AnaptysBio(ANAB) - 2024 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the unaudited consolidated financial statements, management's discussion, market risk, and internal controls Item 1. Consolidated Financial Statements (unaudited) The company reported a net loss with decreased total assets, a significant royalty liability, and a subsequent royalty monetization amendment Consolidated Balance Sheets This section presents the company's financial position, highlighting changes in assets, liabilities, and equity Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $53,695 | $35,965 | | Short-term investments | $300,970 | $354,939 | | Total Assets | $405,835 | $452,389 | | Total current liabilities | $32,298 | $37,442 | | Liability related to sale of future royalties | $310,184 | $310,807 | | Total Liabilities | $358,057 | $364,286 | | Total Stockholders' Equity | $47,778 | $88,103 | Consolidated Statements of Operations and Comprehensive Loss This section details the company's financial performance, including revenue, expenses, and net loss Consolidated Statements of Operations (Unaudited, in thousands, except per share data) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Collaboration revenue | $7,179 | $1,374 | | Research and development | $37,042 | $34,957 | | General and administrative | $12,338 | $10,818 | | Loss from operations | ($42,201) | ($44,401) | | Net loss | ($43,936) | ($44,255) | | Net loss per common share | ($1.64) | ($1.58) | Consolidated Statements of Cash Flows This section outlines the company's cash inflows and outflows from operating, investing, and financing activities Consolidated Statements of Cash Flows (Unaudited, in thousands) | Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($37,253) | ($24,568) | | Net cash provided by investing activities | $68,616 | $85,396 | | Net cash used in financing activities | ($13,633) | ($37,574) | | Net increase in cash and cash equivalents | $17,730 | $23,254 | Notes to the Unaudited Consolidated Financial Statements This section provides detailed explanations and additional information supporting the consolidated financial statements - The company is a clinical-stage biotechnology firm developing immune cell modulating antibodies, with revenue from GSK collaboration milestones and royalties[16] - Collaboration revenue from GSK's Jemperli and Zejula sales significantly increased to $7.2 million in Q1 2024, though this revenue is non-cash due to royalty monetization agreements[30] - A subsequent amendment to the Jemperli Royalty Monetization Agreement provided an additional $50.0 million upfront cash in May 2024[70] - As of March 31, 2024, the company held liabilities of $278.2 million for Jemperli and $32.0 million for Zejula royalty sales[37][39] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses the company's pipeline progress, financial performance drivers, and liquidity position Wholly Owned Product Candidate Pipeline Status | Program | Indication | Status | Anticipated Milestone | | :--- | :--- | :--- | :--- | | ANB032 (BTLA agonist) | Atopic Dermatitis | Phase 2b | Top-line data YE 2024 | | Rosnilimab (PD-1 agonist) | Rheumatoid Arthritis | Phase 2b | Top-line data mid-2025 | | Rosnilimab (PD-1 agonist) | Ulcerative Colitis | Phase 2 | Top-line data H1 2026 | | ANB033 (CD122 antagonist) | Inflammatory Diseases | Preclinical | IND submission Q2 2024 | | ANB101 (BDCA2 modulator) | Inflammatory Diseases | Preclinical | IND submission H2 2024 | | Imsidolimab (IL-36R antagonist) | GPP | Phase 3 Completed | Out-license in 2024 | R&D Expense Breakdown (in thousands) | Program | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Rosnilimab | $10,038 | $2,605 | $7,433 | | ANB032 | $4,866 | $2,536 | $2,330 | | Imsidolimab | $4,496 | $15,463 | ($10,967) | | Total R&D Costs | $37,042 | $34,957 | $2,085 | - Collaboration revenue increased to $7.2 million in Q1 2024 due to higher GSK product sales, which is non-cash and reduces royalty monetization liabilities[98] - The company's cash, cash equivalents, and investments totaled $370.1 million at Q1 2024, projected to fund operations for at least the next twelve months[105][107] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes to its market risk profile since its most recent annual report - No material changes occurred in the company's market risk profile as of March 31, 2024, compared to its latest Form 10-K disclosures[115] Item 4. Controls and Procedures Management concluded that disclosure controls were effective, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO affirmed the effectiveness of the company's disclosure controls and procedures[116] - No material changes in internal control over financial reporting occurred during the quarter[117] PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, other information, and exhibits Item 1. Legal Proceedings The company may face ordinary course legal proceedings but reports no specific material litigation - The company may engage in ordinary course legal proceedings, but no specific material proceedings are currently reported[119] Item 1A. Risk Factors The company faces significant risks related to product development, financial sustainability, operational dependencies, and market competition - Key risks include potential failure or delays in developing early-stage product candidates, as initial clinical trial results may not be indicative of later trials[121][123] - The company has a history of operational losses, lacks approved products, and requires additional capital that may not be available on favorable terms[122][144][147] - The business relies heavily on its GSK collaboration and third-party manufacturers, posing risks to partnerships, supply chain, and production[122][150] Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities This section is reported as not applicable for the current period - This section is not applicable for the reporting period[214] Item 5. Other Information Two directors established Rule 10b5-1 trading plans for common stock sales in March 2024 - In March 2024, directors Hollings C. Renton and Dennis M. Fenton established Rule 10b5-1 trading plans for the sale of 56,121 and 4,965 shares, respectively[217] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including a license agreement amendment and officer certifications - The report includes an amendment to the license agreement with Centessa Pharmaceuticals (UK) Limited as an exhibit[219]