# Century Therapeutics, Inc.: Form 10-Q for the period ended Sep 30, 2024

- Company: [Century Therapeutics, Inc.](/companies/ipsc.md) (CIK 1850119)
- Form: 10-Q
- Filed: 2024-11-05
- Accepted by EDGAR: Nov 5, 2024, 09:05 ET
- Period: 2024-09-30
- Accession: 0001558370-24-014345
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1850119/000155837024014345/ipsc-20240930x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1850119/000155837024014345/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-07-01 to 2024-09-30 | $791.0k | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-01-01 to 2024-09-30 | $2.4m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months, 2024-07-01 to 2024-09-30 | −$34.8m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-01-01 to 2024-09-30 | −$100.9m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-07-01 to 2024-09-30 | −$8.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-01-01 to 2024-09-30 | $14.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | −$31.2m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | −$90.5m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | −$0.37 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | −$1.18 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | −$0.37 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | −$1.18 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 84,704,352 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 76,394,266 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | −$85.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2024-09-30 | $52.6m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-09-30 | $206.0m | us-gaap:AssetsCurrent |
| Total assets | at 2024-09-30 | $388.6m | us-gaap:Assets |
| Current liabilities | at 2024-09-30 | $19.8m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-09-30 | $192.9m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-09-30 | $195.7m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 49,856 characters.

*The following discussion and analysis should be read in conjunction with our financial statements and accompanying notes included in this Quarterly Report on Form 10-Q and the financial statements and accompanying notes thereto for the fiscal year ended December 31, 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 14, 2024 (the “Annual Report”). This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Such forward-looking statements, which represent our intent, belief, or current expectations, involve risks and uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. In some cases you can identify forward-looking statements by terms such as “may,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “predict,” “potential,” “believe,” “should” and similar expressions. Factors that could cause or contribute to differences in results include, but are not limited to, those set forth under “Risk Factors” in our Annual Report. Except as required by law, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes.*

### Overview

We are an innovative biotechnology company harnessing the power of adult stem cells to develop curative cell therapy products for cancer and autoimmune diseases that we believe will allow us to overcome the limitations of first-generation cell therapies. We have created a comprehensive, genetically engineered allogeneic cell therapy platform that includes:

- Industry-leading induced pluripotent stem cells (“iPSCs”) and differentiated know-how to generate immune effector cells from iPSCs (“iPSC-derived cells”);
- Clustered regularly interspaced short palindromic repeats (“CRISPR”) mediated precision gene editing that allows us to incorporate multiple transgenes and remove target genes intended to optimize cell product performance;
- Sophisticated protein engineering capabilities to develop proprietary next generation chimeric antigen receptors (“CARs”);
- Our proprietary Allo-EvasionTM technology intended to prevent rejection of our cell products by the host immune system; and
- Cutting edge manufacturing capabilities intended to minimize product development and supply risk.

We are leveraging our expertise in cellular reprogramming, genetic engineering, and manufacturing to develop therapies with the potential to overcome many of the challenges inherent to cell therapy and provide a significant advantage over existing cell therapy technologies. We believe that these vertically integrated capabilities will allow us to further expand our existing pipeline and develop therapeutics from iPSC-derived natural killer cells (“iNK cells”) and iPSC-derived T cells (“iT cells”) that may provide enhanced clinical outcomes compared to available therapeutic options. We believe our commitment to developing off-the-shelf cell therapies will expand patient access and provide an unparalleled opportunity to advance the course of treatment. Our vision is to become a premier fully integrated biotechnology company by developing and ultimately commercializing off-the-shelf allogeneic cell therapies that dramatically and positively transform the lives of patients suffering from life-threatening cancers, as well as autoimmune diseases. To achieve our vision, we have assembled a world-class team with decades of collective experience in cell therapy and drug development, manufacturing, and commercialization.

Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, conducting discovery and research activities, filing patent applications, identifying potential product candidates, conducting our ELiPSE-1 clinical trial, initiating our CALiPSO-1 clinical trial, undertaking preclinical studies, in-licensing intellectual property, and acquiring and integrating Clade Therapeutics. All of our programs are currently in the development stage, and we do not have any products approved for sale. Since our inception, we have incurred net losses each year. We had an accumulated deficit of $746.3 million as of September 30, 2024. Substantially all of our losses have resulted from expenses incurred in connection with our research and development programs, the acquisition of in-process research and development and from general and administrative costs associated with our operations.

To date, we have funded our operations from the issuance and sale of our equity securities and the receipt of payments from Bristol-Myers Squibb, in connection with our collaborations as described below, and have not generated any revenues. Since our inception, through September 30, 2024, we have raised approximately $666 million in net proceeds from sales of our equity securities. As of September 30, 2024, we had cash and cash equivalents of $52.6 million and investments of $192.1 million.

