Kyverna Therapeutics, Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes and other financial information included in Part II, Item 8 of this Annual Report. Some of the information contained in this discussion and analysis and other parts of this Annual Report on Form 10-K contain forward-looking statements based upon current beliefs, plans and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements regarding our intentions, plans, objectives and expectations for our business. Our actual results and the timing of selected events could differ materially from those described in or implied by these forward-looking statements as a result of several factors, including those set forth under “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes and other financial information included in Part II, Item 8 of this Annual Report. Some of the information contained in this discussion and analysis and other parts of this Annual Report on Form 10-K contain forward-looking statements based upon current beliefs, plans and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements regarding our intentions, plans, objectives and expectations for our business. Our actual results and the timing of selected events could differ materially from those described in or implied by these forward-looking statements as a result of several factors, including those set forth under “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

Previous wording

We are a patient-centered, clinical-stage biopharmaceutical company focused on developing cell therapies for patients suffering from autoimmune diseases. Our goal is to bring disease-modifying therapeutic benefits to patients suffering from autoimmune diseases through our patient-centered approach, our broad platform, our insights into treating immune disorders and the learnings from successful application of cell therapy in other areas of medicine. Our cell therapy approach to the treatment of autoimmune diseases is supported by the scientific publication of multiple autoimmune case studies using CD19 CAR T-cell treatment as well as early clinical data from our ongoing trials illustrating the disease-modifying potential of these therapies. This validation provides us with a clear path to continue advancing our lead product candidate, KYV-101, through clinical development across two broad areas of autoimmune disease: rheumatology and neurology.

Current wording

We are a clinical-stage biopharmaceutical company focused on developing cell therapies for patients with autoimmune diseases. Our goal is to liberate patients from autoimmune diseases through the curative potential of cell therapy. Our approach is supported by our breadth of experience treating patients with our lead product candidate, KYV-101, across more than 15 autoimmune disease indications. This has been documented through the scientific publication of multiple autoimmune case studies, our proprietary dataset of patients treated through named patient forms of compassionate use, our experience in ongoing investigator-initiated trials at leading academic institutions, as well as early clinical data from our ongoing company-sponsored trials illustrating the potential of these therapies to deeply deplete B cells with the aim of achieving durable treatment-free remission. This validation provides us with a clear path to continue advancing KYV-101 through late-stage clinical development and commercialization across two broad areas of autoimmune disease: neuroinflammation and rheumatology.

Previous wording

We have incurred significant losses and negative cash flows from operations since our inception. We have funded our operations primarily from sales of our redeemable convertible preferred stock, issuances of convertible notes and revenue from our collaboration agreement with Gilead Sciences, Inc., or Gilead, which terminated effective as of January 22, 2024. Our net losses were $60.4 million and $28.9 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $136.0 million. On February 12, 2024, we closed an initial public offering, or the IPO, of 16,675,000 shares of our common stock at a price to the public of $22.00 per share, including the exercise in full by the underwriters of their option to purchase 2,175,000 additional shares of our common stock and received gross proceeds of $366.9 million. Net proceeds were approximately $336.2 million, after deducting underwriting discounts and commissions and estimated other offering costs. Management has determined that our cash and cash equivalents and available-for-sale marketable securities of $57.5 million as of December 31, 2023, together with the IPO proceeds, will be sufficient to fund our planned operations for at least one year from the issuance date of the financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. We plan to monitor expenses and raise additional capital through a combination of public and private equity and debt financings, strategic alliances and licensing arrangements. Our ability to access capital when needed is not assured and if capital is not available to us when, and in the amounts, needed, we could be required to delay, scale back or abandon some or all of our development programs and other operations, which could materially harm our business, financial condition and results of operations.

