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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________
FORM 10-Q
_________________________________________________
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to
Commission File Number: 001-40675
_________________________________________________
Immuneering Corporation
(Exact name of registrant as specified in its charter)
_________________________________________________
Delaware26-1976972
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
245 Main St.
Second Floor
Cambridge, MA
02142
(Address of Principal Executive Offices)(Zip Code)
(617) 500-8080
(Registrant’s telephone number)
N/A
(Former name, former address and former fiscal year, if changed since last report)
_________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading symbolName of Exchange on which registered
Class A common Stock, par value $0.001 per shareIMRX
The Nasdaq Global Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filero
Non-accelerated filerxSmaller reporting companyxEmerging growth companyx
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of July 31, 2024 the registrant had 29,653,355 shares of Class A common stock, $0.001 par value per share, issued and outstanding and 0 shares of Class B common stock, $0.001 par value per share, issued and outstanding.

TABLE OF CONTENTS
Page
2
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements including within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including without limitation statements regarding our plans to develop, manufacture and commercialize our product candidates (including whether as potential monotherapies or in combination with other therapeutic agents), the design, timing, disclosure of data, or outcome of our ongoing or planned preclinical studies or clinical trials involving IMM-1-104, IMM-6-415, any of our other pipeline product candidates and any future product candidates, the clinical utility of our product candidates when administered alone or in combination with other therapeutic agents, the filing with, and approval by, regulatory authorities of our product candidates, and the sufficiency of funds to operate the business of the Company and related expected cash runway, are forward-looking statements.
The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions and are based largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those projected in the forward-looking statements, including, but not limited to, those described in the sections of this Quarterly Report on Form 10-Q entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These risks and uncertainties include, but are not limited to:
•our limited operating history;
•our history of operating losses;
•our ability to raise the substantial additional capital that will be required to finance our operations;
•the difficulty of obtaining regulatory approval for any of our current or future product candidates;
•our ability to submit an Investigational New Drug application (“IND”), or IND amendments or comparable documents in foreign jurisdictions in order to commence clinical trials on the timelines we expect;
•our limited experience in designing and conducting clinical trials;
•the timing of the initiation, progress and potential results of our ongoing and planned preclinical studies and clinical trials and our research programs, including our Phase 1/2a clinical trials of IMM-1-104 and IMM-6-415;
•our ability to successfully complete our clinical trials, including our Phase 1/2a clinical trials of IMM-1-104 and IMM-6-415;
•the risk of substantial delays in completing, if at all, the development and commercialization of our current or future product candidates;
•risks related to adverse events, toxicities or other undesirable side effects caused by our current or future product candidates;
•the risk of delays or difficulties in the enrollment and/or maintenance of patients in clinical trials;
•our substantial reliance on the successful development of our current and future product candidates, as well as our platform, including our proprietary technologies;
•risks related to competition in our industry;
•the market opportunity for our product candidates, if approved;
3
•risks related to manufacturing;
•risks related to our reliance on third parties;
•risks related to our intellectual property;
•risks related to ongoing and future pandemics, or other widespread adverse health events; and
•other important risk factors that could affect the outcome of the events set forth in these statements and that could affect our operating results and financial condition described in Part II, Item 1A. “Risk Factors” section of this Quarterly Report on Form 10-Q.
Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
Unless otherwise stated or the context requires otherwise, references to “Immuneering,” the “Company,” “we,” “us,” and “our,” refer to Immuneering Corporation and its subsidiaries.
4
Risk Factors Summary
We are subject to numerous risks and uncertainties, including those further described below in Part II, Item IA. “Risk Factors” in this Quarterly Report on Form 10-Q, that represent challenges that we face in connection with the successful implementation of our strategy and the growth of our business. In particular, the following are principal factors that may offset our competitive strengths or have a negative effect on our business strategy, which could materially adversely affect our business, financial conditions, results of operations, future growth prospects, or cause a decline in the price of our common stock:
•We are a clinical-stage oncology company with a limited operating history in developing pharmaceutical products, have not completed any clinical trials and have no products approved for commercial sale, which may make it difficult for you to evaluate our current business and predict our future success and viability.
•We have incurred significant net losses for the past several years and we expect to continue to incur significant net losses for the foreseeable future and may never obtain profitability.
•We will require substantial additional capital to finance our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and drug development programs or future commercialization efforts.
•The regulatory approval processes of the U.S. Food and Drug Administration ("FDA") and other comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable with respect to outcomes. If we are ultimately unable to obtain regulatory approval for our product candidates, or to obtain regulatory approval to treat the indications we seek to treat with our product candidates, we will be unable to generate product revenue or the level of planned product revenue and our business will be substantially harmed.
•We may encounter substantial delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.
•The outcome of preclinical studies and early clinical trials may not be predictive of the success of later clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA or other comparable foreign regulatory authorities.
•Our current or future product candidates may cause adverse events, toxicities or other undesirable side effects when used alone or in combination with other approved products or investigational new drugs that may result in a safety profile that could inhibit regulatory approval, prevent market acceptance, limit their commercial potential or result in significant negative consequences.
•We are early in our development efforts. Our business is substantially dependent on the successful development of our current and future product candidates. If we are unable to advance our current or future product candidates through clinical trials, obtain marketing approval to treat the indications that we seek to treat with our product candidates, and ultimately commercialize any product candidates we develop, or experience significant delays in doing so, our business will be materially harmed.
•We are substantially dependent on our platform, including our proprietary technologies, which are supported by our information technology systems. Any failure of these or other elements of our platform will materially harm our business.
•Our long-term prospects depend in part upon discovering, developing and commercializing product candidates, which may fail in development or suffer delays that adversely affect their commercial viability.
•Our approach to the discovery and development of product candidates is unproven, and we may not be successful in our efforts to use and expand our platform and capabilities to build a pipeline of product candidates with commercial value.
•We have never commercialized a product candidate before and may lack the necessary expertise, personnel and resources to successfully commercialize any products on our own or together with suitable collaborators.
•We face significant competition, and if our competitors develop and market technologies or products more rapidly than we do or that are more effective, safer or less expensive than the product candidates we develop, our commercial opportunities will be negatively impacted.
5
•We substantially rely, and expect to continue to rely, on third parties, including independent clinical investigators and contract research organizations ("CROs"), to conduct certain aspects of our preclinical studies and our clinical trials. If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed.
•We contract with third parties, including contract manufacturing organizations ("CMOs") and consultants, for the manufacture of our product candidates for preclinical studies and clinical trials, and expect to continue to do so for commercialization of any approved product candidate. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or drugs or be able to acquire such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.
•The manufacture of drugs is complex and our third-party manufacturers may encounter difficulties in production. If any of our third-party manufacturers encounter such difficulties, our ability to provide adequate supply of our product candidates for clinical trials or our products for patients, if approved, could be delayed or prevented.
•If we are unable to obtain and maintain patent and/or other intellectual property protection for our product candidates and technologies, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully develop and commercialize our product candidates, products (if any) and technology may be impaired, and we may not be able to compete effectively in our market.
•Acquisitions or joint ventures could disrupt our business, cause dilution to our stockholders and otherwise harm our business.
6
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
IMMUNEERING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, 2024December 31, 2023
Assets
Current assets:
Cash and cash equivalents$59,728,455 $59,405,817 
Marketable securities— 26,259,868 
Prepaids and other current assets3,957,220 3,417,984 
Total current assets63,685,675 89,083,669 
Property and equipment, net1,290,091 1,400,582 
Goodwill6,690,431 6,690,431 
Intangible asset, net365,047 379,680 
Right-of-use assets, net3,827,943 3,995,730 
Other assets1,228,088 1,034,446 
Total assets$77,087,275 $102,584,538 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable$2,622,237 $2,111,666 
Accrued expenses3,757,148 5,173,960 
Other liabilities90,242 259,770 
Lease liabilities311,459 300,107 
Total current liabilities6,781,086 7,845,503 
Long-term liabilities:
Lease liabilities, net of current portion4,000,554 4,162,852 
Total liabilities10,781,640 12,008,355 
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized at June 30, 2024 and December 31, 2023; 0 shares issued or outstanding at June 30, 2024 and December 31, 2023
— — 
Class A common stock, $0.001 par value, 200,000,000 shares authorized at June 30, 2024 and December 31, 2023; 29,653,355 and 29,271,629 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively
29,653 29,272 
Class B common stock, $0.001 par value, 20,000,000 shares authorized at June 30, 2024 and December 31, 2023; 0 shares issued and outstanding at June 30, 2024 and December 31, 2023
— — 
Additional paid-in capital257,922,316 253,806,267 
Accumulated other comprehensive loss— (778)
Accumulated deficit(191,646,334)(163,258,578)
Total stockholders' equity66,305,635 90,576,183 
Total liabilities and stockholders' equity$77,087,275 $102,584,538 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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IMMUNEERING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Operating expenses
Research and development$10,651,958 $9,452,711 $21,854,372 $19,663,637 
General and administrative4,254,473 4,044,960 8,370,493 8,506,291 
Amortization of intangible asset7,317 7,317 14,633 14,633 
Total operating expenses14,913,748 13,504,988 30,239,498 28,184,561 
Loss from operations(14,913,748)(13,504,988)(30,239,498)(28,184,561)
Other income (expense)
Interest income826,104 1,166,047 1,630,988 1,997,321 
Other income, net7,717 150,193 220,754 394,322 
Net loss$(14,079,927)$(12,188,748)$(28,387,756)$(25,792,918)
Net loss per share attributable to common stockholders, basic and diluted$(0.47)$(0.43)$(0.96)$(0.94)
Weighted-average common shares outstanding, basic and diluted29,653,35528,647,45029,511,85627,550,922
Other comprehensive loss:
Unrealized gains (losses) from marketable securities1,084 (2,724)778 27,902 
Comprehensive Loss$(14,078,843)$(12,191,472)$(28,386,978)$(25,765,016)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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IMMUNEERING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
Class A Common StockClass B Common StockAdditional
Paid-In Capital		Accumulated Other
Comprehensive Income (Loss)		Accumulated
Deficit		Total
Stockholders' Equity
SharesPar ValueSharesPar Value
Balance at December 31, 202226,418,732$26,419 —$— $219,640,912 $(30,120)$(109,786,956)$109,850,255 
Issuance of common stock upon exercise of stock options77,06577 —— 239,332 — — 239,409 
Stock-based compensation expense—— —— 1,273,505 — — 1,273,505 
Net loss—— —— — — (13,604,171)(13,604,171)
Other comprehensive income—— —— — 30,626 — 30,626 
Balance at March 31, 202326,495,797$26,496 —$— $221,153,749 $506 $(123,391,127)$97,789,624 
Issuance of common stock upon exercise of stock options39,95840 —— 176,106 — — 176,146 
Stock-based compensation expense—— —— 1,333,882 — — 1,333,882 
Issuance of common stock upon public offering, net of commissions, underwriting discounts and $203,768 in issuance costs
2,727,2732,727 —— 27,993,508 — — 27,996,235 
Net loss—— —— — — (12,188,748)(12,188,748)
Other comprehensive loss—— —— — (2,724)— (2,724)
Balance at June 30, 202329,263,028$29,263 —$— $250,657,245 $(2,218)$(135,579,875)$115,104,415 







