Ikena Oncology Inc

Previous wording

We are a clinical stage, targeted oncology company, focused on developing differentiated therapies for patients in need that target nodes of cancer growth, spread, and therapeutic resistance in the Hippo and RAS onco-signaling network. Our approach in each of our programs is to target both cancer-driving targets and mechanisms of resistance to other therapies. Our most advanced program, IK-930, is a selective inhibitor of TEAD1. The TEAD transcription factors (TEAD 1-4) execute the ultimate step in the Hippo signaling pathway, a known oncogenic pathway that also drives resistance to multiple targeted and chemo therapies. Our program in the RAS pathway, IK-595, is a molecular glue designed to trap MEK and RAF in an inactive complex, more completely inhibiting RAS signals than existing inhibitors. Since we commenced operations in 2016, we have advanced multiple product candidates into clinical development.

Current wording

We have historically been a clinical stage, targeted oncology company, focused on developing differentiated therapies for patients in need that target nodes of cancer growth, spread, and therapeutic resistance. Our approach has been to target both cancer-driving targets and mechanisms of resistance to other therapies. Our program in the RAS pathway, IK-595, is a molecular glue designed to trap MEK and RAF in an inactive complex, more completely inhibiting RAS signals than existing inhibitors. Since we commenced operations in 2016, we have advanced multiple product candidates into clinical development. We have not had any products approved for sale and have not generated any revenue from product sales.

Previous wording

In addition to our work in the Hippo pathway, we are developing targeted therapies within the RAS pathway, one of the most highly dysregulated pathways in cancer. The RAS pathway is implicated in at least half a million new cancer diagnoses each year in the United States alone. Our goal is to achieve deep and sustained responses through targeting the pathway on multiple levels and leveraging the biology of known resistance mechanisms in our therapeutic design. We nominated IK-595 as our development candidate in our RAS pathway program in November 2022. IK-595 is designed to robustly inhibit MEK-RAF by gluing MEK and the RAFs (A, B, and C) in an inactive complex, thus more completely inhibiting RAS signals than existing inhibitors. IK-595’s potential ability to complex CRAF, in particular, has been shown in preclinical models to prevent a well-recognized signaling bypass mechanism that cancer cells employ to drive therapeutic resistance to other MEK and RAF drugs in this class. In addition, trapping CRAF in an inactive complex has been shown in preclinical models to prevent the kinase independent anti-apoptotic function in RAS and RAF mutant cancers, a mechanism that cannot be addressed with first generation MEK inhibitors or pan-RAF inhibitors. We are developing IK-595 as an oral therapy, with a half-life designed to enable a pharmacokinetic profile that we believe can be potentially superior to other pathway inhibitors, with the goal of optimizing the therapeutic window for patients. We treated the first patient in the dose escalation Phase 1 study of IK-595 in December 2023.

Current wording

In parallel, clinical development of IK-595, our dual MEK-RAF inhibitor has continued. The RAS pathway is implicated in at least half a million new cancer diagnoses each year in the United States alone. Our goal is to achieve deep and sustained responses through targeting the pathway on multiple levels and leveraging the biology of known resistance mechanisms in our therapeutic design. We nominated IK-595 as our development candidate in our RAS pathway program in November 2022. IK-595 is designed to robustly inhibit MEK-RAF by gluing MEK and the RAFs (A, B, and C) in an inactive complex, thus more completely inhibiting RAS signals than existing inhibitors. IK-595’s potential ability to complex CRAF, in particular, has been shown in preclinical models to prevent a well-recognized signaling bypass mechanism that cancer cells employ to drive therapeutic resistance to other MEK and RAF drugs in this class. In addition, trapping CRAF in an inactive complex has been shown in preclinical models to prevent the kinase independent anti-apoptotic function in RAS and RAF mutant cancers, a mechanism that cannot be addressed with first generation MEK inhibitors or pan-RAF inhibitors. We are developing IK-595 as an oral therapy, with a half-life designed to enable a pharmacokinetic profile that we believe can be potentially superior to other pathway inhibitors, with the goal of optimizing the therapeutic window for patients. We treated the first patient in the dose escalation Phase 1 study of IK-595 in December 2023. In May 2024, we reported the observation of promising early pharmacokinetics and pharmacodynamics activity, with dose dependent exposure and target modulation measured in the blood. A total of 51 patients with advanced tumors and MAPK alterations have been enrolled and treated to date. We are actively exploring strategic options for the continued development of IK-595.

