Immunitybio Inc.
11/09/2026 | Press release | Distributed by Public on 11/09/2026 06:53
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Forward-Looking Statements
The following discussion and analysis of our financial condition and results of operations should be read together with the description of our business and the condensed consolidated financial statements and related notes thereto Part I, Item 1. "Financial Statements" in this Quarterly Report. This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are based on our management's beliefs and assumptions and on information currently available to our management. Actual results could differ materially from those discussed in or implied by such forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report, particularly in Part II, Item 1A. "Risk Factors." Except as required by law, we do not undertake any responsibility to update any of these factors or to announce publicly any revisions to any of the forward-looking statements contained in this or any document, whether as a result of new information, future events, or otherwise. Forward-looking statements include, but are not limited to:
•our ability to successfully commercialize ANKTIVA globally in current and future approved indications (including NMIBC and NSCLC), and to obtain incremental regulatory approvals for new indications (including BCG-unresponsive NMIBC with CIS, with or without papillary tumors, BCG-unresponsive NMIBC papillary only, and NSCLC) from the FDA and applicable international regulatory agencies;
•our expectations regarding the operation and effectiveness of our approved product and product candidates and related benefits, potential future uses and applications of our approved product and product candidates, including potential use in cancer vaccines and across multiple tumor types, and the benefits and uses or our strategy and technology generally;
•our ability to obtain additional financing to fund our operations and advance the commercialization of our approved product and the development and commercialization of our other product candidates;
•our ability to comply with the terms, conditions, covenants, restrictions, and obligations set forth in the RIPA and related transaction documents;
•our ability to forecast operating results, including estimates regarding our future revenue and operating expenses, and make period-to-period comparisons predictive of future performance, including due to the impact of fluctuations in warrant, derivative, and fair value accounting measurement values;
•our beliefs regarding the benefits and perceived limitations of competing approaches, and the future of competing technologies and our industry;
•our beliefs regarding the success, cost and timing of our approved product and product candidate development activities and current and future clinical trials and studies, including study design, the enrollment of patients, and the timing of data readouts related thereto;
•our expectations regarding our ability to utilize the Phase 1/2 aNK, haNK®, taNK, and NK-CAR (t-haNK™) clinical trials data to support the development of our product candidates, including our NK-CAR (t-haNK), MSC, and M-ceNK™ product candidates;
•the timing or likelihood of regulatory filings or other actions and related regulatory authority responses in the U.S. and jurisdictions outside of the U.S., including any planned meetings, investigational new drug, BLA, NDA or marketing authorization application or similar filings or pursuit of accelerated regulatory approval pathways or orphan drug status and Breakthrough Therapy, Fast Track or RMAT designations and any designation's impact on BLA submission filing or approval timing and or approval probability;
•the ability and willingness of various third parties to engage in research and development activities involving our product or product candidates, and our ability to leverage those activities;
•our ability to enter into and successfully execute on clinical, regulatory and commercial arrangements internationally to accelerate the development and commercialization of ANKTIVA and our other product candidates;
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
•our expectations regarding the ease of administration and patient compatibility associated with our approved product and product candidates;
•our beliefs regarding the potential markets for our approved product and product candidates and our ability to serve those markets, including the rate and degree of market acceptance of any approved products;
•our beliefs regarding the potential manufacturing and distribution benefits associated with our approved product and product candidates, and our third-party CMOs' abilities to follow cGMP standards to scale up the production of our approved product and product candidates;
•our plans regarding manufacturing and distribution of our approved product and potential future products, including the enhancement of our in-house manufacturing capabilities;
•our ability to attract and retain key personnel;
•our ability to obtain, maintain, protect, and enforce patent protection and other proprietary rights for our approved product and our other product candidates, and other technologies in development;
•the terms and conditions of licenses granted to us and our ability to license additional intellectual property relating to our product, product candidates and technology;
•our expectations regarding the results of market access initiatives and coverage under medical reimbursement policies;
•our expectations regarding the abilities of our international partners to drive commercialization of ANKTIVA in the EU and Middle East and North Africa regions;
•the expected shelf life of ANKTIVA drug substance and drug product and availability of product supply;
•our global expansion efforts and the accuracy of our assumptions related to tariffs and government policy changes, including Most-Favored Nation Prescription Drug Pricing;
•any government shutdown or budget disruption, which could adversely affect the U.S. and global economies, and materially and adversely affect our business and/or our future BLA submissions;
•the impact on us, if any, if the CVRs held by former Altor stockholders become due and payable; and
•regulatory developments in the U.S. and foreign countries.
Forward-looking statements include statements that are not historical facts and can be identified by terms such as "anticipates," "believes," "continues," "goal," "could," "estimates," "scheduled," "expects," "intends," "may," "plans," "potential," "predicts," "indicate," "projects," "seeks," "should," "will," "would," "strategy," and variations of such words or similar expressions. and the negatives of those terms. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. Statements of past performance, efforts, or results of our preclinical and clinical trials, about which inferences or assumptions may be made, can also be forward-looking statements and are not indicative of future performance or results. These statements are based upon information available to us as of the date of this Quarterly Report, and although we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted a thorough inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. We discuss these risks in greater detail in Part II, Item 1A. "Risk Factors" of this Quarterly Report. Given these uncertainties, you should not place undue reliance on these forward-looking statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame. Also, forward-looking statements represent our management's beliefs and assumptions only as of the date of this Quarterly Report.
Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. You should read this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect.
ImmunityBio, ImmunityBio Care, ANKTIVA, ThAnktiva, haNK, taNK, ceNK, NK-92, Nant Cancer Vaccine, BioShield (and other BioShield-related trademarks), NANT 001, NANT XL, NANT 001 and Design, QUILT, Outsmart Your Disease, Smart Therapies for Difficult Diseases, NantKwest, VivaBioCell, and Infacell are trademarks or registered trademarks of ImmunityBio, Inc., its subsidiaries and affiliates.
As of November 9, 2026, ANKTIVA is approved or authorized in six regulatory jurisdictions, including the FDA, MHRA, EMA, SFDA, EDE, and MoH, expanding its global footprint to 35 countries, for use in combination with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with CIS, with or without papillary tumors.
ANKTIVA has also been approved by the FDA and received marketing authorization from the EDE for use in combination with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with high-grade papillary-only tumors and has also received marketing authorization from the EDE and accelerated conditional approval from the SFDA in combination with checkpoint therapy for adult patients with metastatic NSCLC whose disease has progressed following standard-of-care therapy.
Other than as set forth in such specific approved labels, our product candidates, including N-803, are investigational agents that are restricted by federal law to investigational use only, and safety and efficacy have not been established by any agency, including, without limitation, the FDA.
This Quarterly Report contains references to our products and trademarks and products and trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Quarterly Report, including logos, artwork, and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies' products or trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us, by any other companies.
In this Quarterly Report, the terms "ImmunityBio," "the company," "we," "us," and "our" refer to ImmunityBio, Inc. and its subsidiaries.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Our Business
ImmunityBio, Inc. is a biotechnology company focused on innovating, developing, and commercializing next-generation immunotherapies designed to activate the patient's immune system and deliver durable protection against cancer and infectious diseases. Our approach harnesses both the adaptive and innate immune systems with the goal of restoring immune function and generating lasting immunological memory in patients. At the core of our strategy is the Cancer BioShield platform, which is designed to stimulate critical lymphocytes, including natural killer (NK) cells, cytotoxic T cells, and memory T cells via our proprietary IL-15 receptor superagonist, ANKTIVA. Our Cancer BioShield platform is anchored by this antibody-cytokine fusion protein and is complemented by a portfolio that includes adenovirus-vectored vaccines, allogeneic (off-the-shelf) and autologous NK-cell therapies, and additional immunomodulators intended to promote immunogenic cell death and support durable immune responses while potentially reducing reliance on high-dose chemo-radiation therapy.
