Janux Therapeutics, Inc. ( JANX ) presents a rather interesting scenario for speculators. With an early-stage pipeline that has shown a few signals of promise, the primary driver of market sentiment has been aI have my PhD in biochemistry and have worked for years analyzing clinical trials and biotech companies. It is my passion to educate everyone possible on the science behind the businesses that we invest in, and it's my mission to help you do your due diligence and not get burned by the pitfalls of inve ...

Janux Therapeutics, Inc. (JANX) shares rallied 8.8% in the last trading session to close at $29.76. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 15.4% gain over the past four weeks.The price rise can be attributed to growing investor confidence in the company’s pipeline. The most advanced candidates in Janux’s pipeline are JANX007 and JANX008, which are being evaluated in early-stage clinical studies for p ...

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgency to invest in AI technologies now [1][13] - The energy demands of AI technologies are highlighted, with data centers consuming as much energy as small cities, leading to concerns about power grid strain and rising electricity prices [2][3] Investment Opportunity - A specific company is presented as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for supporting the anticipated surge in energy demand from AI data centers [3][7] - This company is characterized as a "toll booth" operator in the AI energy boom, benefiting from the increasing need for energy as AI technologies expand [4][5] Market Position - The company is noted for its unique position in the market, being one of the few capable of executing large-scale engineering, procurement, and construction projects across various energy sectors, including nuclear energy [7][8] - It is described as debt-free and holding a significant cash reserve, which is nearly one-third of its market capitalization, positioning it favorably compared to other energy firms burdened with debt [8][10] Growth Potential - The company also has a substantial equity stake in another AI-related venture, providing investors with indirect exposure to multiple growth opportunities in the AI sector without the associated high premiums [9][10] - The stock is considered undervalued, trading at less than seven times earnings, which presents a compelling investment opportunity given its ties to both AI and energy sectors [10][11] Industry Trends - The article discusses the broader trends of onshoring driven by tariffs and the surge in U.S. LNG exports, indicating a favorable environment for the company's growth [6][14] - The influx of talent into the AI sector is expected to drive continuous innovation and advancements, further solidifying the importance of investing in AI-related companies [12]

Core Viewpoint - Janux Therapeutics, Inc. (JANX) experienced a significant stock price increase of 6.8% to close at $25.85, driven by strong trading volume and positive investor sentiment regarding its clinical pipeline [1][2]. Company Overview - The company's most advanced clinical candidates, JANX007 and JANX008, are currently in early-stage studies targeting prostate cancer and solid tumors, respectively [2]. - Janux is projected to report a quarterly loss of $0.60 per share, reflecting a year-over-year decline of 17.7%. However, revenues are expected to reach $7.81 million, marking a substantial increase of 1675.5% compared to the same quarter last year [3]. Earnings Estimates and Trends - The consensus EPS estimate for Janux has been slightly revised upward in the past 30 days, indicating a positive trend that typically correlates with stock price appreciation [4]. - Empirical research suggests that trends in earnings estimate revisions are closely linked to near-term stock price movements, highlighting the importance of monitoring these changes [3][4]. Industry Context - Janux Therapeutics is part of the Zacks Medical - Biomedical and Genetics industry, where Stoke Therapeutics, Inc. (STOK) also operates. STOK's stock decreased by 2% to $29.90, but it has seen a return of 34.6% over the past month [5]. - Stoke Therapeutics has an unchanged consensus EPS estimate of -$0.56 for its upcoming report, which represents a year-over-year change of -19.2% [6].

Company Overview - Janux Therapeutics Inc. (NASDAQ:JANX) is a clinical-stage biopharmaceutical company focused on developing immunotherapies utilizing Tumor Activated T Cell Engager (TRACTr) and Tumor Activated Immunomodulator (TRACIr) platforms to treat cancer [4]. Investment Potential - Truist initiated coverage of Janux Therapeutics with a Buy rating and a price target of $100, highlighting the company's masking platform's potential to enhance safety and efficacy in treating solid tumors [1][3]. - The company is advancing its pipeline of novel immunotherapies, with both JANX007 and JANX008 currently enrolling patients in Phase 1 clinical trials [3]. Financial Performance - For Q2 2025, Janux reported a net loss of $33.9 million, an increase from the $6.0 million net loss in Q2 2024, primarily due to rising expenses [2]. - Research and Development (R&D) expenses were $34.7 million, up from $14.9 million a year earlier, while General and Administrative (G&A) expenses rose to $10.5 million from $7.8 million in Q2 2024 [2]. Collaborations and Milestones - Janux received a $10 million milestone payment from Merck after the first patient was dosed in a lead collaboration program, indicating progress in its partnerships [3].

Group 1 - Truist Securities initiated coverage of Janux Therapeutics with a Buy recommendation [2] - A target price of $100 was set for Janux Therapeutics [2] - The recommendation is based on a catalyst-rich period expected for the company in the second half of the year [2]

PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Janux Therapeutics, Inc.'s unaudited condensed financial statements, including balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, statements of cash flows, and accompanying notes. It highlights the company's financial position, performance, cash movements, and significant accounting policies and commitments [Condensed Balance Sheets](index=3&type=section&id=Condensed%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and stockholders' equity at specific points in time | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total Assets | $1,032,212 | $1,061,516 | | Cash and cash equivalents | $52,446 | $430,605 | | Short-term investments | $943,565 | $594,568 | | Total Stockholders' Equity | $990,516 | $1,022,781 | [Unaudited Condensed Statements of Operations and Comprehensive Loss](index=4&type=section&id=Unaudited%20Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section outlines the company's financial performance, including revenues, expenses, and net loss over specific reporting periods | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Collaboration revenue | $0 | $8,897 | | Research and development | $34,664 | $14,898 | | General and administrative | $10,454 | $7,821 | | Net loss | $(33,858) | $(5,959) | | Net loss per common share, basic and diluted | $(0.55) | $(0.11) | | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Collaboration revenue | $0 | $10,149 | | Research and development | $59,719 | $28,968 | | General and administrative | $20,296 | $15,164 | | Net loss | $(57,366) | $(20,719) | | Net loss per common share, basic and diluted | $(0.93) | $(0.40) | [Unaudited Condensed Statements of Stockholders' Equity](index=5&type=section&id=Unaudited%20Condensed%20Statements%20of%20Stockholders'%20Equity) This section details changes in the company's equity accounts, reflecting transactions with owners and comprehensive loss | Metric | December 31, 2024 (in thousands) | June 30, 2025 (in thousands) | | :--- | :--- | :--- | | Total Stockholders' Equity | $1,022,781 | $990,516 | | Accumulated Deficit | $(237,757) | $(295,123) | | Stock-based compensation (Six Months Ended June 30, 2025) | N/A | $21,662 | | Stock-based compensation (Six Months Ended June 30, 2024) | N/A | $11,382 | [Unaudited Condensed Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Statements%20of%20Cash%20Flows) This section reports the cash generated and used by the company across operating, investing, and financing activities | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | $(40,837) | $(24,858) | | Net cash used in investing activities | $(338,830) | $(304,621) | | Net cash provided by financing activities | $1,508 | $324,936 | | Net decrease in cash, cash equivalents and restricted cash | $(378,159) | $(4,543) | | Cash, cash equivalents and restricted cash – end of period | $53,262 | $15,478 | [Notes to Unaudited Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) This section provides detailed explanations of the company's significant accounting policies, financial statement line items, and commitments [1. Organization and Summary of Significant Accounting Policies](index=8&type=section&id=1.%20Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) This section describes the company's business and outlines the key accounting principles applied in preparing the financial statements - Janux Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing novel immunotherapies using its proprietary TRACTr and TRACIr platforms[22](index=22&type=chunk) - The company has incurred net losses and negative cash flows from operations since inception, with an **accumulated deficit of $295.1 million** as of June 30, 2025, and expects to incur substantial operating losses for the next several years[23](index=23&type=chunk) - Operations have been funded primarily through convertible notes, preferred stock, IPO, common stock/warrant offerings, stock option exercises, and a collaboration agreement[23](index=23&type=chunk) | Fair Value Measurement Category | Total (in thousands) | Level 1 (in thousands) | Level 2 (in thousands) | | :--- | :--- | :--- | :--- | | **As of June 30, 2025:** | | | | | Money market funds | $40,900 | $40,900 | $0 | | U.S. Treasury securities | $72,156 | $72,156 | $0 | | U.S. agency bonds | $332,077 | $0 | $332,077 | | Corporate debt securities | $305,317 | $0 | $305,317 | | Commercial paper | $234,015 | $0 | $234,015 | | Restricted cash (money market account) | $816 | $816 | $0 | | **Total assets measured at fair value** | **$985,281** | **$113,872** | **$871,409** | - The company recognizes revenue using a five-step approach, allocating transaction price to distinct performance obligations and recognizing revenue as control is transferred. Variable consideration for development and regulatory milestones is included if a significant revenue reversal is not probable[46](index=46&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - All research and development costs are expensed in the period incurred[58](index=58&type=chunk) - Stock-based compensation expense for equity awards (stock options, RSUs, ESPP rights) is recognized on a straight-line basis over the requisite service or offering period[61](index=61&type=chunk) - The company operates as a single operating segment focused on the research and development of novel immunotherapies[63](index=63&type=chunk) - The company is evaluating ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures) but does not expect to early adopt them[67](index=67&type=chunk)[68](index=68&type=chunk) [2. Balance Sheet Details](index=20&type=section&id=2.%20Balance%20Sheet%20Details) This section provides disaggregated information for specific balance sheet accounts, such as prepaid expenses, property and equipment, and accrued expenses | Prepaid expenses and other current assets | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Interest receivable | $5,691 | $5,381 | | Prepaid research and development | $2,241 | $2,354 | | Other prepaid expenses | $1,610 | $758 | | **Total** | **$9,542** | **$8,493** | | Property and equipment, net | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Laboratory equipment | $9,226 | $8,360 | | Furniture and fixtures | $792 | $792 | | Computer equipment and software | $658 | $658 | | Assets not placed in service | $24 | $6 | | Less: accumulated depreciation | $(6,012) | $(4,952) | | **Property and equipment, net** | **$4,688** | **$4,864** | | Accrued expenses | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Accrued research and development | $13,097 | $6,200 | | Accrued compensation | $2,345 | $4,566 | | Other accrued expenses | $587 | $918 | | **Total** | **$16,029** | **$11,684** | [3. Commitments and Contingencies](index=21&type=section&id=3.%20Commitments%20and%20Contingencies) This section details the company's contractual obligations, lease agreements, and potential legal liabilities - The company has a cell line license agreement with WuXi Biologics, requiring low single-digit royalty payments on net sales if third-party manufacturers are used, or a one-time buyout option ranging from low single-digit millions to **$15.0 million**[72](index=72&type=chunk)[73](index=73&type=chunk) - An operating lease for office and laboratory space (Torrey Plaza Lease) commenced on April 1, 2022, with a 130-month term and total minimum lease payments of **$29.8 million** as of June 30, 2025[75](index=75&type=chunk)[80](index=80&type=chunk) - Restricted cash of **$0.8 million** secures a standby letter of credit related to the Torrey Plaza Lease[79](index=79&type=chunk) - The company is not currently party to any material legal proceedings[81](index=81&type=chunk) [4. Stockholders' Equity](index=23&type=section&id=4.