IMMUNOVANT, INC.
You should read the following discussion and analysis of our financial condition
and results of operations together with our (1) unaudited condensed consolidated
financial statements and related notes thereto included elsewhere in this
Quarterly Report on Form 10-Q ("Quarterly Report"), and (2) audited consolidated
financial statements and the related notes thereto and management's discussion
and analysis of financial condition and results of operations for the fiscal
year ended March 31, 2021 , included in our Annual Report on Form 10-K ("Annual
Report"), filed with the Securities and Exchange Commission (the "SEC") on June
1, 2021 . Unless the context requires otherwise, references in this Quarterly
Report to "Immunovant ," the "Company," "we," "us," and "our" refer to
Immunovant, Inc. and its wholly owned subsidiaries.
Prior to
Forward-Looking Statements
This Quarterly Report contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements are often identified by the use of words such as "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "forecast," "goal," "hope," "intend," "likely," "may," "might," "objective," "ongoing," "plan," "potential," "predict," "project," "should," "target," "to be," "will," "would," or the negative or plural of these words, or similar expressions or variations, although not all forward-looking statements contain these words. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur and actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled "Risk Factors" set forth in Part II, Item 1A. of this Quarterly Report and in our other filings with theSEC . These risks are not exhaustive. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
Overview
We are a clinical-stage biopharmaceutical company focused on enabling normal
lives for people with autoimmune diseases. We are developing a novel, fully
human monoclonal antibody, IMVT-1401 (formerly referred to as RVT-1401), that
selectively binds to and inhibits the neonatal fragment crystallizable receptor
("FcRn"). IMVT-1401 is the product of a multi-step, multi-year research program
conducted by HanAll Biopharma Co., Ltd., to design a highly potent anti-FcRn
antibody optimized for subcutaneous delivery. Our product candidate has been
dosed in small volumes (e.g., 2 mL) and with a 27-gauge needle, while still
generating therapeutically relevant pharmacodynamic activity, important
attributes that we believe will drive patient preference and market adoption. In
nonclinical studies and in clinical trials conducted to date, IMVT-1401 has been
observed to reduce immunoglobulin G ("IgG") antibody levels. High levels of
pathogenic IgG antibodies drive a variety of autoimmune diseases and, as a
result, we believe IMVT-1401 has the potential for broad application in these
disease areas. We intend to develop IMVT-1401 in autoimmune diseases for which
there is robust evidence that pathogenic IgG antibodies drive disease
manifestation and for which reduction of IgG antibodies should lead to clinical
benefit.
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We are developing IMVT-1401 as a fixed-dose, self-administered subcutaneous
injection on a convenient weekly, or less frequent, dosing schedule as discussed
below. As a result of our rational design, we believe that IMVT-1401, if
developed and approved for commercial sale, would be differentiated from
currently available, more invasive treatments for advanced IgG-mediated
autoimmune diseases, (e.g., Myasthenia Gravis ("MG"), Warm Autoimmune Hemolytic
Anemia ("WAIHA"), Thyroid Eye Disease ("TED", formerly referred to as Graves'
Ophthalmopathy, or "GO"), Idiopathic Thrombocytopenic Purpura, Pemphigus
Vulgaris, Chronic Inflammatory Demyelinating Polyneuropathy, Bullous Pemphigoid,
Neuromyelitis Optica, Pemphigus Foliaceus, Guillain-Barré Syndrome and PLA2R+
Membranous Nephropathy). In 2020, these diseases had an aggregate prevalence of
approximately 278,000 patients in the United States and 480,000 patients in
Europe . To the extent we choose to develop IMVT-1401 as a treatment for certain
of these rare diseases, we plan to seek orphan drug designation in the United
States and Europe , where applicable. Such designations would primarily provide
financial and exclusivity incentives intended to make the development of orphan
drugs financially viable. In July 2021 , we have been granted orphan drug
designation by the FDA for batoclimab (the non-proprietary name for IMVT-1401)
for the potential treatment of MG and we plan to seek orphan drug designation
from the FDA for IMVT-1401 for the treatment of WAIHA and TED and potentially in
other orphan indications in which there is a medically plausible basis for its
use, and we may seek orphan drug designation for IMVT-1401 in Europe .
