Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) Q3 2023 Results Conference Call November 14, 2023 9:00 AM ET Company Participants Courtney Dugan - Vice President of Investor Relations Michael Rossi - President and Chief Executive Officer Thomas Gad - Chief Business Officer Bo Kruse - Chief Financial Officer Sue Smith - Chief Commercial Officer Steen Lisby - Chief Scientific Officer Conference Call Participants Alec Stranahan - Bank of America Charles Zhu - Guggenheim Bill Maughan - Canaccord Genuity Mike Ulz - Morg ...

[PART I — FINANCIAL INFORMATION](index=8&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Consolidated Financial Statements](index=8&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the company's unaudited consolidated financial statements, including balance sheets, statements of net loss and comprehensive loss, statements of changes in stockholders' equity, statements of cash flows, and detailed notes explaining the financial figures and accounting policies [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :-------------------- | :----------- | :----------- | | Cash and cash equivalents | $86,571 | $105,762 | | Total current assets | $114,860 | $130,447 | | Total assets | $128,884 | $141,456 | | Total liabilities | $28,734 | $32,235 | | Total stockholders' equity | $100,150 | $109,221 | | Accumulated deficit | $(456,482) | $(436,043) | - Total assets decreased by **$12,572,000** from December 31, 2022, to September 30, 2023, primarily due to a reduction in cash and cash equivalents[20](index=20&type=chunk) [Consolidated Statements of Net Loss and Comprehensive Loss](index=9&type=section&id=Consolidated%20Statements%20of%20Net%20Loss%20and%20Comprehensive%20Loss) Consolidated Statements of Net Loss and Comprehensive Loss (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Product revenue, net | $19,954 | $12,537 | $60,956 | $32,820 | | Total revenues | $20,454 | $12,537 | $61,456 | $33,820 | | Total operating costs and expenses | $28,203 | $38,554 | $83,929 | $127,478 | | Loss from operations | $(7,749) | $(26,017) | $(22,473) | $(93,658) | | Net loss | $(7,747) | $(27,526) | $(20,439) | $(96,725) | | Comprehensive loss | $(6,941) | $(25,928) | $(19,921) | $(93,394) | | Net loss per share (basic & diluted) | $(0.18) | $(0.63) | $(0.47) | $(2.21) | - Net loss significantly decreased by **72%** for the three months ended September 30, 2023, and by **79%** for the nine months ended September 30, 2023, compared to the prior year periods[22](index=22&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=10&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Consolidated Statements of Changes in Stockholders' Equity (in thousands) | Metric | Dec 31, 2022 | Sep 30, 2023 | | :-------------------- | :----------- | :----------- | | Common Stock Amount | $4 | $4 | | Additional Paid-in Capital | $543,929 | $554,779 | | Accumulated Other Comprehensive Income | $1,331 | $1,849 | | Accumulated Deficit | $(436,043) | $(456,482) | | Total Stockholders' Equity | $109,221 | $100,150 | - Total stockholders' equity decreased by **$9,071,000** from December 31, 2022, to September 30, 2023, primarily due to the accumulated deficit[24](index=24&type=chunk)[25](index=25&type=chunk) [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (in thousands) | Metric | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :------------------------------------ | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(19,196) | $(67,260) | | Net cash provided by investing activities | — | — | | Net cash provided by financing activities | — | $84 | | Net decrease in cash and cash equivalents | $(19,191) | $(67,038) | | Cash and cash equivalents at end of period | $86,571 | $114,526 | - Net cash used in operating activities decreased significantly by **71%** for the nine months ended September 30, 2023, compared to the same period in 2022[28](index=28&type=chunk) [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [NOTE 1—ORGANIZATION AND DESCRIPTION OF BUSINESS](index=13&type=section&id=NOTE%201%E2%80%94ORGANIZATION%20AND%20DESCRIPTION%20OF%20BUSINESS) - Y-mAbs Therapeutics, Inc. is a commercial-stage biopharmaceutical company focused on the development and commercialization of novel, antibody-based therapeutic products for the treatment of cancer[31](index=31&type=chunk) [NOTE 2—BASIS OF PRESENTATION](index=13&type=section&id=NOTE%202%E2%80%94BASIS%20OF%20PRESENTATION) - The Company has incurred losses in almost all quarters since inception, with an accumulated deficit of **$456,482,000** as of September 30, 2023[33](index=33&type=chunk)[35](index=35&type=chunk) - As of September 30, 2023, the Company had cash and cash equivalents of **$86,571,000** and expects this to be sufficient to fund operating expenses and capital expenditure requirements through at least the next 12 months[36](index=36&type=chunk) - The Company may raise additional capital through equity securities, debt, or licensing/collaboration agreements to fund future operations[37](index=37&type=chunk) [NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=15&type=section&id=NOTE%203%E2%80%94SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) [Cash and Cash Equivalents](index=15&type=section&id=Cash%20and%20Cash%20Equivalents) - Cash equivalents are highly liquid instruments with original maturities of three months or less, held in highly rated securities including a treasury money market fund[42](index=42&type=chunk) [Accounts Receivable, Net](index=15&type=section&id=Accounts%20Receivable%2C%20Net) - Accounts receivable are from DANYELZA sales, recorded net of allowances for chargebacks, doubtful accounts, rebates, returns, and discounts[43](index=43&type=chunk) [Concentration of Credit Risk](index=15&type=section&id=Concentration%20of%20Credit%20Risk) - As of September 30, 2023, **69%** of accounts receivable were from three national specialty distributors in the U.S., with the rest from international distribution partners[44](index=44&type=chunk) [Inventories](index=17&type=section&id=Inventories) - Inventories are valued at the lower of cost or net realizable value on a first-in, first-out basis, including materials, manufacturing, packaging, freight, and labor costs[46](index=46&type=chunk) - Inventory write-downs totaled **$375,000** and **$831,000** for the three and nine months ended September 30, 2023, respectively, and **$1,200,000** for both periods in 2022[48](index=48&type=chunk) [Fair Value Measurements](index=17&type=section&id=Fair%20Value%20Measurements) Fair Value Measurements of Cash Equivalents (in thousands) | Metric | Sep 30, 2023 (Level 2) | Dec 31, 2022 (Level 2) | | :----------------------------------- | :--------------------- | :--------------------- | | Cash equivalents: Money market funds | $82,964 | $86,965 | [Operating Lease Right-of-Use Assets and Operating Lease Liabilities](index=19&type=section&id=Operating%20Lease%20Right-of-Use%20Assets%20and%20Operating%20Lease%20Liabilities) - Operating lease right-of-use assets and liabilities are recognized at lease commencement based on the present value of lease payments over the lease term, using the estimated incremental borrowing rate[54](index=54&type=chunk) [Use of Estimates](index=19&type=section&id=Use%20of%20Estimates) - Significant estimates and assumptions reflected in financial statements include net product revenues, accruals for R&D expenses, milestone and royalty payments, and valuation of stock options[57](index=57&type=chunk) [Revenue Recognition](index=19&type=section&id=Revenue%20Recognition) - The company applies a five-step model to recognize revenue from product and license arrangements, allocating transaction price to distinct performance obligations based on relative standalone selling price[58](index=58&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) [Product revenue, net](index=21&type=section&id=Product%20revenue%2C%20net) - Revenue from DANYELZA sales is recognized when the customer obtains control of the product, net of estimated rebates, chargebacks, and discounts[62](index=62&type=chunk)[63](index=63&type=chunk) - Estimates for deductions are based on contracts, government-mandated discounts, payor mix, and other factors, and are reviewed quarterly[63](index=63&type=chunk) [License revenue](index=23&type=section&id=License%20revenue) - License agreements include regulatory-based and sales-based milestone payments, in addition to royalties, recognized when the milestone is achieved or related sales occur[67](index=67&type=chunk) - The company has license agreements with SciClone (Greater China), Takeda Israel (Israel, West Bank, Gaza Strip), Swixx BioPharma AG (Eastern European territories), and Adium Pharma S.A. (Latin America)[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) [Segment Information](index=25&type=section&id=Segment%20Information) - The Company operates in one operating segment, focused on the discovery, development, distribution, and commercialization of novel antibody-based therapeutic products for cancer[74](index=74&type=chunk) [Recently Issued Accounting Pronouncements](index=25&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) - The Company adopted ASU 2022-04, ASU 2022-02, ASU 2022-01, and ASU 2021-08 effective January 1, 2023, with no material impact on its consolidated financial statements or disclosures[75](index=75&type=chunk) [NOTE 4—PRODUCT REVENUE, NET](index=25&type=section&id=NOTE%204%E2%80%94PRODUCT%20REVENUE%2C%20NET) Product Revenue, Net (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Product revenue, net | $19,954 | $12,537 | $60,956 | $32,820 | | US product revenue | $16,072 | $12,420 | $48,756 | $30,872 | | Other countries product revenue | $3,882 | $117 | $12,200 | $1,948 | | WEP product revenue | $3,048 | — | $5,579 | — | | SciClone product revenue (9 months) | N/A | N/A | $3,535 | N/A | | Royalty revenue from distribution partners | $427 | $58 | $3,814 | $1,412 | - The increase in product revenue was primarily driven by an increase in new US patients and incremental benefit from expanding into international markets, including **$3.0 million** from WEP in Q3 2023 and **$3.5 million** from SciClone in 9M 2023[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) - A change in estimate related to assessed Medicaid claims data experience resulted in a benefit of **$1,586,000** for the quarter ended September 30, 2023[84](index=84&type=chunk) [NOTE 5—NET LOSS PER SHARE](index=27&type=section&id=NOTE%205%E2%80%94NET%20LOSS%20PER%20SHARE) Net Loss Per Share (in thousands, except per share amounts) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net loss | $(7,747) | $(27,526) | $(20,439) | $(96,725) | | Weighted-average shares outstanding | 43,621 | 43,718 | 43,652 | 43,715 | | Basic and diluted net loss per share | $(0.18) | $(0.63) | $(0.47) | $(2.21) | - Potentially dilutive securities (stock options and unvested restricted stock units) totaling **9,015,719** shares as of September 30, 2023, were excluded from diluted EPS calculation due to their antidilutive effect[86](index=86&type=chunk) [NOTE 6—INVENTORIES](index=28&type=section&id=NOTE%206%E2%80%94INVENTORIES) Inventories (in thousands) | Inventory Type | Sep 30, 2023 | Dec 31, 2022 | | :----------------------- | :----------- | :----------- | | Work In Progress | $13,745 | $11,317 | | Finished Goods | $2,219 | $666 | | Total Inventories | $15,964 | $11,983 | | Current Inventories | $7,113 | $6,702 | | Noncurrent Inventories | $8,851 | $5,281 | - **$8,851,000** of work in progress inventories were classified