[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Presents the company's unaudited consolidated balance sheets, statements of operations, changes in equity, and cash flows [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202022%20and%20December%2031%2C%202021) Details the company's assets, liabilities, and stockholders' equity at the end of the reporting period Balance Sheet Summary | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (in thousands) | Change (%) | | :----------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :--------- | | Total Assets | $188,068 | $159,883 | $28,185 | 17.63% | | Total Liabilities | $98,462 | $137,362 | $(38,900) | -28.32% | | Total Stockholders' Equity | $89,606 | $22,521 | $67,085 | 297.88% | [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)%20for%20the%20Three%20and%20Six%20Months%20ended%20June%2030%2C%202022%20and%202021) Summarizes revenues, expenses, and resulting net income or loss over the reporting periods Three-Month Performance | Metric (in thousands) | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | Change (3M) | Change (3M %) | | :-------------------- | :--------------------------- | :--------------------------- | :---------- | :------------ | | Collaboration & License Revenue | $39,273 | $19,663 | $19,610 | 99.73% | | R&D Expenses | $19,182 | $14,463 | $4,719 | 32.63% | | G&A Expenses | $6,231 | $4,748 | $1,483 | 31.24% | | Operating Income (Loss) | $13,860 | $452 | $13,408 | 2966.37% | | Net Income (Loss) | $8,601 | $4,565 | $4,036 | 88.41% | | Basic EPS | $0.06 | $0.04 | $0.02 | 50.00% | | Diluted EPS | $0.06 | $0.00 | $0.06 | - | Six-Month Performance | Metric (in thousands) | 6 Months Ended June 30, 2022 | 6 Months Ended June 30, 2021 | Change (6M) | Change (6M %) | | :-------------------- | :--------------------------- | :--------------------------- | :---------- | :------------ | | Collaboration & License Revenue | $73,272 | $30,713 | $42,559 | 138.57% | | R&D Expenses | $36,871 | $27,467 | $9,404 | 34.24% | | G&A Expenses | $11,768 | $9,952 | $1,816 | 18.25% | | Operating Income (Loss) | $24,633 | $(6,706) | $31,339 | -467.33% | | Net Income (Loss) | $37,379 | $(20,032) | $57,411 | -286.59% | | Basic EPS | $0.27 | $(0.18) | $0.45 | -250.00% | | Diluted EPS | $0.17 | $(0.18) | $0.35 | -194.44% | [Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20for%20the%20Three%20Months%20ended%20March%2031%2C%20and%20June%2030%2C%202022%20and%202021) Reports changes in the company's equity from net income, stock issuances, and other transactions - Total stockholders' equity significantly increased from **$22.5 million** at December 31, 2021, to **$89.6 million** at June 30, 2022, primarily driven by net income of **$37.4 million** and additional paid-in capital from equity financings[14](index=14&type=chunk)[16](index=16&type=chunk)[19](index=19&type=chunk) - Issuance of common stock and common warrants contributed **$21.5 million** to additional paid-in capital during the six months ended June 30, 2022[19](index=19&type=chunk) - Stock-based compensation expense for the six months ended June 30, 2022, was **$6.3 million**[19](index=19&type=chunk)[78](index=78&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20ended%20June%2030%2C%202022%20and%202021) Outlines the cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | Change (in thousands) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :--------- | | Operating Activities | $(24,135) | $(18,176) | $(5,959) | 32.79% | | Investing Activities | $9,446 | $(25,060) | $34,506 | -137.69% | | Financing Activities | $38,603 | $30,291 | $8,312 | 27.44% | | Net Change in Cash, Cash Equivalents, and Restricted Cash | $24,000 | $(12,936) | $36,936 | -285.53% | - Net cash provided by investing activities in 2022 was primarily due to proceeds from maturities of marketable securities, contrasting with net cash used for purchases of marketable securities in 2021[260](index=260&type=chunk) - Net cash provided by financing activities in both periods was mainly from net proceeds from underwritten and 'at-the-market' equity offerings[261](index=261&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed disclosures and explanations of the company's accounting policies and financial statement items [Note 1. Description of the Business](index=9&type=section&id=1.%20Description%20of%20the%20Business) Outlines the company's core operations, focus, and financial outlook - Selecta Biosciences, Inc. is a clinical-stage biopharmaceutical company focused on its **ImmTOR platform**, designed to induce antigen-specific immune tolerance using rapamycin-encapsulated biodegradable nanoparticles[28](index=28&type=chunk) - The company's product candidates are in early development, requiring significant R&D, preclinical/clinical testing, regulatory approval, and **substantial additional capital**[29](index=29&type=chunk)[31](index=31&type=chunk) - As of June 30, 2022, cash, cash equivalents, restricted cash, and marketable securities totaled **$143.4 million**, expected to fund operations for at least the next twelve months[33](index=33&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=10&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) Describes the key accounting principles and new standards adopted by the company - The company adopted ASU 2021-04 (Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options) in fiscal year 2022, with **no impact** on financial position or results[37](index=37&type=chunk) - The company is assessing the impact of ASU 2020-06 (Debt with Conversion and Other Options and Derivatives and Hedging) and ASU 2016-13 (Financial Instruments-Credit Losses), effective for smaller reporting companies after December 15, 2023, and December 15, 2022, respectively[38](index=38&type=chunk)[40](index=40&type=chunk) [Note 3. Marketable Securities and Investments](index=11&type=section&id=3.