Instil Bio, Inc.

Previous wording

ImmuneOnco is conducting a Phase I open label trial in China of AXN-2510/IMM2510 as monotherapy in patients with advanced solid tumors that have failed prior therapies, including triple-negative breast cancer, or TNBC, squamous non-small cell lung cancer, or NSCLC, hepatocellular carcinoma, renal cell carcinoma, and rare solid tumors including soft tissue sarcomas and thymic cancer. As of January 13, 2025, ImmuneOnco announced over 100 patients have been enrolled in this clinical trial.

Current wording

ImmuneOnco is conducting a Phase 1 open label trial in China of AXN-2510/IMM2510 as monotherapy in patients with advanced solid tumors that have failed prior therapies, including triple-negative breast cancer, or TNBC, non-small cell lung cancer, or NSCLC, hepatocellular carcinoma, renal cell carcinoma, and rare solid tumors including soft tissue sarcomas and thymic cancer. As of January 13, 2025, ImmuneOnco announced over 100 patients have been enrolled in this clinical trial.

Previous wording

ImmuneOnco is also conducting a Phase 1 open label clinical trial of AXN-2510/IMM2510 in combination with chemotherapy in patients with advanced/metastatic NSCLC. In January 2025, ImmuneOnco announced that the first patient had been dosed in the safety run-in and is enrolling patients with first-line advanced/metastatic NSCLC in this trial.

Current wording

ImmuneOnco is also conducting a Phase 2 open label clinical trial of AXN-2510/IMM2510 in combination with chemotherapy in patients with advanced/metastatic NSCLC. On July 31, 2025, ImmuneOnco announced preliminary safety and efficacy data from the ongoing Phase 2 open-label, multicenter study of IMM2510/

Previous wording

Since inception, we have had significant operating losses. Our net loss was $28.2 million for the three months ended March 31, 2025. As of March 31, 2025, we had an accumulated deficit of $683.3 million. As of March 31, 2025, we had cash, cash equivalents, restricted cash, marketable securities and long-term investments of $111.8 million, which consists of $15.4 million in cash and cash equivalents, $1.0 million in restricted cash, $88.3 million in marketable securities and $7.2 million in long-term investments. We expect to continue to incur net losses for the foreseeable future.

Current wording

Since inception, we have had significant operating losses. Our net loss was $21.4 million for the three months ended June 30, 2025 and $49.6 million for the six months ended June 30, 2025. As of June 30, 2025, we had an accumulated deficit of $704.7 million. As of June 30, 2025, we had cash, cash equivalents, restricted cash, marketable securities and long-term investments of $103.6 million, which consists of $7.7 million in cash and cash equivalents, approximately $0.2 million in restricted cash, $84.1 million in marketable securities and $11.7 million in long-term investments. We expect to continue to incur net losses for the foreseeable future.

Previous wording

Our development efforts are focused on advancing AXN-2510/IMM2510 and we expect to continue to pursue additional promising therapeutic in-licensing or acquisition opportunities.

Current wording

Our development efforts are focused on advancing AXN-2510/IMM2510 and we may pursue additional promising therapeutic in-licensing or acquisition opportunities.

Previous wording

Restructuring and impairment charges for the three months ended March 31, 2025 primarily consist of an impairment loss recognized on long-lived assets held for sale in connection with listing our Tarzana facility for sale in March 2025, partially offset by a settlement gain on terminated contracts.

Current wording

Restructuring and impairment charges for the six months ended June 30, 2025 primarily consist of contract fees related to terminated contracts, and an impairment loss recognized on long-lived assets held for sale in connection with listing our Tarzana facility for sale in March 2025.

Previous wording

Restructuring and impairment charges for the three months ended March 31, 2024 consist primarily of a loss on contract terminations, impairment loss recognized on long-lived assets held for sale, impairment loss on right-of-use asset and employee termination costs.

Current wording

Restructuring and impairment charges for the six months ended June 30, 2024 consist primarily of employee termination costs, contract terminations, and impairment loss recognized on long-lived assets held for sale.

Previous wording

As a result of the Plan and the impairment loss related to listing our Tarzana facility for sale, we incurred restructuring and impairment charges of $16.1 million during the three months ended March 31, 2025.

Current wording

As a result of the Plan and the impairment loss related to listing our Tarzana facility for sale, we incurred restructuring and impairment charges of $16.6 million during the six months ended June 30, 2024.