ANKTIVA is our lead biological product and a first-in-class IL-15 receptor superagonist antibody-cytokine fusion protein. We are commercializing ANKTIVA for BCG-unresponsive NMIBC. ANKTIVA in combination with BCG was initially approved by the FDA in April 2024 for the treatment of adult patients with BCG-unresponsive NMIBC with CIS, with or without papillary tumors. On October 14, 2026, the FDA approved our sBLA expanding the approved indication for ANKTIVA in combination with BCG to include adult patients with BCG-unresponsive NMIBC. This expanded indication now includes adult patients with BCG-unresponsive NMIBC with high-grade papillary-only tumors.
As of November 9, 2026, ANKTIVA is approved or authorized in six regulatory jurisdictions, including the FDA, MHRA, EMA, SFDA, EDE, and MoH, expanding its global footprint to 35 countries, for use in combination with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with CIS, with or without papillary tumors. Additionally, ANKTIVA has received the following approvals or authorizations:
•FDA approval and EDE marketing authorization in combination with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with high-grade papillary-only tumors; and
•SFDA accelerated conditional approval and EDE marketing authorization in combination with checkpoint therapy for adult patients with metastatic NSCLC whose disease has progressed following standard-of-care therapy.
ANKTIVA in combination with our CAR-NK therapy (PD-L1 t-haNK) has received RMAT designation from the FDA for use in combination with standard-of-care chemotherapy/radiotherapy for the reversal of lymphopenia and treatment of multiply relapsed locally advanced or metastatic pancreatic cancer. Separately, the FDA has authorized an EAP for ANKTIVA to treat lymphopenia in adult patients with refractory or relapsed solid tumors, regardless of tumor type, who have progressed following first-line standard-of-care treatment, including chemotherapy, radiation, or immunotherapy. The EAP includes patients with solid tumors who have failed first-line therapy and have a low ALC (ALC <1,000/μL).
We are seeking to increase international approvals of our existing U.S. label and expand the development of ANKTIVA in combination with current standard-of-care therapies across multiple solid and liquid tumor indications including:
•BCG-naïve NMIBC;
•Second-line NSCLC;
•First-line NSCLC;
•Glioblastoma;
•Indolent non-Hodgkin lymphoma, including Waldenström macroglobulinemia;
•Pancreatic cancer; and
•Prostate cancer.
In addition, ANKTIVA has been selected by the NCI for evaluation in a cancer prevention study in patients with Lynch syndrome, and we are evaluating the combination of ANKTIVA with other agents in colorectal cancer. The company is also supporting an ongoing EAP for rBCG to help address U.S. supply constraints. We are also establishing or conducting trials in multiple myeloma, hepatocellular carcinoma, and triple-negative breast cancer.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Significant Developments
The following is a summary of selected significant developments affecting our business that occurred since the filing of our Quarterly Report dated June 30, 2026 with the SEC on August 4, 2026:
•On October 14, 2026, the FDA approved our sBLA expanding the approved indication for ANKTIVA in combination with BCG to include adult patients with BCG-unresponsive NMIBC. This expanded indication now includes adult patients with BCG-unresponsive NMIBC with high-grade papillary-only tumors.
•In November 2026, we reported that the primary endpoint for Cohort A was met in the randomized QUILT-2.005 trial, and we remain on track to submit an sBLA to the FDA in the fourth quarter of 2026 for ANKTIVA in combination with BCG in patients with BCG-naïve NMIBC.
•In November 2026, we announced approval in Israel of ANKTIVA in combination with BCG for BCG-unresponsive NMIBC with CIS, with or without papillary tumors, bringing the number of global approvals to 35.
•In November 2026, we announced that the first patients in Europe have received treatment with ANKTIVA in combination with BCG for BCG-unresponsive NMIBC with CIS, with or without papillary tumors, expanding access to ANKTIVA across the region.
•Q3 2026 net product revenue of $48.7 million, up 53% year-over-year, driven by continued adoption among U.S. urologists and strong market access
•2026 year-to-date net product revenue of $143.6 million, up 92% year-over-year
•In October 2026, The Journal of Urology published long-term outcomes from our Phase 2/3 QUILT-3.032 trial of ANKTIVA in combination with BCG in 100 patients with BCG-unresponsive NMIBC with CIS, with or without papillary tumors. Among responders, cystectomy avoidance was 84% at 36 months. The median duration of complete response was 26.6 months, with some responses extending beyond 53 months-emphasizing support for ANKTIVA by a mature dataset.
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Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Pipeline Summary
| Product Candidate | Indication | Phase | Status | ||||||||
| ANKTIVA + BCG | BCG-unresponsive NMIBC CIS +/- papillary | Approved | FDA, MHRA, SFDA, and EDE approval; EMA conditional marketing authorization | ||||||||
| ANKTIVA + BCG | BCG-unresponsive papillary | Approved | FDA and EDE approval | ||||||||
| ANKTIVA + CPI | Progressing, metastatic NSCLC | Approved/Phase 3 | EDE approval; SFDA accelerated conditional approval | ||||||||
| ANKTIVA + BCG | BCG-naïve NMIBC | Phase 2B (registrational trial) | Fully enrolled; database locked for Cohort A | ||||||||
| ANKTIVA + PD-L1 CAR-NK | Recurrent GBM | Phase 2/3 | Phase 2 complete. Registrational trial planned. | ||||||||
| ANKTIVA + PD-L1 CAR-NK | Pancreatic cancer | Phase 2 | RMAT designation | ||||||||
| CD19 CAR-NK + rituximab | NHL | Phase 1 | QUILT-106 | ||||||||
| ANKTIVA | Lymphopenia (solid tumors) | Expanded Access | FDA EAP authorized | ||||||||
| rBCG (Serum Institute) | NMIBC | Expanded Access | FDA EAP authorized | ||||||||
| M-ceNK | Solid tumors | Phase 1 | Completed | ||||||||
| Ad-HPV | HPV | Phase 2 | Initiated and enrolling | ||||||||
Cancer BioShield Platform Components Addressing the Immune System
As of September 30, 2026, our pipeline includes clinical-stage programs in the following indications:
•Bladder Cancer: BCG-unresponsive NMIBC with CIS, with or without papillary tumors (approved), BCG-unresponsive NMIBC with high-grade papillary-only tumors (approved), BCG-naïve NMIBC, and MIBC
•Lung Cancer: Progressing, metastatic NSCLC in combination with CPIs (marketing authorization from the EDE and accelerated conditional approval from the SFDA)
•Lymphopenia: Tumor-agnostic treatment of chemotherapy/radiation-induced lymphopenia (EAP authorized)
•Pancreatic Cancer: Advanced/metastatic disease (RMAT designation)
•Glioblastoma: Recurrent GBM (registrational trial planned)
•Non-Hodgkin Lymphoma: Waldenström macroglobulinemia and other CD19+/CD20+ lymphomas
•Colorectal Cancer/Lynch Syndrome: Cancer prevention in high-risk patients (NCI-sponsored)
•Prostate Cancer: High-risk prostate cancer
•Infectious Diseases: HIV, Long COVID, universal nucleocapsid vaccine
•Apheresis Platform: M-ceNK with cryopreservation and storage
•Sepsis: Critically ill adults with sepsis
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Collaboration Agreements
We anticipate that strategic collaborations will continue to be an integral part of our operations, providing opportunities to leverage our partners' expertise and capabilities to gain access to new markets for our approved product and acquire new technologies or further expand the potential of our technologies, approved product and product candidates across relevant platforms. We have initiated strategic commercial partnerships in Europe and the Middle East to expand access to our approved product and expect to continue to form additional commercial partnerships in other regions as our business grows. We also have a global arrangement with Serum Institute, one of the world's largest vaccine manufacturers, to supply us with rBCG for use in our clinical development programs, and a development and supply agreement for the U.S. with JBL for Tokyo-172 BCG to address TICE BCG shortages.