%20Marketable%20Securities%20and%20Investments) Details the composition and fair value of the company's short-term investments Marketable Securities Breakdown | Marketable Securities (in thousands) | June 30, 2022 | December 31, 2021 | | :----------------------------------- | :------------ | :---------------- | | Commercial paper | $3,999 | $11,992 | | Corporate bonds | — | $2,006 | | Total | $3,999 | $13,998 | - All marketable securities had maturities of **less than 12 months** when purchased and are classified as short-term[41](index=41&type=chunk) - The company holds a **$2.0 million investment** in Cyrus Biotechnology, Inc., limited to the carrying value of the investment[42](index=42&type=chunk) [Note 4. Net Income (Loss) Per Share](index=11&type=section&id=4.%20Net%20Income%20(Loss)%20Per%20Share) Explains the calculation of basic and diluted earnings per share Earnings Per Share (EPS) | EPS Metric | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | 6 Months Ended June 30, 2022 | 6 Months Ended June 30, 2021 | | :--------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Basic EPS | $0.06 | $0.04 | $0.27 | $(0.18) | | Diluted EPS | $0.06 | $0.00 | $0.17 | $(0.18) | - Potential dilutive shares of common stock excluded from diluted EPS calculation due to anti-dilutive effect were **47.7 million** for the three months ended June 30, 2022, and **37.5 million** for the six months ended June 30, 2022[44](index=44&type=chunk) [Note 5. Fair Value Measurements](index=12&type=section&id=5.%20Fair%20Value%20Measurements) Discloses the valuation methods for financial assets and liabilities measured at fair value Fair Value of Financial Instruments | Fair Value Item (in thousands) | June 30, 2022 (Total) | December 31, 2021 (Total) | | :----------------------------- | :-------------------- | :------------------------ | | Money market funds | $76,686 | $66,563 | | Marketable securities | $3,999 | $13,998 | | Warrant liabilities | $26,934 | $25,423 | - Warrant liabilities (2019 and 2022 Warrants) are classified as **Level 3** in the fair value hierarchy due to significant unobservable inputs (stock price volatility, expected life) in their Black-Scholes valuation[52](index=52&type=chunk) - The fair value of warrant liabilities increased by **$1.5 million** from December 31, 2021, to June 30, 2022, primarily due to new issuances (**$15.4 million**) offset by a change in fair value (**$13.9 million decrease**)[57](index=57&type=chunk) [Note 6. Property and Equipment](index=14&type=section&id=6.%20Property%20and%20Equipment) Reports the cost and accumulated depreciation of the company's tangible assets Property and Equipment, Net | Property and Equipment (in thousands) | June 30, 2022 | December 31, 2021 | | :------------------------------------ | :------------ | :---------------- | | Total property and equipment | $7,667 | $6,939 | | Less accumulated depreciation | $(4,834) | $(4,797) | | Property and equipment, net | $2,833 | $2,142 | - Net property and equipment increased by **$0.7 million** from December 31, 2021, to June 30, 2022[58](index=58&type=chunk) [Note 7. Accrued Expenses](index=15&type=section&id=7.%20Accrued%20Expenses) Breaks down short-term liabilities for expenses incurred but not yet paid Accrued Expenses Breakdown | Accrued Expenses (in thousands) | June 30, 2022 | December 31, 2021 | | :------------------------------ | :------------ | :---------------- | | Payroll and employee related | $2,223 | $3,179 | | Collaboration and licensing | $500 | — | | Accrued patent fees | $885 | $309 | | Accrued external R&D costs | $6,701 | $4,339 | | Accrued professional & consulting | $547 | $815 | | Accrued interest | $184 | $170 | | Other | $1,326 | $1,721 | | Total Accrued Expenses | $12,366 | $10,533 | - Accrued expenses increased by **$1.8 million**, primarily due to higher accrued external research and development costs and new collaboration and licensing accruals[60](index=60&type=chunk) - Other accrued expenses include a **$0.9 million** estimated liability for litigation settlement as of June 30, 2022[60](index=60&type=chunk) [Note 8. Leases](index=15&type=section&id=8.%20Leases) Details the company's lease obligations, costs, and related financial metrics Lease Cost Summary | Lease Cost (in thousands) | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | 6 Months Ended June 30, 2022 | 6 Months Ended June 30, 2021 | | :------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operating lease cost | $505 | $454 | $1,011 | $898 | | Variable lease cost | $205 | $182 | $425 | $470 | | Short-term lease cost | $2 | $2 | $5 | $5 | | Total lease cost | $712 | $638 | $1,441 | $1,373 | - Total operating lease liabilities as of June 30, 2022, were **$9.1 million**, with a weighted-average remaining lease term of **5.9 years**[61](index=61&type=chunk)[62](index=62&type=chunk) [Note 9. Debt](index=16&type=section&id=9.