ANAPTYSBIO INC

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited consolidated financial statements and related notes for the six months ended June 30, 2024, included in Part I, Item 1 of this report and with our audited consolidated financial statements and related notes thereto for the year ended December 31, 2023 included in our Annual Report on Form 10-K. This discussion and other sections of this Quarterly Report contain forward-looking statements that involve risks and uncertainties, such as our plans, objectives, expectations, intentions, and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section entitled “Risk Factors” included in Part II, Item 1A of this Quarterly Report. You should also carefully read “Special Note Regarding Forward-Looking Statements.”

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited consolidated financial statements and related notes for the nine months ended September 30, 2024, included in Part I, Item 1 of this report and with our audited consolidated financial statements and related notes thereto for the year ended December 31, 2023 included in our Annual Report on Form 10-K. This discussion and other sections of this Quarterly Report contain forward-looking statements that involve risks and uncertainties, such as our plans, objectives, expectations, intentions, and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section entitled “Risk Factors” included in Part II, Item 1A of this Quarterly Report. You should also carefully read “Special Note Regarding Forward-Looking Statements.”

Previous wording

We are a clinical-stage biotechnology company focused on delivering innovative immunology therapeutics. We are developing immune cell modulating antibodies, including two wholly owned checkpoint agonists in clinical-stage development, for autoimmune and inflammatory diseases: rosnilimab, our PD-1 agonist in a Phase 2b trial for the treatment of moderate-to-severe rheumatoid arthritis (“RA”) and a Phase 2 trial for the treatment of moderate-to-severe ulcerative colitis (“UC”); and ANB032, our BTLA agonist, in a Phase 2b trial for the treatment of moderate-to-severe atopic dermatitis (“AD”). We also have other immune cell modulator candidates in our portfolio, including ANB033, an anti-CD122 antagonist antibody, entering a Phase 1 trial and ANB101, a BDCA2 modulator antibody, in preclinical development. In addition, we have developed two cytokine antagonists that we are exploring options for out-licensing: imsidolimab, our anti-IL-36R antibody, that has completed Phase 3 trials for the treatment of generalized pustular psoriasis (“GPP”), and etokimab, our anti-IL-33 antagonist that is Phase 2/3 ready. We have also discovered multiple therapeutic antibodies licensed to GlaxoSmithKline, Inc. (“GSK”) in a financial collaboration for immuno-oncology, including an anti-PD-1 antagonist antibody (Jemperli (dostarlimab-gxly) or “Jemperli”) and an anti-TIM-3 antagonist antibody (cobolimab, GSK4069889). We currently recognize revenue from milestones and royalties achieved under our immuno-oncology collaboration with GSK.

Current wording

We are a clinical-stage biotechnology company focused on delivering innovative immunology therapeutics for autoimmune and inflammatory diseases. Our pipeline includes two programs targeting co-inhibitory receptors: rosnilimab, our PD-1 agonist in a Phase 2b trial for the treatment of moderate-to-severe rheumatoid arthritis (“RA”) and a Phase 2 trial for the treatment of moderate-to-severe ulcerative colitis (“UC”); and ANB032, our BTLA agonist, in a Phase 2b trial for the treatment of moderate-to-severe atopic dermatitis (“AD”). We also have other antibodies in our portfolio, including ANB033, an anti-CD122 antagonist in a Phase 1 trial and ANB101, a BDCA2 modulator, soon to enter clinical development. In addition, we have developed two cytokine antagonists that are available for out-licensing: imsidolimab, our anti-IL-36R antagonist, that has completed Phase 3 trials for the treatment of generalized pustular psoriasis (“GPP”), and etokimab, our anti-IL-33 antagonist that is Phase 2/3 ready. We have also discovered multiple therapeutic antibodies licensed to GlaxoSmithKline, Inc. (“GSK”) in a financial collaboration for immuno-oncology, including an anti-PD-1 antagonist (Jemperli (dostarlimab-gxly) or “Jemperli”) and an anti-TIM-3 antagonist (cobolimab, GSK4069889). We currently recognize revenue from milestones and royalties achieved under our immuno-oncology collaboration with GSK.

Previous wording

Our immune cell modulating antibodies, including checkpoint agonists for PD-1 and BTLA, treat inflammatory disorders by down regulating immune responses mediated by multiple immune cell types including T cells, B cells, and dendritic cells. T cells require both antigen presentation to the T cell receptor and co-stimulation to be activated. When these interactions are inhibited, T cells can’t be effectively primed to expand and differentiate into inflammatory T cells. Inhibition of at least one of these signals is the basis of checkpoint agonism.

