You should read the following discussion and analysis of our financial condition
and results of operations together with our accompanying financial statements
and related notes thereto included elsewhere in this Quarterly Report on Form
10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2021
filed with the U.S. Securities and Exchange Commission, or SEC. Some of the
information contained in this discussion and analysis or set forth elsewhere in
this Quarterly Report on Form 10-Q, including information with respect to our
plans and strategy for our business and related financing, includes
forward-looking statements that involve risks and uncertainties. As a result of
many factors, including those factors set forth in the "Risk Factors" section of
this Quarterly Report on Form 10-Q, our actual results could differ materially
from the results described in or implied by the forward-looking statements
contained in the following discussion and analysis. For convenience of
presentation some of the numbers have been rounded in the text below.

Overview



We are a commercial-stage biopharmaceutical company focused on the development
and commercialization of novel, antibody-based therapeutic products for the
treatment of cancer. We are leveraging our proprietary antibody platforms and
deep expertise in the field of antibodies to develop a broad portfolio of
innovative medicines.

Our only approved drug DANYELZA® (naxitamab-gqgk) was approved by the United
States Food and Drug Administration, or FDA, in November 2020 for the treatment,
in combination with Granulocyte-Macrophage Colony-Stimulating Factor, or GM-CSF,
of pediatric patients one year of age and older and adult patients with relapsed
or refractory, or R/R, high-risk neuroblastoma, or NB, in the bone or bone
marrow who have demonstrated a partial response, minor response, or stable
disease to prior therapy. We are commercializing DANYELZA in the United States
and began shipping the product in February 2021.

DANYELZA is also currently being investigated in three Phase 2 clinical studies
for the treatment of patients with first-line NB, third-line NB, and in relapsed
osteosarcoma. In addition, we have an ongoing Phase 2 trial at

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Memorial Sloan Kettering Cancer Center, or MSK, with our GD2-GD3 Vaccine for the treatment of Stage 4 high-risk NB. We believe the GD2-GD3 Vaccine can potentially serve as an add-on treatment to DANYELZA.



We submitted a Biologics License Application, or BLA, to the FDA for
radiolabeled 131I-omburtamab for central nervous system, or CNS, leptomeningeal
metastases, or LM, from NB in August 2020, and received a Refusal to File letter
from the FDA in October 2020. The reason for the FDA's decision to issue the
Refusal to File letter was that upon preliminary review, the FDA determined that
certain parts of the Chemistry, Manufacturing and Control, or CMC Module and the
Clinical Module of the BLA required further detail. We have been working closely
with the FDA to resolve all issues, and had a number of Type B meetings with the
agency, including a pre-BLA meeting in January 2022. We completed the
resubmission of the BLA for omburtamab in March 2022. However, we can provide no
assurance that omburtamab will ultimately receive FDA approval.

Additionally, we are conducting clinical studies with omburtamab in diffuse intrinsic pontine glioma, or DIPG, and desmoplastic small round cell tumor, or DSRCT. We also have two omburtamab follow-on product candidates.


We are advancing a new generation of antibody constructs based on the SADA
technology, where we use our proprietary radioimmunotherapy SADA platform to
create SADA contructs. Bispecific antibody fragments bind to the tumor before a
radioactive payload is injected in a two-step approach. We also refer to the
SADA technology as Liquid RadiationTM. We have designated GD2-SADA for potential
use in GD2 positive solid tumors as our first SADA constructs and have filed an
IND for GD2-SADA in December 2021. We believe the SADA technology could
potentially improve the efficacy of radiolabeled therapeutics in tumors that
have not historically demonstrated meaningful responses to radiolabeled agents.

Based on the Y-BiClone platform, we have a new generation of T cell engaging
bispecific antibodies, or BsAbs, that may destroy tumor cells by recruitment of
host T cells. Our Y-BiClone format contains two binding arms for the tumor
target and two binding arms for T cells. This format was designed to have the
smallest binding affinity necessary to recruit T cells. We are advancing a CD33
BsAb for the treatment of hematological cancers expressing CD33, a transmembrane
receptor expressed on cells of myeloid lineage, for which we have filed an IND
and expect clinical trials to be initiated by the middle of 2022. We believe our
BsAbs have the potential to result in improved tumor binding, longer serum
half-life and significantly greater T cell mediated killing of tumor cells
without the need for continuous infusion. Our Phase 2 trial with nivatrotamab, a
GD2 BsAb product candidate, for Small Cell Lung Cancer, or SCLC, and our Phase
1/2 trial for the treatment of refractory GD2 positive adult and pediatric solid
tumors will be winded down during the second quarter of 2022 in order to allow
for reallocation of resources to our SADA constructs.

Our mission is to become the world leader in developing better and safer
antibody-based pediatric oncology products addressing clear unmet medical needs
and, as such, have a transformational impact on the lives of patients. We intend
to continue to advance and expand our product pipeline into certain adult cancer
indications either independently or in collaboration with potential partners.

Since our inception on April 30, 2015, we have devoted substantially all of our
resources to organizing and staffing our company, business planning, identifying
potential product candidates, conducting pre-clinical studies of our product
candidates and clinical trials of our lead product candidates, commercializing
our approved product, raising capital, and acquiring and developing our
technology platform among other matters. We have not generated substantial
revenues from sales of DANYELZA which is currently our only approved product.

To date, we have financed our operations primarily through private placements of
our securities, proceeds from our IPO and proceeds from our two subsequent
public offerings, revenues generated from DANYELZA and license revenues, and the
proceeds from our sale of the PRV obtained upon FDA approval of DANYELZA.

On February 22, 2021, we completed our most recent public offering of our common
stock pursuant to which we issued and sold 2,804,878 shares of our common stock
at a price to the public of $41.00 per share, which included the exercise in
full of the underwriters' option to purchase additional shares. We received
aggregate gross proceeds from this offering of $115.0 million, with aggregate
net proceeds of approximately $107.7 million after deducting underwriting
discounts and commissions and offering expenses.

