd. to manufacture and supply us with batoclimab drug substance for commercial sale and perform other manufacturing-related services with respect to batoclimab.
Even if patents do successfully issue based on our patent applications and even if such patents cover our product candidate, uses of our product candidate or other aspects related to our product candidate, third parties may challenge their validity, ownership, enforceability or scope, which may result in such patents being narrowed, invalidated or held unenforceable or circumvented, any of which could limit our ability to prevent competitors and other third parties from developing and marketing similar products or limit the length of terms of patent protection we may have for our product candidate, if approved, and technologies.
Even if patents do successfully issue based on our patent applications and even if such patents cover our product candidates, uses of our product candidates or other aspects related to our product candidates, third parties may challenge their validity, ownership, enforceability or scope, which may result in such patents being narrowed, invalidated or held unenforceable or circumvented, any of which could limit our ability to prevent competitors and other third parties from developing and marketing similar products or limit the length of terms of patent protection we may have for our product candidates, if approved, and technologies.
These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings.
These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter party review, and derivation proceedings.
The following examples are illustrative: • others may be able to make formulations or compositions that are the same as or similar to our product candidate batoclimab, or future product candidates but that are not covered by the claims of the patents that we own or have licensed; • others may be able to make a product that is similar to our product candidate and not covered by the patents that we exclusively licensed and have the right to enforce; • we, our licensor or any collaborators might not have been the first to make or reduce to practice the inventions covered by the issued patents or pending patent applications that we own or have exclusively licensed; • we, our licensor or any collaborators might not have been the first to file patent applications covering certain of our or our licensor’s inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • patents that we own or have exclusively licensed may not provide us with any competitive advantage or may be held invalid or unenforceable as a result of legal challenges; • our competitors might conduct research and development activities in the U.S. and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; • third parties performing manufacturing or testing for us using our product candidate or technologies could use the intellectual property of others without obtaining a proper license; • parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights over that intellectual property; • we may not develop or in-license additional proprietary technologies that are patentable; 84 Table of Contents • we may not be able to obtain and maintain necessary licenses on commercially reasonable terms or at all; and • the patents of others may have an adverse effect on our business.
The following examples are illustrative: • others may be able to make formulations or compositions that are the same as or similar to batoclimab, IMVT-1402 or future product candidates but that are not covered by the claims of the patents that we own or have licensed; • others may be able to make a product that is similar to our product candidates and not covered by the patents that we exclusively licensed and have the right to enforce; • we, our licensor or any collaborators might not have been the first to make or reduce to practice the inventions covered by the issued patents or pending patent applications that we own or have exclusively licensed; • we, our licensor or any collaborators might not have been the first to file patent applications covering certain of our or our licensor’s inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • patents that we own or have exclusively licensed may not provide us with any competitive advantage or may be held invalid or unenforceable as a result of legal challenges; 91 Table of Contents • our competitors might conduct research and development activities in the U.S. and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; • third parties performing manufacturing or testing for us using our product candidates or technologies could use the intellectual property of others without obtaining a proper license; • parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights over that intellectual property; • we may not develop or in-license additional proprietary technologies that are patentable; • we may not be able to obtain and maintain necessary licenses on commercially reasonable terms or at all; and • the patents of others may have an adverse effect on our business.
Failure by our CROs to properly execute study protocols in accordance with applicable law could also create product liability and healthcare regulatory risks for us as sponsors of those studies.
Failure by our CROs to properly execute study protocols in accordance with applicable law could also create product liability and regulatory risks for us as sponsors of those studies.
We may incorrectly determine that our product candidate is not covered by a third-party patent or may incorrectly predict whether a third-party’s pending application will issue with claims of relevant scope.
We may incorrectly determine that our applicable product candidate is not covered by a third-party patent or may incorrectly predict whether a third-party’s pending application will issue with claims of relevant scope.
If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline. 87 Table of Contents Because we do not anticipate paying any cash dividends on shares of our common stock in the foreseeable future, capital appreciation, if any, would be your sole source of gain.
If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline. 94 Table of Contents Because we do not anticipate paying any cash dividends on shares of our common stock in the foreseeable future, capital appreciation, if any, would be your sole source of gain.
Doing business internationally involves a number of risks, including but not limited to: • multiple conflicting and changing laws and regulations such as tax laws, export and import restrictions, employment laws, anti-bribery and anti-corruption laws, regulatory requirements and other governmental approvals, permits and licenses; • failure by us or our collaborators to obtain appropriate licenses or regulatory approvals for the sale or use of our product candidate, if approved, in various countries; • delays or interruptions in the supply of clinical trial materials resulting from any events affecting raw material supply or manufacturing capabilities abroad, including those that may result from the ongoing COVID-19 pandemic; • difficulties in managing foreign operations; • complexities associated with managing multiple payor-reimbursement regimes or self-pay systems; • financial risks, such as longer payment cycles, difficulty enforcing contracts and collecting accounts receivable and exposure to foreign currency exchange rate fluctuations; • reduced protection for intellectual property rights; • natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, including the COVID-19 pandemic and related shelter-in-place orders, travel, social distancing and quarantine policies, boycotts, curtailment of trade and other business restrictions; and • failure to comply with the FCPA, including its books and records provisions and its anti-bribery provisions, the U.K.
Doing business internationally involves a number of risks, including but not limited to: • multiple conflicting and changing laws and regulations such as tax laws, export and import restrictions, employment laws, anti-bribery and anti-corruption laws, regulatory requirements and other governmental approvals, permits and licenses; • failure by us or our collaborators to obtain appropriate licenses or regulatory approvals for the sale or use of our product candidate, if approved, in various countries; • delays or interruptions in the supply of clinical trial materials resulting from any events affecting raw material supply or manufacturing capabilities abroad, including those resulting from the COVID-19 pandemic; • difficulties in managing foreign operations; • complexities associated with managing multiple payor-reimbursement regimes or self-pay systems; • financial risks, such as longer payment cycles, difficulty enforcing contracts and collecting accounts receivable and exposure to foreign currency exchange rate fluctuations; • reduced protection for intellectual property rights; • natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, including pandemics and related shelter-in-place orders, travel, social distancing and quarantine policies, boycotts, curtailment of trade and other business restrictions; and • failure to comply with the FCPA, including its books and records provisions and its anti-bribery provisions, the U.K.
If our or our affiliates’ employees, independent contractors, principal investigators, consultants, commercial collaborators, service providers or other vendors are alleged or found to be in violation of any such regulatory standards or requirements or become subject to a corporate integrity agreement or similar agreement and curtailment of our operations, it could have a significant impact on our business and financial results, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, suspension or delay in our clinical trials, possible exclusion from participation in Medicare, Medicaid and other federal and state healthcare programs, FDA debarment, contractual damages, reputational harm, diminished profits and future earnings and additional reporting requirements and oversight, any of which could adversely affect our ability to operate our business and our results of operations. 63 Table of Contents International expansion of our business exposes us to business, legal, regulatory, political, operational, financial and economic risks associated with conducting business outside of the U.S.
If our or our affiliates’ employees, independent contractors, principal investigators, consultants, commercial collaborators, service providers or other vendors are alleged or found to be in violation of any such regulatory standards or requirements or become subject to a corporate integrity agreement or similar agreement and curtailment of our operations, it could have a significant impact on our business and financial results, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, suspension or delay in our clinical trials, possible exclusion from participation in Medicare, Medicaid and other federal and state healthcare programs or comparable foreign programs, FDA debarment, contractual damages, reputational harm, diminished profits and future earnings and additional reporting requirements and oversight, any of which could adversely affect our ability to operate our business and our results of operations. 70 Table of Contents International expansion of our business exposes us to business, legal, regulatory, political, operational, financial and economic risks associated with conducting business outside of the U.S.
The FDA or other regulatory authorities may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected the integrity of the study.
The FDA or other foreign regulatory authorities may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected the integrity of the study.
Batoclimab and any future product candidate that we may develop, as well as the activities associated with their development and commercialization, including their design, research, testing, manufacture, safety, efficacy, recordkeeping, labeling, packaging, storage, approval, advertising, promotion, sale and distribution are subject to comprehensive regulation by the FDA and other regulatory agencies in the U.S. and by similar regulatory authorities outside the U.S.
Batoclimab, IMVT-1402 and any future product candidate that we may develop, as well as the activities associated with their development and commercialization, including their design, research, testing, manufacture, safety, efficacy, recordkeeping, labeling, packaging, storage, approval, advertising, promotion, sale and distribution are subject to comprehensive regulation by the FDA and other regulatory agencies in the U.S. and by similar regulatory authorities outside the U.S.
If tax authorities were to allocate income to a higher tax jurisdiction, subject our income to double taxation or assess interest and penalties, it would increase our consolidated tax liability, which could adversely affect our financial condition, results of operations and cash flows. 89 Table of Contents Significant judgment is required in evaluating our tax positions and determining our provision for income taxes.