Current wording

Our immune cell modulating antibodies, including those targeting the PD-1 and BTLA co-inhibitory receptors, treat inflammatory disorders by down regulating immune responses mediated by multiple immune cell types including T cells, B cells, and dendritic cells. T cells require both antigen presentation to the T cell receptor and co-stimulation to be activated. When these interactions are inhibited, T cells can’t be effectively primed to expand and differentiate into inflammatory T cells. Inhibition of immune cell activation and co-stimulatory signaling pathways is the basis for targeting co-inhibitory receptors.

Previous wording

PD-1, or programmed cell death protein 1, is an inhibitory checkpoint receptor that regulates T cell proliferation, and cytokine secretion. It is expressed preferentially on activated T cells, reducing the potential for off-target activity by rosnilimab. Genetic mutations in the PD-1 pathway are known to be associated with increased susceptibility to human inflammatory diseases which leads us to believe that rosnilimab is applicable to diseases where PD-1 checkpoint receptor function may be insufficient to maintain immune homeostasis.

Current wording

PD-1, or programmed cell death protein 1, is a co-inhibitory receptor that regulates T cell proliferation, and cytokine secretion. It is expressed preferentially on activated T cells, reducing the potential for off-target activity by rosnilimab. Genetic mutations in the PD-1 pathway are known to be associated with increased susceptibility to human inflammatory diseases which leads us to believe that rosnilimab is applicable to diseases where PD-1 co-inhibitory receptor function may be insufficient to maintain immune homeostasis.

Previous wording

Rosnilimab is an IgG1 antibody that directly targets PD-1+ T cells, resulting in their agonism or depletion, broadly impacting pathogenic drivers of autoimmune and inflammatory diseases. An IgG1 PD-1 agonist acts through three distinct mechanisms; depletion of PD-1 high effector T cells, depletion of PD-1 high Tfh and Tph cells, and agonism of PD-1 int T cells. This drives specific immunological outcomes in both inflamed tissue and the periphery, such as reduction in T cell proliferation, migration, and cytokine secretion, and reduction of plasma cell generation and autoantibody levels. Rosnilimab is designed to enable formation of a tight immune synapse by binding to the PD-1 checkpoint receptor on a membrane-proximal epitope, and simultaneously anchoring to an Fc receptor, on an opposing cell, supporting crosslinking and excluding activating phosphatases such as CD45. Rosnilimab also facilitates depletion by bringing effector cells into closer proximity to pathogenically activated PD-1 high T cells.

Current wording

Rosnilimab is an IgG1 antibody that directly targets PD-1+ T cells, resulting in their agonism or depletion, broadly impacting pathogenic drivers of autoimmune and inflammatory diseases. An IgG1 PD-1 agonist acts through three distinct mechanisms; depletion of PD-1 high effector T cells, depletion of PD-1 high Tfh and Tph cells, and agonism of PD-1 int T cells. This drives specific immunological outcomes in both inflamed tissue and the periphery, such as reduction in T cell proliferation, migration, and cytokine secretion, and reduction of plasma cell generation and autoantibody levels. Rosnilimab is designed to enable formation of a tight immune synapse by binding to PD-1 on a membrane-proximal epitope, and simultaneously anchoring to an Fc receptor on an opposing cell, supporting crosslinking and excluding activating phosphatases such as CD45. Rosnilimab also facilitates depletion by bringing effector cells into closer proximity to pathogenically activated PD-1 high T cells.

Previous wording

In invitro studies, when PD-1+ T cells were cocultured in the presence of NK cells, rosnilimab demonstrated potent depletion of PD-1+ T cells. In separate invitro studies, in which T cells were stimulated in the presence of only dendritic cells (in the absence of any cells capable of mediating depletion), rosnilimab demonstrated potent agonism properties such as a reduction in PD-1+T cell proliferation and reduction in secretion of inflammatory cytokines.

Current wording

Inin vitro studies, when PD-1+ T cells were cocultured in the presence of NK cells, rosnilimab demonstrated potent depletion of PD-1+ T cells. In separate invitro studies, in which T cells were stimulated in the presence of only dendritic cells (in the absence of any cells capable of mediating depletion), rosnilimab demonstrated potent agonism properties such as a reduction in PD-1+T cell proliferation and reduction in secretion of inflammatory cytokines.

