TIL 10-K & 10-Q changes, risk factors and insider trading
Instil Bio, Inc. · Nasdaq · Biological Products, (No Diagnostic Substances) · CIK 1789769 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “If Complex Therapeutics LLC is unable to meet the conditions to exercise its option to extend the maturity of its term loan and/or is unable to refinance its term loan or raise sufficient capital to repay its term loan at maturity, or otherwise fails to comply with the terms of the loan agreement, including financial covenants, it could result in an event of default.”
New heading “We currently have no product candidate in active development. We have, and we may in the future, engage in strategic transactions to license or otherwise acquire new product candidates or technologies, and we may not be successful in developing or commercializing any such product candidates.”
New heading “If our information technology systems or those of the third parties with whom we work or our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences.”
New heading “Non-U.S. holders of our common stock may be subject to U.S. federal income tax if we are considered a United States real property holding corporation.”
Removed heading “Risks Associated with Our Business”
Removed heading “We may derive results and data for AXN-2510/IMM2510 and AXN-27M/IMM27M from clinical trials led by ImmuneOnco in China; our role in any such trials and our access to the clinical results and data, will be limited and there is no assurance that the clinical data from any such trials will be accepted or considered by the FDA, or other comparable regulatory authorities.”
Removed heading “We may seek Fast Track designation for our product candidates, and we may be unsuccessful. Even if received, Fast Track designation may not actually lead to a faster review or approval process and does not increase the likelihood that our product candidates will receive marketing approval.”
Removed heading “We may seek orphan drug designation for some of our product candidates, and we may be unsuccessful, or may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity, for product candidates for which we obtain orphan drug designation.”
Removed heading “Breakthrough therapy designation by the FDA for any product candidate may not lead to a faster development or regulatory review or approval process, and it does not increase the likelihood that the product candidate will receive marketing approval.”
Removed heading “We plan to work with our collaborator, ImmuneOnco, to conduct clinical trials for AXN-2510/IMM2510 and AXN-27M/IMM27M outside the United States, including China, and the FDA and similar foreign regulatory authorities may not accept data from such trials conducted in locations outside of their jurisdiction.”
Removed heading “We have, and we may in the future, engage in strategic transactions to acquire or in-license additional new product candidates or technologies, and we may not be successful in developing and commercializing any product candidates we acquire or in-license, including AXN-2510/IMM2510.”
Removed heading “The market opportunities for any current or future product candidate we develop, if approved, may be limited to those patients who are ineligible for established therapies or for whom prior therapies have failed, and may be small.”
Removed heading “We may develop AXN-2510/IMM2510, AXN-27M/IMM27M and future product candidates for use in combination with other therapies or third-party product candidates, which exposes us to additional regulatory risks.”
Removed heading “Any product candidates for which we intend to seek approval as biologic products may face competition sooner than anticipated.”
Removed heading “Our business and operations would suffer in the event we, or the third parties with whom we work, suffer computer system failures, cyberattacks or a deficiency in our or such third parties’ cybersecurity.”
Removed heading “We depend on our relationship with, and the comprehensiveness of the intellectual property licensed from, ImmuneOnco, and termination of the IO Collaboration Agreement, or issues related to intellectual property could have a material adverse effect on our business.”
Removed heading “Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.”
Removed heading “Any trademarks we have obtained or may obtain may be infringed or otherwise violated, or successfully challenged, resulting in harm to our business.”
Removed heading “Our collaboration with ImmuneOnco subjects us to risks and uncertainties relating to challenged and changing relations between the United States and China.”
Removed heading “U.S.-China trade relations may adversely impact our supply chain operations and business.”
Largest changes
“If our information technology systems or those of the third parties with whom we work or our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences.”see in full comparison
“•We are subject to a variety of stringent and evolving U.S. and foreign laws, regulations, rules, contractual obligations, policies and other obligations related to data privacy and data security, and our actual or perceived failure to comply with them could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits and other adverse business consequences.”see in full comparison
“If Complex Therapeutics LLC is unable to meet the conditions to exercise its option to extend the maturity of its term loan and/or is unable to refinance its term loan or raise sufficient capital to repay its term loan at maturity, or otherwise fails to comply with the terms of the loan agreement, including financial covenants, it could result in an event of default.”see in full comparison
“Obligations related to data privacy and security are quickly changing, becoming increasingly stringent and creating regulatory uncertainty. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions. Preparing for and complying with these obligations requires us to devote significant resources. These obligations may necessitate changes to our services, information technologies, systems and practices and to those of any third parties that process personal data on our behalf. …”see in full comparison
“Obligations related to data privacy and security are quickly changing, becoming increasingly stringent and creating regulatory uncertainty. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions. Preparing for and complying with these obligations requires us to devote significant resources. These obligations may necessitate changes to our services, information technologies, systems and practices and to those of any third parties that process personal data on our behalf. …”see in full comparison
“Applicable data privacy and security obligations may require us, or we may voluntarily choose, to notify relevant stakeholders (including affected individuals, customers, regulators, and investors) of security incidents, or to take other actions, such as providing credit monitoring and identity theft protection services. Such disclosures and related actions can be costly, and the disclosure or the failure to comply with such applicable requirements could lead to adverse consequences. …”see in full comparison
Full comparison: every changed paragraph (300)
Risks Associated with Our Business
Our business is subject to a number of risks of which you should be aware before making a decision to invest in our common stock. These risks are more fully described in this “Risk Factors” section, including the following:
•We have incurred significant losses since our inception. We expect to incur losses for the foreseeable future and may never achieve or maintain profitability.
•We have a limited operating history and no history of completing any clinical trial or commercializing any product, which may make it difficult for an investor to evaluate the success of our business to date and to assess our future viability.
•We will need substantial additional funding to meet our financial obligations and to pursue our business objectives, including the clinical development of AXN-2510/IMM2510. If we are unable to raise capital when needed, we could be forced to delay further development of our product candidates, including AXN-2510/IMM2510, or curtail our planned operations and the pursuit of our growth strategy.
•Our lead product candidate, AXN-2510/IMM2510, as well as our other product candidates, are currently in early-stage clinical development. If we are unable to successfully develop, receive regulatory approval for and commercialize AXN-2510/IMM2510, or successfully develop any other product candidates, or experience significant delays in doing so, our business will be harmed.
•The regulatory approval processes of the U.S. Food and Drug Administration, or FDA, Medicines and Healthcare Products Regulatory Agency, or MHRA, European Medicines Agency, or EMA, and comparable foreign authorities are lengthy, time consuming and inherently unpredictable. If we are not able to obtain required regulatory approval for our product candidates, our business will be substantially harmed.
•Success in preclinical studies or earlier clinical trials may not be indicative of results in future clinical trials. Our product candidates may not have favorable results in later clinical trials, if any, or receive regulatory approval.
•Biologics are complex and difficult to manufacture. We intend to rely on ImmuneOnco Biopharmaceuticals (Shanghai) Inc., or ImmuneOnco, in China to manufacture clinical supplies of AXN-2510/IMM2510, and to produce preclinical and clinical supply of other product candidates and we intend to rely on third parties to produce commercial supplies of any approved product. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or any approved products or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.
