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What changed in Lyell Immunopharma, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Lyell Immunopharma, Inc.'s 2023 and 2024 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 2024 report.

+670 added−595 removedSource: 10-K (2025-03-11) vs 10-K (2024-02-28)

Top changes in Lyell Immunopharma, Inc.'s 2024 10-K

670 paragraphs added · 595 removed · 373 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

91 edited+118 added−153 removed173 unchanged
Biggest changeFigure 11 : LYL119 eliminated H1975 (NSCLC) xenograft tumors and improved survival, even at low doses. Our Manufacturing Capabilities We believe it is critically important to control and continuously monitor all aspects of the cell therapy manufacturing process to mitigate risks, including challenges in managing production, supply chain, patient specimen chain of custody and quality control.
Biggest changeIn addition to developing novel CAR constructs that target undisclosed tumor antigen targets, our research activities explore stacking our proprietary anti-exhaustion technology and these additional approaches targeting the tumor microenvironment via the expression of novel chimeric proteins or polypeptides (Table 3) to optimize more durable CAR T-cell killing for application in future solid tumor product candidates. 15 Table of Contents Our Manufacturing Capabilities We believe it is critically important to control and continuously monitor all aspects of the cell therapy manufacturing process to mitigate risks, including challenges in managing production, supply chain, patient specimen chain of custody and quality control.
Any marketing application for a drug or biologic submitted to the FDA for approval, including a product candidate with a fast track designation and/or breakthrough therapy designation, may be eligible for other types of FDA programs intended to expedite development and review, such as priority review and accelerated approval.
Any marketing application for a drug or biologic submitted to the FDA for approval, including a product candidate with Fast Track and/or Breakthrough Therapy Designation, may be eligible for other types of FDA programs intended to expedite development and review, such as Priority Review and Accelerated Approval.
Additionally, the federal Physician Payments Sunshine Act within the ACA, and its implementing regulations, require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) annually report information related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other health care professionals (such as physician assistants and nurse practitioners) and teaching hospitals and certain ownership and investment interests held by these physicians and their immediate family members.
Additionally, the federal Physician Payments Sunshine Act within the ACA, and its implementing regulations, require that certain manufacturers of commercial drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) annually report information related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other health care professionals (such as physician assistants and nurse practitioners) and teaching hospitals and certain ownership and investment interests held by these physicians and their immediate family members.
Orphan Drug Designation and Exclusivity Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 individuals in the United States, or a patient population greater than 200,000 individuals in the United States and when there is no reasonable expectation that the cost of developing and making available the drug or biologic in the United States will be recovered from sales in the United States for that drug or biologic.
Orphan Drug Designation and Exclusivity Under the Orphan Drug Act, the FDA may grant Orphan Drug Designation (ODD) to a drug or biologic intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 individuals in the United States, or a patient population greater than 200,000 individuals in the United States and when there is no reasonable expectation that the cost of developing and making available the drug or biologic in the United States will be recovered from sales in the United States for that drug or biologic.
The process required by the FDA before biologics may be marketed in the United States generally involves the following: • completion of nonclinical laboratory tests and animal studies performed in accordance with the FDA’s Good Laboratory Practice requirements (GLP); • submission to the FDA of an IND application, which must become effective before clinical trials may begin; • approval by an Institutional Review Board (IRB) or ethics committee at each clinical site before the trial is commenced; • performance of adequate and well-controlled human clinical trials according to the FDA’s regulations (commonly referred to as GCP), regulations and any additional requirements for the protection of human research subjects and their health information to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose; • preparation of and submission to the FDA of a Biologics License Application (BLA), after completion of all pivotal 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 and, if applicable, to assess compliance with the FDA’s current Good Tissue Practices (cGTPs) requirements for the use of human cellular and tissue products, and of selected clinical investigation sites to assess compliance with GCPs; • satisfactory completion of an FDA Advisory Committee review, if applicable; • potential FDA audit of the nonclinical and clinical trial sites that generated the data in support of the BLA; and 22 Table of Contents • FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
The process required by the FDA before biologics may be marketed in the United States generally involves the following: • completion of nonclinical laboratory tests and animal studies performed in accordance with the FDA’s Good Laboratory Practice requirements (GLP); • submission to the FDA of an IND application, which must become effective before clinical trials may begin; • approval by an Institutional Review Board (IRB) or ethics committee at each clinical site before the trial is commenced; • performance of adequate and well-controlled human clinical trials according to the FDA’s regulations (commonly referred to as GCP), regulations and any additional requirements for the protection of human research subjects and their health information to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose; • preparation of and submission to the FDA of a Biologics License Application (BLA), after completion of all pivotal 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 and, if applicable, to assess compliance with the FDA’s current Good Tissue Practices (cGTPs) requirements for the use of human cellular and tissue products, and of selected clinical investigation sites to assess compliance with GCPs; • satisfactory completion of an FDA Advisory Committee review, if applicable; • potential FDA audit of the nonclinical and clinical trial sites that generated the data in support of the BLA; and • FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
Fast Track Designation, Breakthrough Therapy Designations, Priority Review, Accelerated Approval and RMAT designation do not change the standards for approval but may expedite the development or approval process.
Fast Track, Breakthrough Therapy Designation, Priority Review, Accelerated Approval and RMAT designation do not change the standards for approval but may expedite the development or approval process.
For information related to our in-licensed intellectual property, see the subsection titled under “—License, Collaboration and Success Payment Agreements.” Individual patents extend for varying periods of time, depending upon the date of filing of the patent application, the date of patent issuance and the legal term of patents in the countries in which they are obtained.
For information related to our in-licensed intellectual property, see the subsection titled under “—License and Collaboration Agreements.” Individual patents extend for varying periods of time, depending upon the date of filing of the patent application, the date of patent issuance and the legal term of patents in the countries in which they are obtained.
Orphan Drug designation (ODD) must be requested before submitting a BLA. After the FDA grants ODD, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. ODD does not convey any advantage in or shorten the duration of the regulatory review and approval process.
ODD must be requested before submitting a BLA. After the FDA grants ODD, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. ODD does not convey any advantage in or shorten the duration of the regulatory review and approval process.
The license agreement will expire, on a product-by-product and country-by-country basis, on the later of (a) the expiration of the last to expire valid claim of the patents rights covering such product in such country and (b) ten (10) years after the date of the first commercial sale of such product in such country.
The license agreement will expire, on a product-by-product and country-by-country basis, on the later of (a) the expiration of the last to expire valid claim of the patent rights covering such product in such country and (b) ten (10) years after the date of the first commercial sale of such product in such country.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with 23 Table of Contents regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post‑market studies or clinical trials to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program.
If our operations are found to be in violation of any of such laws or any other governmental 28 Table of Contents regulations that apply, we may be subject to penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, the curtailment or restructuring of operations, integrity oversight and reporting obligations, exclusion from participation in federal and state healthcare programs and imprisonment.
If our operations are found to be in violation of any of such laws or any other governmental regulations that apply, we may be subject to penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, the curtailment or restructuring of operations, integrity oversight and reporting obligations, exclusion from participation in federal and state healthcare programs and imprisonment.
The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars. 27 Table of Contents Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity and potency, can be shown through analytical studies, animal studies and a clinical trial or trials.
The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars. Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity and potency, can be shown through analytical studies, animal studies and a clinical trial or trials.
These obligations may include limiting personal data processing to only what is necessary for specified, explicit and legitimate purposes; requiring a legal basis for personal data processing; requiring the appointment of a data protection officer in certain circumstances; increasing transparency obligations to data subjects; requiring data protection impact assessments in certain circumstances; limiting the collection and retention of personal data; increasing rights for data subjects; formalizing a heightened and codified standard of data subject consents; requiring the implementation and maintenance of technical and organizational safeguards for personal data; mandating notice of certain personal data breaches to the relevant supervisory authorities and affected individuals; and mandating the appointment of representatives in the UK and/or the EU in certain circumstances.
These obligations include limiting personal data processing to only what is necessary for specified, explicit and legitimate purposes; requiring a legal basis for personal data processing; requiring the appointment of a data protection officer in certain circumstances; increasing transparency obligations to data subjects; requiring data protection impact assessments in certain circumstances; limiting the collection and retention of personal data; increasing rights for data subjects; formalizing a heightened and codified standard of data subject consents; requiring 28 Table of Contents the implementation and maintenance of technical and organizational safeguards for personal data; mandating notice of certain personal data breaches to the relevant supervisory authorities and affected individuals; and mandating the appointment of representatives in the UK and/or the EU in certain circumstances.
Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials. • Phase 3—The investigational product is administered to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at 23 Table of Contents multiple geographically dispersed clinical trial sites.
Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials. • Phase 3—The investigational product is administered to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites.
We have in-licensed and procured, and filed for numerous patent applications, which include claims directed to compositions, methods of use, processes, dosing and formulations, and possess substantial know-how and trade secrets relating to the development and commercialization of our cell engineering technology platforms and related product candidates, including related manufacturing processes and protocols.
We have in-licensed and procured, and filed for numerous patent applications, which include claims directed to compositions, methods of use, processes, dosing and formulations, and possess substantial know-how and trade secrets relating to the development and commercialization of our cell engineering technology platforms and related product 17 Table of Contents candidates, including related manufacturing processes and protocols.
Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances.
Failure to meet all of the requirements of a particular applicable statutory exception or regulatory 25 Table of Contents safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances.
HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek 29 Table of Contents attorneys’ fees and costs associated with pursuing federal civil actions.
HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions.
Several states have enacted legislation requiring pharmaceutical companies to establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, track and report gifts, compensation and other remuneration made to physicians and other healthcare providers, clinical trials and other activities, and/or register their sales representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical companies for use in sales and marketing, and to prohibit certain other sales and marketing practices.
Several states have enacted legislation requiring pharmaceutical companies to establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, track and report gifts, compensation and other remuneration made to physicians and other healthcare providers, clinical trials and other activities, and/or register their sales representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to 26 Table of Contents pharmaceutical companies for use in sales and marketing, and to prohibit certain other sales and marketing practices.
Product candidates granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of clinical trial sites, including through expansion of trials to additional sites.
Product candidates granted RMAT designation may also be eligible for Accelerated Approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a 22 Table of Contents meaningful number of clinical trial sites, including through expansion of trials to additional sites.
During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own nonclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product.
During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own nonclinical 24 Table of Contents data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product.
The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology and pharmacodynamic characteristics of the product; chemistry, manufacturing and controls information; and any available human data or literature to support the use of the investigational product. An IND must become effective before human clinical trials may begin.
The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology and pharmacodynamic characteristics of the product; chemistry, manufacturing and controls information; and any available human data or literature to support the use of the investigational product. An IND must become effective before human 19 Table of Contents clinical trials may begin.
Our core values are: • Science : We value evidence over opinion and focus and execute on the critical efforts that matter most. • Courage : We challenge the status quo – we are bold and willing to think and act differently. • Respect : We always assume positive intent and seek to understand and communicate directly, transparently and honestly. • Collaboration : We work together to create value, working across teams to solve our most challenging problems to continually improve and learn.
Our core values are: • Science : We value evidence over opinion and focus and execute on the critical efforts that matter most. • Courage : We challenge the status quo – we are bold and willing to think and act differently. • Respect : We operate with positive intent and seek to understand and communicate directly, transparently and honestly. • Collaboration : We work together to create value, working across teams to solve our most challenging problems to continually improve and learn.
In addition, we offer 33 Table of Contents employees the benefit of equity ownership in the company through stock option grants and/or restricted stock units. Our employees are also eligible to participate in an employee stock purchase plan, which offers the opportunity to purchase our common stock at a discount of 15%.
In addition, we offer employees the benefit of equity ownership in the company through stock option grants and/or restricted stock units. Our employees are also eligible to participate in an employee stock purchase plan, which offers the opportunity to purchase our common stock at a discount of 15%.
We continue to externally benchmark our efforts with respect to best practices across industries. The DBIE working group is guided by a collaboratively developed DBIE mission statement. The working group is comprised of volunteers from our three work locations representing various levels in the organization.
We continue to externally benchmark our efforts with respect to best practices across industries. The DBIE working group is guided by a collaboratively developed DBIE mission statement. The working group is comprised of volunteers across each of our work locations representing various levels in the organization.
Further, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (IRA) into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
Further, on August 16, 2022, the Inflation Reduction Act of 2022 (the IRA) was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
It is unclear how any such additional challenges and healthcare reform measures of the Biden administration will impact the ACA and our business. Other legislative changes have also been proposed and adopted in the United States since the ACA was enacted.
It is unclear how any such additional challenges and healthcare reform measures of the second Trump administration will impact the ACA and our business. Other legislative changes have also been proposed and adopted in the United States since the ACA was enacted.
Our organization is designed to support our current research, product development and manufacturing efforts and is ready to scale to meet future plans for commercializing our product candidates, if approved. A strategic priority is attracting and retaining talent with the skills we need today and in the future.
Our organization is designed to support research, product development and manufacturing efforts and is ready to scale to meet future plans for commercializing our product candidates, if approved. A strategic priority is attracting and retaining talent with the skills we need now and in the future.
Our second genetic reprogramming technology, NR4A3 gene knockout, builds on the approach of reprogramming of the AP-1 transcription factor pathway to delay exhaustion and improve antitumor function. We and others have previously observed that the NR4A family of transcription factors is upregulated in exhausted T cells and may contribute to T‑cell exhaustion in part by restricting the activity of AP-1.
NR4A3 Gene Knockout NR4A3 gene knockout builds on the approach of reprogramming of the AP-1 transcription factor pathway to delay exhaustion and improve antitumor function. We and others have previously observed that the NR4A family of transcription factors is upregulated in exhausted T cells and may contribute to T‑cell exhaustion in part by restricting the activity of AP-1.
This package includes competitive market pay, healthcare benefits for employees and family members, a flexible spending account, paid time off benefits, family leave, flexible work schedules, flexible work locations, 401(k) matching, an employee assistance program and a wellness program.
This package includes competitive market pay, healthcare benefits for employees and family members, a flexible spending account or health savings account, paid time off benefits, family leave, flexible work schedules, flexible work locations, 401(k) matching, an employee assistance program and a wellness program.
A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation.
A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received the ODD.
We also rely on trade secrets and know-how relating to our proprietary technology and product candidates, continuing innovation and in-licensing opportunities to develop, strengthen and maintain our 20 Table of Contents proprietary position in the field of cell and gene therapy.
We also rely on trade secrets and know-how relating to our proprietary technology and product candidates, continuing innovation and in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of cell and gene therapy.
The FDA may require one or more Phase 4 post-marketing trials and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization and may limit further marketing of the product based on the results of these post-marketing studies.
The FDA may require one or more Phase 4 21 Table of Contents post-marketing trials and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization and may limit further marketing of the product based on the results of these post-marketing studies.
The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost through a newly established manufacturer discount program. It is possible that the ACA will be subject to judicial or Congressional challenges in the future.
The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost through a newly established manufacturer discount program. It is possible that the ACA will be subject to additional challenges in the future.
Additionally, both in vitro and in vivo nonclinical data demonstrated that the combination of all four of our genetic and epigenetic reprogramming technologies resulted in superior cytotoxicity, improved proliferation and sustained cytokine production upon repeated antigen stimulation compared to various controls lacking one or more of the reprogramming technologies.
