anab-20200930
000137005312/312020Q3FALSEP1YP1YP1Yus-gaap:OtherAssetsNoncurrentus-gaap:OtherLiabilitiesCurrentus-gaap:OtherLiabilitiesNoncurrent00013700532020-01-012020-09-30xbrli:shares00013700532020-11-02iso4217:USD00013700532020-09-3000013700532019-12-31iso4217:USDxbrli:shares00013700532020-07-012020-09-3000013700532019-07-012019-09-3000013700532019-01-012019-09-300001370053us-gaap:CommonStockMember2019-12-310001370053us-gaap:AdditionalPaidInCapitalMember2019-12-310001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001370053us-gaap:RetainedEarningsMember2019-12-310001370053us-gaap:CommonStockMember2020-01-012020-03-310001370053us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-3100013700532020-01-012020-03-310001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001370053us-gaap:RetainedEarningsMember2020-01-012020-03-310001370053us-gaap:CommonStockMember2020-03-310001370053us-gaap:AdditionalPaidInCapitalMember2020-03-310001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-310001370053us-gaap:RetainedEarningsMember2020-03-3100013700532020-03-310001370053us-gaap:CommonStockMember2020-04-012020-06-300001370053us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-3000013700532020-04-012020-06-300001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-012020-06-300001370053us-gaap:RetainedEarningsMember2020-04-012020-06-300001370053us-gaap:CommonStockMember2020-06-300001370053us-gaap:AdditionalPaidInCapitalMember2020-06-300001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-300001370053us-gaap:RetainedEarningsMember2020-06-3000013700532020-06-300001370053us-gaap:CommonStockMember2020-07-012020-09-300001370053us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300001370053us-gaap:RetainedEarningsMember2020-07-012020-09-300001370053us-gaap:CommonStockMember2020-09-300001370053us-gaap:AdditionalPaidInCapitalMember2020-09-300001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-300001370053us-gaap:RetainedEarningsMember2020-09-300001370053us-gaap:CommonStockMember2018-12-310001370053us-gaap:AdditionalPaidInCapitalMember2018-12-310001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-310001370053us-gaap:RetainedEarningsMember2018-12-3100013700532018-12-310001370053us-gaap:CommonStockMember2019-01-012019-03-310001370053us-gaap:AdditionalPaidInCapitalMember2019-01-012019-03-3100013700532019-01-012019-03-310001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-03-310001370053us-gaap:RetainedEarningsMember2019-01-012019-03-310001370053us-gaap:CommonStockMember2019-03-310001370053us-gaap:AdditionalPaidInCapitalMember2019-03-310001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-03-310001370053us-gaap:RetainedEarningsMember2019-03-3100013700532019-03-310001370053us-gaap:CommonStockMember2019-04-012019-06-300001370053us-gaap:AdditionalPaidInCapitalMember2019-04-012019-06-3000013700532019-04-012019-06-300001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-04-012019-06-300001370053us-gaap:RetainedEarningsMember2019-04-012019-06-300001370053us-gaap:CommonStockMember2019-06-300001370053us-gaap:AdditionalPaidInCapitalMember2019-06-300001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-300001370053us-gaap:RetainedEarningsMember2019-06-3000013700532019-06-300001370053us-gaap:CommonStockMember2019-07-012019-09-300001370053us-gaap:AdditionalPaidInCapitalMember2019-07-012019-09-300001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-07-012019-09-300001370053us-gaap:RetainedEarningsMember2019-07-012019-09-300001370053us-gaap:CommonStockMember2019-09-300001370053us-gaap:AdditionalPaidInCapitalMember2019-09-300001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-09-300001370053us-gaap:RetainedEarningsMember2019-09-3000013700532019-09-30anab:segment0001370053us-gaap:EmployeeStockOptionMember2020-07-012020-09-300001370053us-gaap:EmployeeStockOptionMember2019-07-012019-09-300001370053us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001370053us-gaap:EmployeeStockOptionMember2019-01-012019-09-300001370053anab:LaboratoryEquipmentMember2020-09-300001370053anab:LaboratoryEquipmentMember2019-12-310001370053us-gaap:OfficeEquipmentMember2020-09-300001370053us-gaap:OfficeEquipmentMember2019-12-310001370053us-gaap:LeaseholdImprovementsMember2020-09-300001370053us-gaap:LeaseholdImprovementsMember2019-12-310001370053us-gaap:CollaborativeArrangementMemberanab:TESAROInc.AndTESARODevelopmentInc.Member2014-03-012014-03-31anab:target0001370053us-gaap:CollaborativeArrangementMemberanab:TESAROInc.AndTESARODevelopmentInc.Member2014-06-300001370053us-gaap:CollaborativeArrangementMemberanab:TESAROInc.AndTESARODevelopmentInc.Member2014-11-300001370053us-gaap:CollaborativeArrangementMemberanab:TESAROInc.AndTESARODevelopmentInc.Member2014-11-012014-11-30anab:milestone0001370053us-gaap:CollaborativeArrangementMemberanab:TESAROInc.AndTESARODevelopmentInc.Member2020-01-012020-09-300001370053anab:Phase3ClinicalTrialInitiationMemberanab:AnaptysBiogeneratedAntiPD1AntagonistAntibodyTSR042Memberanab:TESAROInc.AndTESARODevelopmentInc.Member2020-01-012020-09-300001370053anab:InVivoToxicologyStudiesMemberanab:AnaptysBiogeneratedAntiPD1AntagonistAntibodyTSR042Memberanab:TESAROInc.AndTESARODevelopmentInc.Member2015-04-012015-06-300001370053anab:AnaptysBioGeneratedAntiTIM3AntagonistAntibodyTSR022Memberanab:InVivoToxicologyStudiesMemberanab:TESAROInc.AndTESARODevelopmentInc.Member2015-10-012015-12-310001370053anab:InVivoToxicologyStudiesMemberanab:TESAROInc.AndTESARODevelopmentInc.Memberanab:AnaptysBioGeneratedAntiLAG3AntagonistAntibodyTSR033Member2016-07-012016-09-300001370053anab:ClearanceOfInvestigationalNewDrugFromFDAMemberanab:AnaptysBiogeneratedAntiPD1AntagonistAntibodyTSR042Memberanab:TESAROInc.AndTESARODevelopmentInc.Member2016-01-012016-03-310001370053anab:ClearanceOfInvestigationalNewDrugFromFDAMemberanab:AnaptysBioGeneratedAntiTIM3AntagonistAntibodyTSR022Memberanab:TESAROInc.AndTESARODevelopmentInc.Member2016-04-012016-06-300001370053anab:ClearanceOfInvestigationalNewDrugFromFDAMemberanab:TESAROInc.AndTESARODevelopmentInc.Memberanab:AnaptysBioGeneratedAntiLAG3AntagonistAntibodyTSR033Member2017-04-012017-06-300001370053anab:Phase2ClinicalTrialInitiationMemberanab:AnaptysBiogeneratedAntiPD1AntagonistAntibodyTSR042Memberanab:TESAROInc.AndTESARODevelopmentInc.Member2017-04-012017-06-300001370053anab:Phase2ClinicalTrialInitiationMemberanab:AnaptysBioGeneratedAntiTIM3AntagonistAntibodyTSR022Memberanab:TESAROInc.AndTESARODevelopmentInc.Member2017-10-012017-12-310001370053anab:Phase2ClinicalTrialInitiationMemberanab:TESAROInc.AndTESARODevelopmentInc.Memberanab:AnaptysBioGeneratedAntiLAG3AntagonistAntibodyTSR033Member2019-10-012019-12-310001370053anab:Phase3ClinicalTrialInitiationMemberanab:AnaptysBiogeneratedAntiPD1AntagonistAntibodyTSR042Memberanab:TESAROInc.AndTESARODevelopmentInc.Member2018-07-012018-09-300001370053anab:Phase3clinicaltrialinitiationsecondindicationDomainanab:AnaptysBiogeneratedAntiPD1AntagonistAntibodyTSR042Memberanab:TESAROInc.AndTESARODevelopmentInc.Member2019-04-012019-06-300001370053anab:AnaptysBiogeneratedAntiPD1AntagonistAntibodyTSR042Memberanab:FilingofNDAMemberanab:TESAROInc.AndTESARODevelopmentInc.Member2020-01-012020-03-310001370053anab:FilingofMMAMemberanab:AnaptysBiogeneratedAntiPD1AntagonistAntibodyTSR042Memberanab:TESAROInc.AndTESARODevelopmentInc.Member2020-01-012020-03-310001370053us-gaap:CollaborativeArrangementMemberanab:TESAROInc.AndTESARODevelopmentInc.Member2020-07-012020-09-300001370053us-gaap:CollaborativeArrangementMemberanab:TESAROInc.AndTESARODevelopmentInc.Member2019-07-012019-09-300001370053us-gaap:CollaborativeArrangementMemberanab:TESAROInc.AndTESARODevelopmentInc.Member2019-01-012019-09-300001370053us-gaap:CollaborativeArrangementMemberanab:CelgeneCorporationMember2011-01-012011-12-310001370053us-gaap:CollaborativeArrangementMemberanab:CelgeneCorporationMember2011-12-310001370053anab:InVivoToxicologyStudiesMemberanab:CelgeneCorporationMemberanab:AnaptysBioGeneratedAntiPD1AntagonistAntibodyCC90006Member2016-04-012016-06-300001370053anab:Phase1ClinicalTrialInitiationMemberanab:CelgeneCorporationMemberanab:AnaptysBioGeneratedAntiPD1AntagonistAntibodyCC90006Member2016-10-012016-12-310001370053us-gaap:CollaborativeArrangementMemberanab:CelgeneCorporationMember2020-07-012020-09-300001370053us-gaap:CollaborativeArrangementMemberanab:CelgeneCorporationMember2020-01-012020-09-300001370053us-gaap:CollaborativeArrangementMemberanab:CelgeneCorporationMember2019-01-012019-09-300001370053us-gaap:CollaborativeArrangementMemberanab:CelgeneCorporationMember2019-07-012019-09-300001370053us-gaap:NotesPayableToBanksMemberanab:LoanAndSecurityAgreementMember2014-12-24anab:installment0001370053us-gaap:NotesPayableToBanksMemberanab:LoanAndSecurityAgreementMember2014-12-242014-12-240001370053us-gaap:NotesPayableToBanksMember2014-12-240001370053anab:TermALoansMemberus-gaap:NotesPayableToBanksMember2014-12-242014-12-24xbrli:pure0001370053anab:TermALoansMemberus-gaap:NotesPayableToBanksMember2014-12-240001370053us-gaap:NotesPayableToBanksMemberanab:TermBLoansAndTermCLoansMember2016-01-310001370053us-gaap:NotesPayableToBanksMemberanab:LoanAndSecurityAgreementMember2016-01-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-09-300001370053us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-09-300001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2020-09-300001370053us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-09-300001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMember2020-09-300001370053us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMember2020-09-300001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:MutualFundMember2020-09-300001370053us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMember2020-09-300001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2020-09-300001370053us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2020-09-300001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2020-09-300001370053us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2020-09-300001370053us-gaap:CertificatesOfDepositMemberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001370053us-gaap:FairValueInputsLevel1Memberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001370053us-gaap:CertificatesOfDepositMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-09-300001370053us-gaap:FairValueInputsLevel3Memberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-09-300001370053us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-09-300001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-09-300001370053us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-09-300001370053anab:CommercialAndCorporateObligationsMemberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001370053us-gaap:FairValueInputsLevel1Memberanab:CommercialAndCorporateObligationsMemberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001370053anab:CommercialAndCorporateObligationsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-09-300001370053us-gaap:FairValueInputsLevel3Memberanab:CommercialAndCorporateObligationsMemberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2019-12-310001370053us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2019-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2019-12-310001370053us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2019-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMember2019-12-310001370053us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMember2019-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:MutualFundMember2019-12-310001370053us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMember2019-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2019-12-310001370053us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2019-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2019-12-310001370053us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2019-12-310001370053us-gaap:CertificatesOfDepositMemberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001370053us-gaap:FairValueInputsLevel1Memberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001370053us-gaap:CertificatesOfDepositMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2019-12-310001370053us-gaap:FairValueInputsLevel3Memberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2019-12-310001370053us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2019-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2019-12-310001370053us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2019-12-310001370053anab:CommercialAndCorporateObligationsMemberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001370053us-gaap:FairValueInputsLevel1Memberanab:CommercialAndCorporateObligationsMemberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001370053anab:CommercialAndCorporateObligationsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2019-12-310001370053us-gaap:FairValueInputsLevel3Memberanab:CommercialAndCorporateObligationsMemberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001370053us-gaap:CarryingReportedAmountFairValueDisclosureMember2020-09-300001370053us-gaap:EstimateOfFairValueFairValueDisclosureMember2020-09-300001370053us-gaap:CarryingReportedAmountFairValueDisclosureMember2019-12-310001370053us-gaap:EstimateOfFairValueFairValueDisclosureMember2019-12-310001370053us-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-09-300001370053us-gaap:CertificatesOfDepositMember2020-09-300001370053anab:CommercialAndCorporateObligationsMember2020-09-300001370053us-gaap:USTreasurySecuritiesMember2020-09-300001370053us-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-01-012020-09-300001370053srt:MinimumMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-01-012020-09-300001370053srt:MaximumMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-01-012020-09-300001370053us-gaap:CertificatesOfDepositMember2020-01-012020-09-300001370053us-gaap:CertificatesOfDepositMembersrt:MinimumMember2020-01-012020-09-300001370053us-gaap:CertificatesOfDepositMembersrt:MaximumMember2020-01-012020-09-300001370053anab:CommercialAndCorporateObligationsMembersrt:MaximumMember2020-01-012020-09-300001370053srt:MinimumMemberus-gaap:USTreasurySecuritiesMember2020-01-012020-09-300001370053srt:MaximumMemberus-gaap:USTreasurySecuritiesMember2020-01-012020-09-300001370053anab:CommercialAndCorporateObligationsMember2019-12-310001370053us-gaap:USTreasurySecuritiesMember2019-12-310001370053anab:EquityIncentivePlan2017Member2020-09-300001370053anab:EmployeeStockPurchasePlan2017Member2020-09-300001370053anab:EquityIncentivePlan2017Member2017-01-262017-01-260001370053anab:EquityIncentivePlan2017Member2020-01-012020-01-010001370053anab:EmployeeStockPurchasePlan2017Memberus-gaap:EmployeeStockMember2018-01-012018-01-010001370053anab:EmployeeStockPurchasePlan2017Memberus-gaap:EmployeeStockMember2020-01-012020-01-010001370053us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001370053srt:DirectorMemberus-gaap:EmployeeStockOptionMember2020-01-012020-09-300001370053us-gaap:EmployeeStockOptionMember2019-01-012019-09-300001370053us-gaap:ResearchAndDevelopmentExpenseMember2020-07-012020-09-300001370053us-gaap:ResearchAndDevelopmentExpenseMember2019-07-012019-09-300001370053us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-09-300001370053us-gaap:ResearchAndDevelopmentExpenseMember2019-01-012019-09-300001370053us-gaap:GeneralAndAdministrativeExpenseMember2020-07-012020-09-300001370053us-gaap:GeneralAndAdministrativeExpenseMember2019-07-012019-09-300001370053us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-09-300001370053us-gaap:GeneralAndAdministrativeExpenseMember2019-01-012019-09-30anab:leaseanab:renewal_option0001370053anab:OneOfficeLeaseMember2020-09-30utr:sqft0001370053anab:A10770WateridgeCircleSanDiegoCalifornia92121Member2020-05-040001370053anab:A10770WateridgeCircleSanDiegoCalifornia92121Member2020-05-042020-05-04iso4217:USDutr:sqft0001370053anab:CollaborationAndExclusiveLicenseAgreementMemberus-gaap:SubsequentEventMemberanab:AnaptysBiogeneratedAntiPD1AntagonistAntibodyTSR042Memberanab:TESAROInc.AndTESARODevelopmentInc.Member2020-10-232020-10-230001370053anab:CollaborationAndExclusiveLicenseAgreementMemberus-gaap:SubsequentEventMembersrt:MinimumMemberanab:AnaptysBiogeneratedAntiPD1AntagonistAntibodyTSR042Memberanab:TESAROInc.AndTESARODevelopmentInc.Member2020-10-232020-10-230001370053anab:CollaborationAndExclusiveLicenseAgreementMemberus-gaap:SubsequentEventMembersrt:MaximumMemberanab:AnaptysBiogeneratedAntiPD1AntagonistAntibodyTSR042Memberanab:TESAROInc.AndTESARODevelopmentInc.Member2020-10-232020-10-230001370053anab:CollaborationAndExclusiveLicenseAgreementMemberus-gaap:SubsequentEventMemberanab:AnaptysBiogeneratedAntiPD1AntagonistAntibodyTSR042Memberanab:TESAROInc.AndTESARODevelopmentInc.Member2020-10-230001370053anab:CollaborationAndExclusiveLicenseAgreementMemberus-gaap:SubsequentEventMembersrt:ScenarioForecastMemberanab:AnaptysBiogeneratedAntiPD1AntagonistAntibodyTSR042Memberanab:TESAROInc.AndTESARODevelopmentInc.Member2021-01-012021-01-010001370053anab:CollaborationAndExclusiveLicenseAgreementMemberanab:AnaptysBiogeneratedAntiPD1AntagonistAntibodyTSR042Memberanab:TESAROInc.AndTESARODevelopmentInc.Member2020-01-012020-09-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2020
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: 001-37985
ANAPTYSBIO, INC.
(Exact name of registrant as specified in its charter)
Delaware20-3828755
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
10421 Pacific Center Court, Suite 200
San Diego, CA 92121
(Address of principal executive offices and zip code)
(858) 362-6295
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 par value ANABThe Nasdaq Stock Market LLC
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 FilerAccelerated Filer
Non-accelerated FilerSmaller 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 13(a) of the Exchange Act.
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes      No  
As of November 2, 2020, there were 27,347,805 shares of the Registrant’s Common Stock outstanding.