Previous wording

Since inception, we have incurred significant operating losses. Our net losses were $68.2 million and $68.8 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $282.4 million. We expect to continue to incur significant expenses and operating losses for at least the next several years as we:

Current wording

Since inception, we have incurred significant operating losses. Our net losses were $49.2 million and $68.2 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $331.6 million.

Previous wording

initiate and continue research and preclinical and clinical development of potential new product candidates;

Current wording

initiate and continue research and clinical development of product candidates;

Previous wording

require the manufacture of larger quantities of our product candidates for clinical development and potential commercialization;

Current wording

require the manufacture of larger quantities of our product candidate for clinical development and potential commercialization;

Previous wording

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity instruments, debt financings, or other capital sources, which may include collaborations with other companies or other strategic transactions. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, reduce or eliminate the development and commercialization of one or more of our product candidates.

Current wording

As a result, should we continue to progress the development of our product candidates, we will need substantial additional funding to support our continuing operations and pursue our strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity instruments, debt financings, or other capital sources, which may include collaborations with other companies or other strategic transactions. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, reduce or eliminate the development and commercialization of one or more of our product candidates.

Previous wording

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain marketing approval for our product candidates. The lengthy process of securing marketing approvals for new drugs requires the expenditure of substantial resources. Any delay or failure to obtain regulatory approvals would materially adversely affect the development efforts of our product candidates and our business overall. Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate revenue from product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

Current wording

If we continue to progress the development of our product candidates, we will not generate revenue from product sales unless and until we successfully complete clinical development and obtain marketing approval for our product candidates. The lengthy process of securing marketing approvals for new drugs requires the expenditure of substantial resources. Any delay or failure to obtain regulatory approvals would materially adversely affect the development efforts of our product candidates and our business overall. Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate revenue from product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

Previous wording

All of our revenue has been derived from research and development revenue under our Bristol-Myers Squibb Collaboration Agreement.

Current wording

We have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the foreseeable future. All of our revenue has been derived from our collaboration agreement with Celgene Corporation (acquired by Bristol-Myers Squibb) (the “Bristol-Myers Squibb Collaboration Agreement”).

Previous wording

In January 2019, we entered into the Bristol-Myers Squibb Collaboration Agreement with Celgene Corporation (which was acquired by Bristol-Myers Squibb in November 2019), pursuant to which Bristol-Myers Squibb could elect in its sole discretion to exclusively license rights to develop and commercialize compounds (and products and diagnostic products containing such compounds) that modulate the activity of two collaboration targets, kynurenine and AHR, excluding AHR agonists for inverse agonists, known as IK-412 and IK-175, respectively. On a program-by-program basis, through the earlier of January 2024 or the completion of a Phase 1b clinical trial for each of IK-175 and IK-412, Bristol-Myers Squibb had the exclusive option to exclusively license to develop, commercialize and manufacture the relevant product candidate worldwide. Concurrent with execution of the Bristol-Myers Squibb Collaboration Agreement, we entered into a stock purchase agreement with Celgene Corporation (now Bristol-Myers Squibb) in November 2019 (the “Stock Purchase Agreement”), pursuant to which we issued Celgene Corporation 14,545,450 shares of Series A-1 preferred stock.

Current wording

In January 2019, we entered into the Bristol-Myers Squibb Collaboration Agreement with Celgene Corporation (which was acquired by Bristol-Myers Squibb in November 2019), pursuant to which Bristol-Myers Squibb could elect in its sole discretion to exclusively license rights to develop and commercialize compounds (and products and diagnostic products containing such compounds) that modulate the activity of two collaboration targets, kynurenine and AHR, excluding AHR agonists for inverse agonists, known as IK-412 and IK-175, respectively. On a program-by-program basis, through the earlier of January 2024 or the completion of a Phase 1b clinical trial for each of IK-175 and IK-412, Bristol-Myers Squibb had the exclusive option to exclusively license to develop, commercialize and manufacture the relevant product candidate worldwide. Concurrent with the execution of the Bristol-Myers Squibb Collaboration Agreement, we entered into a stock purchase agreement with Celgene Corporation (now Bristol-Myers Squibb) in November 2019 (the “Stock Purchase Agreement”), pursuant to which we issued Celgene Corporation 14,545,450 shares of Series A-1 preferred stock.

