Kiniksa Pharmaceuticals International plc

Previous wording

ARCALYST is an interleukin-1α and interleukin-1β cytokine trap. In 2017, we licensed ARCALYST from Regeneron, which discovered and initially developed the drug. Our exclusive license to ARCALYST from Regeneron includes worldwide rights, excluding the Middle East and North Africa, for all applications other than those in oncology and local administration to the eye or ear. We received FDA approval of ARCALYST for thetreatment of recurrent pericarditis and reduction in risk of recurrence in adults and children 12 years and older in March 2021. Recurrent pericarditis is a painful inflammatory cardiovascular disease with an estimated United States prevalent population of approximately 40,000 patients seeking and receiving medical treatment. ARCALYST is commercially available across the United States through a select network of specialty pharmacies. ARCALYST is also approved in the United States for the treatment of Cryopyrin-Associated Periodic Syndromes (“CAPS”), including Familial Cold Autoinflammatory Syndrome (“FCAS”) and Muckle-Wells Syndrome in adults and children 12 years and older, and the maintenance of remission in Deficiency of Interleukin-1 Receptor Antagonist (“DIRA”) in adults and children weighing 10 kg or more. We are responsible for sales and distribution of ARCALYST in all approved indications in the United States, and evenly split profits on sales, as well as third party proceeds, with Regeneron.

Current wording

ARCALYST is an interleukin-1α and interleukin-1β cytokine trap. In 2017, we licensed ARCALYST from Regeneron, which discovered and initially developed the drug. Our exclusive license to ARCALYST from Regeneron includes worldwide rights, excluding the Middle East and North Africa, for all applications other than those in oncology and local administration to the eye or ear. We received FDA approval of ARCALYST for thetreatment of recurrent pericarditis and reduction in risk of recurrence in adults and children 12 years and older in March 2021. Recurrent pericarditis is a painful inflammatory cardiovascular disease with an estimated United States prevalent population of approximately 40,000 patients seeking and receiving medical treatment. ARCALYST is commercially available across the United States through a select network of specialty pharmacies. ARCALYST is also approved in the United States for the treatment of Cryopyrin-Associated Periodic Syndromes (“CAPS”), including Familial Cold Autoinflammatory Syndrome (“FCAS”) and Muckle-Wells Syndrome in adults and children 12 years and older, and the maintenance of remission in Deficiency of Interleukin-1 Receptor Antagonist (“DIRA”) in adults and children weighing 10 kg or more. We are responsible for sales and distribution of ARCALYST in all approved indications in the United States, and evenly split profits on sales, as well as third party proceeds, with Regeneron. In 2022, we granted exclusive rights to Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. (“Huadong”) to develop and commercialize ARCALYST in the Huadong Territory (as defined below).

Previous wording

Abiprubart is an investigational monoclonal antibody inhibitor of CD40-CD154 costimulatory interaction. In 2019, we acquired all of the outstanding securities of Primatope Therapeutics, Inc. (“Primatope”), the company that owned or controlled the intellectual property related to abiprubart. In connection with our acquisition of Primatope, we acquired an exclusive world-wide license to abiprubart from Beth Israel Deaconess Medical Center, Inc. (“BIDMC”). The CD40-CD154 interaction is a key T-cell co-stimulatory signal critical for B-cell maturation, immunoglobulin class switching and Type 1 immune response. We believe disrupting the CD40-CD154 costimulatory interaction is an attractive approach to address multiple autoimmune disease pathologies. In December 2021, we initiated a Phase 2 clinical trial of abiprubart inrheumatoid arthritis (“RA”), which is designed to evaluate pharmacokinetics, safety and efficacy with subcutaneous administration. In January 2024, we announced topline clinical data from Cohorts 1, 2 and 3 of the trial and that the trial met its primary efficacy endpoint in Cohort 3 at the weekly dose level. In April 2024, we announced (a) topline clinical data from Cohort 4 of the RA trial and (b)our plan to initiate a Phase 2b clinical trial of abiprubart in Sjögren’s Disease in the second half of 2024. In July 2024, we announced that we had commenced enrollment in such trial.

Current wording

Abiprubart is an investigational monoclonal antibody inhibitor of CD40-CD154 costimulatory interaction. We hold an exclusive world-wide license to abiprubart from Beth Israel Deaconess Medical Center, Inc. (“BIDMC”). The CD40-CD154 interaction is a key T-cell co-stimulatory signal critical for B-cell maturation, immunoglobulin class switching and Type 1 immune response. We believe disrupting the CD40-CD154 costimulatory interaction is an attractive approach to address multiple autoimmune disease pathologies. In December 2021, we initiated a Phase 2 clinical trial of abiprubart inrheumatoid arthritis (“RA”), which is designed to evaluate pharmacokinetics, safety and efficacy with subcutaneous administration. In January 2024, we announced topline clinical data from Cohorts 1, 2 and 3 of the trial and that the trial met its primary efficacy endpoint in Cohort 3 at the weekly dose level. In April 2024, we announced topline clinical data from Cohort 4 of the RA trial. We are currently enrolling and dosing a Phase 2b clinical trial of abiprubart in Sjögren’s Disease.