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In conjunction with the approval by the FDA of DANYELZA in November 2020 we
received a Priority Review Voucher, or PRV, which we subsequently sold to United
Therapeutics Corporation for a purchase price of $105 million. We were obligated
to pay, and paid 40% of the net proceeds from the sale of the PRV to MSK as
required under the terms of the MSK License. We intend to use the remaining
proceeds to fund further research and development and other operational
programs. The transaction closed in January 2021 upon the resolution of the
substantive closing conditions, and the gain was recognized within "Other
Income, Net" on the Consolidated Statements of Net Income / (Loss) and
Comprehensive Income / (Loss) for the three months ended March 31, 2021. Upon
the potential FDA approval of omburtamab, we expect to receive another PRV, and
upon the sale we would be obligated to pay 33% of the net proceeds from such
sale to MSK.

As of March 31, 2022, we had an accumulated deficit of $368.5 million. Our net
loss was $28.1 million for the three months ended March 31, 2022 and our net
income was $33.4 million for the three months ended March 31, 2021. We have
incurred significant net operating losses in every year since our inception and
expect to continue to incur net operating losses and significant expenses for
the foreseeable future. Our net losses may fluctuate significantly from quarter
to quarter and year to year as we:

•continue to advance our lead product candidates through the regulatory approval process both in the U.S. and internationally;

•continue to advance our other product candidates through pre clinical and clinical development;

•continue to identify additional research programs and additional product candidates, as well as additional indications for existing product candidates;

•initiate pre clinical studies and clinical trials for any additional product candidates we identify;

•develop, maintain, expand and protect our intellectual property portfolio; and

•hire additional research, sales force, commercialization, clinical and scientific personnel.



In August 2015, we entered into a license agreement with MSK, or the MSK
License, pursuant to which we have obtained exclusive rights to MSK's rights in
our current antibody product candidates. Under the MSK License, we committed to
funding scientific research at MSK as well as conducting certain clinical trial
activities at MSK. As these product candidates progress through clinical
development, regulatory approval and commercialization, certain milestone
payments will come due to MSK either as a result of the milestones having been
met or the passage of time even if the milestones have not been met. Also, we
owe MSK customary royalties on commercial sales of our approved products. In
addition, we have committed to obtain certain personnel and laboratory services
at MSK under our Master Data Services Agreement, or MDSA, and two separate Core
Facility Service Agreements, or CFSAs. Also, under our Investigator-Sponsored
Master Clinical Trial Agreement, or MCTA, with MSK, we will provide drug product
and funding for certain clinical trials at MSK.

On April 15, 2020, we entered into the SADA Technology License Agreement, or the
SADA License Agreement, with MSK and Massachusetts Institute of Technology, or
MIT, that grants us an exclusive, worldwide, sublicensable license to certain
patent and intellectual property rights developed by MSK and MIT to develop,
manufacture, and commercialize licensed products and to perform services for all
therapeutic and diagnostic uses in the field of cancer diagnostics and cancer
treatments using SADA-BiDE (2-step Self-Assembly and DisAssembly-Bispecific
DOTA-Engaging antibody system) Pre-targeted Radioimmunotherapy Platform, or the
SADA Technology, a concept we also refer to as Liquid RadiationTM. The patents
and patent applications covered by the SADA License Agreement are directed, in
part, to the SADA Technology, as well as a number of SADA constructs developed
by MSK. Upon entering into the SADA License Agreement in April 2020 and in
exchange for the licenses, we paid MSK and MIT a cash upfront payment and issued
an aggregate of 42,900 shares of our common stock to them. During the year ended
December 31, 2021, we made a cash payment in the amount of $1.0 million to

MSK
and MIT under the agreement.

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As required under the SADA License Agreement, in October 2020, we entered into a
Sponsored Research Agreement with MSK to fund at least $1,500,000 in scientific
research at MSK over the following three years.

Further, the SADA License Agreement requires us to pay to MSK and MIT mid to
high single-digit royalties based on annual net sales of licensed products or
the performance of licensed services by us and our affiliates and sublicensees.
We are obligated to pay minimum annual royalties of $40,000, which shall
increase to $60,000 once a patent has been issued, over the royalty term,
commencing on the tenth anniversary of the license agreement. These amounts are
non refundable but are creditable against royalty payments otherwise due under
the SADA License Agreement. As of March 31, 2022, we have determined that
payment of the minimum royalties is not probable, and accordingly have not
accrued for such royalties at March 31, 2022.

Under the SADA License Agreement, we are also obligated to pay MSK and MIT
certain clinical, regulatory and sales based milestone payments. Certain of the
clinical and regulatory milestone payments become due at the earlier of either
the completion of the related milestone activity or the date indicated in the
SADA License Agreement. Total clinical and regulatory milestones potentially due
under the SADA License Agreement are $4,730,000 and $18,125,000, respectively.
Sales based milestones payments, totaling $23,750,000, become due should the
Company achieve certain amounts of sales. In addition, for each of the SADA
constructs generated by MSK and sold on behalf of the Company by a sublicensee,
the Company may make sales-based milestone payments in the total amount up to
$60,000,000 based on the achievement of various cumulative net sales made by the
sub-licensee. Finally, under the terms of the SADA License, MSK is entitled to
receive 25% of any income generated from the sale of any PRV or the sale of
other comparable incentives provided by any non-U.S. jurisdiction. As of March
31, 2022, we have accrued $605,000 of the clinical based milestones under the
SADA License Agreement which we considered to be estimable and probable and we
expect to pay this amount in the fourth quarter of 2022.

These MSK agreements are important to our business. For a more detailed discussion of the terms and conditions of certain of these agreements, see NOTE 9-LICENSE AGREEMENTS AND COMMITMENTS.