%20Stockholders'%20Equity) This section provides details on common stock, equity offerings, stock option activity, and stock-based compensation - As of June 30, 2025, **$150.0 million** of common stock remained available for sale under an 'at the market offering' program[82](index=82&type=chunk) - In March 2024, the company closed an underwritten offering yielding **$320.1 million** in net proceeds from common stock and pre-funded warrants[85](index=85&type=chunk) - In December 2024, another underwritten offering generated **$377.9 million** in net proceeds from common stock and pre-funded warrants[87](index=87&type=chunk) - Pre-funded common stock warrants are equity classified and accounted for as a component of additional paid-in capital[88](index=88&type=chunk)[89](index=89&type=chunk) | Stock Option Activity | Number of Options (thousands) | Weighted Average Exercise Price | | :--- | :--- | :--- | | Outstanding at December 31, 2024 | 8,873 | $12.81 | | Granted (Six Months Ended June 30, 2025) | 1,633 | $47.69 | | Exercised (Six Months Ended June 30, 2025) | (141) | $7.66 | | Forfeited or cancelled (Six Months Ended June 30, 2025) | (156) | $41.60 | | Outstanding at June 30, 2025 | 10,210 | $18.02 | - Total unrecognized stock-based compensation cost was **$75.9 million** for options (expected over ~2.5 years), **$30.9 million** for RSUs (expected over ~3.4 years), and **$0.9 million** for ESPP (expected over ~1.5 years) as of June 30, 2025[93](index=93&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) | Stock-Based Compensation Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Research and development | $5,489 | $2,324 | | General and administrative | $5,471 | $3,433 | | **Total** | **$10,960** | **$5,757** | | Stock-Based Compensation Expense (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Research and development | $10,688 | $4,508 | | General and administrative | $10,974 | $6,874 | | **Total** | **$21,662** | **$11,382** | - As of June 30, 2025, **21,840,366 shares** of common stock were reserved for future issuance[103](index=103&type=chunk) [5. Research Collaboration and Exclusive License Agreement](index=28&type=section&id=5.%20Research%20Collaboration%20and%20Exclusive%20License%20Agreement) This section describes the terms and financial implications of the company's collaboration agreement with Merck - The company entered into an exclusive research collaboration and license agreement with Merck in December 2020 for up to two collaboration targets related to T cell engager immunotherapies for cancer treatment[104](index=104&type=chunk) - The company is eligible to receive up to **$142.5 million** per Collaboration Target in development and regulatory milestones (**$285.0 million** collectively), plus up to **$350.0 million** for each licensed product for commercial milestones, and tiered royalties on net sales[104](index=104&type=chunk) - No revenue was recognized from the Merck Agreement for the three and six months ended June 30, 2025, as the company's research performance obligations were completed as of June 30, 2025[106](index=106&type=chunk) [6. Subsequent Events](index=28&type=section&id=6.%20Subsequent%20Events) This section discloses significant events that occurred after the balance sheet date but before the financial statements were issued - In August 2025, a developmental milestone related to the First Collaboration Target under the Merck Agreement was achieved, obligating Merck to pay the company a **$10.0 million** milestone payment[107](index=107&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operational results. It details the company's clinical-stage pipeline, significant net losses, funding requirements, and the impact of macroeconomic factors. Key financial changes include increased R&D expenses and the absence of collaboration revenue in the current period [Overview](index=30&type=section&id=Overview) This section introduces the company's business, clinical pipeline, financial performance, and future funding outlook - Janux Therapeutics is a clinical-stage biopharmaceutical company developing novel immunotherapies using its TRACTr, TRACIr, and Adaptive Immune Response Modulator (ARM) platforms[109](index=109&type=chunk) - Lead clinical candidates include JANX007 (PSMA-TRACTr for mCRPC) and JANX008 (EGFR-TRACTr for multiple solid cancers), both in Phase 1 clinical trials[109](index=109&type=chunk) - JANX007 showed meaningful PSA drops, anti-tumor activity, and a favorable safety profile in interim clinical data (December 2024, May 2025), supporting Phase 1b expansion studies[109](index=109&type=chunk) - JANX008 displayed positive early data with anti-tumor activity in multiple tumor types and low-grade adverse events (February 2024)[109](index=109&type=chunk) - The company has incurred net losses since inception, with an **accumulated deficit of $295.1 million** as of June 30, 2025, and expects significant losses to continue[111](index=111&type=chunk) - Existing cash, cash equivalents, and short-term investments are projected to fund operations for at least the next 12 months, but additional financing will be required for product development and commercialization[113](index=113&type=chunk) [Our Research Collaboration with Merck](index=32&type=section&id=Our%20Research%20Collaboration%20with%20Merck) This section details the strategic collaboration with Merck, including its scope, milestones, and revenue potential - The research collaboration and exclusive license agreement with Merck, established in December 2020, focuses on developing TRACTr product candidates for cancer[114](index=114&type=chunk) - Merck selected two collaboration targets, and the company's research services for both targets were completed in August 2024[114](index=114&type=chunk) - The company is eligible to receive up to **$500.5 million** per target in upfront and milestone payments, plus royalties on product sales[114](index=114&type=chunk) [Risks and Uncertainties](index=32&type=section&id=Risks%20and%20Uncertainties) This section discusses the impact of broader macroeconomic and geopolitical factors on the company's operations and financial condition - The company faces widespread geopolitical and macroeconomic uncertainties, including public health crises, bank failures, inflation, and geopolitical conflicts[115](index=115&type=chunk) - Inflation generally increases salaries and fees paid to third-party contract service providers, though no material disruption to operations has been experienced to date[115](index=115&type=chunk) [Financial Operations Overview](index=32&type=section&id=Financial%20Operations%20Overview) This section provides a high-level summary of the company's revenue generation, research and development, general and administrative expenses, and other income [Revenues](index=32&type=section&id=Revenues) This section discusses the sources and trends of the company's revenue, primarily from collaboration agreements - The company has not generated any revenues from product sales and does not expect to in the foreseeable future[116](index=116&type=chunk) | Revenue Source | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :--- | :--- | :--- | | Collaboration revenue (Merck Agreement) | $0 | $10.1 | [Research and Development](index=32&type=section&id=Research%20and%20Development) This section outlines the nature and drivers of the company's R&D expenses, including clinical and preclinical development costs - Research and development expenses are recognized as incurred and primarily support the TRACTr and TRACIr platforms, discovery efforts, and preclinical/clinical development of product candidates[117](index=117&type=chunk) - Direct R&D expenses include external CROs, consultants, license fees, and laboratory supplies, while indirect costs cover salaries, stock-based compensation, and facility-related expenses[118](index=118&type=chunk)[119](index=119&type=chunk)[124](index=124&type=chunk) - R&D expenses are anticipated to increase substantially as development of product candidates progresses, with inherently unpredictable timelines and costs for preclinical and clinical studies[119](index=119&type=chunk)[120](index=120&type=chunk) [General and Administrative](index=34&type=section&id=General%20and%20Administrative) This section describes the components of the company's general and administrative expenses, such as personnel and professional services - General and administrative expenses primarily consist of employee-related costs (including stock-based compensation), facility costs, legal fees, and professional services[121](index=121&type=chunk) - These expenses are expected to increase due to growth in general and administrative headcount and costs associated with operating as a public company[121](index=121&type=chunk) [Other Income](index=34&type=section&id=Other%20Income) This section explains the sources of other income, predominantly interest earned on investments - Other income is primarily derived from interest earned on the company's cash, cash equivalents, and short-term investments[122](index=122&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the company's financial performance across different reporting periods [Comparison of the Three Months Ended June 30, 2025 and 2024](index=34&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) This section analyzes the financial performance and key changes for the three-month period | Metric (in thousands) | June 30, 2025 | June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Collaboration revenue | $0 | $8,897 | $(8,897) | | Research and development | $34,664 | $14,898 | $19,766 | | General and administrative | $10,454 | $7,821 | $2,633 | | Net loss | $(33,858) | $(5,959) | $(27,899) | | Other income | $11,260 | $7,863 | $3,397 | - Collaboration revenue decreased by **$8.9 million** to $0 in Q2 2025 due to a developmental milestone achievement in June 2024 and completion of research activities in August 2024[125](index=125&type=chunk) - Research and development expenses increased by **$19.8 million**, primarily driven by preclinical stage programs (**$10.3 million**), indirect costs (**$5.0 million**), and direct costs for JANX007 (**$4.2 million**) and JANX008 (**$0.3 million**)[126](index=126&type=chunk) - General and administrative expenses increased by **$2.7 million**, mainly due to a **$2.0 million** increase in stock-based compensation[127](index=127&type=chunk) - Other income increased by **$3.4 million** due to higher cash and short-term investments, resulting in increased interest income[128](index=128&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=35&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) This section analyzes the financial performance and key changes for the six-month period | Metric (in thousands) | June 30, 2025 | June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Collaboration revenue | $0 | $10,149 | $(10,149) | | Research and development | $59,719 | $28,968 | $30,751 | | General and administrative | $20,296 | $15,164 | $5,132 | | Net loss | $(57,366) | $(20,719) | $(36,647) | | Other income | $22,649 | $13,264 | $9,385 | - Collaboration revenue decreased by **$10.1 million** to $0 in H1 2025 due to a developmental milestone achievement in June 2024 and completion of research activities in August 2024[130](index=130&type=chunk) - Research and development expenses increased by **$30.8 million**, primarily driven by preclinical stage programs (**$14.9 million**), indirect costs (**$9.5 million**), and direct costs for JANX007 (**$5.8 million**) and JANX008 (**$0.5 million**)[131](index=131&type=chunk) - General and administrative expenses increased by **$5.1 million**, mainly due to a **$4.1 million** increase in stock-based compensation[132](index=132&type=chunk) - Other income increased by **$9.3 million** due to higher cash and short-term investments, resulting in increased interest income[133](index=133&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, investment holdings, and sources and uses of cash - As of June 30, 2025, the company had **$996.8 million** in cash, cash equivalents, restricted cash, and short-term investments[134](index=134&type=chunk) - The company completed significant underwritten offerings in July 2023 (net proceeds **$56.5 million**), March 2024 (net proceeds **$320.1 million**), and December 2024 (net proceeds **$377.9 million**)[136](index=136&type=chunk)[137](index=137&type=chunk)[139](index=139&type=chunk) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(40,837) | $(24,858) | | Net cash used in investing activities | $(338,830) | $(304,621) | | Net cash provided by financing activities | $1,508 | $324,936 | | **Net decrease in cash, cash equivalents and restricted cash** | **$(378,159)** | **$(4,543)** | - Net cash used in operating activities for H1 2025 was **$40.8 million**, primarily due to a net loss of **$57.4 million**, partially offset by **$21.7 million** in stock-based compensation[141](index=141&type=chunk) - Net cash used in investing activities for H1 2025 was **$338.8 million**, mainly due to **$338.0 million** in net purchases of short-term investments[142](index=142&type=chunk) - Net cash provided by financing activities for H1 2025 was **$1.5 million**, primarily from stock option exercises and employee stock purchase plan proceeds, offset by offering issuance costs[143](index=143&type=chunk) [Funding Requirements](index=37&type=section&id=Funding%20Requirements) This section outlines the company's future capital needs for product development and commercialization, and potential financing strategies - The company believes its existing cash, cash equivalents, and short-term investments are sufficient to meet anticipated operating expenses and capital expenditure requirements for at least the next 12 months[144](index=144&type=chunk) - Substantial additional funding will be required to complete the development and commercialization of product candidates[147](index=147&type=chunk) - Future capital requirements depend on factors such as clinical trial progress, regulatory approvals, manufacturing costs, personnel, commercialization activities, intellectual property, and macroeconomic conditions[145](index=145&type=chunk)[149](index=149&type=chunk) - Potential funding sources include equity offerings, debt financings, grants, collaborations, and licensing arrangements, which may lead to stockholder dilution or restrictive covenants[147](index=147&type=chunk) [Contractual Obligations and Commitments](index=39&type=section&id=Contractual%20Obligations%20and%20Commitments) This section