Immunome, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. Immunome is an early-stage biopharmaceutical company focused primarily on oncology and antibody discovery. It has no product-sales revenue and expects operating losses to continue as it advances research and development.
Financial performance and position
| Metric | Q1 2023 | Q1 2022 / comparison |
|---|---|---|
| Collaboration revenue | $2.4 million | None |
| Research and development expense | $3.9 million | $8.1 million; down $4.2 million |
| General and administrative expense | $2.9 million | $3.6 million; down $0.7 million |
| Operating loss | $4.5 million | $11.7 million |
| Net loss | $4.3 million | $11.7 million |
| Basic and diluted loss per share | $0.35 | $0.96 |
| Operating cash flow | $24.2 million provided | $6.4 million used |
At March 31, 2023, cash and cash equivalents were $44.4 million, versus $20.3 million at December 31, 2022; cash plus restricted cash totaled $44.5 million. Current assets were $46.5 million and current liabilities $24.8 million. Total liabilities were $34.3 million, including $27.6 million of deferred revenue; the filing reports no borrowings. Stockholders’ equity was $13.9 million, down from $16.7 million at year-end. The company reported an accumulated deficit of $120.3 million.
Q1 operating cash flow was principally supported by a $27.6 million increase in deferred revenue from AbbVie’s upfront payment, rather than operating profitability. Investing activities used $0.1 million; financing activities provided $0.03 million. No meaningful product gross margin is reported because the company has no commercial product sales.
Material changes and business developments
- In January 2023, Immunome entered a collaboration and option agreement with AbbVie and received a non-refundable $30.0 million upfront payment. It recognized $2.4 million of collaboration revenue in Q1 and recorded $27.6 million of deferred revenue, expected to be recognized over an estimated research period of approximately 1.5 years.
- The AbbVie agreement covers discovery and validation of target-antibody pairs for three specified tumor types, with options for AbbVie to acquire rights to up to 10 pairs. Potential total payments are described as up to approximately $2.8 billion, but depend on research activity, options, development, regulatory and commercial milestones, and sales. The filing cautions that there is no assurance of payments beyond the upfront fee.
- R&D expense fell by $4.2 million year over year. Management attributed the decline mainly to lower IMM-BCP-01 expenses after deciding to seek a partner to continue the trial and development, and lower IMM-ONC-01 development activity; these reductions were partly offset by AbbVie-related outsourced research and materials.
- G&A expense decreased by $0.7 million, primarily from lower professional fees and general expenses, including insurance.
- Interest income rose to $0.2 million from $1,000, reflecting higher interest rates on cash balances.
Outlook, risks and contingencies
- Management expects March 31 cash to fund planned operating expenses and capital expenditures for at least 12 months from the filing date, but says additional financing will be needed to support its research and development strategy. Estimates may prove imprecise, and cash could be exhausted sooner than expected.
- The company expects significant future expenses and losses. If additional funding is unavailable on acceptable terms, it may delay, reduce or terminate programs, enter collaborations earlier or on less favorable terms, pursue strategic alternatives, or reduce or cease operations.
- Immunome plans to submit an IND for its lead oncology program, IMM-ONC-01, by mid-2023. IMM-BCP-01 completed dosing of the first Phase 1b cohort with no significant treatment-related adverse events reported; the company is seeking a partner for continued trial and development.
- The Department of Defense had reimbursed the full $17.6 million available under its COVID-19 program agreement through 2022. The agreement was extended to July 2023 at no additional government cost.
- Risks include uncertain preclinical and clinical outcomes, regulatory and development delays, reliance on partners and vendors, competition, intellectual-property protection, and the ability to raise capital. AbbVie may terminate for convenience, and contingent collaboration payments may not be received.
- Potential license-agreement obligations include up to approximately $2.6 million in development and regulatory milestones, plus specified commercial milestones, royalties and other payments if applicable. The company reported no material litigation and no material legal proceedings.
- The company reported effective disclosure controls and procedures as of March 31, 2023, with no material change in internal control over financial reporting during the quarter.
Key facts investors should verify
- Whether AbbVie collaboration research progresses, whether options are exercised, and whether any contingent milestones or royalties become payable.
- Actual cash burn excluding the upfront-payment-related deferred-revenue increase, and whether the stated 12-month runway remains valid as spending and development plans evolve.
- Progress and timing of the IMM-ONC-01 IND submission and the search for a partner to continue IMM-BCP-01.
- Future financing needs and potential dilution: the company may sell securities under its ATM and shelf registration programs; 3.8 million potentially dilutive options, warrants and unvested awards were excluded from diluted EPS as anti-dilutive.
- Near-term warrant terms: 803,112 Series A warrants at $9.00 per share expire June 2, 2023; 500,000 Series B warrants at $10.00 expire April 28, 2024.