We are developing IMVT-1401 as a fixed-dose subcutaneous injection, and have
focused our initial development efforts on the treatment of MG, WAIHA and TED.
We are also pursuing a series of other indications. MG is an autoimmune disease
associated with muscle weakness. WAIHA is a rare hematologic disease in which
autoantibodies mediate hemolysis, or the destruction of red blood cells. TED is
an autoimmune inflammatory disorder that affects the muscles and other tissues
around the eyes, which can be sight-threatening.
As previously disclosed in our Annual Report, in February 2021 , we voluntarily
paused dosing in our clinical trials for IMVT-1401 due to elevated total
cholesterol and low-density lipoprotein ("LDL") levels observed in some trial
subjects treated with IMVT-1401. No major adverse cardiovascular events have
been reported to date in IMVT-1401 clinical trials. In order to better
characterize the observed lipid findings, we conducted from February 2021
through May 2021 a program-wide data review (including both clinical and
nonclinical data) with input from external scientific and medical experts.
It is our intent to resume development across multiple indications for
IMVT-1401. We are in the process of drafting multiple study protocols and
updating our program-wide safety strategy for discussions with regulatory
agencies. The elements of our development program will include extensive
pharmacokinetic ("PK") and pharmacodynamic ("PD") modeling to select dosing
regimens for IMVT-1401 which optimize reductions in total IgG levels while
minimizing the impact on albumin and LDL levels, particularly for clinical
studies containing long-term treatment extensions. These protocols will likely
include protocol-directed guidelines for the management of any observed lipid
abnormalities. While increases in LDL over a short-term treatment duration would
not be expected to pose a safety concern for patients, the risk-benefit profile
of long-term administration of IMVT-1401 will need to incorporate any
unfavorable effects on lipid profiles. We have initiated discussions with the
FDA and are expected to fully engage with the FDA and other regulatory agencies
during the second half of the calendar year 2021.
Additionally, we have communicated with the FDA regarding a meeting early in the
fourth quarter of the calendar year 2021 to review modifications to our pivotal
Phase 3 study in MG. These modifications are based on the FDA's advice and
feedback obtained during our previous end of Phase 2 meeting. Contingent upon
FDA feedback, we plan to initiate a pivotal study in MG in the early part of the
calendar year 2022. For our open label trial, ASCEND WAIHA, we are on track to
initiate discussions with the FDA in the calendar year 2021 and, based on a
favorable outcome from these meetings, we anticipate re-initiating this study in
the first half of the calendar year 2022. For TED, as previously disclosed,
efficacy results based on the data at the time of pausing our ASCEND GO-2 trial
were inconclusive. We intend to initiate discussions with regulatory authorities
before the end of the calendar year 2021 and reinitiate our program in TED based
on regulatory alignment.
We continue to evaluate potential new indications for IMVT-1401 and we remain on
track to announce at least two new indications and submit INDs with our trial
designs to the FDA over the next 12 months. For competitive reasons, we will
likely announce these indications only after we have agreement with the FDA that
we may proceed with a planned protocol. We expect at least one of the four
indications beyond MG to be initiated as a pivotal trial in the calendar year
2022.
On August 2, 2021 , we entered into a share purchase agreement with RSL pursuant
to which we issued 17,021,276 shares of our common stock, par value $0.0001 per
share, to RSL at a per share price of $11.75 (the "Equity Investment ") and
received aggregate gross proceeds of $200.0 million . We intend to use the
proceeds from this investment to advance the development of IMVT-1401 in
multiple indications and for general corporate purposes.
