10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
	FORM 10-Q

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from         to      

Commission File Number: 001-39452

INHIBRX, INC.
(Exact name of registrant as specified in its charter)
Delaware		82-4257312
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
11025 N. Torrey Pines Road, Suite 200
La Jolla, California		92037
(Address of principal executive offices)		(Zip Code)
	(858) 795-4220
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act
Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001	INBX	The Nasdaq Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                               Yes  ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                                           Yes  ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.       ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes  ☐    No ☒

As of October 31, 2022, the registrant had 43,551,422 shares of common stock outstanding.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or this Quarterly Report, of Inhibrx, Inc., or Inhibrx, or the Company, (also referred to as “we,” “us,” and “our”) contains forward-looking statements that involve risks and uncertainties. Except as otherwise indicated by the context, references in this Quarterly Report to “we,” “us” and “our” are to the consolidated business of the Company. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “design,” “seek,” “should,” “target,” “will,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

•the initiation, timing, progress and results of our research and development programs as well as our preclinical studies and clinical trials;

•our ability to advance therapeutic candidates into, and successfully complete, clinical trials;

•our interpretation of initial, interim or preliminary data from our clinical trials, including interpretations regarding disease control and disease response;

•the timing or likelihood of regulatory filings and approvals, including whether INBRX-101, or any other product candidate, receives approval from the FDA, or similar regulatory authority, for an accelerated approval process;

•the commercialization of our therapeutic candidates, if approved;

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

•our ability to utilize our technology platform to generate and advance additional therapeutic candidates;

•the implementation of our business model and strategic plans for our business and therapeutic candidates;

•our ability to successfully manufacture our therapeutic candidates for clinical trials and commercial use, if approved;

•our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

•the scope of protection we are able to establish and maintain for intellectual property rights covering our therapeutic candidates;

•our ability to enter into strategic partnerships and the potential benefits of such partnerships;

•our estimates regarding expenses, capital requirements and needs for additional financing;

•our ability to raise funds needed to satisfy our capital requirements, which may depend on financial, economic and market conditions and other factors, over which we may have no or limited control;

•our financial performance;

•our expectations regarding the impact of the COVID-19 pandemic on our business;

•our and our third party partners’ and service providers’ ability to continue operations and advance our therapeutic candidates through clinical trials and the ability of our third party manufacturers to provide the required raw materials, antibodies and other biologics for our preclinical research and clinical trials in light of the COVID-19 pandemic, current market conditions and geopolitical events such as the ongoing conflict in Ukraine;

•our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals; and

•developments relating to our competitors and our industry.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the section titled “Risk Factors” elsewhere in this Quarterly Report. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based

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upon information available to us as of the date of this Quarterly Report, and while 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 an exhaustive 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.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report to conform these statements to new information, actual results or to changes in our expectations, except as required by law.

You should read this Quarterly Report and the documents that we file with the Securities and Exchange Commission, or the SEC, with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.

This Quarterly Report includes trademarks, tradenames and service marks that are the property of other organizations. Solely for convenience, trademarks and tradenames referred to in this Quarterly Report appear without the ® and ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or that the applicable owner will not assert its rights, to these trademarks and tradenames.

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TABLE OF CONTENTS

		Page
	Part I. Financial Information
Item 1.	Condensed Consolidated Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021	4
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and September 30, 2021 (unaudited)	5
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2022 and September 30, 2021 (unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and September 30, 2021 (unaudited)	8
	Notes to the Condensed Consolidated Financial Statements (unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	40
Item 4.	Controls and Procedures	41
	Part II. Other Information	42
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	45
Item 6.	Exhibits	46
	Signatures	47

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Part I — Financial Information

Item 1. Financial Statements.

Inhibrx, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data and par value)
(Unaudited)

	SEPTEMBER 30,		DECEMBER 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	146,073	$	131,301
Accounts receivable	243		373
Receivables from related parties	72		505
Prepaid expenses and other current assets	7,366		6,933
Total current assets	153,754		139,112
Property and equipment, net	2,799		3,153
Right-of-use asset	5,135		6,338
Other non-current assets	3,164		1,847
Total assets	$	164,852	$	150,450
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable	$	8,569	$	9,125
Accrued expenses	14,605		9,621
Current portion of deferred revenue	440		2,034
Current portion of lease liability	1,812		1,674
Total current liabilities	25,426		22,454
Long-term debt, including final payment fee	170,819		70,470
Non-current portion of lease liability	3,657		5,033
Non-current portion of deferred revenue	—		110
Total liabilities	199,902		98,067
Commitments and contingencies (Note 8)
Stockholders’ equity (deficit)
Preferred stock, $0.0001 par value; 15,000,000 shares authorized as of September 30, 2022 and December 31, 2021; no shares issued or outstanding as of September 30, 2022 and December 31, 2021.	—		—
Common stock, $0.0001 par value; 120,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 39,087,173 and 38,991,307 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively.	4		4
Additional paid-in-capital	296,404		279,526
Accumulated deficit	(331,458)		(227,147)
Total stockholders’ equity (deficit)	(35,050)		52,383
Total liabilities and stockholders’ equity (deficit)	$	164,852	$	150,450

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

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Inhibrx, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2022		2021		2022		2021
Revenue:
License fee revenue	$	278	$	2,508	$	1,904	$	4,289
Grant revenue	—		24		14		86
Total revenue	278		2,532		1,918		4,375
Operating expenses:
Research and development	24,934		18,485		79,735		52,825
General and administrative	5,347		2,848		15,800		8,710
Total operating expenses	30,281		21,333		95,535		61,535
Loss from operations	(30,003)		(18,801)		(93,617)		(57,160)
Other income (expense):
Interest expense, net	(5,340)		(1,778)		(10,762)		(3,437)
Other income (expense), net	18		(1)		72		20
Total other expense	(5,322)		(1,779)		(10,690)		(3,417)
Loss before income tax expense	(35,325)		(20,580)		(104,307)		(60,577)
Provision for income taxes	—		—		4		2
Net loss	(35,325)		(20,580)		(104,311)		(60,579)
Net loss per share, basic and diluted	$	(0.90)	$	(0.54)	$	(2.67)	$	(1.60)
Weighted-average shares of common stock outstanding, basic and diluted	39,071		37,893		39,043		37,818

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

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Inhibrx, Inc.
Condensed Consolidated Statements of Stockholders’ Equity (Deficit)
(In thousands)
(Unaudited)

	Common Stock (Shares)	Common Stock (Amount)		Additional Paid-In Capital		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
Balance as of December 31, 2021	38,991	$	4	$	279,526	$	(227,147)	$	52,383
Stock-based compensation expense	—	—		5,108		—		5,108
Issuance of shares upon exercise of stock options	35	—		401		—		401
Issuance of warrants	—	—		712		—		712
Net loss	—	—		—		(31,254)		(31,254)
Balance as of March 31, 2022	39,026	$	4	$	285,747	$	(258,401)	$	27,350
Stock-based compensation expense	—	—		5,296		—		5,296
Issuance of shares upon exercise of stock options	15	—		164		—		164
Net loss	—	—		—		(37,732)		(37,732)
Balance as of June 30, 2022	39,041	$	4	$	291,207	$	(296,133)	$	(4,922)
Stock-based compensation expense	—	—		4,691		—		4,691
Issuance of shares upon exercise of stock options	45	—		506		—		506
Net loss	—	—		—		(35,325)		(35,325)
Balance as of September 30, 2022	39,086	$	4	$	296,404	$	(331,458)	$	(35,050)

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	Common Stock (Shares)	Common Stock (Amount)		Additional Paid-In Capital		Accumulated Deficit		Total Stockholders’ Equity
Balance as of December 31, 2020	37,712	$	4	$	220,848	$	(145,379)	$	75,473
Stock-based compensation expense	—	—		3,421		—		3,421
Issuance of shares upon exercise of stock options	93	—		988		—		988
Net loss	—	—		—		(19,289)		(19,289)
Balance as of March 31, 2021	37,805	$	4	$	225,257	$	(164,668)	$	60,593
Stock-based compensation expense	—	—		3,951		—		3,951
Issuance of shares upon exercise of stock options	44	—		485		—		485
Net loss	—	—		—		(20,710)		(20,710)
Balance as of June 30, 2021	37,849	$	4	$	229,693	$	(185,378)	$	44,319
Stock-based compensation expense	—	—		3,493		—		3,493
Issuance of shares upon exercise of stock options	84	—		968		—		968
Net loss	—	—		—		(20,580)		(20,580)
Balance as of September 30, 2021	37,933	$	4	$	234,154	$	(205,958)	$	28,200

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

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Inhibrx, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)

(Unaudited)

	NINE MONTHS ENDED SEPTEMBER 30,
	2022		2021
Cash flows from operating activities
Net loss	$	(104,311)	$	(60,579)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	923		888
Accretion of debt discount and non-cash interest expense	2,190		833
Stock-based compensation expense	15,095		10,865
Non-cash lease expense	1,203		1,108
(Gain) loss on disposal of fixed assets	18		(9)
Changes in operating assets and liabilities:
Accounts receivable	130		(38)
Receivables from related parties	433		150
Prepaid expenses and other current assets	(383)		(2,586)
Other non-current assets	(1,317)		—
Accounts payable	(724)		(1,232)
Accrued expenses and other current liabilities	4,984		(5,053)
Operating lease liability	(1,238)		(1,111)
Deferred revenue, current portion	(1,594)		(312)
Deferred revenue, non-current portion	(110)		(627)
Net cash used in operating activities	(84,701)		(57,703)
Cash flows from investing activities
Purchase of fixed assets	(419)		(597)
Proceeds from the sale of property and equipment	—		55
Net cash used in investing activities	(419)		(542)
Cash flows from financing activities
Proceeds from the issuance of debt	98,871		39,992
Payment of fees associated with debt	(50)		—
Proceeds from the exercise of stock options	1,071		2,441
Deferred offering costs paid	—		(148)
Net cash provided by financing activities	99,892		42,285
Net increase (decrease) in cash and cash equivalents	14,772		(15,960)
Cash and cash equivalents at beginning of period	131,301		128,664
Cash and cash equivalents at end of period	$	146,073	$	112,704
Supplemental disclosure of cash flow information
Cash paid for interest	$	7,834	$	2,001
Cash paid for income taxes	$	4	$	2

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Supplemental schedule of non-cash investing and financing activities
Fair value of warrants issued to lender in conjunction with February 2022 Amendment	$	712	$	—
Payable for purchase of fixed assets	$	261	$	78
Deferred offering costs included in accounts payable and accrued expenses	$	—	$	198

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

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Inhibrx, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Inhibrx, Inc., or the Company, or Inhibrx, is a clinical-stage biopharmaceutical company focused on developing a broad pipeline of novel biologic therapeutic candidates. The Company combines a deep understanding of target biology with innovative protein engineering, proprietary discovery technologies, and an integrative approach to research and development to design highly differentiated therapeutic candidates. The Company’s current pipeline is focused on oncology and orphan diseases.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC, related to an interim report on the Form 10-Q.

The unaudited interim condensed financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results for the periods presented. All such adjustments are of a normal and recurring nature. The operating results presented in these unaudited interim condensed financial statements are not necessarily indicative of the results that may be expected for any future periods.

Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, the accompanying unaudited interim financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2021, which are included in the Company’s Annual Report on Form 10-K filed with the SEC.

Liquidity

As of September 30, 2022, the Company had an accumulated deficit of $331.5 million and cash and cash equivalents of $146.1 million. From its inception and through September 30, 2022, the Company has devoted substantially all of its efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of its therapeutic candidates, organizing and staffing the Company, establishing its intellectual property portfolio and raising capital to support and expand these activities.

The Company believes that its existing cash and cash equivalents will be sufficient to fund the Company’s operations for at least 12 months from the date these condensed consolidated financial statements are issued. The Company plans to finance its future cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses, strategic transactions, and other similar arrangements.

As discussed in Note 4, the Company entered into the Open Market Sale Agreement, or the Sales Agreement, with Jefferies LLC, or the Sales Agent, under which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $200.0 million through the Sales Agent, or the ATM Offering. During the year ended December 31, 2021, the Company sold 921,042 shares pursuant to the Sales Agreement for net proceeds of $40.2 million, after deducting commissions. During the nine months ended September 30, 2022, the Company did not issue any shares under the Sales Agreement.

As discussed in Note 3, the Company received $40.0 million in gross proceeds upon entering into the February 2022 Amendment to the 2020 Loan Agreement, as amended (both as defined below). Pursuant to the Amended 2020 Loan Agreement (as defined below), three additional tranches became available upon the occurrence of contingent events, for additional gross proceeds of up to $90.0 million. In June 2022, two of these tranches were drawn for additional gross proceeds of $60.0 million.

If the Company does raise additional capital through public or private equity or convertible debt offerings, the ownership interests of its existing stockholders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect its stockholders’ rights. If the Company raises capital through

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additional debt financings, it may be subject to covenants limiting or restricting its ability to take specific actions, such as incurring additional debt or making certain capital expenditures. To the extent that the Company raises additional capital through strategic licensing, collaboration or other similar agreement, it may have to relinquish valuable rights to its therapeutic candidates, future revenue streams or research programs at an earlier stage of development or on less favorable terms than it would otherwise choose, or to grant licenses on terms that may not be favorable to the Company. There can be no assurance as to the availability or terms upon which such financing and capital might be available in the future. If the Company is unable to secure adequate additional funding, it will need to reevaluate its operating plan and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, delay, scale back or eliminate some or all of its development programs, or relinquish rights to its technology on less favorable terms than it would otherwise choose. These actions could materially impact its business, financial condition, results of operations and prospects.

The rules and regulations of the SEC or any other regulatory agencies may restrict the Company’s ability to conduct certain types of financing activities, or may affect the timing of and amounts it can raise by undertaking such activities.

Impact of COVID-19 Pandemic

In response to the global COVID-19 pandemic, the Company continues to take the necessary precautions to ensure the safety of its employees and to minimize interruptions to its operations. The full impact of the COVID-19 outbreak continues to evolve as of the date of these financial statements. While the pandemic has not yet had a material effect on the Company’s financial results, the degree to which COVID-19, including new variants of the virus, may impact the Company’s financial condition, liquidity and future results of operations is uncertain. Management is actively monitoring the risks to public health and the impact of overall global business activity on its financial condition, liquidity, operations, suppliers, industry, and workforce.

The U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, which, among a number of varied provisions, aimed to ease tax burdens on companies during the COVID pandemic, permitted employers to defer the payment of the employer share of social security taxes due for the period beginning March 27, 2020 and ending December 31, 2020. Of the amounts deferred, 50% was required to be paid by December 31, 2021 and the remaining 50% is required to be paid by December 31, 2022. The Company began deferring payment of the employer share of social security taxes in April 2020 and deferred a total of $0.4 million of such taxes during the period. The Company paid $0.3 million of deferred taxes during December 2021. As of September 30, 2022, the Company has a remaining deferred payment of $0.1 million of such taxes, which are classified as accrued expenses in the Company’s condensed consolidated balance sheets.

Use of Estimates

The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The Company’s most significant estimates relate to whether revenue recognition criteria have been met, accounting for development work and preclinical studies and clinical trials, determining the assumptions used in measuring stock-based compensation, and valuation allowances for the Company’s deferred tax assets. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. The Company’s actual results may differ from these estimates under different assumptions or conditions.

Concentrations of Credit Risk

The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial condition of the depository institutions in which those deposits are held.

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Fair Value Measurements

The Company determines the fair value measurements of applicable assets and liabilities based on a three-tier fair value hierarchy established by accounting guidance and prioritizes the inputs used in measuring fair value. These tiers include:

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

As of September 30, 2022 and December 31, 2021, the Company had no financial instruments measured at fair value on a recurring basis.

Deferred Offering Costs

The Company capitalizes costs that are directly associated with equity financings until such financings are consummated, at which time such costs are recorded against the gross proceeds of the offering. Legal, accounting, and filing fees related directly to the Company’s Sales Agreement are capitalized as deferred offering costs. Deferred offering costs associated with the Sales Agreement are reclassified to additional paid-in capital when the Company completes offerings under the Company’s Shelf Registration on Form S-3ASR. In November 2021, the Company completed an ATM Offering under the Sales Agreement and offset $1.7 million of offering costs against the proceeds.

Financial Instruments with Characteristics of Both Liabilities and Equity

The Company accounts for issued warrants either as a liability or equity in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, or ASC 480-10, and ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, or ASC 815-40. Under ASC 480-10, warrants are considered a liability if they are mandatorily redeemable and they require settlement in cash, other assets, or a variable number of shares. If warrants do not meet liability classification under ASC 480-10, the Company considers the requirements of ASC 815-40 to determine whether the warrants should be classified as a liability or as equity. Under ASC 815-40, contracts that may require settlement for cash are liabilities, regardless of the probability of the occurrence of the triggering event. Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period. Any change in the fair value of the warrants after the issuance date is recorded in other expense, net in the condensed consolidated statements of operations as a gain or loss. If warrants do not require liability classification under ASC 815-40, in order to conclude warrants should be classified as equity, the Company assesses whether the warrants are indexed to its common stock and whether the warrants are classified as equity under ASC 815-40 or under another applicable GAAP standard. Equity-classified warrants are accounted for at fair value on the issuance date with no changes in fair value recognized after the issuance date. The Company’s outstanding warrants do not meet the requirements for liability classification under ASC-480-10 or ASC-815-40. Therefore, the warrants were treated as equity at the time of issuance.

Revenue Recognition

The Company has generated revenue from its license and collaboration agreements with partners, as well as from grants from government agencies and private not-for-profit organizations. Payments received from customers are included in deferred revenue, allocated between current and non-current on the condensed consolidated balance

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sheet until all revenue recognition criteria are met. In accordance with ASC Topic 606, Revenue from Contracts with Customers, or ASC Topic 606, the Company recognizes revenue when, or as, the promised goods or services are transferred to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those services. To determine revenue recognition for arrangements the Company concludes are within the scope of ASC Topic 606, the Company performs the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligation(s) in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligation(s) in the contract; and (5) recognize revenue when (or as) the performance obligation(s) are satisfied. At contract inception, the Company assesses the goods or services promised within each contract, assesses whether each promised good or service is distinct and identifies those that are performance obligations. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when, or as, the performance obligation is satisfied.

Collaborative Research, Development, and License Agreements

The Company enters into collaborative agreements with partners that typically include one or more of the following: (1) license fees; (2) nonrefundable up-front fees; (3) payments for reimbursement of research costs; (4) payments associated with achieving specific development, regulatory, or commercial milestones; and (5) royalties based on specified percentages of net product sales, if any. At the initiation of an agreement, the Company analyzes whether each unit of account results in a contract with a customer under ASC Topic 606 or in an arrangement with a collaborator subject to guidance under ASC Topic 808, Collaborative Arrangements. The Company’s licensing arrangements are typically for functional intellectual property as it exists at a point in time, being the time that the license agreement is executed. The Company typically does not have an ongoing performance obligation to support or maintain the licensed intellectual property.

The Company considers a variety of factors in determining the appropriate estimates and assumptions under these arrangements, such as whether the elements are distinct performance obligations, whether there are observable stand-alone prices, and whether any licenses are functional or symbolic. The Company evaluates each performance obligation to determine if it can be satisfied and recognized as revenue at a point in time or over time. Typically, license fees, non-refundable upfront fees, and funding of research activities are considered fixed, while milestone payments are identified as variable consideration which must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price. The Company estimates the amount of variable consideration using the most likely amount, as milestone payments typically only have two possible outcomes. The Company recognizes revenue for sales-based royalty promised in exchange for the license of intellectual property only when the subsequent sale occurs. In the case of an agreement which provides the partner with an option to license a therapeutic or therapeutic candidate in the future, the Company evaluates whether this option represents a material right at the inception of the agreement. If determined to be a material right, the Company will consider the option a separate performance obligation. The Company has historically concluded that the option to grant a license in the future is not a material right as it is contingent upon future events which may not occur. When an option is exercised, the Company will identify any separate performance obligations.

The Company may allocate transaction price using a number of methods including estimating standalone selling price of performance obligations and using the residual approach when the standalone selling price of the license is highly variable or uncertain, and observable standalone selling prices exist for the other goods or services promised in the contract.

Research and Development and Clinical Trial Accruals

Research and development costs are expensed as incurred and include the cost of compensation and related expenses, as well as expenses for third parties who conduct research and development on the Company’s behalf, pursuant to development and consulting agreements in place. The Company’s preclinical studies and clinical trials are performed internally, by third party contract research organizations, or CROs, and/or clinical investigators. The Company also engages with contract development and manufacturing organizations, or CDMOs, for clinical supplies and manufacturing scale-up activities related to its therapeutic candidates. Invoicing from these third parties may be monthly based upon services performed or based upon milestones achieved. The Company accrues these expenses based upon its assessment of the status of each clinical trial and the work completed, and upon information obtained from the CROs and CDMOs. The Company’s estimates are dependent upon the timeliness and accuracy of

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data provided by the CROs and CDMOs regarding the status and cost of the studies. Costs incurred related to the Company’s purchases of in-process research and development for early-stage products or products that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred. Costs incurred related to the licensing of products that have not yet received marketing approval to be marketed, or that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the same period. Diluted net loss per share is computed by dividing net loss by the weighted average number of common and common equivalent shares outstanding during the same period. The Company excludes common stock equivalents from the calculation of diluted net loss per share when the effect is anti-dilutive.

For purposes of the diluted net loss per share calculation, warrants for purchase of common stock and stock options are considered to be potentially dilutive securities. Accordingly, for the nine months ended September 30, 2022 and September 30, 2021, there is no difference in the number of shares used to calculate basic and diluted shares outstanding.

Potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in thousands):

	AS OF SEPTEMBER 30,
	2022	2021
Outstanding stock options	5,269	3,983
Warrants to purchase common stock	47	7
	5,316	3,990

Segment Information

The Company operates under one segment which develops biologic therapeutic candidates. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies. The Company believes that the impact of the recently issued accounting pronouncements that are not yet effective will not have a material impact on its condensed consolidated financial condition or results of operations upon adoption.

Adoption of New Accounting Pronouncements

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, which intends to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The Company adopted ASU 2021-04 on

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January 1, 2022, which did not result in a material impact on its condensed consolidated financial statements and related disclosures.

2. OTHER FINANCIAL INFORMATION

Prepaid Expense and Other Current Assets

Prepaid expense and other current assets were comprised of the following (in thousands):

	AS OF		AS OF
	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Outside research and development services	$	6,539	$	6,343
Other	827		590
Prepaid expense and other current assets	$	7,366	$	6,933

Property and Equipment, Net

Property and equipment, net were comprised of the following (in thousands):

	AS OF		AS OF
	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Machinery and equipment	$	6,976	$	6,286
Leasehold improvements	441		441
Computer software	53		42
Furniture and fixtures	524		514
Construction in process	65		281
Total property and equipment	8,059		7,564
Less: accumulated depreciation and amortization	(5,260)		(4,411)
Property and equipment, net	$	2,799	$	3,153

Depreciation and amortization expense totaled $0.3 million for each of the three months ended September 30, 2022 and September 30, 2021 and $0.9 million for each of the nine months ended September 30, 2022 and September 30, 2021, and consisted of the following (in thousands):

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2022		2021		2022		2021
Research and development	$	251	$	250	$	757	$	746
General and administrative	58		49		166		142
Total depreciation and amortization expense	$	309	$	299	$	923	$	888

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Accrued Expenses

Accrued expenses were comprised of the following (in thousands):

	AS OF		AS OF
	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Clinical trials(1)	$	3,950	$	4,496
Clinical drug substance and product manufacturing(2)	3,697		1,564
Other outside research and development	1,418		1,329
Compensation-related	2,712		1,322
Professional fees	1,011		261
Other	1,817		649
Accrued expenses	$	14,605	$	9,621

(1) Relates primarily to the Company’s usage of third-party CROs for management of clinical trials. See Note 1 for further discussion of the components of research and development.

(2) Relates primarily to the Company’s usage of third-party CDMOs for clinical and development efforts. See Note 1 for further discussion of the components of research and development.

3. DEBT

2020 Loan Agreement

On July 15, 2020, the Company entered into a loan and security agreement, or the 2020 Loan Agreement, with Oxford Finance LLC, or Oxford, pursuant to which it received $10.0 million in gross proceeds, or Term A. The 2020 Loan Agreement was subsequently amended in November 2020, or the November 2020 Amendment, upon which a second tranche in an aggregate principal amount of $20.0 million was funded, or Term B, and in June 2021, or the June 2021 Amendment, upon which a third tranche in an aggregate principal amount of $40.0 million was funded, or Term C. In February 2022, the Company entered into an additional amendment, or the February 2022 Amendment, to the 2020 Loan Agreement, collectively, the Amended 2020 Loan Agreement, upon which the Company received gross proceeds of $40.0 million, or Term D, net of $1.1 million of legal and amendment fees.

The February 2022 Amendment also provided for an increase in the interest rate and for three future tranches of debt to be funded upon the achievement of certain milestones. In June 2022, the Company received additional gross proceeds of $30.0 million, or Term E, following the initiation of part 4 of the Phase 1 clinical trial of INBRX-105, as well as an additional $30.0 million in gross proceeds, or Term F, following the receipt of positive topline data from the Phase 1 clinical trial of INBRX-101. One additional tranche with an aggregate principal amount of $30.0 million, or Term G, remains available to the Company, which will be funded subject to the initiation of a registrational clinical trial of INBRX-101 on or before June 30, 2023.

The Company determined the November 2020, June 2021, and February 2022 Amendments should be treated as modifications of the original 2020 Loan Agreement since the terms and resulting cash flows were not substantially changed upon each of the amendments.

As of September 30, 2022, the Company had $170.0 million in gross principal outstanding in term loans under the Amended 2020 Loan Agreement. The outstanding term loans will mature on January 1, 2027, or the Amended Maturity Date, and bear interest at a floating per annum rate equal to the greater of (1) 8.30% or (2) the sum of (i) the 30 day U.S. Dollar LIBOR rate reported in The Wall Street Journal on the last business day of the month that immediately precedes the month in which the interest will accrue, plus (ii) 8.19%. The repayment schedule provides for interest-only payments through February 1, 2025. The interest-only period is followed by 23 months of equal payments of principal and interest beginning on March 1, 2025. The interest-only period may be extended by an additional 12 months in the event the Company raises at least $100.0 million in upfront licensing or partnership proceeds by February 2025, which would then be followed by 11 months of principal repayments. Upon the Amended Maturity Date, a final payment of 9.0% of the original principal amount will be due to Oxford. This final payment of $15.3 million is being accreted over the life of the Amended 2020 Loan Agreement using the effective interest method. The Company has the option to prepay the outstanding balance of the term loans in full prior to the

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Amended Maturity Date, subject to a prepayment fee ranging from 1.0% to 3.0%, depending upon the timing of the prepayment.

The Company’s outstanding debt balance under the Amended 2020 Loan Agreement consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands).

	AS OF		AS OF
	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Term A	$	10,900	$	10,900
Term B	21,800		21,800
Term C	43,600		43,600
Term D	43,600		—
Term E	32,700		—
Term F	32,700		—
Less: debt discount	(14,481)		(5,830)
Long-term debt, including debt discount and final payment fee	$	170,819	$	70,470

As of September 30, 2022, and unless extended in accordance with the terms described above, the Company’s interest-only period will continue through January 2025, with principal payments beginning in February 2025. Future principal payments and final fee payments will be made as follows (in thousands):

	AS OF
	SEPTEMBER 30, 2022
2025	$	73,913
2026	88,696
2027	22,691
Total future minimum payments	185,300
Less: unamortized debt discount	(14,481)
Total debt	$	170,819

The Company’s obligations under the Amended 2020 Loan Agreement are secured by a first priority security interest of substantially all of the Company’s assets with a positive lien on intellectual property. The Amended 2020 Loan Agreement includes customary events of default, including instances of a material adverse change in the Company’s operations, that may require prepayment of the outstanding term loans. Additionally, the Amended 2020 Loan Agreement requires a minimum cash balance of $20.0 million to be maintained in a collateral account. As of September 30, 2022, the Company is in compliance with all covenants under the Amended 2020 Loan Agreement and has not received any notification or indication from Oxford of an intent to declare the loan due prior to maturity.

Concurrently with the February 2022 Amendment, the Company issued 40,000 warrants to Oxford to purchase shares of the Company’s common stock at an exercise price of $45.00. Upon issuance, the warrants were classified as equity and recorded at their fair value of $0.7 million. See Note 4 for further discussion of these warrants.