If tax authorities were to allocate income to a higher tax jurisdiction, subject our income to double taxation or assess interest and penalties, it would increase our consolidated tax liability, which could adversely affect our financial condition, results of operations and cash flows. 96 Table of Contents Significant judgment is required in evaluating our tax positions and determining our provision for income taxes.
Although the FDA and other regulatory agencies do not regulate a physician’s choice of drug treatment made in the physician’s independent medical judgment, regulatory authorities impose stringent restrictions on manufacturers’ communications regarding off-label use, and if we do not market our products for their approved indications, we may be subject to enforcement action for off-label marketing.
Although the FDA and other foreign regulatory authorities do not regulate a physician’s choice of drug treatment made in the physician’s independent medical judgment, regulatory authorities impose stringent restrictions on manufacturers’ communications regarding off-label use, and if we do not market our products for their approved indications, we may be subject to enforcement action for off-label marketing.
We expect to hire, either directly, or through any current or future subsidiaries of ours, additional employees for our managerial, finance and accounting, legal, clinical, scientific and engineering, regulatory, operational, manufacturing, medical affairs, business development and sales and marketing teams. 62 Table of Contents We may have difficulties identifying, hiring, integrating and retaining new personnel.
We expect to hire, either directly, or through any current or future subsidiaries of ours, additional employees for our managerial, finance and accounting, legal, clinical, scientific and engineering, regulatory, operational, manufacturing, medical affairs, business development and sales and marketing teams. 69 Table of Contents We may have difficulties identifying, hiring, integrating and retaining new personnel.
Misconduct by these parties could include intentional, reckless or negligent conduct or other unauthorized activities that violate the laws and regulations of the FDA or other similar regulatory bodies, including those laws that require the reporting of true, complete and accurate information to such regulatory bodies, manufacturing and the GCP or cGMP standards, federal, state and foreign healthcare fraud and abuse laws and data privacy or laws that require the true, complete and accurate reporting of financial information or data.
Misconduct by these parties could include intentional, reckless or negligent conduct or other unauthorized activities that violate the laws and regulations of the FDA or other similar regulatory authorities, including those laws that require the reporting of true, complete and accurate information to such regulatory authorities, manufacturing and the GCP or cGMP standards, federal, state and foreign healthcare fraud and abuse laws and data privacy or laws that require the true, complete and accurate reporting of financial information or data.
Such litigation or other proceedings to enforce or defend intellectual property rights are often very complex in nature, may be very expensive and time-consuming, may divert our management’s attention from our core business and may result in unfavorable results that could limit our ability to prevent third parties from competing with batoclimab or any future product candidates.
Such litigation or other proceedings to enforce or defend intellectual property rights are often very complex in nature, may be very expensive and time-consuming, may divert our management’s attention from our core business and may result in unfavorable results that could limit our ability to prevent third parties from competing with batoclimab, IMVT-1402 or any future product candidates.
We cannot provide you any assurance that we will submit a BLA for regulatory approval for our product candidate within our projected timeframes or whether any such application will be approved by the relevant regulatory authorities. Clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements.
We cannot provide you any assurance that we will submit a BLA for regulatory approval for our product candidates within our projected timeframes or whether any such application will be approved by the relevant regulatory authorities. Clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements.
The FDA or other regulatory authority may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized.
The FDA or other foreign regulatory authority may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized.
Some of these events could be the basis for FDA or other regulatory authority action, including injunction, recall, seizure or total or partial suspension of production.
Some of these events could be the basis for FDA or other foreign regulatory authority action, including injunction, recall, seizure or total or partial suspension of production.
Even if patents covering our product candidate are obtained, once the patent life has expired, we may be open to competition from competitive products, including generics or biosimilars. The patent family directed to the composition of matter of batoclimab has a natural projected expiration date in 2035 in the U.S. and in foreign jurisdictions.
Even if patents covering our product candidates are obtained, once the patent life has expired, we may be open to competition from competitive products, including generics or biosimilars. The patent family directed to the composition of matter of batoclimab has a natural projected expiration date in 2035 in the U.S. and in foreign jurisdictions.
If we do successfully obtain regulatory approval to market a product candidate, our revenue will be dependent upon, in part and among other things, the size of the markets in the territories for which we gain regulatory approval, the number of competitors in such markets, the accepted price for our product candidate, the reimbursement environment for our product candidate and whether we own the commercial rights for those territories.
If we do successfully obtain regulatory approval to market a product candidate, our revenue will be dependent upon, in part and among other things, the size of the markets in the territories for which we obtain regulatory approval, the number of competitors in such markets, the accepted price for our product candidates, the reimbursement environment for our product candidates and whether we own the commercial rights for those territories.
If a prolonged government shutdown occurs or if global health 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 an adverse effect on our business.
If a prolonged government shutdown occurs or if global health concerns prevent the FDA or other foreign 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 an adverse effect on our business.
If any of our patents expire or are challenged, invalidated, circumvented or otherwise limited by third parties prior to the commercialization of our product candidate and if we do not own or have exclusive rights to other enforceable patents protecting our product candidate, competitors and other third parties could market products that are substantially similar to ours and our business would suffer.
If any of our patents expire or are challenged, invalidated, circumvented or otherwise limited by third parties prior to the commercialization of our product candidates and if we do not own or have exclusive rights to other enforceable patents protecting our product candidates, competitors and other third parties could market products that are substantially similar to ours and our business would suffer.
Even if our clinical trials are completed as planned, we cannot be certain that their results will support our expectations for differentiation or the effectiveness or safety of our product candidate. The FDA has substantial discretion in the review and approval process and may disagree that our data support the differentiated claims we propose.
Even if our clinical trials are completed as planned, we cannot be certain that their results will support our expectations for differentiation or the effectiveness or safety of our product candidates. The FDA has substantial discretion in the review and approval process and may disagree that our data support the differentiated claims we propose.
If anti-drug antibodies reduce or neutralize the effectiveness of our product candidate, the continued clinical development or receipt of marketing approval for our product candidate could be delayed or prevented and, even if our product candidate is approved, its commercial success could be limited, any of which would impair our ability to generate revenue and continue operations.
If anti-drug antibodies reduce or neutralize the effectiveness of any of our product candidates, the continued clinical development or receipt of marketing approval for such product candidate could be delayed or prevented and, even if such product candidate is approved, its commercial success could be limited, any of which would impair our ability to generate revenue and continue operations.
Prior to obtaining approval to commercialize a product candidate in any jurisdiction, we or our collaborators must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory agencies, that such product candidate is safe and effective for its intended use.
Prior to obtaining approval to commercialize a product candidate in any jurisdiction, we or our collaborators must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidate is safe and effective for its intended use.
We may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidate because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our product candidate as having the requisite potential to demonstrate safety and efficacy.
We may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy.
We do not have any committed external source of funds. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of batoclimab and any future product candidates or potentially discontinue operations altogether.
We do not have any committed external source of funds. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of batoclimab, IMVT-1402 and any future product candidates or potentially discontinue operations altogether.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our future revenue streams, research programs or batoclimab or any future product candidate or grant licenses on terms that may not be favorable to us.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our future revenue streams, research programs or batoclimab, IMVT-1402 or any future product candidate or grant licenses on terms that may not be favorable to us.
A decision by the Court of Justice of the European Union (the Schrems II ruling) has invalidated the E.U.-U.S. Privacy Shield Framework, which was one of the primary mechanisms used by U.S. companies to import personal information from Europe. Similarly, the Swiss Federal Data Protection and Information Commissioner recently opined that the Swiss-U.S.
A decision by the Court of Justice of the European Union (CJEU) (the Schrems II ruling) has invalidated the E.U.-U.S. Privacy Shield Framework, which was one of the primary mechanisms used by U.S. companies to import personal information from Europe. Similarly, the Swiss Federal Data Protection and Information Commissioner opined that the Swiss-U.S.
Without patent protection for batoclimab or any future product candidates, we may be open to competition from generic versions of such products. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
Without patent protection for batoclimab, IMVT-1402 or any future product candidates, we may be open to competition from generic versions of such products. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
If we are not able to obtain patent term extension in the U.S. under the Hatch-Waxman Act and in foreign countries under similar legislation, thereby potentially extending the term of our marketing exclusivity for batoclimab or other product candidates that we may identify, our business may be harmed.
If we are not able to obtain patent term extension in the U.S. under the Hatch-Waxman Act and in foreign countries under similar legislation, thereby potentially extending the term of our marketing exclusivity for batoclimab, IMVT-1402 or other product candidates that we may identify, our business may be harmed.
Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidate. Defending these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business.
Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidates. Defending these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business.