Additionally, both in vitro and in vivo nonclinical data demonstrated that the combination of all four of these technologies resulted in superior cytotoxicity, improved proliferation and sustained cytokine production upon repeated antigen stimulation compared to various controls lacking one or more of the reprogramming technologies.
Mackall discovered that exhausted T cells have an imbalance in the AP‑1 family of transcription factors, and that correcting for this imbalance by overexpression of c-Jun enables T cells to resist exhaustion, infiltrate solid tumors and maintain their functionality and potency. This work was fully described in a Nature publication in 2019 (Lynn et al., Nature , Dec. 2019).
Dr. Mackall discovered that exhausted T cells have an imbalance in the AP‑1 family of transcription factors, and that correcting for this imbalance by overexpression of c-Jun enables T cells to resist exhaustion, infiltrate solid tumors and maintain their functionality and potency. This work was fully described in a Nature publication in 2019.
Our LyFE Manufacturing Center was commissioned and designed to be in compliance with U.S. and European Union current Good Manufacturing Practices (cGMP) standards and has a flexible and modular design enabling CAR T-cell, TIL, TCR T-cell and cGMP viral vector production to control and de-risk the manufacturing sequence and timing of the major components of our supply chain.
LyFE was commissioned and designed to be in compliance with U.S. and EU current Good Manufacturing Practices (cGMP) standards and has a flexible and modular design enabling CAR T‑cell, TIL, TCR T-cell therapies and cGMP viral vector production to control and de-risk the manufacturing sequence and timing of the major components of our supply chain.
After approval, most changes to the approved product, such as 26 Table of Contents adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing, annual program fees for any marketed products.
After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing, annual program fees for any marketed products.
Additionally, the intent standard under the Anti-Kickback Statute and the criminal healthcare fraud statutes under the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) was amended by the ACA to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
Additionally, the intent standard under the Anti-Kickback Statute and the criminal healthcare fraud statutes under the federal Health Insurance Portability and Accountability Act of 1996 (as amended by the Health Information Technology for Economic and Clinical Health Act, HIPAA) was amended by the ACA to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
We additionally plan to rely on data exclusivity, market exclusivity and patent term extensions, when available, and, as appropriate, have sought and in the future may seek again and rely on regulatory protection afforded through ODDs.
We additionally plan to rely on data exclusivity, market exclusivity and patent‑term extensions, when available, and, as appropriate, have sought and in the future may seek again and rely on regulatory protection afforded through Orphan Drug designations.
Products receiving accelerated approval may be subject to expedited 25 Table of Contents withdrawal procedures if the sponsor fails to conduct the required post-marketing studies or if such studies fail to verify the predicted clinical benefit.
Products receiving Accelerated Approval may be subject to expedited withdrawal procedures if the sponsor fails to conduct the required post-marketing studies or if such studies fail to verify the predicted clinical benefit.
Such obligations may include those from, without limitation, the Federal Trade Commission Act, the California Consumer Privacy Act of 2018 (CCPA), the California Privacy Rights Act (CPRA), the European Union’s General Data Protection Regulation 2016/679 (EU GDPR), the EU GDPR as it forms part of United Kingdom (UK) law by virtue of section 3 of the European Union (Withdrawal) Act 2018 (UK GDPR) and the ePrivacy Directive.
Such obligations may include those from, without limitation, the Federal Trade Commission Act, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (CPRA) (collectively, CCPA), the EU’s General Data Protection Regulation 2016/679 (EU GDPR), the EU GDPR as it forms part of UK law by virtue of section 3 of the European Union (Withdrawal) Act 2018 (UK GDPR) and the ePrivacy Directive.
Our second epigenetic reprogramming technology, Stim‑R, is a proprietary synthetic-cell mimetic composed of lipid-coated silica micro-rods that mimic the physiological cell-like presentation of signals to control T-cell activation in the manufacturing process. Current manufacturing platforms typically utilize antibody-conjugated beads that were 8 Table of Contents developed decades ago for expanding T cells.
Stim-R Technology Stim‑R is our proprietary synthetic-cell mimetic composed of lipid-coated silica micro-rods that mimic the physiological cell-like presentation of signals to control T-cell activation in the manufacturing process. Current manufacturing platforms typically utilize antibody-conjugated beads that were developed decades ago for expanding T cells.
We anticipate that these new laws will result in additional downward pressure on coverage and the price that we receive for any approved product, and could seriously harm our business. Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payors.
These health reform measures will result in additional downward pressure on coverage and the price that we receive for any approved product and could seriously harm our business. Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payors.
Ongoing pay progression is guided by our compensation philosophy; in 2023, this was enhanced to recognize differentiation in rewards, where our highest performing employees received the highest rewards. At the same time, we are committed to pay equity; we have a review process that is conducted on at least an annual basis.
Ongoing pay progression is guided by our compensation philosophy; we recognize differentiation in rewards, where our highest performing employees receive the highest rewards. At the same time, we are committed to pay equity; we have a review process that is conducted on at least an annual basis.
In issuing the CRL, the FDA may recommend actions that the applicant might take to place the BLA in condition for 24 Table of Contents approval, including requests for additional information or clarification.
In issuing the CRL, the FDA may recommend actions that the applicant might take to place the BLA in condition for approval, including requests for additional information or clarification.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain 31 Table of Contents profitability or commercialize our products (if approved). In addition, it is possible that there will be further legislation or regulation that could harm our business, financial condition and results of operations.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products (if approved). In addition, it is possible that there will be further legislation or regulation that could harm our business, financial condition and results of operations, particularly in light of the recent U.S.
Among companies developing cell therapies for solid tumors, we believe we are substantially differentiated by our reprogramming technologies, knowledge, experience, scientific personnel and robust intellectual property portfolio. We believe there are many factors affecting the success of any of our product candidates, including efficacy, safety, accessibility, price and cost of manufacturing.
Among companies developing CAR T-cell therapies for hematologic malignancies and solid tumors, we believe we are substantially differentiated by our technologies, manufacturing protocols and capabilities, knowledge, experience, scientific personnel and robust intellectual property portfolio. We believe there are many factors affecting the success of any of our product candidates, including efficacy, safety, accessibility, price and scale and cost of manufacturing.
We intend to either build a commercial infrastructure to support sales of any approved products or outsource some or all of this function to third parties. We intend to evaluate opportunities to work with partners that enhance our capabilities with respect to the development and commercialization of LYL797, LYL845, LYL119 and any other product candidates we may develop.
We intend to either build a commercial infrastructure to support sales of any approved products or outsource 18 Table of Contents some or all of this function to third parties. We intend to evaluate opportunities to work with partners that enhance our capabilities with respect to the development and commercialization of IMPT-314 and any other product candidates we may develop.
Our intellectual property strategy is designed to provide multi-layered protection covering our T‑cell reprogramming technologies, including but not limited to c-Jun, NR4A3, Epi‑R and Stim‑R, as well as various aspects of our product candidates. For all patent applications, we determine claiming strategy on a case-by-case basis.
Our intellectual property strategy is designed to provide multi-layered protection covering our technologies and manufacturing protocols, including but not limited to c-Jun, NR4A3, CD62L + enrichment, Epi‑R and Stim‑R, as well as various aspects of our product candidates, including but not limited to CAR constructs. For all patent applications, we determine claiming strategy on a case-by-case basis.
As of December 31, 2023, our registered trademark portfolio contains over 135 registered trademarks and pending trademark applications, consisting of approximately one trademark registration and five pending trademark applications in the United States, and approximately 120 foreign trademark registrations and approximately 11 foreign pending trademark applications. We may also rely, in some circumstances, on trade secrets to protect our technology.
As of December 31, 2024, our registered trademark portfolio contains over 135 registered trademarks and pending trademark applications, consisting of approximately one trademark registration and four pending trademark applications in the United States, and approximately 121 foreign trademark registrations and approximately 10 foreign pending trademark applications. We may also rely, in some circumstances, on trade secrets to protect our technology.
Key components of our business strategy to achieve this goal include: • Efficiently advance our diverse pipeline of product candidates — We believe our autologous T‑cell therapies have the potential to deliver improved, durable clinical outcomes for patients with solid tumors.
Key components of our business strategy to achieve this goal include: • Efficiently advance our clinical-stage pipeline of next-generation CAR T-cell product candidates — We believe our autologous T‑cell therapies have the potential to deliver improved, durable clinical outcomes for patients with hematologic malignancies and solid tumors.
To the extent that our employees, contractors, consultants, collaborators and advisors 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.
In addition, our trade secrets may otherwise become known or may be independently discovered by competitors. To the extent that our employees, contractors, consultants, collaborators and advisors 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 nonclinical data suggest the combination of these two technologies, NR4A3 gene knockout and c-Jun overexpression, can act in a complementary fashion and may have the potential to further improve the potency and durability of our CAR therapy. Epigenetic reprogramming technologies: Our two proprietary ex vivo epigenetic reprogramming technologies are Epi‑R and Stim‑R.
Our nonclinical data suggest the combination of these two technologies, NR4A3 gene knockout and c-Jun overexpression, can act in a complementary fashion and may have the potential to further improve the potency and durability of our CAR therapy (Figure 5).
T‑cell therapies for the treatment of solid tumors are being developed by a number of companies, including but not limited to Arcellx, Inc., AstraZeneca plc, Autolus Therapeutics plc, Bristol Myers Squibb Co., Gilead Sciences Inc., Immunocore Holdings plc, Iovance Biotherapeutics Inc., the Janssen Pharmaceutical Companies of Johnson & Johnson, Nanjing Legend Biotech and Novartis AG.
CAR T‑cell therapies for the treatment of hematologic malignancies and solid tumors are being developed by a number of companies, including but not limited to Arcellx, Inc., Allogene Therapeutics, Inc., Arsenal Biosciences, Inc., AstraZeneca plc, Autolus Therapeutics plc, Bristol Myers Squibb Co., Caribou Biosciences, Inc., Cargo Therapeutics, Inc., Gilead Sciences Inc., Immunocore Holdings plc, Johnson & Johnson, Nanjing Legend Biotech, Novartis AG and Poseida/F.
If we identify employees with unjustified pay gaps that do not align with our pay philosophy, we review and take appropriate action to ensure fidelity between our stated philosophy and actions. Available Information Our website address is www.lyell.com.
If we identify employees with unjustified pay gaps that do not align with our pay philosophy, we review and take appropriate action to ensure fidelity between our stated philosophy and actions. Available Information We were incorporated in June 2018 under the laws of the state of Delaware. Our website address is www.lyell.com.
We rigorously analyze, file and protect our intellectual property in an ongoing manner. • Opportunistically pursue strategic partnerships and collaborations to maximize the potential of our technologies and products – We consider a variety of ways to collaborate with external partners.
We rigorously analyze, file and protect our intellectual property in various jurisdictions around the world in an ongoing manner. • Opportunistically pursue strategic opportunities to maximize the potential of our pipeline and capabilities – We consider a variety of ways to collaborate with external partners.
As of December 31, 2023, we had 224 employees, over 79% of whom were engaged in research and development activities, technical operations and process sciences. Our employees are highly skilled, and many hold advanced degrees. Many of our employees have experience with the development of cell therapies. All of our employees are located in California and Washington.
As of December 31, 2024, we had 300 employees, over 83% of whom were engaged in research and development activities, technical operations and process sciences. Our employees are highly skilled, and many hold advanced degrees. 29 Table of Contents Many of our employees have experience with the development of cell therapies.
Our Employees Our employees are one of our most valuable strengths; our people drive our ability to achieve our mission. We compete in the highly competitive biotechnology industry, and attracting, retaining and developing a diverse group of talented employees is crucial to our strategy and our ability to compete effectively.
Our Employees Our people drive our mission. We compete in the highly competitive biotechnology industry, and attracting, retaining and developing a diverse group of talented employees is crucial to our strategy and we believe is a competitive advantage.
Some of these companies may have substantially greater financial and other resources than we have, such as larger research and development staff and well-established marketing and sales forces, or may operate in jurisdictions where lower standards of evidence are required to bring products to market.
Some of these companies have substantially greater financial and other resources than we have, such as larger research and development staff and well-established marketing and sales forces, or operate in jurisdictions where we do not have staffing or resources.
Any product candidates that we successfully develop and commercialize will compete with existing treatments and new treatments that may become available in the future. In addition, during development, our product candidates may compete against other experimental treatments, whether cell therapy or other modalities, for patients with certain histologies or patients with tumors expressing certain antigen targets of interest.
In addition, during development and clinical trials, our product candidates may compete against other experimental treatments, whether cell therapy or other modalities, for patients with certain histologies or patients with tumors expressing certain antigen targets of interest.
As of December 31, 2023, our patent portfolio consists of over 40 issued patents and over 150 pending patent applications that we either own or have licensed. Our portfolio covers various aspects of our T‑cell reprogramming technologies, c-Jun, NR4A3, Epi‑R and Stim‑R, as well as our product candidates.
As of December 31, 2024, our patent portfolio consists of over 50 issued patents and over 250 pending patent applications that we either own or have licensed. Our portfolio covers various aspects of our technologies and manufacturing protocols, including but not limited to c-Jun, NR4A3, CD62L + enrichment, Epi‑R and Stim‑R, as well as our product candidates.
Training, coaching, routine feedback and a systematic approach to employee advancement are key components of our talent strategy. We hold talent discussions regularly, which include promotion cycles across all functions and levels.
Developing our employees is important, and we focus on providing learning opportunities for development and advancement. Training, coaching, routine feedback and a systematic approach to employee advancement are key components of our talent strategy. We hold talent discussions regularly, which include leaders identifying talent for promotion across all functions.
BLA Submission and Review by the FDA Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies and clinical trials are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications.
Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. 20 Table of Contents BLA Submission and Review by the FDA Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies and clinical trials are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications.
It is unclear whether the models will be utilized in any health reform measures in the future. Further, on December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act of 1980 (Bayh-Dole Act).
Further, on December 7, 2023, an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act of 1980 (Bayh-Dole Act) was announced.
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. 32 Table of Contents Employees and Human Capital Management Our Mission We are a clinical stage T‑cell reprogramming company dedicated to developing novel cell therapies to improve the lives of people with malignant solid tumors.
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.
Overexpression of c-Jun is based on the work of Lyell co-founder, Crystal Mackall, M.D., the Ernest and Amelia Gallo Family Professor of Pediatrics and Medicine at Stanford University and Founding Director of the Stanford Center for Cancer Cell Therapy. Dr.
More recently, we have explored new strategies to express novel chimeric proteins to optimize CAR T-cell killing in the hostile tumor microenvironment. c-Jun Overexpression Overexpression of c-Jun is based on the work of our co-founder, Crystal Mackall, M.D., the Ernest and Amelia Gallo Family Professor of Pediatrics and Medicine at Stanford University (Stanford) and Founding Director of the Stanford Center for Cancer Cell Therapy.
If regulatory approval of a product is granted, such approval will be granted for particular indications and may entail limitations on the indicated uses for which such product may be marketed. For example, the FDA may approve the BLA with a REMS, to ensure the benefits of the product outweigh its risks, or otherwise limit the scope of any approval.
If regulatory approval of a product is granted, such approval will be granted for particular indications and may entail limitations on the indicated uses for which such product may be marketed.