We believe that our innovative approach to orchestrate and combine therapies for optimal immune system response will become a therapeutic foundation across multiple indications. Additionally, we believe that data from multiple clinical trials indicates ANKTIVA has broad potential to enhance the activity of therapeutic monoclonal antibodies, including CPIs, across a wide range of tumor types and potentially rescue lymphopenia by proliferation and activation of NK and T cells. We may also enter into supply arrangements for various investigational agents to be used in our clinical trials. See Part I, Item 1. "Business-Collaboration and License Agreements" of our Annual Report filed with the SEC on February 23, 2026 for a more detailed discussion regarding our collaboration and license agreements.
Agreements with Related Parties
Our Executive Chairman and Global Chief Scientific and Medical Officer also founded and has a controlling interest in NantWorks, which is a collection of companies in the healthcare and technology space. We have entered into arrangements with NantWorks, and certain affiliates of NantWorks. Affiliates of NantWorks are also affiliates of the company due to the common control by and/or common ownership interest of our Founder, Executive Chairman and Global Chief Scientific and Medical Officer.
Related-Party Debt
See Note 11 "Related-Party Debt" of the "Notes to Unaudited Condensed Consolidated Financial Statements" that appears in Part I, Item 1. "Financial Statements" of this Quarterly Report for information regarding our related-party debt.
NantWorks, LLC
Our Founder, Executive Chairman and Global Chief Scientific and Medical Officer also founded and has a controlling interest in NantWorks, which is a collection of companies in the healthcare and technology space. We have entered into arrangements with NantWorks, and certain affiliates of NantWorks. Affiliates of NantWorks are also affiliates of the company due to the common control by and/or common ownership interest of our Founder, Executive Chairman and Global Chief Scientific and Medical Officer. See Note 12 "Related-Party Agreements" of the "Notes to Unaudited Condensed Consolidated Financial Statements" that appears in Part I, Item 1. "Financial Statements" of this Quarterly Report for more information regarding our agreements with NantWorks.
Immuno-Oncology Clinic, Inc.
We have entered into multiple agreements with the Clinic to conduct clinical trials related to certain of our product candidates. The Clinic is a related party as it is owned by an officer of the company, and NantWorks manages the administrative operations of the Clinic. See Note 12 "Related-Party Agreements" of the "Notes to Unaudited Condensed Consolidated Financial Statements" that appears in Part I, Item 1. "Financial Statements" of this Quarterly Report for more information regarding our agreements with the Clinic.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Related-Party Leases
We lease property in multiple facilities across the U.S. and Italy, including facilities located in El Segundo and Culver City, CA that are leased from related parties. See Note 12 "Related-Party Agreements" of the "Notes to Unaudited Condensed Consolidated Financial Statements" that appears in Part I, Item 1. "Financial Statements" of this Quarterly Report for more information about our related-party leases.
Related-Party Warrants
A total of 1,638,000 warrants issued to an affiliate of Dr. Soon-Shiong with an exercise price of $3.24 per share were outstanding as of September 30, 2026. See Note 15 "Stock-Based Compensation" of the "Notes to Unaudited Condensed Consolidated Financial Statements" that appears in Part I, Item 1. "Financial Statements" of this Quarterly Report for more information regarding the related-party warrants.
Contingent Value Rights
In connection with our 2017 acquisition of Altor, we issued CVRs under which we agreed to pay the prior stockholders of Altor approximately $304.0 million of contingent consideration upon calendar-year worldwide net sales of ANKTIVA exceeding $1.0 billion prior to December 31, 2026, with amounts payable in cash or shares of our common stock or a combination thereof. As of September 30, 2026, Dr. Soon-Shiong, our Founder, Executive Chairman and Global Chief Scientific and Medical Officer, and his related party hold approximately $139.8 million of net sales CVRs. See Note 8 "Commitments and Contingencies" of the "Notes to Unaudited Condensed Consolidated Financial Statements" that appears in Part I, Item 1. "Financial Statements" of this Quarterly Report for more information regarding the CVRs.
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Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Discussion of Condensed Consolidated Results of Operations
The sum of the components shown in the quarterly and year-to-date fluctuation analyses may not equal the total amount reported in millions due to rounding.
Comparison of the Three Months Ended September 30, 2026 and 2025
|
Three Months Ended September 30, |
|||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Product revenue, net | $ | 48,737 | $ | 31,780 | $ | 16,957 | 53 | % | |||||||||||||||
| Other revenues | 104 | 281 | (177) | (63) | % | ||||||||||||||||||
| Total revenue | 48,841 | 32,061 | 16,780 | 52 | % | ||||||||||||||||||
| Operating cost and expenses | |||||||||||||||||||||||
| Cost of sales | 1,291 | 177 | 1,114 | 629 | % | ||||||||||||||||||
|
Research and development (including amounts
with related parties)
|
71,540 | 51,232 | 20,308 | 40 | % | ||||||||||||||||||
|
Selling, general and administrative (including
amounts with related parties)
|
53,997 | 36,282 | 17,715 | 49 | % | ||||||||||||||||||
| Total operating costs and expenses | 126,828 | 87,691 | 39,137 | 45 | % | ||||||||||||||||||
| Loss from operations | (77,987) | (55,630) | (22,357) | 40 | % | ||||||||||||||||||
| Other income (expense), net: | |||||||||||||||||||||||
| Interest and investment income, net | 3,174 | 2,067 | 1,107 | 54 | % | ||||||||||||||||||
| Change in fair value of related-party convertible note | (60,586) | (1,169) | (59,417) | * | |||||||||||||||||||
| Interest expense related to the revenue interest liability | (17,357) | (12,302) | (5,055) | 41 | % | ||||||||||||||||||
| Change in fair value of warrant liabilities | (15,835) | 14,905 | (30,740) | (206) | % | ||||||||||||||||||
| Interest expense (including amounts with related parties) | (14,660) | (15,282) | 622 | (4) | % | ||||||||||||||||||
| Change in fair value of derivative liabilities | (1,496) | 289 | (1,785) | (618) | % | ||||||||||||||||||
| Other income (expense), net | 182 | (187) | 369 | (197) | % | ||||||||||||||||||
| Total other expense, net | (106,578) | (11,679) | (94,899) | 813 | % | ||||||||||||||||||
| Loss before income taxes and noncontrolling interests | (184,565) | (67,309) | (117,256) | 174 | % | ||||||||||||||||||
| Income tax benefit | - | 35 | (35) | (100) | % | ||||||||||||||||||
| Net loss | $ | (184,565) | $ | (67,274) | $ | (117,291) | 174 | % | |||||||||||||||
_______________
*Not meaningful.
Product Revenue, Net
Product revenue, net increased $17.0 million during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, due to an increase in sales of ANKTIVA.
Other Revenues
Other revenues decreased $0.2 million during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, primarily due to decreased bioreactor and related consumable product sales, and decreased license royalty income.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Cost of Sales
Cost of sales increased $1.1 million during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, primarily due to an increase in inventory write-offs and increased sales of ANKTIVA. Cost of sales consists primarily of third-party manufacturing, distribution, and overhead costs, and may include charges for excess and obsolete inventory reserves and inventory write-offs. All costs associated with the production of ANKTIVA prior to receiving regulatory approval were expensed in research and development expense, on the condensed consolidated statement of operations in the period incurred and therefore are not reflected in cost of sales. As a result, our initial product gross margin is higher as our pre-launch inventory costs are not included in the cost of sales. We expect the cost of sales for ANKTIVA to increase and product gross margin to normalize in relation to product revenues as we deplete these inventories.
Research and Development Expense
Research and development expense consists of expenses incurred while performing research and development activities to expand the approved markets, label, and indications of our approved product ANKTIVA and to discover and develop our technology and product candidates. This includes conducting preclinical studies and clinical trials, manufacturing development efforts, and activities related to regulatory submissions for our approved product and product candidates. We expense research and development costs as they are incurred.
Our research and development expenses primarily consist of:
•clinical trial and regulatory-related costs;
•expenses incurred under agreements with investigative sites, CROs, and consultants that conduct our clinical trials;
•expenses incurred under collaborative agreements;
•manufacturing and testing costs and related supplies and materials;
•employee-related expenses, including salaries, benefits, travel and stock-based compensation; and
•facility and equipment expenses dedicated to research and development.