For DANYELZA, and for any other product candidates for which we obtain
regulatory approval, if any, we expect to incur significant milestone costs, as
well as commercialization expenses related to product sales, marketing,
manufacturing and distribution. Accordingly, we may continue to fund our
operations through public or private equity or debt financings or other sources,
including strategic collaborations. We may, however, be unable to raise
additional funds or enter into such other arrangements when needed on favorable
terms or at all. Our failure to raise capital or enter into such other
arrangements as and when needed would have a negative impact on our financial
condition and our ability to develop our current product candidates, or any
additional product candidates. Because of the numerous risks and uncertainties
associated with the development of our existing product candidates and any
future product candidates, our platform and technology and because the extent to
which we may enter into collaborations with third parties for development of any
of our product candidates is uncertain, we are unable to estimate the amounts of
increased capital outlays and operating expenses associated with completing the
research and development of our product candidates. If we raise additional funds
through collaborations, strategic alliances, or licensing arrangements with
third parties, we may have to relinquish valuable rights to our technologies,
future revenue streams, research programs, product candidates or grant licenses
on terms that may not be favorable to us and could have a negative impact on our
financial condition.

Recent Developments

Since it was first reported to have emerged in December 2019, a novel strain of
coronavirus, which causes COVID-19, has spread around the world, including the
New York metropolitan area and Copenhagen, Denmark, where our primary office and
laboratory spaces are located. The coronavirus pandemic is evolving, and to date
has led to the implementation of various responses, including government-imposed
quarantines, travel restrictions and other public health safety measures.

The extent to which the COVID-19 pandemic impacts our operations or those of our
third-party partners, including our preclinical studies, clinical trials,
manufacturing operations and commercialization efforts, will depend on future
developments, which are highly uncertain and cannot be predicted with
confidence, including the duration of the outbreak, new information that will
emerge concerning the severity of the COVID-19 pandemic, the emergence of new

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variants of the virus such as the Delta and Omicron variants and the actions to
contain the coronavirus or treat its impact, among others. We have taken
precautionary measures intended to help minimize the risk of the virus to our
employees which could negatively affect our business. To date, the COVID-19
pandemic has caused slower initiation of new clinical trials and a fluctuating
rate of recruitment for ongoing clinical trials, which has marginally delayed
our clinical development activities and thereby postponed certain accompanying
costs. The aggregate impact of the coronavirus has not been significant to the
Company.

We cannot presently predict the scope and severity of the potential future shutdowns or disruptions of vendors and other businesses and government agencies, such as the SEC, the FDA or other domestic and international regulatory authorities.

Components of Our Results of Operations

Product Revenue

Product revenue consists of sales of DANYELZA.

Operating Costs and Expenses

Cost of goods sold



Cost of goods sold includes direct and indirect costs related to the
manufacturing and distribution of DANYELZA, including materials, third-party
manufacturing costs, packaging services, freight, labor costs for personnel
involved in the manufacturing process, indirect overhead costs and third-party
royalties payable on our net product revenues.

Research and Development Expenses



Research and development expenses consist of expenses incurred in connection
with the discovery and development of our product candidates. We expense
research and development costs as incurred. These expenses include, but are not
limited to:

sponsored research, laboratory facility services, clinical trial and data

? service at MSK under the Sponsored Research Agreements, or the SRAs, the two

CFSAs, the MCTA, and the MDSA, with MSK;

expenses incurred under agreements with CROs, as well as investigative sites

? and consultants that conduct our non-clinical and pre-clinical studies and

clinical trials;

expenses incurred under agreements with CMOs, including manufacturing scale-up

? expenses and the cost of acquiring and manufacturing pre-clinical studies and

clinical trial materials, including manufacturing validation batches;

? upfront, milestone and other non-revenue related payments due under our

third-party licensing agreements;

? employee-related expenses, which include salaries, benefits, travel and

stock-based compensation;

? expenses related to regulatory activities, including filing fees paid to

regulatory agencies;

? outsourced professional scientific development services; and

? allocated expenses for utilities and other facility-related costs, including

rent, insurance, supplies and maintenance expenses, and other operating costs.




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The successful development and regulatory approval of our product candidates is
highly uncertain. At this time, we cannot reasonably estimate or know the
nature, timing and costs of the efforts that will be necessary to complete the
remainder of the development of DANYELZA and omburtamab or any future product
candidates we may develop. This uncertainty is due to the numerous risks and
uncertainties associated with the duration and cost of clinical trials, which
vary significantly over the life of a project as a result of many factors,
including, but not limited to:

? the number of clinical sites included in the trials;

? the availability and length of time required to enroll a sufficient number of

suitable patients in our clinical trials;

the actual probability of success for our product candidates, including the

? safety and efficacy, early clinical data, competition, manufacturing capability

and commercial viability;

? significant and changing government regulation and regulatory guidance;

? the performance of our existing and any future collaborators;

? the number of doses patients receive;

? the duration of patient follow-up;

? the results of our clinical trials and pre-clinical studies;

? the establishment of commercial manufacturing capabilities;

? adequate ongoing availability of raw materials and drug substance for clinical

development and any commercial sales;

? the terms and timing of regulatory approvals, including the timing of our BLA

and MAA submissions and their acceptance;

the receipt of marketing approvals, including a safety, tolerability and

? efficacy profile that is satisfactory to the FDA, the EMA or any other non-U.S.

regulatory authority;

? any requirement by the FDA, the EMA or any other non-US regulatory authority to

conduct post market surveillance or safety studies;

? the expense of filing, prosecuting, defending and enforcing any patent claims

and other intellectual property rights; and

? the success of commercialization of approved products.