We are aware of a number of companies using ex vivo cell therapy approaches to treat solid tumors.
We are also aware of a number of companies using autologous or allogeneic CAR T-cell therapy approaches to treat hematologic malignancies and solid tumors.
This technology is built upon the groundbreaking science conducted at the National Cancer Institute (NCI), where it was demonstrated that products with more stem-like and functional T cells can be achieved by altering the metabolic state of the cells during expansion (Vodnala et al., Science , Mar. 2019).
Lyell developed technology based upon the science conducted at the National Cancer Institute, where it was demonstrated that products with more stem-like and functional T cells can be achieved by altering the metabolic state of the cells during expansion. CD62L Positive Enrichment Our lead product candidate, IMPT-314 is manufactured with a process that enriches for CD62L positive cells.
Our Reprogramming Technologies Cell therapy has demonstrated profound results in some patients suffering from hematologic malignancies, but solid tumors are more complex and have evolved multiple mechanisms to evade and ultimately resist clearance by the 6 Table of Contents immune system. This has limited the use of cell therapy in solid tumors, which account for 90% of cancer deaths.
Our Preclinical Programs Cell therapy has demonstrated profound results in some patients suffering from hematologic malignancies, but there remains a need for therapies that deliver more complete and durable responses. Solid tumors are even more complex and have evolved multiple mechanisms to evade and ultimately resist clearance by the immune system.
In addition, the IRA, among other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions take effect progressively starting in fiscal year 2023.
In addition, the IRA, among other things, (1) directs HHS to negotiate the price of certain high-expenditure, single-source biologics that have been on the market for at 27 Table of Contents least eleven years covered under Medicare (the Medicare Drug Price Negotiation Program) and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
Generally, patents issued for applications filed in the United States are effective for 20 years from the earliest nonprovisional filing date.
Generally, patents issued for applications filed in the United States are effective for 20 years from the earliest nonprovisional filing date. In the United States, a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the U.S.
In the United States, a patent’s term may be lengthened by patent term adjustment (PTA), which compensates a patentee for administrative delays by the USPTO in examining and granting a patent or may be shortened if a patent is terminally disclaimed over an earlier filed patent.
Patent and Trademark Office (USPTO) in examining and granting a patent or may be shortened if a patent is terminally disclaimed over an earlier filed patent.
Healthcare Reform In the United States, in March 2010, the ACA was enacted, which substantially changed the way healthcare is financed by both governmental and private insurers, and significantly affected the pharmaceutical industry. The ACA contained a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement adjustments and changes to fraud and abuse laws.
Healthcare Reform In the United States, in March 2010, the ACA was enacted, which substantially changed the way healthcare is financed by both governmental and private insurers, and significantly affected the pharmaceutical industry. There have been executive, judicial and Congressional challenges and amendments to certain aspects of the ACA.
None of our employees are subject to a collective bargaining agreement nor represented by labor unions. We consider our relationship with our employees to be good. Developing our employees is important, and we focus on providing training and opportunities for development and advancement.
The majority of our employees are located in California and Washington, with all employees based in the United States. None of our employees are subject to a collective bargaining agreement nor represented by labor unions. We consider our relationship with our employees to be good.
Owning our own facility has enabled seamless collaboration across research, process development and manufacturing for high-quality reproducibility at manufacturing scale. 17 Table of Contents We are currently producing clinical supply for our Phase 1 trials at our LyFE Manufacturing Center.
Owning our own facility has enabled seamless collaboration across research, process development and manufacturing for high-quality reproducibility at manufacturing scale. Clinical supply for our Phase 1/2 trial of IMPT-314 is currently manufactured in our manufacturing facility in Los Angeles, California, that we acquired in connection with the acquisition of ImmPACT.
These novel manufacturing technologies generate product candidates with more stem-like cells and with greater potency during ex vivo T‑cell expansion. Epi‑R is our proprietary ex vivo manufacturing protocol that is designed to generate populations of stem-like T cells with reduced exhaustion and improved proliferation and antitumor activity.
Epi-R Manufacturing Protocol Epi‑R is our proprietary ex vivo manufacturing protocol that is designed to generate populations of stem-like T cells with reduced exhaustion and improved proliferation and antitumor activity. T cells with properties of durable 14 Table of Contents stemness have an increased ability to self-renew and persist to drive durable tumor cytotoxicity.
We also seek to preserve the integrity and confidentiality of our proprietary technology and 21 Table of Contents processes by maintaining physical security of our premises and physical and electronic security of our information technology systems.
We also seek to preserve the integrity and confidentiality of our proprietary technology and processes by maintaining physical security of our premises and physical and electronic security of our information technology systems. Although we have confidence in these individuals, organizations and systems, agreements or security measures may be breached and we may not have adequate remedies for any breach.
Our product candidates are designed to address large patient populations, and we will evaluate options for partnering programs, indications or geographies with pharmaceutical or biotechnology companies for development and/or commercialization. We also consider opportunities to acquire or license rights or invest in differentiated product candidates or technologies to complement our pipeline.
Our technologies can be applied in a target and modality agnostic manner to CAR, tumor infiltrating lymphocyte (TIL) and T-cell receptor (TCR) therapies to improve the functionality of T cells. We will evaluate options for partnering programs, indications or geographies with pharmaceutical or biotechnology companies for the development and/or commercialization of our product candidates designed to address large patient populations.
Competition The pharmaceutical industry is highly competitive and dynamic, owing to rapidly advancing technologies. We face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions, government agencies and public and private research institutions.
We face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions, government agencies and public and private research institutions. Any product candidates that we successfully develop and commercialize will compete with existing treatments and new treatments that may become available in the future.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSome of the factors that may cause the market price of our common stock to fluctuate are listed below and other factors described in this “Risk Factors” section: • the timing and results of nonclinical studies and clinical trials for our product candidates; • failure or discontinuation of any of our product development and research programs; • the success of existing or new competitive product candidates or technologies; • results of clinical trials or regulatory approvals of our competitors; • commencement or termination of collaborations for our product development and research programs; • regulatory or legal developments in the United States and other countries; • the recruitment or departure of key personnel; • developments or disputes including those concerning patent applications, issued patents, or other proprietary rights; • labor discord or disruption, geopolitical events, social unrest, war, armed conflicts, tensions in U.S.-China relations, terrorism, political instability, acts of public violence, boycotts, hostilities and social unrest and health pandemics; • the level of expenses related to any of our research programs or clinical development programs; • actual or anticipated changes in our estimates as to our financial results or development timelines; 67 Table of Contents • whether our financial results, forecasts and development timelines meet the expectations of securities analysts or investors; • announcement or expectation of additional financing efforts; • sales of our common stock by us, our insiders, or other stockholders; • changes in estimates or recommendations by securities analysts, if any, that cover our stock; • market conditions in the healthcare sector; • general economic, industry and market conditions beyond our control, such as inflationary pressures, labor shortages and supply chain disruptions, bank failures and other macroeconomic factors and associated economic downturn; and • the other factors described in this “Risk Factors” section.
Biggest changeSome of the factors that may cause the market price of our common stock to fluctuate are listed below and other factors described in this “Risk Factors” section: • prioritization of our product candidates; • the timing and results of nonclinical studies and clinical trials for our product candidates; • failure or discontinuation of any of our product development and research programs; • the success of existing or new competitive product candidates or technologies; • results of clinical trials or regulatory approvals of our competitors; • commencement or termination of collaborations, licenses, product acquisitions or other strategic transactions relating to our product development and research programs; • the failure to successfully integrate ImmPACT into our business; • any future acquisitions, strategic investments, partnerships or alliances and the related financial terms and obligations; • regulatory or legal developments in the United States and other countries; • the recruitment or departure of key personnel; • developments or disputes including those concerning patent applications, issued patents, or other proprietary rights; • labor discord or disruption, geopolitical events and tensions, social unrest, war, armed conflicts and turmoil, terrorism, political instability, acts of public violence, boycotts, hostilities and social unrest and health pandemics; • the level of expenses related to any of our research programs or clinical development programs; • actual or anticipated changes in our estimates as to our financial results or development timelines; • whether our financial results, forecasts and development timelines meet the expectations of securities analysts or investors; • announcement or expectation of additional financing efforts; • sales of our common stock by us, our insiders, or other stockholders; • changes in estimates or recommendations by securities analysts, if any, that cover our stock; • market conditions in the healthcare sector; 68 Table of Contents • general economic, industry and market conditions beyond our control, such as inflationary pressures, the interest rate environment, labor shortages and supply chain constraints, instability in the banking industry and other macroeconomic factors and associated economic downturn; and • the other factors described in this “Risk Factors” section.
These expenditures will include costs associated with research and development, potentially acquiring or licensing new technologies, conducting nonclinical studies and clinical trials and potentially obtaining regulatory approvals and manufacturing products, as well as marketing and selling products approved for sale, if any.
These expenditures will include costs associated with research and development, acquiring or licensing new technologies, conducting nonclinical studies and clinical trials and potentially obtaining regulatory approvals and manufacturing products, as well as marketing and selling products approved for sale, if any.
We have invested substantial resources in developing our technology platforms and our product candidates, conducting nonclinical studies, commencing clinical trials and building our manufacturing facilities and capabilities, each of which will be required prior to any regulatory approval and commercialization.
We have invested substantial resources in developing our technology platforms and our product candidates, conducting nonclinical studies, commencing and conducting clinical trials and building our manufacturing facilities and capabilities, each of which will be required prior to any regulatory approval and commercialization.
Given the novelty of our technology platforms, we intend to work closely with the FDA and comparable foreign regulatory authorities to perform the requisite scientific analyses and evaluation of our methods to obtain regulatory approval for our product candidates; however, the regulatory pathway with the FDA and comparable regulatory authorities may be more complex and time-consuming relative to other more well-known therapeutics.
Given the novelty of our technology platforms, we intend to work closely with the FDA and comparable foreign regulatory authorities to perform the requisite scientific analyses and evaluation of our methods to obtain regulatory approval for our product candidates; however, the regulatory pathway with the FDA and comparable foreign regulatory authorities may be more complex and time-consuming relative to other more well-known therapeutics.
If our manufacturing facility or any facility in our manufacturing network, or the equipment in these facilities, is either damaged or destroyed, we may not be able to quickly or inexpensively replace our manufacturing capacity, if at all.
If our manufacturing facilities or any facility in our manufacturing network, or the equipment in these facilities, is either damaged or destroyed, we may not be able to quickly or inexpensively replace our manufacturing capacity, if at all.
Our ability to enroll clinical trials or our commercial opportunities will be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer side effects or are less expensive than any products that we may develop.
Our ability to enroll clinical trials and/or our commercial opportunities will be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer side effects or are less expensive than any products that we may develop.
Also, any regulatory approval of our current or future product candidates, once obtained, may be withdrawn. Our cellular therapy product candidates represent new therapeutic approaches that could result in heightened regulatory scrutiny, delays in clinical development or delays in or our inability to achieve regulatory approval, commercialization or payor coverage of our product candidates.
Also, any regulatory approval of our current or future product candidates, once obtained, may be withdrawn. Our cellular therapy product candidates represent new therapeutic approaches that could result in heightened regulatory scrutiny, delays in clinical development or delays in our inability to achieve regulatory approval, commercialization or payor coverage of our product candidates.
Additionally, our product candidates, if approved, could be subject to labeling and other restrictions and market withdrawal, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.
Additionally, our product candidates, if approved, could be subject to labeling and other restrictions and market withdrawal, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.
In the United States, our and our partners’ and vendors’ operations are subject to numerous federal and state laws and regulations, including state data breach notification laws and federal and state data privacy laws and regulations that govern the collection, use, disclosure and protection of health information and other personal information, including information of our employees.
In the United States, our and our partners’ and vendors’ operations are subject to numerous federal and state laws and regulations, including state data breach notification laws and federal and state data privacy laws and regulations that govern the collection, use, disclosure and protection of health information and other personal data, including information of our employees.
Furthermore, to prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation also provides that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (Securities Act).
Furthermore, to prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation also provides that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.
We rely on third-party service providers and technologies to operate critical business systems to process sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, clinical research and development and other functions.
We rely on third-party service providers and technologies to operate critical business systems and to process sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, clinical research and development and other functions.
Further, a clinical trial may be suspended or terminated by us, the IRBs or ethics committees for the institutions in which such trials are being conducted, the Data Safety Monitoring Committee for such trial or the FDA or other regulatory authorities, including comparable foreign regulatory authorities, due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities, including comparable foreign regulatory authorities, resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
Further, a clinical trial may be suspended or terminated by us, the IRBs or ethics committees for the institutions in which such trials are being conducted, the independent Data Safety Monitoring Committee for such trial or the FDA or other regulatory authorities, including comparable foreign regulatory authorities, due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities, including comparable foreign regulatory authorities, resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
Any of these events could have a material adverse effect on our reputation, business or financial condition, including but not limited to: delays in development of our product candidates due to inability to process personal data or to operate in certain jurisdictions; limited ability to develop or commercialize our products; expenditure of time and resources to defend any claim or inquiry; adverse publicity; or substantial changes to our planned candidate pipeline development and business operations.
Any of these events could have a material adverse effect on our reputation, business or financial condition, including but not limited to delays in the development of our product candidates due to inability to process personal data or to operate in certain jurisdictions, limited ability to develop or commercialize our products, expenditure of time and resources to defend any claim or inquiry, adverse publicity or substantial changes to our planned candidate pipeline development and business operations.
Such collaborative arrangements with partners may place the commercialization of our products outside of our control and would make us subject to a number of risks, including that we may not be able to control the amount or timing of resources that our collaborative partner devotes to our products or that our collaborator’s willingness or ability to complete its obligations, and our obligations under our arrangements may be adversely affected by business combinations or significant changes in our collaborator’s business strategy.
Such collaborative arrangements with partners may place the commercialization of our products outside of our control and would make us subject to a number of risks, including that we may not be able to control the amount, quality or timing of resources that our collaborative partner devotes to our products or that our collaborator’s willingness or ability to complete its obligations, and our obligations under our arrangements may be adversely affected by business combinations or significant changes in our collaborator’s business strategy.
Even if we obtain human data to support our product candidates, the FDA or comparable foreign regulatory authorities may lack experience in evaluating the safety and efficacy of our product candidates developed using our technology platforms, which could result in a longer than expected regulatory review process, increase our expected development costs and delay or prevent commercialization of our product candidates.
Even if we obtain human data to support our product candidates, the FDA or comparable foreign regulatory authorities may lack sufficient experience in evaluating the safety and efficacy of our product candidates developed using our technology platforms, which could result in a longer than expected regulatory review process, increase our expected development costs and delay or prevent commercialization of our product candidates.
Our success payment obligations are recorded as liabilities on our consolidated balance sheets. Under U.S. generally accepted accounting principles (GAAP), we are required to estimate the fair value of these liabilities as of each quarter end and changes in the estimated fair value are accreted to research and development expense over the service period of the collaboration agreement.
Our success payment obligations are recorded as liabilities on our audited consolidated balance sheets. Under U.S. generally accepted accounting principles (GAAP), we are required to estimate the fair value of these liabilities as of each quarter end and changes in the estimated fair value are accreted to research and development expense over the service period of the collaboration agreement.
In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands. Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.
