10-Q

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, 2022

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: 001-41259

ARCELLX, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	47-2855917
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
25 West Watkins Mill Road, Suite A Gaithersburg, MD	20878
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (240) 327-0603

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, $0.001 par value per share	ACLX	The Nasdaq Global Select Market

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 ☒

As of May 9, 2022, the registrant had 35,736,584 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	5
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	5
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021	6
	Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Three Months Ended March 31, 2022 and 2021	7
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
PART II.	OTHER INFORMATION	26
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	75
Item 3.	Defaults Upon Senior Securities	75
Item 4.	Mine Safety Disclosures	75
Item 5.	Other Information	75
Item 6.	Exhibits	76
Signature		77

“Arcellx,” “we,” “us,” “our,” or “the Company” as used in this Quarterly Report on Form 10-Q refer to Arcellx, Inc. and, where appropriate, our subsidiary, Subdomain, LLC.

2

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (Quarterly Report) contains express or implied forward-looking statements which are made pursuant to the safe harbor provisions 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) that are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Quarterly Report include, but are not limited to, statements about:

•the impact of the ongoing COVID-19 pandemic or other related disruptions on our business;

•the ability of our clinical trials to demonstrate safety and efficacy of our product candidates, and other favorable results;

•our plans relating to the clinical development of our product candidates, including the disease areas to be evaluated;

•the timing, progress, and results of preclinical studies and clinical trials for our programs and product candidates, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs;

•our ability to recruit and enroll suitable patients in our clinical trials;

•our ability to take advantage of expedited regulatory pathways for our product candidates;

•our plans relating to commercializing our product candidates, if approved, including the geographic areas of focus and sales strategy;

•the expected benefits of potential strategic collaborations with third parties and our ability to attract collaborators with development, regulatory, and commercialization expertise;

•the size of the market opportunity for our product candidates and our ability to maximize those opportunities;

•the success of competing therapies that are or may become available;

•our estimates of the number of patients who suffer from the diseases we are targeting and the number of participants that will enroll in our clinical trials;

•the beneficial characteristics, safety, efficacy, and therapeutic effects of our product candidates;

•the timing or likelihood of regulatory filings and approvals, including our expectation to seek special designations, such as orphan drug designation, for our product candidates for various diseases;

•our ability to obtain and maintain regulatory approval of our product candidates;

•our ability to adequately secure our information technology systems and the regulated data stored therein, as required by law;

•the pricing and reimbursement of our product candidates, if approved;

•our plans relating to the further development and manufacturing of our product candidates, including for additional indications that we may pursue;

•existing regulations and regulatory developments in the United States and other jurisdictions;

•our plans and ability to obtain or protect intellectual property rights, including extensions of existing patent terms where available;

•our reliance on third parties to conduct clinical trials of our product candidates and manufacture of our product candidates for preclinical studies and clinical trials;

•the need to hire additional personnel and our ability to attract and retain such personnel;

•the accuracy of our estimates regarding expenses, future revenue, capital requirements, and needs for additional financing;

•our financial performance;

•the sufficiency of our existing cash and cash equivalents to fund our future operating expenses and capital expenditure requirements;

•our expectations regarding the period during which we will qualify as an emerging growth company under the JOBS Act; and

•our anticipated use of our existing resources.

Forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions, and projections about the business and future financial results of the pharmaceutical industry, and other legal, regulatory, and economic developments. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “intend,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” “continue,” “likely,” and similar expressions (including their use in the negative) intended to identify forward-looking statements although not all forward-looking statements contain these identifying words. Actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including, but not limited to, those described in Part II, Item 1A, Risk Factors of this Quarterly Report.

3

You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect results. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed with or furnished to the U.S. Securities and Exchange Commission (the SEC) completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.

The forward-looking statements in this Quarterly Report represent our views as of the date of this Quarterly Report. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report.

4

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

ARCELLX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except share and per share amounts)

	March 31, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	127,160		$	30,833
Marketable securities		83,769			73,784
Prepaid expenses and other current assets		9,974			8,192
Total current assets		220,903			112,809
Restricted cash		199			199
Property and equipment, net		10,127			10,318
Operating lease right-of-use assets		3,248			—
Deferred offering costs		—			3,172
Prepaid research and development expenses and other long-term assets		8,913			2,284
Total assets	$	243,390		$	128,782
Liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)
Current liabilities:
Accounts payable	$	1,874		$	1,333
Accrued liabilities		14,400			13,180
Operating lease liabilities, current portion		370			—
Deferred rent, current portion		—			183
Other current liabilities		164			149
Total current liabilities		16,808			14,845
Operating lease liabilities, net of current portion		4,844			—
Deferred rent, net of current portion		—			1,895
Other long-term liabilities		147			178
Total liabilities		21,799			16,918
Commitments and contingencies
Redeemable convertible preferred stock:
Series A redeemable convertible preferred stock, par value $0.001 per share; no shares authorized, issued or outstanding as of March 31, 2022; 29,795,227 shares authorized and 5,413,272 shares issued and outstanding as of December 31, 2021; liquidation value of $0 and $29,795 as of March 31, 2022 and December 31, 2021, respectively		—			28,894
Series B redeemable convertible preferred stock, par value $0.001 per share; no shares authorized, issued or outstanding as of March 31, 2022; 49,402,623 shares authorized and 8,975,585 shares issued and outstanding as of December 31, 2021; liquidation value of $0 and $85,681 as of March 31, 2022 and December 31, 2021, respectively		—			85,367
Series C redeemable convertible preferred stock, par value $0.001 per share; no shares authorized, issued or outstanding as of March 31, 2022; 57,224,618 shares authorized and 10,396,707 shares issued and outstanding as of December 31, 2021; liquidation value of $0 and $120,000 as of March 31, 2022 and December 31, 2021, respectively		—			119,118
Total redeemable convertible preferred stock		—			233,379
Stockholders’ equity (deficit):
Preferred stock, par value of $0.001 per share; 200,000,000 shares authorized and no shares issued and outstanding as of March 31, 2022; no shares authorized, issued or outstanding as of December 31, 2021		—			—
Common stock, par value of $0.001 per share; 1,000,000,000 shares authorized and 35,718,764 shares issued and outstanding as of March 31, 2022; 185,000,000 shares authorized and 544,210 shares issued and outstanding as of December 31, 2021		36			1
Additional paid-in capital		384,095			8,615
Accumulated other comprehensive loss		(44	)		(20	)
Accumulated deficit		(162,496	)		(130,111	)
Total stockholders’ equity (deficit)		221,591			(121,515	)
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)	$	243,390		$	128,782

The accompanying notes are an integral part of the condensed consolidated financial statements.

5

ARCELLX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(in thousands, except share and per share amounts)

	Three Months Ended March 31,
	2022			2021
Revenue	$	—		$	—
Operating expenses:
Research and development		24,401			8,521
General and administrative		8,034			2,761
Total operating expenses		32,435			11,282
Loss from operations		(32,435	)		(11,282	)
Other income, net		50			1
Net loss		(32,385	)		(11,281	)
Other comprehensive loss:
Unrealized loss on marketable securities		24			—
Comprehensive loss	$	(32,409	)	$	(11,281	)
Net loss per share attributable to common stockholders—basic and diluted	$	(1.56	)	$	(33.45	)
Weighted-average common shares outstanding—basic and diluted		20,760,722			337,302

The accompanying notes are an integral part of the condensed consolidated financial statements.

6

ARCELLX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ Equity (DEFICIT)

(unaudited)

(in thousands, except share data)
 

	Redeemable Convertible Preferred Stock																				Stockholders’ Equity (Deficit)
	Series A						Series B						Series C								Common Stock
	Shares			Amount			Shares			Amount			Shares			Amount			Subscription Receivable		Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Stockholders' Equity (Deficit)
Balance as of December 31, 2021		5,413,272		$	28,894			8,975,585		$	85,367			10,396,707		$	119,118		$	—		544,210	$	1	$	8,615	$	(130,111	)	$	(20	)	$	(121,515	)
Issuance of common stock (initial public offering), net of transaction costs of $15,029		—			—			—			—			—			—			—		9,487,500		9		127,274		—			—			127,283
Issuance of common stock (private placement), net of transaction costs of $42		—			—			—			—			—			—			—		590,318		1		9,957		—			—			9,958
Conversion of preferred stock to common stock		(5,413,272	)		(28,894	)		(8,975,585	)		(85,367	)		(10,396,707	)		(119,118	)		—		24,785,564		25		233,354		—			—			233,379
Issuance of common stock from vesting of restricted stock		—			—			—			—			—			—			—		24,889		—		107		—			—			107
Exercise of stock options		—			—			—			—			—			—			—		286,283		—		307		—			—			307
Share-based compensation		—			—			—			—			—			—			—		—		—		4,481		—			—			4,481
Unrealized loss on investment		—			—			—			—			—			—			—		—		—		—		—			(24	)		(24	)
Net loss		—			—			—			—			—			—			—		—		—		—		(32,385	)		—			(32,385	)
Balance at March 31, 2022		—		$	—			—		$	—			—		$	—		$	—		35,718,764	$	36	$	384,095	$	(162,496	)	$	(44	)	$	221,591

	Redeemable Convertible Preferred Stock															Stockholders’ Equity (Deficit)
	Series A				Series B				Series C							Common Stock
	Shares		Amount		Shares		Amount		Shares		Amount		Subscription Receivable			Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss		Stockholders’ Deficit
Balance as of December 31, 2020		5,413,272	$	28,894		8,975,585	$	85,367		—	$	—	$	—			333,658	$	1	$	1,421	$	(65,142	)	$	—	$	(63,720	)
Issuance of Series C redeemable convertible preferred stock for cash, net of transaction costs of $814		—		—		—		—		7,970,812		91,186		(10,000	)		—		—		—		—			—		—
Issuance of common stock from vesting of restricted stock		—		—		—		—		—		—		—			7,173		—		5		—			—		5
Exercise of stock options		—		—		—		—		—		—		—			7,522		—		7		—			—		7
Share-based compensation		—		—		—		—		—		—		—			—		—		757		—					757
Net loss		—		—		—		—		—		—		—			—		—		—		(11,281	)		—		(11,281	)
Balance as of March 31, 2021		5,413,272	$	28,894		8,975,585	$	85,367		7,970,812	$	91,186	$	(10,000	)		348,353	$	1	$	2,190	$	(76,423	)	$	—	$	(74,232	)

The accompanying notes are an integral part of the condensed consolidated financial statements.

7

ARCELLX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	Three Months Ended March 31,
	2022			2021
Cash flows from operating activities
Net loss	$	(32,385	)	$	(11,281	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		416			207
Noncash operating lease expense		60			—
Amortization of premiums and discounts on marketable securities		110			—
Share-based compensation		4,481			757
Changes in operating assets and liabilities:
Prepaid expenses and other current and non-current assets		(8,423	)		48
Accounts payable and other current liabilities		696			321
Accrued liabilities		2,563			392
Operating lease liabilities		(104	)		—
Deferred rent		—			49
Net cash used in operating activities		(32,586	)		(9,507	)
Cash flows from investing activities
Purchases of property and equipment		(467	)		(1,066	)
Purchases of marketable securities		(27,026	)		—
Proceeds from maturities of marketable securities		16,850			—
Net cash used in investing activities		(10,643	)		(1,066	)
Cash flows from financing activities
Proceeds from issuance of common stock (initial public offering), net of transactions costs		129,156			—
Proceeds from issuance of common stock (private placement), net of transactions costs		10,000			—
Proceeds from issuance of Series C redeemable convertible preferred stock, net of transaction costs		—			81,756
Proceeds from the exercise of stock options		429			7
Payments under finance leases		(29	)		(121	)
Payments of deferred offering costs		—			(14	)
Net cash provided by financing activities		139,556			81,628
Net increase in cash and cash equivalents and restricted cash		96,327			71,055
Cash and cash equivalents and restricted cash, beginning of the year		31,032			46,795
Cash and cash equivalents and restricted cash, end of the period	$	127,359		$	117,850
Supplemental disclosures of noncash investing and financing activities:
Purchase of property and equipment included in accounts payable and accrued liabilities	$	35		$	238
Deferred offering costs included in accrued liabilities	$	42		$	—

The accompanying notes are an integral part of the condensed consolidated financial statements.

8

Arcellx, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Nature of the Business

Organization

Arcellx, Inc. (Arcellx or the Company) was incorporated in Delaware in December 2014 and is headquartered in Gaithersburg, Maryland. The Company is a clinical-stage biopharmaceutical company reimagining cell therapy through the development of innovative therapies for patients with cancer and other incurable diseases.

On February 8, 2022, the Company closed its initial public offering (IPO) of 9,487,500 shares of its common stock, including the exercise in full by the underwriters of their option to purchase 1,237,500 additional shares of its common stock, at a public offering price of $15.00 per share. The Company received net proceeds of $127.3 million, after deducting underwriting discounts and commissions of and other offering expenses paid by the Company of approximately $15.0 million. The Company’s common stock began trading on the Nasdaq Global Select Market on February 4, 2022, under the ticker symbol “ACLX.”

Liquidity

The Company has not commercialized any of its drug candidates and planned commercial operations have not commenced. The Company expects to incur additional operating losses and negative operating cash flows for the foreseeable future as it continues development of drug candidates, including preclinical and clinical testing and regulatory approval prior to commercialization. The Company has not generated any revenue to date from product sales and does not expect to generate any revenues from product sales in the foreseeable future. Even if drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. The Company expects that its cash and cash equivalents and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements into the second half of 2023.

The Company has funded its operations primarily with proceeds from public and private offerings of its common and preferred stock. The Company plans to seek additional funding through public or private equity offerings, debt financings, marketing and distribution arrangements, other collaborations, strategic alliances, and licensing arrangements. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into strategic alliances or other arrangements on favorable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, the Company could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect its business prospects.

2. Summary of Significant Accounting Policies

There have been no material changes to the significant accounting policies disclosed in the Company’s Annual Report on Form 10-K during the three months ended March 31, 2022, except for the adoption of the new lease accounting standard effective January 1, 2022, as discussed below.

Leases

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2016-02, Leases (Topic 842). Topic 842 increases transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements for both lessees and lessors. The Company adopted the new standard effective January 1, 2022, electing to use the package of practical expedients permitted under the transition guidance which allows for the carry forward of historical lease classification for existing leases on the adoption date and does not require the assessment of existing lease contracts to determine whether the contracts contain a lease or initial direct costs. Prior periods were not retrospectively adjusted.

The adoption of this standard resulted in the recognition of operating lease right-of-use (ROU) assets in the amount of $3.3 million and operating lease liabilities in the amount of $5.4 million for operating lease liabilities on the consolidated balance sheet, with a $2.1 million reclassification of deferred rent and tenant improvement allowances. There was no cumulative effect adjustment to the opening balance of accumulated deficit as of January 1, 2022. The adoption of this standard did not have an impact on the consolidated statements of operations or cash flows on the effective date.

9

The Company leases office space and certain equipment. If a lease arrangement is determined to exist with a lease term of more than 12 months at the lease commencement date, an ROU asset and corresponding lease liability are recorded on the consolidated balance sheet at the lease commencement date based on the present value of lease payments over the lease term. An ROU asset represents the right to control the use of an identified asset over the lease term and a lease liability represents the obligation to make lease payments arising from the lease. The Company uses the discount rate implicit in the lease, if available, or its incremental borrowing rate on the lease commencement date to determine the present value of lease payments. The lease terms used to calculate the ROU assets and related lease liabilities include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases are classified as either operating or financing leases based on the economic substance of the agreement. Lease and non-lease components are accounted for together as a single lease component for leases associated with office space.

For operating leases, the lease expense is recognized on a straight-line basis over the lease term. For finance leases, the ROU asset is amortized from the lease commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term, unless the Company is reasonably certain to exercise an option to purchase the underlying asset or if the lease transfers ownership of the underlying asset to the Company by the end of the lease term, in which case the ROU asset is amortized over the remaining useful life. Interest accretion on the finance lease liabilities is recorded as interest expense. Variable lease expense for both operating and finance leases is expensed as incurred.

For short-term lease arrangements with a term of one year or less, the Company has elected to recognize the related lease payments on a straight-line basis over the lease term without recording related ROU assets and lease liabilities.

3. Restricted Cash

The Company is required to maintain cash collateral on deposit in a segregated money market bank account, as a condition of a lease agreement. The bank may restrict withdrawals or transfers by, or on behalf of, the Company. The required restricted cash reserve totaled $0.2 million as of both March 31, 2022 and December 31, 2021. This amount is presented as restricted cash on the accompanying consolidated balance sheets.

The following table reconciles cash and cash equivalents and restricted cash per the balance sheets to the statements of cash flows (in thousands):

	March 31, 2022		March 31, 2021
Cash and cash equivalents	$	127,160	$	117,651
Restricted cash		199		199
Total	$	127,359	$	117,850

4. Fair Value of Financial Instruments

The fair value of the Company’s financial assets by level within the fair value hierarchy were as follows (in thousands):

	March 31, 2022
	Level 1		Level 2		Level 3
Money market fund (cash equivalent)	$	124,509	$	—	$	—
Money market fund (long-term restricted cash)		199	—		—
Marketable securities:
Commercial paper	—			50,904	—
Corporate debt	—			14,797	—
U.S. government agency	—			15,061	—
Asset-backed securities	—			3,007	—
Total assets measured at fair value	$	124,708	$	83,769	$	—

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	December 31, 2021
	Level 1		Level 2		Level 3
Money market fund (cash equivalent)	$	26,472	$	—	$	—
Money market fund (long-term restricted cash)		199	—		—
Marketable securities (1):
Commercial paper	—			43,969	—
Corporate debt	—			17,072	—
U.S. government agency	—			5,053	—
Asset-backed securities	—			7,690	—
Total assets measured at fair value	$	26,671	$	73,784	$	—
(1) These items have been reclassified to conform to current period presentation.

The fair value of financial assets categorized within Level 1 of the fair value hierarchy is determined by using unadjusted quoted prices that are available in active markets for identical assets and liabilities. The fair value of financial assets categorized within Level 2 of the fair value hierarchy is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets and liabilities in inactive markets. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data.

The Company did not transfer any assets measured at fair value on a recurring basis between levels during the three months ended March 31, 2022 or the year ended December 31, 2021.

5. Marketable Securities

Available-for-sale marketable securities were as follows (in thousands):

	March 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Commercial paper	$	50,904	$	—	$	—		$	50,904
Corporate debt		14,814		1		(18	)		14,797
U.S. government agency		15,081		—		(20	)		15,061
Asset-backed securities		3,013		—		(6	)		3,007
Total	$	83,812	$	1	$	(44	)	$	83,769

	December 31, 2021 (1)
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Commercial paper	$	43,969	$	—	$	—		$	43,969
Corporate debt		17,084		—		(12	)		17,072
U.S. government agency		5,056		—		(3	)		5,053
Asset-backed securities		7,695		—		(5	)		7,690
Total	$	73,804	$	—	$	(20	)	$	73,784

(1) These items have been reclassified to conform to current period presentation.

All of the Company’s available-for-sale debt marketable securities held as of March 31, 2022 had contractual maturities of less than one year. The Company had 9 securities in an unrealized loss position with an aggregate related fair value of $24.8 million as of March 31, 2022. All securities in an unrealized loss position as of March 31, 2022 had been in a loss position for less than 12 months. Unrealized losses on available-for-sale marketable securities as of March 31, 2022 were not significant and were primarily due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities. Accordingly, no allowance for credit losses related to the Company’s available-for-sale marketable securities was recorded for the three months ended March 31, 2022. The Company does not intend to sell these securities or expect to be required to sell the investments before recovery of their amortized cost bases, which may be at maturity. The Company recorded interest income of $0.2 million, offset by amortization of premium of $0.1 million, for the three months ended March 31, 2022, which is included in other income, net on the condensed consolidated statements of operations and comprehensive loss.

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6. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

	March 31, 2022		December 31, 2021
Prepaid research and development costs	$	6,388	$	6,143
Other prepaid expense and current assets		3,586		2,049
Total prepaid expenses and other current assets	$	9,974	$	8,192

7. Commitments

Pursuant to the manufacturing services agreement with Lonza Houston, Inc. (Lonza) in connection with the development and manufacture of autologous drug product CART-ddBCMA (Lonza Agreement), the Company entered into a statement of work with Lonza (Lonza SOW) in February 2022, for the technology transfer and cGMP manufacturing of CART-ddBCMA and potentially other pipeline products. The term of the Lonza SOW expires December 31, 2024, unless earlier terminated by either party or unless extended due to certain delays or suspensions or by mutual agreement. The Lonza SOW is non-cancellable for the first six months of the term and carries minimum non-cancellable costs including upfront payments, milestone fees, and fixed monthly payments during the related period. Subsequent to the non-cancellable period, the Company may terminate the arrangement for any reason upon 12 months' prior notification to Lonza. As of March 31, 2022, the Company’s minimum non-cancellable costs payable to Lonza was approximately $40.6 million. Variable costs under this arrangement include materials, external testing, and other services. The Company paid $5.8 million under this arrangement during the three months ended March 31, 2022.

8. Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	March 31, 2022		December 31, 2021
Research and development accrued expenses	$	12,129	$	6,626
Accrued offering costs		—		1,301
Accrued bonus		793		3,429
Other liabilities		1,478		1,824
Total accrued liabilities	$	14,400	$	13,180

9. Leases

The Company leases office and laboratory space in Gaithersburg, Maryland under one lease that has a term that expires in 2030 unless renewed. The lease agreement contains rent escalation, rent abatement clauses, tenant improvement allowances, and optional renewal clauses. The lease agreement also includes variable lease payments, which are primarily related to common area maintenance and utility charges. The Company also has short-term operating leases with a term of one year or less.

As of March 31, 2022, the Company had operating lease ROU assets of $3.2 million, current operating lease liabilities of $0.4 million, and non-current operating lease liabilities of $4.8 million. The Company used a discount rate of 8.2% in measuring operating lease liabilities. The remaining lease term was 7.8 years as of March 31, 2022.

The Company's total operating lease costs were as follows (in thousands):

	Three Months Ended March 31, 2022
Operating lease costs	$	163
Short-term lease costs		377
Variable lease costs		14
	$	554

As of March 31, 2022, future minimum operating lease payments were as follows (in thousands):

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Through December 31, 2022	$	555
2023		851
2024		872
2025		894
2026		916
2027		939
Thereafter		2,033
Total operating lease payments		7,060
Less: imputed interest		(1,846	)
Present value of total operating lease liabilities	$	5,214

Supplemental cash flow information related to operating leases is as follows (in thousands):

	Three Months Ended March 31, 2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	206
ROU assets obtained in exchange for operating lease liabilities		3,308

10. Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)

Redeemable Convertible Preferred Stock

In connection with the Company's IPO, all outstanding shares of the Company’s redeemable convertible preferred stock automatically converted into shares of common stock at the applicable conversion ratio then in effect. The Company's outstanding shares of preferred stock were converted into 24,785,564 shares of common stock.

Preferred Stock

Subsequent to the IPO, the Company's board of directors has the authority, without further action by the stockholders, to issue shares of preferred stock in one or more series and to fix the rights, preferences, privileges, and restrictions thereof. These rights, preferences, and privileges could include dividend rights, conversion rights, voting rights, redemption rights, liquidation preferences, sinking fund terms, and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. The issuance of preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing change in our control or other corporate action.

Common Stock

In addition to the shares of common stock issued and outstanding in connection with the IPO and the subsequent private placement, total shares of common stock issued and outstanding includes shares issued to employees pursuant to the exercise of vested stock options as well as the vesting of early exercised stock options. In order to execute the early exercises, the employees signed a Restricted Stock Purchase Agreement (RSPA) granting the Company, in the case of termination of employment, the rights to repurchase all of the unvested shares at the price paid by the employee for such shares. Based on the share repurchase rights outlined in the RSPA, the Company recorded the proceeds from the early exercises as a liability on the balance sheet.

All shares that were early exercised by the employees of the Company are considered legally issued. However, for accounting purposes, only vested shares are considered issued. Below is a reconciliation of shares issued and outstanding:

	March 31, 2022			December 31, 2021
Total shares of common stock legally issued and outstanding		35,736,584			544,967
Less: unvested early exercised shares of common stock		(17,820	)		(757	)
Total shares issued and outstanding		35,718,764			544,210

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any. No dividends have been declared or paid by the Company through March 31, 2022.

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In the event of any liquidation or dissolution of the Company, the holders of common stock are entitled to the assets of the Company legally available for distribution.

11. Share-Based Compensation

The Company’s 2017 Equity Incentive Plan (the 2017 Plan) provided for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, to the Company's employees, directors, and consultants. The 2017 Plan terminated one business day prior to effectiveness of the 2022 Equity Incentive Plan (the 2022 Plan) with respect to the grant of future awards. The 2022 Plan became effective on February 3, 2022 and provides for the grant of incentive stock options to the Company's employees and for the grant of nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units (RSUs), and performance awards to the Company's employees, directors, and consultants.

The aggregate number of shares of common stock that may be issued pursuant to equity awards under the 2022 Plan is 4,296,875 shares, plus shares subject to awards granted under the 2017 Plan that expire or otherwise terminate without having been exercised in full or are forfeited to or repurchased by the Company (provided that the maximum number of shares that may be added to the 2022 Plan pursuant to awards under the 2017 Plan is 6,269,300 shares). The number of shares of common stock reserved for issuance under the 2022 Plan shall be cumulatively increased on the first day of each fiscal year, beginning with the Company’s 2023 fiscal year and ending on the ten year anniversary of the date the Company’s board of directors approves the 2022 Plan equal to the least of 4,296,875 shares, 5% of the total number of shares of common stock outstanding as of the last day of the immediately preceding fiscal year, or a lesser number of shares determined by the administrator of the 2022 Plan.

Share-based compensation expense by type of award was as follows (in thousands):

	Three Months Ended March 31,
	2022		2021
Stock options	$	3,030	$	757
Restricted stock units		696		—
Restricted stock units - executive officer		755		—
Total share-based compensation expense	$	4,481	$	757

The Company recognized $4.5 million in share-based compensation expense during the three months ended March 31, 2022, of which $1.3 million was included in research and development and $3.2 million was included in general and administrative in the accompanying condensed consolidated statements of operations. The Company recognized $0.8 million in share-based compensation expense during the three months ended March 31, 2021, of which $0.2 million was included in research and development and $0.6 million was included in general and administrative in the accompanying condensed consolidated statements of operations.

Stock Options

Stock options granted under the 2017 Plan and the 2022 Plan vest over three or four years and expire after 10 years. The Company uses the Black Scholes option pricing model to determine the grant date fair value of stock options.

A summary of stock option activity for awards under the 2017 Plan and the 2022 Plan is presented below:

	Options Outstanding and Exercisable
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value (1) (in thousands)
Outstanding as of January 1, 2022		5,598,830		$	5.36		8.9	$	7,349
Granted		2,829,435			14.87
Forfeited		(3,504	)		11.38
Exercised		(311,172	)		1.35
Outstanding as of March 31, 2022		8,113,589		$	8.83		9.1	$	44,630
Exercisable as of March 31, 2022		1,767,303		$	4.83		8.1	$	16,304

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(1)The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for the options that were in the money as of March 31, 2022.

Restricted Stock Units

RSUs granted under the 2022 Plan generally vest annually over three years. The Company uses the market price of the Company’s common shares on the date of grant to determine the fair value of RSUs.

A summary of RSU activity for awards under the 2022 Plan is presented below:

	Number of Shares			Weighted Average Grate Date Fair Value
Outstanding as of January 1, 2022		—		$	—
Granted		703,329			15.00
Vested		—			—
Forfeited		(666	)		15.00
Outstanding as of March 31, 2022		702,663		$	15.00

Restricted Stock Units - Executive Officer

In June 2021, the Company granted 952,804 RSUs to an executive officer subject to service, performance, and market conditions. In December 2021, the Company added alternative performance conditions for vesting of the same RSUs (the RSU Award). These additional performance conditions provided alternative paths to vesting and the original award from June 2021 and its vesting conditions remained the same, i.e., the original award was not modified.

Each RSU granted in the RSU Award entitles the recipient to one share of common stock upon vesting subject to the service, performance, and market conditions. All 952,804 RSUs were outstanding as of March 31, 2022 and December 31, 2021 and no RSUs were vested or exercisable as of March 31, 2022 or December 31, 2021.

Service Condition

The service condition to vesting of the RSU Award requires the executive officer’s continued employment with the Company through the achievement of any of the performance conditions and the market condition.

Performance Condition

The performance conditions to vesting of the RSU Award include (i) the consummation of a change in control event as defined in the 2017 Plan (Change in Control), (ii) the consummation of the first firm commitment underwritten public offering covering the offer and sale of Company shares, the consummation of the direct listing or direct placement of Company shares on a publicly traded exchange, or the completion of a merger or consolidation with a special purpose acquisition company in which the shares of the surviving or parent entity are listed on a national securities exchange (IPO), or (iii) a Change in Control following an IPO.

Market Condition

The market condition to vesting of the RSU Award involves Company value thresholds depending upon which of the three performance condition scenarios is applicable at the time of measurement.

The Company value on a Change in Control is measured on the date of the Change in Control and is the aggregate amount of deal consideration paid at the closing of a Change in Control by an acquiror for the Company shares of common stock in connection with such Change in Control (Change in Control Market Capitalization). Upon a Change in Control, (i) one-sixth of the RSU Award will vest if a minimum Change in Control Market Capitalization of $2.5 billion is achieved, (ii) all of the RSU Award will vest if a $5.0 billion Change in Control Market Capitalization is achieved, and (iii) a portion of the RSU Award will vest based on a straight-line interpolation if a Change in Control Market Capitalization of between $2.5 billion and $5.0 billion is achieved based on a straight-line interpolation.

The Company value in the event of an IPO is measured each June 30 and December 31 following an IPO (subject to applicable lock-up period) and represents the Company's Enterprise Value. The Company's Enterprise Value is determined using the total market

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capitalization of the Company based the average closing trading price of one share of the Company over the 60-day period ending on the day prior to the applicable IPO measurement date, less cash. Upon an IPO, (i) one-sixth of the RSU Award will vest if a minimum Enterprise Value of $2.5 billion is achieved, (ii) all the RSU Award will vest if a $5.0 billion Enterprise Value is achieved, and (iii) a portion of the RSU Award will vest based on a straight-line interpolation if an Enterprise Value of between $2.5 billion and $5.0 billion is achieved.

The Company utilized Monte Carlo simulation models to estimate the fair value of the RSU Award on the date of grant in each of the three performance condition scenarios.

Upon completion of the IPO in February 2022, the performance condition of the RSU Award was satisfied and the Company began recognizing share-based compensation expense on an accelerated attribution basis over the anticipated service period (10 years) and based on the fair value (aggregate $10.3 million) according to the IPO scenario as no other performance condition was deemed probable at the time of the IPO. The Company recognized $0.8 million in share-based compensation expense related to this RSU Award during the three months ended March 31, 2022.

12. Net Loss Per Share Attributable to Common Stockholders

The Company’s potentially dilutive securities include options to purchase common stock, unvested shares of restricted common stock, and redeemable convertible preferred stock. The Company's potentially dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be anti-dilutive. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at period end, from the computation of diluted net loss per share attributable to common stockholders for the period indicated because including them would have had an anti-dilutive effect:

	March 31,
	2022		2021
Redeemable convertible preferred stock		—		22,359,669
Options to purchase common stock		8,113,589		2,871,594
Unvested shares of restricted common stock from early exercises		17,820		34,647
Restricted stock units		702,663		—
Restricted stock units - executive officer		952,804		—
Total		9,786,876		25,265,910

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

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the three months ended March 31, 2022 as well as in conjunction with our audited consolidated financial statements and the related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, include forward-looking statements that involve risks, uncertainties and assumptions. You should review the section titled Special Note Regarding Forward-Looking Statements and Part II, Item 1A, Risk Factors for a discussion of important factors that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. For convenience of presentation, some of the numbers have been rounded in the text below. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Overview

We are a clinical-stage biotechnology company reimagining cell therapy through the development of innovative immunotherapies for patients with cancer and other incurable diseases. We believe cell therapies are one of the forward pillars of medicine and our mission is to advance humanity by engineering cell therapies that are safer, more effective and more broadly accessible. Though cell therapies have shown benefits to date, cell therapies have historically been constrained to existing biologic structures, which has limited their impact and opportunity. Our novel synthetic binding scaffold, the D-Domain, is designed to overcome the limitations of traditional Chimeric Antigen Receptor T-cells (CAR-Ts). Existing cell therapy solutions, most of which use a biologic-based, single chain variable fragment (scFv) binding domain, tend to be beneficial to a limited segment of patients, often result in high toxicity, and have narrow applicability in treatable indications. We believe we can overcome these limitations by engineering a new class of D-Domain powered autologous and allogeneic CAR-Ts, including classical single infusion CAR-Ts called ddCARs and dosable and controllable universal CAR-Ts called ARC-SparX, to address hematologic cancers, solid tumors, or indications outside of oncology such as autoimmune diseases. We recently announced positive preliminary results for the first 24 patients dosed in our ongoing Phase 1 clinical trial of CART-ddBCMA, our lead ddCAR product candidate, for treatment of relapsed or refractory (r/r) Multiple Myeloma (MM), that demonstrate that D-Domains can potentially provide meaningful clinical benefits. We plan to initiate additional trials with CART-ddBCMA including iMMagine, our Phase 2 pivotal trial in r/r MM, in late 2022, as well as expansion studies to earlier lines of therapy. We are also advancing our novel ARC-SparX programs, ACLX-001 in r/r MM and ACLX-002 and ACLX-003 in r/r acute myeloid leukemia (AML) and high risk myelodysplastic syndrome (MDS). We initiated Phase 1 clinical trials for ACLX-001 during the second quarter of 2022 and plan to initiate Phase 1 clinical trials for ACLX-002 in 2022 and ACLX-003 in 2024. We are also exploring indications in solid tumors, as well as integrating AI-powered discovery and computational tools to expand the applicability of our platforms.

Since our formation, we have devoted substantially all our resources to discovering and developing our product candidates. We have incurred significant operating losses to date. Our net losses were $32.4 million and $11.3 million for the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022, we had an accumulated deficit of $162.5 million. These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future, and our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned research and development activities. We expect our operating expenses and capital requirements will increase substantially in connection with our ongoing activities, as we:

•Expand the clinical program for CART-ddBCMA to include expanded enrollment of the Phase 1 clinical trial, the initiation of the planned Phase 2 pivotal trial, and subsequent clinical trials focused on earlier lines of therapy;

•Grow our supply and contract manufacturing infrastructure to support the continued development of CART-ddBCMA;

•Initiate clinical trials to evaluate our lead ARC-SparX product candidates, ACLX-001, ACLX-002, and ACLX-003;

•Expand our pipeline of product candidates, including through our own product discovery and development efforts or through acquisition or in-licensing;

•Continue to develop our proprietary platforms to extend their use;

•Attract, hire, and retain additional clinical, scientific, manufacturing, management and administrative personnel;

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•Add operational, financial, and management information systems and personnel, including personnel to support our product development, as well as to support our transition to a public reporting company;

•Require increased manufacturing capabilities with third parties for our preclinical studies and clinical trials;

•Determine and execute our long-term manufacturing strategy;

•Pursue regulatory approval of product candidates that successfully complete clinical trials;

•Establish a sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain regulatory approval;

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

•Incur costs associated with being a public company, including legal, accounting and auditing, investor relations, and compliance.

As a result, we will continue to require substantial additional funding to develop our product candidates and our platforms and to support our continuing operations. Our ability to generate product revenue will depend on the successful development, regulatory approval, and eventual commercialization of one or more of our product candidates. Until such time that we can generate significant revenue from product sales, if ever, we expect to finance our operations through public or private equity offerings, debt financings, marketing and distribution arrangements, other collaborations, strategic alliances, and licensing arrangements. We may be unable to raise additional funds or to enter into such agreements or arrangements on favorable terms, if at all. Our failure to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on our business, results of operations, or financial condition, and could force us to delay, reduce or eliminate our product development or future commercialization efforts. We may also be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our development efforts. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

To date, we have not had any products approved for sale and have not generated any revenue from product sales and we have accumulated significant losses. Since our formation in December 2014 through February 2022, we funded our operations primarily with an aggregate of $234.8 million in gross cash proceeds from the sale and issuance of redeemable convertible preferred stock and convertible promissory notes. On February 8, 2022, we completed our IPO, in which we sold an aggregate of 9,487,500 shares of our common stock, which includes the exercise in full of the underwriters’ option to purchase 1,237,500 additional shares of its common stock, at a public offering price of $15.00 per share. We received net proceeds of approximately $127.3 million after deducting underwriting discounts and commissions and offering expenses paid by us. In addition, on March 4, 2022, we issued and sold an aggregate of 590,318 shares of common stock in a private placement at a price of $16.94 per share for an aggregate purchase price of $10.0 million.

As of March 31, 2022, we had cash and cash equivalents and marketable securities of $210.9 million. Based on our expected operating cash requirements and capital expenditures, we believe our current cash and cash equivalents and marketable securities are adequate to fund operations into the second half of 2023.

Impact of the COVID-19 Pandemic

The COVID-19 pandemic continues to present public health and economic challenges around the world, and to date has led to the implementation of various responses, including government-imposed quarantines, stay-at-home orders, travel restrictions, mandated business closures, and other public health safety measures. Although to date, our business has not been materially impacted by COVID-19, it is possible that our clinical development timelines could be negatively affected by COVID-19, which could materially and adversely affect our business, financial condition, and results of operations. See Part II, Item 1A, Risk Factors, for additional discussion of the potential adverse impact of the COVID-19 pandemic.

Components of Results of Operations

Revenue

We have not generated any revenue from product sales and do not expect to do so in the near future. In the future, we may generate revenue from payments received under collaboration agreements, which could include payments of upfront fees, license fees, milestone-based payments, and reimbursements for research and development efforts. However, there can be no assurance as to when we will generate such revenue, if at all.

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Operating Expenses

Research and Development Expenses

Research and development expenses account for a significant portion of our operating expenses and consist primarily of external and internal costs incurred in connection with our CART-ddBCMA program, the development of our ARC-SparX product candidates, and the ongoing discovery and development efforts for additional product candidates.

External expenses include:

•Payments to third parties in connection with the clinical development of our product candidates, including contract research organizations (CROs) and consultants;

•The cost of manufacturing products for use in our preclinical studies and clinical trials, including payments to contract manufacturing organizations (CMOs) and consultants;

•Payments to third parties in connection with the preclinical development of our product candidates, including outsourced professional scientific development services, consulting research fees and for sponsored research arrangements with third parties;

•Laboratory supplies used in the preclinical development of our product candidates; and

•Allocated facilities, depreciation, and other expenses, which include direct or allocated expenses for IT, rent and maintenance of facilities.

Internal expenses include employee-related costs, including salaries, related benefits, and share-based compensation expense for employees engaged in research and development functions.

We expense research and development costs in the periods in which they are incurred. We track external costs on a program-by-program basis beginning with lead candidate selection. External costs that are not allocated to a program are classified as preclinical and discovery costs. We do not track internal costs by program because these costs are deployed across multiple programs, and as such, are not separately classified.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect that our research and development expenses will increase substantially in the foreseeable future as we advance CART-ddBCMA into a Phase 2 pivotal trial; initiate clinical trials for our ARC-SparX product candidates, including ACLX-001 and ACLX-002; continue to discover and develop additional product candidates to expand our pipeline; maintain, expand, protect, and enforce our intellectual property portfolio; and hire additional personnel.

The successful development of our product candidates is highly uncertain, and we do not believe it is possible at this time to accurately project the nature, timing, and estimated costs of the efforts necessary to complete the development of, and obtain regulatory approval for, any of our product candidates. To the extent our product candidates continue to advance into clinical trials, as well as advance into larger and later-stage clinical trials, our expenses will increase substantially and may become more variable. We are also unable to predict when, if ever, we will generate revenue from our product candidates to offset these expenses. Because of the early stage of development of our product candidates, our ability to eventually generate significant revenues from product sales will depend on a number of factors, including:

•Identification of additional target antigens for desired indications;

•Identification and engineering of D-Domain-based binding regions that bind to the desired target antigens;

•Successful completion of preclinical studies;

•Submission of INDs or other regulatory applications for our planned clinical trials or future clinical trials and authorizations from regulators to initiate clinical studies;

•Successful enrollment in, and completion of, clinical trials;

•Achieving favorable results from clinical trials;

•Receipt of marketing approvals from applicable regulatory authorities;

•Establishing and maintaining sufficient manufacturing capabilities, whether internally or with third parties, or arrangements for clinical supplies;

•Sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials;

•Effectively competing with other therapies;

•Developing and implementing successful marketing and reimbursement strategies;

•Obtaining and maintaining patent, trade secret, and other intellectual property protection and regulatory exclusivity for our product candidates; and

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•Maintaining a continued acceptable safety profile of any product following approval, if any.

Any changes in the outcome of any of these factors could significantly impact the costs, timing, and viability associated with the development of our product candidates and our ability to generate significant revenues from product sales.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, related benefits, and share-based compensation expense for personnel in executive, finance, and administrative functions. General and administrative expenses also include allocated facilities, depreciation, and other expenses, which include direct or allocated expenses for rent and maintenance of facilities and insurance, not otherwise included in research and development expenses, as well as professional fees for legal, patent, consulting, investor and public relations, accounting, and audit services.

We anticipate that our general and administrative expenses will increase as we increase our headcount to support the growth of the company. We further expect that our general and administrative expenses will increase substantially as we will incur substantially higher expenses relating to accounting, audit, legal, regulatory, compliance, director and officer insurance, and investor and public relations as a result of being a public company.

Other Income, Net

Other income, net consists primarily of interest earned on our cash and cash equivalents, restricted cash, and marketable securities. Our interest income has not been significant to date due to low interest earned on invested balances.

Results of Operations

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

The following table summarizes our results of operations (in thousands):

	Three Months Ended March 31,
	2022			2021			Change
Operating expenses:
Research and development	$	24,401		$	8,521		$	15,880
General and administrative		8,034			2,761			5,273
Total operating expenses		32,435			11,282			21,153
Loss from operations		(32,435	)		(11,282	)		(21,153	)
Other income, net		50			1			49
Net loss	$	(32,385	)	$	(11,281	)	$	(21,104	)

Research and Development Expenses

Research and development expenses consist of the following (in thousands):

	Three Months Ended March 31,
	2022		2021		Change
External costs:
CART-ddBCMA	$	14,414	$	1,739	$	12,675
Preclinical and discovery costs		5,388		4,295		1,093
Total external costs		19,802		6,034		13,768
Internal costs		4,599		2,487		2,112
Total research and development expenses	$	24,401	$	8,521	$	15,880

Research and development expenses were $24.4 million for the three months ended March 31, 2022 compared to $8.5 million for the three months ended March 31, 2021, an increase of $15.9 million. This increase in research and development expenses was driven by $12.7 million of higher external costs associated with our CART-ddBCMA clinical trial and $1.1 million of higher external costs related to preclinical development of our other product candidates. Additionally, our internal costs reflect an increase of $2.1 million in personnel costs principally related to the addition of research and development and clinical employees.

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General and Administrative Expenses

General and administrative expenses were $8.0 million for the three months ended March 31, 2022 compared to $2.8 million for the three months ended March 31, 2021, an increase of $5.2 million. This increase was driven by an increase of $3.2 million in personnel related costs due to an increase in headcount, $1.3 million in professional fees related to consulting and accounting and audit services, and $0.7 million in other expenses.

Liquidity and Capital Resources

Since inception, we have incurred net losses and negative cash flows from operations. Our net losses were $32.4 million and $11.3 million for the three months ended March 31, 2022 and 2021, respectively, and we expect to incur substantial additional losses in future periods. As of March 31, 2022, we had an accumulated deficit of $162.5 million. As of March 31, 2022, we had cash and cash equivalents and marketable securities of $210.9 million.

In the first quarter of 2022, we received approximately $127.3 million and $10.0 million, respectively, in net cash proceeds from our IPO and a private placement subsequent to the IPO. Prior to the IPO, we have historically financed our operations primarily through the sale of redeemable convertible preferred stock and convertible promissory notes totaling $234.8 million in gross cash proceeds. Based on our expected operating cash requirements and capital expenditures, we believe our current cash and cash equivalents and marketable securities together with the net cash proceeds from our IPO and the private placement subsequent to the IPO are adequate to fund operations into the second half of 2023.

To date, we have not generated any revenue. We do not expect to generate any meaningful revenue unless and until we obtain regulatory approval of, and commercialize any of, our product candidates or enter into collaborative agreements with third parties, and we do not know when, or if, either will occur. We expect to continue to incur significant losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates and begin to commercialize any approved products. We are subject to all of the risks typically related to the development of new product candidates, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. Moreover, we expect to incur additional costs associated with operating as a public company.

We will continue to require additional capital to develop our product candidates and to fund operations for the foreseeable future. We may seek to raise capital through public or private equity offerings, debt financings, marketing and distribution arrangements, other collaborations, strategic alliances, and licensing arrangements. We anticipate that we will need to raise substantial additional capital, for which the requirements will depend on many factors, including:

•The scope, progress, timing, results, and costs of developing and manufacturing our product candidates, and their components, and conducting preclinical studies and clinical trials and other testing of our product candidates;

•Our ability to continue our business operations and product candidate research and development, and to adapt to any changes in the regulatory approval process, manufacturing supply, or clinical trial requirements and timing due to the ongoing COVID-19 pandemic and otherwise, including our ability to comply with new regulatory guidance or requirements on conducting clinical trials during and after the COVID-19 pandemic;

•The costs, timing, and outcome of regulatory review of any of our product candidates;

•The costs and timing of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending any intellectual property-related claims, including any claims by third parties that we are infringing upon their intellectual property rights;

•Our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement;

•The costs and timing of future commercialization activities, including manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval;

•The extent to which our product candidates, if approved, can be offered by prescribers in various clinical settings, including academic hospitals and community practices, the acceptance of our products, if and when approved, by patients, the medical community and third-party payors, and the revenue received from commercial sale of any products for which we receive marketing approval;

•The effect of competing technologies and market developments; and

•The extent to which we acquire or invest in other businesses, products and technologies, and any other licensing or collaboration arrangements for any of our product candidates.
 