9

Class A Common StockClass B Common StockAdditional
Paid-In Capital		Accumulated Other
Comprehensive Income (Loss)		Accumulated
Deficit		Total
Stockholders' Equity
SharesPar ValueSharesPar Value
Balance at December 31, 202329,271,629$29,272 —$— $253,806,267 $(778)$(163,258,578)$90,576,183 
Issuance of common stock upon exercise of stock options229,299229 —— 732,229 — — 732,458 
Issuance of common stock through employee stock purchase plan152,427152 —— 247,313 — — 247,465 
Stock-based compensation expense—— —— 1,474,758 — — 1,474,758 
Net loss—— —— — — (14,307,829)(14,307,829)
Other comprehensive loss—— —— — (306)— (306)
Balance at March 31, 202429,653,355$29,653 —$— $256,260,567 $(1,084)$(177,566,407)$78,722,729 
Stock-based compensation expense—— —— 1,661,749 — — 1,661,749 
Net loss—— —— — — (14,079,927)(14,079,927)
Other comprehensive income—— —— — 1,084 — 1,084 
Balance at June 30, 202429,653,355$29,653 —$— $257,922,316 $— $(191,646,334)$66,305,635 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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IMMUNEERING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2024 and 2023
(Unaudited)
Six Months Ended June 30,
20242023
Cash flows from operating activities:
Net loss$(28,387,756)$(25,792,918)
Adjustment to reconcile to net loss to net cash used in operating activities:  
Depreciation/amortization expense180,742 154,768 
Reduction in carrying amount of right-of-use assets167,787 213,737 
Intangible asset amortization14,633 14,633 
Stock-based compensation expense3,136,507 2,607,387 
Net accretion of discount on marketable securities(169,351)(301,968)
Loss on disposal of fixed assets— 1,483 
Change in assets and liabilities:  
(Increase) decrease in:  
Accounts receivable— 12,417 
Prepaid expenses and other current assets(539,236)687,779 
Other assets(193,644)— 
Increase (decrease) in:  
Accounts payable510,570 (499,262)
Accrued expenses(1,416,812)(2,074,094)
Lease liabilities(150,946)(197,000)
Other liabilities(169,528)6,537 
Net cash used in operating activities(27,017,034)(25,166,501)
Cash flows from investing activities:  
Purchases of property and equipment(70,251)(114,679)
Maturities of marketable securities26,430,000 28,250,000 
Net cash provided by investing activities26,359,749 28,135,321 
Cash flows from financing activities:  
Proceeds from exercise of stock options732,458 415,555 
Proceeds from public offering of common stock, net of commissions and underwriting— 28,200,003 
Proceeds from employee stock purchase plan247,465 — 
Payment of offering costs— (203,768)
Net cash provided by financing activities979,923 28,411,790 
Net increase in cash and cash equivalents322,638 31,380,610 
Cash and cash equivalents at beginning of period59,405,817 72,636,886 
Cash and cash equivalents at end of period$59,728,455 $104,017,496 
Supplemental disclosures of noncash information:  
Property and equipment in accounts payable/accrued expenses $— $37,705 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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IMMUNEERING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 – Organization and Nature of Business
Immuneering Corporation, a Delaware corporation (“Immuneering” or the “Company”), was incorporated in 2008. Immuneering is a clinical-stage oncology company seeking to develop medicines for broad populations of cancer patients, with an initial aim to therapeutically address patients harboring RAS or RAF mutations. The Company aims to achieve universal RAS/RAF activity through Deep Cyclic Inhibition ("DCI"), of the MAPK pathway, impacting cancer cells while sparing healthy cells. Immuneering’s lead product candidate IMM-1-104, as well as its second product candidate IMM-6-415, are in Phase 1/2a clinical trials in patients with advanced solid tumors harboring RAS and RAS/RAF mutations, respectively. The Company is developing IMM-1-104 as a potential once-daily oral therapy that aims to achieve universal-RAS activity and IMM-6-415 with an accelerated twice-daily oral dosing cadence that aims to achieve universal-RAS/RAF activity, in each case through Deep Cyclic Inhibition of the MAPK pathway. The Company’s development pipeline also includes several early-stage programs.

On October 30, 2019, Immuneering formed a wholly owned subsidiary, Immuneering Securities Corporation (“ISC”), a Massachusetts securities corporation, for the sole purpose of buying, selling and holding securities on the Company’s behalf.

On December 22, 2021, the Company acquired all outstanding shares of capital stock of BioArkive, Inc. (“BioArkive”), a California corporation, which as a result became a wholly owned subsidiary.

Immuneering, ISC and BioArkive are collectively referred to as the “Company” throughout these condensed consolidated financial statements.

The Company is subject to a number of inherent risks associated with any biotechnology company that has substantial expenditures for research and development. These risks include, but are not limited to, the need to obtain adequate additional funding, possible failure of clinical trials or other events demonstrating lack of clinical safety or efficacy of its product candidates, dependence on key personnel, reliance on third-party service providers for manufacturing drug product and conducting clinical trials, the ability to successfully secure its proprietary technology, and risks related to the regulatory approval and commercialization of a product candidate. There can be no assurance that the Company’s research and development programs will be successful. In addition, the Company operates in an environment of rapid technological change and is largely dependent on the services of its employees, advisors, and consultants.
On August 3, 2021, the Company completed its initial public offering (“IPO”) pursuant to which it issued and sold 8,625,000 shares of its Class A common stock, inclusive of 1,125,000 shares of its Class A common stock sold pursuant to the full exercise of the underwriters’ option to purchase additional shares. The aggregate net proceeds received by the Company from the IPO were $120,318,750, after deducting underwriting discounts and commissions, but before deducting offering costs payable by the Company, which were $2,124,317.
On April 20, 2023, the Company completed an underwritten follow-on equity offering, pursuant to which it issued and sold 2,727,273 shares of its Class A common stock $0.001 par value per share at an offering price of $11.00 per share. The aggregate net proceeds received by the Company from the offering were $28,200,003, after deducting underwriting discounts and commissions, but before deducting offering costs payable by the Company of $203,768.
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To date, the Company has funded its operations through service revenues (which have since ceased), and with proceeds from the sale of its capital stock and convertible notes. The Company has incurred recurring losses over the past several years and as of June 30, 2024, the Company had an accumulated deficit of $191,646,334. The Company expects to continue to generate operating losses for the foreseeable future. The future viability of the Company is dependent on its ability to raise additional capital to finance its operations. The Company’s inability to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies. There can be no assurances that additional funding will be available on terms acceptable to the Company, or at all. If the Company is unable to raise additional funds when needed, it may be required to delay, reduce the scope of, or eliminate development programs, which may adversely affect its business and operations. Management considered whether or not there are conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern, and concluded that there are none as it estimates that its cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the issuance date of these unaudited condensed consolidated financial statements.
Note 2 - Summary of Significant Accounting Policies
Basis of Presentation
The condensed consolidated financial statements have been prepared in accordance with accounting standards set by the Financial Accounting Standards Board (“FASB”). The FASB sets generally accepted accounting principles (“GAAP”) to ensure the condensed consolidated financial statements are consistently reported. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codifications (“ASC”). The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
There have been no material changes to the accounting policies of the Company as those set forth in Note 2 to the audited consolidated financial statements contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Unaudited Interim Financial Information
The unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with GAAP and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been omitted from the unaudited interim condensed consolidated financial statements, as is permitted by such rules and regulations. While we believe that the disclosures presented are adequate in order to make the information not misleading, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes for the year ended December 31, 2023.
It is management’s opinion that these financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position, operating results and cash flows. Revenues and net loss for any interim period are not necessarily indicative of future or annual results.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the reporting periods. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets, liabilities and the recording of expenses that are not readily apparent from other sources. Significant estimates reflected in these condensed consolidated financial statements include but are not limited to: the accrued research and development expenses, the determination of fair value of stock-based awards, and the impairment of goodwill and intangible assets. Actual results may differ materially and adversely from these estimates.
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Goodwill
Goodwill represents the excess of the fair value of the acquiree over the recognized basis of the net identifiable assets acquired and includes the future economic benefits from other assets that could not be individually identified and separately recognized. Goodwill is not amortized, but instead is periodically reviewed for impairment and an impairment charge is recorded in the periods in which the recorded carrying value of goodwill exceeds its fair value.
On a quarterly basis, the Company performs a review of its business to determine if events or changes in circumstances have occurred which could have a material adverse effect on the fair value of the Company and its goodwill. If such events or changes in circumstances were deemed to have occurred, the Company would perform an impairment test of goodwill as of the end of the quarter and record any noted impairment loss.
The Company’s market capitalization has in the past declined, for example recently starting in March 2024 and continued through the second quarter, and may in the future decline, and any such decrease in market capitalization may be an indicator of impairment. The Company will continue to assess the impact of its market capitalization and any other indicators of potential impairment. It is possible that if the Company’s market capitalization decline is more than temporary, or if other indicators of impairment are identified, an interim impairment analysis may be necessary, which could result in an impairment of goodwill, intangible assets and other long-lived assets in future periods.
The goodwill test is performed at least annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired.
The Company performs its annual impairment test during the fourth quarter of each fiscal year. The Company performed an interim impairment analysis in the quarter ended June 30, 2024 as a result of the decline in market capitalization. Based on the step 1 analysis performed, the fair value of the reporting unit exceeded the carrying value on the valuation date and as a result there is no impairment pursuant to ASC 350 for the quarter ended June 30, 2024.
There were no impairments identified for the year ended December 31, 2023 or for the three and six months ended June 30, 2024.
Deferred Offering Costs
The Company capitalizes certain legal, professional, and other third-party charges related to ongoing equity financings as deferred offering costs until fully consummated. These costs are to be recorded as a reduction of the offering’s proceeds which are recorded to additional paid-in capital within stockholders’ equity. Should the Company choose not to initiate such financing, the deferred offering costs would be immediately expensed as operating expenses.
On August 10, 2022, the Company entered into an Equity Distribution Agreement (the “Sales Agreement”) with Piper Sandler & Co, (the “Sales Agent”) to sell shares of the Company’s common stock, par value $0.001 per share, with aggregate gross sales proceeds of up to $50 million, from time to time, through an “at the market” equity offering program. Deferred offering costs associated with the Sales Agreement are reclassified to additional paid-in capital on a pro-rata basis when the Company completes offerings under the Sales Agreement. Any remaining deferred costs will be expensed to the statement of operations should the planned offering be abandoned. The Company had approximately $0.5 million of deferred offering costs as of June 30, 2024 and $0.3 million as of December 31, 2023.
Recently Issued Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended (“JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to avail itself of this extended transition period and, as a result, the Company will not be required to adopt certain new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.
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In November 2023, the FASB issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280) (“ASU 2023-07”). The guidance in ASU 2023-07 expands prior reportable segment disclosure requirements by requiring entities to disclose significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and details of how the CODM uses financial reporting to assess their segment’s performance. The standard is effective for fiscal years beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating this standard's potential impact on its condensed consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). The guidance in ASU 2023-09 improves the transparency of income tax disclosures by greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The standard is effective for public companies for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted this effective January 1, 2024 and there was no impact to the condensed consolidated financial statements.
Note 3 – Marketable Securities
There were no marketable securities as of June 30, 2024. Marketable securities consisted of the following as of December 31, 2023:
December 31, 2023
Amortized CostUnrealized GainsUnrealized LossesFair Value
Assets:
Current:
U.S. Treasuries$2,989,460 $430 $— $2,989,890 
Government securities15,342,582 888 (2,902)15,340,568 
Commercial paper7,928,122 1,301 (13)7,929,410 
Total marketable securities$26,260,164 $2,619 $(2,915)$26,259,868 
Our marketable securities are classified as available-for-sale pursuant to ASC 320, Investments – Debt and Equity Securities and are recorded at fair value. Unrealized gains (losses) are included as a component of accumulated other comprehensive loss in the consolidated balance sheets and statements of stockholders’ equity and a component of total comprehensive loss in the consolidated statements of comprehensive loss, until realized. The Company assesses its available-for-sale marketable securities for impairment on a quarterly basis. There were no impairments of the Company’s available-for-sale marketable securities measured and carried at fair value during the three and six months ended June 30, 2024 or 2023. Realized gains and losses are included in other income (expense) on the consolidated statements of operations.
Our marketable securities portfolio contains investments in U.S. Treasury, other U.S. government-backed securities, and commercial paper. We review our portfolio based on the underlying risk profile of the securities and we don't expect there to be a loss on these investments. We also regularly review the securities in an unrealized loss position and evaluate the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions.
During the three and six months ended June 30, 2024 and 2023, we recognized no year-to-date credit loss related to our short-term investments, and had no allowance for credit loss recorded as of June 30, 2024 or December 31, 2023.
Note 4 – Fair Value Measurements
We record cash equivalents and marketable securities at fair value. ASC 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs). The hierarchy consists of three levels:
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities.
15
Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, directly or indirectly, for substantially the full term of the asset or liability.
Level 3 – Unobservable inputs that reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date.
The following table summarizes our cash equivalents measured at fair value on a recurring basis as of June 30, 2024:
Level 1Level 2Level 3Total
Assets:
Cash equivalents
Money market$59,477,600 $— $— $59,477,600 
Total cash equivalents59,477,600 — — 59,477,600 
There have been no changes to the valuation methods during the six months ended June 30, 2024. There were no transfers between Level 1 and Level 2 and we had no financial assets or liabilities that were classified as Level 3 at any point during the six months ended June 30, 2024.
Cash equivalents and marketable securities have been initially valued at the transaction price and subsequently, at the end of each reporting period, valued utilizing third-party pricing services or other observable market data. The pricing services utilize industry standard valuation models, including both income and market-based approaches, and observable market inputs to determine value. After completing our valuation procedures, we did not adjust or override any fair value measurements provided by the pricing services as of June 30, 2024 and December 31, 2023.
The following table summarizes our cash equivalents and marketable securities measured at fair value on a recurring basis as of December 31, 2023:
Level 1Level 2Level 3Total
Assets:
Cash equivalents
U.S. Treasuries$3,488,205 $— $— $3,488,205 
Money market50,122,883 — — 50,122,883 
Commercial paper— 2,494,670 — 2,494,670 
Government securities— 2,981,550 — 2,981,550 
Total cash equivalents53,611,088 5,476,220 — 59,087,308 
Marketable securities:
U.S. Treasuries$2,989,890 $— $— $2,989,890 
Government securities— 15,340,568 — 15,340,568 
Commercial paper— 7,929,410 — 7,929,410 
Total marketable securities2,989,890 23,269,978 — 26,259,868 
Total cash equivalents and marketable securities$56,600,978 $28,746,198 $— $85,347,176 
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Note 5 – Property and Equipment, net
Property and equipment, net consisted of the following:
June 30,
2024		December 31,
2023
Computer equipment$558,591 $550,861 
Furniture and fixtures98,628 98,628 
Lab equipment1,242,966 1,180,445 
Leasehold improvements298,941 298,941 
Total2,199,126 2,128,875 
Accumulated depreciation/amortization(909,035)(728,293)
Property and equipment, net$1,290,091 $1,400,582 
Depreciation/amortization expense totaled $90,533 and $78,242 for the three months ended June 30, 2024 and 2023, respectively. Depreciation/amortization expense totaled $180,742 and $154,768 for the six months ended June 30, 2024 and 2023, respectively.

