anab-20230331
000137005312/312023Q1FALSEhttp://www.anaptysbio.com/20230331#CollaborationRevenueMemberhttp://www.anaptysbio.com/20230331#CollaborationRevenueMemberP1YP1YP1YP1YP1YP1YP1YP1Y00013700532023-01-012023-03-3100013700532023-05-09xbrli:shares00013700532023-03-31iso4217:USD00013700532022-12-31iso4217:USDxbrli:shares00013700532022-01-012022-03-310001370053us-gaap:CommonStockMember2022-12-310001370053us-gaap:AdditionalPaidInCapitalMember2022-12-310001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001370053us-gaap:RetainedEarningsMember2022-12-310001370053us-gaap:CommonStockMember2023-01-012023-03-310001370053us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001370053us-gaap:RetainedEarningsMember2023-01-012023-03-310001370053us-gaap:CommonStockMember2023-03-310001370053us-gaap:AdditionalPaidInCapitalMember2023-03-310001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001370053us-gaap:RetainedEarningsMember2023-03-310001370053us-gaap:CommonStockMember2021-12-310001370053us-gaap:AdditionalPaidInCapitalMember2021-12-310001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001370053us-gaap:RetainedEarningsMember2021-12-3100013700532021-12-310001370053us-gaap:CommonStockMember2022-01-012022-03-310001370053us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001370053us-gaap:RetainedEarningsMember2022-01-012022-03-310001370053us-gaap:CommonStockMember2022-03-310001370053us-gaap:AdditionalPaidInCapitalMember2022-03-310001370053us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001370053us-gaap:RetainedEarningsMember2022-03-3100013700532022-03-31anab:segment0001370053us-gaap:EmployeeStockOptionMember2023-01-012023-03-310001370053us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001370053us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001370053us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001370053anab:LaboratoryEquipmentMember2023-03-310001370053anab:LaboratoryEquipmentMember2022-12-310001370053us-gaap:OfficeEquipmentMember2023-03-310001370053us-gaap:OfficeEquipmentMember2022-12-310001370053us-gaap:LeaseholdImprovementsMember2023-03-310001370053us-gaap:LeaseholdImprovementsMember2022-12-310001370053us-gaap:CollaborativeArrangementMemberanab:GlaxoSmithKlineMember2014-03-012014-03-310001370053us-gaap:CollaborativeArrangementMemberanab:GlaxoSmithKlineMember2014-03-31anab:target0001370053us-gaap:CollaborativeArrangementMemberanab:GlaxoSmithKlineMember2014-11-012014-11-300001370053us-gaap:CollaborativeArrangementMemberanab:GlaxoSmithKlineMember2014-11-300001370053srt:MinimumMemberus-gaap:CollaborativeArrangementMemberanab:GlaxoSmithKlineMember2014-11-012014-11-30xbrli:pure0001370053srt:MaximumMemberus-gaap:CollaborativeArrangementMemberanab:GlaxoSmithKlineMember2014-11-012014-11-300001370053anab:RoyaltyAgreementUpTo10BillionMemberanab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:GlaxoSmithKlineMember2020-10-232020-10-230001370053srt:MinimumMemberanab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:RoyaltyAgreementAbove10BillionMemberanab:GlaxoSmithKlineMember2020-10-232020-10-230001370053srt:MaximumMemberanab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:RoyaltyAgreementAbove10BillionMemberanab:GlaxoSmithKlineMember2020-10-232020-10-230001370053anab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:CollaborationAndExclusiveLicenseAgreementMemberanab:GlaxoSmithKlineMember2020-10-012020-12-310001370053anab:CollaborationAndExclusiveLicenseAgreementMemberanab:GlaxoSmithKlineMemberanab:AnaptysBioGeneratedAntiPD1AntagonistAntibodyCC90006Member2023-01-012023-03-310001370053anab:ZejulaAndAnaptysBioGeneratedJEMPERLIMemberanab:GlaxoSmithKlineMemberanab:RoyaltyAgreementMember2023-01-012023-03-310001370053anab:JEMPERLIRoyaltyMonetizationAgreementMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:ZejulaRoyaltyMonetizationAgreementMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:ZejulaAndAnaptysBioGeneratedJEMPERLIMemberanab:GlaxoSmithKlineMemberanab:RoyaltyAgreementMember2022-01-012022-03-310001370053anab:JEMPERLIRoyaltyMonetizationAgreementMemberanab:GlaxoSmithKlineMember2022-01-012022-03-310001370053anab:ZejulaRoyaltyMonetizationAgreementMemberanab:GlaxoSmithKlineMember2022-01-012022-03-310001370053us-gaap:CollaborativeArrangementMemberanab:GlaxoSmithKlineMember2023-01-012023-03-31anab:milestone0001370053us-gaap:CollaborativeArrangementMemberanab:GlaxoSmithKlineMember2022-01-012022-03-310001370053anab:InVivoToxicologyStudiesMemberanab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:GlaxoSmithKlineMember2015-04-012015-06-300001370053anab:InVivoToxicologyStudiesMemberanab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMember2015-10-012015-12-310001370053anab:InVivoToxicologyStudiesMemberanab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:GlaxoSmithKlineMember2016-07-012016-09-300001370053anab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:ClearanceOfInvestigationalNewDrugFromFDAMemberanab:GlaxoSmithKlineMember2016-01-012016-03-310001370053anab:ClearanceOfInvestigationalNewDrugFromFDAMemberanab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMember2016-04-012016-06-300001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:ClearanceOfInvestigationalNewDrugFromFDAMemberanab:GlaxoSmithKlineMember2017-04-012017-06-300001370053anab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:Phase2ClinicalTrialInitiationMemberanab:GlaxoSmithKlineMember2017-04-012017-06-300001370053anab:Phase2ClinicalTrialInitiationMemberanab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMember2017-10-012017-12-310001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:Phase2ClinicalTrialInitiationMemberanab:GlaxoSmithKlineMember2019-10-012019-12-310001370053anab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:GlaxoSmithKlineMemberanab:Phase3ClinicalTrialInitiationFirstIndicationMember2018-07-012018-09-300001370053anab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMemberanab:Phase3ClinicalTrialInitiationFirstIndicationMember2022-10-012022-12-310001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:GlaxoSmithKlineMemberanab:Phase3ClinicalTrialInitiationFirstIndicationMember2023-01-012023-03-310001370053anab:Phase3ClinicalTrialInitiationSecondIndicationMemberanab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:GlaxoSmithKlineMember2019-04-012019-06-300001370053anab:Phase3ClinicalTrialInitiationSecondIndicationMemberanab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:Phase3ClinicalTrialInitiationSecondIndicationMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:FilingOfBiologicsLicenseApplicationFirstIndicationMemberanab:GlaxoSmithKlineMember2020-01-012020-03-310001370053anab:FilingOfBiologicsLicenseApplicationFirstIndicationMemberanab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:FilingOfBiologicsLicenseApplicationFirstIndicationMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:FilingOfMMAFirstIndicationMemberanab:GlaxoSmithKlineMember2020-01-012020-03-310001370053anab:FilingOfMMAFirstIndicationMemberanab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:FilingOfMMAFirstIndicationMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:FilingOfBiologicsLicenseApplicationSecondIndicationMemberanab:GlaxoSmithKlineMember2021-01-012021-03-310001370053anab:FilingOfBiologicsLicenseApplicationSecondIndicationMemberanab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:FilingOfBiologicsLicenseApplicationSecondIndicationMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:FirstBiologicsLicenseApplicationApprovalDMMRECMemberanab:GlaxoSmithKlineMember2021-04-012021-06-300001370053anab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:FirstBiologicsLicenseApplicationApprovalDMMRECMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:FirstBiologicsLicenseApplicationApprovalDMMRECMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:FirstMarketingAuthorizationApplicationApprovalFirstIndicationMemberanab:GlaxoSmithKlineMember2021-04-012021-06-300001370053anab:FirstMarketingAuthorizationApplicationApprovalFirstIndicationMemberanab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:FirstMarketingAuthorizationApplicationApprovalFirstIndicationMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:FirstBiologicsLicenseApplicationApprovalSecondIndicationMemberanab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:GlaxoSmithKlineMember2021-07-012021-09-300001370053anab:FirstBiologicsLicenseApplicationApprovalSecondIndicationMemberanab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:FirstBiologicsLicenseApplicationApprovalSecondIndicationMemberanab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:FilingOfMMASecondIndicationMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:FilingOfMMASecondIndicationMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:FilingOfMMASecondIndicationMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:FirstMarketingAuthorizationApplicationApprovalSecondIndicationMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:FirstMarketingAuthorizationApplicationApprovalSecondIndicationMemberanab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:FirstMarketingAuthorizationApplicationApprovalSecondIndicationMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:FirstCommercialSalesMilestoneMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:FirstCommercialSalesMilestoneMemberanab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:FirstCommercialSalesMilestoneMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:SecondCommercialSalesMilestoneMemberanab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:SecondCommercialSalesMilestoneMemberanab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:SecondCommercialSalesMilestoneMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:ThirdCommercialSalesMilestoneMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:ThirdCommercialSalesMilestoneMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:ThirdCommercialSalesMilestoneMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:FourthCommercialSalesMilestoneMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:FourthCommercialSalesMilestoneMemberanab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:FourthCommercialSalesMilestoneMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:CumulativeMilestonesRecognizedMemberanab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:CumulativeMilestonesRecognizedMemberanab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:CumulativeMilestonesRecognizedMemberanab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:MilestonesYetToBeRecognizedMemberanab:AnaptysBioGeneratedAntiPD1JEMPERLIDostarlimabMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:MilestonesYetToBeRecognizedMemberanab:AnaptysBioGeneratedAntiTIM3GSK4069889ACobolimabMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:AnaptysBioGeneratedAntiLAG3GSK40974386Memberanab:MilestonesYetToBeRecognizedMemberanab:GlaxoSmithKlineMember2023-01-012023-03-310001370053anab:JEMPERLIRoyaltyMonetizationAgreementMemberanab:SagardHealthcareRoyaltyPartnersLPMember2021-10-012021-10-310001370053anab:JEMPERLIRoyaltyMonetizationAgreementMemberanab:SagardHealthcareRoyaltyPartnersLPMember2021-10-310001370053anab:JEMPERLIRoyaltyMonetizationAgreementMemberanab:SagardHealthcareRoyaltyPartnersLPMemberanab:FirstInstallmentMember2021-10-012021-10-310001370053anab:SecondInstallmentMemberanab:JEMPERLIRoyaltyMonetizationAgreementMemberanab:SagardHealthcareRoyaltyPartnersLPMember2021-10-012021-10-310001370053anab:JEMPERLIRoyaltyMonetizationAgreementMemberanab:SagardHealthcareRoyaltyPartnersLPMemberanab:ThirdInstallmentMember2021-10-012021-10-310001370053anab:JEMPERLIRoyaltyMonetizationAgreementMemberanab:SagardHealthcareRoyaltyPartnersLPMember2023-01-012023-03-310001370053anab:JEMPERLIRoyaltyMonetizationAgreementMember2021-10-012021-10-310001370053anab:JEMPERLIRoyaltyMonetizationAgreementMember2023-03-310001370053anab:JEMPERLIRoyaltyMonetizationAgreementMember2023-01-012023-03-310001370053anab:JEMPERLIRoyaltyMonetizationAgreementMember2022-01-012022-03-310001370053anab:JEMPERLIRoyaltyMonetizationAgreementMember2022-12-310001370053anab:ZejulaRoyaltyMonetizationAgreementMemberanab:GlaxoSmithKlineMember2021-01-010001370053anab:ZejulaRoyaltyMonetizationAgreementMemberanab:GlaxoSmithKlineMember2023-03-310001370053anab:DRIHealthcareTrustMemberanab:ZejulaRoyaltyMonetizationAgreementMember2022-09-012022-09-300001370053anab:DRIHealthcareTrustMemberanab:ZejulaRoyaltyMonetizationAgreementMember2022-09-300001370053anab:ZejulaRoyaltyMonetizationAgreementMember2022-09-012022-09-300001370053anab:ZejulaRoyaltyMonetizationAgreementMember2023-03-310001370053anab:ZejulaRoyaltyMonetizationAgreementMember2022-12-310001370053anab:ZejulaRoyaltyMonetizationAgreementMember2023-01-012023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMember2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMember2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMemberus-gaap:FairValueInputsLevel1Member2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMemberus-gaap:FairValueInputsLevel2Member2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MutualFundMember2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMember2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMember2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel1Member2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel2Member2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:CertificatesOfDepositMember2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberanab:CommercialAndCorporateObligationsMember2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberanab:CommercialAndCorporateObligationsMemberus-gaap:FairValueInputsLevel1Member2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberanab:CommercialAndCorporateObligationsMemberus-gaap:FairValueInputsLevel2Member2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberanab:CommercialAndCorporateObligationsMember2023-03-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMember2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMember2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMemberus-gaap:FairValueInputsLevel1Member2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MutualFundMemberus-gaap:FairValueInputsLevel2Member2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MutualFundMember2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMember2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMember2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel1Member2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel2Member2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:CertificatesOfDepositMember2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberanab:CommercialAndCorporateObligationsMember2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberanab:CommercialAndCorporateObligationsMemberus-gaap:FairValueInputsLevel1Member2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberanab:CommercialAndCorporateObligationsMemberus-gaap:FairValueInputsLevel2Member2022-12-310001370053us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberanab:CommercialAndCorporateObligationsMember2022-12-310001370053us-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-03-310001370053us-gaap:CertificatesOfDepositMember2023-03-310001370053anab:CommercialAndCorporateObligationsMember2023-03-310001370053us-gaap:USTreasurySecuritiesMember2023-03-310001370053srt:MinimumMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-01-012023-03-310001370053srt:MaximumMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-01-012023-03-310001370053srt:MinimumMemberus-gaap:CertificatesOfDepositMember2023-01-012023-03-310001370053us-gaap:CertificatesOfDepositMembersrt:MaximumMember2023-01-012023-03-310001370053srt:MinimumMemberanab:CommercialAndCorporateObligationsMember2023-01-012023-03-310001370053srt:MaximumMemberanab:CommercialAndCorporateObligationsMember2023-01-012023-03-310001370053srt:MinimumMemberus-gaap:USTreasurySecuritiesMember2023-01-012023-03-310001370053srt:MaximumMemberus-gaap:USTreasurySecuritiesMember2023-01-012023-03-310001370053us-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310001370053us-gaap:CertificatesOfDepositMember2022-12-310001370053anab:CommercialAndCorporateObligationsMember2022-12-310001370053us-gaap:USTreasurySecuritiesMember2022-12-310001370053srt:MinimumMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-01-012022-12-310001370053srt:MaximumMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-01-012022-12-310001370053srt:MinimumMemberus-gaap:CertificatesOfDepositMember2022-01-012022-12-310001370053us-gaap:CertificatesOfDepositMembersrt:MaximumMember2022-01-012022-12-310001370053srt:MinimumMemberanab:CommercialAndCorporateObligationsMember2022-01-012022-12-310001370053srt:MaximumMemberanab:CommercialAndCorporateObligationsMember2022-01-012022-12-310001370053srt:MinimumMemberus-gaap:USTreasurySecuritiesMember2022-01-012022-12-310001370053srt:MaximumMemberus-gaap:USTreasurySecuritiesMember2022-01-012022-12-3100013700532023-01-310001370053anab:OpenMarketSalesAgreementMember2022-11-300001370053anab:OpenMarketSalesAgreementMember2023-01-012023-03-310001370053anab:EquityIncentivePlan2017Member2018-01-012018-01-010001370053anab:EquityIncentivePlan2017Member2023-01-012023-01-310001370053anab:EquityIncentivePlan2017Member2023-03-310001370053us-gaap:EmployeeStockMemberanab:EmployeeStockPurchasePlan2017Member2018-01-012018-01-010001370053us-gaap:EmployeeStockMemberanab:EmployeeStockPurchasePlan2017Member2023-01-012023-01-310001370053us-gaap:EmployeeStockMemberanab:EmployeeStockPurchasePlan2017Member2023-03-310001370053anab:EmployeeStockPurchasePlan2017Member2023-03-310001370053us-gaap:EmployeeStockOptionMember2023-01-012023-03-310001370053us-gaap:EmployeeStockOptionMembersrt:DirectorMember2023-01-012023-03-3100013700532022-01-012022-12-310001370053us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001370053us-gaap:RestrictedStockUnitsRSUMember2022-12-310001370053us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-12-310001370053us-gaap:RestrictedStockUnitsRSUMember2023-03-310001370053us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001370053us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-03-310001370053us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-03-310001370053us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-03-310001370053us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-03-310001370053anab:FormerChiefExecutiveOfficerMembersrt:ChiefExecutiveOfficerMember2022-03-202022-03-200001370053srt:ChiefExecutiveOfficerMemberus-gaap:RestrictedStockUnitsRSUMemberanab:InterimPresidentAndChiefExecutiveOfficerMember2022-03-212022-03-210001370053srt:ChiefExecutiveOfficerMemberus-gaap:RestrictedStockUnitsRSUMemberanab:InterimPresidentAndChiefExecutiveOfficerMember2023-01-012023-03-310001370053srt:ChiefExecutiveOfficerMemberus-gaap:RestrictedStockUnitsRSUMemberanab:InterimPresidentAndChiefExecutiveOfficerMember2022-01-012022-03-310001370053us-gaap:EmployeeStockOptionMember2023-03-310001370053us-gaap:EmployeeStockMember2023-03-310001370053us-gaap:EmployeeStockMember2023-01-012023-03-310001370053anab:A10770WateridgeCircleSanDiegoCalifornia92121Member2020-05-04utr:sqft0001370053anab:A10770WateridgeCircleSanDiegoCalifornia92121Member2020-05-042020-05-04iso4217:USDutr:sqft0001370053anab:A10770WateridgeCircleSanDiegoCalifornia92121Member2021-04-050001370053anab:A10770WateridgeCircleSanDiegoCalifornia92121Member2023-03-310001370053us-gaap:SubsequentEventMember2023-04-012023-05-05

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 March 31, 2023
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)
10770 Wateridge Circle, Suite 210
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 May 9, 2023, there were 26,487,240 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)
(unaudited)
March 31, 2023December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents$94,562 $71,308 
Receivables from collaborative partners1,523 1,419 
Short-term investments336,589 369,933 
Prepaid expenses and other current assets4,480 4,545 
Total current assets437,154 447,205 
Property and equipment, net1,982 2,089 
Operating lease right-of-use assets17,471 17,898 
Long-term investments94,929 142,935 
Other long-term assets256 256 
Total assets$551,792 $610,383 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$3,168 $2,784 
Accrued expenses30,956 21,633 
Current portion of operating lease liability1,671 1,637 
Total current liabilities35,795 26,054 
Liability related to sale of future royalties307,516 304,413 
Operating lease liability, net of current portion17,388 17,813 
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000 shares authorized and no shares, issued or outstanding at March 31, 2023 and December 31, 2022, respectively
  
Common stock, $0.001 par value, 500,000 shares authorized, 27,018 shares and 28,513 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively
27 29 
Additional paid in capital689,065 717,797 
Accumulated other comprehensive loss(3,267)(5,246)
Accumulated deficit(494,732)(450,477)
Total stockholders’ equity191,093 262,103 
Total liabilities and stockholders’ equity $551,792 $610,383 
 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
March 31,
20232022
Collaboration revenue$1,374 $970 
Operating expenses:
Research and development34,957 22,516 
General and administrative10,818 10,203 
Total operating expenses45,775 32,719 
Loss from operations(44,401)(31,749)
Other income (expense), net:
Interest income4,486 342 
Non-cash interest expense for the sale of future royalties(4,336)(4,854)
Other (expense) income, net(4)6 
Total other income (expense), net146 (4,506)
Net loss(44,255)(36,255)
Unrealized gain (loss) on available for sale securities1,979 (2,012)
Comprehensive loss$(42,276)$(38,267)
Net loss per common share:
      Basic and diluted$(1.58)$(1.31)
Weighted-average number of shares outstanding:
      Basic and diluted27,953 27,713 
 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 LossAccumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance, December 31, 202228,513 $29 $717,797 $(5,246)$(450,477)$262,103 
Issuance of common stock from exercises of options and employee stock purchase plan55 — 1,222 — — 1,222 
Issuance of common stock upon vesting of restricted stock units39 — — — — — 
Repurchases and retirements of common stock(1,589)(2)(38,814)— — (38,816)
Stock-based compensation— — 8,860 — — 8,860 
   Comprehensive gain, net— — — 1,979 — 1,979 
 Net loss— — — — (44,255)(44,255)
Balance, March 31, 202327,018 $27 $689,065 $(3,267)$(494,732)$191,093 
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 LossAccumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance, December 31, 202127,647 $28 $678,575 $(422)$(321,753)$356,428 
Issuance of common stock from exercises of options and employee stock purchase plan531 — 4,844 — — 4,844 
Stock-based compensation— — 7,742 — — 7,742 
  Comprehensive loss, net— — — (2,012)— (2,012)
Net loss— — — — (36,255)(36,255)
Balance, March 31, 202228,178 $28 $691,161 $(2,434)$(358,008)$330,747 
See accompanying notes to unaudited consolidated financial statements.