Previous wording

We are conducting a randomized placebo-controlled global Phase 2b trial assessing three dose levels of subcutaneously administrated rosnilimab in moderate-to-severe RA for up to 28 weeks on well-established endpoints including ACR20/50/70 and DAS28-CRP. We anticipate reporting top-line data on the primary endpoint in the RA trial in the first quarter of 2025. We are also conducting a randomized placebo-controlled 130-patient, global Phase 2 trial assessing two dose levels of subcutaneously administered rosnilimab in moderate-to-severe UC for up to 24 weeks on well-established endpoints including clinical remission on the modified Mayo score (“mMS”), clinical response on the mMS and endoscopic remission. We anticipate reporting top-line data on the primary endpoint in the UC trial in the first quarter of 2026.

Current wording

We have completed enrollment of a randomized, placebo-controlled, global Phase 2b trial assessing three dose levels of subcutaneously administrated rosnilimab in moderate-to-severe RA for up to 28 weeks on well-established endpoints including ACR20/50/70 and DAS28-CRP. We anticipate reporting top-line data on the primary endpoint at Week 12 in the RA trial in February 2025. We are also conducting a randomized placebo-controlled 132-patient, global Phase 2 trial assessing two dose levels of subcutaneously administered rosnilimab in moderate-to-severe UC. Rosnilimab will be dosed for up to 48 weeks on well-established endpoints including clinical remission on the modified Mayo score (“mMS”), clinical response on the mMS and endoscopic remission. We anticipate reporting top-line data on the primary endpoint at Week 12 in the UC trial in the first quarter of 2026.

Previous wording

BTLA, or B and T lymphocyte attenuator, is an inhibitory checkpoint receptor that regulates T cells, B cells, and dendritic cell function. BTLA is expressed only on immune cells and preferentially on activated immune cells, potentially enabling a broad mechanism of action while avoiding off-target activity.

Current wording

BTLA, or B and T lymphocyte attenuator, is a co-inhibitory receptor that regulates T cells, B cells, and dendritic cell function. BTLA is expressed only on immune cells and preferentially on activated immune cells, potentially enabling a broad mechanism of action while avoiding off-target activity.

Previous wording

EASI75, EASI90 and IGA 0/1 measured at week 14. Patients will be followed for an additional 24 weeks after the final dose at week 12 to understand longer term safety as well as the potential for prolonged and sustained efficacy. We anticipate reporting top-line data on the primary endpoint from this trial in December 2024.

Current wording

We have completed enrollment of a randomized, placebo-controlled global Phase 2b trial assessing three dose levels of subcutaneously administered ANB032 in moderate-to-severe AD for 12 weeks on well-established endpoints including EASI75, EASI90 and IGA 0/1 measured at Week 14. Patients will be followed for an additional 24 weeks after the final dose at Week 12 to understand longer term safety as well as the potential for prolonged and sustained efficacy. We anticipate reporting top-line data on the primary endpoint at Week 14 from this trial in December 2024.

Previous wording

ANB033 targets CD122, the common beta subunit shared by the IL-15 and IL-2 receptors. IL-15 and IL-2 signaling mediate the proliferation and survival of NK cells and certain CD8 T cell subsets. ANB033 is an antibody designed with an affinity to CD122 that inhibits IL-15 and IL-2 signaling through the low affinity IL-2 receptor (comprised of CD122 and the common gamma subunit, CD132) while sparing IL-2 signaling through the high affinity IL-2 receptor (comprised of CD122, CD132 and the alpha receptor subunit for IL-2, CD25) expressed by regulatory T cells. This leads to the potential to achieve and maintain remission of inflammation through the reduction of disease-causing NK cells and certain CD8 T cell subsets, while sparing regulatory T cells. By preventing the consumption of IL-2 by pathogenic cells that express the low affinity IL-2 receptor, circulating levels of IL-2 may increase, potentially enhancing regulatory T cell numbers that express the high affinity IL-2 receptor in the setting of inflammation. We anticipate starting the Phase 1 trial in the fourth quarter of 2024.