Current wording

We have incurred significant losses and negative cash flows from operations since our inception. We have funded our operations primarily from sales of our redeemable convertible preferred stock, issuances of convertible notes and revenue from our collaboration agreement with Gilead Sciences, Inc., or Gilead, which terminated effective as of January 22, 2024, and from the sale of shares of our common stock in our initial public offering in February 2024, or the IPO. Our net losses were $127.5 million and $60.4 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $263.5 million. Management has determined that our cash and cash equivalents and available-for-sale marketable securities of $286.0 million as of December 31, 2024 will be sufficient to fund our planned operations for at least one year from the issuance date of the financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. We plan to monitor expenses and raise additional capital through equity or debt financings, strategic alliances and licensing arrangements. Our ability to access capital when needed is not assured and if capital is not available to us when, and in the amounts, needed, we could be required to delay, scale back or abandon some or all of our development programs and other operations, which could materially harm our business, financial condition and results of operations.

Previous wording

continue to progress the development of our product candidates, including KYV-101 in multiple clinical trials in parallel and KYV-201 into the clinic;

Current wording

continue to progress the development of our product candidates, including KYV-101 in multiple clinical trials in parallel;

Previous wording

procure manufacturing of clinical supply for our product candidates;

Current wording

procure manufacturing of clinical supply and manufacturing operations for our product candidates;

Previous wording

We do not currently own or operate any manufacturing facilities. We rely on contract manufacturing organizations, or CMOs, to produce our drug candidates in accordance with the U.S. Food and Drug Administration’s, or the FDA’s, current Good Manufacturing Practices regulations for use in our clinical studies. In March 2022, we entered into a master services agreement with WuXi ATU Advanced Therapies, Inc., or WuXi. WuXi’s facility in Philadelphia, Pennsylvania, provides us with certain customized cell manufacturing, release and testing services for our KYV-101 product candidate. Pursuant to our Licence and Supply Agreement with Oxford Biomedica (UK) Limited, or Oxford, dated September 2023, we recently engaged Oxford to undertake lentiviral vector process development services, with the intention for Oxford to ultimately manufacture and supply to us lentiviral vectors for research and development purposes and for use in connection with our clinical trials. In July 2023, we entered into a Development and Manufacturing Services Agreement with ElevateBio Base Camp, Inc., or ElevateBio, pursuant to which ElevateBio is undertaking process development services for the development of a low-cost, fully closed manufacturing process for our CAR T-cell product candidates.

Current wording

We do not currently own or operate any manufacturing facilities. We rely on contract manufacturing organizations, or CMOs, to produce our drug candidates in accordance with the U.S. Food and Drug Administration’s, or the FDA’s, current Good Manufacturing Practices regulations for use in our clinical studies. In March 2022, we entered into a master services agreement with WuXi ATU Advanced Therapies, Inc., or WuXi. WuXi’s facility in Philadelphia, Pennsylvania, provides us with certain customized cell manufacturing, release and testing services for our KYV-101 product candidate. Under our Development and Manufacturing Services Agreement, dated July 2023, or the Elevate Agreement, with ElevateBio Base Camp, Inc., or Elevate, we engaged Elevate in November 2024 to provide us with cell manufacturing, release and testing services for our KYV-101 product candidate. Pursuant to our Licence and Supply Agreement with Oxford Biomedica (UK) Limited, or Oxford, dated September 2023, we engaged Oxford to undertake lentiviral vector process development services, with the intention for Oxford to ultimately manufacture and supply to us lentiviral vectors for research and development purposes and for use in connection with our clinical trials.

Previous wording

On February 12, 2024, we closed an initial public offering, or the IPO, of 16,675,000 shares of our common stock at a price to the public of $22.00 per share, including the exercise in full by the underwriters of their option to purchase 2,175,000 additional shares of our common stock. We received aggregate gross proceeds from the IPO of $366.9 million, or aggregate net proceeds of approximately $336.2 million, after deducting underwriting discounts and commissions and estimated other offering costs.

Current wording

On February 8, 2024, our common stock began trading on the Nasdaq Global Select Market under the symbol “KYTX”. On February 12, 2024, we closed the IPO and issued 16,675,000 shares of our common stock at a price to the public of $22.00 per share, including the exercise in full by the underwriters of their option to purchase 2,175,000 additional shares of our common stock. We received gross proceeds of $366.9 million. Net proceeds were $336.2 million, after deducting underwriting discounts and commissions and other offering costs. Immediately prior to the IPO closing, all of the outstanding shares of our redeemable convertible preferred stock converted into shares of our common stock on a 1-for-4.5511 basis.