AnaptysBio, Inc.
Table of Contents
 
Page Number
PART I. FINANCIAL INFORMATION
PART II. OTHER INFORMATION



PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (unaudited)
AnaptysBio, Inc.
Consolidated Balance Sheets
(in thousands, except par value data)
September 30, 2020December 31, 2019
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents$209,154 $171,017 
Short-term investments129,192 203,210 
Prepaid expenses and other current assets7,468 3,506 
Total current assets345,814 377,733 
Property and equipment, net1,585 1,618 
Long-term investments36,177 54,305 
Other long-term assets1,114 1,481 
Restricted cash60 60 
Total assets$384,750 $435,197 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$5,484 $16,237 
Accrued expenses18,139 11,052 
Notes payable, current portion 1,375 
Other current liabilities851 871 
Total current liabilities24,474 29,535 
Other long-term liabilities33 654 
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000 shares authorized and no shares, issued or outstanding at September 30, 2020 and December 31, 2019, respectively
  
Common stock, $0.001 par value, 500,000 shares authorized, 27,346 shares and 27,255 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively
27 27 
Additional paid-in capital657,560 648,669 
Accumulated other comprehensive income259 338 
Accumulated deficit(297,603)(244,026)
Total stockholders’ equity360,243 405,008 
Total liabilities and stockholders’ equity $384,750 $435,197 
 See accompanying notes to unaudited consolidated financial statements.
1


AnaptysBio, Inc.
Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except per share data)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
Collaboration revenue$ $ $15,000 $5,000 
Operating expenses:
Research and development19,542 29,931 58,458 77,912 
General and administrative4,794 3,814 13,766 12,262 
Total operating expenses24,336 33,745 72,224 90,174 
Loss from operations(24,336)(33,745)(57,224)(85,174)
Other income (expense), net:
 Interest expense
 (240) (841)
Interest income625 2,757 3,583 8,702 
     Other (expense) income, net(56)144 64 110 
Total other income (expense), net569 2,661 3,647 7,971 
Loss before income taxes(23,767)(31,084)(53,577)(77,203)
Provision for income taxes  51  130 
Net loss(23,767)(31,033)(53,577)(77,073)
Other comprehensive (loss) income:
Unrealized (loss) income on available for sale securities, net of tax of $0, $(25), $0 and $189, respectively
(494)(94)(79)703 
Comprehensive loss$(24,261)$(31,127)$(53,656)$(76,370)
Net loss per common share:
      Basic and diluted$(0.87)$(1.15)$(1.96)$(2.85)
Weighted-average number of shares outstanding:
      Basic and diluted27,316 27,058 27,286 27,022 
 See accompanying notes to unaudited consolidated financial statements.

2


AnaptysBio, Inc.
Consolidated Statement of Stockholders’ Equity
(in thousands)
(unaudited)
Common StockAdditional
Paid-in
Capital
Accumulated Other Comprehensive (Loss) IncomeAccumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance, December 31, 201927,255 $27 $648,669 $338 $(244,026)$405,008 
Shares issued under employee stock plans
22 — 36 — — 36 
Stock-based compensation
— — 2,975 — — 2,975 
Comprehensive income, net
— — — 807 — 807 
Net loss
— — — — (8,262)(8,262)
Balance, March 31, 202027,277 27 651,680 1,145 (252,288)400,564 
Shares issued under employee stock plans
10 — 71 — — 71 
Stock-based compensation
— — 2,741 — — 2,741 
Comprehensive loss, net
— — — (392)— (392)
Net loss
— — — — (21,548)(21,548)
Balance, June 30, 202027,287 27 654,492 753 (273,836)381,436 
Shares issued under employee stock plans
59 — 263 — — 263 
Stock-based compensation— — 2,805 — — 2,805 
Comprehensive loss, net— — — (494)— (494)
Net loss— — — — (23,767)(23,767)
Balance, September 30, 202027,346 $27 $657,560 $259 $(297,603)$360,243 
See accompanying notes to unaudited consolidated financial statements.
3


AnaptysBio, Inc.
Consolidated Statement of Stockholders’ Equity
(in thousands)
(unaudited)
Common StockAdditional
Paid-in
Capital
Accumulated Other Comprehensive (Loss) IncomeAccumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance, December 31, 201826,922 $27 $633,251 $(223)$(146,690)$486,365 
Shares issued under employee stock plans
84 — 574 — — 574 
Stock-based compensation
— — 2,867 — — 2,867 
Comprehensive income, net
— — — 427 — 427 
Net loss
— — — — (22,078)(22,078)
Balance, March 31, 201927,006 27 636,692 204 (168,768)468,155 
Shares issued under employee stock plans
39 — 215 — — 215 
Stock-based compensation
— — 3,643 — — 3,643 
Comprehensive income, net
— — — 370 — 370 
Net loss
— — — — (23,962)(23,962)
Balance, June 30, 201927,045 27 640,550 574 (192,730)448,421 
Shares issued under employee stock plans53 — 454 — — 454 
Stock-based compensation— — 3,144 — — 3,144 
Comprehensive loss, net— — — (94)— (94)
Net loss— — — — (31,033)(31,033)
Balance, September 30, 201927,098 $27 $644,148 $480 $(223,763)$420,892 
See accompanying notes to unaudited consolidated financial statements.
4


AnaptysBio, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended
September 30,
20202019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(53,577)$(77,073)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization415 374 
Stock-based compensation8,521 9,654 
Accretion/amortization of investments, net239 (2,449)
Non-cash interest expense 503 
Changes in operating assets and liabilities:
Prepaid expenses and other assets(2,902)2,099 
Accounts payable and other liabilities(4,431)13,180 
Net cash used in operating activities(51,735)(53,712)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of investments(156,572)(175,049)
Sales and maturities of investments247,707 303,146 
Purchases of property and equipment(258)(701)
Net cash provided by investing activities90,877 127,396 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, upon the exercise of stock options370 1,243 
Payments on notes payable(1,375)(5,625)
Net cash used in financing activities(1,005)(4,382)
Net increase in cash, cash equivalents, and restricted cash38,137 69,302 
Cash, cash equivalents and restricted cash, beginning of period171,077 113,656 
Cash, cash equivalents and restricted cash, end of period$209,214 $182,958 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid$4 $384 
Non-cash investing and financing activities:
Amounts accrued for property and equipment$165 $82 
See accompanying notes to unaudited consolidated financial statements.
5


AnaptysBio, Inc.
Notes to Unaudited Consolidated Financial Statements
1. Description of the Business
AnaptysBio, Inc. (“we,” “us,” “our,” or the “Company”) was incorporated in the state of Delaware in November 2005. We are a clinical-stage biotechnology company developing first-in-class immunology therapeutic product candidates focused on emerging immune control mechanisms applicable to inflammation and immuno-oncology indications. We develop our product candidates using our proprietary antibody discovery technology platform, which is based upon a breakthrough understanding of the natural process of antibody generation, known as somatic hypermutation, and replicates this natural process of antibody generation in vitro. We currently generate revenue from milestones achieved under our collaborative research and development arrangements.
    Since our inception, we have devoted our primary effort to research and development activities. Our financial support has been provided primarily from the sale of our common and preferred stock, as well as through funds received under our collaborative research and development agreements. Going forward, as we continue our expansion, we may seek additional financing and/or strategic investments. However, there can be no assurance that any additional financing or strategic investments will be available to us on acceptable terms, if at all. If events or circumstances occur such that we do not obtain additional funding, we will most likely be required to reduce our plans and/or certain discretionary spending, which could have a material adverse effect on our ability to achieve our intended business objectives. Our management believes our currently available resources will provide sufficient funds to enable us to meet our operating plans for at least the next twelve months. The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been omitted. The accompanying unaudited consolidated financial statements include all known adjustments necessary for a fair presentation of the results of interim periods as required by U.S. GAAP. These adjustments consist primarily of normal recurring accruals and estimates that impact the carrying value of assets and liabilities. Also, certain reclassifications have been made to 2019 financial information to conform to the current year presentation of prepaid expenses and other assets on the Consolidated Statements of Cash Flows. Operating results for the nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. Interim results are not necessarily indicative of results for a full year, particularly in light of the novel coronavirus (“COVID-19”) pandemic, and its impact on domestic and global economies. To limit the spread of COVID-19, governments have taken various actions, including the issuance of stay-at-home orders and social distancing guidelines, which have resulted in some businesses suspending operations or experiencing a reduction in demand for many products from direct or ultimate customers. Accordingly, businesses have adjusted, reduced or suspended operating activities. The effects of the stay-at-home orders and our work-from-home policies may negatively impact productivity, disrupt our business, and delay our development programs and regulatory and commercialization timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. Our future research and development expenses and general and administrative expenses may vary significantly if we experience an increased impact from the COVID-19 pandemic on the costs and timing associated with the conduct of our clinical trials and other related business activities. The financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2019 included in our Annual Form 10-K.
Basis of Consolidation
The accompanying consolidated financial statements include us and our wholly-owned Australian subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. We operate in one reportable segment, and our functional and reporting currency is the U.S. dollar.
6


