Replimune Group Inc.
08/14/2026 | Press release | Distributed by Public on 08/14/2026 14:14
Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)
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 unaudited condensed consolidated financial statements and related notes appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q, or this Quarterly Report, and with our audited consolidated financial statements and notes thereto for the year ended March 31, 2026, included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
In addition to historical information, some of the statements contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. The following information and any forward-looking statements should be considered in light of factors discussed elsewhere in this Quarterly Report, particularly including those risks identified in Part II, Item 1A "Risk Factors" and our other filings with the Securities Exchange Commission, or the SEC.
We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report. Statements made herein are as of the date of the filing of this Quarterly Report with the SEC and should not be relied upon as of any subsequent date. Even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, they may not be predictive of results or developments in future periods. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
Overview
General
We are a commercial-stage biotechnology company committed to applying our leading expertise in the field of oncolytic immunotherapy to transform the lives of cancer patients through our novel oncolytic immunotherapies. Our proprietary oncolytic immunotherapy product and product candidates are designed and intended to maximally activate the immune system against cancer.
Oncolytic immunotherapy is an emerging drug class. Oncolytic immunotherapy exploits the ability of certain viruses to selectively replicate in and directly kill tumors, as well as induce a potent, patient-specific, anti-tumor immune response. Our product and product candidates incorporate multiple mechanisms into a practical "off-the-shelf" approach that is intended to maximize the immune response against a patient's cancer and to offer significant advantages over other approaches to inducing anti-tumor immunity. We believe that the bundling of multiple approaches for the treatment of cancer into single therapies will increase clinical efficacy and simplify the development path of our product and product candidates, while also improving patient outcomes.
Our proprietary RPx platform is based on a novel, engineered strain of herpes simplex virus 1, or HSV-1, backbone with payloads added that are intended to maximize immunogenic cell death and the induction of a systemic anti-tumor immune response. The RPx platform is intended to have unique dual local and systemic activity consisting of direct selective virus-mediated killing of the tumor resulting in the release of tumor-derived antigens and altering of the tumor microenvironment to ignite a strong and durable systemic response. Our product and product candidates are expected to be synergistic with most established and experimental cancer treatment modalities, and, with an attractive safety profile, the RPx platform is expected to have the versatility to be developed alone or combined with a variety of other treatment options. In addition to TUDRIQEV, we currently have two further RPx product candidates in our development pipeline, RP2 (sturlimgene erparepvec) and RP3. Although our fiscal year ends March 31st, our programs and program updates are reported on a calendar year basis.
We have been conducting a number of clinical trials of RP1, both as a monotherapy and in combination with anti-PD-1 therapy, with the goal of establishing a major skin cancer treatment franchise.
Our leading clinical trial of RP1 is referred to as the IGNYTE trial, which is a multi-cohort clinical trial being conducted in collaboration with Bristol Myers Squibb Company, or BMS, under which BMS has granted us a non-exclusive, royalty-free license to, and is supplying at no cost, its anti-PD-1 therapy, nivolumab, for use in combination with RP1.
The leading tumor specific cohort in the IGNYTE trial is our registration directed Phase 2 expansion cohort in anti-PD-1 failed cutaneous melanoma. The anti-PD-1 failed melanoma cohort from the IGNYTE trial includes 140 patients who received RP1 in combination with nivolumab. On August 6, 2026, we announced the FDA granted accelerated approval to TUDRIQEV (vusolimogene oderparepvec-wtpg), previously referred to as RP1, in combination with nivolumab for the treatment of adults with unresectable advanced cutaneous melanoma who experienced disease progression on an anti-PD-1 antibody-based regimen. This indication is approved under accelerated approval based on objective response rate and duration of response. Continued approval for this indication may be contingent on verification of clinical benefit in a confirmatory trial(s). The IGNYTE trial enrolled 140 patients with 91 patients with at least one non-injected lesion included in the efficacy-evaluable population. In this population, TUDRIQEV plus nivolumab achieved an objective response rate (ORR) of 24.2%, with a median duration of response of 14.1 months. Treatment was well tolerated with mostly mild-to-moderate adverse events. The patient population included patients with Stage 4 disease (80%), prior anti-PD-1 adjuvant treatment (13%), PD-L1 negative status (54%), lung (45%) and liver lesions (24%). TUDRIQEV in combination with nivolumab was generally well tolerated, with adverse events predominantly mild to moderate in severity. The most common (incidence ≥ 10%) adverse reactions in patients treated with TUDRIQEV combined with nivolumab were nausea, diarrhea, vomiting, constipation, decreased appetite, abdominal pain, fatigue, pyrexia, chills, injection site reaction, influenza-like illness, infections, musculoskeletal pain, arthralgia, headache, dizziness, cough, dyspnea, rash, edema, pruritus and hemorrhage. Most treatment-related adverse reactions were grade 1 and 2 and transient. There were no grade 4 or 5 common adverse events. See additional Important Safety Information. The IGNYTE study data were published in the Journal of Clinical Oncology in July 2025.