Current wording

ANB033 targets CD122, the common beta subunit shared by the IL-15 and IL-2 receptors. IL-15 and IL-2 signaling mediate the proliferation and survival of NK cells and certain CD8 T cell subsets. ANB033 is an antibody designed with an affinity to CD122 that inhibits IL-15 and IL-2 signaling through the low affinity IL-2 receptor (comprised of CD122 and the common gamma subunit, CD132) while sparing IL-2 signaling through the high affinity IL-2 receptor (comprised of CD122, CD132 and the alpha receptor subunit for IL-2, CD25) expressed by regulatory T cells. This leads to the potential to achieve and maintain remission of inflammation through the reduction of disease-causing NK cells and certain CD8 T cell subsets, while sparing regulatory T cells. By preventing the consumption of IL-2 by pathogenic cells that express the low affinity IL-2 receptor, circulating levels of IL-2 may increase, potentially enhancing regulatory T cell numbers that express the high affinity IL-2 receptor in the setting of inflammation. We initiated a Phase 1 clinical trial in October 2024.

Previous wording

Blood dendritic cell antigen 2 (“BDCA2”) is a molecule specifically expressed on plasmacytoid dendritic cells (“pDCs”), a class of immune cells which, while found in relatively small numbers in healthy patients, are enriched in patients with a variety of inflammatory diseases, that is critical to the regulation of toll-like receptor signaling and interferon secretion. pDCs are a key upstream node in the inflammatory cascade that serve as a bridge between innate and adaptive immunity. They have been shown to be prolific secretors of type I interferons, which drive activation of a variety of downstream cell types including T cells and monocytes. Together with their ability to present antigens to the adaptive immune system, this creates a pro-inflammatory environment for the establishment and perpetuation of autoimmune pathology. BDCA2 has been implicated in the pathophysiology of systemic lupus erythematosus (“SLE”), where there exists mechanistic clinical proof of concept for pDC modulation. ANB101 is a BDCA2 modulator antibody that targets pDCs and potently inhibits interferon secretion and modulates antigen presentation for the treatment of autoimmune and inflammatory diseases. We anticipate submitting an IND for a Phase 1 clinical trial with ANB101 in the fourth quarter of 2024.

Current wording

Blood dendritic cell antigen 2 (“BDCA2”) is a molecule specifically expressed on plasmacytoid dendritic cells (“pDCs”), a class of immune cells which, while found in relatively small numbers in healthy individuals, are enriched in patients with a variety of inflammatory diseases, that is critical to the regulation of toll-like receptor signaling and interferon secretion. pDCs are a key upstream node in the inflammatory cascade that serve as a bridge between innate and adaptive immunity. They have been shown to be prolific secretors of type I interferons, which drive activation of a variety of downstream cell types including T cells and monocytes. Together with their ability to present antigens to the adaptive immune system, this creates a pro-inflammatory environment for the establishment and perpetuation of autoimmune pathology. BDCA2 has been implicated in the pathophysiology of systemic lupus erythematosus (“SLE”), where there exists mechanistic clinical proof of concept for pDC modulation. ANB101 is a BDCA2 modulator antibody that targets pDCs and potently inhibits interferon secretion and modulates antigen presentation for the treatment of autoimmune and inflammatory diseases. We submitted an IND application and plan to initiate enrollment for a Phase 1 clinical trial in the first quarter of 2025.

Previous wording

Data from both trials demonstrate a consistent, favorable safety and tolerability profile with no treatment-related serious adverse events (“SAEs”) or SAEs leading to discontinuation reported in imsidolimab-treated patients. Additionally, the data demonstrated low incidence and no elevation of infections versus placebo; no cases reported of Drug Reaction with Eosinophilia and Systemic Symptoms (“DRESS”) or Guillain-Barre syndrome (“GBS”); no infusion reactions and overall incidence of anti-drug antibodies (“ADA”) was low and, when detected, determined to be non-neutralizing.

Current wording

Data from both trials demonstrate a consistent, favorable safety and tolerability profile with no treatment-related serious adverse events (“SAEs”) or SAEs leading to discontinuation reported in imsidolimab-treated patients. Additionally, the data demonstrated low incidence and no elevation of infections versus placebo; no cases reported of Drug Reaction with

Previous wording

Jemperli is in clinical trials for various solid tumor indications, including a Phase 3 trial in first-line ovarian cancer with top-line results expected in the second half of 2024.

Current wording

Jemperli is in clinical trials for various solid tumor indications, including a Phase 3 trial in first-line ovarian cancer with top-line results expected in the fourth quarter of 2024.