as noncurrent assets as of September 30, 2023, based on the expectation of utilization after one year[87](index=87&type=chunk) - Inventory write-offs were **$375,000** and **$831,000** for the three and nine months ended September 30, 2023, respectively, and **$1,200,000** for both periods in 2022[88](index=88&type=chunk) [NOTE 7—INTANGIBLE ASSETS, NET](index=28&type=section&id=NOTE%207%E2%80%94INTANGIBLE%20ASSETS%2C%20NET) Intangible Assets, Net (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :------------------------------- | :----------- | :----------- | | Intangible assets, net | $2,720 | $2,986 | | Accumulated amortization | $580 | $314 | - Intangible assets are amortized on a straight-line basis over a 10-year useful life, with annual amortization expense expected to be **$355,000** each year from 2023 to 2027[91](index=91&type=chunk) [NOTE 8—ACCRUED LIABILITIES](index=30&type=section&id=NOTE%208%E2%80%94ACCRUED%20LIABILITIES) Accrued Liabilities (in thousands) | Accrued Liability Type | Sep 30, 2023 | Dec 31, 2022 | | :--------------------------------- | :----------- | :----------- | | Accrued licensing, milestone and royalty payments | $2,137 | $4,002 | | Accrued clinical costs | $1,049 | $932 | | Accrued compensation and board fees | $2,805 | $2,445 | | Accrued manufacturing costs | $3,086 | $2,977 | | Accrued sales reserves | $3,482 | $2,474 | | Other | $745 | $411 | | Total | $13,304 | $13,241 | [NOTE 9—LICENSE AGREEMENTS AND COMMITMENTS](index=30&type=section&id=NOTE%209%E2%80%94LICENSE%20AGREEMENTS%20AND%20COMMITMENTS) [MSK License Agreement](index=32&type=section&id=MSK%20License%20Agreement) - The MSK License relates to intellectual property for DANYELZA and requires mid to high single-digit royalties on annual net sales and annual minimum royalties of **$80,000**[98](index=98&type=chunk) - The Company is obligated to pay MSK certain clinical, regulatory, and sales-based milestone payments, totaling **$2.5 million**, **$9.0 million**, and **$20.0 million** respectively[98](index=98&type=chunk)[108](index=108&type=chunk) [SADA License Agreement](index=32&type=section&id=SADA%20License%20Agreement) - The SADA License Agreement grants an exclusive worldwide license to MSK's and MIT's SADA Technology, requiring mid to high single-digit royalties and annual minimum royalties starting at **$40,000**[99](index=99&type=chunk)[100](index=100&type=chunk) - The Company is obligated to pay MSK and MIT clinical, regulatory, and sales-based milestone payments totaling **$4.7 million**, **$18.1 million**, and **$23.8 million** respectively under the SADA License Agreement[100](index=100&type=chunk)[108](index=108&type=chunk) - An expense of **$4,125,000** related to clinical milestones under the SADA License Agreement was recognized during the three and nine months ended September 30, 2023[101](index=101&type=chunk) [Summary of Significant License Agreements and Related Commitments](index=33&type=section&id=Summary%20of%20Significant%20License%20Agreements%20and%20Related%20Commitments) Summary of Significant License Agreements and Related Commitments (in thousands) | Agreement | Cash Paid (9M 2023) | Expense (3M 2023) | Expense (9M 2023) | Accrued Liabilities Current (Sep 30, 2023) | Accrued Liabilities Non-current (Sep 30, 2023) | | :-------- | :------------------ | :---------------- | :---------------- | :----------------------------------------- | :--------------------------------------------- | | MSK | $6,027 | $1,142 | $3,844 | $1,137 | $1,950 | | CD33 | — | — | — | — | $300 | | MabVax | $10 | $10 | $10 | — | — | | SADA | $605 | $4,125 | $4,125 | $1,000 | $3,125 | Maximum Clinical, Regulatory, or Sales-based Milestones (in thousands) | Agreement | Maximum Clinical Milestones | Maximum Regulatory Milestones | Maximum Sales-based Milestones | | :-------- | :-------------------------- | :---------------------------- | :----------------------------- | | MSK | $2,450 | $9,000 | $20,000 | | CD33 | $550 | $500 | $7,500 | | MabVax | $200 | $1,200 | — | | SADA | $4,730 | $18,125 | $23,750 | [Lease Agreements](index=33&type=section&id=Lease%20Agreements) - The Company extended lease agreements for its New Jersey laboratory (to February 2025) and New York corporate headquarters (to April 2025)[109](index=109&type=chunk)[110](index=110&type=chunk) Operating Lease Costs (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total operating lease costs | $229 | $721 | $789 | $2,127 | Operating Lease Liabilities (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--------------------------------------- | :----------- | :----------- | | Total lease payments | $1,752 | $1,906 | | Total operating lease liabilities | $1,623 | $1,767 | | Weighted average remaining lease term | 1.85 years | 2.36 years | | Weighted average discount rate | 8.3% | 8.3% | [Former Chief Executive Officer Contractual Severance Related Benefits](index=35&type=section&id=Former%20Chief%20Executive%20Officer%20Contractual%20Severance%20Related%20Benefits) - The departure of the former CEO in April 2022 resulted in **$1,589,000** in cash compensation and a **$9,286,000** non-cash share-based compensation charge in the nine months ended September 30, 2022[118](index=118&type=chunk) [Legal Matters](index=35&type=section&id=Legal%20Matters) [Donoghue vs. Y-mAbs Therapeutics, Inc., and Gad](index=35&type=section&id=Donoghue%20vs.%20Y-mAbs%20Therapeutics%2C%20Inc.%2C%20and%20Gad) - A lawsuit filed by a stockholder alleges short swing profits by Mr. Thomas Gad; the action is currently stayed through November 30, 2023[119](index=119&type=chunk)[272](index=272&type=chunk) [In re Y-mAbs Therapeutics, Inc. Securities Litigation](index=37&type=section&id=In%20re%20Y-mAbs%20Therapeutics%2C%20Inc.%20Securities%20Litigation) - A class-action lawsuit alleges material misrepresentations regarding the FDA's BLA consideration for omburtamab; defendants filed a motion to dismiss[120](index=120&type=chunk)[273](index=273&type=chunk) [Hazelton vs. Y-mAbs Therapeutics Inc., and Gad, et al.](index=37&type=section&id=Hazelton%20vs.%20Y-mAbs%20Therapeutics%20Inc.%2C%20and%20Gad%2C%20et%20al.) - A purported stockholder derivative action alleges excessive compensation to current and former board members for fiscal years 2020 and 2021; defendants filed a motion to dismiss[121](index=121&type=chunk)[274](index=274&type=chunk) [NOTE 10—STOCKHOLDERS' EQUITY](index=37&type=section&id=NOTE%2010%E2%80%94STOCKHOLDERS%27%20EQUITY) [Authorized Stock](index=37&type=section&id=Authorized%20Stock) - The Company had authorized **100,000,000** shares of common stock and **5,500,000** shares of preferred stock, both with **$0.0001** par value, as of September 30, 2023[122](index=122&type=chunk) [Common Stock](index=37&type=section&id=Common%20Stock) - As of September 30, 2023, **43,621,618** shares of common stock were issued, each entitled to one vote and potential dividends, subject to preferred stock rights[123](index=123&type=chunk) [Preferred Stock](index=37&type=section&id=Preferred%20Stock) - No preferred stock has been issued as of September 30, 2023, or December 31, 2022[124](index=124&type=chunk) [Stock Grant Agreements with Non-Employees](index=39&type=section&id=Stock%20Grant%20Agreements%20with%20Non-Employees) - Two non-employee researchers repaid loans related to tax payments for stock grants in 2022 and 2023, leading to the company recording and subsequently canceling treasury shares (**$963,000** in 2022, **$480,000** in 2023)[127](index=127&type=chunk) [NOTE 11—STOCK-BASED COMPENSATION](index=39&type=section&id=NOTE%2011%E2%80%94STOCK-BASED%20COMPENSATION) [2015 Equity Incentive Plan](index=39&type=section&id=2015%20Equity%20Incentive%20Plan) - The 2015 Plan reserved **4,500,000** shares of common stock for various equity awards, generally vesting over a four-year period[128](index=128&type=chunk) [2018 Equity Incentive Plan](index=39&type=section&id=2018%20Equity%20Incentive%20Plan) - The 2018 Plan initially reserved **5,500,000** shares of common stock, with annual increases, for various equity awards, generally vesting between one and four years[129](index=129&type=chunk)[131](index=131&type=chunk) [Stock Options](index=41&type=section&id=Stock%20Options) Stock-Based Compensation for Stock Options (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Stock-based compensation | $2,229 | $3,257 | $10,793 | $21,822 | - **1,821,000** stock options were granted in the nine months ended September 30, 2023, including **1,105,500** under the Company's retention program[135](index=135&type=chunk) - As of September 30, 2023, unrecognized compensation expense related to employee stock options was **$16,052,000**, expected to vest over **2.59** years[139](index=139&type=chunk) [Restricted Stock Unit Activity](index=43&type=section&id=Restricted%20Stock%20Unit%20Activity) Stock-Based Compensation for Restricted Stock Units (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Stock-based compensation | $181 | $84 | $537 | $242 | - **380,636** restricted stock units were granted in the nine months ended September 30, 2023, under the Company's retention program[143](index=143&type=chunk) - As of September 30, 2023, unrecognized compensation related to employee restricted stock units was **$1,379,000**, expected to vest over **2.22** years[143](index=143&type=chunk) [NOTE 12—INCOME TAXES](index=44&type=section&id=NOTE%2012%E2%80%94INCOME%20TAXES) Income Tax Provision (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Pre-tax net losses | $(7,560) | $(27,526) | $(20,073) | $(96,725) | | Current income tax provision | $187 | — | $366 | — | - The Company maintains a full valuation allowance on its U.S. and foreign deferred tax assets due to historical and forecasted losses[147](index=147&type=chunk) [NOTE 13—OTHER BENEFITS](index=44&type=section&id=NOTE%2013%E2%80%94OTHER%20BENEFITS) - The Company offers a 401(k) savings plan for U.S. employees and a retirement program for Danish employees[148](index=148&type=chunk)[151](index=151&type=chunk) - No matching contributions were made to the 401(k) plan or the Danish retirement program during the three and nine months ended September 30, 2023 and 2022[150](index=150&type=chunk)[151](index=151&type=chunk) [NOTE 14 —RESTRUCTURING CHARGE](index=46&type=section&id=NOTE%2014%20%E2%80%94RESTRUCTURING%20CHARGE) - In January 2023, the Company announced a strategic restructuring plan, reducing its workforce by approximately **35%** to prioritize DANYELZA commercialization and SADA technology development[152](index=152&type=chunk)[161](index=161&type=chunk) - Restructuring expenses totaled **$4,482,000** for the nine months ended September 30, 2023, primarily for severance benefits (**$2,776,000**) and accelerated stock-based compensation (**$1,706,000**)[152](index=152&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, and cash flows, discussing key drivers, recent developments, known trends, critical accounting policies, and future funding requirements [Overview](index=46&type=section&id=Overview) - Y-mAbs Therapeutics is a commercial-stage biopharmaceutical company focused on novel, antibody-based therapeutic products for cancer[154](index=154&type=chunk) - DANYELZA (naxitamab-gqgk) received accelerated FDA approval in November 2020 for relapsed or refractory high-risk neuroblastoma[155](index=155&type=chunk) - The company is developing the SADA-BiDE Pre-targeted Radioimmunotherapy Platform (Liquid Radiation™), with GD2-SADA in Phase 1 clinical trials and CD38-SADA IND cleared for 2024 dosing[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) - A