%20Debt) Outlines the terms, balance, and payment schedule of the company's outstanding debt - The company's 2020 Term Loan principal balance remained at **$25.0 million** as of June 30, 2022, and December 31, 2021[64](index=64&type=chunk) - A Second Amendment to the 2020 Term Loan extended the amortization payment commencement date by twelve months to **April 1, 2023**, with a $0.1 million fee recorded as a debt discount[63](index=63&type=chunk) Future Minimum Principal Payments | Future Minimum Principal Payments (in thousands) | Amount | | :----------------------------------------------- | :----- | | 2023 | $7,759 | | 2024 | $10,345 | | 2025 | $6,896 | | Total | $25,000 | [Note 10. Equity](index=16&type=section&id=10.%20Equity) Describes changes in the company's capital structure, including stock and warrant activity - Authorized common stock increased from **200,000,000 to 350,000,000 shares** on June 17, 2022[65](index=65&type=chunk) - An underwritten offering in April 2022 generated approximately **$36.9 million in net proceeds** from the sale of 27,428,572 common shares and warrants to purchase 20,571,429 shares[66](index=66&type=chunk) Warrant Activity Summary | Warrant Activity | Outstanding at Dec 31, 2021 | Issuance | Canceled | Outstanding at June 30, 2022 | | :--------------- | :-------------------------- | :------- | :------- | :--------------------------- | | Equity classified | 292,469 | — | (79,130) | 213,339 | | Liability classified | 10,443,511 | 20,571,429 | — | 31,014,940 | | Total Warrants | 10,735,980 | 20,571,429 | (79,130) | 31,228,279 | | Weighted average exercise price | $1.62 | $1.55 | $17.71 | $1.53 | [Note 11. Stock Incentive Plans](index=17&type=section&id=11.%20Stock%20Incentive%20Plans) Summarizes stock-based compensation programs for employees and related expenses Stock-based Compensation Expense | Stock-based Compensation Expense (in thousands) | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | 6 Months Ended June 30, 2022 | 6 Months Ended June 30, 2021 | | :---------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Research and development | $2,021 | $786 | $3,039 | $1,540 | | General and administrative | $1,543 | $997 | $3,278 | $2,023 | | Total | $3,564 | $1,783 | $6,317 | $3,563 | - Total unrecognized compensation expense for unvested employee stock options was **$16.9 million** as of June 30, 2022, to be recognized over **2.8 years**[80](index=80&type=chunk) - Unrecognized compensation expense for restricted stock units was **$2.6 million** as of June 30, 2022, to be recognized over **3.2 years**[83](index=83&type=chunk) [Note 12. Revenue Arrangements](index=20&type=section&id=12.%20Revenue%20Arrangements) Details revenue recognized from major collaboration and license agreements - **Takeda Agreement**: **$1.0 million** revenue recognized in H1 2022; the agreement includes a $3.0 million upfront payment and potential future payments up to **$1.124 billion**[86](index=86&type=chunk)[89](index=89&type=chunk) - **Sobi License**: **$29.2 million** and **$52.9 million** revenue recognized in Q2 and H1 2022, respectively; a **$10.0 million** development milestone was achieved for DISSOLVE II trial enrollment completion[99](index=99&type=chunk)[101](index=101&type=chunk) - **Sarepta Agreement**: **$10.1 million** and **$10.2 million** revenue recognized in Q2 and H1 2022, respectively; milestones achieved include a **$2.0 million** payment for option extension and a **$4.0 million** payment for preclinical study milestones[109](index=109&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk) - **Spark License Agreement**: Mutually terminated on January 18, 2022, resulting in **$9.2 million** revenue recognition from short-term contract liability[121](index=121&type=chunk) - As of June 30, 2022, the aggregate amount of transaction price allocated to remaining performance obligations was **$23.1 million**[122](index=122&type=chunk) [Note 13. Related-party Transactions](index=24&type=section&id=13.%20Related-party%20Transactions) Discloses transactions conducted with company insiders or their affiliates - TAS Partners, LLC (an affiliate of Timothy A. Springer, Ph.D.) purchased 6,681,600 shares of common stock and 5,011,200 warrants for a total of **$9.4 million** in the April 2022 offering[125](index=125&type=chunk) - Consulting services from founders for the Scientific Advisory Board incurred **less than $0.1 million** in expenses for both three and six months ended June 30, 2021[126](index=126&type=chunk) [Note 14. Collaboration and License Agreements](index=25&type=section&id=14.