•We have, and we may in the future, engage in strategic transactions to acquire or in-license additional new product candidates or technologies, and we may not be successful in developing and commercializing any product candidates we acquire or in-license, including AXN-2510/IMM2510. The licensing or acquisition of third-party intellectual property rights is competitive, and if we are unable to identify suitable candidates for such transactions on a timely basis or on commercially reasonable terms, it would negatively impact our ability to develop and commercialize product candidates and present significant distractions to our management. The treatable populations for our product candidates may be smaller than we or third parties currently project, which may affect the addressable markets for our product candidates.
•We face significant competition from other biotechnology and pharmaceutical companies, and from non-profit institutions, which may result in others discovering, developing or commercializing products before or more successfully than we do.
•If we or our licensors are unable to obtain and maintain sufficient patent protection for our product candidates, or if the scope of the patent protection is not sufficiently broad, third parties, including our competitors, could develop and commercialize products similar or identical to ours, and our ability to commercialize our product candidates may be adversely affected.
•Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain.
•We are subject to a variety of stringent and evolving U.S. and foreign laws, regulations, rules, contractual obligations, policies and other obligations related to data privacy and data security, and our actual or perceived failure to comply with them could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits and other adverse business consequences.
We have incurred significant losses since our inception.inception and have identified an indicator of substantial doubt about our ability to continue as a going concern. We expect to incur losses for the foreseeable future and may never achieve or maintain profitability.
Since our inception, we have incurred significant net losses, and we expect to continue to incur significant expenses and operating losses for the foreseeable future. Our net losses were $74.1$71.4 million and $156.1$74.1 million for the years ended December 31, 20242025 and 2023,2024, respectively. As of December 31, 2024,2025, we had an accumulated deficit of $655.1$726.5 million. We have financed our operations with $719.0 million in net proceedsfunds raised in our initial public offering andoffering, private placements of convertible preferred stockstock, rental income, and offerings under our at-the-market offering program to date. We have no products approved for commercialization and have never generated any revenue from product sales. In connection with the preparation of our consolidated financial statements accompanying this Annual Report on Form 10-K, we identified an indicator of substantial doubt about our ability to continue as a going concern.
We expect to continue to incur significant expenses and operating losses over the next several years. We expect that it could be many years, if ever, before we have a commercialized product. Our net losses may fluctuate significantly from quarter to quarter and year to year. In addition to incurring legal, accounting and other expenses in operating as a public company and costs related to shutting down Axion Bio’s clinical trial of AXN-2510, we anticipate that our expenses will continue to be significant as we license or otherwise acquire new product candidates, as well as potentially initiate and complete clinical trials of new product candidates, seek regulatory approval for any product candidates that successfully complete clinical trials; scale up our clinical and regulatory capabilities; rely on third parties to manufacture current good manufacturing practices, or cGMP, material for clinical trials or potential commercial sales; establish a commercialization infrastructure and develop internal and external manufacturing and distribution capabilities to commercialize any product candidates for which we may obtain regulatory approval; adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products; maintain, expand and protect the intellectual property portfolio for any product candidates we may seek to develop; hire clinical, manufacturing quality control, regulatory, manufacturing and scientific and administrative personnel; and add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts.
All of our product candidates are in preclinical development or early-stage clinical development. We expect to continue to incur significant expenses and operating losses over the next several years. We expect that it could be many years, if ever, before we have a commercialized product. Our net losses may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will continue to be significant as we:
•pursue clinical development of AXN-2510/IMM2510 and undertake other development efforts pursuant to the license and collaboration agreement with ImmuneOnco, or IO Collaboration Agreement;
•seek to potentially license-in or otherwise acquire additional new product candidates, as well as potentially initiate and complete clinical trials of new product candidates;
•seek regulatory approval for any product candidates that successfully complete clinical trials;
•scale up our clinical and regulatory capabilities;
•rely on collaborators or other third parties to manufacture current good manufacturing practices, or cGMP, material for clinical trials or potential commercial sales;
•establish a commercialization infrastructure and develop internal and external manufacturing and distribution capabilities to commercialize any product candidates for which we may obtain regulatory approval;
•adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products;
•maintain, expand and protect our intellectual property portfolio;
•hire clinical, manufacturing quality control, regulatory, manufacturing and scientific and administrative personnel;
•add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts; and
•incur legal, accounting and other expenses in operating as a public company.
To date, we have not generated any revenue from product sales. ToBefore we can become and remain profitable, we must succeed in licensing or otherwise acquiring one or more product candidates and developing and eventually commercializing such product candidates that generate significant revenue.candidates. This will require us to be successful in a range of challenging activities, including successfully identifying and acquiring or in-licensing one or more new product candidates, completing preclinical testing and clinical trials of ourany such product candidates, and obtaining regulatory approval, and manufacturing, marketing and selling any product candidates for which we may obtain regulatory approval, as well as discovering and developing additional product candidates.approval. We are only in the preliminary stages of mostidentifying ofpotential these activities and all of ournew product candidates areto inin-license early-stageor development.acquire or invest in. We may never succeed in any of these activities and, even if we do, may never generate any revenue or revenue that is significant enough to achieve profitability.
We are a biopharmaceuticalbiotechnology company with a limited operating history. Since we commenced operations in 2019, we have not yet demonstrated our ability to successfully complete any clinical trials, obtain regulatory approvals, manufacture a product on a commercial scale, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful commercialization. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing products.
We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives. For example, fromseveral lateyears 2022 through 2024,ago we implemented several strategic reprioritizations and restructurings of our preclinical and clinical development programs and elected to discontinue our TILtumor infiltrating lymphocyte development program and our related ITIL-168 and ITIL-306 clinical trials. More recently, in January 2026 we discontinued development of AXN-2510. As part of thesediscontinuing variousour restructurings,prior development programs, we have significantly reduced our workforce.workforce Wein mayrecent experienceyears. unforeseenIn delaysthe event we are successful in licensing or otheracquiring challengesone asor amore resultnew ofproduct thesecandidates actions,or whichwe could adversely impact our timelines and operations and, ultimately, our abilityseek to develop new product candidates forourselves, potential commercialization. Wewe will need to develop clinical, manufacturing, regulatory and commercial capabilities, and we may not be successful in doing so.
We will need substantial additional funding to meet our financial obligations and to pursue our business objectives, including the clinical development of AXN-2510/IMM2510.objectives. If we are unable to raise capital when needed, we could be forced to delay further development of our product candidates, including AXN-2510/IMM2510, or curtail our planned operations and the pursuit of our growth strategy.
