10-Q

ROC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-50484

MEI Pharma, Inc.

(Exact name of registrant as specified in its charter)

DELAWARE	51-0407811
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

11455 El Camino Real, San Diego, CA 92130

(Address of principal executive offices) (Zip Code)

(858) 369-7100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.00000002 par value	MEIP	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

As of May 8, 2023, the number of shares outstanding of the issuer’s common stock, $0.00000002 par value, was 6,662,857.

MEI PHARMA, INC.

Table of Contents

		Page
PART I	FINANCIAL INFORMATION		3
Item 1.	Condensed Consolidated Financial Statements (Unaudited)		3
	Condensed Consolidated Balance Sheets as of March 31, 2023 and June 30, 2022		3
	Condensed Consolidated Statements of Operations for the three and nine months ended March 31, 2023 and 2022		4
	Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended March 31, 2023 and 2022		5
	Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2023 and 2022		6
	Notes to Condensed Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		29
Item 4.	Controls and Procedures		30
PART II	OTHER INFORMATION		31
Item 1.	Legal Proceedings		31
Item 1A.	Risk Factors		31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		35
Item 3.	Defaults upon Senior Securities		36
Item 4.	Mine Safety Disclosures		36
Item 5.	Other Information		36
Item 6.	Exhibits		37
SIGNATURES			38

2

PART I FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

MEI PHARMA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value data)

	March 31, 2023			June 30, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	8,812		$	15,740
Short-term investments		103,224			137,512
Total cash, cash equivalents and short-term investments		112,036			153,252
Unbilled receivables		4,580			10,044
Prepaid expenses and other current assets		3,867			3,830
Total current assets		120,483			167,126
Operating lease right-of-use asset		12,338			9,054
Property and equipment, net		1,366			1,660
Total assets	$	134,187		$	177,840
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,389		$	7,918
Accrued liabilities		16,264			10,820
Deferred revenue		1,583			4,834
Operating lease liability		1,385			871
Total current liabilities		23,621			24,443
Deferred revenue, long-term		64,545			90,610
Operating lease liability, long-term		11,667			8,771
Warrant liability		—			1,603
Total liabilities		99,833			125,427
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.01 par value; 100 shares authorized; none outstanding		—			—
Common stock, $0.00000002 par value; 226,000 shares authorized; 6,663 and    6,658 shares issued and outstanding at March 31, 2023 and June 30, 2022,    respectively		—			—
Additional paid-in capital		430,322			426,572
Accumulated deficit		(395,968	)		(374,159	)
Total stockholders’ equity		34,354			52,413
Total liabilities and stockholders’ equity	$	134,187		$	177,840

See accompanying notes to condensed consolidated financial statements.

3

MEI PHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended March 31,						Nine Months Ended March 31,
	2023			2022			2023			2022
Revenue	$	5,894		$	9,694		$	47,359		$	29,283
Operating expenses:
Research and development		15,104			22,318			49,880			63,802
General and administrative		7,181			8,934			23,163			24,769
Total operating expenses		22,285			31,252			73,043			88,571
Loss from operations		(16,391	)		(21,558	)		(25,684	)		(59,288	)
Other income (expense):
Change in fair value of warrant liability		—			12,773			1,603			20,819
Interest and dividend income		957			60			2,282			78
Other expense, net		(4	)		—			(10	)		—
Net loss	$	(15,438	)	$	(8,725	)	$	(21,809	)	$	(38,391	)
Net loss:
Basic	$	(15,438	)	$	(8,725	)	$	(21,809	)	$	(38,391	)
Diluted	$	(15,438	)	$	(8,725	)	$	(21,809	)	$	(46,437	)
Net loss per share:
Basic	$	(2.32	)	$	(1.31	)	$	(3.27	)	$	(6.31	)
Diluted	$	(2.32	)	$	(1.31	)	$	(3.27	)	$	(7.58	)
Shares used in computing net loss per share:
Basic		6,663			6,653			6,663			6,080
Diluted		6,663			6,653			6,663			6,124

See accompanying notes to condensed consolidated financial statements.

4

MEI PHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

	Common Shares		Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity
Balance at June 30, 2022		6,658	$	426,572		$	(374,159	)	$	52,413
Net loss		—		—			(16,624	)		(16,624	)
Issuance of common stock for vested restricted stock units		5		(40	)		—			(40	)
Share-based compensation expense		—		1,559			—			1,559
Balance at September 30, 2022		6,663		428,091			(390,783	)		37,308
Net income		—		—			10,253			10,253
Share-based compensation expense		—		813			—			813
Balance at December 31, 2022		6,663		428,904			(380,530	)		48,374
Net loss		—		—			(15,438	)		(15,438	)
Issuance of warrants		—		500			—			500
Share-based compensation expense		—		918			—			918
Balance at March 31, 2023		6,663	$	430,322		$	(395,968	)	$	34,354

	Common Shares		Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity
Balance at June 30, 2021		5,631	$	369,171		$	(319,705	)	$	49,466
Net loss		—		—			(17,510	)		(17,510	)
Issuance of common stock for vested restricted stock units		3		(194	)		—			(194	)
Share-based compensation expense		—		2,539			—			2,539
Balance at September 30, 2021		5,634		371,516			(337,215	)		34,301
Net loss		—		—			(12,156	)		(12,156	)
Issuance of common stock, net of issuance costs of $3,672		1,006		48,653			—			48,653
Exercise of stock options		5		212			—			212
Share-based compensation expense		—		2,324			—			2,324
Balance at December 31, 2021		6,645		422,705			(349,371	)		73,334
Net loss		—		—			(8,725	)		(8,725	)
Exercise of stock options		13		360			—			360
Share-based compensation expense		—		2,837			—			2,837
Balance at March 31, 2022		6,658	$	425,902		$	(358,096	)	$	67,806

See accompanying notes to condensed consolidated financial statements.

5

MEI PHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended March 31,
	2023			2022
Cash flows from operating activities:
Net loss	$	(21,809	)	$	(38,391	)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of warrant liability		(1,603	)		(20,819	)
Share-based compensation expense		3,290			7,700
Issuance of warrants		500			—
Depreciation and amortization		288			241
Non-cash lease expense		1,063			636
Changes in operating assets and liabilities:
Unbilled receivables		5,464			(864	)
Prepaid expenses and other current assets		(37	)		(2,169	)
Accounts payable		(3,529	)		1,902
Accrued liabilities		5,444			1,680
Deferred revenue		(29,316	)		17,487
Operating lease liability		(937	)		(645	)
Net cash used in operating activities		(41,182	)		(33,242	)
Cash flows from investing activities:
Purchases of short-term investments		(92,098	)		(218,164	)
Proceeds from maturity of short-term investments		126,386			205,117
Proceeds from (purchases) of property and equipment		6			(173	)
Net cash provided by (used in) investing activities		34,294			(13,220	)
Cash flows from financing activities:
Payment of RSU tax withholdings in exchange for common shares surrendered by RSU holders		(40	)		(194	)
Proceeds from exercise of stock options		—			572
Proceeds from issuance of common stock, gross		—			52,325
Payment of issuance costs		—			(3,672	)
Net cash (used in) provided by financing activities		(40	)		49,031
Net (decrease) increase in cash and cash equivalents		(6,928	)		2,569
Cash and cash equivalents at beginning of the period		15,740			8,543
Cash and cash equivalents at end of the period	$	8,812		$	11,112
Supplemental disclosures:
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	4,347		$	2,386

See accompanying notes to condensed consolidated financial statements.

6

MEI PHARMA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. The Company and Summary of Significant Accounting Policies

The Company

MEI Pharma, Inc. (Nasdaq: MEIP) is a clinical stage pharmaceutical company focused on developing potential new therapies for cancer. MEI Pharma's portfolio of drug candidates includes drug candidates with differentiated or novel mechanisms of action intended to address unmet medical needs and deliver improved benefit to patients, either as standalone treatments or in combination with other therapeutic options. Our common stock is listed on the Nasdaq Capital Market under the symbol “MEIP.”

In February 2023, we, Infinity Pharmaceuticals, Inc. (“Infinity”), and Meadow Merger Sub, Inc., our wholly owned subsidiary (“Merger Sub”) entered into an agreement and plan of merger (“Merger Agreement”). The Merger Agreement provides that Merger Sub will merge with and into Infinity, with Infinity being the surviving entity as a wholly-owned subsidiary of us (transaction referred to as the "Merger"). If the Merger is consummated (the "Closing"), each share of Infinity’s common stock issued and outstanding immediately prior will be automatically converted into the right to receive 0.052245 shares (the “Exchange Ratio”) of our common stock. Subject to stockholder approval and the subsequent closing of the merger, the combined company will be renamed "Kimbrx Therapeutics, Inc." and trade on the Nasdaq Stock Market under the symbol "KMBX". The combined company would be headquartered in San Diego, California. The Merger Agreement has been approved by the Boards of Directors of both companies. The Merger is subject to approvals by our and Infinity's stockholders, respectively.

On April 14, 2023, we amended our Certificate of Incorporation to affect a combination of our issued and outstanding common stock at a ratio of one-for-twenty (“Reverse Stock Split”). The par value and authorized shares of our common stock were not adjusted as a result of the Reverse Stock Split. The Reverse Stock Split was effective on April 14, 2023, with a market effective date of April 17, 2023. All historical share and per share amounts have been adjusted to reflect the Reverse Stock Split for all periods presented. All stock options, restricted stock units and warrants outstanding were ratably adjusted to give effect to the Reverse Stock Split.

Clinical Development Programs

We build our pipeline by licensing or acquiring promising cancer agents and creating value in programs through development, commercialization and strategic partnerships, as appropriate. Our objective is to leverage the mechanisms and properties of our pipeline drug candidates to optimize the balance between efficacy and tolerability to meet the needs of patients with cancer. Our drug candidate pipeline includes:

•Voruciclib, an oral cyclin-dependent kinase (“CDK”) inhibitor;

•ME-344, an intravenous small molecule targeting the oxidative phosphorylation pathway; and

•Zandelisib, an oral phosphatidylinositol 3-kinase delta (“PI3Kδ”) inhibitor.

The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current drug candidates may not have favorable results in later studies or trials. The commercial opportunity will be reduced or eliminated if competitors develop and market products that are more effective, have fewer side effects or are less expensive than our drug candidates. We will need substantial additional funds to progress the clinical trial programs for the drug candidates voruciclib and ME-344 and to develop new compounds we might license or acquire. The actual amount of funds that will be needed are determined by a number of factors, some of which are beyond our control. Negative U.S. and global economic conditions may pose challenges to our business strategy, which relies on funding from the financial markets or collaborators.

Reduction in Force and Current Events

In November 2022, we and Kyowa Kirin Co., Ltd. ("Kyowa Kirin") met with the U.S. Food and Drug Administration ("FDA") in a follow-up meeting to the March 2022 end of Phase 2 meeting related to zandelisib. At this meeting, the FDA provided further guidance regarding the design and statistical analysis for the COASTAL trial. Following the November meeting, the companies jointly concluded that a clinical trial consistent with the recent FDA guidance, including modification of the ongoing COASTAL trial, would likely not be feasible to complete within a time period that would support further investment or with sufficient certainty of the regulatory requirements for approval to justify continued global development efforts. As a result, we and Kyowa Kirin jointly decided to discontinue global development of zandelisib for indolent forms of non-Hodgkin lymphoma outside of Japan.

The discontinuation of zandelisib development outside of Japan was a business decision based on the most recent regulatory guidance from the FDA and is not related to the zandelisib clinical data generated to date. Kyowa Kirin is continuing certain ongoing Japanese clinical trials, including the Phase 2 MIRAGE trial evaluating Japanese patients with relapsed or refractory indolent B-cell non-Hodgkin lymphomas, and will explore submitting the MIRAGE and TIDAL trials for marketing authorization in Japan. MIRAGE

7

is a Phase 2 trial, similar in design to the global Phase 2, single-arm, TIDAL trial. In November 2022, we and Kyowa Kirin announced positive topline data from the Phase 2 MIRAGE trial. Kyowa Kirin has been evaluating whether to continue developing zandelisib in Japan and after meeting with the Pharmaceuticals and Medical Devices Agency ("PMDA") has concluded that conducting a randomized study consistent with agency guidance to support a marketing application would likely not be feasible to complete within a time period that would support further investment. As a result, in May 2023, Kyowa Kirin decided to discontinue development of zandelisib in Japan. The discontinuation of zandelisib in Japan was a business decision by Kyowa Kirin based on the most recent regulatory guidance from the PMDA and is not related to the zandelisib clinical data generated to date.

In light of Kyowa Kirin’s decision to discontinue development of zandelisib in Japan, the parties intend to terminate the global license, development and commercialization agreement executed in April 2020.

We and Kyowa Kirin have begun closing all ongoing zandelisib clinical studies outside of Japan, including the Phase 3 COASTAL trial, the Phase 2 TIDAL trial, and the Phase 2 CORAL trial. Depending on the achievement of certain regulatory and commercial milestones in Japan, we may be eligible for additional payments from Kyowa Kirin under the current agreement.

In December 2022, we announced a plan to streamline our organization towards the continued clinical development of voruciclib and ME-344. As a result, we initiated a staggered workforce reduction, initially affecting 28 employees in December 2022 (representing approximately 27% of our workforce) and an additional 14 employees in April 2023. In connection with the reduction in force, we incurred termination costs, which include severance, benefits, and related costs of approximately $2.4 million, of which $1.8 million was research and development expense and $0.6 million was general and administrative expense.

Liquidity

We have accumulated losses of $396.0 million since inception and expect to incur operating losses and generate negative cash flows from operations for the foreseeable future. As of March 31, 2023, we had $112.0 million in cash and cash equivalents and short-term investments. We believe that these resources will be sufficient to meet our obligations and fund our liquidity and capital expenditure requirements for at least the next 12 months from the issuance of these financial statements. Our current business operations are focused on continuing the clinical development of our drug candidates. Changes to our research and development plans or other changes affecting our operations and operating expenses may affect actual future use of existing cash resources. We cannot determine with certainty costs associated with ongoing and future clinical trials or the regulatory approval process. The duration, costs and timing associated with the development of our product candidates will depend on a variety of factors, including uncertainties associated with the results of our clinical trials.

To date, we have obtained cash and funded our operations primarily through equity financings and license agreements. In order to continue the development of our drug candidates, at some point in the future we expect to pursue one or more capital transactions, whether through the sale of equity securities, debt financing, license agreements or entry into strategic partnerships. There can be no assurance that we will be able to continue to raise additional capital in the future.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of MEI Pharma, Inc. and our wholly owned subsidiary, Meadow Merger Sub, Inc. We have eliminated all significant intercompany accounts and transactions in consolidation. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the accompanying financial statements do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) that are necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented.

The accompanying unaudited condensed consolidated financial statements for the quarterly period ended March 31, 2023 should be read in conjunction with the audited financial statements and notes thereto as of and for the fiscal year ended June 30, 2022, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 8, 2022 ("2022 Annual Report"). Interim results are not necessarily indicative of results for a full year.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and disclosures made in the accompanying notes to the consolidated financial statements. We use estimates that affect the reported amounts (including assets, liabilities, revenues and expenses) and related disclosures. Actual results could materially differ from those estimates.

8

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value is as follows:

•Level 1 – Observable inputs such as quoted prices in active markets for identical assets or liabilities.

•Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Revenue Recognition

Revenues from Customers

In accordance with Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("Topic 606"), we recognize revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. For enforceable contracts with our customers, we first identify the distinct performance obligations – or accounting units – within the contract. Performance obligations are commitments in a contract to transfer a distinct good or service to the customer.

Payments received under commercial arrangements, such as licensing technology rights, may include non-refundable fees at the inception of the arrangements, milestone payments for specific achievements designated in the agreements, and royalties on the sale of products. At the inception of arrangements that include milestone payments, we use judgment to evaluate whether the milestones are probable of being achieved and we estimate the amount to include in the transaction price using the most likely method. If it is probable that a significant revenue reversal will not occur, the estimated amount is included in the transaction price. Milestone payments that are not within our or the licensee’s control, such as regulatory approvals, are not included in the transaction price until those approvals are received. At the end of each reporting period, we re-evaluate the probability of achievement of development milestones and any related constraint and, as necessary, we adjust our estimate of the overall transaction price.

We may enter into arrangements that consist of multiple performance obligations. Such arrangements may include any combination of our deliverables. To the extent a contract includes multiple promised deliverables, we apply judgment to determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For arrangements with multiple distinct performance obligations, we allocate variable consideration related to our 50-50 cost share for development services directly to the associated performance obligation and then allocate the remaining consideration among the performance obligations based on their relative stand-alone selling price.

Stand-alone selling price is the price at which we would sell a promised good or service separately to the customer. When not directly observable, we typically estimate the stand-alone selling price for each distinct performance obligation. Variable consideration that relates specifically to our efforts to satisfy specific performance obligations is allocated entirely to those performance obligations. Other components of the transaction price are allocated based on the relative stand-alone selling price, over which management has applied significant judgment. We develop assumptions that require judgment to determine the stand-alone selling price for license-related performance obligations, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical, regulatory and commercial success. We estimate stand-alone selling price for research and development performance obligations by forecasting the expected costs of satisfying a performance obligation plus an appropriate margin.

In the case of a license that is a distinct performance obligation, we recognize revenue allocated to the license from non-refundable, up-front fees at the point in time when the license is transferred to the licensee and the licensee can use and benefit from the license. For licenses that are bundled with other distinct or combined obligations, we use judgment to assess the nature of the performance obligation to determine whether the performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. If the performance obligation is satisfied over time, we evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

9

The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. Revenue is recorded proportionally as costs are incurred. We generally use the cost-to-cost measure of progress because it best depicts the transfer of control to the customer which occurs as we incur costs. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation (an “input method” under Topic 606). We use judgment to estimate the total cost expected to complete the research and development performance obligations, which include subcontractors’ costs, labor, materials, other direct costs and an allocation of indirect costs. We evaluate these cost estimates and the progress each reporting period and, as necessary, we adjust the measure of progress and related revenue recognition.

For arrangements that include sales-based or usage-based royalties, we recognize revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, we have not recognized any sales-based or usage-based royalty revenue from license agreements.

In connection with our License, Development and Commercialization Agreement (the "Kyowa Kirin Commercialization Agreement") with Kyowa Kirin, we perform development services related to our 50-50 cost sharing arrangement for which revenue is recognized over time. Additionally, we perform services for Kyowa Kirin at their request, the costs of which are fully reimbursed to us. We record the reimbursement for such pass through services as revenue at 100% of reimbursed costs, as control of the additional services for Kyowa Kirin is transferred at the time we incur such costs. The costs of these services are recognized in the Condensed Consolidated Statements of Operations as research and development expense.

We recognized revenue associated with the Kyowa Kirin Commercialization Agreement for the periods presented (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Revenue	$	5,894	$	9,694	$	47,359	$	29,283
Timing of Revenue Recognition:
Services performed over time	$	5,598	$	9,694	$	46,430	$	26,970
Pass through services at a point in time		296		—		929		2,313
	$	5,894	$	9,694	$	47,359	$	29,283

Contract Balances

Accounts receivable are included in “Prepaid expenses and other current assets”, and contract liabilities are included in “Deferred revenue" and "Deferred revenue, long-term” on our Condensed Consolidated Balance Sheets. The following table presents

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changes in accounts receivable, unbilled receivables and contract liabilities accounted for under Topic 606 for the periods presented (in thousands):

	Nine Months Ended March 31,
	2023			2022
Accounts receivable
Accounts receivable, beginning of period	$	—		$	—
Amounts billed		23,507			45,927
Payments received		(23,507	)		(45,927	)
Accounts receivable, end of period	$	—		$	—
Unbilled receivables
Unbilled receivables, beginning of period	$	10,044		$	7,582
Billable amounts		18,043			46,791
Amounts billed		(23,507	)		(45,927	)
Unbilled receivables, end of period	$	4,580		$	8,446
Contract liabilities
Contract liabilities, beginning of period	$	30,900		$	14,677
Payments received		—			20,000
Revenue recognized		(4,145	)		(2,513	)
Revenue recognized from change in estimate for performance obligations that are being closed		(16,565	)		—
Revenue recognized for performance obligations that will no longer commence		(8,607	)		—
Contract liabilities, end of period	$	1,583		$	32,164

The timing of revenue recognition, invoicing and cash collections results in billed accounts receivable and unbilled receivables and deferred revenue (contract liabilities). We invoice our customers in accordance with agreed-upon contractual terms, typically at periodic intervals or upon achievement of contractual milestones. Invoicing may occur subsequent to revenue recognition, resulting in unbilled receivables. We may receive advance payments from our customers before revenue is recognized, resulting in contract liabilities. The unbilled receivables and deferred revenue reported on the Condensed Consolidated Balance Sheets relate to the Kyowa Kirin Commercialization Agreement.

As of March 31, 2023 and June 30, 2022, we had $66.1 million and $95.4 million, respectively, of deferred revenue associated with the Kyowa Kirin Commercialization Agreement, of which $64.5 million relates to the U.S. license which is a unit of account under the scope of ASC Topic 808, Collaborative Arrangements ("Topic 808") and is not a performance obligation under Topic 606. The remaining balance of deferred revenue as of March 31, 2023 and June 30, 2022 of $1.6 million and $30.9 million, respectively, relates to the development services performance obligations which are under the scope of Topic 606. The decrease in deferred revenue comes as a result of our winding down of all zandelisib studies outside of Japan. We updated our estimated costs to complete each of the performance obligations, resulting in a higher progress towards completion based on the ratio of costs incurred to date to the total estimated costs. Additionally, during the three months ended December 31, 2022, we recognized revenue related to non-refundable payments for performance obligations that have not commenced and will no longer be initiated.

Our contract liabilities accounted for under Topic 606 relate to the amount of initial upfront consideration that was allocated to the development services performance obligations. Contract liabilities are recognized over the duration of the performance obligations based on the costs incurred relative to total expected costs.

Revenues from Collaborators

At contract inception, we assess whether the collaboration arrangements are within the scope of Topic 808 to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. This assessment is performed based on the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of Topic 808 that contain multiple units of account, we first determine which units of account within the arrangement are within the scope of Topic 808 and which elements are within the scope of Topic 606. For units of account within collaboration arrangements that are accounted for pursuant to Topic 808, an appropriate recognition method is determined and applied consistently, by analogy to authoritative accounting literature. For elements of collaboration arrangements that are accounted for pursuant to Topic 606, we recognize revenue as discussed above. Consideration received that does not meet the requirements to satisfy Topic 606 revenue recognition criteria is recorded as deferred revenue in the accompanying Condensed Consolidated Balance Sheets, classified as either short-term or long-term deferred revenue based on our best estimate of when such amounts will be recognized.

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Research and Development Costs

Research and development costs are expensed as incurred and include costs paid to third-party contractors to perform research, conduct clinical trials and develop and manufacture drug materials. Clinical trial costs, including costs associated with third-party contractors, are a significant component of research and development expenses. We expense research and development costs based on work performed. In determining the amount to expense, management relies on estimates of total costs based on contract components completed, the enrollment of subjects, the completion of trials, and other events. Costs incurred related to the purchase or licensing of in-process research and development for early-stage products or products that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred.

Leases

We account for our leases under ASC Topic 842, Leases (“Topic 842”). Leases which are identified within the scope of Topic 842 and which have a term greater than one year are recognized on our Condensed Consolidated Balance Sheets as right-of-use ("ROU") assets and lease liabilities. Operating lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected remaining lease term. The lease term includes any renewal options and termination options that we are reasonably certain to exercise. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, we use our incremental borrowing rate. The incremental borrowing rate is determined based on the rate of interest that we would pay to borrow on a collateralized basis an amount equal to the lease payments for a similar term and in a similar economic environment. The interest rate implicit in lease contracts to calculate the present value is typically not readily determinable. As such, significant management judgment is required to estimate the incremental borrowing rate.