Note 6 – Accrued Expenses
Accrued expenses consisted of the following:
June 30,
2024		December 31,
2023
Accrued professional services$266,330 $297,160 
Accrued employee expenses1,797,247 3,625,911 
Accrued research and development expenses1,623,137 1,146,398 
Accrued other70,434 104,491 
Total$3,757,148 $5,173,960 
Note 7 - Common Stock
The Company had 200,000,000 authorized shares of Class A common stock, $0.001 par value per share as of June 30, 2024 and December 31, 2023 of which 29,653,355 and 29,271,629 were issued and outstanding, respectively. The holders of Class A common stock are entitled one vote for each share of common stock. Dividends may be paid when, and if declared by the Board of Directors, subject to the limitations, powers and preferences granted to the Preferred Stockholders and on a proportionate basis with holders of Class B common stock.
The Company had 20,000,000 authorized shares of Class B common stock, $0.001 par value per share as of June 30, 2024 and December 31, 2023, of which no shares have been issued nor are outstanding. The holders of Class B common stock have no voting rights. Dividends may be paid when, and if, declared by the Board of Directors, subject to the limitations, powers and preferences granted to the preferred stockholders and on a proportionate basis with holders of Class A common stock.
Equity Offerings
On August 10, 2022, the Company filed a Registration Statement on Form S-3 (File No. 333-266738) (the “2022 Shelf Registration Statement”) with the SEC in relation to the registration of common stock, preferred stock, debt securities, warrants and/or units or any combination thereof in the aggregate amount of up to $200 million for a period of up to three years from the date of its effectiveness on August 19, 2022.
17
On August 10, 2022, the Company also entered into the Sales Agreement with the Sales Agent to sell shares of the Company’s Class A common stock, par value $0.001 per share, with aggregate gross sales proceeds of up to $50 million, from time to time, through an “at the market” equity offering program (the “ATM Program”) under the 2022 Shelf Registration Statement. Subject to the terms and conditions of the Sales Agreement, the Sales Agent may sell the shares by methods deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act, including sales made through the Nasdaq Global Market, on any other existing trading market for the common stock, to or through a market maker, or, if expressly authorized by the Company, in privately negotiated transactions. The Company or Sales Agent may terminate the Sales Agreement upon notice to the other party and subject to other conditions. The Company will pay the Sales Agent a commission equal to 3.0% of the gross proceeds of any Common Stock sold through the Sales Agent under the Sales Agreement and has provided the Sales Agent with customary indemnification rights.
Issuance costs incurred related to the Sales Agreement are classified as long-term assets on the balance sheet at June 30, 2024. The Company had approximately $0.5 million of deferred offering costs as of June 30, 2024 and $0.3 million as of December 31, 2023. No shares were sold pursuant to the ATM Program during the three or six months ended June 30, 2024 or June 30, 2023, respectively.
On April 20, 2023, the Company completed an underwritten follow-on equity offering, pursuant to which it issued and sold 2,727,273 shares of its Class A common stock, $0.001 par value per share, at an offering price of $11.00 per share under the 2022 Shelf Registration Statement. The aggregate net proceeds received by the Company from the offering were $28,200,003, after deducting underwriting discounts and commissions, but before deducting offering costs payable by the Company of $203,768.
Note 8 - Net Loss Per Share Attributable to Common Stockholders
Basic and diluted net loss per share attributable to common stockholders was calculated at June 30, 2024 and June 30, 2023 as follows:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Numerator:
Net loss$(14,079,927)$(12,188,748)$(28,387,756)$(25,792,918)
Denominator - basic and diluted:
Weighted-average common shares outstanding, basic and diluted29,653,35528,647,45029,511,85627,550,922
Net loss per share - basic and diluted$(0.47)$(0.43)$(0.96)$(0.94)
The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive (in common stock equivalent shares) at June 30, 2024 and June 30, 2023:
20242023
Options to purchase common stock6,596,4035,453,392
Total shares of common stock equivalents6,596,4035,453,392
Note 9 – Stock-Based Compensation
During 2015, the Company established the Long Term Incentive Plan (“Incentive Plan”), under which incentive stock options, nonqualified stock options, restricted stock or other awards may be awarded to employees, directors or consultants of the Company. The options typically vest over a four-year period. Upon the effectiveness of the Company’s 2021 Incentive Award Plan (the “2021 Plan”), the Company ceased granting awards under the Incentive Plan. However, the Incentive Plan continues to govern awards outstanding thereunder.
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On July 23, 2021, the Company’s Board of Directors adopted, and on July 23, 2021 its stockholders approved, the 2021 Plan, which became effective on July 29, 2021. The 2021 Plan provides for the grant of incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units, and other stock-based awards. The number of shares reserved for issuance under the 2021 Plan was initially equal to 2,590,000 plus an annual increase on the first day of each calendar year, beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (i) 4% of the aggregate number of shares of Class A common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of Class A common stock as determined by the Board of Directors. No more than 15,350,000 shares of Class A common stock may be issued under the 2021 Plan upon the exercise of incentive stock options. Shares issued under the 2021 Plan may be authorized but unissued shares, shares purchased on the open market or treasury shares. If an award under the 2021 Plan expires, lapses or is terminated, exchanged for or settled in cash, surrendered, repurchased, cancelled without having been fully exercised/settled or forfeited, any unused shares subject to the award will, as applicable, become or again be available for new grants under the 2021 Plan. In addition, shares subject to stock options issued under the Incentive Plan may become available for issuance under the 2021 Plan to the extent such stock options are canceled, forfeited, exchanged, settled in cash or otherwise terminated. As of June 30, 2024, there were 1,388,539 shares available for future issuance under the 2021 Plan.
On July 23, 2021, the Company’s Board of Directors adopted, and on July 23, 2021 its stockholders approved, the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which became effective on July 29, 2021. A total of 250,000 shares of Class A common stock were initially reserved for issuance under this plan. The number of shares of Class A common stock that may be issued under the 2021 ESPP will automatically increase on the first day of each calendar year, beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (i) 1% of the shares of Class A common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of Class A common stock as determined by the Board of Directors, provided that not more than 3,340,000 shares of Class A common stock may be issued under the 2021 ESPP. As of June 30, 2024, there were 917,677 shares of common stock reserved for future issuance under the 2021 ESPP and 152,427 shares had been granted or purchased under the 2021 ESPP.

On May 21, 2024 (the “Effective Date”), based upon the recommendation of the Compensation Committee (the “Committee”) of the Company's Board of Directors (the “Board”), the Board approved an option repricing, in accordance with the 2021 Plan, which repricing was effected on the Effective Date. The repricing applied to options to purchase shares of the Company’s Class A common stock with an exercise price per share greater than $3.01 that were held by current employees and certain non-employee service providers under the 2021 Plan (the “Eligible Options”).

Options held by Benjamin Zeskind, Ph.D., the Company’s President and Chief Executive Officer, Brett Hall, Ph.D., the Company's Chief Scientific Officer and the non-employee members of the Board were not eligible for the repricing.

As a result of the repricing, as of the Effective Date, the exercise price of all Eligible Options was reduced to $3.01 per share, which represents approximately two times the closing trading price of the Company’s Class A common stock on the Nasdaq Global Market on the Effective Date; however, the exercise price for repriced options will revert to the original exercise price for any exercise occurring prior to June 30, 2025 (the "Retention Period"), unless there is a change of control of the Company or the option holder’s employment has been terminated (i) by the Company without cause or (ii) by reason of death or disability. The repriced options otherwise remain subject to their existing terms and conditions as set forth in the 2021 Plan and applicable award agreements. As of the Effective Date, outstanding options to purchase 2,986,354 shares were deemed Eligible Options and were repriced such that the exercise price per share for such outstanding options was reduced to $3.01 per share. There were no changes to the number of shares, the vesting schedule or the expiration date of the Eligible Options.

The effect of the repricing resulted in a total incremental non-cash stock-based compensation expense of $0.6 million, which was calculated using the Black-Scholes option-pricing model, of which $0.2 million of the incremental non-cash stock-based compensation expense is associated with vested repriced options and will be recognized on a straight-line basis through the 13-month Retention Period. The remaining $0.4 million of the incremental non-cash stock-based compensation expense is associated with unvested repriced options and will be recognized as follows: (a) if the Retention Period is greater than the remaining original vesting period of the repriced option, the incremental cost will be amortized on a straight-line basis through the Retention Period end date or (b) if the Retention Period is less than the remaining original vesting term of the repriced option, the incremental cost will be amortized on a straight-line basis over the remaining original vesting period.