Previous wording

Mavrilimumab is an investigational monoclonal antibody inhibitor targeting granulocyte-macrophage colony stimulating factor receptor alpha (“GM-CSFRα”). In 2017, we licensed exclusive worldwide rights in all indications to mavrilimumab from MedImmune, Limited (“MedImmune”). We are currently evaluating potential partnership opportunities to advance mavrilimumab’s development. We previously evaluated mavrilimumab in giant cell arteritis (“GCA”), a chronic inflammatory disease of the medium-to-large arteries, and COVID-19-related acute respiratory distress syndrome (“ARDS”).

Current wording

Mavrilimumab is an investigational monoclonal antibody inhibitor targeting granulocyte-macrophage colony stimulating factor receptor alpha (“GM-CSFRα”). In 2017, we licensed exclusive worldwide rights in all indications to mavrilimumab from MedImmune, Limited (“MedImmune”). We evaluated mavrilimumab in giant cell arteritis (“GCA”), a chronic inflammatory disease of the medium-to-large arteries, and COVID-19-related acute respiratory distress syndrome (“ARDS”). In 2022, we granted exclusive rights to Huadong to develop and commercialize mavrilimumab in the Huadong Territory. We are currently evaluating potential partnership opportunities to advance mavrilimumab’s development.

Previous wording

On June 27, 2024, we announced the completion of the change of place of incorporation of our principal holding company from Bermuda to the United Kingdom (the “Redomiciliation”), pursuant to a scheme of arrangement approved by both the Bermuda Supreme Court and our shareholders. As used herein, and unless the context otherwise requires, references to “we”, “us”, “our” and similar words or phrases prior to the Redomiciliation shall refer to Kiniksa Pharmaceuticals, Ltd. and from and after the Redomiciliation, to Kiniksa Pharmaceuticals International, plc.

Current wording

In June 2024, we announced the completion of the change of place of incorporation of our principal holding company from Bermuda to the United Kingdom (the “Redomiciliation”), pursuant to a scheme of arrangement approved by both the Bermuda Supreme Court and our shareholders. As used herein, and unless the context otherwise requires, references to “we”, “us”, “our” and similar words or phrases prior to the Redomiciliation shall refer to Kiniksa Pharmaceuticals, Ltd. and from and after the Redomiciliation, to Kiniksa Pharmaceuticals International, plc.

Previous wording

Our ability to generate product revenue sufficient to sustain our organization will depend heavily on a number of factors, including the continued commercialization of ARCALYST, the development and eventual commercialization of one or more of our current or future product candidates, if approved, and the management of our costs consistent with our current operating plan. For the three and six months ended June 30, 2024, our net loss was $3.9 million and $21.6 million, respectively. As of June 30, 2024, we had an accumulated deficit of $499.6 million.

Current wording

Our ability to generate product revenue sufficient to sustain our organization will depend heavily on a number of factors, including the continued commercialization of ARCALYST, the development and eventual commercialization of one or more of our current or future product candidates, if approved, and the management of our costs consistent with our current operating plan. For the three and nine months ended September 30, 2024, our net loss was $12.7 million and $34.3 million, respectively. As of September 30, 2024, we had an accumulated deficit of $512.3 million.

Previous wording

As of June 30, 2024, we had cash, cash equivalents and short-term investments of $218.8 million. We believe that our existing cash, cash equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of theunaudited consolidated financial statements included in this Quarterly Report. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and Capital Resources.” Our future viability is dependent on our ability to fund our operations through sales of ARCALYST and/or raise additional capital, such as through debt or equity offerings, as needed.

Current wording

As of September 30, 2024, we had cash, cash equivalents and short-term investments of $223.8 million. We believe that our existing cash, cash equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of theunaudited consolidated financial statements included in this Quarterly Report. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and Capital Resources.” Our future viability is dependent on our ability to fund our operations through sales of ARCALYST and/or raise additional capital, such as through debt or equity offerings, as needed.