Previous wording

We accounted for the acquisition of the licenses, including patent rights and know-how, as an asset acquisition. As the acquired technology did not have an alternative use for accounting purposes, we recorded the consideration of $3.3 million as a research and development expense in the statements of operations and comprehensive loss for the year ended December 31, 2021. We recognized $0.2 million as research and development expense related to minimum annual royalty payments for the year ended December 31, 2023. No benchmark royalties were probable or payable as of December 31, 2023 and 2022.

Current wording

We accounted for the acquisition of the licenses, including patent rights and know-how, as an asset acquisition. As the acquired technology did not have an alternative use for accounting purposes, we recorded the consideration of $3.3 million as a research and development expense in the statements of operations and comprehensive loss for the year ended December 31, 2021. As of December 31, 2024, we recognized $0.6 million related to benchmark royalties for regulatory approvals and patients’ dosing in clinical trials as research and development expenses in the statement of operations and comprehensive loss. As of December 31, 2024, $0.6 million were recorded as accounts payable in the balance sheet. No other benchmark royalties were probable or payable as of December 31, 2024 and 2023. We recognized $0.2 million as research and development expense related to minimum annual royalty payments in each of the years ended December 31, 2024 and 2023.

Previous wording

1,602,649 shares of Series B Preferred Stock at a price of $1.8719 per share under the Series B Preferred Stock Purchase Agreement in cash for total proceeds to us of $3.0 million. We are also obligated to make aggregate milestone payments to Intellia of up to $64.5 million upon the achievement of specified development and regulatory milestones and are obligated to pay to Intellia low to mid-single-digit royalties as a percentage of annual worldwide sales, subject to certain adjustments, and additional potential royalties and milestones to Intellia’s licensors. The royalties are payable on a country-by-country basis, commencing upon the first commercial sale of the CRISPR Product in the applicable country and expiring upon the later of (i) 12 years after the first commercial sale or (ii) the expiration of the last-to-expire valid patent claim.

Current wording

As a consideration for the licenses granted to us pursuant to the Intellia Agreement, we issued to Intellia 3,739,515 shares of our Series B Preferred Stock at a price of $1.8719 per share, which was the price paid by other investors in our Series B Preferred Stock financing, for consideration of $7.0 million. Intellia also purchased 1,602,649 shares of Series B Preferred Stock at a price of $1.8719 per share under the Series B Preferred Stock Purchase Agreement in cash for total proceeds to us of $3.0 million. We are also obligated to make aggregate milestone payments to Intellia of up to $64.5 million upon the achievement of specified development and regulatory milestones and are obligated to pay to Intellia low to mid-single-digit royalties as a percentage of annual worldwide sales, subject to certain adjustments, and additional potential royalties and milestones to Intellia’s licensors. The royalties are payable on a country-by-country basis, commencing upon the first commercial sale of the CRISPR Product in the applicable country and expiring upon the later of (i) 12 years after the first commercial sale or (ii) the expiration of the last-to-expire valid patent claim.

Previous wording

In addition, we granted Intellia an exclusive option, or the Intellia Option, to enter into a co-development and co-commercialization agreement with us for the CRISPR Product, or the Co-Co Agreement, for a fee payable to us. If Intellia exercises the Intellia Option, we and Intellia would share equally the regulatory and clinical development expenses associated with obtaining approval of the CRISPR Product in the United States and would also share equally all net profits and losses from commercialization of the CRISPR Product in the United States. If Intellia exercises the Intellia Option, no milestone payments will be due and payable from that time forward and we will only pay royalties on sales outside of the United States. In addition, upon exercise of the Intellia Option, following regulatory approval of the CRISPR Product, Intellia will have exclusive commercialization rights for the CRISPR Product for U.S. administration, subject to our rights to co-promote the CRISPR Product in the United States, and we will retain the sole and exclusive rights to research, develop, or otherwise exploit the CRISPR Product for rest-of-world administration and shall have sole decision-making authority in relation thereto, subject to the parties’ obligations to cooperate regarding certain development, regulatory and commercialization strategies.

