Immunitybio Inc.
02/23/2026 | Press release | Distributed by Public on 02/23/2026 16:25
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion and analysis of our financial condition and results of operations should be read together with the description of our business that appears in Part I, Item 1. "Business" and the consolidated financial statements and related notes thereto in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual Report. This discussion contains forward-looking statements as a result of many factors, including those set forth under Part I, Item 1. "Business-Forward-Looking Statements" and Item 1A. "Risk Factors" and elsewhere in this Annual Report. These statements 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 Annual Report, particularly in Part I, 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.
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 superagonist, ANKTIVA (nogapendekin alfa inbakicept). 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 biologic product and a first-in-class IL-15 receptor superagonist antibody-cytokine fusion protein. We are commercializing ANKTIVA for the treatment of BCG-unresponsive NMIBC CIS with or without papillary tumors. ANKTIVA has received FDA Breakthrough Therapydesignation for use in BCG-unresponsive NMIBC CIS in adult patients with or without papillary tumors.
ANKTIVA is now approved in the U.S., UK, and Saudi Arabia for BCG-unresponsive NMIBC CIS with or without papillary tumors. In February 2026, the European Commission granted conditional marketing authorization in the EU for ANKTIVA for the same indication. In addition, ANKTIVA is conditionally approved in Saudi Arabia, for use in combination with a CPI, for the treatment of adult patients with metastatic NSCLC whose disease has progressed following standard-of-care therapy. The approved labels highlight ANKTIVA's ability to simultaneously activate NK cells, cytotoxic T cells, and memory T cells.
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 expand development of ANKTIVA in combination with current standard-of-care therapies across multiple solid and liquid tumor indications including:
•BCG-naïve NMIBC;
•BCG-unresponsive NMIBC with papillary tumors;
•Second-line NSCLC;
•First-line NSCLC;
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
•Glioblastoma;
•Indolent non-Hodgkin lymphoma, including Waldenström macroglobulinemia;
•Pancreatic cancer;
•Prostate cancer; and
•Ovarian 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, HCC, and TNBC.
Significant Developments
The following is a summary of selected significant developments affecting our business that occurred since the filing of our Quarterly Report on Form 10-Q dated September 30, 2025 with the SEC on November 5, 2025:
ANKTIVA Updates
•2025 Sales Momentum: ANKTIVA net product revenue increased 20% quarter-over-quarter, with full-year net product revenue of $113 million, representing an approximately 700% increase year-over-year.
•ANKTIVA Unit Growth:750% unit sales volume increase in 2025 compared to 2024.
•Global Approvals in Bladder Cancer: ANKTIVA in combination with BCG for the treatment of BCG-unresponsive NMIBC CIS with or without papillary tumors is now authorized across four major regulatory jurisdictions-the U.S., UK, EU, and Saudi Arabia-encompassing 33 countries in total.
•First Approval for Lung Cancer:ANKTIVA in combination with CPIs has been conditionally approved by the SFDA for the treatment of metastatic NSCLC, with commercial launch planned within 60 days; label expansion plans underway across multiple tumor types and for the treatment of lymphopenia.
•Long-Term Patent Protection:ANKTIVA combinations with CPIs are protected by multiple issued patents, including U.S. Patent Nos. 9,925,247 and 11,071,774, with patent terms extending beyond 2035.
•Commercial Partnerships:Formed a distribution partnership with Accord Healthcare in the EU, with an 85-person sales force deployed across 30 countries, and established an Irish subsidiary in Dublin to support the European launch; partnering with BioPharma & Cigalah Healthcare to expand access to ANKTIVA in Saudi Arabia and, over time, in the MENA region; formed a Kingdom of Saudi Arabia subsidiary to support KSA launch.
Clinical and Regulatory Updates
•ANKTIVA as a Backbone to the Cancer BioShield Platform:Growing enrollment in ongoing and planned key clinical trials in BCG-naïve bladder cancer, NSCLC, glioblastoma, sepsis, non-Hodgkin lymphoma, and treatment of lymphopenia
•BCG-Unresponsive NMIBC with Papillary Tumors:The company applied to the NCCN to seek expansion of the BCG-unresponsive NMIBC guidelines to include papillary-only disease in addition to CIS with or without papillary tumors, and the company is awaiting a decision on the matter expected in late Q1 or early Q2 2026.