Previous wording

In February 2022, we entered into two collaboration and license agreements (the “Huadong Collaboration Agreements”), with Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. (“Huadong”), pursuant to which we granted Huadong exclusive rights to develop and commercialize rilonacept and mavrilimumab (the “Huadong Licensed Products”), in the Asia Pacific region excluding Japan (the “Huadong Territory”). We otherwise retained our current rights to the Licensed Products outside the Territory.

Current wording

In February 2022, we entered into two collaboration and license agreements (the “Huadong Collaboration Agreements”), with Huadong, pursuant to which we granted Huadong exclusive rights to develop and commercialize rilonacept and mavrilimumab (the “Huadong Licensed Products”), in the Asia Pacific region excluding Japan (the “Huadong Territory”). We otherwise retained our current rights to the Licensed Products outside the Territory.

Previous wording

Under the Huadong Collaboration Agreements, we received a total upfront cash payment of $22.0 million, which included $12.0 million for the Huadong Territory license of rilonacept and $10.0 million for the Huadong Territory license of mavrilimumab. In addition, we will be eligible to receive contingent payments, including specified development, regulatory and sales-based milestones. Huadong will also be obligated to pay us tiered percentage royalties

Current wording

Under the Huadong Collaboration Agreements, we received a total upfront cash payment of $22.0 million, which included $12.0 million for the Huadong Territory license of rilonacept and $10.0 million for the Huadong Territory license of mavrilimumab. In addition, we will be eligible to receive contingent payments, including specified development, regulatory and sales-based milestones. Huadong will also be obligated to pay us tiered percentage royalties on a Huadong Licensed Product-by-Huadong Licensed Product basis ranging from the low-teens to low-twenties on

Previous wording

on a Huadong Licensed Product-by-Huadong Licensed Product basis ranging from the low-teens to low-twenties on annual net sales of each Huadong Licensed Product in the Huadong Territory, subject to certain reductions tied to rilonacept manufacturing costs and certain other customary reductions, with an aggregate minimum floor. Royalties will be payable on a Huadong Licensed Product-by-Huadong Licensed Product and country-by-country or region-by-region basis until the later of (i) 12 years after the first commercial sale of the applicable Huadong Licensed Product in such country or region in the Huadong Territory, (ii) the date of expiration of the last valid patent claim of our patent rights or any joint collaboration patent rights that covers the applicable Huadong Licensed Product in such country or region in the Huadong Territory, and (iii) the expiration of the last regulatory exclusivity for the applicable Huadong Licensed Product in such country or region in the Huadong Territory. We recognized the $10.0 million related to the mavrilimumab license during the year ended December 31, 2022. We have recognized $0.2 million of revenue of the $12.0 million transaction price under the rilonacept license agreement as of June 30, 2024, and will recognize the remaining revenue as materials are shipped.

Current wording

annual net sales of each Huadong Licensed Product in the Huadong Territory, subject to certain reductions tied to rilonacept manufacturing costs and certain other customary reductions, with an aggregate minimum floor. Royalties will be payable on a Huadong Licensed Product-by-Huadong Licensed Product and country-by-country or region-by-region basis until the later of (i) 12 years after the first commercial sale of the applicable Huadong Licensed Product in such country or region in the Huadong Territory, (ii) the date of expiration of the last valid patent claim of our patent rights or any joint collaboration patent rights that covers the applicable Huadong Licensed Product in such country or region in the Huadong Territory, and (iii) the expiration of the last regulatory exclusivity for the applicable Huadong Licensed Product in such country or region in the Huadong Territory. We recognized the $10.0 million related to the mavrilimumab license during the year ended December 31, 2022. We have recognized $0.2 million of revenue of the $12.0 million transaction price under the rilonacept license agreement as of September 30, 2024, and will recognize the remaining revenue as materials are shipped.

Previous wording

Collaboration expenses consist of Regeneron’s share of the profit related to ARCALYST sales under the Regeneron Agreement and the cost of products sold under collaboration agreements. We evenly split profits on sales of ARCALYST with Regeneron, where profits are determined after deducting from net sales of ARCALYST certain costs related to the manufacturing and commercialization of ARCALYST. Such costs include but are not limited to (i) our cost of goods sold for product used, sold or otherwise distributed for patient use by us; (ii) customary commercialization expenses, including the cost of our field force, and (iii) our cost to market, advertise and otherwise promote ARCALYST, with such costs identified in subsection (iii) subject to specified limits. With respect to the technology

