Inhibrx Biosciences Inc.

03/19/2026 | Press release | Distributed by Public on 03/19/2026 14:01

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

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 consolidated financial statements and related notes appearing elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report contains forward-looking statements that involve risk and uncertainties, including those described in the section of this Annual Report titled "Special Note Regarding Forward-Looking Statements." As a result of many factors, including those factors set forth in the section of this Annual Report titled "Risk Factors," our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are a clinical-stage biopharmaceutical company with a pipeline of novel biologic therapeutic candidates, developed using our proprietary modular protein engineering platforms. We leverage our innovative protein engineering technologies and deep understanding of target biology to create therapeutic candidates with attributes and mechanisms we believe to be superior to current approaches and applicable to a range of challenging, validated targets with high potential.
Recent Developments
Separation from Former Parent
On May 29, 2024, Inhibrx, Inc., or the Former Parent, effected the spin-off of INBRX-101, an optimized, recombinant alpha-1 antitrypsin, or AAT, augmentation therapy in a registrational trial for the treatment of patients with alpha-1 antitrypsin deficiency, upon which, the Former Parent completed a distribution to holders of its shares of common stock of 92% of the issued and outstanding shares of our common stock, or the Distribution. On May 30, 2024, the Former Parent completed a series of internal restructuring transactions, or the Separation.
On May 30, 2024, the Former Parent completed the merger, or the Merger, of Art Acquisition Sub, Inc., a wholly-owned subsidiary of Aventis Inc., or the Acquirer, a wholly-owned subsidiary of Sanofi S.A., or Sanofi, with and into the Former Parent with the Former Parent continuing as the surviving entity. Pursuant to the Merger (i) all assets and liabilities primarily related to INBRX-101, or the 101 Business, were transferred to the Acquirer; and (ii) by way of the Separation, we acquired the assets and liabilities and corporate infrastructure associated with its ongoing programs, INBRX-106 and ozekibart (INBRX-109), and its discovery pipeline, as well as the remaining close-out obligations related to its previously terminated program, INBRX-105.
Upon the closing, each Former Parent stockholder received: (i) $30.00 per share in cash, (ii) one contingent value right per share, representing the right to receive a contingent payment of $5.00 in cash upon the achievement of a regulatory milestone, and (iii) one SEC-registered, publicly listed, share of Inhibrx for every four shares of the Former Parent's common stock held.
From and after the closing, Inhibrx continues to operate as a stand-alone, publicly traded company focused on ozekibart and INBRX-106, both of which are clinical-stage programs.
For periods prior to the spin-off, descriptions of historical business activities are presented as if the spin-off had already occurred, and the Former Parent's activities related to such assets and liabilities had been performed by us. Refer to Note 1 to our consolidated financial statements included elsewhere in this Annual Report for further discussion of the underlying basis used to prepare the consolidated financial statements. The operating results presented in our historical financial statements prior to the Merger and in connection with the Separation and the Merger may not be indicative of our results following the Merger and Separation.
Transactions with Related Parties
We entered into a Separation and Distribution Agreement and various agreements relating to transition services, licenses and certain other matters with the Former Parent, which govern our relationship with the Former Parent prior to, at and after the Former Parent completed the Distribution. These agreements include the allocation of employee benefits, taxes and certain other liabilities and obligations attributable to periods prior to, at and after the
Distribution. The terms of these agreements, including amounts billed during the period, are discussed in greater detail in Note 7 to our consolidated financial statements included elsewhere in this Annual Report.
Current Clinical Pipeline
Our current clinical pipeline of therapeutic candidates includes ozekibart and INBRX-106, both of which utilize our multivalent formats where the precise valency can be optimized in a target-centric way to mediate what we believe to be the most appropriate agonist function:
ozekibart (INBRX-109)
INBRX-106
Tetravalent DR5 agonist
Hexavalent OX40 agonist
Program Therapeutic Area Target(s)/Format STAGE OF DEVELOPMENT
Preclinical Phase 1 Phase 2 Phase 3
ozekibart (INBRX-109)* Oncology DR5
Tetravalent Agonist
INBRX-106** Oncology OX40
Hexavalent Agonist
__________________
* Currently being investigated in chondrosarcoma, Ewing sarcoma, colorectal cancer, and certain other solid tumor types.