In addition, regardless of merit or eventual outcome, product liability claims may result in, among other things: • impairment of our business reputation and significant negative media attention; • delay or termination of clinical trials, or withdrawal of participants from our clinical trials; • significant costs to defend related litigation; • distraction of management’s attention from our primary business; • substantial monetary awards to patients or other claimants; • inability to commercialize any product candidate, if approved; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • decreased demand for any product candidate, if approved; and • loss of revenue.
In addition, regardless of merit or eventual outcome, product liability claims may result in, among other things: • impairment of our business reputation and significant negative media attention; • delay or termination of clinical trials, or withdrawal of participants from our clinical trials; • significant costs to defend related litigation; • distraction of management’s attention from our primary business; 75 Table of Contents • substantial monetary awards to patients or other claimants; • inability to commercialize any product candidate, if approved; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • decreased demand for any product candidate, if approved; and • loss of revenue.
In addition to the safety, efficacy, manufacturing, and regulatory hurdles faced by our product candidate, batoclimab, the administration of proteins such as monoclonal antibodies, even those that are fully human in nature, including our product candidate, can cause an immune response, resulting in the creation of antibodies directed against the therapeutic protein.
In addition to the safety, efficacy, manufacturing, and regulatory hurdles faced by our product candidates, the administration of proteins such as monoclonal antibodies, even those that are fully human in nature, including our product candidate, can cause an immune response, resulting in the creation of antibodies directed against the therapeutic protein.
There have been, and continue to be, numerous executive, legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any product candidates for which we obtain marketing approval.
There have been, and continue to be, numerous executive, legislative and regulatory changes and proposed changes regarding the U.S. healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any product candidates for which we obtain marketing approval.
Any significant delay in the supply of batoclimab or the raw material components thereof, or in placebo controls for an ongoing clinical trial due to the need to replace a third-party manufacturer could considerably delay completion of our clinical trials, product testing and potential regulatory approval of batoclimab or any future product candidate.
Any significant delay in the supply of batoclimab, IMVT-1402 or the raw material components thereof, or in placebo controls for an ongoing clinical trial due to the need to replace a third-party manufacturer could considerably delay completion of our clinical trials, product testing and potential regulatory approval of batoclimab, IMVT-1402 or any future product candidate.
An adverse determination in any such submission, proceeding or litigation could reduce the scope of or invalidate our patent rights, allow third parties to commercialize batoclimab or any future product candidates and compete directly with us without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.
An adverse determination in any such submission, proceeding or litigation could reduce the scope of or invalidate our patent rights, allow third parties to commercialize batoclimab, IMVT-1402 or any future product candidates and compete directly with us without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.
Filing, prosecuting and defending patents on batoclimab or any future product candidates in all countries throughout the world would be prohibitively expensive and even in countries where we have sought protection for our intellectual property, such protection may be less extensive than that provided in the U.S.
Filing, prosecuting and defending patents on batoclimab, IMVT-1402 or any future product candidates in all countries throughout the world would be prohibitively expensive and even in countries where we have sought protection for our intellectual property, such protection may be less extensive than that provided in the U.S.
As the biotechnology and pharmaceutical industries expand and more patents are issued and as we gain greater visibility and market exposure as a public company, the risk increases that our product candidate or other business activities may be subject to claims of infringement of the patent and other proprietary rights of third parties.
As the biotechnology and pharmaceutical industries expand and more patents are issued and as we gain greater visibility and market exposure as a public company, the risk increases that our product candidates or other business activities may be subject to claims of infringement of the patent and other proprietary rights of third parties.
We cannot provide any assurances that third-party patents do not exist which might be enforced against our product candidate or any future product candidates, resulting in either an injunction prohibiting our sales or, with respect to our sales, an obligation on our part to pay royalties or other forms of compensation to third parties. 78 Table of Contents We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our product candidate or any future product candidates.
We cannot provide any assurances that third-party patents do not exist which might be enforced against our product candidates or any future product candidates, resulting in either an injunction prohibiting our sales or, with respect to our sales, an obligation on our part to pay royalties or other forms of compensation to third parties. 86 Table of Contents We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our product candidates or any future product candidates.
A number of companies in the pharmaceutical industry, including biotechnology companies, have suffered significant setbacks in, or the discontinuation of, clinical trials, even after promising results in earlier nonclinical studies or clinical trials. These setbacks have been caused by, among other things, nonclinical findings observed while clinical trials were underway and safety or efficacy observations in clinical trials.
A number of companies in the pharmaceutical industry, including biotechnology companies, have suffered significant setbacks in, or the discontinuation of, clinical trials, even after positive results in earlier nonclinical studies or clinical trials. These setbacks have been caused by, among other things, nonclinical findings observed while clinical trials were underway and safety or efficacy observations in clinical trials.
It is possible that we will not obtain patent term extension under the Hatch-Waxman Act for a U.S. patent covering batoclimab or other product candidates that we may identify even where that patent is eligible for patent term extension or if we obtain such an extension, it may be for a shorter period than we had sought.
It is possible that we will not obtain patent term extension under the Hatch-Waxman Act for a U.S. patent covering batoclimab, IMVT-1402 or other product candidates that we may identify even where that patent is eligible for patent term extension or if we obtain such an extension, it may be for a shorter period than we had sought.
Our goal is to maintain a robust quality management program which includes the following broad pillars of quality: • monitoring and assuring regulatory compliance for clinical trials, manufacturing and testing of good practice (“GxP”) products; • monitoring and providing oversight of all GxP suppliers (e.g., contract development manufacturing organizations and CROs); • establishing and maintaining an integrated, robust quality management system for clinical, manufacturing, supply chain and distribution operations; and • cultivating a proactive, preventative quality culture and employee and supplier training to ensure quality.
Our goal is to maintain a robust quality management program, which includes the following broad pillars of quality: • monitoring and assuring regulatory compliance for clinical trials, manufacturing and testing of good practice (“GxP”) products; • monitoring and providing oversight of all GxP suppliers (e.g., contract development manufacturing organizations and CROs); 55 Table of Contents • establishing and maintaining an integrated, robust quality management system for clinical, manufacturing, supply chain and distribution operations; and • cultivating a proactive, preventative quality culture and employee and supplier training to ensure quality.
Additionally, although U.K. privacy, data protection and information security law is designed to be consistent with the GDPR, uncertainty remains regarding how data transfers to and from the U.K. will be regulated notwithstanding Brexit. 65 Table of Contents In addition, the GDPR includes restrictions on cross-border data transfers.
Additionally, although U.K. privacy, data protection and information security law is designed to be consistent with the GDPR, uncertainty remains regarding how data transfers to and from the U.K. will be regulated notwithstanding Brexit. 72 Table of Contents In addition, the GDPR includes restrictions on cross-border data transfers.
Potential product liability lawsuits against us could cause us to incur substantial liabilities and limit commercialization of any products that we may develop. The use of batoclimab and any future product candidate in clinical trials and the sale of any products for which we obtain marketing approval exposes us to the risk of product liability claims.
Potential product liability lawsuits against us could cause us to incur substantial liabilities and limit commercialization of any products that we may develop. The use of batoclimab, IMVT-1402 and any future product candidate in clinical trials and the sale of any products for which we obtain marketing approval exposes us to the risk of product liability claims.
We cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms. Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to advance our research or allow commercialization of our product candidate.
We cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms. Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to advance our research or allow commercialization of our product candidates.
Our ability to compete successfully will depend largely on our ability to: • develop and commercialize therapies in our target indications that are superior to other products in the market; • demonstrate through our clinical trials that batoclimab or any future product candidate is differentiated from existing and future therapies; • attract qualified scientific, product development, manufacturing and commercial personnel; • obtain patent or other proprietary protection for batoclimab and any future product candidates; • obtain required regulatory approvals, including approvals to market batoclimab or any future product candidate we develop, in ways that are differentiated from existing and future products and treatments; • have commercial quantities of any approved product manufactured at acceptable cost and quality levels and in compliance with FDA and other regulatory requirements; • successfully commercialize batoclimab or any future product candidate, if approved; • obtain coverage and adequate reimbursement from, and negotiate competitive pricing with, third-party payors; • successfully collaborate with pharmaceutical companies in the discovery, development and commercialization of new therapies; and • avoid regulatory exclusivities or patents held by competitors that may inhibit our products’ entry to the market.
Our ability to compete successfully will depend largely on our ability to: • develop and commercialize therapies in our target indications that are superior to other products in the market; • demonstrate through our clinical trials that batoclimab, IMVT-1402 or any future product candidate is differentiated from existing and future therapies; • attract qualified scientific, product development, manufacturing and commercial personnel; • obtain patent or other proprietary protection for batoclimab, IMVT-1402 and any future product candidates; • obtain required regulatory approvals, including approvals to market batoclimab, IMVT-1402 or any future product candidate we develop, in ways that are differentiated from existing and future products and treatments; • have commercial quantities of any approved product manufactured at acceptable cost and quality levels and in compliance with FDA and other regulatory requirements; • successfully commercialize batoclimab, IMVT-1402 or any future product candidate, if approved; • obtain coverage and adequate reimbursement from, and negotiate competitive pricing with, third-party payors; 54 Table of Contents • successfully collaborate with pharmaceutical companies in the discovery, development and commercialization of new therapies; and • avoid regulatory exclusivities or patents held by competitors that may inhibit our products’ entry to the market.