In August 2022, the U.S. Food and Drug Administration (“FDA”) notified us that our ELiPSE-1 clinical trial may proceed to assess CNTY-101 in patients with relapsed or refractory CD19 positive B-cell malignancies. The Phase 1 trial, ELiPSE-1, is ongoing in patients with relapsed or refractory CD19-positive B-cell malignancies. In December 2023, we announced preliminary clinical data from seven participants treated at the two lowest dose levels in the trial. In June 2024, we presented encouraging interim efficacy and safety data for 12 safety evaluable and 10 efficacy evaluable participants. We have evaluated dose escalation of CNTY-101 at schedule A (single dose per cycle) up to Dose Level 4 (3 billion cells) and schedule B (3 doses per cycle) up to Dose Level 3 (1 billion cells). As of the data snapshot October 15, 2024, eight additional participants have been treated with CNTY-101 for a total of 20 participants evaluable for safety and 19 for preliminary efficacy.

In December 2023, we were notified by the FDA that the Phase 1 CALiPSO-1 clinical trial may proceed to assess CNTY-101 in participants with moderate to severe systemic lupus erythematosus (SLE) who have failed at least two standard immunosuppressive therapies. We amended the clinical protocol in June 2024 to include a new indication-specific cohort of Lupus Nephritis (LN) patients. To further expand evaluation of CNTY-101 in autoimmune diseases, in September 2024, we amended the protocol to include two additional new indication-specific cohorts of diffuse cutaneous Systemic Sclerosis (dcSSc) and idiopathic inflammatory myositis (IIM) patients. We have activated multiple clinical sites in the United States, and expect to activate additional sites in the coming months, with ability to enroll patients across indications. To further facilitate enrollment, we plan to expand trial sites to select European countries.

In January 2023, we announced a strategic internal portfolio prioritization (the “January 2023 Strategic Reprioritization”) through which, among other discovery efforts, CNTY-103, a CAR-iNK product targeting CD133 and a discovery program for hematological malignancies, were de-prioritized, allowing us to further prioritize our CNTY-102 and CNTY-107 product candidates, which we believe have a higher probability of technical success and greater market potential. As a result of the operational restructuring, lab operations in Seattle, Washington and Hamilton, Ontario, were closed and research activities have been consolidated in Philadelphia, Pennsylvania.

In the second quarter of 2024, we announced plans to expand clinical development for CNTY-101 into additional autoimmune disease indications. To support these increased research and development activities in autoimmune diseases, in April 2024 we completed a private placement offering of our common stock to certain institutional investors and received $60 million in gross proceeds before deducting placement agent fees and other offering related expenses. Concurrently, we announced pipeline and platform enhancements through the acquisition of Clade Therapeutics, Inc. (“Clade”), a privately held biotechnology company focused on discovering and delivering engineerable, off-the-shelf, scalable, and consistent stem cell-based medicines, with a focus on iPSC-derived αβ T cells. The acquisition brings us novel technology enhancing our efforts on Allo-EvasionTM and a newly expanded pipeline incorporating three additional preclinical-stage programs from Clade’s αβ iT platform spanning across cancer and autoimmune diseases. We will share what we believe to be the first presentation of iPSC-derived CD4+ and CD8+ CAR T cells that demonstrate function comparable to primary αβ CAR-T cells at the 2024 American Society of Hematology Annual Meeting.

Following the integration of Clade Therapeutics, we are conducting a strategic review of the pre-clinical pipeline to leverage the unique capabilities and technologies at Century towards high-value and differentiated programs. We expect to conclude and communicate the results of this review in the first quarter of 2025. As part of this review, in October, we implemented changes to the organization structure including elimination of overlapping technical and research capabilities to enhance ongoing efficiencies and alignment with the Company’s key programs. With these changes, we have extended expected cash runway into the second half of 2026.

Based on our current business plans, we believe our cash, cash equivalents and investments as of the date of this quarterly report will be sufficient for us to fund our operating expenses and capital expenditures requirements into the second half of 2026. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. We anticipate that our expenses and operating losses will increase substantially over the foreseeable future. The expected increase in expenses will be driven in large part by our ongoing activities, if and as we:

- continue to advance our iPSC cell therapy platforms;
- progress clinical development of CNTY-101 and continue preclinical development of our other product candidates;
- seek to discover and develop additional product candidates;
- expand and validate our own clinical-scale current good manufacturing practices (“cGMP”), facilities;
- seek regulatory approvals for any of our product candidates that successfully complete clinical trials;
- maintain, expand, protect, and enforce our intellectual property portfolio;
- continue to incur costs associated with operating as a public company;
- acquire or in-license other product candidates and technologies;
- incur additional costs associated with operating as a public company, which will require us to add operational, financial and management information systems and personnel, including personnel to support our drug development and any future commercialization efforts; and
- increase our employee headcount and related expenses to support these activities.

We are also investing in building our capabilities in key areas of manufacturing sciences and operations, including development of our iPSC cell therapy platforms, product characterization, and process analytics from the time product candidates are in early research phases. Our investments also include scaled research solutions, scaled infrastructure, and novel technologies intended to improve efficiency, characterization, and scalability of manufacturing.