The company classifies its research and development expenses as either external or internal. The company's external research and development expenses support its various preclinical and clinical programs. The company's internal research and development expenses include payroll and benefits expenses, facilities and equipment expense, and other indirect research and development expenses incurred in support of its research and development activities. The company's external and internal resources are not directly tied to any one research or drug discovery program and are typically deployed across multiple programs and are not allocated to specific product candidates or development programs.
We expect our research and development expenses to increase significantly for the foreseeable future as we continue to invest in research and development activities related to expanding our product into new indications and markets, developing our other product candidates, and conducting our ongoing and planned clinical trials.
The process of conducting clinical trials necessary to obtain regulatory approval is costly and time consuming. The successful development of product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing or costs required to complete the remaining development of our other product candidates or to expand potential approved markets and indications for ANKTIVA. This is due to the numerous risks and uncertainties associated with the development of product candidates.
The costs of clinical trials may vary significantly over the life of a project owing to, but not limited to, the following:
•per patient trial costs;
•the number of sites included in the clinical trials;
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
•the countries in which the clinical trials are conducted;
•the length of time required to enroll eligible patients;
•the number of patients that participate in the clinical trials;
•the number of doses that patients receive;
•the cost of comparative or combination agents used in clinical trials;
•the drop-out or discontinuation rates of patients;
•potential additional safety monitoring or other studies or incremental cohorts requested by regulatory agencies;
•potential CRO costs and overhead;
•the duration of patient follow-up; and
•the safety profile and efficacy of the product candidate.
Research and development expense increased $20.3 million during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The following table summarizes our research and development expense during the three months ended September 30, 2026 and 2025, together with the changes in those items (in thousands):
|
Three Months Ended September 30, |
||||||||||||||||||||
| 2026 | 2025 | $ Change | ||||||||||||||||||
| External research and development expenses | $ | 23,909 | $ | 7,322 | $ | 16,587 | ||||||||||||||
| Internal research and development expenses: | ||||||||||||||||||||
| Personnel-related costs | 28,618 | 23,397 | 5,221 | |||||||||||||||||
| Equipment, depreciation, and facility costs | 13,762 | 12,843 | 919 | |||||||||||||||||
| Other research and development costs | 5,251 | 7,670 | (2,419) | |||||||||||||||||
| Total internal research and development expenses | 47,631 | 43,910 | 3,721 | |||||||||||||||||
| Total research and development expense | $ | 71,540 | $ | 51,232 | $ | 20,308 | ||||||||||||||
Research and development expense increased $20.3 million primarily attributable to the following:
•a $16.6 million increase in external research and development expenses, driven by higher clinical trial expenses, higher consulting fees, and higher contract manufacturing expenses;
•a $5.2 million increase in personnel-related costs, primarily due to higher salaries and benefits, and recruitment costs driven by increased headcount; and
•a $0.9 million increase in equipment, depreciation, and facility costs, primarily due to higher facility costs driven by increased facility security costs and increased common area maintenance fees, and higher equipment purchase costs and maintenance costs, partially offset by lower depreciation expenses, and lower building repair costs; partially offset by
•a $2.4 million decrease in other research and development costs, primarily due to decreased material supply purchases, and increased capitalization of overhead costs into inventory, partially offset by increased software license fees.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
We expect our research and development expense to increase significantly as we pursue label expansions for ANKTIVA in the U.S. and globally, advance our product pipeline, and execute planned clinical trials.
Selling, General and Administrative Expense
Selling, general and administrative expense consists primarily of salaries and personnel-related costs, including employee benefits and any stock-based compensation, for employees performing functions other than research and development. This includes personnel in executive, finance, human resources, information technology, legal, sales and administrative support functions. Other selling, general and administrative expenses include sales and marketing costs, facility-related costs not otherwise allocated to research and development expense, professional fees for auditing, tax and legal services, advertising costs, expenses associated with strategic business transactions and business development efforts, obtaining and maintaining patents, consulting costs, royalties and licensing costs, and costs of our information systems.
We expect that our selling, general and administrative expense will increase for the foreseeable future as we continue commercializing our approved product and expand operations in the U.S. and globally, build out information systems and increase our headcount to support continued research activities and the development of our clinical programs. We have incurred and expect that we will continue to incur in the future, additional costs associated with operating as a public company, including costs to comply with stock exchange listing and SEC requirements, future funding efforts, corporate governance, internal controls, investor relations, disclosure and similar requirements applicable to public companies. Additionally, as we pursue international product sales of our approved product we expect to incur the associated increases in our selling, general and administrative expense. If and when we believe that a regulatory approval of one of our other product candidates appears likely, we expect to incur significant increases in our selling, general and administrative expense related to the sales and marketing of any additional approved product candidates.
Selling, general and administrative expense increased $17.7 million during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, primarily attributable to the following:
•a $7.5 million increase in professional services expenses that was primarily attributable to an increase in legal expenses, and an increase in consulting fees driven by commercialization and marketing related services, partially offset by a decrease in audit and tax fees;
•a $6.2 million increase in personnel-related costs, including salaries and benefits, recruiting and training expenses, travel expenses, and stock-based compensation expense due to growth in sales and marketing activities and expansion into new markets;
•a $3.0 million increase in commercial-related expenses that was primarily driven by higher marketing related expenses and higher distribution costs as a result of continued commercialization development and sales growth;
•a $0.7 million increase in other expenses that was primarily attributable to increased depreciation and amortization expenses, insurance costs, postage and freight expenses, and offices supplies; and
•a $0.3 million increase in equipment expenses that was primarily due to increased IT equipment purchase costs.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Other Income (Expense), Net
Other income (expense), net consists primarily of interest and investment income, interest expense, unrealized gains and losses from investments in equity securities, changes in fair value of warrant liabilities, derivative liabilities, and convertible notes, realized gains and losses on debt and equity securities, warrant issuance costs, write-off of a convertible note receivable, and gains (losses) on foreign currency transactions.
Total other expense, net, increased $94.9 million during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, primarily attributable to the following:
•an increase of $59.4 million from the change in fair value of a related-party convertible note driven by the revaluation loss of $60.6 million associated with the increase in our common stock price during the three months ended September 30, 2026, as compared to the revaluation loss of $1.2 million during the three months ended September 30, 2025;
•an increase of $30.7 million from the change in fair value of warrant liabilities mainly driven by the revaluation loss of $15.8 million associated with the increase in our common stock price during the three months ended September 30, 2026, as compared to the revaluation gain of $14.9 million during the three months ended September 30, 2025;
•an increase of $5.1 million in interest expense related to the revenue interest liability as a result of the increased revenue interest liability principal balance;
•an increase of $1.8 million from the change in fair value of derivative liabilities driven by recurring fair value adjustments at the end of each reporting period; partially offset by
•an increase of $1.1 million in interest and investment income, net, driven by a higher outstanding balance of treasury security holdings and an increase in interest rates;
•a decrease of $0.6 million in interest expense due to the lower December 2024 Convertible Promissory Note balance, partially offset by an increase in interest rates; and
•a decrease of $0.4 million in other income (expense), net, primarily attributable to fluctuations in various miscellaneous items.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Comparison of the Nine Months Ended September 30, 2026 and 2025
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Product revenue, net | $ | 143,576 | $ | 74,710 | $ | 68,866 | 92 | % | |||||||||||||||
| Other revenues | 711 | 293 | 418 | 143 | % | ||||||||||||||||||
| Total revenue | 144,287 | 75,003 | 69,284 | 92 | % | ||||||||||||||||||
| Operating costs and expenses | |||||||||||||||||||||||
| Cost of sales | 1,827 | 371 | 1,456 | 392 | % | ||||||||||||||||||
|
Research and development (including amounts
with related parties)
|
200,345 | 154,702 | 45,643 | 30 | % | ||||||||||||||||||
|
Selling, general and administrative (including amounts
with related parties)
|
151,590 | 111,274 | 40,316 | 36 | % | ||||||||||||||||||
| Total operating costs and expenses | 353,762 | 266,347 | 87,415 | 33 | % | ||||||||||||||||||
| Loss from operations | (209,475) | (191,344) | (18,131) | 9 | % | ||||||||||||||||||
| Other income (expense), net | |||||||||||||||||||||||
| Interest and investment income, net | 8,643 | 4,107 | 4,536 | 110 | % | ||||||||||||||||||
| Change in fair value of related-party convertible note | (393,175) | (42,582) | (350,593) | 823 | % | ||||||||||||||||||
| Change in fair value of warrant liabilities | (355,438) | 18,346 | (373,784) | * | |||||||||||||||||||
| Interest expense related to revenue interest liability | (48,420) | (39,241) | (9,179) | 23 | % | ||||||||||||||||||
| Interest expense (including amounts with related parties) | (43,305) | (46,092) | 2,787 | (6) | % | ||||||||||||||||||
| Change in fair value of derivative liabilities | (1,080) | 7,798 | (8,878) | (114) | % | ||||||||||||||||||
| Other expense, net | (5,493) | (506) | (4,987) | 986 | % | ||||||||||||||||||
| Total other expense, net | (838,268) | (98,170) | (740,098) | 754 | % | ||||||||||||||||||
| Loss before income taxes and noncontrolling interests | (1,047,743) | (289,514) | (758,229) | 262 | % | ||||||||||||||||||
| Income tax expense | (9) | - | (9) | - | % | ||||||||||||||||||
| Net loss | $ | (1,047,752) | $ | (289,514) | $ | (758,238) | 262 | % | |||||||||||||||
_______________
*Not meaningful.