Our operations have consumed substantial amounts of cash since inception. Developing our in-licensed product candidates, including AXN-2510/IMM2510, identifyingIdentifying and potentiallylicensing or otherwise acquiring or in-licensing additionalpromising new product candidates, conducting preclinical testing and clinicalsubsequently trials andsuccessfully developing manufacturingany operations for oursuch product candidates is a time-consuming, expensive and uncertain process that takes years to complete, and we may be unsuccessful or never generate the necessary data or results required to obtain regulatory approval and achieve product sales. We expect to continue to incur significant expenses and operating losses over the next several years as we conduct clinical trials of our product candidates, seek to potentially license-inin-license or otherwise acquire additional new product candidates, initiate future clinical trials of ourany such product candidates,candidates advanceensure our preclinical programs, build oura manufacturing capabilities,supply of any such product candidates and seek marketing approval for any product candidates that successfully complete clinical trials. In addition, ourany product candidates, if approved, may not achieve commercial success. Our revenue, if any, will be derived from sales of products that we do not expect to be commercially available for a number ofmany years, if at all. If we obtain marketing approval for any product candidates that we developseek orto otherwise acquire,develop, we expect to incur significant commercialization expenses related to product sales, marketing, distribution and manufacturing. We also expect to continue to incur significant expenses associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in order to continue our operations.
As of December 31, 2024,2025, we had cash, cash equivalents, restricted cash and marketable securities of $115.1$76.3 million, which consists of $8.8$6.6 million in cash and cash equivalents, $1.8$0.2 million of restricted cash and $104.5$69.5 million in marketable securities. We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital requirements beyond 2026.2027. This estimate is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we expect. Changes may occur beyond our control that would cause us to consume our available capital before that time, including changes in and progress of ourefforts to license or otherwise acquire of new product candidates, changes in development activities, acquisitions of additional product candidates, and changes in regulation. Our future capital requirements will depend on many factors, including:
•the scope, progress, cost and results of clinical development of AXN-2510/IMM2510 outside of China;
•the scope, progress, cost and results of our collaboration with ImmuneOnco in China;
•the extent to which we develop, in-licenselicense or otherwise acquire additionalnew product candidates and technologies forand ourthe productcost candidateof pipelineany such assets;
•our ability to complete a potential sale of ourthe Tarzana, California facility in an amount sufficient to repay the secured debt encumbering the facility;
•the costs, timing and outcome of regulatory review of ourany product candidates we may seek to develop;
•the costs and timing of future commercialization activities, including product manufacturing, marketing, sales, and distribution, for any of our product candidates for which we receive marketing approval;
•the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; and
We will require substantial additional capital to achieve our business objectives. Additional funds may not be available on a timely basis, on favorable terms, or at all, and such funds, if raised, may not be sufficient to enable us to continue to implement our long-term business strategy. Further, our ability to raise additional capital may be adversely impacted by worsening global economic conditions and the disruptions to and volatility in the credit and financial markets in the United States and worldwide, including those resulting from the ongoing armed conflicts in Ukraine, and in the Middle East,conflicts, U.S.-China trade and political tensions, heightened inflation and fluctuations in interest rates, tariffs, recent and potential future bank failures and supply chain disruptions, among other geopolitical and macroeconomic factors. If we are unable to raise sufficient additional capital, we could be forced to delay furtheracquiring developmentand ofdeveloping our technologies ornew product candidates or curtail our planned operations and the pursuit of our growth strategy.
We will need to raise substantial additional capital to support our operations and execute on our business strategy. Until such time, if ever, as we can generate substantial revenue, we may finance our cash needs through a combination of equity offerings, government or private party grants, debt financings or license and collaboration agreements. 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. For example, the agreements governing ourthe constructionterm loansloan containcontains certain affirmative and negative covenants, including restrictions on incurring additional debt, maintaining a specified minimum net worth and amount of liquid assets, which could limit our operations.
If Complex Therapeutics LLC is unable to meet the conditions to exercise its option to extend the maturity of its term loan and/or is unable to refinance its term loan or raise sufficient capital to repay its term loan at maturity, or otherwise fails to comply with the terms of the loan agreement, including financial covenants, it could result in an event of default.
The term loan agreement between Complex Therapeutics LLC, our wholly owned subsidiary, and Midland National Life Insurance Company related to the refinancing of our construction loans secured by our Tarzana facility and land, or the term loan, is scheduled to reach maturity on January 10, 2027. Complex Therapeutics LLC has the option to extend the maturity date of the term loan by up to one year by giving notice to the lender between 120 and 30 days before the scheduled maturity date, subject to satisfaction of specified conditions, including the absence of any potential default or event of default, compliance with certain financial covenants, and payment of an extension fee and related lender costs. Although we currently expect Complex Therapeutics LLC to be able to satisfy these conditions, there can be no assurance that it will be able to do so at the time the extension option becomes exercisable. Any failure of Complex Therapeutics LLC to satisfy such conditions, or to otherwise refinance the term loan or sell the Tarzana facility for sufficient proceeds to repay the term loan at maturity, or any failure to comply with the loan covenants, could subject it to default.
If Complex Therapeutics LLC is unable to obtain the extension or otherwise refinance the term loan, the full principal balance of the term loan would become due at its current maturity date in January 2027. Based on Complex Therapeutic LLC’s existing cash resources and projected lease income, we do not expect it to have sufficient cash on hand to repay the term loan in full at maturity without securing alternative financing or selling the Tarzana facility, neither of which may be available on acceptable terms or at all. If Complex Therapeutics LLC defaults under the loan agreement, the lender will be able to declare all obligations immediately due and payable and take control of its pledged assets, potentially requiring Complex Therapeutics LLC to renegotiate the loan agreement on terms less favorable or suffer worse outcomes. Although the Company has limited obligations related to the term loan and is not a primary obligor of the term loan, any declaration by the lender of an event of default could materially harm our prospects and cause the price of our common stock to decline. In addition, if, among other things, Complex Therapeutics LLC were to file a voluntary bankruptcy petition, an affiliate, officer, director or representative of us or Complex Therapeutics LLC were to file an involuntary bankruptcy petition against Complex Therapeutics LLC or acquiesce or join in an application for the appointment of a custodian, receiver, trustee or examiner for Complex Therapeutics LLC, or Complex Therapeutics LLC were to make an assignment for the benefit of creditors, we will be fully liable for Complex Therapeutics LLC’s obligations under the term loan, which could materially harm our financial position and prospects.
We have sufferedsuffered, and in the future could suffersuffer, additional losses due to impairment charges,charges includingrelated ifto weour areTarzana, unsuccessfulCalifornia facility, and, in completingthe event of a sale of our Tarzana, California manufacturingsuch facility, or, if we are successful, the assetsproceeds beingcould sold forbe less than our carrying value.value or the amount of the secured debt encumbering the facility.
To date, we have recorded significant impairment losses on long-lived assets related to our Tarzana, California facility. Most recently, during the year ended December 31, 2025, we recorded aggregate impairment losses on long-lived assets held for sale of $16.6 million related to the Tarzana facility. We may suffer additional impairment losses related to the Tarzana facility. In addition, in the event the Tarzana facility is sold, we may not recover its carrying value, and we may suffer additional impairment losses. Further, it is possible that we will not be able to sell the facility for an amount equal to or greater than the amount of secured debt encumbering the facility.
To date, we have recorded significant impairment losses on long-lived assets. Most recently, in the year ended December 31, 2024, we recorded aggregate impairment charges of approximately $7.5 million related to our restructuring plans.