Use of Estimates
The preparation of the accompanying consolidated financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. We base our estimates and assumptions on historical experience when available and on various factors that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations, and financial condition, including expenses, reserves and allowances, manufacturing, clinical trials, research and development costs, and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as the economic impact on local, regional, national and international markets. Our actual results could differ from these estimates under different assumptions or conditions.
Net Loss Per Common Share
Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common equivalent shares outstanding for the period, as well as any dilutive effect from outstanding stock options and warrants using the treasury stock method. For each period presented, there is no difference in the number of shares used to calculate basic and diluted net loss per share.
The following table sets forth the weighted-average outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because to do so would be anti-dilutive (in common stock equivalent shares):
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2020201920202019
Options to purchase common stock2,838 2,467 2,899 2,451 
Accounting Pronouncements Recently Adopted
In December 2019, the Financial Accounting Standards Board (the “FASB”) issued ASU 2019-12, Income Taxes (Topic 740) intended to simplify the accounting for income taxes. The guidance removes the following exceptions: (1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items, (2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, (3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary, and (4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. Additionally, the guidance simplifies the accounting for income taxes by: (1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, (3) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements (although the entity may elect to do so (on an entity-by-entity basis) for a legal entity that is both not subject to tax and disregarded by the taxing authority), (4) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date, and (5) making minor improvements for income tax accounting related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2020. Different components of the guidance require retrospective, modified retrospective or prospective adoption, and early adoption is permitted. We early adopted this standard on January 1, 2020, and the adoption of the standard did not have a material impact to our consolidated financial statements.
7


In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326), which changes the accounting treatment for recognizing the impairment of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance also eliminates the other-than-temporary impairment model for available-for-sale (“AFS”) debt securities. Entities will begin to recognize credit losses on AFS debt securities as allowances rather than as reductions in the carrying value of the securities. Impairment that is not credit-related impairment will continue to be recognized in other comprehensive income and entities will no longer consider the length of time a security has been in an unrealized loss position when determining whether a credit loss exists. ASU 2016-13 becomes effective for annual and interim periods beginning after December 15, 2019. We adopted this standard prospectively on January 1, 2020, and the adoption of the standard did not have a material impact to our consolidated financial statements as credit losses are not expected to be significant based on historical trends, the financial condition of our investments and external market factors. We will continue to actively monitor the impact of the COVID-19 pandemic on expected credit losses.
3. Balance Sheet Accounts and Supplemental Disclosures
Property and Equipment
Property and equipment consist of the following:
(in thousands)September 30, 2020December 31, 2019
Laboratory equipment$5,218 $4,911 
Office furniture and equipment827 811 
Leasehold improvements617 575 
Property and equipment, gross6,662 6,297 
Less: accumulated depreciation and amortization(5,077)(4,679)
Total property and equipment, net$1,585 $1,618 
 
Accrued Expenses
Accrued expenses consist of the following:
(in thousands)September 30, 2020December 31, 2019
Accrued compensation and related expenses$2,782 $2,152 
Accrued professional fees1,039 435 
Accrued research, development and manufacturing expenses14,094 8,196 
Other224 269 
Total accrued expenses$18,139 $11,052 
4. Collaborative Research and Development Agreements
GlaxoSmithKline Collaboration
In March 2014, we entered into a Collaboration and Exclusive License Agreement (the “GSK Agreement”) with TESARO, Inc., an oncology-focused biopharmaceutical company now a part of GlaxoSmithKline (“GSK”). Under the terms of the GSK Agreement, we agreed to perform certain discovery and early preclinical development of therapeutic antibodies with the goal of generating immunotherapy antibodies for subsequent preclinical, clinical, regulatory, and commercial development to be performed by GSK. Under the terms of the GSK Agreement, GSK paid an upfront license fee of $17.0 million in March 2014 and agreed to provide funding to us for research and development services related to antibody discovery programs for three specific targets. In November 2014, we and TESARO, Inc. entered into Amendment No. 1 to the GSK Agreement to add an antibody discovery program against an undisclosed fourth target for an upfront license fee of $2.0 million.
8


For each development program, we are eligible to receive milestone payments of up to $18.0 million if certain preclinical and clinical trial events are achieved by GSK, up to an additional $90.0 million if certain U.S. and European regulatory submissions and approvals in multiple indications are achieved, and up to an additional $165.0 million upon the achievement of specified levels of annual worldwide net sales. We will also be eligible to receive tiered single-digit royalties related to worldwide net sales of products developed under the collaboration. Unless earlier terminated by either party upon specified circumstances, the GSK Agreement will terminate, with respect to each specific developed product, upon the later of the 12th anniversary of the first commercial sale of the product or the expiration of the last to expire of any patent. Prior to the adoption of ASC 606, Revenue from Contracts with Customers, we determined that the upfront license fees and research funding under the GSK Agreement, as amended, should be accounted for as a single unit of accounting and that the upfront license fees should be deferred and recognized as revenue over the same period that the research and development services are performed. In December 2015, we determined that the research and development services would be extended through December 31, 2016. As a result, the period over which the unrecognized license fees and discovery milestones were recognized was extended through December 31, 2016 and have since been recognized in full.
We assessed this arrangement in accordance with ASC 606 and concluded that the contract counterparty, GSK, is a customer. We identified the following material promises under the GSK Agreement: (1) the licenses under certain patent rights relating to six discovery programs (four targets) and transfer of certain development and regulatory information, (2) research and development (“R&D”) services, and (3) joint steering committee meetings. We considered the research and discovery capabilities of GSK for these specific programs, GSK’s inability to sub-license, and the fact that the discovery and optimization of these antibodies is proprietary and could not, at the time of contract inception, be provided by other vendors, to conclude that the license does not have stand-alone functionality and is therefore not distinct. Additionally, we determined that the joint steering committee participation would not have been provided without the R&D services and license agreement. Based on these assessments, we identified all services to be interrelated and therefore concluded that the promises should be combined into a single performance obligation at the inception of the arrangement.
As of September 30, 2020, the transaction price for the GSK Agreement includes the upfront payment, research reimbursement revenue, and milestones earned to date, which are allocated in their entirety to the single performance obligation. We earned and recognized two clinical milestones for $15.0 million during the nine months ended September 30, 2020. No other future clinical or regulatory milestones have been included in the transaction price, as all milestone amounts were subject to the revenue constraint. As part of the constraint evaluation, we considered numerous factors including the fact that the receipt of milestones is outside of our control and contingent upon success in future clinical trials, an outcome that is difficult to predict, and GSK’s efforts. Any consideration related to sales-based milestones, including royalties, will be recognized when the related sales occur as they were determined to relate predominantly to the intellectual property license granted to GSK and therefore have also been excluded from the transaction price. We will re-evaluate the variable transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.
Milestones recognized through September 30, 2020 under the GSK Agreement are as follows:
Anti-PD-1
(GSK4057190A/Dostarlimab)
Anti-TIM-3
(GSK4069889A/Cobolimab)
Anti-LAG-3
(GSK40974386)
Milestone EventAmountQuarter RecognizedAmountQuarter RecognizedAmountQuarter Recognized
Initiated in vivo toxicology studies using good laboratory practices (GLPs)
$1.0MQ2'15$1.0MQ4'15$1.0MQ3'16
IND clearance from the FDA$4.0MQ1'16$4.0MQ2'16$4.0MQ2'17
Phase 2 clinical trial initiation$3.0MQ2'17$3.0MQ4'17$3.0MQ4'19
Phase 3 clinical trial initiation - first indication$5.0MQ3'18
Phase 3 clinical trial initiation - second indication$5.0MQ2'19
Filing of the first NDA - first indication$10.0MQ1'20
Filing of the first MAA - first indication$5.0MQ1'20

