Immunome, Inc. — FY 2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; filed March 28, 2024. This is an annual report, not a report for 2023 Q4 alone. Immunome is a development-stage oncology biopharmaceutical company with no product sales. The October 2023 Morphimmune merger materially shifted strategy toward targeted oncology therapies and added preclinical programs.
Business context and pipeline
At year-end, the company reported one clinical asset and three preclinical assets. AL102, an investigational gamma secretase inhibitor for desmoid tumors, was in Phase 3; IM-1021 is a ROR1 antibody-drug conjugate, IM-3050 a FAP-targeted radioligand therapy, and IM-4320 an anti-IL-38 immunotherapy. The company’s 2025 IND timing for IM-1021 and IM-3050, and later IND timing for IM-4320, are plans rather than completed milestones.
Important subsequent events: the company licensed IM-1021 from Zentalis in January 2024; raised $230 million gross in a February 2024 public offering; and completed the Ayala asset purchase on March 25, 2024, including AL102 and AL101. These events occurred after fiscal year-end and are not reflected in the December 31, 2023 balance sheet or FY 2023 results.
Financial performance and liquidity
| Metric | FY 2023 | FY 2022 |
|---|---|---|
| Collaboration revenue | $14.0 million | None |
| Research and development expense | $23.1 million | $23.3 million |
| General and administrative expense | $19.7 million | $13.6 million |
| In-process R&D expense | $80.8 million | None |
| Loss from operations | $109.5 million | $36.9 million |
| Interest income | $2.7 million | Immaterial |
| Net loss | $106.8 million | $36.9 million |
| Basic and diluted loss per share | $5.38 | $3.09 |
| Net cash used in operating activities | $7.6 million | $28.7 million |
The $80.8 million in-process R&D charge related to Morphimmune assets acquired in the merger and was expensed because the assets had no alternative future use. FY 2023 collaboration revenue came from AbbVie; it is not product revenue. Gross margin is not meaningful for the company’s current business and is not reported.
At December 31, 2023, cash and cash equivalents were $98.7 million and marketable securities were $39.5 million, totaling $138.1 million; current assets were $144.7 million and current liabilities $21.8 million. Total liabilities were $28.7 million and stockholders’ equity $119.9 million. The balance sheet reports no borrowings or financial debt. Operating cash use was lower than the net loss largely because of noncash merger-related R&D expense and $16.0 million of increased deferred revenue. Financing activities provided $116.4 million in 2023, principally from the $125.0 million gross PIPE proceeds, partly offset by offering costs.
Management said year-end resources together with the February 2024 offering proceeds were expected to fund current and planned operations for at least 12 months from the filing date. The company nevertheless expects substantial ongoing losses and says additional financing will be needed to pursue its longer-term plans. Shares outstanding increased from 43.3 million at December 31, 2023 to 59.7 million at March 26, 2024.
Changes, outlook, risks and unusual items
- Net loss rose to $106.8 million from $36.9 million, primarily reflecting the one-time $80.8 million Morphimmune IPR&D charge and higher G&A. R&D expense was broadly flat year over year, with spending shifting among programs and toward the AbbVie collaboration.
- RINGSIDE Part B, AL102’s placebo-controlled Phase 3 trial, completed enrollment in February 2024. The company expected topline results in Q1 2025 and was conducting additional manufacturing and pharmacology work to support a potential NDA. AL102 is investigational; Phase 2 results cited by the company are not proof of Phase 3 success or approval.
- AbbVie paid a $30 million upfront fee in 2023. At year-end, $16.0 million remained deferred and was expected to be recognized over approximately 1.5 years. The collaboration offers potential additional access payments, milestones and royalties, but these are contingent and not assured revenue.
- The Zentalis license required $15 million cash and $20 million in stock upfront, plus potential development, regulatory and commercial milestones and royalties. The Ayala purchase required $20 million cash, 2,175,489 shares and assumption of specified liabilities, with up to $37.5 million in contingent milestones. These are material commitments; future milestone and royalty payments depend on specified events.
- The Atreca asset purchase agreement contemplated $5.5 million upfront and up to $7.0 million in clinical milestones, subject to closing conditions, including stockholder approval; the filing expected closing in Q2 2024.
- Key risks include clinical and regulatory failure or delay, the need for further capital and possible dilution, reliance on third-party manufacturers and trial vendors, competition (including FDA-approved nirogacestat for desmoid tumors), integration of Morphimmune, and intellectual-property, data-security and regulatory-compliance risks. The company also depends on external supply and specialized sites for Lu-177 radioligand development.
The financial statements received an unqualified audit opinion. Management concluded disclosure controls and internal control over financial reporting were effective at December 31, 2023; the auditor was not engaged to attest to internal control effectiveness.
Most important facts for investors to verify
- Whether AL102’s Phase 3 results meet the primary endpoint, support an NDA, and show a tolerable safety profile; also verify the timing and scope of any regulatory submission.
- Actual cash burn, subsequent-period cash and marketable securities, and whether the stated runway remains adequate as clinical and manufacturing spending increases.
- Fully diluted share count and potential dilution from the 2024 offering, merger-related awards, licensed and acquired shares, options, warrants, and future financing.
- Progress and funding requirements for the Zentalis-licensed programs, Ayala assets and Atreca transaction, including contingent milestones, royalties, and closing status.
- AbbVie collaboration progress, remaining deferred revenue, and whether any options, additional payments, milestones or royalties are earned; headline potential payments are not guaranteed.