UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2023 OR ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to . Commission File Number: 001-37985 ANAPTYSBIO, INC. (Exact name of registrant as specified in its charter) Delaware 20-3828755 (State or other jurisdiction of incorp ...

Product Development and Clinical Trials - The company is developing therapeutic antibodies, including rosnilimab and ANB032, which are currently in clinical development stages[83]. - The company reported that the initial Phase 2a clinical trial results for etokimab were not representative of later Phase 2b trial results, leading to the discontinuation of its development[83]. - The company has commenced clinical trials for imsidolimab in GPP, with plans for Phase 3 trials enrolling approximately 45 moderate-to-severe GPP patients[87]. - Product candidates typically take 10 to 15 years from discovery to approval, with numerous potential delays due to regulatory, manufacturing, and clinical trial challenges[89]. - The company has limited experience in conducting pivotal Phase 3 clinical trials and commercializing biotechnology products, which may hinder future viability[93]. - The company may face delays in obtaining required regulatory approvals, which would impair its ability to commercialize and generate revenue from its product candidates[87]. - The development of product candidates requires substantial investment in clinical trials, regulatory approvals, and marketing efforts before generating revenue[92]. - The company may not successfully expand its pipeline of product candidates, which could adversely affect future revenue and business prospects[92]. - Competitors may achieve faster regulatory approval, establishing a strong market position before the company can enter the market[96]. - The company may face delays in obtaining marketing approval due to insufficient data or regulatory requirements, impacting the commercialization timeline[90]. - The company outsources the manufacturing of its product candidates and any unexpected loss of supply could lead to significant delays in clinical trials[119]. Financial Performance and Capital Requirements - The company has no products approved for commercial sale and has not generated any revenue or profit from sales of its product candidates[81]. - For the year ended December 31, 2022, collaboration revenue was $10.3 million, and the net loss was $128.7 million, with an accumulated deficit of $450.5 million[102]. - The company has a history of operational losses and may not achieve or sustain profitability without additional capital[81]. - The company expects to continue incurring significant expenses and increasing operating losses for the foreseeable future[103]. - Additional capital will be required to finance operations, and failure to secure funding could lead to significant delays or discontinuation of product development[104]. - The company anticipates that existing cash and investments will fund operations for at least the next 12 months, but rapid capital consumption may occur[105]. - The company has financed operations primarily through public offerings and royalty monetization agreements, indicating reliance on external funding sources[103]. Competition and Market Risks - The company faces significant competition, and if competitors develop more effective or safer products, it could negatively impact commercial opportunities[81]. - Significant competition exists in the biotechnology industry, with competitors having greater financial and technical resources, potentially impacting commercial opportunities[95]. - The market acceptance of approved product candidates is uncertain and depends on factors such as efficacy, safety, timing of introduction, and reimbursement availability[97]. - If product candidates do not achieve adequate market acceptance, the company may not generate sufficient revenue to remain profitable[98]. - The company faces significant competition for skilled personnel, which is critical for the success of product development and commercialization efforts[108]. Regulatory and Compliance Challenges - The company has limited data regarding the safety profile of its product candidates when dosed in humans, which may affect regulatory approval[85]. - Regulatory approvals will require ongoing compliance and could impose significant post-marketing requirements, affecting the company's operations[122]. - The company must navigate complex healthcare laws and regulations that could expose it to criminal sanctions and civil penalties, impacting profitability[131]. - The company is subject to extensive federal and state health care laws, including the federal False Claims Act, which imposes penalties for presenting false claims to the government[132]. - The company may incur substantial civil and criminal penalties due to violations of advertising and promotion regulations, with fines exceeding $1.0 billion in past cases[125]. - The company may face challenges in obtaining timely foreign regulatory approvals, which could diminish the commercial prospects of its product candidates[125]. - Legislative reforms, such as the IRA, may impose price negotiations and penalties for price increases, affecting the company's pricing strategies[129]. Intellectual Property and Legal Risks - The company has filed numerous patent applications, but the patent prosecution process is expensive and time-consuming, with no guarantee of obtaining desired patent rights[136]. - The company may face