Operating lease expense for operating leases is recognized on a straight-line basis over the lease term based on the total lease payments. We have elected the practical expedient to not separate lease and non-lease components for our real estate leases. Our non-lease components are primarily related to property maintenance, which varies based on future outcomes, and thus is recognized in operating lease expense when incurred.

Share-Based Compensation

Share-based compensation expense stock options and restricted stock units ("RSUs") granted to employees and directors is recognized in the Condensed Consolidated Statements of Operations based on estimated amounts. The cost of stock options is measured at the grant date, based on the estimated fair value of the stock option using the Black-Scholes valuation model, which incorporates various assumptions, including expected volatility, risk-free interest rate, the expected term of the award and the dividend yield on the underlying stock. Expected volatility is calculated based on the historical volatility of our stock over the expected option life and other appropriate factors. The expected option term is computed using the "simplified" method as permitted under the provisions of ASC Topic 718, Compensation - Stock Compensation. We use the simplified method to calculate the expected term of stock options and similar instruments, as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. Risk-free interest rates are calculated based on continuously compounded risk-free rates for the appropriate term. The dividend yield is assumed to be zero as we have never paid or declared any cash dividends and do not intend to do so in the foreseeable future. For RSUs, we estimate the grant date fair value using our closing stock price on the date of grant. The estimated fair value of stock options and RSUs is amortized on a straight-line basis over the requisite service period, adjusted for actual forfeitures at the time they occur. The requisite service period is generally the time over which our share-based awards vest.

Income Taxes

Our income tax expense consists of current and deferred income tax expense or benefit. Current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. A deferred income tax asset or liability is recognized for the future tax consequences attributable to tax credits and loss carryforwards and to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of March 31, 2023, we have established a valuation allowance to fully reserve our net deferred tax assets. Tax rate changes are reflected in income during the period such changes are enacted. Changes in our ownership may limit the amount of net operating loss carryforwards that can be utilized in the future to offset taxable income.

There have been no material changes in our unrecognized tax benefits since June 30, 2022, and, as such, the disclosures included in our 2022 Annual Report continue to be relevant for the nine months ended March 31, 2023.

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Recent Accounting Pronouncement

In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), as amended. The amendments in ASU 2016-13 require, among other things, financial assets measured at amortized cost basis to be presented at the net amount expected to be collected as compared to previous U.S. GAAP which delayed recognition until it was probable a loss had been incurred. The amendments in ASU 2016-13 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact that adoption of ASU 2016-13 will have on our financial statements and related disclosures.

Note 2. Fair Value Measurements

The carrying amounts of financial instruments such as cash equivalents, short-term investments and accounts payable approximate the related fair values due to the short-term maturities of these instruments. We invest our excess cash in financial instruments which are readily convertible into cash, such as money market funds and U.S. government securities. Cash equivalents and short-term investments are measured at fair value on a recurring basis and are classified as Level 1 as defined by the fair value hierarchy.

In May 2018, we issued warrants in connection with our private placement of shares of common stock. Pursuant to the terms of the warrants, we could be required to settle the warrants in cash in the event of an acquisition of us and, as a result, the warrants are required to be measured at fair value and reported as a liability in the Condensed Consolidated Balance Sheet. We recorded the fair value of the warrants upon issuance using the Black-Scholes valuation model and are required to revalue the warrants at each reporting date with any changes in fair value recorded on our Condensed Consolidated Statement of Operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. Inputs used to determine estimated fair value of the warrant liabilities include the estimated fair value of the underlying stock at the valuation date, the estimated term of the warrants, risk-free interest rates, expected dividends and the expected volatility of the underlying stock. The significant unobservable inputs used in the fair value measurement of the warrant liabilities were the volatility rate and the estimated term of the warrants. Generally, increases (decreases) in the fair value of the underlying stock and estimated term would result in a directionally similar impact to the fair value measurement. The change in the fair value of the Level 3 warrant liability is reflected in the Condensed Consolidated Statements of Operations for the three and nine months ended March 31, 2023 and 2022, respectively.

To calculate the fair value of the warrant liability, the following assumptions were used for the periods presented:

	March 31, 2023			June 30, 2022
Risk-free interest rate		4.6	%		2.8	%
Expected life (years)		0.1			0.9
Expected volatility		91.5	%		139.4	%
Dividend yield		0.0	%		0.0	%
Black-Scholes Fair Value	$	—		$	0.10

The following table sets forth a summary of changes in the estimated fair value of our Level 3 warrant liability for the nine months ended March 31, 2023 and 2022 (in thousands):

	Fair Value of Warrants Using Significant Unobservable Inputs (Level 3)
	2023			2022
Balance at July 1,	$	1,603		$	22,355
Change in estimated fair value of liability classified warrants		(1,603	)		(20,819	)
Balance at March 31,	$	—		$	1,536

Note 3. Short-Term Investments

As of March 31, 2023, and June 30, 2022, our short-term investments consisted of $103.2 million and $137.5 million, respectively, in U.S. government securities. The short-term investments held as of March 31, 2023 and June 30, 2022 had maturity dates of less than one year, are considered to be “held to maturity” and are carried at amortized cost. As of March 31, 2023, and June 30, 2022, the gross holding gains and losses were immaterial.

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Note 4. License Agreements

Kyowa Kirin License, Development and Commercialization Agreement

In April 2020, we entered into the Kyowa Kirin Commercialization Agreement under which we granted to Kyowa Kirin a co-exclusive, sublicensable, payment-bearing license under certain patents and know-how controlled by us to develop and commercialize zandelisib and any pharmaceutical product containing zandelisib for all human indications in the U.S. (the "U.S. License"), and an exclusive (subject to certain retained rights to perform obligations under the Kyowa Kirin Commercialization Agreement), sublicensable, payment-bearing, license under certain patents and know-how controlled by us to develop and commercialize zandelisib and any pharmaceutical product containing zandelisib for all human indications in countries outside of the U.S. (the “Ex-U.S." and the “Ex-U.S. License”). Kyowa Kirin granted to us a co-exclusive, sublicensable, license under certain patents and know-how controlled by Kyowa Kirin to develop and commercialize zandelisib for all human indications in the U.S., and a co-exclusive, sublicensable, royalty-free, fully paid license under certain patents and know-how controlled by Kyowa Kirin to perform our obligations in the Ex-U.S. under the Kyowa Kirin Commercialization Agreement. Kyowa Kirin paid us an initial payment of $100.0 million.

Kyowa Kirin is responsible for the development and commercialization of zandelisib in the Ex-U.S. and, subject to certain exceptions, is solely responsible for all costs related thereto. We provide to Kyowa Kirin certain drug supplies necessary for the development and commercialization of zandelisib in the Ex-U.S., with the understanding that Kyowa Kirin will assume responsibility for manufacturing for the Ex-U.S. as soon as practicable.

We assessed the Kyowa Kirin Commercialization Agreement in accordance with Topic 808 and Topic 606 and determined that our obligations comprise the U.S. License, the Ex-U.S. License, and development services (the “Development Services”). We determined that the Kyowa Kirin Commercialization Agreement is a collaborative arrangement in accordance with Topic 808 that contains multiple units of account, as we and Kyowa Kirin are both active participants in the development and commercialization activities and are exposed to significant risks and rewards that are dependent on commercial success of the activities of the arrangement. The U.S. License is a unit of account under the scope of Topic 808 and is not a deliverable under Topic 606, while the Ex-U.S. License and Development Services performance obligations are under the scope of Topic 606.

As discussed in Note 1, we and Kyowa Kirin jointly decided to discontinue zandelisib development in the U.S. As of March 31, 2023, we updated our assessment of the total transaction price from the Kyowa Kirin Commercialization Agreement to be $217.0 million, comprised of the upfront payment of $100.0 million, milestone payments of $20.0 million, estimated development cost-sharing of $91.8 million, and deferred revenue of $5.2 million. As of March 31, 2023, the updated assessment reflects a decrease in estimated variable consideration related to development cost sharing of $143.1 million from June 30, 2022. In December 2022, we announced our plan to discontinue the global development of zandelisib outside of Japan. As a result, we decreased our estimate for variable consideration related to development cost sharing. During the three months ended December 31, 2022, we recognized revenue of $16.6 million from the change in estimate. Additionally, during the three months ended December 31, 2022, we recognized $8.6 million of revenue related to non-refundable payments for performance obligations that have not commenced and will no longer be initiated. Any variable consideration related to sales-based royalties and commercial milestones related to licenses of intellectual property will be determined when the sale or usage occurs, and is therefore excluded from the transaction price. In addition, we are eligible to receive future development and regulatory milestones upon the achievement of certain criteria; however, these amounts are excluded from variable consideration as the risk of significant revenue reversal will only be resolved depending on future research and development and/or regulatory approval outcomes. We re-evaluate the estimated variable consideration included in the transaction price and any related constraints at the end of each reporting period.

We allocated the transaction price of the Ex-U.S. License and Development Services performance obligations to each unit of account. Variable consideration that relates specifically to our efforts to satisfy specific performance obligations are allocated entirely to those performance obligations. Other components of the transaction price are allocated based on the relative stand-alone selling price, over which management has applied significant judgment. We developed the estimated stand-alone selling price for the licenses using the risk-adjusted net present values of estimated cash flows, and the estimated stand-alone selling price of the development services performance obligations by estimating costs to be incurred, and an appropriate margin, using an income approach.

We determined that control of the U.S. License and Ex-U.S. License were transferred to Kyowa Kirin during the year ended June 30, 2020, and recognized revenue of $21.0 million related to the Ex-U.S. License. The $64.5 million transaction price allocated to the U.S. License obligation accounted for under Topic 808 is included as non-current deferred revenue. As described in Note 1 we and Kyowa Kirin intend to terminate the Kyowa Kirin Commercialization Agreement. As of March 31, 2023 and June 30, 2022, we have deferred revenue of $1.6 million and $30.9 million, respectively, related to the transaction price allocated to the Development Services performance obligations and are recognizing this revenue based on the proportional performance of these development activities, which we expect to recognize through fiscal year 2024.

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Presage License Agreement

In September 2017, we entered into a license agreement with Presage Biosciences, Inc. (“Presage”). Under the terms of such license agreement (the “Presage License Agreement”), Presage granted to us exclusive worldwide rights to develop, manufacture and commercialize voruciclib, a clinical-stage, oral and selective CDK inhibitor, and related compounds. In exchange, we paid $2.9 million. With respect to the first indication, an incremental $2.0 million payment, due upon dosing of the first subject in the first registration trial, will be owed to Presage, for total payments of $4.9 million prior to receipt of marketing approval of the first indication in the U.S., E.U. or Japan. Additional potential payments of up to $179 million will be due upon the achievement of certain development, regulatory and commercial milestones. We will also pay mid-single-digit tiered royalties on the net sales of any product successfully developed. As an alternative to milestone and royalty payments related to countries in which we sublicense product rights, we will pay to Presage a tiered percent (which decreases as product development progresses) of amounts received from such sublicensees.

Note 5. BeiGene Collaboration

In October 2018, we entered into a clinical collaboration with BeiGene, Ltd. (“BeiGene”) to evaluate the safety and efficacy of zandelisib in combination with BeiGene’s zanubrutinib (marketed as Brukinsa®), an inhibitor of Bruton’s tyrosine kinase, for the treatment of patients with B-cell malignancies. Under the terms of the clinical collaboration agreement, we amended our ongoing Phase 1b trial to include evaluation of zandelisib in combination with zanubrutinib in patients with B-cell malignancies. Study costs are being shared equally by the parties, and we agreed to supply zandelisib and BeiGene agreed to supply zanubrutinib. We record the costs reimbursed by BeiGene as a reduction of our research and development expenses. We retained full commercial rights for zandelisib and BeiGene retained full commercial rights for zanubrutinib. With the discontinuation of the zandelisib program outside of Japan, this clinical collaboration will be concluding with the discontinuation of the Phase 1b trial.

Note 6. Net Loss Per Share

Basic and diluted net loss per share are computed using the weighted average number of shares of common stock outstanding during the period, less any shares subject to repurchase or forfeiture. There were no shares of common stock subject to repurchase or forfeiture for the three and nine months ended March 31, 2023 and 2022. Diluted net loss per share is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period.

The following table presents the calculation of net loss used to calculate basic loss and diluted loss per share (in thousands):

	Three Months Ended March 31,						Nine Months Ended March 31,
	2023			2022			2023			2022
Net loss – basic	$	(15,438	)	$	(8,725	)	$	(21,809	)	$	(38,391	)
Change in fair value of warrant liability		—			—			—			(8,046	)
Net loss – diluted	$	(15,438	)	$	(8,725	)	$	(21,809	)	$	(46,437	)

Share used in calculating net loss per share was determined as follows (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Weighted average shares used in calculating basic net loss per share		6,663		6,653		6,663		6,080
Effect of potentially dilutive common shares from equity awards and liability-classified warrants		—		—		—		44
Weighted average shares used in calculating diluted net loss per share		6,663		6,653		6,663		6,124

Our potentially dilutive shares, which include outstanding stock options, restricted stock units and warrants, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive.

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The following table presents weighted average potentially dilutive shares that have been excluded from the calculation of net loss per share because of their anti-dilutive effect (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Stock options		1,258		1,020		1,340		1,029
Warrants		905		11		837		12
Restricted stock units		—		803		—		268
Total anti-dilutive shares		2,163		1,834		2,177		1,309

Note 7. Commitments and Contingencies

We have contracted with various consultants and third parties to assist us in pre-clinical research and development and clinical trials work for our leading drug compounds. The contracts are terminable at any time, but obligate us to reimburse the providers for any time or costs incurred through the date of termination. We also have employment agreements with certain of our current employees that provide for severance payments and accelerated vesting for share-based awards if their employment is terminated under specified circumstances.

Presage License Agreement

As discussed in Note 4, we are party to a license agreement with Presage under which we may be required to make future payments upon the achievement of certain development, regulatory and commercial milestones, as well as potential future royalties based upon net sales. As of March 31, 2023, we had not accrued any amounts for potential future payments as achievement of the milestones had not been met.

Torreya Partners

In October 2022, we engaged Torreya Partners as a financial advisor to help explore additional strategic opportunities. As part of this engagement, we issued warrants to acquire shares of our common stock having a value equal to $0.5 million. These warrants were issued during the three months ended March 31, 2023. We will also pay Torreya Partners a transaction fee equal to 20% of aggregate consideration, up to a maximum of $2.0 million, upon completion of a strategic transaction. As of March 31, 2023, we have not accrued any amount for potential future transaction fees.

Note 8. Leases

In July 2020, we entered into a lease agreement (the "Initial Lease Agreement") for office space in San Diego, California. The Initial Lease Agreement was extended to November 30, 2029, in accordance with the amended lease agreement that we entered into in January 2022 (the "Amended Lease Agreement"). The Amended Lease Agreement, which began on July 1, 2022 and expires on November 30, 2029, provides additional office space adjacent to our current office in San Diego. Upon taking control of the additional office space on July 1, 2022, we recognized operating lease ROU assets obtained in exchange for operating lease liabilities of $4.3 million. The Initial Lease Agreement and Amended Lease Agreement are collectively referred to as the "Lease Agreements" and have been accounted for as operating leases.

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The following is a schedule of the future minimum lease payments under the Lease Agreements, reconciled to the operating lease liability, as of March 31, 2023 (in thousands):

	March 31, 2023
Remainder of fiscal year ending June 30, 2023	$	566
Years ending June 30,
2024		2,335
2025		1,913
2026		2,477
2027		2,551
2028		2,715
Thereafter		4,386
Total lease payments		16,943
Less: Present value discount		(3,891	)
Total operating lease liability	$	13,052
Balance Sheet Classification – Operating Leases
Operating lease liability	$	1,385
Operating lease liability, long-term		11,667
Total operating lease liability	$	13,052
Other Balance Sheet Information – Operating Leases
Weighted average remaining lease term (in years)		6.7
Weighted average discount rate		7.50	%

The Lease Agreements include rent escalations over the lease terms. In addition, the Lease Agreements include renewal options which were not included in the determination of the ROU assets or lease liabilities as the renewals were not reasonably certain at the inception of the Lease Agreements. Under the terms of the Lease Agreements, we are subject to charges for variable non-lease components (e.g., common area maintenance, maintenance, etc.) that are not included in the ROU assets and operating lease liabilities and are recorded as an expense in the period incurred.

The total operating lease costs and supplemental cash flow information related to our operating leases were as follows (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Operating lease expense	$	609	$	377	$	1,826	$	1,130
Operating cash flows from operating leases	$	567	$	380	$	1,700	$	1,139

Note 9. Stockholders’ Equity

Equity Transactions

Shelf Registration Statement

We have a shelf registration statement that permits us to sell, from time to time, up to $200.0 million of common stock, preferred stock and warrants. The shelf registration was filed and declared effective in May 2020, and carried forward approximately $107.5 million of unsold securities registered under the prior shelf registration statement. As of March 31, 2023, there was $123.4 million aggregate value of securities available under the shelf registration statement, including $60.0 million remaining available under the 2020 ATM Sales Agreement described below. The shelf registration expires on May 18, 2023.

At-The-Market Equity Offering

On November 10, 2020, we entered into an At-The-Market Equity Offering Sales Agreement (the “2020 ATM Sales Agreement”), pursuant to which we may sell an aggregate of up to $60.0 million of our common stock pursuant to the shelf registration statement. As of March 31, 2023, there was $60.0 million remaining available under the 2020 ATM Sales Agreement.

Warrants

As of March 31, 2023, we have outstanding warrants to purchase 802,949 shares of our common stock related to a private placement equity financing that we closed in May 2018. The warrants are fully vested, exercisable at a price of $50.80 per share and expire in May 2023. Pursuant to the terms of the warrants, we could be required to settle the warrants in cash in the event of an

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acquisition of us and, as a result, the warrants are required to be measured at fair value and reported as a liability in the Condensed Consolidated Balance Sheets. The warrants were revalued as of March 31, 2023 and June 30, 2022 at zero and $1.6 million, respectively. The change in fair value of zero and $1.6 million was recorded on the Condensed Consolidated Statement of Operations for the three and nine months ended March 31, 2023.

As of March 31, 2023, we also have outstanding warrants to purchase 102,513 shares of our common stock issued to Torreya Partners. The warrants are fully vested, exercisable at a price of $6.80 per share and expire in October 2027.

Note 10. Share-based Compensation

We use equity-based compensation programs to provide long-term performance incentives for our employees. These incentives consist primarily of stock options and RSUs. In December 2008, we adopted the MEI Pharma, Inc. 2008 Stock Omnibus Equity Compensation Plan (“Omnibus Plan”), as amended and restated from time-to-time, under which 1,450,740 shares of common stock are authorized for issuance. The Omnibus Plan provides for the grant of options and/or other stock-based or stock-denominated awards to our non-employee directors, officers, and employees. In January 2023, our stockholders approved the increase of 400,000 additional shares available for future grant under the Omnibus Plan. As of March 31, 2023, there were 583,468 shares available for future grant under the Omnibus Plan.

In May 2021, we adopted the 2021 Inducement Plan ("Inducement Plan"), under which 125,000 shares of common stock are authorized for issuance. The Inducement Plan is intended to assist us in attracting and retaining selected individuals to serve as employees who are expected to contribute to our success, by providing an inducement for such individuals to enter into employment with us, and to achieve long-term objectives that will benefit our stockholders. As of March 31, 2023, there were 25,185 shares available for future grant under the Inducement Plan.

Total share-based compensation expense for all stock awards consisted of the following for the periods presented (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Research and development	$	374	$	1,118	$	1,224	$	2,398
General and administrative		544		1,719		2,066		5,302
Total share-based compensation expense	$	918	$	2,837	$	3,290	$	7,700

Stock Options

Stock options granted to employees vest 25% one year from the date of grant and ratably each month thereafter for a period of 36 months and expire ten years from the date of grant. Stock options granted to directors vest ratably each month for a period of 12 months from the date of grant and expire ten years from the date of grant. Of the total options outstanding of 1,252,931 as of March 31, 2023, 1,153,116 were granted under the Omnibus Plan and 99,815 were granted under the Inducement Plan.

A summary of our stock option activity and related data follows:

	Number of Options			Weighted- Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at June 30, 2022		996,700		$	57.00
Granted		462,201			10.66
Expired		(7,834	)		52.62
Forfeited/Cancelled		(198,136	)		40.37
Outstanding at March 31, 2023		1,252,931			42.56		7.5	$	—
Vested and exercisable at March 31, 2023		664,330			56.70		6.2	$	—

As of March 31, 2023, the aggregate intrinsic value of outstanding options was calculated as the difference between the exercise price of the underlying options and the closing price of our common stock of $4.58 on that date.

Unrecognized compensation expense related to non-vested stock options totaled $3.9 million as of March 31, 2023. Such compensation expense is expected to be recognized over a weighted average period of 1.5 years. As of March 31, 2023, we expect all options to vest.

