Immunome, Inc. — Q3 2023 Form 10-Q
Reporting period: Three and nine months ended September 30, 2023. Financial statements are unaudited. Immunome is a clinical-stage biotechnology company; it had no product sales. The October 2, 2023 merger with Morphimmune and related PIPE financing occurred after the reporting date and are discussed as subsequent events.
Financial results and liquidity
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Collaboration revenue | $3.6 million | None | $10.2 million | None |
| Research and development expense | $3.8 million | $5.2 million | $13.5 million | $19.0 million |
| General and administrative expense | $4.4 million | $3.3 million | $11.6 million | $10.1 million |
| Operating loss | $4.6 million | $8.5 million | $14.9 million | $29.1 million |
| Net loss | $4.3 million | $8.5 million | $14.2 million | $29.1 million |
| Net loss per share | $0.36 | $0.75 | $1.16 | $2.45 |
- Q3 collaboration revenue was recognized under the AbbVie agreement. No revenue came from commercial product sales.
- At September 30, cash and cash equivalents were $90.6 million, total assets $93.2 million, total liabilities $87.1 million, and stockholders’ equity $6.1 million. Cash included $61.0 million received in advance for the PIPE and recorded as a deposit liability.
- Current assets were $91.4 million and current liabilities $23.1 million. The filing reports no borrowings; operating lease liabilities totaled $0.4 million.
- Nine-month operating cash flow was positive $9.9 million, principally because deferred revenue increased $19.8 million, including the AbbVie upfront payment. Investing cash outflow was $0.5 million and financing cash inflow was $60.9 million. Operating cash flow therefore benefited materially from customer prepayments and should not be read as an indication of positive operating earnings.
Changes and notable events
- Net loss narrowed versus 2022, while collaboration revenue began with the AbbVie agreement. R&D expense fell, primarily as COVID-19 program spending and other development activity decreased; AbbVie-related outsourced research and personnel costs partly offset those reductions.
- G&A expense increased, mainly due to merger-related legal and consulting fees. Interest income increased as rates on cash balances rose.
- On October 2, Immunome completed its merger with Morphimmune, issuing 8.84 million shares to Morphimmune stockholders. It also issued 21.69 million shares at $5.75 per share in a PIPE for $125.0 million gross proceeds: $61.0 million had been received by September 30 and the remaining $64.0 million was received in October.
- The filing reports 42,729,847 common shares outstanding as of November 7, 2023. Morphimmune options were converted into 2.47 million Immunome options. The new CEO also received 2.14 million options, with an estimated grant-date fair value of $9.6 million.
- The former CEO’s departure in connection with the merger triggered approximately $1.0 million of termination benefits and accelerated vesting of options; the filing says these were recognized upon the October termination.
Outlook, risks, and contingencies
- Management expects cash at September 30 plus the remaining PIPE proceeds to fund operating expenses and capital expenditures for at least 12 months from the filing date. It also says additional funding will be needed for continued operations and its growth strategy; estimates depend on assumptions and actual cash use could be faster.
- AbbVie paid a $30.0 million nonrefundable upfront fee. Immunome may be eligible for additional platform payments, option fees, milestones, and royalties; the filing cites potential aggregate payments of approximately $2.8 billion, but emphasizes there is no assurance of further payments. Deferred revenue was $19.8 million at September 30, expected to be recognized over an estimated 1.25-year R&D period.
- Program milestones described by management: provide guidance in Q1 2024 on the timing of an IND submission for IMM-ONC-01; nominate a potential Lu-177 FAP candidate in Q4 2023 and target an IND submission in Q1 2025. IMM-BCP-01 completed dosing of its first Phase 1b cohort without significant treatment-related adverse events, but Immunome is seeking a partner to continue the trial.
- Key risks include early-stage development and regulatory uncertainty, dependence on additional financing and third parties, AbbVie collaboration execution and termination risk, integration of Morphimmune, competition and intellectual-property challenges. Management reported no material litigation and stated disclosure controls were effective; no material internal-control changes occurred during the quarter.
- Immunome terminated its ATM sales agreement by notice dated November 8, 2023; the agreement was to terminate November 22. The company had raised only approximately $34,000 net under the ATM through September 30.
Investor verification points
- Confirm the post-merger share count, option overhang, and resulting dilution from the PIPE, merger consideration, and equity awards.
- Track cash burn after the merger and integration costs, and test management’s stated 12-month funding runway against actual spending.
- Monitor AbbVie research progress, deferred-revenue recognition, and whether any additional payments become sufficiently certain to recognize.
- Assess progress against the IMM-ONC-01 and Lu-177 FAP development timelines, and whether a partner is secured for IMM-BCP-01.
- Review the accounting and financial-statement impact of the Morphimmune asset acquisition, including acquired in-process R&D expense, and the final amount of merger-related and CEO-transition costs.