details the company's significant contractual obligations, including lease payments and license agreements - The company has a cell line license agreement with WuXi Biologics, which includes potential low single-digit royalty payments on net sales or a one-time buyout option up to **$15.0 million**[148](index=148&type=chunk) - A noncancelable operating lease for office and laboratory space (Torrey Plaza Lease) involves aggregate payments of approximately **$38.0 million** over a 126-month term[149](index=149&type=chunk) - The company also enters into various contracts for preclinical and clinical research, manufacturing, and other services, which are generally terminable upon notice with payments for services provided[151](index=151&type=chunk) [Critical Accounting Policies and Estimates](index=41&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the accounting policies that require significant judgment and estimation by management - The company's financial statements involve significant estimates and judgments, particularly for collaboration revenue, accruals for research and development expenses, stock-based compensation, and fair value measurements[152](index=152&type=chunk) - No material changes to the critical accounting policies were reported for the six months ended June 30, 2025[153](index=153&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section addresses the company's exposure to market risks, including interest rate risk, foreign currency exchange risk, and inflation. Management believes that a 10% change in interest rates or foreign currency exchange rates would not materially impact the financial statements as of June 30, 2025, and inflation has not had a material effect to date [Interest rate risk](index=41&type=section&id=Interest%20rate%20risk) This section assesses the company's exposure to fluctuations in interest rates on its financial instruments - The company's financial instruments, including cash, cash equivalents, and short-term investments (U.S. Treasury securities, U.S. agency bonds, corporate debt securities, and commercial paper), are subject to changes in prevailing interest rates[154](index=154&type=chunk) - A **10% change in interest rates** is not expected to have a material effect on the fair value of the investment portfolio as of June 30, 2025[154](index=154&type=chunk) [Foreign currency exchange risk](index=41&type=section&id=Foreign%20currency%20exchange%20risk) This section evaluates the company's exposure to changes in foreign currency exchange rates - The company is not currently exposed to significant market risk related to changes in foreign currency exchange rates, but future contracts with international vendors could increase this risk[155](index=155&type=chunk) - A **10% change in foreign currency exchange rates** is not expected to have a material effect on the financial statements as of June 30, 2025[155](index=155&type=chunk) [Inflation](index=41&type=section&id=Inflation) This section discusses the impact of inflation on the company's operating costs and financial performance - Inflation increases the company's cost of labor and preclinical and clinical development costs[156](index=156&type=chunk) - Inflation did not have a material effect on the company's business, financial condition, or results of operations during the three and six months ended June 30, 2025[156](index=156&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and procedures and any changes in internal control over financial reporting. Management concluded that disclosure controls were effective, and no material changes to internal controls occurred during the quarter [Evaluation of Disclosure Controls and Procedures](index=43&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports on management's assessment of the effectiveness of the company's disclosure controls - Management, with the participation of the Chief Executive Officer, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025[157](index=157&type=chunk) - It was concluded that the disclosure controls and procedures were effective at the reasonable assurance level[157](index=157&type=chunk) [Changes in Internal Control over Financial Reporting](index=43&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes to the company's internal control over financial reporting - There were no changes in internal control over financial reporting during the most recent quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[158](index=158&type=chunk) PART II. OTHER INFORMATION This section covers legal proceedings, comprehensive risk factors, equity sales, and other miscellaneous information [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the company is not currently involved in any material legal proceedings, while acknowledging the potential for future claims in the ordinary course of business - The company is not currently a party to any material legal proceedings[161](index=161&type=chunk) - Claims or lawsuits may arise in the ordinary course of business, which could adversely impact the company due to defense and settlement costs, and diversion of resources[161](index=161&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This comprehensive section details the significant risks associated with investing in the company's common stock. It covers risks related to the company's early stage of development, financial stability, product development and regulatory approval, manufacturing, commercialization, collaborations, industry operations, government regulation, intellectual property, and the securities market [Summary of Risks Associated with Our Business](index=44&type=section&id=Summary%20of%20Risks%20Associated%20with%20Our%20Business) This section provides a high-level overview of the most significant risks impacting the company's operations and financial prospects - The company has a limited operating history, has incurred net losses since inception, and anticipates continued significant losses[163](index=163&type=chunk) - Additional capital will be required, and failure to raise it could delay or eliminate product development programs[163](index=163&type=chunk) - Most product candidates are in preclinical or discovery stages, with limited clinical trial history[163](index=163&type=chunk) - Reliance on third parties for clinical trials and preclinical studies poses risks if they fail to meet contractual duties or deadlines[163](index=163&type=chunk) - The market opportunity for product candidates may be relatively small, limited to specific patient populations[163](index=163&type=chunk) - High dependence on key personnel, with risks if unable to attract and retain qualified individuals[163](index=163&type=chunk) - International trade policies, including tariffs and trade barriers, may adversely affect business[163](index=163&type=chunk) - Inability to obtain and maintain sufficient intellectual property protection could allow competitors to commercialize similar products[163](index=163&type=chunk) - Subject to stringent and evolving data privacy and security laws, with potential for regulatory actions, litigation, and reputational harm from non-compliance[169](index=169&type=chunk) [Risks Related to Our Limited Operating History, Financial Position and Capital Requirements](index=46&type=section&id=Risks%20Related%20to%20Our%20Limited%20Operating%20History,%20Financial%20Position%20and%20Capital%20Requirements) This section details risks stemming from the company's early stage, historical losses, and ongoing need for capital - The company is an early-stage biopharmaceutical company with a limited operating history and has incurred net losses since inception, totaling an **accumulated deficit of $295.1 million** as of June 30, 2025[165](index=165&type=chunk) - The company expects to incur increasing operating losses for the foreseeable future and may never achieve or sustain profitability[166](index=166&type=chunk) - As of June 30, 2025, the company had **$996.0 million** in cash, cash equivalents, and short-term investments, which are estimated to fund operations for at least the next 12 months, but substantial additional capital will be needed for full product development and commercialization[168](index=168&type=chunk) - Raising additional capital through equity offerings may dilute stockholders, while debt financings may impose restrictive covenants. Collaborations could require relinquishing valuable rights[171](index=171&type=chunk) - Future capital requirements are highly dependent on the progress and costs of clinical trials, regulatory approvals, manufacturing, and market conditions[173](index=173&type=chunk) [Risks Related to the Discovery, Development and Regulatory Approval of Our Product Candidates](index=49&type=section&id=Risks%20Related%20to%20the%20Discovery,%20Development%20and%20Regulatory%20Approval%20of%20Our%20Product%20Candidates) This section outlines the inherent uncertainties and challenges in developing and obtaining regulatory approval for novel drug candidates - Most of the company's product candidates are in preclinical or discovery stages, with JANX007 and JANX008 in Phase 1 clinical development, indicating an early stage of development with limited clinical trial experience[175](index=175&type=chunk) - Preclinical and clinical development is a lengthy, expensive, and uncertain process, and early-stage results are not always predictive of future success in later clinical trials or regulatory approval[178](index=178&type=chunk) - Clinical trials may face delays or termination due to factors such as regulatory disagreements, patient enrollment difficulties, issues with CROs, or patient safety concerns[179](index=179&type=chunk)[183](index=183&type=chunk) - Product candidates are based on novel technologies, making the timing, results, and costs of development and regulatory approval difficult to predict[186](index=186&type=chunk) - Serious adverse events or undesirable side effects identified during development or after approval could lead to discontinuation of programs, refusal of regulatory approval, or revocation of marketing authorizations[195](index=195&type=chunk) - The regulatory approval process is lengthy, expensive, and uncertain, with no guarantee of obtaining approval for product candidates[201](index=201&type=chunk) - Even if approved, product candidates will be subject to ongoing regulatory oversight, potentially including post-marketing studies or restrictions on marketing[208](index=208&type=chunk) - Disruptions to government agencies like the FDA or SEC due to funding shortages or staffing cuts could delay regulatory reviews and approvals[215](index=215&type=chunk)[218](index=218&type=chunk) - Limited resources necessitate prioritizing research programs, potentially causing the company to miss more profitable opportunities[220](index=220&type=chunk) [Risks Related to Manufacturing, Commercialization and Reliance on Third Parties](index=63&type=section&id=Risks%20Related%20to%20Manufacturing,%20Commercialization%20and%20Reliance%20on%20Third%20Parties) This section addresses risks associated with external dependencies for production, market acceptance, and sales of potential products - The company relies heavily on third parties to conduct preclinical studies, clinical trials, and manufacturing, increasing the risk of delays, increased costs, or disruptions if these third parties fail to perform or comply with regulations[224](index=224&type=chunk) - Manufacturing product candidates is complex and currently relies on single-source suppliers for Bulk Drug Substance (BDS), posing risks of supply limitations, quality issues, and potential trade restrictions (e.g., with WuXi Biologics in China)[227](index=227&type=chunk)[230](index=230&type=chunk) - Any approved products may fail to achieve sufficient market acceptance by physicians, patients, and payors due to competition, efficacy, pricing, or reimbursement challenges[236](index=236&type=chunk) - Unfavorable pricing regulations or third-party coverage and reimbursement policies could make it difficult to sell product candidates profitably, with significant delays and uncertainty in obtaining adequate coverage[237](index=237&type=chunk) - Approved biologic products may face biosimilar competition sooner than anticipated, leading to significant pricing pressure and limited commercial opportunity[249](index=249&type=chunk) - The market opportunity for product candidates may be relatively small, limited to patients ineligible for or failing prior treatments, and estimates of target patient populations may be inaccurate[253](index=253&type=chunk) - Reliance on third parties requires sharing trade secrets, increasing the risk of discovery, misappropriation, or unauthorized disclosure by competitors[255](index=255&type=chunk) - The company lacks internal sales and marketing capabilities and must either develop them (expensive and time-consuming) or outsource these functions, which carries its own risks and could reduce profitability[258](index=258&type=chunk) - Failure to obtain regulatory approval or commercialize products outside the United States would limit the ability to realize their full market potential[261](index=261&type=chunk) [Risks Related to Our Collaborations and Other Strategic Agreements](index=75&type=section&id=Risks%20Related%20to%20Our%20Collaborations%20and%20Other%20Strategic%20Agreements) This section discusses the risks inherent in partnerships, including potential termination, lack of control, and competition for new alliances - The existing collaboration with Merck is critical, and its termination or failure to lead to commercial products would significantly impact revenue and potentially force independent development or abandonment of product candidates[263](index=263&type=chunk) - Collaborators have discretion over resource allocation and may de-prioritize programs or pursue alternative technologies, potentially reducing or delaying revenue[264](index=264&type=chunk) - Future acquisitions, collaborations, or in-licensing arrangements carry operational and financial risks, including