During the quarter ended June 30, 2024, the Company recognized incremental stock-based compensation expense totaling $36 thousand associated with the repricing which is included in general and administrative and research and development expense in the condensed consolidated statement of operations and comprehensive loss.
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The Company recognized stock-based compensation expense of $1,661,749 and $3,136,507 during the three and six months ended June 30, 2024, respectively. During the three and six months ended June 30, 2023, the Company recognized stock-based compensation expense of $1,333,882 and $2,607,387, respectively. As of June 30, 2024, compensation expense remaining to be recognized for outstanding stock options was $13,151,883 and to be recognized over a weighted-average period of 2.44 years.
The fair value of options granted is calculated on the grant date using the Black-Scholes option valuation model. Prior to the Company’s IPO on August 3, 2021, the Company was a private company and thus lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own publicly traded stock price. For the six months ended June 30, 2024, the Company granted 1,530,445 shares of stock options at a weighted-average grant date fair value of $3.69.
The Company used the following assumptions in its application of the Black-Scholes option pricing model for grants during the six months ended June 30, 2024 and 2023:
Six Months Ended June 30,
20242023
Weighted-average risk-free interest rate
3.93% - 4.82%
3.46% - 4.07%
Expected term (in years)
5.00 - 10.00
5.00 - 10.00
Expected dividend yield0%0%
Expected volatility
66.08% - 69.85%
64.86% - 70.50%
The following table summarizes the stock option activity during the six months ended June 30, 2024:
Number of
Options		Weighted-
Average
Exercise Price
per Share		Weighted
Average
Remaining
Contractual
Term (in Years)		Aggregate
Intrinsic Value
Outstanding at December 31, 20235,496,397$6.54 
Granted1,530,4453.69 
Exercised(229,299)3.19 
Cancelled(201,140)8.84 
Outstanding at June 30, 20246,596,403$4.45 7.69$— 
Vested and exercisable at June 30, 20243,299,573$4.93 6.53$— 
For the three and six months ended June 30, 2024 and 2023, the Company recognized share-based compensation expense on the accompanying condensed consolidated statements of operations as follows:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Research and development$678,377 $615,975 1,245,261 1,206,810 
General and administrative983,372 717,907 1,891,246 1,400,577 
Total$1,661,749 $1,333,882 $3,136,507 $2,607,387 
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Note 10 – Commitments and Contingencies
Operating Leases
In October 2020, the Company entered into an office lease (“Via Frontera Lease”) in San Diego, California with a lease term of 67 months. At the lease commencement date, a right-to-use asset and lease liability was recognized by the Company for $637,863. In January 2022, the Company exercised its option to terminate the Via Frontera Lease 20 months early. The Company subsequently entered into a sublease of the Via Frontera Lease, the term of which commenced in March 2022. The lease and sublease terminated on October 1, 2023. The lease termination was accounted for as a lease modification which reduces the term of the existing lease and the Company adjusted the value of its right-of-use asset and operating lease liability by $347,739 using an incremental borrowing rate of approximately 6%. The sublease income was accounted for as a reduction of rent expense in the statement of operations.
As part of the BioArkive acquisition, the Company assumed the obligations of three leases in San Diego, California. One is for 38,613 square feet of office and laboratory space, under a lease that terminates on April 30, 2032; the second was for a 6,100 square feet of office and laboratory space under a lease that terminated on December 31, 2022; and the third was for a lease for 4,760 square feet of office and laboratory space under a lease that terminated on March 31, 2024. As a result, the Company recorded right-to-use assets and lease liabilities of $4,824,700 on the acquisition date of December 22, 2021.
The Company currently also leases office space in Cambridge, Massachusetts and New York, New York, pursuant to short-term arrangements. The Cambridge lease is on a month-to-month basis, requiring one month’s notice before termination. The New York lease was renewed on July 17, 2024 to extend the lease term until February 28, 2025. These lease agreements include or included payments for lease and non-lease components. The Company has elected to not separate such components and these payments were recognized as rent expense.
As of June 30, 2024, inclusive of the renewal outlined above, total future minimum lease payments for its short-term leases in Cambridge, Massachusetts, and New York, New York were $35,500 due in 2024 and $11,000 due in 2025.
Future minimum lease payments for operating leases with initial or remaining terms in excess of one year at June 30, 2024 were as follows:
Amount
Remainder of 2024$361,746 
2025739,689 
2026761,877 
2027784,737 
2028808,278 
Thereafter2,874,231 
Total future lease payments6,330,558 
Less: Imputed interest(2,018,545)
Total lease liabilities$4,312,013 
Lease liabilities$311,459 
Lease liabilities, net of current portion4,000,554 
Total lease liabilities$4,312,013 
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Quantitative information regarding the Company’s leases for the six months ended June 30, 2024 and 2023 is as follows:
June 30,
2024		June 30,
2023
Lease costs:
Operating lease cost$387,642 $450,496 
Short-term lease cost79,878 108,586 
Sublease income(19,200)(84,074)
Total lease costs$448,320 $475,008 
Cash paid for amounts included in the measurement of lease liabilities:  
Operating cash flows from operating leases$370,800 $433,759 
Operating cash flows from short-term leases79,878 108,586 
$450,678 $542,345 
Weighted-average remaining lease term - operating leases7.84 years8.75 years
Weighted-average discount rate - operating leases10.0 %9.1 %
As the Company’s leases typically do not provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.
Litigation
From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities and may be exposed to litigation in connection with its product candidates and operations. The Company’s policy is to assess the likelihood of any adverse judgments or outcomes related to legal matters, as well as ranges of probable losses. When it is probable that future expenditures will be made and can be reasonably estimated the Company will accrue a liability for such matters. Significant judgement is required to determine both probability and estimated amount. The Company is not aware of any material legal matters.
Clinical Research Contracts
The Company may enter into contracts in the normal course of business with contract research organizations for clinical trials, with contract manufacturing organizations for clinical supplies, and with other vendors for preclinical studies, supplies and other services for the Company’s operating purposes. These contracts generally provide for termination with a 30-day notice.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, including the audited consolidated financial statements and notes thereto. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview

We are a clinical-stage oncology company seeking to develop and commercialize universal-RAS/RAF medicines for broad populations of cancer patients. We aim to achieve universal activity through Deep Cyclic Inhibition of the MAPK pathway, impacting cancer cells while sparing healthy cells. Our inclusive approach differentiates us from narrowly targeted precision therapies, which are limited to patients with tumors harboring select mutations.

We are currently evaluating our lead product candidate IMM-1-104, as well as our second product candidate IMM-6-415, in Phase 1/2a clinical trials in patients with advanced solid tumors harboring RAS and RAS/RAF mutations, respectively. IMM-1-104 is being developed as a potential once-daily oral therapy that aims to achieve universal-RAS activity through Deep Cyclic Inhibition of the MAPK pathway. By contrast, IMM-6-415 aims to achieve universal-RAS/RAF activity with an accelerated twice-daily oral dosing cadence, also through Deep Cyclic Inhibition of the MAPK pathway. Deep Cyclic Inhibition is a novel mechanism that aims to deprive tumor cells of the sustained proliferative signaling required for rapid growth, while sparing healthy cells through a cadenced, normalized level of signaling. This mechanism was engineered using our proprietary informatics-based discovery platform. The development of our pipeline is translationally guided by our proprietary, human-aligned 3D tumor modeling platform that we combine with bioinformatics-driven patient profiling, which we believe has the potential to increase the probability of success in clinical development versus traditional drug development approaches. Our pipeline also includes several early-stage programs.

Universal-RAS Program (IMM-1-104)

In September 2022, the FDA cleared our IND application for IMM-1-104. In November 2022, we commenced dosing in the Phase 1 portion of our Phase 1/2a clinical trial of IMM-1-104 for the potential treatment of patients with advanced RAS mutant solid tumors, and in March 2024 we commenced dosing in the Phase 2a portion. The Phase 1/2a clinical trial is designed to assess the safety, tolerability, pharmacokinetics ("PK"), pharmacodynamics ("PD"), and preliminary anti-tumor activity of IMM-1-104. The Phase 1 portion of the clinical trial includes dose escalation and dose exploration utilizing a Bayesian modified toxicity probability interval ("mTPI-2") statistical design to establish an optimized recommended Phase 2 dose ("RP2D") in solid tumor patients with evidence of any RAS mutation. The Phase 2a portion includes evaluating IMM-1-104 in multiple dose expansion arms. In November 2023 we announced that we had expanded the IMM-1-104 Phase 1/2a clinical trial design by increasing the number of Phase 2a expansion arms to five, including two combination therapy arms and three monotherapy arms.

In February 2024, we announced that the FDA granted Fast Track designation for IMM-1-104 for the treatment of patients with pancreatic ductal adenocarcinoma (“PDAC”) who have failed one line of treatment.

In March 2024, we announced that the first patient was dosed in the Phase 2a portion of our Phase 1/2a clinical trial of IMM-1-104 in advanced RAS-mutant solid tumors. We anticipate enrolling approximately 150 patients in the Phase 2a portion of the clinical trial. The Phase 2a portion is expected to take place across up to 20 clinical sites in the United States. The patients will be administered our candidate RP2D of 320 mg once daily (and 240 mg once daily during the lead-in period for the combination arms) and will be separated into five arms as follows:

•IMM-1-104 monotherapy in patients with PDAC in the first- or second-line setting (N≈30).
•IMM-1-104 monotherapy in patients with RAS-mutant melanoma in the second- or third-line setting post-immunotherapy, or in the first-line setting for patients who are not a candidate for existing therapies (N≈30).
•IMM-1-104 monotherapy in patients with RAS-mutant non-small cell lung cancer in the second- or third-line setting (N≈30).
•IMM-1-104 in combination with modified FOLFIRINOX in patients with PDAC in the first-line setting, which includes a lead-in period with dosing at 240 mg once daily (N≈30).
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•IMM-1-104 in combination with modified gemcitabine plus nab-paclitaxel in patients with PDAC in the first-line setting, which includes a lead-in period with dosing at 240mg once daily (N≈30).

In addition, in March 2024, we announced positive topline results from the Phase 1 portion of the Phase 1/2a clinical trial of IMM-1-104. As of February 20, 2024 (N=41), IMM-1-104 was well-tolerated. Among treatment-related adverse events (“TRAEs”) occurring in greater than 10% of patients, no grade 4 TRAEs were observed, only one grade 3 TRAE was observed (a non-serious rash that was reversible), and a modest number of grade 2 TRAEs were observed. In addition, we observed a number of grade 1 TRAEs in these patients, with diarrhea (19.5%), nausea (19.5%), fatigue (12.2%) and vomiting (12.2%) being the most common. No TRAEs were deemed serious. As of February 20, 2024 (N=19), patient plasma data showed IMM-1-104 at 320 mg inhibiting phosphorylated extracellular signal-regulated kinase (“pERK”) at a level of 90% or greater for approximately 2.7 hours, before returning to near-zero levels in advance of 24 hours. IMM-1-104 at a 240 mg dose achieved 90% or greater levels of pERK inhibition for approximately 1.9 hours, before returning to near-zero levels in advance of 24 hours. We evaluated both 240 mg and 320 mg once daily as prospective doses for the Phase 2a portion of our Phase 1/2a study. Based on data from this trial, we selected a candidate RP2D of 320 mg once daily. As of February 20, 2024 (N=22), 100% of evaluable patients profiled by circulating tumor DNA (“ctDNA”) and treated with IMM-1-104 experienced no new acquired alterations in RAS. Excluding two patients treated with IMM-1-104 at 160 mg, we observed no new acquired alterations in MAPK pathway genes, suggesting that there was no mutation in the MAPK pathway that a tumor could use to evade IMM-1-104.

While clinical activity was not an endpoint of the Phase 1 portion of the trial, as of February 20, 2024, we observed:

•53% of patients had ≥ 1 target lesion(s) regress when treated with IMM-1-104 at either 320 mg or 240 mg.
•Best individual lesion regressions were -35.7% at 320 mg in second-line setting (vs. -11.4% at 240 mg).
•Best RECIST sum of longest diameters was -18.9% at 320 mg in second-line setting (vs. -7.1% at 240 mg).
•Longest duration on therapy was 162 days (greater than five months) at 240 mg, with no TRAEs.