Current wording

Under the Intellia Agreement, Intellia owns rights, title and interests in and to any intellectual property developed in the course of performance under the Intellia Agreement that is not specifically directed to the CRISPR Product. We granted to Intellia certain non-exclusive, royalty-free, fully paid-up, worldwide licenses under our intellectual property solely to perform the activities designated to Intellia under the collaboration, and to research, develop or otherwise exploit any human therapeutic product that is developed or commercialized by Intellia, utilizes or incorporates Intellia intellectual property and that is not the CRISPR Product or any product directed to CD19 or any other B-cell antigen. In addition, we granted Intellia an exclusive option, or the Intellia Option, to enter into a co-development and co-commercialization agreement with us for the CRISPR Product, or the Co-Co Agreement, for a fee payable to us. If Intellia exercises the Intellia Option, we and Intellia would share equally the regulatory and clinical development expenses associated with obtaining approval of the CRISPR Product in the United States and would also share equally all net profits and losses from commercialization of the CRISPR Product in the United States. If Intellia exercises the Intellia Option, no milestone payments will be due and payable from that time forward and we will only pay royalties on sales outside of the United States.

Previous wording

No milestone payments were probable or payable as of December 31, 2023 and 2022.

Current wording

No milestone payments were probable or payable as of each of December 31, 2024 and 2023.

Previous wording

As of December 31, 2023, Intellia owned less than 5% of our outstanding equity. As of December 31, 2022, Intellia owned more than 5% and less than 10% of our outstanding equity.

Current wording

As of December 31, 2024 and 2023, Intellia owned less than 5% of our outstanding equity

Previous wording

We may be affected by worldwide economic conditions and challenges, such as the effects of the ongoing geopolitical conflicts in Ukraine, the Israel-Hamas war, tensions in United States-China relations, disruptions in the banking industry and inflationary trends. The fiscal years 2023 and 2022 were marked by significant market uncertainty and increasing inflationary pressures. These market dynamics continue into 2024, and these and similar adverse market conditions may negatively impact our business, financial position and results of operations. For further discussion of the potential impacts of macroeconomic events on us, refer to the section titled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

Current wording

We may be affected by worldwide economic conditions and challenges, such as the effects of the ongoing geopolitical conflicts in Ukraine, the Israel-Hamas war, the conflict between Israel and Iran, tensions in United States-China relations, disruptions in the banking industry and inflationary trends, and the imposition, or threatened imposition, of tariffs and potential retaliatory trade restrictions. The fiscal years 2024 and 2023 were marked by significant market uncertainty and increasing inflationary pressures. These market dynamics continue into 2025, and these and similar adverse market conditions may negatively impact our business, financial position and results of operations. For further discussion of the potential impacts of macroeconomic events on us, refer to the section titled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

Previous wording

The largest component of our total operating expenses since inception has been research and development activities, including the preclinical and clinical development of our product candidates. Research and development expenses consist primarily of compensation and benefits for research and development employees, including: stock-based compensation; expenses incurred under agreements with clinical research organizations, or CROs, and investigative sites that conduct preclinical and clinical studies; costs of acquiring and manufacturing clinical study materials and other supplies; payments under licensing and research and development agreements; other outside services and consulting costs; and facilities, information technology and overhead expenses. Research and development costs are expensed as incurred.

Current wording

stock-based compensation; expenses incurred under agreements with clinical research organizations, or CROs, and investigative sites that conduct preclinical and clinical studies; costs of acquiring and manufacturing clinical study materials and other supplies; payments under licensing and research and development agreements; other outside services and consulting costs; and facilities, information technology and overhead expenses. Research and development costs are expensed as incurred.