Previous wording

We are subject to income taxes in the United States and the foreign jurisdiction where we operate, the United Kingdom. The United Kingdom has statutory tax rates that differ from those in the United States. Accordingly, our effective tax rates will vary depending on the relative proportion of United Kingdom to United States income, the availability of research and development tax credits, changes in the valuation of our deferred tax assets and liabilities and changes in tax laws.

Current wording

We are subject to income taxes in the United States and the United Kingdom. The United Kingdom has statutory tax rates that differ from those in the United States. Accordingly, our effective tax rates will vary depending on the relative proportion of United Kingdom to United States income, the availability of research and development tax credits, changes in the valuation of our deferred tax assets and liabilities and changes in tax laws.

Previous wording

•$0.8 million decrease in expenses related to facilities and overhead, depreciation, and other expenses due to strategic reductions made in these areas; partially offset by

Current wording

•$1.0 million decrease in expenses related to facilities and overhead, depreciation, and other expenses.

Previous wording

General and administrative expenses were $9.1 million and $12.4 million for the three months ended March 31, 2025 and 2024, respectively. The net decrease of $3.3 million was primarily due to:

Current wording

General and administrative expenses were $6.2 million and $10.7 million for the three months ended June 30, 2025 and 2024, respectively. The net decrease of $4.5 million was primarily due to:

Previous wording

•$2.6 million decrease in employee-related costs from reduced headcount, consisting primarily of a $1.9 million decrease in wages, benefits and other employee-related expenses and a $0.7 million decrease in stock-based compensation expense; and

Current wording

•$2.3 million decrease in costs from reduced headcount, consisting of decreases in wages, benefits, and other employee related expenses of $0.3 million and stock-based compensation expense of $2.0 million;

Previous wording

•$0.2 million increase in consulting and professional services costs.

Current wording

•$0.8 million decrease in consulting and professional services costs.

Previous wording

Interest income, interest expense, other rental income and other income (expense), net were $2.4 million of income and $0.3 million of expense for the three months ended March 31, 2025 and 2024, respectively. The increase of approximately $2.7 million was primarily due to:

Current wording

Interest income, interest expense, other rental income and other income (expense), net was $2.0 million of income and $0.8 million of expense for the three months ended June 30, 2025 and 2024, respectively. The increase of $2.8 million was primarily due to:

Previous wording

•$2.2 million increase in rental income related to our Tarzana facility;

Current wording

•$2.2 million increase in rental income related to the Tarzana facility;

Previous wording

•$0.9 million decrease in interest expense from our note payable;

Current wording

•$0.4 million decrease in interest expense from our note payable; partially offset by

Previous wording

•$1.5 million increase in costs related to research and clinical development activities from our ImmuneOnco collaboration.

Current wording

•$6.3 million increase in costs related to research and clinical development activities from our ImmuneOnco collaboration; partially offset by,

Previous wording

Research and development expenses were $5.4 million and $7.3 million for the three months ended March 31, 2025 and 2024, respectively. The net decrease of $1.9 million was primarily due to:

Current wording

General and administrative expenses were $15.3 million and $23.1 million for the six months ended June 30, 2025 and 2024, respectively. The net decrease of $7.9 million was primarily due to:

Previous wording

Restructuring and impairment charges were approximately $16.1 million and $4.3 million for the three months ended March 31, 2025 and 2024, respectively. The net increase of approximately $11.8 million was primarily due to:

Current wording

Restructuring and impairment charges were $16.6 million and $4.8 million for the six months ended June 30, 2025 and 2024, respectively. The net increase of $11.8 million was primarily due to:

Previous wording

•$0.3 million increase in gain on foreign currency transactions; partially offset by

Current wording

•$0.7 million increase in gain on foreign currency transactions;

Previous wording

Since our inception, we have not generated any revenue from product sales and we have incurred significant operating losses. We do not have any products that have achieved regulatory marketing approval and we do not expect to generate revenue from commercial sales of any product candidates for several years, if ever.

Current wording

Since our inception, we have not generated any revenue from product sales and we have incurred significant operating losses. We do not have any products that have achieved regulatory marketing approval and we do not expect to generate revenue from commercial sales of any product candidates for at least several years, if ever.