strategic restructuring in January 2023, including a **35%** workforce reduction and deprioritization of omburtamab, is expected to extend cash resources into 2027[161](index=161&type=chunk)[162](index=162&type=chunk) [Recent Developments and Other Developments](index=50&type=section&id=Recent%20Developments%20and%20Other%20Developments) [New Chief Executive Officer and Executive Officer Transition](index=50&type=section&id=New%20Chief%20Executive%20Officer%20and%20Executive%20Officer%20Transition) - Michael Rossi started as the new President and Chief Executive Officer on November 6, 2023; the former President, Interim Chief Executive Officer, and Head of Business Development and Strategy transitioned to Chief Business Officer[169](index=169&type=chunk) [Omburtamab BLA and Advisory Committee Meeting](index=52&type=section&id=Omburtamab%20BLA%20and%20Advisory%20Committee%20Meeting) - The FDA issued a Complete Response Letter (CRL) for omburtamab's BLA in December 2022, following an ODAC vote (16-0) that the company had not provided sufficient evidence for overall survival improvement[170](index=170&type=chunk) - The omburtamab program has been deprioritized as part of the strategic restructuring, and an 18-month extension of the BLA was requested in October 2023[161](index=161&type=chunk)[170](index=170&type=chunk) [DANYELZA Regulatory Developments](index=52&type=section&id=DANYELZA%20Regulatory%20Developments) - DANYELZA received marketing authorization in Brazil (May 2023) and Mexico (September 2023)[171](index=171&type=chunk) - **$0.5 million** in regulatory-based license revenue was recognized from Adium for DANYELZA's marketing authorization in Mexico[171](index=171&type=chunk) - SciClone launched commercial sales of DANYELZA in China, generating **$3.5 million** in product revenue and related royalties from an initial inventory stocking order[172](index=172&type=chunk) [Known Trends, Geopolitical Events and Uncertainties](index=52&type=section&id=Known%20Trends%2C%20Geopolitical%20Events%20and%20Uncertainties) - The Russia-Ukraine conflict led to the termination of DANYELZA clinical trials and suspension of regulatory activities in Russia, negatively impacting commercialization plans[173](index=173&type=chunk)[325](index=325&type=chunk) - The Israel-Hamas war poses a risk to Takeda Israel's ability to sell products and collect receivables in the region, potentially impacting royalty income[177](index=177&type=chunk)[325](index=325&type=chunk) - Inflation, rising interest rates, and recession risk may adversely affect operating results and the ability to obtain financing[178](index=178&type=chunk) - Financial institution liquidity risks, exemplified by recent bank failures, could impact access to cash and the ability to raise capital[179](index=179&type=chunk) [Components of Our Results of Operations](index=54&type=section&id=Components%20of%20Our%20Results%20of%20Operations) [Product Revenue, Net](index=54&type=section&id=Product%20Revenue%2C%20Net) - Product revenue consists of sales of DANYELZA and royalty revenue generated from its sales[180](index=180&type=chunk) [License Revenue](index=54&type=section&id=License%20Revenue) - License revenue consists of payments received for the licensing rights to DANYELZA and omburtamab[181](index=181&type=chunk) [Operating Costs and Expenses](index=56&type=section&id=Operating%20Costs%20and%20Expenses) [Cost of goods sold](index=56&type=section&id=Cost%20of%20goods%20sold) - Cost of goods sold includes direct and indirect costs related to manufacturing and distribution of DANYELZA, third-party royalties, and inventory write-offs[183](index=183&type=chunk) [Licensing royalties](index=56&type=section&id=Licensing%20royalties) - Licensing royalties are third-party royalty expenses related to third-party licensing revenues[184](index=184&type=chunk) [Research and development](index=56&type=section&id=Research%20and%20development) - Research and development expenses are expensed as incurred and include costs for clinical trials, outsourced manufacturing, license payments, personnel, and regulatory activities[185](index=185&type=chunk) - The successful development and regulatory approval of product candidates is highly uncertain, with costs and timing varying significantly due to numerous factors[185](index=185&type=chunk)[186](index=186&type=chunk)[189](index=189&type=chunk) - Research and development expenses decreased as a result of the January 2023 strategic restructuring, which deprioritized the omburtamab program and other pipeline programs[190](index=190&type=chunk) [Selling, general, and administrative](index=60&type=section&id=Selling%2C%20general%2C%20and%20administrative) - Selling, general, and administrative expenses primarily consist of employee-related expenses, facility costs, legal fees, and fees for accounting, tax, and consulting services[191](index=191&type=chunk) - SG&A expenses decreased in the nine months ended September 30, 2023, due to the January 2023 restructuring[192](index=192&type=chunk) [Other Income / (Loss), Net](index=60&type=section&id=Other%20Income%20%2F%20%28Loss%29%2C%20Net) - Other income / (loss), net, primarily consists of interest income earned on money market funds and foreign currency transaction gains and losses, which can vary quarter-to-quarter[193](index=193&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=60&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) [Use of Estimates](index=60&type=section&id=Use%20of%20Estimates) - Significant estimates and assumptions include net product revenues, accruals for research and development expenses, milestone and royalty payments, valuation of stock options, and asset impairments[196](index=196&type=chunk) [Product Revenue, Net](index=62&type=section&id=Product%20Revenue%2C%20Net) - Revenue from DANYELZA sales is recognized when the customer obtains control of the product, net of rebates, chargebacks, and discounts[199](index=199&type=chunk)[201](index=201&type=chunk) - The vast majority of product sales were in the United States, with additional sales in China, Europe, Latin America, and Israel through sublicenses and distribution agreements[200](index=200&type=chunk) [License Revenue](index=62&type=section&id=License%20Revenue) - License revenue recognition follows a five-step model, allocating the transaction price to distinct performance obligations based on relative standalone selling price[202](index=202&type=chunk)[203](index=203&type=chunk) [Research and Development](index=62&type=section&id=Research%20and%20Development) - Research and development costs are charged to operations when incurred, including compensation, license costs, payments to CMOs and CROs, and consumables[204](index=204&type=chunk)[205](index=205&type=chunk) - Milestone and royalty payments are recorded when the achievement of the milestone or payment is probable and the amount is reasonably estimable[206](index=206&type=chunk) [Fair Value Measurements](index=64&type=section&id=Fair%20Value%20Measurements) - Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction, with cash equivalents carried at fair value and primarily classified as Level 2[207](index=207&type=chunk)[208](index=208&type=chunk)[211](index=211&type=chunk) [Stock-Based Compensation](index=64&type=section&id=Stock-Based%20Compensation) - Stock options granted to employees, directors, and consultants are measured at fair value on the grant date and recognized as compensation expense over the vesting period[209](index=209&type=chunk) [Fair Value of Stock Options](index=64&type=section&id=Fair%20Value%20of%20Stock%20Options) - The fair value of each stock option grant is estimated using the Black-Scholes option pricing model, considering expected volatility, expected term, risk-free interest rate, and expected dividend yield[210](index=210&type=chunk)[212](index=212&type=chunk)[216](index=216&type=chunk) [Results of Operations](index=66&type=section&id=Results%20of%20Operations) Results of Operations (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Amount Change | Percentage Change | | :-------------------- | :-------------------------- | :-------------------------- | :------------ | :---------------- | | Total revenues | $20,454 | $12,537 | $7,917 | 63% | | Total operating costs and expenses | $28,203 | $38,554 | $(10,351) | (27)% | | Loss from operations | $(7,749) | $(26,017) | $18,268 | (70)% | | Net loss | $(7,747) | $(27,526) | $19,779 | (72)% | [Comparison of the Three Months Ended September 30, 2023 and 2022](index=66&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20September%2030%2C%202023%20and%202022) [Revenues](index=66&type=section&id=Revenues) Revenues (in thousands) | Revenue Type | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Amount Change | Percentage Change | | :--------------------- | :-------------------------- | :-------------------------- | :------------ | :---------------- | | Product revenue, net | $19,954 | $12,537 | $7,417 | 59% | | License revenue | $500 | — | $500 | 100% | - Product revenue, net, increased by **$7.5 million** (**59%**) primarily due to new US patients and international market expansion, including **$3.1 million** from WEP[215](index=215&type=chunk)[217](index=217&type=chunk) - License revenue of **$0.5 million** was recognized from DANYELZA's marketing authorization in Mexico[219](index=219&type=chunk) [Cost of Goods Sold](index=68&type=section&id=Cost%20of%20Goods%20Sold) Cost of Goods Sold (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Amount Change | Percentage Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :------------ | :---------------- | | Cost of goods sold | $2,595 | $2,475 | $120 | 5% | - The increase was driven by increased product revenue and a **$0.4 million** inventory charge in 2023, partially offset by a **$1.2 million** charge in 2022[220](index=220&type=chunk) - Gross margin decreased due to increased revenues from geographic areas outside of the United States, which were at a lower gross margin[220](index=220&type=chunk) [License Royalties](index=68&type=section&id=License%20Royalties) License Royalties (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Amount Change | Percentage Change | | :------------------------------- | :-------------------------- | :-------------------------- | :------------ | :---------------- | | License royalties | $50 | — | $50 | 100% | - License royalty expenses of **$50,000** were incurred in Q3 2023, related to DANYELZA's Mexico marketing authorization[221](index=221&type=chunk) [Research and Development](index=68&type=section&id=Research%20and%20Development) Research and Development Expenses (in thousands) | R&D Expense Category | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Change | Percentage | | :-------------------------- | :-------------------------- | :-------------------------- | :----- | :--------- | | Research and development | $15,358 | $22,453 | $(7,095) | (32)% | | Outsourced manufacturing | $2,809 | $8,459 | $(5,650) | (67)% | | Milestones and license acquisition costs | $4,125 | — | $4,125 | 100% | | Personnel costs | $2,745 | $4,214 | $(1,469) | (35)% | - The **$7.1 million** decrease was primarily due to reduced spending on deprioritized programs, including **$5.7 million** in outsourced manufacturing and **$2.0 million** in personnel-related costs[223](index=223&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk) - This decrease was partially offset by a **$4.1 million** increase in milestones and license acquisition costs related to the SADA