We are evaluating opportunities for a potential sale of our Tarzana, California manufacturing site, which effective July 10, 2024 has been leased to AstraZeneca Pharmaceuticals LP; however, we can provide no assurances that we will successfully sell our Tarzana facility, that we will do so in accordance with our expected timeline or that we will recover its carrying value. The process of pursuing the plan to sell our Tarzana facility may be time consuming and disruptive to our business operations, and if we are unable to effectively manage the process, our businesses, financial condition, and results of operations could be adversely affected. Any potential transactions, and the related valuation, would be dependent upon various external factors beyond our control, including, among others, market conditions, industry trends, interest of third parties, and the availability of financing to potential buyer(s) on reasonable terms.
Risks Related to the Development of our Product Candidates
We currently have no product candidate in active development. We have, and we may in the future, engage in strategic transactions to license or otherwise acquire new product candidates or technologies, and we may not be successful in developing or commercializing any such product candidates.
Currently we do not have any product candidate in active development. We do not have any products that are approved for commercial sale, and we may never be able to license or acquire, develop or commercialize any marketable products. We are seeking to engage in strategic transactions to in-license or acquire and develop therapeutic assets for diseases with significant unmet need. We may not be able to identify, in-license or otherwise acquire, and subsequently develop, new product candidates. The licensing or acquisition of third-party intellectual property rights is a competitive area, and more established or more attractive companies may pursue strategies to license or acquire third-party intellectual property rights or assets that we may consider attractive for further development. These companies may have a competitive advantage over us due to their size, capital resources and/or greater clinical development, manufacturing and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us, and companies that do not perceive us to be a potential competitor may be reluctant to consider licensing to us given our lack of relevant meaningful experience. In addition, the process of identifying new product candidates and technologies that may be available to acquire or in-license and assessing their potential and value is difficult and time-consuming. Even if we identify suitable candidates to license or acquire, negotiating strategic transactions is time-consuming. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all. Even if we are successful in in our efforts to license or acquire product candidates, the potential product candidates that we identify may not be suitable for clinical development. For example, product candidates may be shown to have harmful side effects or other characteristics that indicate that they are unlikely to be successfully developed, much less receive marketing approval and achieve market acceptance. We may not be successful in developing or commercializing any product candidate we may license or otherwise acquire and seek to develop. If we do not successfully develop and commercialize product candidates, we will not be able to obtain product revenue in future periods, which likely would result in significant harm to our financial position and adversely affect our stock price.
Our lead product candidate, AXN-2510/IMM2510, as well as our other product candidates, are currently in early-stage clinical development. If we are unable to successfully develop, receive regulatory approval for and commercialize AXN-2510/IMM2510, or successfully develop any other product candidates,candidates for the indications we seek, or experience significant delays in doing so, our business will be harmed.
We currently have no product candidate in active development or any products approved for commercial sale, and all of our product candidates are currently in early-stage development, including our lead product candidate AXN-2510/IMM2510.sale. As ana organization,company, we have no prior experience completing any clinical trials; we have limited experience in preparing, submitting and prosecuting regulatory filings and we have not previously submitted aan biologics license application,NDA or BLA, for any product candidate. Each of our programs andAny product candidatescandidate that we are able to in-license or otherwise acquire will likely require additional preclinical and/or clinical development, regulatory approval, obtaining manufacturing supply, capacity and expertise, building a commercial organization or successfully outsourcing commercialization, substantial investment and significant marketing efforts before we generate any revenue from product sales. We do not have any products that are approved for commercial sale, and we may never be able to develop or commercialize marketable products.
Our ability to generate revenue from ourany product candidates,candidates which we may seek to develop, which we do not expect will occur for severalmany years, if ever, will depend heavily on the successful development, regulatory approval and eventual commercialization of ourone or more product candidates. The success of any product candidates that we develop or otherwise may acquireseek to develop will depend on several factors, including:
•identifying and successfully licensing or otherwise acquiring promising product candidates;
•effective INDs from the FDA or comparable foreign applications that allow commencement of our planned clinical trials or future clinical trials for oursuch product candidates;
•successful development of, or making arrangements with third-party manufacturers for, our commercialfor manufacturing processes for any of our product candidates that receive regulatory approval;
Management's Discussion & Analysis (MD&A)
New heading “Interest Income, Interest Expense, Other Rental Income and Other Income (Expense), Net”
Removed heading “Forward-Looking Statements”
Removed heading “Interest Income, Interest Expense, Other Rental Income and Other Expense, Net”
Removed heading “Contingent Consideration”
Largest changes
“The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We evaluated our ability to continue as a going concern for the twelve months following the issuance of the consolidated financial statements. …”see in full comparison
“During the year ended December 31, 2025, we determined there were indicators of impairment on the Tarzana facility listed as held for sale. As a result, we performed recoverability tests on the asset group and concluded the asset's fair value less cost to sell was less than the carrying amount. We estimate the fair value of our building through a combination of income-based and market-based approach. The income-based approach is dependent on specific assumptions such as market rental rates, capitalization rates and discount rates. …”see in full comparison
“During the year ended December 31, 2023, we determined there were indicators of impairment on our buildings and construction work-in-progress asset groups. As a result, we performed recoverability tests on these groups and concluded these assets’ undiscounted cash flows did not exceed their carrying values. We estimate the fair value of our buildings through a combination of an income-based approach and a market-based approach. The income-based approach is dependent on specific assumptions such as market rental rates, capitalization rates and discount rates. …”see in full comparison
“In August 2024, our wholly owned subsidiary, Axion Bio, Inc. (formerly SynBioTx, Inc.), or Axion Bio, in-licensed certain bispecific antibodies, including AXN-2510 (formerly SYN-2510)/IMM2510 and AXN-27M (formerly SYN-27M)/IMM27M, a monoclonal antibody targeting cytotoxic T-lymphocyte associated antigen 4, or CTLA-4, from ImmuneOnco Biopharmaceuticals (Shanghai) Inc., or ImmuneOnco. AXN-2510/IMM2510, the lead in-licensed product candidate, is a novel and differentiated PD-L1xVEGF bispecific antibody in development for the treatment of multiple solid tumor cancers. …”see in full comparison
Cash used in operating activities for the year ended December 31,see in full comparison20242025 was$55.7$36.6 million, which consisted of the net loss of$74.1$71.4 million and a$12.6$0.6 million net change to our net operating assets and liabilities, partially offset by$31.0$35.4 million in non-cash charges and other adjustments to reconcile net loss to net cash used in operating activities. The net change in our operating assets and liabilities was primarily due toaandecreaseincrease of$1.9$3.4 million in accruedexpenses,rent receivable, a decrease of $2.3 million in accruedrestructuring costs,expenses and other current liabilities, a decrease of $1.4 million in operating lease liabilities, and a decrease of$0.6$0.1 million inaccountslong-termpayable,liabilitiesandpartiallyanoffsetincreaseby a decrease of$0.2$6.1 million in prepaid expenses and other current assets,anda decrease of$8.6$0.4 million in other long-termassets.assets, and an increase of $0.1 million in accounts payable. The non-cash charges primarily consisted ofstock-based compensationimpairment of$17.3property, plant and equipment of $16.6 million, in-process research and development expenses of $10.0 million,impairmentstock-based compensation offixed assets of $4.3$8.7 million,impairmentnon-cashofinterestright-of-use assetsexpense of $0.8million andmillion, depreciation expense of$3.6$0.5 million, and non-cash lease expenses of $0.2 million; partially offset byaccretion on invested securities of $4.3 million anda decrease in the fair value of contingent consideration of$3.9$0.9 million, and a change in foreign exchange remeasurement of $0.5 million.