Product Revenue, Net
Product revenue, net increased $68.9 million during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, due to an increase in sales of ANKTIVA.
Other Revenues
Other revenues increased $0.4 million during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, primarily due to increased bioreactor and related consumable product sales, and increased license royalty income.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Cost of Sales
Cost of sales increased $1.5 million during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, primarily due to an increase in inventory write-offs and increased sales of ANKTIVA. Cost of sales consists primarily of third-party manufacturing, distribution, and overhead costs, and may include charges for excess and obsolete inventory reserves and inventory write-offs. All costs associated with the production of ANKTIVA prior to receiving regulatory approval were expensed in research and development expense, on the condensed consolidated statement of operations in the period incurred and therefore are not reflected in cost of sales. As a result, our initial product gross margin is higher as our pre-launch inventory costs are not included in the cost of sales. We expect the cost of sales for ANKTIVA to increase and product gross margin to normalize in relation to product revenues as we deplete these inventories.
Research and Development Expense
Research and development expense increased $45.6 million during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The following table summarizes our research and development expense during the nine months ended September 30, 2026 and 2025, together with the changes in those items (in thousands):
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2026 | 2025 | $ Change | ||||||||||||||||||
| External research and development expenses | $ | 54,415 | $ | 21,385 | $ | 33,030 | ||||||||||||||
| Internal research and development expenses: | ||||||||||||||||||||
| Personnel-related costs | 81,070 | 70,094 | 10,976 | |||||||||||||||||
| Equipment, depreciation, and facility costs | 40,760 | 39,146 | 1,614 | |||||||||||||||||
| Other research and development costs | 24,100 | 24,077 | 23 | |||||||||||||||||
| Total internal research and development expense | 145,930 | 133,317 | 12,613 | |||||||||||||||||
| Total research and development expense | $ | 200,345 | $ | 154,702 | $ | 45,643 | ||||||||||||||
Research and development expense increased $45.6 million primarily attributable to the following:
•a $33.0 million increase in external research and development expenses, primarily due to higher clinical trial expenses, contract manufacturing expenses, and consulting costs, partially offset by lower regulatory expenses;
•an $11.0 million increase in personnel-related costs, primarily due to increased salaries, recruiting costs, travel expenses, and decreased net shared service benefits, partially offset by decreased stock-based compensation expenses;
•a $1.6 million increase in equipment, depreciation, and facility costs, primarily due to increased facility security costs, higher depreciation expenses and lease expenses driven by the Dunkirk Lease amendment, increased software purchases, equipment purchases and repairs, and increased common area maintenance costs, partially offset by decreased building repair costs; and
•an immaterial change in other research and development costs.
We expect our research and development expense to increase significantly as we pursue label expansions for ANKTIVA in the U.S. and globally, advance our product pipeline, and execute planned clinical trials.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Selling, General and Administrative Expense
Selling, general and administrative expense increased $40.3 million during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, primarily attributable to the following:
•a $19.1 million increase in professional services expenses, primarily attributable to increased legal expenses, increased consulting fees driven by commercialization and marketing-related services, and higher audit and tax fees;
•an $11.0 million increase in personnel-related costs, including salaries and benefits, commissions, recruiting and training expenses, and travel expenses due to growth in sales and marketing activities and expansion into new markets, partially offset by a decrease in stock-based compensation expense;
•a $6.5 million increase in commercial-related expenses, primarily driven by higher marketing related expenses and higher distribution costs as a result of continued commercialization development and sales growth;
•a $2.1 million increase in other expenses that was primarily attributable to a reduction in net shared service benefits, an increase in depreciation and amortization expenses, and increases in other miscellaneous items; and
•a $1.6 million increase in equipment expenses that was primarily due to increased IT equipment purchases, software license fees, and software purchases.
Other Income (Expense), Net
Total other expense, net, increased $740.1 million during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, primarily attributable to the following:
•an increase of $373.8 million from a change in the fair value of warrant liabilities mainly driven by a revaluation loss of $355.4 million associated with the increase in our common stock price during the nine months ended September 30, 2026, partially offset by warrant exercises during 2026, as compared to a revaluation gain of $18.3 million during the nine months ended September 30, 2025;
•an increase of $350.6 million from a change in the fair value of a related-party convertible note driven by a revaluation loss of $393.2 million mainly associated with an increase in our common stock price during the nine months ended September 30, 2026, as compared to a revaluation loss of $42.6 million during the nine months ended September 30, 2025;
•an increase of $9.2 million in interest expense related to the revenue interest liability as a result of the increased revenue interest liability principal balance;
•an increase of $8.9 million from a change in fair value of derivative liabilities driven by recurring fair value adjustments at the end of each reporting period;
•an increase of $5.0 million in other expense, net, primarily driven by the write-off of a convertible note receivable and all accrued interest, partially offset by a reclassification of the cumulative impact from change in fair value of a related-party convertible note related to instrument-specific credit risk associated with a partial conversion of the December 2024 Convertible Promissory Note during the three months ended March 31, 2026, and decreases from other fluctuations in various miscellaneous items; partially offset by
•an increase of $4.5 million in interest and investment income, net, driven by a higher outstanding balance of treasury security holdings and an increase in interest rates; and
•a decrease of $2.8 million in interest expense primarily due to the lower December 2024 Convertible Promissory Note balance.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Financial Condition, Liquidity and Capital Resources
Sources of Liquidity
From inception through September 30, 2026, we have funded our operations primarily through proceeds from the issuance of related-party promissory notes, sales of common stock under our shelf registration statements, through RDO offerings (including the exercise of associated warrants) and the ATM, RIPA financings, and recently from net product sales associated with ANKTIVA.
Cash and Cash Equivalents, and Marketable Securities on Hand
As of September 30, 2026, we had cash and cash equivalents, and marketable securities of $334.3 million compared to $242.8 million as of December 31, 2025. We have typically invested our cash in a variety of financial instruments and classified these investments as available-for-sale. However, after our entry into the RIPA we can no longer invest our excess funds in corporate or European bonds. Certain of our investments are subject to credit, liquidity, market, and interest-rate risks. The general condition of the financial markets and the economy may increase those risks and may affect the value and liquidity of investments and restrict our ability to access the capital markets.
Shelf Registration Statement
In 2024, we filed a shelf registration statement with the SEC on Form S-3ASR pursuant to which we may, from time to time, sell an indeterminate amount of our common stock, preferred stock, debt securities, depositary shares, warrants, subscription rights, purchase contracts, or units, and an associated prospectus related to the ATM.