%20Collaboration%20and%20License%20Agreements) Describes key partnerships for research, development, and commercialization - **Ginkgo Bioworks Agreements**: The Second Ginkgo Agreement (Jan 2022) focuses on AAV capsids, with potential milestones up to **$207 million** cash per product; a **$0.5 million** payment and **892,857 shares** ($1.0 million value) were issued to Ginkgo in Q2 2022 for a technical development milestone[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) - **Genovis Agreement** (Oct 2021): Exclusive license for Xork enzyme technology for therapeutic uses, with development/sales milestones and **low double-digit royalties**[130](index=130&type=chunk)[131](index=131&type=chunk)[184](index=184&type=chunk) - **Cyrus Agreement** (Sep 2021): Collaboration for protein engineering combining ImmTOR with Cyrus's engineered protein therapeutics, with potential milestones up to **$1.5 billion**; a preclinical milestone was achieved in June 2022[132](index=132&type=chunk)[135](index=135&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - **AskBio Collaboration Agreement** (Aug 2019): FDA clinical hold on SEL-302 was removed in March 2022; collaboration expenses recognized were **$0.2 million** (Q2 2022) and **$0.6 million** (H1 2022)[138](index=138&type=chunk)[144](index=144&type=chunk) [Note 15. Income Taxes](index=28&type=section&id=15.%20Income%20Taxes) Explains the company's income tax position, including deferred tax assets and valuation allowances - The company maintains a **full valuation allowance** against its net deferred tax assets, as realization is not considered more likely than not[150](index=150&type=chunk) - As of December 31, 2021, the company had **$51.1 million** in federal net operating losses and **$1.2 million** in federal tax credits[151](index=151&type=chunk) - Research and experimental expenditures under IRC Section 174 must be capitalized, but the projected taxable loss for 2022 does not result in income tax due[151](index=151&type=chunk) [Note 16. Defined Contribution Plan](index=28&type=section&id=16.%20Defined%20Contribution%20Plan) Details the company's employee retirement savings plan and associated contributions - Company contributions to the 401(k) Plan were **less than $0.1 million** for each of the three months ended June 30, 2022 and 2021, and **$0.2 million** and **$0.1 million** for the six months ended June 30, 2022 and 2021, respectively[154](index=154&type=chunk) [Note 17. Commitments and Contingencies](index=28&type=section&id=17.%20Commitments%20and%20Contingencies) Discloses potential liabilities from legal proceedings and other commitments - A stockholder derivative action (Franchi v. Barabe, et al.) related to a 2019 private placement was settled in principle, with court approval on July 21, 2022; the company accrued an estimated liability of **$0.9 million**[157](index=157&type=chunk)[272](index=272&type=chunk) - The company indemnifies its officers and directors for certain events, with unlimited maximum potential payments, but insurance coverage limits exposure[158](index=158&type=chunk) [Note 18. Subsequent Events](index=29&type=section&id=18.%20Subsequent%20Events) Reports on significant events that occurred after the balance sheet date - No subsequent events requiring disclosure have occurred through the date of financial statement issuance[160](index=160&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) Provides management's analysis of financial condition, operational results, liquidity, and key business developments [Overview](index=29&type=section&id=Overview) Summarizes the company's business focus as a clinical-stage biopharmaceutical entity - Selecta Biosciences is a clinical-stage biopharmaceutical company leveraging its **ImmTOR platform**, which encapsulates rapamycin to induce antigen-specific immune tolerance[162](index=162&type=chunk) - The company is developing **ImmTOR-IL™**, a combination of ImmTOR with Treg-selective IL-2 muteins, showing synergistic activity in expanding antigen-specific Tregs for autoimmune diseases[162](index=162&type=chunk) [Our Product Candidates](index=30&type=section&id=Our%20Product%20Candidates) Details the company's development pipeline across biologics, gene therapies, and autoimmune treatments - The product development strategy focuses on three pillars: **Biologic therapies** (SEL-212), **Gene therapies** (SEL-302, SEL-018), and **Tolerogenic Therapies for Autoimmune Disease** (ImmTOR-IL)[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[169](index=169&type=chunk) - **SEL-212** is in Phase 3 clinical trials with top-line data anticipated in **Q1 2023**[169](index=169&type=chunk) - **SEL-302** for Methylmalonic Acidemia (MMA) had its clinical hold removed by the FDA in March 2022, with study commencement planned for **Q4 2022**[174](index=174&type=chunk) - The company has exclusively licensed **Xork**, an IgG-specific protease, for gene therapy applications to address pre-existing AAV immunity[176](index=176&type=chunk) [Licenses and Collaborations](index=32&type=section&id=Licenses%20and%20Collaborations) Outlines key strategic in-licensing and out-licensing agreements with partners - Key in-licenses include agreements with **Ginkgo Bioworks** (AAV capsids, IgA proteases), **Genovis** (Xork enzyme), **Cyrus Biotechnology** (IL-2 protein engineering), and **IGAN Biosciences** (IgA proteases)[181](index=181&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[187](index=187&type=chunk) - Key out-licenses involve **Takeda** (potential $1.124 billion milestones), **Sobi** (potential $630 million milestones), and **Sarepta** (potential milestones and royalties)[190](index=190&type=chunk)[191](index=191&type=chunk)[195](index=195&type=chunk) - Sobi paid a **$75 million upfront payment** and purchased **$25 million** in common stock; a **$10.0 