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COVID-19 Business Update
We have been actively monitoring the impact of the COVID-19 pandemic on our
employees and our business. Based on guidance issued by federal, state and local
authorities, we transitioned to a remote work model for our employees in
mid-March 2020 and our workforce has continued to work remotely. Our operations
continue as we seek to comply with guidance from governmental authorities and
adjust our activities as appropriate. To date, the COVID-19 pandemic has not had
significant effects on the progression of our clinical trials, though it did
slow enrollment of our clinical trials prior to our voluntary pause of clinical
dosing in February 2021 , as previously disclosed. Further, the COVID-19 pandemic
has not had significant manufacturing supply interruptions of IMVT-1401, and we
intend to continue to advance the research and development of IMVT-1401.
We have not experienced material financial impacts as a result of COVID-19
pandemic. However, the impact of COVID-19 on our future results will largely
depend on future developments related to COVID-19, which are highly uncertain
and cannot be predicted with confidence, such as the ultimate duration of the
pandemic, the spread of its variants and the full impact on our enrolling
clinical sites, financial markets and the global economy, travel restrictions
and social distancing in the United States and other countries, and business
closures or business disruptions, as well as the effectiveness of actions taken
in the United States and other countries to contain and treat the disease,
including the effectiveness of vaccines and vaccine distribution efforts.
For additional information about risks and uncertainties related to the COVID-19
pandemic that may impact our business, financial condition and results of
operations, see the section titled "Risk Factors" under Part II, Item 1A in this
Quarterly Report.
Our Key Agreements
License Agreement with HanAll Biopharma Co., Ltd.
InDecember 2017 , RSG entered into the HanAll Agreement. Under the HanAll Agreement, RSG, a wholly owned subsidiary of RSL, received (1) the non-exclusive right to manufacture and (2) the exclusive, royalty-bearing right to develop, import and use the antibody referred to as IMVT-1401 and certain back-up and next-generation antibodies, and products containing such antibodies, and to commercialize such products, inthe United States ,Canada ,Mexico , the E.U., theU.K. ,Switzerland , theMiddle East ,North Africa andLatin America (the "Licensed Territory"), for all human and animal uses, during the term of the agreement.
In
Under the HanAll Agreement, the parties may choose to collaborate on a research program directed to the research and development of next generation FcRn inhibitors in accordance with an agreed plan and budget. We are obligated to reimburse HanAll for half of such research and development expenses incurred by HanAll, up to an aggregate reimbursement amount of$20.0 million . Intellectual property created by HanAll pursuant to this research program will be included in our license; intellectual property created by us pursuant to this research program will be included in HanAll's license. Since the acquisition of IMVT-1401, we, along with RSL, have performed all the development associated with IMVT-1401 and no amounts were incurred by HanAll and reported to the Company for further research or development of the technology for the three months endedJune 30, 2021 and 2020. Pursuant to the HanAll Agreement, RSG made an upfront payment of$30.0 million to HanAll. InMay 2019 , we achieved our first development and regulatory milestone which resulted in a$10.0 million milestone payment that we subsequently paid inAugust 2019 . We will be responsible for future contingent payments and royalties, including up to an aggregate of$442.5 million upon the achievement of certain development, regulatory and sales milestone events. We are also obligated to pay HanAll tiered royalties ranging from the mid-single digits to mid-teens on net sales of licensed products, subject to standard offsets and reductions as set forth in the HanAll Agreement. These royalty obligations apply on a product-by-product and country-by-country basis and end upon the latest of: (A) the date on which the last valid claim of the licensed patents expire, (B) the date on which the data or market exclusivity expires or (C) 11 years after the first commercial sale of the licensed product, in each case, with respect to a given product in a given country. 20 -------------------------------------------------------------------------------- Table of Content s Services Agreements with RSI and RSG InAugust 2018 , we entered into Services Agreements with RSI and RSG, under which RSI and RSG agreed to provide services related to development, administrative and financial activities to us during our formative period. Under each Services Agreement, we will pay or reimburse RSI or RSG, as applicable, for any expenses they, or third parties acting on our behalf, incur. For any general and administrative and research and development activities performed by RSI or RSG employees, RSI or RSG, as applicable, will charge back the employee compensation expense plus a pre-determined markup. RSI and RSG also provided such services prior to the formalization of the Services Agreements, and such costs have been recognized by us in the period in which the services were rendered. Employee compensation expense, inclusive of base salary and fringe benefits, is determined based upon the relative percentage of time utilized on our matters. All other costs will be billed back at cost. The term of the Services Agreements will continue until terminated by us, RSI or RSG, as applicable, upon 90 days' written notice.
