Annexon(ANNX) - 2025 Q1 - Quarterly Report

PART I—FINANCIAL INFORMATION Financial Statements (Unaudited) For the three months ended March 31, 2025, Annexon reported a net loss of $54.4 million, a significant increase from the $25.2 million loss in the same period of 2024, primarily driven by a 130% rise in R&D expenses Condensed Consolidated Balance Sheets As of March 31, 2025, the company's total assets were $303.0 million, a decrease from $350.1 million at the end of 2024, mainly due to a reduction in short-term investments Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $97,122 | $49,498 | | Short-term investments | $166,574 | $262,519 | | Total current assets | $268,162 | $316,461 | | Total assets | $303,027 | $350,071 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $33,547 | $30,512 | | Total liabilities | $59,239 | $56,966 | | Total stockholders' equity | $243,788 | $293,105 | Condensed Consolidated Statements of Operations For the first quarter of 2025, Annexon reported a net loss of $54.4 million, or $0.37 per share, more than double the net loss of $25.2 million, or $0.21 per share, in the same period of 2024 Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $48,179 | $20,963 | | General and administrative | $9,226 | $7,609 | | Total operating expenses | $57,405 | $28,572 | | Loss from operations | $(57,405) | $(28,572) | | Net loss | $(54,356) | $(25,176) | | Net loss per share, basic and diluted | $(0.37) | $(0.21) | Condensed Consolidated Statements of Cash Flows In the first three months of 2025, net cash used in operating activities was $50.1 million, up from $28.3 million in the prior-year period, while investing activities provided $97.6 million in cash Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(50,055) | $(28,267) | | Net cash provided by (used in) investing activities | $97,620 | $(77,302) | | Net cash provided by financing activities | $59 | $32,412 | | Increase (decrease) in cash, cash equivalents and restricted cash | $47,624 | $(73,157) | Notes to Condensed Consolidated Financial Statements The notes detail the company's financial position and operations, including an accumulated deficit of $765.1 million and sufficient cash to fund operations for at least the next twelve months - As of March 31, 2025, the company had an accumulated deficit of $765.1 million and cash, cash equivalents, and short-term investments of $263.7 million[28] - Management projects that existing cash and investments will fund operating expenses and capital requirements for at least twelve months from the financial statement issuance date[29] - In March 2024, the company initiated a new At-the-Market (ATM) program for up to $100.0 million; as of March 31, 2025, approximately $95.4 million remained available under this program[61] - Total unrecognized stock-based compensation cost related to unvested stock options was $39.5 million as of March 31, 2025, expected to be recognized over a weighted-average period of 3.2 years[71] - Unrecognized stock-based compensation expense for unvested RSUs was $4.7 million as of March 31, 2025, expected to be recognized over a weighted-average period of 2.4 years[73] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the significant increase in operating expenses, particularly a 130% rise in R&D costs to $48.2 million in Q1 2025, driven by manufacturing activities for the tanruprubart BLA submission and the ANX007 program - The company is advancing three priority programs: tanruprubart for Guillain-Barré Syndrome (GBS), ANX007 for Geographic Atrophy (GA), and ANX1502 for autoimmune indications[93] - Key upcoming milestones include a targeted FDA meeting in Q2 2025 for tanruprubart's BLA, completion of ANX007 Phase 3 enrollment in Q3 2025 (topline data in H2 2026), and ANX1502 proof-of-concept data in mid-2025[93][95] Operating Results Comparison (in thousands) | Expense Category | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $48,179 | $20,963 | $27,216 | 130% | | General and administrative | $9,226 | $7,609 | $1,617 | 21% | | Total operating expenses | $57,405 | $28,572 | $28,833 | 101% | - The 130% increase in R&D expenses was primarily due to a $14.1 million increase in contract manufacturing for tanruprubart BLA preparation and ANX007 technology transfer, plus higher personnel and clinical trial costs[107] - As of March 31, 2025, the company had $263.7 million in cash, cash equivalents, and short-term investments, which is expected to fund operations into the second half of 2026[111][119] Quantitative and Qualitative Disclosures About Market Risk This section is not applicable for the reporting period - The company has indicated that quantitative and qualitative disclosures about market risk are not applicable[130] Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025 - The CEO and CFO concluded that as of the end of the quarter, the company's disclosure controls and procedures are effective[131] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[132] PART II—OTHER INFORMATION Legal Proceedings The company is not currently a party to any material legal proceedings but may become involved in various legal matters that arise in the ordinary course of business - As of the report date, the company is not involved in any material legal proceedings[134] Risk Factors The company outlines significant risks to its business, primarily related to its clinical-stage status, financial condition, and dependence on the success of its product candidates - The company is a clinical-stage biopharmaceutical firm with a history of significant losses ($765.1 million accumulated deficit as of March 31, 2025) and expects to incur losses for the foreseeable future[138][139] - Substantial additional financing is required to achieve goals, and failure to obtain capital could force delays, reductions, or termination of development programs[140] - The business is heavily dependent on the successful development, regulatory approval, and commercialization of its product candidates, particularly tanruprubart, ANX007, and ANX1502[153] - The company relies on third-party suppliers for manufacturing and does not have its own manufacturing capabilities, creating dependence and risk related to cGMP compliance, supply chain disruptions, and quality control[217] - The company conducts clinical trials outside the United States, and there is a risk that the FDA and other regulators may not accept data from these trials, which could require additional, costly studies[206][209] - Cybersecurity threats, including ransomware and phishing attacks, pose a significant risk to the company's IT systems and sensitive data, which could lead to operational disruptions, regulatory actions, and financial loss[361][363][364] Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the reporting period - No unregistered sales of equity securities occurred during the quarter[381] Other Information This section discloses the adoption of a Rule 10b5-1 trading plan by a company director, Dr. William H. Carson, on March 17, 2025 - On March 17, 2025, Director William H. Carson, M.D., adopted a Rule 10b5-1 trading plan for the purchase of 28,805 shares of common stock, with an expiration date of January 30, 2026[385] Exhibits This section provides an index of the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The report includes required certifications from the Principal Executive Officer and Principal Financial Officer, as well as XBRL data files[388]