A change in the outcome of any of these variables with respect to the
development of a product candidate could mean a significant change in the costs
and timing associated with the development of that product candidate. For
example, if the FDA, the EMA or another regulatory authority were to require us
to conduct clinical trials beyond those that we anticipate will be required for
the completion of clinical development of a product candidate, or if we
experience significant delays in our clinical trials due to patient enrollment
or other reasons, we would be required to expend significant additional
financial resources and time on the completion of clinical development. We may
also never succeed in achieving regulatory approval for omburtamab or any other
product candidates we may develop.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development,



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primarily due to the increased size and duration of later-stage clinical trials.
We expect our research and development expenses to increase significantly over
the next several years as we increase personnel costs, including stock-based
compensation, conduct clinical trials and potentially prepare regulatory
submissions for our pipeline candidates, including supplementary regulatory
submissions for DANYELZA.

Selling, General, and Administrative Expenses


Selling, general, and administrative expenses consist primarily of employee
related expenses, including salaries, bonus, benefits, and stock-based
compensation expenses for personnel in executive, commercial, finance and
administrative functions. Other significant costs include facility costs not
otherwise included in research and development expenses or cost of goods sold,
legal fees relating to corporate matters, and fees for patent, accounting, tax,
and consulting services.

We anticipate that our selling, general, and administrative expenses will
increase in the future to support continued research and development activities,
potential commercialization of additional product candidates and costs
associated with operating as a public company, including expenses related to
services associated with maintaining compliance with exchange listing and the
SEC requirements, director and officer insurance costs and investor and public
relations costs. These increases will likely include increased costs related to
the hiring of additional personnel and fees to outside consultants, lawyers and
accountants, among other expenses.

Other Income / (Loss), Net



On December 28, 2020, the Company announced that it entered into a definitive
agreement to sell its DANYELZA PRV to United Therapeutics Corporation for $105.0
million. The PRV was granted in conjunction with the approval by the FDA of
DANYELZA®, for the treatment of refractory/relapsed high-risk NB. Under the
terms of the MSK License Agreement, we retained 60% of the net proceeds received
from the sale, and the remaining 40% was paid to MSK. As a result, we received
net proceeds from this sale of $62.0 million. The transaction closed on January
21, 2021 when the substantive closing conditions included within the agreement
were resolved.

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 financial statements, which we have prepared in
accordance with U.S. generally accepted accounting principles, or GAAP. We
believe that several accounting policies are significant to understanding our
historical and future performance. We refer to these policies as critical
because these specific areas generally require us to make judgments and
estimates about matters that are uncertain at the time we make the estimate, and
different estimates-which also would have been reasonable-could have been used.
On an ongoing basis, we evaluate our estimates and judgments, including those
described in greater detail below. We base our estimates on historical
experience and other market-specific or other relevant assumptions that we
believe to be 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.

While our significant accounting policies are described in more detail in the
notes to our financial statements appearing elsewhere in this Quarterly Report
on Form 10-Q, we believe the following accounting policies to be most critical
to the judgments and estimates used in the preparation of our financial
statements.

Use of Estimates



The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of expenses during
the reporting period. Significant estimates and assumptions reflected in these
financial statements include, but are not limited to, net product revenues,

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the accrual for research and development expenses, the accrual of milestone and
royalty payments, and the valuation of stock options. Estimates are periodically
reviewed in light of changes in circumstances, facts and experience. Changes in
estimates are recorded in the period in which they occur. Actual results could
differ from those estimates.

The full extent to which the COVID-19 pandemic will directly or indirectly
impact our business, results of operations and financial condition, including
expenses, manufacturing, clinical trials, research and development costs and
employee-related amounts, will depend on future developments that are highly
uncertain, including as a result of new information that may emerge concerning
COVID-19 and the actions taken to contain it or treat COVID-19, as well as the
economic impact on local, regional, national and international markets.

Revenue Recognition

Product revenue



We recognize revenue from sales of DANYELZA at a point in time when our customer
is deemed to have obtained control of the product, which generally occurs upon
receipt at the end-user hospital.

Substantially all of the Company's product sales were in the United States. The
Company had product sales to certain customers that accounted for more than 10%
of total gross product revenue for the three months ended March 31, 2022 and
March 31, 2021. Mckesson, AmerisourceBergen, and Cardinal Health accounted for
60%, 25%, and 11%, respectively, of our gross product revenue for the three
months ended March 31, 2022. Mckesson and Cardinal Health accounted for 80% and
16%, respectively, of our gross product revenue for the three months ended March
31, 2021.

The amount of revenue we recognize from sales of DANYELZA varies due to rebates,
chargebacks and discounts provided under governmental and other programs,
distribution related fees and other sales-related deductions. In order to
determine those deductions, we estimate, utilizing the expected value method,
the amount of revenue that we will ultimately be entitled to. Such estimate are
based upon contracts with customers and government agencies, statutorily-defined
discounts applicable to government-funded programs, estimated payor mix, and
other relevant factors. Calculating these amounts involves estimates and
judgments.

Research and Development Expenses


Research and development costs are charged to operations when incurred and are
included in operating expenses. Research and development costs consist
principally of compensation cost for our employees and consultants that perform
our research activities, the costs to obtain and maintain our licenses, the
payments to third parties for CMOs and CROs and additional product development,
and consumables and other materials used in research and development. We record
accruals for estimated ongoing research costs. When evaluating the adequacy of
accrued liabilities, we analyze progress of the studies or clinical trials,
including the phase or completion of events, invoices received and contracted
costs. Actual results could differ from our estimates. We are obligated to make
certain milestone and royalty payments in accordance with the contractual terms
of the MSK License, CD33 License, MabVax Sublicense, and SADA License Agreement
based upon the resolution of certain contingencies. Certain of these milestone
payments are due and payable with the passage of time whether or not the
milestones have actually been met. We record the milestone and royalty payment
when the achievement of the milestone (including the passage of time) or payment
of the milestone or royalty is probable and the amount of the payment is
reasonably estimable.

Fair Value Measurements



Certain assets and liabilities are carried at fair value under GAAP. Fair value
is defined as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants

at
the

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measurement date (i.e. an exit price). The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows:

• Level 1 - Unadjusted quoted prices for identical assets or liabilities in active markets;



• Level 2 - Inputs other than quoted prices in active markets for identical
assets and liabilities that are observable either directly or indirectly for
substantially the full term of the asset or liability; and

• Level 3 - Unobservable inputs for the asset or liability, which include management's own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk.