We anticipate that we will need to raise additional financing in the future to fund our operations, including funding for preclinical studies, clinical trials, and the commercialization of any approved product candidates. We intend to use the proceeds from such financings to, among other uses, fund research and development of our product candidates and development programs, including our pre-clinical and clinical development of CNTY-101, CNTY-102, CNTY-107, and CNTY-108, CNTY-308, CNTY-361, as well as CNTY-104 and CNTY-106 in collaboration with Bristol-Myers Squibb. Until such time, if ever, as we can generate significant product revenue, we expect to finance our operations with our existing cash and cash equivalents, investments, any future equity or debt financings; upfront, and, milestone, and royalty payments, if any, received under current and future licenses or collaborations. We may not be able to raise additional capital on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition would be adversely affected. Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability.

### License and collaboration agreements

### Bristol-Myers Squibb

On January 7, 2022, we entered into the Research, Collaboration and License Agreement, with Bristol-Myers Squibb (the “Collaboration Agreement”), to collaborate on the research, development and commercialization of iNK and iT cell programs for hematologic malignancies and solid tumors (the “Collaboration Program”), and each product candidate (each, a “Development Candidate”). We and Bristol-Myers Squibb will initially collaborate on two Collaboration Programs focused on acute myeloid leukemia, and multiple myeloma, and Bristol-Myers Squibb has the option to add up to two additional Collaboration Programs for an additional fee. We are responsible for generating Development Candidates for each Collaboration Program, and Bristol-Myers Squibb has the option to elect to exclusively license the Development Candidates for pre-clinical development, clinical development and commercialization on a worldwide basis. Following Bristol-Myers Squibb’s exercise of the License Option, we will be responsible for performing IND-enabling studies, supporting Bristol-Myers Squibb’s preparation and submission of an IND, and manufacturing of clinical supplies until completion of a proof of concept clinical trial. Bristol-Myers Squibb will be responsible for all regulatory, clinical, manufacturing (after the proof of concept clinical trial) and commercialization activities for such Development Candidates worldwide. We have the option to co-promote Development Candidates generated from certain specified Collaboration Programs.

Under the terms of the Collaboration Agreement, Bristol-Myers Squibb made a non-refundable, upfront cash payment of $100 million and will pay an exercise fee upon the exercise of the License Option, and product candidates developed under a Licensed Program (the “Licensed Products”). For each Licensed Program, Bristol-Myers Squibb will pay up to $235 million in milestone payments upon the first achievement of certain development and regulatory milestones and will pay up to $500 million per Licensed Product in net sales-based milestone payments. Bristol-Myers Squibb will also pay us tiered royalties per Licensed Product as a percentage of net sales in the high-single digits to low-teens, subject to certain adjustments.

In connection with the Collaboration Agreement, Bristol-Myers Squibb purchased 2,160,760 shares of our common stock at a price per share of $23.14 for an aggregate purchase price of $50 million. We determined the common stock purchase represented a premium of $7.82 per share, or $23.2 million in the aggregate, and the remaining $26.8 million was recorded as issuance of common stock in stockholders’ equity.

We identified the following commitments under the arrangement: (i) research and development services under each of the two initial Collaboration Programs and (ii) License Option to elect to exclusively license the Development Candidates for each of the two initial Collaboration Programs. We determined that these four commitments represent distinct performance obligations for purposes of recognizing revenue and will recognize revenue as we fulfill each performance obligation.

### Fujifilm Cellular Dynamics, Inc. (FCDI)

On September 18, 2018, we entered into a license agreement (the “Differentiation License”), with FCDI. The Differentiation License, as amended, provides us with an exclusive license under certain patents and know-how related to human iPSC consisting of cells that are or are modifications of NK cells, T cells, dendritic cells and macrophages derived from human iPSC. In consideration for the Differentiation License, FCDI received 2,980,803 shares of common stock in connection with the January 2023 Strategic Reprioritization.

Also on September 18, 2018, we entered into the non-exclusive license, (the “Reprogramming License”), with FCDI. The Reprogramming License, as amended, provides us with a non-exclusive license under certain patents and know-how related to the reprogramming of human somatic cells to iPSCs and provide us access to iPSC lines for clinical use. Under the Reprogramming License, we are required to make certain developmental and regulatory milestone payments as well as royalty payments upon commercialization in the low single digits. In connection with the Reprogramming License, we entered into a collaboration agreement (the” FCDI Collaboration Agreement”), with FCDI pursuant to which we agreed to fund research and development work at FCDI pursuant to a research plan.

On October 21, 2019, we entered into the FCDI Collaboration Agreement with FCDI, whereby FCDI provides certain services to us to develop and manufacture iPSCs and immune cells derived therefrom. Under the terms of the FCDI Collaboration Agreement, as amended, FCDI will provide services in accordance with the approved research plan and related research budget. The initial research plan covers the period from the date of execution of the FCDI Collaboration Agreement through March 31, 2022. On July 29, 2022, we amended the FCDI Collaboration Agreement to extend the term through September 30, 2025.

On January 7, 2022, we and FCDI entered into a letter agreement, which amends each of the FCDI agreements as further discussed in Note 14 to our consolidated financial statements. Pursuant to the Letter Agreement, and in consideration for amending the FCDI Agreements, we agreed to pay to FCDI (i) an upfront payment of $10 million, (ii) a percentage of any milestone payments received by us under the Collaboration Agreement, in respect of achievement of development or regulatory milestones specific to Japan, and (iii) a percentage of all royalties received by us under the Collaboration Agreement in respect of sales of products in Japan.