4

AnaptysBio, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
March 31,
20232022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(44,255)$(36,255)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization166 162 
Stock-based compensation8,860 7,742 
Accretion/amortization of investments, net(2,191)161 
Amortization of right-of-use assets – operating
427 411 
Non-cash interest expense4,336 4,854 
Changes in operating assets and liabilities:
Receivables from collaborative partners(104)(45)
Prepaid expenses and other assets51 (1,221)
Accounts payable and other liabilities8,533 3,536 
Operating lease liabilities(391)(359)
Net cash used in operating activities(24,568)(21,014)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments(48,555)(322,477)
Sales and maturities of investments134,126 9,620 
Purchases of property and equipment(175)(55)
Net cash provided by (used in) investing activities85,396 (312,912)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock1,265 4,844 
Repurchase and retirements of common stock(37,526) 
Repayment of liability for sale of future royalties(1,270)(233)
Payments for debt issuance costs(43)(2)
Net cash (used in) provided by financing activities(37,574)4,609 
Net increase (decrease) in cash and cash equivalents23,254 (329,317)
Cash, cash equivalents and restricted cash, beginning of period71,308 495,729 
Cash, cash equivalents and restricted cash, end of period$94,562 $166,412 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Non-cash investing and financing activities:
Amounts accrued for property and equipment$38 $19 
Amounts accrued for issuance costs related to the sale of future royalties$ $128 
Amounts accrued for repurchases of common stock$1,290 $ 
Receivable related to issuance of common stock, upon exercise of stock options$(43)$ 
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 focused on delivering innovative immunology therapeutics. We are developing immune cell modulating antibodies, including two wholly owned checkpoint agonists in clinical-stage development, for autoimmune and inflammatory disease: rosnilimab, our PD-1 agonist, previously referred to as ANB030, in a planned Phase 2b trial for the treatment of moderate-to-severe rheumatoid arthritis (“RA”); and ANB032, our BTLA agonist, currently in a Phase 2b trial for the treatment of moderate-to-severe atopic dermatitis (“AD”). We also have other preclinical immune cell modulator candidates in our portfolio, including ANB033, an anti-CD122 antagonist antibody for the treatment of autoimmune and inflammatory diseases. In addition, we have developed two cytokine antagonists that we are exploring options for out-licensing: imsidolimab, our anti-IL-36R antibody, in a Phase 3 trial for the treatment of generalized pustular psoriasis (“GPP”), and etokimab, our anti-IL-33 antagonist that is Phase 2/3 ready. We have also discovered multiple therapeutic antibodies licensed to GlaxoSmithKline, Inc. (“GSK”) in a financial collaboration for immune-oncology, including an anti-PD-1 antagonist antibody (JEMPERLI (dostarlimab-gxly)), an anti-TIM-3 antagonist antibody (cobolimab, GSK4069889) and an anti-LAG-3 antagonist antibody (GSK4074386). We currently recognize revenue from milestones and royalties achieved under our immuno-oncology collaboration with GSK.
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 stock, royalty monetizations, 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 from the issuance of our consolidated financial statements. 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. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2022 included in our Annual Report on 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.
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
6

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. 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
March 31,
(in thousands)20232022
Options to purchase common stock4,555 3,989 
Restricted Stock Units427 14 
Total4,982 4,003 
3. Balance Sheet Accounts and Supplemental Disclosures
Property and Equipment, net
Property and equipment, net consist of the following:
(in thousands)March 31, 2023December 31, 2022
Laboratory equipment$5,916 $5,869 
Office furniture and equipment1,606 1,593 
Leasehold improvements203 203 
Property and equipment, gross7,725 7,665 
Less: accumulated depreciation and amortization(5,743)(5,576)
Total property and equipment, net$1,982 $2,089 
 
Accrued Expenses
Accrued expenses consist of the following:
(in thousands)March 31, 2023December 31, 2022
Accrued compensation and related expenses$3,077 $5,379 
Accrued professional fees620 607 
Accrued research, development and manufacturing expenses25,768 15,351 
Accrued for repurchases of common stock1,290  
Other201 296 
Total accrued expenses$30,956 $21,633 
7

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. (“Tesaro”), an oncology-focused biopharmaceutical company now a part of GlaxoSmithKline (Tesaro and GlaxoSmithKline are hereinafter referred to, collectively, as “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, Amendment No. 1 to the GSK Agreement was agreed by both parties to add an additional antibody discovery program for an upfront license fee of $2.0 million. Currently, under the GSK Agreement, GSK is developing JEMPERLI (dostarlimab), an anti-PD-1 antagonist antibody, as a monotherapy for various solid tumor indications. In addition, GSK is developing dostarlimab in combination with additional therapies under the collaboration, including with two other development programs from the GSK Agreement: cobolimab, an anti-TIM-3 antibody, and GSK40974386, an anti-LAG antibody, for various solid tumor indications.
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 4-8% 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 February 2016, Amendment No. 2 to the GSK Agreement was agreed by both parties to define the effective dates of the development programs of the GSK Agreement. 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 these arrangements 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 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 GSK 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.
8

On October 23, 2020, Amendment No. 3 to the GSK Agreement (the “Amendment”) was agreed to by both parties to permit GSK to conduct development and commercialization in combination with any third-party molecules of Zejula, an oral, once-daily poly (ADP-ribose) polymerase (PARP) inhibitor. Under the Amendment, we were granted increased royalties upon sales of JEMPERLI, 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 provided for a one-time, non-refundable cash payment of $60.0 million that we received and recognized as revenue in the fourth quarter of 2020. The $1.1 billion in cash milestone payments due under the GSK Agreement remain unchanged. Additionally, under the terms of the Amendment, GSK has agreed to certain diligence commitments with respect to the future development of JEMPERLI, and the parties have agreed to review such commitments under regular joint review committee meetings going forward.
We assessed this Amendment in accordance with ASC 606 and concluded the Amendment was a contract modification to the GSK Agreement. Based on our assessment, we identified the terms of the Amendment to be interrelated to the GSK Agreement’s single performance obligation, noting completion and delivery of terms under the Amendment were satisfied by both parties with the execution of the Amendment.