License Agreement[223](index=223&type=chunk)[224](index=224&type=chunk) [Selling, General, and Administrative](index=70&type=section&id=Selling%2C%20general%2C%20and%20administrative) Selling, General, and Administrative Expenses (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Amount Change | Percentage Change | | :--------------------------- | :-------------------------- | :-------------------------- | :------------ | :---------------- | | Selling, general, and administrative | $10,200 | $13,626 | $(3,426) | (25)% | - The **$3.4 million** decrease was primarily attributable to a **$1.9 million** decrease in commercial expense, mainly due to costs incurred in 2022 for the preparation of a potential omburtamab launch[227](index=227&type=chunk) [Interest and Other Income / (Loss)](index=70&type=section&id=Interest%20and%20Other%20Income%20%2F%20%28Loss%29) Interest and Other Income / (Loss) (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Amount Change | Percentage Change | | :--------------------------------- | :-------------------------- | :-------------------------- | :------------ | :---------------- | | Interest and other income/(loss) | $189 | $(1,509) | $1,698 | (113)% | - The **$1.7 million** favorable change was primarily due to a **$0.8 million** decrease in foreign currency transaction losses and a **$0.5 million** increase from money market fund investment income[228](index=228&type=chunk) [Provision for Income Taxes](index=70&type=section&id=Provision%20for%20Income%20Taxes) Provision for Income Taxes (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Amount Change | Percentage Change | | :-------------------------- | :-------------------------- | :-------------------------- | :------------ | :---------------- | | Provision for income taxes | $187 | — | $187 | — | - A **$0.2 million** provision for income taxes was recorded in Q3 2023, primarily driven by certain U.S. state jurisdictions[229](index=229&type=chunk) [Comparison of the Nine Months Ended September 30, 2023 and 2022](index=71&type=section&id=Comparison%20of%20the%20Nine%20Months%20Ended%20September%2030%2C%202023%20and%202022) Results of Operations (in thousands) | Metric | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Amount Change | Percentage Change | | :-------------------- | :-------------------------- | :-------------------------- | :------------ | :---------------- | | Total revenues | $61,456 | $33,820 | $27,636 | 82% | | Total operating costs and expenses | $83,929 | $127,478 | $(43,549) | (34)% | | Loss from operations | $(22,473) | $(93,658) | $71,185 | (76)% | | Net loss | $(20,439) | $(96,725) | $76,286 | (79)% | [Revenues](index=71&type=section&id=Revenues) Revenues (in thousands) | Revenue Type | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Amount Change | Percentage Change | | :--------------------- | :-------------------------- | :-------------------------- | :------------ | :---------------- | | Product revenue, net | $60,956 | $32,820 | $28,136 | 86% | | License revenue | $500 | $1,000 | $(500) | (50)% | - Product revenue, net, increased by **$28.2 million** (**86%**) primarily due to new US patients and international market expansion, including **$3.5 million** from SciClone and **$5.6 million** from WEP[232](index=232&type=chunk) - License revenue decreased to **$0.5 million** in 2023 (from **$1.0 million** in 2022) due to the timing of milestone achievements[233](index=233&type=chunk) [Cost of Goods Sold](index=73&type=section&id=Cost%20of%20Goods%20Sold) Cost of Goods Sold (in thousands) | Metric | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Amount Change | Percentage Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :------------ | :---------------- | | Cost of goods sold | $9,327 | $5,447 | $3,880 | 71% | - The increase was primarily driven by increased product revenue and a **$0.8 million** inventory charge in 2023, partially offset by a **$1.2 million** charge in 2022[235](index=235&type=chunk) - Gross margin decreased due to increased revenues from lower-margin international geographic areas[235](index=235&type=chunk) [License Royalties](index=73&type=section&id=License%20Royalties) License Royalties (in thousands) | Metric | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Amount Change | Percentage Change | | :------------------------------- | :-------------------------- | :-------------------------- | :------------ | :---------------- | | License royalties | $50 | $100 | $(50) | (50)% | - License royalty expenses of **$0.1 million** in 2023 related to DANYELZA's Mexico marketing authorization, compared to **$0.1 million** in 2022 for the FDA BLA Dossier[236](index=236&type=chunk) [Research and Development](index=73&type=section&id=Research%20and%20Development) Research and Development Expenses (in thousands) | R&D Expense Category | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Change | Percentage | | :-------------------------- | :-------------------------- | :-------------------------- | :----- | :--------- | | Research and development | $40,831 | $71,785 | $(30,954) | (43)% | | Outsourced manufacturing | $9,529 | $27,433 | $(17,904) | (65)% | | Milestones and license acquisition costs | $4,125 | — | $4,125 | 100% | | Personnel costs | $10,903 | $14,207 | $(3,304) | (23)% | - The **$31.0 million** decrease was primarily due to reduced spending on deprioritized programs, including **$17.9 million** in outsourced manufacturing and **$4.1 million** in personnel-related costs[238](index=238&type=chunk)[239](index=239&type=chunk)[241](index=241&type=chunk) - This decrease was partially offset by a **$4.1 million** increase in milestones and license acquisition costs related to the SADA License Agreement[238](index=238&type=chunk) [Selling, General, and Administrative](index=75&type=section&id=Selling%2C%20general%2C%20and%20administrative) Selling, General, and Administrative Expenses (in thousands) | Metric | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Amount Change | Percentage Change | | :--------------------------- | :-------------------------- | :-------------------------- | :------------ | :---------------- | | Selling, general, and administrative | $33,721 | $50,146 | $(16,425) | (33)% | - The **$16.4 million** decrease was primarily attributable to a **$10.9 million** charge for severance and share-based compensation expense for the former CEO in 2022[242](index=242&type=chunk) - Also, a **$2.9 million** decrease in commercial expense, primarily due to costs incurred in 2022 for the preparation of a potential omburtamab launch[242](index=242&type=chunk) [Interest and Other Income / (Loss)](index=75&type=section&id=Interest%20and%20Other%20Income%20%2F%20%28Loss%29) Interest and Other Income / (Loss) (in thousands) | Metric | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Amount Change | Percentage Change | | :--------------------------------- | :-------------------------- | :-------------------------- | :------------ | :---------------- | | Interest and other income/(loss) | $2,400 | $(3,067) | $5,467 | (178)% | - The **$5.5 million** favorable increase was primarily due to a **$2.6 million** decrease in foreign currency transaction losses and a **$2.3 million** increase from money market fund investment income[243](index=243&type=chunk) [Provision for Income Taxes](index=75&type=section&id=Provision%20for%20Income%20Taxes) Provision for Income Taxes (in thousands) | Metric | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Amount Change | Percentage Change | | :-------------------------- | :-------------------------- | :-------------------------- | :------------ | :---------------- | | Provision for income taxes | $366 | — | $366 | 100% | - A **$0.4 million** provision for income taxes was recorded in 9M 2023, primarily driven by certain U.S. state jurisdictions[244](index=244&type=chunk) [Liquidity and Capital Resources](index=75&type=section&id=Liquidity%20and%20Capital%20Resources) [Overview](index=75&type=section&id=Overview) - Cash and cash equivalents were **$86.6 million** as of September 30, 2023[245](index=245&type=chunk) - The January 2023 restructuring and anticipated DANYELZA revenues are expected to support operations into 2027[245](index=245&type=chunk) - The Company expects to continue incurring net operating losses and may require additional funding through public/private equity, debt, or strategic collaborations[167](index=167&type=chunk)[168](index=168&type=chunk)[245](index=245&type=chunk) [Cash Flows](index=77&type=section&id=Cash%20Flows) Cash Flows (in thousands) | Cash Flow Category | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Amount Change | Percentage Change | | :----------------------- | :-------------------------- | :-------------------------- | :------------ | :---------------- | | Net cash used in operating activities | $(19,196) | $(67,260) | $48,064 | (71)% | | Net cash provided by investing activities | — | — | — | NA | | Net cash provided by financing activities | — | $84 | $(84) | (100)% | | Net decrease in cash and cash equivalents | $(19,191) | $(67,038) | $47,847 | (71)% | [Net Cash Used in Operating Activities](index=77&type=section&id=Net%20Cash%20Used%20in%20Operating%20Activities) - Net cash used in operating activities decreased by **$48.1 million** to **$19.2 million** for the nine months ended September 30, 2023[251](index=251&type=chunk) - This decrease was primarily due to a **$61.5 million** improvement in net loss (net of non-cash adjustments), partially offset by a **$13.4 million** increase in cash used for working capital[251](index=251&type=chunk) [Net Cash Provided by Investing Activities](index=77&type=section&id=Net%20Cash%20Provided%20by%20Investing%20Activities) - The Company did not generate or use cash for investing activities during the nine months ended September 30, 2023, or 2022[252](index=252&type=chunk) [Net Cash Provided by Financing Activities](index=77&type=section&id=Net%20Cash%20Provided%20by%20Financing%20Activities) - The Company had no cash flows from financing activities in the nine months ended September 30, 2023, compared to **$84,000** provided by exercised stock options in the same period of 2022[253](index=253&type=chunk) [Funding Requirements](index=77&type=section&id=Funding%20Requirements) - The Company expects its **$86.6 million** cash and cash equivalents (as of September 30, 2023), combined with anticipated DANYELZA revenues, to support operations into 2027[257](index=257&type=chunk) - Substantial additional funding will be required for pipeline development, marketing approval, and commercialization of product candidates[254](index=254&type=chunk)[300](index=300&type=chunk) - Global economic conditions, including inflation, international conflicts, and banking instability, could adversely impact the ability to raise additional capital on acceptable terms[256](index=256&type=chunk)[302](index=302&type=chunk) - Failure to obtain additional funding could force delays, reductions, or termination of research and development programs or commercialization efforts, or lead to unfavorable licensing terms[256](index=256&type=chunk)[302](index=302&type=chunk) [Contractual Obligations and Commitments](index=81&type=section&id=Contractual%20Obligations%20and%20Commitments) - Material contractual commitments include license agreements with MSK, CD33, and SADA, involving various milestone and royalty payment obligations[263](index=263&type=chunk)[265](index=265&type=chunk) - Research and development agreements are cancelable at the Company's option if such research and development fails[265](index=265&type=chunk) - Failure to meet certain conditions under license agreements could cause the related licenses to be canceled and result in termination of the respective arrangement[265](index=265&type=chunk) [Recent Accounting Pronouncements](index=81&type=section&id=Recent%20Accounting%20Pronouncements) - Refer to NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES for a discussion of recent accounting pronouncements, which had no material impact on the Company's consolidated financial statements[266](index=266&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=83&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk - As a 'smaller reporting company,' the registrant is not required to provide quantitative and qualitative disclosures about market risk[268](index=268&type=chunk) [Item 4. Controls and Procedures](index=83&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2023. There were no material changes in internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2023[269](index=269&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended September 30, 2023[271](index=271&type=chunk) [PART II — OTHER INFORMATION](index=83&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=83&type=section&id=Item%201.