ImmunityBio, Inc. and Subsidiaries
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 | Approved | FDA, MHRA and SFDA approval; EU (EMA) conditional marketing authorization | ||||||||
| ANKTIVA + CPI | Progressing, metastatic NSCLC | Approved/Phase 3 | SFDA conditional approval | ||||||||
| ANKTIVA + BCG | BCG-naïve NMIBC | Phase 2B | 85% enrolled | ||||||||
| ANKTIVA + BCG | BCG-unresponsive papillary | sBLA | Resubmission plan | ||||||||
| ANKTIVA + PD-L1 CAR-NK | Recurrent GBM | Phase 2/3 | Registration trial | ||||||||
| 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 December 31, 2025, our pipeline includes clinical-stage programs in the following indications:
•Bladder Cancer: BCG-unresponsive NMIBC CIS with or without papillary tumors (approved), BCG-unresponsive papillary, BCG-naïve NMIBC
•Lung Cancer: Progressing, metastatic NSCLC in combination with CPIs (accelerated conditional approval in Saudi Arabia)
•Lymphopenia: Tumor-agnostic treatment of chemotherapy/radiation-induced lymphopenia (EAP authorized)
•Pancreatic Cancer: Advanced/metastatic disease (RMAT designation)
•Glioblastoma: Recurrent GBM (registration trial)
•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
•Ovarian Cancer: Platinum-resistant ovarian cancer
•Infectious Diseases: HIV, Long COVID, universal nucleocapsid vaccine
•Apheresis Platform: M-ceNK with cryopreservation and storage
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 believe we are well positioned to become a leader in immunotherapy due to our broad and vertically-integrated platforms and through complementary strategic partnerships.
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 mAbs, 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"in this Annual Report 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 14 "Related-Party Debt"of the "Notes to Consolidated Financial Statements" that appears in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual Report for more 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 15 "Related-Party Agreements"of the "Notes to Consolidated Financial Statements" that appears in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual 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 15 "Related-Party Agreements"of the "Notes to Consolidated Financial Statements" that appears in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual Report for more information regarding our agreements with the Clinic.
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 15 "Related-Party Agreements"of the "Notes to Consolidated Financial Statements" that appears in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual Report for more information about our related-party leases.
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
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 December 31, 2025. See Note 18 "Stock-Based Compensation"of the "Notes to Consolidated Financial Statements" that appears in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual 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 December 31, 2025, 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 11 "Commitments and Contingencies"of the "Notes to Consolidated Financial Statements" that appears in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual Report for more information regarding the CVRs.
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Discussion of Consolidated Results of Operations
Comparison of the Years Ended December 31, 2025 and 2024
| Year Ended December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Product revenue, net | $ | 112,982 | $ | 14,150 | $ | 98,832 | 698 | % | ||||||||||||||||||
| Other revenues | 306 | 595 | (289) | (49) | % | |||||||||||||||||||||
| Total revenue | 113,288 | 14,745 | 98,543 | 668 | % | |||||||||||||||||||||
| Operating costs and expenses | ||||||||||||||||||||||||||
| Cost of sales | 753 | - | 753 | * | ||||||||||||||||||||||
|
Research and development (including amounts
with related parties)
|
218,559 | 190,144 | 28,415 | 15 | % | |||||||||||||||||||||
|
Selling, general and administrative (including amounts
with related parties)
|
150,003 | 168,783 | (18,780) | (11) | % | |||||||||||||||||||||
| Total operating costs and expenses | 369,315 | 358,927 | 10,388 | 3 | % | |||||||||||||||||||||
| Loss from operations | (256,027) | (344,182) | 88,155 | (26) | % | |||||||||||||||||||||
| Other income (expense), net | ||||||||||||||||||||||||||
| Interest and investment income, net | 6,405 | 7,975 | (1,570) | (20) | % | |||||||||||||||||||||
| Interest expense (including amounts with related parties) | (60,985) | (114,670) | 53,685 | (47) | % | |||||||||||||||||||||
| Interest expense related to revenue interest liability | (51,540) | (39,657) | (11,883) | 30 | % | |||||||||||||||||||||
| Change in fair value of warrant liabilities | 49,089 | 19,955 | 29,134 | 146 | % | |||||||||||||||||||||
| Change in fair value of related-party convertible notes | (42,773) | 43,472 | (86,245) | (198) | % | |||||||||||||||||||||
| Change in fair value of derivative liabilities | 6,398 | 13,477 | (7,079) | (53) | % | |||||||||||||||||||||
| Other expense, net | (2,174) | (15) | (2,159) | * | ||||||||||||||||||||||
| Total other expense, net | (95,580) | (69,463) | (26,117) | 38 | % | |||||||||||||||||||||
| Loss before income taxes and noncontrolling interests | (351,607) | (413,645) | 62,038 | (15) | % | |||||||||||||||||||||
| Income tax benefit | 135 | - | 135 | * | ||||||||||||||||||||||
| Net loss | $ | (351,472) | $ | (413,645) | $ | 62,173 | (15) | % | ||||||||||||||||||
_______________
*Not meaningful.