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A change in the outcome of any of these or other variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we will continue to require additional capital to meet operational needs and capital requirements associated with such operating plans. If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments or engage in certain merger, consolidation, or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders.

Adequate funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategies. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials or we may also be required to sell or license to others rights to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves. If we are required to enter into collaborations and other arrangements to supplement our funds, we may have to give up certain rights that limit our ability to develop and commercialize our product candidates or we may have to accept other terms that are not favorable to us or our stockholders, which could materially affect our business and financial condition.

Cash Flows

The following table sets forth a summary of the primary sources and uses of cash for each of the periods presented below (in thousands):

	Three Months Ended March 31,
	2022			2021
Net cash used in operating activities	$	(32,586	)	$	(9,507	)
Net cash used in investing activities		(10,643	)		(1,066	)
Net cash provided by financing activities		139,556			81,628
Net increase in cash, cash equivalents, and restricted cash	$	96,327		$	71,055

Operating Activities

Net cash used in operating activities during the three months ended March 31, 2022 of $32.6 million was primarily attributable to our net loss of $32.4 million and net changes in operating assets and liabilities of $5.3 million, partially offset by non-cash charges for depreciation and amortization of property and equipment, amortization of premiums and discounts on marketable securities, and share-based compensation in total of $5.1 million.

Net cash used in operating activities during the three months ended March 31, 2021 of $9.5 million was primarily attributable to our net loss of $11.3 million, partially offset by non-cash charges for depreciation of property and equipment and share-based compensation in total of $1.0 million and net changes in operating assets and liabilities of $0.8 million.

Investing Activities

Net cash used in investing activities of $10.6 million during the three months ended March 31, 2022 was attributable to $10.1 million in net purchases of marketable securities and $0.5 million of purchases of lab equipment.

Net cash used in investing activities of $1.1 million during the three months ended March 31, 2021 was attributable to purchases of lab equipment.

Financing Activities

Net cash provided by financing activities of $139.6 million during the three months ended March 31, 2022 was primarily attributable to net proceeds of $129.2 million from the issuance of common stock as part of our IPO, net proceeds of $10.0 million from the issuance of common stock as part of a private placement, and proceeds of $0.4 million from the exercise of stock options.

Net cash provided by financing activities of $81.6 million during the three months ended March 31, 2021 was primarily attributable to net proceeds of $81.8 million from the sale of shares of our Series C redeemable convertible preferred stock.

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Contractual Obligations and Contingencies
 

We lease certain office and laboratory space in Gaithersburg, Maryland under a non-cancelable operating lease that has a term that expires in 2030 unless renewed. Rent expense is recorded on a straight-line basis over the term of the lease. The total future undiscounted minimum lease payments are $7.1 million related to our operating leases as of March 31, 2022.

In September 2021, we entered into a manufacturing services agreement with Lonza Houston, Inc. (Lonza) in connection with the development and manufacture of autologous drug product CART-ddBCMA (the Lonza Agreement), whereby Lonza agreed to perform certain process and analytical development activities and to collaborate with the Company to develop a statement of work setting forth certain technology transfer and cGMP manufacturing activities relating to CART-ddBCMA. In February 2022, and pursuant to the Lonza Agreement, we entered into a statement of work (Lonza SOW) for the technology transfer and cGMP manufacturing of CART-ddBCMA and potentially other pipeline products. The Lonza SOW expires December 31, 2024, unless earlier terminated by either party or unless extended due to certain delays or suspensions or by mutual agreement. The Lonza SOW is non-cancellable for the first six months of the term and carries minimum non-cancellable costs including upfront payments, milestone fees, and fixed monthly payments during the related period. Subsequent to the non-cancellable period, we may terminate the arrangement for any reason upon 12 months’ prior notification to Lonza. As of March 31, 2022, our minimum non-cancellable costs payable to Lonza was approximately $40.6 million.

In addition to the arrangement with Lonza, we have entered into other contracts in the normal course of business with CROs, CMOs, and other third parties for preclinical research studies and testing, clinical trials, and manufacturing services. These contracts do not contain any minimum purchase commitments and are cancelable by us upon prior notice. For such contracts, payments due upon cancellation consist only of payments for services provided and expenses incurred, including non-cancelable obligations of our service providers, up to the date of cancellation. We have also entered into agreements with certain vendors for the provision of goods and services, which include manufacturing services with CMOs and development services with CROs. These agreements may include certain provisions for purchase obligations and termination obligations that could require payments for the cancellation of committed purchase obligations or for early termination of the agreements. The amount of the cancellation or termination payments vary and are based on the timing of the cancellation or termination and the specific terms of the agreement. In addition, certain agreements with our CMOs and third-party vendors contain development and commercial milestone payments and low single-digit royalties on worldwide net sales for certain products we sell that incorporate certain goods provided by our manufacturers and suppliers. Certain of these agreements contain development milestones of up to $18.7 million in the aggregate and commercial milestones of up to $52.0 million in the aggregate, along with royalty buyout provisions.

Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles (GAAP) in the United States. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on a periodic basis. Our actual results may differ from these estimates.

Critical accounting estimates are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or area reasonably likely to have a material impact on our financial condition or results of operations. For a summary of our critical accounting policies and estimates, refer to Management’s Discussion and Analysis section of our Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2022.

Additionally, our significant accounting policies are described in detail in the notes to our consolidated financial statements appearing in the Annual Report on Form 10-K for the year ended December 31, 2021 and in the notes to our condensed consolidated financial statements appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Emerging Growth Company and Smaller Reporting Company Status

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time that those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended

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transition period provided in the JOBS Act. As a result, our consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Unless we affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act, we will remain an emerging growth company until the earliest of (i) the last day of our first fiscal year in which we have total annual gross revenues of $1.07 billion or more, (ii) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC, (iii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years, or (iv) the last day of our fiscal year following the fifth anniversary of the date of the completion of our IPO. An emerging growth company may take advantage of specified reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. As an emerging growth company:

•We may avail ourselves of the exemption from the requirement to obtain an attestation and report from our auditors on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act;

•We may provide reduced disclosure about our executive compensation arrangements; and

•We may not require stockholder non-binding advisory votes on executive compensation or golden parachute arrangements.

We are also a “smaller reporting company” because the market value of our stock held by non-affiliates is less than $700.0 million and our annual revenue is less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company in subsequent fiscal years if either (1) the market value of our stock held by non-affiliates is less than $250.0 million as of June 30 in the most recently completed fiscal year or (2) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million as of June 30 in the most recently completed fiscal year. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Additionally, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited consolidated financial statements in our Annual Reports on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

We have elected to take advantage of certain of the reduced disclosure and reporting requirements in this Quarterly Report on Form 10-Q. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.

Recent Accounting Pronouncements

A description of recently issued and recently adopted accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our consolidated financial statements appearing in the Annual Report on Form 10-K for the year ended December 31, 2021 and in the notes to our condensed consolidated financial statements appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation and supervision of our Chief Executive Officer and our Interim Chief Financial Officer, have evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and our Chief Interim Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specific in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Changes in Internal Control over Financial Reporting

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There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in litigation or other legal proceedings. We are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors.

Our business and industry are subject to significant risks. You should carefully consider the risks described below, as well as the other information in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and the related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Part I, Item 2, before deciding whether to invest in our common stock. The occurrence of any of the events or developments described in the following risk factors and the risks described elsewhere in this report could seriously harm our business, financial condition, results of operations and growth prospects. In such an event, the market price of our common stock could decline and you may lose all or part of your investment. The risks described below are not guarantees that no such conditions exist as of the date of this report and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part. This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described below and elsewhere in this Quarterly Report on Form 10-Q. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.

Risk Factor Summary

Our ability to execute our business strategy is subject to numerous risks, as more fully described in the section immediately following this summary. These risks include, among others:

Risks Related to Our Limited Operating History, Financial Condition and Capital Requirements

•We have a limited operating history and have incurred significant losses since our inception, and we anticipate that we will continue to incur losses for the foreseeable future, which makes it difficult to assess our future viability.

•We will need substantial additional funding. If we are unable to raise capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and development programs, future commercialization efforts or employee headcount.

Risks Related to Development of Our Product Candidates

•Our product candidates are in the early stages of development. We have no products approved for commercial sale and have only recently begun clinical trials to test our first product candidate in humans, which may make it difficult for you to evaluate our current business and predict our future success and viability.

•Our ddCAR and ARC-SparX platforms represent novel and unproven approaches to treatment, which makes it difficult to predict the timing, results and costs of product candidate development and the likelihood of obtaining regulatory approval. In addition, we may experience difficulty in identifying appropriate target binding domains.

•Our ARC-SparX platform is highly dependent on the success of ACLX-001.

•Clinical development is a lengthy, expensive and uncertain process. Our clinical trials may fail to demonstrate adequate safety and/or efficacy of any of our product candidates.

•We may encounter substantial delays, including difficulties enrolling patients, in our clinical trials.

•Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, require expansion of the trial size, limit their commercial potential, or result in significant negative consequences.

•Interim, preliminary or topline data from our clinical trials that we announce or publish from time to time may change as more patient data become available.

•Manufacturing genetically engineered products is complex and subject to both human and systemic risks. We or our third-party manufacturers may encounter difficulties in production and sourcing and may be subject to variations and supply constraints of key components. Modifications in manufacturing may require additional studies and regulatory filings, resulting in additional costs or delay.

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•We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.

Risks Related to Our Business

•Our business is affected by the ongoing COVID-19 pandemic and may be significantly adversely affected as the pandemic continues or if other events out of our control disrupt our business or that of our third party providers.

•We are highly dependent on our key personnel, and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

•We expect to grow the size of our organization, and we may experience difficulties in managing this growth.

Risk Related to Reliance on Third Parties

•We rely and will rely on third parties to conduct our clinical trials. If these third parties do not properly and successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of or commercialize our product candidates.

Risk Related to Our Intellectual Property

•If we are unable to obtain and maintain sufficient intellectual property protection for our platforms and our product candidates, or if the scope of the intellectual property protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products may be adversely affected.

Risk Related to Government Regulation

•We may be unable to obtain regulatory approval for our product candidates. The denial or delay of any such approval would delay commercialization and have a material adverse effect on our potential to generate revenue, our business and our results of operations.

Risk Related to Commercialization of Our Product Candidates

•Even if we obtain regulatory approval of our product candidates, the products may not gain market acceptance among physicians, patients, hospitals, cancer treatment centers and others in the medical community.

Risk Related to Ownership of our Common Stock

•The price of shares of our common stock may be volatile and may be adversely impacted by future events, and you could lose all or part of your investment.

Risks Related to Our Limited Operating History, Financial Condition, and Capital Requirements

We have a limited operating history and have incurred significant losses since our inception, and we anticipate that we will continue to incur losses for the foreseeable future, which makes it difficult to assess our future viability.

We are a clinical-stage biopharmaceutical company with a limited operating history. Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, establishing and protecting our intellectual property portfolio, developing our D-Domain, ddCAR and ARC-SparX technologies, identifying potential new target antigens, developing product candidates and undertaking research and development, including preclinical studies and clinical trials of our product candidates, all of which are biologics or biopharmaceuticals and require approval under a Biologics License Application (BLA). We have not yet demonstrated our ability to successfully initiate and complete any large-scale or pivotal clinical trials, obtain marketing approvals, manufacture commercial-scale product, or conduct sales and marketing activities necessary for successful product commercialization. As a result, it may be more difficult for you to accurately predict our future success or viability than it could be if we had a longer operating history or were closer to commercialization. In addition, as a young business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown challenges that may adversely affect our business.

We have no products approved for commercial sale and have not generated any revenue to date, and we continue to incur significant research and development and other expenses related to our ongoing operations. We have incurred losses in each period since our inception in December 2014. Our net losses were $32.4 million for the three months ended March 31, 2022. As of March 31,

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2022, we had an accumulated deficit of $162.5 million. We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we advance our product candidates through preclinical studies and clinical trials; continue to discover and develop additional product candidates and expand our pipeline; continue to develop our D-Domain, ddCAR and ARC-SparX platforms; maintain, expand, protect and enforce our intellectual property portfolio; and hire additional personnel. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue, which we do not expect will occur in the foreseeable future, as our product candidates are in preclinical or Phase 1 clinical development. Our prior and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

We will need to obtain substantial additional funding to complete the development of our product candidates.

Investment in biopharmaceutical product development is highly risky because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable. As our product candidates enter and advance through preclinical studies and clinical trials, we will need substantial additional funds to expand our clinical, regulatory, quality and manufacturing capabilities, whether internally or with third-party partners and collaborators, and advance our product candidates through preclinical studies and clinical trials in order to obtain marketing approval. If we obtain marketing approval for any of our product candidates, we also expect to incur significant commercialization expenses related to marketing, sales, manufacturing and distribution. Furthermore, we will continue to incur additional costs associated with operating as a public company.

Based on our current operating plan, we believe that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our planned operations into the second half of 2023, but our assumptions could prove to be wrong, and we could consume capital significantly faster than we expect, requiring us to seek additional funding sources sooner than planned, through public or private financings or other sources, such as strategic collaborations. Such financing may result in dilution to stockholders, the imposition of burdensome debt covenants and repayment obligations or other restrictions that may affect our business. Our future capital requirements will depend on many factors, including:

•The scope, progress, timing, results and costs of developing and manufacturing our product candidates, and their components, and conducting preclinical studies and clinical trials and other testing of our product candidates;

•Our ability to continue our business operations and product candidate research and development, and to adapt to any changes in the regulatory approval process, manufacturing supply, or clinical trial requirements and timing due to the ongoing COVID-19 pandemic and otherwise, including our ability to comply with new regulatory guidance or requirements on conducting clinical trials during and after the COVID-19 pandemic;

•The costs, timing and outcome of regulatory review of any of our product candidates;

•The costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims, including any claims by third parties that we are infringing upon their intellectual property rights;

•Our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement;

•The costs and timing of future commercialization activities, including manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval;

•The extent to which our product candidates, if approved, can be offered by prescribers in various clinical settings, including academic hospitals and community practices, the acceptance of our products, if and when approved, by patients, the medical community and third-party payors, and the revenue received from commercial sale of any products for which we receive marketing approval;

•The effect of competing technologies and market developments; and

•The extent to which we acquire or invest in other businesses, products and technologies and any other licensing or collaboration arrangements for any of our product candidates.

We cannot be certain that additional funding will be available on acceptable terms, or at all, especially in view of the widespread impact of the COVID-19 pandemic (as further described under Risks Related to Our Business). If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to decrease headcount and/or significantly delay, scale back or discontinue the development or commercialization of our product candidates or other research and development initiatives. We could be required to seek collaborators for our product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable to us than might otherwise be available or relinquish or license on unfavorable terms our rights to our product candidates in markets where we otherwise would seek to pursue development or commercialization ourselves. Any of the foregoing events could significantly harm our business, prospects, financial condition and results of operations and cause the price of our common stock to decline.

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In addition, we may seek additional capital due to strategic considerations even if we believe we have sufficient funds for our current or future operating plans. Attempting to secure additional financing may divert our management from our day-to-day activities, which may adversely affect our ability to develop our product candidates.

Risks Related to Development of Our Product Candidates

Our product candidates are in the early stages of development. We have no products approved for commercial sale and have only recently began clinical trials to test our first product candidate in humans, which may make it difficult for you to evaluate our current business and predict our future success and viability.

We are early in our development efforts. We are still developing our D-Domain, ddCAR and ARC-SparX platforms, and conducting drug discovery and preclinical studies for a number of product candidates while advancing our ongoing Phase 1 clinical trial for CART-ddBCMA. We have treated a small number of patients as of the date hereof and our clinical experience with our initial product candidate is limited. We have not initiated clinical testing of any product candidates based on our ARC-SparX platform. Because our product candidates are in an early stage of development, there is a high risk of failure and we may never succeed in developing marketable products.

There is a high failure rate for biopharmaceutical products proceeding through clinical trials. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in later stage clinical trials even after achieving promising results in earlier stage clinical trials. Data obtained from preclinical and clinical activities are subject to varying interpretations, which may delay, limit or prevent regulatory approval. In addition, regulatory delays or rejections may be encountered as a result of many factors, including changes in regulatory policy during the period of product development.

Because of the early stage of development of our product candidates, our ability to eventually generate significant revenues from product sales will depend on a number of factors, including:

•Identification of additional target antigens for desired indications;

•Identification and development of D-Domain-based binding regions that bind to the desired target antigens;

•Successful completion of preclinical studies;

•Submission of INDs or other regulatory applications for our planned clinical trials or future clinical trials and authorizations from regulators to initiate clinical studies;

•Successful enrollment in, and completion of, clinical trials;

•Achieving favorable results from clinical trials;

•Receipt of marketing approvals from applicable regulatory authorities;

•Establishing and maintaining sufficient manufacturing capabilities, whether internally or with third parties, for clinical and commercial supply;

•Establishing sales, marketing and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in combination with other products;

•Sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials and commercialization activities;

•Effectively competing with other therapies;

•Developing and implementing successful marketing and reimbursement strategies;

•Obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity for our product candidates; and

•Maintaining a continued acceptable safety profile of any product following approval, if any.

If we do not achieve one or more of these requirements in a timely manner, we could experience significant delays or an inability to successfully commercialize our product candidates, which would materially harm our business.

We cannot be certain that our clinical trials will be initiated and completed on time, if at all, or whether our planned clinical strategy will be acceptable to the FDA or foreign health authorities. In addition, the COVID-19 pandemic is still evolving, and it is impossible to predict the impact this pandemic may have on the development of our product candidates, our preclinical studies and clinical trials, and our business.

To become and remain profitable, we must develop, obtain approval for and eventually commercialize products, if approved, that generate significant revenue. We do not expect to receive approval of any product candidates for many years and may never succeed in these activities. In addition, it is not uncommon for product candidates to exhibit unforeseen safety issues or inadequate efficacy when tested in humans despite promising results in preclinical animal models or earlier trials, and we may ultimately be unable to demonstrate adequate safety and efficacy of our product candidates to obtain marketing approval. Even if we obtain

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approval and begin commercializing one or more of our product candidates, we may never generate revenue that is significant or large enough to achieve profitability.

Even if we succeed in commercializing one or more of our product candidates, we will continue to incur substantial research and development, manufacturing and other expenditures to develop and market additional product candidates. Our failure to become or remain profitable would decrease the value of the company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations.

Our ddCAR and ARC-SparX platforms represent novel and unproven approaches to treatment, which makes it difficult to predict the timing, results and costs of product candidate development and the likelihood of obtaining regulatory approval. In addition, we may experience difficulty in identifying appropriate target binding domains.

We have concentrated our research and development efforts on our ddCAR and ARC-SparX platforms, and our future success depends on the successful development of these platforms. Although there are other cell therapies and adapter platforms in clinical development, our platform technologies, including our D-Domain technology, have not been extensively tested over any significant period of time. In addition, while we believe that our platforms may be capable of overcoming certain challenges faced by conventional CAR-T therapies, we cannot be certain that our approach will result in the intended benefits or will not result in unforeseen negative consequences over time. As an example, we may not be able to identify D-Domain binders that can recognize certain antigen targets that we would like to pursue, or the development of the applicable D-Domain, ddCAR or SparX protein targeting such antigens may be too challenging or expensive to be commercially viable. We do not currently have any approved or commercialized products. As with other targeted therapies, off-tumor or off-target activity could delay development or require us to reengineer or abandon a particular product candidate. There can be no assurance that any problems we experience in the future related to preclinical and clinical development of our novel platforms and our product candidates will not cause significant delays or unanticipated costs or that such problems can be solved. We may also experience delays in developing sustainable, reproducible and scalable manufacturing processes or transferring those processes to manufacturing partners or developing our own internal manufacturing capabilities, which may prevent us from completing our clinical trials or commercializing our product candidates on a timely or profitable basis, if at all.

Because cell therapies represent a relatively new field of cellular immunotherapy and cancer treatment generally, developing and commercializing our product candidates subjects us to a number of risks and challenges, including:

•Developing and deploying consistent and reliable processes for procuring a patient’s apheresis material, engineering a patient’s T cells ex vivo and infusing the engineered T cells back into the patient;

•Developing protocols for the safe administration of our product candidates;

•Establishing integrated solutions in collaboration with specialty treatment centers and other clinical settings in order to reduce the burdens and complex logistics commonly associated with the administration of T cell therapies;

•Conditioning patients with chemotherapy in conjunction with delivering each of our products, which may increase the risk of adverse side effects of our product candidates;

•Educating medical personnel about the administration of our product candidates, particularly if our clinical trials permit expansion of participating physicians to those in various clinical settings;

•Educating medical personnel regarding the potential efficacy and safety profiles of our product candidates, as well as the challenges, of incorporating our product candidates, if approved, into treatment regimens;

•Sourcing, supplies for the materials used to manufacture and process our product candidates for clinical trials and, in the future, commercial sale, if our product candidates are approved;

•Developing reliable and scalable manufacturing processes;

•Establishing adequate manufacturing capacity suitable for the manufacture of our product candidates in line with expanding enrollment in our clinical studies and our projected commercial requirements;

•Achieving cost efficiencies in the scale-up of our manufacturing capacity;

•Obtaining and maintaining regulatory approval from the FDA or other health authorities;

•Establishing sales and marketing capabilities to successfully launch and commercialize our product candidates if and when we obtain any required regulatory approvals, and risks associated with gaining market acceptance of novel therapies if we receive approval; and

•Obtaining coverage and adequate reimbursement from third-party payors for our novel therapies in connection with commercialization of any approved product candidates.

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We may not be able to successfully develop our product candidates, our technology or our other product candidates in a manner that will yield products that are safe, effective, scalable or profitable. Additionally, because our technology involves the genetic modification of patient cells ex vivo, we are subject to additional regulatory challenges and risks, including:

•Regulatory requirements governing gene and cell therapy products have changed frequently and may continue to change in the future;

•Genetically modified products in the event of improper insertion of a gene sequence into a patient’s chromosome could lead to lymphoma, leukemia or other cancers, or other aberrantly functioning cells;

•Although our viral vectors are not able to replicate, there is a risk with the use of lentiviral vectors that they could lead to new or reactivated pathogenic strains of virus or other infectious diseases; and

•The FDA recommends a 15-year follow-up observation period for all patients who receive treatment using gene therapies, and we may need to adopt such an observation period for our product candidates.

Moreover, public perception and awareness of cell therapy safety issues may adversely influence the willingness of subjects to participate in clinical trials of our product candidates, or if approved, of physicians to prescribe our products. Physicians, hospitals and third-party payors often are slow to adopt new products, technologies and treatment practices that require additional upfront costs and training. Treatment centers may not be willing or able to devote the personnel and establish other infrastructure required for the administration of CAR-T cell therapies. Physicians may not be willing to undergo training to adopt this novel and personalized therapy, may decide the therapy is too complex to adopt without appropriate training and may choose not to administer the therapy. Based on these and other factors, hospitals and payors may decide that the benefits of this new therapy do not or will not outweigh its costs.

Additionally, in developing our product candidates, we have not exhaustively explored different options in the design and method for manufacturing ddCARs, ARC-T cells and SparX proteins. Although we do not currently plan to change the structure of our ddCARs, ARC-T cells or SparX proteins in the near term, we may in the future find our ddCARs, ARC-T cells or SparX proteins, or any manufacturing process thereof, may be substantially improved with future design or process changes. Changes in product design and changes in the manufacturing process, equipment, or facilities may require further comparability analysis and approval by FDA before implementation, which could delay our clinical trials and product candidate development, and could require additional clinical trials, including bridging studies, to demonstrate consistent and continued safety, identity, purity and efficacy. For example, we have used a lentiviral vector to transduce the gene for the ddCAR and ARC constructs into patient T cells. In the future, we may find that another type of vector or other means of genetically modifying T cells may offer advantages, particularly as we consider inserting our ddCARs and ARC-T cells into other immune cells. Changing how we genetically modify the immune cells would necessitate additional process development, comparability studies, regulatory filings and clinical testing and delay existing product candidates.

In addition, the clinical trial requirements of the FDA and foreign health authorities and the criteria these regulators use to determine whether a product candidate is acceptable for approval, can vary substantially according to the type, complexity, novelty and intended use and market of the potential products. While CAR-T and other cell therapy products have made progress in recent years, only a small number of products have been approved in the United States or other markets, which makes it difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our product candidates.

Our ARC-SparX platform is highly dependent on the success of ACLX-001.

Our ARC-SparX platform, including our AML/MDS program, is highly dependent on the success of ACLX-001, the first product candidate based on our ARC-SparX platform. ACLX-001 is an immunotherapeutic combination composed of ARC-T cells and bi-valent SparX proteins targeting BCMA, or SPRX001, for the treatment of r/r MM. The ARC-T cells and the SparX proteins comprising ACLX-001 are entirely novel and neither has been tested in humans. All SparX proteins are comprised of one or more antigen-specific binding domains fused to a protein that we refer to as the TAG. The TAG is a novel protein sequence derived from the 26kDA C-terminal fragment of human alpha fetoprotein (hAFP) and also has never been tested in humans. The ARC-T cells are designed to have a binding domain that recognizes the TAG, which we refer to as anti-TAG. The anti-TAG has also never been tested in humans. There can be no assurance that the ARC-T cells, the SparX proteins, the TAG, anti-TAG and other parts of ACLX-001 will not trigger an adverse response, cause unintended off-target recognition, limit the expected activity of the product candidates or result in other negative outcomes.

Additionally, because all product candidates in our ARC-SparX platform use the ARC-T cells, a failure with ACLX-001 will increase the actual or perceived likelihood that our other product candidates in the ARC-SparX platform will experience similar failures.

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Our Phase 1 trial of ACLX-001 is intended to serve as clinical validation of our ARC-SparX platform as we seek to understand the pharmacokinetics, safety profile, and dosing strategy for future clinical development. Upon completion of the Phase 1 trial, we will leverage the learnings from this trial to advance our AML/MDS programs utilizing ARC-SparX and consider developing additional SparX for r/r MM for a broader pipeline in this disease area. If we do not successfully complete the Phase 1 trial for ACLX-001 in a timely manner or fail to achieve favorable results from the trial, we may experience significant delays or other issues in advancing our other ARC-SparX product candidates including ACLX-002, and ACLX-003 and our discovery projects, including AML-3 and AML-4.

Clinical development is a lengthy, expensive and uncertain process. Our clinical trials may fail to demonstrate adequate safety and/or efficacy of any of our product candidates, which would prevent or delay regulatory approval and commercialization and potentially impact the development of our other product candidates.

Before obtaining regulatory approvals for the commercial sale of our product candidates, including CART-ddBCMA, we must demonstrate through lengthy, complex and expensive preclinical testing and clinical trials that our product candidates have adequate safety and efficacy profiles, and the manufactured drug product has quality attributes that are appropriate for use in humans. Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during clinical development, and, because our product candidates are in an early stage of development, there is a high risk of failure and we may never succeed in developing marketable products.

The results of preclinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials, particularly because early trials have smaller numbers of subjects tested. In addition, it is not uncommon for product candidates to exhibit unforeseen safety or efficacy issues, such as immunogenicity, when tested in humans despite promising results in preclinical animal models.

Any clinical trials that we may conduct may not demonstrate the safety and efficacy profiles necessary to obtain regulatory approval to market our product candidates. As we continue developing our product candidates, serious adverse events, undesirable side effects, or unexpected characteristics may emerge, causing us to abandon these product candidates or limit their development to more narrow uses or subpopulations in which the risk-benefit ratio is more acceptable.

Treatment with our product candidates may cause side effects or adverse events that are unrelated to our product candidate but may still impact the success of our clinical trials. The inclusion of patients with significant co-morbidities in our clinical trials may result in deaths or other adverse medical events due to an underlying condition or other therapies or medications that such patients may be using. As described above, any of these events could prevent us from obtaining regulatory approval or achieving or maintaining market acceptance and impair our ability to commercialize our product candidates. Because the product candidates in our platforms share similar components, such as the D-Domain, a failure of one of our clinical trials may also increase the actual or perceived likelihood that our other product candidates will experience similar failures.

In some instances, there can be significant variability in safety and efficacy results between different clinical trials of the same product candidate due to a variety of factors, including, but not limited to, changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the clinical trial protocols and the rate of dropout among clinical trial participants. If our ongoing or future clinical trials are inconclusive with respect to the safety and efficacy of our product candidates, or if we encounter safety concerns associated with our product candidates, we may:

•Incur unplanned costs;

•Be delayed in or prevented from obtaining marketing approval for our product candidates;

•Obtain approval for indications or patient populations that are not as broad as intended or desired;

•Obtain approval with labeling that includes significant restrictions on use or distribution or safety warnings including boxed warnings;

•Be subject to changes in the way the product is administered;

•Be required to perform additional clinical trials to support approval or be subject to additional post-marketing requirements;

•Have regulatory authorities withdraw their approval of the product or impose restrictions on its distribution in the form of a modified Risk Evaluation and Mitigation Strategy (REMS);

•Be subject to the addition of labeling statements, such as warnings or contraindications;

•Be sued; and/or

•Experience damage to our reputation.

In addition, even if the trials are successfully completed, clinical data are often susceptible to varying interpretations and analyses, and we cannot guarantee that the FDA or foreign health authorities will interpret the results as we do, and more trials could

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be required before we submit our product candidates for approval. We cannot guarantee that the FDA or foreign health authorities will view any of our product candidates as having adequate safety and efficacy profiles even if favorable results are observed in these clinical trials, and we may receive unexpected or unfavorable feedback from the FDA or foreign health authorities regarding satisfaction of safety, purity and potency (including clinical efficacy), amongst other factors. To the extent that the results of the trials are not satisfactory to the FDA or foreign health authorities for support of a marketing application, approval of our product candidates may be significantly delayed, or we may be required to expend significant additional resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates.

We may encounter substantial delays in our clinical trials.

We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. Events that may prevent successful or timely completion of clinical development include:

•Delays associated with the COVID-19 global pandemic, as further described under Risks Related to Our Business;

•Delays in reaching a consensus with regulatory agencies on trial design;

•Delays in reaching agreement on acceptable terms with prospective CROs, and clinical trial sites and obtaining required institutional review board (IRB), approval at each clinical trial site;

•Delays in recruiting and enrolling suitable patients to participate in our clinical trials;

•Failure to collect sufficiently viable white blood cells from patients, adequately expand or successfully transduce sufficient number of patient T cells for infusion or otherwise manufacture product candidates, or infuse patients in a timely manner with product candidate;

•Failure by our CROs, other third parties or us to adhere the trial protocol or the FDA’s good clinical practices (GCPs) or applicable regulatory guidelines in other countries;

•Third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or foreign health authorities for violations of applicable regulatory requirements;

•Delays in the testing, validation, manufacturing and delivery of our product candidates to the clinical trial sites, including due to a facility manufacturing any of our product candidates or any of their components being ordered by the FDA or foreign health authorities to temporarily or permanently shut down due to violations of current good manufacturing practices (cGMPs) regulations or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process;

•Delays in having patients complete participation in a trial or return for post-treatment follow-up;

•Clinical trial sites or patients dropping out of a trial or experiencing changing health or other conditions that require removing them from the trial;

•Discovering that product candidates have unforeseen safety issues, undesirable side effects or other unexpected characteristics;

•To the extent that we conduct clinical trials in foreign countries, the failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries;

•Receiving untimely or unfavorable feedback from applicable regulatory authorities regarding the trial or requests from regulatory authorities to modify the design of a trial;

•Suspensions or terminations by IRBs or Data Safety Monitoring Boards (DSMBs) or internal clinical holds and/or clinical holds from or by regulatory authorities;

•Lack of adequate funding to continue operations; or

•Changes in regulatory requirements and guidance that require amending or submitting new clinical protocols and/or amendments to INDs.

Any inability to successfully complete our clinical trials could result in additional costs to us or impair our ability to raise capital, generate revenues from product sales and enter into or maintain collaboration arrangements. In addition, if we make material manufacturing changes to our product candidates or change manufacturers, we may need to conduct additional bridging or comparability studies. Clinical trial delays could also shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.

If we encounter delays or difficulties enrolling patients in our clinical trials and/or retention of patients in clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients

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who remain in the trial until completion of treatment and adequate follow-up. The enrollment of patients depends on many factors, including:

•Inability to enroll, or delay in enrollment of, patients due to outbreaks and public health crises, such as the COVID-19 global pandemic, as further described under Risks Related to Our Business;

•The patient eligibility criteria defined in the protocol;

•The perceived risks and benefits of the product candidate being studied;

•The size of the patient population required for analysis of the trial’s primary endpoints;

•The proximity of patients to trial sites;

•The design of the trial;

•Our ability to recruit clinical trial investigators with the appropriate competencies and experience;

•Our ability to obtain and maintain patient consent;

•Reporting of the preliminary results of any of our clinical trials; and

•The risk that patients enrolled in clinical trials will drop out of the trials before completion of treatment and adequate follow-up.

In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. Since the number of qualified clinical investigation sites is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials at such clinical trial sites. Delays in patient enrollment may result in increased costs or may affect the timing or outcome of our ongoing and planned clinical trials, which could prevent completion or commencement of these trials and adversely affect our ability to advance the development of our product candidates.

Further, conducting clinical trials in foreign countries, as we may do for our product candidates, presents additional risks that may delay completion of our clinical trials. These risks include the failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks, acts of war (including Russia’s actions in Ukraine), relevant to such foreign countries.

Interim, preliminary or topline data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publish interim, preliminary or topline data from clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary or topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary or topline data previously published. As a result, interim, preliminary and topline data should be viewed with caution until the final data are available. Adverse differences between interim, preliminary or topline data and final data could significantly harm our reputation and business prospects.

Moreover, preliminary, interim and topline data are subject to the risk that one or more of the clinical outcomes may materially change as more patient data become available when patients mature on study, patient enrollment continues or as other ongoing or future clinical trials with a product candidate further develop. Past results of clinical trials may not be predictive of future results.

In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically more extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure. Any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product candidate or our business. Similarly, even if we are able to complete our planned and ongoing preclinical studies and clinical trials of our product candidates according to our current development timeline, the positive results from such preclinical studies and clinical trials of our product candidates may not be replicated in subsequent preclinical studies or clinical trial results.

Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development and we cannot be certain that we will not face similar setbacks. These setbacks have been caused by, among other things, preclinical and other nonclinical findings made while clinical trials were underway or safety or efficacy observations made in preclinical studies and clinical trials, including previously unreported adverse events. Moreover, preclinical, nonclinical and clinical data are often susceptible to varying interpretations and analyses and many companies

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that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA or other regulatory approval.

Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, require expansion of the trial size, limit their commercial potential, or result in significant negative consequences.

Our product candidates involve genetically modified T cell-based immunotherapies. A number of genetically modified cell therapies, such as CAR-based products, have potentially severe side effects, including CRS and neurotoxicity, that can escalate and require intensive medical intervention and result in injury or death to the patients.

There is no guarantee that our product candidates will not have side effects similar to those seen in other genetically modified cell therapies or that we will be able to prevent side effects from escalating to an unsafe level for our patients. Additionally, our initial product candidates are directed at treating patients with r/r MM. These patients are often elderly and/or have significant co-morbidities, and we expect they will receive our product candidate as a last line of therapy after most others therapies have failed, and these patients may be particularly susceptible to safety and toxicity risks. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff, as toxicities resulting from T cell therapy may be complicated and difficult to manage, which could result in patient death or other significant issues. Additionally, it can be difficult to determine if the serious adverse or unexpected side effects were caused by the product candidate or another factor, especially in oncology subjects who may suffer from other medical conditions and be taking other medications.

We have designed a new binding domain that we believe should have low immunogenicity because we also removed potentially immunogenic sequences from their binding domains, which we refer to as “deimmunization.” However, it has never been tested in humans outside of our current Phase 1 trial and we cannot guarantee that there will not be any unexpected side effects from this binding domain or the SparX proteins that we plan to test as part of our product candidates. Although we have completed multiple preclinical studies designed to screen for toxicity caused by unintended off-target recognition in vivo by our novel binding domains, our product candidates may still cause unintended off-target recognition in patients. Additionally, our genetically modified T-cells, the ddCARs and the ARC-T cells, may still bind targets other than the target antigens or the TAG on our SparX proteins, respectively. If significant unexpected binding or off-target binding occurs in normal tissue, our product candidates may target and kill the normal tissue in a patient, leading to serious and potentially fatal adverse events, undesirable side effects, toxicities or other unexpected characteristics. Detection of any significant unexpected or off-target binding may halt or delay any ongoing clinical trials for our product candidates and prevent or delay regulatory approval. While we have developed a preclinical screening process to identify cross-reactivity of our product candidates, we cannot be certain that this process will identify all potential off-target tissue that our product candidates may interact with. Any unexpected or off-target binding that impacts patient safety could materially impact our ability to advance our product candidates into clinical trials and ability to proceed to marketing approval and commercialization.

If serious adverse events or undesirable side effects arise, we could be required to suspend, delay, or halt our clinical trials and regulatory authorities could deny approval or require us to limit development of that product candidate to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Undesirable side effects could also result in an expansion in the size of our clinical trials, increasing the expected costs and timeline of our clinical trials. Side effects that are observed during the trial, whether treatment related or not, could also affect patient recruitment for future trials or the ability of enrolled patients to complete the trial or result in potential product liability claims.

Further, if serious adverse events or undesirable side effects are identified during development or after approval and are determined to be attributed to any of our product candidates, we may be required to develop REMS to ensure that the benefits of treatment with such product candidate outweigh the risks for each potential patient, which may include, among other things, a communication plan to health care practitioners, patient education, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive and more costly than what is typical for the industry.

Any of these occurrences may harm our business, financial condition and prospects significantly.

Development of product candidates in combination with other therapies could expose us to additional risks.

Development of any of our product candidates in combination with one or more other therapies that have either been approved or not yet been approved for marketing by the FDA or comparable foreign regulatory authorities could expose us to additional risks, as combination therapies may increase the rate of serious or unexpected adverse events, which could result in a clinical hold as well as pre-approval and post-approval restrictions by the FDA or other regulatory authorities on the proposed combination therapy, including narrowing of the indication, warnings, additional safety data collection and monitoring procedures, and REMS, even if the cause of such serious or unexpected adverse events is not directly attributed to our product candidate. Any of these events or restrictions could

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have a material adverse effect on our business, development of our product candidates, delay our regulatory approval, and decrease the market acceptance and profitability of our product candidate if approved for a combination therapy.

We will not be able to market and sell any product candidate in combination with any unapproved therapies that do not ultimately obtain marketing approval. If the FDA or other comparable foreign regulatory authorities do not approve or revoke their approval of other therapies used in combination therapies, or if safety, efficacy, commercial adoption, manufacturing or supply issues arise with such therapies we choose to evaluate in combination with any of our product candidates, we may be unable to obtain approval of or successfully market any one or all of the product candidates we develop.

Even if any of our product candidates were to receive marketing approval or be commercialized for use in combination with other existing approved therapies, we would continue to be subject to the risks that the FDA or other comparable foreign regulatory authorities could revoke approval of the other therapy used in combination with any of our product candidates, or safety, efficacy, manufacturing or supply issues could arise with these existing therapies. In addition, it is possible that existing therapies with which our product candidates are approved for use could themselves fall out of favor or be relegated to later lines of treatment. This could result in the need to identify other combination therapies for our product candidates or our own products being removed from the market or being less successful commercially. Additionally, if the third-party providers of therapies or therapies in development used in combination with our product candidates are unable to produce sufficient quantities for clinical trials or for commercialization of our product candidates, or if the cost of combination therapies is prohibitive, our development and commercialization efforts would be impaired, which would have an adverse effect on our business, financial condition, results of operations and growth prospects.

Manufacturing genetically engineered products is complex and subject to both human and systemic risks. We or our third-party manufacturers may encounter difficulties in production and sourcing and may be subject to variations and supply constraints of key components. If we or any of our third-party manufacturers encounter such difficulties, our ability to provide supply of our product candidates for clinical trials or our products for patients, if approved, could be delayed or prevented.

The manufacture of biological drug products, such as ddCARs and ARC-SparX, the components thereof, and the viral vectors used to manufacture these product candidates and components, is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers of biologic products often encounter difficulties in production and sourcing, particularly in scaling up or out, validating the production process and assuring high reliability of the manufacturing processes (including the absence of contamination), in light of variations and supply constraints of key components. These problems include logistics and shipping, difficulties with production costs and yields, quality control, including consistency, stability, purity and efficacy of the product, product testing, operator error and availability of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations. Furthermore, if contaminants are discovered in our supply of our product candidates or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. We cannot assure you that any stability, purity, and efficacy failures, deficiencies, or other issues relating to the manufacture of our product candidates will not occur in the future.

Additionally, our product candidates are derived from cells collected from our patients and such cells may vary in type and quality as the patients may vary in age, stage of disease, and history of treatment among many other factors. We have strict specifications for the patient cell material and the product candidates we manufacture, including certain specifications that are reviewed and approved by regulatory authorities. The patient cell material variability may exceed our manufacturing process capability or deviate from the specified ranges, and result in failure in production of the patient therapy, lower quality batches, or even require adjustments to the specifications approved by authorities. The patient cell material may also be variable in factors that we currently may not be detecting with the analytical methods used or may not know how to measure and we may discover failures with the material after production. We may not be able to deliver the quality and consistency of our cell therapy products that we need or may need to re-collect cell material which can increase costs and/or cause delay, adversely impact patient outcomes and otherwise harm our clinical trials, reputation, business and prospects.

We may fail to manage the logistics of collecting and shipping patient material to the manufacturing site and shipping the product candidate back to the relevant parties and experience delays or shortages of certain clinical or commercial grade supplies and components. Logistical and shipment delays and problems caused by us, our vendors or other factors not in our control, including the pandemic, geopolitical tensions related to Russia’s actions in Ukraine, the resulting sanctions imposed by the U.S. and other countries, and retaliatory actions taken by Russia in response to such sanctions, business interruptions, global supply chain issues, and weather, could prevent or delay the delivery of product candidates to patients. Additionally, we have to maintain a complex chain of identity and chain of custody with respect to patient material as it moves to the manufacturing facility, through the manufacturing processes and back to the patient. Failure to maintain chain of identity and chain of custody could result in patient death, loss of product or regulatory action.

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Material modifications in the methods of product candidate manufacturing may result in additional costs or delay.

As product candidates progress from preclinical studies to late-stage clinical trials to marketing approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, materials and processes, are altered along the way in an effort to optimize yield, manufacturing batch size, minimize costs and achieve consistent purity, identity, potency, quality and results. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes could cause our product candidates to perform differently and could affect planned or other clinical trials conducted with product candidates produced using the modified manufacturing methods, materials, and processes. This could delay completion of clinical trials and could require non-clinical or clinical bridging and comparability studies, which could increase costs, delay approval of our product candidates and jeopardize our ability to commercialize our product candidates, if approved.

If we or our third-party manufacturers use hazardous and biological materials in a manner that causes injury or violates applicable law, we may be liable for damages.

Our research and development activities involve the controlled use of potentially hazardous substances, including chemical and biological materials, by our third-party manufacturers. We currently outsource all manufacturing to third parties, but we and our manufacturers are subject to federal, state and local laws and regulations in the United States governing the use, manufacture, storage, handling and disposal of medical and hazardous materials. Although we believe that our manufacturers’ procedures for using, handling, storing and disposing of these materials comply with legally prescribed standards, we cannot completely eliminate the risk of contamination or injury resulting from medical or hazardous materials. As a result of any such contamination or injury, we may incur liability or local, city, state or federal authorities may curtail the use of these materials and interrupt our business operations. In the event of an accident, we could be held liable for damages or penalized with fines, and the liability could exceed our resources. We do not currently have any insurance for liabilities arising from medical or hazardous materials. Compliance with applicable environmental laws and regulations is expensive, and current or future environmental regulations may impair our research, development and production efforts, which could harm our business, prospects, financial condition or results of operations.

The process for treating cancer patients using T cell therapy is subject to human and systemic risks.

The “vein-to-vein” cycle for treating cancer patients using T cell therapy typically takes approximately four to six weeks and involves a large number of steps and human participants. First, the patient’s lymphocytes are isolated by apheresis at the clinical site and shipped to the manufacturing site. Under cGMP conditions at the manufacturing site, the patient’s lymphocytes are washed, and then enriched for CD3-positive T cells using specialized reagents. After overnight culture and T cell activation, the T cells are transduced using lentiviral vector transduction technology to introduce the CAR and ARC genetic construct into the enriched T cell population. At the completion of T cell transduction, the T cells are expanded for several days, harvested, formulated into the final drug product and then cryopreserved for delivery to patients. In the United States, samples of the final product are subjected to several release tests which must fulfill specified criteria for the drug product to be released for infusion. These include sterility, identity, purity, potency and other tests. We are subject to stringent regulatory and quality standards in the course of a T cell therapy treatment process, and we cannot assure you that our quality control and assurance efforts will be successful or that the risk of human or systemic errors in these processes can be eliminated.

Prior treatments can alter the cancer and negatively impact chances for achieving clinical activity with our product candidates.

Patients with hematological cancers typically receive highly toxic chemotherapy as their initial treatments that can impact the viability of the T cells collected from the patient and may contribute to highly variable responses to CAR-T cell therapies. Patients could also have received prior therapies that target the same target antigen on the cancer cells as our intended product candidate and thereby these patients may have cancer cells with low or no expression of the target antigen. As a result, our product candidates may not recognize the cancer cell and may fail to achieve clinical activity.

We may not be able to file additional INDs to commence additional clinical trials on the timelines we expect, and even if we are able to, the FDA may not permit us to proceed.

We expect to submit additional INDs for our current and future product candidates. However, our timing for submitting these INDs is dependent on the results of further research. Additionally, we cannot be sure that submission of an IND will result in the FDA allowing further clinical trials to begin, or that, once clinical trials have begun, issues will not arise that suspend or terminate such clinical trials. Additionally, even if the FDA agrees with the design and implementation of the clinical trials set forth in an IND, we cannot guarantee that the FDA will not change its requirements in the future. These risks also apply to other clinical trials we may seek to commence under other INDs or amendments to existing INDs.