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We use the Black-Scholes valuation model to estimate the grant date fair value of stock options. To calculate these fair values, the following weighted average assumptions were used for the periods presented:

	Nine Months Ended March 31,
	2023			2022
Risk-free interest rate		2.9	%		1.2	%
Expected life (years)		6.0			6.0
Expected volatility		84.1	%		68.8	%
Dividend yield		0.0	%		0.0	%
Weighted average grant date fair value	$	7.71		$	33.00

Restricted Stock Units

A summary of our RSU activity and related data for the nine months ended March 31, 2023 was as follows:

	Number of RSUs			Weighted Average Grant Date Fair Value
Non-vested at June 30, 2022		9,220		$	69.80
Vested		(9,220	)	$	69.80
Non-vested at March 31, 2023		—		$	—

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q ("Quarterly Report") includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding the future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, without limitation, those described in “Risk Factors” in our 2022 Annual Report on Form 10-K ("2022 Annual Report"), as filed with the Securities and Exchange Commission on September 8, 2022. Set forth below is a summary of the principal risks we face:

Risks Related to the Company:

•We have identified a material weakness in our internal control over financial reporting and determined that our disclosure controls and procedures were ineffective as of June 30, 2021, as a result of the restatement of our financial statements as of and for the years ended June 30, 2021 and 2020. Relevant unaudited interim financial information for each of the quarterly periods ended September 30, 2020 through December 31, 2021 have also been restated. In the future, we may identify additional material weaknesses or otherwise fail to maintain an effective system of internal control over financial reporting or adequate disclosure controls and procedures, which may result in material errors of our financial statements or cause us to fail to meet our periodic reporting obligations;

•We will need substantial additional funds to progress the clinical trial programs for our drug candidates, to commercialize our drug candidates, and to develop new compounds. The actual amount of funds we will need will be determined by a number of factors, some of which are beyond our control;

•We are a clinical stage clinical research and development stage company and are likely to incur operating losses for the foreseeable future;

•The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current drug candidates may not have favorable results in later studies or trials;

•Negative U.S. and global economic conditions may pose challenges to our business strategy, which relies on funding from the financial markets or collaborators;

•Changes in drug candidate manufacturing or formulation may result in additional costs or delay;

•If third parties with whom we collaborate on the development and commercialization of our drug candidates do not satisfy their obligations, do not otherwise pursue development or commercialization of our drug candidates or if they terminate their agreements with us, we may not be able to develop or commercialize our drug candidates;

•We are subject to significant obligations to Presage in connection with our license of voruciclib, and we may become subject to significant obligations in connection with future licenses we obtain, which could adversely affect the overall profitability of any products we may seek to commercialize, and such licenses of drug candidates, the development and commercialization for which we are solely responsible, may never become profitable;

•Our business strategy may include entry into additional collaborative or license agreements. We may not be able to enter into collaborative or license agreements or may not be able to negotiate commercially acceptable terms for these agreements;

•Final approval by regulatory authorities of our drug candidates for commercial use may be delayed, limited or prevented, any of which would adversely affect our ability to generate operating revenues;

•The FDA may determine that our drug candidates have undesirable side effects that could delay or prevent their regulatory approval or commercialization;

•If we experience delays or difficulties in the enrollment of patients in clinical trials, our completion of clinical trials and receipt of necessary regulatory approvals could be delayed or prevented;

•Changes in funding for the FDA and other government agencies or future government shutdowns could cause delays in the submission and regulatory review of marketing applications, which could negatively impact our business or prospects;

•Failure to obtain regulatory approval in foreign jurisdictions would prevent us from marketing our products internationally;

•Any designation granted by the FDA for any of our product candidates may not lead to a faster development or regulatory review or approval process and does not increase the likelihood that our product candidates will receive marketing approval. We may also not be able to obtain or maintain any such designation;

•Any orphan drug designations we receive may not confer marketing exclusivity or other benefits;

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•Even if we or our licensees receive regulatory approval to commercialize our drug candidates, our ability to generate revenues from any resulting products will be subject to a variety of risks, many of which are out of our control;

•If any products we develop become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, our ability to successfully commercialize our products will be impaired;

•Our drug candidates are subject to ongoing government regulation both before and after regulatory approval;

•We may not be able to establish the contractual arrangements necessary to develop, market and distribute our drug candidates;

•Our commercial opportunity will be reduced or eliminated if competitors develop and market products that are more effective, have fewer side effects or are less expensive than our drug candidates;

•Our product candidates may face competition sooner than anticipated;

•We rely on third parties to conduct our clinical trials and pre-clinical studies. If those parties do not successfully carry out their contractual duties or meet expected deadlines, our drug candidates may not advance in a timely manner or at all;

•We will depend on third party suppliers and contract manufacturers for the manufacturing of our drug candidates and have no direct control over the cost of manufacturing our drug candidates. Increases in the cost of manufacturing our drug candidates would increase our costs of conducting clinical trials and could adversely affect our future profitability;

•We rely on acquisitions or licenses from third parties to expand our pipeline of drug candidates;

•Our commercial success is dependent, in part, on obtaining and maintaining patent protection and preserving trade secrets, which cannot be guaranteed;

•Claims by other companies that we infringe on their proprietary technology may result in liability for damages or stop our development and commercialization efforts;

•We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property;

•We may be subject to substantial costs stemming from our defense against third-party intellectual property infringement claims;

•We face a risk of product liability claims and claims may exceed our insurance limits;

•Our employees, independent contractors, consultants, commercial partners, principal investigators, or CROs may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business;

•Our business and operations would suffer in the event of system failures;

•Our efforts will be seriously jeopardized if we are unable to retain and attract key employees;

•Laws, rules and regulations relating to public companies may be costly and impact our ability to attract and retain directors and executive officers;

•Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer;

•If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business;

•We or the third parties upon whom we depend may be adversely affected by natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster;

•Limitations on the deductibility of net operating losses could adversely affect our business and financial condition;

•The trading price of the shares of our common stock has been and may continue to be highly volatile and could decline in value and we may incur significant costs from class action litigation;

•Future sales of our common stock, including common stock issued upon exercise of outstanding warrants or options, may depress the market price of our common stock and cause stockholders to experience dilution;

•Because we do not intend to pay, and have not paid, any cash dividends on our shares of common stock, our stockholders will not be able to receive a return on their shares unless the value of our common stock appreciates and they sell their shares;

•We will have broad discretion over the use of the net proceeds from any exercise of outstanding warrants and options;

•We are authorized to issue blank check preferred stock, which could adversely affect the holders of our common stock;

•Anti-takeover provisions contained in our amended and restated certificate of incorporation and fourth amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt;

•Our fourth amended and restated bylaws require, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against our directors, officers, other employees or stockholders; and

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•Our executive officers and directors may sell shares of their stock, and these sales could adversely affect our stock price.

Risks Related to the Proposed Merger:

•The Exchange Ratio will not be adjusted based on the market price of our common stock or Infinity Common Stock, so the merger consideration at the Closing may have a greater or lesser value than at the time the Merger Agreement was signed;

•If the conditions to the Merger are not satisfied or waived, the Merger may not occur;

•The Merger may be completed even though a material adverse effect may result from the announcement of the Merger, industry wide changes or other causes;

•If we and Infinity complete the Merger, the combined company may need to raise additional capital by issuing equity securities or additional debt or through licensing arrangements, which may cause significant dilution to the combined company’s stockholders or restrict the combined company’s operations;

•Our directors and executive officers and Infinity's directors and executive officers have interests in the Merger that are different from yours and that may influence them to support or approve the Merger without regard to your interests;

•Our securityholders and Infinity securityholders will have a reduced ownership and voting interest in, and will exercise less influence over the management of, the combined company following the completion of the Merger as compared to their current ownership and voting interests in the respective companies;

•If the Merger is not completed, our stock price may fluctuate significantly;

•During the pendency of the Merger, we may not be able to enter into a business combination with another party on more favorable terms because of restrictions in the Merger Agreement, which could adversely affect our respective business prospects;

•Certain provisions of the Merger Agreement may discourage third parties from submitting competing proposals, including proposals that may be superior to the Merger;

•The financial analyses, estimates and forecasts considered by us and Infinity in connection with the Merger may not be realized;

•The announcement and pendency of the Merger, whether or not consummated, may adversely affect the trading price of our common stock and our business prospects;

•Failure to consummate the Merger may result in either our or Infinity paying a termination fee to the other party and could harm the common stock price of the party obligated to pay the termination fee and such party’s future business and operations;

•If the Merger is not consummated, we and Infinity would need to determine whether to continue its business, consummate another strategic transaction, or dissolve and liquidate its assets;

•We or Infinity may waive one or more of the conditions to the Merger, and may do so without re-soliciting stockholder approval;

•The Merger may not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, resulting in recognition of taxable gain or loss by Infinity stockholders in respect of their Infinity Common Stock;

•Lawsuits could delay or prevent the Merger;

These risks are not exhaustive. Other sections of this report and our other filings with the Securities and Exchange Commission ("SEC") include additional factors which could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for us to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Past performance may not be an indicator of future results. The following discussion is qualified in its entirety by, and should be read in conjunction with, the more detailed information set forth in the consolidated financial statements and the notes thereto appearing elsewhere in this Quarterly Report and the audited financial statements and notes thereto included in our 2022 Annual Report, as filed with the SEC. Operating results are not necessarily indicative of results that may occur in future periods.

Overview

MEI Pharma, Inc. (Nasdaq: MEIP) is a clinical stage pharmaceutical company focused on developing potential new therapies for cancer. MEI Pharma’s portfolio of drug candidates includes clinical-stage candidates with differentiated or novel mechanisms of

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action intended to address unmet medical needs and deliver improved benefit to patients, either as standalone treatments or in combination with other therapeutic options. Our common stock is listed on the Nasdaq Capital Market under the symbol “MEIP.”

In February 2023, we, Infinity Pharmaceuticals, Inc. (“Infinity”), and Meadow Merger Sub, Inc., our wholly owned subsidiary (“Merger Sub”) entered into an agreement and plan of merger (“Merger Agreement”). The Merger Agreement provides that Merger Sub will merge with and into Infinity, with Infinity being the surviving entity as a wholly-owned subsidiary of us. Upon completion of the Merger, our stockholders will own approximately 58% of the combined company’s outstanding common stock and Infinity's stockholders will own approximately 42%. Subject to stockholder approval and the subsequent closing of the merger, the combined company is expected to be renamed and trade on the Nasdaq Stock Market. The combined company would be headquartered in San Diego, California. The Merger Agreement has been approved by the Boards of Directors of both companies. The merger is expected to close in mid-2023, subject to approvals by our and Infinity's stockholders, respectively.

In accordance with the Merger Agreement, prior to the consummation of the Merger, Daniel P. Gold, will resign as Chief Executive Officer. Dr. Gold will continue to serve on the Board of Directors of the combined company. David M. Urso, current Chief Operating Officer and General Counsel, will become Chief Executive Officer.

In December 2022, we announced plans to realign our clinical development efforts after jointly deciding with our development partner, Kyowa Kirin Co., Ltd. (“Kyowa Kirin”), to discontinue development of our lead drug candidate, zandelisib, outside of Japan. In connection with the realignment, we are focusing our development efforts on our two earlier stage clinical assets, voruciclib and ME-334. Additionally, we initiated a staggered workforce reduction, affecting 28 employees in December 2022 (representing approximately 27% of our workforce) and an additional 14 employees as of April 2023. Following completion of the close of the zandelisib development program, workforce reductions completed to date and any further workforce reductions necessary to fully align resources going forward, we expect that our existing cash, cash equivalents and short-term investments will be sufficient to fund operations for at least 12 months from the issuance of this Quarterly Report.

Clinical Development Programs

Our business strategy is to build our pipeline by licensing or acquiring promising cancer agents and creating value in programs through development, strategic partnerships and commercialization, as appropriate. Our objective is to leverage the mechanisms and properties of our pipeline drug candidates to optimize the balance between efficacy and tolerability to meet the needs of patients with cancer. Our drug candidate pipeline includes voruciclib, an oral cyclin-dependent kinase 9 (“CDK9”) inhibitor and ME-344, an intravenous small molecule targeting the oxidative phosphorylation pathway in the mitochondria.

1.Study pending initiation.

Voruciclib: Potent Orally Administered CDK9 Inhibitor in Phase 1 Studies

Voruciclib is a potent orally administered CDK9 inhibitor. Voruciclib is being evaluated in a Phase 1b trial evaluating dose and schedule in patients with acute myeloid leukemia (“AML”) and B-cell malignancies. Voruciclib is also being evaluated in pre-clinical studies to explore the potential synergistic activity in various solid tumor cancers of voruciclib in combination with drug-candidates that targets in the RAS signaling pathway, including KRAS.

Voruciclib Scientific Overview: Cell Cycle Signaling

CDK9 has important functions in cell cycle regulation, including the modulation of two therapeutic targets in cancer:

•CDK9 is a transcriptional regulator of the myeloid leukemia cell differentiation protein (“MCL1”), a member of the family of anti-apoptotic proteins which, when elevated, may prevent the cell from undergoing cell death. Inhibition of CDK9 blocks the production of MCL1, which is an established resistance mechanism to the B-cell lymphoma (“BCL2”) inhibitor venetoclax (marketed as Venclexta®).

•CDK9 is a transcriptional regulator of the MYC proto-oncogene protein (“MYC”) which regulates cell proliferation and growth. Upregulation of MYC is implicated in many human cancers and is frequently associated with poor prognosis and

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unfavorable patient survival. CDK9, in addition to being a transcription factor for MYC, also decreases phosphorylation of MYC protein that is implicated in stabilizing MYC in KRAS mutant cancers.

Targeting MYC directly has historically been difficult, but CDK9 is a promising approach to target this oncogene.

Voruciclib: Inhibition of MCL1

In pre-clinical studies voruciclib shows dose-dependent suppression of MCL1; in December 2017, a study of voruciclib published in the journal Nature Scientific Reports reported that the combination of voruciclib plus the BCL-2 inhibitor venetoclax was capable of inhibiting two master regulators of cell survival, MCL-1 and BCL-2, and achieved synergistic antitumor effect in an aggressive subset of DLBCL pre-clinical models.

In a peer reviewed manuscript published in 2020 by Luedtke et al, it was reported that the inhibition of CDK9 by voruciclib synergistically enhances cell death induced by the Bcl-2 selective inhibitor venetoclax in preclinical models of AML. The data demonstrated that voruciclib synergizes with venetoclax to induce programmed cell death, or apoptosis, in both AML cell lines and primary patient samples. It was also demonstrated that voruciclib downregulates MCL1, which is relevant for the synergy between voruciclib and venetoclax, and further that voruciclib also downregulates MYC, which also contributes to the synergies with venetoclax.

The research presented suggests that voruciclib is an attractive therapeutic target for treating cancers in combination with venetoclax or other BCL-2 inhibitors, and is supportive of our ongoing clinical evaluation of voruciclib in B-cell malignancies and AML.

Voruciclib: Inhibition of MYC

Many cancers are associated with overexpression of MYC, a transcription factor regulating cell proliferation and growth. CDK9 is a known regulator of MYC transcription and a modulator of MYC protein phosphorylation. Data reported at the American Association for Cancer Research (“AACR”) Annual Meeting 2021 in preclinical models demonstrates that voruciclib:

•Results in a rapid decrease in the phosphorylation of proteins that promote MYC transcription;

•Rapidly decreases phosphorylation of MYC protein on Ser62, a site implicated in stabilizing MYC in KRAS mutant cancers;

•Possesses single agent activity against multiple KRAS mutant cancer cell lines both in vitro and in vivo; and

•Synergistically inhibits KRAS G12C mutant cancer cell lines in combination with KRAS G12C inhibitors, both in vitro and in vivo.

The research presented suggests that voruciclib could be an attractive therapeutic agent for cancers, including solid tumors, dependent on the activity of MYC.

Clinical Program

We are evaluating patients with hematological malignancies in a Phase 1b clinical trial evaluating the dose and schedule of voruciclib. The trial started with the evaluation of dose and schedule of voruciclib as a monotherapy in patients with relapsed and refractory B-cell malignancies and AML after failure of prior standard therapies to determine the safety, preliminary efficacy and maximum tolerated dose. We are now also evaluating the dose and schedule of voruciclib in combination with venetoclax, a BCL2 inhibitor, initially in patients with AML and subsequently across multiple indications where BCL2 inhibition has been shown to be effective. The primary goal of the Phase 1b study is to assess the safety, and possible synergies, of voruciclib administered in combination with venetoclax. We are planning to report key interim clinical data from this trial around calendar year-end 2023.

As reported at the American Society of Hematology 2021 annual meeting in a poster presentation, data to date from the Phase 1 study evaluating voruciclib as a monotherapy on an optimized schedule of 14 consecutive days in a 28-day cycle was well tolerated. No dose limiting toxicities were observed and no significant myelosuppression was seen in patients with B-cell malignancies, suggesting a lower likelihood of additive toxicities in combination with venetoclax. Disease stabilization was observed in heavily pretreated patients and differentiation syndrome was observed in AML patients, which is indicative of biologic activity.

Voruciclib was also previously evaluated in more than 70 patients with solid tumors in multiple Phase 1 studies. The totality of the clinical data, along with data from pre-clinical studies, suggests voruciclib’s ability to inhibit its molecular target at a projected dose as low as 150 mg daily. In one clinical study, voruciclib was evaluated in combination with vemurafenib (marketed as Zelboraf®) in nine patients with BRAF mutated advanced/inoperable malignant melanoma. All three BRAF/MEK naive patients achieved a response: two partial responses and one complete response. In this study voruciclib was dosed at 150 mg daily plus vemurafenib 720 mg or 960 mg twice daily in 28-day cycles. The most common adverse events were fatigue, constipation, diarrhea, arthralgia and headache. One instance of grade 3 fatigue was dose limiting and no serious adverse events related to voruciclib were reported. Other clinical studies evaluated voruciclib at doses up to 850 mg in patients with solid tumors, demonstrating additional evidence of potential biologic activity and an adverse event profile generally consistent with other drugs in its class.

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ME-344: Clinical Stage Mitochondrial Inhibitor with Combinatorial Potential

ME-344 is our novel isoflavone-derived mitochondrial inhibitor drug candidate that demonstrates tumor selective activity in pre-clinical studies. It targets the oxidative phosphorylation pathway involved in adenosine triphosphate (“ATP”) production in the mitochondria. ME-344 has been evaluated in clinical studies, including an investigator-initiated, multi-center, randomized, window of opportunity clinical trial in combination with the vascular endothelial growth factor (“VEGF”) inhibitor bevacizumab (marketed as Avastin ®) that enrolled a total of 42 patients with human epidermal growth factor receptor 2 (“HER2”) negative breast cancer.

ME-344 Scientific Overview: Cancer Metabolism

Tumor cells often display a high metabolic rate to support cell division and growth. This heightened metabolism requires a continual supply of energy in the form of ATP. The two major sources of ATP are the specialized cellular organelles termed mitochondria and through the metabolism of carbohydrates via the glycolysis pathway, which is frequently unregulated in cancer cells in a phenomenon called the Warburg Effect.

ME-344 was identified through a screen of more than 400 new chemical structures originally created based on the central design of naturally occurring plant isoflavones. We believe that some of these synthetic compounds, including our drug candidate ME-344, interact with specific mitochondrial enzyme targets, resulting in the inhibition of ATP generation. When these compounds interact with their target, a rapid reduction in ATP occurs, which leads to a cascade of biochemical events within the cell and ultimately to cell death.

Clinical Program

ME-344 demonstrated evidence of single agent activity against refractory solid tumors in a Phase 1 trial, and in pre-clinical studies tumor cells treated with ME-344 resulted in a rapid loss of ATP and cancer cell death. In addition to single agent activity, ME-344 may also have significant potential in combination with anti-angiogenic therapeutics. In pre-clinical studies, it was shown that one outcome of anti-angiogenics was to reduce the rate of glycolysis in tumors as a mechanism to slow tumor growth. However, tumor metabolism was able to shift to mitochondrial metabolism for energy production to support continued tumor proliferation. In such cases of tumor plasticity in the presence of treatment with anti-angiogenics, targeting the alternative metabolic source with ME-344 may open an important therapeutic opportunity.

Support for this combinatorial use of ME-344 was first published in the June 2016 edition of Cell Reports; pre-clinical data from a collaboration with the Spanish National Cancer Research Centre in Madrid demonstrated mitochondria-specific effects of ME-344 in cancer cells, including substantially enhanced anti-tumor activity when combined with agents that inhibit the activity of VEGF. These data demonstrating the potential anti-cancer effects of combining ME-344 with a VEGF inhibitor due to an inhibition of both mitochondrial and glycolytic metabolism provided a basis for commencement of an investigator-initiated trial of ME-344 in combination with bevacizumab in HER2 negative breast cancer patients.

Results published in the November 2019 issue of Clinical Cancer Research from a multicenter, investigator-initiated, randomized, open-label, clinical trial that evaluated the combination of ME-344 and bevacizumab in 42 women with early HER2-negative breast cancer further support the combinatorial use of ME-344 with anti-angiogenic therapeutics.

The primary objective of the trial was to show proof of ME-344 biologic activity as measured by Ki67 reductions in the presence of the nuclear protein Ki67 (expression of which is strongly associated with tumor cell proliferation and growth) from days 0 to 28 compared to the control group who received bevacizumab alone. Secondary objectives included determining whether ME-344 biologic activity correlates with vascular normalization. The data demonstrate significant biologic activity in the ME-344 treatment group:

•In ME-344 treated patients, mean absolute Ki67 decreases were 13.3 compared to an increase of 1.1 in the bevacizumab monotherapy group (P=0.01).

•In ME-344 treated patients, mean relative Ki67 decreases were 23% compared to an increase of 186% in the bevacizumab monotherapy group (P < 0.01).

•The mean relative Ki67 reduction in patients experiencing vascular normalization in the ME-344 treated patients was 33%, compared to an increase of 11.8% in normalized patients from the bevacizumab monotherapy group (P=0.09). Approximately one-third of patients in each arm had vascular normalization.

Treatment was generally well tolerated; three grade 3 adverse events of high blood pressure were reported, two in the ME-344 arm and one in the bevacizumab monotherapy arm.

Results from our earlier, first-in-human, single-agent Phase 1 clinical trial of ME-344 in patients with refractory solid tumors were published in the April 1, 2015 edition of Cancer. The results indicated that eight of 21 evaluable patients (38%) treated with ME-344 achieved stable disease or better, including five who experienced progression-free survival that was at least twice the duration of their last prior treatment before entry into the trial. In addition, one of these patients, a heavily pre-treated patient with small cell lung

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cancer, achieved a confirmed partial response and remained on study for two years. ME-344 was generally well tolerated at doses equal to or less than 10 mg/kg delivered on a weekly schedule for extended durations. Treatment-related adverse events included nausea, dizziness and fatigue. Dose-limiting toxicities were observed at both the 15 mg/kg and 20 mg/kg dose levels, consisting primarily of grade 3 peripheral neuropathy.

We are planning to advance ME-344 in combination with the anti-angiogenic antibody bevacizumab in a Phase 1b study evaluating patients with relapsed colorectal cancer in the second quarter of calendar year 2023. The study will enroll patients with progressive disease after failure of standard therapies with patients treated until disease progression or intolerance. The primary objective is progression free survival. Secondary endpoints include overall response rate, duration of response, overall survival and safety. We are planning to report key interim clinical data from this trial around calendar year-end 2023.

Additionally, ME-344 may also have clinical potential against hematological malignancies. At the AACR Annual Meeting 2022, a poster presentation reported results from preclinical studies exploring the ability of ME-344 to enhance the activity of venetoclax against AML. Data from the in vitro and in vivo preclinical studies evaluating the combination of ME-344 with venetoclax in standard-of-care-resistant AML cell lines and relapsed or refractory AML patient samples suggest that ME-344, both alone and in combination with venetoclax, inhibits purine biosynthesis, suppresses oxidative phosphorylation, induces apoptosis and decreases MCL-1, which together target metabolic vulnerabilities of AML cells. The data demonstrated that ME-344 and venetoclax prolong survival in MV4-11 and MV4-11/AraC-R-derived xenograft AML models. The poster concludes that ME-344 enhances venetoclax activity against AML cells including resistant AML.

Zandelisib: PI3Kδ Inhibitor Overview

Zandelisib is an oral, once-daily, selective PI3Kδ inhibitor that we were jointly developing with Kyowa Kirin under a global license, development and commercialization agreement entered into in April 2020.

In March 2022, we and Kyowa Kirin reported the outcome of an end of Phase 2 meeting with the FDA wherein the agency discouraged a filing based on data from a single-arm Phase 2 trial, called TIDAL, evaluating zandelisib in patients with relapsed or refractory follicular lymphoma. At this meeting, the FDA stated that data generated from single arm studies such as the Phase 2 TIDAL trial are insufficient to adequately assess the risk/benefit of PI3K inhibitors evaluating indolent non-Hodgkin lymphoma. At that time the FDA emphasized that the companies continue efforts with the ongoing randomized Phase 3 COASTAL trial evaluating patients with relapsed or refractory follicular or marginal zone lymphomas. Subsequently, at an April 2022 meeting of the FDA Oncology Drugs Advisory Committee, the committee voted that future approvals of PI3K inhibitors for hematologic malignancies should be supported by randomized data.

In November 2022, we and Kyowa Kirin met with the FDA in a follow-up meeting to the March 2022 end of Phase 2 meeting. At this meeting, the FDA provided further guidance regarding the design and statistical analysis for the COASTAL trial. Following the November meeting, the companies jointly concluded that a clinical trial consistent with the recent FDA guidance, including modification of the ongoing COASTAL trial, would likely not be feasible to complete within a time period that would support further investment or with sufficient certainty of the regulatory requirements for approval to justify continued global development efforts. As a result, we and Kyowa Kirin jointly decided to discontinue global development of zandelisib for indolent forms of non-Hodgkin lymphoma outside of Japan. The discontinuation of zandelisib development outside of Japan was a business decision based on the most recent regulatory guidance from the FDA and is not related to the zandelisib clinical data generated to date.

Kyowa Kirin has been evaluating whether to continue developing zandelisib in Japan and after meeting with the PMDA has concluded that conducting a randomized study consistent with agency guidance to support a marketing application would likely not be feasible to complete within a time period that would support further investment. As a result, in May 2023, Kyowa Kirin decided to discontinue development of zandelisib in Japan. The discontinuation of zandelisib in Japan was a business decision by Kyowa Kirin based on the most recent regulatory guidance from the PMDA and is not related to the zandelisib clinical data generated to date.