Revenue
Product Revenue, Net
Product revenue, net increased $98.8 million during the year ended December 31, 2025, as compared to the year ended December 31, 2024, due to an increase in sales of ANKTIVA, which was approved in April 2024.
Other Revenues
Other revenues decreased $0.3 million during the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to decreased bioreactor and related consumable product sales, and decreased license royalty income.
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Cost of Sales
Cost of sales increased $0.8 million during the year ended December 31, 2025, as compared to the year ended December 31, 2024. We did not report cost of sales during the year ended December 31, 2024. Cost of sales consists primarily of third-party manufacturing, distribution, and overhead costs. All costs associated with the production of ANKTIVA prior to receiving regulatory approval were expensed in research and development expense, on the 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 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 expense 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.
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
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;
•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 $28.4 million during the year ended December 31, 2025, as compared to the year ended December 31, 2024. The following table summarizes our research and development expense during the years ended December 31, 2025 and 2024, together with the changes in those items (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | $ Change | ||||||||||||||||||
| External research and development expenses | $ | 29,273 | $ | 29,268 | $ | 5 | ||||||||||||||
| Internal research and development expenses: | ||||||||||||||||||||
| Personnel-related costs | 94,767 | 90,864 | 3,903 | |||||||||||||||||
| Equipment, depreciation, and facility costs | 52,087 | 52,176 | (89) | |||||||||||||||||
| Other research and development costs | 42,432 | 17,836 | 24,596 | |||||||||||||||||
| Total internal research and development expense | 189,286 | 160,876 | 28,410 | |||||||||||||||||
| Total research and development expense | $ | 218,559 | $ | 190,144 | $ | 28,415 | ||||||||||||||
Research and development expense increased $28.4 million primarily attributable to the following:
•an immaterial increase in external research and development expense that was primarily due to an increase in clinical trial related costs, including higher investigator fees, CRO fees and other clinical trial costs, partially offset by a reduction in outside service costs, and a reduction in contract manufacturing costs;
•a $3.9 million increase in personnel-related costs that was primarily due to an increase in salary and benefits, and a decrease in shared service costs charged out, partially offset by a decrease in stock-based compensation; partially offset by
•a $0.1 million decrease in equipment, depreciation, and facility costs that was primarily due to lower depreciation expenses due to fully depreciated fixed assets, and lower software subscription expenses, partially offset by an increase in facility costs mainly driven by building repairs; and
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
•a $24.6 million increase in other research and development costs, primarily attributable to a $14.0 million write-off of fixed assets, higher manufacturing costs due to increased production activities, higher license fees due to new subscriptions, and higher distribution costs due to increased clinical trial activities, partially offset by lower inventory materials costs and decreased sponsored research agreement costs.
We expect our research and development expenses 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 decreased $18.8 million during the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily attributable to the following:
•a $53.7 million decrease in professional service expenses that was primarily attributable to a decrease in legal expenses driven by lower defense costs and litigation settlements, a decrease in consulting costs driven by insourced related functions, and a decrease in audit and tax fees; partially offset by
•a $24.6 million increase in personnel-related costs including salaries and benefits, stock based compensation, commissions, recruiting and training expenses, and travel expenses due to growing sales and marketing activities;
•a $5.7 million increase in commercial related expenses that was primarily driven by higher marketing expenses and higher distribution costs as a result of continued commercialization development and sales growth;
•a $1.9 million increase in equipment expenses that was primarily due to increased software license fees, and higher equipment maintenance costs;
•a $1.4 million increase in facility expenses that was primarily due to increased security costs and lease expenses; and
•a $1.3 million increase in other expenses that was primarily attributable to increased public relations expenses, depreciation expenses, and insurance costs, partially offset by a reduction in shared service costs charged out.
Other Income (Expense), Net
Other income (expense), net consists primarily of interest and investment income (loss), interest expense (including amortization of debt discounts), unrealized gains and losses from investments in equity securities and equity-method investments, changes in fair value of warrant liabilities, derivative liabilities, and convertible notes, realized gains and losses on debt and equity securities, warrant issuance costs, and gains and losses on foreign currency transactions.