At-the-Market Offering
In 2021, we entered into the ATM under which we may offer and sell, from time to time at our sole discretion, shares of our common stock through our sales agent. In December 2025, we filed a prospectus supplement to our shelf registration statement in connection with entering into an amendment to the ATM to increase the amount available for future stock issuances under the ATM to $500.0 million. During the three and nine months ended September 30, 2026, we received net proceeds totaling $28.5 million and $175.6 million, respectively, from the issuance of shares under the ATM. As of September 30, 2026, we had $319.9 million available for future stock issuances under the ATM.
Revenue Interest Purchase Agreement
On March 30, 2026, we entered into a Second Amendment to the RIPA. Pursuant to the amendment, Infinity and Oberland acquired additional revenue interests for a gross purchase price of $75.0 million (the Third Payment), less $0.2 million of issuance costs. Of the issuance costs incurred, $0.1 million was capitalized as debt discount and will be amortized to interest expense over the estimated term of the debt. See Note 10 "Revenue Interest Purchase Agreement" of the "Notes to Unaudited Condensed Consolidated Financial Statements" that appears in Part I, Item 1. "Financial Statements" of this Quarterly Report for more information.
Exercise of Warrants
During the nine months ended September 30, 2026, certain institutional holders exercised a total of 23,590,606 warrants pursuant to the 2023 and 2025 warrant agreements with exercise prices ranging from $3.1010 per share to $3.2946 per share resulting in the issuance of 23,590,606 shares of the company's common stock for proceeds totaling $74.6 million. As of September 30, 2026, a total of 41,462,965 warrants remain outstanding under the warrant agreements. See Note 13 "Warrant Liabilities" of the "Notes to Unaudited Condensed Consolidated Financial Statements" that appears in Part I, Item 1. "Financial Statements" of this Quarterly Report for more information.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Partial Conversion of Related-Party Promissory Note
On March 31, 2026, Nant Capital converted $25.0 million of the principal of the December 2024 Convertible Promissory Note into 4,606,596 shares of common stock at a conversion price of $5.4270 per share. See Note 11, "Related-Party Debt" of the "Notes to Unaudited Condensed Consolidated Financial Statements" that appears in Part I, Item 1. "Financial Statements" of this Quarterly Report for more information.
Stock Purchase and Option Agreement
On December 29, 2023 and in connection with the RIPA, we entered into a SPOA with Oberland. Under this agreement, Oberland acquired an option to purchase our common stock, at a price per share to be determined by reference to the 30-day trailing volume weighted-average price of our common stock, calculated from the date of exercise. The option is exercisable by Oberland at any time until the earliest of (i) December 29, 2028, (ii) a change of control of the company, or (iii) a sale of substantially all of the company's assets. Among other limitations, the option may only be exercised to the extent that the common stock issuable pursuant to such exercise would not exceed 19.9% of the common stock outstanding immediately after giving effect to such exercise. As of September 30, 2026, approximately $5.0 million remains available for future exercise under the SPOA.
Uses of Liquidity
In addition to the cash used to fund our operating activities discussed in "-Future Funding Requirements" below, we will require cash to settle the following obligations:
•As of September 30, 2026, our indebtedness payable at maturity is $480.0 million. This convertible promissory note is held by Nant Capital, an entity affiliated with Dr. Soon-Shiong, and matures in December 2027. In connection with the RIPA, our related-party promissory note is a general unsecured obligation of the company that is subordinated in right of payment to indebtedness, obligations, and other liabilities under the RIPA, the Revenue Interests issued pursuant to such agreement, and refinancing of the foregoing.
Although this promissory note is convertible into shares of common stock at $5.4270, there can be no assurance that it will be converted or that the company can refinance this promissory note or what terms will be available in the market at the time of any required refinancing. Furthermore, if prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon refinancing, then the interest expense relating to the refinanced indebtedness would increase. These risks could materially adversely affect the company's financial condition, cash flows and results of operations.
•On December 29, 2023, we entered into the RIPA with Infinity and Oberland. Oberland has the right to receive quarterly Revenue Interest Payments from us based on, among other things, our worldwide net sales, excluding those in China, which will be tiered payments initially ranging from 5.625% to 12.50% (before funding of the Third Payment, 4.5% to 10.0%; before funding of the Second Payment, 3.0% to 7.0%), subject to increase or decrease, following December 31, 2029 (the Test Date) depending on whether our aggregate payments made to Oberland as of the Test Date have met or exceeded the Cumulative Purchaser Payments. In addition, if our aggregate payments made as of the Test Date to Oberland do not equal or exceed the amount of the Cumulative Purchaser Payments as of such date, then we are obligated to make a one-time True-Up Payment to Oberland in an amount equal to 100% of the Cumulative Purchaser Payments as of the Test Date, less the aggregate amount of our previous payments to Oberland as of the Test Date. See Note 10 "Revenue Interest Purchase Agreement" of the "Notes to Unaudited Condensed Consolidated Financial Statements" that appears in Part I, Item 1. "Financial Statements" of this Quarterly Report for more information regarding the RIPA.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
•In connection with our 2017 acquisition of Altor, we issued CVRs under which we agreed to pay the prior stockholders of Altor approximately $304.0 million of contingent consideration upon calendar-year worldwide net sales of ANKTIVA exceeding $1.0 billion prior to December 31, 2026, with amounts payable in cash or shares of our common stock or a combination thereof. As of September 30, 2026, Dr. Soon-Shiong and his related party hold approximately $139.8 million of net sales CVRs and they have both irrevocably agreed to receive shares of the company's common stock in satisfaction of their CVRs. We may be required to pay the other prior Altor stockholders up to $164.2 million for their net sales CVRs should they choose to have their CVRs paid in cash instead of common stock. We may need to seek additional sources of capital to satisfy the CVR obligations if they are achieved. As of September 30, 2026, management does not consider the achievement of the net sales milestone to be probable so no liability has been recorded.
•In connection with our acquisition of VivaBioCell, we are obligated to pay the former owners approximately $2.3 million of contingent consideration upon the achievement of a regulatory milestone relating to the GMP-in-a-Box technology.
Discussion of Condensed Consolidated Cash Flows
The following discussion of ImmunityBio's cash flows is based on the condensed consolidated statements of cash flows in Part I, Item 1. "Financial Statements" and is not meant to be an all-inclusive discussion of the changes in its cash flows for the periods presented below.
The sum of the components shown in the year-to-date fluctuation analyses may not equal the total amount reported in millions due to rounding.