We and Kyowa Kirin have begun closing all ongoing zandelisib clinical studies outside of Japan, including the Phase 3 COASTAL trial, the Phase 2 TIDAL trial, and the Phase 2 CORAL trial.

Kyowa Kirin License, Development and Commercialization Agreement

In April 2020, we entered into the Kyowa Kirin Commercialization Agreement under which we granted to Kyowa Kirin a co-exclusive, sublicensable, payment-bearing license under certain patents and know-how controlled by us to develop and commercialize zandelisib and any pharmaceutical product containing zandelisib for all human indications in the U.S. (the “U.S. License”), and an exclusive (subject to certain retained rights to perform obligations under the Kyowa Kirin Commercialization Agreement), sublicensable, payment-bearing, license under certain patents and know-how controlled by us to develop and commercialize zandelisib and any pharmaceutical product containing zandelisib for all human indications in countries outside of the U.S. (the “Ex-U.S.” and the “Ex-U.S. License”). Kyowa Kirin granted to us a co-exclusive, sublicensable, license under certain patents and know-how controlled by Kyowa Kirin to develop and commercialize zandelisib for all human indications in the U.S., and a co-exclusive,

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sublicensable, royalty-free, fully paid license under certain patents and know-how controlled by Kyowa Kirin to perform our obligations in the Ex-U.S. under the Kyowa Kirin Commercialization Agreement. Kyowa Kirin paid us an initial payment of $100.0 million. Additionally, in Japan, the Kyowa Kirin Commercialization Agreement included potential regulatory and commercialization milestone payments plus royalties on net sales of zandelisib in Japan, which are tiered beginning in the teens.

Kyowa Kirin is responsible for the development and commercialization of zandelisib in the Ex-U.S. and, subject to certain exceptions, is solely responsible for all costs related thereto. We will also provide to Kyowa Kirin certain drug supplies necessary for the development and commercialization of zandelisib in the Ex-U.S., with the understanding that Kyowa Kirin will assume responsibility for manufacturing for the Ex-U.S. as soon as practicable. In light of Kyowa Kirin's decision to discontinue development of zandelisib in Japan, the parties intend to terminate the Kyowa Kirin Commercialization Agreement.

Results of Operations

Comparison of three months ended March 31, 2023 and 2022

Revenue: We recognized revenue of $5.9 million for the three months ended March 31, 2023 compared to $9.7 million for the three months ended March 31, 2022. The decrease in revenue comes as a result of decreased reimbursement of expenses from Kyowa Kirin due to the discontinuation of the zandelisib program in December 2022.

Research and Development: The following is a summary of our research and development expenses to supplement the more detailed discussion below. The dollar values in the following table are in thousands.

	Three Months Ended March 31,
Research and development expenses	2023		2022
Zandelisib	$	7,763	$	13,071
Voruciclib		698		1,364
ME-344		205		382
Other		6,438		7,501
Total research and development expenses	$	15,104	$	22,318

Research and development expenses consist primarily of clinical trial costs (including payments to contract research organizations “CROs”), pre-clinical study costs, and costs to manufacture our drug candidates for non-clinical and clinical studies. Other research and development expenses consist primarily of salaries and personnel costs, share-based compensation, legal costs, and other costs not allocated to specific drug programs. Costs related to zandelisib decreased primarily as a result of the discontinuation of the program during the three months ended March 31, 2023. Costs related to voruciclib decreased due to lower drug manufacturing costs and clinical costs in the Phase 1b study. Costs related to ME-344 decreased due to decreased drug manufacturing costs and offset by increased clinical costs related to the Phase 1b study. The decrease in other research and development costs is primarily due to personnel costs related to the reduction in force.

General and Administrative: General and administrative expenses decreased by $1.7 million to $7.2 million for the three months ended March 31, 2023 compared to $8.9 million for the three months ended March 31, 2022. The decrease is primarily due to lower personnel costs related to the reduction in force.

Other income or expense: We recorded a non-cash gain of zero during the three months ended March 31, 2023 compared to a non-cash gain of $12.8 million during the three months ended March 31, 2022 due to a change in the fair value of our warrant liability. The change in the warrant liability is primarily due to changes in our stock price. Additionally, we received interest and dividend income of $1.0 million for the three months ended March 31, 2023 compared to $60,000 for the three months ended March 31, 2022. The increase is primarily due to higher yields during the three months ended March 31, 2023 compared to the three months ended March 31, 2022.

Comparison of nine months ended March 31, 2023 and 2022

Revenue: We recognized revenue of $47.4 million for the nine months ended March 31, 2023 compared to $29.3 million for the nine months ended March 31, 2022. As a result of the discontinuation of the zandelisib program, we updated our estimated costs to complete each performance obligation, resulting in a higher progress towards completion based on the ratio of costs incurred to date to the total estimated costs, resulting in the recognition of $16.6 million of previously deferred revenue related to performance obligations that are being closed. We also recognized $8.6 million of previously deferred revenue related to performance obligations associated with clinical trials that have not commenced and will no longer be initiated. This increase in revenue is offset by a decrease in reimbursement of expenses from Kyowa Kirin due to the discontinuation of the zandelisib program in December 2022.

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Research and Development: The following is a summary of our research and development expenses to supplement the more detailed discussion below. The dollar values in the following table are in thousands.

	Nine Months Ended March 31,
Research and development expenses	2023		2022
Zandelisib	$	27,634	$	40,082
Voruciclib		1,859		3,950
ME-344		1,053		2,166
Other		19,334		17,604
Total research and development expenses	$	49,880	$	63,802

Research and development expenses consist primarily of clinical trial costs (including payments to contract research organizations “CROs”), pre-clinical study costs, and costs to manufacture our drug candidates for non-clinical and clinical studies. Other research and development expenses consist primarily of salaries and personnel costs, share-based compensation, legal costs, and other costs not allocated to specific drug programs. Costs related to zandelisib decreased primarily as a result of the discontinuation of the program during the nine months ended March 31, 2023. Costs related to voruciclib decreased due to lower drug manufacturing costs and clinical costs related to the Phase 1b study. Costs related to ME-344 decreased due to decreased drug manufacturing costs and clinical costs related to the Phase 1b study. The increase in other research and development costs is primarily due to personnel costs, including severance costs related to the reduction in force, offset by lower share-based compensation expenses.

General and Administrative: General and administrative expenses decreased by $1.6 million to $23.2 million for the nine months ended March 31, 2023 compared to $24.8 million for the nine months ended March 31, 2022. The decrease is primarily due to personnel costs related to the reduction in force offset by increased legal fees and investment banking fees as a result of the proposed merger agreement.

Other income or expense: We recorded a non-cash gain of $1.6 million during the nine months ended March 31, 2023 due to a change in the fair value of our warrant liability compared to a non-cash gain of $20.8 million during the nine months ended March 31, 2022. The change in the warrant liability is primarily due to changes in our stock price. Additionally, we received interest and dividend income of $2.3 million for the nine months ended March 31, 2023 compared to $78,000 for the nine months ended March 31, 2022. The increase is primarily due to higher yields during the nine months ended March 31, 2023 compared to the nine months ended March 31, 2022.

Liquidity and Capital Resources

We have accumulated losses of $396.0 million since inception and expect to incur operating losses and generate negative cash flows from operations for the foreseeable future. As of March 31, 2023, we had $112.0 million in cash and cash equivalents, and short-term investments. We believe that these resources will be sufficient to fund our operations for at least 12 months from the issuance of this Quarterly Report. Our current business operations are focused on continuing the clinical development of our drug candidates. Changes to our research and development plans or other changes affecting our operations and operating expenses may affect actual future use of existing cash resources. We cannot determine with certainty costs associated with ongoing and future clinical trials or the regulatory approval process. The duration, costs and timing associated with the development of our product candidates will depend on a variety of factors, including uncertainties associated with the results of our clinical trials.

To date, we have obtained cash and funded our operations primarily through equity financings and license agreements. In order to continue the development of our drug candidates, at some point in the future we expect to pursue one or more capital transactions, whether through the sale of equity securities, debt financing, license agreements or entry into strategic partnerships. There can be no assurance that we will be able to continue to raise additional capital in the future.

Sources and Uses of Our Cash

Net cash used in operating activities for the nine months ended March 31, 2023 was $41.2 million as compared to net cash used in operating activities of $33.2 million for the nine months ended March 31, 2022. The increase in net cash used in operating activities period over period reflects the receipt of two $10.0 million milestones during the nine months ended March 31, 2022, related to the Kyowa Kirin Commercialization Agreement, with no corresponding receipt for the nine months ended March 31, 2023, as well as other changes in working capital.

Net cash provided by investing activities for the nine months ended March 31, 2023 was $34.3 million as compared to $13.2 million used in investing activities for the nine months ended March 31, 2022. The change was primarily due to increased proceeds from maturities of short-term investments during the nine months ended March 31, 2023, net of purchases.

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Net cash used in financing activities during the nine months ended March 31, 2023 was $40,000 compared with $49.0 million provided by financing activities during the nine months ended March 31, 2022. Cash used during the nine months ended March 31, 2023 was due to the payment of RSU tax withholdings in exchange for common shares surrendered by RSU holders. Cash raised during the nine months ended March 31, 2022 reflected $48.7 million of net proceeds from the issuance of common stock.

Contractual Obligations

We have contracted with various consultants and third parties to assist us in pre-clinical research and development and clinical trials work for our leading drug compounds. The contracts are terminable at any time but obligate us to reimburse the providers for any time or costs incurred through the date of termination. Additionally, we have employment agreements with certain of our current employees that provide for severance payments and accelerated vesting for share-based awards if their employment is terminated under specified circumstances.

We lease office space in San Diego, California under non-cancelable operating leases. The leases are subject to additional variable non-lease component charges (e.g., common area maintenance, maintenance, etc.). See Note 8 Leases of the unaudited condensed consolidated financial statements for additional details related to our lease obligations.

Torreya Partners

In October 2022, we engaged Torreya Partners as a financial advisor to help explore additional strategic opportunities. As part of this engagement, we will pay a transaction fee equal to 20% of aggregate consideration, up to a maximum of $2.0 million, upon completion of a strategic transaction. As of March 31, 2023, we have not accrued any amount for potential future transaction fees.

Presage License Agreement

In September 2017, we entered into the Presage License Agreement. Under the terms of the Presage License Agreement, Presage granted to us exclusive worldwide rights to develop, manufacture and commercialize voruciclib, a clinical-stage, oral and selective CDK inhibitor, and related compounds. In exchange, we paid Presage $2.9 million. With respect to the first indication, an incremental $2.0 million payment, due upon dosing the first subject in the first registration trial will be owed to Presage, for total payments of $4.9 million prior to receipt of marketing approval of the first indication in the U.S., E.U. or Japan. Additional potential payments of up to $179 million will be due upon the achievement of certain development, regulatory and commercial milestones. We will also pay mid-single-digit tiered royalties on the net sales of any product successfully developed. As an alternative to milestone and royalty payments related to countries in which we sublicense product rights, we will pay to Presage a tiered percent (which decreases as product development progresses) of amounts received from such sublicensees. As of March 31, 2023, we had not accrued any amounts for potential future payments.

Critical Accounting Policies and Management Estimates

We describe our significant accounting policies in Note 1. The Company and Summary of Significant Accounting Policies, of the notes to the financial statements included in our 2022 Annual Report. We discuss our critical accounting estimates in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our 2022 Annual Report. There have been no changes in our significant accounting policies or critical accounting estimates since June 30, 2022.

Recent Accounting Pronouncement

See Note 1. The Company and Summary of Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements in this Quarterly Report.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

Our exposure to market interest rates relates primarily to the investments of cash balances and short-term investments. We have cash reserves held in U.S. dollars and we place funds on deposit with financial institutions, which are readily available. Our short-term investments consist solely of U.S. government securities with a maturity of three to twelve months.

We place our cash deposits with high credit quality financial institutions and by policy limit the amount of credit exposure to any one corporation or bank. These deposits are in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. We are adverse to principal loss and we ensure the safety and preservation of our invested funds by limiting default risk, market risk and reinvestment risk. We seek to mitigate default risk by depositing funds with high credit quality financial institutions, by limiting the amount of credit exposure to any one corporation or bank, by purchasing short-term investments consisting of U.S. government securities, and by positioning our portfolio to respond appropriately to a significant reduction in a credit rating of any such financial institution.

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We do not consider the effects of interest rate movements to be a material risk to our financial condition.

Item 4. Controls and Procedures

(a) Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file or submit pursuant to the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective due to the material weakness in our internal control over financial reporting related to the inadequate design and implementation of controls to evaluate and monitor the accounting for revenue recognition related to license agreements.

After giving full consideration to the material weakness, and the additional analyses and other procedures that we performed to ensure that preparation and fair presentation of our financial statements included in this Quarterly Report, our management and the board of directors has concluded that our consolidated financial statements present fairly, in all material respects, our financial position, results of operations and cash flows for the periods disclosed in conformity with U.S. GAAP.

Plan for Remediation of Material Weakness

Management is implementing enhanced internal controls to remediate the material weakness. The remediation plan includes enhancement of our contract review of license agreements to confirm appropriate understanding of the terms, as well as implementation of a control designed to evaluate and monitor, at inception and on a quarterly basis, the estimated consideration to be received under license agreements for purposes of revenue recognition, analysis of deferred revenue balances, and enhanced detailed review of our revenue recognition models.

Changes in Internal Control over Financial Reporting

Other than the ongoing remediation efforts related to the material weakness discussed above, there were no changes in our internal control over financial reporting (as such term is defined by Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.

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PART II OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Risks Related to the Merger

The Exchange Ratio will not be adjusted based on the market price of our common stock or Infinity common stock, so the merger consideration at the Closing may have a greater or lesser value than at the time the Merger Agreement was signed.

At the Closing, outstanding Infinity common stock, par value $0.001 ("Infinity Common Stock") will be converted into shares of our common stock. Applying the Exchange Ratio, the former Infinity stockholders immediately before the Merger are expected to own approximately 42% of the outstanding equity of the combined company immediately following the Merger, and our stockholders immediately before the Merger are expected to own approximately 58% of the outstanding equity of the combined company immediately following the Merger, subject to certain assumptions.

The number of shares Infinity stockholders will be entitled to receive pursuant to the Merger Agreement will not be affected by changes in the market price of our common stock or Infinity Common Stock before the completion of the Merger. Therefore, if before the completion of the Merger, the market price of our common stock increases from the market price on the date of the Merger Agreement and/or the market price of Infinity Common Stock declines from the market price on the date of the Merger Agreement, then Infinity stockholders could receive merger consideration with substantially more value for their Infinity Common Stock than the parties had negotiated when they established the Exchange Ratio. Similarly, if before the completion of the Merger the market price of our common stock declines from the market price on the date of the Merger Agreement and/or the market price of Infinity Common Stock increases from the market price on the date of the Merger Agreement, then Infinity stockholders could receive merger consideration with substantially lower value. The Merger Agreement does not include a price-based termination right.

If the conditions to the Merger are not satisfied or waived, the Merger may not occur.

Even if the Infinity stockholders adopt the Merger Agreement and approve the Infinity Merger Proposal and our stockholders approve the MEI Nasdaq Proposal, specified conditions must be satisfied or waived to complete the Merger. These conditions are set forth in the Merger Agreement. We and Infinity cannot assure you that all of the conditions to the consummation of the Merger will be satisfied or waived. If the conditions are not satisfied or waived, the Merger may not occur or the Closing may be delayed, and we and Infinity each may lose some or all of the intended benefits of the Merger.

The Merger may be completed even though a material adverse effect may result from the announcement of the Merger, industry wide changes or other causes.

In general, neither we nor Infinity are obligated to complete the Merger if there is a continuing material adverse effect affecting the other party between February 22, 2023, the date of the Merger Agreement, and the Closing. However, certain types of changes are excluded from the concept of a “material adverse effect.” Such exclusions include, but are not limited to, changes in general business or economic conditions that generally affect the industry, political conditions, acts of war or terrorism or the outbreak or escalation of armed hostilities, natural disasters, epidemics and pandemics, certain measures and responses with respect to COVID-19, changes in laws or U.S. GAAP, certain changes in the price or trading volume of our common stock or Infinity Common Stock, certain failures by us or Infinity to meet internal or analysts’ expectations or projections or the results of operations, and changes resulting from the announcement, performance or pendency of the Merger. Therefore, if any of these events were to occur, impacting us or Infinity, the other party would still be obliged to consummate the closing of the Merger. If any such adverse changes occur and we and Infinity consummate the closing of the Merger, the stock price of the combined company may suffer. This in turn may reduce the value of the Merger to our stockholders, Infinity stockholders or both.

If we and Infinity complete the Merger, the combined company may need to raise additional capital by issuing equity securities or additional debt or through licensing arrangements, which may cause significant dilution to the combined company’s stockholders or restrict the combined company’s operations.

Additional financing may not be available to the combined company when it is needed or may not be available on favorable terms. To the extent that the combined company raises additional capital by issuing equity securities, such financing will cause additional dilution to all securityholders of the combined company, including our pre-Merger stockholders and Infinity’s former stockholders. It is also possible that the terms of any new equity securities may have preferences over the combined company’s common stock. Any debt financing the combined company enters into may involve covenants that restrict its operations. These

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restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of the combined company’s assets, as well as prohibitions on its ability to create liens, pay dividends, redeem its stock or make investments. In addition, if the combined company raises additional funds through licensing arrangements, it may be necessary to grant licenses on terms that are not favorable to the combined company.

Our directors and executive officers and Infinity directors and executive officers have interests in the Merger that are different from yours and that may influence them to support or approve the Merger without regard to your interests.

Our directors and executive officers and Infinity directors and executive officers have interests in the Merger that are different from, or in addition to, the interests of our stockholders and Infinity stockholders generally. These interests with respect to our directors and executive officers may include, among others, that Daniel P. Gold, Ph.D., Charles V. Baltic III, Thomas C. Reynolds, and Sujay R. Kango, members of our board of directors, will continue as directors after the Merger. In addition, following the Closing, David Urso (currently our Chief Operating Officer and General Counsel) is expected to serve as Chief Executive Officer of the combined company. These interests with respect to Infinity’s directors and executive officers may include, among others, (i) the acceleration of equity award vesting, (ii) that options to purchase shares of Infinity Common Stock will be converted into and become fully vested options to purchase shares of common stock of the combined company, (iii) retention payments for continued services to and through the Closing, (iv) severance payments if employment is terminated in a qualifying termination in connection with the Merger and (v) all of Infinity’s directors and executive officers are entitled to certain indemnification and liability insurance coverage pursuant to the terms of the Merger Agreement. In addition, following the Closing, Robert Ilaria, Jr., M.D. (currently Infinity’s Chief Medical Officer) is expected to serve as Chief Medical Officer of the combined company and Stéphane Peluso, Ph.D. (currently Infinity’s Chief Scientific Officer) is expected to serve as Chief Scientific Officer of the combined company.

Sujay R. Kango serves on our board of directors and Infinity's board of directors. Our board of directors and Infinity's board of directors considered, among other things, that Mr. Kango holds stock options exercisable for shares of our common stock and Infinity Common Stock.

Further, the board of directors of the combined company will include certain of our current directors and executive officers and certain of Infinity's current directors and executive officers. Following the Closing, the board of directors of the combined company is expected to be composed of eight members, consisting of Norman C. Selby (currently Infinity’s Lead Independent Director), who is expected to chair the combined company board, David Urso (currently our Chief Operating Officer and General Counsel), Daniel P. Gold, Ph.D. (currently our Chief Executive Officer), Adelene Q. Perkins (currently Infinity’s Chief Executive Officer and Chair of the board of directors of Infinity), Richard Gaynor, M.D. (currently a director of Infinity), Charles V. Baltic III (currently our Chair of the board of directors), Thomas C. Reynolds, M.D., Ph.D. (currently one of our directors) and Sujay R. Kango (currently one of our directors and a director of Infinity). The non-employee directors of the combined company will be eligible to be compensated pursuant to our non-employee director compensation policy that is expected to remain in place following the Effective Time.

Our board of directors and Infinity's board of directors were aware of and considered those interests, among other matters, in reaching their decisions to approve and adopt the Merger Agreement and approve the Merger, and in the case of the Infinity board of directors, recommend the approval of the Merger Agreement to Infinity’s stockholders. These interests, among other factors, may have influenced our board of directors and Infinity's board of directors to support or approve the Merger.

Our securityholders and Infinity securityholders will have a reduced ownership and voting interest in, and will exercise less influence over the management of, the combined company following the completion of the Merger as compared to their current ownership and voting interests in the respective companies.

Applying the Exchange Ratio, the former Infinity stockholders immediately before the Merger are expected to own approximately 42% of the outstanding equity of the combined company immediately following the Merger, and our stockholders immediately before the Merger are expected to own approximately 58% of the outstanding equity of the combined company immediately following the Merger, subject to certain assumptions. If the combined company is unable to realize the full strategic and financial benefits currently anticipated from the Merger, our stockholders and Infinity stockholders will have experienced substantial dilution of their ownership and voting interests in the respective companies without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the strategic and financial benefits currently anticipated from the Merger.

If the Merger is not completed, our stock price may fluctuate significantly.

The market price of our common stock is subject to significant fluctuations. During the 12-month period ended April 14, 2023, the closing sales price of our common stock on The Nasdaq Capital Market ranged from a high of $13.00 on June 27, 2022 to a low of $4.20 on February 24, 2023.

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Market prices for securities of pharmaceutical, biotechnology and other life science companies have historically been particularly volatile. In addition, the market prices of our common stock and Infinity Common Stock will likely be volatile based on whether stockholders and other investors believe that we and Infinity can complete the Merger or otherwise raise additional capital to support the combined company’s operations if the Merger is not consummated and another strategic transaction cannot be identified, negotiated and consummated in a timely manner, if at all. The volatility of the market prices of our common stock and Infinity Common Stock are exacerbated by low trading volume. Additional factors that may cause the market prices of our common stock and Infinity Common Stock, respectively, to fluctuate include:

•the initiation of, material developments in, or conclusion of litigation to enforce or defend its intellectual property rights or defend against claims involving the intellectual property rights of others;

•the entry into, or termination of, key agreements, including commercial partner agreements;

•announcements by commercial partners or competitors of new commercial products, clinical progress or lack thereof, significant contracts, commercial relationships or capital commitments;

•the introduction of technological innovations or new therapies that compete with its future products;

•the loss of key employees;

•future sales of its common stock;

•general and industry-specific economic conditions that may affect its research and development expenditures;

•the failure to meet industry analyst expectations; and

•period-to-period fluctuations in financial results.

Moreover, the stock markets in general have at times experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading prices of our common stock and Infinity Common Stock. In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against such companies.

During the pendency of the Merger, we may not be able to enter into a business combination with another party on more favorable terms because of restrictions in the Merger Agreement, which could adversely affect our business prospects.

Covenants in the Merger Agreement impede our ability and Infinity's ability to make acquisitions during the pendency of the Merger, subject to specified exceptions. As a result, if the Merger is not completed, we may be at a disadvantage to our competitors during that period. In addition, while the Merger Agreement is in effect, each party is generally prohibited from soliciting, initiating, inducing, encouraging, or facilitating any inquiries, proposals or offers that constitute or could reasonably be expected to lead to certain transactions involving a third party, including a merger, sale of assets or other business combination, subject to specified exceptions. Any such transactions could be favorable to our stockholders, but we may be unable to pursue them.

Certain provisions of the Merger Agreement may discourage third parties from submitting competing proposals, including proposals that may be superior to the Merger.