%20Legal%20Proceedings) The company is a nominal defendant in three ongoing lawsuits: Donoghue vs. Y-mAbs Therapeutics, Inc., and Gad (short swing profits), In re Y-mAbs Therapeutics, Inc. Securities Litigation (securities fraud), and Hazelton vs. Y-mAbs Therapeutics Inc., and Gad, et al. (excessive compensation). The company believes these claims are without merit and has not established liabilities [Donoghue vs. Y-mAbs Therapeutics, Inc., and Gad](index=83&type=section&id=Donoghue%20vs.%20Y-mAbs%20Therapeutics%2C%20Inc.%2C%20and%20Gad) - A lawsuit filed by a stockholder alleges short swing profits by Mr. Thomas Gad; the action is currently stayed through November 30, 2023[119](index=119&type=chunk)[272](index=272&type=chunk) [In re Y-mAbs Therapeutics, Inc. Securities Litigation](index=84&type=section&id=In%20re%20Y-mAbs%20Therapeutics%2C%20Inc.%20Securities%20Litigation) - A class-action lawsuit alleges material misrepresentations regarding the FDA's BLA consideration for omburtamab; defendants filed a motion to dismiss[120](index=120&type=chunk)[273](index=273&type=chunk) [Hazelton vs. Y-mAbs Therapeutics Inc., and Gad, et al.](index=84&type=section&id=Hazelton%20vs.%20Y-mAbs%20Therapeutics%20Inc.%2C%20and%20Gad%2C%20et%20al.) - A purported stockholder derivative action alleges excessive compensation to current and former board members for fiscal years 2020 and 2021; defendants filed a motion to dismiss[121](index=121&type=chunk)[274](index=274&type=chunk) [Item 1A. Risk Factors](index=84&type=page&id=Item%201A.%20Risk%20Factors) This section details numerous risks that could materially and adversely affect the company's business, financial condition, results of operations, and future growth prospects, categorized into financial, product development, third-party dependence, regulatory, intellectual property, employee, common stock, and general risks [Risks Related to Our Financial Condition and Need for Additional Capital](index=84&type=section&id=Risks%20Related%20to%20Our%20Financial%20Condition%20and%20Need%20for%20Additional%20Capital) - The company has a limited operating history and incurred significant losses since inception, with an accumulated deficit of **$456.5 million** as of September 30, 2023[276](index=276&type=chunk)[277](index=277&type=chunk) - DANYELZA is the only approved product, and revenue from its sales does not fully fund operating expenses; significant losses are expected for the foreseeable future[282](index=282&type=chunk) - The January 2023 restructuring and workforce reduction aim to focus resources on DANYELZA and the SADA platform, but may lead to unintended consequences and costs[287](index=287&type=chunk)[288](index=288&type=chunk) - Substantial additional funding will be required for product development and commercialization, which may cause dilution to stockholders or involve restrictive debt covenants[300](index=300&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk) [Risks related to product development and commercialization](index=94&type=section&id=Risks%20related%20to%20product%20development%20and%20commercialization) - Drug development is a lengthy, expensive, and uncertain process; clinical trials may fail to demonstrate safety and efficacy, leading to delays or inability to obtain marketing approval[308](index=308&type=chunk)[309](index=309&type=chunk)[311](index=311&type=chunk) - The SADA Technology is unproven, exposing the company to unforeseen risks, and its safety and efficacy in humans are not guaranteed, potentially leading to longer regulatory review and increased costs[319](index=319&type=chunk)[323](index=323&type=chunk) - DANYELZA and other product candidates may cause serious adverse events or undesirable side effects, which could halt clinical development, delay/withdraw regulatory approval, or limit commercial potential[354](index=354&type=chunk)[355](index=355&type=chunk)[357](index=357&type=chunk) - The outcome of early clinical trials may not predict later success, and interim data is subject to change, potentially affecting regulatory approval and increasing costs[363](index=363&type=chunk)[364](index=364&type=chunk)[365](index=365&type=chunk) [Risks related to our dependence on third parties](index=123&type=section&id=Risks%20related%20to%20our%20dependence%20on%20third%20parties) - Reliance on third parties (CROs, CMOs, research institutions) for clinical trials and manufacturing poses risks if they fail to meet duties, deadlines, or regulatory requirements[391](index=391&type=chunk)[396](index=396&type=chunk)[410](index=410&type=chunk) - Manufacturing DANYELZA and SADA-based candidates is complex, with reliance on limited third-party manufacturers and sole-source vendors, risking production difficulties, supply shortages, and compliance issues[396](index=396&type=chunk)[397](index=397&type=chunk)[398](index=398&type=chunk)[418](index=418&type=chunk)[419](index=419&type=chunk) - Existing license agreements with MSK and MIT are crucial, and their termination due to non-compliance could suspend R&D and commercialization efforts[417](index=417&type=chunk) - Strategic collaborations for DANYELZA and omburtamab in certain jurisdictions (e.g., Takeda Israel, SciClone) carry risks of collaborators not performing as expected or abandoning projects[423](index=423&type=chunk)[424](index=424&type=chunk)[426](index=426&type=chunk) [Risks related to government regulation; market approval and other legal compliance matters](index=137&type=section&id=Risks%20related%20to%20government%20regulation%3B%20market%20approval%20and%20other%20legal%20compliance%20matters) - The FDA regulatory approval process is lengthy, time-consuming, and unpredictable, with no assurance of approval for DANYELZA in additional indications or other product candidates[429](index=429&type=chunk)[436](index=436&type=chunk) - The FDA's CRL for omburtamab highlights challenges in demonstrating effectiveness, especially for rare diseases with small patient populations and reliance on external control comparators[432](index=432&type=chunk)[433](index=433&type=chunk)[435](index=435&type=chunk) - Compliance with anti-kickback, fraud and abuse, and data privacy laws (HIPAA, GDPR, CCPA) is stringent and evolving, posing risks of regulatory investigations, litigation, fines, and business disruptions[489](index=489&type=chunk)[493](index=493&type=chunk)[494](index=494&type=chunk)[499](index=499&type=chunk)[505](index=505&type=chunk) - Government price controls, healthcare reforms (e.g., Inflation Reduction Act), and limited reimbursement from third-party payors could restrict drug pricing and profitability[485](index=485&type=chunk)[486](index=486&type=chunk)[525](index=525&type=chunk)[530](index=530&type=chunk) [Risks related to our intellectual property](index=172&type=section&id=Risks%20related%20to%20our%20intellectual%20property) - Protecting intellectual property (patents, trademarks, trade secrets) is difficult and costly, with no guarantee of broad or enforceable protection[547](index=547&type=chunk)[548](index=548&type=chunk)[549](index=549&type=chunk)[566](index=566&type=chunk) - Dependence on in-licensed technology from MSK and MIT means limited control over patent prosecution and potential termination if license obligations are not met[550](index=550&type=chunk)[556](index=556&type=chunk) - Litigation related to patent infringement or trade secret misappropriation is costly, time-consuming, and could result in substantial damages, injunctions, or loss of valuable rights[571](index=571&type=chunk)[579](index=579&type=chunk)[582](index=582&typ

Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) Q2 2023 Earnings Call Transcript August 11, 2023 9:00 AM ET Company Participants Courtney Dugan - Head of IR Thomas Gad - Founder, President & Interim CEO Vignesh Rajah - CMO Sue Smith - CCO Bo Kruse - CFO Conference Call Participants Alec Stranahan - Bank of America Charles Zhu - Guggenheim Securities Mike Ulz - Morgan Stanley Bill Maughan - Canaccord Genuity Tessa Romero - JP Morgan Luke Shumway - BMO Capital Markets Operator Good morning, and welcome to the Y-mAbs ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38650 Y-mAbs Therapeutics, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I. ...

Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) Q1 2023 Earnings Conference Call May 9, 2023 9:00 AM ET Company Participants Thomas Gad - Founder, President, Interim Chief Executive Officer Sue Smith - Senior Vice President and Chief Commercial Officer Vignesh Rajah - Senior Vice President and Chief Medical Officer Bo Kruse - Chief Financial Officer, Treasurer, and Secretary Conference Call Participants William Maughan - Canaccord Genuity Mike Ulz - Morgan Stanley Charles Zhu - Guggenheim Securities Tessa Romero - ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38650 Y-mAbs Therapeutics, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I ...

Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) Q4 2022 Earnings Conference Call March 31, 2023 9:00 AM ET Company Participants Thomas Gad - Founder, Interim CEO & President Sue Smith - SVP & Chief Commercial Officer Bo Kruse - EVP, Secretary, Treasurer & CFO Vignesh Rajah - Chief Medical Officer Conference Call Participants Alec Stranahan - Bank of America Etzer Darout - BMO Capital Markets William Maughan - Canaccord Genuity Taylor Hanley - JPMorgan Edouard Mullarky - Guggenheim Securities Operator Good mornin ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022. OR Registrant's telephone number, including area code (646)-885-8505 Securities registered pursuant to Section 12(b) of the Act: Title of each class: Trading Symbol Name of each exchange on which registered: ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SE ...

Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) Q3 2022 Earnings Conference Call November 8, 2022 4:00 PM ET Company Participants Thomas Gad - Founder, Interim CEO & President Sue Smith - SVP & Chief Commercial Officer Bo Kruse - EVP, Secretary, Treasurer & CFO Conference Call Participants Alec Stranahan - Bank of America Merrill Lynch Etzer Darout - BMO Capital Markets William Maughan - Canaccord Genuity Edouard Mullarky - Guggenheim Securities Tessa Romero - JPMorgan Chase & Co. Sebastiaan van der Schoot - Kempen ...