unknown liabilities, business disruption, and integration difficulties[267](index=267&type=chunk) - The company may face significant competition in seeking new collaborators and may be unable to establish partnerships on favorable terms, potentially delaying or curtailing development and commercialization plans[268](index=268&type=chunk)[270](index=270&type=chunk) - Inability to obtain licenses for required third-party technology or maintain existing intellectual property rights could force abandonment of research programs or product candidates[271](index=271&type=chunk) [Risks Related to Our Industry and Business Operations](index=77&type=section&id=Risks%20Related%20to%20Our%20Industry%20and%20Business%20Operations) This section covers broader operational risks, including fraud, product liability, competition, personnel, and cybersecurity threats - The company is exposed to risks of fraud or misconduct by employees, investigators, consultants, and partners, which could lead to regulatory sanctions, litigation, and reputational harm[272](index=272&type=chunk) - Product liability claims from clinical trials or commercial sales could result in substantial liability, costs, and negative impacts on regulatory approvals and commercialization efforts[273](index=273&type=chunk) - High dependence on key managerial, scientific, and medical personnel, with intense competition for skilled labor in the San Diego region[277](index=277&type=chunk)[278](index=278&type=chunk) - Expected expansion of development, regulatory, and operational capabilities may lead to difficulties in managing growth, potentially disrupting operations[281](index=281&type=chunk) - The company faces substantial competition in the immunotherapy market from larger pharmaceutical and biotechnology companies, risking obsolescence or reduced commercial opportunity[283](index=283&type=chunk) - The ability to use net operating loss (NOL) carryforwards may be limited by Section 382 of the Internal Revenue Code, potentially increasing future tax liability[291](index=291&type=chunk) - Epidemic diseases or other health crises could adversely impact clinical trials, supply chains, and business development activities, leading to operational disruptions and financial strain[292](index=292&type=chunk) - Unstable market and economic conditions, including bank failures and geopolitical actions, may adversely affect business, financial condition, and stock price, making financing more difficult[412](index=412&type=chunk) - Inflation may increase costs of clinical trials, research, and administration, potentially depleting cash faster than forecasted[413](index=413&type=chunk) - Compromise of internal information technology systems or sensitive information, or those of third parties, due to cyber-attacks or other security incidents could disrupt development programs, lead to regulatory investigations, litigation, and financial losses[414](index=414&type=chunk)[416](index=416&type=chunk)[418](index=418&type=chunk)[422](index=422&type=chunk) [Risks Related to Government Regulation](index=85&type=section&id=Risks%20Related%20to%20Government%20Regulation) This section details the extensive regulatory environment, including healthcare fraud laws, pricing regulations, data privacy, and international trade policies - The company's operations are subject to extensive U.S. federal and state, EU, and foreign healthcare fraud and abuse laws, including the Anti-Kickback Statute, False Claims Act, and HIPAA, with non-compliance potentially leading to substantial penalties[299](index=299&type=chunk) - Enacted and future legislation, such as the Affordable Care Act, Inflation Reduction Act, and OBBBA, may increase the difficulty and cost of obtaining marketing approval, restrict post-approval activities, and affect product pricing[301](index=301&type=chunk)[302](index=302&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk) - The regulatory landscape in the EU is changing with the Clinical Trials Regulation (CTR) and proposed revisions to pharmaceutical legislation, which could impact regulatory frameworks and exclusivity opportunities[307](index=307&type=chunk)[308](index=308&type=chunk) - Brexit has altered the UK's regulatory framework, requiring separate UK marketing authorizations and potentially impacting clinical trial legislation, which could affect the company's operations in the UK[311](index=311&type=chunk)[312](index=312&type=chunk)[313](index=313&type=chunk) - The company is subject to stringent and evolving data privacy and security laws (e.g., HIPAA, CCPA, GDPR), with non-compliance risking regulatory investigations, litigation, fines, and business disruptions[317](index=317&type=chunk)[319](index=319&type=chunk)[320](index=320&type=chunk)[324](index=324&type=chunk) - Limitations on cross-border data transfers, particularly from Europe to the United States, could materially impact business operations and lead to significant adverse consequences[325](index=325&type=chunk) - International trade policies, including tariffs, sanctions, and trade barriers, may adversely affect business by increasing R&D expenses, complicating supply chains, and raising legal and operational risks[329](index=329&type=chunk)[331](index=331&type=chunk)[332](index=332&type=chunk) - Failure to comply with environmental, health, and safety laws and regulations could result in fines, penalties, or substantial costs[427](index=427&type=chunk) [Risks Related to Our Intellectual Property](index=99&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section highlights risks concerning the protection, enforcement, and potential infringement of the company's patents and proprietary information - The company's success depends on obtaining and maintaining sufficient intellectual property protection (patents, know-how, confidentiality agreements) for its platform technologies and product candidates[336](index=336&type=chunk) - Obtaining and enforcing patents is expensive, time-consuming, and uncertain, with no assurance that pending applications will result in issued patents or provide adequate protection against competitors[337](index=337&type=chunk) - Geopolitical actions, such as those related to the military conflict in Ukraine and Russia, could increase uncertainties and costs for patent prosecution and maintenance, potentially leading to loss of patent rights[341](index=341&type=chunk) - Reliance on trade secrets and proprietary know-how carries risks, as they are difficult to protect, and disclosure or misappropriation could erode the company's competitive position[343](index=343&type=chunk) - The company may not identify all relevant third-party patents or may incorrectly interpret their scope or expiration, potentially hindering its ability to develop and market products[348](index=348&type=chunk) - Breaching obligations under license agreements (e.g., with WuXi Biologics) could result in damages or loss of rights to critical technologies[350](index=350&type=chunk) - The company may need to obtain licenses for third-party technology, which may not be available on commercially reasonable terms or at all, potentially forcing abandonment of related efforts[357](index=357&type=chunk) - Being sued for infringing third-party intellectual property rights could lead to costly and time-consuming litigation, injunctions, monetary damages, or delays in commercialization[360](index=360&type=chunk) - Changes in patent law in the United States and other jurisdictions could diminish the value of patents, impairing the company's ability to protect its product candidates[373](index=373&type=chunk) - Failure to adequately protect trademarks and trade names could hinder brand recognition and adversely affect the business[384](index=384&type=chunk) [Risks Related to the Securities Market and Ownership of Our Common Stock](index=119&type=section&id=Risks%20Related%20to%20the%20Securities%20Market%20and%20Ownership%20of%20Our%20Common%20Stock) This section addresses risks specific to the company's stock, including price volatility, dilution, and corporate governance provisions - The price of the company's common stock has been and may continue to be volatile, influenced by factors such as clinical trial results, regulatory developments, financial projections, and overall market conditions[387](index=387&type=chunk) - Principal stockholders and management own a significant percentage of outstanding capital stock, allowing them to exert significant control over matters requiring stockholder approval[389](index=389&type=chunk) - Future sales and issuances of common stock or rights to purchase common stock, including through equity incentive plans, could result in additional dilution of existing stockholders' ownership and cause the stock price to fall[391](index=391&type=chunk)[392](index=392&type=chunk) - The company does not intend to pay dividends on its common stock, limiting returns to stock appreciation[393](index=393&type=chunk) - Delaware law and provisions in the company's organizational documents (e.g., classified board, ability to issue preferred stock, restrictions on stockholder action) could make a merger, tender offer, or proxy contest difficult, potentially depressing the stock price[394](index=394&type=chunk)[396](index=396&type=chunk)[397](index=397&type=chunk) - Exclusive forum provisions in the company's certificate of incorporation and bylaws designate specific courts for certain disputes, potentially limiting stockholders' ability to choose a favorable judicial forum[398](index=398&type=chunk) [General Risk Factors](index=125&type=section&id=General%20Risk%20Factors) This section covers overarching risks applicable to public companies, such as compliance costs, internal control failures, economic conditions, and natural disasters - Operating as a public company incurs significantly increased legal, accounting, and compliance costs, diverting management time and resources[402](index=402&type=chunk) - Failure to maintain an effective system of disclosure controls and internal control over financial reporting could impair the ability to produce timely and accurate financial statements or comply with regulations[404](index=404&type=chunk) - Future changes in financial accounting standards or tax laws could cause adverse and unexpected revenue fluctuations or negatively affect financial condition and results of operations[409](index=409&type=chunk)[410](index=410&type=chunk) - Unstable market and economic conditions, including health epidemics, bank failures, and geopolitical actions, may have serious adverse consequences on the business, financial condition, and stock price[412](index=412&type=chunk) - Inflation may adversely affect the company by increasing costs of clinical trials, research, development, and administration, potentially accelerating cash burn[413](index=413&type=chunk) - Compromise of internal information technology systems or sensitive information, or those of third parties, due to cyber-attacks, ransomware, or other security incidents could lead to material disruptions, regulatory investigations, litigation, and financial losses[414](index=414&type=chunk)[416](index=416&type=chunk)[418](index=418&type=chunk)[422](index=422&type=chunk) - The company's operations may be adversely affected by earthquakes, fires, or other natural disasters, particularly given its location in San Diego, and its business continuity plans may be inadequate[425](index=425&type=chunk) - The company is subject to U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations, with potential for serious consequences for violations[426](index=426&type=chunk) - Difficulty in protecting intellectual property rights globally due to varying national laws and enforcement challenges could adversely affect the company's competitive position[430](index=430&type=chunk) - Cessation or publication of inaccurate/unfavorable research by securities or industry analysts could cause the stock price and trading volume to decline[433](index=433&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=135&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's initial public offering (IPO) in June 2021, including the gross and net proceeds received. It also outlines the use of these proceeds, with a portion already expended and the remainder invested in marketable securities - The company's initial public offering (IPO) closed on June 15, 2021, with the issuance and sale of **13,110,000 shares** of common stock at **$17.00 per share**[436](index=436&type=chunk) - The IPO generated gross proceeds of **$222.9 million** and net proceeds of approximately **$204.2 million** after deducting underwriting discounts and offering costs[436](index=436&type=chunk) - As of June 30, 2025, **$64.4 million** of the IPO proceeds have been used, with the balance invested in high-quality marketable securities with contractual maturity dates of up to three years[438](index=438&type=chunk) [Item 5. Other Information](index=137&type=section&id=Item%205.%20Other%20Information) This section reports on trading arrangements, specifically noting that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the second quarter of 2025 - No director or officer adopted or terminated any Rule 10b5-1 trading arrangement or any non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[439](index=439&type=chunk) [Item 6. Exhibits](index=138&type=section&id=Item%206.%20Exhibits) This section provides a list of exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate governance documents, warrant forms, an employment agreement, and certifications - The exhibits include the Amended and Restated Certificate of Incorporation, Bylaws, Common Stock Certificate, Investors' Rights Agreement, various Pre-Funded Warrants, an Employment Agreement, and certifications[440](index=440&type=chunk) SIGNATURES This section confirms the official signing of the Quarterly Report on Form 10-Q by the authorized representative of Janux Therapeutics, Inc. [SIGNATURES](index=139&type=section&id=SIGNATURES) This section confirms the official signing of the Quarterly Report on Form 10-Q by the authorized representative of Janux Therapeutics, Inc. - The report was signed on August 7, 2025, by David Campbell, Ph.D., President and Chief Executive Officer (Principal Executive and Financial Officer) of Janux Therapeutics, Inc[445](index=445&type=chunk)