challenges in protecting its intellectual property rights, which could impact its competitive position in the market[136]. - The lifespan of patents is generally 20 years from the earliest filing date, which may not provide sufficient protection against competition from generics or biosimilars[136]. - Changes in patent law, such as the transition to a "first-to-file" system, could increase uncertainties and costs related to patent applications and enforcement[140]. - Legal proceedings to enforce intellectual property rights can be costly and time-consuming, with the risk of unfavorable outcomes impacting business operations[144]. - The company relies on trade secrets and non-disclosure agreements to protect its proprietary information, but breaches could lead to significant costs and distractions[151]. Operational and Supply Chain Risks - The company depends on a small number of suppliers for key raw materials, and any loss of these suppliers could materially affect its business[120]. - Risks associated with large-scale manufacturing could severely impact the company's ability to meet clinical trial and commercialization needs[100]. - The reliance on third parties for clinical trials and studies may lead to delays and adversely affect the company's business prospects[117]. - The company relies on third parties for the commercialization of its product candidates, and any failure to establish collaborations could adversely affect future product revenue[114]. Stockholder and Market Considerations - The stock price of the company has been volatile, influenced by various factors including competitive products and regulatory actions[154]. - The company has broad discretion in using net proceeds from public offerings, which may not enhance stockholder value[156]. - The company does not intend to pay dividends, limiting returns to stock appreciation[163]. - Provisions in the company's bylaws may discourage changes in control, potentially depressing stock price[164]. - The company is classified as a "smaller reporting company," which may result in reduced disclosure obligations, potentially making its stock less attractive to investors[169].

Financial Performance and Capital Requirements - The company has no products approved for commercial sale and has not generated any revenue or profit from sales of its product candidates[93] - The company has no approved products and has incurred significant operating losses every year since inception, except for fiscal year 2014[118] - The company expects to continue incurring significant expenses and increasing operating losses for the foreseeable future[118] - The company reported collaboration revenue of $63.2 million for the year ended December 31, 2021, with a net loss of $57.8 million, resulting in an accumulated deficit of $321.8 million[118] - The company anticipates that its research and development expenses will increase substantially as it continues to identify new clinical candidates and conduct clinical trials[119] - The company may require additional capital to finance operations, which may not be available on acceptable terms, potentially impacting product development and commercialization[119] - The company expects significant additional capital will be needed for planned operations, including clinical trials and commercialization efforts, which may lead to dilution of existing stockholders[177] - The company has approximately $293.4 million in federal net operating losses (NOLs) as of December 31, 2021, which can be carried forward to offset taxable income from 2028 to 2037[184] - The company does not intend to pay dividends on its common stock, limiting returns to stock appreciation[180] Clinical Development and Regulatory Challenges - The company has a limited history of conducting clinical trials and no history of commercializing biotechnology products, which may complicate future viability assessments[93] - The company has recently discontinued clinical development of imsidolimab for certain indications due to slower than anticipated patient enrollment[96] - The company currently has no marketing and sales force, which may hinder effective commercialization of its product candidates[93] - The company has only completed Phase 1 and Phase 2 clinical trials with imsidolimab, with ongoing trials for imsidolimab, rosnilimab, and ANB032[99] - The planned Phase 3 trials for imsidolimab will enroll approximately 45 moderate-to-severe GPP patients to demonstrate efficacy and safety[101] - Regulatory authorities may refuse to accept applications or require additional studies, potentially delaying or preventing marketing approval[103] - The company focuses on a limited number of internal product candidates due to financial and managerial resource constraints[104] - The company may forego or delay pursuing other product candidates that could have greater commercial potential due to current resource allocation decisions[104] - The company may encounter unfavorable third-party reimbursement practices, impacting the affordability of treatments for patients[143] - The company faces risks related to obtaining international regulatory approvals, which may involve additional testing and could delay product introductions[140] Competition and Market Dynamics - The company faces significant competition, and if competitors develop more effective or less expensive products, commercial opportunities may be negatively impacted[93] - Company faces competition from major multinational pharmaceutical and