[FORM 10-Q Cover Page Information](index=1&type=section&id=FORM%2010-Q%20Cover%20Page%20Information) This section provides key identifying information for Y-mAbs Therapeutics, Inc.'s Form 10-Q filing, including filer status and outstanding shares - Y-mAbs Therapeutics, Inc. (Delaware, 47-4619612) is a **large accelerated filer**, with its common stock (YMAB) registered on the Nasdaq Global Select Market[2](index=2&type=chunk)[3](index=3&type=chunk) - As of November 2, 2022, there were **43,668,130 shares** of Common Stock ($0.0001 par value) outstanding[4](index=4&type=chunk) [Forward-Looking Statements](index=2&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section cautions that the report contains forward-looking statements subject to substantial risks and uncertainties that may cause actual results to differ materially - This report contains forward-looking statements regarding business strategy, future operations, financial position, revenue, costs, products, approvals, R&D, collaborations, market growth, and future results, which involve substantial risks and uncertainties that may cause actual results to differ materially[6](index=6&type=chunk)[7](index=7&type=chunk) - The company undertakes no obligation to publicly update or review any forward-looking statement, except as required by law[8](index=8&type=chunk) - Actual results or events could differ materially from disclosed plans, intentions, and expectations, particularly due to factors detailed in the 'Risk Factors' section[10](index=10&type=chunk) [Summary of Risk Factors](index=2&type=section&id=SUMMARY%20OF%20RISK%20FACTORS) This section outlines numerous risks that could adversely affect the company's business, financial condition, and operational results, including commercialization and regulatory challenges - The business is subject to numerous risks that could adversely affect its objectives, financial condition, results of operations, cash flows, and prospects[12](index=12&type=chunk) - Key risks include challenges in commercializing DANYELZA and other product candidates (omburtamab), obtaining regulatory approvals (especially for omburtamab after a negative Advisory Committee vote), implementing business strategy, managing pricing/reimbursement, and conducting clinical trials[12](index=12&type=chunk)[14](index=14&type=chunk) - Macroeconomic conditions (inflation, supply chain, geopolitical events like the Ukraine-Russia conflict) and health epidemics (COVID-19) have adversely affected and may continue to affect operations and financial results[17](index=17&type=chunk) [PART I — FINANCIAL INFORMATION](index=8&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This part presents the company's consolidated financial statements, notes, and management's discussion and analysis of financial condition and results of operations [Item 1. Consolidated Financial Statements](index=8&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including the Balance Sheets, Statements of Net Loss and Comprehensive Loss, Statements of Changes in Stockholders' Equity, and Statements of Cash Flows for Y-mAbs Therapeutics, Inc. for the periods ended September 30, 2022, and December 31, 2021 (for balance sheet) or September 30, 2021 (for income and cash flow statements) | Metric | September 30, 2022 | December 31, 2021 | | :-------------------------------- | :----------------- | :------------------ | | **ASSETS** | | | | Cash and cash equivalents | $114,526 | $181,564 | | Total current assets | $133,244 | $202,261 | | TOTAL ASSETS | $143,915 | $212,783 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $32,015 | $27,875 | | TOTAL LIABILITIES | $36,017 | $32,677 | | TOTAL STOCKHOLDERS' EQUITY | $107,898 | $180,106 | | Metric | Three months ended Sep 30, 2022 | Three months ended Sep 30, 2021 | Nine months ended Sep 30, 2022 | Nine months ended Sep 30, 2021 | | :------------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Product revenue, net | $12,537 | $8,965 | $32,820 | $23,299 | | Total revenues | $12,537 | $8,965 | $33,820 | $25,299 | | Total operating costs and expenses | $38,554 | $37,669 | $127,478 | $104,974 | | Loss from operations | $(26,017) | $(28,704) | $(93,658) | $(79,675) | | Gain from sale of priority review voucher, net | — | — | — | $62,010 | | NET LOSS | $(27,526) | $(28,858) | $(96,725) | $(18,382) | | Net loss per share, basic and diluted | $(0.63) | $(0.66) | $(2.21) | $(0.43) | | Metric | Nine months ended September 30, 2022 | Nine months ended September 30, 2021 | | :------------------------------------------ | :----------------------------------- | :----------------------------------- | | Net cash used in operating activities | $(67,260) | $(68,693) | | Net cash provided by investing activities | — | $61,498 | | Net cash provided by financing activities | $84 | $108,214 | | Net increase / (decrease) in cash and cash equivalents | $(67,038) | $101,096 | | Cash and cash equivalents at end of period | $114,526 | $215,730 | [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited consolidated financial statements, offering further context and breakdown of the company's financial position, operations, and cash flows, as well as significant accounting policies and recent events [NOTE 1—Organization and Description of Business](index=13&type=section&id=NOTE%201%E2%80%94Organization%20and%20Description%20of%20Business) This note describes Y-mAbs Therapeutics, Inc. as a commercial-stage biopharmaceutical company focused on developing antibody-based cancer therapies - Y-mAbs Therapeutics, Inc. is a commercial-stage biopharmaceutical company focused on developing and commercializing novel, antibody-based therapeutic products for the treatment of cancer[31](index=31&type=chunk) - The company was incorporated on April 30, 2015, in Delaware and is headquartered in New York[32](index=32&type=chunk) [NOTE 2—Basis of Presentation](index=13&type=section&id=NOTE%202%E2%80%94Basis%20of%20Presentation) This note outlines the company's financial position, including accumulated losses, cash reserves, and the need for future financing to support drug development and commercialization - The company has incurred losses since inception (except for Q1 2021) and faces significant risks related to drug candidate development, regulatory approval, market acceptance, and the need for additional financing[33](index=33&type=chunk) - DANYELZA was FDA-approved in November 2020, but other drug candidates require substantial R&D and regulatory efforts prior to commercialization[34](index=34&type=chunk) - As of September 30, 2022, the accumulated deficit was **$437.2 million**, and cash and cash equivalents were **$114.5 million**, expected to fund operations for at least the next 12 months[35](index=35&type=chunk)[37](index=37&type=chunk)[39](index=39&type=chunk) [NOTE 3—Summary of Significant Accounting Policies](index=15&type=section&id=NOTE%203%E2%80%94Summary%20of%20Significant%20Accounting%20Policies) This note details the significant accounting policies and estimates used in preparing the financial statements, covering revenue recognition, cash equivalents, and R&D expenses - Financial statements are prepared in accordance with GAAP, requiring management to make significant estimates and assumptions for net product revenues, R&D expenses, milestone/royalty accruals, and stock option valuation[41](index=41&type=chunk)[43](index=43&type=chunk) - Cash equivalents are highly liquid instruments with original maturities of three months or less, held in highly rated securities, and valued at Level 2 within the fair value hierarchy[46](index=46&type=chunk)[56](index=56&type=chunk) - Product revenue from DANYELZA sales is recognized when the customer obtains control, generally upon receipt at the end-user hospital, and is net of estimated rebates, chargebacks, discounts, and returns[61](index=61&type=chunk)[62](index=62&type=chunk)[64](index=64&type=chunk) - License revenue is recognized using a five-step model, assessing distinct performance obligations; a **$1.0 million** milestone payment was recognized in Q2 2022 for the updated FDA BLA dossier for DANYELZA[65](index=65&type=chunk) [NOTE 4—Product Revenue](index=23&type=section&id=NOTE%204%E2%80%94Product%20Revenue) This note provides a breakdown of product revenue from DANYELZA sales, including allowances and major customer contributions | Period | 2022 | 2021 | | :-------------------------------- | :--------- | :--------- | | Three months ended September 30 | $12,537 | $8,965 | | Nine months ended September 30 | $32,820 | $23,299 | - Product revenues are recorded net of allowances for rebates, chargebacks, discounts, and returns; as of September 30, 2022, accounts receivable allowances were **$734,000** and accrued liabilities were **$2,451,000**[71](index=71&type=chunk) | Metric | Balance, Dec 31, 2021 | Current provisions | Payments/credits | Change in estimate | Balance, Sep 30, 2022 | | :-------------------------------- | :-------------------- | :---------------- | :--------------- | :----------------- | :-------------------- | | Contractual Allowances and Discounts | $13 | $65 | $(59) | — | $19 | | Government Rebates | $3,027 | $3,459 | $(2,653) | $(709) | $3,124 | | Returns | $61 | $379 | $(398) | — | $42 | | Total | $3,101 | $3,903 | $(3,110) | $(709) | $3,185 | - McKesson and AmerisourceBergen accounted for **78%** and **14%** of gross product revenue for the three months ended September 30, 2022, respectively, and **69%** and **16%** for the nine months ended September 30, 2022, respectively[73](index=73&type=chunk) [NOTE 5—Net Loss Per Share](index=25&type=section&id=NOTE%205%E2%80%94Net%20Loss%20Per%20Share) This note details the calculation of basic and diluted net loss per share, including the impact of potentially dilutive securities | Metric | Three months ended Sep 30, 2022 | Three months ended Sep 30, 2021 | Nine months ended Sep 30, 2022 | Nine months ended Sep 30, 2021 | | :------------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income /(loss) (numerator) | $(27,526) | $(28,858) | $(96,725) | $(18,382) | | Weighted-average shares (denominator), basic and diluted | 43,718 | 43,598 | 43,715 | 43,019 | | Basic net income / (loss) per share | $(0.63) | $(0.66) | $(2.21) | $(0.43) | - Potentially dilutive securities, including stock options and restricted stock units totaling **7,119,332 shares** as of September 30, 2022, were excluded from diluted EPS calculations due to the net loss[76](index=76&type=chunk) [NOTE 6—Inventories](index=27&type=section&id=NOTE%206%E2%80%94Inventories) This note provides a breakdown of inventory categories and discusses the classification of noncurrent inventories and a quality-related charge | Category | September 30, 2022 | December 31, 2021 | | :--------------- | :----------------- | :------------------ | | Raw Materials | $1,500 | — | | Work In Progress | $8,870 | $4,741 | | Finished Goods | $1,088 | $771 | | Total Inventories | $11,458 | $5,512 | - As of September 30, 2022, **$1.5 million** of raw material and **$3.716 million** of work in progress inventories were classified as noncurrent assets, expected to be utilized beyond one year from the balance sheet date[77](index=77&type=chunk) - A **$1.2 million** charge was recorded in cost of goods sold during the three and nine months ended September 30, 2022, related to a commercial batch that did not meet quality specifications[78](index=78&type=chunk) [NOTE 7—Intangible Assets, Net](index=27&type=section&id=NOTE%207%E2%80%94Intangible%20Assets,%20Net) This note details the company's intangible assets, primarily related to DANYELZA, and their amortization schedule | Date | Amount | Accumulated Amortization | Net Book Value | | :----------------- | :--------- | :----------------------- | :------------- | | September 30, 2022 | $1,800 | $270 | $1,530 | | December 31, 2021 | $1,800 | $137 | $1,663 | - Intangible assets, net, totaling **$1.530 million** as of September 30, 2022, relate to capitalized milestone payments for DANYELZA and are amortized on a straight-line basis over a 10-year useful life, with annual amortization expected to be **$180,000** from 2022 to 2026[79](index=79&type=chunk)[80](index=80&type=chunk) [NOTE 