** Currently being investigated in patients with non-small cell lung cancer, or NSCLC, and head and neck squamous cell carcinoma, or HNSCC.
ozekibart (INBRX-109)
ozekibart is a precisely engineered tetravalent death receptor 5, or DR5, agonist currently being evaluated in patients diagnosed with colorectal cancer, Ewing sarcoma, and chondrosarcoma.
Colorectal adenocarcinoma
In January 2025, we announced interim efficacy and safety data from the cohort of the Phase 1/2 trial evaluating ozekibart in combination with FOLFIRI for the treatment of advanced or metastatic, unresectable colorectal adenocarcinoma, or CRC. Efficacy was assessed in 10 of the 13 patients evaluable as of the cutoff date of December 2, 2024, who received at least one dose of ozekibart, based on RECIST v1.1 criteria.
Based on the interim data observed above, we initiated an expansion cohort enrolling 44 patients, as a fourth line of therapy for approximately 70% of patients and as a third line of therapy for approximately 30% of patients. 80% of patients had been previously treated with regimens containing irinotecan. Efficacy was assessed in 26 evaluable
patients who had at least one post-baseline scan as of the cutoff date of October 15, 2025. Based on RECIST v1.1 criteria, a 23% overall response rate, or ORR, was observed and an overall disease control rate of 92% was observed.
We plan to provide an update on the expansion cohort during the second quarter of 2026 when the PFS data is mature. If the current response and duration trends observed continue, we plan to meet with the FDA in the second half of 2026 to discuss an accelerated approval pathway for this indication.
Ewing sarcoma
In November 2023, we announced interim efficacy and safety data from the cohort of the Phase 1/2 trial evaluating ozekibart in combination with Irinotecan, or IRI, and Temozolomide, or TMZ, for the treatment of advanced or metastatic, unresectable Ewing sarcoma. Overall, ozekibart in combination with IRI/TMZ was well tolerated from a safety perspective.
Based on this preliminary data, the ongoing Phase 1/2 trial in the Ewing sarcoma cohort was expanded to enroll up to an additional 50 patients. In March 2026, we provided an update at the European Society for Medical Oncology (ESMO) Sarcoma and Rare Cancers Congress. Of the 31 patients evaluable based on a cutoff date of January 15, 2026, we observed a 64.5% ORR and a disease control rate of 87.1%. At the time of the presentation, responses were ongoing in eight patients, one of which had been on treatment and progression free for more than two years.
We expect to complete enrollment in the Phase 1/2 trial of ozekibart in combination with IRI/TMZ for advanced or metastatic, unresectable, relapsed, or refractory Ewing sarcoma in the second half of 2026. If the current response and duration trends observed continue, we plan to meet with the FDA in the second half of 2026 to discuss an accelerated approval pathway for this indication.
Chondrosarcoma
In June 2021, we initiated a randomized, blinded, placebo-controlled, registrational trial in patients with metastatic, unresectable conventional chondrosarcoma, which enrolled over 200 patients in total at 68 different sites worldwide and for which the United States Food and Drug Administration, or FDA, and the European Medicines Agency, or EMA, granted orphan drug designation for the treatment of chondrosarcoma in November 2021 and August 2022, respectively. The primary endpoint for this trial is progression-free survival, or PFS.
In October 2025, we announced this trial met its primary endpoint of a statistically significant and clinically meaningful median PFS for patients with advanced or metastatic chondrosarcoma treated with ozekibart compared to placebo. Ozekibart achieved a 52% reduction in the risk of disease progression or death compared to placebo (stratified Hazard Ratio 0.479; 95% CI: 0.33, 0.68); P<0.0001), more than doubling median PFS to 5.52 months versus 2.66 months for placebo. Importantly, ozekibart is the first investigational therapy to demonstrate a significant PFS benefit in a randomized trial for chondrosarcoma, a disease with no approved systemic options.
Following recent regulatory interactions, we plan to submit a biologics license application early in the second quarter of 2026.
INBRX-106
INBRX-106 is a hexavalent OX40 agonist currently being investigated as a single agent and in combination with KEYTRUDA®(pembrolizumab), a PD-1 blocking checkpoint inhibitor, in patients with locally advanced or metastatic solid tumors. KEYTRUDA®is a registered trademark of Merck Sharp & Dohme LLC, a subsidiary of Merck & Co., Inc., Rahway, NJ, USA.
In November 2025, we completed enrollment of the Phase 1/2 trial evaluating 34 patients in checkpoint inhibitor refractory or relapsed NSCLC, in combination with KEYTRUDA®. Primary endpoints for this cohort are objective response rate, or ORR, disease control rate, or DCR, duration of response, or DOR, and safety.