“The 2024 Loan has a term of two years with a one-year extension option. The extension option is subject to certain conditions being met, including: (a) no potential default or event of default, (b) payment of a 0.35% extension fee and the costs and expenses of Midland incurred in connection with the extension, (c) replenishing of all reserve funds as reasonably determined by Midland, and (d) compliance with minimum debt yield and debt service coverage ratio requirements. …”see in full comparison
Full comparison: every changed paragraph (110)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included in this Annual Report on Form 10-K. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs and involve numerous risks and uncertainties, including but not limited to those described in the “Risk Factors” section of this Annual Report. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read the “Special Note Regarding Forward-Looking StatementsStatements,” “Risk Factor Summary,” and “Risk Factors.Factors” sections above.
Forward-Looking Statements
The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, our expectations regarding our collaborations and clinical trials, future financial position, future revenues, projected costs, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K and in our other filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements.
We are a biotechnology company focused on identifying and advancing innovative therapeutic opportunities.
WeIn areJanuary a2026, clinical-stagewe biopharmaceuticalannounced companythat focusedour onwholly developingowned asubsidiary, pipelineAxion Bio, was discontinuing development of novelAXN-2510, therapies.our former lead product candidate. We are advancingactively the development of our lead product candidate, AXN-2510/IMM2510, a bispecific antibody targeting both programmed death-ligand 1, or PD-L1, and the family of vascular endothelial growth factors, or VEGFs, in solid tumor cancers, and we seekseeking to in-license or acquire and develop additional novel therapeutic candidates in diseases with significant unmet medical need.
In August 2024, our wholly owned subsidiary, Axion Bio, Inc. (formerly SynBioTx, Inc.), or Axion Bio, in-licensed certain bispecific antibodies, including AXN-2510 (formerly SYN-2510)/IMM2510 and AXN-27M (formerly SYN-27M)/IMM27M, a monoclonal antibody targeting cytotoxic T-lymphocyte associated antigen 4, or CTLA-4, from ImmuneOnco Biopharmaceuticals (Shanghai) Inc., or ImmuneOnco. AXN-2510/IMM2510, the lead in-licensed product candidate, is a novel and differentiated PD-L1xVEGF bispecific antibody in development for the treatment of multiple solid tumor cancers. Pursuant to the license and collaboration agreement with ImmuneOnco, or the IO Collaboration Agreement, Axion Bio has an exclusive license to research, develop, manufacture and commercialize these product candidates outside of China, including mainland China, Hong Kong, Macau and Taiwan, or Greater China. ImmuneOnco retains development and commercialization rights in Greater China.
ImmuneOnco is conducting a Phase I open label trial in China of AXN-2510/IMM2510 as monotherapy in patients with advanced solid tumors that have failed prior therapies, including triple-negative breast cancer, or TNBC, squamous NSCLC, hepatocellular carcinoma, renal cell carcinoma, and rare solid tumors including soft tissue sarcomas and thymic cancer. As of January 13, 2025, ImmuneOnco announced over 100 patients have been enrolled with AXN-2510/IMM2510 in this clinical trial.
ImmuneOnco is also conducting a Phase 1 open label clinical trial of AXN-2510/IMM2510 in combination with chemotherapy in patients with advanced/metastatic NSCLC. In January 2025, ImmuneOnco announced that the first patient had been dosed in the safety run-in and that it expects to eventually enroll patients with first-line advanced/metastatic NSCLC in this trial.
AXN-27M/IMM27M is an antibody-dependent cellular cytotoxicity-enhanced monoclonal antibody targeting CTLA-4, which has been designed to promote intratumoral regulatory T cell depletion to enhance the efficacy and reduce the toxicity associated with first-generation anti-CTLA-4 antibodies. In 2023, ImmuneOnco completed a first-in-human dose escalation study of AXN-27M/IMM27M in patients with solid tumor cancers in China with 25 patients dosed. ImmuneOnco is currently pursuing cohort expansions of the RP2D in this Phase 1 trial in patients with hormone receptor-positive breast cancer and hepatocellular carcinoma who have failed prior therapy.
ImmuneOnco is also conducting a Phase 1 open label clinical trial in China of AXN-2510/IMM2510 combined with AXN-27M/IMM27M in patients with advanced solid tumors that have failed prior therapies.
Since inception, we have had significant operating losses. Our net loss was $74.1$71.4 million and $156.1$74.1 million for the years ended December 31, 20242025 and 2023,2024, respectively. As of December 31, 2024,2025, we had an accumulated deficit of $655.1$726.5 million. As of December 31, 2024,2025, we had cash, cash equivalents, restricted cash and marketable securities of $115.1$76.3 million, which consistsconsisted of $8.8$6.6 million in cash and cash equivalents, $1.8$0.2 million of restricted cash and $104.5$69.5 million in marketable securities. We expect to continue to incur net losses for the foreseeable future.
Our development efforts are focused on advancing AXN-2510/IMM2510 and we expect to continue to pursue additional promising therapeutic in-licensing or acquisition opportunities. As a result, we are no longer actively pursuing the development of cell therapies, including our proprietary folate receptor alpha CoStAR-TIL cell therapy for the treatment of cancer.
In-process research and development (IPR&D) expenses include IPR&D acquired as part of in-license payments made to ImmuneOnco for our prior product candidate AXN-2510, for which there is no alternative future use and are expensed as incurred.
We expect our future research and development expenses to change in line with our clinicalpotential business development activities forand AXN-2510/IMM2510,any AXN-27M/IMM27Mnonclinical and other potential businessclinical development activities. Our expenditures on any future nonclinical and clinical development programs are subject to numerous uncertainties in timing and cost to completion. The duration, costs and timing of clinical trials and development of product candidates will depend on a variety of factors, including:
Restructuring and impairment charges for the year ended December 31, 2025 consisted primarily of fees related to terminated contracts and an impairment loss recognized on long-lived assets held for sale in connection with listing the Tarzana facility for sale in March 2025.
Restructuring and impairment charges for the year ended December 31, 2024 consisted primarily of employee termination costs, contract terminations, and impairment loss recognized on long-lived assets held for sale, leasehold improvements, and right-of-use assets.
In January 2023, our Board of Directors approved a restructuring plan, or the 2023 Plan, related to the consolidation of our former ITIL-306 Phase 1 clinical trial and related manufacturing of CoStAR-TIL to our operations in Manchester, UK.