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Total other expense, net increased $26.1 million during the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily attributable to the following:
•an increase of $86.2 million from the change in fair value of convertible notes driven by the revaluation loss of $42.7 million during the year ended December 31, 2025, as compared to the gain of $43.5 million during the year ended December 31, 2024;
•an increase of $11.9 million in interest expense related to the revenue interest liability;
•a decrease of $7.1 million in the gain from change in fair value of derivative liabilities;
•an increase of $2.1 million in other expense mainly driven by warrant issuance fees during the year ended December 31, 2025;
•a decrease of $1.6 million in interest and investment income, net, driven by a lower outstanding balance of treasury security holdings; partially offset by
•a decrease of $53.7 million in interest expense due to the lower outstanding balance of related-party debt and no amortization of related-party notes discounts as a result of December 2024 debt extinguishment; and
•a decrease of $29.1 million due to the reduction of fair value of warrant liabilities.
Comparison of the Years Ended December 31, 2024 to 2023
See Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations" of our Annual Report filed with the SEC on March 3, 2025 for a discussion of the company's results of operations during the year ended December 31, 2024 compared to the year ended December 31, 2023.
Financial Condition, Liquidity and Capital Resources
Sources of Liquidity
From inception through December 31, 2025, 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 RDOs and the ATM, a RIPA financing, and recently from net product sales associated with ANKTIVA.
Cash and Marketable Securities on Hand
As of December 31, 2025, we had cash and cash equivalents, and marketable securities of $242.8 million compared to $149.8 million as of December 31, 2024. 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 Statements
During 2023, we filed a $750.0 million shelf registration statement with the SEC on Form S-3 for the offering and sale of equity and equity-linked securities, including common stock, preferred stock, debt securities, depositary shares, warrants to purchase common stock, preferred stock or debt securities, subscription rights, purchase contracts, and units. As of December 31, 2025, we had $565.6 million available for use under this shelf. This shelf registration statement expired on February 9, 2026.
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.
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
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. During the year ended December 31, 2025, we received net proceeds totaling $250.1 million from the issuance of shares under the ATM. In December 2025, we filed a prospectus supplement to our shelf registration statement that amended the 2021 ATM agreement to increase the amount available for future stock issuances under the ATM to $500.0 million.
Registered Direct Offerings
On April 7, 2025, we entered into a securities purchase agreement with an institutional investor for the purchase and sale of 29,024,768 shares of our common stock, as well as warrants that allows such investor to purchase an additional 29,024,768 shares of common stock at an exercise price of $3.1010 per share, for a purchase price of $2.5840 per share and accompanying warrant. This transaction generated net proceeds of approximately $74.8 million, after deducting offering costs of $0.2 million. These warrants became immediately exercisable on April 9, 2025 and expire on April 9, 2030.
On July 24, 2025, we entered into a securities purchase agreement with institutional investors for the purchase and sale of 29,629,632 shares of our common stock, as well as warrants that allows such investors to purchase an additional 29,629,632 shares of common stock at an exercise price of $3.240 per share, for a purchase price of $2.700 per share and accompanying warrant. This transaction generated net proceeds of approximately $75.4 million, after deducting placement agent fees and offering costs totaling $4.6 million. These warrants became immediately exercisable on July 28, 2025 and expire on July 28, 2030.
Exercise of Warrants
Subsequent to December 31, 2025, institutional holders exercised a total of 15,524,768 warrants pursuant to the April 2025 Warrant agreement at an exercise price of $3.1010 per share resulting in the issuance of 15,524,768 shares of the company's common stock for proceeds totaling $48.1 million. As of February 23, 2026, a total of 13,500,000 warrants remain outstanding under the April 2025 Warrant agreement. See "Subsequent Events" below for more information.
Revenue Interest Purchase Agreement
On December 29, 2023, we entered into the RIPA with Infinity and Oberland. Pursuant to the RIPA, Oberland acquired certain initial Revenue Interests from us for a gross purchase price of $200.0 million paid on closing. Oberland had the option to purchase additional Revenue Interests from us in exchange for a $100.0 million Second Payment upon satisfaction of certain conditions in the RIPA, including receipt of approval from the FDA of our BLA for ANKTIVA on or before June 30, 2024. In April 2024, the FDA approved our product ANKTIVA and as a result, on May 13, 2024 Oberland purchased additional Revenue Interests from us for a gross purchase price of $100.0 million, less certain issuance costs.
As consideration for the aforementioned payments, Oberland has the right to receive quarterly Revenue Interest Payments from us based on, among other things, a certain percentage of our net sales during such quarter, which are tiered payments ranging from 4.5% to 10.0% (before funding of the Second Payment, 3.0% to 7.0%) of the company's worldwide net sales, excluding those in China. See Note 13 "Revenue Interest Purchase Agreement"of the "Notes to Consolidated Financial Statements" that appears in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual Report for more information regarding our payment obligations under the RIPA.