Current wording

Collaboration expenses consist of Regeneron’s share of the profit related to ARCALYST sales under the Regeneron Agreement and the cost of products sold under collaboration agreements. We evenly split profits on sales of ARCALYST with Regeneron, where profits are determined after deducting from net sales of ARCALYST certain costs related to the manufacturing and commercialization of ARCALYST. Such costs include but are not limited to (i) our cost of goods sold for product used, sold or otherwise distributed for patient use by us; (ii) customary commercialization expenses, including the cost of our field force, and (iii) our cost to market, advertise and otherwise promote ARCALYST, with such costs identified in subsection (iii) subject to specified limits. With respect to the technology transfer of ARCALYST drug substance manufacturing from Regeneron to Samsung, to the extent permitted by the

Previous wording

transfer of ARCALYST drug substance manufacturing from Regeneron to Samsung, to the extent permitted by the Regeneron Agreement, the fully-burdened costs of each of us and Regeneron incurred in performing such technology transfer shall also be deducted from net sales of ARCALYST to determine profit. We also evenly split with Regeneron any proceeds received by us from any licensees, sublicensees and distributors in consideration for the sale, license or other disposition of rights with respect to ARCALYST, including upfront payments, milestone payments and royalties.

Current wording

Regeneron Agreement, the fully-burdened costs of each of us and Regeneron incurred in performing such technology transfer shall also be deducted from net sales of ARCALYST to determine profit. We also evenly split with Regeneron any proceeds received by us from any licensees, sublicensees and distributors in consideration for the sale, license or other disposition of rights with respect to ARCALYST, including upfront payments, milestone payments and royalties.

Previous wording

Research and development activities are central to our business. Product candidates in later stages of clinical development generally have higher costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect that our research and development expenses will be substantial over the next several years as we conduct our ongoing and/or planned clinical trials for our product candidates, as well as conduct other preclinical and clinical development, and make regulatory filings for our product candidates.

Current wording

increased size and duration of later-stage clinical trials. As a result, we expect that our research and development expenses will be substantial over the next several years as we conduct our ongoing and/or planned clinical trials for our product candidates, as well as conduct other preclinical and clinical development, and make regulatory filings for our product candidates.

Previous wording

Prior to the Redomiciliation, our principal holding company was incorporated and principally subject to taxation in Bermuda. Following the Redomiciliation, our principal holding company is incorporated and principally subject to taxation in the United Kingdom. Under the current laws of Bermuda, there is no corporate income tax levied on an exempted company’s income, resulting in an effective zero percent tax rate. As a result, we have not recorded any income tax benefits from our losses incurred in Bermuda during each reporting period, and no net operating loss carryforwards are currently available to us for those losses. Our wholly owned United States subsidiaries, Kiniksa US, and Primatope are subject to federal and state income taxes in the United States. Our wholly owned subsidiary Kiniksa UK, its Swiss branch office, and Kiniksa UK’s wholly owned subsidiaries, Kiniksa Pharmaceuticals (Germany) GmbH, Kiniksa Pharmaceuticals (France) SARL, and Kiniksa Pharmaceuticals, GmbH (“Kiniksa Switzerland”) are subject to taxation in their respective countries.

Current wording

Prior to the Redomiciliation, our principal holding company was incorporated and principally subject to taxation in Bermuda. Following the Redomiciliation, our principal holding company is incorporated and principally subject to taxation in the United Kingdom. Under the current laws of Bermuda, there is no corporate income tax levied on an exempted company’s income, resulting in an effective zero percent tax rate. As a result, we have not recorded any income tax benefits from our losses incurred in Bermuda during each reporting period, and no net operating loss carryforwards are currently available to us for those losses. Our wholly owned United States subsidiaries, Kiniksa US, and Primatope Therapeutics, Inc. are subject to federal and state income taxes in the United States. Our wholly owned subsidiary Kiniksa UK, its Swiss branch office, and Kiniksa UK’s wholly owned subsidiaries, Kiniksa Pharmaceuticals (Germany) GmbH, Kiniksa Pharmaceuticals (France) SARL, and Kiniksa Pharmaceuticals, GmbH (“Kiniksa Switzerland”) are subject to taxation in their respective countries.

Previous wording

We recognized net revenue from the sale of ARCALYST of $103.4 million for the three months ended June 30, 2024, compared to $54.5 million for the three months ended June 30, 2023, an increase of $48.9 million. The increase in product revenue was primarily driven by an increase in patients.

Current wording

We recognized net revenue from the sale of ARCALYST of $112.2 million for the three months ended September 30, 2024, compared to $64.8 million for the three months ended September 30, 2023, an increase of $47.4 million. The increase in product revenue was primarily driven by an increase in patients.

Previous wording

We recognized cost of goods sold of $22.9 million for the six months ended June 30, 2024, compared to $14.7 million for the six months ended June 30, 2023, an increase of $8.2 million. The increase in cost of goods sold relates primarily to the increase in sales of ARCALYST and $4.9 million related to the technology transfer of the manufacturing process, offset by a decrease in average cost per unit resulting from favorable production variances.