In November 2024, we announced submission of our first Biologics License Application, or BLA, to the U.S. Food and Drug Administration, or the FDA, for TUDRIQEV in combination with nivolumab for the treatment of adult patients with advanced melanoma who have previously received an anti-PD-1 containing regimen, and that the FDA had granted Breakthrough Therapy designation for TUDRIQEV in combination with nivolumab in the same setting. In July 2025, we received the first of two CRLs on our BLA for TUDRIQEV in combination with nivolumab for advanced melanoma patients, with the second CRL being issued by the FDA in April 2026. Ultimately, however, at a July 30, 2026 meeting of the Cellular, Tissue, and Gene Therapies Advisory Committee (the "Advisory Committee"), the Advisory Committee voted 10 to 3 on the question: "Are the efficacy results from IGNYTE evaluable and clinically meaningful?" Following this meeting, on August 6, 2026, the FDA granted accelerated approval of TUDRIQEV in combination with nivolumab for the treatment of adults with unresectable advanced cutaneous melanoma who experienced disease progression on an anti-PD-1 antibody-based regimen.
In August 2024, we announced the dosing of the first patient in the IGNYTE-3 trial, or the I-3 trial, a 2-arm randomized Phase 3 clinical trial with physician's choice of treatment as a comparator arm in anti-PD-1 failed melanoma patients. Overall survival is the primary endpoint, and the trial is expected to randomize approximately 400 patients. We continue to enroll patients in the I-3 trial. The I-3 trial is an FDA postmarketing requirement and is intended to serve as the required accelerated approval confirmatory study. In addition to the I-3 trial, we must also complete a pediatric study of TUDRIQEV in combination with nivolumab in pediatric patients 12 years of age and older and are required to fulfill certain other postmarketing commitments set out in FDA's TUDRIQEV approval letter. We continue to enroll patients in the I-3 trial.
In addition to our development of TUDRIQEV for melanoma, we also are studying the product for other indications. In our non-melanoma skin cancer, or NMSC, cohort of the IGNYTE trial, we provided a data update in December 2023 from the first 30 patients with at least 6 months of follow up including patients with cutaneous squamous cell carcinoma, or CSCC, Merkel cell carcinoma, or MCC, basal cell carcinoma, or BCC, and angiosarcoma in this cohort. The data showed that treatment with TUDRIQEV in combination with nivolumab led to an ORR of 30% which is consistent with data from the anti-PD-1 failed melanoma cohort with approximately one-third of patients responding and 60% demonstrating clinical benefit. The combination of TUDRIQEV and nivolumab was well tolerated in this patient population with a safety profile consistent with the overall experience seen with this treatment regimen to date. We provided updated data from the NMSC cohort during our June 2025 Investor Day event and in October 2025 at the European Society for Medical Oncology, or ESMO, conference. Responses to TUDRIQEV plus nivolumab occurred across the NMSC tumor types enrolled, with confirmed responses seen in patients with both anti-PD-1 naïve and anti-PD-1 failed disease, as well as both in locally advanced and metastatic disease. The ORR by NMSC tumor type for anti-PD-1 naïve patients was 100.0% (n=4) in MCC, 33.3% (n=3) in BCC, 66.7% (n=6) in angiosarcoma, and 56.3% (n=16) in CSCC. The ORR by NMSC tumor type for anti-PD-1 failed patients was 26.3% (n=19) in MCC, 30.0% (n=10) in BCC, 37.5% (n=8) in angiosarcoma, and 15.2% (n=33) in CSCC. We closed enrollment in the NMSC tumor type cohorts in the fourth quarter of 2025.
We had been furthering development of TUDRIQEV through enrollment in a Phase 1b/2 clinical trial of single agent TUDRIQEV in solid organ transplant recipients with skin cancers, including CSCC, which we referred to as the ARTACUS trial. The ARTACUS trial enrolled 69 patients to assess the safety and efficacy of TUDRIQEV in liver, kidney, heart, lung, and hematopoietic cell transplant patients with skin cancers. Most recently, Dr. Michael R. Migden presented updated data from the ARTACUS trial at the Society for Melanoma Research 22nd International Congress in October 2025. This updated data showed anti-tumor activity in locally advanced CSCC with an ORR of 34.6% (CR rate of 23.1%) and 2-year duration of response of
61.0%. Furthermore, the data showed that TUDRIQEV monotherapy continued to be well tolerated and the safety profile continued to be similar to that observed in non-immunocompromised patients with advanced skin cancers, and, importantly, no implant rejections were attributed to the TUDRIQEV treatment. We have closed enrollment in the ARTACUS trial and are planning a publication of the data in 2026.
Our previous clinical trial of TUDRIQEV in patients with CSCC, which we referred to as the CERPASS trial, is fully closed and we are planning for a study report to be available in 2026.