In June 2024, a seamless Phase 2/3 clinical trial was initiated for INBRX-106 in combination with KEYTRUDA®as a first-line treatment for patients with locally advanced recurrent or metastatic HNSCC. This trial recruited patients who had not received prior checkpoint inhibitors and whose tumors expressed a PDL-1 combined positive score
equal to or greater than 20. During the first quarter of 2026, we completed enrollment of 68 patients in the Phase 2 portion with a primary endpoint of ORR supported by secondary endpoints of DOR, PFS, and safety. We plan to provide initial results from the Phase 2 trial in the second quarter of 2026.
If positive, we anticipate this data may ungate the Phase 3 portion, where we expect approximately 350 patients will be randomized to INBRX-106 or placebo in combination with KEYTRUDA®. The co-primary endpoints for the Phase 3 portion of the study are expected to be PFS and overall survival.
Components of Results of Operations
Revenue
As of the date of this Annual Report, all of our revenue has been derived from licenses with collaboration partners and grant awards. We have not generated any revenue from the commercial sale of approved therapeutic products to date.
Operating Expenses
Research and Development
As of the date of this Annual Report, our research and development expenses have related primarily to research activities, including our discovery efforts, and preclinical and clinical development and the manufacturing of our therapeutic candidates. Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.
In accordance with the applicable accounting and regulatory requirements, we track all research and development expenses in the aggregate and do not manage or track either external or internal expenses on a program-by-program basis. External research and development expenses are instead managed and tracked by the nature of the activity, and primarily consist of contract manufacturing and clinical trial expenses. Internal research and development expenses primarily relate to personnel, early research and consumable costs, which are deployed across multiple projects under development. We manage and prioritize our research and development expenses based on scientific data, probability of successful technical development and regulatory approval, market potential and unmet medical need, among other considerations. We regularly review our research and development activities and, as necessary, reallocate resources that we believe will best support the long-term growth of our overall business. We review expenses incurred by vendor and by contract as benchmarked against the progression of our clinical and other milestones.
External research and development expenses consist of:
•expenses incurred in connection with the preclinical development of our programs;
•clinical trials of our therapeutic candidates, including under agreements with third parties, such as consultants and contract research organizations, or CROs;
•expenses associated with the manufacturing of our therapeutic candidates under agreements with contract development and manufacturing organizations, or CDMOs;
•expenses associated with regulatory requirements, including fees and other expenses related to our Scientific Advisory Board; and
•other external expenses, such as laboratory services related to our discovery and development programs and other shared services.
Internal research and development expenses consist of:
•salaries, benefits and other related costs, including non-cash stock-based compensation under the former Amended and Restated 2017 Employee, Director and Consultant Equity Incentive Plan, or the 2017 Plan, and the 2024 Omnibus Incentive Plan, or the 2024 Plan, for personnel engaged in research and development functions;
•facilities, depreciation and other expenses, which include direct and allocated expenses for depreciation and amortization, rent and maintenance of facilities; and
•other internal expenses, such as laboratory supplies and other shared research and development costs.
We expect that research and development expense will continue to increase over the next several years as we continue development of our therapeutic candidates currently in clinical stage development and support our preclinical programs. In particular, clinical development of our therapeutic candidates, as opposed to preclinical development, generally has higher development costs, primarily due to the increased size and duration of later-stage clinical trials. Moreover, the costs associated with our CDMOs to manufacture our therapeutic candidates and future commercial products is also much more costly as compared to early-stage preclinical development. We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future preclinical studies and clinical trials of our therapeutic candidates due to the inherently unpredictable nature of preclinical and clinical development. Preclinical and clinical development timelines, the probability of success and development costs can differ materially from expectations. We anticipate that we will make determinations as to which therapeutic candidates to pursue and how much funding to direct to each therapeutic candidate on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments, and our ongoing assessments as to each therapeutic candidate's commercial potential. We will need substantial additional capital in the future to support these efforts. In addition, we cannot forecast which therapeutic candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
Our clinical development costs may vary significantly based on factors such as:
•the per patient trial costs;
•the number of trials required for approval;
•the number of sites included in the trials;
•the countries in which the trials are conducted;
•the length of time required to enroll eligible patients;
•the number of patients that participate in the trials;
•the ability to identify patients eligible for our clinical trials;
•the number of doses that patients receive;
•the drop-out or discontinuation rates of patients;
•the potential additional safety monitoring requested by regulatory agencies;
•the duration of patient participation in the trials and follow-up;
•the cost, timing, and successful manufacturing of our therapeutic candidates;
•the phase and development of our therapeutic candidates;
•the efficacy and safety profile of our therapeutic candidates;
•the timing, receipt, and terms of any approvals from applicable regulatory authorities including the FDA and non-U.S. regulators;
•maintaining a continued acceptable safety profile of our therapeutic candidates following approval, if any;
•significant and changing government regulation and regulatory guidance;
•the ability to attract and retain personnel;
•the impact of any business interruptions to our operations or to those of the third parties with whom we work;
•the uncertainties related to potential economic downturn, inflation, interest rates, geopolitical events and widespread health events on capital and financial markets, the supply chain and our expenses; and
•the extent to which we establish additional strategic collaborations or other arrangements.