million** receivable was recorded in June 2022 for DISSOLVE II trial enrollment completion[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) - Sarepta extended its options for Duchenne and Limb-Girdle Muscular Dystrophies, resulting in a **$2.0 million** receivable, and a **$4.0 million** receivable for preclinical milestones[196](index=196&type=chunk) [Impact of Global Events](index=34&type=section&id=Impact%20of%20Global%20Events) Discusses the effects of the COVID-19 pandemic and geopolitical events on operations - **COVID-19 pandemic** has not materially impacted clinical programs to date, but poses risks of delays in trials, supply chain disruptions, and unforeseen costs[200](index=200&type=chunk)[201](index=201&type=chunk) - The geopolitical situation in Ukraine and Russia led to **increased enrollment** in the DISSOLVE II trial to replace subjects potentially lost from these regions, with topline results expected in **Q1 2023**[203](index=203&type=chunk) [Financial Operations](index=35&type=section&id=Financial%20Operations) Reviews the company's financing history, accumulated deficit, and capital runway - The company has financed operations through public/private equity offerings, debt, research grants, and collaboration/license agreements, with **no product revenue to date**[204](index=204&type=chunk) - Accumulated deficit was **$392.9 million** as of June 30, 2022, with expectations of continued operating losses[205](index=205&type=chunk)[252](index=252&type=chunk) - Existing cash and receivables are expected to fund operations into **mid-2024**[206](index=206&type=chunk)[244](index=244&type=chunk) - Research and development expenses totaled **$400.9 million** from inception through June 30, 2022[210](index=210&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Compares financial results for the three and six-month periods ended June 30, 2022 and 2021 [Comparison of the Three Months Ended June 30, 2022 and 2021](index=37&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030%2C%202022%20and%202021) Analyzes revenue and expense variances for the second quarter - Collaboration and license revenue increased by **$19.6 million (100%)** to $39.3 million, driven by Sobi ($29.2 million) and Sarepta ($10.1 million) agreements[220](index=220&type=chunk) - Research and development expenses increased by **$4.7 million (33%)** to $19.2 million, mainly due to the SEL-212 clinical program, stock compensation, and salaries[221](index=221&type=chunk)[222](index=222&type=chunk) - General and administrative expenses increased by **$1.5 million (31%)** to $6.2 million, primarily due to 2022 equity offering issuance costs and stock compensation[223](index=223&type=chunk) - A **$4.6 million charge** was recognized from the increase in fair value of warrant liabilities in Q2 2022, compared to **$4.8 million income** in Q2 2021[227](index=227&type=chunk) - Net income for Q2 2022 was **$8.6 million**, up from **$4.6 million** in Q2 2021[229](index=229&type=chunk) [Comparison of the Six Months Ended June 30, 2022 and 2021](index=38&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030%2C%202022%20and%202021) Analyzes revenue and expense variances for the first half of the year - Collaboration revenue increased by **$42.6 million (139%)** to $73.3 million, primarily from Sobi ($52.9 million), Sarepta ($10.2 million), and Spark termination ($9.2 million)[230](index=230&type=chunk) - Research and development expenses increased by **$9.4 million (34%)** to $36.9 million, driven by SEL-212, preclinical programs, and personnel[232](index=232&type=chunk)[233](index=233&type=chunk) - General and administrative expenses increased by **$1.8 million (18%)** to $11.8 million, mainly due to equity offering costs and stock compensation[234](index=234&type=chunk) - A **$13.9 million income** was recognized from the decrease in fair value of warrant liabilities in H1 2022, compared to an **$11.9 million charge** in H1 2021[238](index=238&type=chunk) - Net income for H1 2022 was **$37.4 million**, a significant improvement from a net loss of **$20.0 million** in H1 2021[240](index=240&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Details the company's sources of funding, cash position, and future capital needs - From inception through June 30, 2022, the company raised **$692.1 million**, including **$219.4 million** from collaborations and **$241.7 million** from equity offerings[243](index=243&type=chunk) - As of June 30, 2022, cash, cash equivalents, restricted cash, and marketable securities totaled **$143.4 million**[244](index=244&type=chunk) - The 2020 Term Loan has an outstanding principal balance of **$25.0 million**, with amortization payments deferred to April 1, 2023[246](index=246&type=chunk)[247](index=247&type=chunk) - Future capital requirements depend on the product pipeline, clinical trial progress, manufacturing costs, and commercialization efforts[256](index=256&type=chunk) [Summary of Cash Flows](index=42&type=section&id=Summary%20of%20Cash%20Flows) Provides a high-level overview of cash movements from all activities Six-Month Cash Flow | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Operating activities | $(24,135) | $(18,176) | | Investing activities | $9,446 | $(25,060) | | Financing activities | $38,603 | $30,291 | | Net change in cash, cash equivalents, and restricted cash | $24,000 | $(12,936) | - Cash used in operating activities increased by **$5.9 million** to $24.1 million in H1 2022, primarily due to changes in operating assets and liabilities[258](index=258&type=chunk) - Net cash provided by investing activities was **$9.4 million** in H1 2022, a significant shift from **$25.1 million used** in H1 2021, mainly due to marketable securities maturities[260](index=260&type=chunk) - Net cash provided by financing activities increased by **$8.3 million** to $38.6 million in H1 2022, driven by proceeds from equity offerings[261](index=261&type=chunk) [Recent Accounting Pronouncements](index=42&type=section&id=Recent%20Accounting%20Pronouncements) Refers to disclosures on newly adopted or issued accounting standards - Refer to Note 2 for a discussion of recently adopted or issued accounting pronouncements[262](index=262&type=chunk) [Off-Balance Sheet Arrangements](index=42&type=section&id=Off-Balance%20Sheet%20Arrangements) Confirms the absence of any off-balance sheet arrangements - As of June 30, 2022, the company did not have any off-balance sheet arrangements[263](index=263&type=chunk) [Critical Accounting Policies and Use of Estimates](index=42&type=section&id=Critical%20Accounting%20Policies%20and%20Use%20of%20Estimates) States there were no material changes to critical accounting policies - No material changes to critical accounting policies were reported during the three and six months ended June 30, 2022, from those described in the 2021 Annual Report on Form 10-K[264](index=264&type=chunk) [Smaller Reporting Company](index=42&type=section&id=Smaller%20Reporting%20Company) Discloses the company's status as a smaller reporting company - The company qualifies as a 'smaller reporting company' and may utilize scaled disclosure requirements[265](index=265&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses the company's exposure to interest rate risk on its cash and investments - The company's primary market risk exposure is **interest rate sensitivity**, affecting its cash, cash equivalents, restricted cash, and marketable securities (**$143.4 million** as of June 30, 2022)[266](index=266&type=chunk) - An immediate **100 basis point change** in interest rates would not materially affect the fair market value of these assets due to their short-term and low-risk nature[266](index=266&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Reports on the effectiveness of the company's disclosure controls and internal financial reporting controls - Disclosure controls and procedures were evaluated and deemed **effective** at the reasonable assurance level as of June 30, 2022[267](index=267&type=chunk) - **No material changes** in internal control over financial reporting occurred during the three months ended June 30, 2022[269](index=269&type=chunk) - Internal controls have inherent limitations, providing only **reasonable assurance** for financial statement preparation[268](index=268&type=chunk) [PART II. OTHER INFORMATION](index=44&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) Details a stockholder derivative action that has been settled - A stockholder derivative action (Franchi v. Barabe, et al.) was filed in August 2020, alleging breach of fiduciary duties and corporate waste related to a 2019 private placement[272](index=272&type=chunk) - The litigation was stayed, and a settlement in principle was reached and **approved by the Court** of Chancery in Delaware on July 21, 2022[272](index=272&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) Highlights risks related to system failures and cybersecurity threats - The company's business and operations are vulnerable to material disruption from system failures, **security breaches**, data protection law violations, or data loss/damage[274](index=274&type=chunk) - **Cyber-attacks** are increasing in frequency and sophistication, posing risks to system security, data confidentiality, availability, and integrity[275](index=275&type=chunk) - General liability insurance may not cover all claims or be sufficient, and successful large claims could **materially adversely affect** the business[276](index=276&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) States there were no unregistered sales of equity securities to report - None[277](index=277&type=chunk) [Item 3. Defaults Upon Senior Securities](index=45&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) States there were no defaults upon senior securities to report - None[278](index=278&type=chunk) [Item 4. Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States there were no mine safety disclosures to report - None[279](index=279&type=chunk) [Item 5. Other Information](index=45&type=section&id=Item%205.%20Other%20Information) States there is no other information to report - None[280](index=280&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits) Lists the exhibits filed with the quarterly report - The exhibit index includes the Restated Certificate of Incorporation, Amended and Restated By-laws, Form of Common Stock Purchase Warrant, Certifications of Principal Executive and Financial Officers, and Inline XBRL documents[283](index=283&type=chunk) [Signatures](index=47&type=section&id=Signatures) Contains the certifying signatures of the company's principal officers - The report was signed by Carsten Brunn, Ph.D., President and Chief Executive Officer, and Kevin Tan, Chief Financial Officer, on **August 8, 2022**[287](index=287&type=chunk)