Current wording

We recognized cost of goods sold of $20.1 million for the three months ended September 30, 2024, compared to $9.1 million for the three months ended September 30, 2023, an increase of $11.0 million. The increase in cost of goods sold relates primarily to the increase in sales of ARCALYST and a $6.3 million increase related to the technology transfer of the manufacturing process.

Previous wording

Collaboration expenses were $50.8 million for the six months ended June 30, 2024, compared to $22.3 million for the six months ended June 30, 2023, an increase of $28.5 million. Collaboration expenses increased due to increased revenue from sales of ARCALYST and improved profitability under the Regeneron Agreement.

Current wording

Collaboration expenses were $29.3 million for the three months ended September 30, 2024, compared to $17.3 million for the three months ended September 30, 2023, an increase of $12.0 million. Collaboration expenses increased due to increased revenue from sales of ARCALYST.

Previous wording

The direct costs for our abiprubart program were $12.4 million during the three months ended June 30, 2024, compared to $11.6 million during the three months ended June 30, 2023, an increase of $0.7 million. The increase in expenses incurred primarily related to the manufacturing of clinical material, continuation of cohort four of our Phase 2 trial in RA and start-up costs of our Phase 2b clinical trial in Sjögren’s Disease during the three months ended June 30, 2024, as compared to the manufacturing of clinical material, initiation cost of cohort three and continuation of the first two cohorts of our Phase 2 trial in RA incurred during the three months ended June 30, 2023.

Current wording

The direct costs for our abiprubart program were $8.5 million during the three months ended September 30, 2024, compared to $5.5 million during the three months ended September 30, 2023, an increase of $3.0 million. The increase in expenses incurred primarily related to the initiation costs of our Phase 2b clinical trial in Sjögren’s Disease, manufacturing of clinical material and close-out of our Phase 2 trial in RA during the three months ended September 30, 2024, as compared to the manufacturing of clinical material, continuation of the first three cohorts and initiation of cohort four of our Phase 2 trial in RA incurred during the three months ended September 30, 2023.

Previous wording

The direct costs for our vixarelimab program were $0.3 million during the three months ended June 30, 2024, compared to $2.3 million during the three months ended June 30, 2023, a decrease of $2.0 million. The decrease in expenses was primarily related to the wind-down activities of our Phase 2b clinical trial in prurigo nodularis.

Current wording

The direct costs for our vixarelimab program were $0.2 million during the three months ended September 30, 2024, compared to $1.6 million during the three months ended September 30, 2023, a decrease of $1.5 million. The decrease in expenses was primarily related to the wind-down activities of our Phase 2b clinical trial in prurigo nodularis.

Previous wording

Unallocated research and development expenses were $10.6 million for the three months ended June 30, 2024, compared to $9.1 million for the three months ended June 30, 2023, an increase of $1.5 million. The increase of $1.5 million in unallocated research and development expenses was primarily due to an increase in early development activities. Personnel-related costs for the three months ended June 30, 2024 and 2023 included share-based compensation of $1.5 million and $1.4 million, respectively.

Current wording

Unallocated research and development expenses were $17.2 million for the three months ended September 30, 2024, compared to $8.2 million for the three months ended September 30, 2023, an increase of $9.0 million. The increase of $9.0 million in unallocated research and development expenses was primarily due to an increase in early development activities. Personnel-related costs for the three months ended September 30, 2024 and 2023 included share-based compensation of $1.6 million and $1.3 million, respectively.

Previous wording

Selling, general and administrative expenses were $81.1 million for the six months ended June 30, 2024, compared to $58.2 million for the six months ended June 30, 2023. In the second half of 2023, we expanded our ARCALYST salesforce to help drive further prescriber adoption and patient enrollments. The increase of $22.9 million was primarily due to an increase of $11.6 million in personnel-related costs, an increase in sales and marketing of $5.9 million largely attributable to the expansion of our salesforce and an increase in professional fees of $2.6 million largely attributable to the Redomiciliation. Personnel-related costs for the three months ended June 30, 2024 and 2023 included share-based compensation of $10.9 million and $9.2 million, respectively.

Current wording

Selling, general and administrative expenses were $46.4 million for the three months ended September 30, 2024, compared to $34.5 million for the three months ended September 30, 2023. In the second half of 2023, we expanded our ARCALYST salesforce to help drive further prescriber adoption and patient enrollments. The increase of $11.9 million was primarily due to an increase in sales and marketing of $8.0 million largely attributable to the expansion of our salesforce and an increase of $3.6 million in personnel-related costs. Personnel-related costs for the three months ended September 30, 2024 and 2023 included share-based compensation of $5.8 million and $5.0 million, respectively.