Restructuring and impairment charges consist primarily of:
•for the year ended December 31, 2023, asset impairment charges related to our facility in Tarzana;
•for the year ended December 31, 2024, asset impairment charges related to our former leased manufacturing facility in Manchester;
•contract terminations related to our facilities; and
•severance and other employee termination related costs.
As part of a restructuring plan adopted in January 2023, we transitioned clinical manufacturing and trial operations of our former ITIL-306 program to the United Kingdom from the United States, and as a result, in 2023 we reduced our U.S. workforce by approximately 96% and our UK workforce by approximately 42%. Subsequently, inIn January 2024, we decided to initiate closure of our UK manufacturing and clinical operations,operations related to our past development of our CoStAR-TIL technology, and in September 2024 we decided to close most of our remaining Manchester, UK operations,operations related to our past development of our CoStAR-TIL technology, which resulted in the elimination of the majority of the remaining UK workforce, with the remaining reduction substantially completed by the end of 2024, which collectively we refer to as the 2024 Plan.Plan, Asand acollectively result ofwith the 20242023 Plan, we incurred charges of $7.5 million duringas the year ended December 31, 2024.Plan.
As a result of the Plan, we incurred restructuring and impairment charges of $16.6 million and $7.5 million during the years ended December 31, 2025 and 2024, respectively.
Interest income consists of interest income from funds held in our cash and cash equivalent accounts,accounts and marketable securities and long-term investments.securities.
Other rental income consists primarily of rental income related to ourthe Tarzana manufacturing facility.
Other Expense,Income (Expense), Net
Other expense,income (expense), net consists primarily of derivative financial instrument fair value gain or loss, foreign exchange remeasurement gain or loss, debt extinguishment loss and other expenses and income.
We are subject to income taxes in the United States and the foreign jurisdiction where we operate, the United Kingdom. The United Kingdom has statutory tax rates that differ from those in the United States. Accordingly, our effective tax rates will vary depending on the relative proportion of United Kingdom to United States income, the availability of research and development tax credits, changes in the valuation of our deferred tax assets and liabilities and changes in tax laws.
On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was signed into law and included various tax policy changes. OBBBA did not have a material impact on our 2025 consolidated financial statements.
In-process research and development expenses were $10.0 million andfor nileach forof the years ended December 31, 20242025 and 2023, respectively. The increase was2024, due to: a $10.0 million payment to ImmuneOnco for achievement of the IND clearance milestone during the year ended December 31, 2025 and an upfront payment to ImmuneOnco during year ended December 31, 2024.
•$10.0 million in research and development costs related to payments made to ImmuneOnco pursuant to the IO Collaboration Agreement.
Research and development expenses were $11.8$24.7 million and $39.6$11.8 million for the years ended December 31, 20242025 and 2023,2024, respectively. The net decreaseincrease of $27.8$12.9 million was primarily due to:
•$12.8 million decrease in costs from reduced headcount, consisting primarily of decreases of $12.3 million in wages and benefits, $0.2 million for other employee-related expenses in relation to our research and development personnel, and $0.8 million in professional services, offset by a $0.5 million increase in stock-based compensation expense due to forfeitures related to our reduction in force in 2023;
•$5.7$17.7 million decreaseincrease in costs related to research and clinical development activities from our ImmuneOnco collaboration and our clinical trials resulting from our discontinuation of our ITIL-168AXN-2510 clinical manufacturing activitiestrial; andpartially offset by
•$2.8 million decrease in costs from reduced headcount, consisting primarily of decreases of $2.9 million in wages and benefits, $1.3 million in stock-based compensation expense, and $0.1 million for other employee-related expenses in relation to our research and development personnel; partially offset by a $1.5 million increase in professional services; and
The following table shows our research and development expenses by program for the years ended December 31, 20242025 and 20232024 (in thousands):
•$3.0$10.5 million decrease in costs resulting from decreases in headcount and personnel related costs, including a decrease in stock-based compensation expense of $1.4$7.3 million; and
•$0.4 million decrease in consulting and professional service costs, mainly consisting of costs of business operations consultants of $0.6 million, offset by an increase of costs of information technology and facility consultants of $0.2 million; offset by
•$0.1$4.4 million increasedecrease in insurancedepreciation, expense,facility depreciation,costs, and otherinsurance officeexpenses; expenses.and
•$2.1 million decrease in consulting and professional service costs, mainly consisting of decreases in costs of business operations consultants of $2.0 million and information technology and facility consultants of $0.1 million.
Restructuring and impairment charges were approximately $7.5$16.6 million and $72.0$7.5 million for the years ended December 31, 20242025 and 2023,2024, respectively. The net decreaseincrease of $64.5approximately $9.1 million was primarily due to:
•$11.9$12.2 million decreaseincrease in costs resulting from impairments of assets identified as held for salesale, primarily related to an impairment of the Tarzana facility; and
•$41.5 million decrease due to an impairment on our Tarzana manufacturing facility in 2023, which did not recur in 2024;
•$6.9 million decrease in leased assets impairment charge;
•$2.3 million decrease in leasehold improvement impairment charge; and
•$2.7$0.8 million decreaseincrease in costs associatedresulting withfrom termination of contracts; partially offset by
•$0.8$2.7 million increasedecrease in costs consisting of severance payments and benefits continuation costs.costs;
Interest Income, Interest Expense, Other Rental Income and Other Expense, Net
Interest income, interest expense other rental income and other expense, net was $0.6 million of expense and $3.1 million of income for the years ended December 31, 2024 and 2023, respectively. The increase in expense of $3.7 million was primarily due to:
•$1.9 million decrease of interest income related to our investments;
•$0.9 million increase of loss on foreign currency transactions;
•$3.8$0.8 million increasedecrease in costs from impairments of interestright-of-use expense from our debtassets; and
•$0.3 million decrease in costs from leasehold improvement impairments.
Interest Income, Interest Expense, Other Rental Income and Other Income (Expense), Net
Interest income, interest expense, other rental income and other income (expense), net was $7.2 million of income and $0.6 million of expense for the years ended December 31, 2025 and 2024, respectively. The increase in income of $7.8 million was primarily due to:
•$1.3 million increase of other losses, including changes in fair value and termination of derivative financial instrument and debt extinguishment; offset by
•$4.3$4.7 million increase in rental income related to ourthe Tarzana manufacturing facility.facility;
•$3.2 million decrease of interest expense from our debt;
•$2.4 million decrease in other losses, including change in fair value from terminated derivative financial instruments and debt extinguishment; and
What changed in the latest 10-Q
Risk Factors
There are no material changes to the risk factors set forth in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025, except for the following.
We have incurred significant losses related to our Tarzana, California facility and may incur additional significant losses related to the facility in the future.
To date, we have recorded $58.4 million in impairment charges on long-lived assets related to our facility in Tarzana, California. Significant impairment charges related to our Tarzana facility were recorded in the third quarter of 2023, the first quarter of 2025 and, most recently, in the second quarter of 2026. We may incur additional losses due to impairment charges related to the Tarzana facility. In addition, in the event the Tarzana facility is sold, we may not recover its carrying value and may suffer additional significant losses. Further, it is possible that we will not be able to sell the facility for an amount equal to or greater than the amount of secured debt encumbering the facility.