Previous wording

Bristol-Myers Squibb paid a total of $95.0 million in aggregate upfront consideration related to the Bristol-Myers Squibb Collaboration Agreement and Stock Purchase Agreement. The IK-412 and IK-175 programs were eligible for opt-in through early 2024. On January 17, 2024, Bristol-Myers Squibb notified us of its decision not to opt-in on the IK-175 program. In addition, Bristol-Myers Squibb did not provide an opt-in exercise for the IK-412 program. As a result, we have regained full global rights to the IK-175 and IK-412 programs. We will not invest further in the clinical development of IK-175 or IK-412, but will pursue strategic business development opportunities, including out-licensing. Our operating expenses since inception consist solely of research and development costs and general and administrative costs.

Current wording

Bristol-Myers Squibb paid a total of $95.0 million in aggregate upfront consideration related to the Bristol-Myers Squibb Collaboration Agreement and Stock Purchase Agreement. The IK-412 and IK-175 programs were eligible for opt-in through early 2024. On January 17, 2024, Bristol-Myers Squibb notified us of its decision not to opt-in on the IK-175 program. In addition, Bristol-Myers Squibb did not provide an opt-in exercise for the IK-412 program. As a result, we regained full global rights to the IK-175 and IK-412 programs.

Previous wording

Research and development expenses consist primarily of costs incurred for our research and development activities. These efforts and costs include external research costs, personnel costs, consultants, supplies, license fees and facility-related expenses. We expense research and development costs as incurred. These expenses include:

Current wording

Research and development expenses consist primarily of costs incurred for our research and development activities. These efforts and costs include external research and development costs, personnel costs, consultants, supplies, license fees and facility-related expenses. We expense research and development costs as incurred. These expenses include:

Previous wording

expenses incurred under agreements with CMOs, which are primarily engaged to provide drug substance and product for our preclinical research and development programs, nonclinical studies and other scientific development services;

Current wording

expenses incurred under agreements with CMOs, which are primarily engaged to provide drug substance and drug product for our preclinical research and development programs in support of clinical studies, nonclinical studies and other scientific development services;

Previous wording

the cost of acquiring and manufacturing preclinical study materials, including manufacturing registration and validation batches;

Current wording

the cost of acquiring and manufacturing nonclinical study materials, including manufacturing registration and validation batches;

Previous wording

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will increase substantially in connection with our planned clinical development activities in the near term and in the future. At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that will be necessary to complete the clinical development of, or obtain regulatory approval for, any of our current or future product candidates. This is due to the numerous risks and uncertainties associated with product development and commercialization, including the following:

Current wording

Research and development activities have historically been central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses would increase substantially in connection with clinical development activities in the future if we continue to progress the development of our product candidates. At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that would be necessary to complete the clinical development of, or obtain regulatory approval for, any product candidates.

Previous wording

our ability to add and retain key research and development personnel;

Current wording

our ability to attract and retain key research and development personnel as necessary;

Previous wording

our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize our product candidates;

Current wording

our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize product candidates;

Previous wording

the size and cost of any future clinical trials for existing or future product candidates in our pipeline;

Current wording

the size and cost of any future clinical trials for product candidates in our pipeline;

Previous wording

the costs associated with the development of any additional programs we identify in-house or acquire through collaborations and other arrangements and the success of such collaborations;

Current wording

the costs associated with the development of any programs we identify in-house or acquire through collaborations and other arrangements and the success of such collaborations;

Previous wording

the impact of any business interruptions to our operations, including the timing and enrollment of patients in our planned clinical trials, or to those of our manufacturers, suppliers, or other vendors resulting from pandemics or similar public health crisis; and

Current wording

the impact of any business interruptions to our operations, including the timing and enrollment of patients in our clinical trials, or to those of our manufacturers, suppliers, or other vendors resulting from pandemics or similar public health crisis; and

Previous wording

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance, and administrative functions. General and administrative expenses also include direct and allocated facility-related costs as well as professional fees for legal, patent, consulting, investor and public relations, accounting, auditing, tax services, and insurance costs.