Conversion of Related-Party Promissory Notes
On December 10, 2024 in connection with an equity offering, the company received written notices from Nant Capital, the holder of the $30.0 million promissory note due December 31, 2025 and the $200.0 million promissory note due September 11, 2026, of its election to convert the entire outstanding principal and accrued interest due under the existing notes into shares of the company's common stock. As of such date, the total outstanding principal and accrued and unpaid interest due under the existing notes of approximately $30.7 million was converted into 13,475,172 shares of the company's common stock at a price of $2.28 per share (for the $30.0 million note) and approximately $200.7 million was converted into 103,710,088 shares of the company's common stock at a price of $1.9350 per share (for the $200.0 million note) in accordance with the terms of the existing promissory notes.
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
See Note 14 "Related-Party Debt"of the "Notes to Consolidated Financial Statements" that appears in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual Report for more information regarding our related-party debt.
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 had an option to purchase up to $10.0 million of 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.
Pursuant to the SPOA, in April 2024 Oberland exercised its option to purchase 858,990 shares of our common stock at an exercise price of $5.8208 per share generating net proceeds of approximately $4.9 million. In relation to this transaction, we recorded $7.6 million in additional paid-in capital,on the statement of stockholders' deficit during the year ended December 31, 2024. Following such exercise, approximately $5.0 million remains available for future exercise under the SPOA as of December 31, 2025.
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 December 31, 2025, our indebtedness payable at maturity is $505.0 million. This convertible promissory note is held by Nant Capital, an entity affiliated with Dr. Soon-Shiong. 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 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 13 "Revenue Interest Purchase Agreement"of the "Notes to Consolidated Financial Statements" that appears in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual Report for more information regarding the RIPA.
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 December 31, 2025, 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.
•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 Consolidated Cash Flows
The following discussion of ImmunityBio's cash flows is based on the consolidated statements of cash flows in Part II, Item 8. "Financial Statements and Supplementary Data" and is not meant to be an all-inclusive discussion of the changes in its cash flows for the years presented below.
The following table sets forth our primary sources and uses of cash for the years indicated (in thousands):
|
Years Ended December 31, |
|||||||||||
| 2025 | 2024 | ||||||||||
| Cash (used in) provided by: | |||||||||||
| Operating activities | $ | (304,936) | $ | (391,236) | |||||||
| Investing activities | (149,801) | (12,246) | |||||||||
| Financing activities | 400,241 | 281,630 | |||||||||
|
Effect of exchange rate changes on cash and cash equivalents, and restricted cash |
15 | (23) | |||||||||
| Net change in cash and cash equivalents, and restricted cash | $ | (54,481) | $ | (121,875) | |||||||
Operating Activities
During the year ended December 31, 2025, net cash used in operating activities of $304.9 million consisted of a net loss of $351.5 million and $54.3 million of cash used in net working capital, partially offset by $100.9 million in adjustments for non-cash items. The changes in net working capital consisted primarily of an increase of $40.2 million in accounts receivable, net, a decrease of $7.2 million in operating lease liabilities, an increase of $6.3 million in inventories, an increase of $4.9 million in prepaid expenses and other current assets, and a decrease of $0.2 million in accounts payable, partially offset by an increase of $3.2 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 $42.8 million change in the fair value of a related-party convertible note, $41.2 million of non-cash interest expense related to the revenue interest liability, $36.8 million in stock-based compensation expense, $15.5 million in depreciation and amortization expense, a $14.0 million write-off of fixed assets, $6.3 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 $0.6 million in other items, reduced by a $49.1 million change in fair value of warrant liabilities, a $6.4 million change in the fair value of derivative liabilities, $2.7 million of accretion of discounts on marketable debt securities, and $0.3 million in non-cash interest.
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
During the year ended December 31, 2024, net cash used in operating activities of $391.2 million consisted of a net loss of $413.6 million and $19.4 million of cash used in net working capital, partially offset by $41.8 million in adjustments for non-cash items. The changes in net working capital consisted primarily of an increase of $8.3 million in inventories, a decrease of $5.5 million in operating lease liabilities, a decrease of $3.2 million in accounts payable, an increase of $2.4 million in accounts receivable, net, a decrease of $1.4 million in accrued expenses, and an increase of $1.1 million in other assets, partially offset by a decrease of $1.7 million in prepaid expenses and other current assets and an increase of $0.8 million with related parties. Adjustments for non-cash items primarily consisted of $38.0 million of non-cash interest expense related to the revenue interest liability, $34.4 million in stock-based compensation expense, $22.6 million in amortization of related-party note discounts, $17.6 million in depreciation and amortization expense, $5.8 million in non-cash lease expense related to operating lease right-of-use assets, $1.2 million in non-cash interest primarily related to related-party promissory notes, $0.6 million in unrealized losses on equity securities driven by a decrease in the value of our investments, and $0.1 million in other items, reduced by a $43.5 million change in the fair value of a related-party convertible note, a $20.0 million change in fair value of warrant liabilities, a $13.5 million change in the fair value of derivative liabilities, and $1.5 million of accretion of discounts on marketable debt securities.