Interest Expense

Interest expense is calculated using the effective interest method and is inclusive of non-cash amortization of the debt discount and accretion of the final payment. Interest expense was approximately $5.5 million and $1.8 million for the three months ended September 30, 2022 and September 30, 2021 and $11.1 million and $3.6 million for the nine months ended September 30, 2022 and September 30, 2021, respectively, all of which was related to the Amended 2020 Loan Agreement in each period.

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4. STOCKHOLDERS’ EQUITY

Common Stock

In September 2021, the Company entered into the Sales Agreement with the Sales Agent, under which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $200.0 million through the Sales Agent, or the ATM Offering. Pursuant to the Sales Agreement, the Company will pay the Sales Agent a commission for its services in acting as an agent in the sale of common stock in an amount equal to 3% of the gross sales price per share sold. During the year ended December 31, 2021, the Company sold 921,042 shares pursuant to the Sales Agreement for net proceeds of $40.2 million, after deducting commissions. During the nine months ended September 30, 2022, the Company did not issue any shares under the Sales Agreement.

Common Stock Warrants

The Company has 7,354 warrants outstanding at an exercise price of $17.00 per share, which are exercisable for shares of common stock through their expiration date of July 15, 2030. As of September 30, 2022, the warrants are equity-classified and reflected in additional paid-in-capital at a fair value of $0.1 million.

Upon the February 2022 Amendment, the Company issued 40,000 warrants, which are exercisable for shares of common stock of the Company at $45.00 per share. The warrants are exercisable through their expiration date of February 18, 2032. The warrants are equity-classified and reflected in additional paid-in-capital at a fair value of $0.7 million. The fair value of the warrants was determined using the Black-Scholes model on the date of issuance.

No subsequent remeasurement is required for equity-classified warrants.

5. EQUITY COMPENSATION PLAN

Stock Incentive Plan

The Company’s share-based compensation plan, the Amended and Restated 2017 Employee, Director and Consultant Equity Incentive Plan, or the 2017 Plan, provides for the issuance of incentive stock options, restricted and unrestricted stock awards, and other stock-based awards. As of September 30, 2022, an aggregate of 6.1 million shares of common stock were reserved for issuance under the 2017 Plan, of which 0.3 million were available.

Stock Option Activity

The Company recognizes compensation costs related to stock-based awards, including stock options, based on the estimated fair value of the awards on the date of grant. The Company grants options with an exercise price equal to the fair market value of the Company’s stock on the date of the option grant. The options are subject to four-year vesting with a one-year cliff and have a contractual term of 10 years.

A summary of the Company’s stock option activity under its 2017 Plan for the nine months ended September 30, 2022 is as follows (in thousands, except for per share data and years):

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2021	4,064	$	22.19
Granted	1,682	$	24.32
Exercised	(96)	$	11.17
Forfeited	(381)	$	30.73
Outstanding as of September 30, 2022	5,269	$	22.45	7.9	$	13,157
Vested and exercisable as of September 30, 2022	2,247	$	18.26	6.5	$	9,894

The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2022 and September 30, 2021 was $1.4 million and $3.4 million, respectively. Aggregate intrinsic value of stock options

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exercised and outstanding is calculated using the fair value of common stock on the date of exercise and as of September 30, 2022, respectively.

Stock-Based Compensation Expense

The weighted-average assumptions used by the Company to estimate the fair value of stock option grants using the Black-Scholes option pricing model, as well as the resulting weighted-average fair value for the nine months ended September 30, 2022 and September 30, 2021 were as follows:

	NINE MONTHS ENDED SEPTEMBER 30,
	2022			2021
Risk-free interest rate	2.45		%	0.67		%
Expected volatility	85.23		%	93.55		%
Expected dividend yield	—		%	—		%
Expected term (in years)	6.08			6.08
Weighted average fair value	$	17.15		$	24.01

Stock-based compensation expense for stock options consisted of the following (in thousands):

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2022		2021		2022		2021
Research and development	$	3,545	$	2,696	$	10,764	$	8,679
General and administrative	1,146		797		4,331		2,186
Total stock-based compensation expense	$	4,691	$	3,493	$	15,095	$	10,865

As of September 30, 2022, the Company had $52.2 million of total unrecognized stock-based compensation expense related to its stock options, which is expected to be recognized over a weighted-average period of 2.8 years.

6. LICENSE AND GRANT REVENUES

The following table summarizes the total revenue recorded in the Company’s condensed consolidated statements of operations (in thousands):

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2022		2021		2022		2021
License fee revenue
Phylaxis BioScience, LLC	$	14	$	460	$	1,101	$	1,838
2seventy bio, Inc.	—		2,000		200		2,100
Chiesi Farmaceutici S.p.A.	264		48		603		351
Total license fee revenue	278		2,508		1,904		4,289
Grant revenue	—		24		14		86
Total revenue	$	278	$	2,532	$	1,918	$	4,375

License and Collaboration Agreements

Phylaxis

In July 2020, the Company entered into a joint venture with an entity affiliated with ArrowMark Partners, Phylaxis BioScience, LLC, or Phylaxis. In connection with the joint venture, the Company entered into the following agreements: Contribution Agreement, License Agreement, Limited Liability Company Agreement, and Master Services Agreement, or collectively the Phylaxis Agreements, pursuant to which the Company licensed certain intellectual property and know-how to Phylaxis and agreed to provide services to develop certain compounds. Upon closing, the Company received a $2.5 million nonrefundable, upfront payment from Phylaxis under the Master

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Services Agreement, or MSA. The Company has also received an additional $2.5 million, which was payable within 180 days from closing under the MSA, in two payments of $1.25 million each, received in October 2020 and January 2021. Upon closing, the Company received a 10% equity interest in Phylaxis as consideration for the contribution of the license of the Company’s intellectual property and know-how and is entitled to receive an additional 5% based on the achievement of certain milestones. Under the License Agreement, the Company is also entitled to specified development and commercialization milestone payments of up to an aggregate of $225.0 million and $175.0 million, respectively. The Company is also entitled to share in a percentage of the profits of Phylaxis under the Limited Liability Company Agreement.

In order to determine the fair value of the equity interest in Phylaxis, the Company engaged a third-party valuation specialist. The valuation report utilized a market approach to establish the total equity value of Phylaxis using inputs not observable in the market, including the discount rate. The fair value of the equity interest was $0.5 million, which has been accounted for under the equity method. The fair value of the equity interest upon the execution of the agreements has been included in the transaction price, along with the $5.0 million of payments due pursuant to the MSA.

The Company identified the transfer of the exclusive licenses for, and performance of, development services to modify the first and second compounds as one performance obligation and allocated the transaction price evenly between the two compounds. Revenue related to the performance obligation will be recognized over time as services are performed, based on the Company’s progress to satisfy the performance obligation. During the third quarter of 2022, the Company fulfilled this performance obligation in full and recognized all remaining deferred revenue under this contract.

During the three months ended September 30, 2022 and September 30, 2021, the Company recognized $14,000 and $0.5 million of revenue related to this performance obligation, respectively. During the nine months ended September 30, 2022 and September 30, 2021, the Company recognized $1.1 million and $1.8 million of revenue related to this performance obligation, respectively. As of September 30, 2022, there was no deferred revenue remaining related to the Phylaxis Agreements. As of December 31, 2021, there was $1.1 million of deferred revenue related to the Phylaxis Agreements, all of which was classified as current.

2seventy bio, Inc.

2018 License Agreement

On December 20, 2018, the Company entered into a License Agreement with bluebird bio, Inc., or bluebird, whereby the Company granted bluebird the exclusive, worldwide rights to develop, manufacture, and commercialize certain cell therapy products containing binders. In November 2021, bluebird assigned the agreement, which we refer to as the 2018 2seventy Agreement, to its affiliate, 2seventy bio, Inc., or 2seventy, in connection with an internal restructuring and subsequent spin-out of 2seventy. Under the 2018 2seventy Agreement, the Company is entitled to receive specified development milestone payments of up to an aggregate of $51.5 million per therapeutic, as well as percentage tiered royalties on future product sales with rates in the mid-single-digits. Due to the uncertainty in the achievement of the developmental milestones, the variable consideration associated with the future milestone payments has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. These estimates will be re-assessed at each reporting period.

In July 2021, a milestone event under the 2018 2seventy Agreement was achieved and the Company recognized $2.0 million of revenue at that point in time. The Company received the associated $2.0 million payment in August 2021. During each of the three and nine months ended September 30, 2021, the Company recognized a total of $2.0 million in revenue related to this agreement. During the three and nine months ended September 30, 2022, the Company recognized no revenue related to this agreement.

2020 License Agreement

In June 2020, the Company entered into an Option and License Agreement with bluebird pursuant to which the Company granted to bluebird exclusive worldwide rights to develop binders and cell therapy products containing single domain antibodies, or sdAbs, directed to specified targets, consisting of two initial programs and up to an additional 8 programs. The Company retains all rights to the specific sdAbs outside of the cell therapy field. This

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agreement, or the 2020 2seventy Agreement, was assigned to bluebird’s affiliate, 2seventy, in November 2021 in connection with bluebird’s internal restructuring and subsequent spin-out of 2seventy.

In June 2020, the Company received a non-refundable upfront option fee of $0.2 million in connection with each of the two initial programs, or $0.4 million in aggregate, and is entitled to an upfront option fee for each additional program, on a program-by-program basis. In June 2022, 2seventy selected a third program and paid a non-refundable upfront option fee of $0.2 million in exchange for a development license. Under each of the three programs, the Company has granted an option in which 2seventy may acquire an exclusive license with respect to all binders and cell therapy products developed under this agreement, which entitles the Company to additional fees upon exercise of the option. In connection with each program for which 2seventy exercises its option, 2seventy will be required to pay the Company a one-time, non-refundable, non-creditable fee in the low-single-digit millions. The Company is also entitled to receive certain developmental milestone payments of up to an aggregate of $51.5 million per therapeutic, as well as percentage tiered royalties on future product sales with rates in the mid-single-digits. Due to the uncertainty in the achievement of the developmental milestones and future sales, the variable consideration associated with the future milestone payments has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. These estimates will be re-assessed at each reporting period.

As of the effective date of the 2020 2seventy Agreement, the Company identified one performance obligation, which was the transfer of the exclusive development license to bluebird for the two initial programs. The Company determined that the option granted for an exclusive license in the future was not a material right. For the eight programs not identified upon execution of the contract, the Company evaluated the customer option for additional purchases and determined that those options for additional programs did not constitute material rights nor variable consideration. As additional programs are identified, the Company re-assesses its performance obligations and transaction price accordingly.

In May 2021, pursuant to the option extension terms in the 2020 2seventy Agreement, bluebird requested to extend the option term for one of the initial programs by an additional six months in exchange for an option extension fee of $0.1 million. The Company recognized the $0.1 million of revenue related to this extension in May 2021, the point in time in which the extension was granted.

In October 2021, pursuant to the option exercise terms in the 2020 2seventy Agreement, the Company received a $2.1 million option exercise fee for one of the initial programs and transferred an exclusive license for the program and recognized the $2.1 million of revenue related to this option exercise at the point in time in which the exclusive license was transferred.

In June 2022, pursuant to the terms regarding the addition of new programs in the 2020 2seventy Agreement, the Company received a $0.2 million upfront option fee related to the selection of a third program and transferred the related know-how and development license. The Company recognized the $0.2 million of revenue at the point in time in which the program was added and the program term began.

During the nine months ended September 30, 2022 and September 30, 2021, the Company recognized $0.2 million and $0.1 million of revenue related to this agreement, respectively. During the three months ended September 30, 2022 and September 30, 2021, the Company recognized no revenue related to this agreement in either period.

Chiesi

In May 2019, the Company entered into an Option Agreement, as amended by the First Amendment to Option Agreement, dated August 19, 2019, or the Chiesi Option Agreement, with Chiesi Farmaceutici S.p.A., or Chiesi, pursuant to which the Company granted to Chiesi an exclusive option to obtain an exclusive license to develop and commercialize INBRX-101 outside of the United States and Canada. Additionally, the Chiesi Option Agreement provides Chiesi with a right of negotiation for INBRX-101 development and commercialization rights in the United States and Canada in the event that the Company engages in discussions with any third parties for such rights during the term of the Chiesi Option Agreement or, as applicable, the term of a definitive exclusive license agreement between Chiesi and the Company. Under the terms of the Chiesi Option Agreement, the Company received a one-time, non-refundable option initiation payment of $10.0 million in August 2019. If Chiesi chooses to exercise its

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option under the Chiesi Option Agreement, then Chiesi must pay the Company a one-time, non-refundable fee of $12.5 million upon the effective date of the definitive agreement granting Chiesi the exclusive license. If the option is exercised, under the license agreement, the Company may be entitled to receive specified milestone payments of up to $122.5 million, as well as royalties on future product sales.

The Company has identified one performance obligation as of the effective date of the Chiesi Option Agreement, which is to perform research and development services for Chiesi during the option period, which will continue (unless the Chiesi Option Agreement is terminated earlier by Chiesi or the Company) until 60 days following the last to occur of (i) the Company’s delivery to Chiesi of the trial phase data for the first Phase I Clinical Trial, (ii) the Company’s delivery to Chiesi of the finalized minutes from the definitive U.S. Food and Drug Administration, or FDA, scientific advice meeting conducted following completion of such Phase I Clinical Trial, and (iii) the Company’s delivery to Chiesi of the finalized minutes from the definitive parallel European Medicines Agency health technology assessment scientific advice meeting conducted following completion of such Phase I Clinical Trial. The Company has determined that the option to grant a license in the future is not a material right.

The $10.0 million upfront payment has been allocated to the single performance obligation. Revenue is recognized over time as services are performed during the option period, based on the Company’s effort to satisfy the performance obligation relative to the total expense estimated to be incurred during the option period. During the three months ended September 30, 2022, the Company recognized $0.3 million in revenue related to this agreement. During the three months ended September 30, 2021, the Company recognized no revenue related to this agreement. During the nine months ended September 30, 2022 and September 30, 2021, the Company recognized $0.6 million and $0.4 million in revenue related to this agreement, respectively. As of September 30, 2022, the Company has $0.4 million of deferred revenue related to this agreement, all of which is classified as current deferred revenue. As of December 31, 2021, the Company had $0.9 million and $0.1 million of current and non-current deferred revenue related to this agreement, respectively.

7. RELATED PARTY TRANSACTIONS

From time to time, the Company will enter into an agreement with a related party in the ordinary course of its business. These agreements are ratified by the Company’s Board of Directors or a committee thereof pursuant to policy.

LAV Summit Limited

LAV Summit Limited, or LAV SL, a limited company, is a principal shareholder which owned more than 5% of the Company’s outstanding equity interest during the year ended December 31, 2021. Due to this equity ownership, LAV SL was considered a related party. LAV SL’s General Partner, Lilly Asia Ventures, or LAV, through one of its funds, holds a significant equity ownership position in Chinese biotechnology company, Elpiscience Biopharmaceuticals, Inc., or Elpiscience, and the Venture Partner of LAV is the CEO, Founder, and Director at Elpiscience. Accordingly, the Company identified Elpiscience as a related party and all agreements entered into between the Company and Elpiscience through December 31, 2021 are deemed related party agreements. As of December 31, 2021, LAV SL no longer holds more than 5% of the Company’s outstanding equity interest. Accordingly, any future contracts entered into with LAV SL affiliates will not be considered related party transactions.

Elpiscience

In April 2018, the Company entered into a license agreement, or the OX40 License Agreement, with Elpiscience, whereby the Company granted Elpiscience an exclusive license to the Company’s multivalent protein therapeutic directed to the biological target OX40, or INBRX-106. Under this agreement, the Company is entitled to reimbursement for certain CMC and toxicology expenses incurred. The Company received $0.2 million in reimbursements under this agreement during the first quarter of 2022, and has received $5.3 million to date as of September 30, 2022. During the three months ended September 30, 2022, the Company derecognized $32,000 as contra-expenses, which are recorded as receivables from affiliates as of September 30, 2022. No further reimbursements remain under this contract following the receipt of this balance.

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In July 2020, the Company entered into an additional cost sharing agreement with Elpiscience related to the OX40 License Agreement. Under this agreement, the Company is entitled to reimbursement for certain formulation development costs. The Company received $0.3 million and $0.2 million in reimbursements under this agreement in the first quarter of 2022 and 2021, respectively, and has received $0.5 million of reimbursements to date as of September 30, 2022. Reimbursements under this contract are recognized as contra-expense as incurred.

8. COMMITMENTS AND CONTINGENCIES

Operating Leases

In September 2017, the Company entered into a seven-year lease agreement for approximately 34,000 square feet as its sole location in La Jolla, California. The lease expires in June 2025 with an option to extend the lease an additional five years. The lease contained an initial base rent of approximately $0.1 million per month with 2% annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which to be determined annually.

In May 2019, the Company executed an amendment to its lease agreement to expand its facilities by approximately 9,000 square feet and began occupying this space in January 2020. The amended lease terminates coterminously with the initial lease agreement and contains an initial base rent of approximately $30,000 per month with 2% annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which is to be determined annually.

The right-of-use asset and operating lease liability as of September 30, 2022 and December 31, 2021 are as follows (in thousands):

	AS OF		AS OF
	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Right-of-use asset	$	5,135	$	6,338
Operating lease liability
Current	$	1,812	$	1,674
Non-current	3,657		$	5,033
Total operating lease liability	$	5,469	$	6,707

During the three and nine months ended September 30, 2022, the Company recognized operating lease expense of $0.9 million and $2.5 million, respectively. During the three and nine months ended September 30, 2021, the Company recognized operating lease expense of $0.8 million and $2.3 million, respectively. During the three months ended September 30, 2022 and September 30, 2021, the Company paid $0.5 million for amounts included in the measurement of the lease liability in each period. During the nine months ended September 30, 2022 and September 30, 2021, the Company paid $1.6 million for amounts included in the measurement of the lease liability in each period.

As of September 30, 2022 and December 31, 2021, the Company’s operating lease had a remaining term of 2.8 and 3.5 years, respectively. The Company discounts its lease payments using its incremental borrowing rate as of the commencement of the lease. The Company has determined a weighted-average discount rate of 8.2% as of September 30, 2022 and December 31, 2021.

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Future minimum rental commitments for the Company’s operating leases reconciled to the lease liability are as follows (in thousands):

	AS OF
	SEPTEMBER 30, 2022
2022	$	544
2023	2,203
2024	2,247
2025	1,137
Thereafter	—
Total future minimum lease payments	$	6,131
Less: imputed interest	(662)
Present value of operating lease liability	5,469
Less: current portion of operating lease liability	(1,812)
Non-current portion of operating lease liability	$	3,657

Litigation

The Company is not party to any material legal proceedings. From time to time, it may be involved in legal proceedings or subject to claims incident to the ordinary course of business. Regardless of the outcome, such proceedings or claims can have an adverse impact on the Company because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.

9. SUBSEQUENT EVENTS

For the unaudited interim condensed consolidated financial statements as of September 30, 2022, the Company evaluated subsequent events to assess the need for potential recognition or disclosure in these financial statements. Based upon this evaluation, it was determined that no additional subsequent events required recognition or disclosure in these condensed consolidated financial statements, other than disclosures related to those outlined below.

On October 3, 2022, the Company entered into an amendment to the Amended 2020 Loan Agreement, or the October 2022 Amendment. The October 2022 Amendment amended the milestone terms of the last remaining tranche, Term G, under the Amended 2020 Loan Agreement to provide for the funding of $30.0 million upon the announcement of the regulatory path for INBRX-101 rather than upon the initiation of a potential registration-enabling clinical trial of INBRX-101. On October 4, 2022, the Company met this milestone and on October 24, 2022, drew the final tranche for additional gross proceeds of $30.0 million.

In October 2022, the Company sold 4,332,354 shares of its common stock pursuant to its Sales Agreement for net proceeds of $127.4 million after deducting commissions.

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

You should read the following discussion and analysis of our financial condition and results of operations together in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report, and our audited financial statements and notes thereto as of and for the year ended December 31, 2021 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 28, 2022. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report contain forward-looking statements that involve risk and uncertainties, including those described in the section titled “Special Note Regarding Forward-Looking Statements.” As a result of many factors, including those factors set forth in the section of this Quarterly Report titled “Risk Factors,” our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a clinical-stage biopharmaceutical company with a pipeline of novel biologic therapeutic candidates, developed using our protein engineering expertise and proprietary single domain antibody, or sdAb, platform. Our sdAb platform allows us to pursue validated targets with clinical promise where other antibody and biologic based approaches have failed. Highly modular, our sdAbs can be combined with precise valencies and multiple specificities, creating therapeutic candidates designed to be capable of enhanced cell signaling, conditional activation or combined synergistic functions.

We have multiple programs in various stages of development from discovery to preclinical to clinical. We currently have four programs in ongoing clinical trials. Three of these programs are for the treatment of various cancers, and one for the treatment of Alpha-1 Antitrypsin Deficiency, or AATD, as shown below:

INBRX-101	INBRX-109	INBRX-106	INBRX-105
AAT-Fc fusion protein	Tetravalent DR5 agonist	Hexavalent OX40 agonist	PD-L1x4-1BB tetravalent conditional agonist

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Program	Therapeutic Area	Target(s)/Format	STAGE OF DEVELOPMENT
			Preclinical	Phase 1	Phase 2	Phase 3
INBRX-101*	Orphan/Respiratory	Neutrophil Elastase AAT-Fusion Protein
INBRX-109**	Oncology	DR5 Tetravalent Agonist
INBRX-106***	Oncology	OX40 Hexavalent Agonist
INBRX-105***	Oncology	PD-L1 x 4-1BB Tetravalent Conditional Agonist

__________________

*    Commercialization and development rights outside of the United States and Canada, subject to an option agreement with Chiesi Farmaceutici S.p.A., or Chiesi

**    Third party partnership with Chinese biotechnology company, Transcenta Holding, Ltd. (formerly Hangzhou Just Biotherapeutics Co., Ltd.), or Transcenta, currently in place for development and commercialization in China, Hong Kong, Macau and/or Taiwan.

***    Third party partnership with Chinese biotechnology company, Elpiscience Biopharmaceuticals, Inc, or Elpiscience, currently in place for development and commercialization in China, Hong Kong, Macau and/or Taiwan.

INBRX-101 is an optimized, recombinant alpha-1 antitrypsin, or AAT, augmentation therapy candidate for AATD. In March 2022, the U.S. Food and Drug Administration, or FDA, granted orphan-drug designation for INBRX-101 for the treatment of AATD. In May 2022, we announced topline results from the INBRX-101 Phase 1 clinical trial. At our end-of-Phase 1 meeting, the FDA requested additional data on the correlation between functional AAT levels and the clinical benefit in AATD to further support serum AAT levels as a surrogate endpoint that is reasonably likely to predict clinical benefit, a prerequisite for the FDA’s Accelerated Approval Program. We believe the data revealed the potential to achieve normal AAT levels with monthly dosing and showed the treatment was well tolerated with no drug-related severe or serious adverse events at doses up to and including 120 mg/kg in single and multi-dose administered intravenously. We plan to initiate, during the first quarter of 2023, a potential registration-enabling clinical trial using functional AAT as a surrogate endpoint, with the intent to submit for regulatory approval under the FDA’s Accelerated Approval Program.

Our most advanced therapeutic candidate, INBRX-109, is a tetravalent death receptor 5, or DR5, agonist currently being evaluated in patients diagnosed with difficult-to-treat cancers, such as chondrosarcoma, mesothelioma, colorectal cancer, Ewing sarcoma and pancreatic adenocarcinoma. We have ongoing Phase 1 cohorts with INBRX-109 in combination with standard chemotherapies in several indications. In June 2021, we initiated a potentially registration-enabling Phase 2 trial for the treatment of unresectable or metastatic conventional chondrosarcoma for which the FDA and European Medicine Agency, or EMA, granted orphan-drug designation in November 2021 and August 2022, respectively. We plan to announce data from the isocitrate dehydrogenase, or IDH, mutant population cohort at the annual Connective Tissue Oncology Society’s conference in November 2022.

INBRX-106 is a hexavalent OX40 agonist, currently being investigated as a single agent and in combination with Keytruda, a PD-1 blocking checkpoint inhibitor, in patients with locally advanced or metastatic solid tumors. In January 2022, we announced initial Phase 1 dose escalation results for INBRX-106 in combination with Keytruda, which was observed to be well tolerated with predominantly mild or moderate immune-related toxicities noted.

INBRX-105 is a conditional 4-1BB agonist that is currently being investigated as a single agent and in combination with Keytruda in patients with locally advanced or metastatic solid tumors. In June 2022, we announced Phase 1 dose escalation results for INBRX-105 in combination with Keytruda. These results showed INBRX-105 was reasonably well-tolerated and we observed durable responses in checkpoint-naïve and relapsed refractory patients.

We anticipate additional data releases from INBRX-105 and INBRX-106 during the second or third quarter of 2023.

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Liquidity, Capital Resources and Financial Condition

Sources of Liquidity

Sources of capital raised to fund our operations have been comprised of the sale of equity securities, payments received from commercial partners for licensing rights to our therapeutic candidates under development and grants, borrowings under loan and security agreements, and proceeds from the sale and issuance of convertible promissory notes.

The sale of equity securities includes proceeds under our initial public offering, or IPO, from which our aggregate net proceeds from the offering were $125.9 million, net of underwriting discounts, commissions and offering costs, as well as proceeds under our Open Market Sale Agreement, or the Sales Agreement, with Jefferies LLC, or the Sales Agent. Under the Sales Agreement, which we entered into in September 2021, we may, from time to time, sell shares of common stock through the Sales Agent with an aggregate offering price of up to $200.0 million. Sales of our common stock made pursuant to the Sales Agreement, if any, will be made under our $400.0 million Shelf Registration on Form S-3ASR, which became automatically effective upon filing on September 3, 2021. During the year ended December 31, 2021, we sold 921,042 shares pursuant to the Sales Agreement for net proceeds of $40.2 million, after deducting commissions. During the nine months ended September 30, 2022, we did not issue any shares under the Sales Agreement. In October 2022, we sold 4,332,354 shares pursuant to the Sales Agreement for net proceeds of $127.4 million.

Our borrowings under the loan and security agreement, or the Amended 2020 Loan Agreement, with Oxford Finance LLC, or Oxford, include $200.0 million in gross proceeds received in seven tranches between July 2020 and October 2022. As of September 30, 2022, we had $170.0 million in gross proceeds received to date under the Amended 2020 Loan Agreement.

Future Funding Requirements

Since our inception, we have devoted substantially all of our efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of our therapeutic candidates, hiring to support our research and development activities and financial reporting capabilities, establishing our intellectual property portfolio, and raising capital to support and expand these activities. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.

Our net loss for the nine months ended September 30, 2022 and September 30, 2021 was $104.3 million and $60.6 million, respectively. As of September 30, 2022, we had an accumulated deficit of $331.5 million and cash and cash equivalents of $146.1 million. Based upon our current operating plans, we believe that our existing cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months from the date these condensed consolidated financial statements are issued. Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect.

The process of conducting preclinical studies and testing product candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain. We expect to continue to incur net losses for the foreseeable future, and we expect our research and development expenses to increase as we continue our development of, and seek marketing approvals for, our therapeutic candidates (especially as we move more candidates from preclinical to clinical development as well as study candidates in later stages of clinical development), and begin to commercialize any approved products, if ever. If we elect to proceed with the commercialization of any of our product candidates, we would incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. We also expect our general and administrative expenses and losses to increase as we hire additional personnel and incur increased accounting, audit, legal, regulatory, and compliance costs, and as we incur increased costs from investor and public relations expenses associated with operating as a public company.

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Until such time, if ever, we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including strategic licensing and collaborations, disposition transactions, strategic transactions, or other similar arrangements and transactions, and from time to time, we engage in discussions with potential acquirers regarding the disposition of one or more of our product candidates. However, there can be no assurance as to the availability or terms upon which such finances or capital might be available in the future. If we are unable to secure adequate additional funding, we will need to reevaluate our operating plan and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, delay, scale back or eliminate some or all of our development programs, or relinquish rights to our intellectual property on less favorable terms than we would otherwise choose. These actions could materially impact our business, results of operations, financial condition, and prospects.