The terms of the Merger Agreement prohibits us and Infinity from soliciting or engaging in discussions with third parties regarding alternative acquisition proposals, except in limited circumstances when such party’s board of directors determines in good faith that an unsolicited acquisition proposal constitutes or could reasonably be expected to lead to a superior proposal and that failure to take such action would reasonably be expected to be inconsistent with its fiduciary duties under applicable law. In addition, if the Merger Agreement is terminated by us or Infinity under certain circumstances, including because of a decision by either company’s board of directors to accept a superior proposal, such company would be required to pay the other a termination fee. This termination fee may discourage third parties from submitting alternative takeover proposals to either company or its stockholders and may cause such company’s board of directors to be less inclined to recommend an alternative proposal.

The financial analyses, estimates and forecasts considered by us and Infinity in connection with the Merger may not be realized.

Our unaudited prospective financial information and Infinity's unaudited prospective financial information considered by us and Infinity in connection with the Merger was not prepared with a view toward public disclosure, and such information and the estimated synergies were not prepared with a view toward compliance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The estimates and assumptions underlying the unaudited prospective financial information and estimated synergies involve judgments with respect to, among other things, future economic, competitive, regulatory and financial market conditions, future tax rates and future business decisions which may not be realized and that are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, including, among others, risks and uncertainties, all of which are difficult to predict and many of which are beyond our and/or Infinity's control. In addition, the unaudited prospective financial information and estimated synergies will be affected by our or Infinity’s, as applicable, ability to achieve strategic goals, objectives and targets over the

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applicable periods. As a result, there can be no assurance that the underlying assumptions will prove to be accurate or that the projected results or synergies will be realized, and actual results or synergies likely will differ, and may differ materially, from those reflected in the unaudited prospective financial information and the estimated synergies, whether or not the Merger is completed, which could have an adverse effect on our and Infinity’s business, financial condition and result of operations.

The announcement and pendency of the Merger, whether or not consummated, may adversely affect the trading price of our common stock and our business prospects.

The announcement and pendency of the Merger, whether or not consummated, may adversely affect the trading price of our common stock and our business prospects. In the event that the Merger is not completed, the announcement of the termination of the Merger Agreement may also adversely affect the trading price of our common stock and our business prospects.

Failure to consummate the Merger may result in either us or Infinity paying a termination fee to the other party and could harm the common stock price of the party obligated to pay the termination fee and such party’s future business and operations.

The Merger will not be consummated if the conditions precedent to the consummation of the transaction are not satisfied or waived, or if the Merger Agreement is terminated in accordance with its terms. If the Merger is not consummated, we and Infinity, as applicable, are subject to the following risks:

•if the Merger Agreement is terminated under certain circumstances, we may be required to pay Infinity a termination fee of $4,000,000 and/or reimburse Infinity’s reasonable out of pocket fees and expenses incurred in connection with the Merger Agreement and the transaction contemplated thereby up to a maximum of $1,000,000;

•if the Merger Agreement is terminated under certain circumstances, Infinity may be required to pay us a termination fee of $2,900,000 and/or reimburse our reasonable out of pocket fees and expenses incurred in connection with the Merger Agreement and the transaction contemplated thereby up to a maximum of $1,000,000; and

•the price of either party’s common stock may decline and remain volatile.

If the Merger does not close for any reason, either party’s board of directors may elect to, among other things, attempt to complete another strategic transaction, attempt to sell or otherwise dispose of such company’s various assets, dissolve or liquidate its assets, declare bankruptcy or seek to continue to operate its business. If either company seeks another strategic transaction or attempts to sell or otherwise dispose of its various assets, there is no assurance that it will be able to do so, that the terms would be equal to or superior to the terms of the Merger or as to the timing of such transaction. If either company decides to dissolve and liquidates its assets, such company would be required to pay all of its debts and contractual obligations, and to set aside certain reserves for potential future claims, and there can be no assurance as to the amount or timing of available cash left to distribute to stockholders after paying its debts and other obligations and setting aside funds for reserves.

If the Merger is not consummated, each of us and Infinity would need to determine whether to continue its business, consummate another strategic transaction, or dissolve and liquidate its assets.

If the Merger is not consummated, we and Infinity, as applicable, may be unable to retain the services of key remaining members of our respective management teams and, as a result, may be unable to seek or consummate another strategic transaction, properly dissolve and liquidate its assets or continue its business. If the Merger is not successfully consummated, our board of directors and Infinity's board of directors may dissolve or liquidate the respective company’s assets to pursue a dissolution and liquidation. In such an event, the amount of cash available for distribution to our stockholders or Infinity’s stockholders, as applicable, will depend heavily on the timing of such transaction or liquidation.

If the Merger does not close for any reason, the board of directors of Infinity may elect to, among other things, dissolve or liquidate its assets, which may include seeking protection from creditors in a bankruptcy proceeding. If Infinity decided to dissolve and liquidate its assets, it would be required to pay all of its debts and contractual obligations, and to set aside certain reserves for potential future claims, and there can be no assurances as to the amount or timing of available cash left to distribute to stockholders after paying its debts and other obligations and setting aside funds for reserves.

In the event of a dissolution and liquidation, the amount of cash available for distribution to our stockholders or Infinity’s stockholders, as applicable, will depend heavily on the timing of such decision and, ultimately, such liquidation, since the amount of cash available for distribution continues to decrease as we or Infinity, as applicable, fund our respective operations in preparation for the consummation of the Merger. Further, the Merger Agreement contains certain termination rights for each party, and provides that, upon termination under specified circumstances, either party may be required to pay the other a termination fee, which would further decrease such company’s’ available cash resources. If either party’s board of directors were to approve and recommend, and its stockholders were to approve, a dissolution and liquidation, such company would be required under Delaware corporate law to pay its outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to its stockholders. As applicable, our and Infinity’s commitments and contingent liabilities may include (i)

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regulatory and clinical obligations remaining under our respective clinical trials; (ii) obligations under its employment, separation and retention agreements with certain employees that provide for severance and other payments following a termination of employment occurring for various reasons, including a change in control; and (iii) potential litigation against such company, and other various claims and legal actions arising in the ordinary course of business. As a result of this requirement, a portion of our assets and Infinity’s assets, as applicable, may need to be reserved pending the resolution of such obligations. In addition, either company may be subject to litigation or other claims related to a dissolution and liquidation of such company. If a dissolution and liquidation were pursued, such company’s board of directors, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of our common stock and Infinity Common Stock, as applicable, could lose all or a significant portion of their investment in the event of either companies liquidation, dissolution or winding up.

We or Infinity may waive one or more of the conditions to the Merger, and may do so without re-soliciting stockholder approval.

We or Infinity may agree to waive, in whole or in part, some of the conditions to each party’s obligations to complete the Merger, to the extent permitted by applicable law. For example, it is a condition to our and Infinity’s respective obligations to close the Merger that certain of the representations and warranties of the other party are true and correct in all respects as of the date of the Closing (the “Closing Date”), except where the failure of such representations and warranties to be true and correct would not have a material adverse effect. However, if the board of directors of either party determines that it is in the best interests of the stockholders of that company to waive any such breach by the other party, then such board of directors may elect to waive that condition.

In the event of a waiver of a condition, our board of directors and Infinity's board of directors will evaluate the materiality of any such waiver to determine whether amendment of this joint proxy statement/prospectus and re-solicitation of proxies is necessary. In the event that the boards of directors of the waiving party, in its own reasonable discretion, determines any such waiver is not significant enough to require re-solicitation of its stockholders, it will have the discretion to cause the Merger to be completed without seeking further stockholder approval, which decision may have a material adverse effect on the stockholders of the combined company following the Merger. For example, the market could react negatively to such information, which may cause a substantial decline in the price of the common stock of the combined company following the Merger.

Notwithstanding the foregoing, certain closing conditions may not be waived due to applicable law, or otherwise. The following closing conditions may not be waived: receipt of the requisite stockholder approvals; the effectiveness of the registration statement of which this joint proxy statement/prospectus forms a part; and the absence of any order or injunction that has the effect of prohibiting the consummation of the Merger. The foregoing closing conditions are the only closing conditions to the Merger that may not be waived. All other closing conditions to the Merger may be waived by us and/or Infinity, as applicable.

The Merger may not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, resulting in recognition of taxable gain or loss by Infinity stockholders in respect of their Infinity Common Stock.

The Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) Code. However, Infinity has not sought and does not intend to seek a ruling from the IRS or an opinion of counsel regarding the intended tax treatment of the Merger. Consequently, there can be no assurance that the IRS will not challenge the intended tax treatment of the Merger and, if challenged, that a court would not sustain the IRS’s position. In the event that the Merger does not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, each U.S. Holder would recognize gain or loss upon the exchange of shares of Infinity Common Stock for our common stock in the Merger equal to the difference between the fair market value of the shares of our common stock received in exchange for the shares of Infinity Common Stock (plus any cash received in lieu of a fractional share) and such U.S. Holder’s adjusted tax basis in the shares of Infinity Common Stock surrendered. Each Infinity stockholder is urged to consult with his, her or its own tax advisor with respect to the tax consequences of the Merger.

Lawsuits could delay or prevent the Merger.

Putative stockholder complaints, including stockholder class action complaints, and other complaints may be threatened or filed against us, Infinity, and/or our respective boards of directors in connection with the transactions contemplated by the Merger Agreement. We, Infinity, and/or our respective boards of directors may not be successful in defending against any such claims. The outcome of litigation is uncertain, and any such lawsuits that may be threatened or filed against us, Infinity, and/or our respective boards of directors could delay or prevent the Merger from becoming effective or from becoming effective within the intended timeframe, divert the attention of our and/or Infinity’s management and employees from our respective day-to-day businesses and otherwise adversely affect their respective financial conditions.

For additional risk factors, please see our 2022 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

35

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

36

Item 6. Exhibits

Exhibit Index

Exhibits
2.1	Agreement and Plan of Merger, by and among the Company, Merger Sub, and Infinity, dated as of February 22, 2023 (incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed on February 23, 2023 (File No. 000-50484))
3.1	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of MEI Pharma, Inc., filed with the Delaware Secretary of State on April 14, 2023 (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on April 14, 2023 (File No. 000-50484)).
3.2	Fifth Amended and Restated Bylaws of MEI Pharma, Inc., effective as of February 23, 2023 (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on February 23, 2023 (File No. 000-50484))
31.1	Rule 13a-14(a) or Rule 15d-14(a) Certification of Principal Executive Officer.
31.2	Rule 13a-14(a) or Rule 15d-14(a) Certification of Principal Financial Officer.
32.1	Certification of Principal Executive Officer and Principal Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C 1350).
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

37

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.

MEI Pharma, Inc.

/s/ Daniel P. Gold

Daniel P. Gold

President and Chief Executive Officer

Date: May 11, 2023

38

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Daniel P. Gold, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of MEI Pharma, Inc.;

2.Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;

3.Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Quarterly Report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in the Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation; and

(d)disclosed in this Quarterly Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 11, 2023	/s/ Daniel P. Gold
	Daniel P. Gold Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Brian G. Drazba, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of MEI Pharma, Inc.;

2.Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;

3.Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Quarterly Report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in the Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation; and

(d)disclosed in this Quarterly Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 11, 2023	/s/ Brian G. Drazba
	Brian G. Drazba Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to the requirement set forth in Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. § 1350), Daniel P. Gold, the Chief Executive Officer of MEI Pharma, Inc. (the “Registrant”), and Brian G. Drazba, the Chief Financial Officer of the Registrant, each hereby certifies that, to his knowledge:

1.The Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2023, (the “Form 10-Q”) to which this Certification is attached as Exhibit 32.1, fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition of the Registrant at the end of the period covered by the Form 10-Q and results of operations of the registrant for the period covered by the Form 10-Q.

These certifications accompanying the Form 10-Q to which they relate, are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

Dated: May 11, 2023

/s/ Daniel P. Gold	/s/ Brian G. Drazba
Daniel P. Gold	Brian G. Drazba
Chief Executive Officer (Principal Executive Officer)	Chief Financial Officer (Principal Financial Officer)

XML

Cover Page - shares	9 Months Ended
	Mar. 31, 2023	May 08, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Securities Act File Number	000-50484
Trading Symbol	MEIP
Entity Registrant Name	MEI Pharma, Inc.
Entity Tax Identification Number	51-0407811
Entity Central Index Key	0001262104
Current Fiscal Year End Date	--06-30
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Shell Company	false
City Area Code	858
Local Phone Number	369-7100
Entity Small Business	true
Title of 12(b) Security	Common Stock, $0.00000002 par value
Security Exchange Name	NASDAQ
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	11455 El Camino Real
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92130
Entity Interactive Data Current	Yes
Entity Bankruptcy Proceedings, Reporting Current	true
Entity Common Stock, Shares Outstanding		6,662,857

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2023	Jun. 30, 2022
Current assets:
Cash and cash equivalents	$ 8,812	$ 15,740
Short-term investments	103,224	137,512
Total cash, cash equivalents and short-term investments	112,036	153,252
Unbilled receivables	4,580	10,044
Prepaid expenses and other current assets	3,867	3,830
Total current assets	120,483	167,126
Operating lease right-of-use asset	12,338	9,054
Property and equipment, net	1,366	1,660
Total assets	134,187	177,840
Current liabilities:
Accounts payable	4,389	7,918
Accrued liabilities	16,264	10,820
Deferred revenue	1,583	4,834
Operating lease liability	1,385	871
Total current liabilities	23,621	24,443
Deferred revenue, long-term	64,545	90,610
Operating lease liability, long-term	11,667	8,771
Warrant liability	0	1,603
Total liabilities	99,833	125,427
Commitments and contingencies (Note 7)
Stockholders' equity:
Preferred stock, $0.01 par value; 100 shares authorized; none outstanding	0	0
Common stock, $0.00000002 par value; 226,000 shares authorized; 6,663 and 6,658 shares issued and outstanding at March 31, 2023 and June 30, 2022,respectively	0	0
Additional paid-in capital	430,322	426,572
Accumulated deficit	(395,968)	(374,159)
Total stockholders' equity	34,354	52,413
Total liabilities and stockholders' equity	$ 134,187	$ 177,840

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (parenthetical) - $ / shares	Mar. 31, 2023	Jun. 30, 2022
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	100,000	100,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.00000002	$ 0.00000002
Common stock, shares authorized	226,000,000	226,000,000
Common stock, shares issued	6,663,000	6,658,000
Common stock, shares outstanding	6,663,000	6,658,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Revenue	$ 5,894	$ 9,694	$ 47,359	$ 29,283
Operating expenses:
Research and development	15,104	22,318	49,880	63,802
General and administrative	7,181	8,934	23,163	24,769
Total operating expenses	22,285	31,252	73,043	88,571
Loss from operations	(16,391)	(21,558)	(25,684)	(59,288)
Other income (expense):
Change in fair value of warrant liability	0	12,773	1,603	20,819
Interest and dividend income	957	60	2,282	78
Other expense, net	(4)	0	(10)	0
Net loss	(15,438)	(8,725)	(21,809)	(38,391)
Net loss:
Basic	(15,438)	(8,725)	(21,809)	(38,391)
Diluted	$ (15,438)	$ (8,725)	$ (21,809)	$ (46,437)
Net loss per share:
Basic	$ (2.32)	$ (1.31)	$ (3.27)	$ (6.31)
Diluted	$ (2.32)	$ (1.31)	$ (3.27)	$ (7.58)
Shares used in computing net loss per share:
Basic	6,663	6,653	6,663	6,080
Diluted	6,663	6,653	6,663	6,124

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Shares	Additional paid in capital	Accumulated Deficit
Beginning Balance at Jun. 30, 2021	$ 49,466	$ 5,631	$ 369,171	$ (319,705)
Net income (loss)	(17,510)			(17,510)
Issuance of common stock for vested restricted stock units	(194)	3	(194)
Share-based compensation expense	2,539		2,539
Ending Balance at Sep. 30, 2021	34,301	5,634	371,516	(337,215)
Beginning Balance at Jun. 30, 2021	49,466	5,631	369,171	(319,705)
Net income (loss)	(38,391)
Ending Balance at Mar. 31, 2022	67,806	6,658	425,902	(358,096)
Beginning Balance at Sep. 30, 2021	34,301	5,634	371,516	(337,215)
Net income (loss)	(12,156)			(12,156)
Issuance of common stock, net	48,653	1,006	48,653
Exercise of stock options	212	5	212
Share-based compensation expense	2,324		2,324
Ending Balance at Dec. 31, 2021	73,334	6,645	422,705	(349,371)
Net income (loss)	(8,725)			(8,725)
Exercise of stock options	360	13	360
Share-based compensation expense	2,837		2,837
Ending Balance at Mar. 31, 2022	67,806	6,658	425,902	(358,096)
Beginning Balance at Jun. 30, 2022	52,413	6,658	426,572	(374,159)
Net income (loss)	(16,624)			(16,624)
Issuance of common stock for vested restricted stock units	(40)	5	(40)
Share-based compensation expense	1,559		1,559
Ending Balance at Sep. 30, 2022	37,308	6,663	428,091	(390,783)
Beginning Balance at Jun. 30, 2022	52,413	6,658	426,572	(374,159)
Net income (loss)	(21,809)
Ending Balance at Mar. 31, 2023	34,354	6,663	430,322	(395,968)
Beginning Balance at Sep. 30, 2022	37,308	6,663	428,091	(390,783)
Net income (loss)	10,253			10,253
Share-based compensation expense	813		813
Ending Balance at Dec. 31, 2022	48,374	6,663	428,904	(380,530)
Net income (loss)	(15,438)			(15,438)
Issuance of warrants	500		500
Share-based compensation expense	918		918
Ending Balance at Mar. 31, 2023	$ 34,354	$ 6,663	$ 430,322	$ (395,968)

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) $ in Thousands	3 Months Ended
	Dec. 31, 2021 USD ($)
Stock issuance cost	$ 3,672

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net loss	$ (21,809)	$ (38,391)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of warrant liability	(1,603)	(20,819)
Share-based compensation expense	3,290	7,700
Issuance of warrants	500	0
Depreciation and amortization	288	241
Non-cash lease expense	1,063	636
Changes in operating assets and liabilities:
Unbilled receivables	5,464	(864)
Prepaid expenses and other current assets	(37)	(2,169)
Accounts payable	(3,529)	1,902
Accrued liabilities	5,444	1,680
Deferred revenue	(29,316)	17,487
Operating lease liability	(937)	(645)
Net cash used in operating activities	(41,182)	(33,242)
Cash flows from investing activities:
Purchases of short-term investments	(92,098)	(218,164)
Proceeds from maturity of short-term investments	126,386	205,117
Proceeds from (purchases) of property and equipment	6	(173)
Net cash provided by (used in) investing activities	34,294	(13,220)
Cash flows from financing activities:
Payment of RSU tax withholdings in exchange for common shares surrendered by RSU holders	(40)	(194)
Proceeds from exercise of stock options	0	572
Proceeds from issuance of common stock, gross	0	52,325
Payment of issuance costs	0	(3,672)
Net cash (used in) provided by financing activities	(40)	49,031
Net (decrease) increase in cash and cash equivalents	(6,928)	2,569
Cash and cash equivalents at beginning of the period	15,740	8,543
Cash and cash equivalents at end of the period	8,812	11,112
Supplemental disclosures:
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$ 4,347	$ 2,386

XML

The Company and Summary of Significant Accounting Policies

9 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The Company and Summary of Significant Accounting Policies

Note 1. The Company and Summary of Significant Accounting Policies

The Company

MEI Pharma, Inc. (Nasdaq: MEIP) is a clinical stage pharmaceutical company focused on developing potential new therapies for cancer. MEI Pharma's portfolio of drug candidates includes drug candidates with differentiated or novel mechanisms of action intended to address unmet medical needs and deliver improved benefit to patients, either as standalone treatments or in combination with other therapeutic options. Our common stock is listed on the Nasdaq Capital Market under the symbol “MEIP.”

In February 2023, we, Infinity Pharmaceuticals, Inc. (“Infinity”), and Meadow Merger Sub, Inc., our wholly owned subsidiary (“Merger Sub”) entered into an agreement and plan of merger (“Merger Agreement”). The Merger Agreement provides that Merger Sub will merge with and into Infinity, with Infinity being the surviving entity as a wholly-owned subsidiary of us (transaction referred to as the "Merger"). If the Merger is consummated (the "Closing"), each share of Infinity’s common stock issued and outstanding immediately prior will be automatically converted into the right to receive 0.052245 shares (the “Exchange Ratio”) of our common stock. Subject to stockholder approval and the subsequent closing of the merger, the combined company will be renamed "Kimbrx Therapeutics, Inc." and trade on the Nasdaq Stock Market under the symbol "KMBX". The combined company would be headquartered in San Diego, California. The Merger Agreement has been approved by the Boards of Directors of both companies. The Merger is subject to approvals by our and Infinity's stockholders, respectively.

On April 14, 2023, we amended our Certificate of Incorporation to affect a combination of our issued and outstanding common stock at a ratio of one-for-twenty (“Reverse Stock Split”). The par value and authorized shares of our common stock were not adjusted as a result of the Reverse Stock Split. The Reverse Stock Split was effective on April 14, 2023, with a market effective date of April 17, 2023. All historical share and per share amounts have been adjusted to reflect the Reverse Stock Split for all periods presented. All stock options, restricted stock units and warrants outstanding were ratably adjusted to give effect to the Reverse Stock Split.

Clinical Development Programs

We build our pipeline by licensing or acquiring promising cancer agents and creating value in programs through development, commercialization and strategic partnerships, as appropriate. Our objective is to leverage the mechanisms and properties of our pipeline drug candidates to optimize the balance between efficacy and tolerability to meet the needs of patients with cancer. Our drug candidate pipeline includes:

•Voruciclib, an oral cyclin-dependent kinase (“CDK”) inhibitor;

•ME-344, an intravenous small molecule targeting the oxidative phosphorylation pathway; and

•Zandelisib, an oral phosphatidylinositol 3-kinase delta (“PI3Kδ”) inhibitor.

The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current drug candidates may not have favorable results in later studies or trials. The commercial opportunity will be reduced or eliminated if competitors develop and market products that are more effective, have fewer side effects or are less expensive than our drug candidates. We will need substantial additional funds to progress the clinical trial programs for the drug candidates voruciclib and ME-344 and to develop new compounds we might license or acquire. The actual amount of funds that will be needed are determined by a number of factors, some of which are beyond our control. Negative U.S. and global economic conditions may pose challenges to our business strategy, which relies on funding from the financial markets or collaborators.

Reduction in Force and Current Events

In November 2022, we and Kyowa Kirin Co., Ltd. ("Kyowa Kirin") met with the U.S. Food and Drug Administration ("FDA") in a follow-up meeting to the March 2022 end of Phase 2 meeting related to zandelisib. At this meeting, the FDA provided further guidance regarding the design and statistical analysis for the COASTAL trial. Following the November meeting, the companies jointly concluded that a clinical trial consistent with the recent FDA guidance, including modification of the ongoing COASTAL trial, would likely not be feasible to complete within a time period that would support further investment or with sufficient certainty of the regulatory requirements for approval to justify continued global development efforts. As a result, we and Kyowa Kirin jointly decided to discontinue global development of zandelisib for indolent forms of non-Hodgkin lymphoma outside of Japan.

