Contingent Consideration Payable and Royalty Payments

9 Months Ended

Sep. 30, 2025

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Contingent Consideration Payable and Royalty Payments

Contingent Consideration Payable and Royalty Payments

On October 31, 2024 (the “Closing Date”), the Company completed its acquisition of ImmPACT Bio USA Inc., a Delaware corporation (“ImmPACT”), pursuant to the Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, on the Closing Date, the Company acquired all of the outstanding equity interests of ImmPACT in exchange for an upfront payment of $30.0 million in cash (in addition to approximately $11.9 million for ImmPACT’s existing cash balance, net of certain of ImmPACT’s unpaid transaction expenses) and 1.875 million shares of Company common stock. Contingent consideration following the Closing Date includes (a) additional equity consideration of 625,000 shares of Company common stock (“contingent consideration payable”) earned upon the achievement of the earlier to occur of (i) the demonstration of certain clinical milestones or (ii) the receipt of certain regulatory approvals and (b) a low single-digit royalty on future net sales of the dual-targeting CD19/20 CAR T‑cell product in the United States.

During the nine months ended September 30, 2025, the Company achieved a specified clinical milestone related to the contingent consideration payable from the acquisition of ImmPACT. The completion of the milestone triggered the Company’s obligation to issue the additional equity consideration of 625,000 shares of Company common stock valued at $5.9 million to certain former stockholders of ImmPACT, which were issued in July 2025. The issuance fulfilled the contingent consideration payable obligation under the Merger Agreement. The contingent consideration payable obligation was valued at initial issuance and quarterly going forward based on certain valuation inputs, including the closing share price of the Company’s common stock on the respective issuance and reporting dates and the probability of meeting the milestone prior to achievement, as further discussed in Note 7, Fair Value Measurements. The remeasurement of the contingent consideration payable resulted in a loss of $0.4 million and a gain of $1.7 million for the three and nine months ended September 30, 2025, respectively, recognized in other (expense) income, net in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss.

The Company determined that the contingent consideration for the royalty payments is not subject to derivative accounting under ASC 815, Derivatives and Hedging, as its settlement is contingent upon future net sales of the Company's dual-targeting CD19/20 CAR T-cell product in the United States. Therefore, the Company did not record an associated contingent consideration liability on the acquisition date for the royalty payments. The Company will recognize any future contingent consideration payments in the period in which the royalty payments become due and payable. The Company has not made or accrued for contingent payments relating to the royalty payments as these have not become due and payable.