Previous wording

We anticipate that our general and administrative expenses will increase following our IPO, as a result of increased personnel costs, including salaries, benefits and stock-based compensation expense, patent costs for our product candidates, expanded infrastructure and higher consulting, legal and accounting services associated with maintaining compliance with stock exchange listing and requirements of the Securities and Exchange Commission, or the SEC, investor relations costs and director and officer insurance premiums associated with being a public company.

Current wording

Our general and administrative expenses have increased, and are expected to continue to increase following our IPO, as a result of increased personnel costs, including salaries, benefits and stock-based compensation expense, patent costs for our product candidates, expanded infrastructure and higher consulting, legal and accounting services associated with maintaining compliance with stock exchange listing and requirements of the Securities and Exchange Commission, or the SEC, investor relations costs and director and officer insurance premiums.

Previous wording

Interest income consists primarily of interest and accretion of premiums and discounts on our investments in available-for-sale marketable securities.

Current wording

Interest income consists primarily of interest and accretion of premiums and discounts on our investments in available-for-sale marketable securities and cash equivalents.

Previous wording

Interest expense consists primarily of interest expense related to our lab equipment finance leases.

Current wording

Interest expense consists primarily of interest expense related to our laboratory equipment finance leases.

Previous wording

Research and development expenses increased by $21.5 million, or 76%, from $28.4 million for the year ended December 31, 2022 to $49.9 million for the year ended December 31, 2023. License fees for the year ended December 31, 2023 mainly included expenses related to the minimum annual royalties of $0.2 million payable to the NIH. In 2023, CRO, CMO and other third-party preclinical studies and clinical trial expenses increased by $14.2 million and other research and development costs, including laboratory materials and supplies, increased by $0.2 million as compared to 2022 as we continued progress in our pre-clinical studies and clinical trials.

Current wording

Research and development expenses increased by $62.6 million, or 125%, from $49.9 million for the year ended December 31, 2023 to $112.5 million for the year ended December 31, 2024. CRO, CMO, professional consulting and other third-party preclinical studies and clinical trial costs increased by $46.2 million for the year ended December 31, 2024 compared to 2023, as we continued advancing our lead product candidate, KYV-101, through clinical development. Other research and development costs, including laboratory materials and supplies, decreased by $3.0 million for the year ended December 31, 2024 compared to 2023, mainly due to a reduction in procurement of materials for our research and development activities. License fees, milestone payments and annual maintenance fees related to acquired technologies for the year ended December 31, 2024 mainly included expenses related to the minimum annual royalties and milestone fees of $0.9 million payable to the NIH.

Previous wording

In 2023, personnel-related research and development costs increased by $5.8 million as a result of hiring personnel in our research and development organization during the year. This increase included an increase of $0.4 million in stock-based compensation expense. Facilities and overhead costs increased by $1.2 million for 2023, mainly due to a $0.5 million increase in rent expense as we continued to invest in our research organization and expanded our leased facilities, an increase of $0.4 million in conference expenses and an increase of $0.2 million in allocated personnel-related costs.

Current wording

In 2024, personnel-related research and development costs increased by $13.5 million as a result of hiring personnel in our research and development organization during the year. This increase included an increase of $1.7 million in stock-based compensation expense, as we granted more options. Facilities and overhead costs increased by $5.2 million for 2024, mainly due to a $1.3 million increase in allocated overhead expenses, a $1.0 million increase in depreciation expense, a $1.1 million increase in software licenses expense, and an increase in conferences, recruitment and other expenses.

Previous wording

In 2023, KYV-101 program expenses increased by $11.6 million, primarily attributable to a $9.5 million increase in CRO, CMO and other clinical trials costs as we continued to advance KYV-101 through clinical development across two broad areas of autoimmune disease: rheumatology and neurology. KYV-101 program expenses in 2023 also include $1.6 million of external expense related to the development of our Ingenui-T manufacturing process. KYV-201 expenses for 2023 increased by $4.1 million, including a $2.7 million increase in CRO, CMO and other third-party preclinical studies and a $1.2 million increase in other research and development costs, including laboratory materials and supplies, as we continued to advance KYV-201 through preclinical development. Other programs and research and development activities decreased by $1.2 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 and include expenses related to our preclinical research activities, including reagents, lab supplies, outsourced research and development and professional consulting services.

Current wording

In 2024, KYV-101 program expenses increased by $43.6 million, primarily attributable to a $39.0 million increase in CRO, CMO and other clinical trials costs as we continued to advance KYV-101 through clinical development. KYV-101 program CRO, CMC and other clinical trial costs in 2024 also include $4.0 million compared to $1.6 million in 2023 of external expense related to the development of our Ingenui-T manufacturing process. The Ingenui-T manufacturing process is also used to develop a new program, KYV-102, announced in January 2025. Professional consulting expenses related to KYV-101 increased by $4.1 million and license maintenance expenses increased by $0.5 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Previous wording

General and administrative expenses increased $4.5 million, or 56%, to $12.5 million for the year ended December 31, 2023 from $8.0 million for the year ended December 31, 2022. The increase in general and administrative expenses was primarily attributable to a $2.6 million increase in salaries and benefits, including an increase of $0.9 million in stock-based compensation expense, an increase of $1.7 million in professional services costs related to legal, accounting and consulting services, and a $0.2 million increase in facilities and overhead costs.

Current wording

General and administrative expenses increased $17.6 million, or 141%, to $30.1 million for the year ended December 31, 2024 from $12.5 million for the year ended December 31, 2023. The increase in general and administrative expenses was primarily attributable to a $10.7 million increase in salaries and benefits, an increase of $4.7 million in professional services costs related to legal, accounting and consulting services, and a $2.2 million increase in facilities and overhead costs. The increase in salaries and benefits expenses include a $4.5 million increase in stock-based compensation expense, which includes $2.8 million of expenses recognized in connection with the note forgiveness and stock modification expense related to the former chief executive officer.

Previous wording

Interest income increased $1.7 million, from $0.6 million for the year ended December 31, 2022 to $2.3 million for the year ended December 31, 2023. The increase relates to increased amounts invested in available-for-sale marketable securities and an increase in interest rates on these securities during the year ended December 31, 2023 compared to year ended December 31, 2022.

Current wording

Interest income increased $13.1 million, from $2.3 million for the year ended December 31, 2023 to $15.4 million for the year ended December 31, 2024. The increase primarily relates to increased amounts invested in available-for-sale marketable securities and cash equivalents following the IPO in February 2024.

Previous wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. Through December 31, 2023, we have primarily funded our operations from sales of shares of our redeemable convertible preferred stock of $168.0 million, issuances of convertible notes of $2.0 million and an upfront payment of $17.5 million under the Gilead Agreement. As of December 31, 2023, we had $57.5 million in cash, cash equivalents and available-for-sale marketable securities.

Current wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. Through December 31, 2024, we have primarily funded our operations from sales of shares of our redeemable convertible preferred stock of $168.0 million, issuances of convertible notes of $2.0 million, an upfront payment of $17.5 million under the Gilead Agreement and net proceeds from the IPO of $336.2 million. As of December 31, 2024, we had $286.0 million in cash, cash equivalents and available-for-sale marketable securities.

Previous wording

We have incurred significant losses and negative cash flows from operations since our inception. As of December 31, 2023, we had an accumulated deficit of $136.0 million. Based on the current cash forecast, management has determined that our cash and cash equivalents and available-for-sale marketable securities of $57.5 million as of December 31, 2023, together with the IPO proceeds, will be sufficient to fund our planned operations for at least one year from the issuance date of the financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. This forecast of cash resources and planned operations involves risks and uncertainties, and the actual amount of expenses could vary materially as a result of a number of factors.