In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class action claims and mass arbitration demands. Some of these claims allow for the recovery of statutory damages on a per violation basis and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.
Furthermore, significant disruptions of our internal information technology systems or security breaches could result in the loss, misappropriation and/or unauthorized access, use or disclosure of, or the prevention of access to, confidential information (including trade secrets or other intellectual property, proprietary business information and personal information), which could result in financial, legal, business and reputational harm to us.
Furthermore, significant disruptions of our internal information technology systems or security breaches could result in the loss, misappropriation and/or unauthorized access, use or disclosure of, or the prevention of access to, confidential information (including trade secrets or other intellectual property, proprietary business information and personal data), which could result in financial, legal, business and reputational harm to us.
Developing advanced manufacturing techniques and process controls is required to fully utilize our facility. Without further investment, advances in manufacturing techniques may render our facility and equipment inadequate or obsolete. We may also require further investment to build additional manufacturing facilities or expand the capacity of our existing ones. The manufacturing of cellular therapies is very complex.
Developing advanced manufacturing techniques and process controls is required to fully utilize our facilities. Without further investment, advances in manufacturing techniques may render our facilities and equipment inadequate or obsolete. We may also require further investment to build additional manufacturing facilities or expand the capacity of our existing ones. The manufacturing of cellular therapies is very complex.
As a result, delays occur, which can materially impact our ability to meet desired research and clinical development timelines. We do and will continue to or intend to rely on outside scientists and clinical trial investigators and their third-party research institutions for research and development and early clinical testing of our product candidates.
As a result, delays occur, which can materially impact our ability to meet desired research and clinical development timelines. We do and will continue to or intend to rely on outside scientists and clinical trial investigators and their third-party research institutions for research and development and clinical testing of our product candidates.
Any collaboration arrangement that we enter into is subject to numerous risks, which may include the following: • the collaborator has significant discretion in determining the efforts and resources that they will apply to a program or product candidate under the collaboration; • the collaborator may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; • the collaborator may delay or halt clinical trials, provide insufficient funding for a clinical trial, preferentially enroll patients on a portion of a clinical trial not testing our product candidates, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • the collaborator could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates; • the collaborator may not commit sufficient resources to marketing and distribution of our products; • the collaborator may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; • disputes may arise between us and the collaborator that cause the delay or termination of the research, development or commercialization of our product candidates, or that result in costly litigation or arbitration that diverts management attention and resources; • the collaboration may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates; and • the collaborator may own or co-own intellectual property covering our product candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual property.
Any collaboration arrangement that we enter into is subject to numerous risks, which may include the following: • the collaborator has significant discretion in determining the efforts and resources that they will apply to a program or product candidate under the collaboration; • the collaborator may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to the acquisition of competitive products or other reasons, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; • the collaborator may delay or halt clinical trials, provide insufficient funding for a clinical trial, preferentially enroll patients on a portion of a clinical trial not testing our product candidates, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • the collaborator could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates; • the collaborator may not commit sufficient resources to marketing and distribution of our products; • the collaborator may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; • disputes may arise between us and the collaborator that cause the delay or termination of the research, development or commercialization of our product candidates, or that result in costly litigation or arbitration that diverts management attention and resources; 43 Table of Contents • the collaboration may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates; and • the collaborator may own or co-own intellectual property covering our product candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual property.
Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation (including class claims) and mass arbitration demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse business consequences.
Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, litigation (including class action claims) and mass arbitration demands, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits and other adverse business consequences.
Among other things, our organizational documents: • establish that our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving staggered three-year terms; • provide that our directors may be removed only for cause; • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; • eliminate cumulative voting in the election of directors; • authorize our board of directors to issue shares of preferred stock and determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval; 65 Table of Contents • permit stockholders to take actions only at a duly called annual or special meeting and not by unanimous written consent; • prohibit stockholders from calling a special meeting of stockholders; • require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings; • authorize our board of directors, by a majority vote, to amend certain provisions of the bylaws; and • require the affirmative vote of at least 66 2/3% or more of the outstanding shares of common stock to amend many of the provisions described above.
Among other things, our organizational documents: • establish that our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving staggered three-year terms; • provide that our directors may be removed only for cause; • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; • eliminate cumulative voting in the election of directors; • authorize our board of directors to issue shares of preferred stock and determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval; • permit stockholders to take actions only at a duly called annual or special meeting and not by unanimous written consent; • prohibit stockholders from calling a special meeting of stockholders; • require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings; • authorize our board of directors, by a majority vote, to amend certain provisions of the bylaws; and • require the affirmative vote of at least 66 2/3% or more of the outstanding shares of common stock to amend many of the provisions described above.
Our future success is dependent on the successful development of our cellular therapies in general and our development product candidates, in particular. Because these programs represent a new approach to the treatment of cancer, developing and, if approved, commercializing our product candidates subject us to a number of challenges.
Our future success is dependent on the successful development of our cellular therapies in general and our development of product candidates, in particular. Because some of these programs represent a new approach to the treatment of cancer, developing and, if approved, commercializing our product candidates subject us to a number of challenges.
Additionally, certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data or to notify relevant stakeholders, including affected individuals, regulators and investors, of security incidents.
Additionally, certain data privacy and security obligations require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data or to notify relevant stakeholders, including affected individuals, regulators and investors, of security incidents.
In the United States, there have been and continue to be a number of healthcare-related legislative initiatives, as well as executive, judicial and Congressional challenges to existing healthcare laws that have significantly affected, and could continue to significantly affect, the healthcare industry.
In the United States, there have been and continue to be a number of healthcare-related legislative initiatives, as well as executive, judicial and Congressional challenges and amendments to existing healthcare laws that have significantly affected, and could continue to significantly affect, the healthcare industry.
If the interim, topline or preliminary data we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, any of our potential product candidates may be harmed, which could harm our business, operating results, prospects, or financial condition. 52 Table of Contents The FDA and comparable foreign regulatory approval processes are lengthy, time-consuming and inherently unpredictable.
If the interim, topline or preliminary data we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, any of our potential product candidates may be harmed, which could harm our business, operating results, prospects or financial condition. 51 Table of Contents The FDA and comparable foreign regulatory approval processes are lengthy, time-consuming and inherently unpredictable.
Patient enrollment depends on many additional factors, including: • the size and nature of the patient population; 47 Table of Contents • the severity of the disease under investigation; • eligibility criteria for the trial; • the proximity of patients to clinical sites; • the design of the clinical protocol; • the ability to obtain and maintain patient consents; • perceived risks and benefits of the product candidate under evaluation, including any perceived risks associated with genetically modified product candidates; • the ability to recruit clinical trial investigators with the appropriate competencies and experience; • the risk that patients enrolled in clinical trials will drop out of the trials before the administration of our product candidates or trial completion; • the availability of competing clinical trials; • the availability of new drugs approved for the indication that the clinical trial is investigating; and • clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to other available approved or investigational therapies.
Patient enrollment depends on many additional factors, including: • the size and nature of the patient population; • the severity of the disease under investigation; • eligibility criteria for the trial; • the proximity of patients to clinical sites; • the design of the clinical protocol; • the ability to obtain and maintain patient consents; • perceived risks and benefits of the product candidate under evaluation, including any perceived risks associated with genetically modified product candidates; • the ability to recruit clinical trial investigators with the appropriate competencies and experience; • the risk that patients enrolled in clinical trials will drop out of the trials before the administration of our product candidates or trial completion; • the availability of competing clinical trials; • the availability of new drugs approved for the indication that the clinical trial is investigating; and • clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to other available approved or investigational therapies.
Department of Treasury, FDIC and Federal Reserve Board have announced a program to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or other liquidity needs of financial institutions for immediate liquidity may exceed the capacity of such program, and there is no guarantee that such programs will be sufficient.
Department of Treasury, FDIC and Federal Reserve Board have implemented a program to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or other liquidity needs of financial institutions for immediate liquidity may exceed the capacity of such program, and there is no guarantee that such programs will be sufficient.
We may in the future seek to acquire or invest in businesses, products or technologies that we believe could complement or expand our technology platforms, enhance our technical capabilities, or otherwise offer growth opportunities.
In the future, we may seek to acquire or invest in additional businesses, products or technologies that we believe could complement or expand our technology platforms, enhance our technical capabilities or otherwise offer growth opportunities.
While we have not experienced any adverse impact to our liquidity or to our current and projected business operations, financial condition or results of operations as a result of the matters relating to SVB, Signature Bank and Silvergate Capital Corp, uncertainty remains over liquidity concerns in the broader financial services industry, and our business, our business partners or industry as a whole may be adversely impacted in ways that we cannot predict at this time.
While we have not experienced any adverse impact to our liquidity or to our current and projected business operations, financial condition or results of operations as a result of the matters relating to SVB, Signature Bank, Silvergate Capital Corp and First Republic Bank, uncertainty remains over liquidity concerns in the broader financial services industry, and our business, our business partners or industry as a whole may be adversely impacted in ways that we cannot predict at this time.
Furthermore, we may not have identified all material weaknesses, and our current controls and any new controls that we develop may become inadequate because of changes in personnel or conditions in our business or otherwise.
We may not have identified all material weaknesses, and our current controls and any new controls that we develop may become inadequate because of changes in personnel or conditions in our business or otherwise.
As a result, our operating results and financial condition as reported by GAAP may fluctuate significantly from quarter to quarter and from year to year and may reduce the usefulness of our GAAP consolidated financial statements.
As a result, our operating results and financial condition as reported by GAAP may fluctuate significantly from quarter to quarter and from year to year, which may reduce the usefulness of our GAAP consolidated financial statements.
Internal Revenue Code of 1986, as amended (the Code). If the requirement to capitalize Section 174 expenditures is not modified, it may impact our effective tax rate and our cash tax liability in future years. There have been legislative proposals to repeal or defer the Section 174 R&E expense capitalization rules, including legislation recently passed by the U.S.
Internal Revenue Code of 1986, as amended (the Code). If the requirement to capitalize Section 174 expenditures is not modified, it may impact our effective tax rate and our cash tax liability in future years. There have been legislative proposals to repeal or defer the Section 174 R&E expense capitalization rules, including legislation previously passed by the U.S.
We, and our partners and vendors, including CROs, collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit and share (collectively, process) personal data and other sensitive information (collectively, sensitive data) in connection with the operations of our business, such as storage or otherwise processing sensitive data to support the conduct of our clinical trials.
We, and our partners and vendors, including CROs, collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit and share (collectively, process) personal de-identified data and other sensitive information (collectively, sensitive data) in connection with the operations of our business, such as storage or otherwise processing sensitive data to support the conduct of our clinical trials.
Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may ultimately lead to the denial of regulatory approval of our product candidates. 53 Table of Contents Even if our product candidates obtain regulatory approval, we will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense.
Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may ultimately lead to the denial of regulatory approval of our product candidates. 52 Table of Contents Even if our product candidates obtain regulatory approval, we will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense.
Furthermore, the manufacturing facilities in which our product candidates will be made could be adversely affected by earthquakes and other natural disasters, equipment failures, labor shortages, power failures, health epidemics and numerous other factors. If any of these events were to occur and impact our manufacturing facilities, our business would be materially and adversely affected.
Furthermore, the manufacturing facilities in which our product candidates will be made could be adversely affected by earthquakes or fires and other natural disasters, equipment failures, labor shortages, power failures, health epidemics and numerous other factors. If any of these events were to occur and impact our manufacturing facilities, our business would be materially and adversely affected.
Such an event could substantially delay our clinical trials or commercialization of our product candidates. Currently, we maintain insurance coverage against damage to our property and to cover business interruption and research and development restoration expenses. However, our insurance coverage may not reimburse us, or may not be sufficient to reimburse us, for any expenses or losses we may suffer.
Such an event could substantially delay our clinical trials or commercialization of our product candidates. Currently, we maintain insurance coverage against damage to our properties and to cover business interruption and research and development restoration expenses. However, our insurance coverage may not reimburse us, or may not be sufficient to reimburse us, for any expenses or losses we may suffer.
If a regulatory authority discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, or disagrees with the promotion, marketing or labeling of a product, such regulatory authority may impose restrictions on that product or us, 54 Table of Contents including requiring withdrawal of the product from the market.
If a regulatory authority discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, or disagrees with the promotion, marketing or labeling of a product, such regulatory authority may impose restrictions on that product or us, 53 Table of Contents including requiring withdrawal of the product from the market.
Our efforts to enforce, protect or defend our proprietary rights related to trademarks may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our business, financial condition, results of operations and prospects. The lives of our patents may not be sufficient to effectively protect our products and business. Patents have a limited lifespan.
Our efforts to enforce, protect or defend our proprietary rights related to trademarks may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our business, financial condition, results of operations and prospects. The lifespans of our patents may not be sufficient to effectively protect our products and business. Patents have a limited lifespan.
Furthermore, disagreements under any of these license agreements may arise, including those related to: • the scope of rights granted under the license agreement and other interpretation-related issues; • whether and the extent to which our technology and processes may infringe on intellectual property of the licensor that is not subject to the licensing agreement; 62 Table of Contents • our right to sublicense patent and other rights to third parties under collaborative development relationships; and • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners.
Furthermore, disagreements under any of these license agreements may arise, including those related to: • the scope of rights granted under the license agreement and other interpretation-related issues; • whether and the extent to which our technology and processes may infringe on intellectual property of the licensor that is not subject to the licensing agreement; • our right to sublicense patent and other rights to third parties under collaborative development relationships; and • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners.
In addition, there continues to be heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several U.S. presidential executive orders, Congressional inquiries 56 Table of Contents and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under government payor programs and review the relationship between pricing and manufacturer patient programs.
In addition, there continues to be heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several U.S. presidential executive orders, Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under government payor programs and review the relationship between pricing and manufacturer patient programs.
We may be unable to meet our requirements for our product candidates if there were a catastrophic event or failure of our current manufacturing facility or processes. We may rely on third parties to manufacture our product candidates, which subjects us to risks and could delay or prevent our development and/or commercialization, if approved, of our product candidates.
We may be unable to meet our requirements for our product candidates if there were a catastrophic event or failure of our current manufacturing facilities or processes. We may rely on third parties to manufacture our product candidates, which subjects us to risks and could delay or prevent our development and/or commercialization, if approved, of our product candidates.
The termination of any license agreement with one of our partners could adversely affect our ability to utilize the intellectual property that is subject to that license agreement in our discovery and development efforts, our ability to enter into future collaboration, licensing and/or marketing agreements for one or more affected product candidates and our ability to commercialize the affected product candidates.
The termination of any license agreement with one of our licensors could adversely affect our ability to utilize the intellectual property that is subject to that license agreement in our discovery and development efforts, our ability to enter into future collaboration, licensing and/or marketing agreements for one or more affected product candidates and our ability to commercialize the affected product candidates.
In addition, the complexities of utilizing a patient’s own cells as the starting material requires that we have suitable cells capable of yielding a viable cellular therapy product, which may not be possible for severely immune-compromised or heavily pre-treated patients.
In addition, the complexities of utilizing a patient’s own cells as the starting material requires that we have suitable cells capable of yielding a viable cell therapy product, which may not be possible for severely immune-compromised or heavily pre-treated patients.
We may experience delays in initiating, enrolling or conducting our current and planned clinical trials, and we do not know whether clinical trials will begin or enroll subjects on time, will need to be redesigned, will achieve expected enrollment rates or will be completed on schedule, if at all.