Executive Summary Janux Therapeutics reported Q2 2025 financial results, highlighting strategic expansion of its TRACTr, TRACIr, and ARM platforms and anticipated clinical data releases [Introduction and CEO Commentary](index=1&type=section&id=Introduction%20and%20CEO%20Commentary) Janux Therapeutics reported Q2 2025 results, highlighting strategic expansion of its TRACTr, TRACIr, and ARM programs and anticipated clinical data for JANX007 and JANX008 - Janux Therapeutics is a clinical-stage biopharmaceutical company developing novel immunotherapies using its proprietary TRACTr, TRACIr, and ARM platforms[2](index=2&type=chunk) - CEO David Campbell emphasized the strategy to maximize current clinical programs, including JANX007, while advancing other differentiated candidates in oncology and autoimmune disease[3](index=3&type=chunk) - Additional clinical data from **JANX007** and **JANX008** is expected in the second half of 2025[3](index=3&type=chunk)[7](index=7&type=chunk) Business Highlights and Pipeline Updates This section details Janux's pipeline advancements, ongoing clinical trials for lead candidates, strategic collaborations, and platform overview [R&D Day and Platform Progress](index=1&type=section&id=R%26D%20Day%20and%20Platform%20Progress) Janux's R&D Day in July 2025 showcased significant pipeline progress and the best-in-class potential of its novel bispecific ARM platform for autoimmune diseases, identifying multiple preclinical candidates for future clinical trials - R&D Day in July 2025 highlighted pipeline progress and the best-in-class potential of the novel bispecific ARM platform for autoimmune diseases[4](index=4&type=chunk)[5](index=5&type=chunk) - Multiple product candidates from the preclinical pipeline were identified to move towards clinical trials[4](index=4&type=chunk) - New candidates include a PSMA-TRACIr for combination with JANX007, a TROP2-TRACTr for solid tumors, and a CD19-ARM for rapid, deep, and durable B-cell depletion in autoimmune diseases[6](index=6&type=chunk) [Clinical Development Status](index=1&type=section&id=Clinical%20Development%20Status) Enrollment is actively ongoing for Janux's lead clinical candidates, JANX007 and JANX008, in their respective Phase 1 clinical trials, with further data presentations anticipated in the latter half of 2025 - Enrollment is ongoing for **JANX007** in its first-in-human Phase 1 clinical trial for mCRPC (NCT05519449)[5](index=5&type=chunk)[6](index=6&type=chunk) - Enrollment is ongoing for **JANX008** in its first-in-human Phase 1 clinical trial for advanced or metastatic solid tumors (NCT05783622)[5](index=5&type=chunk)[6](index=6&type=chunk) - Updates on **JANX007** and **JANX008** are expected in the second half of 2025[5](index=5&type=chunk)[7](index=7&type=chunk) [Strategic Collaborations](index=1&type=section&id=Strategic%20Collaborations) Janux received a $10 million milestone payment from Merck, triggered by the dosing of the first patient in their lead collaboration program under the existing 2020 Research Collaboration and Exclusive License Agreement - A clinical milestone payment of **$10 million** from Merck was triggered by the first patient dosed in the lead collaboration program[5](index=5&type=chunk)[6](index=6&type=chunk) - This payment is part of the companies' 2020 Research Collaboration and Exclusive License Agreement[6](index=6&type=chunk) [Company Overview: Platforms and Pipeline](index=2&type=section&id=Company%20Overview%3A%20Platforms%20and%20Pipeline) Janux Therapeutics is a clinical-stage biopharmaceutical company focused on developing novel immunotherapies through its proprietary TRACTr, TRACIr, and ARM platforms, with two TRACTr candidates in Phase 1 clinical trials and several preclinical programs - Janux develops novel immunotherapies using its proprietary TRACTr, TRACIr, and ARM platforms[9](index=9&type=chunk)[10](index=10&type=chunk) - **JANX007**, a PSMA-targeting TRACTr, is in a Phase 1 clinical trial for mCRPC[9](index=9&type=chunk)[10](index=10&type=chunk) - **JANX008**, an EGFR-targeting TRACTr, is in a Phase 1 clinical trial for multiple solid cancers including colorectal carcinoma, NSCLC, and triple-negative breast cancer[9](index=9&type=chunk)[10](index=10&type=chunk) - Additional programs include a PSMA-TRACIr for combination with JANX007, a TROP2-TRACTr for TROP2+ solid tumors, and a CD19-ARM for autoimmune diseases, all advancing towards clinical trials[9](index=9&type=chunk) Second Quarter 2025 Financial Performance Janux Therapeutics reported its Q2 2025 financial results, detailing increased net loss, higher R&D expenses, and a strong cash position [Financial Summary](index=2&type=section&id=Financial%20Summary) Janux reported a net loss of $33.9 million for Q2 2025, a significant increase from the $6.0 million net loss in Q2 2024, primarily driven by higher research and development expenses and the absence of collaboration revenue, while maintaining a strong cash position Key Financial Highlights (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :--------------------- | :--------------------- | :----------- | | Collaboration Revenue | $0 | $8,897 | -$8,897 | | Research and Development Expenses | $34,664 | $14,898 | +$19,766 | | General and Administrative Expenses | $10,454 | $7,821 | +$2,633 | | Net Loss | $(33,858) | $(5,959) | -$(27,899) | - Cash, cash equivalents, and short-term investments totaled **$996.0 million** as of June 30, 2025, compared to **$1.03 billion** at December 31, 2024[5](index=5&type=chunk)[11](index=11&type=chunk)[14](index=14&type=chunk) [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) As of June 30, 2025, Janux's total assets decreased to $1,032.2 million from $1,061.5 million at December 31, 2024, primarily due to a decrease in cash and cash equivalents, partially offset by an increase in short-term investments, with total stockholders' equity also declining Condensed Balance Sheets (as of June 30, 2025 vs. December 31, 2024) | Asset/Liability/Equity | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :----- | | Cash and cash equivalents | $52,446 | $430,605 | $(378,159) | | Short-term investments | $943,565 | $594,568 | $348,997 | | Total current assets | $1,005,553 | $1,033,666 | $(28,113) | | Total assets | $1,032,212 | $1,061,516 | $(29,304) | | Total current liabilities | $21,379 | $17,459 | $3,920 | | Total liabilities | $41,696 | $38,735 | $2,961 | | Total stockholders' equity | $990,516 | $1,022,781 | $(32,265) | [Unaudited Condensed Statements of Operations and Comprehensive Loss](index=5&type=section&id=Unaudited%20Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended June 30, 2025, Janux reported no collaboration revenue, a significant increase in R&D and G&A expenses, leading to a wider net loss of $33.9 million or $(0.55) per common share Unaudited Condensed Statements of Operations and Comprehensive Loss (Three Months Ended June 30) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :--------------------- | :--------------------- | :----------- | | Collaboration revenue | $0 | $8,897 | -$8,897 | | Research and development | $34,664 | $14,898 | +$19,766 | | General and administrative | $10,454 | $7,821 | +$2,633 | | Total operating expenses | $45,118 | $22,719 | +$22,399 | | Loss from operations | $(45,118) | $(13,822) | -$(31,296) | | Total other income | $11,260 | $7,863 | +$3,397 | | Net loss | $(33,858) | $(5,959) | -$(27,899) | | Comprehensive loss | $(33,867) | $(7,051) | -$(26,816) | | Net loss per common share, basic and diluted | $(0.55) | $(0.11) | -$(0.44) | | Weighted-average shares outstanding | 61,902,411 | 54,451,666 | +7,450,745 | Unaudited Condensed Statements of Operations and Comprehensive Loss (Six Months Ended June 30) | Metric | H1 2025 (in thousands) | H1 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :--------------------- | :--------------------- | :----------- | | Collaboration revenue | $0 | $10,149 | -$10,149 | | Research and development | $59,719 | $28,968 | +$30,751 | | General and administrative | $20,296 | $15,164 | +$5,132 | | Total operating expenses | $80,015 | $44,132 | +$35,883 | | Loss from operations | $(80,015) | $(33,983) | -$(46,032) | | Total other income | $22,649 | $13,264 | +$9,385 | | Net loss | $(57,366) | $(20,719) | -$(36,647) | | Comprehensive loss | $(55,782) | $(23,000) | -$(32,782) | | Net loss per common share, basic and diluted | $(0.93) | $(0.40) | -$(0.53) | | Weighted-average shares outstanding | 61,847,372 | 51,750,690 | +10,096,682 | Forward-Looking Statements This section outlines inherent risks and uncertainties associated with forward-looking statements, which could impact actual results [Forward-Looking Statements Disclaimer](index=2&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section details inherent risks and uncertainties in forward-looking statements, including clinical trial outcomes, regulatory approvals, and reliance on third parties - The news release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially[11](index=11&type=chunk)[12](index=12&type=chunk) - Risks include interim clinical trial results not being indicative of final results, compounds failing in later preclinical or clinical trials, inability to obtain marketing approval, and reliance on third parties and outside financing[12](index=12&type=chunk) - Janux assumes no obligation to update any forward-looking statements, which are qualified by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[12](index=12&type=chunk) Contacts This section provides essential contact information for investor and media relations inquiries [Investor and Media Relations](index=5&type=section&id=Investor%20and%20Media%20Relations) This section provides contact information for investor and media inquiries regarding Janux Therapeutics - Investor contact: Andy Meyer, ameyer@januxrx.com, (202) 215-2579[17](index=17&type=chunk) - Media contact: Jessica Yingling, Ph.D., jessica@litldog.com, (858) 344-8091[17](index=17&type=chunk)

Group 1 - Janux Therapeutics (NASDAQ: JANX) has garnered significant interest from investors, alongside various buy-out rumors [1] - The company specializes in the research and development of novel Cell & Gene Therapies (CGT) aimed at addressing multiple clinical needs [1] - The analysis will focus on biotechnology, pharmaceutical, Medtech, and healthcare stocks, leveraging expertise in life sciences to evaluate the potential of new treatments [1]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents Janux Therapeutics' unaudited condensed financial statements and management's discussion and analysis for Q1 2025 [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Janux Therapeutics' unaudited condensed financial statements for Q1 2025 and 2024, including balance sheets, statements of operations, stockholders' equity, and cash flows, with detailed notes [Condensed Balance Sheets](index=3&type=section&id=Condensed%20Balance%20Sheets) This section provides a snapshot of the company's financial position at March 31, 2025, and December 31, 2024 | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Cash and cash equivalents | $73,743 | $430,605 | | Short-term investments | $940,403 | $594,568 | | Total current assets | $1,023,339 | $1,033,666 | | Total assets | $1,050,772 | $1,061,516 | | Total current liabilities | $17,502 | $17,459 | | Total liabilities | $38,303 | $38,735 | | Total stockholders' equity | $1,012,469 | $1,022,781 | | Accumulated deficit | $(261,265) | $(237,757) | [Unaudited Condensed Statements of Operations and Comprehensive Loss](index=4&type=section&id=Unaudited%20Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section details the company's financial performance, including revenue, expenses, and net loss, for the three months ended March 31, 2025, and 2024 | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Collaboration revenue | $— | $1,252 | | Research and development | $25,055 | $14,070 | | General and administrative | $9,842 | $7,343 | | Total operating expenses | $34,897 | $21,413 | | Loss from operations | $(34,897) | $(20,161) | | Interest income | $11,389 | $5,401 | | Net loss | $(23,508) | $(14,760) | | Net loss per common share, basic and diluted | $(0.38) | $(0.30) | [Unaudited Condensed Statements of Stockholders' Equity](index=5&type=section&id=Unaudited%20Condensed%20Statements%20of%20Stockholders%27%20Equity) This section outlines changes in stockholders' equity, including stock-based compensation and accumulated deficit, for the three months ended March 31, 2025, and 2024 - Stock-based compensation significantly increased from **$5.6 million in Q1 2024** to **$10.7 million in Q1 2025**, reflecting increased equity awards[15](index=15&type=chunk) - Additional paid-in capital increased by **$11.6 million** from December 31, 2024, to March 31, 2025, primarily due to stock-based compensation and option exercises[15](index=15&type=chunk) - The accumulated deficit grew from **$237.8 million** at December 31, 2024, to **$261.3 million** at March 31, 2025, due to the net loss incurred during the quarter[15](index=15&type=chunk) [Unaudited Condensed Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Statements%20of%20Cash%20Flows) This section presents the cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2025, and 2024 | Cash Flow Activity (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(17,024) | $(14,837) | | Net cash used in investing activities | $(340,392) | $(113,736) | | Net cash provided by financing activities | $554 | $322,171 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(356,862) | $193,598 | | Cash, cash equivalents and restricted cash – end of period | $74,559 | $213,619 | [Notes to Unaudited Condensed Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed financial statements [1. Organization and Summary of Significant Accounting Policies](index=7&type=section&id=1.