As of March 31, 2023, the transaction price for the GSK Agreement and Amendment includes the upfront payment, research reimbursement revenue, one-time payment associated with the Amendment, and milestones and royalties earned to date, which are allocated in their entirety to the single performance obligation.
We recognized $1.4 million in royalty revenue during the three months ended March 31, 2023 related to GSK’s net sales of Zejula and JEMPERLI during the period which we estimate based on GSK’s prior sales experience. Of the royalty revenue recognized during the three months ended March 31, 2023, $0.6 million is JEMPERLI non-cash revenue related to the JEMPERLI Royalty Monetization Agreement and $0.8 million is Zejula non-cash revenue related to the Zejula Royalty Monetization Agreement, each of such agreements as described in Note 5. We recognized $1.0 million in royalty revenue during the three months ended March 31, 2022, related to GSK’s net sales of Zejula and JEMPERLI during the period based on GSK’s prior sales experience. Of the royalty revenue recognized, $0.3 million is JEMPERLI non-cash revenue related to the JEMPERLI Royalty Monetization Agreement and $0.7 million is Zejula revenue prior to the Zejula Royalty Monetization Agreement. GSK reports sales information to us on a one quarter lag and differences between actual and estimated royalty revenues will be adjusted in the following quarter. All royalty revenue related to Zejula global net sales starting July 2022 are paid directly to a wholly owned subsidiary of DRI Healthcare Trust pursuant to the Zejula Royalty Monetization Agreement, as described in Note 5.
No clinical milestones were recognized during the three months ended March 31, 2023 and 2022. 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.
9

Milestones under the GSK Agreement are as follows:
Anti-PD-1
(JEMPERLI/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$5.0MQ4'22$5.0M
Phase 3 clinical trial initiation - second indication$5.0MQ2'19$5.0M$5.0M
Filing of the first BLA(1) - first indication
$10.0MQ1'20$10.0M$10.0M
Filing of the first MAA(2) - first indication
$5.0MQ1'20$5.0M$5.0M
Filing of the first BLA - second indication
$10.0MQ1'21$10.0M$10.0M
First BLA approval - first indication$20.0MQ2'21$20.0M$20.0M
First MAA approval - first indication
$10.0MQ2'21$10.0M$10.0M
First BLA approval - second indication$20.0MQ3'21$20.0M$20.0M
Filing of the first MAA - second indication(3)
$5.0M$5.0M$5.0M
First MAA approval - second indication(3)
$10.0M$10.0M$10.0M
First commercial sales milestone(3)
$15.0M$15.0M$15.0M
Second commercial sales milestone(3)
$25.0M$25.0M$25.0M
Third commercial sales milestone(3)
$50.0M$50.0M$50.0M
Fourth commercial sales milestone$75.0M$75.0M$75.0M
Milestones recognized through March 31, 2023$93.0M$13.0M$8.0M
Milestones that may be recognized in the future$180.0M$260.0M$265.0M
(1)Biologics License Application (“BLA”)
(2)Marketing Authorization Application (“MAA”)
(3)For JEMPERLI, the filing and approval of the first MAA for a second indication and first three commercial sales milestones are included as part of the royalty monetization agreement with Sagard, see Note 5
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.
5. Sale of Future Royalties
JEMPERLI Royalty Monetization Agreement
In October 2021, we signed a royalty monetization agreement (“JEMPERLI Royalty Monetization Agreement”) with Sagard Healthcare Royalty Partners, LP (“Sagard”). Under the terms of the JEMPERLI Royalty Monetization Agreement, we received $250.0 million in exchange for royalties and milestones payable to us under our GSK collaboration on annual global net sales of JEMPERLI below $1.0 billion starting in October 2021. The aggregate JEMPERLI royalties and milestones to be received by Sagard under the JEMPERLI Royalty Monetization Agreement is capped at certain fixed multiples of the upfront payment based on time. Once Sagard receives an aggregate amount of either $312.5 million (125% of the upfront) by the end of 2026, or $337.5 million (135% of the upfront) during 2027, or $412.5 million (165% of the upfront) at any time after 2027, the JEMPERLI Royalty Monetization Agreement will expire resulting in us regaining all subsequent JEMPERLI royalties and milestones. As of March 31, 2023, Sagard has received a total of $2.3 million in royalties and milestones.
10

The JEMPERLI Royalty Monetization Agreement includes a call option pursuant to which at any time after December 1, 2024, we may reacquire our interest in the specified royalties by paying Sagard (in cash) a specified amount as described in the JEMPERLI Royalty Monetization Agreement. The exercise of this call option is at our sole discretion, which we currently do not anticipate exercising.
The proceeds received from Sagard of $250.0 million were recorded as a liability, net of transaction costs of $0.4 million, which will be amortized over the estimated life of the arrangement using the effective interest rate method. The aggregate future estimated payments, less the $249.6 million, net of proceeds, will be recognized as non-cash interest expense over the life of the agreement. Royalty and milestone revenue will be recognized as earned on net sales of JEMPERLI, and we will record the royalty payments to Sagard as a reduction of the liability when paid. As such payments are made to Sagard, the balance of the liability will be effectively repaid over the life of the JEMPERLI Royalty Monetization Agreement.
We estimate the effective interest rate used to record non-cash interest expense under the JEMPERLI Royalty Monetization Agreement based on the estimate of future royalty payments to be received by Sagard. As of March 31, 2023, the estimated effective rate under the agreement was 6.1%. Over the life of the arrangement, the actual effective interest rate will be affected by the amount and the timing of the royalty payments received by Sagard and changes in our forecasted royalties. At each reporting date, we will reassess our estimate of total future royalty payments to be received and if such payments are materially different than our original estimates, we will prospectively adjust the imputed interest rate and the related amortization of the royalty obligation.