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The market opportunities for certain of our product candidates may be limited to those patients who are ineligible for or have failed prior treatments and may be small, and our projections regarding the size of the addressable market may be incorrect.

We are initially developing CART-ddBCMA as a last line therapy for patients with r/r MM with plans to pursue label expansion into earlier lines of therapy. However, there is no guarantee that it, or any of our product candidates, even if approved, would be approved for earlier lines of therapy and any approved products may end up having a smaller market opportunity than we anticipated. Additionally, our projections of both the number of people who have the cancers we are targeting, as well as the size of the subset patient population who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations, or market research and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these cancers. Additionally, the potentially addressable patient population for our product candidates may be limited or may not be amenable to treatment with our product candidates. As a result, the number of patients may turn out to be fewer than expected.

We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and operational resources, we must prioritize our research programs and will need to focus our discovery and development on select product candidates and indications. Correctly prioritizing our research and development activities is particularly important for us due to the breadth of potential product candidates and indications that we intend to utilize with our clinical development strategy. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. As an example, although we believe that targeting BCMA initially before targeting other antigens will help us validate our platforms more easily, the risks associated with MM patients and the competition in cell therapies targeting BCMA, among others, could outweigh the benefits. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may also relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.

The biopharmaceutical industry is characterized by intense competition and rapid innovation. Our competitors may be able to develop other products or drugs that are able to achieve similar or better results or make it difficult for us to develop our product candidates on a timely basis by limiting our access to patients, clinical trial sites, manufacturers and other resources. Our competitors include large and specialty pharmaceutical companies and biotechnology companies, academic research institutions and governmental agencies, and public and private research institutions. We believe the key competitive factors that will affect the development and commercial success of our product candidates are safety, efficacy, ensuring consistent quality and purity of the product candidates, delivery, price and the availability of reimbursement from government and other third-party payors.

We anticipate substantial direct competition from other organizations developing advanced CAR-T or other types of genetically modified cell therapies due to their promising clinical therapeutic effect in clinical trials, including 2seventy, Abbvie, Allogene, Amgen, Autolus, Bristol-Myers Squibb, Caribou Biosciences, CARsgen, Cartesian, Cellectis, Cellular Biomedicine Group, Celyad, Crispr, Gracell, GSK, Innovent, Johnson & Johnson, Legend, Novartis, Pfizer, Poseida Therapeutics, Precision BioSciences, Pregene, and Regeneron. In addition, we expect to also compete with companies developing:

•T cells with CARs that are reactive to tumor associated antigens;

•T cells with T-cell receptors (TCRs) that are reactive to tumor associated antigens;

•T-cells with adapter platforms;

•Bispecifics that bring T cells and diseased cells into close proximity with each other;

•Other immune cells that can be targeted using antibodies;

•Natural killer (NK)-based cell therapies;

•In vivo CAR-T therapeutics; and

•Allogeneic cell therapies.

Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff, greater access to clinical sites and patients, experienced regulatory, marketing and manufacturing teams and well-established sales forces. In addition, many of these competitors are active in seeking patent protection and licensing arrangements in anticipation of collecting royalties for use of technology that they have developed. Smaller or early-stage companies may also prove to

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be significant competitors, particularly through collaborative arrangements with large, established companies. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring or licensing on an exclusive basis drug or biologic products that are more effective, safer, more easily commercialized or less costly than our product candidates or may develop proprietary technologies or secure patent protection that we may need for the development of our technologies and products.

Even if we obtain regulatory approval of our product candidates, the availability and price of our competitors’ products could limit the demand and the price we are able to charge for our product candidates. We may not be able to implement our business plan if the acceptance of our product candidates is inhibited by price competition or the reluctance of physicians to switch from existing methods of treatment to our product candidates, or if physicians switch to other new drug or biologic products or choose to reserve our product candidates for use in limited circumstances.

Risks Related to Our Business

Our business is affected by the ongoing COVID-19 pandemic and may be significantly adversely affected as the pandemic continues or if other events out of our control disrupt our business or that of our third party providers.

While the extent of the impact of the COVID-19 pandemic on our business and financial results is uncertain, a continued and prolonged public health crisis such as the COVID-19 pandemic could have a material negative impact on our business, financial condition and operating results. We have experienced and may in the future experience disruptions from COVID-19 to our business in a number of ways, including:

•Delays in supply chain and manufacturing, including the closure of apheresis collection centers, suspension of cell transport, limitations on transfer of technology, shutdown of manufacturing facilities and delays in delivery of supplies and reagents;

•Delays in discovery and preclinical efforts;

•Changes to procedures or shut down, or reduction in capacity, of clinical trial sites due to limited availability of clinical trial staff, reduced number of inpatient intensive care unit beds for patients receiving cell therapies, diversion of healthcare resources away from clinical trials and other business considerations;

•Limited patient access, enrollment and participation due to travel restrictions and safety concerns, as well as housing and travel difficulties for out of town patients and relatives; and

•Changes in regulatory and other requirements for conducting preclinical studies and clinical trials during the pandemic.

We may be required to develop and implement additional clinical trial policies and procedures designed to help protect subjects from the COVID-19 virus. For example, in March 2020, the FDA issued a guidance on conducting clinical trials during the pandemic, which was updated in July 2020, January 2021 and August 2021. The guidance describes a number of considerations for sponsors of clinical trials impacted by the pandemic, including the requirement to include in the clinical trial report (or as a separate document) contingency measures implemented to manage the trial and any disruption of the trial as a result of the COVID-19 pandemic; a list of all subjects affected by the COVID-19 pandemic-related trial disruptions by unique subject identifier and by investigational site and a description of how the individual’s participation was altered; and analyses and corresponding discussions that address the impact of implemented contingency measures (e.g., participant discontinuation from investigational product and/or trial, alternative procedures used to collect critical safety and/or efficacy data) on the safety and efficacy results reported for the trial. In its most recent update to this guidance, the FDA addressed questions received from clinical practitioners who are adapting their operations in a pandemic environment. These questions focused on, among other things, when to suspend, continue or initiate a trial and how to submit changes to protocols for INDs and handle remote site monitoring visits. There is no assurance that this guidance governing clinical trials during the pandemic will remain in effect or, even if it does, that it will help address the risks and challenges enumerated above.

Other potential impacts of the COVID-19 pandemic on our ongoing clinical trial include patient dosing and trial monitoring, which may be paused or delayed due to changes in policies at various clinical sites, federal, state, local or foreign laws, rules and regulations, including quarantines or other travel restrictions, prioritization of healthcare resources toward pandemic efforts, including diminished attention of physicians serving as our clinical trial investigators and reduced availability of site staff supporting the conduct of our clinical trial, interruption or delays in the operations of the FDA, or other reasons related to the COVID-19 pandemic.

If the COVID-19 pandemic continues, other aspects of our ongoing clinical trial and future planned clinical trials may be adversely affected, delayed or interrupted, including, for example, site initiation, patient recruitment and enrollment, availability of clinical trial materials, clinical trial site data monitoring and efficacy, safety and translational data collection, and data analysis. Some patients and clinical investigators may not be able to comply with clinical trial protocols and patients may choose to withdraw from

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our trials or we may have to pause enrollment or we may choose to or be required to pause enrollment and/or patient dosing in our ongoing or planned clinical trials in order to preserve health resources and protect trial participants. It is unknown how long these pauses or disruptions could continue. Patients may need to withdraw due to COVID-19 infections or experience increased adverse events and deaths in our clinical trials due to COVID-19 related infections, which may result in increased complications due to immune suppression from our lymphodepletion regimen.

In addition, we currently rely on third parties to, among other things, manufacture raw materials, manufacture our product candidates for our ongoing clinical trial, ship investigation drugs and clinical trial samples, perform quality testing and supply other goods and services to run our business. If any such third party in our supply chain for materials is adversely impacted by effects from the COVID-19 pandemic, including staffing shortages, production slowdowns and disruptions in delivery systems, our supply chain may be disrupted and our costs could be increased, limiting our ability to manufacture our product candidates for our ongoing clinical trial and planned future clinical trials and conduct our research and development operations as planned.

We previously closed our offices and requested that most of our personnel, including all of our administrative employees, work remotely, restricted on-site staff to only those personnel and contractors who must perform essential activities that must be completed on-site and limited the number of staff in any given research and development laboratory. Our increased reliance on personnel working from home may negatively impact productivity, or disrupt, delay, or otherwise adversely impact our business. In addition, this could increase our cyber security risk, create data accessibility concerns, and make us more susceptible to communication disruptions, any of which could adversely impact our business operations or delay necessary interactions with local and federal regulators, ethics committees, manufacturing sites, research or clinical trial sites and other important agencies and contractors. Further, we and our third-party service providers, including our CROs, the clinical trial sites, our manufacturers and suppliers, may experience staffing shortages.

Our employees and contractors conducting research and development activities may not be able to access our laboratory for an extended period of time as a result of the closure of our offices and the possibility that governmental authorities further modify current restrictions. In addition, when our facilities are open, we could encounter delays in connection with implementing precautionary measures to mitigate the risk of exposing our facilities and employees to COVID-19 or otherwise in connection with addressing an actual or potential exposure to COVID-19 (for example, temporarily closing all or a portion of a facility or disinfecting all or a portion of a facility that may have been exposed to COVID-19). As a result, this could delay timely completion of preclinical activities, including completing IND/Clinical Trial Application (CTA)-enabling studies or our ability to select future development candidates, and initiation of additional clinical trials for our other development programs.

Health regulatory agencies globally may experience disruptions in their operations as a result of the COVID-19 pandemic. The FDA or foreign health authorities may have slower response times or be under-resourced to continue to monitor our ongoing clinical trial and, as a result, review, inspection, and other timelines may be materially delayed. It is unknown how long these disruptions could continue, were they to occur. Any elongation or de-prioritization of our clinical trial or delay in regulatory review resulting from such disruptions could materially affect the development of our product candidates.

The trading prices for shares of other biopharmaceutical companies have been highly volatile as a result of the COVID-19 pandemic and the trading prices for shares of our common stock could also experience high volatility. As a result, we may face difficulties raising capital through sales of our common stock or such sales may be on unfavorable terms. In addition, a recession, depression or other sustained adverse market event resulting from the spread of the COVID-19 could materially and adversely affect our business and the value of our common stock.

The COVID-19 pandemic continues to evolve. The ultimate impact of the COVID-19 pandemic on our business operations is highly uncertain and subject to change and will depend on future developments, which cannot be accurately predicted, including the duration of the pandemic, additional or modified government actions, and the actions taken to contain COVID-19 or address its impact, among others. We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, our research programs, healthcare systems or the global economy. We will continue to monitor the situation closely.

In addition, our business could be significantly adversely affected by other business disruptions to us or our third-party providers that could seriously harm our potential future revenue and financial condition and increase our costs and expenses. Our operations, and those of our CROs, CMOs, and other contractors, consultants, and third parties could be subject to other global pandemics, other geopolitical uncertainty and instability (including Russia’s actions in Ukraine), earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. We rely on third-party manufacturers to produce and process our product candidates. Our ability to obtain clinical supplies of our product candidates could be disrupted if the operations of these suppliers are affected by a man-made or natural disaster or other business interruption.

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Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.

As widely reported, global credit and financial markets have experienced volatility and disruptions recently including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability, and increased inflationary risk. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including Russia’s actions in Ukraine, terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts, including the one in Ukraine, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, or do not improve, it may make any necessary equity or debt financing more difficult, more costly, and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development plans. In addition, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive these difficult economic times, which could directly affect our ability to attain our operating goals on schedule and on budget.

As of March 31, 2022, we had cash, cash equivalents and marketable securities of $210.9 million. While we are not aware of any downgrades, material losses, or other significant deterioration in the fair value of our cash equivalents and marketable securities since March 31, 2022, no assurance can be given that further deterioration of the global credit and financial markets would not negatively impact our current portfolio of cash equivalents and marketable securities or our ability to meet our financing objectives. Furthermore, our stock price may decline due in part to the volatility of the stock market and the general economic downturn.

We are highly dependent on our key personnel, and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract and retain highly qualified managerial, scientific and medical personnel. We are highly dependent on our management, scientific and medical personnel. The loss of the services of any of our executive officers, other key employees and other scientific and medical advisors, and an inability to find suitable replacements could result in delays in product development and harm our business.

To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided stock options that vest over time. The value to employees of stock options that vest over time may be significantly affected by movements in our stock price that are beyond our control, and may at any time be insufficient to counteract more lucrative offers from other companies. Despite our efforts to retain valuable employees, members of our management, scientific and development teams may terminate their employment with us on short notice. Although we have employment agreements with our key employees, these employment agreements provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice. Our success also depends on our ability to continue to attract, retain and motivate highly skilled junior, mid-level and senior managers as well as junior, mid-level and senior scientific and medical personnel.

We expect to grow the size of our organization, and we may experience difficulties in managing this growth.

As of December 31, 2021, we had 78 employees. As our development and commercialization plans and strategies develop, and as we continue our transition into operating as a public company, we expect to need additional research, development, clinical, quality assurance, statistical analysis, managerial, operational, sales, marketing, financial and other personnel, as well as additional facilities to expand our operations, including for in-house manufacturing capabilities. Future growth would impose significant added responsibilities on members of management, including:

•Identifying, recruiting, integrating, maintaining and motivating additional employees;

•Managing our internal development efforts effectively, including the clinical and FDA review process for our product candidates, while complying with our contractual obligations to contractors and other third parties; and

•Improving our operational, financial and management controls, reporting systems and procedures.

Our future financial performance and our ability to commercialize our product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.

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We currently rely and for the foreseeable future will continue to rely on certain independent organizations, advisors and/or consultants to provide certain services, including regulatory advice, clinical trial support and drug product manufacturing. There can be no assurance that the services of independent organizations, advisors and consultants will continue to be available to us on a timely basis when needed and at a reasonable cost, or that we can find qualified replacements. In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval of our product candidates or otherwise advance our business. There can be no assurance that we will be able to manage our existing consultants or find other competent contractors and consultants on economically reasonable terms, or at all.

We do intend to transition some regulatory, clinical trial execution, and manufacturing capabilities in-house, but in order to do so, will need to identify, recruit and build experienced teams.

If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, or we are not able to effectively build out new facilities to accommodate this expansion, we may not be able to successfully implement the tasks necessary to further develop and commercialize our product candidates and, accordingly, may not achieve our research, development and commercialization goals.

Our internal computer systems, or those used by our third-party CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of the development programs of our product candidates.

Despite the implementation of security measures, our internal computer systems and those of our current and future CROs and other contractors and consultants are vulnerable to damage, breakdown, or interruption from computer viruses, phishing, social engineering, fraudulent inducement, electronic fraud, wire fraud, human error or malfeasance, unauthorized access, natural disasters, and telecommunication and electrical failures. For example, our employees have received and likely will continue to receive phishing or “spoofed” emails to induce them to make payments to fraudulent accounts. While we have not experienced any such material system failure or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Likewise, we currently rely on third parties to manufacture our product candidates and to conduct clinical trials, and similar events relating to their computer systems could also have a material adverse effect on our business. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the development and commercialization of our product candidates could be delayed.

Our employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

Our business operations and current and future relationships with investigators, health care professionals, consultants, third-party payors and customers will be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws and regulations. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties. We are exposed to the risk of employee fraud or other illegal activity by our employees, independent contractors, consultants, commercial partners, vendors and agents acting on behalf of us or our affiliates. Misconduct by these parties could include intentional, reckless and/or negligent conduct that fails to: comply with the regulations of the FDA or foreign health authorities; provide true, complete and accurate information to the FDA or foreign health authorities; comply with manufacturing standards we have established; comply with healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws; or report financial information or data accurately or to disclose unauthorized activities to us.

We will face increasing regulation as we advance our product candidates through clinical trials and pursue commercialization, if approved.

If we obtain FDA approval of any of our product candidates and begin commercializing those products in the United States, our potential exposure under such laws and regulations will increase significantly, and our costs associated with compliance with such laws and regulations are also likely to increase. These laws may impact, among other things, our current activities with principal investigators and research patients, as well as proposed and future sales, marketing and education programs. In particular, the promotion, sales and marketing of healthcare items and services, as well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the

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improper use of information obtained in the course of patient recruitment for clinical trials. The laws that may affect our ability to operate include, but are not limited to the following:

•The federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs.

•The federal civil and criminal false claims laws, including the civil False Claims Act (FCA), that can be enforced by private citizens through civil whistleblower or qui tam actions, prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government. No specific intent to defraud is required under the civil FCA. The criminal FCA provides for criminal penalties for submitting false claims, including imprisonment and criminal fines.

•The Civil Monetary Penalty Act of 1981 and implementing regulations, which impose penalties against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to a federal healthcare program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent, or offered or transferred remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier.

•The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.

•HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization.

•The federal Physician Payment Sunshine Act, created under the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010, collectively, the Affordable Care Act (ACA), and its implementing regulations, which require applicable manufacturers of covered drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare & Medicaid Services (CMS) of the U.S. Department of Health and Human Services (HHS) information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), non-physician healthcare professionals (such as physician assistants and nurse practitioners, among others) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

•Additional requirements and regulations applicable to the distribution of pharmaceutical products, including extensive record-keeping, licensing, price reporting, storage and security requirements intended to prevent the unauthorized sale of pharmaceutical products. Pricing and rebate programs must also comply with the Medicaid rebate requirements of the U.S. Omnibus Budget Reconciliation Act of 1990 and more recent requirements in the ACA. If products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply. Manufacturing, sales, promotion and other activities also are potentially subject to federal and state consumer protection and unfair competition laws.

•Federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers.

Additionally, we are subject to state and foreign equivalents of each of the healthcare laws described above, among others, some of which may be broader in scope and may apply regardless of the payor.

Our board of directors has adopted a code of business conduct and ethics, but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent inappropriate conduct may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.

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Efforts to ensure that our business arrangements will comply with applicable healthcare laws may involve substantial costs. It is possible that governmental and enforcement authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations. In addition, the approval and commercialization of any of our product candidates outside the United States will also likely subject us to foreign equivalents of the healthcare laws mentioned above, among other foreign laws.

We may not realize the benefits of any acquisitions, in-licenses or strategic alliances that we enter into.

In the future, we may seek and form strategic alliances, create joint ventures or collaborations, or enter into acquisitions or additional licensing arrangements with third parties that we believe will complement or augment our existing technologies and product candidates, including artificial intelligence, machine learning and other technology-based platforms that may supplement our discovery efforts.

These transactions can entail numerous operational and financial risks, including exposure to unknown liabilities, disruption of our business and diversion of our management’s time and attention in order to manage a collaboration or develop acquired products, product candidates or technologies, incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs, higher than expected collaboration, acquisition or integration costs, write-downs of assets or goodwill or impairment charges, increased amortization expenses, difficulty and cost in facilitating the collaboration or combining the operations and personnel of any acquired business, impairment of relationships with key suppliers, manufacturers or customers of any acquired business due to changes in management and ownership and the inability to retain key employees of any acquired business. As a result, if we enter into acquisition or in-license agreements or strategic partnerships, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture, which could delay our timelines or otherwise adversely affect our business. We also cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction or such other benefits that led us to enter into the arrangement.

We may become exposed to costly and damaging product liability claims, either when testing our product candidates in the clinic or at the commercial stage, and our product liability insurance may not cover all damages from such claims.

We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if our product candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

•Decreased demand for our product candidates or products that we may develop;

•Impairment of our business reputation;

•Withdrawal of clinical trial participants;

•Initiation of investigations by regulators;

•Costs to defend the related litigation;

•A diversion of management’s time and our resources;

•Substantial monetary awards to trial participants or patients;

•Product recalls, withdrawals or labeling, marketing or promotional restrictions;

•Loss of revenue;

•Exhaustion of any available insurance and our capital resources;

•The inability to commercialize any product candidate; and

•A decline in our share price.

Failure to obtain or retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop, alone or with corporate collaborators. We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our

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insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise.

Patients with cancer and other diseases targeted by our product candidates are often already in severe and advanced stages of disease and have both known and unknown significant pre-existing and potentially life-threatening health risks. During the course of treatment, patients may suffer adverse events, including death, for reasons that may be related to our product candidates. Such events could subject us to costly litigation, require us to pay substantial amounts of money to injured patients, delay, negatively impact or end our opportunity to receive or maintain regulatory approval to market our product candidates, or require us to suspend or abandon our commercialization efforts. Even in a circumstance in which we do not believe that an adverse event is related to our product candidates, the investigation into the circumstance may be time-consuming or inconclusive. These investigations may interrupt our sales efforts, delay our regulatory approval process in other countries, or impact and limit the type of regulatory approvals our product candidates receive or maintain. As a result of these factors, a product liability claim, even if successfully defended, could have a material adverse effect on our business, financial condition or results of operations.

Although we maintain product liability insurance coverage, such insurance may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage each time we commence a clinical trial and if we successfully commercialize any product candidate. As the expense of insurance coverage is increasing, we may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. If a successful product liability claim or series of claims is brought against us for uninsured liabilities or in excess of insured liabilities, our assets may not be sufficient to cover such claims and our business operations could be impaired.

Changes in tax laws or in their implementation or interpretation may adversely affect our business and financial condition.

Recent changes in tax law may adversely affect our business or financial condition. For example, in 2021, there were numerous changes proposed to U.S. federal income tax law, including an increase to the U.S. corporate tax rate, international business operations reform and the imposition of a global minimum tax. Many countries, including the United States, and organizations such as the Organization for Economic Cooperation and Development are also actively considering changes to existing tax laws or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate our business. Any of these developments or changes in federal, state, or international tax laws or tax rulings could adversely affect our effective tax rate and our operating results. We urge prospective investors in our common stock to consult with their legal and tax advisors with respect to any recently enacted tax legislation, or proposed changes in law, and the potential tax consequences of investing in or holding our common stock.

Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change” (generally defined as a greater than 50% change (by value) by 5-percent shareholders in its equity ownership over a three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change taxable income may be limited. As a result of our most recent private placements, our initial public offering, and other transactions that have occurred over the past three years, we may have experienced such an “ownership change.” We may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership. As of December 31, 2021, we had U.S. federal and state net operating loss carryforwards of $117.6 million and $116.5 million, respectively, and U.S. federal research and development tax credit carryforwards of $3.2 million, which could be limited if we experience an “ownership change.” We also have net operating loss carryforwards and credits for state tax purposes, which may be impaired or otherwise subject to limitation. In addition, we will be unable to use our net operating loss carryforwards and credits if we do not attain profitability sufficient to offset our available net operating loss carryforwards and credits prior to their expiration.

Risks Related to Reliance on Third Parties

We rely and will rely on third parties to conduct our clinical trials. If these third parties do not properly and successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of or commercialize our product candidates.

We do not have the ability to conduct all aspects of our preclinical testing or clinical trials ourselves. We depend and will depend upon independent investigators and collaborators, such as medical institutions, CROs, CMOs and strategic partners to conduct our preclinical studies and clinical trials under agreements with us. We expect to negotiate budgets and contracts with CROs, trial sites and CMOs, which may result in delays to our development timelines and increased costs. We will rely heavily on these third parties over the course of our clinical trials, and we control only certain aspects of their activities. As a result, we have less direct control over the conduct, timing and completion of these clinical trials and the management of data developed through clinical trials than would be

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the case if we were relying entirely upon our own staff. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with applicable protocol, legal and regulatory requirements and scientific standards, and our reliance on third parties does not relieve us of our regulatory responsibilities. We and these third parties are required to comply with GCPs, which are regulations and guidelines enforced by the FDA or foreign health authorities for product candidates in clinical development. Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of these third parties fail to comply with applicable GCP regulations, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or foreign health authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that, upon inspection, such regulatory authorities will determine that any of our clinical trials comply with the GCP regulations. In addition, our clinical trials must be conducted with biologic product produced under cGMP regulations and may require a significant number of test patients. Our failure or any failure by these third parties to comply with these regulations or to recruit a sufficient number of patients may require us to repeat clinical trials, which would delay the regulatory approval process. Moreover, our business may be implicated if any of these third parties violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.

Any third parties conducting our clinical trials are not and will not be our employees and, except for remedies available to us pursuant to our agreements with such third parties, we cannot control whether or not they devote sufficient time and resources to our ongoing product candidates. These third parties may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other development activities, which could affect their performance on our behalf. If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain regulatory approval of or successfully commercialize our product candidates. As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed.

If any of our relationships with these third parties terminate, we may not be able to enter into arrangements with alternative providers or do so on commercially reasonable terms. Switching or adding third parties to conduct our clinical trials involves substantial cost and requires extensive management time and focus. In addition, there is a natural transition period when a new third party commences work. As a result, delays may occur, which can materially impact our ability to meet our desired clinical development timelines.

We rely and expect to continue to rely on third parties to manufacture our clinical product supplies, and we may rely on third parties for at least a portion of the manufacturing process of our product candidates, if approved. Our business could be harmed if those third parties fail to provide us with sufficient quantities of product supplies or product candidates or fail to do so at acceptable quality levels or prices.

We do not currently own any facility that may be used as a clinical-scale manufacturing and processing facility, and we rely on outside vendors to manufacture supplies and process our product candidates. For certain of our components or product candidates, we rely on single suppliers or manufacturers to supply or manufacture, but we plan to expand the number of suppliers and manufacturers as we advance our product candidates through clinical development. Our product candidates are not yet manufactured or processed on a commercial scale and we may remain unable to do so for any of our product candidates.

Although in the future we may develop our own manufacturing facilities, we may also continue to use third parties as part of our manufacturing processes and may, in any event, never be successful in developing our own manufacturing facilities. Our anticipated reliance on third-party manufacturers exposes us to the following risks:

•We may be unable to identify manufacturers on acceptable terms or at all because the number of potential manufacturers is limited and the FDA must inspect any manufacturers for current cGMP.

•Non-compliance of our third-party manufacturers with requirements of our marketing application(s). In addition, a new manufacturer would have to be educated in, or develop substantially equivalent processes for, the production of our product candidates.

•Third-party manufacturers may have little or no experience with our product candidates, and therefore may require a significant amount of support from us in order to implement and maintain the infrastructure and processes required to manufacture our product candidates.

•Third-party manufacturers might be unable to timely manufacture our product candidates or produce the quantity and quality required to meet our clinical and commercial needs, if any.

•Third-party manufacturers may not be able to execute our manufacturing procedures and other logistical support requirements appropriately.

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•Third-party manufacturers may not perform as agreed, may not devote sufficient resources to our product candidates or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store, and distribute our products, if any.

•Manufacturers are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards. We do not have control over third-party manufacturers’ compliance with these regulations and standards.

•We may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing processes for our product candidates.

•Our third-party manufacturers could breach or terminate their agreements with us, and we may be required to pay fees upon suspension or termination of the agreement even if the manufacturers do not deliver adequate supply of the product candidates or their components.

•Raw materials and components used in the manufacturing processes, particularly those for which we have no other source or supplier, may not be available or may not be suitable or acceptable for use due to

•Our third-party manufacturers may have unacceptable or inconsistent product quality success rates and yields, and we have no direct control over their ability to maintain adequate quality control, quality assurance and qualified personnel.

Each of these risks could delay or prevent the completion of our clinical trials or the approval of any of our product candidates by the FDA, result in higher costs or adversely impact commercialization of our product candidates. In addition, we will rely on third parties to perform certain specification tests on our product candidates prior to delivery to patients. If these tests are not appropriately done and test data are not reliable, patients could be put at risk of serious harm and the FDA could place significant restrictions on our company until deficiencies are remedied. Furthermore, our or a third party’s failure to execute on our manufacturing requirements, to do so on commercially reasonable terms or to comply with cGMP could adversely affect our business in a number of ways, including:

•An inability to initiate or continue clinical trials of our product candidates under development;

•Delay in submitting regulatory applications, or receiving marketing approvals, for our product candidates;

•Loss of the cooperation of future collaborators;

•Subjecting third-party manufacturing facilities or our manufacturing facilities to additional inspections by regulatory authorities;

•Requirements to cease development or to recall batches of our product candidates; and

•In the event of approval to market and commercialize our product candidates, an inability to meet commercial demands for our product or any other future product candidates.

If any CMO with whom we contract fails to perform its obligations, we may be forced to enter into an agreement with a different CMO, which we may not be able to do on reasonable terms, if at all. In such scenario, our clinical trials supply could be delayed significantly as we establish alternative supply sources. In some cases, the technical skills required to manufacture our products or product candidates may be unique or proprietary to the original CMO and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills to a back-up or alternate supplier, or we may be unable to transfer such skills at all. In addition, if we are required to change CMOs for any reason, we will be required to verify that the new CMO maintains facilities and procedures that comply with quality standards and with all applicable regulations. We will also need to verify, such as through a manufacturing comparability study, that any new manufacturing process will produce our product candidate according to the specifications previously submitted to the FDA or another regulatory authority. The delays associated with the verification of a new CMO could negatively affect our ability to develop product candidates or commercialize our products in a timely manner or within budget. In addition, changes in manufacturers often involve changes in manufacturing procedures and processes, which could require that we conduct bridging studies between our prior clinical supply used in our clinical trials and that of any new manufacturer. We may be unsuccessful in demonstrating the comparability of clinical supplies which could require the conduct of additional clinical trials.

Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.

Because we rely on third parties to research and develop and to manufacture our product candidates, we must share trade secrets with them. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, consulting agreements or other similar agreements with our advisors, employees, third-party contractors and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s

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independent discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect on our business.

In addition, these agreements typically restrict the ability of our advisors, employees, third-party contractors and consultants to publish data potentially relating to our trade secrets, although our agreements may contain certain limited publication rights. For example, any academic institution that we may collaborate with will likely expect to be granted rights to publish data arising out of such collaboration and any joint research and development programs may require us to share trade secrets under the terms of our research and development or similar agreements. Despite our efforts to protect our trade secrets, our competitors may discover our trade secrets, either through breach of our agreements with third parties, independent development or publication of information by any of our third-party collaborators. A competitor’s discovery of our trade secrets would impair our competitive position and have an adverse impact on our business.

We may in the future seek to establish collaborations, and, if we are not able to establish them on commercially reasonable terms, we may have to alter our development and commercialization plans.

We may in the future seek collaboration arrangements with other parties for the development or commercialization of our product candidates. The success of any collaboration arrangements may depend on the efforts and activities of our collaborators. Collaborators generally have significant discretion in determining the efforts and resources that they will apply to these arrangements. Disagreements between parties to a collaboration arrangement regarding clinical development and commercialization matters can lead to delays in the development process or commercializing the applicable product candidate and, in some cases, termination of the collaboration arrangement. These disagreements can be difficult to resolve if neither of the parties has final decision making authority.

Collaborations with biopharmaceutical companies and other third parties often are terminated or are allowed to expire by the other party. Any such termination or expiration could adversely affect us financially and could harm our business reputation.

Any future collaborations we might enter into may pose a number of risks, including the following:

•Collaborators may not perform their obligations as expected;

•Collaborators may not pursue development and commercialization of product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities;

•Collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

•Collaborators could fail to make timely regulatory submissions for a product candidate;

•Collaborators may not comply with all applicable regulatory requirements or may fail to report safety data in accordance with all applicable regulatory requirements, which could subject them or us to regulatory enforcement actions;

•Collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;

•Product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates;

•A collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product candidate or product;

•Disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time consuming and expensive;

•Collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; and

•Collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability.

In addition, if we establish one or more collaborations, all of the risks relating to product development, regulatory approval and commercialization described in this Quarterly Report on Form 10-Q would also apply to the activities of any such future collaborators.

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If any collaborations we might enter into in the future do not result in the successful development and commercialization of products or if one of our future collaborators subsequently terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under such potential future collaboration. If we do not receive the funding we expect under the agreements, our development of our product candidates could be delayed and we may need additional resources to develop our product candidates and our platforms.

Additionally, if any future collaborator of ours is involved in a business combination, the collaborator might deemphasize or terminate development or commercialization of any product candidate licensed to it by us. If one of our future collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our reputation in the business and financial communities could be adversely affected.

We face significant competition in seeking appropriate collaborators. Our ability to reach a definitive agreement for any collaboration will depend upon, among other things, our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors.

If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to fund and undertake development or commercialization activities on our own, we may need to obtain additional expertise and additional capital, which may not be available to us on acceptable terms, or at all. If we fail to enter into collaborations and do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to further develop our product candidates or bring them to market or continue to develop our platforms and our business may be materially and adversely affected.

Risks Related to Our Intellectual Property

If we are unable to obtain and maintain sufficient intellectual property protection for our platforms and our product candidates, or if the scope of the intellectual property protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products may be adversely affected.

Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our platforms, product candidates and research programs. We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our novel discoveries and technologies that are important to our business. Our pending and future patent applications may not result in patents being issued that protect our product candidates or their intended uses or that effectively prevent others from commercializing competitive technologies, products or product candidates.

Obtaining and enforcing patents is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications or maintain and/or enforce patents that may issue based on our patent applications, at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development results before it is too late to obtain patent protection. Although we enter into non-disclosure and confidentiality agreements with parties who have access to patentable aspects of our research and development output, such as our employees, corporate collaborators, outside scientific collaborators, CROs, CMOs, consultants, advisors and other third parties, any of these parties may breach these agreements and disclose such results before a patent application is filed, thereby jeopardizing our ability to seek patent protection. Defects of form in the preparation or filing of our patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, etc., although we are unaware of any such defects that we believe are of material import.

If we, or any future licensors or licensees, fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated. If any future licensors or licensees, are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised. If there are material defects in the form or preparation of our patents or patent applications, such patents or applications may be invalid and unenforceable. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business. In addition, given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such product candidates might expire before or shortly after such product candidates are commercialized. As a result, our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

Composition of matter patents for biological and pharmaceutical products such as proprietary binding domains and CAR-based product candidates often provide a strong form of intellectual property protection for these types of products without regard to any method of use. We cannot be certain that the claims in our pending patent applications covering composition of matter of our product candidates will be considered patentable by the U.S. Patent and Trademark Office (USPTO), or by patent offices in foreign countries,

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or that the claims in any of our issued patents will be considered valid and enforceable by courts or administrative tribunals in the United States or foreign countries.

The patent position of biopharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and in recent years has been the subject of much litigation, resulting in court decisions, including Supreme Court decisions, that have increased uncertainties as to the ability to enforce patent rights in the future. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States, or vice versa.

Further, we may not be aware of all third-party intellectual property rights potentially relating to our product candidates or their intended uses, and as a result the impact of such third-party intellectual property rights upon the patentability of our own patents and patent applications, as well as the impact of such third-party intellectual property upon our freedom to operate, is highly uncertain. Patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or, in some cases, not at all. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our patents or pending patent applications may be challenged in the courts or patent offices in the United States and abroad. For example, we may be subject to a third-party pre-issuance submission of prior art to the USPTO or become involved in post-grant review procedures, derivations, reexaminations, or inter partes review proceedings, in the United States or elsewhere, challenging our patent rights or the patent rights of others. An adverse determination in any such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated, or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products. In addition, given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. Any failure to obtain or maintain patent protection with respect to our product candidates could have a material adverse effect on our business, financial condition, results of operations and prospects.

The patent application process is subject to numerous risks and there can be no assurance that we will be successful in obtaining patents for which we have applied.

Pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications. The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our potential future development partners will be successful in protecting our product candidates by obtaining and defending patents. These risks and uncertainties include the following:

•The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process. There are situations in which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case;

•The coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance;

•Patent applications may not result in any patents being issued;

•Patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, narrowed, found to be unenforceable or otherwise may not provide any competitive advantage;

•Our competitors, many of whom have substantially greater resources and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use, and sell our potential product candidates;

•There may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both in the United States and abroad for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and

•Countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates.

Any of the foregoing events could have a material adverse effect on our business, financial condition, results of operations, and prospects.

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We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products.

We cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction.

The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history. Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect, which may negatively impact our ability to market our products. We may incorrectly determine that our products are not covered by a third-party patent or may incorrectly predict whether a third-party’s pending application will issue with claims of relevant scope. Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, which may negatively impact our ability to develop and market our product candidates. Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our products.

If our efforts to protect the proprietary nature of the intellectual property related to our technologies are not adequate, we may not be able to compete effectively in our market.

We rely upon a combination of patents, confidentiality agreements, trade secret protection and intellectual property and confidentiality agreements to protect the intellectual property related to our technologies. Any disclosure to or misappropriation by third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive position in our market.

We have pending U.S. and foreign patent applications in our portfolio; however, we cannot predict:

•If and when patents will issue based on our patent applications;

•The scope of protection of any patent issuing based on our patent applications;

•The degree and range of protection any issued patents will afford us against competitors including whether third parties will find ways to invalidate or otherwise circumvent our patents;

•Whether any of our intellectual property will provide any competitive advantage;

•Whether or not others will obtain patents claiming aspects similar to those covered by our patents and patent applications;

•Whether we will need to initiate or defend litigation or administrative proceedings to enforce and/or defend our patent rights, which may be costly whether we win or lose; or

•Whether the patent applications that we own or may in-license will result in issued patents with claims that cover our product candidates or uses thereof in the United States or in other foreign countries.

We cannot be certain that the claims in our pending patent applications directed to our product candidates and/or technologies will be considered patentable by the USPTO or by patent offices in foreign countries. There can be no assurance that any such patent applications will issue as granted patents. One aspect of the determination of patentability of our inventions depends on the scope and content of the “prior art,” information that was or is deemed available to a person of skill in the relevant art prior to the priority date of the claimed invention. There may be prior art of which we are not aware that may affect the patentability of our patent claims or, if issued, affect the validity or enforceability of a patent claim. Even if the patents do issue based on our patent applications, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable. Furthermore, even if they are unchallenged, patents in our portfolio may not adequately exclude third parties from practicing relevant technology or prevent others from designing around our claims. If the breadth or strength of our intellectual property position with respect to our product candidates is threatened, it could dissuade companies from collaborating with us to develop and threaten our ability to commercialize our product candidates. In the event of litigation or administrative proceedings, we cannot be certain that the claims in any of our issued patents will be considered valid by courts or administrative tribunals in the United States or foreign countries.

The strength of patents in the biotechnology and cell therapy fields involve complex legal and scientific questions and can be uncertain. The patent applications that we own or may in-license may fail to result in issued patents with claims that cover our product candidates or uses thereof in the United States or in other foreign countries. Even if the patents do successfully issue, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable. Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property or prevent others from designing around our claims. If the breadth or strength of protection provided by the patent applications we hold with respect to our product candidates is threatened, it could dissuade companies from collaborating with us to develop, and threaten our ability to commercialize, our product candidates. Further, if we encounter delays in our clinical trials, the

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period of time during which we could market our product candidates under patent protection would be reduced. Since patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we were the first to file any patent application related to our product candidates. Furthermore, for U.S. applications in which all claims are entitled to a priority date before March 16, 2013, an interference proceeding can be provoked by a third party or instituted by the USPTO, to determine who was the first to invent any of the subject matter covered by the patent claims of our applications. Various post grant review proceedings, such as inter partes review and post grant review, are available for any interested third party to challenge the patentability of claims issued in patents to us. While these post grant review proceedings have been used less frequently to invalidate biotech patents, they have been successful regarding other technologies, and these relatively new procedures are still changing, and those changes might affect future results.

In addition to the protection afforded by patents, we seek to rely on trade secret protection, confidentiality agreements, and other agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce and any other elements of our product discovery and development processes that involve proprietary know-how, information, or technology that is not covered by patents. Although we require all of our employees to assign their inventions to us, and require all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information, or technology to enter into confidentiality agreements, we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Furthermore, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad. If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, operating results and financial condition.

Numerous factors may limit any potential competitive advantage provided by our intellectual property rights.

The degree of future protection afforded by our intellectual property rights, whether owned or in-licensed, is uncertain because intellectual property rights have limitations, and may not adequately protect our business, provide a barrier to entry against our competitors or potential competitors, or permit us to maintain our competitive advantage. Moreover, if a third party has intellectual property rights that cover the practice of our technology, we may not be able to fully exercise or extract value from our intellectual property rights. The following examples are illustrative:

•Pending patent applications that we own or may license may not lead to issued patents;

•Patents, should they issue, that we own or may license, may not provide us with any competitive advantages, or may be challenged and held invalid or unenforceable;

•Others may be able to develop and/or practice technology that is similar to our technology or aspects of our technology but that is not covered by the claims of any patents that we own or may license, should any such patents issue;

•Third parties may compete with us in jurisdictions where we do not pursue and obtain patent protection;

•We (or any licensors) might not have been the first to make the inventions covered by a pending patent application that we own or may license;

•We (or any licensors) might not have been the first to file patent applications covering a particular invention;

•Others may independently develop similar or alternative technologies without infringing our intellectual property rights;

•We may not be able to obtain necessary licenses on reasonable terms or at all;

•Third parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights, or any rights at all, over that intellectual property;

•We may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights, which will be costly whether we win or lose;

•We may not be able to maintain the confidentiality of our trade secrets or other proprietary information;

•We may not develop or in-license additional proprietary technologies that are patentable; and

•The patents of others may have an adverse effect on our business.

Should any of these events occur, they could significantly harm our business and results of operation.

Third-party claims of intellectual property infringement may prevent or delay our product discovery and development efforts.

Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties. There is a substantial amount of litigation involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, as well as administrative proceedings for challenging patents, including interference, reexamination, and post grant review proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are

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developing our product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may give rise to claims of infringement of the patent rights of others.

Third parties may assert that we are employing their proprietary technology without authorization. Generally, conducting clinical trials and other development activities in the United States is not considered an act of infringement. If and when one of our product candidates is approved by the FDA, a third party may then seek to enforce its patent by filing a patent infringement lawsuit against us. While we do not believe that any claims that could otherwise materially adversely affect commercialization of our product candidates, if approved, are valid and enforceable, we may be incorrect in this belief, or we may not be able to prove it in a litigation. In this regard, patents issued in the United States by law enjoy a presumption of validity that can be rebutted only with evidence that is “clear and convincing,” a heightened standard of proof. There may be third-party patents of which we are currently unaware with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates. Because patent applications can take many years to issue, there may be currently pending patent applications, which may later result in issued patents that our product candidates may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. Moreover, we may fail to identify relevant patents or incorrectly conclude that a patent is invalid, not enforceable, exhausted, or not infringed by our activities. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing processes of our product candidates, constructs or molecules used in or formed during the manufacturing processes, or any final product itself, the holders of any such patents may be able to block our ability to commercialize the product candidate unless we obtained a license under the applicable patents, or until such patents expire or they are finally determined to be held invalid or unenforceable. Similarly, if any third-party patent were held by a court of competent jurisdiction to cover aspects of our formulations, processes for manufacture or methods of use, the holders of any such patent may be able to block our ability to develop and commercialize the product candidate unless we obtained a license or until such patent expires or is finally determined to be held invalid or unenforceable. In either case, such a license may not be available on commercially reasonable terms or at all. If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, or at all, our ability to commercialize our product candidates may be impaired or delayed, which could in turn significantly harm our business.

Parties making claims against us may seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidates. Defense of these claims, regardless of their merit, could involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure. We cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms. Furthermore, even in the absence of litigation, we may need or may choose to obtain licenses from third parties to advance our research or allow commercialization of our product candidates. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to further develop and commercialize our product candidates, which could harm our business significantly.

We may become involved in lawsuits to protect or enforce our patents, which could be expensive, time-consuming and unsuccessful.

Competitors or other third parties may infringe our patents, trademarks, copyrights or other intellectual property. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that one or more of our patents is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated, held unenforceable, or interpreted narrowly and could put our patent applications at risk of not issuing. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful infringement claim against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.

Post-grant proceedings, including interference proceedings, provoked by third parties or brought by the USPTO may be necessary to determine the validity or priority of inventions with respect to our patents or those of any licensors. An unfavorable outcome could result in a loss of our current patent rights and could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Litigation or post-grant proceedings may result in a decision adverse to our interests and, even if we are successful, may result in substantial costs and distract our management and other employees. We may not be able to prevent, alone or with any licensors, misappropriation of our trade secrets or confidential information, particularly in countries where the laws may not protect those rights as fully as in the United States.

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Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.

Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties.

Because of the expense and uncertainty of litigation, we may conclude that even if a third-party is infringing our issued patent, any patents that may be issued as a result of our pending or future patent applications or other intellectual property rights, the risk-adjusted cost of bringing and enforcing such a claim or action may be too high or not in the best interest of our company or our stockholders, or it may be otherwise impractical or undesirable to enforce our intellectual property against some third parties. Our competitors or other third parties may be able to sustain the costs of complex patent litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. In such cases, we may decide that the more prudent course of action is to simply monitor the situation or initiate or seek some other non-litigious action or solution. In addition, the uncertainties associated with litigation could compromise our ability to raise the funds necessary to continue our clinical trials, continue our internal research programs, in-license needed technology or other product candidates, or enter into development partnerships that would help us bring our product candidates to market.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business. Failure by us or any licensor to maintain protection of our patent portfolio could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time.

Patent rights are of limited duration. In the United States, if all maintenance fees are paid timely, the natural expiration of a patent is generally 20 years after its first effective filing date. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such product candidates are commercialized. Even if patents covering our product candidates are obtained, once the patent life has expired for a product, we may be open to competition from biosimilar or generic products. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing product candidates similar or identical to ours. Upon issuance in the United States, a patent’s life can be increased based on certain delays caused by the USPTO, but this increase can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution. A patent term extension based on regulatory delay may be available in the United States. However, only a single patent can be extended for each marketing approval, and any patent can be extended only once, for a single product. Moreover, the scope of protection during the period of the patent term extension does not extend to the full scope of the claim, but instead only to the scope of the product as approved. Laws governing analogous patent term extensions in foreign jurisdictions vary widely, as do laws governing the ability to obtain multiple patents from a single patent family. Additionally, we may not receive an extension if we fail to exercise due diligence during the testing phase or regulatory review process, apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product will be shortened and our competitors may obtain approval of competing products following our patent expiration to launch their product earlier than might otherwise be the case, and our revenue could be reduced, possibly materially.