Previous wording

In addition, under the collaboration, GSK is developing dostarlimab in combination with another development program from the GSK Agreement, including cobolimab, an anti-TIM-3 antibody. GSK is conducting a Phase 3 trial, COSTAR Lung, which is a randomized, open label 3-arm trial comparing cobolimab plus dostarlimab plus docetaxel to dostarlimab plus docetaxel to docetaxel alone in patients with advanced non-small-cell lung cancer (“NSCLC”) who have progressed on prior anti-PD-(L)1 therapy and chemotherapy with top-line results expected in 2025.

Current wording

In addition, under the collaboration, GSK is developing dostarlimab in combination with another development program from the GSK Agreement, including cobolimab, an anti-TIM-3 antibody. GSK is conducting a Phase 3 trial, COSTAR Lung, which is a randomized, open label 3-arm trial comparing cobolimab plus dostarlimab plus docetaxel to dostarlimab plus docetaxel to docetaxel alone in patients with advanced non-small-cell lung cancer (“NSCLC”) who have progressed on prior anti-PD-(L)1 therapy and chemotherapy with top-line results expected in the first half of 2025.

Previous wording

Our revenue has been derived from amortization of upfront license payments, research and development funding, milestone and royalty payments under collaboration and license agreements with our collaborators. From inception through June 30, 2024, we have recognized $273.4 million in revenue from our collaborators. We have not generated any revenue from product sales.

Current wording

Our revenue has been derived from amortization of upfront license payments, research and development funding, milestone and royalty payments under collaboration and license agreements with our collaborators. From inception through September 30, 2024, we have recognized $303.4 million in revenue from our collaborators. We have not generated any revenue from product sales.

Previous wording

Non-cash interest expense for the sale of future royalties consists of interest related to the liability for the sale of future royalties, as well as the amortization of debt issuance costs. We impute interest on the unamortized portion of the liability for the sale of future royalties using the effective interest method and record interest expense based on timing of the payments over the term of the Royalty Monetization Agreements. Our estimate of the interest rate under the arrangements is based on forecasted royalty and milestone payments expected to be made over the life of the agreements.

Current wording

Non-cash interest expense for the sale of future royalties consists of interest related to the liability for the sale of future royalties, as well as the amortization of debt issuance costs. We impute interest on the unamortized portion of the liability for the sale of future royalties using the effective interest method and record interest expense based on timing of the payments over the term of the Jemperli Royalty Monetization Agreement and the Zejula Royalty Monetization Agreement (the “Royalty Monetization” Agreements). Our estimate of the interest rate under the arrangements is based on forecasted royalty and milestone payments expected to be made over the life of the agreements.

Previous wording

Results of Operations – Comparison of the Three and Six Months Ended June 30, 2024 and 2023

Current wording

Results of Operations – Comparison of the Three and Nine Months Ended September 30, 2024 and 2023

Previous wording

Collaboration revenue consists of both milestone payments under the collaborations, and royalty payments. We recognized $0 in milestone revenue during each of the three and six months ended June 30, 2024 and 2023. We expect that any collaboration revenue we generate will continue to fluctuate from period to period as a result of the timing and amount of milestones from our existing collaborations.

Current wording

Collaboration revenue consists of both milestone payments under the collaborations, and royalty payments. Our first sales milestone for $15.0 million was recognized during the three and nine months ended September 30, 2024, when Jemperli annual sales exceeded $250 million, and is Jemperli non-cash revenue related to the Jemperli Royalty Monetization Agreement. No sales milestones were recognized during the three and nine months ended September 30, 2023. We expect that any collaboration revenue we generate will continue to fluctuate from period to period as a result of the timing and amount of milestones from our existing collaborations.

Previous wording

Royalty revenue is a function of our partners’ product sales and the applicable royalty rate. During the three months ended June 30, 2024 and 2023, we recognized $11.0 million and $3.5 million, respectively, related to the net sales of GSK’s Jemperliand Zejula, which we estimate based on either GSK’s prior sales experience or actuals. During the six months ended June 30, 2024 and 2023, we recognized $18.2 million and $4.8 million, respectively, of royalty revenue related to the net sales of GSK’s Jemperliand Zejula. All royalty revenue related to Zejula global net sales starting July 2022 is paid directly to a wholly owned subsidiary of DRI Healthcare Trust pursuant to the Zejula Royalty Monetization Agreement. For more information see Note 5 — Sale of Future Royalties in the accompanying notes to the consolidated financial statements.