%20Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) This section describes the company's business, its financial condition, and the key accounting principles applied in preparing the financial statements - Janux Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing novel immunotherapies for cancer using its proprietary TRACTr and TRACIr platforms[21](index=21&type=chunk) - The Company has incurred net losses and negative cash flows from operations since inception, with an accumulated deficit of **$261.3 million** as of March 31, 2025. Management believes existing capital is sufficient for at least 12 months[22](index=22&type=chunk) Fair Value Measurements at March 31, 2025 (in thousands) | Asset Category | Total | Level 1 | Level 2 | Level 3 | | :------------- | :---- | :------ | :------ | :------ | | Money market funds | $37,868 | $37,868 | $— | $— | | Commercial paper | $28,399 | $— | $28,399 | $— | | U.S. Treasury securities | $77,750 | $77,750 | $— | $— | | U.S. agency bonds | $332,666 | $— | $332,666 | $— | | Corporate debt securities | $299,372 | $— | $299,372 | $— | | Restricted cash (money market) | $816 | $816 | $— | $— | | **Total assets measured at fair value** | **$1,007,486** | **$116,434** | **$891,052** | **$—** | - Short-term investments, classified as available-for-sale, include U.S. Treasury securities, U.S. agency bonds, corporate debt securities, and commercial paper, all highly rated[33](index=33&type=chunk) - Revenue recognition follows a five-step approach, identifying contracts, performance obligations, transaction price, allocation, and recognition upon transfer of control. Variable consideration for milestones is included if a significant revenue reversal is improbable[44](index=44&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) - Research and development costs are expensed as incurred, with accruals based on the progress of activities and contracted costs[57](index=57&type=chunk) - The Company operates as a single operating segment focused on novel immunotherapies research and development, with all assets held in the United States and revenue derived from the Merck collaboration[62](index=62&type=chunk) Potentially Dilutive Securities Not Included in Diluted Net Loss Per Share (common stock equivalent shares) | Security Type | As of March 31, 2025 | As of March 31, 2024 | | :------------ | :------------------- | :------------------- | | Common stock options outstanding | 9,995,064 | 9,850,776 | | Restricted stock units outstanding | 603,132 | — | | Employee stock purchase plan shares | 78,772 | 55,251 | | **Total potentially dilutive shares** | **10,676,968** | **9,911,798** | [2. Balance Sheet Details](index=20&type=section&id=2.%20Balance%20Sheet%20Details) This section provides a detailed breakdown of specific balance sheet accounts, including prepaid expenses, property and equipment, and accrued expenses Prepaid Expenses and Other Current Assets (in thousands) | Item | March 31, 2025 | December 31, 2024 | | :--- | :------------- | :---------------- | | Interest receivable | $5,585 | $5,381 | | Prepaid research and development | $2,876 | $2,354 | | Other prepaid expenses | $732 | $758 | | **Total** | **$9,193** | **$8,493** | Property and Equipment, Net (in thousands) | Item | March 31, 2025 | December 31, 2024 | | :--- | :------------- | :---------------- | | Laboratory equipment | $8,731 | $8,360 | | Furniture and fixtures | $792 | $792 | | Computer equipment and software | $658 | $658 | | Assets not placed in service | $237 | $6 | | Total property and equipment | $10,418 | $9,816 | | Less: accumulated depreciation | $(5,471) | $(4,952) | | **Property and equipment, net** | **$4,947** | **$4,864** | Accrued Expenses (in thousands) | Item | March 31, 2025 | December 31, 2024 | | :--- | :------------- | :---------------- | | Accrued research and development | $10,564 | $6,200 | | Accrued compensation | $1,851 | $4,566 | | Other accrued expenses | $925 | $918 | | **Total** | **$13,340** | **$11,684** | [3. Commitments and Contingencies](index=21&type=section&id=3.%20Commitments%20and%20Contingencies) This section outlines the company's contractual obligations, including license agreements and operating leases, and potential contingent liabilities - The Company has a Cell Line License Agreement with WuXi Biologics, requiring low single-digit royalty payments on net sales if a third-party manufacturer is used, with a buyout option ranging up to **$15.0 million**[72](index=72&type=chunk)[73](index=73&type=chunk) - The Torrey Plaza operating lease for office and laboratory space commenced on April 1, 2022, with a term of 130 months and future minimum noncancelable operating lease payments totaling **$30.7 million**[75](index=75&type=chunk)[80](index=80&type=chunk) Future Minimum Noncancelable Operating Lease Payments (in thousands) as of March 31, 2025 | Year | Amount | | :--- | :----- | | 2025 (remaining) | $2,640 | | 2026 | $3,611 | | 2027 | $3,719 | | 2028 | $3,830 | | 2029 | $3,945 | | Thereafter | $12,927 | | **Total minimum lease payments** | **$30,672** | [4. Stockholders' Equity](index=23&type=section&id=4.%20Stockholders%27%20Equity) This section details changes in the company's equity, including stock offerings, stock option activity, and restricted stock units - The Company has an ATM Equity Offering Sales Agreement for up to **$150.0 million** of common stock, with the full amount remaining available as of March 31, 2025[82](index=82&type=chunk) - In March 2024, the Company closed an underwritten offering, issuing 5,397,301 shares of common stock and pre-funded warrants, generating net proceeds of **$320.1 million**[84](index=84&type=chunk)[86](index=86&type=chunk) - In December 2024, another underwritten offering of 6,150,793 shares and pre-funded warrants generated net proceeds of **$377.9 million**[88](index=88&type=chunk) Stock Option Activity Summary (in thousands, except share, per share data and years) | Metric | Outstanding at Dec 31, 2024 | Granted | Exercised | Forfeited or cancelled | Outstanding at Mar 31, 2025 | | :----- | :-------------------------- | :------ | :-------- | :--------------------- | :-------------------------- | | Number of Options | 8,873,071 | 1,329,425 | (103,884) | (103,548) | 9,995,064 | | Weighted Average Exercise Price | $12.81 | $52.74 | $8.68 | $42.87 | $17.85 | | Weighted Average Remaining Contractual Term (years) | 7.2 | | | | 7.3 | | Aggregate Intrinsic Value | $361,595 | | | | $131,168 | - Total unrecognized stock-based compensation cost for options was **$79.6 million** as of March 31, 2025, to be recognized over approximately **2.6 years**[94](index=94&type=chunk) Restricted Stock Unit (RSU) Activity Summary | Metric | Outstanding at Dec 31, 2024 | Granted | Vested | Forfeited or cancelled | Outstanding at Mar 31, 2025 | | :----- | :-------------------------- | :------ | :----- | :--------------------- | :-------------------------- | | Number of Restricted Stock Units | 341,847 | 301,080 | — | (39,795) | 603,132 | | Weighted Average Grant Date Fair Value per Share | $59.09 | $51.95 | $— | $48.72 | $56.21 | - Total unrecognized stock-based compensation cost for RSUs was **$30.9 million** as of March 31, 2025, to be recognized over approximately **3.6 years**[100](index=100&type=chunk) Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--------------- | :-------------------------------- | :-------------------------------- | | Research and development | $5,199 | $2,184 | | General and administrative | $5,503 | $3,441 | | **Total** | **$10,702** | **$5,625** | [5. Research Collaboration and Exclusive License Agreement](index=28&type=section&id=5.%20Research%20Collaboration%20and%20Exclusive%20License%20Agreement) This section details the company's collaboration with Merck for T cell engager immunotherapies, including potential milestone payments and royalties - The Company has a research collaboration and exclusive license agreement with Merck for up to two collaboration targets related to T cell engager immunotherapies for cancer[105](index=105&type=chunk) - Under the Merck Agreement, the Company is eligible to receive up to an aggregate of **$285.0 million** in development and regulatory milestones and up to **$350.0 million** per licensed product in commercial milestones, plus tiered royalties on net sales[105](index=105&type=chunk) Collaboration Revenue (in thousands) | Period | Amount | | :----- | :----- | | Three months ended March 31, 2025 | $0 | | Three months ended March 31, 2024 | $1,252 | - The Company's performance obligations related to the Collaboration Targets under the Merck Agreement were completed as of March 31, 2025[107](index=107&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, clinical-stage biopharmaceutical focus, Merck collaboration, and future funding needs [Overview](index=29&type=section&id=Overview) This section introduces Janux Therapeutics as a clinical-stage biopharmaceutical company, its lead product candidates, and its financial outlook - Janux Therapeutics is a clinical-stage biopharmaceutical company developing tumor-activated immunotherapies (TRACTr and TRACIr platforms) for cancer, aiming to overcome liabilities of prior T cell engagers[109](index=109&type=chunk) - Lead clinical candidates are JANX007 (PSMA-TRACTr for mCRPC) and JANX008 (EGFR-TRACTr for multiple solid cancers), both showing encouraging early clinical data[109](index=109&type=chunk) Net Losses (in millions) | Period | Net Loss | | :----- | :------- | | Three months ended March 31, 2025 | $23.5 | | Three months ended March 31, 2024 | $14.8 | - The Company expects substantial increases in expenses and operating losses as it advances product candidates through clinical development and operates as a public company[112](index=112&type=chunk)[113](index=113&type=chunk) - Existing cash, cash equivalents, and short-term investments of **$1.01 billion** as of March 31, 2025, are believed to be sufficient to fund operations for at least the next 12 months[114](index=114&type=chunk)[131](index=131&type=chunk) [Our Research Collaboration with Merck](index=31&type=section&id=Our%20Research%20Collaboration%20with%20Merck) This section details the company's research collaboration with Merck, focusing on TRACTr product candidates and potential milestone payments - The collaboration with Merck, initiated in December 2020, focuses on developing TRACTr product candidates for two collaboration targets, with Merck receiving exclusive worldwide licenses[115](index=115&type=chunk) - The Company is eligible for up to **$500.5 million** per target in upfront and milestone payments, plus royalties on sales, with research services for both targets completed in August 2024[115](index=115&type=chunk) [Risks and Uncertainties](index=31&type=section&id=Risks%20and%20Uncertainties) This section addresses the widespread geopolitical and macroeconomic uncertainties impacting the company's business and financial condition - The Company faces widespread geopolitical and macroeconomic uncertainties, including public health crises, bank failures, inflation, and geopolitical conflicts, which could impact its business and financial condition[116](index=116&type=chunk) [Financial Operations Overview](index=31&type=section&id=Financial%20Operations%20Overview) This section provides an overview of the company's revenue, research and development, general and administrative expenses, and other income [Revenues](index=31&type=section&id=Revenues) This section discusses the company's collaboration revenue and the absence of product sales revenue to date - The Company has not generated any product sales revenue to date and does not expect to in the foreseeable future[117](index=117&type=chunk) Collaboration Revenue (in millions) | Period | Revenue | | :----- | :------ | | Three months ended March 31, 2025 | $0 | | Three months ended March 31, 2024 | $1.3 | [Research and Development](index=31&type=section&id=Research%20and%20Development) This section outlines the recognition and components of R&D expenses, and anticipated increases due to ongoing development activities - R&D expenses are recognized as incurred and primarily relate to the development of TRACTr and TRACIr platforms, discovery efforts, and preclinical/clinical development of product candidates[118](index=118&type=chunk) - Direct R&D expenses include external CROs and consultants, while indirect costs cover salaries, facilities, and equipment[119](index=119&type=chunk)[125](index=125&type=chunk) - R&D expenses are anticipated to increase substantially due to ongoing development, preclinical studies, clinical trials, and personnel expansion[120](index=120&type=chunk) [General and Administrative](index=33&type=section&id=General%20and%20Administrative) This section describes the components of G&A expenses and the expected increases due to headcount growth and public company operations - G&A expenses consist mainly of salaries, stock-based compensation, facility costs, legal fees, and professional services[122](index=122&type=chunk) - G&A expenses are expected to increase due to headcount growth, support for R&D, and costs associated with operating as a public company[122](index=122&type=chunk) [Other Income](index=33&type=section&id=Other%20Income) This section explains that other income is primarily derived from interest earned on cash, cash equivalents, and short-term investments - Other income is primarily derived from interest earned on cash, cash equivalents, and short-term investments[123](index=123&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's financial performance for the three months ended March 31, 2025, and 2024 [Collaboration Revenue](index=33&type=section&id=Collaboration%20Revenue) This section details the collaboration revenue trends, noting a decrease due to the completion of research activities under the Merck Agreement Collaboration Revenue (in thousands) | Period | Revenue | | :----- | :------ | | Three months ended March 31, 2025 | $0 | | Three months ended March 31, 