General and Administrative
General and administrative, or G&A, expenses consist primarily of:
•salaries, benefits and other related costs, including non-cash stock-based compensation under the former 2017 Plan and 2024 Plan, for personnel engaged in G&A functions;
•expenses incurred in connection with accounting, audit, and tax services, legal services, including costs associated with obtaining and maintaining our patent portfolio, investor relations and consulting expenses under agreements with third parties, such as consultants and contractors;
•expenses incurred in connection with pre-commercialization and business development activity; and
•facilities, depreciation and other expenses, which include direct and allocated expenses for depreciation and amortization, rent and maintenance of facilities, insurance and supplies.
During the year ended December 31, 2024, we incurred increased G&A expenses in connection with the Merger, including stock compensation expense upon acceleration of options, and other transaction costs, including legal, advisory, and consulting services. We do not expect these expenses to recur in future years. We expect certain of our G&A expenses will continue to increase in the future to support our continued research and development activities, including costs related to pre-commercialization and business development activities. Additionally, we will continue to incur other professional service fees, including but not limited to, legal costs associated with the filing, prosecution, and maintenance of our patents for our therapeutic candidates, and other legal matters, as well as costs associated with services for compliance, accounting, legal, regulatory, tax, investor and public relations.
Other Income (Expense)
Gain related to transaction with Acquirer. Gain related to transaction with Acquirer consists of our gain recorded in connection with the completion of the Merger during the second quarter of 2024. We do not expect future gains in connection with the Merger in future periods.
Interest expense.Interest expense consists of interest on our former loans with Oxford incurred prior to the Merger, upon which the outstanding debt was assumed by the Acquirer. In future periods, we expect to incur interest expense in connection with our loan and security agreement with Oxford Finance LLC and other lenders, or collectively, Oxford, entered into in January 2025, or the 2025 Loan Agreement.
Interest income. Interest income consists of interest earned on cash and cash equivalents, which include sweep and money market account balances as well as investments held in highly liquid debt securities with original maturities of less than three months from our date of acquisition.
Results of Operations
Comparison of Years Ended December 31, 2025 and December 31, 2024
The following table summarizes our consolidated results of operations for each of the periods indicated (in thousands, except percentages):
YEAR ENDED DECEMBER 31, CHANGE
2025 2024 ($) (%)
Revenue:
License fee revenue $ 1,300 $ 200 $ 1,100 550 %
Total revenue 1,300 200 1,100 550 %
Operating expenses:
Research and development 113,028 203,743 (90,715) (45) %
General and administrative 23,297 127,905 (104,608) (82) %
Total operating expenses 136,325 331,648 (195,323) (59) %
Loss from operations (135,025) (331,448) 196,423 (59) %
Other income (expense):
Gain related to transaction with Acquirer - 2,021,498 (2,021,498) (100) %
Interest expense (12,196) (13,491) 1,295 (10) %
Interest income 7,549 10,940 (3,391) (31) %
Other income (expense), net
(381) 75 (456) (608) %
Total other income (expense) (5,028) 2,019,022 (2,024,050) (100) %
Provision for income taxes 2 2 - - %
Net income (loss)
$ (140,055) $ 1,687,572 $ (1,827,627) (108) %
License Fee Revenue
License fee revenue during the year ended December 31, 2025 was $1.3 million and consisted of revenue related to Scithera License Agreement which we recognized following the completion of the transfer of all licenses, related materials, and know-how. License fee revenue during the year ended December 31, 2024 was $0.2 million and consisted of revenue related to our license agreement with Regeneron Pharmaceuticals, Inc., which we recognized following the grant of two six-month extensions of the option term during the year, each for revenue of $0.1 million. See Note 6 to our consolidated financial statements included elsewhere in this Annual Report for additional information on our license and collaboration agreements.