Current wording

Royalty revenue is a function of our partners’ product sales and the applicable royalty rate. During the three months ended September 30, 2024 and 2023, we recognized $15.0 million and $3.3 million, respectively, related to the net sales of GSK’s Jemperliand Zejula, which we estimate based on either GSK’s prior sales experience or actuals. During the nine months ended September 30, 2024 and 2023, we recognized $33.2 million and $8.2 million, respectively, of royalty revenue related to the net sales of GSK’s Jemperli and Zejula. All revenue recognized for the three and nine months ended September 30, 2024 and 2023 is non-cash revenue pursuant to the Royalty Monetization Agreements. For more information see Note 5 — Sale of Future Royalties in the accompanying notes to the consolidated financial statements.

Previous wording

Research and development expenses were $42.0 million during the three months ended June 30, 2024 compared to $32.9 million during the three months ended June 30, 2023 for an increase of $9.1 million, primarily due to a $12.1 million increase in clinical expenses, $3.2 million increase in salaries and related expenses, including stock-based compensation expense, and $0.4 million increase in other research and development expenses, offset by a decrease of $6.6 million in outside services for manufacturing expenses.

Current wording

Research and development expenses were $42.2 million during the three months ended September 30, 2024 compared to $30.9 million during the three months ended September 30, 2023 for an increase of $11.3 million, primarily due to a $8.8 million increase in clinical expenses, $4.9 million increase in salaries and related expenses, including stock-based compensation expense, and $0.1 million increase in other research and development expenses, offset by a decrease of $2.5 million in outside services for manufacturing expenses.

Previous wording

Research and development expenses were $79.0 million during the six months ended June 30, 2024 compared to $67.9 million during the six months ended June 30, 2023 for an increase of $11.1 million, primarily due to a $17.7 million increase in clinical expenses, $6.3 million increase in salaries and related expenses, including stock-based compensation expense, and $0.9 million increase in other research and development expenses, offset by a decrease of $13.8 million in outside services for manufacturing expenses.

Current wording

Research and development expenses were $121.3 million during the nine months ended September 30, 2024 compared to $98.8 million during the nine months ended September 30, 2023 for an increase of $22.5 million, primarily due to a $26.4 million increase in clinical expenses, $11.3 million increase in salaries and related expenses, including stock-based compensation expense, and $1.0 million increase in other research and development expenses, offset by a decrease of $16.2 million in outside services for manufacturing expenses.

Previous wording

We do not track fully burdened research and development costs separately for each of our product candidates. We review our research and development expenses by focusing on external development and internal development costs. External development expenses consist of costs associated with our external preclinical and clinical trials, including pharmaceutical development and manufacturing. Included in preclinical and other unallocated costs are external corporate overhead costs that are not specific to any one program. Internal costs consist of salaries and wages, share-based compensation and benefits, which are not tracked by product candidate as several of our departments support multiple product candidate research and development programs. The following table summarizes the external costs attributable to each program and internal costs:

Current wording

We do not track fully burdened research and development costs separately for each of our product candidates. We review our research and development expenses by focusing on external development and internal development costs. External development expenses consist of costs associated with our external preclinical and clinical trials, including pharmaceutical development and manufacturing. Included in preclinical and other unallocated costs are external corporate overhead costs that are not specific to any one program. Internal costs consist of salaries and wages, stock-based compensation and benefits, which are not tracked by product candidate as several of our departments support multiple product candidate research and development programs. The following table summarizes the external costs attributable to each program and internal costs:

Previous wording

General and administrative expenses were $21.6 million during the six months ended June 30, 2024 compared to $21.5 million during the six months ended June 30, 2023 for an increase of $0.1 million, primarily due to a $0.4 million increase in legal and other general and administrative expenses, and a $0.1 million increase in personnel costs, including stock-based compensation expense, offset by a decrease of $0.4 million in market research cost and insurance expense.

Current wording

General and administrative expenses were $10.6 million during the three months ended September 30, 2024 compared to $10.2 million during the three months ended September 30, 2023 for an increase of $0.4 million, primarily due to a $0.5 million increase in market research cost, and a $0.1 million increase in personnel costs, including stock-based compensation expense, offset by a decrease of $0.2 million in legal and insurance expenses.

Previous wording

General and administrative expenses were $9.3 million during the three months ended June 30, 2024 compared to $10.7 million during the three months ended June 30, 2023 for a decrease of $1.4 million, primarily due to a $1.5 million decrease in personnel costs, including stock-based compensation expense, offset by an increase of $0.1 million increase in legal and other general and administrative expenses.