The Company's cash equivalents are carried at fair value, determined according to the fair value hierarchy described above.

Stock-Based Compensation



We measure stock options granted to employees, directors, and consultants based
on the fair value on the date of the grant and recognize compensation expense of
those awards, over the requisite service period, which is the vesting period of
the respective award for employees and directors. Forfeitures are accounted for
as they occur. We issue stock options to employees and directors with only
service-based vesting conditions and record the expense for these awards using
the straight-line method over the requisite service period.

The fair value of each stock option grant is estimated on the date of grant
using the Black-Scholes option pricing model. Historically, we have been a
private company and lack company-specific historical and implied volatility
information for our shares. Therefore, we estimate our expected share price
volatility based on a combination of the historical volatility of a group of
publicly-traded peer companies and the historical volatility of the Y-mAbs share
price, and we expect to continue to do so until such time as we have adequate
historical data regarding the volatility of our own traded share price. The
expected term of our stock options has been determined utilizing the
"simplified" method for awards as we have limited historical data to support the
expected term assumption. The risk-free interest rate is determined by reference
to the U.S. Treasury yield curve in effect at the time of grant of the award for
time periods approximately equal to the expected term of the award. The expected
dividend yield is based on the fact that we have never paid cash dividends on
shares of our common stock and do not expect to pay any cash dividends in the
foreseeable future.

Fair Value of Stock Options

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The assumptions used to determine the fair value of the granted stock options were as follows:

Risk-free interest rate: The risk-free interest rate assumption is based on the

? U.S. Treasury instruments whose terms were consistent with the expected option

term of our stock options.

Expected Dividend Yield: The expected dividend yield assumption is based on the

? fact that we have never paid cash dividends and have no present intention to

pay cash dividends. Consequently, we used an expected dividend of zero.

Expected Volatility: The expected stock price volatility is estimated based on

? a combination of the historical volatility of a group of publicly traded peer

companies and the historical volatility of the Y-mAbs share price. Our industry

peers consist of several public companies in the biopharmaceutical industry.

Expected Term: We determine the average expected life of stock options based on

? the simplified method in accordance with SEC Staff Accounting Bulletin Nos. 107


   and 110. We expect to continue to use the


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simplified method until we have sufficient historical exercise data to provide a

reasonable basis upon which to estimate the expected term.

Results of Operations

Comparison of the Three Months Ended March 31, 2022 and 2021

The following table summarizes our results of operations for the three months ended March 31, 2022 and 2021:



                                                      Three Months Ended
                                                          March 31,                       Change
                                                      2022          2021           Amount      Percentage

                                                               (in thousands)
Revenue:
Product revenue, net                               $   10,486    $    5,383   $     5,103   %          95
Total revenues                                         10,486         5,383         5,103              95
Operating costs and expenses:
Cost of goods sold                                      1,831            93         1,738           1,869
Research and development                               22,912        21,579         1,333               6
Selling, general, and administrative                   13,438        11,970         1,468              12
Total operating costs and expenses                     38,181        33,642         4,539              13
Loss from operations                                 (27,695)      (28,259)           564             (2)
Other income / (loss), net
Gain from sale of priority review voucher                   -        62,010

     (62,010)           (100)
Interest and other loss                                 (373)         (338)          (35)              10
Net income / (loss)                                $ (28,068)    $   33,413   $  (61,481)           (184)


Revenue

We launched DANYELZA in February 2021 and recorded $10.5 million and $5.4 million in net revenues for the three months ended March 31, 2022 and 2021, respectively.

Cost Of Goods Sold


We began capitalizing inventory costs once DANYELZA was approved by the FDA in
November 2020. Cost of Goods Sold was $1,831,000 and $93,000 for the three
months ended March 31, 2022 and 2021, respectively. Our cost of goods sold
includes amounts related to materials, third-party contract manufacturing,
third-party packaging services, freight, labor costs for personnel involved in
the manufacturing process, third party royalties for approved products, and
indirect overhead costs. In periods prior to receiving FDA approval for
DANYELZA, we recognized inventory and related manufacturing costs of DANYELZA as
research and development expenses. This resulted in inventory being sold during
the quater ended March 31, 2021 for which a portion of the costs had been
previously expensed prior to FDA approval. All inventory sold in the quater
ended March 31, 2022, had been produced after we had received FDA approval for
DANYELZA.

In addition, in 2016, we expensed $1.2 million of minimum royalties related to
DANYELZA prior to commercial launch which were fully creditable against earned
royalties in future periods. As a result, there was no royalty expense recorded
for the three months ended March 31, 2021. If we had not sold previously
expensed inventory and if we had not utilized the minimum royalty credit, our
cost of goods sold would have been approximately $561,000 for the three months
ended March 31, 2021.

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Research and Development Expenses



We do not record our research and development expenses on a program-by-program
or on a product-by-product basis as they primarily relate to personnel,
research, manufacturing, license fees, and consumable costs, which are
simultaneously deployed across multiple projects under development. These costs
are included in the table below.

                                      Three Months Ended
                                          March 31,                    Change
                                       2022         2021       Amount      Percentage
Outsourced manufacturing            $    7,692    $  8,858    $ (1,166)    %      (13)
Clinical trials                          2,768       1,615        1,153             71

Outsourced research and supplies 2,681 3,089 (408)

(13)


Personnel costs                          5,136       4,300          836    

19


Professional and consulting fees           810         584          226    

        39
Stock-based compensation                 1,848       1,755           93              5
Other                                    1,977       1,378          599             43
                                    $   22,912    $ 21,579    $   1,333    %         6


Research and development expenses were $22.9 million for the three months ended
March 31, 2022, as compared to $21.6 million for the three months ended March
31, 2021. The $1.3 million increase was primarily due to a $0.9 million increase
in employee-related costs, including salary, benefits and non-cash stock-based
compensation for personnel related to our research activities due to our
expanding workforce, a $1.2 million increase in clinical trials mainly related
to omburtamab, and a $0.6 million increase in other items which mainly included
increased expenses for IT consulting services and rent expenses. The increase
was partially offset by a $1.2 million reduction of oursourced manufacturing
costs mainly due to reduced CMC development costs for omburtamab, and a $0.4
million decrease in outsourced research and supplies primarily driven from the
reduction in outsourced clinical studies.