Previous wording

For the three months ended June 30, 2024, we recorded an income tax provision of $6.2 million relating primarily to income earned in the United Kingdom, Switzerland and the U.S., net of the Foreign Derived Intangible Income (“FDII”) deduction and U.S. federal and state research and development credits (“R&D Credits”) utilized. For the three months ended June 30, 2023, we recorded an income tax benefit of $16.2 million relating primarily to the release of the valuation allowance on our U.S. deferred tax assets offset by income earned in the United Kingdom and the U.S., net of the Foreign Derived Intangible Income (“FDII”) deduction and U.S. federal and state research and development credits (“R&D Credits”) utilized. We expect that our reported income tax expense for future periods will be higher due to the utilization of our deferred tax assets.

Current wording

For the three months ended September 30, 2024, we recorded an income tax provision of $5.5 million relating primarily to income earned in the United Kingdom (“UK”), Switzerland and the U.S., net of the Foreign Derived Intangible Income (“FDII”) deduction and U.S. federal and state research and development credits (“R&D Credits”) utilized. For the three months ended September 30, 2023, we recorded an income tax provision of $5.4 million relating primarily to income earned in the UK and the U.S., net of the FDII deduction and U.S. federal and state R&D Credits utilized. We expect that our reported income tax expense for future periods will be higher due to the utilization of our deferred tax assets.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023:

Previous wording

We recognized net revenue from the sale of ARCALYST of $182.3 million for the six months ended June 30, 2024, compared to $97.2 million for the six months ended June 30, 2023, an increase of $85.1 million. The increase in product revenue was primarily driven by an increase in patients.

Current wording

We recognized net revenue from the sale of ARCALYST of $294.5 million for the nine months ended September 30, 2024, compared to $162.0 million for the nine months ended September 30, 2023, an increase of $132.5 million. The increase in product revenue was primarily driven by an increase in patients.

Previous wording

We reported $6.2 million of license and collaboration revenue for the six months ended June 30, 2024, primarily driven by the achievement of a $5.0 million development milestone related to a third indication under the Genentech License Agreement, $0.7 million of products sold under the Rilonacept Huadong Collaboration Agreements, and $0.2 million of deferred revenue recognized related to the delivery of such materials. We reported $22.7 million of

Current wording

We reported $6.2 million of license and collaboration revenue for the nine months ended September 30, 2024, primarily driven by the achievement of a $5.0 million development milestone related to a third indication under the Genentech License Agreement, $0.7 million of products sold under the Rilonacept Huadong Collaboration Agreements, and $0.2 million of deferred revenue recognized related to the delivery of such materials. We reported $24.9 million of

Previous wording

license and collaboration revenue for the three months ended June 30, 2023, primarily driven by the achievement of a $15.0 million development milestone related to a new indication under the Genentech License Agreement.

Current wording

license and collaboration revenue for the nine months ended September 30, 2023, primarily driven by the achievement of a $15.0 million development milestone related to a new indication under the Genentech License Agreement.

Previous wording

We recognized cost of goods sold of $12.3 million for the three months ended June 30, 2024, compared to $7.7 million for the three months ended June 30, 2023, an increase of $4.6 million. The increase in cost of goods sold relates primarily to the increase in sales of ARCALYST and $2.8 million related to the technology transfer of the manufacturing process, offset by a decrease in average cost per unit resulting from favorable production variances.

Current wording

We recognized cost of goods sold of $43.0 million for the nine months ended September 30, 2024, compared to $23.8 million for the nine months ended September 30, 2023, an increase of $19.2 million. The increase in cost of goods sold relates primarily to the increase in sales of ARCALYST and a $10.7 million increase related to the technology transfer of the manufacturing process, offset by a decrease in average cost per unit resulting from favorable production variances.

Previous wording

Collaboration expenses were $30.0 million for the three months ended June 30, 2024, compared to $14.0 million for the three months ended June 30, 2023, an increase of $16.0 million. Collaboration expenses increased due to increased revenue from sales of ARCALYST and improved profitability under the Regeneron Agreement.

Current wording

Collaboration expenses were $80.1 million for the nine months ended September 30, 2024, compared to $39.6 million for the nine months ended September 30, 2023, an increase of $40.5 million. Collaboration expenses increased due to increased revenue from sales of ARCALYST and improved profitability under the Regeneron Agreement.