8—Accrued Liabilities](index=28&type=section&id=NOTE%208%E2%80%94Accrued%20Liabilities) This note provides a detailed breakdown of the company's accrued liabilities by category, including licensing, clinical, compensation, and manufacturing costs | Category | September 30, 2022 | December 31, 2021 | | :------------------------------------ | :----------------- | :------------------ | | Accrued licensing milestone and royalty payments | $1,593 | $3,090 | | Accrued clinical costs | $985 | $915 | | Accrued compensation and board fees | $4,073 | $1,877 | | Accrued manufacturing costs | $6,466 | $2,622 | | Accrued sales reserves | $2,451 | $2,615 | | Other | $1,524 | $1,421 | | Total | $17,092 | $12,540 | [NOTE 9—License Agreements and Commitments](index=28&type=section&id=NOTE%209%E2%80%94License%20Agreements%20and%20Commitments) This note outlines the company's various license agreements with MSK and MSK/MIT, detailing associated cash payments, expenses, accrued liabilities, and potential future milestone payments - The company has license agreements with MSK (MSK License, CD33 License, MabVax Agreement) and MSK/MIT (SADA License Agreement) for patent and intellectual property rights, involving contingent milestone and royalty payments[82](index=82&type=chunk) | Agreement | Cash paid (9M 2022) | Cash paid (9M 2021) | Expense (9M 2022) | Expense (9M 2021) | Accrued liabilities (Current, Sep 30, 2022) | Accrued liabilities (Non-current, Sep 30, 2022) | Accrued liabilities (Current, Dec 31, 2021) | Accrued liabilities (Non-current, Dec 31, 2021) | | :-------- | :------------------ | :------------------ | :---------------- | :---------------- | :------------------------------------------ | :--------------------------------------------- | :------------------------------------------ | :--------------------------------------------- | | MSK | $2,871 | $1,480 | $2,513 | $531 | $828 | $1,950 | $1,486 | $1,650 | | CD33 | — | $100 | — | — | $150 | $300 | — | $450 | | MabVax | — | $10 | $10 | $10 | $10 | — | — | — | | SADA | $1,000 | $1,000 | — | — | $605 | — | $1,605 | — | | Agreement | Maximum Clinical Milestones | Maximum Regulatory Milestones | Maximum Sales-based Milestones | | :-------- | :-------------------------- | :---------------------------- | :----------------------------- | | MSK | $2,450 | $9,000 | $20,000 | | CD33 | $550 | $500 | $7,500 | | MabVax | $200 | $1,200 | — | | SADA | $4,730 | $18,125 | $23,750 | - Former CEO Dr. Claus Møller's departure resulted in **$1.589 million** in cash compensation and a **$9.286 million** non-cash stock-based compensation expense, totaling **$10.875 million** recorded in SG&A for the nine months ended September 30, 2022[97](index=97&type=chunk) [NOTE 10—Stockholders' Equity](index=34&type=section&id=NOTE%2010%E2%80%94Stockholders'%20Equity) This note provides information on the company's common stock, treasury shares, and proceeds from a public offering - As of September 30, 2022, the company had **43,668,130 shares** of common stock outstanding[100](index=100&type=chunk) - In July 2022, one non-employee researcher repaid a Secured Promissory Note, leading to the company recording and subsequently cancelling **57,887 treasury shares** at an acquisition cost of **$0.963 million**[103](index=103&type=chunk) - A public offering in February 2021 resulted in the issuance of **2,804,878 shares** of common stock, generating aggregate net proceeds of approximately **$107.725 million**[105](index=105&type=chunk) [NOTE 11—Share-Based Compensation](index=36&type=section&id=NOTE%2011%E2%80%94Share-Based%20Compensation) This note details the company's stock-based compensation expenses, outstanding options, and restricted stock units - Stock-based compensation for stock options was **$3.257 million** for Q3 2022 and **$21.822 million** for 9M 2022, with the latter including **$9.286 million** related to the former CEO's departure[108](index=108&type=chunk)[110](index=110&type=chunk) | Metric | September 30, 2022 | December 31, 2021 | | :------------------------------------ | :----------------- | :------------------ | | Options Outstanding and expected to vest | 7,083,767 | 6,687,128 | | Weighted average exercise price | $21.28 | $22.43 | | Aggregate intrinsic value (in thousands) | $23,619 | $26,412 | | Weighted average remaining contractual life (years) | 6.70 | 7.21 | - Unrecognized compensation expense for employee stock options was **$25.520 million** as of September 30, 2022, expected to vest over a period of **2.47 years**[117](index=117&type=chunk) | Metric | September 30, 2022 | December 31, 2021 | | :------------------------------------ | :----------------- | :------------------ | | Restricted Stock Units Outstanding and expected to vest | 35,565 | 28,907 | | Weighted average grant price | $18.42 | $28.04 | | Weighted average remaining vesting life (years) | 2.00 | 1.82 | [NOTE 12—Related Party Transactions](index=42&type=section&id=NOTE%2012%E2%80%94Related%20Party%20Transactions) This note discloses transactions with MSK, a related party and shareholder, including expensed costs and amounts due - MSK is a shareholder and a party to several agreements, with total expensed costs of **$1.221 million** for Q3 2022 and **$4.028 million** for 9M 2022[123](index=123&type=chunk) - As of September 30, 2022, the total amount due to MSK was **$4.761 million**, comprising **$0.275 million** in accounts payable and **$4.486 million** in accrued liabilities[123](index=123&type=chunk) [NOTE 13—Income Taxes](index=42&type=section&id=NOTE%2013%E2%80%94Income%20Taxes) This note explains the company's income tax position, including the absence of current or deferred taxes due to net losses and the maintenance of a full valuation allowance - No current or deferred income taxes were provided due to net losses of **$27.526 million** for Q3 2022 and **$96.725 million** for 9M 2022[124](index=124&type=chunk) - The company maintains a full valuation allowance on its U.S. and foreign deferred tax assets, based on historical and forecasted cumulative losses[126](index=126&type=chunk) [NOTE 14—Other Benefits](index=42&type=section&id=NOTE%2014%E2%80%94Other%20Benefits) This note describes the company's employee benefit programs, including 401(k) and retirement plans, and the absence of matching contributions - The company offers a 401(k) savings plan for U.S. employees and a retirement program for Danish subsidiary employees, but no matching contributions were made by the company for the three or nine months ended September 30, 2022 and 2021[127](index=127&type=chunk)[128](index=128&type=chunk) [NOTE 15—Gain from Sale of Priority Review Voucher](index=44&type=section&id=NOTE%2015%E2%80%94Gain%20from%20Sale%20of%20Priority%20Review%20Voucher) This note details the gain recognized from the sale of a Priority Review Voucher in 2021 and the absence of such a gain in 2022 - In January 2021, the company sold its DANYELZA Priority Review Voucher (PRV) for **$105.0 million**, recognizing a net gain of **$62.010 million** during the nine months ended September 30, 2021[130](index=130&type=chunk) - No corresponding gain from PRV sales was recognized during the three and nine months ended September 30, 2022[131](index=131&type=chunk) [NOTE 16—Subsequent Event](index=44&type=section&id=NOTE%2016%E2%80%94Subsequent%20Event) This note describes the FDA's priority review of omburtamab's BLA and the subsequent negative Advisory Committee vote, indicating uncertainty for approval - The FDA accepted the Biologics License Application (BLA) for omburtamab for priority review in May 2022, with an action date of November 30, 2022[132](index=132&type=chunk) - On October 28, 2022, the Oncologic Drugs Advisory Committee voted **16 to 0** that the BLA did not provide sufficient evidence to conclude that omburtamab improves overall survival, making FDA approval uncertain[132](index=132&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&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 results of operations, highlighting key business developments, financial performance, liquidity, and capital resources [Overview](index=44&type=section&id=Overview) This overview introduces Y-mAbs as a commercial-stage biopharmaceutical company, highlighting its key product DANYELZA, the status of omburtamab, and its history of operating losses - Y-mAbs is a commercial-stage biopharmaceutical company focused on developing novel, antibody-based therapeutic products for cancer, leveraging proprietary platforms[134](index=134&type=chunk) - DANYELZA® (naxitamab-gqgk) was FDA-approved in November 2020 for relapsed/refractory high-risk neuroblastoma and is being commercialized in the United States[135](index=135&type=chunk) - Omburtamab's BLA for CNS leptomeningeal metastases from NB was resubmitted in March 2022 and accepted for priority review in May 2022, but the Advisory Committee voted **16-0** against its efficacy in October 2022[138](index=138&type=chunk) - The company has incurred significant net operating losses, with an accumulated deficit of **$437.2 million** as of September 30, 2022, and expects continued losses due to R&D and commercialization costs[148](index=148&type=chunk) [Recent Developments](index=52&type=section&id=Recent%20Developments) This section summarizes recent key events, including the FDA's review of omburtamab and DANYELZA's international marketing approvals - Omburtamab's BLA for CNS/LM from NB was accepted for priority review by the FDA in May 2022, but the Advisory Committee voted **16 to 0** on October 28, 2022, that the BLA did not provide sufficient evidence for overall survival improvement[157](index=157&type=chunk) - DANYELZA received marketing approval in Israel on August 30, 2022, and a regulatory filing was submitted to the Brazilian Health Regulatory Agency on September 26, 2022[158](index=158&type=chunk) [Known Trends, Geopolitical Events and Uncertainties](index=52&type=section&id=Known%20Trends,%20Geopolitical%20Events%20and%20Uncertainties) This section discusses the adverse impacts of the COVID-19 pandemic, the Russia-Ukraine conflict, and rising inflation on the company's operations and financial results - The COVID-19 pandemic continues to adversely impact operations, including DANYELZA commercialization efforts and clinical trial activities, leading to delays and potential long-term effects on the work environment[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) - The Russia-Ukraine conflict has led to the termination of DANYELZA clinical trials and suspension of regulatory activities in Russia, negatively impacting commercialization plans and causing volatility in global financial markets[163](index=163&type=chunk)[164](index=164&type=chunk) - Rising inflation and increased recession risk are affecting the business, potentially increasing operating costs (clinical trial materials, labor, R&D) and impacting the ability to raise capital[165](index=165&type=chunk) [Components of Our Results of Operations](index=54&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section defines the key components of the company's financial results, including product revenue, license revenue, cost of goods sold, and operating expenses - Product revenue is derived from sales of DANYELZA, recognized when the customer obtains control; license revenue comes from payments for licensing rights to DANYELZA and omburtamab[166](index=166&type=chunk)[167](index=167&type=chunk)[184](index=184&type=chunk) - Cost of goods sold includes direct and indirect manufacturing and distribution costs for DANYELZA, such as materials, third-party services, freight, labor, overhead, royalties, and inventory write-offs[168](index=168&type=chunk) - Research and development expenses are expensed as incurred, covering personnel, research, manufacturing, license fees, and clinical trial costs, and are expected to increase significantly[171](index=171&type=chunk)[176](index=176&type=chunk) - Selling, general, and administrative expenses include employee-related costs, facility costs, legal fees, and consulting services, anticipated to increase to support R&D and