Our future liquidity and capital funding requirements will depend on numerous factors, including:

•the outcome, costs and timing of preclinical studies and clinical trials for our current or future therapeutic candidates;

•whether and when we are able to obtain marketing approval to market any of our therapeutic candidates and the outcome of meetings with applicable regulatory agencies, including the FDA;

•our ability to successfully commercialize any therapeutic candidates that receive marketing approval;

•the emergence and effect of competing or complementary therapeutics or therapeutic candidates;

•our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

•our ability to retain our current employees and the need and ability to hire additional management and scientific and medical personnel;

•the terms and timing of any strategic licensing, collaboration or other similar agreement that we have established or may establish;

•our ability to repay, refinance or restructure our indebtedness when payment is due, including in the event such indebtedness is accelerated;

•the valuation of our capital stock; and

•the continuing or future effects of the COVID-19 pandemic and geopolitical events such as the ongoing conflict in Ukraine on capital and financial markets.

We do not own or operate manufacturing facilities for the production of any of our therapeutic candidates, nor do we have plans to develop our own manufacturing operations in the foreseeable future. We currently rely on a limited number of third-party contract manufacturers for all of our required raw materials, antibodies, and other biologics for our preclinical research, clinical trials, and if and when applicable, commercial product, and employ internal resources to manage our manufacturing relationships with these third parties.

Commitments

Our material cash requirements from known contractual and other obligations primarily relate to our lease obligations, debt, and services provided by our third party contract research organizations, or CROs, and contract development and manufacturing organizations, or CDMOs.

We have two leases for our laboratory and office space, which expire in 2025, with an option to extend the leases for an additional five years. As of September 30, 2022, we have future minimum rental obligations under these leases of $6.1 million, of which $2.2 million and $3.9 million are current and non-current, respectively. For more information regarding these lease agreements, refer to Note 8 to the condensed consolidated financial statements.

Under the Amended 2020 Loan Agreement, we are required to make interest-only payments through February 2025, with all principal payments and final fee payments beginning in March 2025 and continuing through the maturity date, or January 2027, unless extended by a financing event as defined in the Amended 2020 Loan Agreement. In October 2022, the interest-only period was extended by an additional 12 months upon the raise of at least $100.0 million in upfront licensing or partnership proceeds, which would then be followed by 11 months of principal repayments.

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As of September 30, 2022, we had an obligation of $234.6 million of long-term debt, including interest and final fee payments, of which $14.7 million and $219.9 million are current and non-current, respectively. For more information regarding the Amended 2020 Loan Agreement, refer to Note 3 and Note 9 to the condensed consolidated financial statements.

We enter into contracts in the normal course of business with CROs related to our ongoing preclinical studies and clinical trials with CDMOs for clinical supplies and manufacturing scale-up activities. These contracts are generally cancellable, with notice, at our option. We have recorded accrued expenses of approximately $9.1 million in our condensed consolidated balance sheets for expenditures incurred by CROs and CDMOs as of September 30, 2022.

While these contracts are generally cancellable, some may contain specific activities that involve one or more non-cancellable commitments, including minimum purchase commitments, binding annual forecasts, and capital equipment investments. Additionally, depending on the timing and reasoning of the exit, certain termination penalties may apply and can range from the cost of work performed to date up to twelve months of future committed manufacturing costs. As of September 30, 2022, the non-cancellable portion of these contracts total in aggregate, excluding amounts recorded in accounts payable and accrued expenses as of this date, approximately $2.3 million.

License and Collaboration Agreements

Celgene Agreement

On July 1, 2013, we entered into a license agreement with Celgene Corporation, a Bristol Myers Squibb Company, or Celgene, as amended on November 23, 2018, or the Celgene Agreement, pursuant to which we granted Celgene an exclusive, global license for the development, manufacture and commercialization of our proprietary CD47 binding domain, or the Celgene Licensed Intellectual Property. Per the terms of the Celgene Agreement, Celgene is operationally and financially responsible for the development, manufacturing and commercialization activities of Celgene Licensed Intellectual Property and any additional related antibodies covered by the Celgene Agreement.

As payment for the license granted in the Celgene Agreement, we may be eligible to receive development and regulatory milestones of an aggregate of $934.1 million, assuming the achievement of all potential milestones in the Celgene Agreement, as well as percentage tiered royalties based on future worldwide sales, with rates ranging between the high single-digits and low teens, subject to potential reduction when and if comparable third party products attain certain levels of competitive market share (on a country-by-country basis) and, subject to certain limitations, payments to third parties for third-party intellectual property rights. We are obligated to pay 2% of future amounts received under the Celgene Agreement to advisors who assisted us with the negotiations and other matters in connection with the Celgene Agreement.

2seventy bio Agreements

On December 20, 2018, we entered into an exclusive license agreement with bluebird bio, Inc., or bluebird, to research, develop and commercialize CAR T-cell therapies using our proprietary sdAb platform. In November 2021, bluebird assigned this license agreement, or the 2018 2seventy Agreement, to its affiliate 2seventy bio, Inc., or 2seventy, in connection with an internal restructuring and subsequent spin-out of 2seventy. Under the terms of this license agreement, we provided 2seventy the exclusive worldwide rights to develop, manufacture and commercialize certain cell therapy products containing sdAbs directed to various cancer targets. In January 2019, we received a $7.0 million payment and pursuant to the license agreement, we are entitled to receive developmental milestone payments of up to an aggregate of $51.5 million per therapeutic, as well as percentage tiered royalties on future product sales with rates in the mid-single digits. In August 2021, we received a $2.0 million milestone payment under this agreement.

On June 9, 2020, we entered into an additional license agreement with bluebird, or the 2020 2seventy Agreement, which was also assigned to 2seventy in November 2021 in connection with bluebird’s internal restructuring and subsequent spin-out of 2seventy. In June 2020, we received a non-refundable upfront option fee of $0.2 million in connection with each of the two initial programs, or $0.4 million in aggregate, and we are entitled to an upfront option fee for each additional program. In June 2022, 2seventy selected a third program and paid an additional $0.2 million as a non-refundable upfront option fee in exchange for a development license. We also granted options in which 2seventy may acquire an exclusive license with respect to all binders and cell therapy products developed under the 2020 2seventy Agreement, which entitles us to additional fees upon exercise of an option for each

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program. We are also entitled to receive certain developmental milestone payments of up to an aggregate of $51.5 million per therapeutic, as well as percentage tiered royalties on future product sales with rates in the mid-single-digits.

In May 2021, pursuant to the option extension terms in the 2020 2seventy Agreement, bluebird requested to extend the option term for one of the initial programs by an additional six months in exchange for an option extension fee of $0.1 million. In August 2021, pursuant to the option exercise terms in the agreement, bluebird exercised its option to exclusively license one of the initial programs in exchange for an option exercise fee of $2.1 million, the payment of which was received in October 2021.

Chiesi

In May 2019, we entered into an option agreement with Chiesi, or the Chiesi Option Agreement. Under this agreement, we granted to Chiesi an exclusive option to obtain an exclusive license to develop and commercialize INBRX-101 outside of the United States and Canada. Additionally, the Chiesi Option Agreement provides Chiesi with a right of negotiation for INBRX-101 development and commercialization rights in the United States and Canada in the event we engage in discussions with any third parties for such rights during the term of the Chiesi Option Agreement or, as applicable, the term of a definitive exclusive license agreement between Chiesi and the Company. Under the terms of the Chiesi Option Agreement, we received a one-time, non-refundable option initiation payment of $10.0 million in August 2019. Pursuant to the Chiesi Option Agreement, we are performing research and development services for Chiesi during the option period, which will continue (unless the Chiesi Option Agreement is terminated earlier by the Chiesi or the Company) until 60 days following the last to occur of (i) the Company’s delivery to Chiesi of the trial phase data for the first Phase I Clinical Trial, (ii) the Company’s delivery to Chiesi of the finalized minutes from the definitive FDA scientific advice meeting conducted following completion of such Phase I Clinical Trial, and (iii) the Company’s delivery to Chiesi of the finalized minutes from the definitive parallel EMA health technology assessment scientific advice meeting conducted following completion of such Phase I Clinical Trial.

If Chiesi chooses to exercise its option under the Chiesi Option Agreement, we will receive a one-time, non-refundable fee of $12.5 million upon the effective date of the definitive agreement granting Chiesi the exclusive license. If the option is exercised, under the license agreement, we may be entitled to receive specified milestone payments of up to $122.5 million, as well as royalties on future product sales.

Other Collaboration Agreements

In addition to these contracts, we have entered into strategic collaborations with other third parties, including Phylaxis BioScience, LLC, or Phylaxis, Transcenta, and Elpiscience. For more information regarding these agreements, refer to Note 6 to the condensed consolidated financial statements.

Components of Results of Operations

Revenue

To date, all of our revenue has been derived from licenses with collaboration partners and grant awards. We have not generated any revenue from the commercial sale of approved therapeutic products, and we expect our revenue for the next several years will be derived primarily from payments under our current and any future grant awards and agreements with our collaboration partners.

Operating Expenses

Research and Development

To date, our research and development expenses have related primarily to research activities, including our discovery efforts, and preclinical and clinical development and the manufacturing of our therapeutic candidates. Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. We do not track our internal research and development expenses on a program-by-program basis as they primarily relate to personnel, early research and consumable costs, which are deployed across multiple projects under development.

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Research and development expenses consist primarily of:

•External expenses, consisting of:

◦expenses incurred in connection with the preclinical development of our programs;

◦clinical trials of our therapeutic candidates, including under agreements with third parties, such as consultants and CROs;

◦expenses associated with manufacturing our contract development and manufacturing therapeutic candidates including under agreements with CDMOs;

◦expenses associated with regulatory requirements, including fees and other expenses related to our Scientific Advisory Board, or SAB; and

◦other external expenses, such as laboratory services related to our discovery and development programs and other shared services, and

•Internal expenses, consisting of:

◦salaries, benefits and other related costs, including stock-based compensation, for personnel engaged in research and development functions;

◦facilities, depreciation and other expenses, which include direct and allocated expenses for depreciation and amortization, rent and maintenance of facilities; and

◦other internal expenses, such as laboratory supplies and other shared research and development costs.

We expect that research and development expense will continue to increase over the next several years as we continue development of our therapeutic candidates currently in clinical stage development, support our preclinical programs, and continue to discover new therapeutic candidates, as well as increase our headcount. In particular, clinical development of our therapeutic candidates, as opposed to preclinical development, generally has higher development costs, primarily due to the increased size and duration of later-stage clinical trials. Moreover, the costs associated with our CDMOs to manufacture our therapeutic candidates and future commercial products is also much more costly as compared to early stage preclinical development. We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future preclinical studies and clinical trials of our therapeutic candidates due to the inherently unpredictable nature of preclinical and clinical development. Preclinical and clinical development timelines, the probability of success and development costs can differ materially from expectations. We anticipate that we will make determinations as to which therapeutic candidates to pursue and how much funding to direct to each therapeutic candidate on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments and our ongoing assessments as to each therapeutic candidate’s commercial potential. We will need substantial additional capital in the future to support these efforts. In addition, we cannot forecast which therapeutic candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

Our clinical development costs may vary significantly based on factors such as:

•per patient trial costs;

•the number of trials required for approval;

•the number of sites included in the trials;

•the countries in which the trials are conducted;

•the length of time required to enroll eligible patients;

•the number of patients that participate in the trials;

•the number of doses that patients receive;

•the drop-out or discontinuation rates of patients;

•potential additional safety monitoring requested by regulatory agencies;

•the duration of patient participation in the trials and follow-up;

•the cost and timing of manufacturing of our therapeutic candidates;

•the phase and development of our therapeutic candidates;

•the efficacy and safety profile of our therapeutic candidates; and

•uncertainties related to the COVID-19 pandemic.

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General and Administrative

G&A expenses consist primarily of:

•salaries, benefits and other related costs, including stock-based compensation, for personnel engaged in G&A functions;

•expenses incurred in connection with accounting and audit services, legal services, and investor relations, as well as consulting expenses under agreements with third parties, such as consultants and contractors;

•expenses incurred in connection with commercial and business development activity; and

•facilities, depreciation and other expenses, which include direct and allocated expenses for depreciation and amortization, rent and maintenance of facilities, insurance and supplies.

We expect our G&A expenses will continue to increase over the next several years as we continue to increase our headcount and incur increased accounting, audit, legal, regulatory, commercialization, business development, and compliance costs as well as investor and public relations expenses associated with operating as a public company.

Other Income (Expense)

Interest expense. Interest expense consists primarily of our interest on our loans with Oxford, offset in part by our interest income.

Results of Operations

Comparison of the Three Months Ended September 30, 2022 and September 30, 2021

The following table summarizes our condensed consolidated results of operations for each of the periods indicated (in thousands, except percentages):

	THREE MONTHS ENDED SEPTEMBER 30,				CHANGE
	2022		2021		($)		(%)
Revenue:
License fee revenue	$	278	$	2,508	$	(2,230)	(89)	%
Grant revenue	—		24		(24)		(100)	%
Total revenue	278		2,532		(2,254)		(89)	%
Operating expense:
Research and development	24,934		18,485		6,449		35	%
General and administrative	5,347		2,848		2,499		88	%
Total operating expense	30,281		21,333		8,948		42	%
Loss from operations	(30,003)		(18,801)		(11,202)		60	%
Other income (expense)
Interest expense, net	(5,340)		(1,778)		(3,562)		200	%
Other income (expense), net	18		(1)		19		(1,900)	%
Total other expense	(5,322)		(1,779)		(3,543)		199	%
Provision for income taxes	—		—		—		100	%
Net loss	$	(35,325)	$	(20,580)	$	(14,745)	72	%

License Fee Revenue

License fee revenue decreased by $2.2 million to $0.3 million during the three months ended September 30, 2022 from $2.5 million during the three months ended September 30, 2021. During the three months ended September 30, 2022, we recognized all remaining deferred revenue related to our agreements with Phylaxis for total license fee revenue of approximately $14,000 during the period. Additionally, during the three months ended September 30, 2022, we recognized approximately $0.3 million of license fee revenue related to our effort to satisfy the performance obligation relative to the total expense estimated to be incurred during the option period under our option agreement with Chiesi. During the three months ended September 30, 2021, we recognized $2.0 million upon

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the achievement of a milestone under our license agreement with 2seventy. In addition, approximately $0.5 million of license fee revenue recognized was related to our agreements with Phylaxis while approximately $48,000 of license fee revenue recognized was related to our effort to satisfy the performance obligation relative to the total expense estimated to be incurred during the option period under our option agreement with Chiesi.

Grant Revenue

Grant revenue during the three months ended September 30, 2021 consisted of revenue earned under a grant with the Department of Defense of $24,000. During the three months ended September 30, 2022, there was no grant revenue following the completion of our grant with the Department of Defense in the first quarter of 2022.

Research and Development Expense

The following table sets forth the primary external and internal research and development expenses (in thousands, except percentages):

	THREE MONTHS ENDED SEPTEMBER 30,				CHANGE
	2022		2021		($)		(%)
External expenses:
Clinical trials	$	6,870	$	6,048	$	822	14	%
Contract manufacturing	5,064		794		4,270		538	%
Preclinical studies	397		1,528		(1,131)		(74)	%
Other external research and development	637		857		(220)		(26)	%
Internal expenses:
Personnel	9,052		6,781		2,271		33	%
Equipment, depreciation, and facility	1,552		1,401		151		11	%
Other internal research and development	1,362		1,076		286		27	%
Total research and development expenses	$	24,934	$	18,485	$	6,449	35	%

Research and development expenses increased by $6.4 million to $24.9 million during the three months ended September 30, 2022 from $18.5 million during the three months ended September 30, 2021. The overall increase was primarily due to the following factors:

•clinical trial expense increased by $0.8 million, primarily attributable to the continued expenses related to the progression of our INBRX-109 potentially registration-enabling Phase 2 trial for the treatment of unresectable or metastatic conventional chondrosarcoma, which was initiated in the second quarter of 2021;

•contract manufacturing expense increased by $4.3 million due to greater production run costs at our CDMO partners to support our clinical and preclinical therapeutic candidates, including larger yield batch sizes, drug substance batch manufacturing in preparation for a Phase 2 trial supply, and pilot batch production for a preclinical candidate;

•preclinical studies expense decreased by $1.1 million due to the completion of several preclinical studies initiated during 2021; and

•personnel-related expense increased by $2.3 million, primarily related to an increase in headcount including significant expansion of our clinical operations and technical operations teams, as well as the issuance of additional stock options and the expansion of the bonus eligibility pool during the current year.

G&A Expense

G&A expenses increased by $2.5 million to $5.3 million during the three months ended September 30, 2022 from $2.8 million during the three months ended September 30, 2021. The overall increase during the three months ended September 30, 2022 was primarily due to the following factors:

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•personnel-related expenses increased by $1.4 million, attributable to an increase in headcount primarily due to building out our commercial strategy team, additional stock option grants to employees, and the expansion of the bonus eligibility pool in the current year;

•pre-commercialization expenses increased by $0.8 million, primarily related to market research expenses in connection with INBRX-101 and INBRX-109, and other expenses incurred in relation to scientific publications;

•facility and equipment-related expense increased by $0.2 million, which was primarily attributable to an increase in software and other depreciable equipment.

Other income (expense)

Interest expense, net. Interest expense, net, increased by $3.5 million to $5.3 million during the three months ended September 30, 2022 from $1.8 million during the three months ended September 30, 2021. During the three months ended September 30, 2022, we recorded $5.5 million of interest related to interest paid and the amortization of debt discounts related to the Amended 2020 Loan Agreement, under which we had an outstanding principal balance of $170.0 million as of September 30, 2022. Interest expense was offset in part by $0.2 million of interest income during the period. During the three months ended September 30, 2021, we incurred $1.8 million of interest related to interest paid and the amortization of debt discounts related to the Amended 2020 Loan, under which we had an outstanding principal balance of $70.0 million as of September 30, 2021.

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Comparison of the Nine Months Ended September 30, 2022 and September 30, 2021

The following table summarizes our condensed consolidated results of operations for each of the periods indicated (in thousands, except percentages):

	NINE MONTHS ENDED SEPTEMBER 30,				CHANGE
	2022		2021		($)		(%)
Revenue:
License fee revenue	$	1,904	$	4,289	$	(2,385)	(56)	%
Grant revenue	14		86		(72)		(84)	%
Total revenue	1,918		4,375		(2,457)		(56)	%
Operating expense:
Research and development	79,735		52,825		26,910		51	%
General and administrative	15,800		8,710		7,090		81	%
Total operating expense	95,535		61,535		34,000		55	%
Loss from operations	(93,617)		(57,160)		(36,457)		64	%
Other income (expense)
Interest expense, net	(10,762)		(3,437)		(7,325)		213	%
Other income, net	72		20		52		260	%
Total other expense	(10,690)		(3,417)		(7,273)		213	%
Provision for income taxes	4		2		2		100	%
Net loss	$	(104,311)	$	(60,579)	$	(43,732)	72	%

License Fee Revenue

License fee revenue decreased by $2.4 million to $1.9 million during the nine months ended September 30, 2022 from $4.3 million during the nine months ended September 30, 2021. During the nine months ended September 30, 2022, approximately $1.1 million of license fee revenue recognized was related to our agreements with Phylaxis as we completed our performance obligation under this contract and recognized all remaining deferred revenue. Additionally, we recognized approximately $0.6 million of license fee revenue related to our effort to satisfy the performance obligation relative to the total expense estimated to be incurred during the option period under our option agreement with Chiesi. During the nine months ended September 30, 2022, we also earned $0.2 million under our option and license agreement with 2seventy in which we granted an exclusive option and development license upon initiation of a third program. During the nine months ended September 30, 2021, we recognized $2.0 million upon the achievement of a milestone under the 2018 2seventy Agreement and an additional $0.1 million upon an option term extension under the 2020 2seventy Agreement. In addition, approximately $1.8 million of license fee revenue recognized was related to our agreements with Phylaxis, while approximately $0.4 million of license fee revenue recognized was related to our effort to satisfy the performance obligation relative to the total expense estimated to be incurred during the option period under the Chiesi Option Agreement.

Grant Revenue

Grant revenue of $14,000 and $86,000 during the nine months ended September 30, 2022 and September 30, 2021, respectively, consisted of revenue earned under a grant with the Department of Defense.

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Research and Development Expense

The following table sets forth the primary external and internal research and development expenses (in thousands, except percentages):

	NINE MONTHS ENDED SEPTEMBER 30,				CHANGE
	2022		2021		($)		(%)
External expenses:
Clinical trials	$	21,380	$	15,245	$	6,135	40	%
Contract manufacturing	19,016		3,710		15,306		413	%
Preclinical studies	2,378		3,272		(894)		(27)	%
Other external research and development	2,477		2,327		150		6	%
Internal expenses:
Personnel	26,302		20,720		5,582		27	%
Equipment, depreciation, and facility	4,455		4,063		392		10	%
Other internal research and development	3,727		3,488		239		7	%
Total research and development expenses	$	79,735	$	52,825	$	26,910	51	%

Research and development expenses increased by $26.9 million to $79.7 million during the nine months ended September 30, 2022 from $52.8 million during the nine months ended September 30, 2021. The overall increase was primarily due to the following factors:

•clinical trial expense increased by $6.1 million, primarily related to increases in Phase 1 trial expenses, including the purchase of Keytruda used in combination with INBRX-105 in our Phase 1 clinical trial, as well as continued expenses related to our INBRX-109 potentially registration-enabling Phase 2 trial for the treatment of unresectable or metastatic conventional chondrosarcoma, which was initiated in the second quarter of 2021;

•contract manufacturing expense increased by $15.3 million due to greater production run costs at our CDMO partners supporting our clinical and preclinical therapeutic candidates, including larger yield batch sizes, drug substance batch manufacturing in preparation for a Phase 2 trial supply, pilot batch production for a preclinical candidate, and drug process development and manufacturing;

•pre-clinical expense decreased by $0.9 million due to the completion of several preclinical studies initiated during 2021;

•personnel-related expense increased by $5.6 million, which was attributable to an increase in our headcount including significant expansion of our clinical operations and technical operations teams, the issuance of additional stock options, and the expansion of the bonus eligibility pool in the current year; and

•facility and equipment-related expense increased by $0.4 million, which was attributable to an increase in depreciable equipment.

G&A Expense

G&A expenses increased by $7.1 million to $15.8 million during the nine months ended September 30, 2022 from $8.7 million during the nine months ended September 30, 2021. The overall increase during the nine months ended September 30, 2022, was primarily due to the following factors:

•personnel-related expenses increased by $4.5 million, related to an increase in headcount primarily due to building out our commercial strategy team, additional stock option grants to employees, and the expansion of the bonus eligibility pool in the current year;

•pre-commercialization expenses increased by $1.6 million, primarily related to market research expenses related to INBRX-101 and INBRX-109, and other expenses incurred in relation to scientific publications and our commercial strategy efforts;

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•accounting fees increased by $0.3 million due to additional professional services required following the establishment of our ATM facility, as well as other consultation fees; and

•facility and equipment-related expense increased by $0.4 million, which was primarily attributable to an increase in software and other depreciable equipment; and

•other G&A expense of $0.2 million of expenses related to our participation in a conference in which we presented data for INBRX-101.

Other Expense

Interest expense, net. Interest expense, net, increased by $7.4 million to $10.8 million during the nine months ended September 30, 2022 from $3.4 million during the nine months ended September 30, 2021. During the nine months ended September 30, 2022, we recorded $11.1 million of interest related to interest paid and the amortization of debt discounts related to the Amended 2020 Loan Agreement, under which we had an outstanding principal balance of $170.0 million as of September 30, 2022. Interest expense was offset in part by $0.3 million of interest income during the nine months ended September 30, 2022. During the nine months ended September 30, 2021, we recorded $3.6 million of interest related to interest paid and the amortization of debt discounts related to the Amended 2020 Loan Agreement, under which we had an outstanding principal balance of $70.0 million as of September 30, 2021. Interest expense was offset in part by $0.2 million of interest income during the nine months ended September 30, 2021.

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Cash Flow Summary

The following table sets forth a summary of the net cash flow activity for each of the periods indicated (in thousands):

	NINE MONTHS ENDED SEPTEMBER 30,
	2022		2021
Net cash used in operating activities	$	(84,701)	$	(57,703)
Net cash used in investing activities	(419)		(542)
Net cash provided by financing activities	99,892		42,285
Net increase (decrease) in cash and cash equivalents	$	14,772	$	(15,960)

Operating Activities

Net cash used in operating activities was $84.7 million during the nine months ended September 30, 2022 and consisted primarily of a net loss of $104.3 million, adjusted for non-cash items including accretion on our debt discount and the non-cash portion of interest expense related to our debt of $2.2 million, stock-based compensation expense of $15.1 million, depreciation and amortization of $0.9 million, and non-cash lease expense of $1.2 million. Changes in operating assets and liabilities also contributed to the cash used in operating activities, primarily related to increases in prepaid expenses and other current assets of $0.4 million and accrued expenses and other current liabilities of $5.0 million due to the timing of clinical activity and contract manufacturing work performed by our CDMO partners. These were offset by increases in other non-current assets of $1.3 million relating to deposits paid to one of our CRO partners. Additionally, deferred revenue decreased by $1.7 million upon the recognition of revenue under our option and license agreements and the operating lease liability decreased by $1.2 million.

Net cash used in operating activities was $57.7 million during the nine months ended September 30, 2021 and consisted primarily of a net loss of $60.6 million, adjusted for non-cash items including accretion on our debt discount and the non-cash portion of interest expense related to our debt of $0.8 million, stock-based compensation expense of $10.9 million, depreciation and amortization of $0.9 million, and non-cash lease expense of $1.1 million. Changes in operating assets and liabilities also contributed to the cash used in operating activities, primarily related to increases in prepaid expenses and other current assets of $2.6 million and decreases in accounts payable of $1.2 million and accrued expenses and other current liabilities of $5.1 million due to the timing of clinical activity and contract manufacturing work performed by our CDMO partners. Additionally, deferred revenue decreased by $0.9 million and the operating lease liability decreased by $1.1 million.

Investing Activities

Net cash used in investing activities was $0.4 million and $0.5 million during the nine months ended September 30, 2022 and September 30, 2021, respectively, and was primarily related to capital purchases, including laboratory equipment.

Financing Activities

Net cash provided by financing activities was $99.9 million during the nine months ended September 30, 2022 and consisted primarily of approximately $98.9 million of proceeds from Oxford under the Amended 2020 Loan Agreement upon draw of the Term D Loan in February 2022 and the Term E and Term F Loans in June 2022. Additionally, we received approximately $1.1 million of proceeds upon the exercise of stock options.

Net cash provided by financing activities was $42.3 million during the nine months ended September 30, 2021 and consisted primarily of approximately $40.0 million of proceeds from Oxford under the Amended 2020 Loan Agreement upon draw of the Term C Loan. Additionally, we received approximately $2.4 million of proceeds received upon the exercise of stock options.

Critical Accounting Estimates and Policies

Our management’s 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 accounting principles

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generally accepted in the United States of America, or GAAP. The preparation of financial statements requires us to make estimates and judgements that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Changes in estimates are reflected in reported results for the period in which they become known. Actual results could differ significantly from the estimates made by our management.

There have been no material changes to our critical accounting policies and estimates from those disclosed in our financial statements and the related notes and other financial information included in our Annual Report on Form 10-K for the year ended December 31, 2021.

Recent Accounting Pronouncements

See Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report for a discussion of recent accounting pronouncements and their effect, if any, on us.

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Item 3. Quantitative and Qualitative Disclosures about Market Risks.

Interest Rate Risk

Our cash and cash equivalents consist of cash held in readily available checking and money market accounts. We are exposed to market risk related to fluctuations in interest rates and market prices. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of United States interest rates. However, due to the short-term nature of the instruments in our portfolio, a sudden change in market interest rates would not be expected to have a material impact on our financial condition or results of operations.

Effects of Inflation

Inflation generally affects us by increasing our cost of labor and research and development contract costs. We do not believe inflation has had a material effect on our results of operations during the periods presented.

Foreign Currency Exchange Risk

We are exposed to market risk related to changes in foreign currency exchange rates. We contract with vendors that are located outside the United States, and certain invoices are denominated in foreign currencies. We are subject to fluctuations in foreign currency rates in connection with these arrangements. To date, we have not experienced any material effects from foreign currency fluctuations.

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation and supervision of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were designed and operating effectively at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. In addition, the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

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Part II — Other Information

Item 1. Legal Proceedings.