Research and Development Expense
The following table sets forth the primary external and internal research and development expenses (in thousands, except percentages):
YEAR ENDED DECEMBER 31, CHANGE
2025 2024 ($) (%)
External expenses:
Clinical trials $ 35,339 $ 47,665 $ (12,326) (26) %
Contract manufacturing 19,590 55,643 (36,053) (65) %
Other external research and development 9,537 11,691 (2,154) (18) %
Internal expenses:
Personnel 35,372 72,790 (37,418) (51) %
Equipment, depreciation, and facility 10,227 9,693 534 6 %
Other internal research and development 2,963 6,261 (3,298) (53) %
Total research and development expenses $ 113,028 $ 203,743 $ (90,715) (45) %
Research and development expense decreased by $90.7 million from $203.7 million during the year ended December 31, 2024 to $113.0 million during the year ended December 31, 2025. The overall decrease was primarily due to the following factors:
•clinical trial expense decreased by $12.3 million primarily due to decreased expenses following the spin-off of our INBRX-101 program, which occurred during the second quarter of 2024, and the termination of our INBRX-105 program during 2024, in addition to decreases in expenses in our ozekibart (INBRX-109) registration-enabling trial for the treatment of unresectable or metastatic conventional chondrosarcoma as the trial approached completion of enrollment ahead of our data readout. These decreases in expenses were offset in part by increases in our ongoing trials for INBRX-106, in which we opened additional sites and increased enrollment during the period;
•contract manufacturing expense decreased by $36.1 million compared to the prior year, primarily attributable to increased expense in the prior year associated with the purchase of raw materials for our drug substance manufacturing and process development and manufacturing activities with one of our CDMO partners for our ozekibart program, as well as decreased expenses following the spin-off of our INBRX-101 program, which occurred during the second quarter of 2024;
•personnel-related expense decreased by $37.4 million, which was primarily related to $25.9 million in stock option expense recognized during 2024 upon the acceleration of outstanding options in connection with the close of the Merger, in addition to a decrease in headcount during the current period;
•facility and equipment-related expense increased by $0.5 million, which was primarily related to our operating lease expense; and
•other research and development expense decreased by $5.5 million, which was primarily attributable to a decrease in certain non-recurring sponsored research and preclinical activities, as well as a decrease in purchases of lab supplies and travel expenses following the decrease in headcount during the current period.
G&A Expense
G&A expense decreased by $104.6 million from $127.9 million during the year ended December 31, 2024 to $23.3 million during the year ended December 31, 2025. The overall decrease was primarily due to the following factors:
•one-time expenses incurred in the prior year related to the Merger of $68.1 million, consisting of legal, advisory, and consulting services performed in connection to the transaction, and SEC filing fees in connection with filings related to the transaction;
•personnel-related expenses decreased by $23.2 million, which was primarily related to $15.2 million in stock option expense recognized during 2024 upon the acceleration of outstanding options in connection with the close of the Merger, in addition to a decrease in headcount during the current period;
•professional services-related expenses related to legal services, decreased by $9.6 million, primarily attributable to the conclusion of legal proceedings and other intellectual property matters.
Other Income (Expense)
Gain related to transaction with Acquirer. During the year ended December 31, 2024, we earned $2.0 billion of other income, consisting of gains recorded in connection with the completion of the Merger. We recorded a gain of $1.7 billion related to Merger consideration for our outstanding common stock, warrants, and stock options, in addition to $211.3 million related to the extinguishment of our loan under an amended loan agreement with Oxford, or the Amended 2020 Loan Agreement, which was assumed by the Acquirer. In addition to the Acquirer assuming our outstanding debt, the Acquirer assumed outstanding assets and liabilities related to INBRX-101 upon the transaction, resulting in a gain of $14.5 million. The Acquirer also reimbursed us for or paid on our behalf $68.0 million of transaction costs related to the Merger, resulting in a gain. We did not earn income or gains in connection with the Merger during the year ended December 31, 2025 and do not expect to in future periods.