We are also developing or are continuing to develop product candidates, RP2 and RP3, that have been further engineered to enhance anti-tumor immune responses and are intended to address additional tumor types, including traditionally less immune responsive tumor types. In addition to the expression of GALV-GP R(-) and human GM-CSF as in TUDRIQEV, RP2 has been engineered to express an antibody-like molecule intended to block the activity of CTLA-4, a protein that inhibits the full activation of an immune response, including to tumors. RP3 has been engineered with the intent to further stimulate an anti-tumor immune response through activation of immune co-stimulatory pathways through the additional expression of the ligands for CD40 and 4-1BBL, as well as anti-CTLA-4 and GALV-GP R(-), but without the expression of GM-CSF.
We continue the development of our product candidate RP2 with the goal of moving beyond skin cancers and aiming to treat the more prevalent tumor types commonly found in liver and lung metastasis and including those involving primary liver cancer. Notably, as previously reported, from our Phase 1 clinical trial of RP2 alone and in combination with nivolumab, we have seen durable responses from a monotherapy cohort in a variety of difficult to treat tumors as well as in combination with anti-PD-1 and in particular in patients with metastatic uveal melanoma, or mUM. In November 2023, we presented updated data from a cohort of mUM patients during a Plenary Session at the 20th Annual International Society for Melanoma Research Congress. The updated data showed RP2 led to an ORR of 29.4% (5 of 17 patients; one of the responding patients was treated with RP2 monotherapy and four of the responding patients were treated with RP2 combined with nivolumab), including responses in patients with liver, lung, and bone metastases. The median duration of response (DOR) at the data cutoff was 11.47 months (range of 2.78 to 21.22 with responses ongoing). Nearly all patients (15 of 17, 88.2%) in the study had progressed on or after immunotherapy with 12 of 17 patients (70.6%) having previously received both anti-PD-1 and anti-CTLA-4 therapies, including four of the responding patients. RP2 was generally well tolerated both as monotherapy and in combination with nivolumab with no additive adverse events observed. The most common grade 1 or 2 treatment related adverse events, or TRAEs, overall in both cohorts were pyrexia, chills, fatigue, hypotension and pruritis. Six patients had grade 3 TRAEs, including two cases of hypotension. There were no grade 4 or 5 TRAEs. In June 2024, we presented that the disease control rate for this cohort of mUM patients was 58.8%.
Leading the development of the RP2 product candidate is our REVEAL study. The REVEAL study is enrolling patients in a registration-directed study of RP2 in mUM patients who are immune checkpoint inhibitor-naïve. The REVEAL study is a randomized, Phase 2/3 open label study expected to enroll approximately 280 patients to investigate the efficacy and safety of RP2 in combination with nivolumab vs. ipilimumab in combination with nivolumab in immune checkpoint inhibitor naïve adult patients with metastatic uveal melanoma. The primary endpoints of the trial are overall survival and progression free survival, and key secondary endpoints are overall response rate and disease control rate. In January 2026 we announced the Phase 2/3 transition is expected to occur in the first quarter of 2027.
We continue our signal finding trial of RP2 in combination with atezolizumab and bevacizumab in the second-line (2L) setting of patients with hepatocellular carcinoma, or HCC, in collaboration with Roche. The protocol has been amended to include RP2 as monotherapy and we plan to release preliminary HCC data by the end of 2026. We have also opened a cohort in our RP2 study to investigate the potential to address biliary tract cancer, or BTC, through the dosing of RP2 in combination with durvalumab. We are currently evaluating these signal finding studies.
TUDRIQEV, RP2 and RP3 are administered by direct injection into solid tumors, guided either visually or by ultrasound, computerized tomography or other imaging methods. We believe that direct injection maximizes virus-mediated tumor cell death, provides the most efficient delivery of virus-encoded immune activating proteins into the tumor with the goal of activating systemic immunity, and limits the systemic toxicities that could be associated with intravenous administration. Activation of systemic immunity through local administration is intended to lead to the induction of anti-tumor immune responses leading to clinical response of tumors that have not themselves been injected.
Financial
Since our inception, we have devoted substantially all of our resources to developing our proprietary RPx platform, building our intellectual property portfolio, conducting research and development of our product candidates, business planning, raising capital and providing general and administrative support for our operations. To date, we have incurred significant
operating losses and we have financed our operations primarily with proceeds from the sale of equity securities and to a lesser extent, proceeds from borrowing under secured loan facilities. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of TUDRIQEV and our other product candidates. As of June 30, 2026, we do not have any products approved for sale and have not generated any revenue from product sales.
Since our initial public offering, or IPO, on July 20, 2018, we have raised an aggregate of approximately $1,132.9 million in net proceeds to fund our operations, of which $101.2 million was from our IPO, $862.0 million was from four separate follow-on offerings, or the Public Offerings, that we closed in November 2019, June 2020, October 2020, December 2022, and November 2024, respectively, $96.7 million was from our private investment in public equity offering in June 2024, and $73.0 million was from at-the-market offerings.