On September 22, 2023, we and FCDI entered into a worldwide license agreement whereby FCDI will grant non-exclusive licenses to us for certain patent rights and know-how related to cell differentiation and reprogramming for the development and commercialization of iPSC-derived therapies for the treatment of inflammatory and autoimmune diseases (the “Autoimmune License”). Under the terms of the Autoimmune License, FCDI will be eligible to receive certain development and regulatory milestone payments as well as low single-digit royalties related to products developed in connection with the Autoimmune License. In addition, on September 22, 2023, we and FCDI amended the Reprogramming License, Differentiation License and the Collaboration Agreement to expand our existing license related to the development and commercialization of iPSC-derived cancer immunotherapeutic to also include inflammatory and autoimmune diseases.

During the three and nine months ended September 30, 2024, we made payments of $3.7 million and $6.6 million and incurred research and development expenses of $1.0 million and $6.3 million recorded within general and administrative expenses in its consolidated statements of operations and comprehensive loss.

During the three and nine months ended September 30, 2023, the amounts paid to FCDI were immaterial

From inception of the FCDI Collaboration Agreement through September 30, 2024, we incurred $42.6 million of expenses under the FCDI Collaboration Agreement.

### Components of operating results

### Collaboration revenue

We have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products for the foreseeable future. Our revenues to date have been generated through our collaboration, option and license agreement with Bristol-Myers Squibb. We recognize revenue over the expected performance period under this agreement. We expect that our revenue for the next several years will be derived primarily from this agreement and any additional collaborations that we may enter into in the future. To date, we have not received any royalties under any of our existing collaboration agreements.

### Operating expenses

#### Research and development

To date, research and development expenses have related primarily to discovery and development of our iPSC cell therapy platform technology and product candidates and acquired in-process research and development. 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 recorded as prepaid expenses until the goods or services are received.

Research and development expenses consist of personnel-related costs, including salaries, and benefits, stock compensation expense, external research and development expenses incurred under arrangements with third parties, laboratory supplies, costs to acquire and license technologies facility and other allocated expenses, including rent, depreciation, and allocated overhead costs, and other research and development expenses.

We deploy our employee and infrastructure resources across multiple research and development programs for developing our iPSC cell therapy platforms, identifying and developing product candidates, and establishing manufacturing capabilities. Due to the number of ongoing projects and our ability to use resources across several projects, the vast majority of our research and development costs are not recorded on a program-specific basis. These include costs for personnel, laboratory, and other indirect facility and operating costs.

Research and development activities account for a significant portion of our operating expenses. We anticipate that our research and development expenses will increase for the foreseeable future as we expand our research and development efforts including expanding the capabilities of our iPSC cell therapy platforms, identifying product candidates, progressing preclinical studies and clinical trials, including for our first clinical product candidate CNTY-101, seeking regulatory approval of our product candidates, and incurring costs to acquire and license technologies aligned with our goal of translating iPSCs to therapies. A change in the outcome of any of these variables could mean a significant change in the costs and timing associated with the development of our product candidates.

#### General and administrative

General and administrative expenses consist of personnel-related costs, including salaries, benefits, and non-cash stock-based compensation, for our employees in executive, legal, finance, human resources, information technology, and other administrative functions, legal fees, consulting fees, recruiting costs, and facility costs not otherwise included in research and development expenses. Legal fees include those related to corporate and patent matters.

### Interest expense

Interest expense relates to interest incurred on the September 14, 2020 $10.0 million Term Loan Agreement (the “Loan Agreement”) we entered into with Hercules Capital, Inc., as well as amortization of the related deferred financing cost. The loan was repaid in full in May 2023. See Note 7 to our consolidated financial statements for additional information.

### Interest income

Interest income consists of interest earned on our cash, cash equivalents and investment balances.

### Income taxes

We have incurred losses and recorded a full valuation allowance on all of our net deferred tax assets. For the nine months ended September 30, 2024, the Company recorded no income tax benefits for the net operating losses incurred or for the research and development tax credits generated in the U.S. due to its uncertainty of realizing a benefit from those items. The tax provision recorded during the 2023 interim period primarily consisted of current federal and state tax expense resulting from revenue recognition for tax purposes from the Company's Research Collaboration and License Agreement entered into with Bristol-Myers Squibb Company in 2022, combined with statutory limitations on deductions for research and development expenses, net operating losses, and research credits.