Financial Data and Key Metrics Changes - For Q2 2022, Selecta reported collaboration and license revenue of $39.3 million, up from $19.7 million in Q2 2021, primarily driven by clinical supply shipments and reimbursements related to the Phase III DISSOLVE program [32] - Net cash used in operating activities was $24.1 million for the six months ended June 30, 2022, compared to $18.2 million for the same period in 2021 [32] - Selecta reported a net income of $8.6 million or basic net income per share of $0.06 for Q2 2022, compared to a net income of $4.6 million or basic net income per share of $0.04 for Q2 2021 [33] Business Line Data and Key Metrics Changes - The company completed enrollment of the DISSOLVE II trial, triggering a $10 million milestone payment from Sobi [5] - Sarepta extended their option and license agreement, resulting in anticipated payments of $6 million in Q3 2022 [6] - The company raised approximately $38.7 million through an underwritten offering, ending Q2 2022 with approximately $143.4 million in cash and equivalents [7][31] Market Data and Key Metrics Changes - Over 24 million Americans suffer from autoimmune diseases, with current treatments often leaving patients vulnerable to serious infections [10] - The company aims to address the unmet medical need in autoimmune diseases, particularly in primary biliary cholangitis (PBC), where existing treatments have limited efficacy [13][91] Company Strategy and Development Direction - Selecta is focused on advancing its proprietary pipeline, including the ImmTOR platform and gene therapy candidates [5][9] - The company plans to commence Phase I clinical trials for SEL-302 in Q4 2022 and expects to complete the Phase III DISSOLVE trial in collaboration with Sobi [7][8] - Selecta aims to leverage its precision immune tolerance platform to transform treatment paradigms in autoimmune diseases and enhance the efficacy of gene therapies [9][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the commercial opportunity for SEL-212, highlighting the differentiation of monthly dosing compared to competitors [40] - The company remains committed to addressing the challenges in autoimmune diseases and believes its technology could represent a generational leap forward [35] - Management anticipates multiple clinical readouts within its cash runway, including results from the Phase III DISSOLVE trials in Q1 2023 [31] Other Important Information - Selecta's proprietary IgG protease candidate, Xork, is being developed to enable repeat dosing of gene therapies by addressing preexisting antibodies [22][23] - The company is working with external partners to identify an IgA protease candidate for the treatment of IgA nephropathy [30] Q&A Session Summary Question: What could be driving the low uptake of KRYSTEXXA in the refractory gout market? - Management noted that compliance is a key driver, as SEL-212 would offer a monthly treatment compared to KRYSTEXXA's bi-monthly regimen, which could enhance patient adherence [40] Question: What is the total amount of milestone payments remaining for the Sobi partnership? - Management indicated that Selecta is eligible to receive $630 million in milestones, with $10 million already received for full enrollment in DISSOLVE II [43][46] Question: Are there plans to include IL-2 in the MMA study? - Management confirmed that IL-2 will not be included in the initial MMA trial but may be added in the future once safety studies are completed [52][54] Question: What are the biomarkers for PBC? - Management highlighted alkaline phosphatase levels as a validated biomarker for PBC, which will be monitored during trials [65] Question: What is the market opportunity for PBC? - Management emphasized the unmet medical need in PBC, as current therapies do not address the underlying immunologic causes of the disease [91]

| --- | --- | --- | |-------|-------|--------------------------------------------| | | | | | | | | | | | | | | | | | | | Selecta Biosciences Corporate Presentation | May 2022 Safe harbor / disclaimer Any statements in this presentation about the future expectations, plans and prospects of Selecta Biosciences, Inc. (the "Company"), including without limitation, statements regarding the Company's cash runway, the unique proprietary technology platform of the Company, and the unique proprietary platform of its ...

Selecta Biosciences, Inc. (SELB) Q1 2021 Earnings Conference Call May 5, 2022 8:30 AM ET Company Participants Carsten Brunn - President & Chief Executive Officer Kevin Tan - Chief Financial Officer Peter Traber - Chief Medical Officer Kei Kishimoto - Chief Scientific Officer Conference Call Participants John Newman - Canaccord Kristen Kluska - Cantor Fitzgerald Yun Zhong - BTIG Raju Prasad - William Blair Uy Ear - Mizuho Boobalan Pachaiyappan - HC Wainwright Chang Liu - Needham Operator 00:05 Good morning a ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number: 001-37798 Selecta Biosciences, Inc. (Exact name of registrant as specified in its charter) Delaware 26-1622110 (I.R.S. Employe ...