Furthermore, any negative results or new safety signals we may report in clinical trials of our product candidate may make it difficult or impossible to recruit and retain patients in other clinical trials we are conducting or to resume enrolling patients once a paused clinical trial has been resumed.
Furthermore, any negative results or new safety signals we may report in clinical trials of our product candidates may make it difficult or impossible to recruit and retain patients in other clinical trials we are conducting or to resume enrolling patients once a paused clinical trial has been resumed.
We expect to rely on third-party CROs, consultants and our collaborators to assist us in filing and supporting the applications necessary to gain marketing approvals. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory authorities.
We expect to rely on third-party CROs, consultants and our collaborators to assist us in filing and supporting the applications necessary to obtain marketing approvals. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory authorities.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties We maintain our headquarters at 320 West 37th Street, New York, New York 10018 and also conduct business operations at 1000 Park Forty Plaza, Suite 210, Durham, North Carolina 27713. ISL’s registered office is located at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda and ISL’s principal office is located at Suite 1, 3rd Floor, 11-12 St.
Biggest changeItem 2. Properties We maintain our headquarters at 320 West 37th Street, New York, New York 10018 and also conduct business operations at 1000 Park Forty Plaza, Suite 210, Durham, North Carolina 27713.
James’s Square, London, SW1Y 4LB, United Kingdom. ISG maintains its headquarters at Viaduktstrasse 8, 4051 Basel, Switzerland. In June 2020, we entered into two sublease agreements for our headquarters in New York, New York which expire in February 2024 and April 2024, respectively.
In June 2020, we entered into two sublease agreements for our headquarters in New York, New York which expire in February 2024 and April 2024, respectively.
Added
ISL’s registered office is located at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda and ISL’s principal office is located at 7th Floor, 50 Broadway, London, SW1H 0DB. ISG maintains its headquarters at Viaduktstrasse 8, 4051 Basel, Switzerland.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we may become involved in legal or regulatory proceedings arising in the ordinary course of our business. We do not currently, however, expect such legal proceedings to have a material adverse effect on our business, operating results or financial condition.
Biggest changeItem 3. Legal Proceedings From time to time, we have been and may become involved in legal or regulatory proceedings arising in the ordinary course of our business. We do not currently, however, expect such legal proceedings to have a material adverse effect on our business, operating results or financial condition.
Mine Safety Disclosures Not applicable. 92 Table of Contents PART II
Mine Safety Disclosures Not applicable. 99 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES 92 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 93 ITEM 6. [RESERVED] 93 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 94 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 102 ITEM 8.
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 99 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 100 ITEM 6. [RESERVED] 100 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 101 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 110 ITEM 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of the close of business on June 3, 2022, we had three holders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes shareholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Biggest changeAs of the close of business on May 17, 2023, we had three holders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes shareholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.

Item 7. Management's Discussion & Analysis

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

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Biggest changeResults of Operations Comparison of the Years Ended March 31, 2022 and 2021 The following table sets forth our results of operations for the years ended March 31, 2022 and 2021 (in thousands): Years Ended March 31, Change 2022 2021 $ Operating expenses: Research and development $ 101,808 $ 68,604 $ 33,204 General and administrative 54,225 39,513 14,712 Total operating expenses 156,033 108,117 47,916 Other expense (income), net 781 (328) 1,109 Loss before benefit for income taxes (156,814) (107,789) (49,025) Benefit for income taxes (84) (358) 274 Net loss $ (156,730) $ (107,431) $ (49,299) Research and Development Expenses The following table summarizes the year-over-year changes in research and development expenses for the years ended March 31, 2022 and 2021 (in thousands): Years Ended March 31, Change 2022 2021* $ Program-specific costs: Neurology diseases $ 14,341 $ 10,166 $ 4,175 Endocrine diseases 20,818 20,056 762 Hematology diseases 6,935 11,606 (4,671) Unallocated costs: Personnel-related expenses including stock-based compensation 33,905 18,729 15,176 Other 25,809 8,047 17,762 Total research and development expenses $ 101,808 $ 68,604 $ 33,204 ___________ * Certain prior year amounts have been reclassified to conform to current year presentation.
Biggest changeResults of Operations Comparison of the Years Ended March 31, 2023 and 2022 The following table sets forth our results of operations for the years ended March 31, 2023 and 2022 (in thousands): Years Ended March 31, Change 2023 2022 $ Operating expenses: Research and development $ 160,257 $ 101,808 $ 58,449 Acquired in-process research and development 10,000 — 10,000 General and administrative 48,019 54,225 (6,206) Total operating expenses 218,276 156,033 62,243 Interest income, net (7,578) — (7,578) Other expense 253 781 (528) Loss before provision (benefit) for income taxes (210,951) (156,814) (54,137) Provision (benefit) for income taxes 9 (84) 93 Net loss $ (210,960) $ (156,730) $ (54,230) Research and Development Expenses The following table summarizes the year-over-year changes in research and development expenses for the years ended March 31, 2023 and 2022 (in thousands): Years Ended March 31, Change 2023 2022* $ Batoclimab - Program-specific costs: Neurology diseases $ 52,100 $ 14,341 $ 37,759 Endocrine diseases 26,377 20,818 5,559 Hematology diseases — 6,935 (6,935) Total Batoclimab - Program-specific costs 78,477 42,094 36,383 IMVT-1402 10,270 9,915 355 Unallocated costs: Personnel-related expenses including stock-based compensation 49,767 33,905 15,862 Other 21,743 15,894 5,849 Total research and development expenses $ 160,257 $ 101,808 $ 58,449 ___________ * Certain prior year amounts have been reclassified to conform to current year presentation. 105 Table of Contents Research and development expenses increased by $58.4 million, from $101.8 million for the year ended March 31, 2022 to $160.3 million for the year ended March 31, 2023.
Our product candidate, batoclimab, has been dosed in small volumes (e.g., 2 mL) and with a 27-gauge needle, while still generating therapeutically relevant pharmacodynamic activity, important attributes that we believe will drive patient preference and market adoption. In nonclinical studies and in clinical trials conducted to date, batoclimab has been observed to reduce immunoglobulin G (“IgG”) antibody levels.
Batoclimab, our first product candidate, has been dosed in small volumes (e.g., 2 mL) and with a 27-gauge needle, while still generating therapeutically relevant pharmacodynamic activity, important attributes that we believe will drive patient preference and market adoption. In nonclinical studies and in clinical trials conducted to date, batoclimab has been observed to reduce immunoglobulin G (“IgG”) antibody levels.
We are also required to reimburse HanAll for half of budgeted research and development costs incurred by HanAll with respect to batoclimab, up to an aggregate of $20.0 million. Lease Agreements In June 2020, we entered into two sublease agreements with RSI, for the two floors of the building that serves as our headquarters in New York.
We are also required to reimburse HanAll for half of budgeted research and development costs incurred by HanAll with respect to batoclimab and IMVT-1402, up to an aggregate of $20.0 million. Lease Agreements In June 2020, we entered into two sublease agreements with RSI, for the two floors of the building that serves as our headquarters in New York.
Product Service Agreement and Master Services Agreement On November 17, 2021, Immunovant, Inc.’s wholly owned subsidiary, ISG, entered into a Product Service Agreement, (“PSA”), with Samsung Biologics Co., Ltd., (“Samsung”), pursuant to which Samsung will manufacture and supply us with batoclimab drug substance for commercial sale and perform other manufacturing-related services with respect to batoclimab.
Product Service Agreement and Master Services Agreement On November 17, 2021, Immunovant, Inc.’s wholly owned subsidiary, ISG, entered into a Product Service Agreement, (“PSA”) with Samsung Biologics Co., Ltd., (“Samsung”), pursuant to which Samsung will manufacture and supply us with batoclimab drug substance for commercial, if approved, sale and perform other manufacturing-related services with respect to batoclimab.
We anticipate that our short-term and long-term future capital requirements will increase substantially as we: • fund our clinical development programs; • launch any potential Phase 2 proof-of-concept studies of batoclimab in additional indications; • increase manufacturing of batoclimab substance to support clinical trials; • achieve milestones under our agreements with third parties, including the HanAll Agreement, that will require us to make substantial payments to those parties; • seek to identify, acquire, develop and commercialize additional product candidates; • integrate acquired technologies into a comprehensive regulatory and product development strategy; • maintain, expand and protect our intellectual property portfolio; • hire scientific, clinical, quality control and administrative personnel; 101 Table of Contents • add operational, financial and management information systems and personnel, including personnel to support our drug development efforts; • commence the number of clinical trials required for approval; • seek regulatory approvals for any product candidates that successfully complete clinical trials; • ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any drug candidates for which we may obtain regulatory approval; and • incur insurance, legal and other regulatory compliance expenses to operate as a public company.