We have historically experienced negative cash flows from operating activities. Although our net product sales have increased after the 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 year ended December 31, 2025, net cash used in investing activities was $149.8 million, which included cash outflows of $241.4 million for purchases of marketable debt securities, and $4.2 million for purchases of property, plant and equipment and software development costs, partially offset by proceeds of $95.8 million from maturities and sales of marketable debt securities.
During the year ended December 31, 2024, net cash used in investing activities was $12.2 million, which included cash outflows of $140.2 million for purchases of marketable debt securities, $6.9 million in purchases of property, plant and equipment, $1.0 million used for the acquisition of a business, net of transaction costs, and $0.7 million cash paid for other investments, partially offset by proceeds of $136.6 million from maturities and sales of marketable debt and equity 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 year ended December 31, 2025, net cash provided by financing activities was $400.2 million, which consisted of $400.6 million in net proceeds from equity offerings, $2.8 million in proceeds from short-term borrowings, and $0.2 million in proceeds from the exercise of stock options, partially offset by $2.3 million related to net share settlement of vested RSUs for payment of payroll tax withholding and $1.1 million in principal payments on a premium financing.
During the year ended December 31, 2024, net cash provided by financing activities was $281.6 million, which consisted of $111.4 million in net proceeds from equity offerings, $97.0 million in net proceeds from payments received pursuant to the RIPA, $73.3 million of proceeds from the exercise of warrants, $4.9 million in net proceeds from the partial exercise of the Oberland stock option, and $0.7 million in proceeds from the exercise of stock options, partially offset by $5.6 million related to net share settlement of vested RSUs for payment of payroll tax withholding and $0.1 million in principal payments of finance leases.
Comparison of the Years Ended December 31, 2024 to 2023
See Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations" of our Annual Report filed with the SEC on March 3, 2025 for a discussion of the company's consolidated cash flows for the year ended December 31, 2024 compared to the year ended December 31, 2023.
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Future Funding Requirements
ANKTIVA is now approved by the U.S. FDA, UK MHRA, and Saudi Arabia. SFDA and has been granted conditional marketing authorization from the EC (EMA) for the EU and Iceland, Liechtenstein, and Norway for the treatment of BCG-unresponsive NMIBC CIS with or without papillary tumors. ANKTIVA is also approved by the Saudi Arabia 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 uncertainties associated with government policy decisions like MFN changes enacted in the U.S. 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.
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
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
12 months following the issuance date of the 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 FDA and EMA regulations;
•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.
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.
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
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 informal arrangements. We are also obligated to pay interest and to repay principal under our related-party promissory note. See Note 14"Related-Party Debt"of the "Notes to Consolidated Financial Statements" that appears in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual 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 $10.0 million or 10.0% (after funding of the Second 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 $4.5 million or 4.5% (after funding of the Second 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 13"Revenue Interest Purchase Agreement"of the "Notes to Consolidated Financial Statements" that appears in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual 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 12"Lease Arrangements"and Note 15"Related-Party Agreements"of the "Notes to Consolidated Financial Statements" that appear in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual Report for information regarding our lease obligations.
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 11"Commitments and Contingencies-Contingent Consideration Related to Business Combinations"of the "Notes to Consolidated Financial Statements" that appears in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual 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 this Annual Report 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 December 31, 2025 for the acquisition of goods and services in the ordinary course of business. As of December 31, 2025, the amounts of the contractual commitments that are expected to be paid are $57.6 million within one year and $2.4 million for fiscal year 2027 and beyond.
•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 December 31, 2025, the maximum amount that may be payable related to these commitments is $87.8 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 11 "Commitments and Contingencies-Dunkirk Facility Leasehold Interest"of the "Notes to Consolidated Financial Statements" that appears in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual 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 consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of 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 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.