We may experience delays in initiating, enrolling or conducting our current and planned clinical trials, and we do not know whether clinical trials will begin or enroll patients on time, will need to be redesigned, will achieve expected enrollment rates or will be completed on schedule, if at all.
For example, any such event that leads to unauthorized access, use or disclosure of personal information, including personal information regarding our clinical trial subjects or employees, could harm our reputation directly, compel us to comply with potentially costly federal and/or state breach notification laws and foreign law equivalents, subject us to mandatory corrective action, including expending significant resources or modifying our business practices such as our clinical trial activities, and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information, which could result in significant legal and financial exposure and reputational damages that could potentially have an adverse effect on our business.
For example, any such event that leads to unauthorized access, use or disclosure of personal data, including personal data regarding our clinical trial patients or employees, could harm our reputation directly, compel us to comply with potentially costly federal and/or state breach notification laws and foreign law equivalents, subject us to mandatory corrective action, including expending significant resources or modifying our business practices such as our clinical trial activities, and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal data, which could result in significant legal and financial exposure and reputational damages that could potentially have an adverse effect on our business.
Sanctions imposed by the United States and other countries in response to geopolitical conflicts, including the one in Ukraine, may also continue to adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
Sanctions imposed, and other actions taken, by the United States and other countries in response to geopolitical conflicts, including the one in Ukraine, may also continue to adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
If we fail to keep apprised of and comply with applicable international, federal, state or local regulatory requirements and changes thereto, we could be subject to a range of regulatory actions that could affect our or any vendors' or partners’ ability to seek to commercialize our product candidates.
If we fail to keep apprised of and comply with applicable foreign, federal, state or local regulatory requirements and changes thereto, we could be subject to a range of regulatory actions that could affect our or any vendors’ or partners’ ability to seek to commercialize our product candidates.
For information related to our success payment obligations, see Note 3, License, Collaboration and Success Payment Agreements , in the accompanying notes to the audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10‑K.
For information related to our success payment obligations, see Note 4, License, Collaboration and Success Payment Agreements , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10‑K.
Though we intend to carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects.
Though we carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects.
Any clinical trial programs, including related regulatory filings, and research collaborations that we engage in outside the United States in the future may implicate international laws and regulations concerning data protection and privacy, including those governing various aspects of clinical research in the EU and the UK.
Any clinical trial programs, including related regulatory filings, and research collaborations that we engage in outside the United States in the future may implicate international laws and regulations concerning data privacy and security, including those governing various aspects of clinical research in the EU and the UK.
Our ability to generate revenues and achieve profitability also depends on a number of additional factors, including our ability to: • successfully complete our research activities to identify the technologies and product candidates to further investigate in clinical trials; • successfully complete development activities, including the necessary clinical trials; • complete and submit regulatory submissions to the FDA, the EMA or other agencies and obtain regulatory approval for indications for which there is a commercial market; • obtain coverage and adequate reimbursement from third parties, including government and private payors; • set commercially viable prices for our products, if any; • develop manufacturing and distribution processes for our product candidates; • produce commercial quantities of our products at acceptable cost levels; • maintain adequate supply of our product candidates, including the starting materials and reagents needed; • maintain the supply of our product candidates in a manner that is compliant with global legal requirements or to the extent necessary; • establish and maintain manufacturing relationships with reliable third parties; • achieve market acceptance of our products, if any; • attract, hire and retain qualified personnel; • protect our rights in our intellectual property portfolio; • develop a commercial organization capable of sales, marketing and distribution for any products we intend to sell ourselves in the markets in which we choose to commercialize on our own; and • find suitable distribution partners to help us market, sell and distribute our approved products in other markets.
Our ability to generate revenues and achieve profitability also depends on a number of additional factors, including our ability to: • successfully complete our research activities to identify the technologies and product candidates to further investigate in clinical trials; • successfully complete development activities, including the necessary clinical trials; • complete and submit regulatory submissions to the FDA, the European Medicines Agency or other agencies and obtain regulatory approval for indications for which there is a commercial market; 32 Table of Contents • obtain coverage and adequate reimbursement from third parties, including government and private payors; • set commercially viable prices for our products, if any; • develop manufacturing and distribution processes for our product candidates; • produce commercial quantities of our products at acceptable cost levels; • maintain adequate supply of our product candidates, including any starting materials and reagents needed; • maintain the supply of our product candidates in a manner that is compliant with global legal requirements or to the extent necessary; • establish and maintain manufacturing relationships with reliable third parties; • achieve market acceptance of our products, if any; • attract, hire and retain qualified personnel; • protect our rights in our intellectual property portfolio; • develop a commercial organization capable of sales, marketing and distribution for any products we intend to sell ourselves in the markets in which we choose to commercialize on our own; and • find suitable distribution partners to help us market, sell and distribute our approved products in other markets.
You should carefully consider the risks described below, as well as the other information contained in this Annual Report on Form 10-K, including our audited consolidated financial statements and unaudited condensed consolidated financial statements and the related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The occurrence of any of the events or developments described below could harm our business, financial condition, results of 34 Table of Contents operations and growth prospects.
You should carefully consider the risks described below, as well as the other information contained in this Annual Report on Form 10-K, including our audited consolidated financial statements and unaudited condensed consolidated financial statements and the related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations and growth prospects.
The financial markets and the global economy may also be adversely affected by the current or anticipated impact of supply chain disruptions, labor shortages, fluctuations in currency exchange rates, changes in interest rates, military conflict, acts of terrorism or other geopolitical events.
The financial markets and the global economy may also be adversely affected by the impact of supply chain disruptions, labor shortages, fluctuations in currency exchange rates, changes in interest rates, military conflict, acts of terrorism or other geopolitical events.
The clinical testing that will be required for any product candidates we choose to advance is expensive and can take many years to complete, and its outcome is inherently uncertain. The FDA may not clear the IND applications for any planned clinical trials.
The clinical testing that will be required for any product candidates we choose to advance is expensive and can take many years to complete, and its outcome is inherently uncertain. The FDA may not clear the IND submissions for any planned clinical trials.
There is no guarantee that we will be able to obtain such licenses from third parties on commercially reasonable terms, or at all. In addition, the USPTO and various foreign governmental or inter-governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during and after the patent application process.
There is no guarantee that we will be able to obtain such licenses from third parties on commercially reasonable terms, or at all. In addition, the USPTO and various foreign governmental or inter-governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during and after the 60 Table of Contents patent application process.
The future success of our business is substantially dependent on our ability to obtain regulatory approval for our product candidates for the indications we seek, and, if approved, to successfully commercialize one or more product candidates in a timely manner.
The future success of our business is substantially dependent on our ability to obtain regulatory approval for our product candidates, and any product candidates we acquire, for the indications we seek, and, if approved, to successfully commercialize one or more product candidates in a timely manner.
Moreover, we cannot be sure that the manufacturing processes used in connection with our cellular therapy product candidates will yield a sufficient supply of satisfactory products that are safe, pure and potent, scalable or profitable.
Moreover, we cannot be sure that the manufacturing processes used in connection with our cell therapy product candidates will yield a sufficient supply of satisfactory products that are safe, pure and potent, scalable or profitable.
If adequate funds are not available to us on a timely basis, including pursuant to the Sales Agreement (as defined below), we may be required to delay, limit, reduce or terminate nonclinical studies, clinical trials or other development activities for our product candidates or delay, limit, reduce or terminate our establishment of sales, marketing and distribution capabilities or other activities that may be necessary to commercialize our product candidates.
If adequate funds are not available to us on a timely basis, including pursuant to the Sales Agreement (as defined below), we may be required to delay, limit, reduce or terminate nonclinical studies, clinical trials or other development activities for 33 Table of Contents our product candidates or delay, limit, reduce or terminate our establishment of sales, marketing and distribution capabilities or other activities that may be necessary to commercialize our product candidates.
Actual or perceived safety issues, including adoption of new therapeutics or novel approaches to treatment, may adversely influence the willingness of subjects to participate in clinical trials, or if approved by applicable regulatory authorities, of physicians to subscribe to the novel treatment mechanics.
Actual or perceived safety issues, including adoption of new therapeutics or novel approaches to treatment, may adversely influence the willingness of patients to participate in clinical trials, or if approved by applicable regulatory authorities, of physicians to subscribe to the novel treatment mechanics.
Even when HIPAA does not apply, failure to take appropriate steps to keep consumers’ personal information secure may constitute a violation of the Federal Trade Commission Act and other similar laws (e.g., wiretapping laws).
Even when HIPAA does not apply, failure to take appropriate steps to keep consumers’ personal data secure may constitute a violation of the Federal Trade Commission Act and other similar laws (e.g., wiretapping laws).
This preference for U.S. industry may limit our ability to contract with non-U.S. product manufacturers for products covered by such intellectual property. 63 Table of Contents We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming and unsuccessful and have an adverse effect on the success of our business.
This preference for U.S. industry may limit our ability to contract with non-U.S. product manufacturers for products covered by such intellectual property. We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming and unsuccessful and have an adverse effect on the success of our business.
Misappropriation or unauthorized disclosure of our trade secrets to third parties could impair our competitive advantage in the market and could adversely affect our business, results of operations and financial condition. We may be subject to claims that our employees, consultants or independent contractors have breached non-compete or non-solicit obligations and/or wrongfully used or disclosed confidential information of third parties.
Misappropriation or unauthorized disclosure of our trade secrets to third parties could impair our competitive advantage in the market and could adversely affect our business, results of operations and financial condition. 65 Table of Contents We may be subject to claims that our employees, consultants or independent contractors have breached non-compete or non-solicit obligations and/or wrongfully used or disclosed confidential information of third parties.
We may also encounter additional challenges and slower than anticipated enrollment in our clinical trials if any of our competitors obtain FDA approval before us in the same therapeutic areas as our product candidates.
We may also encounter additional challenges and slower than anticipated enrollment in our clinical trials if more of our competitors obtain FDA approval before us in the same therapeutic areas as our product candidates.
Moreover, the standards applied by the U.S. Patent and Trademark Office (USPTO) and non-U.S. patent offices in granting patents are not always applied uniformly or predictably. There is also no assurance that all potentially relevant prior art relating to our patents and patent applications is known to us or has been found in the instances where searching was done.
Patent and Trademark Office (USPTO) and non-U.S. patent offices in granting patents are not always applied uniformly or predictably. There is also no assurance that all potentially relevant prior art relating to our patents and patent applications is known to us or has been found in the instances where searching was done.
In addition, our manufacturing facility will be subject to ongoing, periodic inspection by the FDA, competent authorities of EU Member States and other comparable regulatory authorities to ensure compliance with cGMPs and cGTPs.
In addition, our manufacturing facilities will be subject to ongoing, periodic inspection by the FDA, competent authorities of EU Member States and other comparable regulatory authorities to ensure compliance with cGMPs and cGTPs.
Changes in corporate tax rates, the realization of net deferred tax assets relating to our U.S. operations and the deductibility of expenses under the Tax Act or future tax reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one-time charges in the current or future taxable years and 69 Table of Contents could increase our future U.S. tax expense.
Changes in corporate tax rates, the realization of net deferred tax assets relating to our U.S. operations and the deductibility of expenses under the Tax Act or future tax reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one-time charges in the current or future taxable years and could increase our future U.S. tax expense.
Contamination with microbes, viruses or other 42 Table of Contents pathogens in either the donor material or materials utilized in the manufacturing process or ingress of microbiological material at any point in the process may result in contaminated, unusable product or necessitate the closing of a manufacturing facility for an extended period of time to allow us to investigate and remedy the contamination.
Contamination with microbes, viruses or other pathogens in either the donor material or materials utilized in the manufacturing process or ingress of microbiological material at any point in the process may result in contaminated, unusable product or necessitate the closing of a manufacturing facility for an extended period of time to allow us to investigate and remedy the contamination.
In addition, some of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates. We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.
In addition, some of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates. We face substantial competition in rapidly changing industries, which may result in others discovering, developing or commercializing products before or more successfully than we do.
If we are not able to further qualify 41 Table of Contents our existing facility or the appropriate regulatory approvals for the facility are delayed, or if we are unable to otherwise expand our manufacturing capacity, we may be unable to manufacture sufficient quantities of our product candidates, if at all, which would limit our development activities and our opportunities for growth.
If we are not able to further qualify our existing facility or the appropriate regulatory approvals for the facility are delayed, or if we are unable to otherwise expand our manufacturing capacity, we may be unable to manufacture sufficient quantities of our product candidates, if at all, which would limit our development activities and our opportunities for growth.
Such scientists and collaborators may have other commitments that would limit their availability to us. Although our scientific advisors generally agree not to do competing work, if an actual or potential conflict of interest between their work for us and their work for another entity arises, we may lose their services.
Such investigators, study staff, scientists and collaborators may have other commitments that would limit their availability to us. Although our scientific advisors generally agree not to do competing work, if an actual or potential conflict of interest between their work for us and their work for another entity arises, we may lose their services.
We have not yet demonstrated our ability to successfully complete any clinical trials (including any Phase 3 or other pivotal clinical trials), obtain regulatory approvals, manufacture a commercial‑scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.
We have not yet demonstrated our ability to successfully complete any clinical trials (including any pivotal clinical trials), obtain regulatory approvals, manufacture a commercial‑scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.
For example, in March 2023, Silicon Valley Bank (SVB) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. Similarly, later in March 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership. While the U.S.
For example, in March 2023, Silicon Valley Bank (SVB) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. Similarly, later in March 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership.
Section 404, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements and rules of The Nasdaq Stock Market LLC (Nasdaq Listing Rules) and other applicable U.S. rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
Section 404, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules and regulations of the Securities and Exchange Commission, the listing requirements and rules of The Nasdaq Stock Market LLC and other applicable U.S. rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. 64 Table of Contents If we are unable to protect the confidentiality of our trade secrets and other proprietary information, the value of our technology could be adversely affected and our business could be harmed.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. If we are unable to protect the confidentiality of our trade secrets and other proprietary information, the value of our technology could be adversely affected and our business could be harmed.
We operate in a rapidly evolving field and, having commenced operations in June 2018, have a limited operating history, which makes it difficult to evaluate our business and prospects.
We operate in a rapidly evolving field and, having commenced operations in June 2018, have a limited operating history, which make it difficult to evaluate our business and prospects.
For example, the Tax Cuts and Jobs Act of 2017 (the Tax Act), the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) and the recently enacted IRA made many significant changes to the U.S. tax laws.
For example, the Tax Cuts and Jobs Act of 2017 (the Tax Act), the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) and the IRA made many significant changes to the U.S. tax laws.
If we are unable to obtain regulatory approval for one of our product candidates in one or more jurisdictions, or any approval contains significant limitations, we may not be able to obtain sufficient funding to continue the development of that product or generate revenues attributable to that product candidate.
If we are unable to obtain regulatory approval for one of our product candidates in one or more jurisdictions, or any approval contains significant limitations, we may not be able to obtain sufficient funding to continue the development of 47 Table of Contents that product or generate revenues attributable to that product candidate.
This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations.