9


Milestones achieved during the discovery period were recognized as revenue pro-rata through December 31, 2016. Milestones achieved during fiscal 2017 were recognized as revenue in the period earned, while milestones after December 31, 2017 are recognized upon determination that a significant reversal of revenue would not be probable. Cash is generally received within 30 days of milestone achievement.
We recognized $0 and $15.0 million in revenue under the GSK Agreement during the three and nine months ended September 30, 2020, respectively, and $0 and $5.0 million during the three and nine months ended September 30, 2019, respectively.
Antibody Generation Agreement with Bristol-Myers Squibb
In December 2011, we entered into a license and collaboration agreement (the “BMS Agreement”) with Celgene, now a part of Bristol-Myers Squibb (“BMS”), to develop therapeutic antibodies against multiple targets. We granted BMS the option to obtain worldwide commercial rights to antibodies generated against each of the targets under the agreement, which option was triggered on a target-by-target basis by our delivery of antibodies meeting certain pre-specified parameters pertaining to each target under the agreement.
The BMS Agreement provided for an upfront payment of $6.0 million from BMS, which we received in 2011 and recognized through 2014, milestone payments of up to $53.0 million per target, low single-digit royalties on net sales of antibodies against each target, and reimbursement of specified research and development costs.
We assessed this arrangement in accordance with ASC Topic 606 and concluded that the contract counterparty, BMS, is a customer. We identified the following material promises under the BMS Agreement: (1) the licenses under certain patent rights relating to four targets and transfer of certain development and regulatory information, (2) R&D services, (3) a written report documenting findings, and (4) steering committee meetings. We considered the research and discovery capabilities of BMS, BMS’s inability to sub-license the four targets, and the fact that the discovery and optimization of these antibodies is proprietary and could not, at the time of contract inception, be provided by other vendors, to conclude that the license does not have stand-alone functionality and is therefore not distinct. Additionally, we determined that the report of findings and steering committee participation would not have been provided without the R&D services and license agreement. Based on these assessments, we identified all services to be interrelated, and therefore concluded that the promises should be combined into a single performance obligation at the inception the arrangement.
As of September 30, 2020, the transaction price of the BMS Agreement includes the upfront payment, success fees, expense reimbursement, and milestones earned to date, which are allocated in their entirety to the single performance obligation. None of the future clinical or regulatory milestones have been included in the transaction price, as all milestone amounts were subject to the revenue constraint. As part of the constraint evaluation, we considered numerous factors, including the fact that the receipt of milestones is outside of our control and contingent upon success in future clinical trials and BMS’s efforts. Any consideration related to sales-based milestones, including royalties, will be recognized when the related sales occur as they were determined to relate predominantly to the intellectual property license granted to BMS and therefore have also been excluded from the transaction price. We will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.
Milestones achieved through September 30, 2020 under the BMS Agreement are as follows:
Anti-PD-1
(CC-90006)
Milestone EventAmountQuarter Recognized
Completion of first in vivo toxicology studies using GLPs
$0.5MQ2'16
Phase 1 clinical trial initiation$1.0MQ4'16
Revenue from future contingent milestone payments will be recognized when it is more likely than not that the revenue will not be reversed in future periods. Cash is generally received within 30 days of milestone achievement.
There was no revenue recognized under this agreement during the three and nine months ended September 30, 2020 and 2019.
10


5. Notes Payable
On December 24, 2014, we entered into a Loan and Security Agreement, as amended from time to time (the “Loan Agreement”), with a bank and a financial institution whereby we may borrow up to $15.0 million in three separate draws of $5.0 million each. The Term A Loans, for an aggregate of $5.0 million, were drawn on December 24, 2014 with a fixed interest rate of 6.97%.
In January 2016, the Loan Agreement was amended to combine Term B Loans and Term C Loans for a total of $10.0 million available for draw through December 31, 2016 and delay the beginning of our Term A Loans’ principal repayments from February 1, 2016 until February 1, 2017. The Term B Loans and Term C Loans became available for draw on July 1, 2016. In December 2016, we further amended the Loan Agreement to (i) allow for the Term B Loans and Term C Loans to be drawn on December 30, 2016, (ii) delay principal repayments of all Term Loans until February 1, 2018, and (iii) amend the interest rate for each Term Loan. The Term B Loans and the Term C Loans were drawn on December 30, 2016, and Term A, B and C Loans are now collectively referred to as the Term Loans. Principal repayments began in February 2018, and the Term Loans were paid in full, without penalty or premium, on January 1, 2020.
The costs incurred to issue the Term Loans were deferred and were included in the discount to the carrying value of the Term Loans in the accompanying balance sheet. The Term Loans also included a final payment fee of $0.8 million due at the earlier of prepayment or the maturity date of the Term Loans. The deferred costs and the final payment fee were amortized to interest expense over the expected term of the Term A Loans using the effective interest method.
6. Fair Value Measurements and Available for Sale Investments
Fair Value Measurements
Our financial instruments consist principally of cash, cash equivalents, restricted cash, short-term and long-term investments, receivables, accounts payable, and notes payable. Certain of our financial assets and liabilities have been recorded at fair value in the consolidated balance sheet in accordance with the accounting standards for fair value measurements.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Accounting guidance also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 - Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities 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 related assets or liabilities; and
Level 3 - Unobservable inputs that are supported by little or no market activities, therefore requiring an entity to develop its own assumptions.
11


Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table summarizes our assets and liabilities that require fair value measurements on a recurring basis and their respective input levels based on the fair value hierarchy:
Fair Value Measurements at End of Period Using:
(in thousands)
Fair
Value
Quoted Market
Prices for
Identical Assets
(Level 1)
Significant
Other Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
At September 30, 2020
Money market funds(1)
$204,678 $204,678 $ $ 
Mutual funds(1)
4,833 4,833   
U.S. Treasury securities(2)
107,159 107,159   
Certificates of deposit(2)
3,713  3,713  
Agency securities(2)
15,805  15,805  
Commercial and corporate obligations(2)
38,692  38,692  
At December 31, 2019
Money market funds(1)
$162,928 $162,928 $ $ 
Mutual funds(1)
7,619 7,619   
U.S. Treasury securities(2)
96,434 96,434   
Certificates of deposit(2)
5,428  5,428  
 Agency securities(2)
33,623  33,623  
Commercial and corporate obligations(2)
122,030  122,030  
(1)    Included in cash and cash equivalents or restricted cash in the accompanying consolidated balance sheets.
(2)    Included in short-term or long-term investments in the accompanying consolidated balance sheets depending on the respective maturity date.
The following methods and assumptions were used to estimate the fair value of our financial instruments for which it is practicable to estimate that value:
Marketable Securities. For fair values determined by Level 1 inputs, which utilize quoted prices in active markets for identical assets, the level of judgment required to estimate fair value is relatively low. For fair values determined by Level 2 inputs, which utilize quoted prices in less active markets for similar assets, the level of judgment required to estimate fair value is also considered relatively low.
Fair Value of Other Financial Instruments
The fair value of our other financial instruments estimated as of September 30, 2020 and December 31, 2019 are presented below:
September 30, 2020December 31, 2019
(in thousands)
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Notes payable$ $ $1,375 $1,365 
The following methods and assumptions were used to estimate the fair value of our notes payable:
Notes Payable—We use the income approach to value the aforementioned debt instrument. We use a present value calculation to discount principal and interest payments and the final maturity payment on these liabilities using a discounted cash flow model based on observable inputs. We discount these debt instruments based on what the current market rates would offer us as of the reporting date. Based on the assumptions used to value these liabilities at fair value, these debt instruments are categorized as Level 2 in the fair value hierarchy.
12