We recognized JEMPERLI non-cash royalty revenue of approximately $0.6 million and $0.3 million for the three months ended March 31, 2023 and three months ended March 31, 2022, respectively, and non-cash interest expense of approximately $4.0 million and $4.9 million for the three months ended March 31, 2023 and three months ended March 31, 2022, respectively. The interest and amortization of issuance costs is reflected as non-cash interest expense for the sale of future royalties in the Consolidated Statements of Operations.
The following table shows the activity within the liability account for the three months ended March 31, 2023:
(in thousands)March 31, 2023
Liability related to sale of future JEMPERLI royalties and milestones - balance at 12/31/2022$269,540 
Issuance costs related to the sale of future royalties37 
Amortization of issuance costs9 
Royalty and milestone payments to Sagard(528)
Non-cash interest expense recognized3,953 
Liability related to sale of future royalties and milestones - ending balance$273,011 
Zejula Royalty Monetization Agreement
In October 2020, in connection with Amendment No. 3 to the GSK Agreement, GSK agreed, under the terms of a settlement agreement (the “GSK Settlement Agreement”), to pay us a royalty on all GSK net sales of Zejula starting January 1, 2021. Under the GSK Settlement Agreement, the royalty is paid at a rate of 1.0% but is subject to reduction due to royalties paid to third parties, with a minimum royalty payable under the GSK Settlement Agreement of 0.5% of global net sales of Zejula. The current effective royalty rate is 0.5%.
In September 2022, we signed a purchase and sale agreement (the “Zejula Royalty Monetization Agreement”) with a wholly owned subsidiary of DRI Healthcare Trust (“DRI”) to monetize all of our future royalties on global net sales of Zejula under the GSK Settlement Agreement. Under the terms of the Zejula Royalty Monetization Agreement, we received $35.0 million in exchange for all royalties payable by GSK to us under the GSK Settlement Agreement on global net sales of Zejula starting in July 2022 (the “Purchased Royalty Interest”). In addition, under the Zejula Royalty Monetization Agreement, we are entitled to receive an additional $10.0 million payment from DRI if Zejula is approved by the U.S. Food and Drug Administration for the treatment of endometrial cancer on or prior to December 31, 2025.
11

The proceeds received from DRI of $35.0 million were recorded as a liability, net of transaction costs of $0.2 million, which will be amortized over the estimated life of the arrangement using the effective interest rate method. Royalty revenue will be recognized as earned on net sales of Zejula, and we will record the royalty payments to DRI as a reduction of the liability when paid. The aggregate future estimated payments, less the $34.8 million, of net proceeds, will be recorded as non-cash interest expense over the life of the agreement. As such payments are made to DRI, the balance of the liability will be effectively repaid over the life of the Zejula Royalty Monetization Agreement.
We estimate the effective interest rate used to record non-cash interest expense under the Zejula Royalty Monetization Agreement based on the estimate of future royalty payments to be received by DRI. As of March 31, 2023, the estimated effective rate under the agreement was 2.5%. Over the life of the arrangement, the actual effective interest rate will be affected by the amount and the timing of the royalty payments received by DRI and the changes in our forecasted royalties. At each reporting date, we will reassess our estimate of total future royalty payments to be received and if such payments are materially different than our original estimates, we will prospectively adjust the imputed interest rate and the related amortization of the royalty obligation.
We recognized Zejula non-cash royalty revenue of approximately $0.8 million and $0.0 million for the three months ended March 31, 2023 and three months ended March 31, 2022, respectively, and non-cash interest expense of approximately $0.4 million and $0.0 million for the three months ended March 31, 2023 and three months ended March 31, 2022, respectively. The interest and amortization of issuance costs is reflected as non-cash interest expense for the sale of future royalties in the Consolidated Statements of Operations.
The following table shows the activity within the liability account for the three months ended March 31, 2023:
(in thousands)March 31, 2023
Liability related to sale of future Zejula royalties and milestones - balance at 12/31/2022$34,873 
Amortization of issuance costs7 
Royalty and milestone payments to DRI(742)
Non-cash interest expense recognized367 
Liability related to sale of future royalties and milestones - ending balance$34,505 
6. Fair Value Measurements and Available for Sale Investments
Fair Value Measurements
Our financial instruments consist principally of cash, cash equivalents, short-term and long-term investments, receivables, and accounts 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.
12

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 March 31, 2023
Money market funds(1)
$78,767 $78,767 $ $ 
Mutual funds(1)
12,585 12,585   
U.S. Treasury securities(2)
301,699 301,699   
Certificates of deposit(2)
2,149  2,149  
Agency securities(2)
69,806  69,806  
Commercial and corporate obligations(2)
57,864  57,864  
At December 31, 2022
Money market funds(1)
$29,702 $29,702 $ $ 
Mutual funds(1)
41,812 41,812   
U.S. Treasury securities(2)
374,527 374,527   
Certificates of deposit(2)
2,856  2,856  
 Agency securities(2)
74,602  74,602  
Commercial and corporate obligations(2)
60,883  60,883  
(1)    Included in cash and cash equivalents 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 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.
13

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 March 31, 2023 are as follows:
(in thousands)Amortized
Cost
Gross
Unrealized Gains
Gross
Unrealized Losses
Total
Fair Value
Agency securities(1)
$70,413 $3 $(610)$69,806 
Certificates of deposit(2)
2,190  (41)2,149 
Commercial and corporate obligations(3)
58,416 3 (555)57,864 
U.S. Treasury securities(4)
303,559 72 (1,932)301,699 
     Total available for sale investments$434,578 $78 $(3,138)$431,518 
(1)    Of our outstanding agency securities, $62.8 million have maturity dates of less than one year and $7.0 million have maturity dates between one to two years as of March 31, 2023.