Interest expense.Interest expense was $12.2 million during the year ended December 31, 2025, all of which related to interest incurred and the amortization of debt discounts related to the 2025 Loan Agreement, under which we had $100.0 million in outstanding principal during the period. Interest expense was $13.5 million during the year ended December 31, 2024, all of which related to interest incurred and the amortization of debt discounts related to the Amended 2020 Loan Agreement, under which we had $200.0 million in outstanding principal during the period prior to its extinguishment upon the Merger.
Interest income.During the years ended December 31, 2025 and December 31, 2024, we earned $7.5 million and $10.9 million, respectively, of interest income related to interest earned on our sweep and money market account balances.
Income Taxes
Income tax expense was approximately $2,000 during each of the years ended December 31, 2025 and December 31, 2024, respectively. For the years ended December 31, 2025 and December 31, 2024, we have applied a 100% valuation allowance against our federal deferred tax assets since it is more likely than not that the deferred tax assets will not be realized.
Liquidity and Capital Resources
Sources of Liquidity
As of the date of this Annual Report, sources of capital raised to fund our operations have been comprised of the sale of equity securities, borrowings under loan and security agreements, payments received from commercial partners for licensing rights to our therapeutic candidates under development, grants, and proceeds from the sale and issuance of convertible promissory notes.
In January 2025, we entered into the 2025 Loan Agreement with Oxford, upon which we received gross proceeds of $100 million. On March 18, 2026, we entered into the First Amendment to Loan and Service Agreement with Oxford, or the March 2026 Amendment. The March 2026 Amendment provides for an additional tranche, or the Term B Loans, in an aggregate principal amount of $75.0 million, upsized from $50.0 million originally available
under the 2025 Loan Agreement prior to the March 2026 Amendment, $75.0 million of which was funded on the date of the March 2026 Amendment.
Future Funding Requirements
Since our inception, we have devoted substantially all of our efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of our therapeutic candidates, pre-commercialization activities, organizing and staffing the Company, establishing our intellectual property portfolio, and raising capital to support and expand these activities. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses. Our net income or losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities, as well as the timing of other corporate transactions. During the year ended December 31, 2025, our net loss was $140.1 million. As of December 31, 2025, we had an accumulated deficit of $246.2 million and cash and cash equivalents of $124.2 million.
Based upon our current operating plans, we believe that our existing cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months from the date of filing of this Annual Report. Our forecast of the period through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect.
The process of conducting preclinical studies and testing therapeutic candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain. Though we had net income during the year ended December 31, 2024 following the Merger, we expect to continue to incur net losses for the foreseeable future until, if ever, we have an approved product and can successfully commercialize it. We expect our research and development expenses to increase as we continue our development of, and seek marketing approvals for, our therapeutic candidates (especially as we move more candidates into later stages of clinical development), and begin to commercialize any approved products, if ever. At this time, we are preparing to proceed with the commercialization of certain of our therapeutic candidates, if ever approved. As a result, we will incur significant pre-commercialization expenses in preparation for launch, the outcome of which is uncertain. Additionally, if approved, we will incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution.
Until such time we, if ever, can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including strategic licensing and collaborations, strategic transactions, or other similar arrangements and transactions, and from time to time, we engage in discussions with potential acquirers regarding the disposition of one or more of our therapeutic candidates. If the Company does raise additional capital through public or private equity or convertible debt offerings, the ownership interests of its existing stockholders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect its stockholders' rights. If the Company raises capital through additional debt financings, it may be subject to covenants limiting or restricting its ability to take specific actions, such as incurring additional debt or making certain capital expenditures. To the extent that the Company raises additional capital through strategic licensing, collaboration or other similar agreements, it may have to relinquish valuable rights to its therapeutic candidates, future revenue streams or research programs at an earlier stage of development or on less favorable terms than it would otherwise choose, or to grant licenses on terms that may not be favorable to the Company. However, there can be no assurance as to the availability or terms upon which such finances or capital might be available in the future. If we are unable to secure adequate additional funding, we will need to reevaluate our operating plan and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, delay, scale back or eliminate some or all of our development programs, or relinquish rights to our intellectual property on less favorable terms than we would otherwise choose. These actions could materially impact our business, results of operations, financial condition, and prospects.