Our net losses were $69.8 million and $86.7 million for the three months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $1,332.3 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 at least the next several years.
We anticipate that our expenses and capital requirements will fluctuate from period to period depending upon the Company's development programs and priorities. We expect to continue to incur costs and expenses in the future and our expenses may increase if and as we:
•seek to successfully commence and achieve commercial sales of TUDRIQEV;
•seek to successfully complete one or more confirmatory trials of TUDRIQEV, including our ongoing IGNYTE-3 clinical trial;
•seek to obtain adequate coverage and reimbursement for TUDRIQEV
•continue to conduct our current and future clinical trials;
•further preclinical development of our platform;
•seek to manufacture and maintain sufficient commercial supply of TUDRIQEV, or clinical supply of our product candidates, from our in-house manufacturing facility;
•seek to identify and develop additional product candidates;
•seek marketing approvals for any of our product and product candidates that successfully complete clinical trials, if any;
•establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval;
•maintain, expand, protect and defend our intellectual property portfolio;
•hire, train and retain additional clinical, quality control, scientific and general and administration personnel;
•acquire or in-license other drugs, technologies or intellectual property rights; and
•add operational, financial and management information systems and personnel, including personnel to support our research and development programs, any future commercialization efforts and operations as a public company.
Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.
As of June 30, 2026, we had cash and cash equivalents and short-term investments of $195.3 million. Based on our current operating plan including the commercialization of TUDRIQEV in the near term, we believe that our existing cash and cash equivalents and short-term investments, including the $141.0 million of net proceeds from the issuance of our common stock in August 2026, will be sufficient to fund operating expenses and capital expenditure requirements for greater than twelve months from the issuance of these condensed consolidated financial statements included in this quarterly report.
See "-Liquidity and capital resources" and "Risk factors-Risks related to our financial position and need for additional capital."
Components of our results of operations
Revenue
To date, we have not generated any revenue from product sales as we previously did not have any approved products prior to the approval of TUDRIQEV in August 2026. We can not be certain we will generate any revenue from the sale of TUDRIQEV or other potential products in the future. If our development efforts for any of our other product candidates that we may develop in the future are successful and result in regulatory approval, or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from a combination of product sales or payments from those collaborations or license agreements.
Operating expenses
Our expenses since inception have consisted solely of research and development costs and general and administrative costs.
Research and development expenses
Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts and the development of our product candidates, and include:
•expenses incurred under agreements with third parties, including clinical research organizations, or CROs, that conduct research, preclinical activities and clinical trials on our behalf as well as contract manufacturing organizations, or CMOs, that manufacture raw materials and supplies for our product and product candidates and their manufacturing, packaging and labeling;
•salaries, benefits and other related costs, including stock-based compensation expense, for personnel engaged in research and development functions;
•costs of outside consultants engaged in research and development functions, including their fees, stock-based compensation and related travel expenses;
•the costs of laboratory supplies and acquiring, developing and manufacturing preclinical study and clinical trial materials;
•costs related to compliance with regulatory requirements in connection with the development of our product and product candidates; and
•facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.
These costs may be partially offset by cost-sharing arrangements under collaboration agreements that we may enter from time to time.
We expense research and development costs as incurred. We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our service providers. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our consolidated financial statements as prepaid or accrued research and development expenses.
Direct research and development costs, consisting of costs, such as fees paid to consultants, contractors, CMOs and CROs in connection with our preclinical and clinical development activities, are tracked by study. Additional costs, consisting primarily of our initial manufacturing costs, including materials, supplies, depreciation and facility costs, are allocated at a program level, based upon manufacturing runs, as the drug product can be utilized across multiple studies for any particular program. Additional costs to label, package and distribute the drug product is then directly allocated to the specific studies when incurred, as that drug product has then been assigned to a particular study. In the event our additional future or ongoing study costs become meaningful to investors, we will present those costs by study.
We do not allocate personnel costs, costs associated with our discovery efforts, laboratory supplies or other indirect costs, to specific product development programs because these costs are deployed across multiple product development programs and, as such, are not separately classified.
Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will continue to increase for the foreseeable future as we continue enrollment in, and the initiation of, additional clinical trials, as well as the continued discovery and development of additional product candidates. However, if we determine that the commercialization of TUDRIQEV is not viable, our outlook and plans may be uncertain and the impact on our research and development expenses will also be uncertain. At this time the ability to fund and successfully develop, and commercialize, if approved, our product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with product development and commercialization, including the following:
•the extent to which we are able to reach a mutually agreeable path forward with the FDA with respect to the scope, design, implementation and timing of an approval for our product candidates and other research and development activities that we may conduct;
•the number and scope of preclinical and clinical programs we decide to pursue;
•our ability to maintain our current research and development programs and to establish new ones;
•uncertainties in clinical trial design;
•the rate of enrollment in clinical trials;
•the successful completion of clinical trials with safety, tolerability, and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority;
•the receipt of regulatory approvals from applicable regulatory authorities;
•our success in operating our manufacturing facility, or securing manufacturing supply through relationships with third parties;
•our ability to obtain and maintain patents, trade secret protection, and regulatory exclusivity, both in the United States and internationally;
•our ability to maintain, expand, protect and defend our rights in our intellectual property portfolio;
•the commercialization of our product candidates, if and when approved and the timing of such approval;
•the acceptance of our product candidates, if approved, by patients, the medical community, and third-party payors;
•our ability to successfully develop our product candidates for use in combination with third-party products or product candidates;
•negative developments in the field of immuno-oncology;
•competition with other products; and
•significant and changing government regulation and regulatory guidance and the views and implementation of such regulation and guidance from the leadership of the applicable regulatory agencies.
A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant trial delays due to patient enrollment or other reasons, we could be required to expend significant additional financial resources and time on the completion of clinical development. We may never succeed in obtaining regulatory approval for any of our product candidates.
Selling, general and administrative expenses
Selling, general and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance, corporate, commercial and business development and administrative functions. Selling, general and administrative expenses also include professional fees for legal, patent, accounting, auditing, tax and consulting services, pre-commercial planning, travel expenses, and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.
We expect our selling, general and administrative expenses to continue to increase in the future as we increase our selling, general and administrative headcount to support our continued operations and pre-launch and launch activities for the commercialization of TUDRIQEV. We also expect to continue to incur increased expenses, including accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements; director and officer insurance costs; and investor and public relations costs. If we are unable to successfully commercialize TUDRIQEV, we expect that our selling, general and administrative expenses will decrease but to what extent we are uncertain.
Other income (expense), net
Research and development incentives
Research and development incentives consists of reimbursements of research and development expenditures. We participate, through our subsidiary in the United Kingdom, in the research and development program provided by the United Kingdom tax relief program, such that a percentage of up to 16.2% of our qualifying research and development expenditures are reimbursed by the United Kingdom government, and such incentives are reflected as other income.
Investment income
Investment income consists of income earned on our cash and cash equivalents and short-term investments.
Interest expense on debt obligations
Interest expense on debt obligations consists of the amortization of debt discount and cash paid for interest under the loan agreement with Hercules.
Interest expense on finance lease liability
Interest expense on finance lease liability consists of amortization of finance charges under our financing lease.
Other (expense) income
Other (expense) income consists primarily of realized and unrealized foreign currency transaction gains and losses.
Income taxes
The Company's tax provision and the resulting effective tax rate for interim periods is determined based upon its estimated annual effective tax rate ("AETR"), adjusted for the effect of discrete items arising in that quarter. The impact of such inclusions could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings or losses versus annual projections. In each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual tax rate changes, a cumulative adjustment is made in that quarter.
The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets both in the United States and United Kingdom, which primarily consist of net operating loss carryforwards. The Company has considered its history of cumulative net losses, estimated future taxable income and prudent and feasible tax planning strategies and has concluded that it is more likely than not that the Company will not realize the benefits of its deferred tax assets.
Results of operations
Comparison of the three months ended June 30, 2026 and 2025
The following chart summarizes our results of operations for the three months ended June 30, 2026 and 2025:
|
Three Months Ended
June 30,
|
|||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| (Amounts in thousands) | |||||||||||||||||
| Operating expenses: | |||||||||||||||||
| Research and development | $ | 49,277 | $ | 57,843 | $ | (8,566) | |||||||||||
| Selling, general and administrative | 18,970 | 32,579 | (13,609) | ||||||||||||||
| Total operating expenses | 68,247 | 90,422 | (22,175) | ||||||||||||||
| Loss from operations | (68,247) | (90,422) | 22,175 | ||||||||||||||
| Other income (expense): | |||||||||||||||||
| Research and development incentives | 296 | 420 | (124) | ||||||||||||||
| Investment income | 1,960 | 4,714 | (2,754) | ||||||||||||||
| Interest expense on finance lease liability | (506) | (521) | 15 | ||||||||||||||
| Interest expense on debt obligations | (2,581) | (1,475) | (1,106) | ||||||||||||||
| Other (expense) income, net | (688) | 591 | (1,279) | ||||||||||||||
| Total other (expense) income, net | (1,519) | 3,729 | (5,248) | ||||||||||||||
| Net loss | $ | (69,766) | $ | (86,693) | $ | 16,927 | |||||||||||
Research and development expenses
Research and development expenses for the three months ended June 30, 2026 were $49.3 million, compared to $57.8 million for the three months ended June 30, 2025. The following table summarizes our research and development expenses for the three months ended June 30, 2026 and 2025:
|
Three Months Ended
June 30,
|
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| 2026 | 2025 | Change | |||||||||||||||
| Direct research and development expenses by program | |||||||||||||||||
| RP1 program costs by study: | |||||||||||||||||
| IGNYTE | 674 | 3,452 | (2,778) | ||||||||||||||
| ARTACUS | 484 | 1,619 | (1,135) | ||||||||||||||
| CERPASS | (270) | 1,208 | (1,478) | ||||||||||||||
| IGNYTE-3 | 7,950 | 4,861 | 3,089 | ||||||||||||||
| Other RP1 study costs | 1,399 | 4,422 | (3,023) | ||||||||||||||
| Total RP1 costs | 10,237 | 15,562 | (5,325) | ||||||||||||||
| RP2 | 8,828 | 3,875 | 4,953 | ||||||||||||||
| RP3 | 246 | 857 | (611) | ||||||||||||||
| Unallocated research and development expenses: | |||||||||||||||||
| Personnel related (including stock-based compensation) | 23,533 | 27,324 | (3,791) | ||||||||||||||
| Other | 6,433 | 10,225 | (3,792) | ||||||||||||||
| Total research and development expenses | $ | 49,277 | $ | 57,843 | $ | (8,566) | |||||||||||
The overall decrease of $8.6 million in total research and development expenses was driven by a decrease in unallocated expenses of approximately $7.6 million, which included a decrease of $3.8 million in personnel related costs and a decrease of $3.8 million in other costs. Personnel related costs, including stock compensation, were down as a result of the
Company restructuring which was announced in April 2026. The decrease in other costs is driven by a decrease in consulting costs and medical affairs spending.