New heading “We have incurred significant losses related to our Tarzana, California facility and may incur additional significant losses related to the facility in the future.”
Largest changes
“We have incurred significant losses related to our Tarzana, California facility and may incur additional significant losses related to the facility in the future.”see in full comparison
“To date, we have recorded $58.4 million in impairment charges on long-lived assets related to our facility in Tarzana, California. Significant impairment charges related to our Tarzana facility were recorded in the third quarter of 2023, the first quarter of 2025 and, most recently, in the second quarter of 2026. We may incur additional losses due to impairment charges related to the Tarzana facility. In addition, in the event the Tarzana facility is sold, we may not recover its carrying value and may suffer additional significant losses. …”see in full comparison
Full comparison: every changed paragraph (3)
There are no material changes to the risk factors set forth in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025.2025, except for the following.
We have incurred significant losses related to our Tarzana, California facility and may incur additional significant losses related to the facility in the future.
To date, we have recorded $58.4 million in impairment charges on long-lived assets related to our facility in Tarzana, California. Significant impairment charges related to our Tarzana facility were recorded in the third quarter of 2023, the first quarter of 2025 and, most recently, in the second quarter of 2026. We may incur additional losses due to impairment charges related to the Tarzana facility. In addition, in the event the Tarzana facility is sold, we may not recover its carrying value and may suffer additional significant losses. Further, it is possible that we will not be able to sell the facility for an amount equal to or greater than the amount of secured debt encumbering the facility.
Management's Discussion & Analysis (MD&A)
New heading “In-Process Research and Development”
New heading “In-process Research and Development Expenses”
New heading “General and Administrative Expenses”
New heading “Interest Income, Interest Expense, Other Rental Income and Other Income (Expense), Net”
New heading “Comparison of the Six Months Ended June 30, 2026 and 2025”
New heading “In-process Research and Development Expenses”
New heading “Research and Development Expenses”
Removed heading “Restructuring and Impairment Charges”
Removed heading “Restructuring and Impairment Charges”
Largest changes
“Restructuring and Impairment Charges”see in full comparison
“Restructuring and Impairment Charges”see in full comparison
“Cash used in operating activities for the three months ended March 31, 2025 was $4.2 million, which consisted of the net loss of $28.2 million, partially offset by a $3.6 million net change to our net operating assets and liabilities and $20.4 million in non-cash charges and other adjustments to reconcile net loss to net cash used in operating activities. …”see in full comparison
“Restructuring and impairment charges, net for the six months ended June 30, 2026 consisted primarily of a net remeasurement loss recognized upon reclassifying the Tarzana facility to held and used and employee termination costs, partially offset by a reversal of previously recognized cost to sell. Restructuring and impairment charges, net for the six months ended June 30, 2025 consisted primarily of impairment charges and related estimated cost to sell recognized in connection with classifying our Tarzana facility as held for sale, as well as contract terminations costs.”see in full comparison
Restructuring and impairmentsee in full comparisonchargescharges, net for the three months endedMarchJune31,30, 2026consisted of employee termination costs. Restructuring and impairment charges for the three months ended March 31, 2025consisted primarily of an impairment loss recognizedonuponlong-livedreclassifyingassets held for sale in connection with listing ourthe Tarzana facilityfortosaleheldinandMarch 2025,used, partially offset by asettlementreversalgainofonpreviouslyterminatedrecognizedcontracts.cost to sell. Restructuring and impairment charges, net for the three months ended June 30, 2025 consisted primarily of contract terminations costs.
“Restructuring and impairment charges, net were $0.2 million and $0.5 million for the three months ended June 30, 2026 and 2025, respectively. The net decrease of $0.3 million was due to:”see in full comparison
Full comparison: every changed paragraph (75)
Since inception, we have had significant operating losses. Our net loss was $4.2$4.3 million for the three months ended MarchJune 31,30, 2026 and $8.5 million for the six months ended June 30, 2026. As of MarchJune 31,30, 2026, we had an accumulated deficit of $730.7$735.0 million. As of MarchJune 31,30, 2026, we had cash, cash equivalents, restricted cashcash, and marketable securities of approximately $74.7$69.9 million, which consists of $5.0$5.5 million in cash and cash equivalents, $0.1$0.3 million in restricted cashcash, and $69.5$64.1 million in marketable securities. We expect to continue to incur net losses for the foreseeable future.
In-Process Research and Development
In-process research and development, or IPR&D, expenses include IPR&D acquired as part of in-license payments made to ImmuneOnco for which there is no alternative future use, and are expensed as incurred.
The process of conducting the necessary clinical research to obtain regulatory approval from the U.S. Food and Drug Administration, or FDA, Medicines and Healthcare Products Regulatory Agency, or MHRA, European Medicines Agency, or EMA, and comparable foreign authorities is costly and time-consumingtime consuming and the successful development of product candidates is highly uncertain. The risks and uncertainties associated with our research and development projects are discussed more fully in the section of this Quarterly Report titled “Risk Factors.” As a result of these risks and uncertainties, we are unable to determine with any degree of certainty the duration and completion costs of our research and development projects, or if, when or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval. We may never succeed in achieving regulatory approval for any product candidates.
Restructuring and Impairment Charges
Restructuring and impairment chargescharges, net for the three months ended MarchJune 31,30, 2026 consisted of employee termination costs. Restructuring and impairment charges for the three months ended March 31, 2025 consisted primarily of an impairment loss recognized onupon long-livedreclassifying assets held for sale in connection with listing ourthe Tarzana facility forto saleheld inand March 2025,used, partially offset by a settlementreversal gainof onpreviously terminatedrecognized contracts.cost to sell. Restructuring and impairment charges, net for the three months ended June 30, 2025 consisted primarily of contract terminations costs.
Restructuring and impairment charges, net for the six months ended June 30, 2026 consisted primarily of a net remeasurement loss recognized upon reclassifying the Tarzana facility to held and used and employee termination costs, partially offset by a reversal of previously recognized cost to sell. Restructuring and impairment charges, net for the six months ended June 30, 2025 consisted primarily of impairment charges and related estimated cost to sell recognized in connection with classifying our Tarzana facility as held for sale, as well as contract terminations costs.
In January 2023, the Board of Directors approved a restructuring planplan, and we announced the consolidation of the ITIL-306 Phase 1 clinical trial, which included contract terminations.
In May 2026, the Board of Directors approved discontinuing our plan to actively market the Tarzana facility for sale, and the Tarzana facility was reclassified from held for sale to held and used. In connection with the reclassification, we recognized an impairment charge to reduce the carrying value of the Tarzana facility to the lower of its adjusted carrying amount and fair value, which we refer to as the 2026 Tarzana Charges.
In May 2026, we determined that there had been a change to our plan with respect to the Tarzana facility and the Board of Directors approved discontinuing the plan to market the Tarzana facility for sale. As a result, we determined that this asset no longer meets the criteria to be classified as held for sale under ASC 360. Consequently, in the second quarter of 2026, this asset will be reclassified as held and used at the lower of (a) its carrying amount before the asset was classified as held for sale, adjusted for depreciation expenses that would have been recognized had the asset been continuously classified as held and used, and (b) its fair value. We are currently evaluating the financial statement impact of this reclassification. The resulting adjustment will be recognized in the second quarter in the condensed consolidated statement of operations and comprehensive loss as a component of gain (loss) from operations.