Previous wording

The direct costs for our abiprubart program were $27.5 million during the six months ended June 30, 2024, compared to $15.1 million during the six months ended June 30, 2023, an increase of $12.4 million. The increase in expenses incurred primarily related to the manufacturing of clinical material, continuation of cohort four of our Phase 2 trial in RA and start-up costs of our Phase 2b clinical trial in Sjögren’s Disease during the six months ended June 30, 2024, as compared to the manufacturing of clinical material, initiation cost of cohort three and continuation of the first two cohorts of our Phase 2 trial in RA incurred during the six months ended June 30, 2023.

Current wording

The direct costs for our abiprubart program were $35.9 million during the nine months ended September 30, 2024, compared to $20.6 million during the nine months ended September 30, 2023, an increase of $15.3 million. The increase in expenses incurred primarily related to the manufacturing of clinical material, continuation of cohort four and study wind-down activities of our Phase 2 trial in RA and start-up costs of our Phase 2b clinical trial in Sjögren’s Disease during the nine months ended September 30, 2024, as compared to the manufacturing of clinical material, continuation of the first two cohorts and initiation of cohorts three and four of our Phase 2 trial in RA incurred during the nine months ended September 30, 2023.

Previous wording

The direct costs for our vixarelimab program were $1.0 million during the six months ended June 30, 2024, compared to $4.3 million during the six months ended June 30, 2023, a decrease of $3.3 million. The decrease in expenses was primarily related to the wind-down activities of our Phase 2b clinical trial in prurigo nodularis.

Current wording

The direct costs for our vixarelimab program were $1.2 million during the nine months ended September 30, 2024, compared to $6.0 million during the nine months ended September 30, 2023, a decrease of $4.8 million. The decrease in expenses was primarily related to the wind-down activities of our Phase 2b clinical trial in prurigo nodularis.

Previous wording

Unallocated research and development expenses were $20.8 million for thesix months ended June 30, 2024, compared to $18.5 million for the six months ended June 30, 2023, an increase of $2.3 million. The increase of $2.3 million in unallocated research and development expenses was primarily due to an increase in early development activities. Personnel-related costs for the six months ended June 30, 2024 and 2023 included share-based compensation of $3.0 million and $2.8 million, respectively.

Current wording

Unallocated research and development expenses were $37.9 million for thenine months ended September 30, 2024, compared to $26.6 million for the nine months ended September 30, 2023, an increase of $11.3 million. The increase of $11.3 million in unallocated research and development expenses was primarily due to an increase in early development activities. Personnel-related costs for the nine months ended September 30, 2024 and 2023 included share-based compensation of $4.6 million and $4.1 million, respectively.

Previous wording

Selling, general and administrative expenses were $42.4 million for the three months ended June 30, 2024, compared to $29.2 million for the three months ended June 30, 2023. In the second half of 2023, we expanded our ARCALYST salesforce to help drive further prescriber adoption and patient enrollments. The increase of $13.2 million was primarily due to an increase of $5.6 million in personnel-related costs, an increase in sales and marketing of $4.4 million largely attributable to the expansion of our salesforce and an increase in professional fees of $1.5 million largely attributable to the Redomiciliation. Personnel-related costs for the three months ended June 30, 2024 and 2023 included share-based compensation of $5.5 million and $4.8 million, respectively.

Current wording

Selling, general and administrative expenses were $127.5 million for the nine months ended September 30, 2024, compared to $92.7 million for the nine months ended September 30, 2023. In the second half of 2023, we expanded our ARCALYST salesforce to help drive further prescriber adoption and patient enrollments. The increase of $34.8 million was primarily due to an increase of $15.2 million in personnel-related costs, an increase in sales and marketing of $13.9 million largely attributable to the expansion of our salesforce and an increase in professional fees of $2.2 million largely attributable to the Redomiciliation. Personnel-related costs for the nine months ended September 30, 2024 and 2023 included share-based compensation of $16.7 million and $14.2 million, respectively.

Previous wording

For the six months ended June 30, 2024, we recorded an income tax provision of $9.6 million relating primarily to income earned in the United Kingdom, Switzerland and the U.S., net of the Foreign Derived Intangible Income (“FDII”) deduction and U.S. federal and state research and development credits (“R&D Credits”) utilized. For the six months ended June 30, 2023, we recorded an income tax benefit of $13.3 million relating primarily to the release of the valuation allowance on our U.S. deferred tax assets offset by income earned in the United Kingdom and the U.S., net of the FDII deduction and R&D Credits utilized.

Current wording

For the nine months ended September 30, 2024, we recorded an income tax provision of $15.1 million relating primarily to income earned in the UK, Switzerland and the U.S., net of the FDII deduction and U.S. federal and state R&D Credits utilized. For the nine months ended September 30, 2023, we recorded an income tax benefit of $7.9 million relating primarily to the release of the valuation allowance on our U.S. deferred tax assets offset by income earned in the UK and the U.S., net of the FDII deduction and R&D Credits utilized.