Our future liquidity and capital funding requirements will depend on numerous factors, including:
•the outcome, costs and timing of preclinical studies and clinical trials for our current or future therapeutic candidates;
•whether and when we are able to obtain marketing approval to market any of our therapeutic candidates and the outcome of meetings with applicable regulatory agencies, including the FDA;
•our ability to successfully commercialize, including the costs and timing of manufacturing, any therapeutic candidates that receive marketing approval;
•the emergence and effect of competing or complementary therapeutics or therapeutic candidates;
•our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;
•our ability to retain our current employees and the need and ability to hire additional management and scientific and medical personnel;
•the costs and timing of establishing or securing sales and marketing capabilities if any current or future therapeutic candidate is approved;
•the terms and timing of any strategic licensing, collaboration or other similar agreement that we have established or may establish;
•our ability to achieve market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved therapeutics;
•our ability to repay, refinance or restructure when payment is due any indebtedness we might incur, including in the event such indebtedness is accelerated;
•the valuation of our capital stock; and
•the continuing or future effects of a potential economic downturn, inflation, interest rates, geopolitical events, and widespread health events on capital and financial markets, the supply chain and our expenses.
We do not own or operate manufacturing and testing facilities for the production of any of our therapeutic candidates, nor do we have plans to develop our own manufacturing operations in the foreseeable future. We currently rely on a limited number of third-party contract manufacturers for all of our required raw materials, antibodies and other biologics for our preclinical research, clinical trials, and if and when applicable, commercial product, and employ internal resources to manage our manufacturing relationships with these third parties.
Commitments
As of December 31, 2025, our material cash requirements from known contractual and other obligations primarily relate to our lease obligations and services provided by our third party CROs and CDMOs.
Our lease for our laboratory and office space expires in 2028, with an option to extend for an additional three years. As of December 31, 2025, we have future minimum rental obligations under these leases of $7.3 million, of which $2.9 million and $4.4 million are current and non-current, respectively. For more information regarding these lease agreements, refer to Note 9 to the consolidated financial statements.
We enter into contracts in the normal course of business with CROs related to our ongoing preclinical studies and clinical trials and with CDMOs for clinical supplies and manufacturing scale-up activities. These contracts are generally cancellable, with notice, at our option. We have recorded accrued expenses of approximately $16.4 million in our consolidated balance sheets for expenditures incurred for R&D services performed at CROs, CDMOs, and other third-party organizations as of December 31, 2025.
While these contracts are generally cancellable, some may contain specific activities that involve one or more noncancellable commitments. Depending on the timing and reasoning of the exit, certain termination penalties may apply and can range from the cost of work performed to date up to twelve months of future committed manufacturing costs. As of December 31, 2025, the noncancellable portion of these contracts totaled in aggregate, excluding amounts recorded in accounts payable and accrued expenses as of this date, approximately $15.9 million. The noncancellable purchase commitments relate to future contract manufacturing of drug supply for one of our therapeutic candidates.
Cash Flow Summary
The following table sets forth a summary of the net cash flow activity for each of the periods indicated (in thousands):
YEAR ENDED DECEMBER 31,
2025 2024
Net cash used in operating activities $ (129,794) $ (194,409)
Net cash used in investing activities (28) (2,597)
Net cash provided by financing activities 101,446 71,678
Net decrease in cash $ (28,376) $ (125,328)
Operating Activities
Net cash used in operating activities was $129.8 million during the year ended December 31, 2025 and consisted primarily of a net loss of $140.1 million, adjusted for non-cash items, including accretion on our debt discount and the non-cash portion of interest expense related to our debt of $2.4 million, stock-based compensation expense of $11.1 million, depreciation and amortization of $2.5 million, and non-cash lease expense of $1.8 million. Changes in operating assets and liabilities also contributed to the cash used in operating activities, including a decrease in operating lease liability of $1.6 million as a result of lease payments made throughout the period and decreases in accounts payable of $3.3 million and accrued expenses of $4.4 million due to the timing of payments to our CRO and CDMO partners during the period. These uses of cash were offset in part by a decrease in prepaid expenses and other current assets of $1.4 million as a result of the timing of payments to our CRO and CDMO partners during the period, as well as a decrease in accounts receivable and other receivables of $0.2 million.