 The carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts payable, and accrued expenses approximate fair value due to their short-term nature.
Available for Sale Investments
We invest our excess cash in agency securities, debt instruments of financial institutions and corporations, commercial obligations, and U.S. Treasury securities, which we classify as available-for-sale investments. These investments are carried at fair value and are included in the tables above. The aggregate market value, cost basis, and gross unrealized gains and losses of available-for-sale investments by security type, classified in cash equivalents, short-term and long-term investments as of September 30, 2020 are as follows:
(in thousands)Amortized
Cost
 Gross
Unrealized Gains
 Gross
Unrealized Losses
 Total
Fair Value
Agency securities(1)
$15,790 $16 $(1)$15,805 
Certificates of deposit(2)
3,696 17  3,713 
Commercial and corporate obligations(3)
38,590 105 (3)38,692 
U.S. Treasury securities(4)
106,826 343 (10)107,159 
     Total available-for-sale investments$164,902 $481 $(14)$165,369 
(1)    Of our outstanding agency securities, $0.8 million have maturity dates of less than one year and $15.0 million have a maturity date of between one to two years as of September 30, 2020.
(2)    Of our outstanding certificates of deposit, $3.0 million have maturity dates of less than one year and $0.7 million have a maturity date of between one to two years as of September 30, 2020.
(3)    All of our outstanding commercial and corporate obligations have maturity dates of less than one year as of September 30, 2020.
(4)    Of our outstanding U.S. Treasury securities, $86.7 million have maturity dates of less than one year and $20.4 million have a maturity date of between one to two years as of September 30, 2020.
The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of September 30, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:
September 30, 2020
Less than 12 Months12 Months or GreaterTotal
(in thousands)
Fair Value
Gross
Unrealized Losses
Fair Value
Gross
Unrealized Losses
Fair Value
Gross
Unrealized Losses
Agency securities$9,998 $(1)$ $ $9,998 $(1)
Commercial and corporate obligations4,096 (3)  4,096 (3)
US Treasury Securities25,223 (10)  25,223 (10)
Total
$39,317 $(14)$ $ $39,317 $(14)
13


December 31, 2019
Less than 12 Months12 Months or GreaterTotal
(in thousands)
Fair Value
Gross
Unrealized Losses
Fair Value
Gross
Unrealized Losses
Fair Value
Gross
Unrealized Losses
Commercial and corporate obligations$5,986 $(4)$ $ $5,986 $(4)
US Treasury Securities17,608 (2)  17,608 (2)
Total
$23,594 $(6)$ $ $23,594 $(6)
7. Stockholders’ Equity
Common Stock
Of the 500,000,000 shares of common stock authorized, 27,346,228 shares were issued and outstanding as of September 30, 2020. Common stock reserved for future issuance upon the exercise, issuance or conversion of the respective equity instruments at September 30, 2020 are as follows:
 
Issued and Outstanding:
Stock options2,876,063 
Shares Reserved For:
2017 Equity Incentive Plan
3,040,085 
2017 Employee Stock Purchase Plan997,682 
Total6,913,830 
8. Equity Incentive Plans
2017 Equity Incentive Plan
On January 12, 2017, our board of directors and stockholders approved and adopted the 2017 Equity Incentive Plan (the “2017 Plan”). The 2017 Plan became effective upon the execution and delivery of the underwriting agreement for our initial public offering on January 26, 2017 and replaced our existing 2006 Equity Incentive Plan. Under the 2017 Plan, we may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then our employees, officers, directors or consultants. In addition, the number of shares of stock available for issuance under the 2017 Plan will be automatically increased each January 1, beginning on January 1, 2018, by 4% of the aggregate number of outstanding shares of our common stock as of the immediately preceding December 31 or such lesser number as determined by our board of directors. The 2017 Plan automatically increased by 1,090,203 shares as of January 1, 2020.
Employee Stock Purchase Plan
On January 12, 2017, our board of directors and stockholders approved and adopted the 2017 Employee Stock Purchase Plan or the ESPP. The ESPP became effective upon the execution and delivery of the underwriting agreement for our initial public offering on January 26, 2017. In addition, the number shares of stock available for issuance under the ESPP will be automatically increased each January 1, beginning on January 1, 2018, by 1% of the aggregate number of outstanding shares of our common stock as of the immediately preceding December 31 or such lesser number as determined by our board of directors. The ESPP automatically increased by 272,550 shares as of January 1, 2020.
Stock Options
Stock options granted to employees and non-employees generally vest over a four-year period while stock options granted to directors vest over a one year period. Each stock option award has a maximum term of 10 years from the date of grant, subject to earlier cancellation prior to vesting upon cessation of service to us. A summary of the activity related to stock option awards during the nine months ended September 30, 2020 is as follows:
14


 
Shares
Subject to
Options
Weighted-Average
Exercise
Price per
Share
Weighted-Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic
Value (in
thousands)
Outstanding at January 1, 20203,039,880 $29.40 
Granted461,425 $18.30 
Exercises(91,146)$4.06 
Forfeitures and cancellations(534,096)$37.54 
Outstanding at September 30, 20202,876,063 $26.91 7.47$6,747 
Exercisable at September 30, 20201,355,530 $27.48 5.64$6,365 
Stock-Based Compensation Expense
The estimated fair values of stock option awards granted to employees were determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions:
Nine Months Ended
September 30,
20202019
Risk-free interest rate0.5 %2.5 %
Expected volatility90.5 %68.4 %
Expected dividend yield % %
Expected term (in years)6.256.25
Weighted-average grant date fair value per share$13.88 $43.08 
We determine the appropriate risk-free interest rate, expected term for employee stock-based awards, contractual term for non-employee stock-based awards, and volatility assumptions. The weighted-average expected option term for employee and non-employee stock-based awards reflects the application of the simplified method, which defines the life as the average of the contractual term of the options and the weighted-average vesting period for all option tranches. Estimated volatility incorporates historical volatility of our stock price as well as similar entities whose share prices are publicly available. The risk-free interest rate is based upon U.S. Treasury securities with remaining terms similar to the expected or contractual term of the stock-based payment awards. The assumed dividend yield is based on our expectation of not paying dividends in the foreseeable future.
Total non-cash stock-based compensation expense for all stock awards that was recognized in the consolidated statements of operations and comprehensive loss is as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2020201920202019
Research and development$926 $1,580 $3,030 $4,469 
General and administrative1,879 1,564 5,491 5,185 
Total$2,805 $3,144 $8,521 $9,654 
 
At September 30, 2020, there was $24.8 million of unrecognized compensation cost related to unvested stock option awards, which is expected to be recognized over a remaining weighted-average vesting period of 3.03 years.
9. Commitments and Contingencies
Operating Leases
We have two non-cancellable office leases (the “Office Leases”), with remaining lease terms of approximately one year, each of which are classified as operating leases. Both leases expire in 2021. Only one of our leases has remaining renewal
15


options, which includes three options to renew for one additional year. The exercise of lease renewal options is at our sole discretion, which we currently do not anticipate exercising and as such were not recognized as part of our right-of-use (“ROU”) asset and lease liabilities. Our lease payments are fixed, and we recognize lease expense for these leases on a straight-line basis over the lease term. Operating lease ROU assets and lease liabilities are recorded based on the present value of the future minimum lease payments over the lease term at commencement date. As our leases do not provide an implicit rate, we used our incremental borrowing rate based on the information available at effective date of adoption in determining the present value of future payments. The weighted-average discount rate used was 8.59%.
Our balance sheet includes our ROU assets and lease liabilities as follows (in thousands):
LeasesClassification on the Balance SheetSeptember 30, 2020December 31, 2019
Operating ROU assetsOther long-term assets$824 $1,402 
Operating lease liabilitiesOther current liabilities851 871 
Operating lease liabilitiesOther long-term liabilities33 654 
The following costs are included in our consolidated statements of cash flow (in thousands):
Nine Months Ended
September 30,
LeasesClassification on the Cash Flow20202019
Operating lease costOperating$660 $660 
Cash paid for amounts included in the measurement of lease liabilitiesOperating722 698 
At September 30, 2020, the future minimum annual obligations for the Office Leases in excess of one year are as follows (in thousands):
Years Ending December 31,
2020$247 
2021676 
2022 
2023 
2024 
Thereafter 
Total minimum payments required923 
Less imputed interest(39)
Total$884 
On May 4, 2020, we entered into a lease agreement (the “Lease Agreement”) with Wateridge Property Owner, LP, with respect to facilities in the building at 10770 Wateridge Circle, San Diego, California 92121. Under the Lease Agreement, we agreed to lease approximately 45,000 square feet of space in the 10770 Wateridge Circle Building for a term of 124 months, beginning on March 1, 2021 (or on such later date as described in the Lease Agreement). The terms of the Lease Agreement provide us with an option to extend the term of the lease for an additional five years, as well as a one-time option to terminate the lease after seven years with the payment of a termination fee. The monthly base rent will be $4.20 per rentable square foot and will be increased by 3% annually. Under the Lease Agreement, we are also responsible for our pro rata share of real estate taxes, building insurance, maintenance, direct expenses, and utilities. As of September 30, 2020, we have recorded $0.2 million in prepaid rent and $0.3 million as a security deposit in accordance with the terms of the Lease Agreement.
16