RSL Information Sharing and Cooperation Agreement
InDecember 2018 , we entered into an amended and restated information sharing and cooperation agreement (the "Cooperation Agreement") with RSL, which, among other things: (1) obligates us to deliver to RSL periodic financial statements and other information upon reasonable request and to comply with other specified financial reporting requirements; (2) requires us to supply certain material information to RSL to assist it in preparing any futureSEC filings; and (3) requires us to implement and observe certain policies and procedures related to applicable laws and regulations. We have agreed to indemnify RSL and its affiliates and their respective officers, employees and directors against all losses arising out of, due to or in connection with RSL's status as a stockholder under the Cooperation Agreement and the operations of or services provided by RSL or its affiliates or their respective officers, employees or directors to us or any of our subsidiaries, subject to certain limitations set forth in the Cooperation Agreement. No amounts have been paid or received under this agreement; however, we believe this agreement is material to our business and operations. Subject to specified exceptions, the Cooperation Agreement will terminate upon the earlier of (1) the mutual written consent of the parties or (2) the later of when RSL no longer (a) is required by generally accepted accounting principles inthe United States ("U.S. GAAP") to consolidate our results of operations and financial position, account for its investment in us under the equity method of accounting or, by any rule of theSEC , include our separate financial statements in any filings it may make with theSEC and (b) has the right to elect directors constituting a majority of our board of directors.
Financial Operations Overview
Revenue
We have not generated any revenue and have incurred significant operating losses since inception, and we do not expect to generate any revenue from the sale of any products unless or until we obtain regulatory approval of and commercialize IMVT-1401 or any future product candidates. Our ability to generate revenue sufficient to achieve profitability will depend completely on the successful development and eventual commercialization of IMVT-1401 and any future product candidates.
Research and Development Expenses
We have been primarily engaged in preparing for and conducting clinical trials. Research and development expenses include program-specific costs, as well as unallocated costs. Program-specific costs include direct third-party costs, which include expenses incurred under agreements with contract research organizations and the cost of consultants who assist with the development of the Company's product candidate on a program-specific basis, investigator grants, sponsored research, and any other third-party expenses directly attributable to the development of the product candidate.
Unallocated costs include:
•costs related to contract manufacturing operations including manufacturing costs in connection with producing materials for use in conducting preclinical and clinical studies;
•personnel-related expenses for research and development personnel, which includes employee-related expenses such as salaries, benefits and other staff-related costs;
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•payments upon the achievement of certain development and regulatory milestones under the HanAll Agreement;
•costs allocated to us under our services agreements with RSI and RSG (the "Services Agreements"); and
•other expenses, which include the cost of consultants who assist with our research and development, but are not allocated to a specific program.
Research and development activities will continue to be central to our business model. We expect our research and development expenses to increase significantly over the next several years as we increase personnel and compensation costs, commence additional clinical trials for IMVT-1401 and prepare to seek regulatory approval for our product candidate. It is not possible to determine with certainty the duration and completion costs of any clinical trial we may conduct. The duration, costs and timing of clinical trials of IMVT-1401 and any future product candidates will depend on a variety of factors that include, but are not limited to:
•the number of trials required for approval;
•the per patient trial costs;
•the number of patients that participate in the trials;
•the number of sites included in the trials;
•the countries in which the trial is conducted;
•the length of time required to enroll eligible patients;
•the number of doses that patients receive;
•the drop-out or discontinuation rates of patients;
•the potential additional safety monitoring or other studies requested by regulatory agencies;
•the duration of patient follow-up;
•the timing and receipt of regulatory approvals;
•the potential impact of the ongoing COVID-19 pandemic;
•the efficacy and safety profile of the product candidate; and
•the cost of manufacturing.