Direct research costs decreased by approximately $1.0 million overall which was a result of a decrease of $5.3 million in total TUDRIQEV costs relating to the IGNYTE, ARTACUS and CERPASS studies, specifically as a result of the completion of enrollment in the IGNYTE advanced melanoma cohort and declining enrollment and the wind down of the CERPASS and ARTACUS studies. These TUDRIQEV cost decreases were somewhat offset by an increase of $3.1 million related to the IGNYTE-3 confirmatory study, which continued to progress in first quarter of fiscal 2027. In addition, RP2 direct spending increased by approximately $5.0 million versus the same quarter of the prior year related to the REVEAL study, as the Company continued to ramp up enrollment and expanded this trial outside of the United States.
Selling, general and administrative expenses
Selling, general and administrative expenses were $19.0 million for the three months ended June 30, 2026, compared to $32.6 million for the three months ended June 30, 2025. The decrease of $13.6 million is primarily the result of a decrease of $10.2 million in external sales and marketing costs and a decrease of $3.4 million in personnel related costs in the sales and marketing and G&A functions. These decreases are the result of the Company restructuring which occurred during the first quarter of fiscal 2027, and included a reduction of workforce by approximately 55%, impacting the entirety of the Company's commercial team.
Total other (expense) income, net
Other expense was $1.5 million for the three months ended June 30, 2026, compared to income of $3.7 million for the three months ended June 30, 2025. The net change of $5.2 million is primarily attributable to a decrease in investment income of $2.8 million as a result of a lower investment balance year over year. In addition, there was an increase in expense of $1.3 million in the current quarter compared to the prior year due to exchange rate fluctuations related to the changes in foreign exchange rates of the British Pound Sterling to the United States Dollar, specifically on intercompany and other non-functional currency transactions, as well as an increase in expense on debt of $1.1 million as a result of a higher debt balance as compared to the same quarter in the prior year.
Liquidity and capital resources
Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. Until we are able to generate sufficient revenue from TUDRIQEV and our other product candidates that we develop, which may never occur, we anticipate that we will continue to incur significant operating losses and negative cash flows from our operations.
Sources of liquidity
To date, we have financed our operations primarily with proceeds from the sale of equity securities and, to a lesser extent, proceeds from borrowing under a secured loan facility. Through June 30, 2026, we had received net proceeds of $1,132.9 million through the sale of shares of common stock and pre-funded warrants exercisable for common stock in public offerings, a private placement transaction, and at-the-market offerings, as well as our incurrence of debt under the Hercules Loan Agreement. As of June 30, 2026, we had cash and cash equivalents and short-term investments of $195.3 million.
Cash flows
The following table summarizes our cash flows for each of the periods presented:
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (Amounts in thousands) | |||||||||||
| Net cash used in operating activities | $ | (75,728) | $ | (77,016) | |||||||
|
Net cash provided by investing activities
|
49,993 | 65,048 | |||||||||
| Net cash provided by (used in) financing activities | 800 | (158) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 1,270 | (1,616) | |||||||||
| Net decrease in cash and cash equivalents | $ | (23,665) | $ | (13,742) | |||||||
Operating activities
During the three months ended June 30, 2026, net cash used in operating activities was $75.7 million, primarily resulting from our net loss of $69.8 million partially offset by non-cash charges of $9.5 million, which primarily consist of stock-based compensation expense of $7.7 million and depreciation and amortization of $1.8 million, and a decrease in cash of $15.5 million related to changes in our operating assets and liabilities. Changes in our operating assets and liabilities for the three months ended June 30, 2026 consisted primarily of a $2.3 million decrease in accounts payable, a $17.4 million decrease in accrued expenses and other current liabilities, and a $1.3 million decrease in research and development incentives receivable from the United Kingdom government due to the timing and amount of our qualifying expenditures.