The discontinuation of zandelisib development outside of Japan was a business decision based on the most recent regulatory guidance from the FDA and is not related to the zandelisib clinical data generated to date. Kyowa Kirin is continuing certain ongoing Japanese clinical trials, including the Phase 2 MIRAGE trial evaluating Japanese patients with relapsed or refractory indolent B-cell non-Hodgkin lymphomas, and will explore submitting the MIRAGE and TIDAL trials for marketing authorization in Japan. MIRAGE

is a Phase 2 trial, similar in design to the global Phase 2, single-arm, TIDAL trial. In November 2022, we and Kyowa Kirin announced positive topline data from the Phase 2 MIRAGE trial. Kyowa Kirin has been evaluating whether to continue developing zandelisib in Japan and after meeting with the Pharmaceuticals and Medical Devices Agency ("PMDA") has concluded that conducting a randomized study consistent with agency guidance to support a marketing application would likely not be feasible to complete within a time period that would support further investment. As a result, in May 2023, Kyowa Kirin decided to discontinue development of zandelisib in Japan. The discontinuation of zandelisib in Japan was a business decision by Kyowa Kirin based on the most recent regulatory guidance from the PMDA and is not related to the zandelisib clinical data generated to date.

In light of Kyowa Kirin’s decision to discontinue development of zandelisib in Japan, the parties intend to terminate the global license, development and commercialization agreement executed in April 2020.

We and Kyowa Kirin have begun closing all ongoing zandelisib clinical studies outside of Japan, including the Phase 3 COASTAL trial, the Phase 2 TIDAL trial, and the Phase 2 CORAL trial. Depending on the achievement of certain regulatory and commercial milestones in Japan, we may be eligible for additional payments from Kyowa Kirin under the current agreement.

In December 2022, we announced a plan to streamline our organization towards the continued clinical development of voruciclib and ME-344. As a result, we initiated a staggered workforce reduction, initially affecting 28 employees in December 2022 (representing approximately 27% of our workforce) and an additional 14 employees in April 2023. In connection with the reduction in force, we incurred termination costs, which include severance, benefits, and related costs of approximately $2.4 million, of which $1.8 million was research and development expense and $0.6 million was general and administrative expense.

Liquidity

We have accumulated losses of $396.0 million since inception and expect to incur operating losses and generate negative cash flows from operations for the foreseeable future. As of March 31, 2023, we had $112.0 million in cash and cash equivalents and short-term investments. We believe that these resources will be sufficient to meet our obligations and fund our liquidity and capital expenditure requirements for at least the next 12 months from the issuance of these financial statements. Our current business operations are focused on continuing the clinical development of our drug candidates. Changes to our research and development plans or other changes affecting our operations and operating expenses may affect actual future use of existing cash resources. We cannot determine with certainty costs associated with ongoing and future clinical trials or the regulatory approval process. The duration, costs and timing associated with the development of our product candidates will depend on a variety of factors, including uncertainties associated with the results of our clinical trials.

To date, we have obtained cash and funded our operations primarily through equity financings and license agreements. In order to continue the development of our drug candidates, at some point in the future we expect to pursue one or more capital transactions, whether through the sale of equity securities, debt financing, license agreements or entry into strategic partnerships. There can be no assurance that we will be able to continue to raise additional capital in the future.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of MEI Pharma, Inc. and our wholly owned subsidiary, Meadow Merger Sub, Inc. We have eliminated all significant intercompany accounts and transactions in consolidation. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the accompanying financial statements do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) that are necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented.

The accompanying unaudited condensed consolidated financial statements for the quarterly period ended March 31, 2023 should be read in conjunction with the audited financial statements and notes thereto as of and for the fiscal year ended June 30, 2022, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 8, 2022 ("2022 Annual Report"). Interim results are not necessarily indicative of results for a full year.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and disclosures made in the accompanying notes to the consolidated financial statements. We use estimates that affect the reported amounts (including assets, liabilities, revenues and expenses) and related disclosures. Actual results could materially differ from those estimates.

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value is as follows:

•Level 1 – Observable inputs such as quoted prices in active markets for identical assets or liabilities.

•Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Revenue Recognition

Revenues from Customers

In accordance with Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("Topic 606"), we recognize revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. For enforceable contracts with our customers, we first identify the distinct performance obligations – or accounting units – within the contract. Performance obligations are commitments in a contract to transfer a distinct good or service to the customer.

Payments received under commercial arrangements, such as licensing technology rights, may include non-refundable fees at the inception of the arrangements, milestone payments for specific achievements designated in the agreements, and royalties on the sale of products. At the inception of arrangements that include milestone payments, we use judgment to evaluate whether the milestones are probable of being achieved and we estimate the amount to include in the transaction price using the most likely method. If it is probable that a significant revenue reversal will not occur, the estimated amount is included in the transaction price. Milestone payments that are not within our or the licensee’s control, such as regulatory approvals, are not included in the transaction price until those approvals are received. At the end of each reporting period, we re-evaluate the probability of achievement of development milestones and any related constraint and, as necessary, we adjust our estimate of the overall transaction price.

We may enter into arrangements that consist of multiple performance obligations. Such arrangements may include any combination of our deliverables. To the extent a contract includes multiple promised deliverables, we apply judgment to determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For arrangements with multiple distinct performance obligations, we allocate variable consideration related to our 50-50 cost share for development services directly to the associated performance obligation and then allocate the remaining consideration among the performance obligations based on their relative stand-alone selling price.

Stand-alone selling price is the price at which we would sell a promised good or service separately to the customer. When not directly observable, we typically estimate the stand-alone selling price for each distinct performance obligation. Variable consideration that relates specifically to our efforts to satisfy specific performance obligations is allocated entirely to those performance obligations. Other components of the transaction price are allocated based on the relative stand-alone selling price, over which management has applied significant judgment. We develop assumptions that require judgment to determine the stand-alone selling price for license-related performance obligations, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical, regulatory and commercial success. We estimate stand-alone selling price for research and development performance obligations by forecasting the expected costs of satisfying a performance obligation plus an appropriate margin.

In the case of a license that is a distinct performance obligation, we recognize revenue allocated to the license from non-refundable, up-front fees at the point in time when the license is transferred to the licensee and the licensee can use and benefit from the license. For licenses that are bundled with other distinct or combined obligations, we use judgment to assess the nature of the performance obligation to determine whether the performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. If the performance obligation is satisfied over time, we evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. Revenue is recorded proportionally as costs are incurred. We generally use the cost-to-cost measure of progress because it best depicts the transfer of control to the customer which occurs as we incur costs. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation (an “input method” under Topic 606). We use judgment to estimate the total cost expected to complete the research and development performance obligations, which include subcontractors’ costs, labor, materials, other direct costs and an allocation of indirect costs. We evaluate these cost estimates and the progress each reporting period and, as necessary, we adjust the measure of progress and related revenue recognition.

For arrangements that include sales-based or usage-based royalties, we recognize revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, we have not recognized any sales-based or usage-based royalty revenue from license agreements.

In connection with our License, Development and Commercialization Agreement (the "Kyowa Kirin Commercialization Agreement") with Kyowa Kirin, we perform development services related to our 50-50 cost sharing arrangement for which revenue is recognized over time. Additionally, we perform services for Kyowa Kirin at their request, the costs of which are fully reimbursed to us. We record the reimbursement for such pass through services as revenue at 100% of reimbursed costs, as control of the additional services for Kyowa Kirin is transferred at the time we incur such costs. The costs of these services are recognized in the Condensed Consolidated Statements of Operations as research and development expense.

We recognized revenue associated with the Kyowa Kirin Commercialization Agreement for the periods presented (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Revenue	$	5,894	$	9,694	$	47,359	$	29,283
Timing of Revenue Recognition:
Services performed over time	$	5,598	$	9,694	$	46,430	$	26,970
Pass through services at a point in time		296		—		929		2,313
	$	5,894	$	9,694	$	47,359	$	29,283

Contract Balances

Accounts receivable are included in “Prepaid expenses and other current assets”, and contract liabilities are included in “Deferred revenue" and "Deferred revenue, long-term” on our Condensed Consolidated Balance Sheets. The following table presents

changes in accounts receivable, unbilled receivables and contract liabilities accounted for under Topic 606 for the periods presented (in thousands):

	Nine Months Ended March 31,
	2023			2022
Accounts receivable
Accounts receivable, beginning of period	$	—		$	—
Amounts billed		23,507			45,927
Payments received		(23,507	)		(45,927	)
Accounts receivable, end of period	$	—		$	—
Unbilled receivables
Unbilled receivables, beginning of period	$	10,044		$	7,582
Billable amounts		18,043			46,791
Amounts billed		(23,507	)		(45,927	)
Unbilled receivables, end of period	$	4,580		$	8,446
Contract liabilities
Contract liabilities, beginning of period	$	30,900		$	14,677
Payments received		—			20,000
Revenue recognized		(4,145	)		(2,513	)
Revenue recognized from change in estimate for performance obligations that are being closed		(16,565	)		—
Revenue recognized for performance obligations that will no longer commence		(8,607	)		—
Contract liabilities, end of period	$	1,583		$	32,164

The timing of revenue recognition, invoicing and cash collections results in billed accounts receivable and unbilled receivables and deferred revenue (contract liabilities). We invoice our customers in accordance with agreed-upon contractual terms, typically at periodic intervals or upon achievement of contractual milestones. Invoicing may occur subsequent to revenue recognition, resulting in unbilled receivables. We may receive advance payments from our customers before revenue is recognized, resulting in contract liabilities. The unbilled receivables and deferred revenue reported on the Condensed Consolidated Balance Sheets relate to the Kyowa Kirin Commercialization Agreement.

As of March 31, 2023 and June 30, 2022, we had $66.1 million and $95.4 million, respectively, of deferred revenue associated with the Kyowa Kirin Commercialization Agreement, of which $64.5 million relates to the U.S. license which is a unit of account under the scope of ASC Topic 808, Collaborative Arrangements ("Topic 808") and is not a performance obligation under Topic 606. The remaining balance of deferred revenue as of March 31, 2023 and June 30, 2022 of $1.6 million and $30.9 million, respectively, relates to the development services performance obligations which are under the scope of Topic 606. The decrease in deferred revenue comes as a result of our winding down of all zandelisib studies outside of Japan. We updated our estimated costs to complete each of the performance obligations, resulting in a higher progress towards completion based on the ratio of costs incurred to date to the total estimated costs. Additionally, during the three months ended December 31, 2022, we recognized revenue related to non-refundable payments for performance obligations that have not commenced and will no longer be initiated.

Our contract liabilities accounted for under Topic 606 relate to the amount of initial upfront consideration that was allocated to the development services performance obligations. Contract liabilities are recognized over the duration of the performance obligations based on the costs incurred relative to total expected costs.

Revenues from Collaborators

At contract inception, we assess whether the collaboration arrangements are within the scope of Topic 808 to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. This assessment is performed based on the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of Topic 808 that contain multiple units of account, we first determine which units of account within the arrangement are within the scope of Topic 808 and which elements are within the scope of Topic 606. For units of account within collaboration arrangements that are accounted for pursuant to Topic 808, an appropriate recognition method is determined and applied consistently, by analogy to authoritative accounting literature. For elements of collaboration arrangements that are accounted for pursuant to Topic 606, we recognize revenue as discussed above. Consideration received that does not meet the requirements to satisfy Topic 606 revenue recognition criteria is recorded as deferred revenue in the accompanying Condensed Consolidated Balance Sheets, classified as either short-term or long-term deferred revenue based on our best estimate of when such amounts will be recognized.

Research and Development Costs

Research and development costs are expensed as incurred and include costs paid to third-party contractors to perform research, conduct clinical trials and develop and manufacture drug materials. Clinical trial costs, including costs associated with third-party contractors, are a significant component of research and development expenses. We expense research and development costs based on work performed. In determining the amount to expense, management relies on estimates of total costs based on contract components completed, the enrollment of subjects, the completion of trials, and other events. Costs incurred related to the purchase or licensing of in-process research and development for early-stage products or products that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred.

Leases

We account for our leases under ASC Topic 842, Leases (“Topic 842”). Leases which are identified within the scope of Topic 842 and which have a term greater than one year are recognized on our Condensed Consolidated Balance Sheets as right-of-use ("ROU") assets and lease liabilities. Operating lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected remaining lease term. The lease term includes any renewal options and termination options that we are reasonably certain to exercise. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, we use our incremental borrowing rate. The incremental borrowing rate is determined based on the rate of interest that we would pay to borrow on a collateralized basis an amount equal to the lease payments for a similar term and in a similar economic environment. The interest rate implicit in lease contracts to calculate the present value is typically not readily determinable. As such, significant management judgment is required to estimate the incremental borrowing rate.

Operating lease expense for operating leases is recognized on a straight-line basis over the lease term based on the total lease payments. We have elected the practical expedient to not separate lease and non-lease components for our real estate leases. Our non-lease components are primarily related to property maintenance, which varies based on future outcomes, and thus is recognized in operating lease expense when incurred.

Share-Based Compensation

Share-based compensation expense stock options and restricted stock units ("RSUs") granted to employees and directors is recognized in the Condensed Consolidated Statements of Operations based on estimated amounts. The cost of stock options is measured at the grant date, based on the estimated fair value of the stock option using the Black-Scholes valuation model, which incorporates various assumptions, including expected volatility, risk-free interest rate, the expected term of the award and the dividend yield on the underlying stock. Expected volatility is calculated based on the historical volatility of our stock over the expected option life and other appropriate factors. The expected option term is computed using the "simplified" method as permitted under the provisions of ASC Topic 718, Compensation - Stock Compensation. We use the simplified method to calculate the expected term of stock options and similar instruments, as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. Risk-free interest rates are calculated based on continuously compounded risk-free rates for the appropriate term. The dividend yield is assumed to be zero as we have never paid or declared any cash dividends and do not intend to do so in the foreseeable future. For RSUs, we estimate the grant date fair value using our closing stock price on the date of grant. The estimated fair value of stock options and RSUs is amortized on a straight-line basis over the requisite service period, adjusted for actual forfeitures at the time they occur. The requisite service period is generally the time over which our share-based awards vest.

Income Taxes

Our income tax expense consists of current and deferred income tax expense or benefit. Current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. A deferred income tax asset or liability is recognized for the future tax consequences attributable to tax credits and loss carryforwards and to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of March 31, 2023, we have established a valuation allowance to fully reserve our net deferred tax assets. Tax rate changes are reflected in income during the period such changes are enacted. Changes in our ownership may limit the amount of net operating loss carryforwards that can be utilized in the future to offset taxable income.

There have been no material changes in our unrecognized tax benefits since June 30, 2022, and, as such, the disclosures included in our 2022 Annual Report continue to be relevant for the nine months ended March 31, 2023.

Recent Accounting Pronouncement

In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), as amended. The amendments in ASU 2016-13 require, among other things, financial assets measured at amortized cost basis to be presented at the net amount expected to be collected as compared to previous U.S. GAAP which delayed recognition until it was probable a loss had been incurred. The amendments in ASU 2016-13 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact that adoption of ASU 2016-13 will have on our financial statements and related disclosures.

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Fair Value Measurements

9 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 2. Fair Value Measurements

The carrying amounts of financial instruments such as cash equivalents, short-term investments and accounts payable approximate the related fair values due to the short-term maturities of these instruments. We invest our excess cash in financial instruments which are readily convertible into cash, such as money market funds and U.S. government securities. Cash equivalents and short-term investments are measured at fair value on a recurring basis and are classified as Level 1 as defined by the fair value hierarchy.

In May 2018, we issued warrants in connection with our private placement of shares of common stock. Pursuant to the terms of the warrants, we could be required to settle the warrants in cash in the event of an acquisition of us and, as a result, the warrants are required to be measured at fair value and reported as a liability in the Condensed Consolidated Balance Sheet. We recorded the fair value of the warrants upon issuance using the Black-Scholes valuation model and are required to revalue the warrants at each reporting date with any changes in fair value recorded on our Condensed Consolidated Statement of Operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. Inputs used to determine estimated fair value of the warrant liabilities include the estimated fair value of the underlying stock at the valuation date, the estimated term of the warrants, risk-free interest rates, expected dividends and the expected volatility of the underlying stock. The significant unobservable inputs used in the fair value measurement of the warrant liabilities were the volatility rate and the estimated term of the warrants. Generally, increases (decreases) in the fair value of the underlying stock and estimated term would result in a directionally similar impact to the fair value measurement. The change in the fair value of the Level 3 warrant liability is reflected in the Condensed Consolidated Statements of Operations for the three and nine months ended March 31, 2023 and 2022, respectively.

To calculate the fair value of the warrant liability, the following assumptions were used for the periods presented:

	March 31, 2023			June 30, 2022
Risk-free interest rate		4.6	%		2.8	%
Expected life (years)		0.1			0.9
Expected volatility		91.5	%		139.4	%
Dividend yield		0.0	%		0.0	%
Black-Scholes Fair Value	$	—		$	0.10

The following table sets forth a summary of changes in the estimated fair value of our Level 3 warrant liability for the nine months ended March 31, 2023 and 2022 (in thousands):

	Fair Value of Warrants Using Significant Unobservable Inputs (Level 3)
	2023			2022
Balance at July 1,	$	1,603		$	22,355
Change in estimated fair value of liability classified warrants		(1,603	)		(20,819	)
Balance at March 31,	$	—		$	1,536

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Short-Term Investments

9 Months Ended

Mar. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Short-Term Investments

Note 3. Short-Term Investments

As of March 31, 2023, and June 30, 2022, our short-term investments consisted of $103.2 million and $137.5 million, respectively, in U.S. government securities. The short-term investments held as of March 31, 2023 and June 30, 2022 had maturity dates of less than one year, are considered to be “held to maturity” and are carried at amortized cost. As of March 31, 2023, and June 30, 2022, the gross holding gains and losses were immaterial.

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License Agreements

9 Months Ended

Mar. 31, 2023

Related Party Transactions [Abstract]

License Agreements

Note 4. License Agreements

Kyowa Kirin License, Development and Commercialization Agreement

In April 2020, we entered into the Kyowa Kirin Commercialization Agreement under which we granted to Kyowa Kirin a co-exclusive, sublicensable, payment-bearing license under certain patents and know-how controlled by us to develop and commercialize zandelisib and any pharmaceutical product containing zandelisib for all human indications in the U.S. (the "U.S. License"), and an exclusive (subject to certain retained rights to perform obligations under the Kyowa Kirin Commercialization Agreement), sublicensable, payment-bearing, license under certain patents and know-how controlled by us to develop and commercialize zandelisib and any pharmaceutical product containing zandelisib for all human indications in countries outside of the U.S. (the “Ex-U.S." and the “Ex-U.S. License”). Kyowa Kirin granted to us a co-exclusive, sublicensable, license under certain patents and know-how controlled by Kyowa Kirin to develop and commercialize zandelisib for all human indications in the U.S., and a co-exclusive, sublicensable, royalty-free, fully paid license under certain patents and know-how controlled by Kyowa Kirin to perform our obligations in the Ex-U.S. under the Kyowa Kirin Commercialization Agreement. Kyowa Kirin paid us an initial payment of $100.0 million.

Kyowa Kirin is responsible for the development and commercialization of zandelisib in the Ex-U.S. and, subject to certain exceptions, is solely responsible for all costs related thereto. We provide to Kyowa Kirin certain drug supplies necessary for the development and commercialization of zandelisib in the Ex-U.S., with the understanding that Kyowa Kirin will assume responsibility for manufacturing for the Ex-U.S. as soon as practicable.

We assessed the Kyowa Kirin Commercialization Agreement in accordance with Topic 808 and Topic 606 and determined that our obligations comprise the U.S. License, the Ex-U.S. License, and development services (the “Development Services”). We determined that the Kyowa Kirin Commercialization Agreement is a collaborative arrangement in accordance with Topic 808 that contains multiple units of account, as we and Kyowa Kirin are both active participants in the development and commercialization activities and are exposed to significant risks and rewards that are dependent on commercial success of the activities of the arrangement. The U.S. License is a unit of account under the scope of Topic 808 and is not a deliverable under Topic 606, while the Ex-U.S. License and Development Services performance obligations are under the scope of Topic 606.

As discussed in Note 1, we and Kyowa Kirin jointly decided to discontinue zandelisib development in the U.S. As of March 31, 2023, we updated our assessment of the total transaction price from the Kyowa Kirin Commercialization Agreement to be $217.0 million, comprised of the upfront payment of $100.0 million, milestone payments of $20.0 million, estimated development cost-sharing of $91.8 million, and deferred revenue of $5.2 million. As of March 31, 2023, the updated assessment reflects a decrease in estimated variable consideration related to development cost sharing of $143.1 million from June 30, 2022. In December 2022, we announced our plan to discontinue the global development of zandelisib outside of Japan. As a result, we decreased our estimate for variable consideration related to development cost sharing. During the three months ended December 31, 2022, we recognized revenue of $16.6 million from the change in estimate. Additionally, during the three months ended December 31, 2022, we recognized $8.6 million of revenue related to non-refundable payments for performance obligations that have not commenced and will no longer be initiated. Any variable consideration related to sales-based royalties and commercial milestones related to licenses of intellectual property will be determined when the sale or usage occurs, and is therefore excluded from the transaction price. In addition, we are eligible to receive future development and regulatory milestones upon the achievement of certain criteria; however, these amounts are excluded from variable consideration as the risk of significant revenue reversal will only be resolved depending on future research and development and/or regulatory approval outcomes. We re-evaluate the estimated variable consideration included in the transaction price and any related constraints at the end of each reporting period.

We allocated the transaction price of the Ex-U.S. License and Development Services performance obligations to each unit of account. Variable consideration that relates specifically to our efforts to satisfy specific performance obligations are allocated entirely to those performance obligations. Other components of the transaction price are allocated based on the relative stand-alone selling price, over which management has applied significant judgment. We developed the estimated stand-alone selling price for the licenses using the risk-adjusted net present values of estimated cash flows, and the estimated stand-alone selling price of the development services performance obligations by estimating costs to be incurred, and an appropriate margin, using an income approach.

We determined that control of the U.S. License and Ex-U.S. License were transferred to Kyowa Kirin during the year ended June 30, 2020, and recognized revenue of $21.0 million related to the Ex-U.S. License. The $64.5 million transaction price allocated to the U.S. License obligation accounted for under Topic 808 is included as non-current deferred revenue. As described in Note 1 we and Kyowa Kirin intend to terminate the Kyowa Kirin Commercialization Agreement. As of March 31, 2023 and June 30, 2022, we have deferred revenue of $1.6 million and $30.9 million, respectively, related to the transaction price allocated to the Development Services performance obligations and are recognizing this revenue based on the proportional performance of these development activities, which we expect to recognize through fiscal year 2024.

Presage License Agreement

In September 2017, we entered into a license agreement with Presage Biosciences, Inc. (“Presage”). Under the terms of such license agreement (the “Presage License Agreement”), Presage granted to us exclusive worldwide rights to develop, manufacture and commercialize voruciclib, a clinical-stage, oral and selective CDK inhibitor, and related compounds. In exchange, we paid $2.9 million. With respect to the first indication, an incremental $2.0 million payment, due upon dosing of the first subject in the first registration trial, will be owed to Presage, for total payments of $4.9 million prior to receipt of marketing approval of the first indication in the U.S., E.U. or Japan. Additional potential payments of up to $179 million will be due upon the achievement of certain development, regulatory and commercial milestones. We will also pay mid-single-digit tiered royalties on the net sales of any product successfully developed. As an alternative to milestone and royalty payments related to countries in which we sublicense product rights, we will pay to Presage a tiered percent (which decreases as product development progresses) of amounts received from such sublicensees.

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BeiGene Collaboration

9 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BeiGene Collaboration

Note 5. BeiGene Collaboration

In October 2018, we entered into a clinical collaboration with BeiGene, Ltd. (“BeiGene”) to evaluate the safety and efficacy of zandelisib in combination with BeiGene’s zanubrutinib (marketed as Brukinsa®), an inhibitor of Bruton’s tyrosine kinase, for the treatment of patients with B-cell malignancies. Under the terms of the clinical collaboration agreement, we amended our ongoing Phase 1b trial to include evaluation of zandelisib in combination with zanubrutinib in patients with B-cell malignancies. Study costs are being shared equally by the parties, and we agreed to supply zandelisib and BeiGene agreed to supply zanubrutinib. We record the costs reimbursed by BeiGene as a reduction of our research and development expenses. We retained full commercial rights for zandelisib and BeiGene retained full commercial rights for zanubrutinib. With the discontinuation of the zandelisib program outside of Japan, this clinical collaboration will be concluding with the discontinuation of the Phase 1b trial.