In addition, the probability of success for IMVT-1401 will depend on numerous factors, including our product's efficacy, safety, ease of use, competition, manufacturing capability and commercial viability.
General and Administrative Expenses
General and administrative expenses consist primarily of employee salaries and
related benefits, costs allocated under the Services Agreements and stock-based
compensation for general and administrative personnel, legal and accounting
fees, consulting services and other operating costs relating to corporate
matters and daily operations.
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We anticipate that our general and administrative expenses will continue to
increase in the future to support our continued research and development
activities and increased costs of operating as a public company. These increases
will likely include patent-related costs, including legal and professional fees
for filing, prosecution and maintenance of our product candidates, increased
costs related to the hiring of additional personnel and fees to outside
consultants for professional services. In addition, whenever IMVT-1401 obtains
regulatory approval, we expect that we would incur significant additional
expenses associated with building medical affairs and commercial teams.
Results of Operations
The following table sets forth our results of operations for the three months
ended
Three Months Ended June 30,
2021 2020 Change
Operating expenses:
Research and development $ 18,705 $ 16,922 $ 1,783
General and administrative 11,181 9,664 1,517
Total operating expenses 29,886 26,586 3,300
Other expense, net 626 74 552
Loss before (benefit) provision for income taxes (30,512) (26,660) (3,852)
(Benefit) provision for income taxes (41) 48 (89)
Net loss $ (30,471) $ (26,708) $ (3,763) Research and Development Expenses
The following table summarizes the period-over-period changes in research and development expenses for the three months endedJune 30, 2021 and 2020 (in thousands): Three Months Ended June 30, Change 2021 2020 $ Program-specific costs: Neurology diseases $ 245$ 1,006 $ (761) Endocrine diseases 2,449 1,624 825 Hematology diseases 690 661 29 Unallocated costs: Contract manufacturing costs 7,145 9,887 (2,742) Personnel-related expenses including stock-based compensation 4,796 2,329 2,467 Other 3,380 1,415 1,965 Total research and development expenses$ 18,705
Research and development expenses increased by$1.8 million , from$16.9 million for the three months endedJune 30, 2020 to$18.7 million for the three months endedJune 30, 2021 . Program-specific research and development costs increased by$0.1 million , from$3.3 million for the three months endedJune 30, 2020 to$3.4 million for the three months endedJune 30, 2021 , primarily reflecting increases related to clinical activities for analyzing data and the program-wide data review. Unallocated research and development costs increased by$1.7 million , from$13.6 million for the three months endedJune 30, 2020 to$15.3 million for the three months endedJune 30, 2021 . This increase was primarily due to higher personnel-related expenses of$2.5 million and other increases related to clinical studies and clinical research of$2.0 million , partially offset by decreases in contract manufacturing costs of$2.7 million . The lower contract manufacturing costs were due to the voluntary pause in our clinical trials. 23
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General and Administrative Expenses
General and administrative expenses increased by$1.5 million , from$9.7 million for the three months endedJune 30, 2020 to$11.2 million for the three months endedJune 30, 2021 . This increase was primarily due to higher personnel-related costs (including stock-based compensation) of$1.3 million due to higher headcount.