Net cash used in operating activities was $194.4 million during the year ended December 31, 2024 and consisted primarily of a net income of $1.7 billion, adjusted for non-cash items. Non-cash adjustments primarily related to gains recorded upon the Merger of $2.0 billion. Other non-cash adjustments included accretion on our debt discount and the non-cash portion of interest expense related to our debt of $2.1 million, stock-based compensation expense, including expense related to the acceleration of options upon the Merger, of $58.5 million, depreciation and amortization of $2.3 million, and non-cash lease expense of $1.9 million. Changes in operating assets and liabilities also contributed to the cash used in operating activities, primarily related to an increase in other non-current assets of $3.7 million due to prepayments and additional deposits we made to our CRO partners during the period. Additionally, the operating lease liability decreased by $1.4 million as a result of lease payments made throughout the period. These uses of cash were offset by increases in accrued expenses and other current liabilities of $35.9 million, an increase in accounts payable of $17.9 million, and a decrease in prepaid expenses of $3.0 million due to the timing of payments to our CRO and CDMO partners during the period, each of which excludes the liabilities related to INBRX-101 which were assumed by the Acquirer in the Merger.
Investing Activities
Net cash used in investing activities was $28,000 and $2.6 million during the years ended December 31, 2025 and December 31, 2024, respectively, and was related to capital purchases of software, leasehold improvements, and laboratory and office equipment.
Financing Activities
Net cash provided by financing activities was $101.4 million during the year ended December 31, 2025, which consisted primarily of net proceeds of $99.8 million from the 2025 Loan Agreement which we entered into in January 2025, in addition to $1.6 million from the proceeds from the exercise of stock options. Net cash provided by financing activities was $71.7 million during the year ended December 31, 2024, which consisted of proceeds from the exercise of stock options.
Critical Accounting Estimates
Our consolidated financial statements and accompanying notes are prepared in accordance with United States generally accepted accounting principles, or GAAP, which requires management to make estimates and assumptions
that affect the amounts reported. Management bases its estimates on historical experience, market and other conditions, and various other assumptions it believes to be reasonable. Although these estimates are based on management's best knowledge of current events and actions that may impact us in the future, the estimation process is, by its nature, uncertain given that estimates depend on events over which we may not have control. If market and other conditions change from those that we anticipate, our consolidated financial statements may be materially affected. In addition, if our assumptions change, we may need to revise our estimates, or take other corrective actions, either of which may also have a material effect in our consolidated financial statements. We review our estimates, judgments, and assumptions used in our accounting practices periodically and reflect the effects of revisions in the period in which they are deemed to be necessary. We believe that these estimates are reasonable; however, our actual results may differ from these estimates.
While our significant accounting policies are described in more detail in Note 1 to our consolidated financial statements included elsewhere in this Annual Report, we believe that the following critical accounting policies and estimates have a higher degree of inherent uncertainty and require our most significant judgments:
Accrued Research and Development and Clinical Trial Costs
We enter into contracts for research and development activities, including with CDMOs for clinical supplies and manufacturing scale-up activities related to our therapeutic candidates and with CROs for our preclinical studies and clinical trials. The financial terms of these agreements vary and may result in payment flows that do not match the periods over which materials or services are provided, resulting in either an accrual or a prepaid expense.
These accruals of research and development expenses require us to estimate expenses incurred, including estimates of the time period over which services will be performed, completion of contract components, the enrollment of subjects, and the status of our clinical trials. Such estimates are dependent upon the timeliness and accuracy of data provided by the CROs and CDMOs regarding the status and cost of the studies. If the actual timing of the performance of services varies from our estimates, we adjust the accrual or prepaid expense accordingly.
Although we do not expect our estimates to be materially different from amounts actually incurred, if our estimates of the status and timing of services performed differ from the actual status and timing of services performed, it could result in us reporting amounts that are too high or too low in any particular period. To date, there have been no material differences between our estimates of such expenses and the amounts actually incurred.
Emerging Growth Company
We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, enacted in 2012. As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, presenting only two years of audited financial statements, not being required to comply with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation, and an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or golden parachute arrangements.
In addition, an emerging growth company can take advantage of an extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. We have irrevocably elected not to avail ourselves of this exemption and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
Smaller Reporting Company Status
Additionally, we are a "smaller reporting company," as defined in Rule 12b-2 under the Exchange Act. As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not smaller reporting companies, including, but not limited to, reduced disclosure obligations regarding executive compensation.
We will remain a smaller reporting company as long as either: (i) the market value of the shares of our common stock held by non-affiliates is less than $250.0 million as of the last business day of our most recently completed second fiscal quarter; or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal
year and the market value of the shares of our common stock held by non-affiliates is less than $700.0 million as of the last business day of our most recently completed second fiscal quarter.
Recent Accounting Pronouncements
For information with respect to recently issued accounting standards and the impact of these standards, if any, on our consolidated financial statements, refer to Note 1 in our consolidated financial statements in Part II, Item 8 of this Annual Report.
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