2024 | $1,252 | - The **$1.3 million** decrease in collaboration revenue was primarily due to the completion of research activities under the Merck Agreement in August 2024[126](index=126&type=chunk) [Research and Development Expense](index=34&type=section&id=Research%20and%20Development%20Expense) This section analyzes the increase in R&D expenses, driven by direct costs for product candidates and indirect costs Research and Development Expenses (in thousands) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :------- | :-------------------------------- | :-------------------------------- | :----- | | JANX007 | $4,443 | $2,820 | $1,623 | | JANX008 | $1,476 | $1,256 | $220 | | Preclinical stage programs and other direct unallocated costs | $7,046 | $2,430 | $4,616 | | Total direct costs | $12,965 | $6,506 | $6,459 | | Indirect costs | $12,090 | $7,564 | $4,526 | | **Total R&D expenses** | **$25,055** | **$14,070** | **$10,985** | - Total R&D expenses increased by **$11.0 million**, driven by increases in direct costs for JANX007 (**$1.6M**), JANX008 (**$0.2M**), other preclinical programs (**$4.6M**), and indirect costs (**$4.6M**)[128](index=128&type=chunk) [General and Administrative Expense](index=34&type=section&id=General%20and%20Administrative%20Expense) This section examines the increase in G&A expenses, primarily attributed to higher stock-based compensation General and Administrative Expenses (in thousands) | Period | Amount | | :----- | :----- | | Three months ended March 31, 2025 | $9,842 | | Three months ended March 31, 2024 | $7,343 | - G&A expenses increased by **$2.5 million**, primarily due to a **$2.1 million** increase in stock-based compensation[129](index=129&type=chunk) [Other Income](index=34&type=section&id=Other%20Income) This section discusses the increase in other income, driven by higher interest earnings from increased cash and investments Other Income (in thousands) | Period | Amount | | :----- | :----- | | Three months ended March 31, 2025 | $11,389 | | Three months ended March 31, 2024 | $5,401 | - Other income increased by **$6.0 million**, driven by higher interest income from increased cash, cash equivalents, and short-term investments[130](index=130&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's financial liquidity, capital resources, and cash flow activities for the three months ended March 31, 2025, and 2024 - As of March 31, 2025, the Company had **$1.01 billion** in cash, cash equivalents, restricted cash, and short-term investments, including **$0.8 million** in restricted cash[131](index=131&type=chunk) - The Company has an 'at the market offering' program with BofA Securities for up to **$150.0 million** of common stock, all of which remained available as of March 31, 2025[132](index=132&type=chunk) - Significant capital was raised through underwritten offerings: **$56.5 million** net proceeds in July 2023, **$320.1 million** net proceeds in March 2024, and **$377.9 million** net proceeds in December 2024[133](index=133&type=chunk)[134](index=134&type=chunk)[136](index=136&type=chunk) Cash Flows Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------- | :-------------------------------- | :-------------------------------- | | Operating activities | $(17,024) | $(14,837) | | Investing activities | $(340,392) | $(113,736) | | Financing activities | $554 | $322,171 | - Net cash used in operating activities increased to **$17.0 million** in Q1 2025 from **$14.8 million** in Q1 2024, primarily due to increased net loss and changes in operating assets/liabilities[138](index=138&type=chunk) - Net cash used in investing activities significantly increased to **$340.4 million** in Q1 2025 from **$113.7 million** in Q1 2024, mainly due to higher net purchases of short-term investments[139](index=139&type=chunk) - Net cash provided by financing activities decreased substantially to **$0.6 million** in Q1 2025 from **$322.2 million** in Q1 2024, reflecting lower proceeds from equity offerings[140](index=140&type=chunk) [Funding Requirements](index=36&type=section&id=Funding%20Requirements) This section discusses the company's need for substantial additional funding to complete product development and commercialization, and potential financing methods - The Company believes existing capital is sufficient for at least the next 12 months but will require substantial additional funding to complete product candidate development through regulatory approval[141](index=141&type=chunk) - Future capital requirements depend on factors such as clinical trial progress, regulatory approvals, manufacturing costs, personnel hiring, commercialization activities, and intellectual property protection[142](index=142&type=chunk)[144](index=144&type=chunk) - Financing is expected through equity offerings, debt financings, or collaborations, which may lead to stockholder dilution or relinquishing rights to technologies[142](index=142&type=chunk) [Contractual Obligations and Commitments](index=38&type=section&id=Contractual%20Obligations%20and%20Commitments) This section outlines the company's significant contractual obligations, including license agreements and operating lease payments - The Company has a Cell Line License Agreement with WuXi Biologics, potentially requiring royalty payments on net sales if a third-party manufacturer is used, with a buyout option up to **$15.0 million**[143](index=143&type=chunk) - A noncancelable operating lease for office and laboratory space (Torrey Plaza Lease) involves aggregate payments of approximately **$38.0 million** over a 126-month term[146](index=146&type=chunk) [Critical Accounting Policies and Estimates](index=40&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights key accounting estimates and judgments, including revenue recognition, R&D accruals, and equity award valuation - Key accounting estimates and judgments include collaboration revenue recognition, accruals for R&D expenses, and valuation of equity awards for stock-based compensation[148](index=148&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section assesses the company's exposure to market risks, including interest rate, foreign currency, and inflation, and their potential financial impact [Interest rate risk](index=40&type=section&id=Interest%20rate%20risk) This section discusses the company's exposure to interest rate fluctuations on its financial instruments - The Company's financial instruments, including cash, cash equivalents, and short-term investments, are subject to interest rate fluctuations[150](index=150&type=chunk) - A **10.0%** change in interest rates as of March 31, 2025, would not have had a material effect on the fair value of the investment portfolio[150](index=150&type=chunk) [Foreign currency exchange risk](index=40&type=section&id=Foreign%20currency%20exchange%20risk) This section addresses the company's exposure to foreign currency exchange rate risk, noting it is not currently significant - The Company is not currently exposed to significant foreign currency exchange rate risk, despite contracting with some international vendors[151](index=151&type=chunk) - A **10.0%** change in foreign currency exchange rates as of March 31, 2025, would not have had a material effect on the financial statements[151](index=151&type=chunk) [Inflation](index=42&type=section&id=Inflation) This section discusses the impact of inflation on the company's costs and its material effect on financial results - Inflation generally increases labor and preclinical/clinical development costs[153](index=153&type=chunk) - Inflation did not have a material effect on the Company's business, financial condition, or results of operations during the three months ended March 31, 2025[153](index=153&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of disclosure controls and procedures and reports on changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=42&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of March 31, 2025 - As of March 31, 2025, the Chief Executive Officer concluded that the Company's disclosure controls and procedures were effective at the reasonable assurance level[154](index=154&type=chunk) [Changes in Internal Control over Financial Reporting](index=42&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports no material changes in internal control over financial reporting during the most recent quarter - There were no changes in internal control over financial reporting during the most recent quarter that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[155](index=155&type=chunk) [PART II. OTHER INFORMATION](index=43&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information not included in the financial statements, covering legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) This section states the company is not currently involved in any material legal proceedings - The Company is not currently a party to any material legal proceedings[158](index=158&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks related to the company's limited operating history, financial position, product development, manufacturing, collaborations, industry operations, government regulation, intellectual property, and market factors [Summary of Risks Associated with Our Business](index=43&type=section&id=Summary%20of%20Risks%20Associated%20with%20Our%20Business) This section provides an overview of key risks, including limited operating history, continuous net losses, capital needs, early development stage, reliance on third parties, and intellectual property challenges - Key risks include a limited operating history, continuous net losses, the need for additional capital, early development stage of product candidates (except JANX007 and JANX008), reliance on third parties, and challenges in intellectual property protection[160](index=160&type=chunk)[162](index=162&type=chunk) [Risks Related to Our Limited Operating History, Financial Position and Capital Requirements](index=45&type=section&id=Risks%20Related%20to%20Our%20Limited%20Operating%20History%2C%20Financial%20Position%20and%20Capital%20Requirements) This section details risks stemming from the company's limited operating history, ongoing net losses, and substantial future capital requirements - The Company has incurred net losses since inception (**$23.5M** in Q1 2025, **$14.8M** in Q1 2024) and expects significant future losses, with an accumulated deficit of **$261.3 million** as of March 31, 2025[162](index=162&type=chunk) - Substantial additional funding will be required to complete product development and commercialization, which may lead to stockholder dilution or relinquishing rights to technologies[164](index=164&type=chunk)[168](index=168&type=chunk) - Future capital requirements are highly dependent on the timing and costs of preclinical studies, clinical trials (especially JANX007 and JANX008), regulatory approvals, manufacturing, and commercialization activities[167](index=167&type=chunk)[170](index=170&type=chunk) [Risks Related to the Discovery, Development and Regulatory Approval of Our Product Candidates](index=48&type=section&id=Risks%20Related%20to%20the%20Discovery%2C%20Development%20and%20Regulatory%20Approval%20of%20Our%20Product%20Candidates) This section outlines risks associated with the lengthy, expensive, and uncertain process of discovering, developing, and obtaining regulatory approval for product candidates - Most product candidates are in preclinical or discovery stages, and the Company has limited experience conducting clinical trials, making success in development and commercialization uncertain[172](index=172&type=chunk) - Preclinical and clinical development is lengthy, expensive, and unpredictable; early positive results do not guarantee success in later trials, and product candidates may fail to achieve favorable safety and efficacy[175](index=175&type=chunk) - Delays in clinical trials can occur due to regulatory disagreements, patient enrollment issues, safety concerns, or manufacturing challenges, impacting development timelines and costs[176](index=176&type=chunk)[180](index=180&type=chunk)[191](index=191&type=chunk) - Product candidates based on novel technologies face difficulties in predicting development timing, results, and costs, and adverse developments in one program could impact others[183](index=183&type=chunk) - Serious adverse events or undesirable side effects identified during development or after approval could lead to discontinuation of programs, refusal of regulatory approval, or revocation of marketing authorizations[192](index=192&type=chunk)[195](index=195&type=chunk) - Interim or preliminary clinical data are subject to change and audit, and differences from final data could harm business prospects[196](index=196&type=chunk)[197](index=197&type=chunk) - The regulatory approval process is lengthy, expensive, and uncertain, with potential for delays, limited indications, or post-market requirements[198](index=198&type=chunk)[199](index=199&type=chunk)[204](index=204&type=chunk) - Disruptions at regulatory authorities (e.g., FDA, EMA) due to funding shortages or global health concerns could delay product review and approval[215](index=215&type=chunk)[216](index=216&type=chunk) - Limited resources necessitate prioritizing product candidates, potentially foregoing more profitable opportunities, and there is no guarantee of identifying additional successful candidates[217](index=217&type=chunk)[218](index=218&type=chunk) [Risks Related to Manufacturing, Commercialization and Reliance on Third Parties](index=62&type=section&id=Risks%20Related%20to%20Manufacturing%2C%20Commercialization%20and%20Reliance%20on%20Third%20Parties) This section covers risks associated with manufacturing, commercialization, and heavy reliance on third parties for preclinical testing, clinical trials, and product manufacturing - The Company relies heavily on third parties for preclinical testing, clinical trials, and manufacturing of product candidates, increasing risks of delays, increased costs, or substandard