In April 2024, we presented preclinical data at the American Association for Cancer Research ("AACR") annual meeting demonstrating that combining IMM-1-104 with chemotherapies used in the treatment of first-line pancreatic cancer yielded deeper and more durable tumor growth inhibition than either treatment alone. We view these data as supportive of the ongoing Phase 2a portion of our clinical trial of IMM-1-104 in RAS-mutant advanced or metastatic solid tumors.

In July 2024, we announced that the FDA granted Fast Track designation for IMM-1-104 as a first-line treatment for patients with PDAC.

We plan to announce initial data from multiple arms of the Phase 2a portion of the trial in the second half of 2024.

Universal-RAS/RAF Program (IMM-6-415)

In December 2023, the FDA cleared our IND application for IMM-6-415 and, in March 2024, we commenced dosing in the Phase 1 portion of our Phase 1/2a clinical trial of IMM-6-415 for the potential treatment of patients with advanced solid tumors harboring RAF or RAS mutations. The Phase 1/2a clinical trial is designed to assess the safety, tolerability, PK, PD, and preliminary anti-tumor activity of IMM-6-415. The Phase 1 portion of the clinical trial includes dose escalation and dose exploration for IMM-6-415, using a mTPI-2 statistical design to establish an optimized RP2D in solid tumor patients with evidence of any RAF or RAS mutation. The Phase 2a portion includes exploring IMM-6-415 in multiple dose expansion arms at the candidate RP2D.

We plan to provide initial PK, PD and safety data from the Phase 1 portion of our Phase 1/2a clinical trial of IMM-6-415 in the second half of 2024.

Business and Financing

For the period from inception through 2017, we devoted substantially all of our efforts to business planning, service revenue generation, developing tools to aid in drug discovery, and recruiting management and technical staff. Since 2018, we have focused significant effort on our own internal research and development programs, and since December 2022 have exclusively focused our efforts on such programs. We have financed our operations through service revenues (which have since ceased), the issuance of convertible debt and the sale of convertible preferred stock and common stock.

On December 22, 2021, we completed the acquisition of all outstanding shares of capital stock of BioArkive, Inc., a California corporation (“BioArkive”) for a market value of $8.75 million.

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BioArkive was a San Diego based contract research organization that previously provided preclinical research services and biosample storage to us and other biotechnology companies. BioArkive was fully integrated into our operations following the acquisition and exclusively supports our internal preclinical research activities for our oncology pipeline. In connection with the acquisition, we assumed the obligations under BioArkive’s three lease agreements.
On April 20, 2023, we completed an underwritten offering, pursuant to which we issued and sold 2,727,273 shares of our Class A common stock at an offering price of $11.00 per share. The aggregate net proceeds received from the offering was $28.2 million, after deducting underwriting discounts and commissions, but before deducting offering costs payable by us, which were $0.2 million.
Since inception, we have had significant annual operating losses. Our net loss was approximately $28.4 million for the six months ended June 30, 2024 and approximately $53.5 million for the year ended December 31, 2023. As of June 30, 2024, we had an accumulated deficit of approximately $191.6 million and approximately $59.7 million in cash and cash equivalents.
Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our accounts payable and accrued expenses. We expect to continue to incur net losses for the foreseeable future, and we expect our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase. In particular, we expect our expenses to increase as we continue our development of, and seek regulatory approvals for, our internally developed product candidates as well as add operational, financial and management informational systems and personnel to support our product development. In addition, if and when we seek and obtain regulatory approval to commercialize any product candidate, we will also incur increased expenses in connection with commercialization and marketing of any such product. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.
Based on our current business plans, we believe that our existing cash and cash equivalents will enable us to fund our development activities and other operations into the second half of 2025. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. To finance our operations beyond that point we will need to raise additional capital, which cannot be assured.
We have not had any internally developed products approved for sale. We do not expect to generate any product sales unless and until we successfully complete development of, obtain regulatory approval for, and successfully bring to market one or more of our internally developed product candidates. If we obtain regulatory approval for any of our internally developed product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. As a result, until such time, if ever, that we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including without limitation potential collaborations, licenses or similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed or on favorable terms, if at all. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies, including our research and development activities. If we are unable to raise capital, we will need to delay, reduce or terminate planned activities to reduce costs.
Components of Our Results of Operations
Operating Expenses

Our operating expenses consist of: (i) research and development expenses, and (ii) general and administrative expenses.
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Research and Development
Research and development expenses account for a significant portion of our operating expenses. Our research and development expenses consist primarily of direct and indirect costs incurred in connection with the development of our research platform, product candidates, discovery efforts and preclinical and clinical activities related to our program pipeline.
Our direct costs include:
•expenses incurred under agreements with third-party CROs and other vendors that conduct our preclinical and clinical activities on our behalf, including clinical trial sites that conduct research and development activities on our behalf;
•laboratory expenses related to the execution of discovery programs, preclinical studies and clinical trials; and
•costs related to production of clinical and preclinical materials, including fees paid to contract manufacturers.
Our indirect costs include:
•personnel-related expenses, consisting of employee salaries, bonuses, benefits and stock-based compensation expense, and recruiting costs for personnel engaged in research and development activities;
•contractor and consulting fees related to the preparation and ongoing support of clinical trials; and
•facility and equipment related expenses, consisting of indirect and allocated expenses for rent, depreciation, maintenance of facilities, insurance, and other supplies.
We expense research and development costs in the periods in which they are incurred.

Our direct research and development expenses are tracked on a program-by-program basis once they are in Phase 1 clinical trials and consist of external costs and fees paid to contract manufacturing organizations, or CMOs, and CROs in connection with our preclinical and clinical development and manufacturing activities. Such program costs also include the external costs of laboratory and consumable materials and costs of raw materials that are directly attributable to and incurred for any single program. We do not allocate employee costs, contractor/consultant fees, costs associated with our platform development and discovery efforts, payments made under third-party licensing agreements, costs of laboratory supplies and consumable materials that are not directly attributable to any single program, and facilities expenses, including rent, depreciation and other indirect costs, to specific product development programs because these costs are deployed across multiple programs and our platform technology and, as such, are not separately classified.

Due to the inherently unpredictable nature and numerous risks and uncertainties associated with product development and the current stage of development of our product candidates and programs, we cannot reasonably estimate or know the nature, timing and estimated costs necessary to complete the remainder of the development of our product candidates or programs. We are also unable to predict if, when, or to what extent we will obtain approval and generate revenues from the commercialization and sale of any of our product candidates.

The duration, costs and timing of preclinical studies and clinical trials and development of our product candidates will depend on a variety of factors, such as:
•successful completion of preclinical studies and initiation of clinical trials for future product candidates;
•successful enrollment and completion of clinical trials for our current product candidates;
•data from our clinical programs that support an acceptable risk-benefit profile of our product candidates in the intended patient populations;
•acceptance by the FDA or other applicable regulatory agencies of IND applications, clinical trial applications and/or other regulatory filings for our product candidates;
•expansion and maintenance of a workforce of experienced scientists and others to continue to develop our product candidates;
•successful application for and receipt of marketing approvals from applicable regulatory authorities;
•obtainment and maintenance of intellectual property protection and regulatory exclusivity for our product candidates;
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•making of arrangements with contract manufacturing organizations for, or establishment of, commercial manufacturing capabilities;
•establishment of sales, marketing and distribution capabilities and successful launch of commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others;
•acceptance of our product candidates, if and when approved, by patients, the medical community and third-party payors;
•effective competition with other therapies;
•obtainment and maintenance of coverage, adequate pricing and adequate reimbursement from third-party payors, including government payors;
•maintenance, enforcement, defense and protection of our rights in our intellectual property portfolio;
•avoidance of infringement, misappropriation or other violations with respect to others’ intellectual property or proprietary rights; and
•maintenance of a continued acceptable safety profile of our product candidates following receipt of marketing approvals, if any.
A change in the outcome of any of these variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate.

The process of conducting the necessary preclinical and clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for our product candidates may be affected by a variety of factors.

We may never succeed in achieving regulatory approval for any of our product candidates. Further, a number of factors, including those outside of our control, could adversely impact the timing and duration of our product candidates’ development, which could increase our research and development expense. We may obtain unexpected results from our preclinical studies and clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others. A change in the outcome of any of these factors could mean a significant change in the costs and timing associated with the development of our current and future preclinical and clinical product candidates. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development, or if we experience significant delays in execution of or enrollment in any of our preclinical studies or clinical trials, we could be required to expend significant additional financial resources and time on the completion of preclinical and clinical development.

We expect that our research and development expenses will substantially increase for the foreseeable future as we continue to implement our business strategy, which includes advancing our product candidates through clinical development, expanding our research and development efforts, including hiring additional personnel to support our research and development efforts, and seeking regulatory approvals for our product candidates that successfully complete clinical trials. In addition, product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect our research and development expenses to increase as our product candidates advance into later stages of clinical development. As of the date of this Quarterly Report on Form 10-Q, we cannot reasonably determine or accurately project total program-specific expenses through commercialization, if such was to occur. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development.
General and Administrative
Our general and administrative expenses consist primarily of personnel-related expenses, including employee salaries, bonuses, benefits, stock-based compensation, and recruiting costs for personnel in executive, finance, and other administrative functions. Other significant general and administrative expenses include legal fees relating to intellectual property and corporate matters, professional fees for accounting, tax and consulting services, insurance costs, travel expenses and facility related expenses not otherwise included in research and development expenses.
We expect our general and administrative expenses may increase for the foreseeable future if and as we continue to increase our general and administrative headcount to support our continued research and development activities and, if any product candidates receive marketing approval, commercialization activities, as well as to support our operations generally.
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We also expect to continue to incur expenses associated with operating as a public company, including costs related to accounting, audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and rules and regulations of the Securities and Exchange Commission (“SEC”), Sarbanes-Oxley Act, director and officer insurance costs, and investor and public relations costs.
Amortization of intangible asset
Amortization of intangible asset relates to the technology acquired in the BioArkive acquisition.
Other Income (Expense)
Interest income

Interest income consists of interest earned on our cash and cash equivalents balances and our marketable securities. The primary objective of our investment policy is capital preservation.