Shareholder Lawsuit
On March 25, 2020, a putative securities class action was filed in the United States District Court for the Southern District of California naming the Company and certain of its current or former officers as defendants. The complaint purports to assert claims under Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Exchange Act Rule 10b-5, and Section 20(a) of the Exchange Act, on behalf of persons and entities who acquired our common stock between October 10, 2017 and November 7, 2019 (the “Class Period”). An amended complaint was filed on September 30, 2020 alleging that, during the Class Period, the defendants made material misrepresentations or omissions regarding our etokimab product candidate that artificially inflated our stock price. The plaintiff seeks, among other things, damages in an unspecified amount, as well as costs and expenses. We believe that the plaintiff’s allegations are without merit and intend to vigorously defend against the claims. On September 1, 2020, a related shareholder derivative complaint was filed based on allegations substantially similar to those in the class action, and asserting claims against current or former officers and directors for contribution under Sections 10(b) and 21D of the Exchange Act, breach of fiduciary duty, unjust enrichment and corporate waste. Because the Company is in the early stages of this litigation matter, we are unable to estimate a reasonably possible loss or range of loss, if any, that may result from these matters.
10. Subsequent Event
On October 23, 2020, we entered into a confidential settlement agreement (the “Settlement Agreement”) with GSK and TESARO, Inc., and TESARO Development, Ltd. (together, “Tesaro”) to resolve the claims previously raised in the notice of breach (the “Notice”) we delivered to GSK and Tesaro on August 20, 2020. Pursuant to the Settlement Agreement, we, GSK and Tesaro agreed to the terms of the Amendment described below and a mutual release of claims relating to the Notice, the Delaware Chancery Court action related to the Notice, the Collaboration Agreement and the obligations of the parties under the Collaboration Agreement. Pursuant to the terms of the Settlement Agreement, we and Tesaro agreed to enter into the Amendment that provided GSK with freedom to conduct development and commercialization of Zejula in combination with third-party molecules.
On October 23, 2020, we amended our GSK Agreement (the “Amendment”) with GSK and Tesaro. Under the Amendment, we allowed for GSK to conduct development and commercialization of Zejula and we are entitled to increased royalties upon sales of dostarlimab, an anti-PD-1 antagonist antibody under development by GSK for multiple oncological disorders, including endometrial cancer, non-small cell lung cancer, ovarian cancer, colorectal cancer and mismatch repair deficient solid tumors, equal to 8% of Net Sales (as defined in the GSK Agreement) below $1.0 billion and from 12% up to 25% of Net Sales above $1.0 billion. The Amendment also entitles us a one-time non-refundable cash payment of $60.0 million payable to us within 30 days of the date of the Amendment. Tesaro also agreed, starting January 1, 2021, to pay us a 1% royalty on all GSK and Tesaro Net Sales of Zejula TM, an oral, once-daily poly (ADP-ribose) polymerase (PARP) inhibitor, which has received US approval for the maintenance treatment of adult patients with advanced epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in a complete or partial response to first-line platinum-based chemotherapy, and is under development for additional cancer indications. The $1.1 billion in cash milestone payments due under the GSK Agreement remain unchanged. Additionally, under the terms of the Amendment, Tesaro and GSK have agreed to certain diligence commitments with respect to the future development of dostarlimab, and the parties have agreed to review such commitments under regular joint review committee (JRC) meetings going forward.
17


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and section 27A of the Securities Act of 1933, as amended (the “Securities Act”). The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” and “expect,” and similar expressions that convey uncertainty of future events or outcomes, are intended to identify forward-looking statements.
The forward-looking statements in this report include, among other things, statements about:
the success, cost, and timing of our product candidate development activities and ongoing and planned clinical trials;
our plans to develop and commercialize antibodies, including our lead product candidate: imsidolimab for patients with generalized pustular psoriasis (“GPP”) and palmoplantar pustulosis (“PPP”);
the impact of the coronavirus (“COVID-19”) pandemic on our business and the United States (“U.S.”) and global economies;
the likelihood that the clinical data generated in any study we performed, are performing, or plan to perform in a non-U.S. jurisdiction will be subsequently accepted by the U.S. Food and Drug Administration (“FDA”) and/or by foreign regulatory authorities outside of the jurisdiction where the study was being performed;
the timing and ability of our collaborators to develop and commercialize our partnered product candidates;
the potential benefits and advantages of our product candidates and approaches versus those of our competitors;
our ability to execute on our strategy, including advancing our lead product candidates, identifying emerging opportunities in key therapeutic areas, continuing to expand our wholly-owned pipeline, and retaining rights to strategic products in key commercial markets;
our ability to obtain funding for our operations, including funding necessary to complete further development and commercialization of our product candidates;
the timing of and our ability to obtain and maintain regulatory approvals for imsidolimab and our other product candidates;
our ability to develop our product candidates;
the rate and degree of market acceptance and clinical utility of any approved product candidates;
the size and growth potential of the markets for any approved product candidates, and our ability to serve those markets;
our commercialization, marketing, and manufacturing capabilities and strategy;
our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates;
regulatory developments in the U.S., the United Kingdom, Australia, and other foreign countries;
the success of competing therapies that are or may become available;
our ability to attract and retain key scientific or management personnel;
our use of the net proceeds from our public offerings;
our ability to identify additional products or product candidates with significant commercial potential that are consistent with our commercial objectives; and
our estimates regarding expenses, future revenue, capital requirements, and needs for additional financing.
These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in Part II, Item 1A, “Risk Factors,” and elsewhere in this Quarterly Report. Moreover, we operate in a competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all
18


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.
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 to conform these statements to actual results or to changes in our expectations, except as required by law.
You should read this Quarterly Report with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.
Unless the context indicates otherwise, as used in this Quarterly Report, the terms “AnaptysBio,” “company,” “we,” “us” and “our” refer to AnaptysBio, Inc., a Delaware corporation, and its subsidiaries taken as a whole, unless otherwise noted. AnaptysBio is our common law trademark. This Quarterly Report contains additional trade names, trademarks, and service marks of other companies, which are the property of their respective owners. We do not intend our use or display of other companies’ trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.
19


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 with our unaudited consolidated financial statements and related notes for the nine months ended September 30, 2020, included in Part I, Item 1 of this report and with our audited consolidated financial statements and related notes thereto for the year ended December 31, 2019 included in the Company’s Form 10-K. This discussion and other sections of this Quarterly Report contain forward-looking statements that involve risks and uncertainties, such as our plans, objectives, expectations, intentions, and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section entitled “Risk Factors” included in Part II, Item 1A of this Quarterly Report. You should also carefully read “Special Note Regarding Forward-Looking Statements.”
Overview
We are a clinical stage biotechnology company developing first-in-class immunology therapeutic product candidates focused on emerging immune control mechanisms applicable to inflammation and immuno-oncology indications. We develop our product candidates using our proprietary antibody discovery technology platform, which is based upon a breakthrough understanding of the natural process of antibody generation, known as somatic hypermutation (“SHM”), and replicates this natural process of antibody generation in vitro. Our strategy is to advance the development of our proprietary product candidates, and where applicable, establish partnerships with leading biopharmaceutical companies where we retain certain development and commercialization rights. Our most advanced wholly-owned antibody programs, imsidolimab, etokimab, ANB030 and ANB032, are designed to modulate therapeutic targets that are genetically associated with human inflammatory disorders.
Imsidolimab, our IL-36R antibody previously referred to as ANB019, inhibits the interleukin-36 receptor (“IL-36R”), and is being developed for the treatment of rare inflammatory diseases, including generalized pustular psoriasis (“GPP”) and palmoplantar pustulosis (“PPP”). We completed a Phase 1 clinical trial in healthy volunteers, which was presented at the European Academy of Allergy and Clinical Immunology in 2018, where imsidolimab was well-tolerated by all subjects, no dose-limiting toxicities were observed, and no serious adverse events were reported among any subjects in the trial. In July 2020, the U.S. Food and Drug Administration (the “FDA”) granted Orphan Drug Designation for imsidolimab for the treatment of patients with GPP. We are conducting an open-label, multi-dose, single-arm Phase 2 clinical trial of imsidolimab in 8 GPP patients, also referred to as the GALLOP trial, where we announced positive topline data in October 2020. Six of 8 (75%) patients treated with imsidolimab monotherapy achieved the primary endpoint of improvement in the clinical global impression scale (“CGI”) on Day 29. Two of 8 (25%) patients were considered to have not met the primary endpoint because they dropped out of the trial prior to Day 29. The modified Japanese Dermatology Association Severity Index (“mJDA-SI”) score, which incorporates both dermatological and systemic aspects of GPP, decreased on average by 29% on Day 8 and 54% on Day 29. Erythema with skin pustules, which clinically defines GPP, decreased by 60% on Day 8 and 94% on Day 29. Serum c-reactive protein (“CRP”), which is an indicator of systemic inflammation, was normal (less than 5 mg/L) for 5 of the 6 patients achieving the primary endpoint on Day 29. Genotypic testing indicated homozygous wild-type IL-36RN, CARD14 and AP1S3 alleles for all 8 patients. We believe this suggests that imsidolimab may be broadly applicable to pustular diseases irrespective of genetic drivers. Anti-drug antibodies were not detected as of Day 29 in any patient. Imsidolimab was generally well-tolerated and most treatment-emergent adverse events were mild to moderate in severity and resolved without sequelae. No infusion or injection site reactions were observed. One patient dropped out of the trial due to a diagnosis of Staphylococcal aureus bacteremia in the first week, which was a serious adverse event deemed to be possibly drug-related. Because the patient was symptomatic prior to dosing and had a prior medical history of bacteremia, a common comorbidity of GPP, we do not believe this event is likely attributable to imsidolimab. Another patient dropped out of the study on Day 22 due to investigator reported inadequate efficacy. One patient contracted COVID-19 during the course of the trial, which was mild, unrelated to imsidolimab, and did not lead to study discontinuation. In September 2019, we announced from the first two patients to have completed the Day 113 treatment period under this trial, which indicated sustained efficacy in these two patients through Day 113. We plan to report full data from the GALLOP trial at a medical conference in 2021. We anticipate an FDA end-of-Phase 2 meeting during the fourth quarter of 2020 to outline the registration path of imsidolimab for the treatment of GPP.
We are also conducting a randomized, double-blind, placebo-controlled approximately 50-patient multi-dose trial of imsidolimab in PPP, also referred to as the POPLAR trial, where enrollment has been completed and the trial was over-enrolled, and top-line data are anticipated in the first quarter of 2021. We also plan to initiate a global registry of GPP and PPP
20