Issued patents covering our product candidates could be found invalid or unenforceable if challenged in court or the USPTO.

If we or a licensing partner initiate legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent covering our product candidate, as applicable, is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are

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commonplace, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, inter parties review, post grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our patent counsel and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates. Such a loss of patent protection could have a material adverse impact on our business.

Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.

As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity and is therefore costly, time consuming and inherently uncertain. Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs, and may diminish our ability to protect our inventions, obtain, maintain, and enforce our intellectual property rights and, more generally, could affect the value of our intellectual property or narrow the scope of our owned and any licensed patents. Patent reform legislation in the United States and other countries, including the Leahy-Smith America Invents Act (the Leahy-Smith Act), signed into law on September 16, 2011, could increase those uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.

In addition, the patent positions of companies in the development and commercialization of pharmaceuticals are particularly uncertain. The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. Depending on future actions by the U.S. Congress, the U.S. courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

We may not be able to protect our intellectual property and proprietary rights throughout the world.

Filing, prosecuting, and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection or licenses but enforcement is not as strong as that in the United States. These products may compete with our products, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our intellectual property and proprietary rights generally. Proceedings to enforce our intellectual property and proprietary rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly, could put our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property and proprietary rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or may license.

Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we or any of our licensors is forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations, and prospects may be adversely affected.

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We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.

Although we are not currently aware of any claims challenging the inventorship of our patents or ownership of our intellectual property, we may in the future be subject to claims that former employees, collaborators or other third parties have an interest in our patents or other intellectual property as an inventor or co-inventor. We generally enter into confidentiality and intellectual property assignment agreements with our employees, consultants, and contractors. These agreements generally provide that inventions conceived by the party in the course of rendering services to us will be our exclusive property. However, those agreements may not be honored and may not effectively assign intellectual property rights to us. Moreover, there may be some circumstances, where we are unable to negotiate for such ownership rights. Disputes regarding ownership or inventorship of intellectual property can also arise in other contexts, such as collaborations and sponsored research. If we are subject to a dispute challenging our rights in or to patents or other intellectual property, such a dispute could be expensive and time consuming. If we were unsuccessful, we could lose valuable rights in intellectual property that we regard as our own, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties.

We may receive confidential and proprietary information from third parties. In addition, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies. We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed alleged trade secrets or other confidential information of these third parties or our employees’ former employers or our consultants’ or contractors’ current or former clients or customers. Although we try to ensure that our employees and consultants do not use intellectual property, proprietary information, know-how or trade secrets of others in their work for us, we may become subject to claims that we caused an employee to breach the terms of his or her non-competition or non-solicitation agreement, or that we or these individuals have, inadvertently or otherwise, used or disclosed the alleged trade secrets or other proprietary information of a former employer or competitor. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial cost and be a distraction to our management and employees. If we are not successful, we could lose access or exclusive access to valuable intellectual property.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

In addition to seeking patents for our technology and product candidates, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position. We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties. We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Detecting the disclosure or misappropriation of a trade secret and enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

Our current or future trademarks or trade names may be challenged, infringed, circumvented or declared generic or descriptive determined to be infringing on other marks. We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest. During trademark registration proceedings, we may receive rejections of our applications by the USPTO or in other foreign jurisdictions. Although we would be given an opportunity to respond to those rejections, we may be unable to overcome such rejections. In addition, in the USPTO and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks. Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings. If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected. We may license our trademarks and trade names to third parties, such as distributors. Though these license agreements may provide guidelines for how our trademarks and trade names may be used, a breach of these agreements or misuse of our trademarks and tradenames by our licensees may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names.

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Moreover, any name we may propose to use with our product candidate in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark. Similar requirements exist in Europe. The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names. If the FDA (or an equivalent administrative body in a foreign jurisdiction) objects to any of our proposed proprietary product names, it may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA. Furthermore, in many countries, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark. At times, competitors or other third parties may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. If we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced to cease use of such trademarks.

Risks Related to Government Regulation

We may be unable to obtain regulatory approval for our product candidates. The denial or delay of any such approval would delay commercialization and have a material adverse effect on our potential to generate revenue, our business and our results of operations.

The research, development, testing, manufacturing, labeling, packaging, approval, promotion, advertising, storage, recordkeeping, marketing, distribution, post-approval monitoring and reporting, and export and import of drug products are subject to extensive regulation by the FDA, and by foreign health authorities in other countries. These regulations differ from country to country. In the United States, we are not permitted to market our product candidates until we receive regulatory approval from the FDA. The process of obtaining regulatory approval is expensive, often takes many years following the commencement of clinical trials and can vary substantially based upon the type, complexity and novelty of the product candidates involved, as well as the target indications and patient population. Despite the time and expense invested in clinical development of product candidates, regulatory approval is never guaranteed. To gain approval to market our product candidates, we must provide clinical data that adequately demonstrate the safety and efficacy of the product for the intended indication. We have not yet obtained regulatory approval to market any of our product candidates in the United States or any other country. Our business depends upon obtaining these regulatory approvals. The FDA can delay, limit or deny approval of our product candidates for many reasons, including:

•Our inability to satisfactorily demonstrate that the product candidates have acceptable safety and efficacy profiles for the requested indication;

•The FDA’s disagreement with our trial designs or the interpretation of data from preclinical studies or clinical trials;

•The population studied in the clinical trial may not be sufficiently broad or representative to assess safety in the full population for which we seek approval;

•Our inability to demonstrate that clinical or other benefits of our product candidates outweigh any safety or other perceived risks;

•The FDA’s determination that additional preclinical or clinical trials are required;

•The FDA’s non-approval of the formulation, labeling or the specifications of our product candidates;

•The FDA’s failure to accept the manufacturing processes, drug product characteristics or facilities of third-party manufacturers with which we contract; or

•The potential for approval policies or regulations of the FDA to significantly change in a manner rendering our clinical data insufficient for approval.

Even if we eventually complete clinical testing and receive approval of any regulatory filing for our product candidates, the FDA may grant approval contingent on the performance of costly additional post-approval clinical trials. The FDA may also approve our product candidates for a more limited indication or a narrower patient population than we originally requested, and the FDA may not approve the labeling that we believe is necessary or desirable for the successful commercialization of our product candidates. If FDA requires us to narrow our indications to smaller patient subsets, our market opportunities for our product candidates, if approved, and our ability to generate revenues may be materially limited. To the extent we seek regulatory approval in foreign countries, we may face challenges similar to those described above with regulatory authorities in applicable jurisdictions.

Any delay in obtaining, or inability to obtain, applicable regulatory approval for any of our product candidates would delay or prevent commercialization of our product candidates and would materially adversely impact our business, results of operations and prospects.

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The FDA regulatory approval process is lengthy, time-consuming and inherently unpredictable, and we may experience significant delays in the clinical development and regulatory approval of our product candidates or be unable to generate product revenue.

We have not previously submitted a BLA to the FDA or similar marketing applications to foreign health authorities. A BLA must include extensive preclinical and clinical data and supporting information to establish the product candidate’s safety, purity and efficacy for each desired indication. The BLA must also include significant information regarding the manufacturing controls for the product. The novel nature of our product candidates may introduce uncertain, complex, expensive and lengthy challenges that could impact regulatory approval. Even if we eventually complete clinical testing and receive approval of any regulatory filing for our product candidates, the FDA or foreign health authorities may approve our product candidates for a more limited indication or a narrower patient population than we originally requested.

We may also experience delays in completing planned clinical trials for a variety of reasons, including delays related to:

•The availability of financial resources to commence and complete the planned trials;

•Reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

•Obtaining approval at each clinical trial site by an IRB or ethics committee;

•Recruiting suitable patients to participate in a trial;

•Enrolling and retaining sufficient number of patients to complete a trial, including post-treatment follow-ups;

•Clinical trial sites deviating from trial protocol or dropping out of a trial;

•Adding new clinical trial sites; or

•Manufacturing sufficient quantities of qualified materials under cGMPs and applying them on a subject by subject basis for use in clinical trials.

We could also experience delays in physicians enrolling patients in clinical trials of our product candidates in lieu of prescribing existing treatments or other clinical trials. Furthermore, a clinical trial may be suspended or terminated by us, the IRBs for the institutions in which such trials are being conducted, the Data Monitoring Committee for such trial, or by the FDA or foreign health authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or foreign health authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. If we experience termination of, or delays in the completion of, any clinical trial of our product candidates, the commercial prospects for our product candidates will be harmed, and our ability to generate product revenue will be delayed. In addition, any delays in completing our clinical trials will increase our costs, slow down our product development and approval process and jeopardize our ability to commence product sales and generate revenue.

Securing regulatory approval also requires the submission of information about the manufacturing processes and inspection of manufacturing facilities by the relevant regulatory authority. The FDA or foreign health authorities may fail to approve our manufacturing processes or facilities, whether run by us or our CMOs. In addition, if we make manufacturing changes to our product candidates in the future, we may need to conduct additional preclinical and/or clinical studies to bridge our modified product candidates to earlier versions.

Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may ultimately lead to the denial of regulatory approval of our product candidates. Applications for our product candidates could fail to receive regulatory approval for many reasons, including but not limited to the following:

•The FDA or foreign health authorities may disagree with the design, implementation or data analyses of our clinical trials;

•The FDA or foreign health authorities may determine that our product candidate(s) do not have adequate risk-benefit ratio or have undesirable or unintended side effects, toxicities or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use;

•The population studied in the clinical program may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval;

•The FDA or foreign health authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

•The data collected from clinical trials of our product candidates may not be sufficient to support the submission of a BLA or other submission or to obtain regulatory approval in the United States or elsewhere;

•The FDA or foreign health authorities may fail to approve the manufacturing processes, test procedures and specifications or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and

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•The approval policies or regulations of the FDA or foreign health authorities may significantly change in a manner rendering our clinical data insufficient for approval.

We have or may pursue Fast Track, orphan drug, and/or RMAT designations from the FDA for one or more of our product candidates. Even if one or more of our product candidates receive Fast Track, orphan drug, and/or RMAT designations, we may be unable to obtain and maintain the benefits associated with such designations. These designations may not lead to a faster development or regulatory review or approval process, and will not increase the likelihood that such product candidates will receive marketing approval.

To date, CART-ddBCMA has been granted Fast Track, orphan drug, and Regenerative Medicine Advanced Therapy (RMAT) designations by the FDA. In the future, we may pursue one or more similar designations for other product candidates.

Fast Track designation is designed to facilitate the development and expedite the review of therapies for serious conditions with an unmet medical need. Programs with Fast Track designation may benefit from early and frequent communications with the FDA, potential priority review and the ability to submit a rolling application for regulatory review. Fast Track designation applies to both the product candidate and the specific indication for which it is being studied. However, if we do not continue to meet the criteria of the Fast Track designation, or if our clinical trials are delayed, suspended or terminated, or put on clinical hold due to unexpected adverse events or issues with clinical supply, we will not receive the benefits associated with the Fast Track program. Furthermore, Fast Track designation does not change the standards for approval. Fast Track designation alone does not guarantee qualification for the FDA’s priority review procedures. Fast track designation also does not guarantee our product candidate will be approved in a timely manner, if at all.

Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States. In the European Union, the prevalence of the condition must not be more than 5 in 10,000. Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process. If a product that has orphan drug designation from the FDA subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a BLA, to market the same biologic for the same indication, for seven years, except in limited circumstances such as a showing of clinical superiority to the product with orphan product exclusivity or if FDA finds that the holder of the orphan exclusivity has not shown that it can ensure the availability of sufficient quantities of the orphan product to meet the needs of patients with the disease or condition for which the product was designated. Even if we or our collaborators obtain orphan designation to a product candidate, we may not be the first to obtain marketing approval for any particular orphan indication due to the uncertainties associated with developing pharmaceutical products. The scope of exclusivity is limited to the scope of any approved indication, even if the scope of the orphan designation is broader than the approved indication. Additionally, exclusive marketing rights may be limited if we or our collaborators seek approval for an indication broader than the orphan designated indication and may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition. Further, even if a product obtains orphan drug exclusivity, that exclusivity may not effectively protect the product from competition because different drugs with different active moieties can be approved for the same condition. Even after an orphan drug is approved, the FDA can subsequently approve a product with the same active moiety for the same condition if the FDA concludes that the later product is safer, more effective, or makes a major contribution to patient care. Furthermore, the FDA can waive orphan exclusivity if we or our collaborators are unable to manufacture sufficient supply of the product. If we or our collaborators do not receive or maintain orphan drug designation to product candidates for which we seek such designation, it could limit our ability to realize revenues from such product candidates.

A company may request RMAT designation of its product candidate, which designation may be granted if the product meets the following criteria: (1) it is a cell therapy, therapeutic tissue engineering product, human cell and tissue product, or any combination product using such therapies or products, with limited exceptions; (2) it is intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition; and (3) preliminary clinical evidence indicates that the drug has the potential to address unmet medical needs for such a disease or condition. RMAT designation provides potential benefits that include more frequent meetings with FDA to discuss the development plan for the product candidate, and potential eligibility for rolling review and priority review. Products granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of sites, including through expansion to additional sites post-approval, if appropriate. RMAT-designated products that receive accelerated approval may, as appropriate, fulfill their post-approval requirements through the submission of clinical evidence, clinical studies, patient registries, or other sources of real world evidence (such as electronic health records); through the collection of larger confirmatory data sets; or via post-approval monitoring of all patients treated with such therapy prior to approval of the therapy. RMAT designation does not change the standards for product approval, and there is no assurance that any such designation or eligibility will result in expedited

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review or approval or that the approved indication will not be narrower than the indication covered by the RMAT designation. Additionally, RMAT designation can be revoked if the criteria for eligibility cease to be met as clinical data emerges.

We may pursue Breakthrough Therapy designation for one or more of our product candidates in the future. Even if granted by the FDA, such designation may not lead to a faster development or regulatory review or approval process, and it does not increase the likelihood that the product candidate will receive marketing approval.

A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For drugs that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Drugs designated as breakthrough therapies by the FDA are also eligible for priority review if supported by clinical data at the time of the submission of the BLA.

Although Breakthrough Designation or access to any other expedited program may expedite the development or approval process, it does not change the standards for approval. We may not experience faster development timelines or achieve faster review or approval compared to conventional FDA procedures. For example, the time required to identify and resolve issues relating to manufacturing and controls, the acquisition of a sufficient supply of our product for clinical trial purposes or the need to conduct additional nonclinical or clinical studies may delay approval by the FDA, even if the product qualifies for breakthrough designation or access to any other expedited program. Access to an expedited program may also be withdrawn by the FDA if it believes that the designation is no longer supported by data from our clinical development program. Additionally, qualification for any expedited review procedure does not ensure that we will ultimately obtain regulatory approval for such product candidate.

If approved, our investigational products regulated as biologics may face competition from biosimilars approved through an abbreviated regulatory pathway.

The ACA includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (BPCIA), which created an abbreviated approval pathway for biologic products that are biosimilar to or interchangeable with an FDA-licensed reference biologic product. Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a BLA for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity, and potency of the other company’s product. The law is complex and is still being interpreted and implemented by the FDA. As a result, its ultimate impact, implementation, and meaning are subject to uncertainty.

We believe that any of our product candidates approved as a biologic product under a BLA should qualify for the 12-year period of exclusivity. However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider our investigational medicines to be reference products for competing products, potentially creating the opportunity for generic competition sooner than anticipated. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation. Moreover, the extent to which a biosimilar, once licensed, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biologic products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing. If competitors are able to obtain regulatory approval for biosimilars referencing our products, our products may become subject to competition from such biosimilars, with the attendant competitive pressure and consequences.

Even if we receive regulatory approval of our product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our product candidates.

Any regulatory approvals that we receive for our product candidates will require surveillance to monitor the safety of the product candidate. The FDA may also require REMS as a condition of approving our product candidates, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. In addition, if the FDA or foreign health authorities approve our product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and recordkeeping for our product candidates will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMPs and GCPs for any clinical trials that we conduct post-approval. Later discovery of previously

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unknown problems with our product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

•Restrictions on the marketing or manufacturing of our product candidates, withdrawal of the product from the market or voluntary or mandatory product recalls;

•Fines, warning letters or holds on clinical trials;

•Refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals;

•Withdrawal of the drug from the market or voluntary or mandatory product recalls;

•Adverse publicity, fines, warning letters or holds on clinical trials;

•Product seizure or detention, or refusal to permit the import or export of our product candidates; and

•Injunctions or the imposition of civil or criminal penalties.

The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability.

The FDA strictly regulates manufacturers’ promotional claims of drug products. In particular, a drug product may not be promoted by manufacturers for uses that are not approved by the FDA, as reflected in the FDA-approved labeling, although healthcare professionals are permitted to use drug products for off-label uses. The FDA, the DOJ, the Inspector General of the Department of HHS, among other government agencies, actively enforce the laws and regulations prohibiting manufacturers’ promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability, including large civil and criminal fines, penalties, and enforcement actions. The FDA has also imposed consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed for companies that engaged in such prohibited activities. If we cannot successfully manage the promotion of our approved product candidates, we could become subject to significant liability, which would materially adversely affect our business and financial condition.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions. Failure to obtain regulatory approval in foreign jurisdictions would prevent our product candidates from being marketed abroad.

In addition to regulations in the United States, to market and sell our products in the European Union, many Asian countries and other jurisdictions, we must obtain separate regulatory approvals and comply with numerous and varying regulatory requirements, both from a clinical and manufacturing perspective. Approval by the FDA does not ensure approval by regulatory or payor authorities in other countries or jurisdictions, and approval by one regulatory or payor authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. However, a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical trials as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval. A product candidate that has been approved for sale in a particular country may not receive reimbursement approval in that country. We may not be able to obtain approvals from regulatory authorities or payor authorities outside the United States on a timely basis, if at all.

We may also submit marketing applications in other countries, such as countries in Europe or Asia. We may not be able to file for regulatory approvals and may not receive necessary approvals to commercialize our products in any jurisdiction. Regulatory authorities in jurisdictions outside of the United States have requirements for approval of product candidates with which we must comply prior to marketing in those jurisdictions. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our products in certain countries. We do not have any product candidates approved for sale in any jurisdiction, including international markets, and we do not have experience in obtaining regulatory approval in international markets. If we are unable to obtain approval of any of our product candidates by regulatory or payor authorities in the European Union, Asia or elsewhere, or if we fail to comply with the

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regulatory requirements in foreign jurisdictions, the commercial prospects of that product candidate may be significantly diminished, and our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed.

Even if we obtain FDA approval of any of our product candidates, we may never obtain approval or commercialize such products outside of the United States, which would limit our ability to realize their full market potential.

In order to market any product outside of the United States, we must establish and comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy. Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. Approval procedures vary among countries and can involve additional product testing and validation and additional administrative review periods. Seeking foreign regulatory approvals could result in significant delays, difficulties and costs for us and may require additional preclinical studies or clinical trials, which would be costly and time consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our products in those countries. Satisfying these and other regulatory requirements is costly, time consuming, uncertain and subject to unanticipated delays. In addition, our failure to obtain regulatory approval in any country may delay or have negative effects on the process for regulatory approval in other countries. We do not have any product candidates approved for sale in any jurisdiction, including international markets, and we do not have experience in obtaining regulatory approval in international markets. If we fail to comply with regulatory requirements in international markets or fail to obtain and maintain required approvals, our ability to realize the full market potential of our products will be harmed.

The impact of recent healthcare reform legislation and other changes in the healthcare industry and in healthcare spending on us is currently unknown, and may adversely affect our business model.

Our revenue prospects could be affected by changes in healthcare spending and policy in the United States and abroad. We operate in a highly regulated industry and new laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related to healthcare availability, the method of delivery or payment for healthcare products and services could negatively impact our business, operations and financial condition.

There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare, including proposals aimed at lowering prescription drug prices and increasing competition for prescription drugs, as well as additional regulation on pharmaceutical transparency and reporting requirements, any of which could negatively impact our future profitability and increase our compliance burden. We cannot predict the initiatives that may be adopted in the future, including future challenges or significant revisions to the ACA. The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect:

•The demand for our product candidates, if we obtain regulatory approval;

•Our ability to set a price that we believe is fair for our products;

•Our ability to obtain coverage and reimbursement approval for a product;

•Our ability to generate revenue and achieve or maintain profitability;

•The level of taxes that we are required to pay; and

•The availability of capital.

Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors, which may adversely affect our future profitability.

Risks Related to Commercialization of Our Product Candidates

Even if we obtain regulatory approval of our product candidates, the products may not gain market acceptance among physicians, patients, hospitals, cancer treatment centers and others in the medical community.

If any of our product candidates receive marketing approval, they may nonetheless fail to gain sufficient market acceptance by physicians, patients, healthcare payors and others in the medical community. For example, existing cell therapies are currently offered only in tertiary academic hospitals that have intensive care units that can support the safety and toxicity issues associated with cell therapies. If we are unable to demonstrate sufficient safety to permit a broader use of our product candidates, we may not generate significant product revenue and we may not become profitable. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including:

•The clinical indications for which our product candidates are approved;

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•The willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

•Physicians, hospitals, cancer treatment centers and patients considering our product candidates as a safe, pure and effective treatment;

•The potential and perceived advantages of our product candidates over alternative treatments;

•Our ability to demonstrate the advantages of our product candidates over other conventional CAR-T therapies;

•The perceived prevalence and severity of any side effects for our product candidates compared to the prevalence and severity of any side effects for conventional CAR-T products and other cell therapies;

•Product labeling, limitations, warnings or product insert requirements of the FDA or foreign health authorities;

•The timing of market introduction of our product candidates as well as competitive products;

•The cost of treatment in relation to alternative treatments;

•The availability of adequate coverage, reimbursement and pricing by third-party payors and government authorities;

•The willingness of patients to pay out-of-pocket in the absence of coverage by third-party payors and government authorities;

•Relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies; and

•The effectiveness of our sales and marketing efforts.

If our product candidates are approved but fail to achieve market acceptance among physicians, patients, hospitals, cancer treatment centers or others in the medical community, we will not be able to generate significant revenue.

Even if our products achieve market acceptance, we may not be able to maintain that market acceptance over time if new products or technologies are introduced that are more favorably received than our products, are more cost effective or render our products obsolete.

We may face difficulties from changes to current regulations and future legislation. Current and future legislation may increase the difficulty and cost for us to commercialize our drugs, if approved, and affect the prices we may obtain, including changes in coverage and reimbursement policies in certain market segments for our product candidates, which could make it difficult for us to sell our product candidates, if approved, profitably.

Existing regulatory policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, and we may not achieve or sustain profitability. In both domestic and foreign markets, successful sales of our product candidates, if approved, will depend on the availability of adequate coverage and reimbursement from third-party payors. In addition, because our product candidates represent novel approaches to the treatment of cancer and autoimmune diseases, we cannot accurately estimate the potential revenue from our product candidates.

Patients who receive medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors is critical to new product acceptance.

Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which drugs and treatments they will cover and the amount of reimbursement. Reimbursement by a third-party payor may depend upon a number of factors, including, but not limited to, the third-party payor’s determination that use of a product is:

•A covered benefit under its health plan;

•Medically necessary and has acceptable risk-benefit ratio;

•Appropriate for the specific patient;

•Cost-effective; and

•Neither experimental nor investigational.

Obtaining coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide to the payor supporting scientific, clinical and cost-effectiveness data for the use of our products. Even if we obtain coverage for a given product, the resulting reimbursement payment rates might not be adequate for us to achieve or sustain profitability or may require co-payments that patients find unacceptably high. Due to the high costs associated with cell therapies, patients are unlikely to use our product candidates unless coverage is provided or reimbursement is adequate to cover a significant portion of the cost of our product candidates.

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In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained.

We intend to seek approval to market our product candidates in both the United States and in selected foreign jurisdictions. If we obtain approval in one or more foreign jurisdictions for our product candidates, we will be subject to rules and regulations in those jurisdictions. In some foreign countries, particularly those in the European Union, the pricing of biologics is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after obtaining marketing approval of a product candidate. In addition, market acceptance and sales of our product candidates will depend significantly on the availability of adequate coverage and reimbursement from third-party payors for our product candidates and may be affected by existing and future healthcare reform measures.

The ACA made extensive changes to the delivery of health care in the United States. We expect that the rebates, discounts, taxes and other costs resulting from the ACA over time will have a negative effect on our expenses and profitability in the future. The ACA contains provisions that may reduce the profitability of drug products through increased rebates for drugs reimbursed by Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health care programs. For example, the ACA made several changes to the Medicaid Drug Rebate Program, including increasing pharmaceutical manufacturers’ rebate liability by increasing the minimum basic Medicaid rebate on most branded prescription drugs. Additionally, for a drug product to receive federal reimbursement under the Medicaid or Medicare Part B programs or to be sold directly to U.S. government agencies, the manufacturer must extend discounts to entities eligible to participate in the 340B drug pricing program.

Since the enactment of the ACA, there have been judicial and Congressional challenges to certain aspects of the ACA. In June 2021, the United States Supreme Court held that Texas and other challengers had no legal standing to challenge the ACA, dismissing the case without specifically ruling on the constitutionality of the ACA. Accordingly, the ACA remains in effect in its current form. It is unclear how this Supreme Court decision, future litigation, or healthcare measures promulgated by the Biden administration will impact our business, financial condition and results of operations. Complying with any new legislation or changes in healthcare regulation could be time-intensive and expensive, resulting in material adverse effect on our business.

Other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, the Budget Control Act of 2011, among other things, included reductions to CMS payments to providers of 2% per fiscal year, which went into effect in 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2031, with the exception of a temporary suspension implemented under various COVID-19 relief legislation from May 1, 2020 through March 31, 2022, unless additional Congressional action is taken. Under current legislation, the actual reduction in Medicare payments will vary from 1% in 2022 to up to 4% in the final fiscal year of this sequester. In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 (the ATRA), which, among other things, reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. Legislators, regulators and third-party payers may continue to put forth proposals to reduce costs while expanding individual healthcare benefits, including proposals that impose additional limitations on the rates we will be able to charge for our product candidates, if approved, or the amount of reimbursement available for such approved products from governmental agencies or third-party payers. Current and future healthcare reform legislation and policies could have a material adverse effect on our business and financial condition. We cannot predict what other health care programs and regulations will ultimately be implemented at the federal or state level or the effect of any future legislation or regulation in the United States may have on our business.

There has been heightened governmental scrutiny recently over the manner in which drug manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. For example, in 2020, HHS and CMS issued various rules that are expected to impact, among others, price reductions from pharmaceutical manufacturers to plan sponsors under Part D, fee arrangements between pharmacy benefit managers and manufacturers, manufacturer price reporting requirements under the Medicaid Drug Rebate Program, including regulations that affect manufacturer-sponsored patient assistance programs subject to pharmacy benefit manager accumulator programs and Best Price reporting related to certain value-based purchasing arrangements, and manufacturer price reporting under Medicare Part B. Multiple lawsuits have been brought against HHS challenging various aspects of the rules implemented during the Trump administration. As a result, the Biden administration and HHS have delayed the implementation or published rules rescinding some of these Trump-era policies.

Under the American Rescue Plan Act of 2021, effective January 1, 2024, the statutory cap on Medicaid Drug Rebate Program rebates that manufacturers pay to state Medicaid programs will be eliminated. Elimination of this cap may require pharmaceutical

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manufacturers to pay more in rebates than it receives on the sale of products, which could have a material impact on our business. Further, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at increasing competition for prescription drugs. In response to this executive order, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and potential legislative policies that Congress could pursue to advance these principles. In addition, Congress is considering legislation that, if passed, could have significant impact on prices of prescription drugs covered by Medicare, including limitations on drug price increases. The impact of these regulations and any future healthcare measures and agency rules implemented by the Biden administration on us and the pharmaceutical industry as a whole is currently unknown. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our product candidates if approved. Complying with any new legislation and regulatory changes could be time-intensive and expensive, resulting in a material adverse effect on our business.

At the state level, individual states are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including discounts, restrictions on certain product access and marketing cost disclosure and transparency measures. For example, a number of states are considering or have recently enacted state drug price transparency and reporting laws that could substantially increase our compliance burdens and expose us to greater liability under such state laws once we begin commercialization after obtaining regulatory approval for any of our products. These measures could reduce the demand for our products, if approved, or impose additional pricing pressures on how much we can charge for our products if approved.

Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition, increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-approval testing and other requirements.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or in other jurisdictions. If we or our collaborators are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or our collaborators are not able to maintain regulatory compliance, our product candidates may lose any marketing approval that may have been obtained and we may not achieve or sustain profitability, which would adversely affect our business.

We currently have no marketing and sales organization and have limited experience in marketing cell therapy products. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, if approved, we may not be able to generate product revenue.

We currently have no sales, marketing or distribution capabilities and have limited experience in marketing cell therapy products. To achieve commercial success for any approved product for which we retain sales and marketing responsibilities, we must either develop a sales and marketing organization, which would be expensive and time consuming, or outsource these functions to other third parties. In the future, we may choose to build a focused sales and marketing infrastructure to sell, or participate in sales activities with our collaborators for, some of our product candidates if and when they are approved.

There are risks involved with both establishing our own sales and marketing capabilities and entering into arrangements with third parties to perform these services. For example, recruiting and training a sales force is expensive and time consuming and could delay any product launch. If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel. We may have little or no control over the marketing and sales efforts of third parties conducting such activities on our behalf and our revenue from product sales may be lower than if we had commercialized our product candidates in-house. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our product candidates.

There can be no assurance that we will be able to develop adequate in-house sales and distribution capabilities or establish or maintain relationships with third-party collaborators to commercialize any product in the United States or abroad.

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Failure to comply with health and data protection laws and regulations could lead to government enforcement actions (which could include civil or criminal penalties), private litigation and/or adverse publicity and could negatively affect our operating results and business.

We may be subject to or affected by data protection laws and regulations, such as laws and regulations that address privacy and data security. In the United States, numerous federal and state laws and regulations, including federal and state health information privacy laws, state data breach notification laws, and federal and state consumer protection laws, such as Section 5 of the Federal Trade Commission Act, govern the collection, use, disclosure and protection of health information and other personal information could apply to our operations. In addition, we may obtain health information from third parties, including research institutions from which we obtain clinical trial data, that are subject to privacy and security requirements under HIPAA, as amended by HITECH, and its implementing rules and regulations. Depending on the facts and circumstances, we could be subject to criminal penalties if we knowingly obtain, use, or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.

In addition, the California Consumer Privacy Act (CCPA) took effect in January 2020 and became enforceable in July 2020. The CCPA created new individual privacy rights for California consumers (as the word is broadly defined in the law) and placed increased privacy and security obligations on many organizations that handle personal information of consumers or households. The CCPA requires covered companies to provide new disclosure to consumers about such companies’ data collection, use and sharing practices, provide such consumers a new right to opt-out of certain sales or transfers of personal information, and provides consumers with a new cause of action for certain data breaches. Additionally, California voters voted to approve the California Privacy Rights Act (CPRA) in November 2020, which modifies the CCPA significantly, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply. The CCPA and CPRA may impact our business activities and increase our compliance costs and potential liability. Many similar privacy laws have been enacted or proposed at the federal level and in other states. For example, Virginia passed its Consumer Data Protection Act in March 2021, Colorado passed the Colorado Privacy Act in June 2021, and Utah passed the Utah Consumer Privacy Act in March 2022. Each of these differs from the CCPA and CPRA and becomes effective in 2023.

Compliance with data protection laws and regulations could require us to take on more onerous obligations in our contracts, increase our costs of legal compliance, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions. Failure to comply with data protection laws and regulations could result in government investigations and/or enforcement actions (which could include civil, criminal, and administrative penalties), private litigation and/or adverse publicity and could negatively affect our operating results and business. Moreover, clinical trial subjects about whom we or our potential collaborators obtain information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose the information. Claims that we have violated individuals’ privacy rights, failed to comply with data protection laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend and could result in adverse publicity that could harm our business.

A variety of risks associated with seeking regulatory approval for and marketing our product candidates internationally could materially adversely affect our business.

We plan to seek regulatory approval of our product candidates outside of the United States and, accordingly, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including:

•Differing regulatory requirements in foreign countries, including constraints on manufacturing;

•Additional trials in foreign countries;

•Requirement to secure and validate region-specific manufacturing and clinical and commercial supply;

•Unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements;

•Economic weakness, including inflation, or political instability in particular foreign economies and markets;

•Compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

•Foreign taxes, including withholding of payroll taxes;

•Foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;

•Difficulties staffing and managing foreign operations;

•Workforce uncertainty in countries where labor unrest is more common than in the United States;

•Potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign regulations;

•Challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States;

•Production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

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•Business interruptions resulting from geo-political actions, including war (including ongoing geopolitical tensions related to Russia’s actions in Ukraine, resulting sanctions imposed by the U.S. and other countries, and retaliatory actions taken by Russia in response to such sanctions), armed conflict, terrorist activities, global pandemics and terrorism.

These and other risks associated with our international operations, including relating to data privacy and security, may materially adversely affect our ability to attain or maintain profitable operations.

The European Union system for authorization of medicinal products for human use offers several routes: the centralized procedure, the decentralized procedure, and the mutual recognition procedure, as well as domestic national routes. The centralized procedure provides for the grant of a single marketing authorization that is valid for all European Union Member States as well as the European Economic Area (EEA) countries of Iceland, Liechtenstein and Norway. The centralized procedure is mandatory for certain categories of investigational products, including human products containing a new active substance indicated for the treatment of certain diseases, including cancer, AIDS, diabetes and neurodegenerative illness; orphan medicinal products; and medicinal products manufactured using biotechnological processes. Applications for marketing authorization for such medicines must be submitted to the European Medicines Agency (EMA), in which the Committee for Medicinal Products for Human Use (CHMP) is generally responsible for conducting the initial assessment of a product.

The decentralized and mutual recognition procedures are applicable to the majority of conventional medicinal products and are both based on the principle of recognition of a marketing authorization by one or more Member States. Any national marketing authorization granted by a European Union Member State’s national authority can be used to support an application for its mutual recognition by other Member States. Marketing authorization applications can also be submitted directly to the Member State’s national competent authority under the national route (if the centralized route is not compulsory). Following Brexit, there are now multiple routes to obtain a marketing authorization in the United Kingdom, Great Britain or Northern Ireland, including national routes and international routes. The application procedure will depend on the relevant procedure chosen. Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of Brexit or otherwise, may force us to restrict or delay efforts to seek regulatory approval in the United Kingdom for our product candidates, which could significantly and materially harm our business. Further, even after obtaining market authorization, differences in GMP, pharmacovigilance, and other regulatory requirements in different jurisdictions can increase our compliance costs and exposure to potential liability.

Inadequate funding for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels and the ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory and policy changes and other events that may otherwise affect the FDA’s ability to perform routine functions. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA and other agencies, such as recent furloughs or government shutdowns, may also increase the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

Separately, in response to the COVID-19 pandemic, since March 2020 when foreign and domestic inspections of facilities were largely placed on hold, the FDA has been working to resume routine surveillance, bioresearch monitoring and pre-approval inspections on a prioritized basis. The FDA has developed a rating system to assist in determining when and where it is safest to conduct prioritized domestic inspections. As of May 2021, certain inspections, such as foreign preapproval, surveillance, and for-cause inspections that are not deemed mission-critical, remain temporarily postponed. In April 2021, the FDA issued guidance for industry formally announcing plans to employ remote interactive evaluations, using risk management methods, to meet user fee commitments and goal dates and in May 2021 announced plans to continue progress toward resuming standard operational levels. Should FDA determine that an inspection is necessary for approval and an inspection cannot be completed during the review cycle due to restrictions on travel, and the FDA does not determine a remote interactive evaluation to be adequate, the FDA has stated that it generally intends to issue a complete response letter or defer action on the application until an inspection can be completed. In 2020 and 2021, a number of companies announced receipt of complete response letters due to the FDA’s inability to complete required inspections for their applications. As of May 26, 2021, the FDA noted it was continuing to ensure timely reviews of applications for medical products during the ongoing COVID-19 pandemic in line with its user fee performance goals and conducting mission critical domestic and foreign inspections to ensure compliance of manufacturing facilities with FDA quality standards. However, the FDA may not be able to continue its current pace and review timelines could be extended, including where a pre-approval inspection or an inspection of clinical sites is required and due to the ongoing COVID-19 pandemic and travel restrictions, the FDA is unable to complete such required inspections during the review period. Regulatory authorities outside the U.S. may adopt similar restrictions or

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other policy measures in response to the COVID-19 pandemic and may experience delays in their regulatory activities. If a prolonged government shutdown or other disruption occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Future shutdowns or other disruptions could also affect other government agencies such as the SEC, which may also impact our business by delaying review of our public filings, to the extent such review is necessary, and our ability to access the public markets.

Regulatory authorities outside the United States may also impose similar restrictions or other policy measures in response to the COVID-19 pandemic. If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Our business activities may be subject to the Foreign Corrupt Practices Act and similar anti-bribery and anti-corruption laws, as well as U.S. and certain foreign export controls, trade sanctions, and import laws and regulations, all of which can subject us to criminal liability and other serious consequences for violations.

Our business activities may be subject to the U.S. Foreign Corrupt Practices Act (the FCPA), and similar anti-bribery or anti-corruption laws, regulations or rules of other countries in which we operate. These laws generally prohibit companies and their employees and third party business partners, representatives and agents from engaging in corruption and bribery, including offering, promising, giving or authorizing the provision of anything of value, either directly or indirectly, to a government official or commercial party in order to influence official action, direct business to any person, gain any improper advantage, or obtain or retain business. The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the transactions of the corporation and to devise and maintain an adequate system of internal accounting controls. Our business is heavily regulated and therefore involves significant interaction with government officials, including potentially officials of non-U.S. governments.

Additionally, in many countries, healthcare providers are employed by the government, and the purchasers of biopharmaceuticals are government entities. As a result, our dealings with these providers and purchasers are subject to regulation and such healthcare providers and employees of such purchasers may be considered “foreign officials” as defined in the FCPA. Recently, the SEC and the DOJ have increased their FCPA enforcement activities with respect to biotechnology companies. In addition to our own employees, we may in the future leverage third parties to conduct our business abroad, such as obtaining government licenses and approvals. We and our third-party business partners, representatives and agents may have direct or indirect interactions with officials and employees of government agencies, state-owned or affiliated entities and we may be held liable for the corrupt or other illegal activities of our employees, our third-party business partners, representatives and agents, even if we do not explicitly authorize such activities. There is no certainty that our employees or the employees of our third-party business partners, representatives and agents will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws. Violations of these laws and regulations could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, debarment from U.S. government contracts, substantial diversion of management’s attention, significant legal fees and fines, severe criminal or civil sanctions against us, our officers, or our employees, disgorgement and other sanctions and remedial measures, and prohibitions on the conduct of our business. Any such violations could include prohibitions on our ability to offer our products in one or more countries and could materially damage our reputation, our brand, our international expansion efforts, our ability to attract and retain employees, and our business, prospects, operating results, financial condition and stock price.

Furthermore, our products may be subject to U.S. and foreign export controls, trade sanctions and import laws and regulations. Governmental regulation of the import or export of our products, or our failure to obtain any required import or export authorization for our products, when applicable, could harm our business. Moreover, U.S. export control laws and economic sanctions prohibit the provision of certain products and services to countries, governments, and persons targeted by U.S. sanctions. U.S. sanctions that have been or may be imposed as a result of military conflicts in other countries may impact our ability to conduct activities at clinical trial sites within regions covered by such sanctions. For example, as a result of Russia’s actions in Ukraine, the United States and its European allies have recently announced the imposition of sanctions on certain industry sectors and parties in Russia and the regions of Donetsk and Luhansk in Ukraine, as well as enhanced export controls on certain products and industries. These and any additional sanctions and export controls, as well as any economic countermeasures by the governments of Russia or other jurisdictions, could adversely impact our ability to continue activities at clinical trial sites within regions covered by such sanctions or directly or indirectly disrupt our supply chain. If we fail to comply with export and import regulations and such economic sanctions, penalties could be imposed, including fines and/or denial of certain export privileges.

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Risks Related to Ownership of our Common Stock

An active, liquid, and orderly trading market may not continue to be developed or sustained for our common stock and, as a result, it may be difficult for you to sell your shares of our common stock.

Prior to our initial public offering, there was no public trading market for shares of our common stock. Although our common stock is listed on the Nasdaq Global Select Market, an active trading market for our shares may not be sustained and the trading market may be limited. You may not be able to sell your shares quickly or at the market price if trading in shares of our common stock is not active. The lack of an active market may also reduce the fair market value of your shares. Further, an inactive market may also impair our ability to raise capital by selling shares of our common stock and may impair our ability to enter into strategic partnerships or acquire companies or products by using our shares of our common stock as consideration.

The price of shares of our common stock may be volatile and may be adversely impacted by future events, and you could lose all or part of your investment.

The trading price of our common stock is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, many of which are beyond our control, including limited trading volume. In addition to the factors discussed in this Risk Factors section and elsewhere in this Quarterly Report on Form 10-Q, these factors include:

•Our decision to initiate a clinical trial, not to initiate a clinical trial, or to terminate an existing clinical trial;

•The commencement, enrollment, or results of the clinical trials of our product candidates or any future clinical trials we may conduct, or changes in the development status of our product candidates;

•Results from ongoing clinical trials and future clinical trials of our competitors;

•Any delay in our regulatory filings for our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information;

•Our failure to achieve product development goals in the timeframes we announce;

•Adverse results or delays in clinical trials;

•Adverse regulatory decisions, including failure to receive regulatory approval of our product candidates;

•Changes in laws or regulations applicable to our product candidates, including, but not limited to, clinical trial requirements for approvals;

•Adverse developments concerning our manufacturers;

•Our inability to obtain adequate supply for any product candidate, or any component thereof, or approved product or inability to do so at acceptable prices;

•Our inability to establish collaborations if needed;

•Our failure to commercialize our product candidates;

•Unanticipated serious safety concerns related to the use of our product candidates;

•Introduction of new products or other therapies offered by us or our competitors;

•Announcements of significant acquisitions, strategic partnerships, joint ventures, or capital commitments by us or our competitors;

•Additions or departures of key scientific or management personnel;

•Our ability to effectively manage our growth;

•The size and growth of our initial cancer target markets;

•Our ability to successfully treat additional types of cancers or at different stages;

•Actual or anticipated variations in quarterly operating results;

•Our cash position;

•Our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public;

•Publication of research reports about us or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts;

•Changes in the market valuations of similar companies;

•Our operating performance and the performance of other similar companies;

•Overall performance of the equity markets;

•The expiration of market stand-off or contractual lock-up agreements;

•Sales of our common stock by us or our stockholders in the future;

•Trading volume of our common stock;

•Changes in accounting practices;

•Ineffectiveness of our internal controls;

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•Disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies;

•Significant lawsuits, including patent or stockholder litigation;

•General political and economic conditions, including the impact of the COVID-19 global pandemic and the ongoing geopolitical tensions related to Russia’s actions in Ukraine, resulting sanctions imposed by the U.S. and other countries, and retaliatory actions taken by Russia in response to such sanctions; and

•Other events or factors, many of which are beyond our control.
 

In addition, the stock market in general, and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. A limited number of securities and industry analysts currently publish research on our company. If no, or very few, new securities or industry analysts commence coverage of our company, the trading price for our stock may be negatively impacted. If one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price may decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.

Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant influence over matters subject to stockholder approval.

As of March 1, 2022, our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates beneficially owned approximately 57.9% of our outstanding voting stock. Therefore, these stockholders will have the ability to influence us through this ownership position. These stockholders may be able to determine all matters requiring stockholder approval. For example, these stockholders may be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interests as one of our stockholders. Further, the significant concentration of stock ownership may adversely affect the market price of our common stock due to investors’ perception that conflicts of interest may exist or arise.

We are an emerging growth company and a smaller reporting company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors.

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act (JOBS Act) enacted in April 2012. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (Sarbanes-Oxley Act), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding nonbinding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years following the year of our initial public offering, although circumstances could cause us to lose that status earlier. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which requires, among other things, that the market value of our common stock that is held by non-affiliates to exceed $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1 billion in non-convertible debt during the prior three-year period.

Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,” which would allow us to take advantage of many of the same exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

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Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period under the JOBS Act. As a result, our consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make comparison of our financials to those of other public companies more difficult. As a result, changes in rules of U.S. generally accepted accounting principles or their interpretation, the adoption of new guidance, or the application of existing guidance to changes in our business could significantly affect our financial position and results of operations.

We have and will continue to incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time and resources to new compliance initiatives.

As a public company, and particularly after we are no longer an emerging growth company or a smaller reporting company, we have and will continue to incur significant legal, accounting, and other expenses that we did not incur as a private company. We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (Exchange Act), which require, among other things, that we file with the SEC annual, quarterly, and current reports with respect to our business and financial condition. Compliance with the various reporting and other requirements applicable to public companies requires considerable time and attention of management. We cannot assure you that we will satisfy our obligations as a public company on a timely basis.

In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and the Nasdaq Stock Market (Nasdaq) to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Further, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) was enacted. There are significant corporate governance and executive compensation related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations in these areas, such as “say on pay” and proxy access. Recent legislation permits emerging growth companies to implement many of these requirements over a longer period and up to five years from the pricing of our initial public offering. We intend to take advantage of this new legislation but cannot guarantee that we will not be required to implement these requirements sooner than budgeted or planned and thereby incur unexpected expenses. Stockholder activism, the current political environment, and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act and regulations implemented by the SEC and Nasdaq may increase legal and financial compliance costs and make some activities more time consuming. These laws, regulations and standards are subject to varying interpretations and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. We expect the rules and regulations applicable to public companies to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition, and results of operations. The increased costs will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business or increase the prices of our products or services. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees, or as executive officers.

Substantial amounts of our outstanding shares may be sold into the market when lock-up or market standoff periods end. Sales of a substantial number of shares of our common stock by our existing stockholders in the public market could cause our stock price to fall.