biotechnology companies with greater resources and experience in clinical testing and regulatory approvals[108] - Competitors for GPP include therapies such as secukinumab (Cosentyx) and ustekinumab (Stelara), while acne treatments include retinoids and antibiotics[109] - The biotechnology industry is characterized by rapid technological change, and failure to keep pace may hinder competitive effectiveness[111] - The company’s product candidates may not achieve adequate market acceptance, which is crucial for commercial success[112] - Market acceptance will depend on factors such as efficacy, safety profile, and cost of treatment compared to alternatives[112] Operational Risks and Dependencies - The company relies on third-party manufacturers for production, and any difficulties they encounter could delay clinical trials or product supply[93] - The company relies on third parties for manufacturing and supply of product candidates, making it vulnerable to disruptions that could adversely affect business operations[133] - The company depends on a small number of suppliers for key raw materials, and any loss or failure of these suppliers could materially impact its business[135] - The company has limited data regarding the safety profile of its product candidates when dosed in humans, which may affect regulatory approval[93] - The company must attract and retain highly skilled employees to succeed in its operations[93] - The company faces significant competition for qualified personnel, which is critical for the success of its product development efforts[122] Intellectual Property and Legal Risks - The company has filed numerous patent applications to protect its intellectual property rights, which are crucial for competitive advantage[152] - The company is involved in numerous legal proceedings regarding intellectual property rights, which can be expensive and time-consuming, potentially harming business and financial results[161] - The company may face claims from third parties alleging infringement of their intellectual property rights, which could block the development and commercialization of product candidates[164] - The company relies on trade secrets and proprietary information to maintain its competitive position, but breaches of confidentiality agreements could lead to significant risks[167] - The patent prosecution process is expensive and time-consuming, with potential failure to identify patentable aspects of inventions[153] - The company may not be able to protect its intellectual property rights globally, as enforcement varies by country[154] Compliance and Regulatory Environment - The company must comply with extensive regulatory requirements for manufacturing, labeling, and distribution post-approval, which could impose operational burdens[138] - Compliance with healthcare laws and regulations may expose the company to criminal sanctions, civil penalties, and reputational harm[148] - The company is subject to the federal Anti-Kickback Statute and other healthcare fraud laws, which could impact its marketing and sales arrangements[149] - The company may need to conduct expensive pharmaco-economic studies to demonstrate the cost-effectiveness of its products to obtain reimbursement[144] - Legislative reforms in healthcare could increase the difficulty and costs associated with obtaining marketing approvals and affect pricing strategies[145] - The company anticipates that compliance with evolving laws and regulations will increase general and administrative expenses[175] Market and Stock Performance - The market price of the company's stock has been volatile, influenced by various factors including regulatory actions and competitive product success[170] - The company has broad discretion in the use of net proceeds from public offerings, which may not necessarily enhance stockholder value[173] - The company is currently subject to securities litigation, which could result in substantial costs and divert management's attention[174] - The company is classified as a "smaller reporting company," which may result in reduced disclosure obligations and potentially make its stock less attractive to investors[185]

Clinical Trials and Research - Imsidolimab achieved a primary endpoint improvement in the clinical global impression scale (CGI) for 6 of 8 (75%) patients in the GALLOP clinical trial[75]. - The modified Japanese Dermatology Association Severity Index (mJDA-SI) score decreased by an average of 29% on Day 8 and 54% on Day 29 in the GALLOP clinical trial[75]. - The company plans to initiate Phase 3 registrational trials for imsidolimab for GPP, called GEMINI-1 and GEMINI-2, in Q3 2021[76]. - The RADIANCE study is a global registry of GPP patients aimed at improving understanding of the patient journey and assisting in future clinical trial enrollment[77]. - A Phase 2 clinical trial of imsidolimab for moderate-to-severe acne (ACORN) will involve 120 patients, with top-line data expected in H1 2022[78]. - A Phase 2 clinical trial of imsidolimab for hidradenitis suppurativa (HARP) will also involve 120 patients, with top-line data anticipated in H2 2022[79]. Financial Performance and Revenue - The company has received approximately $205.3 million in cash receipts from collaborations, including a $20.0 million milestone payment for the FDA approval of JEMPERLI[84]. - JEMPERLI is projected to have peak year annual sales estimates of £1-£2 billion according to GSK[84]. - The company amended its collaboration with GSK to increase