patients, also referred to as the RADIANCE study, starting in the first quarter of 2021, which we anticipate will assist in enrollment of future clinical trials.
In addition to GPP and PPP, we anticipate initiation of Phase 2 clinical trials of imsidolimab in two additional indications: (1) skin toxicities associated with treatments with inhibitors of epidermal growth factor (“EGFRi”) and MAPK/ERK kinase (“MEKi”) and (2) ichthyosis Treatment of solid tumors with EGFRi and/or MEKI is frequently limited by the occurrence of skin toxicities, including acneiform or papulopustular rash. Recent translational data has suggested that these skin toxicities are mediated by excess IL-36 signaling, leading to IL-8-mediated cutaneous neutrophilia and acneiform rash. Based on existing claims data, approximately 60,000 patients are prescribed EGFRi and/or MEKi treatments annually, and the vast majority of these patients experience skin toxicity, which in some cases leads to dose reduction and/or discontinuation of treatment. Current standard-of-care treatments are generally ineffective in patients with the most severe grades of EGFRi and/or MEKi mediated skin toxicity. During the fourth quarter of 2020, we anticipate initiating a Phase 2 clinical trial of imsidolimab, in combination with EGFRi inhibitors, for the treatment of patients diagnosed with a certain baseline severity of skin toxicity, to assess the efficacy of imsidolimab in the treatment of this indication.
Ichthyosis is a family of rare, inherited, dermatological disorders characterized by dry, scaling and thickened skin. Recent human translational studies have suggested that the underlying skin inflammation responsible for ichthyosis is mediated by dysregulated IL-36 signaling, and we believe that imsidolimab treatment may be efficacious in treatment of this condition. Approximately 6,000 patients in the United States are affected with moderate-to-severe levels of ichthyosis and no approved therapies are available for this disease. We anticipate initiating a Phase 2 clinical trial of imsidolimab in patients with certain baseline severity of ichthyosis, during the fourth quarter of 2020.
Etokimab, our anti-IL-33 antibody previously referred to as ANB020, inhibits the activity of the interleukin-33 cytokine (“IL-33”), which we believe may be applicable to the treatment of respiratory disorders. We are conducting a randomized, placebo-controlled Phase 2 clinical trial of etokimab in approximately 100 adult patients with CRSwNP (a debilitating atopic disorder associated with elevated IL-33 pathway signaling), also referred to as the ECLIPSE trial. We recently reported top-line data from a week 8 interim analysis of the ECLIPSE trial. Patients dosed with etokimab every four (q4w) or eight weeks (q8w) failed to achieve statistically significant improvement in their bilateral nasal polyps score (“NPS”), an endoscopic measure of nasal occlusion, and in their sino-nasal outcome test (“SNOT-22”), a patient reported quality-of-life assessment, versus placebo at the week 8 time point. Both endpoints demonstrated statistically significant improvement over baseline levels of NPS and SNOT-22. Blood eosinophil levels, which are a biomarker of etokimab’s mechanism, demonstrated statistically significant reduction relative to baseline in both etokimab treatment arms. We intend to determine next steps for the etokimab program after reviewing week 16 primary endpoint data by year-end 2020.
Our third wholly-owned program, ANB030, is an anti-PD-1 agonist antibody program designed to augment PD-1 signaling through ANB030 treatment to suppress T-cell driven human inflammatory diseases. Genetic mutations in the PD-1 pathway are known to be associated with increased susceptibility to human inflammatory diseases, and hence we believe that ANB030 is applicable to diseases where PD-1 checkpoint receptor function may be under-represented. We presented preclinical data for ANB030 at the Festival of Biologics Annual Meeting in March 2020. We initiated a Phase 1 healthy volunteer clinical trial in the first half of 2020 subsequent to clearance of our Investigational New Drug Application (“IND”) for ANB030 by the FDA, which is designed to assess the safety, pharmacokinetics and pharmacodynamics of ANB030 in single and multiple ascending dose cohorts. We anticipate top-line data from this Phase 1 clinical trial in mid-2021.
Our fourth wholly-owned program is an anti-BTLA modulator antibody, known as ANB032, which is broadly applicable to human inflammatory diseases associated with lymphoid and myeloid immune cell dysregulation. Mutations in the BTLA signaling pathway are associated with human inflammatory disease, and we believe ANB032 silences pro-inflammatory signaling by modulating BTLA binding to HVEM. We anticipate filing an IND for ANB032 during the fourth quarter of 2020. We presented preclinical data regarding ANB032 at the 2020 Federation of Clinical Immunology Societies (FOCIS) Virtual Annual Meeting in October 2020.
In addition to our wholly-owned antibody programs, multiple Company-developed antibody programs have been advanced to preclinical and clinical milestones under our collaborations. We have received to date approximately $105.0 million in cash receipts from collaborations. Our collaborations include an immuno-oncology-focused collaboration with GSK, Inc. (“GSK”) and an inflammation-focused collaboration with BMS Corporation. A Biologics License Application (“BLA”) for our most advanced partnered program, which is an anti-PD-1 antagonist antibody called dostarlimab, was submitted by GSK
21


and accepted by the FDA for the treatment of advanced or recurrent deficient mismatch repair endometrial cancer (“dMMREC”). In addition, the European Medicines Agency (“EMA”) recently accepted GSK’s Marketing Authorization Application (“MAA”) for dostarlimab in the EU for dMMREC. We received a $10.0 million cash milestone payment upon the FDA acceptance of GSK’s NDA and anticipate an additional $20.0 million cash milestone payment upon first FDA approval of dostarlimab during the fourth quarter of 2020. This FDA approval is dependent on a pre-approval inspection of the dostarlimab manufacturing site by the FDA and is therefore contingent on easing of the coronavirus (“COVID-19”) pandemic travel restrictions. We also received a $5.0 million milestone payment for the EMA acceptance of GSK’s MAA and anticipate an additional $10.0 million cash milestone payment upon EMA approval. In addition, GSK anticipates submitting a regulatory filing for potential approval of dostarlimab in a second indication, the treatment of pan-deficient mismatch repair tumors, during the first half of 2021.We anticipate receiving additional milestones from GSK, of equal magnitude to the milestone payments outlined above, upon acceptance and approval of BLA and EMA filings of dostarlimab for this second indication. Depending upon the timing of the aforementioned dostarlimab regulatory acceptance and approval milestones, we anticipate a total of $75.0 million in such milestone payments over the upcoming 18 months. An additional $165.0 million in sales milestones is anticipated upon achievement of certain dostarlimab annual sales revenues. Dostarlimab is also under development at GSK for a number of oncological indications, including endometrial cancer, non-small cell lung cancer, ovarian cancer, colorectal cancer and mismatch repair deficient solid tumors. In October 2020, we amended our GSK collaboration to increase royalties on global net sales of dostarlimab to 8-25%, add a royalty to GSK’s global net sales of ZejulaTM and a one-time cash payment of $60.0 million. For more information about these collaborations, see Part I-Note 4, Collaborative Research and Development Agreements, and Part I-Note 10, Subsequent Event above.
The following table summarizes certain key information about our wholly-owned and partnered product candidates:
https://cdn.kscope.io/3e4e6803572e70aeaddde1bec9f046e0-anab-20200930_g1.jpg