Current wording

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance, and administrative functions. General and administrative expenses also include direct and allocated facility-related costs as well as professional fees for legal, patent, consulting, investor and public relations, accounting, auditing, tax services, and insurance costs. We expect our general and administrative expenses to decrease in the future due to our previous workforce reductions and reduced level of business activities. We do expect to incur significant costs, however, related to the Merger, including legal, accounting and advisory expenses and other related charges.

Previous wording

The following table summarizes our results of operations:

Current wording

The following table summarizes our results of operations (dollars in thousands):

Previous wording

The research and development revenue under collaboration agreement is related to the Bristol-Myers Squibb Collaboration Agreement for the IK-175 and IK-412 programs which was executed in January 2019. The decrease in revenue during the twelve months ended December 31, 2023, as compared to the same period in the prior year, was primarily due to an increase in manufacturing activities as a result of the substantial completion of manufacturing efforts related to the IK-412 program in 2022.

Current wording

Collaboration revenue was related to the Bristol-Myers Squibb Collaboration Agreement for the IK-175 and IK-412 programs which was executed in January 2019. The decrease in revenue during the year ended December 31, 2024, as compared to 2023, was due to completion of research activities under the collaboration in 2023.

Previous wording

The following table summarizes our research and development expenses:

Current wording

The following table summarizes our research and development expenses (dollars in thousands):

Previous wording

The following table summarizes our general and administrative expenses:

Current wording

The following table summarizes our general and administrative expenses (dollars in thousands):

Previous wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses. We have not yet commercialized any products, and we do not expect to generate revenue from sales of any product candidates for several years, if ever. To date, we have financed our operations primarily through private placements of preferred stock, from upfront payments from the Bristol-Myers Squibb Collaboration Agreement, from cash obtained from acquisitions, from common stock in our IPO and URO, and most recently, through the acquisition of Pionyr. As of December 31, 2023, we had cash, cash equivalents and marketable securities of $175.5 million.

Current wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses. We have not yet commercialized any products and we do not expect to generate revenue from sales of any product candidates for several years, if ever. To date, we have financed our operations primarily through private placements of preferred stock, from upfront payments from the Bristol-Myers Squibb Collaboration Agreement, from the sale of common stock in our IPO and URO, and most recently, through the acquisition of Pionyr. As of December 31, 2024, we had cash, cash equivalents and marketable securities of $124.4 million.

Previous wording

The following table summarizes our sources and uses of cash for the years ended December 31, 2023 and 2022:

Current wording

The following table summarizes our sources and uses of cash (in thousands):

Previous wording

Cash flows from operating activities are greatly influenced by our use of cash for operating expenses and working capital requirements to support the business. We have historically experienced negative cash flows from operating activities as we invested in developing our platform, drug discovery efforts, and related infrastructure. Net cash used in operating activities for the twelve months ended December 31, 2023 increased by $5.6 million compared to the same period in 2022. Cash used in operating activities was primarily related to our net loss of $68.2 million, the payout of operating liabilities assumed in connection with the acquisition of Pionyr, partially offset by a decrease in deferred revenue.

Current wording

Cash flows from operating activities are greatly influenced by our use of cash for operating expenses and working capital requirements to support the business. We have historically experienced negative cash flows from operating activities as we invested in developing our platform, drug discovery efforts, and related infrastructure.

Previous wording

The increase in cash provided by investing activities of $163.4 million was primarily attributable to proceeds from the sales and maturities of marketable securities of $154.6 million, offset by the purchase of marketable securities of $90.1 million during the year ended December 31, 2023, compared to the sales and maturities of marketable securities of $118.5 million and the purchase of marketable securities of $216.3 million during the year ended December 31, 2022.

Current wording

During the year ended December 31, 2023, net cash provided by investing activities was $64.1 million, primarily due to proceeds from maturities of marketable securities of $154.6 million, partially offset by purchases of marketable securities of $90.1 million.