Liquidity and Capital Resources
Overview
We had cash of
OnAugust 2, 2021 , we entered into a share purchase agreement with RSL pursuant to which we issued 17,021,276 shares of our common stock, par value$0.0001 per share, to RSL at a per share price of$11.75 (the "Equity Investment ") and received aggregate gross proceeds of$200.0 million . We also intend to use the proceeds from theEquity Investment to advance the development of IMVT-1401 in multiple indications and for general corporate purposes. We expect to continue to incur significant expenses and increasing operating losses at least for the next several years. We have never generated any revenue and we do not expect to generate product revenue unless and until we successfully complete development and obtain regulatory approval for IMVT-1401 or any future product candidate. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our planned clinical trials, timing of IMVT-1401 manufacturing, HanAll milestone payments and our expenditures on other research and development activities. We anticipate that our expenses will increase substantially as we:
•fund our clinical trials of IMVT-1401;
•fund our clinical development programs;
•launch any potential Phase 2 proof-of-concept studies of IMVT-1401 in additional indications;
•incur costs associated with the pause, analysis and safety review of the clinical trials of IMVT-1401;
•achieve milestones under our agreements with third parties, including the HanAll Agreement, that will require us to make substantial payments to those parties;
•seek to identify, acquire, develop and commercialize additional product candidates;
•integrate acquired technologies into a comprehensive regulatory and product development strategy;
•maintain, expand and protect our intellectual property portfolio;
•hire scientific, clinical, quality control and administrative personnel;
•add operational, financial and management information systems and personnel, including personnel to support our drug development efforts;
•commence the number of trials required for approval;
•seek regulatory approvals for any product candidates that successfully complete clinical trials;
•ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any drug candidates for which we may obtain regulatory approval; and
•incur insurance, legal and other regulatory compliance expenses to operate as a public company.
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Our primary use of cash is to fund our clinical trials and clinical development
activities. Our current funds will not be sufficient to enable us to complete
all necessary development and commercially launch IMVT-1401. We anticipate that
we will continue to incur net losses for the foreseeable future.
Until such time, if ever, as we can generate substantial product revenue from
sales of IMVT-1401 or any future product candidate, we expect to finance our
cash needs through a combination of equity offerings, debt financings and
potential collaboration, license or development agreements. Our ability to raise
additional capital may be adversely impacted by potential worsening global
economic conditions and the recent disruptions to, and volatility in, the credit
and financial markets in the United States and worldwide resulting from the
ongoing COVID-19 pandemic. We do not currently have any committed external
source of funds. To the extent that we raise additional capital through the sale
of equity or convertible debt securities, your ownership interest will be
diluted, and the terms of these securities may include liquidation or other
preferences that adversely affect your rights as a common stockholder. Debt
financing and preferred equity financing, if available, may involve agreements
that include covenants limiting or restricting our ability to take specific
actions, such as incurring additional debt, making capital expenditures or
declaring dividends.
If we raise additional funds through collaborations, strategic alliances or
marketing, distribution or licensing arrangements with third parties, we may be
required to relinquish valuable rights to future revenue streams, research
programs or product candidates or to grant licenses on terms that may not be
favorable to us. Adequate additional funding may not be available to us on
acceptable terms, or at all. If we are unable to raise capital in sufficient
amounts or on terms acceptable to us, we may be required to delay, limit, reduce
or terminate our drug development or future commercialization efforts or grant
rights to develop and market product candidates that we would otherwise prefer
to develop and market ourselves or potentially discontinue operations.
Cash Flows
The following table sets forth a summary of our cash flows for the three months
ended
Three Months Ended June 30,
2021 2020
Net cash used in operating activities$ (21,214) $
(13,798)
Net cash used in investing activities (18)
(47)
Net cash provided by financing activities 91 193,553 Operating Activities For the three months endedJune 30, 2021 ,$21.2 million of cash was used in operating activities. This was primarily attributable to a net loss from operations for the year of$30.5 million , partially offset by non-cash charges of$4.7 million and a net change in operating assets and liabilities of$4.6 million . The non-cash charges consisted mainly of stock-based compensation of$3.9 million , reflecting the higher headcount as compared with the prior period. The change in our operating assets and liabilities was primarily due to$3.0 million of lower prepaid expenses and other current assets, driven by the timing of payments related to clinical research and contract manufacturing activities, and an increase of$1.8 million in accounts payable and accrued expenses. For the three months endedJune 30, 2020 ,$13.8 million of cash was used in operating activities. This was primarily attributable to a net loss from operations of$26.7 million , non-cash charges of$4.2 million and a net change in operating assets and liabilities of$8.7 million . The non-cash charges consisted mainly of stock-based compensation of$4.0 million . The change in our operating assets and liabilities was primarily due to an increase of$6.2 million in accounts payable and accrued expenses, primarily driven by increased research and development efforts and general and administrative activities, and a decrease of$3.0 million in prepaid expenses and other current assets due to settlement of a VAT receivable inApril 2020 .