We are not currently a party to any material legal proceedings. From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors.

Item 1A. Risk Factors.

There have been no material changes to the risk factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021 and in Part II, Item 1A of our Quarterly Report on Form 10-Q for the three months ended March 31, 2022.

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

(a) Recent Sales of Unregistered Securities

None.

(b) Use of Proceeds

On August 18, 2020, the SEC declared effective our registration statement on Form S-1 (File No. 333-240135), as amended, filed in connection with our IPO. Our IPO closed on August 21, 2020, and we issued and sold 8,050,000 shares of our common stock at a price to the public of $17.00 per share, which included the exercise in full of the underwriters’ option to purchase additional shares. We received gross proceeds from our IPO of $136.9 million, before deducting underwriting discounts, commissions and offering costs of $11.0 million, for net proceeds of approximately $125.9 million. No offering expenses were paid directly or indirectly to any of our directors or officers (or their associates) or persons owning ten percent or more of any class of our equity securities or to any other affiliates.

The joint book-running managing underwriters of the offering were Jefferies LLC, Evercore Group L.L.C. and Credit Suisse Securities (USA) LLC, with LifeSci Capital as Co-Manager.

Upon receipt, the net proceeds from our IPO were held in cash and cash equivalents, primarily bank deposits and money market funds. Through September 30, 2022, we have used the net proceeds from our IPO for the research and development of our programs and for general corporate purposes. There has been no material change in the planned use of proceeds from our IPO from those disclosed in the Prospectus for our IPO filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on August 18, 2020.

(c) Issuer Purchases of Equity Securities

For the quarter ended September 30, 2022, we did not repurchase any equity securities.

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Item 3. Defaults Upon Senior Securities.

None.

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Item 4. Mine Safety Disclosures.

Not applicable.

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Item 5. Other Information.

Amendment and Restatement of Executive Officer Employment Agreements

The following information is being included in this Item 5 in lieu of filing such information on a Current Report on Form 8-K under Item 5.02. Compensatory Arrangements of Certain Officers.

On November 4, 2022, in connection with the regularly scheduled review of executive compensation, the compensation committee of our Board of Directors approved, effective as of January 1, 2023, annual salary increases for Mark Lappe, Brendan Eckelman, Ph.D., and Kelly Deck, as well as increased target annual bonus opportunities for Mark Lappe and Kelly Deck. The employment agreements of Mark Lappe and Kelly Deck have been amended and restated accordingly, effective as of January 1, 2023. All other terms remain the same. The amended and restated employment agreements attached to this Quarterly Report as Exhibits 10.2 and 10.3 will supersede and replace the current employment agreements previously filed with the Securities and Exchange Commission.

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Item 6. Exhibits.

(a) Exhibits.

Exhibit No.	Description of Exhibit	Filed Herewith	Form	Incorporated By Reference File No.	Date Filed
10.1	Sixth Amendment to Loan and Security Agreement, dated October 3, 2022, by and between the Company and Oxford Finance LLC		8-K	001-39452	10/4/2022
10.2^	Third Amended and Restated Executive Employment Agreement, effective as of January 1, 2023, by and between the Company and Mark Lappe	X
10.3^	Second Amended and Restated Executive Employment Agreement, effective as of January 1, 2023, by and between the Company and Kelly Deck	X
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X
32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
32.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document	X
101.SCH	Inline XBRL Taxonomy Extension Schema Document	X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	X
104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document contained in Exhibit 101	X

*    This certification is deemed not filed for purpose of section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

^    Management compensation plan or arrangement.

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SIGNATURES

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

	INHIBRX, INC.
Date: November 7, 2022	/s/ Mark P. Lappe
	Mark P. Lappe
	Chief Executive Officer and Chairman
	(Principal Executive Officer)
Date: November 7, 2022	/s/ Kelly D. Deck
	Kelly D. Deck, C.P.A.
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

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EX-10.2

Exhibit 10.2

THIRD AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

This Third Amended and Restated Executive Employment Agreement (this “Agreement”) is effective as of January 1, 2023 (the “Effective Date”) by and between Inhibrx, Inc., a Delaware corporation (the “Company”), and Mark Lappe (“Executive”).

WHEREAS, Executive is currently employed by the Company, pursuant to the terms of that certain Second Amended and Restated Executive Employment Agreement effective as of January 1, 2022 (the “Prior Agreement”); and

WHEREAS, Executive and the Company desire to amend and restate the terms of the Prior Agreement as set forth herein, and to have this Agreement become effective as of the Effective Date.

NOW, THEREFORE, in consideration of the mutual promises, terms, provisions, and conditions contained herein, the Company and Executive hereby agree to amend and restate the Prior Agreement as follows:

1.Roles and Duties.

(a)Chief Executive Officer Role. Subject to the terms and conditions of this Agreement, the Company shall employ Executive as its Chief Executive Officer, reporting to the Company’s Board of Directors (the “Board”). The Executive shall have such duties and responsibilities as are reasonably determined by the Board of Directors and are consistent with the duties customarily performed by a chief executive officer of a similarly situated company in the United States. Executive accepts such employment upon the terms and conditions set forth herein, and agrees to perform such duties and discharge such responsibilities to the best of Executive’s ability. During Executive’s employment, Executive shall devote all of Executive’s business time and energies to the business and affairs of the Company. Notwithstanding the foregoing, nothing herein shall preclude Executive from (i) performing services for such other companies as the Company may designate or permit; (ii) serving, with the prior written consent of the Board, which consent shall not be unreasonably withheld, as a member of the boards of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses or charitable, educational or civic organizations; (iii) engaging in charitable activities and community affairs; and (iv) managing Executive’s personal investments and affairs; provided, however, that the activities set out in clauses (i), (ii), (iii) and (iv) shall be limited by Executive so as not to materially interfere, individually or in the aggregate, with the performance of Executive’s duties and responsibilities hereunder.

(b)Board Membership. Executive shall serve as a member of the Board during Executive’s employment hereunder until the term of his directorship expires and he is not re-elected or his earlier resignation or removal from the Board. During the Term (as defined below), the Company or the applicable Board committee will recommend to the Board for nomination, and the Board shall nominate the Executive for reelection to the Board. Executive’s service as a Board member shall be without further compensation. Executive shall resign from the Board effective immediately upon the termination of Executive’s employment with the Company for any reason, and in the absence of any other written resignation proffered to the Board, this agreement, upon such termination, shall constitute such a written resignation.

2.Term of Employment.

(c)Term. Subject to the terms hereof, Executive’s employment hereunder shall continue until terminated hereunder by either party (such term of employment referred to herein as the “Term”).

(d)Termination. Notwithstanding anything else contained in this Agreement, Executive’s employment hereunder shall terminate upon the earliest to occur of the following:

(i)Death. Immediately upon Executive’s death;

(ii)Termination by the Company.

(A)If because of Executive’s Disability (as defined below in Section 2(c)), written notice by the Company to Executive that Executive’s employment is being terminated as a result of Executive’s Disability, which termination shall be effective on the date of such notice or such later date as specified in writing by the Company;

(B)If for Cause (as defined below in Section 2(d)), written notice by the Company to Executive that Executive’s employment is being terminated for Cause, which termination shall be effective on the date of such notice or such later date as specified in writing by the Company, provided that if prior to the effective date of such termination Executive has cured the circumstances giving rise to the Cause (if capable of being cured as provided in Section 2(d)), then such termination shall not be effective; or

(C)If by the Company for reasons other than under Sections 2(b)(ii)(A) or (B), written notice by the Company to Executive that Executive’s employment is being terminated, which termination shall be effective thirty (30) days after the date of such notice.

(i)Termination by Executive.

(D)If for Good Reason (as defined below in Section 2(e)), written notice by Executive to the Company that Executive is terminating Executive’s employment for Good Reason and that sets forth the factual basis supporting the alleged Good Reason, which termination shall be effective thirty (30) days after the date of such notice; provided that if prior to the effective date of such termination the Company has cured the circumstances giving rise to the Good Reason if capable of being cured as provided in Section 2(e), then such termination shall not be effective; or

(E)If without Good Reason, written notice by Executive to the Company that Executive is terminating Executive’s employment, which termination shall be effective no fewer than sixty (60) days after the date of such notice unless waived, in whole or in part, by the Company.

Notwithstanding anything in this Section 2(b), the Company may at any point, under the conditions set forth in Section 2(b)(ii)(B), terminate Executive’s employment for Cause prior to the effective date of any other termination contemplated hereunder; provided that if prior to the effective date of such for-Cause termination Executive has cured the circumstances giving rise to the Cause (if capable of being cured as provided in Section 2(d)), then such termination shall not be effective.

(a)Definition of “Disability”. For purposes of this Agreement, “Disability” shall mean Executive’s incapacity or inability to perform Executive’s duties and responsibilities as contemplated herein by reason of a medically determinable mental or physical impairmentfor one hundred twenty (120) days or more within any one (1) year period (cumulative or

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consecutive), which impairment can reasonably be expected to result in death or can be expected to last for a continuous period of not less than six (6) months. The determination that Executive is disabled hereunder, if disputed by the parties, shall be resolved by a physician reasonably satisfactory to Executive and the Company, at the Company’s expense, and the determination of such physician shall be final and binding upon both Executive and the Company. Executive hereby consents to such examination and consultation by a physician. The Company will keep all information it receives as a result of such inquiry and determination confidential and will not use it for any purpose other than in connection with exercising its rights under this Agreement.

(b)Definition of “Cause”. As used herein, “Cause” shall mean: (i) Executive’s conviction of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (ii) Executive’s willful failure or refusal to comply with lawful directions of the Board, which failure or refusal continues for more than five (5) business days after written notice is given to Executive, which notice sets forth in reasonable detail the nature of such failure or refusal; (iii) willful and material breach by Executive of a material written Company policy or under this Agreement, provided Executive does not cure such breach within five (5) business days after receiving written notice of the alleged breach; or (iv) misconduct by Executive that materially damages the Company or any of its affiliates. Except in the case of (ii) above, it is not necessary that the Company’s finding of Cause occur prior to Executive’s termination of service.

(c)Definition of “Good Reason”. As used herein, “Good Reason” shall mean: (i) relocation of Executive’s principal business location to a location more than thirty (30) miles from Executive’s then-current business location; (ii) a material diminution in Executive’s duties, authority or responsibilities; (iii) a material reduction in Executive’s Base Salary; or (iv) willful and material breach by the Company of its covenants and/or obligations under this Agreement; provided that, in each of the foregoing clauses (i) through (iv) (A) Executive provides the Company with written notice that Executive intends to terminate Executive’s employment hereunder for one of the grounds set forth in this Section 2(e) within thirty (30) days of such ground occurring, (B) if such ground is capable of being cured, the Company has failed to cure such ground within a period of thirty (30) days from the date of such written notice, and (C) Executive terminates by written notice Executive’s employment within sixty-five (65) days from the date that Executive provides the notice contemplated by clause (A) of this Section 2(e). For purposes of clarification, the above-listed conditions shall apply separately to each occurrence of Good Reason, and failure to adhere to such conditions in the event of Good Reason shall not disqualify Executive from asserting Good Reason for any subsequent occurrence of Good Reason. For purposes of this Agreement, “Good Reason” shall be interpreted in a manner, and limited to the extent necessary, so that it shall not cause adverse tax consequences for either party with respect to Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”) and any successor statute, regulation and guidance thereto.

3.Compensation.

(a)Base Salary. The Company shall pay Executive a base salary (the “Base Salary”) at the annual rate of Six Hundred Seventy-Five Thousand Dollars ($675,000.00). The Base Salary shall be payable in substantially equal periodic installments in accordance with the Company’s payroll practices as in effect from time to time. The Company shall deduct from each such installment all amounts required to be deducted or withheld under applicable law or under any employee benefit plan in which Executive participates. The Board or an appropriate committee thereof shall, on an annual basis, review the Base Salary, which may be adjusted upward (but not downward) at the Company’s discretion. Each year, the Board or an appropriate committee thereof will evaluate an increase in Executive’s Base Salary based on considerations

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including but not limited to merit, cost of living, and competitive benchmarking. The amount of such salary increase, if any, will be determined by the Board in its discretion.

(b)Annual Performance Bonus. Executive shall be eligible to receive an annual cash bonus (the “Annual Performance Bonus”), with the target amount of such Annual Performance Bonus equal to sixty percent (60%) of Executive’s Base Salary (the “Target Performance Bonus”) in the year to which the Annual Performance Bonus relates; provided that the actual amount of the Annual Performance Bonus may be greater or less than the Target Performance Bonus. The Annual Performance Bonus shall be based on performance and achievement of Company goals and objectives as defined by the Board or Compensation Committee. The amount of the Annual Performance Bonus shall be determined by the Board or Compensation Committee in its sole discretion, and shall be paid to Executive no later than March 15th of the calendar year immediately following the calendar year in which it was earned. Except as provided in Section 4, Executive must be employed by the Company on the date that the Annual Performance Bonus is paid to Executive in order to be eligible for, and to be deemed as having earned, such Annual Performance Bonus. The Company shall deduct from the Annual Performance Bonus all amounts required to be deducted or withheld under applicable law or under any employee benefit plan in which Executive participates.

(c)Equity. In addition to the equity awards currently outstanding, Executive will be eligible to be considered for the grant of stock options and/or other equity-based awards commensurate with Executive’s position and responsibilities. The amount, terms and conditions of any stock option or other equity-based award will be determined by the Board or an appropriate committee thereof in its discretion and set forth in the applicable equity plan and other documents governing the award.

(d)Paid Time Off. Executive is permitted unlimited discretionary paid time off for vacation and personal leave, (i) provided that this does not negatively impact Executive’s duties to Company (contemplated in Section 1 of this Agreement) in a material manner, (ii) subject to limitations for short and long-term disability, and (iii) to the extent such benefit continues to be extended to other executives of the Company. Executive shall not accrue any paid time off and no such paid time off shall be paid/owed to Executive at the time of termination—regardless of the circumstances of Executive’s termination of employment.

(e)Fringe Benefits. Executive shall be entitled to participate in all benefit/welfare plans and fringe benefits provided to Company senior executives. Executive understands that, except when prohibited by applicable law, the Company’s benefit plans and fringe benefits may be amended by the Company from time to time in its sole discretion. The terms of any such benefits shall be governed by the applicable plan documents and Company policies in effect from time to time (and, to the extent this Agreement conflicts with such terms, the terms of such benefit plans shall govern).

(f)Reimbursement of Expenses. The Company shall reimburse Executive for all ordinary and reasonable out-of-pocket business expenses incurred by Executive in furtherance of the Company’s business in accordance with the Company’s policies with respect thereto as in effect from time to time. Executive must submit any request for reimbursement no later than ninety (90) days following the date that such business expense is incurred. All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement); (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year; (iii) the reimbursement of an eligible expense shall be made no later than the last day of the calendar year

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following the year in which the expense is incurred; and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

(g)Indemnification. Executive shall be entitled to indemnification with respect to Executive’s services provided hereunder pursuant to Delaware law, the terms and conditions of the Company’s certificate of incorporation and/or by-laws, and the Company’s standard indemnification agreement for directors and officers as executed by the Company and Executive. The Executive shall be entitled to coverage under the Company’s Directors’ and Officers’ (“D&O”) insurance policies that it may hold now or in the future to the same extent and in the same manner (i.e., subject to the same terms and conditions) to which the Company’s other executive officers are entitled to coverage under any of the Company’s D&O insurance policies.

(h)Forfeiture/Clawback. All compensation shall be subject to any forfeiture or clawback policy established by the Company generally for senior executives from time to time and any other such policy required by applicable law.

4.Payments Upon Termination.

(d)Definition of Accrued Obligations. For purposes of this Agreement, “Accrued Obligations” means: (i) the portion of Executive’s Base Salary that has accrued prior to any termination of Executive’s employment with Company and has not yet been paid; and (ii) the amount of any expenses properly incurred by Executive on behalf of the Company prior to any such termination and not yet reimbursed.Executive’s entitlement to any other compensation or benefit under any Company plan shall be governed by and determined in accordance with the terms of such plans, except as otherwise specified in this Agreement.

(e)Termination by the Company for Cause. If Executive’s employment hereunder is terminated by the Company for Cause, then the Company shall pay the Accrued Obligations to Executive within the time provided by law for terminated employees and the Company shall have no further obligations to Executive under this Agreement.

(f)Termination by Executive Without Good Reason. If Executive’s employment hereunder is terminated by Executive without Good Reason, then the Company shall pay the Accrued Obligations and any accrued and unpaid Annual Performance Bonus for the prior fiscal year to Executive within the time provided by law and the Company shall have no further obligations to Executive under this Agreement.

(g)Termination as a Result of Executive’s Disability or Death. If Executive’s employment hereunder terminates as a result of Executive’s Disability or death, the Company shall pay to Executive within the time provided by law (i) the Accrued Obligations; (ii) any accrued and unpaid Annual Performance Bonus for the prior fiscal year; and (iii) the Pro Rated Bonus (as defined below) and, shall have no further obligations with respect to any benefit or compensation under this Agreement to Executive hereunder. As used in this Section 4, “Pro Rated Bonus” shall mean an amount in cash equal to the Target Performance Bonus for which Executive would have been eligible with respect to the year in which termination of Executive’s employment occurs multiplied by a fraction, the numerator of which is the number of days during which Executive is employed by the Company during the year of termination and the denominator of which is 365.

(h)Termination by the Company Without Cause or by Executive For Good Reason. In the event that Executive’s employment is terminated by action of the Company without Cause, or Executive terminates Executive’s employment for Good Reason, then, in addition to the Accrued Obligations and any accrued and unpaid Annual Performance Bonus for

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the prior fiscal year, Executive shall receive the following, subject to the terms and conditions described in Section 4(g) (including Executive’s execution of the Release (as defined herein)):

(i)Severance Payments. Continuation of payments in an amount equal to Executive’s then-current Base Salary for a twelve (12) month period, less all customary and required taxes and employment-related deductions, in accordance with the Company’s normal payroll practices (provided such payments shall be made at least monthly) (the “Severance Payments”).

(ii)Equity Acceleration. On the date of termination of Executive’s employment, Executive shall become fully vested in any and all equity awards that would have vested during the twelve (12) month period following the termination date.

(iii)Benefits Payments. Upon completion of appropriate forms and subject to applicable terms and conditions under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall continue to provide Executive medical insurance coverage to the same extent that such insurance continues to be provided to similarly situated executives at the time of Executive’s termination with the cost of the regular premium for such benefits shared in the same relative proportion by the Company and Executive as in effect on the last day of employment (the “COBRA Payment”), until the earlier to occur of: (i) twelve (12) months following Executive’s termination date, or (ii) the date Executive becomes eligible for medical benefits with another employer. Notwithstanding the foregoing, if Executive’s COBRA Payment would cause the applicable group health plan to be discriminatory and, therefore, result in adverse tax consequences to Executive, the Company shall, in lieu of the COBRA Payment, provide Executive with an equivalent monthly cash payment, minus deduction of all amounts required to be deducted or withheld under applicable law, for any period of time Executive is eligible to receive the COBRA Payment. Executive shall bear full responsibility for applying for COBRA continuation coverage and the Company shall have no obligation to provide Executive such coverage if Executive fails to elect COBRA benefits in a timely fashion.

Payment of the above described severance payments and benefits are expressly conditioned on Executive’s execution without revocation of the Release and return of Company property under Section 6. The Company will commence payment of the Severance Payments and the COBRA Payment on the first payroll date following the date on which the Release required by Section 4(g) becomes effective and non-revocable, provided, that if the 60 day period during which the Release is required to become enforceable and irrevocable crosses a tax year, then the payments will be delayed until such subsequent calendar year; provided further that if such payments are delayed until such subsequent year, the first such payment shall be a lump sum in an amount equal to the payments that would have come due since Executive’s separation from service.

(a)Termination by the Company Without Cause or by Executive For Good Reason Following a Change of Control. In the event that a Change of Control of the Company (as defined below) occurs and within a period of one (1) year following the Change of Control, or ninety (90) days preceding the earlier to occur of a Change of Control or the execution of a definitive agreement the consummation of which would result in a Change of Control, Executive’s employment is terminated without Cause, or Executive terminates Executive’s employment for Good Reason, then, in addition to the Accrued Obligations and any accrued and unpaid Annual Performance Bonus for the prior fiscal year, Executive shall receive the

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following, subject to the terms and conditions described in Section 4(g) (including Executive’s execution of the Release):

(iv)Lump Sum Severance Payment. Payment of a lump sum amount equal to the sum of (A) eighteen (18) months of Executive’s then-current Base Salary and (B) 1.5 times the Target Performance Bonus for the year in which termination of Executive’s employment occurs, less all customary and required taxes and employment-related deductions (the “Lump Sum Severance Amount”)

(v) Equity Acceleration. On the date of termination of Executive’s employment, Executive shall become fully vested in any and all equity awards outstanding as of the date of Executive’s termination and this provision shall supersede any option acceleration provision contained in any option agreement outstanding on the Effective Date.

(vi)Benefit Payments. Upon completion of appropriate forms and subject to applicable terms and conditions under COBRA, the Company shall continue to provide Executive medical insurance coverage to the same extent that such insurance continues to be provided to similarly situated executives at the time of Executive’s termination with the cost of the regular premium for such benefits shared in the same relative proportion by the Company and Executive as in effect on the last day of employment, until the earlier to occur of: (i) eighteen (18) months following Executive’s termination date, or (ii) the date Executive becomes eligible for medical benefits with another employer. Notwithstanding the foregoing, if Executive’s COBRA Payment would cause the applicable group health plan to be discriminatory and, therefore, result in adverse tax consequences to Executive, the Company shall, in lieu of the COBRA Payment, provide Executive with an equivalent monthly cash payment, minus deduction of all amounts required to be deducted or withheld under applicable law, for any period of time Executive is eligible to receive the COBRA Payment. Executive shall bear full responsibility for applying for COBRA continuation coverage and the Company shall have no obligation to provide Executive such coverage if Executive fails to elect COBRA benefits in a timely fashion.

Payment of the above described severance payments and benefits are expressly conditioned on Executive’s execution without revocation of the Release and return of Company property under Section 6. In the event that Executive is eligible for the severance payments and benefits under this Section 4(f), Executive shall not be eligible for any of the severance payments and benefits as provided in Section 4(e). The Company will pay the Lump Sum Severance Amount and will commence payment of the COBRA Payment on the first payroll date following the date on which the Release required by Section 4(g) becomes effective and non-revocable, provided, that if the 60 day period during which the Release is required to become enforceable and irrevocable crosses a tax year, then the payments will delayed until such subsequent calendar year; provided further that if such payments are delayed until such subsequent year, the first such payment shall be a lump sum in an amount equal to the payments that would have come due since Executive’s separation from service.

As used herein, a “Change of Control” shall mean the occurrence of any of the following events: (i) Ownership. Any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “Beneficial Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company, or any affiliate, parent or subsidiary of the Company, or by any employee benefit plan of the

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Company) pursuant to a transaction or a series of related transactions; or (ii) Merger/Sale of Assets. (A) A merger or consolidation of the Company whether or not approved by the Board, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such corporation) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such corporation, as the case may be, outstanding immediately after such merger or consolidation; (B) or the Company’s stockholders approve an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; or (iii) Change in Board Composition. A change in the composition of the Board, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A) are directors of the Company as of the date of this Agreement, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors, or by a committee of the Board made up of at least a majority of the Incumbent Directors, at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors).

(i)Execution of Release of Claims. The Company shall not be obligated to pay Executive any of the severance payments or benefits described in this Section 4 unless and until Executive has executed (without revocation) a release of claims as described below (the “Release”). The Release shall contain reasonable and customary provisions including a general release of claims against the Company and its affiliated entities and each of their officers, directors and employees as well as provisions concerning non-disparagement, confidentiality, cooperation and the like. The Release must be provided to Executive not later than fifteen (15) days following the effective date of termination of Executive’s employment by the Company and executed by Executive and returned to the Company within sixty (60) days after such effective date. If Executive fails or refuses to return the Release within such 60-day period, Executive’s severance payments and benefits to be paid hereunder shall be forfeited.

(j)No Other Payments or Benefits Owing. Except as expressly set forth herein, the payments and benefits set forth in this Section 4: (a) shall be the sole amounts owing to Executive upon termination of Executive’s employment for the reasons set forth above, and Executive shall not be eligible for any other payments or other forms of compensation or benefits; (b) shall be the sole remedy, if any, available to Executive in the event that Executive brings any claim against the Company relating to the termination of Executive’s employment under this Agreement; and (c) shall not be subject to set-off by the Company or any obligation on the part of Executive to mitigate or to offset compensation earned by Executive in other pursuits after termination of employment, other than as specified herein with respect medical benefits provided by another employer.

5.Proprietary Information. Executive expressly acknowledges that: (a) there are competitive and proprietary aspects of the business of the Company; (b) during the course of Executive’s employment, the Company shall furnish, disclose or make available to Executive confidential and proprietary information and may provide Executive with unique and specialized training; (c) such confidential information and training have been developed and shall be developed by the Company through the expenditure of substantial time, effort and money, and could be used by Executive to compete with the Company; and (d) in the course of Executive’s employment, Executive shall be introduced to customers and others with important relationships to the Company, and any and all “goodwill” created through such introductions belongs exclusively to the Company, including, but not limited to, any goodwill created as a result of direct or indirect contacts or relationships between Executive and any customers of the Company. In light of the foregoing acknowledgements, and as a condition of continued employment hereunder, Executive hereby reaffirms, confirms and approves the Proprietary

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Information and Inventions Assignment Agreement entered into on the date hereof as a binding obligation of the Executive, enforceable in accordance with its terms.

6.Property and Records. Upon the termination of Executive’s employment hereunder for any reason or for no reason, or if the Company otherwise requests, Executive shall: (a) return to the Company all tangible business information and copies thereof (regardless how such confidential information or copies are maintained), and (b) deliver to the Company any property of the Company which may be in Executive’s possession, including, but not limited to, devices, smart phones, laptops, cell phones (the foregoing, “electronic devices”), products, materials, memoranda, notes, records, reports or other documents or photocopies of the same. Executive may retain copies of any exclusively personal data contained in or on the Company-owned electronic devices returned to the Company pursuant to the foregoing. The foregoing notwithstanding, Executive understands and agrees that the Company property belongs exclusively to the Company, it should be used for Company business, and Executive has no reasonable expectation of privacy on any Company property or with respect to any information stored thereon.

7.Cooperation. During and after Executive’s employment, Executive shall fully cooperate with the Company to the extent reasonable in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company (other than claims directly or indirectly against Executive) which relate to events or occurrences that transpired while Executive was employed by the Company. Executive’s cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after Executive’s employment, Executive also shall fully cooperate with the Company to the extent reasonable in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while Executive was employed by the Company. The Company shall reimburse Executive for any reasonable out-of-pocket expenses incurred in connection with the Executive’s performance of obligations pursuant to this section.

8.Code Sections 409A and 280G.

(i)In the event that the payments or benefits set forth in Section 4 of this Agreement constitute “non-qualified deferred compensation” subject to Section 409A, then the following conditions apply to such payments or benefits:

(i)Any termination of Executive’s employment triggering payment of benefits under Section 4 must constitute a “separation from service” under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits can commence. To the extent that the termination of Executive’s employment does not constitute a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be provided by Executive to the Company at the time Executive’s employment terminates), any such payments under Section 4 that constitute deferred compensation under Section 409A shall be delayed until after the date of a subsequent event constituting a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h). For purposes of clarification, this Section 8(a) shall not cause any forfeiture of benefits on Executive’s part, but shall only act as a delay until such time as a “separation from service” occurs.

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(ii)Notwithstanding any other provision with respect to the timing of payments under Section 4 if, at the time of Executive’s termination, Executive is deemed to be a “specified employee” of the Company (within the meaning of Section 409A(a)(2)(B)(i) of the Code), then limited only to the extent necessary to comply with the requirements of Section 409A, any payments to which Executive may become entitled under Section 4 which are subject to Section 409A (and not otherwise exempt from its application) shall be withheld until the first (1st) business day of the seventh (7th) month following the termination of Executive’s employment, at which time Executive shall be paid an aggregate amount equal to the accumulated, but unpaid, payments otherwise due to Executive under the terms of Section 4.

(k)It is intended that each installment of the payments and benefits provided under Section 4 of this Agreement shall be treated as a separate “payment” for purposes of Section 409A. Neither the Company nor Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A.