royalties on global net sales of JEMPERLI to 8% on sales below $1 billion and 12-25% on sales above $1 billion[84]. - The company anticipates additional milestone payments of $15.0 million and $165.0 million upon achieving certain regulatory and commercial milestones for JEMPERLI[84]. - Collaboration revenue for Q2 2021 was $30.0 million, compared to $0 million in Q2 2020, primarily from milestone payments related to JEMPERLI[97]. - Milestone revenue for the six months ended June 30, 2021, was $40.0 million, compared to $15.0 million in the same period of 2020[97]. Expenses and Cash Flow - Research and development expenses increased to $25.3 million in Q2 2021 from $17.9 million in Q2 2020, driven by a $4.5 million rise in clinical expenses[98]. - Total research and development expenses for the six months ended June 30, 2021, were $49.5 million, up from $38.9 million in the same period of 2020, reflecting a $10.6 million increase[98]. - General and administrative expenses rose to $5.2 million in Q2 2021 from $4.7 million in Q2 2020, mainly due to increased personnel costs[100]. - Interest income decreased to $0.1 million in Q2 2021 from $1.1 million in Q2 2020, attributed to lower interest rates and reduced investment balances[101]. - As of June 30, 2021, the company had $396.3 million in cash, cash equivalents, and investments[103]. - Net cash used in operating activities for the six months ended June 30, 2021, was $13.6 million, compared to $34.7 million for the same period in 2020[107]. - Net cash provided by investing activities during the six months ended June 30, 2021, was $94.7 million, an increase from $86.1 million in 2020[110]. - The net cash provided by financing activities during the six months ended June 30, 2021, was $0.7 million, related to the issuance of common stock upon the exercise of stock options[111]. - Net cash used in operating activities was primarily due to a net loss of $18.6 million for the six months ended June 30, 2021[107]. Future Outlook and Financing - The company expects research and development expenses to remain high as it advances product candidates into larger clinical trials[91]. - The company anticipates an increase in general and administrative expenses due to costs associated with being a publicly traded company[100]. - The company expects its existing cash resources to fund its current operating plan at least into 2024[106]. - The company may seek additional financing through equity or debt financings or collaborations in the future[106]. - There have been no material changes in market risk, including interest rate risk and foreign currency exchange risk, as of June 30, 2021[115]. - The company has contractual obligations with vendors for goods and services, which may require payments for cancellation or early termination[112].

Product Development and Commercialization - The company has no products approved for commercial sale and has not generated any revenue or profit from sales of its product candidates[163]. - The company is currently conducting clinical trials for imsidolimab, ANB030, and ANB032, but has a limited history of clinical trials and no history of commercializing biotechnology products[163]. - The company has limited data regarding the safety profile of its wholly-owned product candidates when dosed in humans, which may inhibit regulatory approval[176]. - The company has not established effective sales or marketing capabilities, which may hinder its ability to generate product revenue[163]. - The company’s ability to commercialize product candidates depends on obtaining necessary regulatory approvals, which can be lengthy and uncertain[182]. - The company is currently only in the clinical development stages for its most advanced product candidates and may never generate significant revenues[215]. - The company plans to seek Orphan Drug Designation for imsidolimab, which could provide market exclusivity if granted[254]. - The commercialization of product candidates is heavily dependent on third-party reimbursement practices and pricing regulations, which can significantly impact sales revenue[257]. - The inability to establish adequate reimbursement could adversely affect the adoption and sales revenue of approved product candidates[264]. Financial Performance and Capital Requirements - The company has limited operating revenue and a history of operational losses, requiring additional capital to finance operations[163]. - The company has incurred significant operating losses since inception, with a net loss of $19.9 million for the year ended December 31, 2020, and an accumulated deficit of $264.0 million[212]. - The company expects to continue incurring significant expenses and increasing operating losses for the foreseeable future[213]. - The company believes its existing cash, cash equivalents, and investments will fund its current operating plan at least into 2024[217]. - The company may need to raise additional funds or obtain funding through collaboration agreements to continue the development of its product candidates[217]. - Future funding requirements will depend on various factors, including the costs and results of clinical trials and regulatory approvals[219]. - The company may seek additional capital through various means, which could result in dilution of existing stockholders' interests[221]. Competition and Market Risks - The company faces significant competition, and if competitors develop more effective or less expensive products, its commercial