Current wording

General and administrative expenses were $32.2 million during the nine months ended September 30, 2024 compared to $31.7 million during the nine months ended September 30, 2023 for an increase of $0.5 million, primarily due to a $0.2 million increase in market research cost, $0.2 million increase in personnel costs, including stock-based compensation expense, and $0.3 million increase in legal and other general and administrative expenses, offset by a decrease of $0.2 million in insurance expense.

Previous wording

Non-cash interest expense was $11.0 million and $4.4 million during the three months ended June 30, 2024 and 2023, respectively. The increase of $6.6 million in non-cash interest expense is primarily due to the Jemperli Amendment which increased the threshold amounts of aggregate Jemperli royalties and milestones to be received by Sagard.

Current wording

Non-cash interest expense was $15.4 million and $4.4 million during the three months ended September 30, 2024 and 2023, respectively. The increase of $11.0 million in non-cash interest expense is primarily due to the Jemperli Amendment which increased the threshold amounts of aggregate Jemperli royalties and milestones to be received by Sagard.

Previous wording

Non-cash interest expense was $17.3 million and $8.7 million during the six months ended June 30, 2024 and 2023, respectively. The increase of $8.6 million in non-cash interest expense is primarily due to the Jemperli Amendment which increased the threshold amounts of aggregate Jemperli royalties and milestones to be received by Sagard.

Current wording

Non-cash interest expense was $32.7 million and $13.1 million during the nine months ended September 30, 2024 and 2023, respectively. The increase of $19.6 million in non-cash interest expense is primarily due to the Jemperli Amendment which increased the threshold amounts of aggregate Jemperli royalties and milestones to be received by Sagard.

Previous wording

Interest income was $4.6 million and $4.7 million during the three months ended June 30, 2024 and 2023, respectively, which primarily related to our short-term and long-term investments. The slight decrease in interest income is primarily due to the timing of sales, maturities and purchases of our investments.

Current wording

Interest income was $5.3 million and $4.9 million during the three months ended September 30, 2024 and 2023, respectively, which primarily related to our short-term and long-term investments. The increase in interest income is primarily due to the timing of sales, maturities and purchases of our investments.

Previous wording

Interest income was $9.2 million and $9.1 million during the six months ended June 30, 2024 and 2023, respectively, which primarily related to our short-term and long-term investments. The slight increase in interest income is primarily due to the timing of sales, maturities and purchases of our investments.

Current wording

Interest income was $14.5 million and $14.0 million during the nine months ended September 30, 2024 and 2023, respectively, which primarily related to our short-term and long-term investments. The increase in interest income is primarily due to the timing of sales, maturities and purchases of our investments.

Previous wording

Other expense, net was less than $0.1 million for both the six months ended June 30, 2024 and 2023, which primarily related to foreign exchange transactions with our foreign CROs and CMOs.

Current wording

Other expense, net was less than $0.1 million for both the three and nine months ended September 30, 2024, which primarily related to foreign exchange transactions with our foreign CROs and CMOs.

Previous wording

Other income, net was less than $0.1 million for both the three months ended June 30, 2024 and 2023, which primarily related to foreign exchange transactions with our foreign CROs and CMOs.

Current wording

Other income, net was less than $0.1 million for both the three and nine months ended September 30, 2023, which primarily related to foreign exchange transactions with our foreign CROs and CMOs.

Previous wording

From our inception through June 30, 2024, we have received an aggregate of $1.2 billion to fund our operations, which included $639.1 million from the sale of equity securities, $335.0 million from the sale of future royalties, and $234.2 million from our collaboration agreements. As of June 30, 2024, we had $393.5 million in cash, cash equivalents and investments.

Current wording

From our inception through September 30, 2024, we have received an aggregate of $1.3 billion to fund our operations, which included $738.6 million from the sale of equity securities, $335.0 million from the sale of future royalties, and $234.2 million from our collaboration agreements. As of September 30, 2024, we had $458.0 million in cash, cash equivalents and investments.

Previous wording

In November 2022, we entered into a Sales Agreement (the “Cowen Sales Agreement”) with Cowen and Company, LLC (“Cowen”), through which we may offer and sell shares of our common stock, having an aggregate offering of up to $150.0 million through Cowen as our sales agent. As of June 30, 2024, we had sold no shares under this agreement.