We anticipate that our short-term and long-term future capital requirements will increase substantially as we: • fund our clinical development programs; • launch any potential Phase 2 proof-of-concept studies of batoclimab or IMVT-1402 in additional indications; • increase manufacturing of batoclimab and IMVT-1402 substance to support clinical trials; • achieve milestones under our agreements with third parties, including the HanAll Agreement, that will require us to make substantial payments to those parties; • integrate acquired technologies into a comprehensive regulatory and product development strategy; • maintain, expand and protect our intellectual property portfolio; • hire scientific, clinical, quality control and administrative personnel; • add operational, financial and management information systems and personnel, including personnel to support our drug development efforts; • commence the number of clinical trials required for approval; • seek regulatory approvals for any product candidates that successfully complete clinical trials; • seek to identify, acquire, develop and commercialize additional product candidates; • ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any drug candidates for which we may obtain regulatory approval; and • incur insurance, legal and other regulatory compliance expenses to operate as a public company.
Until such time, if ever, as we can generate substantial product revenue from sales of batoclimab or any future product candidate, we expect to finance our cash needs through a combination of equity offerings, debt financings and potential collaboration, license or development agreements.
Until such time, if ever, as we can generate substantial product revenue from sales of batoclimab, IMVT-1402 or any future product candidate, we expect to finance our cash needs through a combination of equity offerings, debt financings and potential collaboration, license or development agreements.
Our ability to generate revenue sufficient to achieve profitability will depend completely on the successful development and eventual commercialization of batoclimab and any future product candidates. Research and Development Expenses We have been primarily engaged in preparing for and conducting clinical trials.
Our ability to generate revenue sufficient to achieve profitability will depend completely on the successful development and eventual commercialization of batoclimab, IMVT-1402 and any future product candidates. Research and Development Expenses We have been primarily engaged in preparing for and conducting clinical trials.
Financial Operations Overview Revenue We have not generated any revenue and have incurred significant operating losses since inception, and we do not expect to generate any revenue from the sale of any products unless or until we obtain regulatory approval of and commercialize batoclimab or any future product candidates.
Financial Operations Overview Revenue We have not generated any revenue and have incurred significant operating losses since inception, and we do not expect to generate any revenue from the sale of any products unless or until we obtain regulatory approval of and commercialize batoclimab, IMVT-1402 or any future product candidates.
These increases will likely include patent-related costs, including legal and professional fees for filing, prosecution and maintenance of our product candidate, increased costs related to the hiring of additional personnel and fees to outside consultants for professional services.
These increases will likely include patent-related costs, including legal and professional fees for filing, prosecution and maintenance of our product candidates, increased costs related to the hiring of additional personnel and fees to outside consultants for professional services.
We agreed to pay SVB Leerink up to 3% of the gross proceeds sold through the sale agreement. Our common stock would be sold at prevailing market prices at the time of the sale and, as a result, prices may vary. We have not issued or sold any securities pursuant to the shelf registration statement or ATM offering program.
We agreed to pay SVB Leerink up to 3% of the gross proceeds sold through the sale agreement. Our common stock would be sold at prevailing market prices at the time of the sale and, as a result, prices may vary. We have not issued or sold any securities pursuant to the ATM offering program.
Funding Requirements Our primary uses of capital have been, and we expect will continue to be, for advancing our clinical and preclinical development programs. We have based our estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect.
Material Cash Requirements Our primary uses of capital have been, and we expect will continue to be, for advancing our clinical and preclinical development programs. We have based our estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect.
Payments for a product license prior to regulatory approval of the product and payments for milestones achieved prior to regulatory approval of the product are expensed in the period incurred as research and development expenses.
Payments for a product license prior to regulatory approval of the product and payments for milestones achieved prior to regulatory approval of the product are expensed in the period incurred as acquired in-process research and development expenses.
Our research and development expenses are expected to continue to increase over the next several years as we hire personnel and our compensation costs increase, commence additional clinical trials for batoclimab, increase manufacturing of batoclimab substance and prepare to seek regulatory approval for batoclimab.
Our research and development expenses are expected to continue to increase over the next several years as we hire personnel and our compensation costs increase, commence additional clinical trials for batoclimab, increase manufacturing of batoclimab and IMVT-1402 substance and prepare to seek regulatory approval for our product candidates.
Financing Activities For the year ended March 31, 2022, $200.1 million of cash provided by financing activities primarily consisted of $200.0 million in proceeds from the sale of 17,021,276 shares of common stock to RSL, at a per share price of $11.75 in August 2021.
Cash provided by financing activities also reflected $0.7 million of proceeds from the exercise of stock options. For the year ended March 31, 2022, $200.1 million of cash provided by financing activities primarily consisted of $200.0 million in proceeds from the sale of 17,021,276 shares of common stock to RSL, at a per share price of $11.75 in August 2021.
Our primary use of cash is to fund our clinical trials and clinical development activities. Our current funds will not be sufficient to enable us to complete all necessary development and commercially launch batoclimab. We anticipate that we will continue to incur net losses for the foreseeable future.
Our primary use of cash is to fund our clinical trials and clinical development activities. Our current funds will not be sufficient to enable us to complete all necessary development and, if approved, commercially launch batoclimab or IMVT-1402. We anticipate that we will continue to incur net losses for the foreseeable future.
Research and development expenses include program-specific costs, as well as unallocated costs, and are net of costs reimbursable to the Company pursuant to cost-sharing arrangements with a third party. 96 Table of Contents Program-specific costs include direct third-party costs, which include expenses incurred under agreements with contract research organizations and the cost of consultants who assist with the development of the Company’s product candidate on a program-specific basis, investigator grants, sponsored research, and any other third-party expenses directly attributable to the development of the product candidate.
Research and development expenses include program-specific costs, as well as unallocated costs, and are net of costs reimbursable to the Company pursuant to cost-sharing arrangements with third parties. 103 Table of Contents Program-specific costs include direct third-party costs, which include expenses incurred under agreements with contract research organizations and the cost of consultants who assist with the development of our product candidates on a program-specific basis, investigator grants, sponsored research, and any other third-party expenses directly attributable to the development of the product candidates.
Unallocated costs include: • costs related to contract manufacturing operations not allocated to a specific program; • personnel-related expenses for research and development personnel, which includes employee-related expenses such as salaries, benefits and other staff-related costs; • stock-based compensation expenses for research and development personnel; • payments upon the achievement of certain development and regulatory milestones under the HanAll Agreement; • costs allocated to us under our services agreements with RSI and RSG (the “Services Agreements”); and • other expenses, which include the cost of consultants who assist with our research and development, but are not allocated to a specific program.
Unallocated costs include: • personnel-related expenses for research and development personnel, which includes employee-related expenses such as salaries, benefits and other staff-related costs; • stock-based compensation expenses for research and development personnel; • costs allocated to us under our services agreements with RSI and RSG (the “Services Agreements”); and • other expenses, which include the cost of consultants who assist with our research and development and costs related to contract manufacturing, but are not allocated to a specific program.
The lease agreement includes an option at the Company’s election to renew for an additional two years. Our future minimum lease payments as of March 31, 2022 totaled $1.2 million related to short-term lease liabilities, and $1.2 million related to long-term lease liabilities. For more information on our leases, see Part II, Item 8.
The lease agreement includes an option at the Company’s election to renew for an additional two years. Our future minimum lease payments as of March 31, 2023 totaled $1.2 million related to short-term lease liabilities, and less than $0.1 million related to long-term lease liabilities. 108 Table of Contents For more information on our leases, see Part II, Item 8.
Actual results may differ from these estimates under different assumptions or conditions. We define our critical accounting estimates as those under U.S.
Actual results may differ from these estimates under different assumptions or conditions. 109 Table of Contents We define our critical accounting estimates as those under U.S.
Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our planned clinical trials, timing of batoclimab manufacturing, HanAll milestone payments and our expenditures on other research and development activities.
Our net losses and operating cash flows may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our planned clinical trials, timing of batoclimab or IMVT-1402 manufacturing, HanAll milestone payments and our expenditures on other research and development activities.
The duration, costs and timing of clinical trials of batoclimab and any future product candidates will depend on a variety of factors that include, but are not limited to: • the number of trials required for approval; • the per patient trial costs; • the number of patients that participate in the trials; • the number of sites included in the trials; • the countries in which the trial is conducted; • the length of time required to enroll eligible patients; • the number of doses that patients receive; • the drop-out or discontinuation rates of patients; • the potential additional safety monitoring or other studies requested by regulatory agencies; • the duration of patient follow-up; • the timing and receipt of regulatory approvals; • the potential impact of the ongoing COVID-19 pandemic; • the efficacy and safety profile of the product candidate; and • the cost of manufacturing.