Previous wording

In June 2022, our wholly owned subsidiaries, Complex Therapeutics Mezzanine LLC, and Complex Therapeutics LLC, entered into a mortgage construction loan and mezzanine construction loan, or together, the Construction Loans, secured by Complex Therapeutics LLC’s Tarzana, California land and building. Construction of the Tarzana facility was completed and the facility has been leased to AstraZeneca Pharmaceuticals LP, or Tenant. The initial principal amount of the Construction Loans was $52.1 million, with additional future principal of up to $32.9 million to fund then ongoing construction costs. During the year ended December 31, 2024, Complex Therapeutics LLC refinanced the outstanding principal amount under the Construction Loans and we treated it as an extinguishment for accounting purposes. On December 20, 2024, or the Closing Date, Complex Therapeutics LLC entered into a Term Loan Agreement and related loan documents with Midland National Life Insurance Company, or Lender, pursuant to which Lender loaned Complex Therapeutics LLC a term loan in the principal amount of $85.6 million, or the Loan, to refinance the Construction Loans secured by the facility in Tarzana, California. Substantially all of the Loan proceeds were used to repay in full the Construction Loans. As of March 31, 2025, the outstanding principal amount under the Loan was $85.6 million and unamortized debt issuance costs were $1.4 million.

Current wording

In June 2022, our wholly owned subsidiaries, Complex Therapeutics Mezzanine LLC, and Complex Therapeutics LLC, entered into a mortgage construction loan and mezzanine construction loan, or together, the Construction Loans, secured by Complex Therapeutics LLC's Tarzana, California land and building. Construction of the Tarzana facility was completed and the facility has been leased to AstraZeneca Pharmaceuticals LP, or Tenant. The initial principal amount of the Construction Loans was $52.1 million, with additional future principal of up to $32.9 million to fund then ongoing construction costs. During the year ended December 31, 2024, Complex Therapeutics LLC refinanced the outstanding principal amount under the Construction Loans and we treated it as an extinguishment for accounting purposes. On December 20, 2024, or the Closing Date, Complex Therapeutics LLC entered into a Term Loan Agreement and related loan documents with Midland National Life Insurance Company, or Lender, pursuant to which Lender loaned Complex Therapeutics LLC a term loan in the principal amount of $85.6 million, or the Loan, to refinance the Construction Loans secured by the facility in Tarzana, California. Substantially all of the Loan proceeds were used to repay in full the Construction Loans. As of June 30, 2025, the outstanding principal amount under the Loan was $85.6 million and unamortized debt issuance costs were $1.2 million.

Previous wording

In March 2025, we entered into an Open Market Sale Agreement SM, or the ATM Sales Agreement, with Jefferies LLC, or Jefferies, as sales agent, under which we may offer and sell, from time to time, shares of our common stock, or ATM Shares, through Jefferies, or the ATM Offering. In March 2025, we filed a sales agreement prospectus to our registration statement on Form S-3 filed with the SEC in November 2024, for the issuance and sale of up to $100.0 million of shares of our common stock under the ATM Sales Agreement. Under the ATM Sales Agreement, Jefferies may sell the ATM Shares by methods deemed to be an “at the market offering,” as defined in Rule 415(a)(4) promulgated under the Securities Exchange Act of 1934, as amended. We may sell the ATM Shares in amounts and at times to be determined by us from time to time subject to the terms and conditions of the ATM Sales Agreement, but we have no obligation to sell any of the ATM Shares in the ATM Offering.

Current wording

In March 2025, we entered into an Open Market Sale Agreement SM, or the ATM Sales Agreement, with Jefferies LLC, or Jefferies, as sales agent, under which we may offer and sell, from time to time, shares of our common stock through Jefferies, with an aggregate offering price of up to $100.0 million by methods deemed to be an “at the market offering,” or the ATM Program.

Previous wording

As of March 31, 2025, we had cash, cash equivalents, restricted cash, marketable securities, and long-term investments of $111.8 million, which consisted of $15.4 million in cash and cash equivalents, approximately $1.0 million in restricted cash, $88.3 million in marketable securities and $7.2 million in long-term investments. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation.

Current wording

As of June 30, 2025, we had cash and cash equivalents, restricted cash, marketable securities and long-term investments of $103.6 million, which consisted of $7.7 million in cash and cash equivalents, approximately $0.2 million in restricted cash, $84.1 million in marketable securities and $11.7 million in long-term investments. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation.