While our significant accounting policies are more fully described in the notes accompanying our consolidated financial statements that appear in Part II, Item 8. "Financial Statements and Supplementary Data" of this Annual Report, we believe the following accounting policies to be the most critical in understanding the judgments and estimates we use in preparing our consolidated financial statements:
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Revenue Recognition
Product Sales and Sales Deductions
The company recognizes revenue from product sales when obligations under the terms of a contract with a customer are satisfied. This occurs upon transfer of control of a product to a customer, generally upon delivery, based on an amount that reflects the consideration to which we expect to be entitled, net of accruals for estimated rebates, wholesaler chargebacks, discounts and other deductions (collectively, sales deductions) and returns established at the time of sale.
Product revenue is recorded with each sale at wholesale acquisition cost, net of: (a) consideration payable to customers; and (b) variable consideration. The company pays fees to the specialty distributors and specialty pharmacy for certain administrative services associated with the distribution of the product wherein the terms of which are also detailed in its contracts. Such fees are not for a distinct good or service and, accordingly, are recorded as a reduction of revenue, as well as a reduction of accounts receivable (trade discounts) or as a component of accrued expenses (distributor fees). The variable consideration components include, but are not limited to, prompt payment discounts, product returns, chargebacks, rebates, and co-payment assistance, which are collectively referred to as "Gross-to-Net Adjustments." In accordance with ASC 606, the company must make judgments to determine the estimates for certain variable considerations. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The company utilizes the expected value method when estimating the amount of variable consideration to include in the transaction price with respect to each of the foregoing variable consideration components. Where appropriate, these estimates are based on factors such as industry and forecasted customer buying and payment patterns, our experience, current contractual and statutory requirements, and specific known market events and trends.
Variable consideration is reassessed each reporting period, and adjustments are recorded on a cumulative catch-up basis, which affects product revenue and net income in the period of adjustment. The actual amounts of variable consideration ultimately received may differ from our estimates. If actual results in future periods vary from our estimates, we adjust these estimates accordingly.
Revenue Interest Liability
On December 29, 2023, we entered into the RIPA with Infinity and Oberland. Pursuant to the RIPA, Oberland acquired certain Revenue Interests from us for a gross purchase price of $200.0 million paid on closing. In addition, Oberland may purchase additional Revenue Interests from us in exchange for the $100.0 million Second Payment upon satisfaction of certain conditions specified in the RIPA. Under the RIPA, Oberland has the right to receive quarterly payments from us based on, among other things, a certain percentage of our worldwide net sales, excluding those in China, during such quarter. The RIPA is considered a sale of future revenues and is accounted for as a liability net of a debt discount comprised of deferred issuance costs, the fair value of a freestanding option agreement related to the SPOA, and the fair value of embedded derivatives requiring bifurcation on the consolidated balance sheet. The company imputes interest expense associated with this liability using the effective interest rate method. The effective interest rate is calculated based on the rate that would enable the debt to be repaid in full over the anticipated life of the arrangement. Interest expense is recognized over the estimated term on the consolidated statement of operations. The interest rate on this liability may vary during the term of the agreement depending on a number of factors, including the level of actual and forecasted net sales. The company evaluates the interest rate quarterly based on actual and forecasted net sales utilizing the prospective method.
Derivative Liabilities
Embedded derivatives that are required to be bifurcated from the underlying debt instrument that do not meet the derivative scope exception and equity classification criteria are accounted for and valued as separate financial instruments. The terms of an embedded derivative related to a contingent exercisable prepayment feature of a convertible note have been evaluated and deemed to require bifurcation. This embedded derivative was initially measured at fair value and is remeasured to fair value at each reporting date until the derivative is settled. On December 10, 2024, the company and Nant Capital entered into a second
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
amended and restated promissory note (the $505 million December 2024 Promissory Note) for which the FVO method of accounting was elected. As such, the bifurcation of the embedded derivative is not required. The embedded derivative is now included within the fair value of the second amended and restated promissory note recorded in related-party convertible note payable at fair value, on the consolidated balance sheet.
In addition, the RIPA contains certain features that meet the definition of being an embedded derivative requiring bifurcation as a separate compound financial instrument apart from the RIPA. The derivative liability is initially measured at fair value upon issuance and is subject to remeasurement at each reporting period. Fair value is determined using a Monte Carlo simulation model. The input assumptions include net sales discount rate, net sales volatility, risk-free rate, payment lag, estimated market yield and change of control date. The change in fair value is recognized in other income (expense), net, on the consolidated statement of operations.