The duration, costs and timing of clinical trials of batoclimab, IMVT-1402 and any future product candidates will depend on a variety of factors that include, but are not limited to: • the number of trials required for approval; • the per patient trial costs; • the number of patients that participate in the trials; • the number of sites included in the trials; • the countries in which the trial is conducted; • the length of time required to enroll eligible patients; • the number of doses that patients receive; • the drop-out or discontinuation rates of patients; • the potential additional safety monitoring or other studies requested by regulatory agencies; • the duration of patient follow-up; • the timing and receipt of regulatory approvals; • the potential impact of macroeconomic events, including the COVID-19 pandemic, rising inflation, the U.S.
In December 2018, we obtained and assumed all rights, title, interest and obligations under the HanAll Agreement from RSG, including all rights to batoclimab from RSG in the Licensed Territory, pursuant to an assignment and assumption agreement between RSG and its wholly owned subsidiary, ISG, for an aggregate purchase price of $37.8 million.
In December 2018, we obtained and assumed all rights, title, interest and obligations under the HanAll Agreement from RSG, including all rights to batoclimab and IMVT-1402 in the Licensed Territory, pursuant to an assignment and assumption agreement between RSG and our wholly owned subsidiary, Immunovant Sciences GmbH (“ISG”), for an aggregate purchase price of $37.8 million.
To the extent we choose to develop batoclimab as a potential treatment for certain of these rare diseases, we plan to seek orphan drug designation in the United States and Europe, where applicable. Such designations would primarily provide financial and exclusivity incentives intended to make the development of orphan drugs financially viable.
To the extent we choose to develop batoclimab and IMVT-1402 as potential treatments for certain of these and other rare diseases, we plan to seek orphan drug designation in the U.S. and Europe, where applicable. Such designations would primarily provide financial and exclusivity incentives intended to make the development of orphan drugs financially viable.
Outlook Based on our existing cash balance as of March 31, 2022 of $493.8 million, our research and development plans and our timing expectations related to our development programs for batoclimab, we expect to be able to fund our operating expenses and capital expenditure requirements into the calendar year 2025.
Outlook Based on our existing cash balance as of March 31, 2023 of $376.5 million, our research and development plans and our timing expectations related to our development programs for batoclimab and IMVT-1402, we expect to be able to fund our operating expenses and capital expenditure requirements into the second half of calendar year 2025.
Batoclimab is the product of a multi-step, multi-year research program conducted by HanAll Biopharma Co., Ltd., to design a highly potent anti-FcRn antibody to be optimized as a simple, subcutaneous injection with dosing that we believe can be tailored based on disease severity and stage.
Batoclimab and IMVT-1402 are the result of a multi-step, multi-year research program conducted by us and HanAll Biopharma Co., Ltd., (“HanAll”) to design highly potent anti-FcRn antibodies that may be optimized as a simple, subcutaneous injection with dosing that we believe can be tailored based on disease severity and stage.
As of March 31, 2022, the aggregate maximum amount of milestone payments we could be required to make under the HanAll Agreement is $442.5 million upon the achievement of certain development, regulatory and sales milestone events.
As of March 31, 2023, the aggregate maximum amount of milestone payments we could be required to make under the HanAll Agreement is $432.5 million (after an aggregate amount of $20.0 million of milestone achievements as of March 31, 2023) upon the achievement of certain development, regulatory and sales milestone events.
In addition, whenever batoclimab obtains regulatory approval, we expect that we would incur significant additional expenses associated with building medical affairs and commercial teams.
In addition, if either batoclimab or IMVT-1402 obtains regulatory approval, we expect that we would incur significant additional expenses associated with further building medical affairs and commercial teams.
In connection with this agreement, we have a minimum long-term obligation to Samsung of approximately $36.0 million, of which is $17.7 million is expected to be paid during the fiscal year ending March 31, 2023 and $18.3 million is expected to be paid during the fiscal year ending March 31, 2026. See Part II, Item 8.
In connection with this agreement, we have a remaining minimum long-term obligation to Samsung of approximately $33.3 million, of which $17.5 million, $0.3 million and $15.5 million is expected to be paid during the fiscal years ending March 31, 2024, 2025 and 2026, respectively. See Part II, Item 8.
Based on third-party patient prevalence estimates for the more than 15 indications that have been announced by multiple companies for clinical development with anti-FcRn assets, including our planned development of batoclimab in MG, TED and WAIHA, we estimate the total potential opportunity for batoclimab to be greater than two million patients in the United States (the “U.S.”) and Europe (Europe includes all European Union countries (the “E.U.”), the United Kingdom (the “U.K.”) and Switzerland).
Based on third-party patient prevalence estimates, for the 22 indications that have been announced by multiple companies for clinical development with anti-FcRn assets, we estimate the total potential opportunity for our FcRn franchise to be greater than two million patients in the U.S. and Europe (includes all European Union countries, Norway, Lichtenstein, Iceland, the United Kingdom, and Switzerland).
Under the HanAll Agreement, RSG, a wholly owned subsidiary of RSL, received (1) the non-exclusive right to manufacture and (2) the exclusive, royalty-bearing right to develop, import and use the antibody referred to as batoclimab and certain back-up and next-generation antibodies, and products containing such antibodies, and to commercialize such products, in the United States, Canada, Mexico, the E.U., the U.K., Switzerland, the Middle East, North Africa and Latin America, or the Licensed Territory, for all human and animal uses, during the term of the agreement.
(“RSL”), received (1) the non-exclusive right to manufacture and (2) the exclusive, royalty-bearing right to develop, import and use the antibody referred to as batoclimab and certain back-up and next-generation antibodies (including IMVT-1402), and products containing such antibodies, and to commercialize such products, in the U.S., Canada, Mexico, the E.U., the U.K., Switzerland, the Middle East, North Africa and Latin America (the “Licensed Territory”), for all human and animal uses, during the term of the agreement.
We anticipate that our general and administrative expenses will continue to increase in the future to support our continued research and development activities and increased costs of operating as a public company.
We anticipate that our general and administrative expenses will continue to increase in the future to support our continued research and development activities.
Overview We are a clinical-stage biopharmaceutical company dedicated to enabling normal lives for people with autoimmune diseases. Our innovative compound, batoclimab, formerly referred to as IMVT-1401, is a novel, fully human, monoclonal antibody targeting the neonatal fragment crystallizable receptor (“FcRn”).
Overview We are a clinical-stage biopharmaceutical company dedicated to enabling normal lives for people with autoimmune diseases. Our innovative product pipeline includes batoclimab, formerly referred to as IMVT-1401, and IMVT-1402, both of which are novel, fully human monoclonal antibodies that target the neonatal fragment crystallizable receptor (“FcRn”).
This increase reflected higher costs related to cross-indication clinical studies and clinical research costs of approximately $18 million, primarily reflecting activities to advance the clinical development of batoclimab in current and potentially new indications.
Also contributing to the increase were higher costs related to cross-indication clinical studies and clinical research costs of $5.8 million, primarily reflecting activities to advance the clinical development of batoclimab and IMVT-1402 in current and potentially new indications.
Also contributing to the increase were higher personnel-related expenses of approximately $15 million, primarily reflecting the enhancement of our capabilities to support our strategic objectives as we prepared to resume our clinical activities and evaluated potential new indications.
This increase reflected higher personnel-related expenses of $15.9 million, primarily reflecting higher headcount and enhancement of our capabilities to support our strategic objectives as we resumed our clinical activities and evaluated potential new indications.
In January 2021, we filed a shelf registration statement on Form S-3 with the SEC which permits the offering, issuance and sale by us of up to a maximum aggregate offering price of $900.0 million of our common stock, of which $150.0 million may be issued and sold pursuant to an at-the-market (ATM) offering program for sales of our common stock under a sales agreement with SVB Leerink LLC, subject to certain conditions as specified in the sales agreement.
Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. 106 Table of Contents In January 2021, we filed a shelf registration statement on Form S-3 with the SEC which permits the offering, issuance and sale by us of up to a maximum aggregate offering price of $900.0 million of our common stock, of which $150.0 million may be issued and sold pursuant to an at-the-market (“ATM”) offering program for sales of our common stock under a sales agreement with SVB Leerink LLC, subject to certain conditions as specified in the sales agreement.
We intend to develop batoclimab in autoimmune diseases for which there is robust evidence that pathogenic IgG antibodies drive disease manifestation and for which reduction of IgG antibodies should lead to clinical benefit. We are currently developing batoclimab for Myasthenia Gravis (“MG”), Thyroid Eye Disease (“TED”) and Warm Autoimmune Hemolytic Anemia (“WAIHA”).
We are developing batoclimab and IMVT-1402 in autoimmune diseases for which there is robust evidence that pathogenic IgG antibodies drive disease manifestation and for which reduction of IgG antibodies should lead to clinical benefit.