Selling, General, and Administrative Expenses



Selling, general, and administrative expenses were $13.4 million for the three
months ended March 31, 2022, as compared to $12.0 million for the three months
ended March 31, 2021. The $1.4 million increase in selling, general, and
administrative expenses was primarily attributable to a $0.7 million increase in
employee related costs, including salary, benefits and non-cash stock-based
compensation for personnel related to our business activities mainly due to the
growth of commercialization team, $0.2 million increase in commercial expense,
and a $0.2 million increase in travel expense, primarily related to the
increased activity of our commercial team to support DANYELZA sales growth.

Other Income / (Loss), Net



On December 28, 2020, the Company announced that it entered into a definitive
agreement to sell its DANYELZA Priority Review Voucher, or PRV to United
Therapeutics Corporation for $105.0 million. The PRV was granted in conjunction
with the approval by the FDA of DANYELZA for the treatment of
refractory/relapsed high-risk NB. Under the terms of the MSK License, Y-mAbs
retained 60% of the net proceeds received from the sale of the PRV, and the
remaining 40% was paid to MSK. The transaction closed on January 21, 2021 and
the Company recognized a net gain of $62.0 million during the quarter ended
March 31, 2021 related to the sale of the PRV. There were no PRV sales during
the quarter ended March 31, 2022.

Interest and other loss for the three months ended March 31, 2022 was $373,000
as compared to $338,000 for the three months ended March 31, 2021. Our interest
and other loss increased by $35,000 due to an increase in foreign currency

exchange losses.

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Liquidity and Capital Resources

Overview



Except for the quarter ended March 31, 2021, we have incurred significant net
operating losses since inception, and expect to continue to incur net operating
losses and significant expenses for the foreseeable future. Our net losses may
fluctuate significantly from quarter to quarter and year to year. We currently
have one approved product, DANYELZA, which launched in the first quarter of
2021. We have financed our operations through March 31, 2022 primarily through
gross proceeds from the sale of our common stock of $378.8 million in the years
2015 through 2019, and an additional $115.0 million from the sale of our common
stock in 2021, as well as additional funding from the proceeds from the sales of
DANYELZA and from proceeds from the sale of the DANYELZA PRV. As of March 31,
2022 and December 31, 2021, we had cash and cash equivalents of $156.7 million
and $181.6 million, respectively. We might need additional capital to continue
funding our operations, which we may obtain from additional equity or debt
financings, collaborations, licensing arrangements, or other sources.

In conjunction with the approval by the FDA of DANYELZA in November 2020 we
received a PRV, which we subsequently sold to United Therapeutics Corporation in
a transaction that closed in January 2021 based on an agreed valuation of $105.0
million. We were obligated to pay 40% of the net proceeds to MSK. We intend to
use the remaining proceeds to fund further research and development and other
operational programs.

For an analysis of the type of contractual obligation and the relevant time
periods for the related cash requirements of such obligations which may have a
material impact on our liquidity and capital resources see the section herein
entitled "Contractual Obligations and Commitments".

Cash Flows

The following table provides information regarding our cash flows for the three months ended March 31, 2022 and 2021:



                                            Three Months Ended March 31,                  Change
                                              2022                2021            Amount       Percentage

                                                   (in thousands)                     (in thousands)
Net cash used in operating activities    $      (24,925)     $      (31,861)    $     6,936   %       (22)
Net cash provided by investing
activities                                             -              61,610       (61,610)          (100)
Net cash provided by financing
activities                                            32             107,835      (107,803)          (100)
Effect of exchange rates on cash and
cash equivalents                                      53                  53              -              -
Net increase / (decrease) in cash and
cash equivalents                         $      (24,840)     $       

137,637 $ (162,477) % (118)

Net Cash Used in Operating Activities

The use of cash in all periods resulted primarily from our net losses adjusted for non-cash charges and changes in components of working capital.



Net cash used in operating activities was $24.9 million for the three months
ended March 31, 2022, as compared to net cash used in operating activities of
$31.9 million for the three months ended March 31, 2021. The $7.0 million
decrease in cash used in operating activities was primarily due to decreased
cash used for working capital of $6.1 million during the three months ended
March 31, 2022 compared to the corresponding period in 2021. This $6.1 million
decreased cash used for working capital is driven by higher accounts receivable
collection of $4.4 million for the three months ended March 31, 2022, as
compared to March 31, 2021. Additionally, there was a $0.9 million decreased use
of cash to fund the net loss in the three months ended March 31, 2022 of $22.5
million, net of non-cash adjustments, compared to the net loss in the three
months ended March 31, 2021 of $23.3 million, net of non-cash adjustments.

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Net Cash Provided By Investing Activities



We did not generate or use cash for investing activities during the three months
ended March 31, 2022. Net cash provided by investing activities was $61.6
million for the three months ended March 31, 2021. The net change of $61.6
million was primarily the result of $62.0 million of our share of net proceeds
received from the sale of our PRV to United Therapeutics Corporation, please
refer to the section entitled "Other Income / (Loss), Net".

Net Cash Provided by Financing Activities


Net cash provided by financing activities was $32.0 thousand for the three
months ended March 31, 2022, which resulted from proceeds from exercised stock
options. Net cash provided by financing activities was $107.8 million for the
three months ended March 31, 2021, which was driven by the net proceeds of
$107.7 million received from our public offering in February 2021 and proceeds
from exercised stock options of $110.0 thousand for the three months ended
March
31, 2021.

