Acquisitions

12 Months Ended

Dec. 31, 2025

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

Acquisitions

ICT License Acquisition

On November 6, 2025, the Company entered into an Exclusive License Agreement with Innovative Cellular Therapeutics Holdings Limited and Innovative Cellular Therapeutics, Inc. (together, “ICT”) for the development and commercialization of LYL273, a novel GCC-targeted CAR T-cell product candidate for the treatment of mCRC and other GCC-expressing cancers (the “ICT License Agreement”). Pursuant to the terms of the ICT License Agreement, the Company received exclusive global rights, outside of mainland China, Hong Kong, Macau and Taiwan, to research, develop, manufacture, commercialize and otherwise exploit LYL273 (“LYL273 license”), along with clinical supply through the technology transfer period (subject to a $10 million cap) (“Prepaid clinical supply”), in exchange for an upfront payment of $40 million in cash and the issuance of 1.9 million shares of the Company’s common stock. The fair value of the common stock consideration transferred for the ICT License Agreement was calculated based on the closing stock price of the Company’s common stock on November 6, 2025, which was $17.88 per share, resulting in total upfront consideration of approximately $75.2 million. In addition, ICT is eligible to receive additional cash and equity payments of (i) a potential $30 million clinical milestone payment, up to $115 million upon the achievement of certain late-stage regulatory milestones and up to $675 million in commercial sales milestones; (ii) up to an additional 1.85 million shares of the Company’s common stock based on the achievement of certain clinical and regulatory milestones; and (iii) tiered royalties ranging from mid-single-digits up to 10% on annual net sales in the United States and low to mid-single-digit royalties on annual net sales in other countries within the licensed territory.

The estimated fair value of the assets acquired on November 6, 2025 are as follows (in thousands):


Assets acquired:	As of November 6, 2025
Prepaid clinical supply	$	8,835
LYL273 license	66,332
Total assets	$	75,167

The fair value of the Prepaid clinical supply was estimated using a market approach as the fair value a market participant would require for the materials (Level 3 of the fair value hierarchy), which resulted in a fair value that differs from the $10 million contractual limit. The Company utilized estimates and assumptions in determining the number of patients and the fair value of Prepaid clinical supply per patient during the technology transfer period to estimate the fair value of the Prepaid clinical supply using the market approach. A small change in the number of patients or the estimate of the fair value of Prepaid clinical supply per patient may have a material change in the total estimated fair value of the

Prepaid clinical supply. During the year ended December 31, 2025, the Company received $1.3 million in prepaid clinical supply, resulting in a remaining prepaid clinical supply balance of $7.5 million as of December 31, 2025. Prepaid clinical supply balances are recorded in prepaid expenses and other current assets in the Company’s consolidated balance sheets.

The Company determined that the cash milestones and royalty payments are not subject to derivative accounting under ASC 815, Derivatives and Hedging, as their settlement is contingent upon future net sales and operational milestones related to LYL273. The Company did not record an associated liability on the acquisition date for the cash milestones or royalty payments as the milestones had not yet been achieved. The Company will recognize any future cash milestones or royalty payments in the period in which the cash milestones or royalty payments become due and payable. The Company has not made or accrued for cash milestones or royalty payments as these have not become due and payable.

The Company determined that the milestone payments payable in the Company’s common stock are subject to accounting under ASC 718, Compensation - Stock Compensation. Consistent with the Company’s treatment of other performance-based equity awards, compensation expense is recognized for the number of shares expected to be earned after assessing the probability that a certain performance condition will be met and the targeted payout level associated with the performance condition expected to be achieved. At each reporting date, the Company is required to evaluate whether achievement of a performance condition is probable. If performance conditions are not met or not expected to be met, any compensation expense previously recognized associated with the awards will be reversed. As of December 31, 2025, it was determined a clinical milestone of 1.1 million shares of common stock was probable of achievement resulting in stock compensation expense of $19.7 million, which was recognized in research and development expense.

The Company concluded that the arrangement met the definition of an asset acquisition rather than a business combination, as the transaction failed to meet the definition of a business under ASC 805, Business Combinations. The $66.3 million fair value of the LYL273 license IPR&D acquired was charged to acquired IPR&D expense during the year ended December 31, 2025 as it had no alternative future use as of November 6, 2025.

ImmPACT Acquisition

On October 31, 2024 (the “Closing Date”), the Company completed its previously announced acquisition of ImmPACT Bio USA Inc., a Delaware corporation (“ImmPACT”), pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of October 24, 2024, by and among the Company, ImmPACT, Inspire Merger Sub Inc., a Delaware corporation and an indirect, wholly owned subsidiary of the Company (“Merger Sub”), and an attorney-in-fact of ImmPACT securityholders (the “Representative”).

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. The acquisition was effected via a merger whereby Merger Sub merged with and into ImmPACT (the “Merger”), with ImmPACT surviving the merger as an indirect, wholly-owned subsidiary of the Company. Contingent consideration following the Closing Date includes (a) additional equity consideration of 625,000 shares of Company Common Stock (“contingent consideration payable”) that may be 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. Contingent consideration payable in the Company’s consolidated balance sheet as of December 31, 2024 consisted of the additional equity consideration of 625,000 shares of Company common stock. All per-share values have been retroactively adjusted to reflect the Reverse Split effected on May 30, 2025. See Note 2, Summary of Significant Accounting Policies, for additional information regarding the Reverse Split.

The total consideration paid for the Merger consisted of the following (in thousands):


Fair value of components of purchase price consideration at closing:	As of Closing Date
Cash (including $11.9 million for existing cash balances)	$	41,913
Common Stock	36,011
Representative holdback	200
Contingent consideration payable	11,404
Company’s capitalizable transaction expenses	4,215
Total consideration paid	$	93,743

The fair value of the common stock consideration transferred for the acquisition of ImmPACT was calculated based on the closing stock price of the Company’s common stock on October 31, 2024, which was $19.21 per share. The fair value of the contingent consideration payable was derived based on certain valuation inputs, including the closing share price of Lyell common stock on October 31, 2024 and the probability of meeting the milestone, as further discussed in Note 8, Fair Value Measurements. Pursuant to the terms of the Merger Agreement, the Company has a right to offset and cause the sellers to forfeit shares underlying the contingent consideration payable against certain indemnification claims and indemnifiable losses. As a result of this provision, the number of shares underlying the contingent consideration payable is contingently subject to adjustments and the Company has concluded that the arrangement is not indexed to the Company’s equity pursuant to guidance in Accounting Standards Codification (“ASC”) 815-40. Accordingly, the contingent consideration payable was classified as a liability and remeasured at fair value at each reporting date with changes in fair value reported in earnings until the liability was settled in accordance with the terms of the Merger Agreement.

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.

The estimated fair value of the net assets acquired at Closing Date are as follows (in thousands):


Assets acquired:	As of Closing Date
Cash and cash equivalents	$	14,982
Prepaid expenses and other current assets	1,211
Property and equipment, net	4,446
Long-term deposits	459
Operating lease right-of-use assets	1,816
Assembled workforce intangible asset	1,315
IPR&D asset	87,184
Total assets	$	111,413
Liabilities Assumed:
Accounts payable and other current liabilities	$	16,090
Operating lease liability, long-term	1,580
Total liabilities assumed	17,670
Total net assets acquired	$	93,743

The Company concluded that the arrangement met the definition of an asset acquisition rather than a business combination, as substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset,

IPR&D of product candidate ronde-cel. The $87.2 million fair value of the IPR&D acquired was charged to acquired IPR&D expense during the year ended December 31, 2024 as it had no alternative future use at the time of the Closing Date.