Partially offsetting these changes was an increase in accounts receivable of $11.6 million reflecting amounts owed to us under research and development cost-sharing arrangements with a third party. For the year ended March 31, 2021, $83.3 million of cash was used in operating activities.
Partially offsetting these changes was an increase in accounts receivable of $11.6 million reflecti ng amounts owed to us under research and development cost-sharing arrangements with a third party.
High levels of pathogenic IgG antibodies drive a variety of autoimmune diseases and, as a result, we believe batoclimab has the potential for broad application in these disease areas.
High levels of pathogenic IgG antibodies drive a variety of autoimmune diseases and, as a result, we believe batoclimab has the potential for broad application in these disease areas. Likewise, IMVT-1402, our second product candidate, has also been observed in nonclinical studies to reduce IgG antibody levels.
As a result of our rational design and current outlook on potential opportunities, we believe that batoclimab, if developed and approved for commercial sale, would be differentiated from currently available, more invasive treatments for advanced IgG-mediated autoimmune diseases.
We are currently developing batoclimab for myasthenia gravis (“MG”), thyroid eye disease (“TED”), chronic inflammatory demyelinating polyneuropathy (“CIDP”) and Graves’ disease (“GD”). As a result of our rational design and current outlook on potential opportunities, we believe that batoclimab and IMVT-1402, if developed and approved for commercial sale, would be differentiated from currently available treatments for advanced IgG-mediated autoimmune diseases.
At this point, the extent to which COVID-19 may impact our future financial condition or results of operations is uncertain. For additional information about risks and uncertainties related to the COVID-19 pandemic that may impact our business, financial condition and results of operations, see the section titled “Risk Factors” under Part I, Item 1A in this Annual Report.
If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed. For additional information about risks and uncertainties related to the macroeconomic that may impact our business, financial condition and results of operations, see the section titled “Risk Factors” under Part I, Item 1A in this Annual Report.
However, we have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. Critical Accounting Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
Critical Accounting Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
As of March 31, 2022, the minimum purchase commitment related to this agreement is estimated to be approximately $36.0 million. Related Party Transactions For a description of our transactions under agreements with related parties, refer to Part II, Item 8. Financial Statements and Supplementary Data, Note 5 – Related Party Transactions.
Related Party Transactions For a description of our transactions under agreements with related parties, refer to Part II, Item 8. Financial Statements and Supplementary Data, Note 5 – Related Party Transactions.
We did not make any material changes to these assumptions for the year ended March 31, 2022. We do not expect any material changes in the near term to the underlying assumptions during the year ended March 31, 2022. Research and Development Expenses Research and development costs with no alternative future use are expensed as incurred.
We did not make any material changes to these assumptions for the year ended March 31, 2023. We do not expect any material changes in the near term to the underlying assumptions during the year ended March 31, 2023.
We expect our research and development expenses to increase significantly in the short term as we plan to initiate a Phase 3 trial of batoclimab as a treatment for MG by the end of June 2022 and plan to initiate two Phase 3 clinical trials to evaluate batoclimab for the treatment of TED in the second half of calendar year 2022.
We expect our research and development expenses to increase in the short term as we continue our ongoing Phase 3 pivotal trial of batoclimab as a treatment for MG, our Phase 3 clinical program to evaluate batoclimab for the treatment of TED and a pivotal Phase 2b trial of batoclimab as a treatment for CIDP.
In addition, the probability of success for batoclimab will depend on numerous factors, including our product’s efficacy, safety, ease of use, competition, manufacturing capability and commercial viability. 97 Table of Contents General and Administrative Expenses General and administrative expenses consist primarily of employee salaries and related benefits, costs allocated under the Services Agreements and stock-based compensation for general and administrative personnel, legal and accounting fees, consulting services and other operating costs relating to corporate matters and daily operations.
General and Administrative Expenses General and administrative expenses consist primarily of employee salaries and related benefits, stock-based compensation for general and administrative personnel, legal and accounting fees, consulting services, costs allocated under the Services Agreements and other operating costs relating to corporate matters and daily operations.
This was primarily attributable to a net loss from operations for the year of $107.4 million, partially offset by non-cash charges of $19.5 million and a net change in operating assets and liabilities of $4.6 million.
For the year ended March 31, 2022, $106.1 million of cash was used in operating activities, primarily reflecting a net loss from operations of $156.7 million, partially offset by non-cash charges of $35.5 million and a net change in operating assets and liabilities of $15.1 million.
Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide, including disruptions resulting from the onset of hostilities by Russia towards Ukraine and the COVID-19 pandemic.
Our ability to raise additional capital may be adversely impacted by worsening global economic conditions and the continuing disruptions to, and volatility in, the credit and financial markets in the U.S. and worldwide, including disruptions resulting from the ongoing military conflict between Russia and Ukraine, the COVID-19 pandemic, decades-high inflation, rising interest rates and recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures.
In May 2019, we achieved our first development and regulatory milestone, which resulted in a $10.0 million milestone payment that we subsequently paid in August 2019. We will be responsible for future contingent payments and royalties, including up to an aggregate of $442.5 million upon the achievement of certain development, regulatory and sales milestone events.
We will be responsible for future contingent payments and royalties, including up to an aggregate of $432.5 million (after an aggregate amount of $20.0 million of milestone achievements as of March 31, 2023) upon the achievement of certain development, regulatory and sales milestone events.
Because of the numerous risks and uncertainties associated with the development and commercialization of product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures necessary to complete the development of product candidates. 100 Table of Contents Our short-term and long-term material cash requirements as of March 31, 2022 primarily consisted of those related to our clinical trials and clinical development activities, which we expect to fund primarily with our existing cash balance.
Our short-term and long-term material cash requirements as of March 31, 2023 primarily consisted of those related to our clinical trials and clinical development activities, which we expect to fund primarily with our existing cash balance.
We accrue costs for clinical trial activities based upon estimates of the services received and related expenses incurred that have yet to be invoiced by contract research organizations. In making these estimates, we consider various factors, including status and timing of services performed, the number of patients enrolled and the rate of patient enrollment.
Research and Development and Acquired In-Process Research and Development Expenses Research and development costs with no alternative future use are expensed as incurred. We accrue costs for clinical trial activities based upon estimates of the services received and related expenses incurred that have yet to be invoiced by contract research organizations.
This increase reflected higher contract manufacturing costs of approximately $9 million for process development and drug substance manufacturing as we prepared to resume our clinical activities, including our planned Phase 3 trial for batoclimab in MG.
This increase reflected $19.1 million of upfront and start-up costs related to our Phase 2b trial of batoclimab as a treatment for CIDP and $18.7 million of upfront and start-up costs related to our Phase 3 trial for batoclimab as a treatment for MG, including higher contract manufacturing costs for process development and drug substance manufacturing in preparation for process performance qualification activities for each indication.
Our Key Agreements License Agreement with HanAll Biopharma Co., Ltd. In December 2017, RSG entered into the HanAll Agreement.
Our Key Agreements License Agreement with HanAll (“HanAll Agreement”) In December 2017, Roivant Sciences GmbH (“RSG”) entered into the HanAll Agreement. Under the HanAll Agreement, RSG, a wholly owned subsidiary of Roivant Sciences Ltd.
Research and development expenses increased by $33.2 million, from $68.6 million for the year ended March 31, 2021 to $101.8 million for the year ended March 31, 2022. Program-specific research and development costs increased by $0.3 million, from $41.8 million for the year ended March 31, 2021 to $42.1 million for the year ended March 31, 2022.
Batoclimab program-specific research and development costs increased by $36.4 million, from $42.1 million for the year ended March 31, 2023 to $78.5 million for the year ended March 31, 2023.
We expect to continue to incur significant expenses and increasing operating losses at least for the next several years. We have never generated any revenue and we do not expect to generate product revenue unless and until we successfully complete development and obtain regulatory approval for batoclimab or any future product candidate.
We have never generated any revenue and we do not expect to generate product revenue unless and until we successfully complete development and obtain regulatory approval for batoclimab, IMVT-1402 or any future product candidate. To date, we have financed our operations primarily from equity offerings and the sale of convertible promissory notes.
Intellectual property created by HanAll pursuant to this research program will be included in our license; intellectual property created by us pursuant to this research program will be included in HanAll’s license.
We are obligated to reimburse HanAll for half of such research and development expenses incurred by HanAll, up to an aggregate reimbursement amount of $20.0 million. Intellectual property created by HanAll pursuant to this research program will be included in our license; intellectual property created by us pursuant to this research program will be included in HanAll’s license.
As of March 31, 2022, $0.4 million was payable to HanAll for research and development costs incurred and reported to us pursuant to the HanAll Agreement. 95 Table of Contents Pursuant to the HanAll Agreement, RSG made an upfront payment of $30.0 million to HanAll.