opportunities may be negatively impacted[163]. - The company faces significant competition from established pharmaceutical and biotechnology companies with greater resources and experience[194]. - Competitors for GPP and PPP include therapies such as secukinumab (Cosentyx) and ustekinumab (Stelara), among others[195]. - For hidradenitis suppurativa, adalimumab (Humira) is a key competitor approved for moderate to severe cases[196]. - The company’s ability to compete may be affected by competitors obtaining regulatory approval more rapidly and establishing a strong market position before the company can enter the market[200]. Clinical Trials and Regulatory Challenges - Clinical trials for product candidates may be delayed or halted due to various factors, including safety concerns and regulatory holds[185]. - The average time for product candidates to be developed from discovery to approval is estimated to be 10 to 15 years[185]. - Regulatory authorities may impose conditions that could delay or prevent marketing approval for product candidates[187]. - The company may incur additional costs or experience delays if clinical trials fail to demonstrate safety and efficacy[180]. - One patient dropped out of the GALLOP Phase 2 clinical trial for imsidolimab due to a serious adverse event, which was deemed possibly drug-related[179]. Manufacturing and Supply Chain Risks - The company relies on third-party manufacturers for production, and any difficulties they encounter could delay the supply of product candidates[163]. - The company is dependent on third-party manufacturers for the production of biologics, which is complex and subject to multiple risks, including contamination and compliance with regulations[208]. - Manufacturing biotechnology products is complex, and any difficulties in production could delay the availability of product candidates for clinical trials[225]. - The company outsources the manufacturing of its product candidates and lacks internal manufacturing capabilities, which poses risks of supply disruptions[243]. - The company depends on a small number of suppliers for key raw materials, and any loss of these suppliers could materially affect its business[246]. Intellectual Property and Legal Risks - The company has filed numerous patent applications, but the patent prosecution process is expensive and may not result in the desired patent rights[283]. - The patent position of biotechnology companies is uncertain, and pending applications may not result in patents that effectively protect the company's technology[284]. - The company may face challenges in protecting its intellectual property rights globally, with potential high costs and varying enforcement levels in different jurisdictions[289]. - The company may face legal proceedings alleging infringement of intellectual property rights, which could adversely affect business success[311]. - The company relies on trade secrets and non-disclosure agreements to protect proprietary information, but breaches could lead to significant costs and competitive disadvantages[315]. Regulatory Compliance and Legal Obligations - The company is subject to various health care laws and regulations, including the federal Anti-Kickback Statute, which prohibits remuneration to induce referrals for services covered by federal health care programs[275]. - The company faces potential civil and criminal penalties under the federal False Claims Act for presenting false claims for payment to the federal government[276]. - Compliance with state laws requires biotechnology companies to report marketing expenditures and payments to health care providers, which can be time-consuming and costly[277]. - The General Data Protection Regulation (GDPR) imposes fines of up to €20 million or 4% of worldwide revenue for non-compliance, increasing the company's liability regarding personal data processing[279]. - The company may incur substantial costs to ensure compliance with health care laws and regulations, which could adversely affect its business operations[279]. Market and Economic Conditions - The market price of the company's stock has been volatile, posing a risk of investment loss[163]. - The stock price of the company has been volatile, influenced by factors such as competitive product success and regulatory actions, which could lead to significant investment losses[317]. - Legislative reforms, such as the Affordable Care Act, have significantly impacted the pharmaceutical industry, including changes to Medicaid rebates and pricing methodologies[267]. - Ongoing healthcare reform measures may limit government payments for healthcare products, resulting in reduced demand and additional pricing pressures[273]. - International operations face extensive governmental price controls, with prices in many countries being substantially lower than in the U.S., which may affect revenue generation[260]. Employee and Operational Risks - The company must attract and retain highly skilled employees to succeed in its business[163]. - The company expects to experience growth in operations and employee numbers, which may lead to significant costs and require effective management to avoid disruptions[231]. - The company faces intense competition for qualified personnel, which is critical for its success in product development and commercialization[223]. - Employee misconduct, including noncompliance with regulatory standards, poses a risk that could lead to significant fines or sanctions against the company[280].