The following table sets forth our primary sources and uses of cash for periods indicated (in thousands):
|
Nine Months Ended September 30, |
|||||||||||
| 2026 | 2025 | ||||||||||
| Cash (used in) provided by: | |||||||||||
| Operating activities | $ | (217,186) | $ | (234,558) | |||||||
| Investing activities | (147,162) | (193,374) | |||||||||
| Financing activities | 321,403 | 345,347 | |||||||||
| Effect of exchange rate changes on cash and cash equivalents, and restricted cash | (125) | 10 | |||||||||
| Net change in cash and cash equivalents, and restricted cash | $ | (43,070) | $ | (82,575) | |||||||
Operating Activities
During the nine months ended September 30, 2026, net cash used in operating activities of $217.2 million consisted of a net loss of $1,047.8 million, partially offset by $822.3 million in adjustments for non-cash items and $8.3 million of cash provided by net working capital. Adjustments for non-cash items primarily consisted of a $393.2 million change in the fair value of a related-party convertible note, a $355.4 million change in fair value of warrant liabilities, $30.3 million of non-cash interest expense related to the revenue interest liability, $25.4 million in stock-based compensation expense, $12.7 million in depreciation and amortization expense, a $7.4 million write-off of a convertible note receivable, $5.1 million in non-cash lease expense related to operating lease right-of-use assets, and a $1.1 million change in the fair value of derivative liabilities, reduced by $6.4 million of accretion of discounts on marketable debt securities, $1.4 million due to a realized gain on instrument-specific credit risk, $0.4 million in other items, and $0.1 million in non-cash interest. The changes in net working capital consisted primarily of an increase of $28.8 million in accrued expenses and other liabilities, an increase of $5.4 million in accounts payable, an increase of $0.7 million with related parties, partially offset by an increase of $11.0 million in accounts receivable, net, an increase of $6.7 million in inventories, a decrease of $5.9 million in operating lease liabilities, an increase of $1.9 million in prepaid expenses and other current assets, and an increase of $1.1 million in other assets.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
During the nine months ended September 30, 2025, net cash used in operating activities of $234.6 million consisted of a net loss of $289.5 million and $40.0 million of cash used in net working capital, partially offset by $94.9 million in adjustments for non-cash items. The changes in net working capital consisted primarily of an increase of $29.7 million in accounts receivable, net, an increase of $7.9 million in prepaid expenses and other current assets, a decrease of $5.4 million in operating lease liabilities, and a decrease of $1.2 million in accounts payable, partially offset by a decrease of $1.6 million in inventories, an increase of $1.3 million in accrued expenses and other liabilities, a decrease of $0.8 million in other assets, and an increase of $0.5 million with related parties. Adjustments for non-cash items primarily consisted of a $42.6 million change in the fair value of a related-party convertible note, $32.6 million of non-cash interest expense related to the revenue interest liability, $28.1 million in stock-based compensation expense, $11.7 million in depreciation and amortization expense, $4.7 million in non-cash lease expense related to operating lease right-of-use assets, $2.2 million of transaction costs allocable to warrant liabilities, and $0.3 million in other items, reduced by an $18.3 million change in fair value of warrant liabilities, a $7.8 million change in the fair value of derivative liabilities, $1.0 million of accretion of discounts on marketable debt securities, and $0.2 million in non-cash interest.
We have historically experienced negative cash flows from operating activities. Although our net product sales have increased after the initial FDA approval of ANKTIVA, there can be no assurance these negative cash flows will not continue for the foreseeable future as we accelerate our initiatives which will require significant additional spending.
Investing Activities
During the nine months ended September 30, 2026, net cash used in investing activities was $147.2 million, which included cash outflows of $412.8 million for purchases of marketable debt securities, $10.0 million cash paid for other equity securities, and $8.2 million for purchases of property, plant and equipment, partially offset by proceeds of $283.8 million from maturities and sales of marketable debt securities.
During the nine months ended September 30, 2025, net cash used in investing activities was $193.4 million, which included cash outflows of $195.8 million for purchases of marketable debt securities and $3.0 million for purchases of property, plant and equipment, partially offset by proceeds of $5.4 million from maturities of marketable debt securities.
Our investments in property, plant and equipment are primarily related to acquisitions of equipment that will be used for the manufacturing of our approved product and product candidates and expenditures related to the build out of our manufacturing facilities. We expect to accelerate our capital spending as we scale our GMP manufacturing capabilities, which will require significant capital for the foreseeable future.
Financing Activities
During the nine months ended September 30, 2026, net cash provided by financing activities was $321.4 million, which consisted of $175.7 million in net proceeds from equity offerings, $74.9 million in net proceeds from payments received pursuant to the RIPA, $74.6 million of proceeds from the exercise of warrants, $3.1 million in proceeds from borrowings, and $3.0 million in proceeds from the exercise of stock options, partially offset by $8.2 million related to net share settlement of vested RSUs for payment of payroll tax withholding and $1.7 million in principal payments on a premium financing.
During the nine months ended September 30, 2025, net cash provided by financing activities was $345.3 million, which consisted of $346.8 million in net proceeds from equity offerings and $0.2 million in proceeds from the exercise of stock options, partially offset by $1.7 million related to net share settlement of vested RSUs for payment of payroll tax withholding.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Future Funding Requirements
As of November 9, 2026, ANKTIVA is approved or authorized in six regulatory jurisdictions, expanding its global footprint to 35 countries, for use in combination with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with CIS, with or without papillary tumors. ANKTIVA is also approved by the FDA and has received marketing authorization from the EDE for use in combination with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with high-grade papillary-only tumors and has also received marketing authorization from the EDE and accelerated conditional approval from the SFDA in combination with checkpoint therapy for adult patients with metastatic NSCLC whose disease has progressed following standard-of-care therapy. As a result, we have begun to generate revenue, although we expect it to take some time to generate sufficient revenue from our approved product to offset our expenses, and we can provide no assurance when, or if, this will occur.
We began commercial distribution of ANKTIVA in May 2024 and our permanent J-code became effective in January 2025; however, we can provide no assurance with respect to our future U.S. and global revenues, market acceptance, reimbursement from third-party payors, or the profitability of our approved product or any other product candidate for which we may obtain approval. It may also take significant time to generate revenue from our approved product in international markets given challenges and uncertainties associated with government policy proposals such as MFN drug pricing where only recently has the CMS issued a final rule establishing the GLOBE Model MFN-based rebates in Medicare Part B. We do not expect additional revenue from our other product candidates unless and until we obtain regulatory approval of and commercialize any of our other product candidates, and we do not know when, or if, this will occur. In addition, we expect our operating expenses to significantly increase in connection with our ongoing development activities, particularly as we continue the research, development and clinical trials of, and seek regulatory approval for, our other product candidates. We have also incurred and expect that we will continue to incur in the future additional costs associated with operating as a public company as well as costs related to future fundraising efforts. In addition, subject to obtaining regulatory approval of our other product candidates, we expect to incur significant incremental commercialization expenses for product sales, marketing, manufacturing and distribution. We anticipate that we will need substantial additional funding in connection with our continuing operations.
We expect that our operating expenses will increase substantially if and as we:
•commercialize our approved product in the U.S. and globally;
•continue research and development, including preclinical and clinical development of our other existing product candidates;
•seek regulatory approval of our approved product in incremental markets and indications and potentially seek regulatory approval for our other product candidates;
•seek to discover and develop additional product candidates;
•establish a commercialization infrastructure and scale up our manufacturing and distribution capabilities to commercialize any of our other product candidates for which we may obtain regulatory approval;
•seek to comply with regulatory standards and laws;
•maintain, leverage and expand our intellectual property portfolio;
•hire clinical, manufacturing, scientific and other personnel to support our product candidates' development and future commercialization efforts;
•add operational, financial and management information systems and personnel; and
•incur additional legal, accounting and other expenses in operating as a public company.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
As a result of continuing anticipated operating cash outflows as we commercialize our approved product in the U.S. and globally and accelerate our development efforts, we believe that substantial doubt exists regarding our ability to continue as a going concern without additional funding or financial support. However, we believe our existing cash and cash equivalents, and investments in marketable securities; sales of our approved product; capital to be raised through equity offerings, including but not limited to, the offering, issuance and sale by us of our common stock under our Form S-3ASR shelf registration statement; and our potential ability to borrow from affiliated entities will be sufficient to fund our operations through at least the next 12 months following the issuance date of the condensed consolidated financial statements based primarily upon our Founder, Executive Chairman and Global Chief Scientific and Medical Officer's intent and ability to support our operations with additional funds, including loans from affiliated entities, as required, which we believe alleviates such doubt. In addition to funds from the future sales of our approved product, which we expect to take time to establish, we may also seek to sell additional equity, through one or more follow-on public offerings, or in separate financings, or obtain a credit facility, issue other debt in compliance with the terms of the RIPA, or engage in strategic partnership transactions. However, we may not be able to secure such external financing in a timely manner or on favorable terms, if at all. Without additional funds, we may choose to delay or reduce our operating or investment expenditures. Further, because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we may need additional funds to meet our needs sooner than planned.
We will need to obtain additional financing to fund our future operations, including completing the commercialization of our approved product and the development and commercialization of our other product candidates. Changing circumstances may cause us to increase our spending significantly faster than we currently anticipate and we may need to raise additional funds sooner than we presently anticipate. Moreover, research and development and our operating costs and fixed expenses such as rent and other contractual commitments, including those for our research collaborations, are substantial and are expected to increase in the future.