During the three months ended June 30, 2025, net cash used in operating activities was $77.0 million, primarily resulting from our net loss of $86.7 million partially offset by non-cash charges of $10.1 million, which primarily consist of stock-based compensation expense of $8.8 million and depreciation and amortization of $1.7 million, somewhat offset by net amortization of premiums and discounts on short-term investments of $1.3 million, and a decrease in cash of $0.4 million related to changes in our operating assets and liabilities. Changes in our operating assets and liabilities for the three months ended June 30, 2025 consisted primarily of a $5.5 million decrease in accrued expenses and other current liabilities, offset by a $3.8 million increase in accounts payable, and a $1.6 million decrease in research and development incentives receivable from the United Kingdom government due to the timing and amount of our qualifying expenditures.
Investing activities
During the three months ended June 30, 2026, net cash provided by investing activities was $50.0 million, consisting of $59.9 million in proceeds from sales and maturities of short-term investments, partially offset by $9.9 million in purchases of available for sale securities.
During the three months ended June 30, 2025, net cash provided by investing activities was $65.0 million, consisting of $105.4 million in proceeds from sales and maturities of short-term investments, partially offset by $37.6 million in purchases of available for sale securities and $2.7 million in purchases of property, plant and equipment and capitalized software.
Financing Activities
During the three months ended June 30, 2026, net cash provided by financing activities was $0.8 million, relating to approximately $1.0 million in proceeds from the exercise of stock options, somewhat offset by principal payments of the Company's financing lease obligation.
During the three months ended June 30, 2025, net cash used in financing activities was $0.2 million, relating to principal payments of the Company's financing lease obligation.
Funding requirements
Our plan of operation is to continue implementing our business strategy, commence and achieve commercial sales of TUDRIQEV, and continue research and development of our product candidates and continue to expand our research pipeline and our internal research and development capabilities. We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the commercialization of TUDRIQEV and the preclinical activities and clinical trials of our product candidates and if and as we:
•seek to successfully commence and achieve commercial sales of TUDRIQEV;
•seek to complete one or more confirmatory trials of TUDRIQEV, including our ongoing IGNYTE-3 clinical trial, as well as our other post marketing requirements and commitments;
•seek to obtain adequate coverage and reimbursement for TUDRIQEV
•conduct our current and future clinical trials with RP2 and RP3;
•further preclinical development of any of our product candidates from our RPx platform;
•operate, qualify and maintain our in-house manufacturing facility and qualify and maintain our product and product candidates made therein for use in our clinical trials;
•seek to identify and develop additional product candidates;
•seek marketing approvals for any of our product candidates that successfully complete clinical trials, if any;
•establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval;
•seek to manufacture and maintain sufficient commercial supply of TUDRIQEV, or clinical supply of our product candidates, from our in-house manufacturing facility;
•maintain, expand, protect and defend our intellectual property portfolio;
•hire, train and retain additional clinical, quality control, scientific and general and administration personnel;
•acquire or in-license other drugs, technologies or third-party intellectual property; and
•add operational, financial and management information systems and personnel, including personnel to support our research and development programs, any future commercialization efforts and operations as a public company.
As of June 30, 2026, we had cash and cash equivalents and short-term investments of $195.3 million. Based on its current operating plan, the Company expects that its cash and cash equivalents and short-term investments will be sufficient to fund its operations for greater than twelve months from the issuance of these condensed consolidated financial statements, which includes the commercialization of TUDRIQEV in advanced melanoma and for working capital and general corporate purposes.
Because of the numerous risks and uncertainties associated with the commercialization of TUDRIQEV and the development of our other product candidates and programs, and because the extent to which we may enter into collaborations with third parties for development of our product candidates is unknown, we are unable to estimate the timing and amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates. Our future capital requirements will depend on many factors, including those described in this section and above under "-Operating expenses-Research and development expenses."
Developing novel biopharmaceutical products, including conducting preclinical studies and clinical trials, is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval for any product candidates or generate revenue from the sale of any products for which we may obtain marketing approval. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of therapies that we can not be certain will become commercially available. Accordingly, we will need to obtain substantial additional funds to achieve our business objectives.
Adequate additional funds may not be available to us on acceptable terms, or at all. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of our equity or convertible debt securities, our shareholders' interest may be diluted, and the terms of these securities may include liquidation or other preferences and anti-dilution protections that could adversely affect the rights of our common stockholder. Additional debt or preferred equity financing, if available, may involve agreements that include restrictive covenants that may limit our ability to take specific actions, such as incurring debt adversely impact our ability to conduct our business, and may require the issuance of warrants, which could potentially dilute your ownership interest.
