ImmunityBio, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This annual filing does not provide standalone fourth-quarter results in the supplied text. ImmunityBio is a clinical-stage biotechnology company developing immunotherapies and vaccines for cancer and infectious diseases. It had no approved products for commercial sale; reported revenue came from licensing, bioreactors and consumables, and grants.
Financial performance and position
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | $0.24 million | $0.93 million |
| Research and development expense | $248.1 million | $196.0 million |
| Selling, general and administrative expense | $102.7 million | $135.3 million |
| Operating loss | $351.3 million | $330.3 million |
| Net loss | $417.3 million | $349.8 million |
| Net loss attributable to ImmunityBio common stockholders | $416.6 million; $1.04 per share | $346.8 million; $0.89 per share |
| Cash used in operating activities | $337.5 million | $274.4 million |
| Cash, cash equivalents and marketable securities | $108.0 million | $317.9 million |
Revenue fell 74% year over year, mainly due to lower bioreactor and royalty revenue. R&D spending rose 27%, reflecting higher manufacturing, clinical, regulatory and facility costs. SG&A fell 24%, primarily because of insurance reimbursements for legal expenses and lower merger-related consulting and insurance costs. Interest expense increased to $63.5 million from $14.8 million, driven by related-party borrowing, higher SOFR and debt-discount amortization. A $13.5 million noncash gain from the decline in warrant-liability fair value partly offset other expense.
At year-end, total assets were $362.4 million, total liabilities $812.2 million and stockholders’ deficit $449.8 million. Related-party debt was $737.4 million at face amount, including accrued interest; the balance sheet reports debt net of discounts. Of the face amount, $475.0 million was due December 31, 2023, and $262.4 million was due September 30, 2025. The variable-rate notes bore Term SOFR plus 8%; the stated year-end rate was 12.59%. The company had no meaningful product-sales revenue, so product margins are not meaningful.
Material changes and financing
- Cash and marketable securities declined by approximately $209.9 million year over year, while operating cash use increased by $63.1 million.
- FY2022 financing included $174.1 million net proceeds from related-party notes, $47.3 million net proceeds from a registered direct offering and $13.1 million from the at-the-market program. The December offering issued 9.1 million shares and warrants for 9.1 million more shares at $6.60 per share; the warrants were recorded as a liability.
- In August 2022, related-party debt was amended, including adding conversion rights to fixed-rate notes at $5.67 per share. The company recorded an $82.9 million common-control gain in additional paid-in capital and a debt discount that contributed to higher noncash interest expense. In December, a related-party note and accrued interest were converted into 9.99 million shares.
- After year-end, a February 2023 registered direct offering closed with approximately $47 million net proceeds and warrants to purchase 14.1 million shares at $4.2636. These financings support operations but create dilution risk.
Outlook, risks and unusual items
- Liquidity and going concern: Management said substantial doubt exists about continuing as a going concern without additional funding or financial support. It believed available funds, equity issuance and potential affiliate borrowing would fund operations for at least 12 months after the financial statements’ issuance, relying substantially on the executive chairman’s stated intent and ability to provide support. The company has no committed source of additional capital and expects continued losses and cash outflows.
- Lead program: FDA accepted the BLA for Anktiva (N-803) with BCG for BCG-unresponsive NMIBC with carcinoma in situ; the target PDUFA date was May 23, 2023. Approval was not assured. The company reported a 71% complete-response rate in the relevant trial cohort; these are company-reported clinical results for an investigational product, not proof of approval or commercial outcomes. The FDA advised a randomized trial for the papillary bladder-cancer program and a randomized trial for late-stage metastatic pancreatic cancer.
- Pipeline and execution: The company reported 26 clinical trials across 12 indications, with 17 in Phase 2 or 3. Trial results, enrollment, manufacturing scale-up, regulatory review, commercialization readiness and reimbursement remain uncertain. Management expected R&D expense and capital spending to rise as development and manufacturing continued.
- Dunkirk facility: The company acquired a 409,000-square-foot facility and expected construction to take approximately 12–18 months; it reduced the facility workforce during 2022. Agreements include $1.52 billion of operating-spend commitments over the initial 10-year term, hiring commitments for 450 employees, and potential consequences if obligations are not met.
- Contingencies: The regulatory-milestone CVR tied to N-803 approval by December 31, 2022 expired because approval had not occurred by that date. Up to $164.2 million of sales-milestone CVRs held by former Altor stockholders could require cash payment if achieved and elected. In a separate Sorrento arbitration, ImmunityBio subsidiaries obtained judgments totaling approximately $176.4 million plus 10% post-judgment interest; collection timing and recovery are uncertain, and Sorrento filed for Chapter 11. Other proceedings include a Beike arbitration and a construction-related lawsuit; management stated it did not believe current proceedings were likely to have a material adverse effect.
- Governance and related parties: Dr. Soon-Shiong and affiliates held approximately 76.7% of common stock at year-end and controlled significant voting power. Related-party debt, services, leases and clinical-site relationships create governance and execution risks. The auditor identified related-party transactions and disclosures as a critical audit matter; it issued unqualified opinions on the financial statements and internal control over financial reporting.
Most important facts for investors to verify
- Current cash runway, financing availability and whether expected affiliate support is provided on the stated basis.
- Debt maturity, interest, conversion and dilution exposure, including the December 2023 related-party debt due date and outstanding warrants.
- FDA action and any subsequent regulatory requirements for Anktiva, alongside final and independently assessable trial data.
- Progress, cost and obligations associated with the Dunkirk build-out, including hiring and operating-spend commitments.
- Whether Sorrento-related judgments are collectible and the status and potential exposure of other legal proceedings and CVRs.