Current wording

We have incurred significant losses and negative cash flows from operations since our inception. As of December 31, 2024, we had an accumulated deficit of $263.5 million. Based on the current cash forecast, management has determined that our cash and cash equivalents and available-for-sale marketable securities of $286.0 million as of December 31, 2024 will be sufficient to fund our planned operations for at least one year from the issuance date of the financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Our operating cash burn can vary from quarter to quarter; for example, we made certain one-time investments in our CMC readiness in the second half of 2024, which we expect to continue through the first half of 2025 for an anticipated BLA in 2026. We have also accelerated enrollment in certain of our clinical trials, with completion of enrollment in our pivotal Phase 2 trial in SPS expected in mid-2025. For these reasons, we currently expect our operating cash burn in the first half of 2025 to be higher than our operating cash burn in the second half of 2025. This forecast of cash resources and planned operations involves risks and uncertainties, and the actual amount of expenses could vary materially as a result of a number of factors.

Previous wording

the cost of filing and prosecuting our patent applications, and maintaining and enforcing our patents and other intellectual property rights;

Current wording

litigation expenses we incur to defend against any claims, including the cost of filing and prosecuting our patent applications, and maintaining and enforcing our patents and other intellectual property rights;

Previous wording

Cash used in operating activities for the year ended December 31, 2022, was primarily due to our net loss of $28.9 million, decreased by non-cash charges of $3.1 million and increased by a net reduction of $10.3 million in our net operating assets and liabilities. The non-cash charges primarily consisted of a $1.4 million non-cash lease expense, a $1.1 million depreciation and amortization expense and a $0.9 million stock-based compensation expense, partially offset by $0.3 million of income related to the accretion of discounts on available-for-sale marketable securities. The change in our net operating assets and liabilities was primarily due to a decrease in deferred revenue of $7.0 million related to recognition of collaboration revenue under the Gilead Agreement, a decrease in accrued license expenses of $1.6 million, a decrease in operating lease liabilities of $1.1 million, an increase in prepaid expenses and other current assets of $0.9 million and an increase in other long-term assets of $0.6 million, offset by a $0.7 million increase in accounts payable and a $0.3 million increase in accrued compensation.

Current wording

Cash used in operating activities for the year ended December 31, 2024, was primarily due to our net loss of $127.5 million, decreased by other non-cash charges of $5.4 million and decreased by a net reduction of $7.9 million in our net operating assets and liabilities. Non-cash changes primarily consisted of $8.4 million stock-based compensation expense, $2.1 million depreciation and amortization expense and a $2.5 million non-cash lease expense, partially offset by $7.7 million accretion of discount on available-for-sale marketable securities. The change in our net operating assets and liabilities was primarily due to an increase in other accrued expenses and current liabilities of $10.9 million, primarily due to an increase in accrued CRO and CMO research and development expenses, an increase in accrued compensation of $2.1 million, and an increase in accounts payable of $0.7 million, partially offset by a decrease in operating lease liabilities of $2.4 million, an increase in other non-current assets of $2.0 million, and an increase in prepaid expenses and other current assets of $1.5 million.

Previous wording

Cash used in operating activities for the year ended December 31, 2023, was primarily due to our net loss of $60.4 million, decreased by other non-cash charges of $4.5 million and decreased by a net reduction of $3.4 million in our net operating assets and liabilities. Non-cash changes primarily consisted of $2.2 million stock-based compensation expense, $1.7 million depreciation and amortization expense and a $1.7 million non-cash lease expense, partially offset by $1.1 million accretion of discount on available-for-sale marketable securities. The change in our net operating assets and liabilities was primarily due to an increase in accounts payable of $4.1 million, a $2.7 million increase in other current liabilities and a $1.4 million increase in accrued compensation, offset by an increase in other non-current assets of $1.8 million, a decrease in operating lease liabilities of $1.7 million and an increase in prepaid expenses and other current assets of $1.2 million.

Current wording

Cash used in operating activities for the year ended December 31, 2023, was primarily due to our net loss of $60.4 million, decreased by other non-cash charges of $4.5 million and decreased by a net reduction of $3.4 million in our net operating assets and liabilities. Non-cash changes primarily consisted of $2.2 million of stock-based compensation expense, $1.7 million of depreciation and amortization expense and a $1.7 million non-cash lease expense, partially offset by $1.1 million accretion of discount on available-for-sale marketable securities. The change in our net operating assets and liabilities was primarily due to an increase in accounts payable of $4.1 million, a $2.7 million increase in other current liabilities and a $1.4 million increase in accrued compensation, offset by an increase in other non-current assets of $1.8 million, a decrease in operating lease liabilities of $1.7 million and an increase in prepaid expenses and other current assets of $1.2 million.