### Results of operations

#### Comparison of the three months ended September 30, 2024 and 2023.

The following table summarizes our results of operations for the periods presented:

*(in thousands)*

| ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ Three Months Ended September 30, 2024 | ​ ​ ​ | ​ ​ Three Months Ended September 30, 2023 | ​ ​ ​ | ​ ​ ​ ​ Change | ​ ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- |
| Collaboration revenue | ​ | $791 | ​ | $148 | ​ | $643 | ​ |
| Operating expenses: |  | **​** **​** |  | **​** **​** | **​** | **​** **​** | ​ |
| Research and development |  | ​ 27,228 |  | ​ 22,788 |  | ​ 4,440 | ​ |
| General and administrative | ​ | 8,352 | ​ | 8,986 | ​ | (634) | ​ |
| In-process research and development asset | ​ | — | ​ | 4,000 | ​ | (4,000) | ​ |
| Total operating expenses | ​ | 35,580 | ​ | 35,774 | ​ | (194) | ​ |
| Loss from operations | ​ | (34,789) | ​ | (35,626) | ​ | 837 | ​ |
| Other income (expense): | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Interest expense | ​ | — | ​ | — | ​ | — | ​ |
| Interest income | ​ | ​ 3,305 | ​ | ​ 3,486 | ​ | ​ (181) | ​ |
| Other income, net | ​ | 250 | ​ | 12 | ​ | 238 | ​ |
| Total other income (expense) | ​ | ​ 3,555 | ​ | ​ 3,498 | ​ | ​ 57 | ​ |
| Loss before provision for income taxes | ​ | ​ (31,234) | ​ | ​ (32,128) | ​ | ​ 894 | ​ |
| Provision for income taxes | ​ | ​ 8 | ​ | ​ (592) | ​ | ​ 600 | ​ |
| Net loss | ​ | $(31,226) | ​ | $(32,720) | ​ | $1,494 | ​ |

### Collaboration revenue

During the three months ended September 30, 2024 and 2023, we recognized revenue of $0.8 million and $0.1 million under our collaboration agreement with Bristol-Myers Squibb, respectively. Revenue recognized under the collaboration agreement fluctuates based on the amount and timing of expenses incurred under the agreement.

### Research and development expenses

The following table summarizes the components of our research and development expenses for the periods presented:

*(in thousands)*

| ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ Three Months Ended September 30, 2024 ​ | ​ ​ ​ | ​ ​ Three Months Ended September 30, 2023 | ​ ​ ​ | ​ ​ ​ ​ Change |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Personnel and related costs |  | $11,056 |  | $10,237 |  | $819 |
| Facility and other allocated costs | ​ | 5,502 | ​ | 6,361 | ​ | (859) |
| Research and laboratory | ​ | 7,098 | ​ | 5,471 | ​ | 1,627 |
| Collaboration | ​ | 2,602 | ​ | — | ​ | 2,602 |
| Consulting | ​ | 560 | ​ | 302 | ​ | 258 |
| Other | ​ | 410 | ​ | 417 | ​ | (7) |
| Total research and development expense | ​ | $27,228 | ​ | $22,788 | ​ | $4,440 |

Research and development expenses were $27.2 million and $22.8 million for the three months ended September 30, 2024 and 2023, respectively. The increase of $4.4 million was primarily due to:

- an increase in personnel-related expenses of $0.8 million, including an increase in salary and benefit expense of $0.6 million, and an increase in stock compensation expense of $0.2 million. This is primarily the result of the acquisition of Clade.
- an increase of $2.6 million in research and laboratory due to progression of ELiPSE-1 trial and start-up costs of CALiPSO-1 trial.
- An increase of $1.6 million in collaboration due to manufacturing our CNTY-101 product candidate performed under our collaboration with FCDI.

### General and administrative expenses

General and administrative expenses were $8.4 million for the three months ended September 30, 2024 and $9.0 million for three months ended September 30, 2023. The decrease is primarily due to a gain recognized on contingent consideration liabilities.

### Interest income

Interest income was $3.3 million and $3.5 million for the three months ended September 30, 2024 and 2023, respectively, which related to interest earned on our cash, cash equivalents, and investment balances.

### Results of operations

#### Comparison of the nine months ended September 30, 2024 and 2023.

The following table summarizes our results of operations for the periods presented:

*(in thousands)*

| ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ Nine Months Ended September 30, 2024 ​ | ​ ​ ​ | ​ ​ Nine Months Ended September 30, 2023 | ​ ​ ​ | ​ ​ ​ ​ Change |
| --- | --- | --- | --- | --- | --- | --- |
| Collaboration revenue | ​ | $2,416 | ​ | $1,967 | ​ | $449 |
| Operating expenses: |  | **​** ​ |  | **​** **​** | **​** | **​** **​** |
| Research and development |  | ​ 77,869 |  | ​ 70,414 | ​ | ​ 7,455 |
| General and administrative | ​ | 25,400 | ​ | 26,117 | ​ | (717) |
| In-process research and development | ​ | ​ — | ​ | ​ 4,000 | ​ | ​ (4,000) |
| Impairment of long-lived assets | ​ | — | ​ | ​ 4,220 | ​ | ​ (4,220) |
| Total operating expenses | ​ | 103,269 | ​ | 104,751 | ​ | (1,482) |
| Loss from operations | ​ | (100,853) | ​ | (102,784) | ​ | 1,931 |
| Other income (expense): | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Interest expense | ​ | — | ​ | (540) | ​ | 540 |
| Interest income | ​ | ​ 10,126 | ​ | ​ 9,167 | ​ | ​ 959 |
| Other income, net | ​ | ​ 248 | ​ | ​ (368) | ​ | ​ 616 |
| Total other income (expense) | ​ | ​ 10,374 | ​ | ​ 8,259 | ​ | ​ 2,115 |
| Loss before provision for income taxes | ​ | ​ (90,479) | ​ | ​ (94,525) | ​ | ​ 4,046 |
| Provision for income taxes | ​ | ​ (14) | ​ | ​ (2,750) | ​ | ​ 2,736 |
| Net loss | ​ | $(90,493) | ​ | $(97,275) | ​ | $6,782 |