(l)Notwithstanding any other provision of this Agreement to the contrary, this Agreement shall be interpreted and at all times administered in a manner that avoids the inclusion of compensation in income under Section 409A, or the payment of increased taxes, excise taxes or other penalties under Section 409A. The parties intend this Agreement to be in compliance with Section 409A. Executive acknowledges and agrees that the Company does not guarantee the tax treatment or tax consequences associated with any payment or benefit arising under this Agreement, including but not limited to consequences related to Section 409A.

(m)If any payment or benefit Executive would receive under this Agreement, when combined with any other payment or benefit Executive receives pursuant to a Change of Control (for purposes of this section, a “Payment”) would: (i) constitute a “parachute payment” within the meaning of Section 280G the Code; and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be either: (A) the full amount of such Payment; or (B) such lesser amount (with cash payments being reduced before stock option compensation) as would result in no portion of the Payment being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local employments taxes, income taxes, and the Excise Tax, results in Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. Notwithstanding the foregoing, if, prior to the closing of an initial public offering, any Payment can be exempt from the definition of “parachute payment” and the Excise Tax pursuant to the shareholder approval requirements described in Treas. Regs. § 1.280G-1, Q&A 6, the Company will, at the Executive’s election (and subject to the Executive signing an appropriate waiver) seek shareholder approval to exempt such Payment from the definition of “parachute payment” and the Excise Tax.

9.General.

(b)Notices. Except as otherwise specifically provided herein, any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier upon written verification of receipt; (iii) by telecopy or electronic mail transmission provided acknowledgment of receipt of electronic transmission is provided; or (iv) by certified or registered mail, return receipt requested, upon verification of receipt.

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Notices to Executive shall be sent to the last known address in the Company’s records or such other address as Executive may specify in writing.

Notices to the Company shall be sent to:

        Inhibrx, Inc.

        Attn: Board of Directors

        11025 N. Torrey Pines Road, Suite 200

        La Jolla, CA 92037

(c)Modifications and Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by the parties hereto.

(d)Waivers and Consents. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by a written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given and shall not constitute a continuing waiver or consent.

(e)Assignment. The Company may assign its rights and obligations hereunder to any person or entity that succeeds to all or substantially all of the Company’s business or that aspect of the Company’s business in which Executive is principally involved. Executive may not assign Executive’s rights and obligations under this Agreement without the prior written consent of the Company.

(f)Governing Law/Dispute Resolution. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the law of the State of California without giving effect to the conflict of law principles thereof. Any legal action or proceeding with respect to this Agreement shall be brought in the courts of the State of California or of the United States of America for the Southern District of California. By execution and delivery of this Agreement, each of the parties hereto accepts for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts.

(g)Headings and Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.

(h)Entire Agreement. This Agreement, together with the other agreements specifically referenced herein, embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.

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(i)Counterparts. This Agreement may be executed in two or more counterparts, and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. For all purposes an electronic signature shall be treated as an original.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

INHIBRX, INC.

By: /s/ Jon Faiz Kayyem

       Name: Jon Faiz Kayyem

       Title: Director and Chairman of the Compensation Committee

EXECUTIVE

By: /s/ Mark Lappe

       Name: Mark Lappe

[Signature Page to Third Amended and Restated Executive Employment Agreement]

EX-10.3

Exhibit 10.3

SECOND AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

This Second Amended and Restated Executive Employment Agreement (this “Agreement”) is effective as of January 1, 2023 (the “Effective Date”) by and between Inhibrx, Inc., a Delaware corporation (the “Company”), and Kelly Deck (“Executive”).

WHEREAS, Executive is currently employed by the Company, pursuant to the terms of that certain Amended and Restated Executive Employment Agreement effective as of January 1, 2022 (the “Prior Agreement”); and

WHEREAS, Executive and the Company desire to amend and restate the terms of the Prior Agreement as set forth herein, and to have this Agreement become effective as of the Effective Date.

NOW, THEREFORE, in consideration of the mutual promises, terms, provisions, and conditions contained herein, the Company and Executive hereby agree to amend and restate the Prior Agreement as follows:

1.Roles and Duties. Subject to the terms and conditions of this Agreement, the Company shall employ Executive as its EVP, Chief Financial Officer reporting to the Company’s Chief Executive Officer (the “CEO”). The Executive shall have such duties and responsibilities as are reasonably determined by the Board of Directors (the “Board”) and are consistent with the duties customarily performed by a chief financial officer of a similarly situated company in the United States. Executive accepts such employment upon the terms and conditions set forth herein, and agrees to perform such duties and discharge such responsibilities to the best of Executive’s ability. During Executive’s employment, Executive shall devote all of Executive’s business time and energies to the business and affairs of the Company. Notwithstanding the foregoing, nothing herein shall preclude Executive from (i) performing services for such other companies as the Company may designate or permit; (ii) serving, with the prior written consent of the Board, which consent shall not be unreasonably withheld, as a member of the boards of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses or charitable, educational or civic organizations; (iii) engaging in charitable activities and community affairs; and (iv) managing Executive’s personal investments and affairs; provided, however, that the activities set out in clauses (i), (ii), (iii) and (iv) shall be limited by Executive so as not to materially interfere, individually or in the aggregate, with the performance of Executive’s duties and responsibilities hereunder.

2.Term of Employment.

(a)Term. Subject to the terms hereof, Executive’s employment hereunder shall continue until terminated hereunder by either party (such term of employment referred to herein as the “Term”).

(b)Termination. Notwithstanding anything else contained in this Agreement, Executive’s employment hereunder shall terminate upon the earliest to occur of the following:

(i)Death. Immediately upon Executive’s death;

(ii)Termination by the Company.

(A)If because of Executive’s Disability (as defined below in Section 2(c)), written notice by the Company to Executive that Executive’s employment is being terminated as a result of Executive’s

Disability, which termination shall be effective on the date of such notice or such later date as specified in writing by the Company;

(B)If for Cause (as defined below in Section 2(d)), written notice by the Company to Executive that Executive’s employment is being terminated for Cause, which termination shall be effective on the date of such notice or such later date as specified in writing by the Company, provided that if prior to the effective date of such termination Executive has cured the circumstances giving rise to the Cause (if capable of being cured as provided in Section 2(d)), then such termination shall not be effective; or

(C)If by the Company for reasons other than under Sections 2(b)(ii)(A) or (B), written notice by the Company to Executive that Executive’s employment is being terminated, which termination shall be effective thirty (30) days after the date of such notice.

(iii)Termination by Executive.

(D)If for Good Reason (as defined below in Section 2(e)), written notice by Executive to the Company that Executive is terminating Executive’s employment for Good Reason and that sets forth the factual basis supporting the alleged Good Reason, which termination shall be effective thirty (30) days after the date of such notice; provided that if prior to the effective date of such termination the Company has cured the circumstances giving rise to the Good Reason if capable of being cured as provided in Section 2(e), then such termination shall not be effective; or

(E)If without Good Reason, written notice by Executive to the Company that Executive is terminating Executive’s employment, which termination shall be effective no fewer than sixty (60) days after the date of such notice unless waived, in whole or in part, by the Company.

Notwithstanding anything in this Section 2(b), the Company may at any point, under the conditions set forth in Section 2(b)(ii)(B), terminate Executive’s employment for Cause prior to the effective date of any other termination contemplated hereunder; provided that if prior to the effective date of such for-Cause termination Executive has cured the circumstances giving rise to the Cause (if capable of being cured as provided in Section 2(d)), then such termination shall not be effective.

(a)Definition of “Disability”. For purposes of this Agreement, “Disability” shall mean Executive’s incapacity or inability to perform Executive’s duties and responsibilities as contemplated herein by reason of a medically determinable mental or physical impairmentfor one hundred twenty (120) days or more within any one (1) year period (cumulative or consecutive), which impairment can reasonably be expected to result in death or can be expected to last for a continuous period of not less than six (6) months. The determination that Executive is disabled hereunder, if disputed by the parties, shall be resolved by a physician reasonably satisfactory to Executive and the Company, at the Company’s expense, and the determination of such physician shall be final and binding upon both Executive and the Company. Executive hereby consents to such examination and consultation by a physician. The Company will keep all information it receives as a result of such inquiry and determination confidential and will not use it for any purpose other than in connection with exercising its rights under this Agreement.

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(b)Definition of “Cause”. As used herein, “Cause” shall mean: (i) Executive’s conviction of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (ii) Executive’s willful failure or refusal to comply with lawful directions of Executive’s supervisor, which failure or refusal continues for more than five (5) business days after written notice is given to Executive, which notice sets forth in reasonable detail the nature of such failure or refusal; (iii) willful and material breach by Executive of a material written Company policy or under this Agreement, provided Executive does not cure such breach witihin five (5) business days after receiving written notice of the alleged breach; or (iv) misconduct by Executive that materially damages the Company or any of its affiliates. Except in the case of (ii) above, it is not necessary that the Company’s finding of Cause occur prior to Executive’s termination of service.

(c)Definition of “Good Reason”. As used herein, “Good Reason” shall mean: (i) relocation of Executive’s principal business location to a location more than thirty (30) miles from Executive’s then-current business location; (ii) a material diminution in Executive’s duties, authority or responsibilities; (iii) a material reduction in Executive’s Base Salary; or (iv) willful and material breach by the Company of its covenants and/or obligations under this Agreement; provided that, in each of the foregoing clauses (i) through (iv) (A) Executive provides the Company with written notice that Executive intends to terminate Executive’s employment hereunder for one of the grounds set forth in this Section 2(e) within thirty (30) days of such ground occurring, (B) if such ground is capable of being cured, the Company has failed to cure such ground within a period of thirty (30) days from the date of such written notice, and (C) Executive terminates by written notice Executive’s employment within sixty-five (65) days from the date that Executive provides the notice contemplated by clause (A) of this Section 2(e). For purposes of clarification, the above-listed conditions shall apply separately to each occurrence of Good Reason, and failure to adhere to such conditions in the event of Good Reason shall not disqualify Executive from asserting Good Reason for any subsequent occurrence of Good Reason. For purposes of this Agreement, “Good Reason” shall be interpreted in a manner, and limited to the extent necessary, so that it shall not cause adverse tax consequences for either party with respect to Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”) and any successor statute, regulation and guidance thereto.

3.Compensation.

(a)Base Salary. The Company shall pay Executive a base salary (the “Base Salary”) at the annual rate of Four Hundred Thirty Thousand Dollars ($430,000.00). The Base Salary shall be payable in substantially equal periodic installments in accordance with the Company’s payroll practices as in effect from time to time. The Company shall deduct from each such installment all amounts required to be deducted or withheld under applicable law or under any employee benefit plan in which Executive participates. The Board or an appropriate committee thereof shall, on an annual basis, review the Base Salary, which may be adjusted upward (but not downward) at the Company’s discretion. Each year, the Board or an appropriate committee thereof will evaluate an increase in Executive’s Base Salary based on considerations including but not limited to merit, cost of living, and competitive benchmarking. The amount of such salary increase, if any, will be determined by the Board or appropriate committee in its discretion.

(b)Annual Performance Bonus. Executive shall be eligible to receive an annual cash bonus (the “Annual Performance Bonus”), with the target amount of such Annual Performance Bonus equal to forty-five percent (45%) of Executive’s Base Salary (the “Target Performance Bonus”) in the year to which the Annual Performance Bonus relates; provided that the actual amount of the Annual Performance Bonus may be greater or less than the Target Performance Bonus. The Annual Performance Bonus shall be based on performance and achievement of Company goals and objectives as defined by the Board or Compensation

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Committee. The amount of the Annual Performance Bonus shall be determined by the Board or Compensation Committee in its sole discretion, and shall be paid to Executive no later than March 15th of the calendar year immediately following the calendar year in which it was earned. Except as provided in Section 4, Executive must be employed by the Company on the date that the Annual Performance Bonus is paid to Executive in order to be eligible for, and to be deemed as having earned, such Annual Performance Bonus. The Company shall deduct from the Annual Performance Bonus all amounts required to be deducted or withheld under applicable law or under any employee benefit plan in which Executive participates.

(c)Equity. In addition to the equity awards currently outstanding, Executive will be eligible to be considered for the grant of stock options and/or other equity-based awards commensurate with Executive’s position and responsibilities. The amount, terms and conditions of any stock option or other equity-based award will be determined by the Board or an appropriate committee thereof in its discretion and set forth in the applicable equity plan and other documents governing the award.

(d)Paid Time Off. Executive is permitted unlimited discretionary paid time off for vacation and personal leave, (i) provided that this does not negatively impact Executive’s duties to Company (contemplated in Section 1 of this Agreement) in a material manner, (ii) subject to limitations for short and long-term disability, and (iii) to the extent such benefit continues to be extended to other executives of the Company. Executive shall not accrue any paid time off and no such paid time off shall be paid/owed to Executive at the time of termination—regardless of the circumstances of Executive’s termination of employment.

(e)Fringe Benefits. Executive shall be entitled to participate in all benefit/welfare plans and fringe benefits provided to Company senior executives. Executive understands that, except when prohibited by applicable law, the Company’s benefit plans and fringe benefits may be amended by the Company from time to time in its sole discretion. The terms of any such benefits shall be governed by the applicable plan documents and Company policies in effect from time to time (and, to the extent this Agreement conflicts with such terms, the terms of such benefit plans shall govern).

(f)Reimbursement of Expenses. The Company shall reimburse Executive for all ordinary and reasonable out-of-pocket business expenses incurred by Executive in furtherance of the Company’s business in accordance with the Company’s policies with respect thereto as in effect from time to time. Executive must submit any request for reimbursement no later than ninety (90) days following the date that such business expense is incurred. All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement); (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year; (iii) the reimbursement of an eligible expense shall be made no later than the last day of the calendar year following the year in which the expense is incurred; and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

(g)Indemnification. Executive shall be entitled to indemnification with respect to Executive’s services provided hereunder pursuant to Delaware law, the terms and conditions of the Company’s certificate of incorporation and/or by-laws, and the Company’s standard indemnification agreement for directors and officers as executed by the Company and Executive. The Executive shall be entitled to coverage under the Company’s Directors’ and Officers’ (“D&O”) insurance policies that it may hold now or in the future to the same extent and in the same manner (i.e., subject to the same terms and conditions) to which the Company’s other executive officers are entitled to coverage under any of the Company’s D&O insurance policies.

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(h)Forfeiture/Clawback. All compensation shall be subject to any forfeiture or clawback policy established by the Company generally for senior executives from time to time and any other such policy required by applicable law.

4.Payments Upon Termination.

(d)Definition of Accrued Obligations. For purposes of this Agreement, “Accrued Obligations” means: (i) the portion of Executive’s Base Salary that has accrued prior to any termination of Executive’s employment with Company and has not yet been paid; and (ii) the amount of any expenses properly incurred by Executive on behalf of the Company prior to any such termination and not yet reimbursed.Executive’s entitlement to any other compensation or benefit under any Company plan shall be governed by and determined in accordance with the terms of such plans, except as otherwise specified in this Agreement.

(e)Termination by the Company for Cause. If Executive’s employment hereunder is terminated by the Company for Cause, then the Company shall pay the Accrued Obligations to Executive within the time provided by law for terminated employees and the Company shall have no further obligations to Executive under this Agreement.

(f)Termination by Executive Without Good Reason. If Executive’s employment hereunder is terminated by Executive without Good Reason, then the Company shall pay the Accrued Obligations and any accrued and unpaid Annual Performance Bonus for the prior fiscal year to Executive within the time provided by law and the Company shall have no further obligations to Executive under this Agreement.

(g)Termination as a Result of Executive’s Disability or Death. If Executive’s employment hereunder terminates as a result of Executive’s Disability or death, the Company shall pay to Executive within the time provided by law (i) the Accrued Obligations; (ii) any accrued and unpaid Annual Performance Bonus for the prior fiscal year; and (iii) the Pro Rated Bonus (as defined below) and, shall have no further obligations with respect to any benefit or compensation under this Agreement to Executive hereunder. As used in this Section 4, “Pro Rated Bonus” shall mean an amount in cash equal to the Target Performance Bonus for which Executive would have been eligible with respect to the year in which termination of Executive’s employment occurs multiplied by a fraction, the numerator of which is the number of days during which Executive is employed by the Company during the year of termination and the denominator of which is 365.

(h)Termination by the Company Without Cause or by Executive For Good Reason. In the event that Executive’s employment is terminated by action of the Company without Cause, or Executive terminates Executive’s employment for Good Reason, then, in addition to the Accrued Obligations and any accrued and unpaid Annual Performance Bonus for the prior fiscal year, Executive shall receive the following, subject to the terms and conditions described in Section 4(g) (including Executive’s execution of the Release (as defined herein)):

(i)Severance Payments. Continuation of payments in an amount equal to Executive’s then-current Base Salary for a twelve (12) month period, less all customary and required taxes and employment-related deductions, in accordance with the Company’s normal payroll practices (provided such payments shall be made at least monthly) (the “Severance Payments”).

(ii)Equity Acceleration. On the date of termination of Executive’s employment, Executive shall become fully vested in any and all equity awards

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that would have vested during the twelve (12) month period following the termination date.

(iii)Benefits Payments. Upon completion of appropriate forms and subject to applicable terms and conditions under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall continue to provide Executive medical insurance coverage to the same extent that such insurance continues to be provided to similarly situated executives at the time of Executive’s termination with the cost of the regular premium for such benefits shared in the same relative proportion by the Company and Executive as in effect on the last day of employment (the “COBRA Payment”), until the earlier to occur of: (i) twelve (12) months following Executive’s termination date, or (ii) the date Executive becomes eligible for medical benefits with another employer. Notwithstanding the foregoing, if Executive’s COBRA Payment would cause the applicable group health plan to be discriminatory and, therefore, result in adverse tax consequences to Executive, the Company shall, in lieu of the COBRA Payment, provide Executive with an equivalent monthly cash payment, minus deduction of all amounts required to be deducted or withheld under applicable law, for any period of time Executive is eligible to receive the COBRA Payment. Executive shall bear full responsibility for applying for COBRA continuation coverage and the Company shall have no obligation to provide Executive such coverage if Executive fails to elect COBRA benefits in a timely fashion.

Payment of the above described severance payments and benefits are expressly conditioned on Executive’s execution without revocation of the Release and return of Company property under Section 6. The Company will commence payment of the Severance Payments and the COBRA Payment on the first payroll date following the date on which the Release required by Section 4(g) becomes effective and non-revocable, provided, that if the 60 day period during which the Release is required to become enforceable and irrevocable crosses a tax year, then the payments will be delayed until such subsequent calendar year; provided further that if such payments are delayed until such subsequent year, the first such payment shall be a lump sum in an amount equal to the payments that would have come due since Executive’s separation from service.

(i)Termination by the Company Without Cause or by Executive For Good Reason Following a Change of Control. In the event that a Change of Control of the Company (as defined below) occurs and within a period of one (1) year following the Change of Control, or ninety (90) days preceding the earlier to occur of a Change of Control or the execution of a definitive agreement the consummation of which would result in a Change of Control, Executive’s employment is terminated without Cause, or Executive terminates Executive’s employment for Good Reason, then, in addition to the Accrued Obligations and any accrued and unpaid Annual Performance Bonus for the prior fiscal year, Executive shall receive the following, subject to the terms and conditions described in Section 4(g) (including Executive’s execution of the Release):

(iv)Lump Sum Severance Payment. Payment of a lump sum amount equal to the sum of (A) eighteen (18) months of Executive’s then-current Base Salary and (B) 1.5 times the Target Performance Bonus for the year in which termination of Executive’s employment occurs, less all customary and required taxes and employment-related deductions (the “Lump Sum Severance Amount”).

(v)Equity Acceleration. On the date of termination of Executive’s employment, Executive shall become fully vested in any and all equity awards outstanding as of the date of Executive’s termination and this provision shall

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supersede any option acceleration provision contained in any option agreement outstanding on the Effective Date.

(vi)Benefit Payments. Upon completion of appropriate forms and subject to applicable terms and conditions under COBRA, the Company shall continue to provide Executive medical insurance coverage to the same extent that such insurance continues to be provided to similarly situated executives at the time of Executive’s termination with the cost of the regular premium for such benefits shared in the same relative proportion by the Company and Executive as in effect on the last day of employment, until the earlier to occur of: (i) eighteen (18) months following Executive’s termination date, or (ii) the date Executive becomes eligible for medical benefits with another employer. Notwithstanding the foregoing, if Executive’s COBRA Payment would cause the applicable group health plan to be discriminatory and, therefore, result in adverse tax consequences to Executive, the Company shall, in lieu of the COBRA Payment, provide Executive with an equivalent monthly cash payment, minus deduction of all amounts required to be deducted or withheld under applicable law, for any period of time Executive is eligible to receive the COBRA Payment. Executive shall bear full responsibility for applying for COBRA continuation coverage and the Company shall have no obligation to provide Executive such coverage if Executive fails to elect COBRA benefits in a timely fashion.

Payment of the above described severance payments and benefits are expressly conditioned on Executive’s execution without revocation of the Release and return of Company property under Section 6. In the event that Executive is eligible for the severance payments and benefits under this Section 4(f), Executive shall not be eligible for any of the severance payments and benefits as provided in Section 4(e). The Company will pay the Lump Sum Severance Amount and will commence payment of the COBRA Payment on the first payroll date following the date on which the Release required by Section 4(g) becomes effective and non-revocable, provided, that if the 60 day period during which the Release is required to become enforceable and irrevocable crosses a tax year, then the payments will delayed until such subsequent calendar year; provided further that if such payments are delayed until such subsequent year, the first such payment shall be a lump sum in an amount equal to the payments that would have come due since Executive’s separation from service.

As used herein, a “Change of Control” shall mean the occurrence of any of the following events: (i) Ownership. Any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “Beneficial Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company, or any affiliate, parent or subsidiary of the Company, or by any employee benefit plan of the Company) pursuant to a transaction or a series of related transactions; or (ii) Merger/Sale of Assets. (A) A merger or consolidation of the Company whether or not approved by the Board, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such corporation) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such corporation, as the case may be, outstanding immediately after such merger or consolidation; (B) or the Company’s stockholders approve an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; or (iii) Change in Board Composition. A change in the composition of the Board, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A) are directors of

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the Company as of the date of this Agreement, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors, or by a committee of the Board made up of at least a majority of the Incumbent Directors, at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors).

(a)Execution of Release of Claims. The Company shall not be obligated to pay Executive any of the severance payments or benefits described in this Section 4 unless and until Executive has executed (without revocation) a release of claims as described below (the “Release”). The Release shall contain reasonable and customary provisions including a general release of claims against the Company and its affiliated entities and each of their officers, directors and employees as well as provisions concerning non-disparagement, confidentiality, cooperation and the like. The Release must be provided to Executive not later than fifteen (15) days following the effective date of termination of Executive’s employment by the Company and executed by Executive and returned to the Company within sixty (60) days after such effective date. If Executive fails or refuses to return the Release within such 60-day period, Executive’s severance payments and benefits to be paid hereunder shall be forfeited.

(b)No Other Payments or Benefits Owing. Except as expressly set forth herein, the payments and benefits set forth in this Section 4: (a) shall be the sole amounts owing to Executive upon termination of Executive’s employment for the reasons set forth above, and Executive shall not be eligible for any other payments or other forms of compensation or benefits; (b) shall be the sole remedy, if any, available to Executive in the event that Executive brings any claim against the Company relating to the termination of Executive’s employment under this Agreement; and (c) shall not be subject to set-off by the Company or any obligation on the part of Executive to mitigate or to offset compensation earned by Executive in other pursuits after termination of employment, other than as specified herein with respect medical benefits provided by another employer.

5.Proprietary Information. Executive expressly acknowledges that: (a) there are competitive and proprietary aspects of the business of the Company; (b) during the course of Executive’s employment, the Company shall furnish, disclose or make available to Executive confidential and proprietary information and may provide Executive with unique and specialized training; (c) such confidential information and training have been developed and shall be developed by the Company through the expenditure of substantial time, effort and money, and could be used by Executive to compete with the Company; and (d) in the course of Executive’s employment, Executive shall be introduced to customers and others with important relationships to the Company, and any and all “goodwill” created through such introductions belongs exclusively to the Company, including, but not limited to, any goodwill created as a result of direct or indirect contacts or relationships between Executive and any customers of the Company. In light of the foregoing acknowledgements, and as a condition of continued employment hereunder, Executive hereby reaffirms, confirms and approves the Proprietary Information and Inventions Assignment Agreement entered into on the date hereof as a binding obligation of the Executive, enforceable in accordance with its terms.

6.Property and Records. Upon the termination of Executive’s employment hereunder for any reason or for no reason, or if the Company otherwise requests, Executive shall: (a) return to the Company all tangible business information and copies thereof (regardless how such confidential information or copies are maintained), and (b) deliver to the Company any property of the Company which may be in Executive’s possession, including, but not limited to, devices, smart phones, laptops, cell phones (the foregoing, “electronic devices”), products, materials, memoranda, notes, records, reports or other documents or photocopies of the same. Executive may retain copies of any exclusively personal data contained in or on the Company-owned electronic devices returned to the Company pursuant to the foregoing. The foregoing

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notwithstanding, Executive understands and agrees that the Company property belongs exclusively to the Company, it should be used for Company business, and Executive has no reasonable expectation of privacy on any Company property or with respect to any information stored thereon.

7.Cooperation. During and after Executive’s employment, Executive shall fully cooperate with the Company to the extent reasonable in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company (other than claims directly or indirectly against Executive) which relate to events or occurrences that transpired while Executive was employed by the Company. Executive’s cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after Executive’s employment, Executive also shall fully cooperate with the Company to the extent reasonable in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while Executive was employed by the Company. The Company shall reimburse Executive for any reasonable out-of-pocket expenses incurred in connection with the Executive’s performance of obligations pursuant to this section.

8.Code Sections 409A and 280G.

(j)In the event that the payments or benefits set forth in Section 4 of this Agreement constitute “non-qualified deferred compensation” subject to Section 409A, then the following conditions apply to such payments or benefits:

(i)Any termination of Executive’s employment triggering payment of benefits under Section 4 must constitute a “separation from service” under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits can commence. To the extent that the termination of Executive’s employment does not constitute a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be provided by Executive to the Company at the time Executive’s employment terminates), any such payments under Section 4 that constitute deferred compensation under Section 409A shall be delayed until after the date of a subsequent event constituting a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h). For purposes of clarification, this Section 8(a) shall not cause any forfeiture of benefits on Executive’s part, but shall only act as a delay until such time as a “separation from service” occurs.

(ii)with respect to the timing of payments under Section 4 if, at the time of Executive’s termination, Executive is deemed to be a “specified employee” of the Company (within the meaning of Section 409A(a)(2)(B)(i) of the Code), then limited only to the extent necessary to comply with the requirements of Section 409A, any payments to which Executive may become entitled under Section 4 which are subject to Section 409A (and not otherwise exempt from its application) shall be withheld until the first (1st) business day of the seventh (7th) month following the termination of Executive’s employment, at which time Executive shall be paid an aggregate amount equal to the accumulated, but unpaid, payments otherwise due to Executive under the terms of Section 4.

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(i)It is intended that each installment of the payments and benefits provided under Section 4 of this Agreement shall be treated as a separate “payment” for purposes of Section 409A. Neither the Company nor Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A.

(j)Notwithstanding any other provision of this Agreement to the contrary, this Agreement shall be interpreted and at all times administered in a manner that avoids the inclusion of compensation in income under Section 409A, or the payment of increased taxes, excise taxes or other penalties under Section 409A. The parties intend this Agreement to be in compliance with Section 409A. Executive acknowledges and agrees that the Company does not guarantee the tax treatment or tax consequences associated with any payment or benefit arising under this Agreement, including but not limited to consequences related to Section 409A.

(k)If any payment or benefit Executive would receive under this Agreement, when combined with any other payment or benefit Executive receives pursuant to a Change of Control (for purposes of this section, a “Payment”) would: (i) constitute a “parachute payment” within the meaning of Section 280G the Code; and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be either: (A) the full amount of such Payment; or (B) such lesser amount (with cash payments being reduced before stock option compensation) as would result in no portion of the Payment being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local employments taxes, income taxes, and the Excise Tax, results in Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. Notwithstanding the foregoing, if, prior to the closing of an initial public offering, any Payment can be exempt from the definition of “parachute payment” and the Excise Tax pursuant to the shareholder approval requirements described in Treas. Regs. § 1.280G-1, Q&A 6, the Company will, at the Executive’s election (and subject to the Executive signing an appropriate waiver) seek shareholder approval to exempt such Payment from the definition of “parachute payment” and the Excise Tax.