If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after lock-ups and other legal restrictions on resale lapse, the trading price of our common stock could decline. As of March 1, 2022, we had 35,146,266 shares of common stock outstanding. This includes the 9,487,500 shares that were sold in our IPO, which may be resold in the public market immediately without restriction. Substantially all of the remaining outstanding shares of common stock are currently restricted from resale as a result of market standoff and lock-up agreements entered into in connection with our IPO. These shares will become available to be sold 181 days after the completion of our IPO. BofA Securities, Inc. and SVB Leerink LLC, as representatives of the underwriters of our initial public offering, however, may, in their discretion, permit our officers, directors, and other stockholders who are subject to lock-up agreements to sell shares prior to the expiration of the lock-up agreements.

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In addition, we have filed a registration statement on Form S-8 under the Securities Act registering the issuance of 10,878,616 shares of common stock that are either subject to outstanding equity awards or reserved for future issuance under our equity incentive plans. These shares can be freely sold in the public market upon issuance and once vested, subject to volume limitations applicable to affiliates and the lock-up and market stand-off agreements described above.

The holders of up to 24,785,564 shares of our common stock will be entitled to rights with respect to the registration of their shares under the Securities Act, subject to the lock-up agreements described above.

The market price of the shares of our common stock could decline as a result of the sale of a substantial number of our shares of common stock in the public market or the perception in the market that the holders of a large number of shares intend to sell their shares.

Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

We expect that significant additional capital may be needed in the future to continue our planned operations, which include conducting clinical trials, pursuing commercialization efforts, expanding research and development activities, and continuing to operate as a public company. To raise capital, we may sell common stock, convertible securities, or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities, or other equity securities, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights, preferences, and privileges senior to the holders of our common stock, including shares of common stock sold in our initial public offering. If we raise additional funds through up-front payments or milestone payments pursuant to strategic collaborations with third parties, we may have to relinquish valuable rights to our drug candidates, or grant licenses on terms that are not favorable to us. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

Pursuant to the 2022 Equity Incentive Plan (the 2022 Plan), our board of directors or its duly authorized committee is authorized to grant equity awards to our employees, directors, and consultants.

Initially, the aggregate number of shares of our common stock that may be issued pursuant to equity awards under the 2022 Plan is 4,296,875 shares, plus shares subject to awards granted under our 2017 Equity Incentive Plan (the 2017 Plan) that, after the date of stockholder approval of the 2022 Plan, expire or otherwise terminate without having been exercised in full or are forfeited to or repurchased by us (provided that the maximum number of shares that may be added to the 2022 Plan pursuant to awards under the 2017 Plan is 6,269,300 shares). The number of shares of our common stock reserved for issuance under the 2022 Plan shall be cumulatively increased on the first day of each fiscal year, beginning with our 2023 fiscal year and ending on the ten year anniversary of the date our board of directors approves the 2022 Plan equal to the least of 4,296,875 shares, 5% of the total number of shares of our common stock outstanding as of the last day of the immediately preceding fiscal year, or a lesser number of shares determined by the administrator of the 2022 Plan. Unless the administrator of the 2022 Plan elects not to increase the number of shares available for future grant each year, our stockholders may experience additional dilution, which could cause our stock price to fall.

Pursuant to our 2022 Employee Stock Purchase Plan (the 2022 ESPP), our employees may receive the right to purchase shares of our common stock.

Initially, the aggregate number of shares of our common stock available for sale under our 2022 ESPP is 312,500 shares. The number of shares of our common stock available for sale under our 2022 ESPP shall be cumulatively increased on the first day of each fiscal year, beginning with the fiscal year following the fiscal year in which the first enrollment date (if any) occurs under the 2022 ESPP and ending on the twenty year anniversary of the date our board of directors approves the 2022 ESPP equal to the least of 312,500 shares, 1.0% of the total number of shares of our common stock outstanding as of the last day of the immediately preceding fiscal year, or a lesser number of shares determined by the administrator of the 2022 ESPP. Unless the administrator of the 2022 ESPP elects not to increase the number of shares available for future grant each year, our stockholders may experience additional dilution, which could cause our stock price to fall.

If we fail to establish and maintain proper and effective internal controls over financial reporting, our operating results and our ability to operate our business could be harmed.

Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be evaluated frequently. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. We have begun the

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process of documenting, reviewing, and improving our internal controls and procedures for compliance with Section 404 of the Sarbanes-Oxley Act, which will require annual management assessment of the effectiveness of our internal control over financial reporting. We continue to recruit additional finance and accounting personnel with certain skill sets that we need as a public company.

Implementing any appropriate changes to our internal controls may distract our officers and employees, entail substantial costs to modify our existing processes, and take significant time to complete. These changes may not, however, be effective in maintaining the adequacy of our internal controls, and any failure to maintain that adequacy, or consequent inability to produce accurate financial statements on a timely basis, could increase our operating costs and harm our business. We may discover weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our consolidated financial statements. Our internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to maintain proper and effective internal controls over financial reporting, we may not be able to produce timely and accurate financial statements. If that were to happen, our investors could lose confidence in our reported financial information, the market price of our stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities. In addition, investors’ perceptions that our internal controls are inadequate or that we are unable to produce accurate financial statements on a timely basis may harm our stock price and make it more difficult for us to effectively market and sell our service to new and existing customers.

If we are unable to maintain effective internal controls, our business, financial position and results of operations could be adversely affected.

We are subject to the periodic reporting requirements of the Exchange Act. We designed our disclosure controls and procedures to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations include the facts that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

We do not intend to pay dividends on our common stock, so any returns will be limited to the capital appreciation of our stock.

You should not rely on an investment in our common stock to provide dividend income. We have never declared or paid any cash dividends on our common stock. We currently anticipate that we will retain future earnings for the development, operation, and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. In addition, the terms of any future debt agreements may preclude us from paying dividends. Any return to stockholders will therefore be limited to the appreciation of their stock, which may never occur.

Certain provisions under our charter documents and Delaware law could delay or prevent a change of control, which could limit the market price of our common stock and may prevent or frustrate attempts by our stockholders to replace or remove our current management.

Our amended and restated certificate of incorporation and amended and restated bylaws, contain provisions that could discourage, delay or prevent a change of control of our company or changes in our board of directors that our stockholders might consider favorable. Some of these provisions include:

•A board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time, which could delay the ability of stockholders to change the membership of a majority of our board of directors;

•The exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death, disqualification or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

•A prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at an annual or special meeting of our stockholders;

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•A requirement that special meetings of stockholders be called only by the chairperson of our board of directors, our Chief Executive Officer, our President, or our board of directors acting pursuant to a resolution adopted by a majority of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;

•Advance notice requirements for stockholder proposals and nominations for election to our board of directors, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us;

•A requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than a majority of the shares present in person or by proxy at the meeting and entitled to vote, which could delay the ability of stockholders to change the membership of our board of directors;

•A requirement of approval of not less than two-thirds of all outstanding shares of our voting stock to amend any bylaws by stockholder action or to amend specific provisions of our certificate of incorporation, which may inhibit the ability of an acquirer to affect such amendments to facilitate an unsolicited takeover attempt; and

•The authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval, which preferred stock may include rights superior to the rights of the holders of common stock and could be used to significantly dilute the ownership of a hostile acquirer.

In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporate Law, which may prohibit certain business combinations with stockholders owning 15% or more of our outstanding voting stock. A Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation or by amendment to its certificate of incorporation or bylaws approved by its stockholders. However, we have not opted out of this provision. These anti-takeover provisions and other provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by the then-current board of directors and could also delay or impede a merger, tender offer, or proxy contest involving our company. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing or cause us to take other corporate actions you desire. Any delay or prevention of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline and limit opportunities for you to realize value in a corporate transaction.

Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America are the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another state court in Delaware) is the exclusive forum for the following (except for any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within 10 days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than such court or for which such court does not have subject matter jurisdiction):

•Any derivative action or proceeding brought on our behalf;

•Any action asserting a claim of breach of fiduciary duty;

•Any action asserting a claim against us arising under the Delaware General Corporation Law (DGCL), our amended and restated certificate of incorporation or our amended and restated bylaws; and

•Any action asserting a claim against us that is governed by the internal-affairs doctrine.

This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction.

Our amended and restated bylaws further provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. For the avoidance of doubt, this provision shall not apply to any claim brought to enforce a duty or liability created by the Exchange Act.

These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. Any person or entity purchasing or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to these provisions. There is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies’ charter documents has been challenged in legal proceedings. It is possible that a court could find these types of provisions to be inapplicable or unenforceable, and if a court were to find either

74

exclusive-forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business.

We could be subject to securities class action litigation.

In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because pharmaceutical companies have experienced significant stock price volatility in recent years. If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business, operating results, or financial condition.

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

(a) Sales of Unregistered Securities

From January 1, 2022 through March 31, 2022, we granted to our employees stock options to purchase an aggregate of 45,419 shares of our common stock under the 2017 Plan at a weighted-average exercise price of $6.66 per share and options to purchase an aggregate of 2,784,016 shares of our common stock under the 2022 Plan at a weighted-average exercise price of $15.00 per share.

From January 1, 2022 through March 31, 2022, we issued and sold to our employees an aggregate of 327,025 shares of common stock upon the exercise of stock options issued under the 2017 Plan at exercise prices ranging from $0.78 to $6.28 per share, for an aggregate exercise price of $0.4 million.

On March 4, 2022, we issued and sold an aggregate of 590,318 shares of our common stock in a private placement to one accredited investor at a price of $16.94 per share for an aggregate purchase price of $10.0 million.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. We believe these transactions were exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act (and Regulation D promulgated thereunder) or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or under benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed on the shares issued in these transactions. All recipients had adequate access, through their relationships with us, to information about us. The sales of these securities were made without any general solicitation or advertising.

(b) Use of Proceeds from Public Offering of Common Stock

On February 8, 2022, we closed our IPO, in which we issued and sold 9,487,500 shares of common stock, including the exercise in full by the underwriters of their option to purchase up to 1,237,500 additional shares of common stock, at a public offering price of $15.00 per share. We received net proceeds of $127.3 million, after deducting underwriting discounts and commissions and other offering expenses paid by us of approximately $15.0 million. All of the shares of common stock issued and sold in our initial public offering were registered under the Securities Act of 1933, as amended, or the Securities Act, pursuant to a registration statement on Form S-1 (Registration No. 333-262191), which was declared effective by the SEC on February 3, 2022. BofA Securities, Inc., SVB Securities LLC, Barclays Capital Inc. and William Blair & Company, L.L.C. acted as representatives of the several underwriters of the IPO. No offering expenses were paid directly or indirectly to any of our directors or officers (or their associates) or persons owning 10% or more of any class of our equity securities or to any other affiliates.

There has been no material change in the planned use of IPO proceeds from that described in our final prospectus filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act on February 7, 2022.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.

The exhibits listed on the Exhibit Index immediately preceding such exhibits, which is incorporated herein by reference, are filed or furnished as part of this Quarterly Report.

		Incorporation by Reference
Exhibit Number	Description	Form	Exhibit Number	Filing Date
3.1	Amended and Restated Certificate of Incorporation of the Registrant, as amended, as currently in effect.	S-1	3.2	1/14/2022
3.2	Amended and Restated Bylaws of the Registrant, as currently in effect.	S-1	3.4	1/14/2022
4.1	Amended and Restated Investors’ Rights Agreement among the Registrant and certain of its stockholders, dated March 26, 2021.	S-1	4.1	1/14/2022
4.2	Specimen common stock certificate of the Registrant.	S-1/A	4.2	1/31/2022
10.1+	Form of Indemnification Agreement, by and between the Registrant and each of its directors and executive officers.	S-1	10.1	1/14/2022
10.2+	2017 Equity Incentive Plan, as amended, and forms of agreement thereunder.	S-1	10.2	1/14/2022
10.3+	2022 Equity Incentive Plan and forms of agreements thereunder.	S-1/A	10.3	1/31/2022
10.4+	2022 Employee Stock Purchase Plan	S-1/A	10.4	1/31/2022
10.5+	Employee Incentive Compensation Plan.	S-1	10.6	1/14/2022
10.6+	Outside Director Compensation Policy.	S-1	10.12	1/14/2022
10.7+	Confirmatory Employment Letter between the Registrant and Rami Elghandour.	S-1/A	10.9	1/31/2022
10.8+	Confirmatory Employment Letter between the Registrant and Christopher Heery, M.D.	S-1/A	10.10	1/31/2022
10.9+	Confirmatory Employment Letter between the Registrant and Neeraj Teotia.	S-1/A	10.11	1/31/2022
10.10+#	Consulting Agreement between the Registrant and Danforth Advisors, LLC dated January 7, 2022.	S-1	10.14	1/14/2022
10.11+	Transition Agreement and Release between the Registrant and David Hilbert, Ph.D., dated January 7, 2022.	S-1	10.15	1/14/2022
10.12+	Form of Executive Change in Control and Severance Agreement.	S-1	10.5	1/14/2022
10.13*#	Master Services Agreement between Registrant and Lonza Houston, Inc., dated September 2, 2021.
10.14*#	Statement of Work A-1 between Registrant and Lonza Houston, Inc. dated February 16, 2022.
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*†	Certification of Principal Executive Officer Pursuant to Rules 13a-14(b) and 15d-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*†	Certification of Principal Financial Officer Pursuant to Rules 13a-14(b) and 15d-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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).

* Filed herewith.

# Portions of this exhibit have been redacted in compliance with to Item 601(b)(10) of Regulation S-K.

+ Indicated management contract or compensatory plan.

† The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q 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 this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

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SIGNATURE

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

	Arcellx, Inc.
Date: May 12, 2022	By:	/s/ Lance Thibault, C.P.A.
		Lance Thibault, C.P.A.
		Interim Chief Financial Officer (Principal Financial Officer and duly authorized to sign on behalf of the registrant)

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EX-10.13

Exhibit 10.13

[CERTAIN INFORMATION IN THIS EXHIBIT IDENTIFIED BY [***] IS CONFIDENTIAL AND HAS BEEN EXCLUDED BECAUSE IT (I) IS NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.]

MANUFACTURING SERVICES AGREEMENT

This Manufacturing Services Agreement (this “Agreement”) is made as of September 2, 2021, (the “Effective Date”) between Lonza Houston, Inc., 14905 Kirby, Drive, Pearland, Texas 77047 (“LONZA”), and Arcellx, Inc., a Delaware corporation, having an office at 25 West Watkins Mill Road, Suite A, Gaithersburg, Maryland 20878 (“CLIENT”) (each of LONZA and CLIENT, a “Party” and, collectively, the “Parties”).

RECITALS

A. LONZA operates a multi-client production facility located at Lonza Houston, Inc., 14905 Kirby, Drive, Pearland, Texas 77047, and/or such other location as LONZA may designate in writing from time to time (the “Facility”).

B. CLIENT desires to have LONZA produce a product intended for therapeutic use in humans, and LONZA desires to produce such product.

C. CLIENT desires to have LONZA conduct work according to one or more individual Statements of Work, as further defined below.

NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants hereinafter set forth, LONZA and CLIENT, intending to be legally bound, hereby agree as follows:

AGREEMENT

1.Definitions

When used in this Agreement, capitalized terms will have the meanings as defined below and throughout the Agreement.

1.1.“Acceptance Period” shall have the meaning set forth in Section 5.2.

1.2.“Affiliate” means, with respect to either Party, any other corporation or business entity that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Party. For purposes of this definition, the term “control” and, with correlative meanings, the terms “controlled by” and “under common control with” means direct or indirect ownership of more than fifty percent (50%) of the securities or other ownership interests representing the equity voting stock or general partnership or membership interest of such entity or the power to direct or cause the direction of the management or policies of such entity, whether through the ownership of voting securities, by contract, or otherwise.

1.3.“Applicable Law” means (a) any United States federal, state or local, law, statute, standard, ordinance, code, rule, regulation, resolution, promulgation, or government order; (b) any foreign or multinational, law, statute, standard, ordinance, code, rule, regulation, resolution, promulgation, or government order of any regulatory authority thatmay be in effect with respect to LONZA’s performance of any activities in support of manufacturing of the Product.

1.4.“Background Intellectual Property” means any Intellectual Property either (a) owned or controlled by a Party prior to the Effective Date or (b) developed or acquired by a Party independently from performance under this Agreement and without the use of the other Party’s Confidential Information during the term of the Agreement.

1.5.“Batch” means a specific quantity of Product that is intended to have uniform character and quality, within specified limits, and is produced according to a single manufacturing order during the same cycle of manufacture.

1.6.“Batch Record” means the production record pertaining to a Batch.

1.7.“cGMP” or “GMP” means the current Good Manufacturing Practices as provided for (and as amended from time to time) in the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) Harmonized Tripartite Guideline, Good Manufacturing Practice Guide for Active Pharmaceutical Ingredients, Q7 (ICH Q7), the EU Guidelines to Good Manufacturing Practice Medicinal Products for Human and Veterinary Use in Volume 4 of the European Commission’s Rules governing medicinal products in the European Union and any analogous guidelines in the United Kingdom, the United States Federal Food, Drug, and Cosmetic Act section 501(a)(2)(B) (21 U.S.C. 351(a)(2)(B)) and the United States Code of Federal Regulations 21 C.F.R. Parts 210 and 211, 610, and 1271 in each case, as applicable.

1.8.“cGMP Batch”means any Batch which is required under the Statement of Work to be manufactured in accordance with cGMP.

1.9.“Change Order” has the meaning set forth in Section 2.2.

1.10.“CLIENT Development Materials” has the meaning set forth in Section 2.3.

1.11.“CLIENT Inventions” means any know-how or inventions, whether or not patentable, conceived, developed or reduced to practice by CLIENT on or before the Effective Date.

1.12.“CLIENT Materials” means the CLIENT Development Materials and the CLIENT Production Materials.

1.13.“CLIENT Personnel” has the meaning set forth in Section 4.9.1.

1.14.“CLIENT Production Materials” has the meaning set forth in Section 4.1.

1.15.“Commencement Date” means the date set forth in the Statement of Work for the commencement of Services, including the production of the Product.

1.16. “Commercially Reasonable Efforts” means, with respect to LONZA’s performance of its obligations under this Agreement, [***].

1.17.“Confidential Information” has the meaning set forth in Section 10.1.

1.18.“Disapproval Notice” shall have the meaning set forth in Section 5.2.

1.19.“Engineering Batch” means a Batch that is intended to demonstrate the transfer of the Process to the Facility.

1.20.“Excluded Lists” has the meaning set forth in Section 12.2.

1.21.“FDA” means the U.S. Food and Drug Administration, and any successor agency thereof.

1.22.“FFDCA” has the meaning set forth in Section 12.2.

1.23.“Intellectual Property” means all worldwide patents, copyrights, trade secrets, know-how and all other intellectual property rights, including all applications and registrations with respect thereto, but excluding all trademarks, trade names, service marks, logos and other corporate identifiers.

1.24.“Latent Defect” has the meaning set forth in Section 5.2.3.

1.25.“LOI” has the meaning set forth in Section 2.1.

1.26.“LONZA Inventions” means any know-how, media, assays, methods or other inventions, whether or not patentable, conceived, developed or reduced to practice by LONZA: (a) on or before the Effective Date; or (b) in connection with the performance of the Statement of Work.

1.27.“LONZA Operating Documents” means the corporate standards, standard operating procedures, electronic programs and files, raw material specifications, protocols, validation documentation, and supporting documentation used by LONZA, such as environmental monitoring, for operation and maintenance of the Facility and LONZA equipment used in the process of producing the Product, excluding the Project Documentation and any of the foregoing that are specific to the manufacture of Product.

1.28.“LONZA Parties” has the meaning set forth in Section 15.2.

1.29.“Materials” means all raw materials and supplies to be used in the production of a Product.

1.30.“Process” means the manufacturing process for a Product, as such Process may be amended from time to time in accordance with this Agreement.

1.31.“Product” means the biological substance more specifically described in the applicable Statement of Work.

1.32.“Product Warranties” means those warranties as specifically stated in Section 5.1.

1.33.“Project Documentation”means the compilation of documentation generated by LONZA in preparation of and during the performance of a given SOW, including executed Batch Records, Material specifications, protocols, validation documentation according to the respective SOW, component records, test records and test record forms, certificates of analysis, study protocols, study summary reports, deviation reports, laboratory investigations, environment excursions, formulation records, and other related documents.

1.34.“Quality Agreement” has the meaning set forth in Section 2.4.

1.35.“Regulatory Approval” means the approval by the FDA or EMA to market and sell the Product in the respective markets.

1.36.“Services” means the activities to be performed by LONZA under a Statement of Work.

1.37.“SOP” means a standard operating procedure.

1.38.“Special Equipment” has the meaning set forth in Section 3.3.1.

1.39.“Specifications” means the Product specifications as provided by CLIENT and agreed to by LONZA in writing under the applicable Statement of Work, as such specifications may be amended upon mutual agreement from time to time in accordance with this Agreement.

1.40.“Statement of Work” or “SOW” has the meaning set forth in Section 2.1.

1.41.“Technology Transfer” means the transfer of documentation, specifications, and production process by CLIENT to LONZA for the development of the Project Documentation for the manufacture of the Product specifically for the CLIENT.

1.42.“Term” has the meaning set forth in Section 14.1.

1.43.“Testing Laboratories” has the meaning set forth in Section 2.3.

1.44.“Third Party” means any party other than LONZA, CLIENT or their respective Affiliates.

2.Statements of Work - Process and Product Development; Process or Product Manufacture

2.1Statement of Work. Prior to performing any Process or Product development, Technology Transfer, or Process or Product manufacture (other than, in each case, pursuant to that

certain Letter of Intent, dated as of July 9, 2021, between the Parties (the “LOI”)), the Parties will collaborate to develop a statement of work, describing the activities to be performed by the Parties, or to be subcontracted by LONZA to Third Parties, which shall at a minimum include: (a) a description of the services to be performed pursuant to such statement of work, including, if applicable, any start-up activities to be performed by or on behalf of CLIENT in connection with the transfer-in to LONZA of the existing Process; (b) cost for the performance of such services; (c) a listing (including quantities) of any materials to be provided by CLIENT to LONZA for use in the performance of such services; (d) lead times and delivery schedules (if known); (e) deliverables to be provided by LONZA to CLIENT; and (f) such other information as may be necessary for the manufacture of the Product(s) or performance of other activities with respect to such services (each, a “Statement of Work” or “SOW”). It is contemplated that each separate project shall have its own Statement of Work. As each Statement of Work is agreed to by the Parties, each shall state that it is to be incorporated and made a part of this Agreement and shall be consecutively numbered starting with A-1 and then A-2, A-3, etc. In the event of a conflict between the terms and conditions of this Agreement and any Statement of Work, the terms and conditions of this Agreement shall control, except to the extent the applicable Statement of Work expressly and specifically states an intent to supersede this Agreement on a specific matter. Any such superseding term of a Statement of Work shall only apply to the specified Statement of Work and not to any other Statement of Work.

2.2Modification of Statement of Work. Should either Party want to change a Statement of Work, including to add additional services to be provided by LONZA, such Party may propose to the other Party an amendment to the Statement of Work with the desired changes or additional services (“Change Order”). In the event of a Change Order proposed by CLIENT, if LONZA determines that it has the resources and capabilities to accommodate such Change Order, LONZA will prepare a modified version of the Statement of Work reflecting such Change Order (including any changes to the estimated timing, estimated charges or scope of a project) and will submit such modified version of the Statement of Work to CLIENT for review and comment. A Change Order shall be binding on the Parties only if it refers to this Agreement and the Statement(s) of Work it modifies, states that it is to be made a part thereof, and is signed by both Parties. Whereafter such modified version of the Statement of Work will be deemed to have replaced the prior version of the Statement of Work. Notwithstanding the foregoing, if a Change Order is not agreed to by both Parties, the existing Statement of Work shall remain in effect.

2.3CLIENT Deliverables. Within the time period specified in a Statement of Work, CLIENT will provide LONZA with (a) the materials listed in the Statement of Work for which CLIENT is responsible for delivering to LONZA, and any handling instructions, protocols, SOPs and other documentation necessary to maintain the properties of such materials for the performance of the Statement of Work, and (b) any protocols, SOPs and other information and documentation in possession or control of CLIENT and necessary for the performance of the Statement of Work, and for the preparation of the Project Documentation in conformance with cGMP, including manufacturing process information, SOPs, development data and reports, quality control assays, raw material specifications (including vendor, grade and sampling/testing requirements), product and sample packing and shipping instructions, and product specific cleaning and decontamination information, (collectively the materials in clauses (a) and (b), the “CLIENT Development Materials”). If CLIENT does not provide the CLIENT Development Materials within the time period specified in a Statement of Work, then LONZA shall be excused

for any delays in performing the applicable Statement of Work arising from such failure. LONZA shall have the right to use the CLIENT Materials solely for the purpose of performing Services. LONZA and its Affiliates will not use the CLIENT Materials (or any part thereof) for any other purpose without CLIENT’s prior written consent. CLIENT shall retain all right, title and interest in and to CLIENT Materials. LONZA shall: (i) at all times use all reasonable endeavours to keep CLIENT Materials secure and safe from loss, damage, theft, misuse and unauthorized access in such manner as LONZA stores its own materials of similar nature; (ii) use the CLIENT Materials in compliance with Applicable Law and comply with any safety precautions and instructions accompanying the CLIENT Materials; (iii) not use the CLIENT Materials for the benefit of any Third Party, transfer the CLIENT Materials to any Third Party or otherwise part with possession of the CLIENT Materials or the Product, save for the purpose of tests at any Third Party instructed by LONZA and approved by CLIENT to carry out tests on the CLIENT Materials or the Product (such Third Parties, “Testing Laboratories”) or as directed by CLIENT; (iv) not attempt to reverse-engineer or otherwise determine the genetic or amino acid sequence of the CLIENT Materials without the prior written consent of CLIENT; and (v) cause all Testing Laboratories to be subject to confidentiality and non-use obligations no less onerous than those confidentiality and non-use obligations imposed on LONZA under this Agreement.

2.4Performance by LONZA. Subject to the provision by CLIENT of the CLIENT Development Materials pursuant to Section 2.3, LONZA will perform, directly or, where expressly contemplated by the applicable Statement of Work or approved by CLIENT (such approval not to be unreasonably withheld), through a Third Party contractor, the work described in a Statement of Work, in a professional and workmanlike manner in accordance with the terms of this Agreement, any quality agreement entered into between LONZA and CLIENT with respect to the Services (the “Quality Agreement”), Applicable Law, LONZA’s standard operating procedure, CLIENT’s instructions agreed to by LONZA, and industry standards applicable to the Services; provided that the failure to achieve any of the deliverables set forth in a Statement of Work will not be deemed as a breach of LONZA’s obligation under this Section or under the Statement of Work if LONZA has used Commercially Reasonable Efforts to achieve such deliverables. LONZA will promptly notify CLIENT of any material delays that arise during the performance of the Statement of Work.

2.5 Engineering Batches. LONZA shall manufacture Engineering Batches in accordance with the applicable Statement of Work. CLIENT shall have the right to make whatever further use of the non-cGMP Engineering Batches as it shall determine, provided that CLIENT pays for such Batches in accordance with the Statement of Work, such use is not for human use and does not violate any Applicable Laws. LONZA makes no warranty that Engineering Batches will meet cGMP or the Specifications. Regardless of whether any Engineering Batch meets cGMP or the Specifications, CLIENT shall pay to LONZA the price for such Engineering Batch as contemplated in the applicable Statement of Work.

2.6 cGMP Batches. LONZA will, in accordance with the terms of this Agreement, Statement of Work, and Quality Agreement, manufacture at the Facility and release to CLIENT, cGMP Batches that comply with the Process, cGMP and the Specifications, together with a certificate of analysis; provided, however, that cGMP manufacture shall not commence until the successful completion of a Process validation study pursuant to a Statement of Work. Prior to commencement of cGMP manufacturing, LONZA shall review the process assumptions. In the event that there is a material difference in the process assumptions as compared with the process

results demonstrated during the manufacture of Engineering Batches, the Parties shall meet to discuss in good faith a revision to the Batch price to reflect such difference.

2.7 Affiliates. An Affiliate of LONZA may, with the consent of CLIENT, execute a Statement of Work (which Statement of Work shall constitute such CLIENT consent) with CLIENT pursuant to this Agreement and submit invoices to CLIENT under such Statement of Work. In such circumstances, all references in this Agreement to LONZA shall be deemed to be to the applicable Affiliate of LONZA with respect to (i) that particular Statement of Work or (ii) the relevant portions of a Statement of Work under which the Affiliate will be performing specified Services. The Affiliate shall be entitled to enforce this Agreement with respect to such Statement of Work, or as applicable the relevant portions of such Statement of Work, in its own name as an intended third party beneficiary and the Affiliate shall be solely liable to CLIENT for any obligations and liabilities undertaken pursuant to such Statement of Work and subject to the terms of this Agreement.

2.8 Non-Exclusive Arrangement. The Parties acknowledge and agree that, pursuant to this Agreement, they are establishing a non-exclusive manufacturing arrangement. Subject to Article 10 and Article 11, nothing contained herein is intended, or shall be construed, to prohibit or otherwise restrict CLIENT from carrying out directly, or having performed by one or more Affiliates or Third Parties, the activities included within the scope of the Services hereunder (not including the Services themselves or CLIENT’s obligations under the Agreement), including by manufacturing or having manufactured Product or any product containing such Product.

2.9 LOI Services. The Parties acknowledge that they entered into the LOI prior to entering into this Agreement, pursuant to which LONZA agreed to perform certain services on behalf of CLIENT in preparation for the activities described herein. The Parties now wish to supersede the LOI and have the activities contemplated thereby, and the Parties’ respective rights and obligations with respect thereto, governed by this Agreement. Without limitation of the foregoing, Attachment B of the LOI shall hereby be incorporated into this Agreement as Schedule 1. In the event of any conflict between any term or condition of the LOI and any term or condition of this Agreement, this Agreement shall control.

3.Technology Transfer

3.1 Drafting of Project Documentation. Based on the information provided by CLIENT and including process definition or changes developed by LONZA pursuant to any applicable Statement of Work, LONZA will prepare the Project Documentation for the Process in accordance with the Statement of Work. CLIENT will inform LONZA of any specific requirements CLIENT may have relating to the Project Documentation, including any information or procedures CLIENT wishes to have incorporated therein. If LONZA intends to either (i) include in the Project Documentation the use of any assay, medium, or other technology that is not commercially available or (ii) incorporate any LONZA Background Intellectual Property into the Process or Product such that use of LONZA Background Intellectual Property is necessary to make or have made the Product in accordance with the Process, LONZA will inform CLIENT of such intention and the Parties will meet to discuss and attempt to agree in good faith on the terms of use of such non-commercially available materials, technology, or LONZA Background Intellectual

Property in the Process or Product, as applicable. The applicable Project Documentation, as set forth in the SOW, shall be completed and delivered by LONZA.

3.2 Review of Project Documentation. CLIENT will cooperate with LONZA to provide reasonable assistance to LONZA to develop the Project Documentation and Process, including, without limitation, by providing LONZA with additional information and procedures as specified in Section 2.3. LONZA will deliver a draft version of the applicable portions of the Project Documentation to CLIENT for its review and approval in accordance with the schedule set forth in the Statement of Work. CLIENT will notify LONZA in writing of any objections it has to the draft Project Documentation, and upon such notification, representatives of LONZA and CLIENT will meet promptly to resolve such objections. CLIENT shall use commercially reasonable efforts to review the draft Project Documentation and provide any objections or comments within [***] following receipt of such draft Project Documentation by CLIENT. Upon CLIENT’s written acceptance of the draft Project Documentation, such draft shall become the Project Documentation for the applicable Statement of Work. LONZA shall be excused from its obligations to perform Services hereunder to the extent that CLIENT's failure to provide such comments or objections within such [***] period prevents LONZA from performing the affected Services, and CLIENT shall be responsible for any reasonable and documented costs actually incurred by LONZA as a direct result of such delay by CLIENT in accordance with the applicable SOW.

3.3 Equipment.

3.3.1 The Parties anticipate that CLIENT will provide, or LONZA will need to purchase, the equipment expressly described in each SOW as being provided by CLIENT (the “Special Equipment”) in order to perform the manufacture of the Product. CLIENT shall pay the cost of Special Equipment, and pay the reasonable costs of installation and validation of such Special Equipment as described below. This Section 3.3 shall not apply to any replacement equipment (other than replacements for Special Equipment) purchased by LONZA because of obsolescence (technical or otherwise). LONZA must receive written approval from CLIENT prior to any purchase of Special Equipment not set forth in the applicable SOW. LONZA shall purchase such Special Equipment and promptly invoice CLIENT for all amounts LONZA owes for such Special Equipment and the reasonable installation and equipment validation costs after LONZA installs the Special Equipment, in each case in accordance with the budget therefor agreed in writing by the Parties in advance.

3.3.2 Except as otherwise indicated in the applicable SOW, CLIENT shall own any Special Equipment upon the date it makes full payment to LONZA for such Special Equipment. Thereafter, title to and risk of loss of such Special Equipment shall be retained by CLIENT; provided, however, that LONZA shall be responsible for replacing any Special Equipment that is destroyed due to LONZA’s negligence or willful misconduct. LONZA shall execute such forms, documents and instruments evidencing CLIENT’s ownership of such Special Equipment as CLIENT reasonably shall request from time to time during the Term, including financing statements under the Uniform Commercial Code. LONZA shall take no action that is inconsistent with the right, title and interest of CLIENT in and to the Special Equipment owned by CLIENT, and any attempt by LONZA to sell, or to grant or create a lien on or security interest in, such Special Equipment shall be void ab initio.

3.3.3 LONZA shall be responsible for routine and non-routine maintenance and servicing of Special Equipment, which costs shall be borne by CLIENT. To the extent spare or replacement parts are necessary for the operation of the Special Equipment, the purchase of such spare or replacement parts shall be facilitated by LONZA and the costs shall be borne by CLIENT.LONZA shall notify CLIENT prior to the performance of any non-routine maintenance or servicing.

3.3.4 Special Equipment shall be used exclusively for manufacturing Product hereunder unless otherwise permitted in advance by CLIENT in writing. If CLIENT authorizes and LONZA agrees to the use of the Special Equipment for any products other than the Product, LONZA and CLIENT shall mutually agree upon a credit for CLIENT in the [***].

3.3.5 Except as provided in this Section 3.3 with respect to Special Equipment, CLIENT shall not have any obligation in connection with the Services or this Agreement to provide, or reimburse LONZA for, any equipment, or otherwise make payments to LONZA for an capital expenditures, including with respect to any facility.

4.Manufacture Of Product; Order Process; Deliveries

4.1CLIENT Deliverables. Within any time period agreed to in any applicable Statement of Work, CLIENT will provide LONZA with the materials listed in the Statement of Work required to be supplied by CLIENT for the production of the Product, and any handling instructions, protocols, SOPs and other documentation necessary to maintain the properties of such materials for the performance of the Statement of Work (collectively, the “CLIENT Production Materials”).

4.2Commencement Date. The Statement of Work will include a Commencement Date agreed upon by the Parties.

4.3Manufacture by LONZA. LONZA will (a) manufacture, package, ship, handle quality assurance and quality control for the Product, all as set forth in the Statement of Work, and (b) deliver to CLIENT the Product requested by CLIENT in the Statement of Work, all in accordance with the terms set forth in Section 4.6 below, and provided that the failure to achieve any of the deliverables set forth in a Statement of Work will not be deemed as a breach of LONZA’s obligation under this Section or under the Statement of Work if LONZA has used Commercially Reasonable Efforts to achieve such deliverables.

4.4Cancellation of a Statement of Work. Each Statement of Work shall provide the termination and/or cancellation fees for such Statement of Work (the “Cancellation Fee”).

4.5Payment of Cancellation Fee and Costs. The Cancellation Fee associated with any cancelled Batch shall be payable in accordance with Section 8.1.

4.6Packaging and Shipping. LONZA will package and label the Product for shipment in accordance with the Project Documentation and LONZA’s standard practices in effect at the time of performance by LONZA. LONZA will (i) ship the Product [***] to a common carrier designated by CLIENT to LONZA in writing not less than [***] prior to the applicable delivery date unless otherwise agreed to in a Statement of Work and (ii) reasonably cooperate with

CLIENT’s and CLIENT’s designated carrier’s instructions regarding such shipment. CLIENT will provide to LONZA its account number with a designated carrier and will pay for all shipping costs in connection with each shipment of Product. Each shipment will be accompanied by the documentation listed in the Statement of Work. Risk and title in the Product will pass upon delivery to the carrier. LONZA will use Commercially Reasonable Efforts to deliver each shipment of Product to CLIENT on the requested delivery date for such shipment. LONZA will promptly notify CLIENT if LONZA reasonably believes that it will be unable to meet a delivery date. If LONZA fails to deliver a Batch of Product by the applicable delivery date and such Batch is not administered to the patient it is intended for due to such late delivery, upon notice from CLIENT, LONZA shall refund the cost of the original Batch of Product (if CLIENT has first paid for the original Batch of Product). CLIENT shall be required to take physical possession of a Batch of Product within [***] after acceptance of such Batch in accordance with Section 5.2 (the “Delivery Period”), unless CLIENT requests in writing, and LONZA consents in writing, to store the material on CLIENT’s behalf and at CLIENT’s expense.

4.7Genetic Alterations. LONZA is not responsible for any genetic alterations that occur during production of any product, including as a result of a predisposition of any material provided by CLIENT, except to the extent those genetic alterations result from a failure to manufacture in accordance with the Process or a grossly negligent or intentionally wrongful act or omission of LONZA. Unless they arise from a grossly negligent or intentionally wrongful act or omission of LONZA, genetic alterations shall not be the basis for a breach of warranty claim by CLIENT. If LONZA fails to deliver materials in accordance with the terms of this Agreement or a Statement of Work, or if materials produced pursuant to the Statement of Work fail to meet any technical specification required by the Statement of Work, and such failure is due to genetic alterations which do not arise from a grossly negligent or intentionally wrongful act or omission of LONZA, LONZA will re-perform the specific project at issue at the earliest practicable time, [***].

4.8Records. LONZA will prepare and maintain complete, accurate, and organized records of all Services as well as any additional records required by Applicable Law. LONZA will retain possession of the Project Documentation, all Batch Records and LONZA Operating Documents, and will make copies thereof available to CLIENT upon CLIENT’s request and at CLIENT’s expense. LONZA Operating Documents will remain LONZA Confidential Information. CLIENT will have the right to use and reference LONZA Operating Documents in connection with a filing for Regulatory Approval of the Product or as otherwise authorized by the Agreement. For the avoidance of doubt, subject to Article 10 and Article 11, CLIENT may use the Project Documentation and Batch Records for any purpose.

4.9CLIENT Access.

4.9.1CLIENT’s employees and agents (including its independent contractors but excluding, for clarity, third party auditors) (collectively, “CLIENT Personnel”) may participate in the production of the Product at the Facility only (i) in such capacities as may be approved in writing in advance by LONZA or (ii) as agreed to in a Statement of Work. If applicable, CLIENT Personnel working at the Facility are required to comply with LONZA’s Operating Documents and any other applicable LONZA facility and/or safety policies that are generally applicable to third parties while at the LONZA facility; provided that, LONZA must provide the relevant portion

of such information to CLIENT Personnel. For the avoidance of doubt, CLIENT Personnel may not physically participate in the production or manufacture of any Product that may be used in or on humans.

4.9.2CLIENT Personnel working at the Facility will be and remain employees of CLIENT, and CLIENT will be solely responsible for the payment of compensation for such CLIENT Personnel (including applicable Federal, state and local withholding, FICA and other payroll taxes, workers’ compensation insurance, health insurance, and other similar statutory and fringe benefits). CLIENT covenants and agrees to maintain insurance as required by applicable Federal and state laws with respect to all CLIENT Personnel working at the Facility.

4.9.3CLIENT will pay for the actual cost of repairing or replacing to its previous status ([***]) any property of LONZA damaged or destroyed by CLIENT Personnel, provided CLIENT shall not be liable for repair or replacement costs resulting from ordinary wear and tear.

4.9.4 In addition, CLIENT will reimburse LONZA for the cost of any lost security cards issued to CLIENT Personnel, at the rate of [***].

4.9.5CLIENT will indemnify and hold harmless LONZA from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) arising out of any injuries suffered by CLIENT Personnel while at the Facility or elsewhere, except to the extent caused by the gross negligence or willful misconduct on the part of any LONZA Party.

4.10Disclaimers. CLIENT acknowledges and agrees that LONZA Parties will not engage in any Product refinement or development of the Product, other than as expressly set forth in this Agreement and any Statement of Work. CLIENT acknowledges and agrees that LONZA Parties have not participated in the invention or testing of any Product, and have not evaluated its safety or suitability for use in humans or otherwise.

5.Product Warranties; Acceptance And Rejection Of Products

5.1Product Warranties. LONZA warrants that any Product manufactured by LONZA pursuant to this Agreement, at the time of delivery pursuant to Section 4.6: (a) conforms to the Specifications, except with respect to Engineering Batches; (b) was manufactured in accordance with the Project Documentation; and (c) where applicable, was manufactured in accordance with cGMP, except with respect to Engineering Batches. LONZA further warrants that unencumbered title to all Product will be conveyed to CLIENT upon delivery.

5.2Approval of Completed Product.

5.2.1When a cGMP Batch has been completed, LONZA will notify CLIENT and supply CLIENT with the required Project Documentation set forth in the SOW. Within [***] after CLIENT’s receipt of such documentation regarding such cGMP Batch (the “Acceptance Period”), CLIENT shall determine by review of such documentation whether or not the given cGMP Batch conforms to the product warranties set forth in Section 5.1 above (“Product Warranties”). If CLIENT asserts that the cGMP Batch does not comply with the Product Warranties set forth in Section 5.1 above, CLIENT will deliver to LONZA, in accordance with the

notice provisions set forth in Section 17.4 hereof, written notice of disapproval (the “Disapproval Notice”) of such cGMP Batch, stating in reasonable detail the basis for such assertion of non-compliance with the Product Warranties. If a Disapproval Notice is received by LONZA during the Acceptance Period, then LONZA and CLIENT will provide one another with all related paperwork and records (including, but not limited to, quality control tests) relating to both the production or testing of the cGMP Batch. If a valid Disapproval Notice is not received during the Acceptance Period, the cGMP Batch will be deemed accepted and ready for shipment to CLIENT, or storage for CLIENT, as applicable.

5.2.2If Product is to be shipped to CLIENT, then upon acceptance, the Product shall be delivered to CLIENT, and CLIENT shall accept delivery thereof, within [***] after such acceptance. Title and risk of loss to such Product shall pass to CLIENT at the time of delivery to the common carrier pursuant to Section 4.6. If the Product is to be stored by LONZA for CLIENT, LONZA shall do so in accordance with agreed upon terms of a SOW which covers all relevant details of a Product storage engagement.

5.2.3 Notwithstanding anything to the contrary, CLIENT shall have the further right to reject quantities of Product accepted pursuant to Section 5.2.1 or Section 5.2.2 if it [***], provided such non-conformance could not have [***] been discoverable upon the inspection and testing by LONZA and CLIENT that would have been expected in the ordinary course of Product release and disposition, but is discovered at a later time and [***] (a “Latent Defect”) and CLIENT provides a Disapproval Notice related thereto. Any Disapproval Notice for a Latent Defect shall be provided within [***] of the discovery of any such Latent Defect, but in no event later than [***] after delivery of the applicable Product to CLIENT. If a Disapproval Notice is received by LONZA during such period, then LONZA and CLIENT will provide one another with all related paperwork and records (including, but not limited to, quality control tests) relating to both the production of the Product and the Disapproval Notice.

5.3Dispute Resolution. LONZA and CLIENT will attempt to resolve any dispute regarding the conformity of a cGMP Batch with the Product Warranties. If such dispute cannot be settled within [***] of the submission by each Party of such related paperwork and records to the other Party, and if the cGMP Batch is alleged not to conform with the Product Warranties set forth in Section 5.1(a), then CLIENT will submit a sample of the disputed Product to an independent expert or independent testing laboratory of recognized repute either of which is selected by [***] for analysis, under procedures to be selected by such expert or laboratory, of the conformity of such cGMP Batch or with the Specifications. The costs associated with such analysis by such independent expert or independent testing laboratory will be paid by [***].

5.4Remedies for Non-Conforming, Damaged, or Destroyed Product.

5.4.1In the event that the Parties agree, or an independent testing laboratory determines, pursuant to Section 5.3, that (a) a cGMP Batch fails to conform to the Product Warranties (including failure to conform with the Specifications) and such failure is the reason a cGMP Batch is not administered to the patient it is intended for, or (b) Product and/or Materials are destroyed or damaged by LONZA personnel, and the failure under clause (a), or the destruction or damage under clause (b), as the case may be, is due to the failure of (i) LONZA personnel properly to execute the Project Documentation or (ii) LONZA personnel to comply with cGMP,

then at CLIENT’s request, LONZA will, as soon as it is commercially practicable to do so, produce one time for CLIENT sufficient quantities of Product to replace the non-conforming, damaged or destroyed portion of such cGMP Batch (the “Production Rerun”), in accordance with the provisions of this Agreement and at no additional cost to CLIENT; provided, however, CLIENT shall have first paid for the original cGMP Batch. If a replacement Product cannot be provided to CLIENT or if CLIENT elects not to have LONZA provide a Production Rerun, then LONZA shall refund the cost of the original Batch of Product (if CLIENT has first paid for the original Batch of Product).

5.4.2In the event that the Parties agree, or an independent testing laboratory determines, pursuant to Section 5.3, that a cGMP Batch materially fails to conform to the Product Warranties, or Product and/or Materials are destroyed or damaged by LONZA personnel, for any reason other than as set forth in Section 5.4.1, then LONZA shall have no liability to CLIENT with respect to such cGMP Batch, Product or Material and LONZA will, at CLIENT’s request, produce for CLIENT a Production Rerun at CLIENT’s expense. Notwithstanding anything to the contrary set forth in Section 5.4, if during the manufacture of Product pursuant to this Agreement, Product or Materials are destroyed or damaged by LONZA personnel while LONZA personnel were acting at the direction of CLIENT Personnel, then LONZA will have no liability to CLIENT as the result of such destruction or damage.