commercialization[177](index=177&type=chunk)[178](index=178&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=60&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) This section highlights the critical accounting policies that require significant management judgment and estimates, such as revenue recognition, R&D accruals, and stock option valuation - Key accounting policies require significant judgments and estimates, including those for net product revenues (rebates, chargebacks, discounts), accruals for R&D expenses, milestone and royalty payments, and the valuation of stock options[180](index=180&type=chunk)[182](index=182&type=chunk) - Revenue recognition for license arrangements follows a five-step model, assessing distinct performance obligations and allocating the transaction price[189](index=189&type=chunk) - Stock options are valued using the Black-Scholes option pricing model, with assumptions for risk-free interest rate, zero expected dividend yield, and volatility based on peer companies and historical Y-mAbs share price[197](index=197&type=chunk)[198](index=198&type=chunk) [Results of Operations](index=66&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's financial performance, comparing revenues and expenses for the three and nine months ended September 30, 2022, and 2021 | Metric | Three months ended Sep 30, 2022 | Three months ended Sep 30, 2021 | Change (Amount) | Change (Percentage) | | :---------------- | :------------------------------ | :------------------------------ | :---------------- | :------------------ | | Product revenue, net | $12,537 | $8,965 | $3,572 | 40% | | Total revenues | $12,537 | $8,965 | $3,572 | 40% | - Product revenue increased by **40%** for Q3 2022 compared to Q3 2021, driven by an increase in new US patients and a **$0.7 million** benefit from a change in estimate[201](index=201&type=chunk) | Metric | Three months ended Sep 30, 2022 | Three months ended Sep 30, 2021 | Change (Amount) | Change (Percentage) | | :-------------------------------- | :------------------------------ | :------------------------------ | :---------------- | :------------------ | | Cost of goods sold | $2,475 | $550 | $1,925 | 350% | | Research and development | $22,453 | $23,131 | $(678) | (3)% | | Selling, general, and administrative | $13,626 | $13,988 | $(362) | (3)% | | Total operating costs and expenses | $38,554 | $37,669 | $885 | 2% | - Cost of goods sold increased significantly (**350%**) in Q3 2022, primarily due to a **$1.2 million** charge for a batch that did not meet quality specifications[202](index=202&type=chunk) | Metric | Nine months ended Sep 30, 2022 | Nine months ended Sep 30, 2021 | Change (Amount) | Change (Percentage) | | :---------------- | :----------------------------- | :----------------------------- | :---------------- | :------------------ | | Product revenue, net | $32,820 | $23,299 | $9,521 | 41% | | License revenue | $1,000 | $2,000 | $(1,000) | (50)% | | Total revenues | $33,820 | $25,299 | $8,521 | 34% | - Total revenues increased by **34%** for 9M 2022, driven by a **41%** increase in product revenue from DANYELZA sales and a **$1.0 million** license revenue from an updated FDA BLA Dossier for DANYELZA[210](index=210&type=chunk)[211](index=211&type=chunk) | Metric | Nine months ended Sep 30, 2022 | Nine months ended Sep 30, 2021 | Change (Amount) | Change (Percentage) | | :-------------------------------- | :----------------------------- | :----------------------------- | :---------------- | :------------------ | | Cost of goods sold | $5,447 | $843 | $4,604 | 546% | | License royalties | $100 | $210 | $(110) | (52)% | | Research and development | $71,785 | $64,488 | $7,297 | 11% | | Selling, general, and administrative | $50,146 | $39,433 | $10,713 | 27% | | Total operating costs and expenses | $127,478 | $104,974 | $22,504 | 21% | - Net loss for 9M 2022 was **$(96.7) million**, a significant increase from **$(18.4) million** in 9M 2021, primarily due to the absence of the **$62.0 million** PRV gain recognized in 2021 and increased operating expenses[209](index=209&type=chunk)[222](index=222&type=chunk) [Liquidity and Capital Resources](index=73&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's financial liquidity, capital needs, and cash flow activities, including sources of funding and future operational projections - The company has incurred significant net operating losses and expects to continue doing so, financing operations through common stock sales, DANYELZA revenues, and the 2021 PRV sale[224](index=224&type=chunk) | Metric | Nine months ended Sep 30, 2022 | Nine months ended Sep 30, 2021 | Change (Amount) | Change (Percentage) | | :------------------------------------------ | :----------------------------- | :----------------------------- | :---------------- | :------------------ | | Net cash used in operating activities | $(67,260) | $(68,693) | $1,433 | (2)% | | Net cash provided by investing activities | — | $61,498 | $(61,498) | (100)% | | Net cash provided by financing activities | $84 | $108,214 | $(108,130) | (100)% | | Net increase / (decrease) in cash and cash equivalents | $(67,038) | $101,096 | $(168,134) | (166)% | - Net cash provided by investing activities decreased by **$61.5 million** for 9M 2022, due to the absence of the **$62.0 million** PRV sale proceeds received in 2021[230](index=230&type=chunk) - As of September 30, 2022, cash and cash equivalents were **$114.5 million**, expected to fund operations through mid-2024, assuming DANYELZA revenues increase **10% annually** and no new partnerships or omburtamab approval[235](index=235&type=chunk)[237](index=237&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=82&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, primarily interest rate risk and foreign currency exchange risk, and how these risks are managed - The company is exposed to market risk related to changes in interest rates, but it is considered immaterial due to investments primarily in highly rated, short-term money market funds[253](index=253&type=chunk) - The primary foreign currency exchange risk is to the Danish Kroner (DKK); an immediate **10% change** in the DKK to USD exchange rate would not have any material effect on cash balances[254](index=254&type=chunk) [Item 4. Controls and Procedures](index=82&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting - Management, with the participation of the Interim CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** at a reasonable assurance level as of September 30, 2022[255](index=255&type=chunk) - There was no change in the company's internal control over financial reporting during the quarter ended September 30, 2022, that materially affected, or is reasonably likely to materially affect, internal control over financial reporting[257](index=257&type=chunk) [PART II — OTHER INFORMATION](index=82&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This part covers legal proceedings, detailed risk factors, and other miscellaneous information not included in the financial statements [Item 1. Legal Proceedings](index=82&type=section&id=Item%201.%20Legal%20Proceedings) This section describes ongoing legal proceedings, specifically two lawsuits against the company and Mr. Thomas Gad regarding alleged short swing profits - The company is a nominal defendant in two lawsuits (Deborah Donoghue and Mark Rubenstein) filed in the U.S. District Court, Southern District of New York, alleging short swing profits by Mr. Thomas Gad from a transaction on March 10, 2021[258](index=258&type=chunk)[260](index=260&type=chunk) - Mr. Gad's motion to dismiss the Donoghue lawsuit was denied, and the case has entered the discovery phase; the company and Mr. Gad believe the claims are without merit and intend to vigorously defend the actions[260](index=260&type=chunk) [Item 1A. Risk Factors](index=84&type=section&id=Item%201A.%20Risk%20Factors) This extensive section details various risks that could materially and adversely affect the company's business, financial condition, results of operations, and future growth prospects, including financial, operational, regulatory, intellectual property, and market-related challenges - The company has a limited operating history and has incurred significant losses since inception, with an accumulated deficit of approximately **$437.2 million** as of September 30, 2022, and expects to continue incurring significant losses[262](index=262&type=chunk)[264](index=264&type=chunk) - Omburtamab's BLA faces significant uncertainty after the Advisory Committee voted **16 to 0** that it did not provide sufficient evidence for overall survival improvement, making FDA approval uncertain[263](index=263&type=chunk)[285](index=285&type=chunk)[351](index=351&type=chunk) - The company will need substantial additional funding to finance operations, complete product development, and commercialization, and failure to obtain such funding could force delays, reductions, or termination of programs[278](index=278&type=chunk)[280](index=280&type=chunk) - Drug development is a lengthy, expensive, and uncertain process; clinical trials may fail to demonstrate safety and efficacy, leading to additional costs, delays, or inability to obtain marketing approval[286](index=286&type=chunk)[287](index=287&type=chunk) - The COVID-19 pandemic and the Russia-Ukraine conflict have adversely impacted operations, including commercialization efforts, clinical trials, supply chains, and financial markets, leading to increased costs and uncertainty[298](index=298&type=chunk)[311](index=311&type=chunk) - Commercial success of DANYELZA and future approved products depends on market acceptance by physicians, patients, and third-party payors, which is uncertain, especially for small target patient populations[316](index=316&type=chunk)[328](index=328&type=chunk)[329](index=329&type=chunk) - The company relies on third parties for clinical trials and manufacturing, including SpectronRx for omburtamab radiolabeling, and failures or disruptions by these parties could harm development and commercialization[370](index=370&type=chunk)[375](index=375&type=chunk)[379](index=379&type=chunk) - Protecting intellectual property (patents, trademarks, trade secrets) is difficult, costly, and uncertain, with risks of invalidation, infringement by third parties, or loss of licensed rights, which could materially adversely affect the business[499](index=499&type=chunk)[501](index=501&type=chunk)[508](index=508&type=chunk) - The company is highly dependent on its executive officers and key personnel, and the loss of their services could materially harm the business, as evidenced by recent management changes[546](index=546&type=chunk)[547](index=547&type=chunk) - The price of the common stock has been and is likely to be volatile, influenced by clinical trial results, regulatory actions, competition, and macroeconomic conditions, which could result in substantial losses for investors[592](index=592&type=chunk)[595](index=595&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=111&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds were reported[619](index=619&type=chunk) [Item 3. Defaults Upon Senior Securities](index=111&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities to report for the period - No defaults upon senior securities were reported[620](index=620&type=chunk) [Item 4. Mine Safety Disclosures](index=111&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable to the company[621](index=621&type=chunk) [Item 5. Other Information](index=111&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report for the period - No other information was reported[622](index=622&type=chunk) [Item 6. Exhibits](index=111&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate documents, stock option agreements, certifications, and XBRL data files - The report includes various exhibits such as the Amended and Restated Certificate of Incorporation and Bylaws, stock option grant notices, a separation agreement for the former CEO, and certifications by principal executive and financial officers[623](index=623&type=chunk) - Interactive Data Files (XBRL) are also included as exhibits, providing structured data for financial reporting[629](index=629&type=chunk)