Previous wording

As of June 30, 2024, our principal source of liquidity was cash, cash equivalents and short-term investments, which totaled $218.8 million. Net income (loss) was ($3.9) million and $2.7 million for the six months ended June 30, 2024 and 2023, respectively. We expect to incur operating losses for the foreseeable future.

Current wording

As of September 30, 2024, our principal source of liquidity was cash, cash equivalents and short-term investments, which totaled $223.8 million. Net loss was $34.3 million and $11.2 million for the nine months ended September 30, 2024 and 2023, respectively. We expect to incur operating losses for the foreseeable future.

Previous wording

Under various agreements with third parties, we have agreed to make milestone payments, pay royalties, pay annual maintenance fees and to meet due diligence requirements, each based upon specified events. Pursuant to the Regeneron Agreement, we have entered into a supply agreement with Regeneron to purchase both clinical and commercial product. We have committed to minimum payments to Regeneron of $20.3 million, all of which are due within one year. We have entered into lease agreements for office and laboratory space, and vehicles, with total future lease payments of $14.1 million, of which $3.8 million are due within one year. In connection with our ongoing technology transfer of ARCALYST drug substance manufacturing, we have entered into a Master Services Agreement and a Product Specific Agreement with Samsung. Our commitments under such agreements, which include the purchase of raw materials and related service fees, will obligate us to minimum payments of $144.7 million, $15.8 million of which are due within one year. We have additionally entered into agreements with several CDMOs to provide the Company with preclinical and clinical trial materials for our non-ARCALYST assets, which obligate us to minimum payments of $15.7 million, $7.2 million of which are due within one year.

Current wording

Under various agreements with third parties, we have agreed to make milestone payments, pay royalties, pay annual maintenance fees and to meet due diligence requirements, each based upon specified events. Pursuant to the Regeneron Agreement, we have entered into a supply agreement with Regeneron to purchase both clinical and commercial product. We have committed to minimum payments to Regeneron of $9.3 million, all of which are due within one year. We have entered into lease agreements for office and laboratory space, and vehicles, with total future lease payments of $13.1 million, of which $3.7 million are due within one year. In connection with our ongoing technology transfer of ARCALYST drug substance manufacturing, we have entered into a Master Services Agreement and a Product Specific Agreement with Samsung. Our commitments under such agreements, which include the purchase of raw materials and related service fees, will obligate us to minimum payments of $139.6 million, $16.0 million of which are due within one year. We have additionally entered into agreements with several CDMOs to provide the Company with preclinical and clinical trial materials for our non-ARCALYST assets, which obligate us to minimum payments of $38.0 million, $35.5 million of which are due within one year.

Previous wording

Net cash provided by operations was $9.2 million for the six months ended June 30, 2024, compared to net cash used in operating activities of $8.0 million for the six months ended June 30, 2023. The increase in cash provided by operating activities is primarily due to an increase in net contribution from higher ARCALYST sales, offset by a decrease in cash received from licensing agreements of $5.0 million.

Current wording

Net cash provided by operations was $6.9 million and $9.0 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease in cash provided by operating activities is primarily due to a decrease in cash received from licensing agreements of $20.0 million, offset by an increase in net contribution from higher ARCALYST sales.

Previous wording

Net cash used in investing activities was $21.3 million for the six months ended June 30, 2024, compared to net cash used in investing activities of $2.4 million for the six months ended June 30, 2023. The increase in net cash used in investing activities was driven by managing our cash and short-term investments portfolio mix.

Current wording

Net cash used in investing activities was $27.6 million for the nine months ended September 30, 2024, compared to net cash used in investing activities of $14.7 million for the nine months ended September 30, 2023. The increase in net cash used in investing activities was driven by managing our cash and short-term investments portfolio mix.

Previous wording

During the six months ended June 30, 2024 and 2023, net cash provided by financing activities was $3.4 million and $0.2 million, respectively, consisting of proceeds from the exercise of share options offset by payments in connection with Common Stock tendered for employee tax obligations.

Current wording

During the nine months ended September 30, 2024 and 2023, net cash provided by financing activities was $10.1 million and $0.8 million, respectively, consisting of proceeds from the exercise of share options offset by payments in connection with Common Stock tendered for employee tax obligations.

Previous wording

●make milestone or other payments under any current or future license, acquisition, collaboration or other strategic transaction agreement;

Current wording

●make milestone or other payments under any current or future license, acquisition, collaboration or other strategic transaction agreements;