Funding Requirements

We expect our expenses to increase as we continue to expand our
commercialization efforts for DANYELZA, continue the development of omburtamab,
and advance our BLA for omburtamab. In addition, we plan to advance the
development of other pipeline programs, initiate new research and pre-clinical
development efforts and seek marketing approval for any additional product
candidates that we successfully develop. If we obtain approval for any
additional product candidates, we expect to incur commercialization expenses,
which may be significant, related to establishing sales, marketing,
manufacturing capabilities, distribution and other commercial infrastructure to
commercialize such products. Accordingly, we might need to obtain substantial
additional funding in connection with our continuing operations. If we are
unable to raise capital when needed or on attractive terms, we would be forced
to delay, reduce or eliminate our research and development programs and/or
future commercialization efforts.

In conjunction with the approval by the FDA of DANYELZA in November 2020 we
received a PRV, which we subsequently sold to United Therapeutics Corporation
for $105.0 million. We were obligated to pay 40% of the net proceeds to MSK. We
intend to use the remaining net proceeds of $62.0 million to fund further
research and development and other operational programs.

On February 22, 2021, we completed a public offering of our common stock
pursuant to which we issued and sold 2,804,878 shares of our common stock at a
price to the public of $41.00 per share which included the exercise in full of
the underwriters' option to purchase additional shares. We received aggregate
gross proceeds from our third public offering of $115.0 million, with aggregate
net proceeds of approximately $107.7 million after deducting underwriting
discounts and commissions and offering expenses.

We believe our current cash and cash equivalents of $156.7 million is sufficient
to fund our operation through mid-2024, and have based our projections of
operating capital requirements on assumptions that may prove to be incorrect and
we may use all of our available capital resources sooner than we expect. Because
of the numerous risks and uncertainties associated with the development and
commercialization of naxitamab and omburtamab, and the research, development and
commercialization of other potential product candidates, we are unable to
estimate the exact amount of our operating capital requirements. Our future
capital requirements will depend on many factors, including:

the scope, progress, timing, costs and results of clinical trials for

? developing our lead product candidates, naxitamab and omburtamab, and

conducting pre-clinical studies and clinical trials for our other product

candidates;

? research and pre-clinical development efforts for any future product candidates

that we may develop;

? our ability to enter into and the terms and timing of any collaborations,

licensing agreements, distribution agreements or other arrangements;




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? the achievement of milestones or occurrence of other developments that trigger

payments under any collaboration or other agreements;

? the number of future product candidates that we pursue and their development

requirements;

? the outcome, timing and costs of seeking regulatory approvals;

the costs of commercialization activities for any of our product candidates

that receive marketing approval to the extent such costs are not the

? responsibility of any future collaborators, including the costs and timing of

establishing product sales, marketing, distribution and manufacturing

capabilities;

? the amount and timing of future revenue, if any, received from commercial sales

of our current and future product candidates upon any marketing approvals;

? proceeds received, if any, from monetization of any future PRVs;

? our headcount growth and associated costs as we expand our research and

development and establish a commercial infrastructure;

the costs of preparing, filing and prosecuting patent applications, maintaining

? and protecting our intellectual property rights and defending against

intellectual property related claims; and

? the costs of operating as a public company.




Identifying potential product candidates and conducting pre-clinical studies and
clinical trials is a time-consuming, expensive and uncertain process that takes
many years to complete, and we may never generate the necessary data or results
required to obtain marketing approval and achieve product sales. In addition,
our product candidates, if approved, may not achieve commercial success.
Accordingly, we will need to continue to rely on additional financing to achieve
our business objectives. Adequate additional financing may not be available to
us on acceptable terms, or at all.

Until such time, if ever, as we can generate substantial product revenues, we
expect to finance our cash needs through a combination of equity offerings, debt
financings, collaborations, strategic alliances and licensing arrangements. To
the extent that we raise additional capital through the sale of equity or
convertible debt securities, existing ownership interest in our company may be
materially diluted, and the terms of these securities may include liquidation or
other preferences that adversely affect common stockholders' rights. Debt
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 funds through additional collaborations, strategic alliances or
licensing arrangements with third parties, we may have to relinquish valuable
rights to our technologies, future revenue streams, research programs or product
candidates or to grant licenses on terms that may not be favorable to us. If we
are unable to raise additional funds through equity or debt financings when
needed, we may be required to delay, limit, reduce or terminate our product
development or future commercialization efforts or grant rights to develop and
market product candidates that we would otherwise prefer to develop and market
ourselves.

Off-Balance Sheet Arrangements


We did not have during the periods presented, and we do not currently have any
off-balance sheet arrangements, as defined under the applicable regulations

of
the SEC.

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Contractual Obligations and Commitments



A summary of the financial balances related to our material outstanding
contractual commitments and the maximum financial impact related to milestones
under those contractual obligations are included in NOTE 9-LICENSE AGREEMENTS
AND COMMITMENTS of our enclosed financial statements.

We enter into contracts in the normal course of business with CROs, CMOs,
clinical sites and other third parties for clinical trials, pre clinical
research studies and testing, professional consultants for expert advice and
other vendors for clinical supply, manufacturing and other services. These
contracts are not considered contractual obligations, as they provide for
termination upon prior notice, and, therefore, are cancelable contracts and do
not include any minimum purchase commitments. Payments due upon cancellation
consist only of payments for services provided or expenses incurred, including
non cancellable obligations of our service providers, up to the date of
cancellation.

As further described below, under various licensing and related agreements with
third parties, we have agreed to make milestone and royalty payments to third
parties.

We have entered into three license agreements and certain other agreements with
MSK. The license agreements are further described below as the MSK License, the
CD33 License, and the SADA License. Additionally, through the SAAA we have
established a direct license with MSK relating to the GD2-GD3 Vaccine.