### Collaboration revenue

During the nine months ended September 30, 2024 and 2023, we recognized revenue of $2.4 million and $2.0 million under our collaboration agreement with Bristol-Myers Squibb, respectively. Revenue recognized under the collaboration agreement fluctuates based on the amount and timing of expenses incurred under the agreement.

### Research and development expenses

The following table summarizes the components of our research and development expenses for the periods presented:

*(in thousands)*

| ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ Nine Months Ended September 30, 2024 ​ | ​ ​ ​ | ​ ​ Nine Months Ended September 30, 2023 | ​ ​ ​ | ​ ​ ​ ​ Change | ​ ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- |
| Personnel and related costs |  | $31,757 |  | $32,526 |  | $(769) | ​ |
| Facility and other allocated costs | ​ | 16,738 | ​ | 18,587 | ​ | (1,849) | ​ |
| Research and laboratory | ​ | 22,221 | ​ | 17,267 | ​ | 4,954 | ​ |
| Collaboration | ​ | 4,429 | ​ | 254 | ​ | 4,175 | ​ |
| Consulting | ​ | 1,472 | ​ | 964 | ​ | 508 | ​ |
| Other | ​ | 1,252 | ​ | 816 | ​ | 436 | ​ |
| Total research and development expense | ​ | $77,869 | ​ | $70,414 | ​ | $7,455 | ​ |

Research and development expenses were $77.9 million and $70.4 million for the nine months ended September 30, 2024 and 2023, respectively. The increase of $7.5 million was primarily due to:

- an increase of $4.9 million in research and laboratory due to progression of ELiPSE-1 trial and start-up costs of CALiPSO-1 trial.
- a decrease in personnel-related expenses of $0.8 million, including a decrease in salary and benefit expense of $0.3 million, and a decrease in stock compensation expense of $0.5 million.
- a decrease of $1.9 million of facility and other allocated costs, which consists of a decrease in rent of $1.1 million, and a decrease of facility services of $1.2 million. This was offset by an increase in depreciation of $0.5 million.
- An increase in collaboration of $4.2 million due to manufacturing our CNTY-101 product candidate performed under our collaboration with FCDI.

### General and administrative expense

General and administrative expenses were $25.4 million for the nine months ended September 30, 2024 and $26.1 million for nine months ended September 30, 2023. The decrease is primarily due to a gain recognized on contingent consideration liabilities.

### Interest expense

Interest expense was $0.0 million and $0.5 million for the nine months ended September 30, 2024 and 2023, respectively, which related to our Loan Agreement with Hercules. On May 1, 2023, we repaid the loan in its entirety and thus expect our interest expenses to decrease accordingly in subsequent periods.

### Interest income

Interest income was $10.1 million and $9.2 million for the nine months ended September 30, 2024 and 2023, respectively, which related to interest earned on our cash, cash equivalents, and investment balances. The increase in our interest income was due to higher interest rates earned on average balances of cash, cash equivalents and investments.

### Liquidity, capital resources, and capital requirements

### Sources of liquidity

To date, we have funded our operations from the issuance and sale of our equity securities, debt financing and collaboration revenues. Since our inception, we have raised approximately $666 million in net proceeds from the sales of our equity securities. As of September 30, 2024, we had cash, and cash equivalents of $52.6 million and investments of $192.1 million. Based on our research and development plans, we believe our existing cash, cash equivalents and investments, will be sufficient to fund our operating expenses and capital expenditures requirements into the second half of 2026. Since our inception, we have incurred significant operating losses. We have not yet commercialized any products and we do not expect to generate revenue from sales of any product candidates for a number of years, if ever. We had an accumulated deficit of $746.2 million as of September 30, 2024.

In July 2022, we entered into a Sales Agreement, with Cowen and Company, LLC (“Cowen”), under which we may offer and sell, from time to time in our sole discretion, shares of our common stock, having an aggregate offering price of up to $150 million through Cowen as sales agent. In February of 2024, 4,084,502 shares of common stock were issued and sold pursuant to the Sales Agreement at a weighted-average price of $4.50 per share, resulting in approximately $18.4 million in gross proceeds.

In April 2024, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain institutional accredited investors (the “Investors”), pursuant to which we agreed to issue and sell to the Investors in a private placement an aggregate of 15,873,011 shares of common stock (the “Private Placement Shares”), at a price of $3.78 per share (the “Private Placement”). We received aggregate gross proceeds from the Private Placement of approximately $60 million, before deducting placement agent fees and offering expenses.