Previous wording

Based on our current operating plan, we believe our existing cash, cash equivalents, restricted cash, marketable securities and long-term investments will be sufficient to fund our operating expenses and capital expenditure requirements beyond 2026. In March 2025, the Board of Directors approved a plan to sell the Tarzana facility and we listed our Tarzana facility for sale. The facility is leased, and Tenant has a right of first offer to purchase it. If we are successful in selling the Tarzana facility, such a transaction could extend our expected cash runway. We have based this estimate on assumptions that may prove to be wrong, we may not be successful in securing a sale of the Tarzana facility, or at all, and we could utilize our available capital resources sooner than we expect.

Current wording

Based on our current operating plan, we believe our existing cash, cash equivalents, restricted cash, marketable securities and long-term investments will be sufficient to fund our operating expenses and capital expenditure requirements beyond 2026. In March 2025, the Board of Directors approved a plan to sell the Tarzana facility and we listed our Tarzana facility for sale. The facility is leased, and Tenant has a right of first offer to purchase it. If we are successful in selling the Tarzana facility, such a transaction could potentially extend our expected cash runway. We have based this estimate on assumptions that may prove to be wrong, we may not be successful in securing a sale of the Tarzana facility in a timely manner, or at all, and we could utilize our available capital resources sooner than we expect.

Previous wording

As discussed above, in August 2024, we entered into the IO Collaboration Agreement with ImmuneOnco. Among other things, pursuant to that agreement, Axion Bio made an up-front payment of $10.0 million to ImmuneOnco and also prepaid $5.0 million in development costs. As of March 31, 2025, the $5.0 million prepayment was fully expensed. An additional $5.0 million prepayment, of which $0.2 million in development costs was accrued as of March 31, 2025 and subsequently paid to ImmuneOnco during the quarter ended June 30, 2025. ImmuneOnco is eligible to receive additional potential near-term payments of up to $30.0 million, up to $2.1 billion in commercial, development and regulatory milestones (including up to $270.0 million in longer term development and regulatory milestones and up to $1.8 billion in commercial milestones) plus single-digit to low double-digit percentage royalties on global net sales of the licensed products outside of Greater China.

Current wording

ImmuneOnco is eligible to receive additional potential near-term payments of up to $20.0 million, up to $2.1 billion in commercial, development and regulatory milestones (including up to $270.0 million in longer term development and regulatory milestones and up to $1.8 billion in commercial milestones) plus single-digit to low double-digit percentage royalties on global net sales of the licensed products outside of Greater China.

Previous wording

We lease operating spaces in the United States and the United Kingdom under non-cancelable operating lease arrangements that expire on various dates through 2026. These arrangements require us to pay certain operating expenses, such as taxes, repairs and insurance, and contain landlord or tenant incentives or allowances, renewal and escalation clauses. As of March 31, 2025, our future minimum lease payments under committed or non-cancelable lease agreements were $2.8 million.

Current wording

We lease operating spaces in the United States and the United Kingdom under non-cancelable operating lease arrangements that expire on various dates through 2026. These arrangements require us to pay certain operating expenses, such as taxes, repairs, and insurance and contain landlord or tenant incentives or allowances, renewal and escalation clauses. As of June 30, 2025, our future minimum lease payments under committed or non-cancelable lease agreements were $0.5 million.

Previous wording

Cash used in operating activities for the three months ended March 31, 2025 was $4.2 million, which consisted of the net loss of $28.2 million, partially offset by a $3.6 million net change to our net operating assets and liabilities and $20.4 million in non-cash charges and other adjustments to reconcile net loss to net cash used in operating activities. The net change in our operating assets and liabilities was primarily due to an increase of $6.5 million in prepaid expenses and other current assets, an increase of $1.3 million in accrued rent receivable and other long-term assets, a decrease of $0.2 million in operating lease liabilities, a decrease of $0.4 million in accounts payable, and a decrease of $1.0 million in accrued restructuring liabilities, accrued expenses and other current liabilities. The non-cash charges primarily consisted of stock-based compensation expense of $3.5 million, depreciation expense of $0.5 million, impairment of property, plant and equipment of $16.6 million, and non-cash interest expense of $0.2 million, offset by accretion on invested securities of $0.2 million and change in foreign exchange remeasurement of $0.2 million.