As of March 31, 2023, we do not have any additional amounts payable to HanAll for research and development costs incurred and reported to us pursuant to the HanAll Agreement.
In July 2021, we were granted orphan drug designation by the U.S. Food and Drug Administration (“FDA”) for batoclimab for the potential treatment of MG. We plan to seek orphan drug designation from the FDA for batoclimab for the treatment of TED and WAIHA, and potentially other orphan indications in which there is a medically plausible basis for batoclimab's use.
In August 2022, we were granted orphan drug designation from the European Commission for batoclimab for the treatment of MG. Previously, batoclimab received orphan drug designation by the U.S. Food and Drug Administration (“FDA”) for the treatment of MG.
Under the HanAll Agreement, the parties may choose to collaborate on a research program directed to the research and development of next generation FcRn inhibitors in accordance with an agreed plan and budget. We are obligated to reimburse HanAll for half of such research and development expenses incurred by HanAll, up to an aggregate reimbursement amount of $20.0 million.
Under the HanAll Agreement, the parties may choose to collaborate on a research program directed to the research and development of next generation FcRn inhibitors in accordance with an agreed plan and budget. Each party has agreed that neither it nor certain of its affiliates will clinically develop or commercialize certain competitive products in the Licensed Territory.
If we are unable to raise capital in sufficient amounts or on terms acceptable to us, we may be required to delay, limit, reduce or terminate our drug development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves or potentially discontinue operations. 99 Table of Contents Cash Flows The following table sets forth a summary of our cash flows for the years ended March 31, 2022 and 2021 (in thousands): Years Ended March 31, 2022 2021 Net cash used in operating activities (106,112) (83,327) Net cash used in investing activities (254) (210) Net cash provided by financing activities 200,129 383,112 Operating Activities For the year ended March 31, 2022, $106.1 million of cash was used in operating activities, primarily reflecting a net loss from operations of $156.7 million, partially offset by non-cash charges of $35.5 million and a net change in operating assets and liabilities of $15.1 million.
If we are unable to raise capital in sufficient amounts or on terms acceptable to us, we may be required to delay, limit, reduce or terminate our drug development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves or potentially discontinue operations.
Financial Statements and Supplementary Data, Note 9 – Leases. Except as discussed above, we did not have any other ongoing material contractual obligations for which cash flows were fixed and determinable. We expect to enter into other commitments as the business further develops.
However, we have based this estimate on our current operating plan and assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. Except as discussed above, we did not have any other ongoing material contractual obligations for which cash flows were fixed and determinable.
These changes were partially offset by an increase of $2.9 million in prepaid expenses, driven by the timing of payments related to clinical research and contract manufacturing activities. Investing Activities For the years ended March 31, 2022 and 2021, cash used in investing activities was related to the purchase of computer equipment.
Investing Activities For the years ended March 31, 2023 and 2022, cash used in investing activities was related to the purchase of computer equipment. 107 Table of Contents Financing Activities For the year ended March 31, 2023, $70.9 million of cash provided by financing activities primarily consisted of proceeds from our October 2022 underwritten offering of approximately $70.2 million, after deducting underwriting discounts and commissions and offering expenses.
Offsetting this increase was approximately $9 million of lower clinical activities due to the continued voluntary pause in our clinical trials. 98 Table of Contents Unallocated research and development costs increased by $32.9 million, from $26.8 million for the year ended March 31, 2021 to $59.7 million for the year ended March 31, 2022.
Unallocated research and development costs increased by $21.7 million, from $49.8 million for the year ended March 31, 2022 to $71.5 million for the year ended March 31, 2023.
Liquidity and Capital Resources Sources of Liquidity We had cash of $493.8 million and $400.1 million as of March 31, 2022 and 2021, respectively. For the years ended March 31, 2022 and 2021, we had net losses of $156.7 million and $107.4 million, respectively.
For the years ended March 31, 2023 and 2022, we had net losses of $211.0 million and $156.7 million, respectively. We expect to continue to incur significant expenses and increasing operating losses at least for the next several years.
In addition, we expect one of our three indications beyond MG and TED to be initiated as a pivotal study in the calendar year 2022.
We expect top-line results from this program to be available in the first half of calendar year 2025. In the second quarter of calendar year 2022, we initiated our Phase 3 pivotal trial of batoclimab as a treatment for MG. We expect top-line data from this trial to be available in the second half of calendar year 2024.
Removed
We may seek orphan drug designation for batoclimab in Europe. We intend to continue the development of batoclimab for the treatment of MG, TED and WAIHA, as well as two new indications to be announced by August 2022. MG is an autoimmune disease associated with muscle weakness.
Added
Importantly, based on the anticipated human effective dose levels, the human equivalent doses of IMVT-1402 have demonstrated minimal or no impact on levels of albumin and low-density lipoprotein (“LDL”) cholesterol in cynomolgus monkeys.
Removed
TED is an autoimmune inflammatory disorder that affects the muscles and other tissues around the eyes, and in severe cases can be sight-threatening. WAIHA is a rare hematologic disease in which autoantibodies mediate hemolysis, or the destruction of red blood cells.
Added
This is a key attribute for IMVT-1402, which we believe could potentially allow its use as a treatment of chronic conditions requiring maintenance doses that achieve high degrees of IgG suppression.
Removed
We were incorporated in July 2018 and we have been primarily engaged in preparing for and conducting clinical trials for our product candidate, batoclimab. To date, we have not generated any revenue and have generated significant operating losses since our inception. As of March 31, 2022 and 2021, we had an accumulated deficit of $355.4 million and $198.7 million, respectively.
Added
We plan to seek orphan drug designation in the U.S. and Europe for batoclimab and/or IMVT-1402 in other indications where there is a medically plausible basis for batoclimab and/or IMVT-1402’s use. 101 Table of Contents Recent Developments in Our Clinical Programs For IMVT-1402, our next generation FcRn inhibitor, in the second quarter of calendar year 2023, the FDA cleared our IND application for IMVT-1402 and we initiated a Phase 1 clinical trial in in healthy volunteers in New Zealand after approval of the CTA by the regulatory authority, MEDSAFE.
Removed
For the years ended March 31, 2022 and 2021, we recorded net losses of $156.7 million and $107.4 million, respectively. 94 Table of Contents Recent Developments in Our Clinical Programs As previously disclosed, in December 2021, we achieved alignment with the FDA Division of Neurology 1 to move forward with our pivotal trial of batoclimab as a treatment for MG.
Added
Initial data from single-ascending dose cohorts are expected in August or September 2023, while initial data from multiple-ascending dose cohorts are expected in October or November 2023. For batoclimab, in the second quarter of calendar year 2023, we initiated a proof-of-concept Phase 2 clinical trial in GD in Germany.
Removed
We plan to initiate this Phase 3 trial by the end of June 2022. We recently achieved alignment with the FDA Division of Ophthalmology to move forward in TED. We plan to initiate two Phase 3 clinical trials to evaluate batoclimab for the treatment of TED in the second half of calendar year 2022.
Added
We expect initial results from this trial to be available in the fourth quarter of calendar year 2023. In the fourth quarter of calendar year 2022, we initiated a pivotal Phase 2b trial of batoclimab as a treatment for CIDP.
Removed
Following expected discussions with the hematology division of the FDA, we intend to initiate a randomized, placebo-controlled study of batoclimab as a treatment for WAIHA. We continue to evaluate potential new indications for batoclimab. As previously disclosed, we plan to announce two new indications by August 2022.
Added
We expect initial data from the open-label period of this trial (where one of two blinded doses of batoclimab are delivered) to be available in the first half of calendar year 2024. Also in the fourth quarter of calendar year 2022, we initiated our Phase 3 clinical program to evaluate batoclimab as a treatment for TED.
Removed
We expect one of our three indications beyond MG and TED to be initiated as a pivotal study in the calendar year 2022. COVID-19 Business Update The COVID-19 pandemic continues to and is disrupting supply chains and affecting production and sales across a range of industries.
Added
Macroeconomic Considerations Unfavorable conditions in the economy in the U.S., Canada and abroad may negatively affect the growth of our business and our results of operations. For example, macroeconomic events, including the COVID-19 pandemic, rising inflation, the U.S.
Removed
Currently, we have not suffered significant adverse consequences as a result of the COVID-19 pandemic, though it did slow enrollment of our clinical trials prior to our voluntary pause of clinical dosing in February 2021, as previously disclosed.
Added
Federal Reserve raising interest rates, recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures and the Russia-Ukraine war, have led to economic uncertainty globally. The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk Under SEC rules and regulations, because we are considered to be a “smaller reporting company”, we are not required to provide the information required by this item in this report. 102 Table of Contents
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk Under SEC rules and regulations, because we are considered to be a “smaller reporting company”, we are not required to provide the information required by this item in this report. 110 Table of Contents

Other IMVT 10-K year-over-year comparisons