### Future funding requirements

We expect to incur additional losses in the foreseeable future as we conduct and expand our research and development efforts, including conducting preclinical studies and clinical trials, developing new product candidates, establishing internal and external manufacturing capabilities, and funding our operations generally. We anticipate that we will need to raise additional financing in the future to fund our operations, including the commercialization of any approved product candidates. We are subject to the risks typically related to the development of new products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business.

Our future capital requirements will depend on many factors, including:

- the scope, timing, progress, costs, and results of discovery, preclinical development, and clinical trials for our current and future product candidates;
- the number of clinical trials required for regulatory approval of our current and future product candidates;
- the costs, timing, and outcome of regulatory review of any of our current and future product candidates;
- the cost of manufacturing clinical and commercial supplies of our current and future product candidates;
- the costs and timing of future commercialization activities, including manufacturing, marketing, sales, and distribution, for any of our product candidates for which we receive marketing approval;
- the costs and timing of preparing, filing, and prosecuting patent applications, obtaining, maintaining, protecting, and enforcing our intellectual property rights, and defending any intellectual property-related claims, including any claims by third parties that we are infringing upon, misappropriating, or violating their intellectual property rights;
- our ability to maintain existing, and establish new, strategic collaborations, licensing, or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty, or other payments due under any such agreement;
- the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;
- expenses to attract, hire and retain, skilled personnel;
- costs of operating as a public company;
- our ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payors;
- the effect of competing technological and market developments; and
- the extent to which we acquire or invest in businesses, products, and technologies.

Until and unless we can generate substantial product revenue, we expect to finance our cash needs through the proceeds from a combination of equity offerings and debt financings, and potentially through additional license and development agreements or strategic partnerships or collaborations with third parties. Financing may not be available in sufficient amounts or on reasonable terms. In addition, market volatility resulting from the effects of pandemics, inflationary pressures, disruptions of financial institutions, political unrest and hostilities, war or other factors could adversely impact our ability to access capital as and when needed. We have no commitments for any additional financing and will likely be required to raise such financing through the sale of additional securities, which, in the case of equity securities, may occur at prices lower than the offering price of our common stock. If we sell equity or equity-linked securities, our current stockholders, may be diluted, and the terms may include liquidation or other preferences that are senior to or otherwise adversely affect the rights of our stockholders. Moreover, if we issue debt, we may need to dedicate a substantial portion of our operating cash flow to paying principal and interest on such debt and we may need to comply with operating restrictions, such as limitations on incurring additional debt, which could impair our ability to acquire, sell or license intellectual property rights which could impede our ability to conduct our business.

### Cash flows

The following table summarizes our cash flows for the periods indicated:

*(in thousands)*

| ​ ​ ​ ​ ​ Net cash (used in) provided by: | ​ ​ ​ ​ ​ ​ | ​ ​ ​ Nine Months Ended September 30, 2024 ​ ​ | ​ ​ ​ | ​ ​ ​ Nine months ended September 30, 2023 ​ ​ |
| --- | --- | ---: | --- | ---: |
| Operating activities | ​ | $(85,912) | ​ | $(62,118) |
| Investing activities | ​ | 16,876 | ​ | 42,529 |
| Financing activities | ​ | 75,165 | ​ | (9,369) |
| Net (decrease) increase in cash, cash equivalents, and restricted cash | ​ | $6,129 | ​ | $(28,958) |

#### Operating activities

Net cash used in operating activities was $85.9 million and $62.1 million for the nine months ended September 30, 2024 and 2023, respectively. Net cash used in operating activities during the nine months ended September 30, 2024 consisted primarily of our net loss of $90.5 million and a decrease of $11.1 million in our net operating assets and liabilities, partially offset by non-cash charges of $15.7 million. The non-cash charges of $14.7 million consisted primarily of $10.0 million for depreciation expense, non-cash operating lease benefit of $0.4 million, a decrease in lease liability due to lease termination, and stock-based compensation expense of $10.0 million, partially offset by amortization of marketable securities of $3.8 million and gain on contingent consideration liability of $1.1 million. The change in operating assets and liabilities was primarily due to a $3.1 million increase in prepaid expenses and other assets, a $4.1 million decrease in operating lease liability, a $2.4 million decrease in deferred revenue, and a $1.8 million decrease in accounts payable.

Net cash used in operating activities was $62.1 million for the nine months ended September 30, 2023, which consisted primarily of our net loss of $97.3 million, partially offset by and an increase of $12.3 million in our net operating assets and liabilities and non-cash charges of $22.9 million. The non-cash charges of $22.9 million consisted of $9.5 million for depreciation expense, stock-based compensation expense of $11.1 million, and impairment of $4.2 million. The change in operating assets and liabilities was primarily due to the receipt of $11.7 million of tenant reimbursement, and a $1.7million increase in accrued expenses and other liabilities, partially offset by a $2.0 million increase in deferred revenue.