Previous wording

The increase in cash provided by financing activities of $74.9 million primarily reflects the net cash received in connection with the acquisition of Pionyr of $39.1 million and the net cash proceeds received from our May 17, 2023 offering of common stock of $37.4 million in our URO.

Current wording

During the year ended December 31, 2023, net cash provided by financing activities was $76.0 million, primarily due to proceeds from the issuance of common stock in our URO of $37.4 million, net of offering costs, cash and cash equivalents acquired in connection with the acquisition of Pionyr of $40.0 million, net of issuance costs partially offset by the cash consideration paid in connection with the acquisition of Pionyr of $0.9 million and the repurchase of common stock of $0.7 million.

Previous wording

We expect to continue to incur significant expenses for the foreseeable future in connection with our ongoing activities, particularly as we continue the research and development for, initiate clinical trials for, and seek marketing approval for, our product candidates. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution. Furthermore, we expect to continue to incur additional costs associated with operating as a public company, including increased costs of accounting, audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance costs, and investor and public relations costs. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts.

Current wording

We expect to continue to incur costs associated with seeking strategic alternatives as well as expenses for the foreseeable future in connection with our continuing activities. In addition, if we continue to progress the development of our product candidates and if we obtain marketing approval for IK-595 or any of our other product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution. Furthermore, we expect to continue to incur costs associated with operating as a public company, including costs of accounting, audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance costs, and investor and public relations costs. Accordingly, we may need to obtain additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce, or eliminate our research and development or future commercialization efforts.

Previous wording

We expect that our existing cash, cash equivalents, and marketable securities as of December 31, 2023, will enable us to fund our operating expenses and capital expenditure requirements into the second half of 2026. We have based this estimate on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Our future operating and capital requirements will depend on many factors, including:

Current wording

As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $124.4 million. Based upon our current operating plan, we believe that, if the Merger is not consummated, our cash, cash equivalents and marketable securities as of December 31, 2024 will enable us to fund our operating expenses, notes to Inmagene and capital expenditure requirements for at least 12 months following the date of this filing. Our belief with respect to our ability to fund operations is based on estimates that are subject to risks, uncertainties and assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Because our resource requirements could change depending on the outcome of our ongoing strategic alternative review process, we are unable to estimate the exact amount of our working capital requirements. In addition to factors related to the exploration of strategic options for the continued development of IK-595 and certain other legacy programs, if the Merger is not consummated or if we continue to progress the development of our product candidates, our future operating and capital requirements may depend on many other factors, including:

Previous wording

the costs and timing of future commercialization activities, including product sales, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;

Current wording

the costs and timing of future commercialization activities, including product sales, marketing, manufacturing and distribution, for our product candidates for which we receive marketing approval;

Previous wording

the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval;

Current wording

the amount of revenue, if any, received from commercial sales of our product candidates, should our product candidates receive marketing approval;

Previous wording

our headcount growth and associated costs, as we expand our business operations and our research and development activities; and

Current wording

our headcount and associated costs, as we pursue our research and development activities; and

Previous wording

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, and licensing arrangements. We do not have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interests may be diluted, and the terms of these securities may include liquidation or other preferences that could adversely affect your rights as a common stockholder. Any debt financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business.

Current wording

If the Merger is not consummated, until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other strategic transactions. We do not have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders’ ownership interests may be diluted, and the terms of these securities may include liquidation or other preferences that could adversely affect our stockholders’ rights. Any debt financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business.

Previous wording

We have a non-cancelable operating lease agreement for our office, lab, and animal care facility space in our Boston, Massachusetts corporate headquarters. We expect the total future minimum lease payments from December 31, 2023 to lease expiration in May 2026 to be $4.5 million. Additionally, in connection with the acquisition of Pionyr, we acquired an operating lease agreement for office and lab space in San Francisco, California. The space is currently vacant and we are actively seeking a tenant to sublease the space. We expect the total future minimum lease payments from December 31, 2023 to lease expiration in April 2027 to be $7.5 million. Our total future minimum lease payments for each of the next five years and in total are included in Note 15.