9.General.

(k)Notices. Except as otherwise specifically provided herein, any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier upon written verification of receipt; (iii) by telecopy or electronic mail transmission provided acknowledgment of receipt of electronic transmission is provided; or (iv) by certified or registered mail, return receipt requested, upon verification of receipt.

Notices to Executive shall be sent to the last known address in the Company’s records or such other address as Executive may specify in writing.

Notices to the Company shall be sent to:

Inhibrx, Inc.

        Attn: CEO

        11025 N. Torrey Pines Road, Suite 200

        La Jolla, CA 92037

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(l)Modifications and Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by the parties hereto.

(m)Waivers and Consents. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by a written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given and shall not constitute a continuing waiver or consent.

(n)Assignment. The Company may assign its rights and obligations hereunder to any person or entity that succeeds to all or substantially all of the Company’s business or that aspect of the Company’s business in which Executive is principally involved. Executive may not assign Executive’s rights and obligations under this Agreement without the prior written consent of the Company.

(o)Governing Law/Dispute Resolution. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the law of the State of California without giving effect to the conflict of law principles thereof. Any legal action or proceeding with respect to this Agreement shall be brought in the courts of the State of California or of the United States of America for the Southern District of California. By execution and delivery of this Agreement, each of the parties hereto accepts for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts.

(p)Headings and Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.

(q)Entire Agreement. This Agreement, together with the other agreements specifically referenced herein, embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.

(r)Counterparts. This Agreement may be executed in two or more counterparts, and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. For all purposes an electronic signature shall be treated as an original.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

INHIBRX, INC.

By: /s/ Mark Lappe

       Name: Mark Lappe

       Title: Chief Executive Officer

EXECUTIVE

By: /s/ Kelly Deck

       Name: Kelly Deck

[Signature Page to Second Amended and Restated Executive Employment Agreement]

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mark P. Lappe, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Inhibrx, Inc;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2022	/s/ Mark P. Lappe
	Mark P. Lappe
	Chief Executive Officer and Chairman
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kelly D. Deck, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Inhibrx, Inc;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2022	/s/ Kelly D. Deck
	Kelly D. Deck, C.P.A.
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Inhibrx, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark P. Lappe, Chief Executive Officer and Chairman of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2022	/s/ Mark P. Lappe
	Mark P. Lappe
	Chief Executive Officer and Chairman
	(Principal Executive Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Inhibrx, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kelly D. Deck, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2022	/s/ Kelly D. Deck
	Kelly D. Deck, C.P.A.
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Cover - shares	9 Months Ended
	Sep. 30, 2022	Oct. 31, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-39452
Entity Registrant Name	INHIBRX, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-4257312
Entity Address, Address Line One	11025 N. Torrey Pines Road
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	La Jolla
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92037
City Area Code	(858)
Local Phone Number	795-4220
Title of 12(b) Security	Common Stock, par value $0.0001
Trading Symbol	INBX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		43,551,422
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Entity Central Index Key	0001739614
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 146,073	$ 131,301
Accounts receivable	243	373
Receivables from related parties	72	505
Prepaid expenses and other current assets	7,366	6,933
Total current assets	153,754	139,112
Property and equipment, net	2,799	3,153
Right-of-use asset	5,135	6,338
Other non-current assets	3,164	1,847
Total assets	164,852	150,450
Current liabilities:
Accounts payable	8,569	9,125
Accrued expenses	14,605	9,621
Current portion of deferred revenue	440	2,034
Current portion of lease liability	1,812	1,674
Total current liabilities	25,426	22,454
Long-term debt, including final payment fee	170,819	70,470
Non-current portion of lease liability	3,657	5,033
Non-current portion of deferred revenue	0	110
Total liabilities	199,902	98,067
Commitments and contingencies (Note 8)
Stockholders’ equity (deficit)
Preferred stock, $0.0001 par value; 15,000,000 shares authorized as of September 30, 2022 and December 31, 2021; no shares issued or outstanding as of September 30, 2022 and December 31, 2021.	0	0
Common stock, $0.0001 par value; 120,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 39,087,173 and 38,991,307 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively.	4	4
Additional paid-in-capital	296,404	279,526
Accumulated deficit	(331,458)	(227,147)
Total stockholders’ equity (deficit)	(35,050)	52,383
Total liabilities and stockholders’ equity (deficit)	$ 164,852	$ 150,450

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	15,000,000	15,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	120,000,000	120,000,000
Common stock, shares issued (in shares)	39,087,173	38,991,307
Common stock, shares outstanding (in shares)	39,087,173	38,991,307

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue:
Total revenue	$ 278	$ 2,532	$ 1,918	$ 4,375
Operating expenses:
Research and development	24,934	18,485	79,735	52,825
General and administrative	5,347	2,848	15,800	8,710
Total operating expenses	30,281	21,333	95,535	61,535
Loss from operations	(30,003)	(18,801)	(93,617)	(57,160)
Other income (expense):
Interest expense, net	(5,340)	(1,778)	(10,762)	(3,437)
Other income (expense), net	18	(1)	72	20
Total other expense	(5,322)	(1,779)	(10,690)	(3,417)
Loss before income tax expense	(35,325)	(20,580)	(104,307)	(60,577)
Provision for income taxes	0	0	4	2
Net loss	$ (35,325)	$ (20,580)	$ (104,311)	$ (60,579)
Net loss per share, basic (in dollars per share)	$ (0.90)	$ (0.54)	$ (2.67)	$ (1.60)
Net loss per share, diluted (in dollars per share)	$ (0.90)	$ (0.54)	$ (2.67)	$ (1.60)
Weighted-average shares of common stock outstanding, basic (in shares)	39,071	37,893	39,043	37,818
Weighted-average shares of common stock outstanding, diluted (in shares)	39,071	37,893	39,043	37,818
License fee revenue
Revenue:
Total revenue	$ 278	$ 2,508	$ 1,904	$ 4,289
Grant revenue
Revenue:
Total revenue	$ 0	$ 24	$ 14	$ 86

XML

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2020		37,712,000
Beginning balance at Dec. 31, 2020	$ 75,473	$ 4	$ 220,848	$ (145,379)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	3,421		3,421
Issuance of shares upon exercise of stock options (in shares)		93,000
Issuance of shares upon exercise of stock options	988		988
Net loss	(19,289)			(19,289)
Ending balance (in shares) at Mar. 31, 2021		37,805,000
Ending balance at Mar. 31, 2021	60,593	$ 4	225,257	(164,668)
Beginning balance (in shares) at Dec. 31, 2020		37,712,000
Beginning balance at Dec. 31, 2020	75,473	$ 4	220,848	(145,379)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(60,579)
Ending balance (in shares) at Sep. 30, 2021		37,933,000
Ending balance at Sep. 30, 2021	28,200	$ 4	234,154	(205,958)
Beginning balance (in shares) at Mar. 31, 2021		37,805,000
Beginning balance at Mar. 31, 2021	60,593	$ 4	225,257	(164,668)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	3,951		3,951
Issuance of shares upon exercise of stock options (in shares)		44,000
Issuance of shares upon exercise of stock options	485		485
Net loss	(20,710)			(20,710)
Ending balance (in shares) at Jun. 30, 2021		37,849,000
Ending balance at Jun. 30, 2021	44,319	$ 4	229,693	(185,378)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	3,493		3,493
Issuance of shares upon exercise of stock options (in shares)		84,000
Issuance of shares upon exercise of stock options	968		968
Net loss	(20,580)			(20,580)
Ending balance (in shares) at Sep. 30, 2021		37,933,000
Ending balance at Sep. 30, 2021	$ 28,200	$ 4	234,154	(205,958)
Beginning balance (in shares) at Dec. 31, 2021	38,991,307	38,991,000
Beginning balance at Dec. 31, 2021	$ 52,383	$ 4	279,526	(227,147)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	5,108		5,108
Issuance of shares upon exercise of stock options (in shares)		35,000
Issuance of shares upon exercise of stock options	401		401
Issuance of warrants	712		712
Net loss	(31,254)			(31,254)
Ending balance (in shares) at Mar. 31, 2022		39,026,000
Ending balance at Mar. 31, 2022	$ 27,350	$ 4	285,747	(258,401)
Beginning balance (in shares) at Dec. 31, 2021	38,991,307	38,991,000
Beginning balance at Dec. 31, 2021	$ 52,383	$ 4	279,526	(227,147)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of shares upon exercise of stock options (in shares)	96,000
Net loss	$ (104,311)
Ending balance (in shares) at Sep. 30, 2022	39,087,173	39,086,000
Ending balance at Sep. 30, 2022	$ (35,050)	$ 4	296,404	(331,458)
Beginning balance (in shares) at Mar. 31, 2022		39,026,000
Beginning balance at Mar. 31, 2022	27,350	$ 4	285,747	(258,401)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	5,296		5,296
Issuance of shares upon exercise of stock options (in shares)		15,000
Issuance of shares upon exercise of stock options	164		164
Net loss	(37,732)			(37,732)
Ending balance (in shares) at Jun. 30, 2022		39,041,000
Ending balance at Jun. 30, 2022	(4,922)	$ 4	291,207	(296,133)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	4,691		4,691
Issuance of shares upon exercise of stock options (in shares)		45,000
Issuance of shares upon exercise of stock options	506		506
Net loss	$ (35,325)			(35,325)
Ending balance (in shares) at Sep. 30, 2022	39,087,173	39,086,000
Ending balance at Sep. 30, 2022	$ (35,050)	$ 4	$ 296,404	$ (331,458)

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities
Net loss	$ (104,311)	$ (60,579)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	923	888
Accretion of debt discount and non-cash interest expense	2,190	833
Stock-based compensation expense	15,095	10,865
Non-cash lease expense	1,203	1,108
(Gain) loss on disposal of fixed assets	18	(9)
Changes in operating assets and liabilities:
Accounts receivable	130	(38)
Receivables from related parties	433	150
Prepaid expenses and other current assets	(383)	(2,586)
Other non-current assets	(1,317)	0
Accounts payable	(724)	(1,232)
Accrued expenses and other current liabilities	4,984	(5,053)
Operating lease liability	(1,238)	(1,111)
Deferred revenue, current portion	(1,594)	(312)
Deferred revenue, non-current portion	(110)	(627)
Net cash used in operating activities	(84,701)	(57,703)
Cash flows from investing activities
Purchase of fixed assets	(419)	(597)
Proceeds from the sale of property and equipment	0	55
Net cash used in investing activities	(419)	(542)
Cash flows from financing activities
Proceeds from the issuance of debt	98,871	39,992
Payment of fees associated with debt	(50)	0
Proceeds from the exercise of stock options	1,071	2,441
Deferred offering costs paid	0	(148)
Net cash provided by financing activities	99,892	42,285
Net increase (decrease) in cash and cash equivalents	14,772	(15,960)
Cash and cash equivalents at beginning of period	131,301	128,664
Cash and cash equivalents at end of period	146,073	112,704
Supplemental disclosure of cash flow information
Cash paid for interest	7,834	2,001
Cash paid for income taxes	4	2
Supplemental schedule of non-cash investing and financing activities
Fair value of warrants issued to lender in conjunction with February 2022 Amendment	712	0
Payable for purchase of fixed assets	261	78
Deferred offering costs included in accounts payable and accrued expenses	$ 0	$ 198

XML

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Inhibrx, Inc., or the Company, or Inhibrx, is a clinical-stage biopharmaceutical company focused on developing a broad pipeline of novel biologic therapeutic candidates. The Company combines a deep understanding of target biology with innovative protein engineering, proprietary discovery technologies, and an integrative approach to research and development to design highly differentiated therapeutic candidates. The Company’s current pipeline is focused on oncology and orphan diseases.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC, related to an interim report on the Form 10-Q.

The unaudited interim condensed financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results for the periods presented. All such adjustments are of a normal and recurring nature. The operating results presented in these unaudited interim condensed financial statements are not necessarily indicative of the results that may be expected for any future periods.

Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, the accompanying unaudited interim financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2021, which are included in the Company’s Annual Report on Form 10-K filed with the SEC.

Liquidity

As of September 30, 2022, the Company had an accumulated deficit of $331.5 million and cash and cash equivalents of $146.1 million. From its inception and through September 30, 2022, the Company has devoted substantially all of its efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of its therapeutic candidates, organizing and staffing the Company, establishing its intellectual property portfolio and raising capital to support and expand these activities.

The Company believes that its existing cash and cash equivalents will be sufficient to fund the Company’s operations for at least 12 months from the date these condensed consolidated financial statements are issued. The Company plans to finance its future cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses, strategic transactions, and other similar arrangements.

As discussed in Note 4, the Company entered into the Open Market Sale Agreement, or the Sales Agreement, with Jefferies LLC, or the Sales Agent, under which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $200.0 million through the Sales Agent, or the ATM Offering. During the year ended December 31, 2021, the Company sold 921,042 shares pursuant to the Sales Agreement for net proceeds of $40.2 million, after deducting commissions. During the nine months ended September 30, 2022, the Company did not issue any shares under the Sales Agreement.

As discussed in Note 3, the Company received $40.0 million in gross proceeds upon entering into the February 2022 Amendment to the 2020 Loan Agreement, as amended (both as defined below). Pursuant to the Amended 2020 Loan Agreement (as defined below), three additional tranches became available upon the occurrence of contingent events, for additional gross proceeds of up to $90.0 million. In June 2022, two of these tranches were drawn for additional gross proceeds of $60.0 million.

If the Company does raise additional capital through public or private equity or convertible debt offerings, the ownership interests of its existing stockholders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect its stockholders’ rights. If the Company raises capital through

additional debt financings, it may be subject to covenants limiting or restricting its ability to take specific actions, such as incurring additional debt or making certain capital expenditures. To the extent that the Company raises additional capital through strategic licensing, collaboration or other similar agreement, it may have to relinquish valuable rights to its therapeutic candidates, future revenue streams or research programs at an earlier stage of development or on less favorable terms than it would otherwise choose, or to grant licenses on terms that may not be favorable to the Company. There can be no assurance as to the availability or terms upon which such financing and capital might be available in the future. If the Company is unable to secure adequate additional funding, it will need to reevaluate its operating plan and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, delay, scale back or eliminate some or all of its development programs, or relinquish rights to its technology on less favorable terms than it would otherwise choose. These actions could materially impact its business, financial condition, results of operations and prospects.

The rules and regulations of the SEC or any other regulatory agencies may restrict the Company’s ability to conduct certain types of financing activities, or may affect the timing of and amounts it can raise by undertaking such activities.

Impact of COVID-19 Pandemic

In response to the global COVID-19 pandemic, the Company continues to take the necessary precautions to ensure the safety of its employees and to minimize interruptions to its operations. The full impact of the COVID-19 outbreak continues to evolve as of the date of these financial statements. While the pandemic has not yet had a material effect on the Company’s financial results, the degree to which COVID-19, including new variants of the virus, may impact the Company’s financial condition, liquidity and future results of operations is uncertain. Management is actively monitoring the risks to public health and the impact of overall global business activity on its financial condition, liquidity, operations, suppliers, industry, and workforce.

The U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, which, among a number of varied provisions, aimed to ease tax burdens on companies during the COVID pandemic, permitted employers to defer the payment of the employer share of social security taxes due for the period beginning March 27, 2020 and ending December 31, 2020. Of the amounts deferred, 50% was required to be paid by December 31, 2021 and the remaining 50% is required to be paid by December 31, 2022. The Company began deferring payment of the employer share of social security taxes in April 2020 and deferred a total of $0.4 million of such taxes during the period. The Company paid $0.3 million of deferred taxes during December 2021. As of September 30, 2022, the Company has a remaining deferred payment of $0.1 million of such taxes, which are classified as accrued expenses in the Company’s condensed consolidated balance sheets.

Use of Estimates

The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The Company’s most significant estimates relate to whether revenue recognition criteria have been met, accounting for development work and preclinical studies and clinical trials, determining the assumptions used in measuring stock-based compensation, and valuation allowances for the Company’s deferred tax assets. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. The Company’s actual results may differ from these estimates under different assumptions or conditions.

Concentrations of Credit Risk

The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial condition of the depository institutions in which those deposits are held.

Fair Value Measurements

The Company determines the fair value measurements of applicable assets and liabilities based on a three-tier fair value hierarchy established by accounting guidance and prioritizes the inputs used in measuring fair value. These tiers include:

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

As of September 30, 2022 and December 31, 2021, the Company had no financial instruments measured at fair value on a recurring basis.

Deferred Offering Costs

The Company capitalizes costs that are directly associated with equity financings until such financings are consummated, at which time such costs are recorded against the gross proceeds of the offering. Legal, accounting, and filing fees related directly to the Company’s Sales Agreement are capitalized as deferred offering costs. Deferred offering costs associated with the Sales Agreement are reclassified to additional paid-in capital when the Company completes offerings under the Company’s Shelf Registration on Form S-3ASR. In November 2021, the Company completed an ATM Offering under the Sales Agreement and offset $1.7 million of offering costs against the proceeds.

Financial Instruments with Characteristics of Both Liabilities and Equity

The Company accounts for issued warrants either as a liability or equity in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, or ASC 480-10, and ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, or ASC 815-40. Under ASC 480-10, warrants are considered a liability if they are mandatorily redeemable and they require settlement in cash, other assets, or a variable number of shares. If warrants do not meet liability classification under ASC 480-10, the Company considers the requirements of ASC 815-40 to determine whether the warrants should be classified as a liability or as equity. Under ASC 815-40, contracts that may require settlement for cash are liabilities, regardless of the probability of the occurrence of the triggering event. Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period. Any change in the fair value of the warrants after the issuance date is recorded in other expense, net in the condensed consolidated statements of operations as a gain or loss. If warrants do not require liability classification under ASC 815-40, in order to conclude warrants should be classified as equity, the Company assesses whether the warrants are indexed to its common stock and whether the warrants are classified as equity under ASC 815-40 or under another applicable GAAP standard. Equity-classified warrants are accounted for at fair value on the issuance date with no changes in fair value recognized after the issuance date. The Company’s outstanding warrants do not meet the requirements for liability classification under ASC-480-10 or ASC-815-40. Therefore, the warrants were treated as equity at the time of issuance.

Revenue Recognition

The Company has generated revenue from its license and collaboration agreements with partners, as well as from grants from government agencies and private not-for-profit organizations. Payments received from customers are included in deferred revenue, allocated between current and non-current on the condensed consolidated balance

sheet until all revenue recognition criteria are met. In accordance with ASC Topic 606, Revenue from Contracts with Customers, or ASC Topic 606, the Company recognizes revenue when, or as, the promised goods or services are transferred to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those services. To determine revenue recognition for arrangements the Company concludes are within the scope of ASC Topic 606, the Company performs the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligation(s) in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligation(s) in the contract; and (5) recognize revenue when (or as) the performance obligation(s) are satisfied. At contract inception, the Company assesses the goods or services promised within each contract, assesses whether each promised good or service is distinct and identifies those that are performance obligations. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when, or as, the performance obligation is satisfied.

Collaborative Research, Development, and License Agreements

The Company enters into collaborative agreements with partners that typically include one or more of the following: (1) license fees; (2) nonrefundable up-front fees; (3) payments for reimbursement of research costs; (4) payments associated with achieving specific development, regulatory, or commercial milestones; and (5) royalties based on specified percentages of net product sales, if any. At the initiation of an agreement, the Company analyzes whether each unit of account results in a contract with a customer under ASC Topic 606 or in an arrangement with a collaborator subject to guidance under ASC Topic 808, Collaborative Arrangements. The Company’s licensing arrangements are typically for functional intellectual property as it exists at a point in time, being the time that the license agreement is executed. The Company typically does not have an ongoing performance obligation to support or maintain the licensed intellectual property.

The Company considers a variety of factors in determining the appropriate estimates and assumptions under these arrangements, such as whether the elements are distinct performance obligations, whether there are observable stand-alone prices, and whether any licenses are functional or symbolic. The Company evaluates each performance obligation to determine if it can be satisfied and recognized as revenue at a point in time or over time. Typically, license fees, non-refundable upfront fees, and funding of research activities are considered fixed, while milestone payments are identified as variable consideration which must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price. The Company estimates the amount of variable consideration using the most likely amount, as milestone payments typically only have two possible outcomes. The Company recognizes revenue for sales-based royalty promised in exchange for the license of intellectual property only when the subsequent sale occurs. In the case of an agreement which provides the partner with an option to license a therapeutic or therapeutic candidate in the future, the Company evaluates whether this option represents a material right at the inception of the agreement. If determined to be a material right, the Company will consider the option a separate performance obligation. The Company has historically concluded that the option to grant a license in the future is not a material right as it is contingent upon future events which may not occur. When an option is exercised, the Company will identify any separate performance obligations.

The Company may allocate transaction price using a number of methods including estimating standalone selling price of performance obligations and using the residual approach when the standalone selling price of the license is highly variable or uncertain, and observable standalone selling prices exist for the other goods or services promised in the contract.

Research and Development and Clinical Trial Accruals

Research and development costs are expensed as incurred and include the cost of compensation and related expenses, as well as expenses for third parties who conduct research and development on the Company’s behalf, pursuant to development and consulting agreements in place. The Company’s preclinical studies and clinical trials are performed internally, by third party contract research organizations, or CROs, and/or clinical investigators. The Company also engages with contract development and manufacturing organizations, or CDMOs, for clinical supplies and manufacturing scale-up activities related to its therapeutic candidates. Invoicing from these third parties may be monthly based upon services performed or based upon milestones achieved. The Company accrues these expenses based upon its assessment of the status of each clinical trial and the work completed, and upon information obtained from the CROs and CDMOs. The Company’s estimates are dependent upon the timeliness and accuracy of

data provided by the CROs and CDMOs regarding the status and cost of the studies. Costs incurred related to the Company’s purchases of in-process research and development for early-stage products or products that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred. Costs incurred related to the licensing of products that have not yet received marketing approval to be marketed, or that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the same period. Diluted net loss per share is computed by dividing net loss by the weighted average number of common and common equivalent shares outstanding during the same period. The Company excludes common stock equivalents from the calculation of diluted net loss per share when the effect is anti-dilutive.

For purposes of the diluted net loss per share calculation, warrants for purchase of common stock and stock options are considered to be potentially dilutive securities. Accordingly, for the nine months ended September 30, 2022 and September 30, 2021, there is no difference in the number of shares used to calculate basic and diluted shares outstanding.

Potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in thousands):

	AS OF SEPTEMBER 30,
	2022	2021
Outstanding stock options	5,269	3,983
Warrants to purchase common stock	47	7
	5,316	3,990

Segment Information

The Company operates under one segment which develops biologic therapeutic candidates. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies. The Company believes that the impact of the recently issued accounting pronouncements that are not yet effective will not have a material impact on its condensed consolidated financial condition or results of operations upon adoption.

Adoption of New Accounting Pronouncements

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, which intends to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The Company adopted ASU 2021-04 on

January 1, 2022, which did not result in a material impact on its condensed consolidated financial statements and related disclosures.

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OTHER FINANCIAL INFORMATION

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

OTHER FINANCIAL INFORMATION

OTHER FINANCIAL INFORMATION

Prepaid Expense and Other Current Assets

Prepaid expense and other current assets were comprised of the following (in thousands):

	AS OF		AS OF
	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Outside research and development services	$	6,539	$	6,343
Other	827		590
Prepaid expense and other current assets	$	7,366	$	6,933

Property and Equipment, Net

Property and equipment, net were comprised of the following (in thousands):

	AS OF		AS OF
	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Machinery and equipment	$	6,976	$	6,286
Leasehold improvements	441		441
Computer software	53		42
Furniture and fixtures	524		514
Construction in process	65		281
Total property and equipment	8,059		7,564
Less: accumulated depreciation and amortization	(5,260)		(4,411)
Property and equipment, net	$	2,799	$	3,153

Depreciation and amortization expense totaled $0.3 million for each of the three months ended September 30, 2022 and September 30, 2021 and $0.9 million for each of the nine months ended September 30, 2022 and September 30, 2021, and consisted of the following (in thousands):

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2022		2021		2022		2021
Research and development	$	251	$	250	$	757	$	746
General and administrative	58		49		166		142
Total depreciation and amortization expense	$	309	$	299	$	923	$	888

Accrued Expenses

Accrued expenses were comprised of the following (in thousands):

	AS OF		AS OF
	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Clinical trials(1)	$	3,950	$	4,496
Clinical drug substance and product manufacturing(2)	3,697		1,564
Other outside research and development	1,418		1,329
Compensation-related	2,712		1,322
Professional fees	1,011		261
Other	1,817		649
Accrued expenses	$	14,605	$	9,621

(1) Relates primarily to the Company’s usage of third-party CROs for management of clinical trials. See Note 1 for further discussion of the components of research and development.

(2) Relates primarily to the Company’s usage of third-party CDMOs for clinical and development efforts. See Note 1 for further discussion of the components of research and development.

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DEBT

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

DEBT

DEBT

2020 Loan Agreement

On July 15, 2020, the Company entered into a loan and security agreement, or the 2020 Loan Agreement, with Oxford Finance LLC, or Oxford, pursuant to which it received $10.0 million in gross proceeds, or Term A. The 2020 Loan Agreement was subsequently amended in November 2020, or the November 2020 Amendment, upon which a second tranche in an aggregate principal amount of $20.0 million was funded, or Term B, and in June 2021, or the June 2021 Amendment, upon which a third tranche in an aggregate principal amount of $40.0 million was funded, or Term C. In February 2022, the Company entered into an additional amendment, or the February 2022 Amendment, to the 2020 Loan Agreement, collectively, the Amended 2020 Loan Agreement, upon which the Company received gross proceeds of $40.0 million, or Term D, net of $1.1 million of legal and amendment fees.

The February 2022 Amendment also provided for an increase in the interest rate and for three future tranches of debt to be funded upon the achievement of certain milestones. In June 2022, the Company received additional gross proceeds of $30.0 million, or Term E, following the initiation of part 4 of the Phase 1 clinical trial of INBRX-105, as well as an additional $30.0 million in gross proceeds, or Term F, following the receipt of positive topline data from the Phase 1 clinical trial of INBRX-101. One additional tranche with an aggregate principal amount of $30.0 million, or Term G, remains available to the Company, which will be funded subject to the initiation of a registrational clinical trial of INBRX-101 on or before June 30, 2023.

The Company determined the November 2020, June 2021, and February 2022 Amendments should be treated as modifications of the original 2020 Loan Agreement since the terms and resulting cash flows were not substantially changed upon each of the amendments.

As of September 30, 2022, the Company had $170.0 million in gross principal outstanding in term loans under the Amended 2020 Loan Agreement. The outstanding term loans will mature on January 1, 2027, or the Amended Maturity Date, and bear interest at a floating per annum rate equal to the greater of (1) 8.30% or (2) the sum of (i) the 30 day U.S. Dollar LIBOR rate reported in The Wall Street Journal on the last business day of the month that immediately precedes the month in which the interest will accrue, plus (ii) 8.19%. The repayment schedule provides for interest-only payments through February 1, 2025. The interest-only period is followed by 23 months of equal payments of principal and interest beginning on March 1, 2025. The interest-only period may be extended by an additional 12 months in the event the Company raises at least $100.0 million in upfront licensing or partnership proceeds by February 2025, which would then be followed by 11 months of principal repayments. Upon the Amended Maturity Date, a final payment of 9.0% of the original principal amount will be due to Oxford. This final payment of $15.3 million is being accreted over the life of the Amended 2020 Loan Agreement using the effective interest method. The Company has the option to prepay the outstanding balance of the term loans in full prior to the

Amended Maturity Date, subject to a prepayment fee ranging from 1.0% to 3.0%, depending upon the timing of the prepayment.

The Company’s outstanding debt balance under the Amended 2020 Loan Agreement consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands).