This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Changes in tax laws or regulations, including those that are applied adversely to us or our customers, may have a material adverse effect on our business, cash flow, financial condition, results of operations, effective tax rate or compliance costs.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe audit committee of our board of directors assists the board of directors in the oversight and assessment of risks relating to data privacy, technology and information security, including cybersecurity. 72 Table of Contents Our audit committee holds regular meetings to discuss issues including our cybersecurity threats and has a dedicated agenda during such meetings that are designed to assist our board of directors and our audit committee in exercising their oversight function.
Biggest changeOur audit committee holds regular meetings to discuss issues including our cybersecurity threats and has a dedicated agenda during such meetings that are designed to assist our board of directors and our audit committee in exercising their oversight function.
For additional information about the risks from cybersecurity threats that may materially affect us and how they may do so, see the section entitled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K, including “If our information technology systems or those third parties upon which we rely, or our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm and other adverse consequences.” Governance Our cybersecurity risk management strategy relies on input from management, including our Chief Operating Officer, Mr.
For additional information about the risks from cybersecurity threats that may materially affect us and how they may do so, see the section entitled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K, including “If our information technology systems or those third parties with whom we work, or our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm and other adverse consequences.” Governance Our cybersecurity risk management strategy relies on input from management, including our Chief Operating Officer, Mr.
We identify such threats by, among other things, monitoring the threat environment using manual and automated tools, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and actors, 71 Table of Contents conducting scans of the threat environment, evaluating our and our industry’s risk profile, evaluating threats reported to us, conducting threat assessments for internal and external threats and conducting vulnerability assessments to identify vulnerabilities.
We identify such threats by, among other things, monitoring the threat environment using manual and automated tools, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and actors, conducting scans of the threat environment, evaluating our and our industry’s risk profile, evaluating threats reported to us, conducting threat assessments for internal and external threats and conducting vulnerability assessments to identify vulnerabilities.
To operate our business, we utilize certain third‑party service providers to perform a variety of functions, such as outsourced business functions, professional services, software-as-a-service platforms, managed services, property management, cloud-based infrastructure, data center facilities, encryption and authentication technology and corporate productivity services.
To operate our business, we utilize certain third‑party service providers to perform a variety of functions, such as outsourced business functions, professional services, software-as-a-service platforms, managed services, property management, cloud-based infrastructure, data center facilities, encryption and authentication technology and corporate 73 Table of Contents productivity services.
Removed
For service providers that provide particularly critical services to us or process particularly sensitive information for us, we engage industry leaders with robust and documented cybersecurity programs.
Added
The audit committee of our board of directors assists the board of directors in the oversight and assessment of risks relating to data privacy, technology and information security, including cybersecurity.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that these existing facilities will be adequate for our near-term needs. If required, we believe that suitable additional or alternative space would be available in the future on commercially reasonable terms.
Biggest changeWe believe that these existing facilities will be adequate for our near-term needs. If required, we believe that suitable additional or alternative space would be available in the future on commercially reasonable terms. 74 Table of Contents
Added
In connection with our acquisition of ImmPACT, we acquired a lease for office and laboratory space in Los Angeles, California. We lease approximately 26,000 square feet of manufacturing, office and laboratory space in Los Angeles, California, pursuant to a lease agreement that we acquired in October 2024 and expires in January 2028.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of outcome, any such proceedings or claims is subject to inherent uncertainties and can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained. Item 4. Mine Safety Disclosures. Not applicable. 73 Table of Contents PART II
Biggest changeRegardless of outcome, any such proceedings or claims is subject to inherent uncertainties and can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained. Item 4. Mine Safety Disclosures. Not applicable. 75 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders On February 22, 2024, there were 60 holders of record of our common stock.
Biggest changeHolders On March 6, 2025, there were 73 holders of record of our common stock.
The comparisons in the table are required by the Securities and Exchange Commission and are not intended to forecast or be indicative of possible future performance of our common stock. 74 Table of Contents The above Stock Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, each as amended, except to the extent that we specifically incorporate it by reference into such filing.
The comparisons in the table are required by the Securities and Exchange Commission and are not intended to forecast or be indicative of possible future performance of our common stock. 76 Table of Contents The above Stock Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, each as amended, except to the extent that we specifically incorporate it by reference into such filing.
Stock Performance Graph The following stock performance graph compares the value of an investment in (i) our common stock, (ii) Nasdaq Composite Index and (iii) Nasdaq Biotechnology Index for the period from June 17, 2021 (the date our common stock commenced trading on the Nasdaq Global Select Market) through December 31, 2023.
Stock Performance Graph The following stock performance graph compares the value of an investment in (i) our common stock, (ii) Nasdaq Composite Index and (iii) Nasdaq Biotechnology Index for the period from June 17, 2021 (the date our common stock commenced trading on The Nasdaq Global Select Market) through December 31, 2024.
Unregistered Sales of Equity Securities None. Repurchases of Equity Securities None. Item 6. [Reserved] 75 Table of Contents
Unregistered Sales of Equity Securities None. Repurchases of Equity Securities None. Item 6. [Reserved] 77 Table of Contents

Item 7. Management's Discussion & Analysis

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

49 edited+60 added−35 removed37 unchanged
Biggest changeResults of Operations Years Ended December 31, 2023, 2022 and 2021 The following table summarizes our results of operations for the periods presented (in thousands): Year Ended December 31, Change 2023 2022 2021 2023 vs 2022 2022 vs 2021 Revenue $ 130 $ 84,683 $ 10,650 $ (84,553) $ 74,033 Operating expenses: Research and development 182,945 159,188 138,693 23,757 20,495 General and administrative 66,983 117,307 89,057 (50,324) 28,250 Other operating income, net (2,790) (4,754) (2,324) 1,964 (2,430) Total operating expenses 247,138 271,741 225,426 (24,603) 46,315 Loss from operations (247,008) (187,058) (214,776) (59,950) 27,718 Interest income, net 23,453 7,053 1,165 16,400 5,888 Other income (expense), net 1,846 1,887 (161) (41) 2,048 Impairment of other investments (12,923) (5,000) (36,447) (7,923) 31,447 Total other income (loss), net 12,376 3,940 (35,443) 8,436 39,383 Net loss $ (234,632) $ (183,118) $ (250,219) $ (51,514) $ 67,101 Revenue Reven ue was $0.1 million a nd $84.7 million for the years ended December 31, 2023 and 2022, respectively.
Biggest changeImpairment of Other Investments Impairment of other investments consists of reductions in the value of certain other investments. 82 Table of Contents Results of Operations Years Ended December 31, 2024, 2023 and 2022 The following table summarizes our results of operations for the periods presented (in thousands): Year Ended December 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 Revenue $ 61 $ 130 $ 84,683 $ (69) $ (84,553) Operating expenses: Research and development 171,603 182,945 159,188 (11,342) 23,757 General and administrative 52,041 66,983 117,307 (14,942) (50,324) Other operating income, net (3,309) (2,790) (4,754) (519) 1,964 Acquired in-process research and development 87,184 — — 87,184 — Impairment of long-lived assets 51,297 — — 51,297 — Total operating expenses 358,816 247,138 271,741 111,678 (24,603) Loss from operations (358,755) (247,008) (187,058) (111,747) (59,950) Interest income, net 24,068 23,453 7,053 615 16,400 Other income, net 4,694 1,846 1,887 2,848 (41) Impairment of other investments (13,001) (12,923) (5,000) (78) (7,923) Total other income, net 15,761 12,376 3,940 3,385 8,436 Net loss $ (342,994) $ (234,632) $ (183,118) $ (108,362) $ (51,514) Research and Development Expenses The following table summarizes the components of our research and development expenses for the periods presented (in thousands): Year Ended December 31, Change 2024 2023 2022 2024 vs 2023 2023 vs 2022 Personnel $ 67,693 $ 81,717 $ 70,483 $ (14,024) $ 11,234 Research activities, collaborations and outside services 53,654 50,470 41,682 3,184 8,788 Facilities, technology and depreciation 50,564 51,688 52,153 (1,124) (465) Success payments (308) (930) (5,130) 622 4,200 Total research and development expenses $ 171,603 $ 182,945 $ 159,188 $ (11,342) $ 23,757 Research and developm ent expenses were $171.6 million and $182.9 million for the years ended December 31, 2024 and 2023, respectively.
Upfront payments and milestones paid to third parties in connection with technology platforms that have not reached technological feasibility and do not have an alternative future use are expensed as incurred. Research and development costs also include expenses related to the reduction in workforce, which was substantially completed in 2023.
Upfront payments and milestones paid to third parties in connection with technology platforms that have not reached technological feasibility and do not have an alternative future use are expensed as incurred. Research and development costs also include expenses related to the November 2023 reduction in workforce, which was substantially completed in 2023.
Our research and development expenses may vary significantly based on factors such as: • the number and scope of nonclinical and IND-enabling studies; • per patient trial costs; • the number of trials required for approval; • the number of sites included in the trials; • the countries in which the trials are conducted; • the length of time required to enroll eligible patients; • the number of patients that participate in the trials; • the drop-out or discontinuation rates of patients; • potential additional safety monitoring requested by regulatory agencies; • the duration of patient participation in the trials and follow-up; • the cost and timing of manufacturing our product candidates; • the phase of development of our product candidates; • the efficacy and safety profile of our product candidates; • the extent to which we establish additional collaboration or license agreements; and • whether we choose to partner any of our product candidates and the terms of such partnership.
Our research and development expenses may vary significantly based on factors such as: • the number and scope of nonclinical and IND-enabling studies; • per patient trial costs; • the number of trials required for approval; • the number of sites included in the trials; • the countries in which the trials are conducted; • the length of time required to enroll eligible patients; • the number of patients that participate in the trials; • the drop-out or discontinuation rates of patients; • potential additional safety monitoring requested by regulatory agencies; • the duration of patient participation in the trials and follow-up; 81 Table of Contents • the cost and timing of manufacturing our product candidates; • the phase of development of our product candidates; • the efficacy and safety profile of our product candidates; • the extent to which we establish additional collaboration or license agreements; and • whether we choose to partner any of our product candidates and the terms of such partnership.
GSK terminated the GSK Agreement effective December 2022 and we do not expect further revenue from the collaboration. See Note 3, License, Collaboration and Success Payment Agreements , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details regarding termination of the GSK Agreement.
GSK terminated the GSK Agreement effective December 2022 and we do not expect further revenue from the collaboration. See Note 4, License, Collaboration and Success Payment Agreements , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details regarding termination of the GSK Agreement.
The impairment expenses were recorded within impairment of other investments on the Consolidated Statements of Operations and Comprehensive Loss and as a reduction of the other investments on the Consolidated Balance Sheets.
The impairment expenses were recorded within impairment of other investments on our Consolidated Statements of Operations and Comprehensive Loss and as a reduction of the other investments on our Consolidated Balance Sheets.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report on Form 10-K can be found in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Our future capital requirements will depend on many factors, including: • the scope, timing, progress, costs and results of discovery, nonclinical development and clinical trials for our current and future product candidates and any additional nonclinical studies; • the number of clinical trials required for regulatory approval of our current and future product candidates; • the costs, timing and outcome of regulatory review of any of our current and future product candidates; • the cost of manufacturing clinical and commercial supplies of our current and future product candidates; • the costs and timing of future commercialization activities, including manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; • further investment to build additional manufacturing facilities or expand the capacity of our existing ones; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; • our ability to maintain existing, and establish new, collaborations, licenses, product acquisitions or other strategic transactions and the fulfillment of our financial obligations under any such agreements, including the 82 Table of Contents timing and amount of any success payment, future contingent payments, milestone, royalty or other payments due under any such agreement; • the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; • expenses to attract, hire and retain skilled personnel; • the costs and estimated financial impact of our reduction in workforce in the fourth quarter of 2023; • the costs of operating as a public company, including legal, accounting and other related expenses as well as costs relating to maintaining or expanding our operational, financial and management systems; • addressing or responding to any potential disputes or litigation; and • the extent to which we acquire or invest in businesses, products and technology platforms.
Our future capital requirements will depend on many factors, including: • the scope, timing, progress, costs and results of discovery, nonclinical development and clinical trials for our current and future product candidates and any additional nonclinical studies; • the number of clinical trials required for regulatory approval of our current and future product candidates; • the costs, timing and outcome of regulatory review of any of our current and future product candidates; • the cost of manufacturing clinical and commercial supplies of our current and future product candidates; • the costs and timing of future commercialization activities, including manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; • further investment to build additional manufacturing facilities or expand the capacity of our existing ones; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; • our ability to maintain existing, and establish new, collaborations, licenses, product acquisitions or other strategic transactions and the fulfillment of our financial obligations under any such agreements, including the timing and amount of any success payment, future contingent payments, milestone, royalty or other payments due under any such agreement; • the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; • expenses to attract, hire and retain skilled personnel; • the costs and estimated financial impact of our reduction in workforce in the fourth quarter of 2023; • the costs of operating as a public company, including legal, accounting and other related expenses as well as costs relating to maintaining or expanding our operational, financial and management systems; • addressing or responding to any potential disputes or litigation; • the extent to which we acquire or invest in businesses, products and technology platforms; and • integration of businesses, products and technology platforms, such as ImmPACT, into our business.
Recently Adopted and Recent Accounting Pronouncements See Note 2, Basis of Presentation and Significant Accounting Policies, in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for information about recent accounting pronouncements, the timing of their adoption and our assessment, to the extent we have made one yet, of their potential impact on our financial condition or results of operations. 85 Table of Contents
Recently Adopted and Recent Accounting Pronouncements See Note 2, Basis of Presentation and Significant Accounting Policies, in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for information about recent accounting pronouncements, the timing of their adoption and our assessment, to the extent we have made one yet, of their potential impact on our financial condition or results of operations.
The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the audited consolidated financial statements, as well as the reported revenue and expenses incurred during the reporting periods.
GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of our audited consolidated financial statements, as well as the reported revenue and expenses incurred during the reporting periods.
See also the section titled “Special Note Regarding Forward-Looking Statements.” This section under Management’s Discussion and Analysis of Financi al Condition and Results of Operations generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
See also the section titled “Special Note Regarding Forward-Looking Statements.” This section under Management’s Discussion and Analysis of Financi al Condition and Results of Operations generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
We anticipate that our research and development expenses will increase over the foreseeable future as we expand our research and 78 Table of Contents development efforts including completing nonclinical studies, commencing planned clinical trials, conducting and completing current and planned clinical trials, seeking regulatory approvals of our product candidates, identifying new product candidates and incurring costs to acquire and license technology platforms.
We anticipate that our research and development expenses will increase over the foreseeable future as we expand our research and development efforts including completing nonclinical studies, commencing planned clinical trials, conducting and completing current and planned clinical trials, seeking regulatory approvals of our product candidates, identifying new product candidates and incurring costs to acquire and license technology platforms.
From June 29, 2018 (inception) through December 31, 2023, we raised an aggregate of $1.4 billion in gross proceeds from the sales of our convertible preferred stock and the IPO.
From June 29, 2018 (inception) through December 31, 2024, we raised an aggregate of $1.4 billion in gross proceeds from the sales of our convertible preferred stock and the IPO.
Our ability to raise additional funds 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 resulting from actual or perceived changes in interest rates and economic inflation, and otherwise.
Our ability to raise additional funds 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 resulting from actual or 85 Table of Contents perceived changes in interest rates and economic inflation, and otherwise.