#### Investing activities

Net cash provided by investing activities was 16.9 million and $42.5 million for the nine months ended September 30, 2024 and 2023, respectively. Cash provided by investing activities for the nine months ended September 30, 2024 consisted primarily of the sale of fixed maturity securities, available for sale of $128.6 million, which was partially offset by purchases of fixed maturity securities of $102.1 million, and the acquisition of Clade of $9.6 million.

Cash provided by investing activities was $42.5 million for the nine months ended September 30, 2023 and consisted primarily of the sale of fixed maturity securities, available for sale of $254.6 million, which was partially offset by purchases of fixed maturity securities of $199.3 million and acquisition of property and equipment of $12.8 million.

#### Financing activities

Net cash provided by (used in) financing activities was $75.2 million and ($9.4) million for the nine months ended September 30, 2024 and 2023, respectively. Cash provided by financing activities consisted of $17.8 million from proceeds from our at-the-market capital raise, $56.6 million from proceeds from our PIPE financing, and $0.7 million from issuance of our common stock from equity incentive plans pursuant to the exercise of employee stock options.

Net cash used in financing activities was $9.4 million for the nine months ended September 30, 2023. Cash provided by financing activities consisted of $10.2 million for payments on long term debt and offset by $0.9 million from issuance of our common stock from equity incentive plans pursuant to the exercise of employee stock options.

### Contractual obligations and commitments

The following table summarizes our significant contractual obligations and commitments as of September 30, 2024:

*(in thousands)*

| ​ ​ ​ ​ ​ ​ ​ ​ | ​ ​ Payments Due by Period 1 Year | ​ ​ ​ ​ 1 to 3 Years | ​ ​ ​ ​ 3 to 5 Years | ​ ​ ​ ​ More than 5 Years | ​ ​ ​ ​ Total |
| --- | ---: | ---: | ---: | ---: | ---: |
| Operating leases | $9,703 | $18,947 | $19,782 | $38,571 | $87,003 |

Payment obligations under our license, collaboration, and acquisition and merger agreements as of September 30, 2024 are contingent upon future events such as our achievement of pre-specified development, regulatory, and commercial milestones, or royalties on net product sales. As of September 30, 2024, the timing and likelihood of achieving the milestones and success payments and generating future product sales are uncertain and therefore, any related payments are not included in the table above. We also enter into agreements in the normal course of business for sponsored research, preclinical studies, contract manufacturing, and other services and products for operating purposes, which are generally cancelable upon written notice. These obligations and commitments are not included in the table above. See Note 9 “Commitments and contingencies” for additional information.

We have commitments under operating leases for certain facilities used in our operations.

### JOBS Act accounting election

As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of specified reduced reporting requirements that are otherwise generally applicable to public companies. As such, we may take advantage of reduced disclosure and other requirements otherwise generally applicable to public companies, including:

- not being required to have our registered independent public accounting firm attest to management’s assessment of our internal control over financial reporting;
- presenting reduced disclosure about our executive compensation arrangements;
- an exemption from compliance with any requirement that the Public Company Accounting Oversight Board may adopt regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;
- not being required to hold non-binding advisory votes on executive compensation or golden parachute arrangements; and,
- extended transition periods for complying with new or revised accounting standards.

The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period to enable us to comply with new or revised accounting standards and, therefore, we will adopt new or revised accounting standards at the time private companies adopt the new or revised accounting standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company.

We will remain an emerging growth company until the earliest of (i) December 31, 2026, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates is less than $700.0 million and our annual revenue is less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million as of the last business day of the second fiscal quarter of such year. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

### Critical accounting policies and significant judgments and estimates

Refer to Note 2, Summary of Significant Accounting Policies, included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of our critical accounting policies.

During the nine months ended September 30, 2024, there were no material changes to our critical accounting policies from those described in our audited financial statements for the year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the SEC on March 14, 2024, except as noted above.

## Market risk

As filed, 1,332 characters.

We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. We do not currently have any material exposure to foreign currency fluctuations and do not engage in any hedging activities as part of our normal course of business.

### Interest rate risk

We had cash, cash equivalents, and restricted cash of $52.6 million as of September 30, 2024, which consisted of bank deposits and money market funds. We also had investments of $192.1 million as of September 30, 2024. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates. However, because of the low risk profile of the instruments in our portfolio, a change in market interest rates would not have a material impact on our financial condition and/or results of operations.

### Banking Instability

Future disruptions of financial institutions where we bank or have credit arrangements, or disruptions of the financial services industry in general, could adversely affect our ability to access our cash and cash equivalents.

### Effects of Inflation

Inflation generally affects us by increasing our cost of labor and laboratory consumables. We believe that inflation has not had a material effect on our financial statements.

## Controls and procedures

As filed, 2,081 characters.

### Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosures controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of September 30, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2024, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.

### Changes in Internal Control over Financial Reporting

Management determined that, as of September 30, 2024, there were no changes in our internal control over financial reporting that occurred during the nine months then ended that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 259 characters.

Other than what is set forth below, there have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.

Filed Nov 5, 2024.
Source: SEC EDGAR, the filing index for accession 0001558370-24-014345. Last ingested by Listed: Nov 3, 2026, 18:08 ET. No prices; not investment advice.