Current wording

We have a non-cancelable operating lease agreement for our office, lab, and animal care facility space in our Boston, Massachusetts corporate headquarters. We expect the total future minimum lease payments from December 31, 2024 to lease expiration in May 2026 to be $2.8 million. Additionally, in connection with the acquisition of Pionyr, we acquired an operating lease agreement for office and laboratory space in San Francisco, California which we subleased to third parties in April 2024. We expect total future minimum lease payments from December 31, 2024 to lease expiration in April 2027 to be $5.3 million. We expect to receive fixed minimum payments of $2.0 million during this same period. Our total future minimum lease payments for each of the next five years and in total are included in Note 13 in this Annual Report on Form 10-K.

Previous wording

We may incur potential contingent payments upon our achievement of clinical, regulatory, and commercial milestones, as applicable, or that we may be required to make royalty payments under license agreements we have entered into with various entities pursuant to which we have in-licensed certain intellectual property, such as our patent license agreement with the University of Texas at Austin. Due to the uncertainty of the achievement and timing of the events requiring payment under these agreements, the amounts to be paid by us are not fixed or determinable at this time and have not been included in the table above.

Current wording

We may incur potential contingent payments upon our achievement of clinical, regulatory, and commercial milestones, as applicable, or that we may be required to make royalty payments under license agreements we have entered into with various entities pursuant to which we have in-licensed certain intellectual property. Due to the uncertainty of the achievement and timing of the events requiring payment under these agreements, the amounts to be paid by us are not fixed or determinable at this time.

Previous wording

The Black-Scholes option-pricing model uses the following inputs: the fair value of our common stock, the expected volatility of our common stock, the expected term of our stock options, the risk-free interest rate for a period that approximates the expected term of our stock options and our expected dividend yield. Due to the lack of a public market for our common stock and a lack of company-specific historical and implied volatility data, we have based our computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to us, including stage of product development, life science industry focus, length of trading history and similar vesting provisions. The historical volatility data is calculated based on a period of time commensurate with the expected term assumption. We will continue to apply this process until a sufficient amount of historical information regarding the volatility of our own stock price becomes available or until circumstances change, such that the identified entities are no longer representative companies. In the latter case, more suitable, similar entities whose share prices are publicly available would be utilized in the calculation. We use the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share-Based Payment, to calculate the expected term for options granted to employees as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. Under this approach, the weighted-average expected option term is presumed to be the average of the contractual term (ten years) and the vesting term (generally four years) of our stock options. We utilize this method due to lack of historical exercise data and the “plain-vanilla” nature of our stock-based awards. The expected term is applied to the stock option grant group as a whole, as we do not expect substantially different exercise or post-vesting termination behavior among our employee population. For options granted to non-employees, we utilize the contractual term of the arrangement as the basis for the expected term assumption. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. The expected dividend yield is assumed to be zero as we have never paid cash dividends and have no current plans to pay any cash dividends on our common stock. The fair value of each restricted common stock award is estimated on the date of grant based on the fair value of our common stock on that same date.

Current wording

The Black-Scholes option-pricing model uses the following inputs: the fair value of our common stock, the expected volatility of our common stock, the expected term of our stock options, the risk-free interest rate for a period that approximates the expected term of our stock options and our expected dividend yield. Due to the lack of a public market for our common stock and a lack of company-specific historical and implied volatility data, we have based our computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to us, including stage of product development, life science industry focus, length of trading history and similar vesting provisions. The historical volatility data is calculated based on a period of time commensurate with the expected term assumption. We will continue to apply this process until a sufficient amount of historical information regarding the volatility of our own stock price becomes available or until circumstances change, such that the identified entities are no longer representative companies. In the latter case, more suitable, similar entities whose share prices are publicly available would be utilized in the calculation. We use the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share-Based Payment, to calculate the expected term for options granted to employees as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. Under this approach, the weighted-average expected option term is presumed to be the average of the contractual term (ten years) and the vesting term (generally four years) of our stock options. We utilize this method due to lack of historical exercise data and the “plain-vanilla” nature of our stock-based awards. The expected term is applied to the stock option grant group as a whole, as we do not expect substantially different exercise or post-vesting termination behavior among our employee population. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. The expected dividend yield is assumed to be zero as we have never paid cash dividends and have no current plans to pay any cash dividends on our common stock. The fair value of each restricted common stock award is estimated on the date of grant based on the fair value of our common stock on that same date.