	AS OF		AS OF
	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Term A	$	10,900	$	10,900
Term B	21,800		21,800
Term C	43,600		43,600
Term D	43,600		—
Term E	32,700		—
Term F	32,700		—
Less: debt discount	(14,481)		(5,830)
Long-term debt, including debt discount and final payment fee	$	170,819	$	70,470

As of September 30, 2022, and unless extended in accordance with the terms described above, the Company’s interest-only period will continue through January 2025, with principal payments beginning in February 2025. Future principal payments and final fee payments will be made as follows (in thousands):

	AS OF
	SEPTEMBER 30, 2022
2025	$	73,913
2026	88,696
2027	22,691
Total future minimum payments	185,300
Less: unamortized debt discount	(14,481)
Total debt	$	170,819

The Company’s obligations under the Amended 2020 Loan Agreement are secured by a first priority security interest of substantially all of the Company’s assets with a positive lien on intellectual property. The Amended 2020 Loan Agreement includes customary events of default, including instances of a material adverse change in the Company’s operations, that may require prepayment of the outstanding term loans. Additionally, the Amended 2020 Loan Agreement requires a minimum cash balance of $20.0 million to be maintained in a collateral account. As of September 30, 2022, the Company is in compliance with all covenants under the Amended 2020 Loan Agreement and has not received any notification or indication from Oxford of an intent to declare the loan due prior to maturity.

Concurrently with the February 2022 Amendment, the Company issued 40,000 warrants to Oxford to purchase shares of the Company’s common stock at an exercise price of $45.00. Upon issuance, the warrants were classified as equity and recorded at their fair value of $0.7 million. See Note 4 for further discussion of these warrants.

Interest Expense

Interest expense is calculated using the effective interest method and is inclusive of non-cash amortization of the debt discount and accretion of the final payment. Interest expense was approximately $5.5 million and $1.8 million for the three months ended September 30, 2022 and September 30, 2021 and $11.1 million and $3.6 million for the nine months ended September 30, 2022 and September 30, 2021, respectively, all of which was related to the Amended 2020 Loan Agreement in each period.

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STOCKHOLDERS’ EQUITY

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

STOCKHOLDERS’ EQUITY

STOCKHOLDERS’ EQUITY

Common Stock

In September 2021, the Company entered into the Sales Agreement with the Sales Agent, under which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $200.0 million through the Sales Agent, or the ATM Offering. Pursuant to the Sales Agreement, the Company will pay the Sales Agent a commission for its services in acting as an agent in the sale of common stock in an amount equal to 3% of the gross sales price per share sold. During the year ended December 31, 2021, the Company sold 921,042 shares pursuant to the Sales Agreement for net proceeds of $40.2 million, after deducting commissions. During the nine months ended September 30, 2022, the Company did not issue any shares under the Sales Agreement.

Common Stock Warrants

The Company has 7,354 warrants outstanding at an exercise price of $17.00 per share, which are exercisable for shares of common stock through their expiration date of July 15, 2030. As of September 30, 2022, the warrants are equity-classified and reflected in additional paid-in-capital at a fair value of $0.1 million.

Upon the February 2022 Amendment, the Company issued 40,000 warrants, which are exercisable for shares of common stock of the Company at $45.00 per share. The warrants are exercisable through their expiration date of February 18, 2032. The warrants are equity-classified and reflected in additional paid-in-capital at a fair value of $0.7 million. The fair value of the warrants was determined using the Black-Scholes model on the date of issuance.

No subsequent remeasurement is required for equity-classified warrants.

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EQUITY COMPENSATION PLAN

9 Months Ended

Sep. 30, 2022

Share-based Payment Arrangement [Abstract]

EQUITY COMPENSATION PLAN

EQUITY COMPENSATION PLAN

Stock Incentive Plan

The Company’s share-based compensation plan, the Amended and Restated 2017 Employee, Director and Consultant Equity Incentive Plan, or the 2017 Plan, provides for the issuance of incentive stock options, restricted and unrestricted stock awards, and other stock-based awards. As of September 30, 2022, an aggregate of 6.1 million shares of common stock were reserved for issuance under the 2017 Plan, of which 0.3 million were available.

Stock Option Activity

The Company recognizes compensation costs related to stock-based awards, including stock options, based on the estimated fair value of the awards on the date of grant. The Company grants options with an exercise price equal to the fair market value of the Company’s stock on the date of the option grant. The options are subject to four-year vesting with a one-year cliff and have a contractual term of 10 years.

A summary of the Company’s stock option activity under its 2017 Plan for the nine months ended September 30, 2022 is as follows (in thousands, except for per share data and years):

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2021	4,064	$	22.19
Granted	1,682	$	24.32
Exercised	(96)	$	11.17
Forfeited	(381)	$	30.73
Outstanding as of September 30, 2022	5,269	$	22.45	7.9	$	13,157
Vested and exercisable as of September 30, 2022	2,247	$	18.26	6.5	$	9,894

The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2022 and September 30, 2021 was $1.4 million and $3.4 million, respectively. Aggregate intrinsic value of stock options

exercised and outstanding is calculated using the fair value of common stock on the date of exercise and as of September 30, 2022, respectively.

Stock-Based Compensation Expense

The weighted-average assumptions used by the Company to estimate the fair value of stock option grants using the Black-Scholes option pricing model, as well as the resulting weighted-average fair value for the nine months ended September 30, 2022 and September 30, 2021 were as follows:

	NINE MONTHS ENDED SEPTEMBER 30,
	2022			2021
Risk-free interest rate	2.45		%	0.67		%
Expected volatility	85.23		%	93.55		%
Expected dividend yield	—		%	—		%
Expected term (in years)	6.08			6.08
Weighted average fair value	$	17.15		$	24.01

Stock-based compensation expense for stock options consisted of the following (in thousands):

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2022		2021		2022		2021
Research and development	$	3,545	$	2,696	$	10,764	$	8,679
General and administrative	1,146		797		4,331		2,186
Total stock-based compensation expense	$	4,691	$	3,493	$	15,095	$	10,865

As of September 30, 2022, the Company had $52.2 million of total unrecognized stock-based compensation expense related to its stock options, which is expected to be recognized over a weighted-average period of 2.8 years.

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LICENSE AND GRANT REVENUES

9 Months Ended

Sep. 30, 2022

Collaborative Arrangement and Arrangement Other than Collaborative [Abstract]

LICENSE AND GRANT REVENUES

LICENSE AND GRANT REVENUES

The following table summarizes the total revenue recorded in the Company’s condensed consolidated statements of operations (in thousands):

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2022		2021		2022		2021
License fee revenue
Phylaxis BioScience, LLC	$	14	$	460	$	1,101	$	1,838
2seventy bio, Inc.	—		2,000		200		2,100
Chiesi Farmaceutici S.p.A.	264		48		603		351
Total license fee revenue	278		2,508		1,904		4,289
Grant revenue	—		24		14		86
Total revenue	$	278	$	2,532	$	1,918	$	4,375

License and Collaboration Agreements

Phylaxis

In July 2020, the Company entered into a joint venture with an entity affiliated with ArrowMark Partners, Phylaxis BioScience, LLC, or Phylaxis. In connection with the joint venture, the Company entered into the following agreements: Contribution Agreement, License Agreement, Limited Liability Company Agreement, and Master Services Agreement, or collectively the Phylaxis Agreements, pursuant to which the Company licensed certain intellectual property and know-how to Phylaxis and agreed to provide services to develop certain compounds. Upon closing, the Company received a $2.5 million nonrefundable, upfront payment from Phylaxis under the Master

Services Agreement, or MSA. The Company has also received an additional $2.5 million, which was payable within 180 days from closing under the MSA, in two payments of $1.25 million each, received in October 2020 and January 2021. Upon closing, the Company received a 10% equity interest in Phylaxis as consideration for the contribution of the license of the Company’s intellectual property and know-how and is entitled to receive an additional 5% based on the achievement of certain milestones. Under the License Agreement, the Company is also entitled to specified development and commercialization milestone payments of up to an aggregate of $225.0 million and $175.0 million, respectively. The Company is also entitled to share in a percentage of the profits of Phylaxis under the Limited Liability Company Agreement.

In order to determine the fair value of the equity interest in Phylaxis, the Company engaged a third-party valuation specialist. The valuation report utilized a market approach to establish the total equity value of Phylaxis using inputs not observable in the market, including the discount rate. The fair value of the equity interest was $0.5 million, which has been accounted for under the equity method. The fair value of the equity interest upon the execution of the agreements has been included in the transaction price, along with the $5.0 million of payments due pursuant to the MSA.

The Company identified the transfer of the exclusive licenses for, and performance of, development services to modify the first and second compounds as one performance obligation and allocated the transaction price evenly between the two compounds. Revenue related to the performance obligation will be recognized over time as services are performed, based on the Company’s progress to satisfy the performance obligation. During the third quarter of 2022, the Company fulfilled this performance obligation in full and recognized all remaining deferred revenue under this contract.

During the three months ended September 30, 2022 and September 30, 2021, the Company recognized $14,000 and $0.5 million of revenue related to this performance obligation, respectively. During the nine months ended September 30, 2022 and September 30, 2021, the Company recognized $1.1 million and $1.8 million of revenue related to this performance obligation, respectively. As of September 30, 2022, there was no deferred revenue remaining related to the Phylaxis Agreements. As of December 31, 2021, there was $1.1 million of deferred revenue related to the Phylaxis Agreements, all of which was classified as current.

2seventy bio, Inc.

2018 License Agreement

On December 20, 2018, the Company entered into a License Agreement with bluebird bio, Inc., or bluebird, whereby the Company granted bluebird the exclusive, worldwide rights to develop, manufacture, and commercialize certain cell therapy products containing binders. In November 2021, bluebird assigned the agreement, which we refer to as the 2018 2seventy Agreement, to its affiliate, 2seventy bio, Inc., or 2seventy, in connection with an internal restructuring and subsequent spin-out of 2seventy. Under the 2018 2seventy Agreement, the Company is entitled to receive specified development milestone payments of up to an aggregate of $51.5 million per therapeutic, as well as percentage tiered royalties on future product sales with rates in the mid-single-digits. Due to the uncertainty in the achievement of the developmental milestones, the variable consideration associated with the future milestone payments has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. These estimates will be re-assessed at each reporting period.

In July 2021, a milestone event under the 2018 2seventy Agreement was achieved and the Company recognized $2.0 million of revenue at that point in time. The Company received the associated $2.0 million payment in August 2021. During each of the three and nine months ended September 30, 2021, the Company recognized a total of $2.0 million in revenue related to this agreement. During the three and nine months ended September 30, 2022, the Company recognized no revenue related to this agreement.

2020 License Agreement

In June 2020, the Company entered into an Option and License Agreement with bluebird pursuant to which the Company granted to bluebird exclusive worldwide rights to develop binders and cell therapy products containing single domain antibodies, or sdAbs, directed to specified targets, consisting of two initial programs and up to an additional 8 programs. The Company retains all rights to the specific sdAbs outside of the cell therapy field. This

agreement, or the 2020 2seventy Agreement, was assigned to bluebird’s affiliate, 2seventy, in November 2021 in connection with bluebird’s internal restructuring and subsequent spin-out of 2seventy.

In June 2020, the Company received a non-refundable upfront option fee of $0.2 million in connection with each of the two initial programs, or $0.4 million in aggregate, and is entitled to an upfront option fee for each additional program, on a program-by-program basis. In June 2022, 2seventy selected a third program and paid a non-refundable upfront option fee of $0.2 million in exchange for a development license. Under each of the three programs, the Company has granted an option in which 2seventy may acquire an exclusive license with respect to all binders and cell therapy products developed under this agreement, which entitles the Company to additional fees upon exercise of the option. In connection with each program for which 2seventy exercises its option, 2seventy will be required to pay the Company a one-time, non-refundable, non-creditable fee in the low-single-digit millions. The Company is also entitled to receive certain developmental milestone payments of up to an aggregate of $51.5 million per therapeutic, as well as percentage tiered royalties on future product sales with rates in the mid-single-digits. Due to the uncertainty in the achievement of the developmental milestones and future sales, the variable consideration associated with the future milestone payments has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. These estimates will be re-assessed at each reporting period.

As of the effective date of the 2020 2seventy Agreement, the Company identified one performance obligation, which was the transfer of the exclusive development license to bluebird for the two initial programs. The Company determined that the option granted for an exclusive license in the future was not a material right. For the eight programs not identified upon execution of the contract, the Company evaluated the customer option for additional purchases and determined that those options for additional programs did not constitute material rights nor variable consideration. As additional programs are identified, the Company re-assesses its performance obligations and transaction price accordingly.

In May 2021, pursuant to the option extension terms in the 2020 2seventy Agreement, bluebird requested to extend the option term for one of the initial programs by an additional six months in exchange for an option extension fee of $0.1 million. The Company recognized the $0.1 million of revenue related to this extension in May 2021, the point in time in which the extension was granted.

In October 2021, pursuant to the option exercise terms in the 2020 2seventy Agreement, the Company received a $2.1 million option exercise fee for one of the initial programs and transferred an exclusive license for the program and recognized the $2.1 million of revenue related to this option exercise at the point in time in which the exclusive license was transferred.

In June 2022, pursuant to the terms regarding the addition of new programs in the 2020 2seventy Agreement, the Company received a $0.2 million upfront option fee related to the selection of a third program and transferred the related know-how and development license. The Company recognized the $0.2 million of revenue at the point in time in which the program was added and the program term began.

During the nine months ended September 30, 2022 and September 30, 2021, the Company recognized $0.2 million and $0.1 million of revenue related to this agreement, respectively. During the three months ended September 30, 2022 and September 30, 2021, the Company recognized no revenue related to this agreement in either period.

Chiesi

In May 2019, the Company entered into an Option Agreement, as amended by the First Amendment to Option Agreement, dated August 19, 2019, or the Chiesi Option Agreement, with Chiesi Farmaceutici S.p.A., or Chiesi, pursuant to which the Company granted to Chiesi an exclusive option to obtain an exclusive license to develop and commercialize INBRX-101 outside of the United States and Canada. Additionally, the Chiesi Option Agreement provides Chiesi with a right of negotiation for INBRX-101 development and commercialization rights in the United States and Canada in the event that the Company engages in discussions with any third parties for such rights during the term of the Chiesi Option Agreement or, as applicable, the term of a definitive exclusive license agreement between Chiesi and the Company. Under the terms of the Chiesi Option Agreement, the Company received a one-time, non-refundable option initiation payment of $10.0 million in August 2019. If Chiesi chooses to exercise its

option under the Chiesi Option Agreement, then Chiesi must pay the Company a one-time, non-refundable fee of $12.5 million upon the effective date of the definitive agreement granting Chiesi the exclusive license. If the option is exercised, under the license agreement, the Company may be entitled to receive specified milestone payments of up to $122.5 million, as well as royalties on future product sales.

The Company has identified one performance obligation as of the effective date of the Chiesi Option Agreement, which is to perform research and development services for Chiesi during the option period, which will continue (unless the Chiesi Option Agreement is terminated earlier by Chiesi or the Company) until 60 days following the last to occur of (i) the Company’s delivery to Chiesi of the trial phase data for the first Phase I Clinical Trial, (ii) the Company’s delivery to Chiesi of the finalized minutes from the definitive U.S. Food and Drug Administration, or FDA, scientific advice meeting conducted following completion of such Phase I Clinical Trial, and (iii) the Company’s delivery to Chiesi of the finalized minutes from the definitive parallel European Medicines Agency health technology assessment scientific advice meeting conducted following completion of such Phase I Clinical Trial. The Company has determined that the option to grant a license in the future is not a material right.

The $10.0 million upfront payment has been allocated to the single performance obligation. Revenue is recognized over time as services are performed during the option period, based on the Company’s effort to satisfy the performance obligation relative to the total expense estimated to be incurred during the option period. During the three months ended September 30, 2022, the Company recognized $0.3 million in revenue related to this agreement. During the three months ended September 30, 2021, the Company recognized no revenue related to this agreement. During the nine months ended September 30, 2022 and September 30, 2021, the Company recognized $0.6 million and $0.4 million in revenue related to this agreement, respectively. As of September 30, 2022, the Company has $0.4 million of deferred revenue related to this agreement, all of which is classified as current deferred revenue. As of December 31, 2021, the Company had $0.9 million and $0.1 million of current and non-current deferred revenue related to this agreement, respectively.

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2022

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

From time to time, the Company will enter into an agreement with a related party in the ordinary course of its business. These agreements are ratified by the Company’s Board of Directors or a committee thereof pursuant to policy.

LAV Summit Limited

LAV Summit Limited, or LAV SL, a limited company, is a principal shareholder which owned more than 5% of the Company’s outstanding equity interest during the year ended December 31, 2021. Due to this equity ownership, LAV SL was considered a related party. LAV SL’s General Partner, Lilly Asia Ventures, or LAV, through one of its funds, holds a significant equity ownership position in Chinese biotechnology company, Elpiscience Biopharmaceuticals, Inc., or Elpiscience, and the Venture Partner of LAV is the CEO, Founder, and Director at Elpiscience. Accordingly, the Company identified Elpiscience as a related party and all agreements entered into between the Company and Elpiscience through December 31, 2021 are deemed related party agreements. As of December 31, 2021, LAV SL no longer holds more than 5% of the Company’s outstanding equity interest. Accordingly, any future contracts entered into with LAV SL affiliates will not be considered related party transactions.

Elpiscience

In April 2018, the Company entered into a license agreement, or the OX40 License Agreement, with Elpiscience, whereby the Company granted Elpiscience an exclusive license to the Company’s multivalent protein therapeutic directed to the biological target OX40, or INBRX-106. Under this agreement, the Company is entitled to reimbursement for certain CMC and toxicology expenses incurred. The Company received $0.2 million in reimbursements under this agreement during the first quarter of 2022, and has received $5.3 million to date as of September 30, 2022. During the three months ended September 30, 2022, the Company derecognized $32,000 as contra-expenses, which are recorded as receivables from affiliates as of September 30, 2022. No further reimbursements remain under this contract following the receipt of this balance.

In July 2020, the Company entered into an additional cost sharing agreement with Elpiscience related to the OX40 License Agreement. Under this agreement, the Company is entitled to reimbursement for certain formulation development costs. The Company received $0.3 million and $0.2 million in reimbursements under this agreement in the first quarter of 2022 and 2021, respectively, and has received $0.5 million of reimbursements to date as of September 30, 2022. Reimbursements under this contract are recognized as contra-expense as incurred.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Operating Leases

In September 2017, the Company entered into a seven-year lease agreement for approximately 34,000 square feet as its sole location in La Jolla, California. The lease expires in June 2025 with an option to extend the lease an additional five years. The lease contained an initial base rent of approximately $0.1 million per month with 2% annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which to be determined annually.

In May 2019, the Company executed an amendment to its lease agreement to expand its facilities by approximately 9,000 square feet and began occupying this space in January 2020. The amended lease terminates coterminously with the initial lease agreement and contains an initial base rent of approximately $30,000 per month with 2% annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which is to be determined annually.

The right-of-use asset and operating lease liability as of September 30, 2022 and December 31, 2021 are as follows (in thousands):

	AS OF		AS OF
	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Right-of-use asset	$	5,135	$	6,338
Operating lease liability
Current	$	1,812	$	1,674
Non-current	3,657		$	5,033
Total operating lease liability	$	5,469	$	6,707

During the three and nine months ended September 30, 2022, the Company recognized operating lease expense of $0.9 million and $2.5 million, respectively. During the three and nine months ended September 30, 2021, the Company recognized operating lease expense of $0.8 million and $2.3 million, respectively. During the three months ended September 30, 2022 and September 30, 2021, the Company paid $0.5 million for amounts included in the measurement of the lease liability in each period. During the nine months ended September 30, 2022 and September 30, 2021, the Company paid $1.6 million for amounts included in the measurement of the lease liability in each period.

As of September 30, 2022 and December 31, 2021, the Company’s operating lease had a remaining term of 2.8 and 3.5 years, respectively. The Company discounts its lease payments using its incremental borrowing rate as of the commencement of the lease. The Company has determined a weighted-average discount rate of 8.2% as of September 30, 2022 and December 31, 2021.

Future minimum rental commitments for the Company’s operating leases reconciled to the lease liability are as follows (in thousands):

	AS OF
	SEPTEMBER 30, 2022
2022	$	544
2023	2,203
2024	2,247
2025	1,137
Thereafter	—
Total future minimum lease payments	$	6,131
Less: imputed interest	(662)
Present value of operating lease liability	5,469
Less: current portion of operating lease liability	(1,812)
Non-current portion of operating lease liability	$	3,657

Litigation

The Company is not party to any material legal proceedings. From time to time, it may be involved in legal proceedings or subject to claims incident to the ordinary course of business. Regardless of the outcome, such proceedings or claims can have an adverse impact on the Company because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2022

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

For the unaudited interim condensed consolidated financial statements as of September 30, 2022, the Company evaluated subsequent events to assess the need for potential recognition or disclosure in these financial statements. Based upon this evaluation, it was determined that no additional subsequent events required recognition or disclosure in these condensed consolidated financial statements, other than disclosures related to those outlined below.

On October 3, 2022, the Company entered into an amendment to the Amended 2020 Loan Agreement, or the October 2022 Amendment. The October 2022 Amendment amended the milestone terms of the last remaining tranche, Term G, under the Amended 2020 Loan Agreement to provide for the funding of $30.0 million upon the announcement of the regulatory path for INBRX-101 rather than upon the initiation of a potential registration-enabling clinical trial of INBRX-101. On October 4, 2022, the Company met this milestone and on October 24, 2022, drew the final tranche for additional gross proceeds of $30.0 million.

In October 2022, the Company sold 4,332,354 shares of its common stock pursuant to its Sales Agreement for net proceeds of $127.4 million after deducting commissions.

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC, related to an interim report on the Form 10-Q.

The unaudited interim condensed financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results for the periods presented. All such adjustments are of a normal and recurring nature. The operating results presented in these unaudited interim condensed financial statements are not necessarily indicative of the results that may be expected for any future periods.

Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, the accompanying unaudited interim financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2021, which are included in the Company’s Annual Report on Form 10-K filed with the SEC.

Liquidity

Liquidity

As of September 30, 2022, the Company had an accumulated deficit of $331.5 million and cash and cash equivalents of $146.1 million. From its inception and through September 30, 2022, the Company has devoted substantially all of its efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of its therapeutic candidates, organizing and staffing the Company, establishing its intellectual property portfolio and raising capital to support and expand these activities.

The Company believes that its existing cash and cash equivalents will be sufficient to fund the Company’s operations for at least 12 months from the date these condensed consolidated financial statements are issued. The Company plans to finance its future cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses, strategic transactions, and other similar arrangements.

As discussed in Note 4, the Company entered into the Open Market Sale Agreement, or the Sales Agreement, with Jefferies LLC, or the Sales Agent, under which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $200.0 million through the Sales Agent, or the ATM Offering. During the year ended December 31, 2021, the Company sold 921,042 shares pursuant to the Sales Agreement for net proceeds of $40.2 million, after deducting commissions. During the nine months ended September 30, 2022, the Company did not issue any shares under the Sales Agreement.

As discussed in Note 3, the Company received $40.0 million in gross proceeds upon entering into the February 2022 Amendment to the 2020 Loan Agreement, as amended (both as defined below). Pursuant to the Amended 2020 Loan Agreement (as defined below), three additional tranches became available upon the occurrence of contingent events, for additional gross proceeds of up to $90.0 million. In June 2022, two of these tranches were drawn for additional gross proceeds of $60.0 million.

If the Company does raise additional capital through public or private equity or convertible debt offerings, the ownership interests of its existing stockholders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect its stockholders’ rights. If the Company raises capital through

additional debt financings, it may be subject to covenants limiting or restricting its ability to take specific actions, such as incurring additional debt or making certain capital expenditures. To the extent that the Company raises additional capital through strategic licensing, collaboration or other similar agreement, it may have to relinquish valuable rights to its therapeutic candidates, future revenue streams or research programs at an earlier stage of development or on less favorable terms than it would otherwise choose, or to grant licenses on terms that may not be favorable to the Company. There can be no assurance as to the availability or terms upon which such financing and capital might be available in the future. If the Company is unable to secure adequate additional funding, it will need to reevaluate its operating plan and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, delay, scale back or eliminate some or all of its development programs, or relinquish rights to its technology on less favorable terms than it would otherwise choose. These actions could materially impact its business, financial condition, results of operations and prospects.

The rules and regulations of the SEC or any other regulatory agencies may restrict the Company’s ability to conduct certain types of financing activities, or may affect the timing of and amounts it can raise by undertaking such activities.

Use of Estimates

Use of Estimates

The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The Company’s most significant estimates relate to whether revenue recognition criteria have been met, accounting for development work and preclinical studies and clinical trials, determining the assumptions used in measuring stock-based compensation, and valuation allowances for the Company’s deferred tax assets. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. The Company’s actual results may differ from these estimates under different assumptions or conditions.

Concentrations of Credit Risk

Concentrations of Credit Risk The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial condition of the depository institutions in which those deposits are held.

Fair Value Measurements

Fair Value Measurements

The Company determines the fair value measurements of applicable assets and liabilities based on a three-tier fair value hierarchy established by accounting guidance and prioritizes the inputs used in measuring fair value. These tiers include:

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Deferred Offering Costs

Deferred Offering CostsThe Company capitalizes costs that are directly associated with equity financings until such financings are consummated, at which time such costs are recorded against the gross proceeds of the offering. Legal, accounting, and filing fees related directly to the Company’s Sales Agreement are capitalized as deferred offering costs. Deferred offering costs associated with the Sales Agreement are reclassified to additional paid-in capital when the Company completes offerings under the Company’s Shelf Registration on Form S-3ASR. In November 2021, the Company completed an ATM Offering under the Sales Agreement and offset $1.7 million of offering costs against the proceeds.

Financial Instruments with Characteristics of Both Liabilities and Equity

Financial Instruments with Characteristics of Both Liabilities and Equity

The Company accounts for issued warrants either as a liability or equity in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, or ASC 480-10, and ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, or ASC 815-40. Under ASC 480-10, warrants are considered a liability if they are mandatorily redeemable and they require settlement in cash, other assets, or a variable number of shares. If warrants do not meet liability classification under ASC 480-10, the Company considers the requirements of ASC 815-40 to determine whether the warrants should be classified as a liability or as equity. Under ASC 815-40, contracts that may require settlement for cash are liabilities, regardless of the probability of the occurrence of the triggering event. Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period. Any change in the fair value of the warrants after the issuance date is recorded in other expense, net in the condensed consolidated statements of operations as a gain or loss. If warrants do not require liability classification under ASC 815-40, in order to conclude warrants should be classified as equity, the Company assesses whether the warrants are indexed to its common stock and whether the warrants are classified as equity under ASC 815-40 or under another applicable GAAP standard. Equity-classified warrants are accounted for at fair value on the issuance date with no changes in fair value recognized after the issuance date. The Company’s outstanding warrants do not meet the requirements for liability classification under ASC-480-10 or ASC-815-40. Therefore, the warrants were treated as equity at the time of issuance.

Revenue Recognition

Revenue Recognition

The Company has generated revenue from its license and collaboration agreements with partners, as well as from grants from government agencies and private not-for-profit organizations. Payments received from customers are included in deferred revenue, allocated between current and non-current on the condensed consolidated balance

sheet until all revenue recognition criteria are met. In accordance with ASC Topic 606, Revenue from Contracts with Customers, or ASC Topic 606, the Company recognizes revenue when, or as, the promised goods or services are transferred to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those services. To determine revenue recognition for arrangements the Company concludes are within the scope of ASC Topic 606, the Company performs the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligation(s) in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligation(s) in the contract; and (5) recognize revenue when (or as) the performance obligation(s) are satisfied. At contract inception, the Company assesses the goods or services promised within each contract, assesses whether each promised good or service is distinct and identifies those that are performance obligations. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when, or as, the performance obligation is satisfied.

Collaborative Research, Development, and License Agreements

The Company enters into collaborative agreements with partners that typically include one or more of the following: (1) license fees; (2) nonrefundable up-front fees; (3) payments for reimbursement of research costs; (4) payments associated with achieving specific development, regulatory, or commercial milestones; and (5) royalties based on specified percentages of net product sales, if any. At the initiation of an agreement, the Company analyzes whether each unit of account results in a contract with a customer under ASC Topic 606 or in an arrangement with a collaborator subject to guidance under ASC Topic 808, Collaborative Arrangements. The Company’s licensing arrangements are typically for functional intellectual property as it exists at a point in time, being the time that the license agreement is executed. The Company typically does not have an ongoing performance obligation to support or maintain the licensed intellectual property.