5.4.3CLIENT acknowledges and agrees that, other than a right of indemnity with respect to third party product liability claims subject to Sections 13.3 and 15.3.2, its sole remedy with respect to (i) the failure of Product to conform with any of the Product Warranties and (ii) damaged or destroyed Materials and/or Product, is as set forth in this Section 5.4, and in furtherance thereof, Client hereby waives all other remedies at law or in equity regarding the foregoing claims.

6.Storage Of Materials

6.1Pre-Production. LONZA will store at the expense of CLIENT any CLIENT Materials, equipment or other property (in each case, other than Special Equipment) delivered pursuant to the Statement of Work to the Facility by CLIENT more than [***] prior to the Commencement Date. The storage rates will be set forth in the Statement of Work and may be amended from time to time by LONZA. No storage fees will be charged during the period starting [***] prior to the Commencement Date and ending upon completion of the manufacturing of the applicable Product.

6.2Post-Production. LONZA will store at the Facility free of charge any in–process materials, CLIENT Materials, equipment and other CLIENT property (other than Product manufactured hereunder) that remains at the Facility on the date of completion of the manufacturing of the applicable Product that are not otherwise intended to be used under a Statement of Work (collectively “Remaining CLIENT Property”), for up to [***]. Within [***] of completion of the manufacturing of the applicable Product, in the course of regular operational team meetings, LONZA shall provide CLIENT verbal notice of the Remaining CLIENT Property in its possession and the deadline for CLIENT response in accordance with the following sentence. If CLIENT has not provided any instructions as to the shipment or other disposition of Remaining CLIENT Property prior to the expiration of such [***] period, LONZA may, in its sole discretion,

destroy such Remaining CLIENT Property, or continue to store such Remaining CLIENT Property at the Facility or elsewhere. In the event that LONZA continues to store such Remaining CLIENT Property, CLIENT will pay to LONZA a storage charge at the post-production monthly storage rates for the period set forth in the applicable Statement of Work beginning on the [***] after the completion of the manufacturing of the applicable Product through the date that the storage terminates.

6.3Product. Notwithstanding the foregoing, if CLIENT fails to take delivery of a Product within the applicable Delivery Period as required by Section 4.6, CLIENT will pay to LONZA a storage charge at [***] the post-production monthly storage rate set for in the applicable Statement of Work, which shall begin accruing on the first day following the expiration of the applicable Delivery Period.

7.Regulatory Matters

7.1Permits and Approvals. During the term, LONZA will maintain any licenses, permits and approvals necessary for the manufacture of the Product in the Facility in accordance with Applicable Law as of the date of this Agreement. LONZA will promptly notify CLIENT if LONZA receives notice that any necessary license, permit, or approval is or may be revoked or suspended. If LONZA fails to maintain any license, permit and/or approval necessary for the manufacture of the Product in the Facility, CLIENT shall have the right to terminate this Agreement; provided, however that CLIENT shall have no right to terminate this Agreement in the event that the failure results from a change in law or regulation with which LONZA [***]; provided further that LONZA obtains the relevant license, permit and/or approval within the lesser of [***] from the date of CLIENT’s written request, or the grace period permitted by the applicable law or regulation.

7.2Inspections/Quality Audit by CLIENT. At least [***] per year and upon not less than [***] prior written notice, LONZA will permit CLIENT to inspect and audit the parts of the Facility where the manufacture of the Product is carried out in order to assess LONZA’s compliance with this Agreement and Statements of Work; however, if any such audit reveals a material compliance issue or other reasonable cause exists, then CLIENT shall have the right to conduct additional audits during such year to verify that such issue has been remedied. Such audits shall not last for more than [***]. CLIENT Personnel engaged in such inspection will abide by the terms and conditions set forth in Sections 4.9.4 and 10. For each such audit, CLIENT shall be permitted to inspect any Facility used in the Services as well as the manufacturing of the Product, including inspection of (a) the Materials used in the manufacture of the Product, (b) the holding facilities for such Materials, (c) the equipment used in the manufacture of the Product, and (d) all records relating to such manufacturing and each Facility, including Project Documentation (which records, other than SOPs that are LONZA’s Confidential Information, may be copied by CLIENT). Following such audit, CLIENT shall discuss its observations and conclusions with LONZA and LONZA shall implement such corrective actions as may be reasonably determined by CLIENT within [***] after notification thereof by CLIENT.

In addition to the foregoing, CLIENT and/or its representatives shall have the right to perform “For Cause” audits at any time upon reasonable advance notice and during regular business hours. If a For Cause audit confirms that LONZA did not comply with its obligations

under the Agreement, the audit shall not be charged by LONZA; in all other cases LONZA’s standard hourly rates apply. Notwithstanding the foregoing, a For Cause audit shall also be at no cost for CLIENT if [***]. For the avoidance of doubt, any and all costs related to deviations and or modifications to the Facility requested and/or approved by CLIENT (outside of those related to material breaches of the Agreement attributable to LONZA which costs shall be the sole responsibility of LONZA) related to the manufacturing of Product will be priced in a quote from LONZA and shall only be implemented upon CLIENT acceptance of such costs.

7.3Inspections by Regulatory Agencies. Except as otherwise set forth in the Quality Agreement, LONZA will allow representatives of any regulatory agency to inspect the relevant parts of the Facility where the manufacture of the Product is carried out and to inspect the Project Documentation and Batch Records to verify compliance with cGMP and other practices or regulations and will promptly notify CLIENT of the scheduling of any such inspection relating to the manufacture of Product. LONZA will promptly send to CLIENT a copy of any reports, citations, or warning letters received by LONZA in connection with an inspection of a regulatory agency to the extent such documents relate to or affect the manufacture of the Product. LONZA shall provide CLIENT with a copy of all draft responses for comment as soon as reasonably possible and all final responses for review and approval by CLIENT, which shall not be unreasonably withheld or delayed, within [***] prior to submission thereof.

7.4Regulatory Support. On CLIENT’s reasonable request, LONZA shall provide CLIENT with such existing files and other documents in LONZA’s possession regarding LONZA’s manufacturing processes and procedures for Product as is reasonably necessary for CLIENT to comply with its obligations under Applicable Laws, rules and regulations as the sponsor of clinical trials of Products or to file or maintain regulatory approvals for Products (including providing the batch documentation associated with the technology transfer runs that may be used to support the IND filing or other regulatory submissions). Notwithstanding the foregoing, LONZA shall not be obligated to provide CLIENT with SOPs that are LONZA’s Confidential Information, and shall provide such SOPs (or a right of reference thereto as part of a Drug Master File) directly to the regulatory authority. To the extent additional regulatory support is requested by CLIENT, LONZA shall provide all reasonable and necessary regulatory support as agreed to by the Parties in a separate Statement of Work.

7.5Process Changes. No change to the Process shall be made except by an agreement in writing signed by the authorized representatives of the Parties, provided that [***]. CLIENT shall be responsible for obtaining all necessary Product-related approvals from regulatory authorities with respect to a Process change. LONZA shall submit to CLIENT for its approval a revised price proposal for Batches of the Product that reflects any reasonable cost increase or decrease resulting from any Process changes with respect to the manufacture of the Product and which is consistent with the principles in item (ii) of Section 9, to the extent applicable. In the event the Parties are unable after good faith negotiation to agree on such cost increase or decrease, (a) LONZA may [***]; or (b) CLIENT may [***].

7.6Specification Changes. No change to the Specifications shall be made except by an agreement in writing signed by the authorized representatives of the Parties, provided that [***]. LONZA shall submit to CLIENT for its approval a revised price for the Product that reflects any reasonable cost increase or decrease resulting from any proposed changes to the Process or test

methods resulting from such requested modification of the Specifications and which is consistent with the principles in item (ii) of Section 9, to the extent applicable. In the event the Parties are unable after good faith negotiation to agree on such cost increase or decrease, (a) LONZA may [***]; or (b) CLIENT may [***]. If such modification results in the requirement to reprocess and/or retest previously manufactured and otherwise acceptable Product, any reasonable and documented costs incurred by LONZA in such reprocessing and/or retesting shall be paid within the longer of: (x) [***] of the mutual written agreement of the Parties for LONZA to reprocess and/or retest the Product; or (y) [***] after CLIENT receives the final report of the results of such retest or reprocessing.

8.Financial Terms

8.1Payments. CLIENT will make payments to LONZA in the amounts set forth in the Statement of Work upon receipt of an invoice from LONZA. In the event that CLIENT has not either paid or [***] with respect to any invoice within [***] of the applicable due date (as established by Section 8.2), CLIENT’s failure shall be considered a material breach under Section 14.2, subject to the cure provisions set forth therein; provided that if there is a dispute between the Parties regarding whether Product conforms with the Product Warranties pursuant to Sections 5.2 through 5.4, then payment with respect to such Product shall be due within [***] after the Parties agree that, or CLIENT receives notice from the independent expert or laboratory that, the invoiced Product complies with the Specifications or, subject to Section 5.4, CLIENT receives replacement Product in conformance with the Specifications, as the case may be; provided further, if CLIENT in good faith disputes any portion of an invoice, it shall pay the undisputed portion and shall provide LONZA with written notice of the disputed portion and its reasons therefor, and CLIENT shall not be obligated to pay such disputed portion while the dispute is pending. Further, in addition to all other remedies available to LONZA, in the event that CLIENT has not paid an invoice other than a Disputed Invoice within [***] of the applicable due date (as established by Section 8.2), LONZA may elect to suspend the provision of all or a portion of the services under such Statement of Work.

8.2Invoices and Pricing. LONZA will charge for the services in accordance with the price schedule in each individual Statement of Work. LONZA will invoice CLIENT according to the schedule set forth in a Statement of Work. LONZA will deliver invoices electronically by email, which shall be considered to be an original invoice. LONZA shall include the applicable purchase order number on each invoice. Invoices should be e-mailed to [***], and/or to such other e-mail address(es) as CLIENT may stipulate from time to time. LONZA will not deliver a paper invoice. Payment of invoices is due as provided in the Statement of Work. Unless otherwise provided in the Statement of Work, all pricing excludes taxes and costs relating to shipping, validation and regulatory filings. The price shall be invoiced to CLIENT in the local currency of the location of the facility in which the Services were performed.

8.3Taxes. CLIENT agrees that it is responsible for and will pay any sales, use or other taxes (the “Taxes”) resulting from LONZA’s production of Product under this Agreement (except for income or personal property taxes payable by LONZA). The amount of any such tax shall be added by LONZA to its invoices issued hereunder and paid by CLIENT.

8.4Interest. Any fee, charge or other payment due to LONZA by CLIENT under this Agreement that is not paid within [***] after it is due will accrue interest on a daily basis at a rate of [***] (or the maximum legal interest rate allowed by Applicable Law, if less) from and after such date.

8.5Method of Payment. Except as otherwise set forth in Section 8.2, all payments to LONZA hereunder by CLIENT will be in United States currency and will be by check, wire transfer, money order, or other method of payment approved by LONZA. Bank information for wire transfers is as follows:

Mailing address for wire transfer payments:

[***] [***]

[***] [***]

[***]

[***] [***]

[***] [***]

[***] [***]

[***] [***]

[***]

9.Cost Adjustments. The prices set forth in the Statement of Work attached hereto will be subjected to an automatic adjustment for annual inflation or deflation, as applicable, after the [***] anniversary of the Effective Date, as per [***], provided, however in no event shall adjustment result in an adjustment of the prices more than [***] as compared to the prior year. In addition to the foregoing, a price adjustment may implemented [***]

10.Confidential Information

10.1Definition. “Confidential Information” means all technical, scientific and other know-how and information, trade secrets, knowledge, technology, means, methods, processes, practices, formulas, instructions, skills, techniques, procedures, specifications, data, results and other material, pre-clinical and clinical trial results, manufacturing procedures, test procedures and purification and isolation techniques, and any tangible embodiments of any of the foregoing, and any scientific, manufacturing, marketing and business plans, any financial and personnel matters relating to a Party or its present or future products, sales, suppliers, customers, employees, investors or business, that has been disclosed by or on behalf of such Party or such Party’s Affiliates to the other Party or the other Party’s Affiliates either in connection with the discussions and negotiations pertaining to this Agreement or in the course of performing this Agreement. Without limiting the foregoing, the terms of this Agreement will be deemed “Confidential Information” of both Parties and will be subject to the terms and conditions set forth in this Article 10. The Process, Project Documentation, Specifications, and any improvements or modifications thereto developed during the term of this Agreement, but excluding any LONZA Operating Documents, LONZA Inventions or LONZA Confidential Information included in any of the foregoing, will be (i) the property of CLIENT and LONZA shall and hereby does, and shall cause its Affiliates to, assign to CLIENT any and all interest it has in the same and (ii) deemed CLIENT Confidential Information and subject to the provisions set forth in this Article 10.

10.2Exclusions. Notwithstanding the foregoing Section 10.1, the confidentiality obligations under this Section 10 shall not apply to the extent that such information:

(a)at the time of disclosure is in the public domain;

(b)becomes part of the public domain, by publication or otherwise, through no fault of the Party receiving such information;

(c)at the time of disclosure is already in possession of the Party who received such information, as established by contemporaneous written records;

(d)is lawfully provided to a Party, without restriction as to confidentiality or use, by a Third Party lawfully entitled to possession and such distribution of such Confidential Information; or

(e)is independently developed by a Party without use of or reference to the other Party’s Confidential Information, as established by contemporaneous written records.

10.3Disclosure and Use Restriction. Except as expressly provided herein, the Parties agree that for the term of the Agreement and the [***] period following any termination of the Agreement, each Party and its Affiliates will keep completely confidential and will not publish or otherwise disclose any Confidential Information of the other Party, its Affiliates or sublicensees, except in accordance with Section 10.4. Neither Party will use Confidential Information of the other Party except as necessary to perform its obligations or to exercise its rights under this Agreement.

10.4Permitted Disclosures. Each receiving Party agrees to (i) institute and maintain security procedures to identify and account for all copies of Confidential Information of the disclosing Party and (ii) limit disclosure of the disclosing Party’s Confidential Information to its U.S. and European Affiliates and each of its and their respective officers, directors, employees, agents, consultants and independent contractors having a need to know such Confidential Information for purposes of this Agreement; provided that such U.S. and European Affiliates and each of its and their respective officers, directors, employees, agents, consultants and independent contractors are informed of the terms of this Agreement and are subject to obligations of confidentiality, non-disclosure and non-use similar to those set forth herein.

10.5Government-Required Disclosure. If a duly constituted government authority, court or regulatory agency orders that a Party hereto disclose information subject to an obligation of confidentiality under this Agreement, such Party may comply with the order, but shall limit the disclosure to the minimum amount of the other Party’s Confidential Information required to be disclosed under such order and shall notify the other Party as soon as possible and provide the said Party an opportunity to apply to a court of record for relief from the order.

10.6Publicity. Neither Party will refer to, display or use the other’s name, trademarks or trade names confusingly similar thereto, alone or in conjunction with any other words or names, in any manner or connection whatsoever, including any publication, article, or any form of advertising or publicity, except with the prior written consent of the other Party or as otherwise set forth in Section 10.7.

10.7 Publications. Subject to the other provisions of this Article 10, neither Party shall make a press release or other public announcement regarding this Agreement, the terms hereof or the transactions contemplated hereby without the prior written approval of the other Party, except for any such press release or other public announcement that is required by Applicable Law or the rules of a stock exchange on which the securities of the Party making such press release or announcement are listed (or to which an application for listing has been submitted), in which case such Party shall provide the other Party with the proposed text of any such press release or public announcement for review and approval (which approval shall not be unreasonably withheld, conditioned or delayed) as early as possible, but in no event less than [***] in advance of the publication, communication or dissemination thereof; provided, however, that such other Party shall be deemed to have approved any such press release or public announcement if it fails to notify the proposing Party in writing of any objections to such press release or public announcement within [***] of receipt by such other Party of the text of such press release or public announcement. For general business development purposes, LONZA may announce on its website or in press releases the general nature of work performed for CLIENT under any given Statement of Work upon receiving permission from CLIENT.

10.8 CLIENT Permitted Disclosures. Notwithstanding anything else in this Agreement, CLIENT or its Affiliates or licensees may disclose LONZA Confidential Information (i) in connection with the performance of CLIENT’s obligations or exercise of its rights as contemplated by this Agreement, (ii) to existing or prospective collaborators, partners, joint ventures or investors, (iii) in connection with a merger, consolidation or similar transaction of such entity or the sale of all or substantially all of the assets of CLIENT to which this Agreement relates, or (iv) as may be necessary or useful to file, prosecute or maintain patents rights with respect to the Product or the Process subject to Article 11.

11.Intellectual Property

11.1Ownership.

11.1.1Except as expressly otherwise provided herein, neither Party will, as a result of this Agreement, acquire any right, title, or interest in any Background Intellectual Property of the other Party. Except as expressly otherwise provided herein, ownership of any Intellectual Property that is developed, conceived, invented, first reduced to practice or made in connection with the performance under this Agreement shall follow inventorship all as determined under Applicable Laws.

11.1.2Subject to Section 11.1.3, CLIENT shall own all right, title, and interest in and to any and all Intellectual Property that LONZA and/or its Affiliates develops, conceives, invents, first reduces to practice or makes, solely or jointly with CLIENT or others, (i) that is a development or improvement to CLIENT Materials, CLIENT Confidential Information and/or CLIENT Background Intellectual Property or (ii) as a result of or in connection with this Agreement (collectively, “CLIENT New IP”). For the removal of doubt, CLIENT New IP shall not include LONZA New IP, as defined below. LONZA shall, and shall cause its Affiliates and contractors to, promptly disclose in writing to CLIENT the conception, discovery, development, reduction to practice or making of any CLIENT New IP. LONZA hereby assigns, and shall cause its employees and representatives to assign, to CLIENT all of LONZA’s right, title and interest in

and to such CLIENT New IP. LONZA shall promptly disclose to CLIENT in writing all CLIENT New IP. LONZA shall execute, and shall require its personnel as well as its Affiliates, or other contractors or agents and their personnel involved in the performance of this Agreement to execute, any documents reasonably required to confirm CLIENT’s ownership of CLIENT New IP, and any documents required to apply for, maintain and enforce any patent or other right in the CLIENT New IP.

11.1.3Notwithstanding Section 11.1.2, and subject to the license granted in Section 11.2.2, LONZA shall own all right, title and interest in “LONZA New IP”, which as used in this Agreement means Intellectual Property that LONZA and/or its Affiliates, or other contractors or agents of LONZA develops, conceives, invents, or first reduces to practice or makes in the course of performance under this Agreement that (i) is generally applicable to the development or manufacture of biological materials or (ii) is an improvement of, or direct derivative of, any LONZA Materials, LONZA Confidential Information and/or LONZA Background Intellectual Property, in each case that is not solely derived from or solely based on CLIENT’s Confidential Information, the Product, or other deliverables under this Agreement. For avoidance of doubt, “LONZA New IP” shall include any material, processes or other items that embody, or that are claimed or covered by, any of the foregoing Intellectual Property. CLIENT hereby assigns, and shall cause its employees and representatives to assign, to LONZA all of CLIENT’s right, title and interest in and to such LONZA New IP. CLIENT shall promptly disclose to LONZA in writing all LONZA New IP. CLIENT shall execute, and shall require its personnel as well as its Affiliates, or other contractors or agents and their personnel involved in the performance of this Agreement to execute, any documents reasonably required to confirm LONZA’s ownership of the LONZA New IP, and any documents required to apply for, maintain and enforce any patent or other right in the LONZA New IP.

11.2License Grants.

11.2.1During the term of this Agreement, CLIENT hereby grants to LONZA a fully paid, non-exclusive license under any and all CLIENT Intellectual Property that is necessary for LONZA to perform its obligations under this Agreement for the sole and limited purpose of LONZA’s performance of its obligations under this Agreement, including the development of the Process and the manufacture of Product for CLIENT.

11.2.2Subject to the terms and conditions set forth herein (including the payment required under this Agreement), LONZA hereby grants to CLIENT a non-exclusive, world-wide, fully paid-up, irrevocable, transferable license, including the right to grant sublicenses (including through multiple tiers), (a) under the LONZA New IP and such other Intellectual Property of LONZA, to use, sell, import or otherwise exploit the Product (including any improvements thereto) or any finished pharmaceutical or biological product that contains the Product manufactured under this Agreement and (b) under the LONZA New IP to make and have made the Product (including any improvements thereto) or any finished pharmaceutical or biological product that contains the Product.

11.3Further Assurances. Each Party agrees to take all necessary and proper acts, and will cause its employees, Affiliates, contractors, and consultants to take such necessary and proper acts, to effectuate the ownership provisions set forth in this Article 11.

11.4Prosecution of Patents.

11.4.1LONZA will have the sole right and discretion to file, prosecute and maintain patent applications and patents claiming LONZA Inventions at LONZA’s expense. CLIENT will cooperate with LONZA to file, prosecute, maintain and defend patent applications and patents claiming LONZA Inventions, and will have the right to review and provide comments to LONZA relating to such patent applications and patents.

11.4.2CLIENT will have the sole right and discretion to file, prosecute and maintain patent applications and patents claiming CLIENT Inventions at CLIENT’s expense. LONZA will cooperate with CLIENT to file, prosecute and maintain patent applications and patents claiming CLIENT Inventions, and will have the right to review and provide comments to CLIENT relating to such patent applications and patents.

11.5LONZA Technology Transfer. At any time or from time to time during, or after the term of this Agreement, and upon request by CLIENT, LONZA shall, and shall cause its Affiliates to, transfer to CLIENT or its designee(s) the Process, the Project Documentation and Specifications, that are necessary or useful for, or are otherwise related to, the manufacture of the Product as conducted under this Agreement. For clarity, LONZA is not obligated to transfer LONZA Operating Documents. CLIENT shall pay LONZA for its reasonable and documented, out-of-pocket expenses incurred in the performance of its activities under this Section 11.5 unless such activities are requested by CLIENT in response to a breach by LONZA of its obligations hereunder, in which case LONZA shall bear all of its own costs and expenses. LONZA shall conduct any such technology transfer in accordance with an SOW setting forth the activities to be conducted to effect the technology transfer and an estimated timeline; provided, however, that any such SOW (or failure by the Parties to agree such SOW) is not intended to limit, and shall not be construed as limiting, LONZA’s obligation to effect the technology transfer pursuant to this Section 11.5.

12.Representations and Warranties

12.1By CLIENT. CLIENT hereby represents and warrants to LONZA that, to the best of its knowledge, (i) it has the requisite intellectual property and legal rights related to the CLIENT Materials and the Product to authorize the performance of LONZA’s obligations under this Agreement, and (ii) the performance of the Statement of Work and the production by LONZA of the Product as contemplated in this Agreement will not give rise to a potential cause of action by a Third Party against LONZA for infringement or another violation of intellectual property rights. Such representation and warranty will not apply to any production equipment supplied by LONZA or intellectual property used by LONZA and not owned or controlled by CLIENT.

12.2By LONZA. LONZA hereby represents and warrants to CLIENT that, to the best of its knowledge, (i) it or its Affiliates have the requisite intellectual property rights in its equipment and Facility to be able to perform its obligations under this Agreement, (ii) that LONZA’s or its Affiliates’ use of its equipment and Facility as contemplated in this Agreement will not give rise to a potential cause of action by a Third Party against CLIENT for infringement or another violation of intellectual property rights, (iii) neither LONZA nor any of its Affiliates has been debarred or is subject to debarment pursuant to Section 306 of the United States Federal

Food, Drug, and Cosmetic Act, 21 U.S.C. 301, et. seq. (the “FFDCA”) or analogous provisions of Applicable Law outside the United States or listed on the United States Department of Health and Human Service’s List of Excluded Individuals/Entities and the United States General Services Administration’s Lists of Parties Excluded from Federal Procurement and Non-Procurement Programs, or any analogous lists pursuant to Applicable Law outside the United States (collectively, “Excluded Lists”), and (iv) neither LONZA nor any of its Affiliates will use in any capacity, in connection with the activities to be performed under this Agreement, any person or entity who has been debarred pursuant to Section 306 of the FFDCA or analogous provisions of Applicable Law outside the United States, or who is the subject of a conviction described in such Section or analogous provisions of Applicable Law outside the United States, or listed on any Excluded List. LONZA shall inform CLIENT in writing immediately if it or any person or entity who is performing activities hereunder is debarred or is the subject of a conviction described in Section 306 of the FFDCA or analogous provisions of Applicable Law outside the United States or listed on any Excluded List, or if any action, suit, claim, investigation or legal or administrative proceeding is pending or, to the best of LONZA’s knowledge, is threatened, relating to the debarment or conviction Section 306 of the FFDCA or analogous provisions of Applicable Law outside the United States, or listing on any Excluded List, of LONZA or any person or entity performing activities hereunder.

13.Disclaimer; Limitation of Liability

13.1DISCLAIMER. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT, EACH PARTY MAKES NO REPRESENTATIONS AND GRANTS NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, WITH RESPECT TO THE PRODUCTS, MATERIALS, AND SERVICES PROVIDED UNDER THIS AGREEMENT, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE WITH RESPECT TO SUCH PRODUCTS, MATERIALS, OR SERVICES.

13.2Disclaimer of Consequential Damages. EXCEPT IN THE EVENT OF [***], IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER OR ANY OF ITS AFFILIATES FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES (INCLUDING LOST PROFITS, BUSINESS OR GOODWILL) SUFFERED OR INCURRED BY SUCH OTHER PARTY OR ITS AFFILIATES IN CONNECTION WITH THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

13.3Limitation of Liability. EXCEPT IN THE EVENT OF [***], BOTH PARTIES HEREBY AGREE THAT TO THE FULLEST EXTENT PERMITTED BY LAW, LONZA’S LIABILITY TO CLIENT, FOR ANY AND ALL INJURIES, CLAIMS, LOSSES, EXPENSES, OR DAMAGES, WHATSOEVER, ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT FROM ANY CAUSE OR CAUSES, INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE, ERRORS, OMISSIONS OR STRICT LIABILITY, SHALL NOT EXCEED [***]. TO THE EXTENT THAT THIS

CLAUSE CONFLICTS WITH ANY OTHER CLAUSE, THIS CLAUSE SHALL TAKE PRECEDENCE OVER SUCH CONFLICTING CLAUSE. IF APPLICABLE LAW PREVENTS ENFORCEMENT OF THIS CLAUSE, THEN THIS CLAUSE SHALL BE DEEMED MODIFIED TO PROVIDE THE MAXIMUM PROTECTION FOR LONZA AS IS ALLOWABLE UNDER APPLICABLE LAW.

14.Term and Termination

14.1Term. The initial term of this Agreement will commence on the Effective Date and will continue until the fifth anniversary of the Effective Date unless terminated prior to that time or extended by the Parties; provided, however, that this Agreement will continue to remain in effect with respect to any Statements of Work already issued at the time of such termination or expiration, until such Statements of Work are themselves terminated or expire. The initial term shall automatically be extended for additional two-year terms upon the end of the then-current term (the initial term plus any such extension, the “Term”) unless (i) CLIENT provides notice of non-renewal to LONZA at least [***] prior to the end of the then-current Term or (ii) LONZA provides notice of non-renewal to CLIENT at least [***] prior to the end of the then-current Term.

14.2Termination for Material Breach. Either Party may terminate this Agreement or any SOW, by written notice to the other Party, for any material breach of this Agreement or such SOW by the other Party, if such breach is not cured within [***] after the breaching Party receives written notice of such breach from the non-breaching Party; provided, however, that if such breach is not capable of being cured within such thirty-day period and the breaching Party has commenced and diligently continued actions to cure such breach within such thirty-day period, except in the case of a payment default, the cure period shall be extended to [***], so long as the breaching Party is making [***] to cure and such breach is capable of being cured within such [***] period. Such termination shall be effective upon expiration of such cure period.

14.3Termination Without Cause. CLIENT may terminate this Agreement or any SOW by providing written notice of termination no less than [***] in advance of the date of termination. After the first anniversary of the Effective Date, LONZA may terminate this Agreement or any SOW by providing written notice of termination no less than [***] in advance of the date of termination. For the avoidance of doubt, in the event of termination by CLIENT under this Section 14.3, CLIENT shall, in addition to any fees owed pursuant to Section 4.4, at a minimum, remain liable for all fees owed pursuant to any outstanding Statement of Work during such [***] period.

14.4Termination for Insolvency. Either Party may terminate this Agreement upon notice to the other Party, upon (a) the dissolution, termination of existence, liquidation or business failure of the other Party; (b) the appointment of a custodian or receiver for the other Party who has not been terminated or dismissed within ninety (90) days of such appointment; (c) the institution by the other Party of any proceeding under national, federal or state bankruptcy, reorganization, receivership or other similar laws affecting the rights of creditors generally or the making by such Party of a composition or any assignment for the benefit of creditors under any national, federal or state bankruptcy, reorganization, receivership or other similar law affecting the rights of creditors generally, which proceeding is not dismissed within ninety (90) days of filing. All rights and licenses granted pursuant to this Agreement are, and shall otherwise be deemed to

be, for purposes of Section 365(n) of Title 11 of the United States Code, licenses of rights of “intellectual property” as defined therein.

14.5CLIENT Termination Rights. CLIENT may terminate this Agreement immediately upon notice to LONZA in the event that (a) any regulatory authority requires or causes the withdrawal of any Product or (b) CLIENT ceases to develop or commercialize any Product.

14.6Effects of Termination.

14.6.1Accrued Rights. Termination of this Agreement or an SOW for any reason will be without prejudice to any rights that will have accrued to the benefit of a Party prior to such termination. Such termination will not relieve a Party of obligations that are expressly indicated to survive the termination of this Agreement, including as expressly described in any SOW, and this Agreement shall continue in full force and effect with respect to any such obligations. Without limitation of the foregoing, in the event of termination of this Agreement or of any Statement of Work, LONZA shall be compensated for (i) Services rendered up to the date of termination of this Agreement or such SOW, as applicable; (ii) all reasonable and documented non-cancellable costs incurred through the date of termination in compliance with the applicable Statement of Work, including costs and fees for Materials used or purchased for use in connection with the Services; and (iii) except in the case of a termination for LONZA breach, termination under Section 14.3 by LONZA, termination for LONZA insolvency under Section 14.4, or termination by CLIENT under Section 14.5, any applicable Cancellation Fees, and in the case of each of clauses (i) through (iii), LONZA shall refund any fees prepaid by CLIENT not otherwise required to be paid in accordance with clauses (i) through (iii). In the case of termination by LONZA for CLIENT’s material breach, all scheduled Batches shall be deemed cancelled by CLIENT, and Cancellation Fees shall be calculated as of the date of written notice of termination to the extent LONZA cannot reallocate the applicable manufacturing capacity to another customer after using reasonable efforts to do so.

14.6.2Disposition of Remaining CLIENT Property and Confidential Information. Upon termination or expiration of this Agreement, LONZA will store any Remaining CLIENT Property as set forth in Section 6.2 and, at CLIENT’s option, return or destroy any CLIENT Confidential Information in the possession or control of LONZA. Likewise, CLIENT will, at LONZA’s option, return or destroy any LONZA Confidential Information in the possession or control of CLIENT (other than LONZA Confidential Information for which CLIENT has a right to continue to use or disclose). Notwithstanding the foregoing provisions: (i) LONZA may retain and preserve, at its sole cost and expense, samples and standards of each Product following termination or expiration of this Agreement solely for use in determining LONZA’s rights and obligations hereunder; and (ii) each Party may retain a single copy of the other Party’s Confidential Information for documentation purposes only and which shall remain subject to the obligations of nonuse and confidentiality set forth in this Agreement.

14.6.3Survival. Articles 1, 5, 10, 11 (other than Section 11.2.1), 13, 15, 16, and 17 and Sections 2.8, 2.9, 3.3.2, 4.4, 4.5, 4.7, 4.8, 4.10, 6.2, 8.1 (for final accounting only), 8.5 (for final accounting only), and 14.6 of this Agreement, together with any appendices referenced therein, will survive any expiration or termination of this Agreement.

15.Indemnification

15.1Indemnification of CLIENT. LONZA will indemnify CLIENT, its Affiliates, and their respective directors, officers, employees and agents, and defend and hold each of them harmless, from and against any and all losses, damages, liabilities, costs and expenses (including attorneys’ fees and expenses) in connection with any and all liability suits, investigations, claims or demands (collectively, “Losses”) to the extent such Losses arise out of or result from any claim, lawsuit or other action or threat by a Third Party arising out of: (a) any breach by LONZA of this Agreement, (b) the negligence or willful misconduct on the part of one or more of the LONZA Parties in performing any activity contemplated by this Agreement, or (c) any infringement or misappropriation of the intellectual property rights of any Third Party relating to any acts of LONZA under this Agreement attributable to any change to or deviation from a Statement of Work made by LONZA except to the extent attributable to any infringement or misappropriation of the intellectual property rights of any Third Party by CLIENT’s Background Intellectual Property or CLIENT New IP, except in each case for those Losses for which CLIENT has an obligation to indemnify the LONZA Parties pursuant to Section 15.2, as to which Losses each Party will indemnify the other to the extent of their respective liability for the Losses.

15.2Indemnification of LONZA. CLIENT will indemnify LONZA and its Affiliates, and their respective directors, officers, employees and agents (the “LONZA Parties”), and defend and hold each of them harmless, from and against any and all Losses to the extent such Losses arise out of or result from any claim, lawsuit or other action or threat by a Third Party arising out of: (a) any breach by CLIENT of this Agreement, (b) the use or sale of Products, except to the extent such Losses arise out of or result from a breach by LONZA of the Product Warranties, (c) the negligence or willful misconduct on the part of CLIENT or its Affiliates in performing any activity contemplated by this Agreement, (d) the use or practice by LONZA of any process, invention or other intellectual property supplied by CLIENT to LONZA under this Agreement, and (e) any infringement or misappropriation of the intellectual property rights of any Third Party relating to any acts of CLIENT under this Agreement or the use of the Product or the performance of the Services, except to the extent attributable to any change to or deviation from a Statement of Work made by LONZA or to the extent attributable to any infringement or misappropriation of the intellectual property rights of any Third Party by LONZA’s Background Intellectual Property or LONZA New IP, except in each case for those Losses for which LONZA has an obligation to indemnify CLIENT pursuant to Section 15.1, as to which Losses each Party will indemnify the other to the extent of their respective liability for the Losses.

15.3Indemnification Procedure.

15.3.1An “Indemnitor” means the indemnifying Party. An “Indemnitee” means the indemnified Party, its Affiliates, and their respective directors, officers, employees and agents.

15.3.2An Indemnitee which intends to claim indemnification under Section 15.1 or Section 15.2 hereof shall promptly notify the Indemnitor in writing of any claim, lawsuit or other action in respect of which the Indemnitee, its Affiliates, or any of their respective directors, officers, employees and agents intend to claim such indemnification. The Indemnitee shall permit, and shall cause its Affiliates and their respective directors, officers, employees and agents to

permit, the Indemnitor, at its discretion, to settle any such claim, lawsuit or other action and agrees to the complete control of such defense or settlement by the Indemnitor; provided, however, that in order for the Indemnitor to exercise such rights, such settlement shall not adversely affect the Indemnitee’s rights under this Agreement or impose any obligations on the Indemnitee in addition to those set forth herein. No such claim, lawsuit or other action shall be settled without the prior written consent of the Indemnitor and the Indemnitor shall not be responsible for any legal fees or other costs incurred other than as provided herein. The Indemnitee, its Affiliates and their respective directors, officers, employees and agents shall cooperate fully with the Indemnitor and its legal representatives in the investigation and defense of any claim, lawsuit or other action covered by this indemnification, all at the reasonable expense of the Indemnitor. The Indemnitee shall have the right, but not the obligation, to be represented by counsel of its own selection and expense.

15.4Insurance. Each of CLIENT and LONZA will maintain, at all times during the term of this Agreement and for [***] thereafter, coverage of the types and in the amounts customary and consistent with biopharmaceutical industry standards (the “Insurance Policy”), and will provide a Certificate of Insurance to the other Party that the Insurance Policy has been endorsed to designate such other Party as an additional insured. Each Party will maintain the Insurance Policy with an insurance company having [***] and will provide the other Party with at least 30 days’ written notice prior to termination of such Insurance Policy.

16.Additional Covenants

16.1Non-Solicitation. During the term of this Agreement and for [***] thereafter, each of the Parties agrees not to seek to induce or solicit any employee of the other Party or its Affiliates to discontinue his or her employment with the other Party or its Affiliate in order to become an employee or an independent contractor of the soliciting Party or its Affiliate; provided that, with respect to employees of LONZA and its Affiliates, such employees must have been involved in the provision of the Services; provided further that, neither Party shall be in violation of this Section 16.1 as a result of making a general solicitation for employees or independent contractors. For the avoidance of doubt, the publication of an advertisement shall not constitute solicitation or inducement.

17.Miscellaneous

17.1Independent Contractors. Each of the Parties is an independent contractor and nothing herein contained shall be deemed to constitute the relationship of partners, joint venturers, nor of principal and agent between the Parties. Neither Party shall at any time enter into, incur, or hold itself out to Third Parties as having authority to enter into or incur, on behalf of the other Party, any commitment, expense, or liability whatsoever.

17.2Force Majeure. Neither Party shall be in breach of this Agreement if there is any failure of performance under this Agreement (except for payment of any amounts due under this Agreement) occasioned by any reason beyond the control and without the fault or negligence of the Party affected thereby, including an act of God, fire, flood, act of government or state, war, civil commotion, insurrection, acts of terrorism, embargo, sabotage, a viral, bacterial or mycoplasmal contamination which causes a shutdown of the Facility, prevention from or

hindrance in obtaining energy or other utilities, a shortage of raw materials or other necessary components, labor disputes of whatever nature, or any other reason beyond the control and without the fault or negligence of the Party affected thereby (a “Force Majeure Event”). Such excuse shall continue as long as the Force Majeure Event continues. Upon cessation of such Force Majeure Event, the affected Party shall promptly resume performance under this Agreement as soon as it is commercially reasonable for the Party to do so. Each Party agrees to give the other Party prompt written notice of the occurrence of any Force Majeure Event, the nature thereof, and the extent to which the affected Party will be unable to fully perform its obligations under this Agreement. Each Party further agrees to use commercially reasonable efforts to correct the Force Majeure Event as quickly as practicable (provided that in no event shall a Party be required to settle any labor dispute) and to give the other Party prompt written notice when it is again fully able to perform such obligations.

17.3Condemnation. If the Facility is condemned or taken as a result of the exercise of the power of eminent domain or will be conveyed to a governmental agency having power of eminent domain under the threat of the exercise of such power (any of the foregoing, a “Condemnation”), then this Agreement will terminate as of the date on which title to the Facility vests in the authority so exercising or threatening to exercise such power and CLIENT will not have any right to the Condemnation proceeds nor shall CLIENT owe LONZA any Cancellation Fees.

17.4Notices. Any notice required or permitted to be given under this Agreement by any Party shall be in writing and shall be (a) delivered personally, (b) sent by registered mail, return receipt requested, postage prepaid, (c) sent by a nationally-recognized courier service guaranteeing next-day or second day delivery, charges prepaid, or (d) delivered by facsimile (with documented evidence of transmission), to the addresses or facsimile numbers of the other Party set forth below, or at such other addresses as may from time to time be furnished by similar notice by any Party. The effective date of any notice under this Agreement shall be the date of receipt by the receiving Party.

If to LONZA:

Lonza Houston, Inc..
Attn: Business Head
14905 Kirby, Drive

Pearland, Texas 77047

With a copy to:

Assistant General Counsel
Lonza America, Inc.
412 Mount Kemble Avenue
Morristown, NJ 07960
[***]

If to CLIENT:

Arcellx, Inc.
Attn: Sr. Director of Contracts

25 West Watkins Mill, Suite A
Gaithersburg, MD 20878

Either Party may change its address for notice by giving notice thereof in the manner set forth in this Section 17.4.

17.5Entire Agreement; Amendments. This Agreement, including the Appendices attached hereto and referenced herein, constitutes the full understanding of the Parties and a complete and exclusive statement of the terms of their agreement with respect to the specific subject matter hereof and supersedes all prior agreements and understandings, oral and written, among the Parties with respect to the subject matter hereof. No terms, conditions, understandings or agreements purporting to amend, modify or vary the terms of this Agreement (including any Appendix hereto) shall be binding unless hereafter made in a written instrument referencing this Agreement and signed by each of the Parties.

17.6Governing Law. The construction, validity and performance of the Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to its conflicts of laws provisions.

17.7Counterparts. This Agreement and any amendment hereto may be executed in any number of counterparts, each of which shall for all purposes be deemed an original and all of which shall constitute the same instrument. This Agreement shall be effective upon full execution by facsimile or original, and a facsimile signature shall be deemed to be and shall be as effective as an original signature.

17.8Severability. If any part of this Agreement shall be found to be invalid or unenforceable under applicable law in any jurisdiction, such part shall be ineffective only to the extent of such invalidity or unenforceability in such jurisdiction, without in any way affecting the remaining parts of this Agreement in that jurisdiction or the validity or enforceability of the Agreement as a whole in any other jurisdiction. In addition, the part that is ineffective shall be reformed in a mutually agreeable manner so as to as nearly approximate the intent of the Parties as possible.

17.9Titles and Subtitles. All headings, titles and subtitles used in this Agreement (including any Appendix hereto) are for convenience only and are not to be considered in construing or interpreting any term or provision of this Agreement (or any Appendix hereto).

17.10Exhibits. All “RECITALS”, “DEFINITIONS”, exhibits and appendices referred to herein form an integral part of this Agreement and are incorporated into this Agreement by such reference.

17.11Construction. Except where the context requires otherwise, whenever used the singular includes the plural, the plural includes the singular, the use of any gender is applicable to all genders and the word “or” has the inclusive meaning represented by the phrase “and/or”. The headings of this Agreement are for convenience and reference only. The term “including” or “includes” as used in this Agreement means including, without limiting the generality of any

description preceding such term. The wording of this Agreement shall be deemed to be the wording mutually chosen by the Parties and no rule of strict construction shall be applied against any Party.

17.12Assignment. This Agreement shall be binding upon the successors and assigns of the Parties and the name of a Party appearing herein shall be deemed to include the names of its successors and assigns. Neither Party may assign its interest under this Agreement without the prior written consent of the other Party, such consent not to be unreasonably withheld; provided, however, that either Party shall be entitled without the prior written consent of the other Party to assign this Agreement to an Affiliate or to any company to which the assigning Party may transfer all or substantially all of its assets or capital stock relating to the activities contemplated under this Agreement, whether through purchase, sale, merger, consolidation, change of control or otherwise; provided, further, however, if such assignee of CLIENT is [***], then any such assignment will be subject to the consent of LONZA (such consent not to be unreasonably withheld, conditioned or delayed). In the case of an assignment by a Party to its Affiliate, such Party, if it survives, shall remain jointly and severally liable for the performance of such delegated obligations under this Agreement. Any permitted assignment of this Agreement by either Party will be conditioned upon that Party’s permitted assignee agreeing in writing to comply with all the terms and conditions contained in this Agreement. Any purported assignment without a required consent shall be void. No assignment shall relieve any Party of responsibility for the performance of any obligation that accrued prior to the effective date of such assignment.

17.13Waiver. The failure of any Party at any time or times to require performance of any provision of this Agreement (including any Appendix hereto) will in no manner affect its rights at a later time to enforce the same. No waiver by any Party of any term, provision or condition contained in this Agreement (including any Appendix hereto), whether by conduct or otherwise, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, provision or condition or of any other term, provision or condition of this Agreement (including any Appendix hereto).

17.14Dispute Resolution. If the Parties are unable to resolve a dispute, despite its good faith efforts, either Party may refer the dispute to the President of each Party’s respective business unit (or other designee). In the event that no agreement is reached by the Presidents (or other designees) with respect to such dispute within [***] after its referral to them, either Party may pursue any and all remedies available at law or in equity.

17.15No Presumption Against Drafter. For purposes of this Agreement, CLIENT hereby waives any rule of construction that requires that ambiguities in this Agreement (including any Appendix hereto) be construed against the drafter.

17.16Equitable Relief. Each Party acknowledges and agrees that in the event of a violation or threatened violation of any provision of Sections 10 or 11 of this Agreement, the other Party shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving irreparable injury or actual damages and without the necessity of having to post a bond, as well as to an equitable accounting of all earnings, profits, and other benefits arising from any such violation.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

ARCELLX, INC.

9/3/21______________________ By: /s/ Brian Murphy

Date Name: Brian Murphy

Title: VP Cell Process Sciences

LONZA HOUSTON, INC.

Sept 2nd, 2021_________________ By: /s/ Thomas Fellner

Date Name: Thomas Fellner

Title: VP, Sales & Program Mgmt

Schedule 1

LOI Attachment B

[***]

Appendix 1

[***]

EX-10.14

Exhibit 10.14

[CERTAIN INFORMATION IN THIS EXHIBIT IDENTIFIED BY [***] IS CONFIDENTIAL AND HAS BEEN EXCLUDED BECAUSE IT (I) IS NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.]

Arcellx SOW A-1

Technology Transfer and Manufacturing of CART ddBCMA

Table of Contents

1.	Project Scope	3
2.	Abbreviation	3
3.	Key Assumptions	4
4.	Project Activities	8
4.1.	Process Technology Transfer	8
4.1.1.	Pilot Runs	8
4.1.2.	Engineering Run	9
4.1.3.	Aseptic Process Simulation	10
4.1.4.	Technology Transfer Report	12
4.2.	Comparability Runs	12
4.3.	[***]	13
4.4.	cGMP Manufacturing	13
5.	Protocols and Reports	17
6.	Financial Terms	18
Pricing Table		18
Payment Schedule		18
7.	Estimated Project Timeline	20
Rescheduling		20
Suspension or Delay		21
8.	Term and Termination	22
9.	Key Contact Information	23
Attachment I: Manufacturing Process, as provided by Client		24
Attachment II: Product Characterization and Release Testing		26
Attachment III: Comparability Study Work Flow		26

Attachment IV: Key equipment [***] 27

Statement of Work

This Statement of Work A-1 (this “SOW”) is effective as of February 16th, 2022 (the “Effective Date”) and is agreed to by Arcellx, Inc. (the “Client”) and Lonza Houston, Inc., 14905 Kirby Drive, Pearland, TX 77047, USA (collectively, “Lonza” or “LONZA”) pursuant to the Manufacturing Services Agreement, dated 02 September 2021 by and between Client and Lonza Houston, Inc. (the “Agreement”), and is incorporated therein and made a part of such Agreement.