Other income (expense)

Other income (expense) consists of the amortization of premiums or accretion of discounts related to our marketable securities.
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Results of Operations
Comparison of the Three Months Ended June 30, 2024 and 2023
The following table summarizes our results of operations for the periods indicated:
Three Months Ended June 30,Change
20242023$%
(in thousands, except percentages)
Operating expenses
Research and development$10,652 $9,453 $1,199 12.7 %
General and administrative4,254 4,045 209 5.2 %
  Amortization of intangible asset7 7 — — %
Total operating expenses14,913 13,505 1,408 10.4 %
Loss from operations(14,913)(13,505)(1,408)10.4 %
Other income (expense)
Interest income826 1,166 (340)(29.2)%
Other income, net8 150 (142)(94.7)%
Net loss$(14,079)$(12,189)$(1,890)15.5 %
Research and Development
The following table summarizes the components of our research and development expenses for the periods indicated:
Three Months Ended June 30,Change
20242023$%
(in thousands, except percentages)
Direct research and development expenses by program:
IMM-1-104$3,807 $984 $2,823 286.9 %
IMM-6-4151,132 2,179 (1,047)(48.0)%
Other programs1,485 2,213 (728)(32.9)%
Indirect research and development expenses:
Employee-related costs3,147 3,058 89 2.9 %
Stock-based compensation expense678 616 62 10.1 %
Facilities and other expenses341 347 (6)(1.7)%
Depreciation/amortization62 56 6 10.7 %
Total research and development$10,652 $9,453 $1,199 12.7 %
Research and development expenses increased by approximately $1.2 million, or 12.7%, to approximately $10.7 million for the three months ended June 30, 2024 as compared to approximately $9.5 million for the three months ended June 30, 2023. The increase of approximately $1.2 million was primarily due to an increase of approximately $1.0 million related to direct research and development expenses, including a $2.8 million increase in expenses related to IMM-1-104, offset by an approximately $1.0 million decrease in expenses related to IMM-6-415 driven by decreased manufacturing and preclinical spend, offset by increased clinical spend. Additionally, there was a decrease of approximately $0.7 million in expenses for earlier stage programs. The remaining variance was driven by an increase in unallocated research and development expenses of approximately $0.2 million, which was primarily driven by increased employee-related costs of $0.1 million, in addition to increased stock-based compensation expense of $0.1 million.
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General and Administrative
The following table summarizes the components of our general and administrative expenses for the periods indicated:
Three Months Ended June 30,Change
20242023$%
(in thousands, except percentages)
Employee-related costs$2,054 $2,048 $6 0.3 %
Stock-based compensation expense983 718 265 36.9 %
Professional fees726 928 (202)(21.8)%
Facilities and other allocated expenses61 71 (10)(14.1)%
Other430 280 150 53.6 %
Total general and administrative$4,254 $4,045 $209 5.2 %
General and administrative expenses increased by approximately $0.2 million, or 5.2%, to approximately $4.3 million for the three months ended June 30, 2024 compared to approximately $4.0 million for the three months ended June 30, 2023. The increase of approximately $0.2 million was primarily due to increased stock-based compensation expense of approximately $0.3 million and a $0.1 million increase in facilities and other expenses in the aggregate. This is primarily offset by decreased professional fees for accounting, auditing and legal services of approximately $0.2 million.
Amortization of Intangible Asset
Amortization of intangible asset was $7,317 in the three months ended June 30, 2024 and 2023. This amortization is related to the technology acquired for the BioArkive acquisition completed in December 2021.
Other Income (Expense)
Interest income decreased by approximately $340 thousand for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. While the interest rates on our cash and cash equivalents balances increased, we had a lower total cash balance leading to an overall decrease in interest income.
Other income was approximately $8 thousand for the three months ended June 30, 2024, compared to $150 thousand for the three months ended June 30, 2023. This is primarily as a result of the increase in the accretion of premiums related to our marketable securities.
Comparison of the Six Months Ended June 30, 2024 and 2023
The following table summarizes our results of operations for the periods indicated:
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Six Months Ended June 30,Change
20242023$%
(in thousands, except percentages)
Operating expenses
Research and development$21,854$19,664$2,19011.1%
General and administrative8,3708,506(136)(1.6)%
  Amortization of intangible asset1515——%
Total operating expenses30,23928,1852,0547.3%
Loss from operations(30,239)(28,185)(2,054)7.3%
Other income (expense)
Interest income1,6311,997(366)(18.3)%
Other income221 394 (173)(43.9)%
Net loss$(28,387)$(25,794)$(2,593)10.1 %

Research and Development
The following table summarizes the components of research and development expenses for the periods indicated:
Six Months Ended June 30,Change
20242023$%
(in thousands, except percentages)
Direct research and development expenses by program:
IMM-1-104$7,454 $3,066 $4,388 143.1 %
IMM-6-4152,160 2,882 (722)(25.1)%
Other programs3,536 4,762 (1,226)(25.7)%
Indirect research and development expenses:
Employee-related costs6,687 6,971 (284)(4.1)%
Stock-based compensation expense1,245 1,207 38 3.1 %
Facilities and other allocated expenses649 668 (19)(2.8)%
Depreciation/amortization123 108 15 13.9 %
Total research and development$21,854 $19,664 $2,190 11.1 %

Research and development expenses increased by approximately $2.2 million, or 11.1%, to approximately $21.9 million for the six months ended June 30, 2024 as compared to approximately $19.7 million for the six months ended June 30, 2023. The increase of approximately $2.2 million was primarily due to an increase of approximately $2.4 million related to direct research and development expenses, of which there was a $4.4 million increase in expenses related to IMM-1-104, offset by a $0.7 million decrease in expenses related to IMM-6-415 driven by decreased manufacturing and preclinical spend, offset by increased clinical activity. Additionally, there was a $1.2 million decrease for earlier stage programs. The remaining offset was driven by decreased unallocated research and development costs of approximately $0.3 million, of which $0.3 million was associated with employee-related costs. The remaining decrease is attributable to a minor increase in stock-based compensation expense and depreciation/amortization costs, in the aggregate.
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General and Administrative
The following table summarizes the components of general and administrative expenses for the periods indicated:
Six Months Ended June 30,Change
20242023$%
(in thousands, except percentages)
Employee-related costs$4,243 $4,394 $(151)(3.4)%
Stock-based compensation expense1,891 1,401 490 35.0 %
Professional fees1,356 1,846 (490)(26.5)%
Facilities and other allocated expenses156 210 (54)(25.7)%
Other724 655 69 10.5 %
Total general and administrative$8,370 $8,506 $(136)(1.6)%

General and administrative expenses decreased by approximately $0.1 million, or 1.6%, to approximately $8.4 million for the six months ended June 30, 2024 compared to approximately $8.5 million for the six months ended June 30, 2023. The decrease of approximately $0.1 million was primarily due to a decrease in professional fees incurred for accounting, auditing, legal and tax services of approximately $0.5 million, a decrease in employee-related costs of $0.2 million, and a decrease of $0.1 million for facilities and other allocated expense. This is offset by increased stock-based compensation expense of approximately $0.5 million, along with increased other expenses of $0.1 million.
Amortization of Intangible Asset
Amortization of intangible asset was $14,633 in the six months ended June 30, 2024, and 2023. This amortization is related to the technology acquired for the BioArkive acquisition completed in December 2021.
Other Income (Expense)
Interest income decreased by approximately $0.4 million for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. While the interest rates on our cash and cash equivalents balances increased, we had a lower total cash balance leading to an overall decrease in interest income.
Other income was approximately $0.2 million for the six months ended June 30, 2024, compared to $0.4 million for the six months ended June 30, 2023. This is primarily a result of the increase in the accretion of premiums related to our marketable securities.
Liquidity and Capital Resources
Sources of Liquidity
We finance our operations through the issuance of convertible notes payable, convertible preferred stock, common stock, and the exercise of stock options. As of June 30, 2024, we had an accumulated deficit of $191.6 million and $59.7 million in cash and cash equivalents. Cash and cash equivalents are comprised of deposits at major financial banking institutions and highly liquid investments with an original maturity of three months or less at the date of purchase. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, reflected in the change in our outstanding accounts payable and accrued expenses.

Since our inception, we have incurred significant operating losses. We have not yet commercialized any of our product candidates, and we do not expect to generate revenue from sales of any product candidates for the next several years, if at all. To date, our operations have been financed primarily by service revenues and proceeds from sales of our debt and equity securities.
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On August 10, 2022, we entered into an Equity Distribution Agreement (the "Sales Agreement") with Piper Sandler & Co (the "Sales Agent"), to sell shares of our common stock with aggregate gross proceeds of up to $50 million, from time to time, through an “at the market” equity offering program ("ATM Program"). During the six months ended June 30, 2024, we did not sell any shares of common stock pursuant to the Sales Agreement under the ATM Program.
On April 20, 2023, we completed an underwritten follow-on equity offering, pursuant to which we issued and sold 2,727,273 shares of our Class A common stock at an offering price of $11.00 per share. The aggregate net proceeds received from the offering was $28.2 million, after deducting underwriting discounts and commissions, but before deducting offering costs payable by us, which were $0.2 million.

As of June 30, 2024, we have contractual obligations related to various leases of $0.4 million for 2024, $0.7 million for 2025, $0.8 million for 2026, $0.8 million for 2027, $0.8 million for 2028 and $2.9 million for the periods thereafter.