Current wording

Cash used in operating activities for the six months ended June 30, 2025 was $19.0 million, which consisted of the net loss of $49.6 million, and a $1.4 million net change to our net operating assets and liabilities, partially offset by $32.0 million in non-cash charges and other adjustments to reconcile net loss to net cash used in operating activities. The non-cash charges primarily consisted of impairment of property, plant and equipment of $16.6 million, in-process research and development expenses of $10.0 million, stock-based compensation expense of $5.3 million, depreciation expense of $0.5 million, and non-cash interest expense of $0.4 million, partially offset by a change in foreign exchange remeasurement of $0.6 million and accretion on invested securities of $0.2 million. The net change in our operating assets and liabilities was primarily due to an increase of $3.2 million in accrued expenses and other current liabilities, a decrease of $2.4 million in other long-term assets, a decrease of $1.5 million in operating lease liabilities, and a decrease of $0.1 million in accounts payable, partially offset by a decrease of $5.8 million in prepaid expenses and other current assets.

Previous wording

Cash used in operating activities for the three months ended March 31, 2024 was $14.4 million, which consisted of the net loss of $24.3 million, partially offset by a $1.8 million net change to our net operating assets and liabilities and $8.1 million in non-cash charges and other adjustments to reconcile net loss to net cash used in operating activities. The net change in our operating assets and liabilities was primarily due to an increase of $1.3 million in prepaid expenses and other current assets, a decrease of $0.2 million in other long-term assets, a decrease of $0.2 million in operating lease liabilities, and an increase of $0.8 million in accrued restructuring liabilities. The non-cash charges primarily consisted of stock-based compensation expense of $4.5 million, impairment of fixed assets of $2.5 million, impairment of right-of-use assets of $0.2 million, depreciation expense of $1.0 million, change in fair value of contingent consideration of $0.1 million, change in foreign exchange remeasurement of $0.2 million, impairment of leasehold improvements of $0.3 million, and non-cash interest expense of $0.3 million, offset by accretion on invested securities of $1.1 million.

Current wording

Cash used in operating activities for the six months ended June 30, 2024 was $25.0 million, which consisted of the net loss of $39.2 million, partially offset by $13.4 million in non-cash charges and other adjustments, and a $0.8 million net change to our net operating assets and liabilities to reconcile net loss to net cash used in operating activities. The non-cash charges primarily consisted of stock-based compensation expense of $8.7 million, impairment of property, plant and equipment, impairment of right-of-use assets, and loss on disposal of property and equipment of $3.3 million, change in fair value of interest cap derivative instrument and non-cash interest expense of $1.4 million, and depreciation expense of $2.0 million, partially offset by accretion on invested securities of $2.4 million. The net change in our operating assets and liabilities was primarily due to a decrease of $0.2 million in accrued expenses and other current liabilities, a decrease of $2.5 million in prepaid expenses and other current assets, an increase of $0.9 million in other long-term assets, and a decrease of $0.6 million in operating lease liabilities.

Previous wording

Cash provided by investing activities for the three months ended March 31, 2025 was $9.6 million, consisting primarily of $9.2 million related to redemptions from marketable securities and $0.4 million of cash received from the sale of assets classified as held for sale.

Current wording

Cash provided by investing activities for the six months ended June 30, 2025 was $9.2 million, consisting primarily of $8.8 million of cash provided by marketable securities investments and $0.4 million of cash received from held for sale assets.

Previous wording

Cash provided by financing activities for the three months ended March 31, 2025 was $0.2 million, which was primarily related to proceeds from the exercise of stock options of $0.4 million, offset by loan agreement closing costs of $0.2 million.

Current wording

Cash provided by financing activities for the six months ended June 30, 2025 was $6.9 million, and primarily consisted of net proceeds from our ATM Program of $6.6 million and net proceeds from the exercise of stock options of $0.5 million, partially offset by loan agreement closing costs of $0.2 million.

Previous wording

Cash provided by financing activities for the three months ended March 31, 2024 was nil.

Current wording

Cash provided by financing activities for the six months ended June 30, 2024 was nil.

Previous wording

For a description of critical accounting policies that require significant judgments and estimates during the preparation of our financial statements, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” and Note 2 to our Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024 and Note 2 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10Q.

Current wording

For a description of critical accounting policies that require significant judgments and estimates during the preparation of our financial statements, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” and Note 2 to our Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024 and Note 2 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.