In the event of a conflict between the terms and conditions of this SOW and the Agreement, the terms and conditions of the Agreement shall control, except to the extent this SOW expressly and specifically states an intent to supersede this Agreement on a specific matter. Any such superseding term of this SOW shall only apply to this SOW and not to any other Statement of Work under the Agreement.

1. Project Scope

This SOW describes Lonza activities for the technology transfer and GMP manufacturing of Client’s autologous drug product CART-ddBCMA (the “Product”) derived from autologous apheresis material. If Client requests Lonza to allocate manufacturing slots described herein for any of Client’s other products or CAR-T ddBCMA activities as feasible, Lonza will accommodate such request and such allocation will be confirmed in a mutually agreed Change Order.

The project activities included in this SOW are (collectively, “Project Activities”):

• Process Technology Transfer

• Assay Transfer to LHI QC

• Comparability Runs

• cGMP manufacturing to support clinical studies.

2. Abbreviation

APS – Aseptic Process Simulation

BAS – Bioassay Services

BOM – Bill of Material

cGMP – Current Good Manufacturing Practices

COA – Certificate of Analysis

EMPQ – Environmental Monitoring Performance Qualification

LVV – Lenti Virus Vector

MBR – Master Batch Record

MSAT – Manufacturing Science and Technology

PD – Process Development

QA – Quality Assurance

QC – Quality Control

RM – Raw Materials (includes consumables, disposables, chemicals)

SOP – Standard Operating Procedure

TSB – Tryptic Soy Broth

3. Key Assumptions

a. The Project Activities of this SOW will commence after the Process/Assay Evaluation and Gap Assessment is completed under Letter of Intent between Lonza and Client, dated 09 July 2021 (the “LOI”). For clarity and confirmation, the outcome of the Process/Assay Evaluation and Gap Assessment shall not be gating to the start or continue Project Activities. The scope of this SOW may be revised based on the outcome of the Gap Assessment being performed in accordance with the LOI, subject to mutual agreement between Lonza and Client with respect to such revision.

b. Technology Transfer scope and activities for cGMP Documentation, Raw Material part set-up, Client-provided Equipment procurement/qualification is included in LOI Amendment-1 between Lonza and Client, dated 20 October 2021 (the “LOI Amendment-1”).

c. The Assay Qualification & Transfer-to-QC scope and activities is included in LOI Amendment-4 between Lonza and Client, dated 29 December 2021 (the “LOI Amendment-4”).

d. Except for changes set forth in the Gap Assessment Report or as mutually agreed in writing, no change in the manufacturing process, analytical methods, material, and/or equipment will occur during technology transfer runs, and cGMP manufacturing except in accordance with the Quality Agreement and the Agreement.

e. The Regulatory Assessment to ensure compliance with other countries is excluded from this SOW. If any changes to the process, equipment, material or documentation are required to assure compliance to other countries, they will be the Client’s responsibility and can be added to this SOW as an amendment or covered under future SOW(s).

f. Client will provide the following items required for the execution of Project Activities (which shall constitute “Client Materials” for purposes of the Agreement):

• [***].

- [***]

• Proprietary material, media or formula, if any. If Lonza is required to manufacture such material, it will be handled via Change Order to update the scope, timeline, and pricing.

• Reference standards, controls for analytical methods, as applicable.

g. Starting Material:

• The manufacturing Process will use [***] (the “Starting Material”).

• Client will provide Starting Material for clinical manufacturing and for Comparability Runs.

• For Pilot Runs and Engineering Run:

- Client will provide Starting Material for pilot runs and engineering run; provided, that upon request from Client, Lonza will procure up to a maximum [***] Starting Material from non-mobilized healthy donors from established sources and further assumes no Client-defined donor characteristics panel will be required. Lonza requires [***] advance notification for procurement.

- Lonza will not be responsible for delays to the timeline due to

1. COVID-19 impact(s) including without limitation, collection restrictions or availability of healthy donors

2. Donor withdrawal

3. Tissue failure/rejection.

Lonza will use Commercially Reasonable Efforts to procure Starting Material from suitable alternative sources to mitigate any timeline risk associated with such delay.

- For the removal of doubt, Lonza procuring Starting Material beyond the maximum of [***] Starting Material is out of scope of this SOW and will require a Change Order. Costs will be borne by Client.

h. Raw Materials (includes consumables, disposables, chemicals)

• Lonza will procure materials and commercially available culture media and reagents required for this SOW.

- If any materials are not commercially available, Client shall provide such materials (and such materials shall be deemed “Client Materials” under the Agreement) or instruction to produce them at Lonza. If Lonza is required to produce such materials, a Change Order will be issued to update the scope, timeline, and pricing.

• Materials will be ordered in advance of activities described herein.

• Lonza will purchase and store a reasonable safety stock of materials necessary for the activities described herein (excluding apheresis units required for non-clinical runs). Actual numbers may vary based on lead times and criticality of specific materials and will be decided by the project team in consultation with Client. A safety stock of at minimum [***] is recommended.

• Client-provided material (including, but not limited to, [***] and Starting Material):

- will meet all Lonza Global Quality incoming material requirements prior to receipt into Lonza inventory and release for use in the Runs, or otherwise any alternative Quality requirements Lonza and Client will mutually agree upon.

- The need for additional testing on incoming material will be evaluated and the SOW will be revised accordingly.

• Qualification of test methods for non-compendial raw materials is required. Upon identification of such materials a separate Change Order will be submitted along with a list of the required test methods.

• Non-cGMP materials may be used for the non-cGMP Pilot runs with Client’s prior consent not to be unreasonably withheld.

i. Manufacturing Process: The scope of this SOW is based on the manufacturing Process provided by Client, as outlined in Attachment I.

j. [***] is not included in the scope of this SOW. If this activity is required, the scope will be discussed with Client and covered under a Change Order.

k. Equipment: Key equipment required to support Project Activities of this SOW is listed in Attachment IV. The activities of procurement, installation, qualification and maintenance for Client-provided equipment are covered under LOI Amendment-1(such Client provided equipment specified in Section 1.8 of LOI Amendment-1 and Attachment IV herein constitute “Special Equipment” under the Agreement).

If any change in equipment requirements is identified during the execution of this SOW, and if Client needs to provide additional equipment, it shall be re-evaluated and discussed between Lonza and Client.

l. The number of technology transfer runs included in each Project Activity is estimated based on Lonza’s current understanding of the manufacturing Process. Depending on the outcome of these runs, the need for additional or repeat runs will be discussed between Lonza and Client, and can be added to this SOW as an amendment or a Change Order to update the scope, timeline, and pricing.

m. The scope for analytical methods provided by Client, and included in this SOW is outlined in Attachment II.

n. cGMP suite:

• Lonza will provide [***] to support clinical manufacturing. The timeline for providing such suite is given in Sections 4.4 and 7 of this SOW.

• The Project Activities to be executed in the cGMP suite will be scheduled around biannual suite shutdowns and such slots will be reallocated as set forth in Section 4.4 of this SOW. Lonza shall provide the estimated month when a shutdown will be scheduled [***] in advance and will communicate the shutdown dates to Client no later than [***] prior to the shutdowns.

• The cGMP suite time estimated in this SOW is based on the current understanding of the process and scope. If additional suite time is required to complete the Project Activities described herein, Lonza and the Client will enter into good faith negotiations to mutually agree upon the revised timeline. Such revisions and

associated fees would be included in a subsequent SOW or SOW amendment or Change Order.

o. Excluded from this SOW are; [***] but each can be added to this SOW as an amendment or covered under separate SOW(s).

p. This SOW excludes [***]. If required, this can be added via a change order or SOW Amendment. Preparation of client-specific media/buffers required by the batch documentation is included in this SOW.

q. Lonza shall provide storage services (for all samples of Product, intermediates, and reagents generated as part of the activities in this SOW) per Section 6 of Agreement. Such services will be mutually agreed upon between the Parties in a separate Statement of Work.

r. Preparation of CMC sections to support IND/BLA and MAA submissions in eCTD format, import/export support, permits and licenses, meetings with regulatory authorities, and regulatory assessments or drafting/review of briefing documents, are excluded from this SOW and can be added to this SOW as an amendment or covered under future SOW(s).

s. Subject to Section 4.9 of the Agreement, Client may be on site to observe the activities described herein. Lonza will follow the site policies to permit Client’s entry to the Facility, provided that Client abide by applicable Lonza’s standard policies, operating procedures and security procedures established by Lonza and made available to Client prior to or at the time of such entry.

t. The project team will meet on a bi-weekly basis or as otherwise needed, either in person or by teleconference, to review data and make directional changes if necessary, in order to facilitate success and meeting the estimated timeline as defined in this SOW.

u. Notwithstanding the definition of “cGMP” set forth in the Agreement, for purposes of this SOW, “cGMP” or “GMP” means the current Good Manufacturing Practices as provided for (and as amended from time to time) in the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) Harmonized Tripartite Guideline, Good Manufacturing Practice Guide for Active Pharmaceutical Ingredients, Q7 (ICH Q7), the EU Guidelines to Good Manufacturing Practice Medicinal Products for Human and Veterinary Use in Volume 4 of the European Commission’s Rules governing medicinal products in the European Union and any analogous guidelines in the United Kingdom, the United States Federal Food, Drug, and Cosmetic Act section 501(a)(2)(B) (21 U.S.C. 351(a)(2)(B)) and the United States Code of Federal Regulations 21 C.F.R. Parts 210 and 211, 610, and 1271; and The Canada Food and Drug Act, Part C, Division 2 of the Food and Drug Regulations, and the Good manufacturing practices guide for drug products (GUI-0001), in each case, as applicable.

v. For purposes of this SOW, Lonza shall not subcontract any Project Activities without the prior written consent of Client with such consent not to be unreasonably withheld.

4. Project Activities

4.1. Process Technology Transfer

The Technology Transfer activities included in this SOW will commence after generating Technology Transfer Protocol under LOI Amendment-1.

4.1.1. Pilot Runs

Objectives:

- To provide operator training.

- To assess the execution of the Product process and make minor modifications to the process, as needed, prior to the execution of Engineering Runs.

- Finalize the development of the documents that will be used in the manufacturing of the Product.

Activities:

a. It is understood that the process is locked prior to initiation of Pilot Runs and any required development/optimization is completed prior to initiating the Pilot Runs. Lonza will execute manufacturing processes as described in Attachment 1. There will be no changes made to the raw materials or manufacturing process, unless deemed necessary by Lonza and approved by client, to ensure cGMP and Lonza Global Quality requirements are met. Any changes to process or materials will require approval by the Client.

b. Lonza will execute [***] in accordance with mutually approved Tech Transfer Protocol.

c. The Pilot Runs will be executed:

- In a non-cGMP laboratory; possibly with non-qualified equipment

- By Lonza manufacturing staff with Lonza PD/MSAT as deemed necessary

- By following Lonza-generated draft documentation

- With research grade Starting Material

- With raw materials that may not have been QA released

d. Lonza Testing of the Pilot Runs will be executed per Technology Transfer Protocol. If the testing panel in the protocol is different than the Attachment I, this SOW will be revised accordingly.

e. Assay Transfer and Transfer-to-QC as set forth in LOI Amendment-4 may not be completed prior to testing product manufactured during the Pilot Runs. Testing may be performed by Lonza personnel undergoing training and with draft methods or by Lonza BAS.

f. Pilot Runs are manufactured with a goal to meet in-process and final release test specifications. Lonza, however, does not guarantee that the Pilot Runs will meet all in-process and final release test specifications. Failure to meet such specifications may result in an investigation of the root cause of the failure, and mutually agreed mitigation actions, as well as in the repeated execution of the batch(es). Fees for any additional studies and/or runs agreed to by Client, will be [***] covered under a separate SOW or amendment.

g. The information gathered during the Pilot Runs will be used to determine if the requirements are met to proceed to the Engineering Runs. Lonza and Client will conduct an evaluation at the completion of the Pilot Runs. The Evaluation Point review meeting will evaluate whether additional Pilot Runs are needed and identify gaps in the process that must be addressed prior to the execution of the Engineering Runs. Any changes to the process deemed necessary in the final report would be mutually agreed between both parties and approved prior to implementation with future production. If additional studies are needed, they will be covered under a separate SOW or amendment.

Deliverables:

- Lonza will present experimental data to the Client during routine project team meetings.

- Material generated in the Pilot Runs may be placed on stability, or used in analytical method transfer, or shipped to the Client or designated laboratory upon request. Such material may not be used in human studies.

4.1.2. Engineering Run

Objective: To execute non-cGMP Engineering Run to confirm manufacturing readiness in the manufacturing space.

Activities:

a. The non-cGMP Engineering Run will be executed per mutually approved Technology Transfer Protocol.

b. Upon successful completion of the Pilot Runs, cGMP raw material part number set-up, and qualification of Client-provided equipment under LOI Amendment-1; Lonza will execute [***] in the cGMP Cell Therapy Facility with Lonza’s Cell Therapy manufacturing staff and Lonza MSAT staff for assistance and oversight, as deemed necessary.

c. The Engineering Run will be executed:

- In a cGMP suite, with qualified equipment

- By Lonza manufacturing staff with Lonza MSAT as deemed necessary

- By following Lonza-generated draft documentation

- With research grade Starting Material

- With cGMP grade raw materials released by QA

d. Draft versions of Lonza-generated cGMP documentation will be used during Engineering Run.

e. Testing of the Engineering Run will be executed per Technology Transfer Protocol. If the testing panel in the protocol is different than the Attachment I, this SOW will be revised accordingly.

f. Assay Transfer and Transfer-to-QC as set forth in LOI Amendment-4 may not be completed prior to testing product manufactured during the Engineering Run. Testing may be performed by Lonza personnel undergoing training and with draft methods or by Lonza BAS.

g. Engineering Run will be manufactured with a goal to meet all in-process and final release specifications; provided, however, Lonza does not guarantee that Engineering Runs will meet all in-process and final release specifications. Failure to meet such specification, both in-process and final release, may result in the repeated execution of the run(s). Fees for any additional runs agreed to by Client will be [***] covered under a separate SOW or amendment.

h. Additional Engineering Runs may be necessary based on the outcome of the initial runs, as mutually agreed by both Parties.

i. The Product manufactured during the Engineering Run may be used for stability studies, shipped to the client or to a contract laboratory. Engineering Runs product cannot be used for human studies.

Deliverables:

- Lonza will present experimental data to the Client during routine project team meetings.

- The Engineering Run data will be included in Technology Transfer Report

4.1.3. Aseptic Process Simulation

Objective: Demonstrate that the manufacturing process is capable of being executed without microbial contamination.

Activities:

a. APS Protocol:

- Lonza will draft [***] APS Protocol (the “APS Protocol”) in accordance with their existing quality and operating procedures, and per current Regulatory guidance and accepted industry regulatory standards.

- Client and Lonza QA will be responsible for review and approval of the APS Protocol, with final approval completed at least [***] prior to the execution of the APS qualification.

- APS will challenge the manufacturing process with growth supportive medium, Tryptic Soy Broth (TSB), or equivalent, in place of all reagents, cells and mediums used in the manufacturing process. The successful completion of each APS (specific to the process) will be primarily determined by the absence of microbial growth in TSB, following the incubation of samples, as defined in the APS Protocol.

- The APS will simulate the manufacturing process for Product to the maximum extent possible, including and the use of cGMP-released disposables.

b. APS Runs:

- Lonza manufacturing operators will execute [***] in the [***] as defined in the mutually agreed upon Protocol, and in accordance with Lonza’s Master Validation Plan.

- A minimum [***] will be required every [***] in [***] as deemed necessary by Lonza QA pursuant to Lonza policies and procedures.

- If the Client desires, Lonza will apply Commercially Reasonable Efforts to execute APS requalification outside of manufacturing slots, in such case the applicable fees of [***] will be applicable per pricing table.

- The APS will take place in an intended cGMP suite that will include the use of the Facility common areas unless otherwise agreed upon.

- An approved testing method will be used for performing microbial growth promotion of the TSB media.

- The successful completion of each APS series (specific to the process) will be primarily determined by the absence of microbial growth in TSB, following the incubation of samples, as defined in the APS Protocol.

c. APS Report:

- Per cGMP guidelines, Lonza will draft [***] APS Report (the “APS Report”) for [***] at the conclusion of the initial APS qualification. Lonza will draft [***] APS Report per APS re-qualification run.

- Lonza QA will be responsible for review and approval of the APS Report.

- Any changes to the Process deemed necessary in the final report will be mutually agreed between both Parties, will be documented in a change control and approved by both Parties prior to implementation with future production.

- The successful completion of initial APS runs and the finalization of the respective reports will serve as the initial aseptic qualification for the manufacturing Process of that particular Product.

d. Executed APS qualification will cover the aseptic process validation of the Product described in the Project Scope of this SOW. Other products being manufactured by Lonza for Client will require additional APS as deemed necessary by Lonza QA.

Deliverables:

- Lonza will deliver [***] risk assessment based APS Protocol (the “APS Protocol”). The Client shall review the APS Protocol in accordance with the “Protocols and Reports” section below.

- Lonza will deliver an APS Report (the “APS Report”) for [***]. The Client shall review the APS Report(s) in accordance with the “Protocols and Reports” section below.

4.1.4. Technology Transfer Report

Upon completion of the Process Technology Transfer runs, Lonza will deliver a Technology Transfer Report documenting the execution of such runs and results from Engineering Runs, if any additional studies are required to be performed, and/or risks associated with the transfer to clinical supply manufacturing. Any changes to the process deemed necessary in the final report will be mutually agreed between both Parties, and approved prior to implementation with future production.

4.2. Comparability Runs

Objective: To execute parallel runs at LHI and by Client to compare the outcome manufacturing process and testing.

Activities:

a. Client will draft a protocol for comparability study (the “Comparability Protocol”) as required for the Comparability Runs. The Comparability Protocol will be mutually reviewed and agreed upon prior to execution in accordance with Protocols and Reports section of this SOW.

b. Upon successful completion of the Engineering Run(s), Lonza will execute [***] Comparability Runs.

c. Starting Material:

- Client will provide Starting Material to execute Comparability Runs.

- Lonza will accept such Starting Material per Lonza procedures and policies.

d. The Comparability Runs will be executed;

- per mutually agreed Comparability Protocol(s) including but not limited to the [***]

- in the [***], with qualified equipment

- with material release for cGMP use by Lonza QA

- with Lonza’s Cell Therapy manufacturing staff and Lonza MSAT staff for assistance and oversight, as deemed necessary

- With Lonza-generated cGMP documentation

e. Testing of the Comparability Runs will be executed per Protocol. If the testing panel in the protocol is different than the Attachment I, this SOW will be revised accordingly.

Assay Transfer-to-QC as described in LOI Amendment-4 will be completed prior to testing product manufactured during the Comparability Runs.

f. The Product manufactured by Lonza during the Comparability Runs may be shipped to the Client or to a contract laboratory. It may not be used for human studies.

Deliverables:

- Lonza will present experimental data to the Client during routine project team meetings as required per the agreed Comparability Protocol and release criteria. For clarification and in addition to the foregoing, Lonza will present & provide a final summary of the experimental data in PowerPoint format, and will not generate a Comparability Report.

- Upon Client’s request, Lonza will ship cryopreserved product from all Comparability Runs to Client.

4.3. [***]

[***].

4.4. cGMP Manufacturing

Objective: cGMP manufacturing of the autologous Product to support clinical studies to be conducted in the USA and Canada.

Activities and Assumptions:

a. Assuming successful completion of the Technology Transfer activities for the process and assays in accordance with Section 4.1 of this SOW, LOI Amendment-1, and LOI Amendment-4 as applicable, Lonza will initiate cGMP manufacturing.

b. No further change in the manufacturing process, analytical methods, material, and/or equipment will occur during cGMP manufacturing except in accordance with the Agreement. Any updates to the MBR or supporting documents required by Lonza to add clarification to the documents is included in the batch price. Any Client driven changes to the documents will be addressed via Change Order.

c. All cGMP manufacturing will be performed by Lonza in accordance with the Quality Agreement, the Agreement and the specified Product release timeframe(s) mutually agreed for each patient.

d. cGMP-compliant manufacturing and Product testing with qualified assays will be executed in accordance with Lonza’s existing quality and operations procedures and systems. MBRs and SOPs specific to the production of the Product, which have been approved by Client and Lonza, will be followed at all times.

e. The cGMP manufacturing will be executed in [***] with validated equipment, clinical grade Starting Material, cGMP materials; by Lonza’s Cell Therapy manufacturing staff and Lonza MSAT staff for assistance and oversight, as deemed necessary.

f. The testing for each cGMP run will be performed per testing plan outlined in the Attachment II.

g. Lonza will provide copies of documentation related to the manufacturing and testing of the Product (including raw materials release certification of Lonza and supplier, in-process testing, final release testing, MBRs, labeling and packaging records, and summary reports) in accordance with the Quality Agreement. Additional documents can be provided by Lonza to Client, upon reasonable request from Client and each subject to Lonza’s acceptance and such acceptance to not be unreasonably withheld.

h. Lonza will review testing records/reports and will issue COA. Copies of all controlled documents executed during batch preparation will be uploaded onto the Lonza/Client SharePoint.

i. Lonza QA will be responsible for release of each Product batch to Client as mentioned in the Quality Agreement; provided however that all pre-requisites including but not limited to APS report final sign off, deviation closures or a full product impact assessment performed, MBR reviews and testing results/review have been completed as appropriate for the Product. Client and Lonza shall use good faith and Commercially Reasonable Efforts to release Batches within the timeframes set forth in the Quality Agreement. Lonza QA will be responsible for providing Client with release documentation including the generation of the COA for each batch manufactured. Shipment of Product to the clinical site can be scheduled on same business day as product release. Lonza may also ship under quarantine in advance of the batch on an as-needed basis upon client memo.

j. Shipping: Lonza will ship the Product via [***] or if Client prefers to use any other courier services, any other carrier designated by Client in accordance with Section 4.6 of the Agreement. For clarification, Lonza will prepare primary packaging the Product per Lonza SOP and prepare the shipping container, the Client will manage the logistics and financials with the courier company directly in accordance with Section 4.6 of the Agreement.

Manufacturing Schedule:

a. Upon commencement of cGMP manufacturing Lonza will provide [***] to manufacture Product [***] as set forth in detail below. For the sake of clarity, Client

will pay the [***] Fees according to the [***] Payment schedule further stipulated in the Financial Terms section below only once cGMP manufacturing has commenced.

i. Lonza will provide manufacturing slots per month in accordance with the Ramp-up Table provided below, subject to adjustments in accordance with the provisions of this paragraph (a)(i).

[***]

Subject to the adjustments set forth above, all slots will be provided [***].

The manufacturing will initiate in [***] according to the schedule below, and will continue until 31st December 2024. Notwithstanding the foregoing, Lonza will make all Commercially Reasonable Efforts to accelerate cGMP manufacturing to begin in June 2022.

The manufacturing in [***] will follow the run rate as given below in Ramp-up Table [***] provided that, the dates in such Ramp-up Table shall be revised such that the first month of such Ramp-up Table reflects the calendar month in which cGMP manufacturing commences if Lonza is able to begin cGMP manufacturing prior to [***] in accordance with the immediately preceding sentence.

Ramp-up Table:

Specific ramp-up [***] are as follows: *

[***]

If Lonza fails to provide the capacity as set forth above, accounting for any adjustment pursuant to this paragraph (a)(i), other than to the extent that such failure to provide capacity resulted from (i) Client causing a slot to not be available, (ii) a shutdown occurring in accordance with paragraph (c) under the heading “Manufacturing Schedule” of Section 4.4 or (iii) reasons outside the reasonable control of Lonza, and subject to Sections 7 and 8, Client shall [***] to reflect the capacity actually provided. If Lonza fails to provide the capacity as set forth above, accounting for any adjustment pursuant to this paragraph (a)(i), and [***].

[***].

ii. [***]

iii. Lonza will prepare the released Product for shipment to the clinical site within [***] of the lot release provided that Client provides [***] notice to Lonza for the shipment request.

b. The manufacturing model assumes the following:

i. [***].

ii. In order to coordinate receipt of patient Starting Material, Client to confirm if they want to use their slots for a healthy donor run, or a patient run with a minimum of [***] prior to commencement of each batch (except with respect to batches where Lonza is providing Starting Material in which case Client must provide [***] notice. In the event that a previously confirmed patient run slot is unable to be utilized due to patient related issues, the Client must confirm with a minimum notice of [***] prior to the commencement of the batch the switch to a healthy donor run in which the Client will provide starting material.

iii. When possible, Client will ship Starting Material in time for Lonza to receive it [***] prior to manufacturing. For Lonza to initiate same day processing, Lonza must receive Starting Material per patient, no later than [***] of [***] manufacturing. If Starting Material is received later than [***], Lonza will make all Commercially Reasonable Efforts to initiate [***]. For clarification, Starting Material received later than [***] on [***], will be manufactured as [***] or in the next available slot depending on the Starting Material stability, or the slot will be forfeited.

iv. This SOW assumes a fixed cadence for [***], and a fixed-day processing schedule for each slot to maximize the suite efficiency. This schedule will be re-evaluated after technology transfer runs are completed and the required changes will be addressed via a Change Order. [***].

c. The slots will be scheduled in a cGMP suite based on Lonza’s bi-annual mandatory suite shutdown for suite maintenance. Lonza shall provide the month a shutdown is scheduled [***] in advance and will provide a minimum of [***] advance notification to Client regarding suite shutdown schedule dates. For clarity, the manufacturing schedule provided in the Ramp-up Table is the capacity Lonza is required to provide notwithstanding available capacity including such mandatory shutdowns. Lonza shall reallocate capacity lost due to the bi-annual suite shutdown within [***] of the original date such slots were scheduled to occur. However, if Lonza is unable to reallocate any Manufacturing capacity within [***] as set forth above, the [***] owed by Client to Lonza for such slots shall be reduced by [***].

d. APS re-qualification runs, will be required as mentioned in Section 4.1.3.b of this SOW. If the client desires, Lonza will execute APS requalification outside of manufacturing slots, in such case the [***] will be applicable per Pricing Table. At higher through-put, when it is not possible to schedule APS-requalification outside

of a manufacturing slot, Lonza will utilize one manufacturing slot for APS-requalification [***].

e. Unless the parties have executed or are negotiating in good faith a commercial manufacturing agreement with respect to the Product, and subject to Section 8.a.i below in the case of a termination by Arcellx pursuant to Section 14.3 of the Agreement, Lonza will perform project closeout activities (example: APSs, equipment movement, etc.) only after completion of all Product manufacturing scheduled during the Term (i.e., the close-out period will commence after expiration of the Term). Lonza will provide a Change Order to Client with the list of closeout activities and associated fees. Such closeout fees are estimated to be [***].

Deliverables:

- The Client will provide Starting Materials.

- Lonza will ship the cGMP Product to the Client specified clinical site or Cryoport as applicable in accordance with Section 3.p of this SOW.

- Lonza will provide COA.

5. Protocols and Reports

Lonza will draft protocols (Assay Transfer Protocol, Comparability Protocol) for the applicable Project Activities to be conducted by Lonza. Client will in its sole discretion, provide approval signature or other written communication, which authorizes Lonza to proceed with the work proposed, in each case that has been accepted by Lonza.

As Protocols are issued, Client will review each Protocol in accordance with Section 3.2 of the Agreement.

Upon completion of each Protocol, Lonza will generate Reports (Assay Qualification Report, Assay Transfer Report, Technology Transfer Report) detailing the experimental methods, materials and results obtained from each Protocol’s execution. No official Report will be generated for work conducted in the absence of an approved Protocol; however, data generated by such work’s execution may be shared by Lonza with Client as it becomes available throughout the execution of such work.

Lonza will target issuance of each individual Report within approximately [***] of completion of the work under the associated approved Protocol to allow for compilation of data. Lonza will share preliminary data with the Client as soon as possible. Client will review each Report in accordance with Section 3.2 of the Agreement.

6. Financial Terms

All payments shall be invoiced and paid as per Section 8 “Financial Terms” of the Agreement. Payments shall be made according to the Payment Schedule provided below,

Pricing Table

[***]

Payment Schedule

Lonza will invoice Client and Client will pay to Lonza as below:

1. Upfront Payment: Upon signature of this SOW, Lonza will invoice upfront payments per table below which will serve as a prepayment and are [***] (the “Upfront Payment”). For clarity, any portion of the Upfront Payment that remains after application of the foregoing credits will be promptly refunded to Client.

[***]

Materials, external testing, and shipping are invoiced separately.

2. [***]

3. [***]: Lonza will start to invoice the Client on a monthly basis for the following starting with the Effective Date of this SOW:

a. [***]

b. Notwithstanding the foregoing, if Lonza fails to initiate cGMP Manufacturing in [***] and such failure was not caused by Client and was not outside of Lonza’s reasonable control, the [***] as set forth above shall not commence and not be due until cGMP Manufacturing commences. If Lonza fails to initiate cGMP Manufacturing in [***] and such failure was outside of Lonza’s reasonable control and not caused by Client, the [***] Fees as set forth above shall commence but such [***] Fees owed by Client shall be reduced by [***] until Lonza initiates cGMP Manufacturing.

c. APS re-qualification: [***] when applicable, in the month APS requalification is performed if an scheduled manufacturing slot is not used for APS re-qualification. For clarity and confirmation, if Client has not used all of its scheduled manufacturing slots, Client may use such slot(s) for APS re-qualification runs at no additional cost and Lonza will accommodate such request.

d. For clarity and confirmation, the [***] Fees described herein will be adjusted for the capacity actually provided by Lonza in [***] in accordance with the ramp-up tiers set forth in the Pricing Table and adjustments thereto pursuant to paragraph (a)(i) under the heading “Manufacturing Schedule” in Section 4.4. Furthermore, other than to the extent that a slot is not available as a result of (i) Client causing a slot to not be available, (ii) a shutdown occurring in accordance with paragraph (c) under the heading “Manufacturing Schedule” of Section 4.4 or (iii) reasons outside the reasonable control of Lonza, and subject to Sections 7 and 8, Client shall not be obligated to pay the [***] for any slots not actually made available by Lonza in such month. Subject to Sections 7 and 8, Client shall only be obligated to pay [***] of the [***] set forth above in a month for any slots not actually made

available by Lonza in such month where such failure is due to reasons outside the reasonable control of Lonza and not caused by Client.

e. Raw Materials will be invoiced as follows, calculated at [***]:

- If a material is a general inventory item, it will be invoiced in the month it is consumed.

- If a material is a custom ordered to be used only in the Client’s process, it will be invoiced in the month it is received by Lonza.

f. Starting Material fees will be invoiced in the month of order placed.

g. The price of any outsourced test will be applicable as [***].

a. Shipping preparation fees of [***] will be applicable as required. Freight is excluded from the shipping fees; this will be invoiced as pass-through cost.

h. The travel cost associated with Technology Transfer activities (if any) will be invoiced in the month it is incurred as pass-through cost. The travel cost will include the air fare, hotel accommodation, food and miscellaneous expenses. All travel costs and expenses will comply with the Client’s travel policies and Lonza shall submit all travel arrangements for Client’s review prior to booking.

i. Lonza acknowledges that Client and Lonza entered into Amendment-6 to Letter of Intent dated January 28, 2022 pursuant to which Client paid Lonza [***]
as a prepayment of the [***] Fees owed by Client to Lonza for February
2022 under this SOW and Lonza will apply [***] as a credit against the invoice for [***] owed by Client for February 2022.

Pricing Assumptions:

j. The prices included in this SOW are based on the manufacturing process and analytical methods which are under development at the time of executing this SOW. Any changes made to the manufacturing process and analytical methods impacting the price will be covered via Change Order.

k. The [***] Fees include labor, and internal testing for each activity in the Project Scope.

l. Price estimate of consumables, raw materials, and other materials set forth above are only estimates.

m. Raw material evaluation, vendor qualification, and raw material testing, if required, is excluded from the SOW, as well as any CapEx.

n. If additional runs or repeated Project Activities are required, additional fees will apply and will be addressed via a change order or an Amendment.

o. Shipping pricing listed above will be applicable to the shipping of samples as well as final product using Lonza’s standard shipping procedures and shipping containers/material.

 The above shipping quantity is specific to [***] final drug product shipment per batch manufactured. If additional doses are required to be shipped per batch, then the Client and Lonza will mutually agree on a path forward.

 Any Product specific shipping requirement will lead to revise the shipping fees.

 The shipping price will be reevaluated after shipping protocol is finalized.

p. Project close-out fees are excluded, this will be covered via a change order and such fees are estimated to be approximately [***].

Limitation of Liability

Notwithstanding Section 13.3 of the Agreement, the following limitation shall apply to Lonza’s liability under this SOW:

EXCEPT IN THE EVENT OF [***], BOTH PARTIES HEREBY AGREE THAT TO THE FULLEST EXTENT PERMITTED BY LAW, LONZA’S LIABILITY TO CLIENT, FOR ANY AND ALL INJURIES, CLAIMS, LOSSES, EXPENSES, OR DAMAGES, WHATSOEVER, ARISING OUT OF OR IN ANY WAY RELATED TO THIS SOW FROM ANY CAUSE OR CAUSES, INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE, ERRORS, OMISSIONS OR STRICT LIABILITY, SHALL NOT EXCEED [***]. LONZA’S LIABILITY TO CLIENT FOR ANY AND ALL INJURIES, CLAIMS, LOSSES, EXPENSES, OR DAMAGES THAT ARE SUBJECT TO [***] SHALL NOT EXCEED [***]. TO THE EXTENT THAT THIS CLAUSE CONFLICTS WITH ANY OTHER CLAUSE, THIS CLAUSE SHALL TAKE PRECEDENCE OVER SUCH CONFLICTING CLAUSE. IF APPLICABLE LAW PREVENTS ENFORCEMENT OF THIS CLAUSE, THEN THIS CLAUSE SHALL BE DEEMED MODIFIED TO PROVIDE THE MAXIMUM PROTECTION FOR LONZA AS IS ALLOWABLE UNDER APPLICABLE LAW.

7. Estimated Project Timeline

The duration of this SOW is thirty-five (35) months from February 1st 2022, (the “Commencement Date”).

Initiation of some Project Activities under this SOW are dependent on availability of the Starting Material, raw materials, and Client provided LVV.

The table below shows estimated timeline up to the initiation of the cGMP manufacturing phase at high level. The project team will create a detailed Gantt chart for the scope of this SOW.

Client and Lonza will work together to identify potential opportunities to accelerate the timeline and Lonza shall make all Commercially Reasonable Efforts to initiate clinical manufacturing in [***].

[***]

Rescheduling

LONZA and Client shall use all Commercially Reasonable Efforts to meet the timelines for Tech Transfer work set forth herein. Notwithstanding the foregoing, if Lonza is unable to meet such timelines for reasons beyond Lonza’s reasonable control, Lonza may reschedule a commencement date of any Tech Transfer work to be performed hereunder upon reasonable

prior written notice to Client, provided that the rescheduled commencement date is no earlier or no later than [***] from the originally estimated commencement date.

Suspension or Delay

In the event of any suspension or delay (i) caused or requested in writing by Client or (ii) caused by a delay in the Client provided material, Client will pay all reasonable costs incurred by LONZA in respect of Project Activities to the extent attributable to the suspension or delay, including without limitation, LONZA’s out-of-pocket expenses related to the purchase of unmarketable materials which have become unusable by reason of such suspension or delay, all non-cancellable commitments which incur costs during the suspension or delay, labor charges, [***] that cannot be reallocated with Lonza having applied Commercially Reasonably Efforts to do so and all work in process including all professional services rendered through the term of suspension or delay (hereinafter “Suspension or Delay Costs”). In the event of any suspension or delay caused by non-availability of raw materials other than Client provided material or which is otherwise outside the reasonable control of LONZA (despite LONZA exercising Commercially Reasonable Efforts), Client will pay [***] of the resulting Suspension or Delay Costs and Lonza shall be responsible for the remaining [***] of such suspension and delay costs. Within [***] of the end of each calendar month during the duration of the suspension or delay, LONZA shall submit an invoice for Suspension and Delay Costs in accordance with this paragraph.

In the event of any suspension or delay caused by or in connection with (i) a complete or partial clinical hold from any regulatory agency or (ii) any circumstance beyond the reasonable control of Client including but not limited to Tech Transfer delays, Client shall have the right to suspend or delay the manufacturing activities described herein upon [***] notice to Lonza, provided that following the effective date of Client’s notice hereunder Client shall continue to pay [***] of the applicable [***] Fees per Payment Schedule Section 3.a for the first [***] following the effective date of the Client’s notice and [***] of the applicable [***] Fees per Payment Schedule Section 3.a thereafter. During such delay Lonza will apply Commercially Reasonable Efforts to use the [***] for other clients and in such case the suspension and delay fees under this Section shall be reduced by the amount of any revenue received by Lonza through such efforts.

In addition to the foregoing, in the event Client, at any time, by written notice to LONZA, suspends or delays all or any portion of LONZA’s performance hereunder, upon receipt of such notice, LONZA shall do the following, unless the notice requires otherwise: (a) promptly discontinue such performance to the extent specified in the notice; (b) incur no further obligations relating to the suspended services, including without limitation placement of orders for material, or services or reserving [***], except for any obligations relating to the wind down or suspension of the services; (c) reasonably maintain any materials utilized in such performance, and any work completed or in progress; and (d) mitigate costs associated with any such suspension, including using reasonable efforts to find alternative uses for the reserved [***] or committed labor for new projects.

Suspensions or delays may be withdrawn by written notice from Client, specifying the requested effective date and scope of the withdrawal and LONZA shall use Commercially Reasonable Efforts to restart as soon as possible.

8. Term and Termination

Term:

The term of this SOW will begin on 1st February 2022 (the “Commencement Date”) and will continue for 35 months from the Commencement Date (“Term”) to assure security of capacity for Client. However, in the event of a delay or suspension pursuant to Section 7, Client shall have the right to extend the Term up to the length of such delay.

Extending SOW:

If Client and Lonza mutually agree to extend the Term of this SOW, such extension requires a minimum notification period of [***] for Lonza to accommodate the request.

Termination:

i. This SOW is non-cancellable for the first six (6) months of the Term. After the first six months Client may terminate manufacturing [***] in accordance with Section 14.3 of the Agreement for any reason upon [***] prior notification to Lonza with respect to [***]. For [***] an applicable cancellation fee shall be calculated as follows:

a. Client will pay the [***] Fees per Payment Schedule Section 3.a during the [***] of the entire notification period.

During the [***], Lonza will perform project closeout activities (example: equipment movement, etc.) necessary to be completed by the end of the notice period, and not manufacture any Product batches. Lonza will apply Commercially Reasonable Efforts during such closeout period to minimize the incremental closeout costs for Client (e.g., utilizing resources previously allocated to client during manufacturing period).

If Client does not require any manufacturing in [***] during the notification period and Lonza is able to use either [***] for another client during the notification period, the [***] Fee applicable to [***] shall be reduced by [***] and shall be paid in [***]. Alternatively, Client can use any available capacity which has not been committed to other clients for other Client programs subject to separate SOW(s).

For clarity, this Section 8.i.a only applies in the event of a termination for convenience by Client pursuant to Section 14.3 of the Agreement.

b. Client may terminate this SOW by notice to Lonza in the event any regulatory authority requires or causes the withdrawal of the Product. In such case, Client shall pay a cancellation fee equal to [***] of the [***] Fees per Payment Schedule Section 3a for a period of [***] from the date of such notice and manufacturing will cease; provided that Lonza shall use Commercially Reasonable Efforts to use the [***] for other clients and in such case the cancellation fee under this sentence shall be reduced on a pro rata basis to reflect the capacity reallocated to such other clients.

c. In the event of termination, Client will pay reasonable costs incurred by Lonza in accordance with 14.6.1 of the Agreement.

d. [***].

For the avoidance of doubt, notwithstanding anything else in the Agreement, in the event of a conflict between the terms of this Section (Term and Termination) and the Agreement, the Parties hereby agree that the terms of this Section (Term and Termination) shall control.

9. Key Contact Information

Any supplemental information required in addition to this SOW should be addressed to the following contact:

[***]

Attachment I: Manufacturing Process, as provided by Client

[***]

Attachment II: Product Characterization and Release Testing

[***]

Attachment III: Comparability Study Work Flow

[***]

Attachment IV: Key equipment per suite

[***]

IN WITNESS WHEREOF, the parties have executed this SOW as of the Effective Date.

Client

By: /s/ Rami Elghandour_____________

Name: Rami Elghandour____________

Title: CEO______________________

Date: 2/11/2022__________________

Lonza Houston, Inc.

By: /s/ Thomas Fellner______________

Name: Thomas Fellner______________

Title: VP, Sales & PM______________

Date: _2/2/2022____________________

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Rami Elghandour, certify that:

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

2.Based on my knowledge, this 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 report;

3.Based on my knowledge, the financial statements, and other financial information included in this 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 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)) 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 report is being prepared;

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

(c)Disclosed in this 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; and

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 (or persons performing the equivalent functions):

(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 12, 2022

/s/ Rami Elghandour

Rami Elghandour

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lance Thibault, certify that:

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

2.Based on my knowledge, this 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 report;

3.Based on my knowledge, the financial statements, and other financial information included in this 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 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)) 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 report is being prepared;

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

(c)Disclosed in this 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; and

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 (or persons performing the equivalent functions):

(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 12, 2022

/s/ Lance Thibault

Lance Thibault

Interim Chief Financial Officer

(Principal Accounting and Financial Officer)

EX-32.1

Exhibit 32.1

ARCELLX, INC.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Arcellx, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Rami Elghandour, Chief Executive Officer (Principal Executive Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 12, 2022

/s/ Rami Elghandour

Rami Elghandour

Chief Executive Officer

(Principal Executive Officer)

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Arcellx, Inc. 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 Report), irrespective of any general incorporation language contained in such filing.