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Net Loss Per Share

9 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Net Loss Per Share

Note 6. Net Loss Per Share

Basic and diluted net loss per share are computed using the weighted average number of shares of common stock outstanding during the period, less any shares subject to repurchase or forfeiture. There were no shares of common stock subject to repurchase or forfeiture for the three and nine months ended March 31, 2023 and 2022. Diluted net loss per share is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period.

The following table presents the calculation of net loss used to calculate basic loss and diluted loss per share (in thousands):

	Three Months Ended March 31,						Nine Months Ended March 31,
	2023			2022			2023			2022
Net loss – basic	$	(15,438	)	$	(8,725	)	$	(21,809	)	$	(38,391	)
Change in fair value of warrant liability		—			—			—			(8,046	)
Net loss – diluted	$	(15,438	)	$	(8,725	)	$	(21,809	)	$	(46,437	)

Share used in calculating net loss per share was determined as follows (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Weighted average shares used in calculating basic net loss per share		6,663		6,653		6,663		6,080
Effect of potentially dilutive common shares from equity awards and liability-classified warrants		—		—		—		44
Weighted average shares used in calculating diluted net loss per share		6,663		6,653		6,663		6,124

Our potentially dilutive shares, which include outstanding stock options, restricted stock units and warrants, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive.

The following table presents weighted average potentially dilutive shares that have been excluded from the calculation of net loss per share because of their anti-dilutive effect (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Stock options		1,258		1,020		1,340		1,029
Warrants		905		11		837		12
Restricted stock units		—		803		—		268
Total anti-dilutive shares		2,163		1,834		2,177		1,309

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Commitments and Contingencies

9 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 7. Commitments and Contingencies

We have contracted with various consultants and third parties to assist us in pre-clinical research and development and clinical trials work for our leading drug compounds. The contracts are terminable at any time, but obligate us to reimburse the providers for any time or costs incurred through the date of termination. We also have employment agreements with certain of our current employees that provide for severance payments and accelerated vesting for share-based awards if their employment is terminated under specified circumstances.

Presage License Agreement

As discussed in Note 4, we are party to a license agreement with Presage under which we may be required to make future payments upon the achievement of certain development, regulatory and commercial milestones, as well as potential future royalties based upon net sales. As of March 31, 2023, we had not accrued any amounts for potential future payments as achievement of the milestones had not been met.

Torreya Partners

In October 2022, we engaged Torreya Partners as a financial advisor to help explore additional strategic opportunities. As part of this engagement, we issued warrants to acquire shares of our common stock having a value equal to $0.5 million. These warrants were issued during the three months ended March 31, 2023. We will also pay Torreya Partners a transaction fee equal to 20% of aggregate consideration, up to a maximum of $2.0 million, upon completion of a strategic transaction. As of March 31, 2023, we have not accrued any amount for potential future transaction fees.

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Leases

9 Months Ended

Mar. 31, 2023

Disclosure Text Block [Abstract]

Leases

Note 8. Leases

In July 2020, we entered into a lease agreement (the "Initial Lease Agreement") for office space in San Diego, California. The Initial Lease Agreement was extended to November 30, 2029, in accordance with the amended lease agreement that we entered into in January 2022 (the "Amended Lease Agreement"). The Amended Lease Agreement, which began on July 1, 2022 and expires on November 30, 2029, provides additional office space adjacent to our current office in San Diego. Upon taking control of the additional office space on July 1, 2022, we recognized operating lease ROU assets obtained in exchange for operating lease liabilities of $4.3 million. The Initial Lease Agreement and Amended Lease Agreement are collectively referred to as the "Lease Agreements" and have been accounted for as operating leases.

The following is a schedule of the future minimum lease payments under the Lease Agreements, reconciled to the operating lease liability, as of March 31, 2023 (in thousands):

	March 31, 2023
Remainder of fiscal year ending June 30, 2023	$	566
Years ending June 30,
2024		2,335
2025		1,913
2026		2,477
2027		2,551
2028		2,715
Thereafter		4,386
Total lease payments		16,943
Less: Present value discount		(3,891	)
Total operating lease liability	$	13,052
Balance Sheet Classification – Operating Leases
Operating lease liability	$	1,385
Operating lease liability, long-term		11,667
Total operating lease liability	$	13,052
Other Balance Sheet Information – Operating Leases
Weighted average remaining lease term (in years)		6.7
Weighted average discount rate		7.50	%

The Lease Agreements include rent escalations over the lease terms. In addition, the Lease Agreements include renewal options which were not included in the determination of the ROU assets or lease liabilities as the renewals were not reasonably certain at the inception of the Lease Agreements. Under the terms of the Lease Agreements, we are subject to charges for variable non-lease components (e.g., common area maintenance, maintenance, etc.) that are not included in the ROU assets and operating lease liabilities and are recorded as an expense in the period incurred.

The total operating lease costs and supplemental cash flow information related to our operating leases were as follows (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Operating lease expense	$	609	$	377	$	1,826	$	1,130
Operating cash flows from operating leases	$	567	$	380	$	1,700	$	1,139

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Stockholders' Equity

9 Months Ended

Mar. 31, 2023

Federal Home Loan Banks [Abstract]

Stockholders' Equity

Note 9. Stockholders’ Equity

Equity Transactions

Shelf Registration Statement

We have a shelf registration statement that permits us to sell, from time to time, up to $200.0 million of common stock, preferred stock and warrants. The shelf registration was filed and declared effective in May 2020, and carried forward approximately $107.5 million of unsold securities registered under the prior shelf registration statement. As of March 31, 2023, there was $123.4 million aggregate value of securities available under the shelf registration statement, including $60.0 million remaining available under the 2020 ATM Sales Agreement described below. The shelf registration expires on May 18, 2023.

At-The-Market Equity Offering

On November 10, 2020, we entered into an At-The-Market Equity Offering Sales Agreement (the “2020 ATM Sales Agreement”), pursuant to which we may sell an aggregate of up to $60.0 million of our common stock pursuant to the shelf registration statement. As of March 31, 2023, there was $60.0 million remaining available under the 2020 ATM Sales Agreement.

Warrants

As of March 31, 2023, we have outstanding warrants to purchase 802,949 shares of our common stock related to a private placement equity financing that we closed in May 2018. The warrants are fully vested, exercisable at a price of $50.80 per share and expire in May 2023. Pursuant to the terms of the warrants, we could be required to settle the warrants in cash in the event of an

acquisition of us and, as a result, the warrants are required to be measured at fair value and reported as a liability in the Condensed Consolidated Balance Sheets. The warrants were revalued as of March 31, 2023 and June 30, 2022 at zero and $1.6 million, respectively. The change in fair value of zero and $1.6 million was recorded on the Condensed Consolidated Statement of Operations for the three and nine months ended March 31, 2023.

As of March 31, 2023, we also have outstanding warrants to purchase 102,513 shares of our common stock issued to Torreya Partners. The warrants are fully vested, exercisable at a price of $6.80 per share and expire in October 2027.

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Share-based Compensation

9 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Share-based Compensation

Note 10. Share-based Compensation

We use equity-based compensation programs to provide long-term performance incentives for our employees. These incentives consist primarily of stock options and RSUs. In December 2008, we adopted the MEI Pharma, Inc. 2008 Stock Omnibus Equity Compensation Plan (“Omnibus Plan”), as amended and restated from time-to-time, under which 1,450,740 shares of common stock are authorized for issuance. The Omnibus Plan provides for the grant of options and/or other stock-based or stock-denominated awards to our non-employee directors, officers, and employees. In January 2023, our stockholders approved the increase of 400,000 additional shares available for future grant under the Omnibus Plan. As of March 31, 2023, there were 583,468 shares available for future grant under the Omnibus Plan.

In May 2021, we adopted the 2021 Inducement Plan ("Inducement Plan"), under which 125,000 shares of common stock are authorized for issuance. The Inducement Plan is intended to assist us in attracting and retaining selected individuals to serve as employees who are expected to contribute to our success, by providing an inducement for such individuals to enter into employment with us, and to achieve long-term objectives that will benefit our stockholders. As of March 31, 2023, there were 25,185 shares available for future grant under the Inducement Plan.

Total share-based compensation expense for all stock awards consisted of the following for the periods presented (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Research and development	$	374	$	1,118	$	1,224	$	2,398
General and administrative		544		1,719		2,066		5,302
Total share-based compensation expense	$	918	$	2,837	$	3,290	$	7,700

Stock Options

Stock options granted to employees vest 25% one year from the date of grant and ratably each month thereafter for a period of 36 months and expire ten years from the date of grant. Stock options granted to directors vest ratably each month for a period of 12 months from the date of grant and expire ten years from the date of grant. Of the total options outstanding of 1,252,931 as of March 31, 2023, 1,153,116 were granted under the Omnibus Plan and 99,815 were granted under the Inducement Plan.

A summary of our stock option activity and related data follows:

	Number of Options			Weighted- Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at June 30, 2022		996,700		$	57.00
Granted		462,201			10.66
Expired		(7,834	)		52.62
Forfeited/Cancelled		(198,136	)		40.37
Outstanding at March 31, 2023		1,252,931			42.56		7.5	$	—
Vested and exercisable at March 31, 2023		664,330			56.70		6.2	$	—

As of March 31, 2023, the aggregate intrinsic value of outstanding options was calculated as the difference between the exercise price of the underlying options and the closing price of our common stock of $4.58 on that date.

Unrecognized compensation expense related to non-vested stock options totaled $3.9 million as of March 31, 2023. Such compensation expense is expected to be recognized over a weighted average period of 1.5 years. As of March 31, 2023, we expect all options to vest.

We use the Black-Scholes valuation model to estimate the grant date fair value of stock options. To calculate these fair values, the following weighted average assumptions were used for the periods presented:

	Nine Months Ended March 31,
	2023			2022
Risk-free interest rate		2.9	%		1.2	%
Expected life (years)		6.0			6.0
Expected volatility		84.1	%		68.8	%
Dividend yield		0.0	%		0.0	%
Weighted average grant date fair value	$	7.71		$	33.00

Restricted Stock Units

A summary of our RSU activity and related data for the nine months ended March 31, 2023 was as follows:

	Number of RSUs			Weighted Average Grant Date Fair Value
Non-vested at June 30, 2022		9,220		$	69.80
Vested		(9,220	)	$	69.80
Non-vested at March 31, 2023		—		$	—

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The Company and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Mar. 31, 2023

Clinical Development Programs

Clinical Development Programs

We build our pipeline by licensing or acquiring promising cancer agents and creating value in programs through development, commercialization and strategic partnerships, as appropriate. Our objective is to leverage the mechanisms and properties of our pipeline drug candidates to optimize the balance between efficacy and tolerability to meet the needs of patients with cancer. Our drug candidate pipeline includes:

•Voruciclib, an oral cyclin-dependent kinase (“CDK”) inhibitor;

•ME-344, an intravenous small molecule targeting the oxidative phosphorylation pathway; and

•Zandelisib, an oral phosphatidylinositol 3-kinase delta (“PI3Kδ”) inhibitor.

The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current drug candidates may not have favorable results in later studies or trials. The commercial opportunity will be reduced or eliminated if competitors develop and market products that are more effective, have fewer side effects or are less expensive than our drug candidates. We will need substantial additional funds to progress the clinical trial programs for the drug candidates voruciclib and ME-344 and to develop new compounds we might license or acquire. The actual amount of funds that will be needed are determined by a number of factors, some of which are beyond our control. Negative U.S. and global economic conditions may pose challenges to our business strategy, which relies on funding from the financial markets or collaborators

Reduction in Force and Current Events

Reduction in Force and Current Events

In November 2022, we and Kyowa Kirin Co., Ltd. ("Kyowa Kirin") met with the U.S. Food and Drug Administration ("FDA") in a follow-up meeting to the March 2022 end of Phase 2 meeting related to zandelisib. At this meeting, the FDA provided further guidance regarding the design and statistical analysis for the COASTAL trial. Following the November meeting, the companies jointly concluded that a clinical trial consistent with the recent FDA guidance, including modification of the ongoing COASTAL trial, would likely not be feasible to complete within a time period that would support further investment or with sufficient certainty of the regulatory requirements for approval to justify continued global development efforts. As a result, we and Kyowa Kirin jointly decided to discontinue global development of zandelisib for indolent forms of non-Hodgkin lymphoma outside of Japan.

The discontinuation of zandelisib development outside of Japan was a business decision based on the most recent regulatory guidance from the FDA and is not related to the zandelisib clinical data generated to date. Kyowa Kirin is continuing certain ongoing Japanese clinical trials, including the Phase 2 MIRAGE trial evaluating Japanese patients with relapsed or refractory indolent B-cell non-Hodgkin lymphomas, and will explore submitting the MIRAGE and TIDAL trials for marketing authorization in Japan. MIRAGE

is a Phase 2 trial, similar in design to the global Phase 2, single-arm, TIDAL trial. In November 2022, we and Kyowa Kirin announced positive topline data from the Phase 2 MIRAGE trial. Kyowa Kirin has been evaluating whether to continue developing zandelisib in Japan and after meeting with the Pharmaceuticals and Medical Devices Agency ("PMDA") has concluded that conducting a randomized study consistent with agency guidance to support a marketing application would likely not be feasible to complete within a time period that would support further investment. As a result, in May 2023, Kyowa Kirin decided to discontinue development of zandelisib in Japan. The discontinuation of zandelisib in Japan was a business decision by Kyowa Kirin based on the most recent regulatory guidance from the PMDA and is not related to the zandelisib clinical data generated to date.

In light of Kyowa Kirin’s decision to discontinue development of zandelisib in Japan, the parties intend to terminate the global license, development and commercialization agreement executed in April 2020.

We and Kyowa Kirin have begun closing all ongoing zandelisib clinical studies outside of Japan, including the Phase 3 COASTAL trial, the Phase 2 TIDAL trial, and the Phase 2 CORAL trial. Depending on the achievement of certain regulatory and commercial milestones in Japan, we may be eligible for additional payments from Kyowa Kirin under the current agreement.

In December 2022, we announced a plan to streamline our organization towards the continued clinical development of voruciclib and ME-344. As a result, we initiated a staggered workforce reduction, initially affecting 28 employees in December 2022 (representing approximately 27% of our workforce) and an additional 14 employees in April 2023. In connection with the reduction in force, we incurred termination costs, which include severance, benefits, and related costs of approximately $2.4 million, of which $1.8 million was research and development expense and $0.6 million was general and administrative expense.

Liquidity

Liquidity

We have accumulated losses of $396.0 million since inception and expect to incur operating losses and generate negative cash flows from operations for the foreseeable future. As of March 31, 2023, we had $112.0 million in cash and cash equivalents and short-term investments. We believe that these resources will be sufficient to meet our obligations and fund our liquidity and capital expenditure requirements for at least the next 12 months from the issuance of these financial statements. Our current business operations are focused on continuing the clinical development of our drug candidates. Changes to our research and development plans or other changes affecting our operations and operating expenses may affect actual future use of existing cash resources. We cannot determine with certainty costs associated with ongoing and future clinical trials or the regulatory approval process. The duration, costs and timing associated with the development of our product candidates will depend on a variety of factors, including uncertainties associated with the results of our clinical trials.

To date, we have obtained cash and funded our operations primarily through equity financings and license agreements. In order to continue the development of our drug candidates, at some point in the future we expect to pursue one or more capital transactions, whether through the sale of equity securities, debt financing, license agreements or entry into strategic partnerships. There can be no assurance that we will be able to continue to raise additional capital in the future.

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of MEI Pharma, Inc. and our wholly owned subsidiary, Meadow Merger Sub, Inc. We have eliminated all significant intercompany accounts and transactions in consolidation. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the accompanying financial statements do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) that are necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented.

The accompanying unaudited condensed consolidated financial statements for the quarterly period ended March 31, 2023 should be read in conjunction with the audited financial statements and notes thereto as of and for the fiscal year ended June 30, 2022, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on September 8, 2022 ("2022 Annual Report"). Interim results are not necessarily indicative of results for a full year.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and disclosures made in the accompanying notes to the consolidated financial statements. We use estimates that affect the reported amounts (including assets, liabilities, revenues and expenses) and related disclosures. Actual results could materially differ from those estimates.

Fair Value Measurements

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value is as follows:

•Level 1 – Observable inputs such as quoted prices in active markets for identical assets or liabilities.

•Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Revenue Recognition

Revenue Recognition

Revenues from Customers

In accordance with Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("Topic 606"), we recognize revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. For enforceable contracts with our customers, we first identify the distinct performance obligations – or accounting units – within the contract. Performance obligations are commitments in a contract to transfer a distinct good or service to the customer.

Payments received under commercial arrangements, such as licensing technology rights, may include non-refundable fees at the inception of the arrangements, milestone payments for specific achievements designated in the agreements, and royalties on the sale of products. At the inception of arrangements that include milestone payments, we use judgment to evaluate whether the milestones are probable of being achieved and we estimate the amount to include in the transaction price using the most likely method. If it is probable that a significant revenue reversal will not occur, the estimated amount is included in the transaction price. Milestone payments that are not within our or the licensee’s control, such as regulatory approvals, are not included in the transaction price until those approvals are received. At the end of each reporting period, we re-evaluate the probability of achievement of development milestones and any related constraint and, as necessary, we adjust our estimate of the overall transaction price.

We may enter into arrangements that consist of multiple performance obligations. Such arrangements may include any combination of our deliverables. To the extent a contract includes multiple promised deliverables, we apply judgment to determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For arrangements with multiple distinct performance obligations, we allocate variable consideration related to our 50-50 cost share for development services directly to the associated performance obligation and then allocate the remaining consideration among the performance obligations based on their relative stand-alone selling price.

Stand-alone selling price is the price at which we would sell a promised good or service separately to the customer. When not directly observable, we typically estimate the stand-alone selling price for each distinct performance obligation. Variable consideration that relates specifically to our efforts to satisfy specific performance obligations is allocated entirely to those performance obligations. Other components of the transaction price are allocated based on the relative stand-alone selling price, over which management has applied significant judgment. We develop assumptions that require judgment to determine the stand-alone selling price for license-related performance obligations, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical, regulatory and commercial success. We estimate stand-alone selling price for research and development performance obligations by forecasting the expected costs of satisfying a performance obligation plus an appropriate margin.

In the case of a license that is a distinct performance obligation, we recognize revenue allocated to the license from non-refundable, up-front fees at the point in time when the license is transferred to the licensee and the licensee can use and benefit from the license. For licenses that are bundled with other distinct or combined obligations, we use judgment to assess the nature of the performance obligation to determine whether the performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. If the performance obligation is satisfied over time, we evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. Revenue is recorded proportionally as costs are incurred. We generally use the cost-to-cost measure of progress because it best depicts the transfer of control to the customer which occurs as we incur costs. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation (an “input method” under Topic 606). We use judgment to estimate the total cost expected to complete the research and development performance obligations, which include subcontractors’ costs, labor, materials, other direct costs and an allocation of indirect costs. We evaluate these cost estimates and the progress each reporting period and, as necessary, we adjust the measure of progress and related revenue recognition.

For arrangements that include sales-based or usage-based royalties, we recognize revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, we have not recognized any sales-based or usage-based royalty revenue from license agreements.

In connection with our License, Development and Commercialization Agreement (the "Kyowa Kirin Commercialization Agreement") with Kyowa Kirin, we perform development services related to our 50-50 cost sharing arrangement for which revenue is recognized over time. Additionally, we perform services for Kyowa Kirin at their request, the costs of which are fully reimbursed to us. We record the reimbursement for such pass through services as revenue at 100% of reimbursed costs, as control of the additional services for Kyowa Kirin is transferred at the time we incur such costs. The costs of these services are recognized in the Condensed Consolidated Statements of Operations as research and development expense.

We recognized revenue associated with the Kyowa Kirin Commercialization Agreement for the periods presented (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Revenue	$	5,894	$	9,694	$	47,359	$	29,283
Timing of Revenue Recognition:
Services performed over time	$	5,598	$	9,694	$	46,430	$	26,970
Pass through services at a point in time		296		—		929		2,313
	$	5,894	$	9,694	$	47,359	$	29,283

Contract Balances

Accounts receivable are included in “Prepaid expenses and other current assets”, and contract liabilities are included in “Deferred revenue" and "Deferred revenue, long-term” on our Condensed Consolidated Balance Sheets. The following table presents

changes in accounts receivable, unbilled receivables and contract liabilities accounted for under Topic 606 for the periods presented (in thousands):

	Nine Months Ended March 31,
	2023			2022
Accounts receivable
Accounts receivable, beginning of period	$	—		$	—
Amounts billed		23,507			45,927
Payments received		(23,507	)		(45,927	)
Accounts receivable, end of period	$	—		$	—
Unbilled receivables
Unbilled receivables, beginning of period	$	10,044		$	7,582
Billable amounts		18,043			46,791
Amounts billed		(23,507	)		(45,927	)
Unbilled receivables, end of period	$	4,580		$	8,446
Contract liabilities
Contract liabilities, beginning of period	$	30,900		$	14,677
Payments received		—			20,000
Revenue recognized		(4,145	)		(2,513	)
Revenue recognized from change in estimate for performance obligations that are being closed		(16,565	)		—
Revenue recognized for performance obligations that will no longer commence		(8,607	)		—
Contract liabilities, end of period	$	1,583		$	32,164

The timing of revenue recognition, invoicing and cash collections results in billed accounts receivable and unbilled receivables and deferred revenue (contract liabilities). We invoice our customers in accordance with agreed-upon contractual terms, typically at periodic intervals or upon achievement of contractual milestones. Invoicing may occur subsequent to revenue recognition, resulting in unbilled receivables. We may receive advance payments from our customers before revenue is recognized, resulting in contract liabilities. The unbilled receivables and deferred revenue reported on the Condensed Consolidated Balance Sheets relate to the Kyowa Kirin Commercialization Agreement.

As of March 31, 2023 and June 30, 2022, we had $66.1 million and $95.4 million, respectively, of deferred revenue associated with the Kyowa Kirin Commercialization Agreement, of which $64.5 million relates to the U.S. license which is a unit of account under the scope of ASC Topic 808, Collaborative Arrangements ("Topic 808") and is not a performance obligation under Topic 606. The remaining balance of deferred revenue as of March 31, 2023 and June 30, 2022 of $1.6 million and $30.9 million, respectively, relates to the development services performance obligations which are under the scope of Topic 606. The decrease in deferred revenue comes as a result of our winding down of all zandelisib studies outside of Japan. We updated our estimated costs to complete each of the performance obligations, resulting in a higher progress towards completion based on the ratio of costs incurred to date to the total estimated costs. Additionally, during the three months ended December 31, 2022, we recognized revenue related to non-refundable payments for performance obligations that have not commenced and will no longer be initiated.

Our contract liabilities accounted for under Topic 606 relate to the amount of initial upfront consideration that was allocated to the development services performance obligations. Contract liabilities are recognized over the duration of the performance obligations based on the costs incurred relative to total expected costs.

Revenues from Collaborators

At contract inception, we assess whether the collaboration arrangements are within the scope of Topic 808 to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. This assessment is performed based on the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of Topic 808 that contain multiple units of account, we first determine which units of account within the arrangement are within the scope of Topic 808 and which elements are within the scope of Topic 606. For units of account within collaboration arrangements that are accounted for pursuant to Topic 808, an appropriate recognition method is determined and applied consistently, by analogy to authoritative accounting literature. For elements of collaboration arrangements that are accounted for pursuant to Topic 606, we recognize revenue as discussed above. Consideration received that does not meet the requirements to satisfy Topic 606 revenue recognition criteria is recorded as deferred revenue in the accompanying Condensed Consolidated Balance Sheets, classified as either short-term or long-term deferred revenue based on our best estimate of when such amounts will be recognized.