See Note 3, License, Collaboration and Success Payment Agreements , and Note 9, Leases , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8, of this Annual Report on Form 10-K for additional information.
See Note 4, License, Collaboration and Success Payment Agreements , Note 11, Leases , and Note 3, Acquisition , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8, of this Annual Report on Form 10-K for additional information.
When our assessment indicates that an impairment exists, we write down the investment to its fair value. We perform quarterly qualitative assessments of potential indicators of impairment and determined that indicators existed for certain of our other investments during the years ended December 31, 2023, 2022 and 2021 .
When our assessment indicates that an impairment exists, we write down the investment to its fair value. 88 Table of Contents We perform quarterly qualitative assessments of potential indicators of impairment and determined that indicators existed for certain of our other investments during the years ended December 31, 2024, 2023 and 2022 .
Liquidity and Capital Resources Sources of Liquidity Since our inception, we have funded our operations primarily through the sale and issuance of convertible preferred stock, the sale of common stock in connection with our IPO and business development activities. As of December 31, 2023, we ha d $562.7 million in cas h, cash equivalents and marketable securities.
Liquidity and Capital Resources Sources of Liquidity Since our inception, we have funded our operations primarily through the sale and issuance of convertible preferred stock, the sale of common stock in connection with our IPO and business development activities. As of December 31, 2024, we ha d $383.5 million in cas h, cash equivalents and marketable securities.
Financing Activities During the year ended December 31, 2023, cash provided by financing activities was $1.7 million, consisting of $1.9 million in proceeds from our employee stock purchase plan and $0.3 million in proceeds from the exercise of stock options, partially offset by $0.5 million in taxes paid related to the net share settlement of equity awards.
Financing Activities During the year ended December 31, 2024, cash provided by financing activities was $1.3 million, consisting of $1.2 million in proceeds from our employee stock purchase plan and $0.2 million in proceeds from the exercise of stock options, partially offset by $0.1 million in taxes paid related to the net share settlement of equity awards.
License, Collaboration and Success Payment Agreements For a detailed description of our license, collaboration and success payment agreements, see the section titled “ Business—License, Collaboration and Success Payment Agreements ” in Part I, Item 1 of this Annual Report on Form 10‑K and Notes 2 and 3 to our audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
License and Collaboration Agreements For a detailed description of our license and collaboration agreements, see the section titled “ Business—License and Collaboration Agreements ” in Part I, Item 1 of this Annual Report on Form 10 ‑K and Notes 2 and 4 to o ur audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
As of December 31, 2023 , our material cash requirements consisted primarily of paying salaries and benefits, administering clinical trials, conducting research, improving our manufacturing capabilities, providing the technology and facilities necessary to support our operations, funding operating lease obligations and other payments related to our collaborative agreements.
As of December 31, 2024 , our material cash requirements consisted primarily of paying salaries and benefits, administering clinical trials, conducting research, improving our manufacturing capabilities, providing the technology and facilities necessary to support our operations, funding operating lease obligations and other payments related to our collaboration and license agreements and the Merger Agreement.
Recording upward and downward adjustments to the carrying value of our equity investments as a result of observable price changes requires quantitative assessments of the fair value of our investments using various valuation methodologies and involves the use of estimates.
Recording upward and downward adjustments to the carrying value of our equity investments as a result of observable price changes requires quantitative assessments of the fair value of our investments using various valuation methodologies and involves the use of estimates. Non-marketable equity investments are also subject to periodic impairment reviews.
Macroeconomic Environment Our business and operations may be affected by worldwide economic conditions, which may continue to be impacted by global macroeconomic challenges such as the effects of the ongoing geopolitical conflicts in Ukraine, escalating armed conflicts and turmoil in the Middle East, tensions in U.S.-China relations, inflationary pressures, interest rate environment, instability in the banking industry and overall market volatility.
Macroeconomic Environment Our business and operations may be affected by worldwide economic conditions, which may continue to be impacted by global macroeconomic challenges such as the effects of the ongoing geopolitical conflicts in Ukraine, armed conflicts and turmoil in the Middle East, tensions in U.S.-China relations, inflationary pressures, fluctuations in the interest rate environment, disruption between the U.S. and its trading partners due to tariffs or other policies, instability in the banking industry, supply constraints and overall market volatility.
General and Administrative Expenses General and administrative expenses were $67.0 million and $117.3 million for the years ended December 31, 2023 and 2022, respectively.
General and Administrative Expenses General and administrative expenses were $52.0 million and $67.0 million for the years ended December 31, 2024 and 2023, respectively.
Interest Income, Net Interest income, net was $23.5 million and $7.1 million for the years ended December 31, 2023 and 2022, respectively. The increase of $16.4 million was primarily driven by higher interest rates in 2023. Other Income (Expense), Net Other income (expense), net was $1.8 million and $1.9 million for the years ended December 31, 2023 and 2022, respectively.
The increase of $0.6 million was primarily driven by higher interest rates in 2024. Other Income, Net Other income, net was $4.7 million and $1.8 million for the years ended December 31, 2024 and 2023, respectively.
Based on our current operating plan, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to meet our working capital and capital expenditure needs into 2027.
Based on our current operating plan, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months.
Operating Expenses Research and Development To date, research and development expenses consist of costs incurred by us for the discovery and development of our technology platforms and product candidates, and include costs incurred in connection with strategic collaborations, costs to license technology, personnel-related costs, including stock-based compensation expense, facility and technology related costs, research and laboratory expenses, as well as other expenses, which include consulting fees and other costs.
In the future, we may generate additional revenue from other collaborations, strategic alliances, licensing agreements, product sales, or a combination of these. 80 Table of Contents Operating Expenses Research and Development To date, research and development expenses consist of costs incurred by us for the discovery and development of our technology platforms and product candidates, and include costs incurred in connection with strategic collaborations, costs to license technology, personnel-related costs, including stock-based compensation expense, facility and technology related costs, research and laboratory expenses, as well as other expenses, which include consulting fees and other costs.
For the year ended December 31, 2022, the $5.0 million impairment consisted of the full impairment of one of our other investments. See Note 5, Other Investments , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8, of this Annual Report on Form 10-K for additional information.
See Note 7, Other Investments , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8, of this Annual Report on Form 10-K for additional information.
Non-cash deferred revenue of $84.7 million also contributed to net cash used in operating activities. Investing Activ ities During the year ended December 31, 2023, cas h provided by investing activities was $184.0 million, consisting of net maturities, sales and purchases of marketable securities of $186.7 million, partially offset by purchases of property and equipment of $2.7 million.
During the year ended December 31, 2023, cash used in investing activities was $184.0 million , consisting of net maturities and purchases of marketable securities of $186.7 million, partially offset by purchases of property and equipment of $2.7 million .
For the year ended December 31, 2023 and future periods, the change in the Fred Hutch success payment liability fair value is recognized in other income (expense), net, as the requisite service obligation had been met.
For the last three months of the year ended December 31, 2024 and future periods, the change in the Stanford success payment liability fair value was recognized in other income, net, as the requisite service obligation had been met.
We will pay commissions to the Agent of up to 3% of the gross proceeds of the sale of the Placement Shares sold under the Sales Agreement and reimburse the Agent for certain expenses. Neither us nor the Agent is obligated to sell any shares and, to date, we have not made any sales under the Sales Agreement.
We will pay commissions to the Agent of up to 3% of the gross proceeds of the sale of the Placement Shares sold under the Sales Agreement and reimburse the Agent for certain expenses.
For additional information regarding our business, see “Business” in Part I, Item 1 of this Annual Report on Form 10-K. Pipeline Programs and Operational Updates Pipeline Programs We are advancing four wholly-owned product candidates. Two product candidates, LYL797 and LYL845 are in Phase 1 clinical development.
For additional information regarding our business, see “Business” in Part I, Item 1 of this Annual Report on Form 10-K. Pipeline Programs and Operational Updates Pipeline Programs We are advancing a pipeline of next-generation CAR T-cell product candidates.
Since our inception, we have incurred significant operating losses. We have not yet commercialized any product candidates and we do not expect to generate revenue from sales of any product candidates for a number of years, if ever. We had an accumulated deficit of $1.0 billion as of December 31, 2023.
Since our inception, we have incurred significant operating losses. We have not yet commercialized any product candidates and we may never generate revenue from sales of any product candidates. We had an accumulated deficit of $1.3 billion as of December 31, 2024.
Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2023 2022 2021 Net cash (used in) provided by: Operating activities $ (163,694) $ (169,555) $ (126,249) Investing activities 184,048 (11,540) (121,573) Financing activities 1,743 10,635 401,244 Net increase (decrease) in cash, cash equivalents and restricted cash $ 22,097 $ (170,460) $ 153,422 Operating Activities During the year ended December 31, 2023, net cash used in operating activities was $163.7 million, primarily reflecting our net loss of $234.6 million, partially offset by non-cash items primarily related to stock-based compensation expense o f $47.1 million , depreciation and amortization expense of $20.3 million and impairment of other investments of $12.9 million.
Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2024 2023 2022 Net cash (used in) provided by: Operating activities $ (162,394) $ (163,694) $ (169,555) Investing activities 122,424 184,048 (11,540) Financing activities 1,326 1,743 10,635 Net (decrease) increase in cash, cash equivalents and restricted cash $ (38,644) $ 22,097 $ (170,460) Operating Activities During the year ended December 31, 2024, net cash used in operating activities was $162.4 million, primarily reflecting our net loss of $343.0 million, partially offset by non-cash items primarily related to acquired IPR&D expense of $87.2 million, impairment of long-lived assets expense of $51.3 million , stock-based compensation expense o f $33.1 million , depreciation and amortization expense of $19.6 million and impairment of other investments of $13.0 million.
Non-cash net amortization and accretion on marketable securitie s of $9.6 million also contributed to net cash used in operating activities. 83 Table of Contents During the ye ar ended December 31, 2022, net cash used in operating activities was $169.6 million , primarily reflecting our net loss of $183.1 million , partially offset by non-cash items mainly related to stock-based compensation expense of $81.9 million , depreciation and amortization expense of $18.0 million and impairment of other investments of $5.0 million.
During the ye ar ended December 31, 2023, net cash used in operating activities was $163.7 million , primarily reflecting our net loss of $234.6 million , partially offset by non-cash items mainly related to stock-based compensation expense of $47.1 million , depreciation and amortization expense of $20.3 million and impairment of other investments of $12.9 million.
During the year ended December 31, 2022, cash provided by financing activities was $10.6 million, consisting of $9.6 million in proceeds from the exercise of stock options and $1.5 million in proceeds from our employee stock purchase plan, partially offset by $0.5 million in taxes paid related to the net share settlement of equity awards.
During the year ended December 31, 2023, cash provided by financing activities was $1.7 million, consisting of $1.9 million in proceeds from our employee stock purchase plan and $0.3 million in proceeds from the exercise of stock options, partially offset by $0.5 million in taxes paid related to the net share settlement of equity awards. 86 Table of Contents Critical Accounting Policies and Significant Judgments and Estimates Our audited consolidated financial statements are prepared in accordance with U.S.
For a further description of our revenue recognition, see Note 2, Basis of Presentation and Significant Accounting Policies, in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8, of this Annual Report on Form 10-K.
See Note 3, Acquisition , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8, of this Annual Report on Form 10-K for additional information.
Future Funding Requirements We expect to incur additional losses in the foreseeable future as we conduct and expand our research and development efforts, including conducting nonclinical studies and clinical trials, developing new product candidates, establishing internal manufacturing capabilities and funding our operations generally.
Neither us nor the Agent is obligated to sell any shares and, to date, we have not made any sales under the Sales Agreement. 84 Table of Contents Future Funding Requirements We expect to incur additional losses in the foreseeable future as we conduct and expand our research and development efforts, including conducting nonclinical studies and clinical trials, integration of ImmPACT into our business, developing new product candidates, establishing internal manufacturing capabilities and funding our operations generally.
As a result, we recorded impairment expense of $12.9 million for our PACT Series D convertible preferred stock and another investment for the year ended December 31, 2023 , $5.0 million for one investment for the year ended December 31, 2022 and $36.4 million for our PACT Series C-1 convertible preferred stock investment for the year ended December 31, 2021.
As a result, we recorded impairment expense of $13.0 million for one investment the year ended December 31, 2024 , $12.9 million for two investments for the year ended December 31, 2023 and $5.0 million for one investment for the year ended December 31, 2022.
For fiscal 2023, changes in the Fred Hutch success payment liability were recognized in other income (expense) net as Fred Hutch had provided the requisite service obligation to earn the potential success payment consideration under the continued collaboration as of December 2022.
For the year ended December 31, 2023 and future periods, the change in the Fred Hutch success payment liability fair value was recognized in other income, net, as the requisite service obligation had been met. As of September 30, 2024, Stanford had provided the requisite service obligation to earn the potential success payment consideration under the continued collaboration.
Interest Income, Net Interest income, net consists primarily of interest earned on our cash, cash equivalents and marketable securities balances. 79 Table of Contents Other Income (Expense), Net Other income (expense), net consists primarily of the change in fair value associated with our success payment liabilities to Fred Hutch for the year ended December 31, 2023 and primarily of a gain to record the PACT Series D convertible preferred shares for the year ended December 31, 2022 and changes in the fair value of an equity warrant investment held for the years ended December 31, 2022 and 2021.
Other income, net for the year ended December 31, 2022 consists primarily of a gain to record the PACT Series D convertible preferred shares and changes in the fair value of an equity warrant investment for the year ended December 31, 2022.
For a further discussion of trends, uncertainties and other factors that could impact our operating results, see the section entitled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K. 77 Table of Contents Reduction in Workforce In the fourth quarter of 2023, we implemented a reduction in our workforce of approximately 25% to reduce operating costs and improve operating efficiency.
Economic uncertainty may persist into the remainder of 2025, and the market dynamics discussed above and similar adverse conditions may negatively impact our business. For a further discussion of trends, uncertainties and other factors that could impact our operating results, see the section entitled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.
During the year ended December 31, 2022, cash used in investing activities was $11.5 million , consisting of purchases of property and equipment of $24.3 million offset by net maturities, sales and purchases of marketable securities of $12.7 million .
Investing Activ ities During the year ended December 31, 2024, cas h provided by investing activities was $122.4 million, consisting of net maturities and purchases of marketable securities of $154.2 million, partially offset by the $31.3 million acquisition of ImmPACT net of cash acquired.
Legal costs include those related to corporate, dispute and patent matters. General and administrative costs also include expenses related to the reduction in workforce, which was substantially completed in 2023.
Legal costs include those related to corporate, dispute and patent matters.
The fair value of stock-based awards is recognized as an expense on a straight-line basis over the requisite service period, with forfeitures recognized as they occur. We use the Black-Scholes model to determine the fair value of our options.
Stock-based compensation expense for RSAs, RSUs and stock options is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective award. The Company accounts for forfeitures as they occur.
Other income (expense), net of $1.8 million consisted primarily of a gain associated with the change in fair value associated with our Fred Hutch success payment liabilities.
Other income, net for the year ended December 31, 2023 consists primarily of changes in the fair value of our success payment liabilities to Fred Hutch.
The decrease of $50.3 million was primarily due to a decrease of $36.3 million in stock-based compensation expense, primarily related to significant awards being fully expensed, a decrease of $9.7 million in outside services primarily due to a decrease in legal and consulting expenses and a decrease of $2.8 million in other administrative expenses.