EX-32.2

Exhibit 32.2

ARCELLX, INC.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Arcellx, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lance Thibault, Interim Chief Financial Officer (Principal Financial Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 12, 2022

/s/ Lance Thibault

Lance Thibault

Interim Chief Financial Officer

(Principal Financial Officer)

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Arcellx, Inc. 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 Report), irrespective of any general incorporation language contained in such filing.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2022	May 09, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Registrant Name	ARCELLX, INC.
Entity Central Index Key	0001786205
Entity File Number	001-41259
Entity Tax Identification Number	47-2855917
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	ACLX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	25 West Watkins Mill Road
Entity Address, Address Line Two	Suite A
Entity Address, City or Town	Gaithersburg
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	20878
City Area Code	240
Local Phone Number	327-0603
Entity Common Stock, Shares Outstanding		35,736,584

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Assets, Current [Abstract]
Cash and cash equivalents	$ 127,160	$ 30,833
Marketable securities	83,769	73,784
Prepaid expenses and other current assets	9,974	8,192
Total current assets	220,903	112,809
Restricted cash	199	199
Property and equipment, net	10,127	10,318
Operating lease right-of-use assets	3,248
Deferred offering costs		3,172
Prepaid research and development expenses and other long-term assets	8,913	2,284
Total assets	243,390	128,782
Current liabilities:
Accounts payable	1,874	1,333
Accrued liabilities	14,400	13,180
Operating lease liabilities, current portion	370
Deferred rent, current portion		183
Other current liabilities	164	149
Total current liabilities	16,808	14,845
Operating lease liabilities, net of current portion	4,844
Deferred Rent Credit, Noncurrent		1,895
Other Liabilities, Noncurrent	147	178
Total liabilities	21,799	16,918
Redeemable convertible preferred stock:
Redeemable convertible preferred stock		233,379
Stockholders' equity (deficit):
Preferred stock, par value of $0.001 per share; 200,000,000 shares authorized, and no shares issued and outstanding as of March 31, 2022; no shares authorized, issued or outstanding as of December 31, 2021
Common stock, par value of $0.001 per share; 1,000,000,000 shares authorized and 35,718,764 shares issued and outstanding as of March 31, 2022; 185,000,000 shares authorized and 544,210 shares issued and outstanding as of December 31, 2021	36	1
Additional paid-in capital	384,095	8,615
Accumulated other comprehensive loss	(44)	(20)
Accumulated Deficit	(162,496)	(130,111)
Total stockholders' equity (deficit)	221,591	(121,515)
Total liabilities, redeemable convertible preferred stock, and stockholders' equity (deficit)	$ 243,390	128,782
Series A Redeemable Convertible Preferred Stock
Redeemable convertible preferred stock:
Redeemable convertible preferred stock		28,894
Series B Redeemable Convertible Preferred Stock
Redeemable convertible preferred stock:
Redeemable convertible preferred stock		85,367
Series C Redeemable Convertible Preferred Stock
Redeemable convertible preferred stock:
Redeemable convertible preferred stock		$ 119,118

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Preferred stock, par or stated value per share	$ 0.001	$ 0.001
Preferred stock, shares authorized	200,000,000	0
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par or stated value per share	$ 0.001	$ 0.001
Common stock, shares authorized	1,000,000,000	185,000,000
Common stock, shares, issued	35,718,764	544,210
Common stock, shares, outstanding	35,718,764	544,210
Series A Redeemable Convertible Preferred Stock
Temporary equity, par or stated value per share	$ 0.001	$ 0.001
Temporary equity, shares authorized	0	29,795,227
Temporary equity, shares issued	0	5,413,272
Temporary equity, shares outstanding	0	5,413,272
Temporary Equity, Liquidation Preference	$ 0	$ 29,795
Series B Redeemable Convertible Preferred Stock
Temporary equity, par or stated value per share	$ 0.001	$ 0.001
Temporary equity, shares authorized	0	49,402,623
Temporary equity, shares issued	0	8,975,585
Temporary equity, shares outstanding	0	8,975,585
Temporary Equity, Liquidation Preference	$ 0	$ 85,681
Series C Redeemable Convertible Preferred Stock
Temporary equity, par or stated value per share	$ 0.001	$ 0.001
Temporary equity, shares authorized	0	57,224,618
Temporary equity, shares issued	0	10,396,707
Temporary equity, shares outstanding	0	10,396,707
Temporary Equity, Liquidation Preference	$ 0	$ 120,000

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues [Abstract]
Revenue	$ 0	$ 0
Operating expenses:
Research and development	24,401	8,521
General and administrative	8,034	2,761
Total operating expenses	32,435	11,282
Loss from operations	(32,435)	(11,282)
Other income, net	50	1
Net loss	(32,385)	(11,281)
Other comprehensive loss:
Unrealized loss on marketable securities	24	0
Comprehensive loss	$ (32,409)	$ (11,281)
Net loss per share attributable to common stockholders-basic and diluted	$ (1.56)	$ (33.45)
Weighted-average common shares outstanding-basic and diluted	20,760,722	337,302

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CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (unaudited) - USD ($) $ in Thousands	Total	Series A	Series B	Series C	IPO	Private Placement	Common Stock	Common Stock IPO	Common Stock Private Placement	Additional Paid In Capital	Additional Paid In Capital IPO	Additional Paid In Capital Private Placement	Retained Earnings	Accumulated Other Comprehensive Income
Beginning Balance at Dec. 31, 2020	$ (63,720)						$ 1			$ 1,421			$ (65,142)
Beginning Balance, Shares at Dec. 31, 2020							333,658
Temporary Equity, Beginning Balance at Dec. 31, 2020		$ 28,894	$ 85,367
Temporary Equity, Beginning balance, shares at Dec. 31, 2020		5,413,272	8,975,585
Issuance of Series C redeemable convertible preferred stock for cash, Value, net of transaction costs				$ 91,186
Issuance of Series C redeemable convertible preferred stock for cash, shares, net of transaction costs				7,970,812
Issuance of Series C redeemable convertible preferred stock for cash, subscriptions				$ (10,000)
Issuance of common stock from vesting of restricted stock, value	5									5
Issuance of common stock from vesting of restricted stock, shares							7,173
Exercise of stock options, value	7									7
Exercise of stock options, shares							7,522
Share-based compensation	757									757
Net loss	(11,281)												(11,281)
Ending Balance at Mar. 31, 2021	(74,232)						$ 1			2,190			(76,423)
Ending Balance, shares at Mar. 31, 2021							348,353
Temporary Equity, Ending Balance at Mar. 31, 2021		$ 28,894	$ 85,367	$ 91,186
Temporary Equity, Ending balance, Shares at Mar. 31, 2021		5,413,272	8,975,585	7,970,812
Issuance of Series C redeemable convertible preferred stock for cash, subscriptions receivable, ending balance at Mar. 31, 2021				$ (10,000)
Beginning Balance at Dec. 31, 2021	(121,515)						$ 1			8,615			(130,111)	$ (20)
Beginning Balance, Shares at Dec. 31, 2021							544,210
Temporary Equity, Beginning Balance at Dec. 31, 2021	233,379	$ 28,894	$ 85,367	$ 119,118
Temporary Equity, Beginning balance, shares at Dec. 31, 2021		5,413,272	8,975,585	10,396,707
Issuance of common stock, net of transaction costs, value					$ 127,283	$ 9,958		$ 9	$ 1		$ 127,274	$ 9,957
Issuance of common stock , net of transaction costs, shares								9,487,500	590,318
Conversion of preferred stock to common stock, value	233,379						$ 25			233,354
Conversion of preferred stock to common stock, shares							24,785,564
Temporary Equity, Conversion of stock, value		$ (28,894)	$ (85,367)	$ (119,118)
Temporary Equity, Conversion of stock, shares		(5,413,272)	8,975,585	(10,396,707)
Issuance of common stock from vesting of restricted stock, value	107									107
Issuance of common stock from vesting of restricted stock, shares							24,889
Exercise of stock options, value	307									307
Exercise of stock options, shares							286,283
Share-based compensation	4,481									4,481
Unrealized loss on investment	(24)													(24)
Net loss	(32,385)												(32,385)
Ending Balance at Mar. 31, 2022	$ 221,591						$ 36			$ 384,095			$ (162,496)	$ (44)
Ending Balance, shares at Mar. 31, 2022							35,718,764
Temporary Equity, Ending balance, Shares at Mar. 31, 2022		0	0	0

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CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Series C Redeemable Convertible Preferred Stock
Transaction costs		$ 814
Common Stock | IPO [Member]
Transaction costs	$ 15,029
Common Stock | Private Placement [Member]
Transaction costs	$ 42

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities
Net loss	$ (32,385)	$ (11,281)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	416	207
Noncash operating lease expense	60
Amortization of premiums and discounts on marketable securities	110
Share-based compensation	4,481	757
Changes in operating assets and liabilities:
Prepaid expenses and other current and non-current assets	(8,423)	48
Accounts payable and other current liabilities	696	321
Accrued liabilities	2,563	392
Operating lease liabilities	(104)
Deferred rent		49
Net cash used in operating activities	(32,586)	(9,507)
Cash flows from investing activities
Purchases of property and equipment	(467)	(1,066)
Purchases of marketable securities	(27,026)
Proceeds from maturities of marketable securities	16,850
Net cash used in investing activities	(10,643)	(1,066)
Cash flows from financing activities
Proceeds from issuance of common stock (initial public offering), net of transactions costs	129,156
Proceeds from issuance of common stock (private placement), net of transactions costs	10,000
Proceeds from issuance of Series C redeemable convertible preferred stock, net of transaction costs		81,756
Proceeds from the exercise of stock options	429	7
Payments under finance leases	(29)	(121)
Payments of deferred offering costs		(14)
Net cash provided by financing activities	139,556	81,628
Net increase in cash and cash equivalents and restricted cash	96,327	71,055
Cash and cash equivalents and restricted cash, beginning of the year	31,032	46,795
Cash and cash equivalents and restricted cash, end of the period	127,359	117,850
Supplemental disclosures of noncash investing and financing activities:
Purchase of property and equipment included in accounts payable and accrued liabilities	35	$ 238
Deferred offering costs included in accrued liabilities	$ 42

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Nature of the Business

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of The Business

1. Nature of the Business

Organization

Arcellx, Inc. (Arcellx or the Company) was incorporated in Delaware in December 2014 and is headquartered in Gaithersburg, Maryland. The Company is a clinical-stage biopharmaceutical company reimagining cell therapy through the development of innovative therapies for patients with cancer and other incurable diseases.

On February 8, 2022, the Company closed its initial public offering (IPO) of 9,487,500 shares of its common stock, including the exercise in full by the underwriters of their option to purchase 1,237,500 additional shares of its common stock, at a public offering price of $15.00 per share. The Company received net proceeds of $127.3 million, after deducting underwriting discounts and commissions of and other offering expenses paid by the Company of approximately $15.0 million. The Company’s common stock began trading on the Nasdaq Global Select Market on February 4, 2022, under the ticker symbol “ACLX.”

Liquidity

The Company has not commercialized any of its drug candidates and planned commercial operations have not commenced. The Company expects to incur additional operating losses and negative operating cash flows for the foreseeable future as it continues development of drug candidates, including preclinical and clinical testing and regulatory approval prior to commercialization. The Company has not generated any revenue to date from product sales and does not expect to generate any revenues from product sales in the foreseeable future. Even if drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. The Company expects that its cash and cash equivalents and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements into the second half of 2023.

The Company has funded its operations primarily with proceeds from public and private offerings of its common and preferred stock. The Company plans to seek additional funding through public or private equity offerings, debt financings, marketing and distribution arrangements, other collaborations, strategic alliances, and licensing arrangements. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into strategic alliances or other arrangements on favorable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, the Company could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect its business prospects.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

There have been no material changes to the significant accounting policies disclosed in the Company’s Annual Report on Form 10-K during the three months ended March 31, 2022, except for the adoption of the new lease accounting standard effective January 1, 2022, as discussed below.

Leases

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2016-02, Leases (Topic 842). Topic 842 increases transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements for both lessees and lessors. The Company adopted the new standard effective January 1, 2022, electing to use the package of practical expedients permitted under the transition guidance which allows for the carry forward of historical lease classification for existing leases on the adoption date and does not require the assessment of existing lease contracts to determine whether the contracts contain a lease or initial direct costs. Prior periods were not retrospectively adjusted.

The adoption of this standard resulted in the recognition of operating lease right-of-use (ROU) assets in the amount of $3.3 million and operating lease liabilities in the amount of $5.4 million for operating lease liabilities on the consolidated balance sheet, with a $2.1 million reclassification of deferred rent and tenant improvement allowances. There was no cumulative effect adjustment to the opening balance of accumulated deficit as of January 1, 2022. The adoption of this standard did not have an impact on the consolidated statements of operations or cash flows on the effective date.

The Company leases office space and certain equipment. If a lease arrangement is determined to exist with a lease term of more than 12 months at the lease commencement date, an ROU asset and corresponding lease liability are recorded on the consolidated balance sheet at the lease commencement date based on the present value of lease payments over the lease term. An ROU asset represents the right to control the use of an identified asset over the lease term and a lease liability represents the obligation to make lease payments arising from the lease. The Company uses the discount rate implicit in the lease, if available, or its incremental borrowing rate on the lease commencement date to determine the present value of lease payments. The lease terms used to calculate the ROU assets and related lease liabilities include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases are classified as either operating or financing leases based on the economic substance of the agreement. Lease and non-lease components are accounted for together as a single lease component for leases associated with office space.

For operating leases, the lease expense is recognized on a straight-line basis over the lease term. For finance leases, the ROU asset is amortized from the lease commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term, unless the Company is reasonably certain to exercise an option to purchase the underlying asset or if the lease transfers ownership of the underlying asset to the Company by the end of the lease term, in which case the ROU asset is amortized over the remaining useful life. Interest accretion on the finance lease liabilities is recorded as interest expense. Variable lease expense for both operating and finance leases is expensed as incurred.

For short-term lease arrangements with a term of one year or less, the Company has elected to recognize the related lease payments on a straight-line basis over the lease term without recording related ROU assets and lease liabilities.

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Restricted Cash

3 Months Ended

Mar. 31, 2022

Cash and Cash Equivalents [Abstract]

Restricted Cash

3. Restricted Cash

The Company is required to maintain cash collateral on deposit in a segregated money market bank account, as a condition of a lease agreement. The bank may restrict withdrawals or transfers by, or on behalf of, the Company. The required restricted cash reserve totaled $0.2 million as of both March 31, 2022 and December 31, 2021. This amount is presented as restricted cash on the accompanying consolidated balance sheets.

The following table reconciles cash and cash equivalents and restricted cash per the balance sheets to the statements of cash flows (in thousands):

	March 31, 2022		March 31, 2021
Cash and cash equivalents	$	127,160	$	117,651
Restricted cash		199		199
Total	$	127,359	$	117,850

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

4. Fair Value of Financial Instruments

The fair value of the Company’s financial assets by level within the fair value hierarchy were as follows (in thousands):

	March 31, 2022
	Level 1		Level 2		Level 3
Money market fund (cash equivalent)	$	124,509	$	—	$	—
Money market fund (long-term restricted cash)		199	—		—
Marketable securities:
Commercial paper	—			50,904	—
Corporate debt	—			14,797	—
U.S. government agency	—			15,061	—
Asset-backed securities	—			3,007	—
Total assets measured at fair value	$	124,708	$	83,769	$	—

	December 31, 2021
	Level 1		Level 2		Level 3
Money market fund (cash equivalent)	$	26,472	$	—	$	—
Money market fund (long-term restricted cash)		199	—		—
Marketable securities (1):
Commercial paper	—			43,969	—
Corporate debt	—			17,072	—
U.S. government agency	—			5,053	—
Asset-backed securities	—			7,690	—
Total assets measured at fair value	$	26,671	$	73,784	$	—
(1) These items have been reclassified to conform to current period presentation.

The fair value of financial assets categorized within Level 1 of the fair value hierarchy is determined by using unadjusted quoted prices that are available in active markets for identical assets and liabilities. The fair value of financial assets categorized within Level 2 of the fair value hierarchy is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets and liabilities in inactive markets. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data.

The Company did not transfer any assets measured at fair value on a recurring basis between levels during the three months ended March 31, 2022 or the year ended December 31, 2021.

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Marketable Securities

3 Months Ended

Mar. 31, 2022

Marketable Securities [Abstract]

Marketable Securities

. Marketable Securities

Available-for-sale marketable securities were as follows (in thousands):

	March 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Commercial paper	$	50,904	$	—	$	—		$	50,904
Corporate debt		14,814		1		(18	)		14,797
U.S. government agency		15,081		—		(20	)		15,061
Asset-backed securities		3,013		—		(6	)		3,007
Total	$	83,812	$	1	$	(44	)	$	83,769

	December 31, 2021 (1)
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Commercial paper	$	43,969	$	—	$	—		$	43,969
Corporate debt		17,084		—		(12	)		17,072
U.S. government agency		5,056		—		(3	)		5,053
Asset-backed securities		7,695		—		(5	)		7,690
Total	$	73,804	$	—	$	(20	)	$	73,784

(1) These items have been reclassified to conform to current period presentation.

All of the Company’s available-for-sale debt marketable securities held as of March 31, 2022 had contractual maturities of less than one year. The Company had 9 securities in an unrealized loss position with an aggregate related fair value of $24.8 million as of March 31, 2022. All securities in an unrealized loss position as of March 31, 2022 had been in a loss position for less than 12 months. Unrealized losses on available-for-sale marketable securities as of March 31, 2022 were not significant and were primarily due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities. Accordingly, no allowance for credit losses related to the Company’s available-for-sale marketable securities was recorded for the three months ended March 31, 2022. The Company does not intend to sell these securities or expect to be required to sell the investments before recovery of their amortized cost bases, which may be at maturity. The Company recorded interest income of $0.2 million, offset by amortization of premium of $0.1 million, for the three months ended March 31, 2022, which is included in other income, net on the condensed consolidated statements of operations and comprehensive loss.

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Prepaid Expenses and Other Current Assets

3 Months Ended

Mar. 31, 2022

Prepaid Expense and Other Assets, Current [Abstract]

Prepaid Expenses and Other Current Assets

6. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

	March 31, 2022		December 31, 2021
Prepaid research and development costs	$	6,388	$	6,143
Other prepaid expense and current assets		3,586		2,049
Total prepaid expenses and other current assets	$	9,974	$	8,192

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Commitments

3 Months Ended

Mar. 31, 2022

Commitments [Abstract]

Commitments

7. Commitments

Pursuant to the manufacturing services agreement with Lonza Houston, Inc. (Lonza) in connection with the development and manufacture of autologous drug product CART-ddBCMA (Lonza Agreement), the Company entered into a statement of work with Lonza (Lonza SOW) in February 2022, for the technology transfer and cGMP manufacturing of CART-ddBCMA and potentially other pipeline products. The term of the Lonza SOW expires December 31, 2024, unless earlier terminated by either party or unless extended due to certain delays or suspensions or by mutual agreement. The Lonza SOW is non-cancellable for the first six months of the term and carries minimum non-cancellable costs including upfront payments, milestone fees, and fixed monthly payments during the related period. Subsequent to the non-cancellable period, the Company may terminate the arrangement for any reason upon 12 months' prior notification to Lonza. As of March 31, 2022, the Company’s minimum non-cancellable costs payable to Lonza was approximately $40.6 million. Variable costs under this arrangement include materials, external testing, and other services. The Company paid $5.8 million under this arrangement during the three months ended March 31, 2022.

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Accrued Liabilities

3 Months Ended

Mar. 31, 2022

Accrued Liabilities, Current [Abstract]

Accrued Liabilities

. Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	March 31, 2022		December 31, 2021
Research and development accrued expenses	$	12,129	$	6,626
Accrued offering costs		—		1,301
Accrued bonus		793		3,429
Other liabilities		1,478		1,824
Total accrued liabilities	$	14,400	$	13,180

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Leases

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Leases

. Leases

The Company leases office and laboratory space in Gaithersburg, Maryland under one lease that has a term that expires in 2030 unless renewed. The lease agreement contains rent escalation, rent abatement clauses, tenant improvement allowances, and optional renewal clauses. The lease agreement also includes variable lease payments, which are primarily related to common area maintenance and utility charges. The Company also has short-term operating leases with a term of one year or less.

As of March 31, 2022, the Company had operating lease ROU assets of $3.2 million, current operating lease liabilities of $0.4 million, and non-current operating lease liabilities of $4.8 million. The Company used a discount rate of 8.2% in measuring operating lease liabilities. The remaining lease term was 7.8 years as of March 31, 2022.

The Company's total operating lease costs were as follows (in thousands):

	Three Months Ended March 31, 2022
Operating lease costs	$	163
Short-term lease costs		377
Variable lease costs		14
	$	554

As of March 31, 2022, future minimum operating lease payments were as follows (in thousands):

Through December 31, 2022	$	555
2023		851
2024		872
2025		894
2026		916
2027		939
Thereafter		2,033
Total operating lease payments		7,060
Less: imputed interest		(1,846	)
Present value of total operating lease liabilities	$	5,214

Supplemental cash flow information related to operating leases is as follows (in thousands):

	Three Months Ended March 31, 2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	206
ROU assets obtained in exchange for operating lease liabilities		3,308

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Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)

. Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)

Redeemable Convertible Preferred Stock

In connection with the Company's IPO, all outstanding shares of the Company’s redeemable convertible preferred stock automatically converted into shares of common stock at the applicable conversion ratio then in effect. The Company's outstanding shares of preferred stock were converted into 24,785,564 shares of common stock.

Preferred Stock

Subsequent to the IPO, the Company's board of directors has the authority, without further action by the stockholders, to issue shares of preferred stock in one or more series and to fix the rights, preferences, privileges, and restrictions thereof. These rights, preferences, and privileges could include dividend rights, conversion rights, voting rights, redemption rights, liquidation preferences, sinking fund terms, and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. The issuance of preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing change in our control or other corporate action.

Common Stock

In addition to the shares of common stock issued and outstanding in connection with the IPO and the subsequent private placement, total shares of common stock issued and outstanding includes shares issued to employees pursuant to the exercise of vested stock options as well as the vesting of early exercised stock options. In order to execute the early exercises, the employees signed a Restricted Stock Purchase Agreement (RSPA) granting the Company, in the case of termination of employment, the rights to repurchase all of the unvested shares at the price paid by the employee for such shares. Based on the share repurchase rights outlined in the RSPA, the Company recorded the proceeds from the early exercises as a liability on the balance sheet.

All shares that were early exercised by the employees of the Company are considered legally issued. However, for accounting purposes, only vested shares are considered issued. Below is a reconciliation of shares issued and outstanding:

	March 31, 2022			December 31, 2021
Total shares of common stock legally issued and outstanding		35,736,584			544,967
Less: unvested early exercised shares of common stock		(17,820	)		(757	)
Total shares issued and outstanding		35,718,764			544,210

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any. No dividends have been declared or paid by the Company through March 31, 2022.

In the event of any liquidation or dissolution of the Company, the holders of common stock are entitled to the assets of the Company legally available for distribution.

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Share-Based Compensation

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Share-Based Compensation

11. Share-Based Compensation

The Company’s 2017 Equity Incentive Plan (the 2017 Plan) provided for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, to the Company's employees, directors, and consultants. The 2017 Plan terminated one business day prior to effectiveness of the 2022 Equity Incentive Plan (the 2022 Plan) with respect to the grant of future awards. The 2022 Plan became effective on February 3, 2022 and provides for the grant of incentive stock options to the Company's employees and for the grant of nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units (RSUs), and performance awards to the Company's employees, directors, and consultants.

The aggregate number of shares of common stock that may be issued pursuant to equity awards under the 2022 Plan is 4,296,875 shares, plus shares subject to awards granted under the 2017 Plan that expire or otherwise terminate without having been exercised in full or are forfeited to or repurchased by the Company (provided that the maximum number of shares that may be added to the 2022 Plan pursuant to awards under the 2017 Plan is 6,269,300 shares). The number of shares of common stock reserved for issuance under the 2022 Plan shall be cumulatively increased on the first day of each fiscal year, beginning with the Company’s 2023 fiscal year and ending on the ten year anniversary of the date the Company’s board of directors approves the 2022 Plan equal to the least of 4,296,875 shares, 5% of the total number of shares of common stock outstanding as of the last day of the immediately preceding fiscal year, or a lesser number of shares determined by the administrator of the 2022 Plan.

Share-based compensation expense by type of award was as follows (in thousands):

	Three Months Ended March 31,
	2022		2021
Stock options	$	3,030	$	757
Restricted stock units		696		—
Restricted stock units - executive officer		755		—
Total share-based compensation expense	$	4,481	$	757

The Company recognized $4.5 million in share-based compensation expense during the three months ended March 31, 2022, of which $1.3 million was included in research and development and $3.2 million was included in general and administrative in the accompanying condensed consolidated statements of operations. The Company recognized $0.8 million in share-based compensation expense during the three months ended March 31, 2021, of which $0.2 million was included in research and development and $0.6 million was included in general and administrative in the accompanying condensed consolidated statements of operations.

Stock Options

Stock options granted under the 2017 Plan and the 2022 Plan vest over three or four years and expire after 10 years. The Company uses the Black Scholes option pricing model to determine the grant date fair value of stock options.

A summary of stock option activity for awards under the 2017 Plan and the 2022 Plan is presented below:

	Options Outstanding and Exercisable
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value (1) (in thousands)
Outstanding as of January 1, 2022		5,598,830		$	5.36		8.9	$	7,349
Granted		2,829,435			14.87
Forfeited		(3,504	)		11.38
Exercised		(311,172	)		1.35
Outstanding as of March 31, 2022		8,113,589		$	8.83		9.1	$	44,630
Exercisable as of March 31, 2022		1,767,303		$	4.83		8.1	$	16,304

(1)The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for the options that were in the money as of March 31, 2022.

Restricted Stock Units

RSUs granted under the 2022 Plan generally vest annually over three years. The Company uses the market price of the Company’s common shares on the date of grant to determine the fair value of RSUs.

A summary of RSU activity for awards under the 2022 Plan is presented below:

	Number of Shares			Weighted Average Grate Date Fair Value
Outstanding as of January 1, 2022		—		$	—
Granted		703,329			15.00
Vested		—			—
Forfeited		(666	)		15.00
Outstanding as of March 31, 2022		702,663		$	15.00

Restricted Stock Units - Executive Officer

In June 2021, the Company granted 952,804 RSUs to an executive officer subject to service, performance, and market conditions. In December 2021, the Company added alternative performance conditions for vesting of the same RSUs (the RSU Award). These additional performance conditions provided alternative paths to vesting and the original award from June 2021 and its vesting conditions remained the same, i.e., the original award was not modified.

Each RSU granted in the RSU Award entitles the recipient to one share of common stock upon vesting subject to the service, performance, and market conditions. All 952,804 RSUs were outstanding as of March 31, 2022 and December 31, 2021 and no RSUs were vested or exercisable as of March 31, 2022 or December 31, 2021.

Service Condition

The service condition to vesting of the RSU Award requires the executive officer’s continued employment with the Company through the achievement of any of the performance conditions and the market condition.

Performance Condition

The performance conditions to vesting of the RSU Award include (i) the consummation of a change in control event as defined in the 2017 Plan (Change in Control), (ii) the consummation of the first firm commitment underwritten public offering covering the offer and sale of Company shares, the consummation of the direct listing or direct placement of Company shares on a publicly traded exchange, or the completion of a merger or consolidation with a special purpose acquisition company in which the shares of the surviving or parent entity are listed on a national securities exchange (IPO), or (iii) a Change in Control following an IPO.

Market Condition

The market condition to vesting of the RSU Award involves Company value thresholds depending upon which of the three performance condition scenarios is applicable at the time of measurement.

The Company value on a Change in Control is measured on the date of the Change in Control and is the aggregate amount of deal consideration paid at the closing of a Change in Control by an acquiror for the Company shares of common stock in connection with such Change in Control (Change in Control Market Capitalization). Upon a Change in Control, (i) one-sixth of the RSU Award will vest if a minimum Change in Control Market Capitalization of $2.5 billion is achieved, (ii) all of the RSU Award will vest if a $5.0 billion Change in Control Market Capitalization is achieved, and (iii) a portion of the RSU Award will vest based on a straight-line interpolation if a Change in Control Market Capitalization of between $2.5 billion and $5.0 billion is achieved based on a straight-line interpolation.

The Company value in the event of an IPO is measured each June 30 and December 31 following an IPO (subject to applicable lock-up period) and represents the Company's Enterprise Value. The Company's Enterprise Value is determined using the total market

capitalization of the Company based the average closing trading price of one share of the Company over the 60-day period ending on the day prior to the applicable IPO measurement date, less cash. Upon an IPO, (i) one-sixth of the RSU Award will vest if a minimum Enterprise Value of $2.5 billion is achieved, (ii) all the RSU Award will vest if a $5.0 billion Enterprise Value is achieved, and (iii) a portion of the RSU Award will vest based on a straight-line interpolation if an Enterprise Value of between $2.5 billion and $5.0 billion is achieved.

The Company utilized Monte Carlo simulation models to estimate the fair value of the RSU Award on the date of grant in each of the three performance condition scenarios.

Upon completion of the IPO in February 2022, the performance condition of the RSU Award was satisfied and the Company began recognizing share-based compensation expense on an accelerated attribution basis over the anticipated service period (10 years) and based on the fair value (aggregate $10.3 million) according to the IPO scenario as no other performance condition was deemed probable at the time of the IPO. The Company recognized $0.8 million in share-based compensation expense related to this RSU Award during the three months ended March 31, 2022.

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Net Loss Per Share Attributable to Common Stockholders

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Net Loss Per Share Attributable to Common Stockholders

12. Net Loss Per Share Attributable to Common Stockholders

The Company’s potentially dilutive securities include options to purchase common stock, unvested shares of restricted common stock, and redeemable convertible preferred stock. The Company's potentially dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be anti-dilutive. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at period end, from the computation of diluted net loss per share attributable to common stockholders for the period indicated because including them would have had an anti-dilutive effect:

	March 31,
	2022		2021
Redeemable convertible preferred stock		—		22,359,669
Options to purchase common stock		8,113,589		2,871,594
Unvested shares of restricted common stock from early exercises		17,820		34,647
Restricted stock units		702,663		—
Restricted stock units - executive officer		952,804		—
Total		9,786,876		25,265,910

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Leases

Leases

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2016-02, Leases (Topic 842). Topic 842 increases transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements for both lessees and lessors. The Company adopted the new standard effective January 1, 2022, electing to use the package of practical expedients permitted under the transition guidance which allows for the carry forward of historical lease classification for existing leases on the adoption date and does not require the assessment of existing lease contracts to determine whether the contracts contain a lease or initial direct costs. Prior periods were not retrospectively adjusted.

The adoption of this standard resulted in the recognition of operating lease right-of-use (ROU) assets in the amount of $3.3 million and operating lease liabilities in the amount of $5.4 million for operating lease liabilities on the consolidated balance sheet, with a $2.1 million reclassification of deferred rent and tenant improvement allowances. There was no cumulative effect adjustment to the opening balance of accumulated deficit as of January 1, 2022. The adoption of this standard did not have an impact on the consolidated statements of operations or cash flows on the effective date.

The Company leases office space and certain equipment. If a lease arrangement is determined to exist with a lease term of more than 12 months at the lease commencement date, an ROU asset and corresponding lease liability are recorded on the consolidated balance sheet at the lease commencement date based on the present value of lease payments over the lease term. An ROU asset represents the right to control the use of an identified asset over the lease term and a lease liability represents the obligation to make lease payments arising from the lease. The Company uses the discount rate implicit in the lease, if available, or its incremental borrowing rate on the lease commencement date to determine the present value of lease payments. The lease terms used to calculate the ROU assets and related lease liabilities include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases are classified as either operating or financing leases based on the economic substance of the agreement. Lease and non-lease components are accounted for together as a single lease component for leases associated with office space.

For operating leases, the lease expense is recognized on a straight-line basis over the lease term. For finance leases, the ROU asset is amortized from the lease commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term, unless the Company is reasonably certain to exercise an option to purchase the underlying asset or if the lease transfers ownership of the underlying asset to the Company by the end of the lease term, in which case the ROU asset is amortized over the remaining useful life. Interest accretion on the finance lease liabilities is recorded as interest expense. Variable lease expense for both operating and finance leases is expensed as incurred.

For short-term lease arrangements with a term of one year or less, the Company has elected to recognize the related lease payments on a straight-line basis over the lease term without recording related ROU assets and lease liabilities.

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Restricted Cash (Tables)

3 Months Ended

Mar. 31, 2022

Cash and Cash Equivalents [Abstract]

Schedule of Cash and Cash Equivalents and Restricted Cash

The following table reconciles cash and cash equivalents and restricted cash per the balance sheets to the statements of cash flows (in thousands):

	March 31, 2022		March 31, 2021
Cash and cash equivalents	$	127,160	$	117,651
Restricted cash		199		199
Total	$	127,359	$	117,850

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Company's Financial Assets

The fair value of the Company’s financial assets by level within the fair value hierarchy were as follows (in thousands):

	March 31, 2022
	Level 1		Level 2		Level 3
Money market fund (cash equivalent)	$	124,509	$	—	$	—
Money market fund (long-term restricted cash)		199	—		—
Marketable securities:
Commercial paper	—			50,904	—
Corporate debt	—			14,797	—
U.S. government agency	—			15,061	—
Asset-backed securities	—			3,007	—
Total assets measured at fair value	$	124,708	$	83,769	$	—

	December 31, 2021
	Level 1		Level 2		Level 3
Money market fund (cash equivalent)	$	26,472	$	—	$	—
Money market fund (long-term restricted cash)		199	—		—
Marketable securities (1):
Commercial paper	—			43,969	—
Corporate debt	—			17,072	—
U.S. government agency	—			5,053	—
Asset-backed securities	—			7,690	—
Total assets measured at fair value	$	26,671	$	73,784	$	—
(1) These items have been reclassified to conform to current period presentation.

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Marketable Securities (Tables)

3 Months Ended

Mar. 31, 2022

Marketable Securities [Abstract]

Schedule of Available-for-sale Marketable Securities

Available-for-sale marketable securities were as follows (in thousands):

	March 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Commercial paper	$	50,904	$	—	$	—		$	50,904
Corporate debt		14,814		1		(18	)		14,797
U.S. government agency		15,081		—		(20	)		15,061
Asset-backed securities		3,013		—		(6	)		3,007
Total	$	83,812	$	1	$	(44	)	$	83,769

	December 31, 2021 (1)
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Commercial paper	$	43,969	$	—	$	—		$	43,969
Corporate debt		17,084		—		(12	)		17,072
U.S. government agency		5,056		—		(3	)		5,053
Asset-backed securities		7,695		—		(5	)		7,690
Total	$	73,804	$	—	$	(20	)	$	73,784

(1) These items have been reclassified to conform to current period presentation.

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Prepaid Expenses and Other Current Assets (Tables)

3 Months Ended

Mar. 31, 2022

Prepaid Expense and Other Assets, Current [Abstract]

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

	March 31, 2022		December 31, 2021
Prepaid research and development costs	$	6,388	$	6,143
Other prepaid expense and current assets		3,586		2,049
Total prepaid expenses and other current assets	$	9,974	$	8,192

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Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2022

Accrued Liabilities, Current [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	March 31, 2022		December 31, 2021
Research and development accrued expenses	$	12,129	$	6,626
Accrued offering costs		—		1,301
Accrued bonus		793		3,429
Other liabilities		1,478		1,824
Total accrued liabilities	$	14,400	$	13,180

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Leases (Tables)

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Operating lease costs

The Company's total operating lease costs were as follows (in thousands):

	Three Months Ended March 31, 2022
Operating lease costs	$	163
Short-term lease costs		377
Variable lease costs		14
	$	554

Summary of Future Minimum operating lease payments

As of March 31, 2022, future minimum operating lease payments were as follows (in thousands):

Through December 31, 2022	$	555
2023		851
2024		872
2025		894
2026		916
2027		939
Thereafter		2,033
Total operating lease payments		7,060
Less: imputed interest		(1,846	)
Present value of total operating lease liabilities	$	5,214

Summary of Supplemental Cash Flow Information Related to Operating Leases

Supplemental cash flow information related to operating leases is as follows (in thousands):

	Three Months Ended March 31, 2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	206
ROU assets obtained in exchange for operating lease liabilities		3,308

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Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Tables)

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Schedule of Reconciliation of Shares Issued and Outstanding

Below is a reconciliation of shares issued and outstanding:

	March 31, 2022			December 31, 2021
Total shares of common stock legally issued and outstanding		35,736,584			544,967
Less: unvested early exercised shares of common stock		(17,820	)		(757	)
Total shares issued and outstanding		35,718,764			544,210

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Schedule of Share-based Compensation Expense

Share-based compensation expense by type of award was as follows (in thousands):

	Three Months Ended March 31,
	2022		2021
Stock options	$	3,030	$	757
Restricted stock units		696		—
Restricted stock units - executive officer		755		—
Total share-based compensation expense	$	4,481	$	757

Summary of Stock Option Activity

A summary of stock option activity for awards under the 2017 Plan and the 2022 Plan is presented below:

	Options Outstanding and Exercisable
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value (1) (in thousands)
Outstanding as of January 1, 2022		5,598,830		$	5.36		8.9	$	7,349
Granted		2,829,435			14.87
Forfeited		(3,504	)		11.38
Exercised		(311,172	)		1.35
Outstanding as of March 31, 2022		8,113,589		$	8.83		9.1	$	44,630
Exercisable as of March 31, 2022		1,767,303		$	4.83		8.1	$	16,304

(1)The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for the options that were in the money as of March 31, 2022.

Summary of Restricted Stock Units Activity

A summary of RSU activity for awards under the 2022 Plan is presented below:

	Number of Shares			Weighted Average Grate Date Fair Value
Outstanding as of January 1, 2022		—		$	—
Granted		703,329			15.00
Vested		—			—
Forfeited		(666	)		15.00
Outstanding as of March 31, 2022		702,663		$	15.00

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Net Loss Per Share Attributable to Common Stockholders (Tables)

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Schedule of Antidilutive Securities Excluded From Computation of Earnings Per Share

	March 31,
	2022		2021
Redeemable convertible preferred stock		—		22,359,669
Options to purchase common stock		8,113,589		2,871,594
Unvested shares of restricted common stock from early exercises		17,820		34,647
Restricted stock units		702,663		—
Restricted stock units - executive officer		952,804		—
Total		9,786,876		25,265,910

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Nature of The Business - Additional Information (Details) - IPO - Common Stock - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
	Feb. 08, 2022	Mar. 31, 2022
Class of Stock [Line Items]
Number of shares issued	9,487,500	9,487,500
Additional stock issued during period shares exercised by underwriters with option to purchase	1,237,500
Public offering price per share	$ 15.00
Net proceeds from initial public offering	$ 127.3
Cash paid for underwriting discounts and commissions and other offering expenses	$ 15.0

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Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands		3 Months Ended
	Jan. 01, 2022	Mar. 31, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Accounting standards update [Extensible Enumeration]		us-gaap:AccountingStandardsUpdate201602Member
Change in accounting principle, accounting standards update, adopted date		Jan. 01, 2022
Change in accounting principle, accounting standards update, adopted [true false]		true
Operating lease right-of-use assets	$ 3,300	$ 3,248
Operating lease liabilities	5,400	$ 5,214
Reclassification of deferred rent and tenant improvement allowances	$ 2,100

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Restricted Cash (Additional Information) (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Cash and Cash Equivalents [Abstract]
Restricted cash reserve	$ 0.2	$ 0.2

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Restricted Cash - Schedule of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract]
Cash and cash equivalents	$ 127,160	$ 30,833	$ 117,651
Restricted cash	199		199
Cash, cash equivalents and restricted cash	$ 127,359	$ 31,032	$ 117,850	$ 46,795

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Fair Value of Financial Instruments - Schedule of Fair Value of Company's Financial Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Assets
Marketable securities	$ 83,769	$ 73,784	[1]
Level 1 | Recurring
Assets
Money market fund (cash equivalent)	124,509	26,472
Money market fund (long-term restricted cash)	199	199
Total assets measured at fair value	124,708	26,671
Level 2 | Recurring
Assets
Total assets measured at fair value	83,769	73,784
Level 2 | Recurring | Commercial Paper
Assets
Marketable securities	50,904	43,969
Level 2 | Recurring | Corporate Debt
Assets
Marketable securities	14,797	17,072
Level 2 | Recurring | U.S. Government Agency
Assets
Marketable securities	15,061	5,053
Level 2 | Recurring | Asset-Backed Securities
Assets
Marketable securities	$ 3,007	$ 7,690

[1] These items have been reclassified to conform to current period presentation.

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Marketable Securities - Schedule of Available-for-sale Marketable Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	[1]
Marketable Securities [Line Items]
Amortized costs	$ 83,812	$ 73,804
Gross Unrealized Gains	1
Gross Unrealized Loss	(44)	(20)
Fair Value	83,769	73,784
Commercial Paper
Marketable Securities [Line Items]
Amortized costs	50,904	43,969
Fair Value	50,904	43,969
Corporate Debt
Marketable Securities [Line Items]
Amortized costs	14,814	17,084
Gross Unrealized Gains	1
Gross Unrealized Loss	(18)	(12)
Fair Value	14,797	17,072
U.S. Government Agency
Marketable Securities [Line Items]
Amortized costs	15,081	5,056
Gross Unrealized Loss	(20)	(3)
Fair Value	15,061	5,053
Asset-Backed Securities
Marketable Securities [Line Items]
Amortized costs	3,013	7,695
Gross Unrealized Loss	(6)	(5)
Fair Value	$ 3,007	$ 7,690

[1] These items have been reclassified to conform to current period presentation.

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Marketable Securities - Additional Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) Condition
Marketable Securities [Abstract]
Available-for-sale debt marketable securities contractual maturities	less than one year
Number of securities in an unrealized loss position | Condition	9
Aggregate fair value an unrealized loss position	$ 24,800
Allowance for credit losses	0
Interest income	200
Amortization of premium	$ 100

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Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Prepaid Expense and Other Assets, Current [Abstract]
Prepaid research and development costs	$ 6,388	$ 6,143
Other prepaid expense and current assets	3,586	2,049
Total prepaid expenses and other current assets	$ 9,974	$ 8,192

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Manufacturing Services Agreement with Lonza Houston, Inc - Additional Information (Details) $ in Millions	Mar. 31, 2022 USD ($)
Manufacturing Services Agreement [Abstract]
Obligated to pay to Lonza	$ 5.8
Minimum non-cancellable costs	$ 40.6

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Commitments - Additional Information (Details) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)
Commitments [Abstract]
Prior notification period to terminate arrangement	12 months
Minimum non-cancellable costs	$ 40.6
Obligated to pay to Lonza	$ 5.8

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Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Accrued Liabilities, Current [Abstract]
Research and development accrued expenses	$ 12,129	$ 6,626
Accrued offering costs		1,301
Accrued bonus	793	3,429
Other liabilities	1,478	1,824
Total accrued liabilities	$ 14,400	$ 13,180

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Leases - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Jan. 01, 2022	Dec. 31, 2021
Lessee, Lease, Description [Line Items]
Short-term operating lease, term	1 year
Operating lease right-of-use assets	$ 3,248	$ 3,300
Current operating lease liabilities	370
Non-current operating lease liabilities	$ 4,844
Operating lease, discount rate	8.20%
Operating lease, remaining lease term	7 years 9 months 18 days
Office and Laboratory Space | Gaithersburg, Maryland
Lessee, Lease, Description [Line Items]
Lease expiration year	2030

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Leases - Summary of Lease Costs (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Leases [Abstract]
Operating lease costs	$ 163
Short-term lease costs	377
Variable lease costs	14
Total operating lease costs	$ 554

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Leases - Summary of Future Minimum Operating Lease Payments (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Jan. 01, 2022
Leases [Abstract]
Through December 31, 2022	$ 555
2023	851
2024	872
2025	894
2026	916
2027	939
Thereafter	2,033
Total operating lease payments	7,060
Less: imputed interest	(1,846)
Present value of total operating lease liabilities	$ 5,214	$ 5,400

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Leases - Supplemental Cash Flow Information Related to Operating Leases (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Lessee Disclosure [Abstract]
Cash paid for amounts included in the measurement of operating lease liabilities	$ 206
ROU assets obtained in exchange for operating lease liabilities	$ 3,308

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Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) - Additional Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) shares
Class of Stock [Line Items]
Common stock voting rights	one vote
Common Stock
Class of Stock [Line Items]
Dividends declared or paid | $	$ 0
IPO | Redeemable Convertible Preferred Stock
Class of Stock [Line Items]
Shares issued upon conversion of preferred stock | shares	24,785,564

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Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) - Schedule of Reconciliation of Shares Issued and Outstanding (Details) - Common Stock - shares	Mar. 31, 2022	Dec. 31, 2021
Class of Stock [Line Items]
Total shares of common stock legally issued and outstanding	35,736,584	544,967
Less: unvested early exercised shares of common stock	(17,820)	(757)
Total shares issued and outstanding	35,718,764	544,210

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Share-Based Compensation - Additional Information (Details) $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
	Jun. 30, 2021 shares	Mar. 31, 2022 USD ($) Condition shares	Mar. 31, 2021 USD ($)	Dec. 31, 2021 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense | $		$ 4,481	$ 757
2022 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Restricted stock units, granted		4,296,875
2017 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units, outstanding		6,269,300
Board of Directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anniversary period		10 years
Board of Directors | 2022 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units, granted		4,296,875
Percentage increase in common stock reserve for future issuance		5.00%
Research and Development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense | $		$ 1,300	200
General and Administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense | $		3,200	600
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense | $		$ 3,030	$ 757
Stock Options | 2017 and 2022 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period		10 years
Stock Options | 2017 and 2022 Equity Incentive Plan | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Stock Options | 2017 and 2022 Equity Incentive Plan | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		4 years
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense | $		$ 696
Restricted Stock Units | 2022 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units, granted		703,329
Restricted stock units, outstanding		702,663
Restricted Stock Units | Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense | $		$ 755
Restricted stock units, granted	952,804
Vesting description		Each RSU granted in the RSU Award entitles the recipient to one share of common stock upon vesting subject to the service, performance, and market conditions.
Restricted stock units, outstanding		952,804		952,804
Restricted stock units, vested		0		0
Restricted stock units, exercisable		0		0
Number of performance condition scenarios | Condition		3
Restricted Stock Units | IPO | Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting description		Upon an IPO, (i) one-sixth of the RSU Award will vest if a minimum Enterprise Value of $2.5 billion is achieved, (ii) all the RSU Award will vest if a $5.0 billion Enterprise Value is achieved, and (iii) a portion of the RSU Award will vest based on a straight-line interpolation if an Enterprise Value of between $2.5 billion and $5.0 billion is achieved.
Anticipated service period		10 years
Fair value of the RSU award | $		$ 10,300
Restricted Stock Units | Change in Control | Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting description		Upon a Change in Control, (i) one-sixth of the RSU Award will vest if a minimum Change in Control Market Capitalization of $2.5 billion is achieved, (ii) all of the RSU Award will vest if a $5.0 billion Change in Control Market Capitalization is achieved, and (iii) a portion of the RSU Award will vest based on a straight-line interpolation if a Change in Control Market Capitalization of between $2.5 billion and $5.0 billion is achieved based on a straight-line interpolation.
Restricted Stock Units | General and Administrative | Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense | $		$ 800

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Share-Based Compensation - Schedule of Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	$ 4,481	$ 757
Stock Options
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	3,030	$ 757
Restricted Stock Units
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	696
Restricted Stock Units | Executive Officer
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total share-based compensation expense	$ 755

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Share-Based Compensation - Summary of Stock Option Activity (Details) - Stock Options - 2017 and 2022 Equity Incentive Plan - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended	12 Months Ended
		Mar. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Outstanding, Beginning balance		5,598,830
Number of Shares, Granted		2,829,435
Number of Shares, Forfeited		(3,504)
Number of Shares, Exercised		(311,172)
Number of Shares, Outstanding, Ending balance		8,113,589	5,598,830
Number of Shares, Exercisable		1,767,303
Weighted Average Exercise Price, Outstanding, Beginning balance		$ 5.36
Weighted Average Exercise Price, Granted		14.87
Weighted Average Exercise Price, Forfeited		11.38
Weighted Average Exercise Price, Exercised		1.35
Weighted Average Exercise Price, Outstanding, Ending balance		8.83	$ 5.36
Weighted Average Exercise Price, Exercisable		$ 4.83
Weighted Average Remaining Contractual Life (Years), Outstanding		9 years 1 month 6 days	8 years 10 months 24 days
Weighted Average Remaining Contractual Life (Years), Exercisable		8 years 1 month 6 days
Aggregate Intrinsic Value, Outstanding	[1]	$ 44,630	$ 7,349
Aggregate Intrinsic Value, Exercisable	[1]	$ 16,304

[1] The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for the options that were in the money as of March 31, 2022.

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Share-Based Compensation - Summary of Restricted Stock Units Activity (Details) - 2022 Equity Incentive Plan	3 Months Ended
	Mar. 31, 2022 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Granted	4,296,875
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Granted	703,329
Number of Shares, Forfeited	(666)
Number of Shares, Outstanding, Ending balance	702,663
Weighted Average Grant Date Fair Value, Granted | $ / shares	$ 15.00
Weighted Average Grant Date Fair Value, Forfeited | $ / shares	15.00
Weighted Average Grant Date Fair Value, Outstanding, Ending Balance | $ / shares	$ 15.00

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Net Loss Per Share Attributable to Common Stockholders - Summary of Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount	9,786,876	25,265,910
Redeemable Convertible Preferred Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount		22,359,669
Options to Purchase Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount	8,113,589	2,871,594
Unvested Shares of Restricted Common Stock from Early Exercises
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount	17,820	34,647
Restricted Stock Units
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount	702,663
Restricted stock units - executive officer
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount	952,804