We have no off-balance sheet arrangements that have a material current effect or that are reasonably likely to have a material future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Cash Flows
The following table summarizes our sources and uses of cash for the periods indicated:
Six Months Ended June 30,
20242023
(in thousands)
Net cash (used in) provided by:
Operating activities$(27,017)$(25,167)
Investing activities26,360 28,135 
Financing activities980 28,412 
Net increase in cash and cash equivalents$323 $31,380 
Net Cash Used in Operating Activities
During the six months ended June 30, 2024, operating activities used approximately $27.0 million of cash, primarily resulting from our net loss of approximately $28.4 million and changes in assets and liabilities of $1.9 million, partially offset by stock-based compensation expense of approximately $3.1 million and the reduction in carrying amount of right-of-use assets of approximately $0.2 million.
During the six months ended June 30, 2023, operating activities used approximately $25.2 million of cash, primarily resulting from our net loss of approximately $25.8 million and changes in assets and liabilities of $2.0 million, partially offset by stock-based compensation expense of approximately $2.6 million and the reduction in carrying amount of right-of-use assets of $0.2 million.
Net Cash Provided by Investing Activities
During the six months ended June 30, 2024, investing activities provided approximately $26.4 million of cash, primarily resulting from the maturities of marketable securities of approximately $26.4 million, partially offset by purchases of property and equipment of approximately $70 thousand.
During the six months ended June 30, 2023, investing activities provided approximately $28.1 million, primarily resulting from the maturities of marketable securities of approximately $28.3 million, partially offset by purchases of property and equipment of $0.1 million.
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Net Cash Provided by Financing Activities
During the six months ended June 30, 2024, net cash provided by financing activities was approximately $1.0 million, primarily driven by proceeds of approximately $0.7 million from the exercise of stock options and approximately $0.2 million from the Company's employee stock purchase plan.
During the six months ended June 30, 2023, net cash provided by financing activities was approximately $28.4 million, primarily driven by net proceeds of approximately $28.2 million from the Company's underwritten follow-on equity offering, after deducting commissions and underwriting fees, in addition to $0.4 million from the exercise of stock options. This was partially offset by $0.2 million in payments of costs related to the public offering.
Future Funding Requirements
We expect that our expenses will increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials for our product candidates in development. The timing and amount of our operating and capital expenditures will depend largely on:
•the costs and results of our ongoing clinical trials for IMM-1-104 and IMM-6-415 and potential future clinical trials for our other product candidates;
•the scope, progress, results and costs of discovery research, preclinical development, laboratory testing and clinical trials for our other product candidates;
•the costs, timing and outcome of regulatory review of our product candidates;
•our ability to enter into contract manufacturing arrangements for supply of active pharmaceutical ingredient, or API, and manufacture of our product candidates and the terms of such arrangements;
•the payment or receipt of milestones and receipt of other collaboration-based revenues, if any;
•the costs and timing of future commercialization activities, if any, including product manufacturing, sales, marketing and distribution, for any of our product candidates for which we may receive marketing approval;
•the amount and timing of revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;
•the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights and defending any intellectual property related claims;
•the extent to which we acquire or in-license other products, product candidates, technologies or data referencing rights;
•our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of such arrangements;
•our ability to access the private and public capital markets or to obtain financing at commercially reasonable rate;
•the ability to receive additional non-dilutive funding, including grants from organizations and foundations;
•the costs of operating as a public company; and
•the impacts of ongoing or future pandemics or other widespread adverse health events.
Based on our current business plans, we believe that our existing cash and cash equivalents will enable us to fund our development activities and other operations into the second half of 2025. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.
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Critical Accounting Estimates
Our financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, revenue, costs and expenses, and related disclosures. Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Use of Estimates” in our Annual Report on 10-K for the fiscal year ending December 31, 2023. If actual results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our reported financial condition and results of operations could be materially affected. There have been no significant changes to our critical accounting policies from those described in our Annual Report on 10-K for the fiscal year ending December 31, 2023.
A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.
Emerging Growth Company Status
As an emerging growth company, or EGC, under the Jumpstart Our Business Startups Act of 2012, or JOBS Act, we may delay the adoption of certain accounting standards until such time as those standards apply to private companies. Other exemptions and reduced reporting requirements under the JOBS Act for EGCs include presentation of only two years of audited consolidated financial statements in a registration statement for an IPO, an exemption from the requirement to provide an auditor’s report on internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board, and less extensive disclosure about our executive compensation arrangements.
In addition, the JOBS Act provides that an EGC can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an EGC to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we: (i) are no longer an emerging growth company, or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our condensed consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
We may remain classified as an EGC until December 31, 2026, which is the end of the fiscal year following the fifth anniversary of our IPO, although if the market value of our common stock that is held by non-affiliates exceeds $700 million as of June 30 of any year before that time, or if we have annual gross revenues of $1.235 billion or more in any fiscal year, we will cease to be an EGC as of December 31 of the applicable year. We also will cease to be an EGC if we issue more than $1.0 billion of non-convertible debt over a three-year period.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
As a smaller reporting company, as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, we are not required to provide this information.
Item 4. Controls and Procedures.
Limitations on Effectiveness of Controls and Procedures
Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
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Act) as of June 30, 2024. Based on that evaluation, our Chief Executive Officer and our Chief Accounting Officer and Treasurer concluded that, as of June 30, 2024, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended June 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
From time to time we may be involved in claims and proceedings arising in the course of our business. The outcome of any such claims or proceedings, regardless of the merits, is inherently uncertain. We are not currently party to any material legal proceedings.
Item 1A. Risk Factors
Our future operating results could differ materially from the results described in this Quarterly Report on Form 10-Q due to the risks and uncertainties described below. You should consider carefully the following information about risks below in evaluating our business. If any of the following risks actually occur, our business, financial conditions, results of operations and future growth prospects would likely be materially and adversely affected. In these circumstances, the market price of our Class A common stock would likely decline. In addition, we cannot assure investors that our assumptions and expectations will prove to be correct. Important factors could cause our actual results to differ materially from those indicated or implied by forward-looking statements. See “Forward-Looking Statements” for a discussion of some of the forward-looking statements that are qualified by these risk factors. Factors that could cause or contribute to such differences include those factors discussed below.
Risks Related to Our Financial Condition and Capital Requirements
We are a clinical-stage oncology company with a limited operating history in developing pharmaceutical products, have not completed any clinical trials and have no products approved for commercial sale, which may make it difficult for you to evaluate our current business and predict our future success and viability.
Pharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. We are a clinical-stage oncology company with a limited operating history in developing pharmaceutical products which makes it difficult to evaluate our business and prospects in future product development. We have no products approved for commercial sale and have not generated any revenue from product sales. To date, we have devoted substantially all of our resources and efforts to providing computational biology services to pharmaceutical and biotechnology companies, organizing and staffing our company, business planning, executing partnerships, raising capital, discovering, identifying and developing potential product candidates, securing related intellectual property rights and undertaking research and preclinical studies and clinical trials of our product candidates, including our ongoing Phase 1/2a clinical trials of IMM-1-104 and IMM-6-415 for the treatment of advanced solid tumors in patients harboring RAS or RAS/RAF mutant tumors, respectively. We have not yet demonstrated our ability to successfully complete any clinical trials, obtain marketing 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. As a result, it may be more difficult for you to accurately predict our future success or viability to develop new pharmaceutical products than it could be if we had a longer operating history.
In addition, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors and risks frequently experienced by biopharmaceutical companies developing products in rapidly evolving fields. We also may need to transition from a company with a research and development focus to a company capable of supporting commercial activities. If we do not adequately address these risks and difficulties or successfully make such a transition, our business will suffer.
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We have incurred significant net losses for the past several years and we expect to continue to incur significant net losses for the foreseeable future and may never obtain profitability.
We have incurred net losses in each reporting period for the past several years, have not generated any revenue from product sales to date and have financed our operations principally through our historical computational biology services to pharmaceutical and biotechnology companies (which have since ceased), the issuance of convertible debt and the sale of our convertible preferred stock and Class A common stock. We have incurred net losses of approximately $28.4 million and $53.5 million for the six months ended June 30, 2024 and year ended December 31, 2023, respectively. As of June 30, 2024, we had an accumulated deficit of approximately $191.6 million. Our losses have resulted principally from expenses incurred in research and development of our product candidates, from management and administrative costs and from other expenses that we have incurred while building our business infrastructure. We are currently conducting ongoing Phase 1/2a clinical trials for each of our product candidates, IMM-1-104 and IMM-6-415, for the treatment of advanced solid tumors in patients harboring RAS or RAS/RAF mutant tumors, respectively. Our other product candidates are in earlier stages of drug development. As a result, we expect that it will be several years, if ever, before we have a commercialized product and generate revenue from product sales. Even if we succeed in receiving marketing approval for and commercializing one or more of our product candidates, we expect that we will continue to incur substantial research and development and other expenses as we discover, develop and market additional potential product candidates.
We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase substantially if and as we:
•advance the development of our current and future product candidates, including IMM-1-104 and IMM-6-415, through preclinical and clinical development, and, if approved by the FDA or other comparable foreign regulatory authorities, commercialization;
•incur manufacturing costs for our product candidates;
•seek regulatory approvals for any of our product candidates that successfully complete clinical trials;
•increase our research and development activities to identify and develop new product candidates;
•hire additional personnel;
•expand our operational, financial and management systems;
•invest in measures to protect and expand our intellectual property;
•establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any product candidates for which we may obtain marketing approval and intend to commercialize;
•expand our manufacturing and develop our commercialization efforts, if any; and
•operate as a public company.
The net losses we incur may fluctuate significantly from quarter to quarter such that a period-to-period comparison of our results of operations may not be a good indication of our future performance. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue. Our prior losses and expected future losses have had and will continue to have an adverse effect on our working capital and our ability to achieve and maintain profitability.
To become and remain profitable, we must succeed in developing and eventually commercializing product candidates that generate significant revenue. This will require us to be successful in a range of challenging activities, including completing preclinical studies and clinical trials of our product candidates, discovering additional product candidates, obtaining regulatory approval for these product candidates, manufacturing, marketing and selling any products for which we may obtain regulatory approval, achieving market acceptance of any such approved products and receiving reimbursements in amounts above our costs. We are only in the preliminary stages of most of these activities. We may never succeed in these activities and, even if we do, we may never generate revenue that is significant enough to achieve profitability. Because of the numerous risks and uncertainties associated with pharmaceutical product candidate development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. If we are required by the FDA or other regulatory authorities to perform preclinical studies or clinical trials in addition to those currently expected, or if there are any delays in completing our ongoing preclinical studies or clinical trials or the
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development of any of our product candidates, our expenses could increase and revenue could be further delayed. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would depress our value and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our product offerings or even continue our operations.
We will require substantial additional capital to finance our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and drug development programs or future commercialization efforts.
Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is a very time-consuming, expensive and uncertain process that takes years to complete. Our operations have consumed substantial amounts of cash since inception, and we expect our expenses to increase in connection with our ongoing activities, particularly as we initiate and conduct preclinical studies and clinical trials, and seek marketing approval for our current and any future product candidates. Even if one or more of the product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate. Our expenses could increase beyond expectations if we are required by the FDA or other comparable foreign regulatory authorities to perform clinical trials or preclinical studies in addition to those that we currently anticipate. Other unanticipated costs may also arise. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to drug sales, marketing, manufacturing and distribution. Because the design and outcome of our current and anticipated clinical trials are highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of any product candidate we develop. We also expect to continue to incur the costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in order to maintain our continuing operations in the future.
As of June 30, 2024, we had approximately $59.7 million in cash and cash equivalents. Based on our current business plans, we believe that our existing cash and cash equivalents will be sufficient to fund our development activities and other operations into the second half of 2025. Our estimate as to how long we expect our existing cash and cash equivalents to be able to continue to fund our operating expenses and capital expenditures requirements is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.
Our future funding requirements will depend on many factors, including, but not limited to:
•the initiation, progress, timeline, cost and results of our clinical trials for our product candidates;
•the initiation, progress, timeline, cost and results of additional research and/or preclinical studies related to pipeline development and other research programs we initiate in the future;
•the cost and timing of manufacturing activities as we advance our product candidates through preclinical and clinical development, and possible commercialization;
•the potential expansion of our current development programs to seek new indications;
•the potential negative impact of widespread adverse economic or health events (including due to military conflict or pandemics) on our business;
•the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities;
•the cost of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights, in-licensed or otherwise;
•the effect of competing technological and market developments;
•the payment of licensing fees, potential royalty payments and potential milestone payments;
•the cost of general operating expenses;
•the cost and timing of completion of commercial-scale manufacturing activities, if any;
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•the cost of establishing sales, marketing, and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own; and
•the cost of operating as a public company.
Advancing the development of our product candidates will require a significant amount of capital. Our existing cash and cash equivalents will not be sufficient to fund all of the activities that are necessary to complete the development of our product candidates.
We will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources, which may dilute our stockholders or restrict our operating activities. We do not have any committed external source of funds. Adequate additional financing may not be available to us on acceptable terms, or at all. For example in 2022, due to macroeconomic conditions including inflation and higher interest rates, the stock price of biotech companies, including ours, generally declined, making fundraising in our industry more difficult and on less favorable terms. Furthermore, additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and potentially commercialize our product candidates. Our failure to raise capital as and when needed or on acceptable terms would have a negative impact on our financial condition and our ability to pursue our business strategy, and we may have to delay, reduce the scope of, suspend or eliminate one or more of our research-stage programs, clinical trials or future commercialization efforts.
We maintain the majority of our cash and cash equivalents in accounts with major U.S. and multi-national financial institutions, and our deposits at certain of these institutions exceed insured limits. Market conditions have in the past impacted and may in the future impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect our business and financial position.
Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our product candidates on unfavorable terms to us.
We may seek additional capital through a variety of means, including through public or private equity offerings made pursuant to the Sales Agreement or otherwise, debt financings or other sources, including up-front payments and milestone payments from strategic collaborations. To the extent that we raise additional capital through the sale of equity or convertible debt or equity securities, for example, as we did in April 2023, your ownership interest may be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. In addition to dilution, such financings may result in the imposition of debt covenants, increased fixed payment obligations or other restrictions (including operating restrictions) that may affect our business. If we raise additional funds through up-front payments or milestone payments pursuant to strategic collaborations with third parties, we may have to relinquish valuable rights to our product candidates, or grant licenses on terms that are not favorable to us. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
Our ability to use our net operating losses and other tax attributes may be limited.
As of December 31, 2023, we had approximately $75.7 million of federal and $42.1 million of state net operating loss carryforwards ("NOLs") available to offset future taxable income. Under Sections 382 and 383 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change,” generally defined as a greater than 50% change by value in its equity ownership over a three-year period is subject to limitations on its ability to utilize its pre-change NOLs and other tax attributes such as research tax credits to offset future taxable income. We have not performed an analysis to determine whether our past issuances of stock and other changes in our stock ownership may have resulted in other ownership changes. If it is determined that we have in the past experienced other ownership changes, or if we undergo one or more ownership changes as a result of future transactions in our stock, which may be outside our control, then our ability to utilize NOLs and other pre-change tax attributes could be further limited by Sections 382 and 383 of the Code, and certain of our NOLs and other pre-change tax attributes may expire unused. As a result, if or when we earn net taxable income, our ability to use our pre-change NOLs or other tax attributes to offset such taxable income or otherwise reduce any liability for income taxes may be subject to limitations, which could adversely affect our future cash flows.
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Risks Related to Development, Regulatory Approval and Commercialization
The regulatory approval processes of the FDA and other comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable with respect to outcomes. If we are ultimately unable to obtain regulatory approval for our product candidates, or to obtain regulatory approval to treat the indications we seek to treat with our product candidates, we will be unable to generate product revenue or the level of planned product revenue and our business will be substantially harmed.
We are not permitted to commercialize, market, promote or sell any product candidate in the United States without obtaining marketing approval from the FDA. Foreign regulatory authorities impose similar requirements. The time required to obtain approval by the FDA and other comparable foreign regulatory authorities is unpredictable, typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the type, complexity and novelty of the product candidates involved. In addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, which may cause delays in the approval or the decision not to approve an application. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other data. Even if we eventually complete clinical testing and receive approval of any regulatory filing for our product candidates, the FDA and other comparable foreign regulatory authorities may approve our product candidates for a more limited indication or a narrower patient population than we originally requested. We have not submitted for, or obtained, regulatory approval for any product candidate, and it is possible that none of our existing product candidates or any product candidates we may seek to develop in the future will ever obtain regulatory approval.
Applications for our product candidates could fail to receive, or be delayed in receiving, regulatory approval for many reasons, including the following:
•the FDA or other comparable foreign regulatory authorities may disagree with the design, implementation or results of our clinical trials, including without limitation with respect to the appropriate or proper escalation of dosing in patients or the use of our product candidates as potential combination therapies;
•the FDA or other comparable foreign regulatory authorities may determine that our product candidates are not safe and/or not effective, only moderately effective or have undesirable or unintended side effects, toxicities or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use;
•the population studied in the clinical trial may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval;
•the FDA or other comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;
•the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a NDA or other submission or to obtain regulatory approval in the United States or elsewhere;
•we may be unable to demonstrate to the FDA or other comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio for its proposed indication is acceptable;
•the FDA or other comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and
•the approval policies or regulations of the FDA or other comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
This lengthy approval process, as well as the unpredictability of the results of clinical trials, may result in our failing to obtain regulatory approval to market any of our product candidates, which would significantly harm our business, results of operations and prospects. In addition, the FDA or comparable foreign regulatory authorities may change their policies, adopt additional regulations or revise existing regulations or take other actions, which may prevent or delay approval of our future product candidates under development on a timely basis. Such policy or regulatory changes could impose additional requirements upon us that could delay our ability to obtain approvals, increase the costs of compliance or restrict our ability to maintain any marketing authorizations we may have obtained.
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In addition, even if we obtain approval of our product candidates, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may impose significant limitations in the form of narrow indications, warnings, or a REMS. Regulatory authorities may not approve the price we intend to charge for products we may develop, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate. Any of the foregoing scenarios could seriously harm our business.
We are a clinical-stage oncology company, and we may not be able to submit additional INDs or IND amendments or comparable documents in foreign jurisdictions to commence additional clinical trials on the timelines we expect, and even if we are able to, the FDA may not permit us to proceed.
We may not be able to submit additional INDs, IND amendments or comparable documents for IMM-1-104 or IMM-6-415, for which INDs were previously submitted, or for our other potential product candidates on the timelines we expect. We may also experience manufacturing delays or other delays with IND-enabling studies. Moreover, we cannot be sure that submission of an IND or comparable document will result in the FDA or other comparable foreign regulatory authorities allowing further clinical trials to begin, or that, once begun, issues will not arise that suspend or terminate clinical trials. Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND, we cannot guarantee that such regulatory authorities will not change their requirements in the future. These considerations also apply to new clinical trials we may submit as amendments to existing INDs or to a new IND. Any failure to file INDs on the timelines we expect or to obtain regulatory approvals for our trials may prevent us from completing our clinical trials or commercializing our products on a timely basis, if at all.
We are a clinical-stage oncology company, and our company has limited experience in designing clinical trials and may experience delays or unexpected difficulties in obtaining regulatory approval for our current and future product candidates.
We are a clinical-stage oncology company, and we have limited experience in designing clinical trials and may be unable to design and execute a clinical trial to support marketing approval. We cannot be certain that our ongoing or planned clinical trials or any future clinical trials will be successful. It is possible that the FDA may refuse to accept, or be delayed in accepting, any or all of our planned NDAs for substantive review or may conclude after review of our data that our application is insufficient to obtain regulatory approval for any product candidates. If the FDA does not approve any of our planned NDAs, it may require that we conduct additional costly clinical trials, preclinical studies or manufacturing validation studies before it will reconsider our applications. Depending on the extent of these or any other FDA-required studies, approval of any NDA or other application that we submit may be significantly delayed, possibly for several years, or may require us to expend more resources than we have available. Any failure or delay in obtaining regulatory approvals would prevent us from commercializing our product candidates, generating revenues and achieving and sustaining profitability. It is also possible that additional studies, if performed and completed, may not be considered sufficient by the FDA to approve any NDA or other application that we submit. If any of these outcomes occur, we may be forced to abandon the development of our product candidates, which would materially adversely affect our business and could potentially cause us to cease operations. We face similar risks for our applications in foreign jurisdictions.
We may encounter substantial delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.
Before obtaining marketing approval from the FDA or other comparable foreign regulatory authorities for the sale of our product candidates, we must complete preclinical development and extensive clinical trials to demonstrate the safety and efficacy of our product candidates. Clinical testing is expensive, difficult to design and implement, can take many years to complete and its ultimate outcome is uncertain. A failure of one or more clinical trials can occur at any stage of the process. The outcome of preclinical studies and early-stage clinical trials may not be predictive of the success of later clinical trials. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their drugs. The outcome of preclinical studies and early-stage clinical trials may not be predictive of the success of later clinical trials.
In addition, we are substantially dependent on preclinical, clinical and quality data generated by CROs and other third parties for regulatory submissions for our product candidates. While we have or will have agreements governing these third parties’ services, we have limited influence over their actual performance. If these third parties do not make data available to us, or, if applicable, make regulatory submissions in a timely manner, in each case pursuant to our agreements with
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them, our development programs may be significantly delayed, and we may need to conduct additional studies or collect additional data independently. In either case, our development costs would increase, perhaps substantially.
We do not know whether our future clinical trials will begin on time or enroll patients on time, or whether our future clinical trials will be completed on schedule or at all. Clinical trials can be delayed for a variety of reasons, including delays related to:
•the FDA or comparable foreign regulatory authorities disagreeing as to the design, implementation or results of our clinical trials, including without limitation with respect to the appropriate or proper escalation of dosing in patients or the use of our product candidates as potential combination therapies;
•obtaining regulatory authorizations to commence a trial or reaching a consensus with regulatory authorities on trial design;
•any failure or delay in reaching an agreement with CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;
•obtaining approval from one or more IRBs;
•IRBs refusing to approve, suspending or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trial;
•delays in enrollment due to travel or quarantine policies, or other factors related to current or future pandemics or other events outside our control;
•changes to clinical trial protocol;
•clinical sites deviating from trial protocol or dropping out of a trial;
•manufacturing sufficient quantities of product candidates or obtaining sufficient quantities of combination therapies for use in clinical trials;
•subjects failing to enroll or remain in our trial at the rate, with the tumor types, and/or at the stage(s) of disease that we expect, or failing to return for post-treatment follow-up;
•subjects choosing an alternative treatment for the indication for which we are developing our product candidates, or participating in competing clinical trials;
•lack of adequate funding to continue the clinical trial;
•subjects experiencing severe or unexpected drug-related adverse effects;
•occurrence of serious adverse events in trials of the same class of agents conducted by other companies;
•selection of clinical end points that require prolonged periods of clinical observation or analysis of the resulting data;
•a facility manufacturing our product candidates or any of their components being ordered by the FDA or comparable foreign regulatory authorities to temporarily or permanently shut down due to violations of cGMP regulations or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process;
•any changes to our manufacturing process that may be necessary or desired;
•third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCP, or other regulatory or contractual requirements;
•third-party contractors not performing data collection or analysis in a timely or accurate manner; or
•third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications.
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In addition, the occurrence of any public health crisis or similar global events, such as a future pandemic and its variants, could disrupt the supply chain and the manufacture or shipment of drug substances and finished drug products for our product candidates for use in our research and clinical trials, delay, limit or prevent our employees and CROs from continuing research and development activities, impede the ability of patients to enroll or continue in clinical trials, or impede testing, monitoring, data collection and analysis or other related activities, any of which could delay our clinical trials and increase our development costs, and have a material adverse effect on our business, financial condition and results of operations.
We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such trials are being conducted, by a Data Safety Monitoring Board for such trial or by the FDA or comparable foreign regulatory authorities. Such authorities may impose such a suspension or termination 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 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 drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. In addition, changes in regulatory requirements and policies may occur, and we may need to amend clinical trial protocols to comply with these changes. Amendments may require us to resubmit our clinical trial protocols to IRBs for reexamination, which may impact the costs, timing or successful completion of a clinical trial.
Further, conducting clinical trials in foreign countries, as we may do for our product candidates, presents additional risks that may delay completion of our clinical trials. These risks include the failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, including with respect to healthcare, cybersecurity and data privacy matters, as well as political and economic risks or military conflicts relevant to such foreign countries.
Additionally, if the results of our clinical trials are inconclusive or if there are safety concerns or serious adverse events associated with our product candidates, we may:
•be delayed in obtaining marketing approval, if at all;
•obtain approval for indications or patient populations that are not as broad as intended or desired;
•obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;
•be subject to additional post-marketing testing requirements;
•be required to perform additional preclinical studies or clinical trials to support approval or be subject to additional post-marketing testing requirements;
•have regulatory authorities withdraw, or suspend, their approval of the drug or impose restrictions on its distribution in the form of a modified REMS;
•be subject to the addition of labeling statements, such as warnings or contraindications;
•be sued; or
•experience damage to our reputation.
Our development costs will also increase if we experience delays in testing or obtaining marketing approvals. We do not know whether any of our preclinical studies or clinical trials will begin as planned, need to be restructured or be completed on schedule, if at all. Any delay in, or termination of, our clinical trials will delay the submission of an NDA to the FDA or similar applications with comparable foreign regulatory authorities and, ultimately, our ability to commercialize our product candidates, if approved, and generate product revenue. Even if our clinical trials are completed as planned, we cannot be certain that their results will support our claims for differentiation or the effectiveness or safety of our product candidates. The FDA has substantial discretion in the review and approval process and may disagree that our data support the claims we propose.
Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA or comparable foreign regulatory authorities. The FDA or comparable foreign regulatory authorities may conclude that a financial relationship between us and a principal investigator has created
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a conflict of interest or otherwise affected interpretation of the study. The FDA or comparable foreign regulatory authorities may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of our marketing applications by the FDA or comparable foreign regulatory authorities, as the case may be, and may ultimately lead to the denial of marketing approval of one or more of our product candidates.
If we experience delays in the completion of, or termination of, any clinical trial of our product candidates, the commercial prospects of our product candidates will be harmed, and our ability to generate product revenues from any of these product candidates will be delayed. Moreover, any delays in completing our clinical trials will increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues.
In addition, many of the factors that cause, or lead to, termination or suspension of, or a delay in the commencement or completion of, clinical trials may also ultimately lead to the denial of regulatory approval of a product candidate. Any delays to our clinical trials that occur as a result could shorten any period during which we may have the exclusive right to commercialize our product candidates and our competitors may be able to bring products to market before we do, and the commercial viability of our product candidates could be significantly reduced. Any of these occurrences may harm our business, financial condition and prospects significantly.
The outcome of preclinical studies and early clinical trials may not be predictive of the success of later clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA or other comparable foreign regulatory authorities.
Before obtaining regulatory approvals for the commercial sale of any of our product candidates, we will be required to demonstrate with substantial evidence through well-controlled clinical trials that our product candidates are safe and effective for their intended uses. Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. Success in preclinical studies and early-stage clinical trials does not mean that future clinical trials will be successful. We do not know whether any of our product candidates will perform in current or future clinical trials as they have performed in preclinical studies. Product candidates in later-stage clinical trials may fail to demonstrate sufficient safety and efficacy to the satisfaction of the FDA or other