ImmunityBio, Inc. — FY2023 Form 10-K
Reporting period: Year ended December 31, 2023. This is an annual report, not a standalone fourth-quarter report. The filing was signed March 19, 2024. ImmunityBio is a clinical-stage biotechnology company; as of the filing, it had no products approved for commercial sale and no therapeutic-product sales.
Financial highlights
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $0.6 million | $0.2 million |
| Research and development expense | $232.4 million | $248.1 million |
| Selling, general and administrative expense | $129.6 million | $102.7 million |
| Loss from operations | $362.3 million | $351.3 million |
| Interest expense | $129.2 million | $63.5 million |
| Total other expense, net | $221.6 million | $66.0 million |
| Net loss attributable to ImmunityBio common stockholders | $583.2 million; $1.15 per share | $416.6 million; $1.04 per share |
| Cash used in operating activities | $366.8 million | $337.5 million |
Revenue remained immaterial and came from grants, licenses, and equipment-related activities—not product sales. Gross margin is not a meaningful indicator given the company’s minimal, non-product revenue. The larger net loss chiefly reflects higher interest expense and non-cash fair-value losses on warrants and a related-party convertible note, in addition to operating costs.
At year-end, cash and cash equivalents were $265.5 million and marketable securities were approximately $1.9 million, versus $108.0 million combined a year earlier. Current assets were $294.1 million and current liabilities $58.3 million. Total liabilities were $1.09 billion, including $735.0 million of related-party debt principal and a $155.4 million carrying value for the revenue-interest liability; stockholders’ deficit was $585.9 million. The company reported $118.8 million of warrant liabilities.
FY2023 financing cash flow was $558.3 million, including $192.8 million net proceeds under the revenue interest purchase agreement (RIPA), $258.7 million from related-party notes, and $100.6 million from equity offerings. Investing activities used $30.5 million, including $30.6 million of property and equipment purchases. The filing does not provide a product-sales basis for assessing commercial margins.
Changes versus FY2022
- Revenue increased by $0.4 million, primarily from higher grant revenue, but remained negligible.
- R&D expense fell $15.8 million, reflecting lower personnel, facility, and other costs, partly offset by higher external testing, qualification, and regulatory work related to the Anktiva BLA resubmission.
- SG&A rose $26.9 million, principally because legal expenses increased $28.9 million, including defense and general legal costs.
- Interest expense more than doubled, increasing $65.7 million, due to higher related-party borrowings, higher SOFR, and debt-discount amortization. Fair-value changes in warrant and convertible-note liabilities further increased other expense.
- Net loss attributable to common stockholders widened by $166.6 million. Operating cash use increased by $29.2 million.
- Cash and cash equivalents plus marketable securities increased from $108.0 million to about $267.4 million, largely supported by financing rather than operations.
- Shares outstanding increased substantially: the company issued 209.3 million shares in exchange for approximately $270 million of related-party notes and accrued interest, alongside other equity issuances. Year-end shares outstanding were 670.9 million.
Business, outlook, and material risks
- Anktiva regulatory review: The FDA issued a complete response letter in May 2023 for Anktiva (N-803) plus BCG in BCG-unresponsive non-muscle-invasive bladder cancer with carcinoma in situ, citing issues including third-party contract manufacturing inspections, CMC matters, and requests for updated response-duration and safety information. The company resubmitted in October 2023; the FDA accepted the resubmission and set an April 23, 2024 PDUFA date. The filing emphasized that approval was not assured. The CRL did not request new preclinical studies or Phase III trials.
- Reported clinical findings: In the QUILT 3032 Cohort A study, the company reported a 71% complete-response rate (58 of 82 patients) and median response duration of 26.6 months. These are company-reported study results; verify the FDA’s review, final data, and any approved label before relying on them.
- Funding and going concern: Management stated that substantial doubt existed about the company’s ability to continue as a going concern without additional funding or support. It believed available funds and potential financing would fund operations for at least 12 months after issuance of the financial statements, relying in part on the intent and ability of Executive Chairman Patrick Soon-Shiong and affiliated entities to provide support. Additional financing may be needed; equity issuance could dilute shareholders, while debt or partnerships may impose restrictions or require rights concessions.
- RIPA obligations: Oberland paid $200 million gross for revenue interests and may provide a further $100 million if specified conditions are met, including FDA approval by June 30, 2024. Oberland is entitled to tiered payments on worldwide net sales excluding China, generally 3%–7% before the second payment and 4.5%–10% afterward, subject to later adjustments and possible true-up or other payments. The arrangement is secured by substantially all company assets and includes covenants and default provisions. Related-party notes are subordinated to RIPA obligations.
- Debt and dilution: Related-party debt bears floating SOFR-based interest; weighted-average rate was 13.09% at year-end. A 100-basis-point SOFR increase was estimated to raise future interest payments by $16.1 million. Certain notes are convertible at the holder’s option. Warrants, options, CVRs, and potential additional equity offerings create further dilution risk.
- Manufacturing and commercialization: The prior BLA CRL underscores dependence on third-party manufacturers and remediation of inspection or quality issues. The Dunkirk facility build-out remains incomplete amid a contractor dispute and Athenex bankruptcy proceedings. The company has significant operating and hiring commitments tied to that facility and may face loss of access, additional costs, or repayment of certain benefits.
- Pipeline and execution: The company described 9 first-in-human therapeutic agents across planned or ongoing trials. Programs remain exposed to clinical, regulatory, enrollment, supply, manufacturing, reimbursement, and funding risks. Management expects R&D and commercialization-related expenses to rise; the filing provides no quantified revenue or earnings guidance.
- Other items: The company discontinued the Tarmogen R&D program and recorded a $0.9 million impairment. Amyris filed for Chapter 11; the joint-venture investment carrying value was zero. A securities class action related to disclosures about the BLA and manufacturing was pending, and a Beike arbitration over N-803 rights in China remained unresolved. Management could not estimate a loss range for these matters.
- Governance and reporting: Soon-Shiong and affiliates owned approximately 79.4% of common stock at year-end, creating significant voting control and related-party concentration. The auditor issued an unqualified opinion on the financial statements; management stated disclosure controls and internal control over financial reporting were effective. The auditor was not engaged to attest to ICFR.
Most important facts for investors to verify
- The FDA’s decision and any conditions or label limitations for the Anktiva BLA resubmission, plus the status of manufacturing remediation and inspections.
- Current cash runway and financing access, including whether affiliated-party support is committed, the conditions for the RIPA’s possible second payment, and the effect of RIPA payments and covenants.
- Debt balances, maturity and conversion terms, variable-rate interest exposure, and the fully diluted share count, including warrants, options, and CVRs.
- Final and independently interpretable clinical data, trial progress, BCG supply availability, and whether reported study results translate into regulatory approval and adoption.
- Progress, remaining costs, contractual obligations, and dispute exposure related to the Dunkirk facility and third-party manufacturing capacity.
- Developments in the securities litigation, Beike arbitration, and other disclosed legal or contingent obligations.