Previous wording

Net cash used in investing activities for the year ended December 31, 2022, was $14.1 million, which consisted of $56.5 million of purchases of available-for-sale marketable securities and $0.8 million of purchases of property and equipment, offset by $43.2 million in proceeds from maturities and sales of available-for-sale marketable securities.

Current wording

Net cash used in investing activities for the year ended December 31, 2024, was $160.9 million, which consisted of $490.0 million of purchases of available-for-sale marketable securities and $2.2 million of purchases of property and equipment, offset by $331.3 million in proceeds from maturities of available-for-sale marketable securities.

Previous wording

Net cash provided by financing activities for the year ended December 31, 2022, was $11.9 million, which consisted of $12.0 million net cash proceeds from our issuance of shares of Series B Preferred Stock and $0.2 million of proceeds from exercises of stock options, partially offset by a payment of $0.3 million related to finance lease obligations.

Current wording

Net cash provided by financing activities for the year ended December 31, 2024, was $337.1 million, which consisted of $341.2 million cash proceeds from the issuance of shares of our common stock in the IPO, net of underwriting discount and $0.3 million of proceeds from exercises of stock options, partially offset by a payment of $3.4 million related to offering costs and a payment of $1.0 million related to finance lease obligations.

Previous wording

We enter into contracts in the normal course of business with CROs for clinical trials, with CMOs for clinical supplies manufacturing and with other vendors for preclinical studies, supplies and other products and services for operating purposes. These agreements generally provide for termination at the request of either party generally with less than one-year notice and, therefore, we believe that our non-cancellable obligations under these agreements are not material. We do not currently expect any of these agreements to be terminated and did not have any non-cancellable obligations under these agreements as of December 31, 2023 and 2022.

Current wording

We enter into contracts in the normal course of business with CROs for clinical trials, with CMOs for clinical supplies manufacturing and with other vendors for preclinical studies, supplies and other products and services for operating purposes. These agreements generally provide for termination at the request of either party generally with less than one-year notice and, therefore, we believe that our non-cancellable obligations under these agreements are not material. We do not currently expect any of our other agreements to be terminated and did not have any other non-cancellable obligations under these agreements as of December 31, 2024 and 2023.

Previous wording

In July 2020, we entered into a lab and office lease agreement, which was amended in November 2021 and expires in January 2027. In January and September 2022, we rented additional space under the amended agreement. We also have multiple leases for laboratory equipment with 36-month terms that are accounted for as finance leases. We have also leased some of our office and lab space under short-term lease agreements. As of December 31, 2023, our non-cancellable lease obligations were $8.2 million and $2.1 million under operating and finance leases, respectively, of which $2.5 million and $1.1 million related to operating and finance leases, respectively, are due within the next 12 months. Refer to Note 7 in our financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information on our lease obligations.

Current wording

As of December 31, 2024, we leased approximately 68,000 square feet of office and laboratory space in Emeryville, California under operating leases which have terms through February 2027. We also have multiple leases for laboratory equipment with 36-month terms that are accounted for as finance leases. As of December 31, 2024, our non-cancellable lease obligations were $8.1 million and $1.1 million under operating and finance leases, respectively, of which $3.6 million and $0.9 million related to operating and finance leases, respectively, are due within the next 12 months.

Previous wording

We measure stock-based awards made to employees and non-employees based on the estimated fair value of the awards as of the grant date using the Black-Scholes option-pricing model. The model requires management to make a number of assumptions including common stock fair value, expected volatility, expected term, risk-free interest rate and expected dividend yield.

Current wording

We measure stock-based option awards made to employees and non-employees based on the estimated fair value of the awards as of the grant date using the Black-Scholes option-pricing model. The model requires management to make a number of assumptions including common stock fair value, expected volatility, expected term, risk-free interest rate and expected dividend yield.