The decrease of $14.9 million was primarily due to a $13.0 million reduction in personnel costs, including a $10.3 million decrease in stock-based compensation expense, primarily related to significant awards being fully expensed in previous periods and a decrease of $2.7 million in personnel-related expenses mainly due to a decrease in headcount associated with the Company’s November 2023 reduction in workforce. 83 Table of Contents Other Operating Income, Net Other operating income, net was $3.3 million and $2.8 million for the years ended December 31, 2024 and 2023, respectively.
(PACT) Series D convertible preferred shares acquired, offset by a decrease of $1.1 million in the fair value of an equity warrant investment held for the year ended December 31, 2022. 81 Table of Contents Impairment of Other Investments For the year ended December 31, 2023, the $12.9 million impairment consisted of the full impairment of two of our other investments.
Impairment of Other Investments For the year ended December 31, 2024, the $13.0 million impairment consisted of the full impairment of one of our other investments. For the year ended December 31, 2023, the $12.9 million impairment consisted of the full impairment of two of our other investments.
The Black-Scholes option pricing model requires the use of assumptions, including stock price volatility, the expected life of stock options, risk-free interest rate and the fair value of the underlying common stock on the date of grant. Our restricted stock awards and restricted stock units are valued based on the fair market value of the award on the grant date.
The fair value of stock options is estimated on the date of grant using a Black-Scholes option pricing model which requires management to apply judgment and make estimates, using inputs including: • Fair Value of Common Stock—The fair value of common stock is based on the closing price as reported on The Nasdaq Global Select Market on the date of grant. • Expected Term—The expected term represents the period that a stock-based award is expected to be outstanding.
Overview We are a clinical-stage cell therapy company advancing a pipeline of product candidates for patients with solid tumors utilizing our proprietary ex vivo genetic and epigenetic T‑cell reprogramming technologies. Our investigational therapies use the patient’s own cells as the starting point to generate highly tumor-reactive, longer-lasting functional T cells with enhanced ability to defeat solid tumors.
Overview We are a clinical-stage cell therapy company expecting to enter pivotal trials in 2025 and advancing a pipeline of proprietary next-generation autologous CAR T-cell product candidates for patients with hematologic malignancies and solid tumors. We are pioneering novel approaches designed to generate T cells that drive long-lasting clinical responses.
The liabilities are marked to market at each balance sheet date with all changes in value recognized in research and development expense in the Consolidated Statements of Operations and Comprehensive Loss. Once their service periods are complete , the success payment fair value changes are recorded in other income (expense), net.
Liabilities for contingent consideration are remeasured each reporting period and subsequent changes in fair value are recognized within other income, net in our Consolidated Statements of Operations and Comprehensive Loss. The assumptions utilized in the calculation of the fair values include the probability of success and our stock price.
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Our innovative reprogramming technologies address what we believe are the primary barriers that limit consistent and long-lasting responses to T‑cell therapy in solid tumors: T‑cell exhaustion and lack of durable stemness. Our technologies are designed to generate T cells with the ability to persist and self‑renew while driving durable tumor cytotoxicity, even in the setting of an immunosuppressive tumor microenvironment.
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The patient’s own living cells are the starting point for our investigational CAR T-cell therapies, and we enhance them with our innovative CAR constructs, technology and manufacturing protocols. In hematologic malignancies, we are focused on advancing to pivotal trials a product candidate designed to deliver improved outcomes over first-generation CD19 CAR T-cell therapies for patients with aggressive large B-cell lymphoma.
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We apply our technologies with the aim of developing T‑cell therapies with improved and durable antitumor responses for patients with solid tumors. Our technologies can be applied in a target agnostic manner to multiple T‑cell modalities, including chimeric antigen receptor (CAR), tumor-infiltrating lymphocytes (TIL) and T‑cell receptor (TCR) therapies.
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Our lead program, IMPT-314, is a dual-targeting CD19/CD20 CAR T-cell product candidate designed to increase complete response rates and prolong the duration of response as compared to the approved CD19‑targeted CAR T-cell therapies.
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Our growing pipeline of promising cell product candidates targets solid tumor indications with large unmet needs that are collectively responsible for approximately 180,000 deaths in the United States annually. Each of our programs provide opportunities to expand into additional indications beyond the patient populations we are initially targeting.
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IMPT-314 is designed with a true ‘OR’ logic gate to target B cells that express either CD19 or CD20 with full potency and is manufactured with a process that enriches for CD62L+ cells to generate cell products with more naïve and central memory CAR T cells with enhanced stemlike features and antitumor activity.
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Two additional product candidates, LYL119 and a second-generation tumor infiltrating lymphocyte (TIL) product candidate, are in preclinical development and our T-cell rejuvenation technology is in research.
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To realize the potential of cell therapy for solid tumors, Lyell is also developing next-generation CAR T-cell product candidates enhanced with our anti-exhaustion and additional arming technologies and manufactured with our proprietary protocols.
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LYL797 – A ROR1-targeted Chimeric Antigen Receptor (CAR) T-cell product candidate genetically reprogrammed to overexpress c-Jun and epigenetically reprogrammed using Lyell’s proprietary Epi-R TM manufacturing protocol, designed for differentiated potency and durability • Enrollment in the Phase 1 clinical trial of LYL797 is ongoing.
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These approaches are designed to endow CAR T cells with attributes needed to drive durable tumor cytotoxicity and achieve consistent and long-lasting clinical responses, including the ability to resist exhaustion, maintain qualities of durable stemness and function in the hostile tumor microenvironment.
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The study includes patients with relapsed or refractory triple-negative breast cancer (TNBC) or non-small cell lung cancer (NSCLC). • Initial clinical and translational data from at least 20 patients in the Phase 1 trial of LYL797 are expected in the first half of 2024. • Initiated a CAR T-cell manufacturing proof-of-concept collaboration with Cellares as part of an overall manufacturing strategy to build scale and reduce cost.
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Our lead program, IMPT-314, is in Phase 1/2 clinical development for relapsed or refractory aggressive large B-cell lymphoma and our preclinical programs target solid tumor indications. Each of our programs target cancers with large unmet need with substantial patient populations (see Table 1).
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Under the collaboration, the companies have agreed on a proof-of-concept technology transfer process for the manufacture of Lyell’s LYL797 CAR T-cell therapy, using Cellares’ Cell Shuttle™. 76 Table of Contents • Announced initial results from Lyell’s ROR1 screening program indicating that expression of ROR1 in TNBC and NSCLC, 53% (N=77) and 33% (N=18), respectively, is consistent with what has been reported in the literature.
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IMPT-314: A next-generation dual-targeting CD19/CD20 CAR T-cell product candidate designed to increase complete response rates and prolong the duration of response as compared to the approved CD19‑targeted CAR T-cell therapies for the treatment of large B-cell lymphoma. • A Phase 1/2 clinical trial is ongoing and currently enrolling patients in the 3 rd line+ and 2 nd line settings who have not previously received CAR T-cell therapy.
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The screening program is designed to support Lyell’s current and future clinical trials. • Presented a LYL797 Trial in Progress poster at the 38th Annual Meeting of the Society for Immunotherapy of Cancer (SITC).
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IMPT-314 has received Fast Track Designation from the U.S. Food and Drug Administration for the treatment of relapsed/refractory aggressive large B-cell lymphoma in the 3 rd line+ setting. 78 Table of Contents • Initial data from the Phase 1/2 trial was presented at the ASH 2024 Annual Meeting on December 9, 2024.
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LYL845 – A novel epigenetically reprogrammed TIL product candidate using Lyell’s proprietary Epi-R TM manufacturing protocol, designed for differentiated potency and durability • Enrollment in the Phase 1 clinical trial for LYL845 is ongoing.
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Data from 23 patients with R/R, CAR T-naive large B-cell lymphoma who received IMPT-314 were reported. The efficacy evaluable population consisted of 17 patients. The overall response rate was 94% (16/17 patients), with 71% (12/17 patients) achieving a complete response by three months.
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The study includes patients with relapsed and/or refractory metastatic or locally advanced melanoma, NSCLC and colorectal cancer. • Initial clinical and translational data from the Phase 1 trial of LYL845 are expected in the second half of 2024. • Received FDA Orphan Drug designation (ODD) for LYL845 for the treatment of stage IIB-IV melanoma. • Presented nonclinical data at SITC highlighting the Epi-R P2 manufacturing process, which is designed to shorten TIL manufacturing time to less than three weeks without impacting cell number and phenotype.
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The median follow up was 6.3 months (range 1.2 – 12.5 months) and 71% of patients were experiencing a response at last follow-up. In the safety evaluable population of 23 patients, no Grade 3+ CRS was reported.
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Epi-R P2 is expected to be incorporated into the Phase 1 trial of LYL845 in 2024. • Presented a LYL845 Trial in Progress poster at SITC.
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Grade 3 ICANS was reported in 13% (3/23) of patients with a median time to complete ICANS resolution of 5 days, and rapid improvement to Grade 2 or lower with standard therapy. • More mature data from the ongoing Phase 1/2 trial in the 3 rd line+ setting and initial data from patients in the 2 nd line setting are expected to be presented in mid-2025. • We expect to initiate a pivotal trial in mid-2025 in patients with relapsed/refractory large B-cell lymphoma in the 3 rd line+ setting who have not yet received CAR T-cell therapy. • We expect to initiate a pivotal trial by early 2026 in patients with relapsed/refractory large B-cell lymphoma in the 2 nd line setting who have not yet received CAR T-cell therapy.
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LYL119 – A ROR1-targeted CAR T-cell product candidate incorporating Lyell’s four stackable and complementary reprogramming technologies for enhanced cytotoxicity • LYL119 is a ROR1-targeted CAR T-cell product enhanced with Lyell’s four novel genetic and epigenetic reprogramming technologies: c-Jun overexpression, NR4A3 knockout, Epi-R manufacturing protocol and Stim‑R TM T-cell activation technology. • An IND application for LYL119 is expected to be submitted in the first half of 2024. • Presented posters highlighting preclinical development of LYL119 at the American Society for Gene and Cell Therapy and at SITC.
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Preclinical Pipeline, Technologies and Manufacturing Protocols • The first IND for a fully-armed CAR T-cell product candidate with an undisclosed target for solid tumors is expected in 2026.
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In preclinical studies, LYL119 demonstrated superior cytotoxicity and sustained cytokine production upon repeated antigen stimulation compared to various controls lacking one or more of the reprogramming technologies and showed robust in vivo antitumor efficacy and prolonged survival in a mouse xenograft tumor model at very low cell doses.
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Lyell is advancing next-generation fully-armed CAR T-cell product candidates, meaning they are armed with multiple technologies, each designed to address different barriers to effective cell therapies, including T-cell exhaustion, lack of durable stemness, as well as immune suppression within the hostile tumor microenvironment. • During the past year, we presented nonclinical and clinical data from our suite of anti-exhaustion and manufacturing technologies demonstrating their potential to improve T-cell function in solid tumors. • We presented data at the Society for Immunotherapy of Cancer (SITC) 2024 from a validated nonclinical xenograft model of non-small cell lung cancer, demonstrating that combining c-Jun overexpression and NR4A3 knockout achieves tumor control and prolonged survival even at very low doses (100,000 CAR T cells/dose) compared to c‑Jun overexpression alone (1,000,000 CAR T cells/dose).
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Rejuvenation – Novel partial reprogramming technology designed to maintain T-cell identity while reducing cells’ epigenetic age • Presented nonclinical data at the International Society for Stem Cell Research (ISSCR) 2023 Annual Meeting demonstrating that Lyell’s T‑cell Rejuvenation technology generates cells with improved expansion capacity and increased expression of biomarkers associated with T-cell stemness, that also exhibit improved antitumor properties compared with non-rejuvenated T-cell controls in sequential cell-killing assays. • Presented nonclinical data at SITC demonstrating that TIL generated with Lyell’s Rejuvenation technology retain a broad TCR repertoire and demonstrate improved T-cell function and antitumor properties.
Added
The study presented potential molecular mechanisms underlying the functional reduction of T-cell exhaustion and enhancement of memory‑related characteristics of CAR T cells enhanced with c-Jun overexpression and NR4A3 knockout after antigen encounter in vitro and in vivo. • We presented translational clinical data at SITC 2024 from an in-human Phase 1 trial of CAR T-cells enhanced with c‑Jun overexpression and manufactured with Epi-R, showing reduced T-cell exhaustion and enhanced stemness of CAR T cells, resulting in CAR T-cell tumor infiltration with histological evidence of T-cell mediated tumor lysis in patients with ROR1 positive triple-negative breast cancer and non-small cell lung cancer.
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Corporate Updates • Appointed Matt Lang, J.D., Chief Business Officer. Mr. Lang, who also serves as Lyell’s Chief Legal Officer and Corporate Secretary, is an experienced company builder who has successfully led growth in complex organizations.
Added
ROR1 CAR T cells enhanced with c-Jun overexpression demonstrated lower exhaustion and maintenance of stem- and memory-like phenotypes in the peripheral blood post-infusion, suggesting c-Jun overexpression can delay CAR T-cell exhaustion in patients. • We delivered an oral presentation at SITC 2024 demonstrating successful incorporation of an anti-TGF-β scFv domain into a novel bispecific CAR designed to mediate TGF-β blockade and overcome the suppressive solid tumor microenvironment.
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The first half of 2023 was marked by significant market uncertainty, inflationary pressures, banking upheaval and supply constraints. Although these negative impacts improved throughout the fiscal year, economic uncertainty persists and could continue in 2024, and these market dynamics and similar adverse market conditions may negatively impact our business.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed5 unchanged
Biggest changeWe believe a hypothetical 1% change in exchange rates during any of the periods presented would not have a material effect on our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Effects of Inflation Inflation generally affects us by increasing our cost of labor and our clinical trial costs.
Biggest changeWe believe a hypothetical 1% change in exchange rates during any of the periods presented would not have a material effect on our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. 89 Table of Contents Effects of Inflation Inflation generally affects us by increasing our cost of labor and our clinical trial costs.
We had no debt outstanding as of December 31, 2023. Foreign Currency Exchange Risk All of our employees and operations are currently located in the United States and our expenses are generally denominated in U.S. dollars. We therefore are not currently exposed to significant market risk related to changes in foreign currency exchange rates.
We had no debt outstanding as of December 31, 2024. Foreign Currency Exchange Risk All of our employees and operations are currently located in the United States and our expenses are generally denominated in U.S. dollars. We therefore are not currently exposed to significant market risk related to changes in foreign currency exchange rates.
We believe that inflation has not had a material effect on our audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. 86 Table of Contents
We believe that inflation has not had a material effect on our audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. 90 Table of Contents
Interest Rate Risk We had cash equivalents of $127.7 million a s of December 31, 2023, which consisted of money market funds and highly liquid investments purchased with original maturities of three months or less from the purchase date. We also had marketable securiti es of $417.1 million as of December 31, 2023.
Interest Rate Risk We had cash equivalents of $80.6 million a s of December 31, 2024, which consisted of money market funds and highly liquid investments purchased with original maturities of three months or less from the purchase date. We also had marketable securiti es of $277.9 million as of December 31, 2024.

Other LYEL 10-K year-over-year comparisons