Research and Development Costs

Research and Development Costs

Research and development costs are expensed as incurred and include costs paid to third-party contractors to perform research, conduct clinical trials and develop and manufacture drug materials. Clinical trial costs, including costs associated with third-party contractors, are a significant component of research and development expenses. We expense research and development costs based on work performed. In determining the amount to expense, management relies on estimates of total costs based on contract components completed, the enrollment of subjects, the completion of trials, and other events. Costs incurred related to the purchase or licensing of in-process research and development for early-stage products or products that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred.

Leases

Leases

We account for our leases under ASC Topic 842, Leases (“Topic 842”). Leases which are identified within the scope of Topic 842 and which have a term greater than one year are recognized on our Condensed Consolidated Balance Sheets as right-of-use ("ROU") assets and lease liabilities. Operating lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected remaining lease term. The lease term includes any renewal options and termination options that we are reasonably certain to exercise. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, we use our incremental borrowing rate. The incremental borrowing rate is determined based on the rate of interest that we would pay to borrow on a collateralized basis an amount equal to the lease payments for a similar term and in a similar economic environment. The interest rate implicit in lease contracts to calculate the present value is typically not readily determinable. As such, significant management judgment is required to estimate the incremental borrowing rate.

Operating lease expense for operating leases is recognized on a straight-line basis over the lease term based on the total lease payments. We have elected the practical expedient to not separate lease and non-lease components for our real estate leases. Our non-lease components are primarily related to property maintenance, which varies based on future outcomes, and thus is recognized in operating lease expense when incurred.

Share-based Compensation

Share-Based Compensation

Share-based compensation expense stock options and restricted stock units ("RSUs") granted to employees and directors is recognized in the Condensed Consolidated Statements of Operations based on estimated amounts. The cost of stock options is measured at the grant date, based on the estimated fair value of the stock option using the Black-Scholes valuation model, which incorporates various assumptions, including expected volatility, risk-free interest rate, the expected term of the award and the dividend yield on the underlying stock. Expected volatility is calculated based on the historical volatility of our stock over the expected option life and other appropriate factors. The expected option term is computed using the "simplified" method as permitted under the provisions of ASC Topic 718, Compensation - Stock Compensation. We use the simplified method to calculate the expected term of stock options and similar instruments, as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. Risk-free interest rates are calculated based on continuously compounded risk-free rates for the appropriate term. The dividend yield is assumed to be zero as we have never paid or declared any cash dividends and do not intend to do so in the foreseeable future. For RSUs, we estimate the grant date fair value using our closing stock price on the date of grant. The estimated fair value of stock options and RSUs is amortized on a straight-line basis over the requisite service period, adjusted for actual forfeitures at the time they occur. The requisite service period is generally the time over which our share-based awards vest.

Income Taxes

Income Taxes

Our income tax expense consists of current and deferred income tax expense or benefit. Current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. A deferred income tax asset or liability is recognized for the future tax consequences attributable to tax credits and loss carryforwards and to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of March 31, 2023, we have established a valuation allowance to fully reserve our net deferred tax assets. Tax rate changes are reflected in income during the period such changes are enacted. Changes in our ownership may limit the amount of net operating loss carryforwards that can be utilized in the future to offset taxable income.

There have been no material changes in our unrecognized tax benefits since June 30, 2022, and, as such, the disclosures included in our 2022 Annual Report continue to be relevant for the nine months ended March 31, 2023.

Recent Accounting Pronouncements

Recent Accounting Pronouncement

In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), as amended. The amendments in ASU 2016-13 require, among other things, financial assets measured at amortized cost basis to be presented at the net amount expected to be collected as compared to previous U.S. GAAP which delayed recognition until it was probable a loss had been incurred. The amendments in ASU 2016-13 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact that adoption of ASU 2016-13 will have on our financial statements and related disclosures.

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The Company and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule Of Revenue Associated With License Agreement

We recognized revenue associated with the Kyowa Kirin Commercialization Agreement for the periods presented (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Revenue	$	5,894	$	9,694	$	47,359	$	29,283
Timing of Revenue Recognition:
Services performed over time	$	5,598	$	9,694	$	46,430	$	26,970
Pass through services at a point in time		296		—		929		2,313
	$	5,894	$	9,694	$	47,359	$	29,283

Schedule of Changes in Contract Assets and Contract Liabilities

The following table presents

changes in accounts receivable, unbilled receivables and contract liabilities accounted for under Topic 606 for the periods presented (in thousands):

	Nine Months Ended March 31,
	2023			2022
Accounts receivable
Accounts receivable, beginning of period	$	—		$	—
Amounts billed		23,507			45,927
Payments received		(23,507	)		(45,927	)
Accounts receivable, end of period	$	—		$	—
Unbilled receivables
Unbilled receivables, beginning of period	$	10,044		$	7,582
Billable amounts		18,043			46,791
Amounts billed		(23,507	)		(45,927	)
Unbilled receivables, end of period	$	4,580		$	8,446
Contract liabilities
Contract liabilities, beginning of period	$	30,900		$	14,677
Payments received		—			20,000
Revenue recognized		(4,145	)		(2,513	)
Revenue recognized from change in estimate for performance obligations that are being closed		(16,565	)		—
Revenue recognized for performance obligations that will no longer commence		(8,607	)		—
Contract liabilities, end of period	$	1,583		$	32,164

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Fair Value Measurements (Tables)

9 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Assumptions Used to Calculate Fair Value of Warrant Liability

To calculate the fair value of the warrant liability, the following assumptions were used for the periods presented:

	March 31, 2023			June 30, 2022
Risk-free interest rate		4.6	%		2.8	%
Expected life (years)		0.1			0.9
Expected volatility		91.5	%		139.4	%
Dividend yield		0.0	%		0.0	%
Black-Scholes Fair Value	$	—		$	0.10

Schedule of Changes in Estimated Fair Value of Warrant Liability

The following table sets forth a summary of changes in the estimated fair value of our Level 3 warrant liability for the nine months ended March 31, 2023 and 2022 (in thousands):

	Fair Value of Warrants Using Significant Unobservable Inputs (Level 3)
	2023			2022
Balance at July 1,	$	1,603		$	22,355
Change in estimated fair value of liability classified warrants		(1,603	)		(20,819	)
Balance at March 31,	$	—		$	1,536

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Net Loss Per Share (Tables)

9 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of Income (Loss) Per Share, Basic and Diluted

The following table presents the calculation of net loss used to calculate basic loss and diluted loss per share (in thousands):

	Three Months Ended March 31,						Nine Months Ended March 31,
	2023			2022			2023			2022
Net loss – basic	$	(15,438	)	$	(8,725	)	$	(21,809	)	$	(38,391	)
Change in fair value of warrant liability		—			—			—			(8,046	)
Net loss – diluted	$	(15,438	)	$	(8,725	)	$	(21,809	)	$	(46,437	)

Calculation of Weighted Average Shares Used to Calculate Basic and Diluted Income (Loss) Earnings Per Share

Share used in calculating net loss per share was determined as follows (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Weighted average shares used in calculating basic net loss per share		6,663		6,653		6,663		6,080
Effect of potentially dilutive common shares from equity awards and liability-classified warrants		—		—		—		44
Weighted average shares used in calculating diluted net loss per share		6,663		6,653		6,663		6,124

Antidilutive Securities

The following table presents weighted average potentially dilutive shares that have been excluded from the calculation of net loss per share because of their anti-dilutive effect (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Stock options		1,258		1,020		1,340		1,029
Warrants		905		11		837		12
Restricted stock units		—		803		—		268
Total anti-dilutive shares		2,163		1,834		2,177		1,309

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Leases (Tables)

9 Months Ended

Mar. 31, 2023

Disclosure Text Block [Abstract]

Schedule of Future Minimum Rental Payments

The following is a schedule of the future minimum lease payments under the Lease Agreements, reconciled to the operating lease liability, as of March 31, 2023 (in thousands):

	March 31, 2023
Remainder of fiscal year ending June 30, 2023	$	566
Years ending June 30,
2024		2,335
2025		1,913
2026		2,477
2027		2,551
2028		2,715
Thereafter		4,386
Total lease payments		16,943
Less: Present value discount		(3,891	)
Total operating lease liability	$	13,052
Balance Sheet Classification – Operating Leases
Operating lease liability	$	1,385
Operating lease liability, long-term		11,667
Total operating lease liability	$	13,052
Other Balance Sheet Information – Operating Leases
Weighted average remaining lease term (in years)		6.7
Weighted average discount rate		7.50	%

Schedule of Total Operating Costs

The total operating lease costs and supplemental cash flow information related to our operating leases were as follows (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Operating lease expense	$	609	$	377	$	1,826	$	1,130
Operating cash flows from operating leases	$	567	$	380	$	1,700	$	1,139

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Share-based Compensation (Tables)

9 Months Ended

Mar. 31, 2023

Share-Based Compensation Expense for Stock Awards

Total share-based compensation expense for all stock awards consisted of the following for the periods presented (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Research and development	$	374	$	1,118	$	1,224	$	2,398
General and administrative		544		1,719		2,066		5,302
Total share-based compensation expense	$	918	$	2,837	$	3,290	$	7,700

Summary of Stock Option Activity and Related Data

A summary of our stock option activity and related data follows:

	Number of Options			Weighted- Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at June 30, 2022		996,700		$	57.00
Granted		462,201			10.66
Expired		(7,834	)		52.62
Forfeited/Cancelled		(198,136	)		40.37
Outstanding at March 31, 2023		1,252,931			42.56		7.5	$	—
Vested and exercisable at March 31, 2023		664,330			56.70		6.2	$	—

Fair Value of Stock Options Weighted-Average Assumptions Used

following weighted average assumptions were used for the periods presented:

	Nine Months Ended March 31,
	2023			2022
Risk-free interest rate		2.9	%		1.2	%
Expected life (years)		6.0			6.0
Expected volatility		84.1	%		68.8	%
Dividend yield		0.0	%		0.0	%
Weighted average grant date fair value	$	7.71		$	33.00

Summary of RSU activity

A summary of our RSU activity and related data for the nine months ended March 31, 2023 was as follows:

	Number of RSUs			Weighted Average Grant Date Fair Value
Non-vested at June 30, 2022		9,220		$	69.80
Vested		(9,220	)	$	69.80
Non-vested at March 31, 2023		—		$	—

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The Company and Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Mar. 31, 2023	Jun. 30, 2022	Feb. 28, 2023
Targeted or Tracking Stock, Stock [Line Items]
Exchange Ratio of common stock			5.2245%
Reduction of workforce	27.00%
Severance benefits, and related costs	$ 2,400
Unrecognized tax benefits	0
Accumulated Losses Since Inception	(395,968)	$ (374,159)
Cash And Cash Equivalents,Short Term Investments And Common Stock Proceeds Receivable	112,000
Deferred Revenue, Revenue Recognized	66,100	95,400
Research and Development
Targeted or Tracking Stock, Stock [Line Items]
Severance benefits, and related costs	1,800
General and Administrative Expense Member
Targeted or Tracking Stock, Stock [Line Items]
Severance benefits, and related costs	$ 600
Pass Through Services Member
Targeted or Tracking Stock, Stock [Line Items]
Percentage of reimbursement of pass through costs as revenue	100.00%
US License
Targeted or Tracking Stock, Stock [Line Items]
Deferred Revenue, Revenue Recognized	$ 64,500
Development Services Performance Obligations
Targeted or Tracking Stock, Stock [Line Items]
Deferred Revenue, Revenue Recognized	$ 1,600	$ 30,900

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The Company and Summary of Significant Accounting Policies - Revenue Associated With The Following license agreements (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Recognized Revenue Associated with The Following License Agreements [Line Items]
Revenues	$ 5,894	$ 9,694	$ 47,359	$ 29,283
Services Performed Over Time [Member]
Recognized Revenue Associated with The Following License Agreements [Line Items]
Revenues	5,598	9,694	46,430	26,970
Pass through services at a point in time [Member]
Recognized Revenue Associated with The Following License Agreements [Line Items]
Revenues	$ 296	$ 0	$ 929	$ 2,313

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The Company and Summary of Significant Accounting Policies - Schedule of Changes in Contract Assets and Contract Liabilities (Detail) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Sep. 30, 2022	Sep. 30, 2021
Contract with Customer Asset and Liability [Line Items]
Accounts Receivable, beginning of period			$ 0	$ 0
Amounts billed	$ 23,507	$ 45,927
Payments received	(23,507)	(45,927)
Accounts Receivable, end of period	0	0
Unbilled receivables, beginning of year	10,044	7,582
Billable amounts	18,043	46,791
Amounts billed	(23,507)	(45,927)
Unbilled receivables, end of year	4,580	8,446
Contract liabilities, beginning of period	30,900	14,677
Payments received	0	20,000
Revenue recognized	(4,145)	(2,513)
Revenue recognized from change in estimate for performance obligations that are being closed	(16,565)	0
Revenue recognized for performance obligations that will no longer commence	(8,607)	0
Contract liabilities, end of period	$ 1,583	$ 32,164

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Schedule of Assumptions Used to Calculate Fair Value of Warrant Liability (Detail)	Mar. 31, 2023 USD ($) yr	Jun. 30, 2022 yr USD ($)
Risk Free Interest Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and Rights Outstanding, Measurement Input	4.6	2.8
Expected life years
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and Rights Outstanding, Measurement Input | yr	0.1	0.9
Expected volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and Rights Outstanding, Measurement Input	91.5	139.4
Dividend Yield
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and Rights Outstanding, Measurement Input	0.0	0.0
Black-Scholes Fair Value
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and Rights Outstanding, Measurement Input | $	0	0.10

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Schedule of Changes in Estimated Fair Value of Warrant Liability (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Fair value measurements Significant unobservable inputs [Line Items]
Beginning balance			$ 1,603
Change in estimated fair value of liability classified warrants	$ 0	$ (12,773)	(1,603)	$ (20,819)
Ending balance	0		0
Fair Value, Measurements, Recurring [Member] | Level 3
Fair value measurements Significant unobservable inputs [Line Items]
Beginning balance			1,603	22,355
Change in estimated fair value of liability classified warrants			(1,603)	(20,819)
Ending balance	$ 0	$ 1,536	$ 0	$ 1,536

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Short-Term Investments - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 31, 2023	Jun. 30, 2022
Schedule of Equity Method Investments [Line Items]
Short-term investments	$ 103,224	$ 137,512

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License Agreements - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2022	May 31, 2020
Related Party Transaction [Line Items]
Revenue recognized			$ (4,145)	$ (2,513)
Kyowa Kirin Co
Related Party Transaction [Line Items]
Total upfront payment receivable for grant of rights						$ 100,000
Presage License Agreement | Presage Biosciences, Inc.
Related Party Transaction [Line Items]
Compensation payable for grant of rights	$ 4,900
Payment for license	2,900
Presage License Agreement | Presage Biosciences, Inc. | Incremental Payment
Related Party Transaction [Line Items]
Compensation payable for grant of rights	2,000
Presage License Agreement | Presage Biosciences, Inc. | Potential Payments on Achievement of Development Regulatory and Commercial Milestones
Related Party Transaction [Line Items]
Milestone payment receivable amount	$ 179,000
Kkc Agreements [Member] | Kyowa Kirin Co
Related Party Transaction [Line Items]
Upfront payment			100,000
Transaction price relating to the performance obligation			217,000
Expected milestone payment receivable			20,000
Estimated development cost sharing recovered through earnings			91,800
Deferred revenue			5,200
Revenue recognized		$ 16,600
Revenue related to non-refundable payments for performance obligations		$ 8,600
Kkc Agreements [Member] | Kyowa Kirin Co | Ex US License
Related Party Transaction [Line Items]
Revenue recognized			21,000
License Obligation Account Transaction Price Allocated			64,500
Kkc Agreements [Member] | Kyowa Kirin Co | Development Services
Related Party Transaction [Line Items]
Contract with customer liability non current			1,600		$ 30,900
Kkc Agreements [Member] | Kyowa Kirin Co | Maximum
Related Party Transaction [Line Items]
Estimated development cost sharing recovered through earnings			$ 143,100

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Net Loss Per Share - Additional Information (Detail) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Potentially Dilutive Securities Outstanding [Line Items]
Common stock subject to repurchase or forfeiture	0	0	0	0

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Schedule of Net Income (Loss) Per Share, Basic and Diluted (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Net loss - basic	$ (15,438)	$ (8,725)	$ (21,809)	$ (38,391)
Change in fair value of warrant liability	0	0	0	(8,046)
Net loss - diluted	$ (15,438)	$ (8,725)	$ (21,809)	$ (46,437)

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Calculation of Weighted Average Shares Used to Calculate Basic and Diluted Income (Loss) Earnings Per Share (Detail) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average shares used in calculating basic net loss per share	6,663	6,653	6,663	6,080
Effect of potentially dilutive common shares from equity awards and liability-classified warrants	0	0	0	44
Weighted average shares used in calculating diluted net loss per share	6,663	6,653	6,663	6,124

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Antidilutive Securities (Detail) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Potentially Dilutive Securities Outstanding [Line Items]
Total anti-dilutive shares	2,163	1,834	2,177	1,309
Employee Stock option
Potentially Dilutive Securities Outstanding [Line Items]
Total anti-dilutive shares	1,258	1,020	1,340	1,029
Warrants
Potentially Dilutive Securities Outstanding [Line Items]
Total anti-dilutive shares	905	11	837	12
Restricted Stock Units (RSUs)
Potentially Dilutive Securities Outstanding [Line Items]
Total anti-dilutive shares	0	803	0	268

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Commitments and Contingencies - Additional Information (Detail) - USD ($)	3 Months Ended	9 Months Ended
	Mar. 31, 2023	Mar. 31, 2023	Jun. 30, 2022
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Common stock value	$ 0	$ 0	$ 0
Torreya partners
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Accrued payment for potential future payments	$ 0	0
Transaction fee	20.00%
Torreya partners | Maximum
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Business Combination, Consideration Transferred		2,000,000.0
General and administrative | Torreya partners
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Acquire shares of common stock grant date fair value		500,000
Presage License Agreement
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Accrued payment for potential future payments	$ 0	$ 0

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Leases - Additional Information (Detail) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2023	Jul. 01, 2022
Extended date	November 30, 2029
Lease expire date	Nov. 30, 2029
Operating lease liabilities, Total	$ 13,052
San Diego California [Member]
Operating lease liabilities, Total		$ 4,300

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Schedule of Future Minimum Rental Payments (Detail) - USD ($) $ in Thousands	Mar. 31, 2023	Jun. 30, 2022
Disclosure Text Block [Abstract]
Remainder of fiscal year ending June 30, 2023	$ 566
2024	2,335
2025	1,913
2026	2,477
2027	2,551
2028	2,715
Thereafter	4,386
Total lease payments	16,943
Less: Present value discount	(3,891)
Total operating lease liability	13,052
Operating lease liabilities	1,385	$ 871
Operating lease liabilities, long-term	11,667	$ 8,771
Operating lease liabilities, Total	$ 13,052
Weighted average remaining lease term (in years)	6 years 8 months 12 days
Weighted average discount rate	7.50%

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Schedule of Total Operating Costs (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Operating lease cost	$ 609	$ 377	$ 1,826	$ 1,130
Operating cash flows from operating leases	$ 567	$ 380	$ 1,700	$ 1,139

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Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Jun. 30, 2022	Nov. 10, 2020
Class of Stock [Line Items]
Fair value of warrants	$ 0		$ 0		$ 1,603
Unsold Securities Shares and Warrants Under Agreement			107,500
Aggregate Value of Securities Available Under Agreement	123,400		123,400
Change in fair value of warrant liability	$ 0	$ 12,773	$ 1,603	$ 20,819
Shelf registration expiration date			May 18, 2023
Warrant [Member]
Class of Stock [Line Items]
Exercise price	$ 50.80		$ 50.80
Warrants outstanding	802,949,000		802,949,000
Change in fair value of warrant liability	$ 0		$ 1,600
Warrant [Member] | Torreya Partners [Member]
Class of Stock [Line Items]
Exercise price	$ 6.80		$ 6.80
Warrants outstanding	102,513,000		102,513,000
Two Thousand And Twenty At The Market Sale Agreement
Class of Stock [Line Items]
Aggregate value of securities available under shelf registration statement	$ 60,000		$ 60,000
Maximum
Class of Stock [Line Items]
Sale of shares and warrants under agreement			200,000
Maximum | Two Thousand And Twenty At The Market Sale Agreement
Class of Stock [Line Items]
Sale of shares under agreement	$ 60,000		$ 60,000			$ 60,000

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Share-based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Mar. 31, 2023	Jan. 31, 2023	Jun. 30, 2022	May 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Options	1,252,931		996,700
Unrecognized compensation expense related to unvested stock options	$ 3.9
Expected weighted average period for recognition of compensation expense	1 year 6 months
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Closing price of common stock	$ 4.58
Employee Stock Option | Directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting period	12 months
Share-based compensation arrangement by share-based payment award, expiration period	10 years
Employee Stock Option | Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option vested percentage	25.00%
Share-based compensation arrangement by share-based payment award, award vesting period	36 months
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested	(9,220)
2008 Omnibus Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock authorized	1,450,740,000
Shares available for future grant	583,468,000
Number of additional shares available for future grant		400,000,000
2008 Omnibus Plan | Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant	1,153,116,000
Outstanding Options	1,252,931,000
Inducement Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock authorized				125,000,000
Shares available for future grant	25,185,000
Inducement Plan [Member] | Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant	99,815,000

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Share-Based Compensation Expense for Stock Awards (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 918	$ 2,837	$ 3,290	$ 7,700
Research and Development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	374	1,118	1,224	2,398
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 544	$ 1,719	$ 2,066	$ 5,302

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Summary of Stock Option Activity (Detail)	9 Months Ended
	Mar. 31, 2023 USD ($) $ / shares shares
Number of Options
Beginning Balance | shares	996,700
Granted | shares	462,201
Expired | shares	(7,834)
Forfeited / Cancelled | shares	(198,136)
Ending balance | shares	1,252,931
Vested and exercisable at end of period | shares	664,330
Weighted- Average Exercise Price
Beginning Balance | $ / shares	$ 57.00
Granted | $ / shares	10.66
Expired | $ / shares	52.62
Forfeited / Cancelled | $ / shares	40.37
Ending balance | $ / shares	42.56
Vested and exercisable at end of period | $ / shares	$ 56.70
Weighted Average Remaining Contractual Term (in years)
Outstanding at end of period	7 years 6 months
Vested and exercisable at end of period	6 years 2 months 12 days
Aggregate Intrinsic Value
Outstanding at end of period | $	$ 0
Vested and exercisable at end of period | $	$ 0

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Share-based Compensation - Fair Value of Stock Options Weighted-Average Assumptions Used (Detail) - $ / shares	9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	2.90%	1.20%
Expected life (years)	6 years	6 years
Expected volatility	84.10%	68.80%
Dividend yield	0.00%	0.00%
Weighted-average grant date fair value	$ 7.71	$ 33.00

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Share Based Compensation - Summary of RSU activity and related data (Details) - Restricted Stock Units (RSUs) [Member]	9 Months Ended
	Mar. 31, 2023 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance | shares	9,220
Vested | shares	(9,220)
Ending balance | shares	0
Weighted average grant date fair value
Beginning balance | $ / shares	$ 69.80
Vested | $ / shares	69.80
Ending balance | $ / shares	$ 0