If we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technology, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or collaborations, strategic alliances or licensing arrangements with third parties when needed, we may be required to delay, limit, reduce and/or terminate our product development programs or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
Contractual obligations and commitments
During the three months ended June 30, 2026, there were no material changes to our contractual obligations and commitments from those described under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations-Contractual Obligations and Commitments" in our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on June 29, 2026.
Collaborations
BMS
In February 2018, we entered into a Clinical Trial Collaboration and Supply Agreement with BMS. Pursuant to the agreement, BMS is providing to us, at no cost, nivolumab, its anti-PD-1 therapy, for use in combination with RP1 in our ongoing Phase 1/2 clinical trial. Under the agreement, we will sponsor, fund and conduct the clinical trial in accordance with an agreed-upon protocol. BMS granted us a non-exclusive, non-transferrable, royalty-free license (with a right to sublicense) under its intellectual property to use nivolumab in the clinical trial and has agreed to supply nivolumab, at no cost to us, for use in the clinical trial. Both parties will own the study data produced in the clinical trial, other than study data related solely to nivolumab, which will belong solely to BMS, or study data related solely to RP1, which will belong solely to us. In January 2020, this agreement was expanded to cover an additional cohort of 125 patients with anti-PD-1 failed melanoma.
Unless earlier terminated, the agreement will remain in effect until (i) the completion of the clinical trial, (ii) all related clinical trial data have been delivered to both parties and (iii) the completion of any statistical analyses and bioanalyses contemplated by the clinical trial protocol or any analysis otherwise agreed upon by the parties. The agreement may be terminated by either party (x) in the event of an uncured material breach by the other party, (y) in the event the other party is insolvent or in bankruptcy proceedings or (z) for safety reasons. Upon termination, the licenses granted to us to use nivolumab in the clinical trial will terminate. The agreement contains representations, warranties, undertakings and indemnities customary for a transaction of this nature.
In April 2019, we entered into a separate agreement with BMS on terms similar to the terms set forth in the agreement described above, pursuant to which BMS will provide, at no cost to us, nivolumab for use in our Phase 1 clinical trial of RP2 in combination with nivolumab.
Roche
In December 2022, we entered into a Master Clinical Trial Collaboration and Supply Agreement with Roche in relation to our RP2 and RP3 programs in colorectal cancer, or CRC, and HCC. Under the agreement, the companies intended to collaborate in 30 patient cohort signal finding studies in third-line, or 3L, CRC and in first- and second-line, or 1L and 2L, respectively, HCC. Following our re-prioritization of our product development portfolio in December 2023, we have agreed with Roche to terminate the CRC collaboration and pursue the 2L cohort in HCC with RP2 only. Roche has continued to supply its currently approved drugs, atezolizumab and bevacizumab for the 2L cohort in HCC but is not sharing costs following our re-prioritization. Under the terms of the initial agreement we retained the responsibility of operating the clinical trials as well as retaining all the rights to the development and commercialization of our product candidates. The agreement may be terminated by either party upon sixty days prior written notice to the other party.
Critical accounting policies and estimates
Our management's discussion and analysis of financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our condensed 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 an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are described in greater detail in Note 2 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our condensed consolidated financial statements.
Accrued research and development expenses
As part of the process of preparing our condensed consolidated financial statements, we are required to estimate our accrued research and development expenses. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advanced payments. We make estimates of our accrued expenses as of each balance sheet date in the condensed consolidated financial statements based on facts and circumstances known to us at that time. Examples of estimated accrued research and development expenses include fees paid to:
•CROs in connection with performing research activities and conducting preclinical studies and clinical trials on our behalf;
•CMOs in connection with the production of preclinical and clinical trial materials;
•investigative sites or other service providers in connection with clinical trials;
•vendors in connection with preclinical and clinical development activities; and
•vendors related to product manufacturing and development and distribution of preclinical and clinical supplies.
We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CMOs and CROs that supply, conduct and manage preclinical studies and clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period. To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.
Stock-based compensation
We issue stock-based awards to employees, directors, consultants and non-employees in the form of stock options and restricted stock units. We measure such stock-based awards in accordance with ASC 718, Compensation - Stock Compensation, which requires all stock-based awards to be recognized in the consolidated statements of operations and comprehensive loss based on their fair value on the date of the grant and the related compensation expense for those awards is recognized over the requisite service period, which is generally the vesting period of the respective award. We have, to date, only issued stock-based awards with service-based vesting conditions and record the expense for these awards using the straight-line method. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and our expected dividend yield. See Note 10 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report for more information. Forfeitures are accounted for as they occur. The fair value of each stock-based award is estimated on the date of grant based on the fair value of our common stock on that same date.
We classify stock-based compensation expense in our consolidated statements of operations in the same manner in which the award recipient's payroll costs are classified or in which the award recipient's service payments are classified.
Recently issued accounting pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report.
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