performance[219](index=219&type=chunk)[220](index=220&type=chunk)[224](index=224&type=chunk)[225](index=225&type=chunk) - Manufacturing is complex and relies on single-source suppliers for Bulk Drug Substance (BDS), posing risks of supply limitations, interruptions, or quality issues[225](index=225&type=chunk) - Compliance with cGMP regulations by third-party manufacturers is critical, and any failure could lead to delays, regulatory issues, or inability to meet commercial demand[226](index=226&type=chunk)[229](index=229&type=chunk) - Geopolitical factors, such as trade restrictions or sanctions involving Chinese biotechnology companies like WuXi Biologics, could disrupt the supply chain[229](index=229&type=chunk) - Approved products may fail to achieve market acceptance due to competition, pricing, convenience, or lack of reimbursement, limiting commercial success[236](index=236&type=chunk)[238](index=238&type=chunk) - Unfavorable pricing regulations or third-party coverage and reimbursement policies could make it difficult to sell product candidates profitably, impacting demand and revenue[237](index=237&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk) - Product candidates approved as biologics may face biosimilar competition sooner than anticipated, leading to significant pricing pressure[248](index=248&type=chunk)[250](index=250&type=chunk) - The market opportunity may be limited to patients who have failed prior treatments, and estimates of target patient populations may be inaccurate[252](index=252&type=chunk)[254](index=254&type=chunk) - Reliance on third parties requires sharing trade secrets, increasing the risk of discovery or misappropriation by competitors[255](index=255&type=chunk) - The Company lacks internal sales and marketing capabilities and faces risks in establishing its own or outsourcing these functions, potentially hindering commercialization[258](index=258&type=chunk)[259](index=259&type=chunk)[261](index=261&type=chunk) - Failure to obtain regulatory approval or commercialize products outside the United States would limit market potential due to varying international regulatory requirements[262](index=262&type=chunk) [Risks Related to Our Collaborations and Other Strategic Agreements](index=76&type=section&id=Risks%20Related%20to%20Our%20Collaborations%20and%20Other%20Strategic%20Agreements) This section addresses risks associated with collaborations, including potential termination, disputes, and the inability to form new strategic alliances - The existing collaboration with Merck is crucial, and its termination or Merck's de-prioritization of programs could result in reduced or no milestone payments and royalties[264](index=264&type=chunk)[265](index=265&type=chunk) - Disputes with collaborators could delay development, create intellectual property uncertainties, and incur substantial expenses[265](index=265&type=chunk) - Inability to form additional collaborations or realize benefits from strategic alliances could alter or delay development and commercialization plans[269](index=269&type=chunk)[271](index=271&type=chunk) [Risks Related to Our Industry and Business Operations](index=78&type=section&id=Risks%20Related%20to%20Our%20Industry%20and%20Business%20Operations) This section covers risks inherent to the biopharmaceutical industry and business operations, including misconduct, product liability, competition, and macroeconomic factors - The Company is exposed to risks of misconduct by employees, investigators, consultants, and partners, including non-compliance with regulatory standards and healthcare fraud laws[273](index=273&type=chunk) - Product liability claims, even if meritless, could result in substantial costs, reputational harm, and delays in regulatory approvals or commercialization[274](index=274&type=chunk)[277](index=277&type=chunk) - High dependence on key personnel and intense competition for skilled labor in the San Diego area pose risks to business strategy implementation and growth management[278](index=278&type=chunk)[279](index=279&type=chunk)[280](index=280&type=chunk) - The Company faces substantial competition in the immunotherapy market, with competitors having greater resources and more advanced products, potentially rendering its technologies obsolete[285](index=285&type=chunk)[288](index=288&type=chunk) - The ability to use net operating loss (NOL) carryforwards may be limited by ownership changes (Section 382) or state-level restrictions, potentially increasing future tax liability[292](index=292&type=chunk)[294](index=294&type=chunk) - Epidemic diseases could significantly disrupt operations, clinical trials, supply chains, and access to capital, exacerbating other business risks[295](index=295&type=chunk)[297](index=297&type=chunk)[298](index=298&type=chunk)[300](index=300&type=chunk) [Risks Related to Government Regulation](index=87&type=section&id=Risks%20Related%20to%20Government%20Regulation) This section details risks arising from extensive government regulations, including healthcare fraud laws, pricing legislation, data privacy, and international trade policies - Business operations are subject to extensive U.S. federal and state, EU, and foreign healthcare fraud and abuse laws, transparency laws, and other regulations, with potential for substantial penalties for non-compliance[301](index=301&type=chunk)[302](index=302&type=chunk)[303](index=303&type=chunk) - Enacted and future legislation, such as the Affordable Care Act and Inflation Reduction Act (IRA), may increase the difficulty and cost of obtaining marketing approval and commercializing products, and affect pricing[304](index=304&type=chunk)[305](index=305&type=chunk)[307](index=307&type=chunk) - The IRA directs Medicare drug price negotiations and imposes rebates for price increases exceeding inflation, potentially impacting future revenues[307](index=307&type=chunk) - Changes in EU regulatory frameworks, including the Clinical Trials Regulation (CTR) and Health Technology Assessment (HTA) processes, could impact clinical trial authorization and product pricing/reimbursement[310](index=310&type=chunk) - Brexit has changed the UK's regulatory relationship with the EU, requiring compliance with separate UK regulatory frameworks for clinical trials and marketing authorizations[314](index=314&type=chunk)[315](index=315&type=chunk)[316](index=316&type=chunk) - The Company processes sensitive information, including health-related data, and is subject to stringent and evolving data privacy and security laws (e.g., HIPAA, CCPA, GDPR), with non-compliance risking investigations, litigation, and penalties[320](index=320&type=chunk)[321](index=321&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk)[328](index=328&type=chunk) - Limitations on cross-border data transfers, particularly from Europe to the U.S., could disrupt operations and lead to significant expenses or regulatory actions[329](index=329&type=chunk)[331](index=331&type=chunk) - International trade policies, including tariffs and sanctions, may adversely affect business by increasing R&D expenses, disrupting supply chains (e.g., WuXi Biologics in China), and creating legal/operational risks[334](index=334&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk) [Risks Related to Our Intellectual Property](index=99&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section addresses risks concerning the company's intellectual property, including patent protection, trade secrets, inventorship claims, and trademark protection - Failure to obtain and maintain sufficient patent protection for platform technologies and product candidates could allow competitors to commercialize similar products, adversely affecting the Company's competitive position[339](index=339&type=chunk)[341](index=341&type=chunk) - The patent application process is expensive, time-consuming, and uncertain; issued patents may be challenged, invalidated, or circumvented, limiting protection[342](index=342&type=chunk)[347](index=347&type=chunk) - Reliance on trade secret protection carries risks of disclosure or independent development by competitors, harming competitive position[348](index=348&type=chunk)[383](index=383&type=chunk)[384](index=384&type=chunk) - The Company may be subject to claims challenging inventorship or ownership of patents, potentially leading to loss of valuable intellectual property rights[385](index=385&type=chunk)[386](index=386&type=chunk) - Patent terms may be inadequate to protect product candidates for a sufficient period, leading to biosimilar or generic competition upon expiration[389](index=389&type=chunk) - Inadequate protection of trademarks and trade names could hinder brand recognition and competitive effectiveness[390](index=390&type=chunk) [Risks Related to the Securities Market and Ownership of Our Common Stock](index=119&type=section&id=Risks%20Related%20to%20the%20Securities%20Market%20and%20Ownership%20of%20Our%20Common%20Stock) This section discusses risks related to the volatility of the company's common stock price, stockholder control, future stock issuances, and corporate governance provisions - The price of the Company's common stock is subject to significant volatility due to factors like clinical trial results, regulatory developments, market conditions, and analyst recommendations[392](index=392&type=chunk)[394](index=394&type=chunk) - Principal stockholders and management own a significant percentage of stock, allowing them to exert substantial control over stockholder approval matters[395](index=395&type=chunk) - Future sales and issuances of common stock, including through equity incentive plans, could dilute existing stockholders' ownership and cause the stock price to fall[397](index=397&type=chunk)[398](index=398&type=chunk) - The Company does not intend to pay dividends, limiting stockholder returns to stock appreciation[399](index=399&type=chunk) - Delaware law and corporate provisions could make mergers, tender offers, or proxy contests difficult, potentially depressing the stock price[400](index=400&type=chunk)[404](index=404&type=chunk) - Exclusive forum provisions in corporate documents may limit stockholders' ability to choose a favorable judicial forum for disputes, potentially increasing costs[405](index=405&type=chunk)[407](index=407&type=chunk) [General Risk Factors](index=124&type=section&id=General%20Risk%20Factors) This section covers broad risks including public company operating costs, control failures, accounting changes, market instability, inflation, cybersecurity, natural disasters, and compliance with various laws - Operating as a public company incurs significantly increased legal, accounting, and compliance costs, diverting management time and potentially impacting financial performance[408](index=408&type=chunk)[409](index=409&type=chunk) - Failure to maintain effective disclosure controls and internal control over financial reporting could impair timely and accurate financial statements, harm business, and lead to investor loss of confidence[410](index=410&type=chunk)[413](index=413&type=chunk) - Future changes in financial accounting standards or tax laws could cause adverse revenue fluctuations, increase costs, or impact financial results[416](index=416&type=chunk)[417](index=417&type=chunk) - Unstable market and economic conditions, including health epidemics, bank failures, and geopolitical conflicts, may adversely affect business, financial condition, and stock price[418](index=418&type=chunk)[419](index=419&type=chunk) - Inflation increases operating costs, potentially accelerating cash burn and requiring additional capital sooner than expected[420](index=420&type=chunk) - Compromises of internal IT systems or sensitive information, or those of third parties, could lead to disruptions, regulatory actions, litigation, and reputational harm[422](index=422&type=chunk)[424](index=424&type=chunk)[427](index=427&type=chunk)[431](index=431&type=chunk) - Natural disasters (e.g., earthquakes, fires) could disrupt operations, especially given the concentration of facilities in San Diego, and the lack of comprehensive disaster recovery plans[433](index=433&type=chunk) - Violations of U.S. and foreign anti-corruption, anti-money laundering, export control, and sanctions laws could result in substantial penalties and reputational damage[434](index=434&type=chunk) - Failure to comply with environmental, health, and safety laws could lead to fines, penalties, or substantial costs[435](index=435&type=chunk)[437](index=437&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=135&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's June 2021 IPO, including gross and net proceeds, and confirms the use of proceeds aligns with planned allocation - The Company's IPO in June 2021 generated gross proceeds of **$222.9 million** and net proceeds of approximately **$204.2 million**[444](index=444&type=chunk) - As of March 31, 2025, **$38.7 million** of the IPO proceeds have been used, with no material change in the planned use, and the balance invested in high-quality marketable securities[445](index=445&type=chunk) [Item 5. Other Information](index=135&type=section&id=Item%205.%20Other%20Information) This section reports no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2025[446](index=446&type=chunk) [Item 6. Exhibits](index=136&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, stock certificates, investor agreements, and certifications - The exhibits include Amended and Restated Certificate of Incorporation, Bylaws, Form of Common Stock Certificate, Amended and Restated Investors' Rights Agreement, Forms of Pre-Funded Warrant, Amended and Restated Non-Employee Director Compensation Policy, and various certifications[448](index=448&type=chunk) [SIGNATURES](index=137&type=section&id=SIGNATURES) This section contains the authorized signature for the Quarterly Report on Form 10-Q - The report is signed by David Campbell, Ph.D., President and Chief Executive Officer (Principal Executive and Financial Officer) of Janux Therapeutics, Inc. on May 8, 2025[453](index=453&type=chunk)