As a result of the Plan,2026 theEmployee 2025 Tarzana ChargesTerminations and the 2026 EmployeeTarzana Terminations,Charges we incurred restructuring and impairment chargescharges, net of $1.0$0.2 million and $16.1$1.2 million during the three and six months ended MarchJune 31,30, 2026 and 2025,2026, respectively.
Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025
The following table summarizes our results of operations for the three months ended MarchJune 31,30, 2026 and 2025 (in thousands):
In-process Research and Development Expenses
In-process research and development expenses were nil and $10.0 million for the three months ended June 30, 2026 and 2025, respectively. The net decrease of $10.0 million was due to the fact that there was no in-license payments for the three months ended June 30, 2026 and a $10.0 million in-license payment to ImmuneOnco pursuant to the license and collaboration agreement between Axion Bio and ImmuneOnco, or the IO Collaboration Agreement, for three months ended June 30, 2025.
Research and development expenses were $0.7$0.3 million and $5.4$6.7 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The net decrease of approximately $4.7$6.4 million was primarily due to:
•$3.6$5.0 million decrease in costs related to research and clinical development activities primarily due to discontinuing development of AXN-2510; and
•$0.8 million decrease in consulting and professional services fees; and
•$1.1$0.6 million decrease in employee-related costs from reduced headcount, consisting primarily of a $0.6$0.5 million decrease in wages and benefits, $0.1 million decrease in stock-based compensation expense and a decrease in bonus and severance payments of $0.5 million.expense.
The following table shows our research and development expenses by program for the three months ended MarchJune 31,30, 2026 and 2025 (in thousands):
_____________________________________________________________ (1) Other program expenses consist of costs related to our past development of our CoStAR-TIL technology.
General and Administrative Expenses
General and administrative expenses were $5.1 million and $6.2 million for the three months ended June 30, 2026 and 2025, respectively. The net decrease of $1.1 million was primarily due to:
•$0.7 million decrease in costs primarily from stock-based compensation expense; and
•$0.4 million decrease in facility and other office expenses.
Restructuring and impairment charges, net were $0.2 million and $0.5 million for the three months ended June 30, 2026 and 2025, respectively. The net decrease of $0.3 million was due to:
•$0.5 million decrease in costs resulting from a termination of a contract; partially offset by
•$0.2 million increase in impairment costs attributable to a $8.1 million impairment loss recognized on the Tarzana facility due to reclassifying the Tarzana facility to held and used, partially offset by a $7.9 million reversal of previously recognized estimated cost to sell.
Interest Income, Interest Expense, Other Rental Income and Other Income (Expense), Net
Interest income, interest expense, other rental income and other income (expense), net was $1.3 million and $2.0 million of income for the three months ended June 30, 2026 and 2025, respectively. The net decrease of $0.7 million was primarily due to:
•$0.4 million decrease in interest income related to our investments; and
•$0.3 million decrease in gain on foreign currency transactions.
Comparison of the Six Months Ended June 30, 2026 and 2025
The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025 (in thousands):
In-process Research and Development Expenses
In-process research and development expenses were nil and $10.0 million for the six months ended June 30, 2026 and 2025, respectively. The net decrease of $10.0 million was due to the fact that there was no in-license payment in the six months ended June 30, 2026 and a $10.0 million in-license payment to ImmuneOnco pursuant to the IO Collaboration Agreement in the six months ended June 30, 2025.
Research and Development Expenses
Research and development expenses were $0.9 million and $12.1 million for the six months ended June 30, 2026 and 2025, respectively. The net decrease in research and development expenses of $11.2 million was primarily due to:
•$8.7 million decrease in costs related to research and clinical development activities primarily due to discontinuing development of AXN-2510;
•$1.8 million decrease in costs from reduced headcount, consisting primarily of a $1.0 million decrease in wages and benefits, a $0.7 million decrease in stock-based compensation expense, and a $0.1 million decrease for other employee-related expenses in relation to our research and development personnel; and
•$0.7 million decrease in consulting and professional service costs.
The following table shows our research and development expenses by program for the six months ended June 30, 2026 and 2025 (in thousands):
General and administrative expenses were $5.3$10.5 million and $9.1$15.3 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The net decrease of $3.8$4.8 million was primarily due to:
•$2.3$3.0 million decrease in employee-related costs from reduced headcount, mainly consisting primarily of a $1.9 million decrease in stock-based compensation expense andof $2.6 million, a $0.4 million decrease in bonuswages of $0.3 million, and a decrease in other employee-related expenses of $0.1 million;
•$0.8$1.0 million decrease in consultingdepreciation and professional servicesfacility costs; and
•$0.7$0.8 million decrease in insurance expense, depreciation,consulting and officeprofessional expenses.services costs.
Restructuring and Impairment Charges
Restructuring and impairment chargescharges, net were approximately $1.0$1.2 million and $16.1$16.6 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The net decreasechange of approximately $15.1$15.4 million was primarily due to:
•$16.4 million decrease related to a $0.2 million impairment recognized in 2026 upon reclassifying the Tarzana facility from held for sale to held and used, consisting of a $8.1 million impairment loss partially offset by a $7.9 million reversal of estimated cost to sell, compared to a $16.6 million impairment charge and related estimated cost to sell recognized on the Tarzana facility in 2025, consisting of a $8.7 million impairment loss and $7.9 million related to the estimated cost to sell; partially offset by
•$16.6 million impairment recognized on long-lived assets held for sale mainly related to impairment of the Tarzana facility and as well as charges related to the anticipated cost to sell the facility in the first quarter of 2025; partially offset by
•$1.0 million increase in severance payments; and benefits continuation costs.
•$0.5 million increase due to a settlement gain on terminated contracts in 2025.
Interest Income, Interest Expense, Other Rental Income, Gain on Contract Termination, and Other Income (Expense) Income,, Net
Interest income, interest expense, other rental income, gain on contract termination and other income (expense) income,, net were $2.8$4.1 million and $2.4$4.4 million of income for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The net increasedecrease of approximately $0.4$0.3 million was primarily due to:
•$1.6 million increase in gain on contract termination;
•$0.1 million decrease in other expenses; partially offset by
•$0.5 million increase in interest expense related to the 2024 Loan (as defined below);
•$0.5$0.9 million decrease in interest income related to our investments; and
•$0.3$0.6 million increase in foreign currency transaction losses.losses; and
•$0.4 million increase of interest expense from our note payable; partially offset by
TIL insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding TIL (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Millennium Management (Israel Englander) | 2026-06-30 | 134,575 | $1.0M | 0.0% | Added 1% |
| Renaissance Technologies | 2026-06-30 | 50,300 | $386.8K | 0.0% | Reduced 15% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 30,639 | $235.6K | 0.0% | Reduced 21% |