Contingencies
We record accruals for loss contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. We accrue for the best estimate of a loss within a range; however, if no estimate in the range is better than any other, then we accrue the minimum amount in the range. If we determine that a material loss is reasonably possible, we disclose the possible loss or range of loss, or that the amount of loss cannot be estimated at this time. We evaluate, on a quarterly basis, developments in legal proceedings and other matters that could cause a change in the potential amount of the liability recorded or the range of potential losses disclosed. Moreover, we record gain contingencies only when they are realizable and the amount is known. Additionally, we record our rights to insurance recoveries, limited to the extent of incurred or probable losses, as a receivable when such recoveries have been agreed to with our third-party insurers and when receipt is deemed probable. This includes instances when our third-party insurers have agreed to pay, on our behalf, certain legal defense costs and settlement amounts directly to applicable law firms and a settlement fund.
Warrants
The company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480, and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the company's own stock and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For warrants that meet all criteria for equity classification, the warrants are required to be recorded at their initial fair value at the time of issuance, as a component of additional paid-in capital, on the consolidated statement of stockholders' deficit. For warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and on each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss in other income (expense), net, on the consolidated statement of operations. The fair value of the warrants was estimated using the Black-Scholes option pricing model.
Related-Party Convertible Note at Fair Value
The company elected to apply the FVO method of accounting and measured the $505 million December 2024 Promissory Noteat fair value on a recurring basis. In estimating the fair value, the company used the binomial lattice model which includes the construction of various intermediate lattices such as stock price tree, conversion value tree, conversion probability tree and discount rate tree. The input assumptions are primarily the company's stock price and volatility, market yield and risk-free rate. The changes in fair value of the notes accounted for at fair value are recorded as a component of other income (expense), net, on the consolidated statement of operations. Any changes in fair value caused by instrument-specific credit risk are
ImmunityBio, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
recorded separately in other comprehensive income (loss), on the consolidated statement of comprehensive loss. The cumulative amount previously recorded in other comprehensive income (loss)resulting from changes in the instrument-specific credit risk for extinguished notes are reclassified and reported in current earnings on the consolidated statement of operations. All costs associated with the issuance of the convertible promissory note accounted for using the FVO method were expensed upon issuance.
Debt Modification and Extinguishment
The company evaluates amendments to its debt instruments in accordance with ASC 470-50. This evaluation includes comparing (1) if applicable, the net present value of future cash flows of the amended debt to that of the original debt and (2) the change in fair value of an embedded conversion feature to that of the carrying amount of the debt immediately prior to amendment to determine, in each case, if a change greater than 10% occurred. In instances where the net present value of future cash flows or the fair value of an embedded conversion feature, if any, changed more than 10%, the company applies extinguishment accounting. In instances where the net present value of future cash flows and the fair value of an embedded conversion feature, if any, changed less than 10%, the company accounts for the amendment to the debt as a debt modification. Gains and losses on debt amendments that are considered extinguishments are recognized in current earnings or in additional paid-in capital if the transactions are with entities under common control. Debt amendments that are considered debt modifications are accounted for prospectively through yield adjustments, based on the revised terms. The increase in fair value of the embedded conversion feature from the debt modification was accounted for as an increase in debt discount with a corresponding increase in additional paid-in capital. Legal fees and other costs incurred with third parties that are directly related to debt modifications are expensed as incurred. Amounts paid by the company to the lenders, are reflected as additional debt discount and amortized as an adjustment of interest expense over remaining term of modified debt using the effective interest rate method.
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 this Annual Report for a discussion of recent accounting pronouncements or changes in accounting pronouncements that are of significance, or potential significance, to us.
Subsequent Events
Warrant Exercises
Subsequent to December 31, 2025, institutional holders exercised a total of 15,524,768 warrants pursuant to the April 2025 Warrant agreement at an exercise price of $3.1010 per share resulting in the issuance of 15,524,768 shares of the company's common stock for proceeds totaling $48.1 million. As of February 23, 2026, a total of 13,500,000 warrants remain outstanding under the April 2025 Warrant agreement.
Amendment to the Second Amended and Restated Promissory Note
On January 23, 2026, the company entered into a letter amendment to the second amended and restated promissory note (the "$505 million December 2024 Promissory Note") with Nant Capital, LLC (the "note holder"), an entity affiliated with Dr. Soon-Shiong, the company's Executive Chairman and Global Chief Scientific and Medical Officer. Pursuant to the letter amendment, the note holder may convert any portion of the outstanding principal amount of the $505 million December 2024 Promissory Note into fully paid and nonassessable shares of the company's common stock at any time prior to the maturity date. Prior to the letter amendment, the $505 million December 2024 Promissory Note, the note holder could only convert the outstanding principal amount in full. No other changes were made in connection with the letter amendment.
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