Immunome Inc. annual report, FY2020

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Immunome, Inc. — FY2020 Form 10-K

Reporting period: Fiscal year ended December 31, 2020. This is an annual report; it does not provide standalone Q4 results. Immunome is a preclinical biopharmaceutical company developing antibody therapeutics using a human memory B-cell discovery platform. It had no product-sales revenue and no approved products.

Financial performance and position

  • Revenue: No product-sales revenue; the filing does not report commercial revenue.
  • Net loss: $17.8 million, versus $10.4 million in 2019. Basic and diluted loss per share was $5.26 versus $9.55, respectively.
  • Operating expenses: $12.3 million, up from $10.3 million. R&D expense was $7.5 million versus $8.8 million, including $1.7 million of DoD reimbursements recorded as a reduction of R&D expense. G&A expense increased to $4.8 million from $1.5 million.
  • Unusual expense: A $5.5 million noncash charge from remeasurement of preferred-stock warrant liabilities contributed to the larger net loss; the liability was reclassified to equity upon the IPO.
  • Cash flow: Operating cash used was $12.1 million, compared with $9.6 million in 2019. Investing cash used was $0.6 million; financing cash provided was $49.9 million. Cash and restricted cash increased by $37.2 million.
  • Liquidity: Cash was $39.8 million at year-end (balance sheet: $39.766 million); current assets were $42.9 million and current liabilities $3.0 million. Management expected cash to fund operations through Q2 2022, based on assumptions that may prove imprecise.
  • Debt: The balance sheet reported $0.5 million of PPP loan debt, of which $0.366 million was current and $0.134 million long-term. Equipment-loan payable was $0.113 million current. The company applied for PPP forgiveness in January 2021; approval was not assured.
  • Capital: The October 2020 IPO raised approximately $38.7 million net of underwriting discounts and offering costs in the equity statements; the filing also describes $41.7 million net of underwriting discounts but before other offering expenses. Series A preferred stock converted into common stock at the IPO.

Material changes versus 2019

  • Net loss widened by $7.4 million, primarily reflecting the $5.5 million warrant-liability charge and higher G&A expenses.
  • R&D expense decreased in reported terms because of DoD reimbursements and constrained activity; excluding the DoD offset, the filing says R&D costs increased year over year.
  • G&A increased $3.3 million, driven by personnel, professional and consulting fees, and insurance, including costs associated with becoming a public company.
  • The IPO and preferred-stock conversion substantially strengthened year-end cash and stockholders’ equity. The company had $39.8 million cash at year-end versus $2.5 million in 2019.

Outlook, risks and other important matters

  • Programs: IMM-ONC-01 targets IL-38 and remained preclinical; the company expected to file an IND in the second half of 2021. IMM-BCP-01 is an investigational SARS-CoV-2 antibody cocktail developed with the DoD; the company expected an IND filing in late Q2 or early Q3 2021. These were targets, not completed milestones, and neither program had been tested in humans.
  • DoD agreement: The agreement provided for up to $13.3 million in expense reimbursement, subject to its terms and technical goals. The DoD could terminate for convenience, and the award would not fund development through commercialization.
  • Funding and profitability: The company expected continued losses and negative operating cash flows, and said it would need additional financing beyond its projected runway. It had no committed external funding source.
  • Key risks: Preclinical and clinical failure, regulatory delays, COVID-related disruption, competition, dependence on third-party manufacturers and vendors, uncertain intellectual-property protection, and future financing needs. The COVID program also faced uncertainty from variants, vaccines, competing treatments, patient recruitment and manufacturing capacity.
  • Controls: Management concluded disclosure controls were not effective at year-end due to material weaknesses involving journal-entry review, timely review of account balances, and insufficient accounting and reporting personnel. Remediation was underway but not yet complete. The auditor did not audit internal control effectiveness.
  • Management and legal: Diane Marcou was interim CFO while a permanent successor search was underway. The company reported no material legal proceedings.

Important facts for investors to verify

  • Whether the planned IND filings occurred on the stated schedules and what FDA feedback, if any, followed.
  • How much of the DoD award was ultimately reimbursed, whether the agreement continued, and how much company-funded spending was required.
  • Actual cash burn, financing activity and runway relative to the estimate through Q2 2022.
  • Whether the PPP loan was forgiven and whether any balance remained repayable.
  • Whether internal-control weaknesses were remediated and whether subsequent filings report any additional weaknesses or restatements.
  • Clinical, manufacturing and regulatory evidence supporting the antibody programs, including activity against emerging SARS-CoV-2 variants.