Investing Activities
For the three months ended
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Financing Activities
For the three months ended
For the three months endedJune 30, 2020 ,$193.6 million of cash provided by financing activities consisted of$131.0 million in proceeds from the issuance of common stock in an underwritten public offering and$65.8 million in proceeds from the issuance of common stock upon warrant redemptions, partially offset by the repayment of a note payable to RSL of$2.9 million and the payment of offering costs of$0.6 million .
Outlook
Based on our existing cash balance as ofJune 30, 2021 of$379.0 million , our research and development plans and our timing expectations related to our development programs for IMVT-1401, we expect to be able to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of this Quarterly Report. We also intend to use the proceeds from theEquity Investment to advance the development of IMVT-1401 in multiple indications and for general corporate purposes. However, we have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect.
Contractual Obligations and Commitments
As of
In the normal course of business, we enter into agreements with CROs for clinical trials and with vendors for nonclinical studies, manufacturing and other services and products for operating purposes, which agreements are generally cancellable by us at any time, subject to payment of remaining obligations under binding purchase orders and, in certain cases, nominal early-termination fees. These commitments are not deemed significant. There are certain contracts wherein we have a minimum purchase commitment, however, most of it is due and payable within one year. We have not included potential future payments due under the HanAll Agreement in a table of contractual obligations because the payment obligations under this agreement are contingent upon future events. As ofJune 30, 2021 , the aggregate maximum amount of milestone payments we could be required to make under the HanAll Agreement is$442.5 million upon the achievement of certain development, regulatory and sales milestone events. We are also required to reimburse HanAll for half of budgeted research and development costs incurred by HanAll with respect to IMVT-1401, up to an aggregate of$20.0 million .
Sublease Agreements
InJune 2020 , we entered into two sublease agreements with RSI, for the two floors of the building that serves as our headquarters inNew York . The subleases will expire onFebruary 27, 2024 andApril 29, 2024 , respectively, and have scheduled rent increases each year. The future fixed operating lease payments under both sublease agreements are$3.2 million over a lease period of approximately three years. InApril 2020 , we entered into a sublease agreement with an unrelated party for one floor of a building inNorth Carolina . The sublease will expire onFebruary 28, 2022 and has no scheduled rent increases. The future fixed operating lease payments under the sublease agreement are$0.1 million over the remaining lease period of 8 months.
Off-Balance Sheet Arrangements
During the periods presented, we did not have any off-balance sheet
arrangements, as defined under
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Critical Accounting Policies and Significant Judgments and Estimates
Our management's discussion and analysis of our financial condition and results
of operations is based on our consolidated financial statements, which have been
prepared in accordance with U.S. GAAP. The preparation of these consolidated
financial statements requires us to make estimates, judgments and assumptions
that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities as of the date of the balance sheet, and the
reported amounts of expenses during the reporting period. In accordance with
U.S. GAAP, we evaluate our estimates and judgments on an ongoing basis. We base
our estimates on historical experience and on various other factors that we
believe are reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.
We define our critical accounting policies as those under U.S. GAAP that require
us to make subjective estimates and judgments about matters that are uncertain
and are likely to have a material impact on our financial condition and results
of operations, as well as the specific manner in which we apply those
principles. During the three months ended June 30, 2021 , there were no material
changes to our critical accounting policies and use of estimates from those
disclosed in the audited consolidated financial statements for the year ended
March 31, 2021 included in our Annual Report.
Recent Accounting Pronouncements
For information with respect to recently issued accounting standards and the impact of these standards on our unaudited condensed consolidated financial statements, refer to "Note 2 - Summary of Significant Accounting Policies" in our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report.
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