The Company considers a variety of factors in determining the appropriate estimates and assumptions under these arrangements, such as whether the elements are distinct performance obligations, whether there are observable stand-alone prices, and whether any licenses are functional or symbolic. The Company evaluates each performance obligation to determine if it can be satisfied and recognized as revenue at a point in time or over time. Typically, license fees, non-refundable upfront fees, and funding of research activities are considered fixed, while milestone payments are identified as variable consideration which must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price. The Company estimates the amount of variable consideration using the most likely amount, as milestone payments typically only have two possible outcomes. The Company recognizes revenue for sales-based royalty promised in exchange for the license of intellectual property only when the subsequent sale occurs. In the case of an agreement which provides the partner with an option to license a therapeutic or therapeutic candidate in the future, the Company evaluates whether this option represents a material right at the inception of the agreement. If determined to be a material right, the Company will consider the option a separate performance obligation. The Company has historically concluded that the option to grant a license in the future is not a material right as it is contingent upon future events which may not occur. When an option is exercised, the Company will identify any separate performance obligations.

The Company may allocate transaction price using a number of methods including estimating standalone selling price of performance obligations and using the residual approach when the standalone selling price of the license is highly variable or uncertain, and observable standalone selling prices exist for the other goods or services promised in the contract.

Research and Development and Clinical Trial Accruals

Research and Development and Clinical Trial Accruals

Research and development costs are expensed as incurred and include the cost of compensation and related expenses, as well as expenses for third parties who conduct research and development on the Company’s behalf, pursuant to development and consulting agreements in place. The Company’s preclinical studies and clinical trials are performed internally, by third party contract research organizations, or CROs, and/or clinical investigators. The Company also engages with contract development and manufacturing organizations, or CDMOs, for clinical supplies and manufacturing scale-up activities related to its therapeutic candidates. Invoicing from these third parties may be monthly based upon services performed or based upon milestones achieved. The Company accrues these expenses based upon its assessment of the status of each clinical trial and the work completed, and upon information obtained from the CROs and CDMOs. The Company’s estimates are dependent upon the timeliness and accuracy of

data provided by the CROs and CDMOs regarding the status and cost of the studies. Costs incurred related to the Company’s purchases of in-process research and development for early-stage products or products that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred. Costs incurred related to the licensing of products that have not yet received marketing approval to be marketed, or that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred.

Income Taxes

Income Taxes Income taxes are accounted for under the asset and liability method. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized.

Net Loss Per Share

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the same period. Diluted net loss per share is computed by dividing net loss by the weighted average number of common and common equivalent shares outstanding during the same period. The Company excludes common stock equivalents from the calculation of diluted net loss per share when the effect is anti-dilutive.

For purposes of the diluted net loss per share calculation, warrants for purchase of common stock and stock options are considered to be potentially dilutive securities. Accordingly, for the nine months ended September 30, 2022 and September 30, 2021, there is no difference in the number of shares used to calculate basic and diluted shares outstanding.

Segment Information

Segment Information The Company operates under one segment which develops biologic therapeutic candidates. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies. The Company believes that the impact of the recently issued accounting pronouncements that are not yet effective will not have a material impact on its condensed consolidated financial condition or results of operations upon adoption.

Adoption of New Accounting Pronouncements

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, which intends to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The Company adopted ASU 2021-04 on

January 1, 2022, which did not result in a material impact on its condensed consolidated financial statements and related disclosures.

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Potential Dilutive Securities Excluded from Diluted Loss Per Share

Potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows (in thousands):

	AS OF SEPTEMBER 30,
	2022	2021
Outstanding stock options	5,269	3,983
Warrants to purchase common stock	47	7
	5,316	3,990

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OTHER FINANCIAL INFORMATION (Tables)

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Prepaid Expense and Other Current Assets

Prepaid expense and other current assets were comprised of the following (in thousands):

	AS OF		AS OF
	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Outside research and development services	$	6,539	$	6,343
Other	827		590
Prepaid expense and other current assets	$	7,366	$	6,933

Schedule of Property and Equipment

Property and equipment, net were comprised of the following (in thousands):

	AS OF		AS OF
	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Machinery and equipment	$	6,976	$	6,286
Leasehold improvements	441		441
Computer software	53		42
Furniture and fixtures	524		514
Construction in process	65		281
Total property and equipment	8,059		7,564
Less: accumulated depreciation and amortization	(5,260)		(4,411)
Property and equipment, net	$	2,799	$	3,153

Depreciation and amortization expense totaled $0.3 million for each of the three months ended September 30, 2022 and September 30, 2021 and $0.9 million for each of the nine months ended September 30, 2022 and September 30, 2021, and consisted of the following (in thousands):

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2022		2021		2022		2021
Research and development	$	251	$	250	$	757	$	746
General and administrative	58		49		166		142
Total depreciation and amortization expense	$	309	$	299	$	923	$	888

Schedule of Accrued Expenses

Accrued expenses were comprised of the following (in thousands):

	AS OF		AS OF
	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Clinical trials(1)	$	3,950	$	4,496
Clinical drug substance and product manufacturing(2)	3,697		1,564
Other outside research and development	1,418		1,329
Compensation-related	2,712		1,322
Professional fees	1,011		261
Other	1,817		649
Accrued expenses	$	14,605	$	9,621

(1) Relates primarily to the Company’s usage of third-party CROs for management of clinical trials. See Note 1 for further discussion of the components of research and development.

(2) Relates primarily to the Company’s usage of third-party CDMOs for clinical and development efforts. See Note 1 for further discussion of the components of research and development.

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DEBT (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Schedule of Long-term Debt

The Company’s outstanding debt balance under the Amended 2020 Loan Agreement consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands).

	AS OF		AS OF
	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Term A	$	10,900	$	10,900
Term B	21,800		21,800
Term C	43,600		43,600
Term D	43,600		—
Term E	32,700		—
Term F	32,700		—
Less: debt discount	(14,481)		(5,830)
Long-term debt, including debt discount and final payment fee	$	170,819	$	70,470

Schedule of Maturities of Long-term Debt

Future principal payments and final fee payments will be made as follows (in thousands):

	AS OF
	SEPTEMBER 30, 2022
2025	$	73,913
2026	88,696
2027	22,691
Total future minimum payments	185,300
Less: unamortized debt discount	(14,481)
Total debt	$	170,819

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EQUITY COMPENSATION PLAN (Tables)

9 Months Ended

Sep. 30, 2022

Share-based Payment Arrangement [Abstract]

Schedule of Stock Options Roll Forward

A summary of the Company’s stock option activity under its 2017 Plan for the nine months ended September 30, 2022 is as follows (in thousands, except for per share data and years):

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2021	4,064	$	22.19
Granted	1,682	$	24.32
Exercised	(96)	$	11.17
Forfeited	(381)	$	30.73
Outstanding as of September 30, 2022	5,269	$	22.45	7.9	$	13,157
Vested and exercisable as of September 30, 2022	2,247	$	18.26	6.5	$	9,894

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The weighted-average assumptions used by the Company to estimate the fair value of stock option grants using the Black-Scholes option pricing model, as well as the resulting weighted-average fair value for the nine months ended September 30, 2022 and September 30, 2021 were as follows:

	NINE MONTHS ENDED SEPTEMBER 30,
	2022			2021
Risk-free interest rate	2.45		%	0.67		%
Expected volatility	85.23		%	93.55		%
Expected dividend yield	—		%	—		%
Expected term (in years)	6.08			6.08
Weighted average fair value	$	17.15		$	24.01

Schedule of Stock-Based Compensation Expense

Stock-based compensation expense for stock options consisted of the following (in thousands):

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2022		2021		2022		2021
Research and development	$	3,545	$	2,696	$	10,764	$	8,679
General and administrative	1,146		797		4,331		2,186
Total stock-based compensation expense	$	4,691	$	3,493	$	15,095	$	10,865

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LICENSE AND GRANT REVENUES (Tables)

9 Months Ended

Sep. 30, 2022

Collaborative Arrangement and Arrangement Other than Collaborative [Abstract]

Schedule of License and Grant Revenue

The following table summarizes the total revenue recorded in the Company’s condensed consolidated statements of operations (in thousands):

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2022		2021		2022		2021
License fee revenue
Phylaxis BioScience, LLC	$	14	$	460	$	1,101	$	1,838
2seventy bio, Inc.	—		2,000		200		2,100
Chiesi Farmaceutici S.p.A.	264		48		603		351
Total license fee revenue	278		2,508		1,904		4,289
Grant revenue	—		24		14		86
Total revenue	$	278	$	2,532	$	1,918	$	4,375

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COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Schedule of Operating Lease, by Balance Sheet Location

The right-of-use asset and operating lease liability as of September 30, 2022 and December 31, 2021 are as follows (in thousands):

	AS OF		AS OF
	SEPTEMBER 30, 2022		DECEMBER 31, 2021
Right-of-use asset	$	5,135	$	6,338
Operating lease liability
Current	$	1,812	$	1,674
Non-current	3,657		$	5,033
Total operating lease liability	$	5,469	$	6,707

Schedule of Operating Lease Maturity

Future minimum rental commitments for the Company’s operating leases reconciled to the lease liability are as follows (in thousands):

	AS OF
	SEPTEMBER 30, 2022
2022	$	544
2023	2,203
2024	2,247
2025	1,137
Thereafter	—
Total future minimum lease payments	$	6,131
Less: imputed interest	(662)
Present value of operating lease liability	5,469
Less: current portion of operating lease liability	(1,812)
Non-current portion of operating lease liability	$	3,657

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands		1 Months Ended				9 Months Ended		12 Months Ended
	Feb. 18, 2022 USD ($)	Jun. 30, 2022 USD ($) tranche	Feb. 28, 2022 USD ($) tranche	Dec. 31, 2021 USD ($) shares	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) segment	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($) shares	Nov. 30, 2021 USD ($)	Apr. 30, 2020 USD ($)
Property, Plant and Equipment [Line Items]
Accumulated deficit				$ 227,147		$ 331,458		$ 227,147
Cash and cash equivalents				131,301		146,073		$ 131,301
Common stock offering price					$ 200,000
Proceeds from the issuance of debt						98,871	$ 39,992
Deferred payment of federal payroll taxes						$ 100				$ 400
Payments associated with equity offering				$ 300
Deferred offering costs									$ 1,700
Number of operating segments | segment						1
Amended 2022 Oxford Term Loan | Secured Debt
Property, Plant and Equipment [Line Items]
Proceeds from the issuance of debt	$ 40,000	$ 60,000	$ 40,000
Number of additional tranches available upon contingent events | tranche			3
Additional gross proceeds			$ 90,000
Number of additional tranches available upon contingent events, drawn from | tranche		2
Sales Agreement
Property, Plant and Equipment [Line Items]
Common stock shares sold (in shares) | shares				921,042				921,042
Sale of stock, proceeds received								$ 40,200

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Potential Dilutive Securities (Details) - shares shares in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Antidilutive securities excluded from earnings per share computation (in shares)	5,316	3,990
Outstanding stock options
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Antidilutive securities excluded from earnings per share computation (in shares)	5,269	3,983
Warrants to purchase common stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Antidilutive securities excluded from earnings per share computation (in shares)	47	7

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OTHER FINANCIAL INFORMATION - Prepaid Expense and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Outside research and development services	$ 6,539	$ 6,343
Other	827	590
Prepaid expense and other current assets	$ 7,366	$ 6,933

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OTHER FINANCIAL INFORMATION - Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 8,059		$ 8,059		$ 7,564
Less: accumulated depreciation and amortization	(5,260)		(5,260)		(4,411)
Property and equipment, net	2,799		2,799		3,153
Depreciation and amortization	309	$ 299	923	$ 888
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	6,976		6,976		6,286
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	441		441		441
Computer software
Property, Plant and Equipment [Line Items]
Total property and equipment	53		53		42
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment	524		524		514
Construction in process
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 65		$ 65		$ 281

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OTHER FINANCIAL INFORMATION - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Property, Plant and Equipment [Line Items]
Depreciation and amortization	$ 309	$ 299	$ 923	$ 888
Research and development
Property, Plant and Equipment [Line Items]
Depreciation and amortization	251	250	757	746
General and administrative
Property, Plant and Equipment [Line Items]
Depreciation and amortization	$ 58	$ 49	$ 166	$ 142

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OTHER FINANCIAL INFORMATION - Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Clinical trials	$ 3,950	$ 4,496
Clinical drug substance and product manufacturing	3,697	1,564
Other outside research and development	1,418	1,329
Compensation-related	2,712	1,322
Professional fees	1,011	261
Other	1,817	649
Accrued expenses	$ 14,605	$ 9,621

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DEBT - Narrative (Details) $ / shares in Units, shares in Thousands, $ in Thousands					1 Months Ended		3 Months Ended			9 Months Ended
	Feb. 18, 2022 USD ($) $ / shares	Jun. 18, 2021 USD ($)	Nov. 12, 2020 USD ($)	Jul. 15, 2020 USD ($)	Jun. 30, 2022 USD ($)	Feb. 28, 2022 USD ($) tranche $ / shares shares	Sep. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Jun. 23, 2023 USD ($)
Debt Instrument [Line Items]
Proceeds from the issuance of debt										$ 98,871	$ 39,992
Reclassification of warrant liabilities to equity								$ 712
Amended 2020 Oxford Term Loan Tranche One | Secured Debt
Debt Instrument [Line Items]
Proceeds from the issuance of debt				$ 10,000
Amended 2020 Oxford Term Loan Tranche Two | Secured Debt
Debt Instrument [Line Items]
Proceeds from the issuance of debt			$ 20,000
Amended 2020 Oxford Term Loan June 2021 Amendment | Secured Debt
Debt Instrument [Line Items]
Proceeds from the issuance of debt		$ 40,000
2022 Loan Agreement | Secured Debt
Debt Instrument [Line Items]
Proceeds from the issuance of debt	$ 40,000				$ 60,000	$ 40,000
Legal and amendment fees	1,100
Number of additional tranches available upon contingent events | tranche						3
Number of additional tranches available upon contingent events, remaining | tranche						1
Minimum cash balance	$ 20,000
2022 Loan Agreement | Secured Debt | Warrants Issued Concurrently With 2022 Loan Agreement
Debt Instrument [Line Items]
Warrants issued (in shares) | shares						40
Warrant price (in dollars per share) | $ / shares	$ 45.00					$ 45.00
Reclassification of warrant liabilities to equity						$ 700
Amended 2020 Oxford Term Loan February 2022 Amendment Tranche One | Secured Debt
Debt Instrument [Line Items]
Proceeds from the issuance of debt					30,000
Amended 2020 Oxford Term Loan February 2022 Amendment Tranche Two | Secured Debt
Debt Instrument [Line Items]
Proceeds from the issuance of debt					$ 30,000
Amended 2020 Oxford Term Loan February 2022 Amendment Tranche Three | Secured Debt | Forecast
Debt Instrument [Line Items]
Term loan aggregate amount												$ 30,000
Amended 2020 Oxford Term Loan | Secured Debt
Debt Instrument [Line Items]
Gross principal outstanding							$ 170,000			$ 170,000
Annual interest rate							8.30%			8.30%
Equal payments of principal and interest period if interest only period is extended										23 months
Upfront licensing or partnership proceeds raised										$ 100,000
Equal payments of principal period if interest only period is extended										11 months
Percentage of principal amount for final payment							9.00%			9.00%
Periodic payment terms, final payment amount							$ 15,300			$ 15,300
Amended 2020 Oxford Term Loan | Secured Debt | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate										8.19%
Amended 2020 Oxford Term Loan | Secured Debt | Minimum
Debt Instrument [Line Items]
Prepayment fee							1.00%			1.00%
Amended 2020 Oxford Term Loan | Secured Debt | Maximum
Debt Instrument [Line Items]
Prepayment fee							3.00%			3.00%
2020 Loan Agreement | Secured Debt
Debt Instrument [Line Items]
Debt interest expense							$ 5,500		$ 1,800	$ 11,100	$ 3,600

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DEBT - Loan Agreement Balance (Details) - Secured Debt - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
2022 Loan A
Debt Instrument [Line Items]
Debt	$ 10,900
2020 Term A
Debt Instrument [Line Items]
Debt		$ 10,900
2022 Loan B
Debt Instrument [Line Items]
Debt	21,800
2020 Term B
Debt Instrument [Line Items]
Debt		21,800
2022 Loan C
Debt Instrument [Line Items]
Debt	43,600
2020 Term C
Debt Instrument [Line Items]
Debt		43,600
2022 Loan D
Debt Instrument [Line Items]
Debt	43,600
2020 Term D
Debt Instrument [Line Items]
Debt		0
2022 Oxford Term Loan E
Debt Instrument [Line Items]
Debt	32,700
2020 Oxford Term Loan E
Debt Instrument [Line Items]
Debt		0
2022 Oxford Term Loan F
Debt Instrument [Line Items]
Debt	32,700
2020 Oxford Term Loan F
Debt Instrument [Line Items]
Debt		0
2022 Loan Agreement
Debt Instrument [Line Items]
Less: debt discount	(14,481)
Total debt	$ 170,819
2020 Loan Agreement
Debt Instrument [Line Items]
Less: debt discount		(5,830)
Total debt		$ 70,470

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DEBT - Future Minimum Payments (Details) - 2020 and 2022 Oxford Term Loans - Secured Debt $ in Thousands	Sep. 30, 2022 USD ($)
Debt Instrument [Line Items]
2025	$ 73,913
2026	88,696
2027	22,691
Total future minimum payments	185,300
Less: unamortized debt discount	(14,481)
Total debt	$ 170,819

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STOCKHOLDERS’ EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended	9 Months Ended	12 Months Ended
	Feb. 28, 2022	Sep. 30, 2021	Mar. 31, 2022	Sep. 30, 2022	Dec. 31, 2021	Feb. 18, 2022
Temporary Equity [Line Items]
Aggregate offering price		$ 200,000
Commission percent		3.00%
Reclassification of warrant liabilities to equity			$ 712
Additional Paid-in Capital
Temporary Equity [Line Items]
Reclassification of warrant liabilities to equity			$ 712
Warrants Issued Upon Consummation of IPO | 2020 Loan Agreement | Secured Debt
Temporary Equity [Line Items]
Warrants exercisable for shares of common stock (in shares)				7,354
Warrant price (in dollars per share)				$ 17.00
Warrants Issued Upon Consummation of IPO | 2020 Loan Agreement | Secured Debt | Additional Paid-in Capital
Temporary Equity [Line Items]
Reclassification of warrant liabilities to equity				$ 100
Warrants Issued Concurrently With 2022 Loan Agreement | Amended 2022 Oxford Term Loan | Secured Debt
Temporary Equity [Line Items]
Warrant price (in dollars per share)	$ 45.00					$ 45.00
Reclassification of warrant liabilities to equity	$ 700
Warrants issued (in shares)	40,000
Warrants Issued Concurrently With 2022 Loan Agreement | Amended 2022 Oxford Term Loan | Secured Debt | Additional Paid-in Capital
Temporary Equity [Line Items]
Reclassification of warrant liabilities to equity	$ 700
Sales Agreement
Temporary Equity [Line Items]
Common stock shares sold (in shares)					921,042
Sale of stock, proceeds received					$ 40,200

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EQUITY COMPENSATION PLAN - Narrative (Details) - USD ($) shares in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)	6.1
Available shares reserved for issuance (in shares)	0.3
Aggregate intrinsic value of stock options exercised	$ 1.4	$ 3.4
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Contractual term	10 years
Unrecognized stock-based compensation expense	$ 52.2
Weighted-average period of recognition	2 years 9 months 18 days
Employee Stock Option | Cliff Vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year

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EQUITY COMPENSATION PLAN - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2022
Number of Shares
Outstanding, beginning balance (in shares)	4,064
Granted (in shares)	1,682
Exercised (in shares)	(96)
Forfeited (in shares)	(381)
Outstanding, ending balance (in shares)	5,269
Vested and exercisable (in shares)	2,247
Weighted Average Exercise Price
Outstanding, beginning balance (in dollars per share)	$ 22.19
Granted (in dollars per share)	24.32
Exercised (in dollars per share)	11.17
Forfeited (in dollars per share)	30.73
Outstanding, ending balance (in dollars per share)	22.45
Vested and Exercisable (in dollars per share)	$ 18.26
Weighted Average Remaining Contractual Term	7 years 10 months 24 days
Weighted Average Remaining Contractual Term, Vested and Exercisable	6 years 6 months
Aggregate Intrinsic Value	$ 13,157
Aggregate Intrinsic Value, Vested and Exercisable	$ 9,894

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EQUITY COMPENSATION PLAN - Fair Value of Stock Option Grants (Details) - $ / shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average fair value (in dollars per share)	$ 17.15	$ 24.01
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	2.45%	0.67%
Expected volatility	85.23%	93.55%
Expected dividend yield	0.00%	0.00%
Expected term (in years)	6 years 29 days	6 years 29 days

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EQUITY COMPENSATION PLAN - Stock-based Compensation Expense (Details) - Employee Stock Option - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 4,691	$ 3,493	$ 15,095	$ 10,865
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	3,545	2,696	10,764	8,679
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 1,146	$ 797	$ 4,331	$ 2,186

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LICENSE AND GRANT REVENUES - Revenue Summary (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue	$ 278	$ 2,532	$ 1,918	$ 4,375
License fee revenue from non-affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue	278	2,508	1,904	4,289
License fee revenue from non-affiliates | Phylaxis BioScience, LLC
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue	14	460	1,101	1,838
License fee revenue from non-affiliates | 2seventy bio, Inc.
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue	0	2,000	200	2,100
License fee revenue from non-affiliates | Chiesi Farmaceutici S.p.A.
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue	264	48	603	351
Grant revenue
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue	$ 0	$ 24	$ 14	$ 86

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LICENSE AND GRANT REVENUES - License and Collaboration Agreements (Details)	1 Months Ended								3 Months Ended		9 Months Ended
	Jun. 30, 2022 USD ($) program	Oct. 31, 2021 USD ($)	Aug. 31, 2021 USD ($)	Jul. 31, 2021 USD ($)	May 31, 2021 USD ($)	Jul. 31, 2020 USD ($) performance_obligation compound	Jun. 30, 2020 USD ($) program performance_obligation	Aug. 31, 2019 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)	Aug. 19, 2019 performance_obligation	Dec. 20, 2018 USD ($)
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Current portion of deferred revenue									$ 440,000		$ 440,000		$ 2,034,000
Total revenue									278,000	$ 2,532,000	1,918,000	$ 4,375,000
Non-current portion of deferred revenue									0		0		110,000
License fee revenue from non-affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue									278,000	2,508,000	1,904,000	4,289,000
Phylaxis BioScience, LLC
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Equity interest percentage						10.00%
Additional equity interest percentage entitled to receive						5.00%
Phylaxis BioScience, LLC
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Nonrefundable, upfront payment						$ 2,500,000
Additional payable due from agreement						$ 2,500,000
Additional payment receivable period						180 days
Development milestone payment receivable						$ 225,000,000
Commercialization milestone payment receivable						175,000,000
Equity method investment						500,000
Payments due pursuant to agreement						$ 5,000,000
Number of performance obligations | performance_obligation						1
Number of compounds | compound						2
Current portion of deferred revenue									0		0		1,100,000
Phylaxis BioScience, LLC | Payment One
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Additional payable due from agreement						$ 1,250,000
Phylaxis BioScience, LLC | Payment Two
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Additional payable due from agreement						$ 1,250,000
Phylaxis BioScience, LLC | License fee revenue from non-affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Revenue recognized related to performance obligation									14,000	500,000	1,100,000	1,800,000
Total revenue									14,000	460,000	1,101,000	1,838,000
2seventy bio, Inc. | 2018 Option and License Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Development milestone payment receivable															$ 51,500,000
2seventy bio, Inc. | Initial Programs
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Nonrefundable, upfront payment							$ 400,000
Number of performance obligations | performance_obligation							1
Number of programs related to collaborative agreement | program	3						2
2seventy bio, Inc. | Additional Programs
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Number of programs related to collaborative agreement | program							8
2seventy bio, Inc. | Initial Programs, Program 1
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Nonrefundable, upfront payment							$ 200,000
2seventy bio, Inc. | Initial Programs, Program 2
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Nonrefundable, upfront payment							200,000
2seventy bio, Inc. | Initial Programs, Program 3
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Nonrefundable, upfront payment	$ 200,000
2seventy bio, Inc. | 2020 Option and License Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Development milestone payment receivable							$ 51,500,000
Project extension term					6 months
Option extension fee		$ 2,100,000			$ 100,000
2seventy bio, Inc. | License fee revenue from non-affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue									0	2,000,000	200,000	2,100,000
2seventy bio, Inc. | License fee revenue from non-affiliates | 2018 Option and License Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue				$ 2,000,000					0	2,000,000	0	2,000,000
Milestone payment received			$ 2,000,000
2seventy bio, Inc. | License fee revenue from non-affiliates | 2020 Option and License Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Total revenue		$ 2,100,000			$ 100,000				0	0	200,000	100,000
Chiesi Farmaceutici S.p.A.
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Nonrefundable, upfront payment								$ 10,000,000
Additional payable due from agreement								12,500,000
Number of performance obligations | performance_obligation														1
Current portion of deferred revenue									400,000		400,000		900,000
Milestone payments receivable								$ 122,500,000
Term of research and development services option period								60 days
Non-current portion of deferred revenue													$ 100,000
Chiesi Farmaceutici S.p.A. | License fee revenue from non-affiliates
Collaborative Arrangements And Noncollaborative Arrangement Transactions Line Items
Revenue recognized related to performance obligation									300,000	0	600,000	400,000
Total revenue									$ 264,000	$ 48,000	$ 603,000	$ 351,000

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RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2022	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Elpiscience | OX40 License Agreement
Related Party Transaction [Line Items]
Reimbursement expenses		$ 200
Reimbursement for related party transaction expenses incurred to date	$ 5,300
Liabilities derecognized from agreements	32
Elpiscience | OX40 License Agreement | Cost Sharing Agreement
Related Party Transaction [Line Items]
Reimbursement expenses		$ 300	$ 200
Reimbursement for related party transaction expenses incurred to date	$ 500
Affiliates | LAV Summit Limited
Related Party Transaction [Line Items]
Ownership interest, more than				5.00%

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COMMITMENTS AND CONTINGENCIES - Narrative (Details) ft² in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2021	May 31, 2019 USD ($) ft²	Sep. 30, 2017 USD ($) ft²
Commitments and Contingencies Disclosure [Abstract]
Lease agreement term							7 years
Square footage of lease agreement (in sq feet) | ft²							34
Lease extension term							5 years
Initial base rent per month						$ 30	$ 100
Annual escalations						2.00%	2.00%
Square footage of lease extension agreement (in sq feet) | ft²						9
Operating lease expense	$ 900	$ 800	$ 2,500	$ 2,300
Payments included in measurement of lease liability	$ 500	$ 500	$ 1,600	$ 1,600
Remaining term of operating lease	2 years 9 months 18 days		2 years 9 months 18 days		3 years 6 months
Weighted-average discount rate	8.20%		8.20%		8.20%

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COMMITMENTS AND CONTINGENCIES - Schedule of Right-Of-Use Asset and Operating Lease Liability (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Right-of-use asset	$ 5,135	$ 6,338
Operating lease liability
Current	1,812	1,674
Non-current	3,657	5,033
Present value of operating lease liability	$ 5,469	$ 6,707

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COMMITMENTS AND CONTINGENCIES - Schedule of Operating Lease Liability Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
2022	$ 544
2023	2,203
2024	2,247
2025	1,137
Thereafter	0
Total future minimum lease payments	6,131
Less: imputed interest	(662)
Present value of operating lease liability	5,469	$ 6,707
Current portion of lease liability	(1,812)	(1,674)
Non-current portion of lease liability	$ 3,657	$ 5,033

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SUBSEQUENT EVENTS (Details) - USD ($)		1 Months Ended	9 Months Ended		12 Months Ended
	Oct. 24, 2022	Oct. 31, 2022	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Oct. 03, 2022
Subsequent Event [Line Items]
Proceeds from the issuance of debt			$ 98,871,000	$ 39,992,000
Sales Agreement
Subsequent Event [Line Items]
Sale of stock, proceeds received					$ 40,200,000
Subsequent Event | Sales Agreement
Subsequent Event [Line Items]
Sale of stock, shares issued (in shares)		4,332,354
Sale of stock, proceeds received		$ 127,400,000
Subsequent Event | Secured Debt | Amended 2020 Oxford Term Loan October 2022 Amendment
Subsequent Event [Line Items]
Term loan aggregate amount						$ 30,000,000
Proceeds from the issuance of debt	$ 30,000,000