Under the MSK License and the CD33 License we are obligated to (i) make certain
payments to MSK, which become due based upon the achievement of the related
milestone activities or the passage of time in the event such milestone
activities are not achieved, as well as certain sales-related milestones,
(ii) pay mid to high single-digit royalties to MSK, on a product-by-product and
country-by-country basis, based on net sales of products licensed under the
applicable agreement and (iii) pay to MSK a percentage of any sublicense fees
received by us. Under the CD33 License, we are obligated to pay annual minimum
royalties of $40,000 over the royalty term beginning in 2027, increasing to
$60,000 once a patent within the licensed rights is issued. These amounts are
non-refundable but are creditable against royalty payments otherwise due under
the respective agreements. We are also obligated to pay MSK certain clinical,
regulatory and sales-based milestone payments under the MSK License and the CD33
License. Certain of the clinical and regulatory milestone payments become due at
the earlier of completion of the related milestone activity or the date
indicated in the MSK License. Total clinical, regulatory and sales based
milestones potentially due under the MSK License are $2,450,000, $9,000,000 and
$20,000,000, respectively. In addition, under the CD33 License, we are obligated
to make potential payments of $550,000, $500,000 and $7,500,000 for clinical,
regulatory and sales based milestones, respectively. We record milestones in the
period in which the contingent liability is probable and the amount is
reasonably estimable.

On April 15, 2020, we entered the SADA License Agreement, which requires us to
pay to MSK and MIT mid to high single-digit royalties based on annual net sales
of licensed products or the performance of licensed services by us and our
affiliates and sublicensees. We are obligated to pay annual minimum royalties of
$40,000, increasing to $60,000 once a patent has been issued, over the royalty
term, commencing on the tenth anniversary of the license agreement. These
amounts are non refundable but are creditable against royalty payments otherwise
due under the SADA License Agreement. Under the SADA License Agreement, we are
also obligated to pay MSK and MIT certain clinical, regulatory and sales based
milestone payments. Certain of the clinical and regulatory milestone payments
become due at the earlier of completion of the related milestone activity or the
date indicated in the SADA License Agreement. Total clinical and regulatory
milestones potentially due under the SADA License Agreement are $4,730,000 and
$18,125,000, respectively. There are also sales based milestones, totaling
$23,750,000, that become due should the Company achieve certain amounts of sales
of licensed products. In addition, for each SADA construct generated by MSK and
sold for the Company by a sublicensee, the Company may pay sales milestones in
the total amount of $60,000,000 based on the achievement of various levels of
cumulative net sales by the sublicensee. Further, under the SADA License
Agreement, we have committed to funding scientific research at MSK for up to
$1,500,000 over the next three years, which we will expense as incurred.

On December 2, 2019, we entered into the Settlement and Assumption and Assignment, or SAAA, of MSK License and Y-mAbs Sublicense Agreement, or the MabVax/Y-mAbs Sublicense, between us and MabVax dated June



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27, 2018, with MabVax Therapeutics Holdings, Inc. and MabVax Therapeutics, Inc.,
or together, MabVax, and MSK, which became effective on December 13, 2019.
Pursuant to the MabVax/Y-mAbs Sublicense, MabVax sublicensed to us certain
patent rights and know-how for development and commercialization of products for
the prevention or treatment of NB by means of administering a bi-valent
ganglioside vaccine granted to MabVax, pursuant to an exclusive license
agreement dated June 20, 2008 between MabVax and MSK, as amended, or the
MabVax/MSK License Agreement. We remain responsible for any potential downstream
payment obligations by MabVax to MSK related to the GD2-GD3 Vaccine that were
specified in the MabVax/MSK License Agreement. This includes the obligation to
pay development milestones totaling $1,400,000, annual minimum royalties of
$10,000, increasing to $25,000 from approval of the first NDA/BLA for a licensed
product, over the royalty term, commencing on the second anniversary of the
MabVax/Y-mAbs Sublicense and mid single-digit royalty payments to MSK on sales.
Minimum royalties are non-refundable but creditable against royalty payments
otherwise due from us to MSK pursuant to the MabVax/MSK License Agreement. In
addition, if we obtain FDA approval for the GD2-GD3 Vaccine, then we are
obligated to file with the FDA for a PRV. The SAAA stipulates that, if we are
granted a PRV from the FDA covering a licensed product under the MabVax/Y-mAbs
Sublicense and the PRV is subsequently sold, we will pay directly to MabVax and
to MSK, respectively, a percentage of the proceeds from the sale thereof in
order that MabVax and MSK each receive the same amount therefrom as envisaged
under the MabVax/MSK License Agreement. The MabVax/MSK License Agreement will
expire with effect for us, on a country by country basis, on the later of the
expiration of (i) 10 years from the first commercial sale of the licensed
product in such country or (ii) the last to expire valid claim covering such
licensed product rights at the time of and in the country of sale.

Research and development is inherently uncertain and, should such research and
development fail, the MSK License, the CD33 License, and SADA License are
cancelable at our option. We have also considered the development risk and each
party's termination rights under the three license agreements when considering
whether any contingent payments, certain of which also contain time based
payment requirements, were probable. In addition, to the extent we enter into
sublicense arrangements, we are obligated to pay to MSK a percentage of certain
payments that we receive from sublicensees of the rights licensed to us by MSK,
which percentage will be based upon the achievement of certain clinical
milestones. To date, we have not entered into any sublicenses related to the
CD33 License, the SADA License or the MabVax License. We have entered
sublicenses with SciClone and Takeda in 2020 and Adium in 2021 as allowed under
the MSK License. Our failure to meet certain conditions under such arrangements
could cause the related license to such licensed product to be canceled and
could result in termination of the entire respective arrangement with MSK. In
addition, we may terminate the MSK License, the CD33 License, or the SADA
License with prior written notice to MSK.

Recent Accounting Pronouncements

Refer to NOTE 3-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES in the accompanying notes to the consolidated financial statements for a discussion of recent accounting pronouncements.

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