Company Overview - Selecta Biosciences' ImmTOR platform has broad applicability in biologics and gene therapy, with a diversified pipeline expanding to autoimmune diseases and targeted partnerships to maximize platform potential[6] - The company's precision immune tolerance platform aims to restore self-tolerance in autoimmune disease and overcome immunogenicity of gene therapies and biologics[6] - Selecta Biosciences has funding into mid-2024 to support development across pipeline programs[6, 144] ImmTOR Platform & Technology - ImmTOR combines nanoparticle technology with an FDA-approved anti-inflammatory and immunomodulatory drug to generate antigen-specific immune tolerance[9] - Preclinical data indicates a potentially profound synergy of ImmTOR and engineered Treg-selective IL-2 (ImmTOR-IL) to expand antigen-specific Tregs and improve durability of immune tolerance[6] - ImmTOR, by inhibiting the formation of neutralizing antibodies, could make redosing of gene therapies possible[58] Clinical Programs & Pipeline - SEL-212 in chronic refractory gout has dosed over 400 patients, with Phase 3 DISSOLVE I expected readout in Q4 2022[6] - SEL-302: IND for gene therapy program in methylmalonic acidemia (MMA) was submitted in Q3 2021, with Phase 1 start expected in 2H 2022[6, 88] - In a Phase 2 trial, 66% of patients treated with SEL-212 (pegadricase + ImmTOR) maintained control of serum uric acid (SUA), compared to only 15% treated with pegadricase alone[112, 115] - In a study with healthy volunteers, 100% of subjects dosed with 0.3 mg/kg ImmTOR had NAb titers ≤1:25 at Day 30[77]

Financial Data and Key Metrics Changes - As of December 31, 2021, the company had $129.4 million in liquidity, down from $140.1 million a year earlier [29] - Net cash used for the fiscal year 2021 was $60.4 million, compared to a net cash provided by operating activities of $34.9 million in 2020 [30] - Collaboration and license revenue for Q4 2021 was $29.9 million, and for the full year, it was $85.1 million, significantly up from $12 million and $16.6 million in 2020 [31] - The company reported a net income of $12.2 million for Q4 2021, compared to a net loss of $15.4 million in Q4 2020, while the full-year net loss was $25.7 million, down from $68.9 million in 2020 [37][38] Business Line Data and Key Metrics Changes - Research and development expenses for Q4 2021 were $20.3 million, up from $15.1 million in Q4 2020, and for the full year, they were $68.7 million compared to $54.5 million in 2020 [32] - General and administrative expenses for Q4 2021 were $5.5 million, compared to $4.8 million in Q4 2020, with full-year expenses at $20.9 million versus $18.9 million in 2020 [33] Market Data and Key Metrics Changes - The company is focusing on the gene therapy market, particularly with the upcoming Phase 1 trial of SEL-302 for Methylmalonic acidemia (MMA), expected to start in the second half of 2022 [7][22] - The collaboration with Takeda aims to combine ImmTOR with targeted gene therapies for lysosomal storage disorders, indicating a strategic move into rare disease markets [16] Company Strategy and Development Direction - The company aims to advance its precision immune tolerance platform, particularly through the development of ImmTOR-IL, which combines ImmTOR with a Treg-selective IL-2 molecule [9][41] - The focus for 2022 includes accelerating the development of ImmTOR-IL and continuing IND enabling studies for the primary biliary cholangitis program [14] - The company is also exploring partnerships to enhance its gene therapy capabilities, particularly in addressing immunogenicity issues [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the broad applicability of the ImmTOR platform to restore self-tolerance in autoimmune diseases and mitigate immunogenicity in gene therapies and biologics [40] - The company anticipates multiple catalysts in 2022, including updates on gene therapy opportunities and the completion of the DISSOLVE Phase 3 trial for SEL-212 [42] Other Important Information - The company has taken proactive measures to address the impact of the geopolitical situation in Ukraine and Russia on its clinical trials, including temporarily closing sites in those regions [26][75] - The company is working closely with regulatory authorities to ensure the safety of patients and investigators amid the ongoing conflict [26] Q&A Session Summary Question: Can you discuss the CMC-related items for the hold and future studies? - Management indicated that the FDA had questions regarding the AAV capsid and additional analytics, which were addressed before starting the trial, providing a clearer regulatory path [47][48] Question: How will the FDA's draft guidance on immunogenicity impact physician behavior? - Management noted that their platform specifically addresses anti-drug antibodies (ADAs), which could foster more interest in their technology as it helps overcome challenges faced by many biologics [50] Question: What are the details of the SEL-302 study design for MMA? - The trial will involve administering MMA-101 with three doses of ImmTOR, with provisions for dose escalation based on antibody production [60][63] Question: How will the DISSOLVE II trial be affected by the conflict in Ukraine? - Management confirmed that DISSOLVE I has completed enrollment and is unaffected, while DISSOLVE II has faced disruptions, leading to the addition of U.S. sites to offset enrollment challenges [75] Question: Is there a plan for re-dosing in the SEL-302 trial? - The protocol does not currently include provisions for re-dosing within the first three months, but the FDA is open to discussions based on trial results [100]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Exact name of registrant as specified in its charter) Delaware 26-1622110 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 65 Grove Street, Watertown, MA ...

Selecta Biosciences Corporate Presentation SELB January 2022 Safe harbor / disclaimer Any statements in this presentation about the future expectations, plans and prospects of Selecta Biosciences, Inc. ("the company"), including without limitation, statements regarding the progress of the clinical development of SEL-212, the anticipated timing of the head-to-head trial comparing SEL-212 and pegloticase and related data readouts, the potential of ImmTOR™ to reduce AAV vector immunogenicity and enable redosin ...

Selecta Biosciences, Inc. (SELB) Q3 2021 Earnings Conference Call November 9, 2021 8:30 AM ET Company Participants Kevin Tan - Chief Financial Officer Carsten Brunn - President and CEO Peter Traber - Chief Medical Officer Kei Kishimoto - Chief Scientific Officer Conference Call Participants Kristen Kluska - Cantor Fitzgerald Raju Prasad - William Blair Gil Blum - Needham & Company Shu Zhiqiang - BTIG Operator Good morning. And welcome to the Selecta Biosciences Third Quarter 2021 Financial Results and Corpo ...