Our future funding requirements will depend on many factors, including, but not limited to:
•our ability to successfully commercialize ANKTIVA or any future approved products in the U.S. or internationally;
•progress, timing, number, scope and costs of researching and developing our product candidates and our ongoing, planned and potential clinical trials;
•time and cost of regulatory approvals;
•our ability to successfully commercialize any of our other product candidates, if approved and the costs of such commercialization activities;
•revenue from product candidates that we may commercialize, if any, including the selling prices for such potential products and the availability of adequate third-party coverage and reimbursement for patients;
•interest and principal payments on our related-party promissory note, and repayment of Revenue Interests and Test Date payments due under the RIPA;
•cost of building, staffing and validating our own manufacturing facilities in the U.S., including having a product candidate successfully manufactured consistent with applicable regulations and requirements of the FDA and comparable foreign regulatory authorities;
•terms, timing and costs of our current and any potential future collaborations, business or product acquisitions, CVRs, milestones, royalties, licensing or other arrangements that we have established or may establish;
•time and cost necessary to respond to technological, regulatory, political and market developments; and
•costs of filing, prosecuting, maintaining, defending and enforcing any patent claims and other intellectual property rights.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Unless and until we can generate a sufficient amount of revenues, we may finance future cash needs through public or private equity offerings, license agreements, debt financings, collaborations, strategic alliances and marketing or distribution arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms, or at all.
To the extent that we raise additional capital through the sale of equity or equity-linked securities (including warrants), convertible debt or through our shelf registration statements, or other offerings, or if any of our current debt is converted into equity or if our existing warrants are exercised, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. The incurrence of additional indebtedness would result in increased fixed payment obligations and could involve certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms unfavorable to us and our revenue interest liability may come due. We have no committed source of additional capital and if we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may be required to delay or reduce the scope of or eliminate one or more of our research or development programs or our commercialization efforts. Our current license and collaboration agreements may also be terminated if we are unable to meet the payment obligations under those agreements. As a result, we may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time.
Contractual Obligations
We have material cash requirements to pay related-party affiliates and third parties under various contractual obligations discussed below:
•We are obligated to make payments to several related-party affiliates under written agreements and other arrangements. We are also obligated to pay interest and to repay principal under our related-party promissory note due in December 2027. See Note 11 "Related-Party Debt" of the "Notes to Unaudited Condensed Consolidated Financial Statements" that appears in Part I, Item 1. "Financial Statements" of this Quarterly Report for information regarding our financing obligations.
•We are obligated to make payments to Oberland associated with our revenue interest liability, which do not have a fixed repayment schedule. Oberland's right to receive payments under the RIPA shall terminate when Oberland has received maximum payments (including any True-Up Payment) equal to 195.0% of the then Cumulative Purchaser Payments unless the RIPA is terminated prior to such date.
Under the terms of the agreement, prior to the Test Date, every $100.0 million of worldwide net sales, excluding those in China, of less than or equal to $600.0 million in a calendar year will result in a tiered Revenue Interest Payment of approximately $12.5 million or 12.50% (after funding of the Third Payment). Worldwide net sales, excluding those in China, for a calendar year exceeding $600.0 million will result in a tiered Revenue Interest Payment of approximately $5.625 million or 5.625% (after funding of the Third Payment) for every $100.0 million of worldwide net sales, excluding those in China, above the threshold.
In the future, cumulative worldwide net sales, excluding those in China, levels up to the Test Date will determine whether or not we are required to make a True-Up Payment and implement modified payment rates. The amount of the obligation and timing of payment is likely to change. See Note 10 "Revenue Interest Purchase Agreement" of the "Notes to Unaudited Condensed Consolidated Financial Statements" that appears in Item 1. "Financial Statements" of this Quarterly Report for more information regarding the RIPA.
•We are obligated to make payments under our operating leases, which primarily consist of facility leases. See Note 9 "Lease Arrangements" and Note 12 "Related-Party Agreements" of the "Notes to Unaudited Condensed Consolidated Financial Statements" that appear in Part I, Item 1. "Financial Statements" of this Quarterly Report for information regarding our lease obligations.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
•In connection with the acquisitions of Altor and VivaBioCell, we are obligated to pay contingent consideration upon the achievement of certain milestones. See Note 8 "Commitments and Contingencies-Contingent Consideration Related to Business Combinations" of the "Notes to Unaudited Condensed Consolidated Financial Statements" that appears in Part I, Item 1. "Financial Statements" of this Quarterly Report for information regarding our contingent consideration obligations.
•We have contractual obligations to make payments to related-party affiliates and third parties under unconditional purchase arrangements. See Note 11 "Commitments and Contingencies-Unconditional Purchase Obligations" of the "Notes to Consolidated Financial Statements" that appears in Part II, Item 8. "Financial Statements and Supplementary Data" of our Annual Report filed with the SEC on February 23, 2026 for information on these unconditional purchase obligations.
•We have certain unconditional contractual commitments that are expected to be paid depending on the actual progress of build outs, completion of services, or in accordance with the terms of the respective third-party agreements as the payments become due. These are primarily related to capital expenditures and open purchase orders as of September 30, 2026 for the acquisition of goods and services in the ordinary course of business. As of September 30, 2026, the amounts of the contractual commitments that are expected to be paid are $75.7 million within one year and $48.5 million beyond one year.
•In addition, we have conditional contractual commitments that are expected to be paid in fiscal year 2027 and beyond based on the achievement of various development, regulatory and commercial milestones for agreements with third parties. These payments may not be realized or may be modified and are contingent upon the occurrence of various future events, substantially all of which have a high degree of uncertainty of occurring. As of September 30, 2026, the maximum amount that may be payable related to these commitments is $40.8 million.
•In connection with our leasehold interest in the Dunkirk Facility, we are committed to spend $0.5 million a year in rent as well as an aggregate of $55.0 million for capital and operational expenses during the three-year term of the amended lease. We also agreed to meet certain headcount targets by hiring at least 100 full-time employees by the end of the three-year term of the amended lease. If the option to purchase is exercised, we are required to hire at least 450 full-time employees by December 31, 2032 through December 31, 2033; and we are prohibited from conveying the premises for a five-year period without the prior written consent of the counterparties. These amounts are not included in the discussion above. See Note 8 "Commitments and Contingencies-Dunkirk Facility Leasehold Interest" of the "Notes to Unaudited Condensed Consolidated Financial Statements" that appears in Part I, Item 1. "Financial Statements" of this Quarterly Report for more information on these obligations.
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of condensed consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Those estimates can be complex and actual results could differ materially from those estimates. Estimates are assessed each period and updated to reflect current information.
There have been no material changes to our critical accounting policies during the three months ended September 30, 2026 as compared to what was described in our annual consolidated financial statements and notes thereto included in our Annual Report filed with the SEC on February 23, 2026. See "Critical Accounting Estimates" that appears in Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report filed with the SEC on February 23, 2026 for the accounting policies we believe to be the most critical in understanding the judgments and estimates we use in preparing our condensed consolidated financial statements.
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ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Recent Accounting Pronouncements
See Note 2 "Summary of Significant Accounting Policies" of the "Notes to Consolidated Financial Statements" that appears in Part II, Item 8. "Financial Statements and Supplementary Data" of our Annual Report filed with the SEC on February 23, 2026 for a discussion of recent accounting pronouncements or changes in accounting pronouncements that are of significance, or potential significance, to us.
Subsequent Event
FDA Approval of ANKTIVA in combination with BCG for BCG-unresponsive NMIBC
On October 14, 2026, the FDA approved our sBLA expanding the approved indication for ANKTIVA in combination with BCG to include adult patients with BCG-unresponsive NMIBC. This expanded indication now includes adult patients with BCG-unresponsive NMIBC with high-grade papillary-only tumors.
Immunitybio Inc. published this content on November 09, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 09, 2026 at 12:53 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]