Current wording

In November 2022, we entered into a sales agreement with Cowen and Company, LLC (“Cowen”), through which we may offer and sell shares of our common stock, having an aggregate offering of up to $150.0 million through Cowen as our sales agent. As of September 30, 2024, we had sold no shares under this agreement. In November 2024, we entered into a sales agreement with TD Securities (USA) LLC (“TD Cowen”), through which we may offer and sell shares of our common stock, having an aggregate offering of up to $100.0 million through TD Cowen as our sales agent. Our prior sales agreement with Cowen will terminate upon effectiveness of the registration statement on the Form S-3 we will file in connection with our sales agreement with TD Cowen.

Previous wording

Cash, cash equivalents and investments totaled $393.5 million as of June 30, 2024, compared to $417.9 million as of December 31, 2023. We believe that our existing cash, cash equivalents and investments will fund our current operating plan for at least the next twelve months from the issuance of our consolidated financial statements. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. Additionally, the process of testing product candidates in clinical trials and seeking regulatory approval is costly, and the timing of progress and expenses in these trials is uncertain.

Current wording

Cash, cash equivalents and investments totaled $458.0 million as of September 30, 2024, compared to $417.9 million as of December 31, 2023. We believe that our existing cash, cash equivalents and investments will fund our current operating plan for at least the next 12 months from the issuance of our consolidated financial statements. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. Additionally, the process of testing product candidates in clinical trials and seeking regulatory approval is costly, and the timing of progress and expenses in these trials is uncertain.

Previous wording

The following table summarizes our cash flows for the six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes our cash flows for the nine months ended September 30, 2024 and 2023:

Previous wording

Net cash used in operating activities during the six months ended June 30, 2024 of $58.6 million was primarily due to our net loss of $90.6 million, adjusted for addbacks for non-cash expenses of $30.7 million, which includes stock-based compensation, amortization of operating ROU assets, non-cash interest expense, income from marketable securities and net increases in working capital of $1.3 million.

Current wording

Net cash used in operating activities during the nine months ended September 30, 2024 of $68.7 million was primarily due to our net loss of $123.4 million, adjusted for addbacks for non-cash expenses of $52.3 million, which includes stock-based compensation, amortization of operating ROU assets, non-cash interest expense, income from marketable securities and net increases in working capital of $2.4 million.

Previous wording

Net cash used in operating activities during the six months ended June 30, 2023 of $50.0 million was primarily due to our net loss of $84.1 million, adjusted for addbacks for non-cash expenses of $22.8 million, which includes stock-based compensation, amortization of operating ROU assets, non-cash interest expense, income from marketable securities and net increases in working capital of $11.3 million.

Current wording

Net cash used in operating activities during the nine months ended September 30, 2023 of $86.5 million was primarily due to our net loss of $121.4 million, adjusted for addbacks for non-cash expenses of $32.6 million, which includes stock-based compensation, amortization of operating ROU assets, non-cash interest expense, income from marketable securities and net increases in working capital of $2.3 million.

Previous wording

Net cash provided by investing activities during the six months ended June 30, 2024 and 2023 of $66.2 million and $64.9 million, respectively, primarily relates to the timing of sales, maturities and purchases of our investments.

Current wording

Net cash provided by investing activities during the nine months ended September 30, 2024 and 2023 of $124.8 million and $95.6 million, respectively, primarily relates to the timing of sales, maturities and purchases of our investments.

Previous wording

The net cash provided by financing activities during the six months ended June 30, 2024 of $28.3 million was primarily related to $50.0 million received for the sale of future royalties, $1.8 million of cash received for the issuance of common stock, offset by $16.0 million for repayments of the liability for the sale of future royalties and $7.5 million for net share settlement of equity awards.

Current wording

The net cash provided by financing activities during the nine months ended September 30, 2024 of $99.5 million was primarily related to $94.4 million of proceeds received from public offerings, net of underwriters’ fees, $50.0 million received for the sale of future royalties, $5.9 million of cash received for the issuance of common stock, offset by $42.8 million for repayments of the liability for the sale of future royalties, $7.5 million for net share settlement of equity awards, and $0.5 million payments for offering and debt issuance costs.

Previous wording

The net cash used in financing activities during the six months ended June 30, 2023 of $51.1 million was primarily related to $50.0 million paid for repurchases and retirements of common stock, $3.1 million for repayments of the liability for the sale of future royalties, offset by $2.0 million of cash received for the issuance of common stock.

Current wording

The net cash used in financing activities during the nine months ended September 30, 2023 of $54.1 million was primarily related to $50.0 million paid for repurchases and retirements of common stock, $6.3 million for repayments of the liability for the sale of future royalties, offset by $2.2 million of cash received for the issuance of common stock.