(2)    Of our outstanding certificates of deposit, $1.9 million have maturity dates of less than one year and $0.2 million have a maturity date of between one to two years as of March 31, 2023.
(3)    Of our outstanding commercial and corporate obligations, $48.0 million have maturity dates of less than one year and $9.9 million have a maturity date of between one to two years as of March 31, 2023.
(4)    Of our outstanding U.S. Treasury securities, $223.9 million have maturity dates of less than one year and $77.8 million have a maturity date of between one to two years as of March 31, 2023.
The aggregate market value, cost basis, and gross unrealized gains and losses of available for sale investments by security type, classified in short-term and long-term investments as of December 31, 2022 are as follows:
(in thousands)Amortized
Cost
Gross
Unrealized Gains
Gross
Unrealized Losses
Total
Fair Value
Agency securities(1)
$75,504 $11 $(913)$74,602 
Certificates of deposit(2)
2,915  (59)2,856 
Commercial and corporate obligations(3)
61,791 8 (916)60,883 
US Treasury securities(4)
377,697 19 (3,189)374,527 
     Total available for sale investments$517,907 $38 $(5,077)$512,868 
(1)    Of our outstanding agency securities, $57.1 million have maturity dates of less than one year and $17.5 million have a maturity date of between one to two years as of December 31, 2022.
(2)     Of our outstanding certificates of deposit, $2.6 million have a maturity date of less than one year and $0.3 million have a maturity date of between one to two years as of December 31, 2022.
(3)     Of our outstanding commercial and corporate obligations, $44.0 million have maturity dates of less than one year and $16.9 million have a maturity date of between one to two years as of December 31, 2022.
(4)     Of our outstanding U.S. Treasury securities, $266.2 million have maturity dates of less than one year and $108.3 million have a maturity date of between one to two years as of December 31, 2022.
The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2023 and December 31, 2022, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:
14

March 31, 2023
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$44,522 $(275)$20,199 $(335)$64,721 $(610)
Commercial and corporate obligations31,505 (314)25,367 (241)56,872 (555)
Certificates of deposit484 (10)1,665 (31)2,149 (41)
US Treasury Securities139,861 (1,006)63,721 (926)203,582 (1,932)
Total
$216,372 $(1,605)$110,952 $(1,533)$327,324 $(3,138)
December 31, 2022
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$61,117 $(843)$3,437 $(70)$64,554 $(913)
Certificates of Deposit481 (10)2,375 (49)2,856 (59)
Commercial and corporate obligations44,213 (624)14,778 (292)58,991 (916)
US Treasury Securities298,575 (2,667)41,937 (522)340,513 (3,189)
Total
$404,386 $(4,144)$62,527 $(933)$466,914 $(5,077)
As of March 31, 2023 and December 31, 2022, unrealized losses on available-for-sale investments were $3.1 million and $5.1 million, respectively, with unrealized losses of $1.5 million, on available for sale investments that were in an unrealized loss position for greater than 12 months as of March 31, 2023. We do not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost basis, accordingly, no allowance for credit losses was recorded.
7. Stockholders’ Equity
Common Stock
Of the 500,000,000 shares of common stock authorized, 27,018,197 shares were issued and outstanding as of March 31, 2023.
Stock Repurchase Program
In January 2023, our Board of Directors authorized a stock repurchase program (the “Repurchase Program”) to repurchase up to $50.0 million of our outstanding common stock, par value $0.001 per share.
The shares of common stock may be repurchased from time to time, in open market transactions, or other means in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-18 of the Exchange Act. The timing, number of shares repurchased, and prices paid for the stock under this program will depend on general business and market conditions as well as corporate and regulatory limitations, prevailing stock prices, and other considerations. The Repurchase Program will expire on December 31, 2023, may be suspended or discontinued at any time, and does not obligate us to acquire any amount of common stock.
The following table presents the repurchase activity through March 31, 2023:
15

Total number of shares purchasedAverage price paid per shareApproximate dollar value of shares purchased
(in thousands)
First Quarter 20231,589,424 $24.19 $38,456 
The repurchased common stock was subsequently retired after the repurchase and the par value of the shares was charged to common stock. The excess of the repurchase price over the par value was applied against additional paid in capital. As of March 31, 2023, $11.5 million remained available for future shares of common stock to be repurchased under the Repurchase Program.
In May 2023, we completed the Repurchase Program, and the second quarter activity is presented in Subsequent Events - Note 10.
Open Market Sales Agreement
In November 2022, we entered into the Cowen Sales Agreement with Cowen and Company, LLC, through which we may offer and sell shares of our common stock, having an aggregate offering of up to $150.0 million through Cowen and Company, LLC as our sales agent. As of March 31, 2023, we had sold no shares under this agreement.
8. Equity Incentive Plans
2017 Equity Incentive Plan
In January 2017, our board of directors and stockholders approved and adopted the 2017 Equity Incentive Plan (the “2017 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 1,140,527 shares as of January 1, 2023. As of March 31, 2023, 2,392,572 shares were available for future issuance.
Employee Stock Purchase Plan
In January 2017, our board of directors and stockholders approved and adopted the 2017 Employee Stock Purchase Plan or the ESPP. 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 285,131 shares as of January 1, 2023. As of March 31, 2023, 49,967 shares have been issued under the ESPP. As of March 31, 2023, 1,782,873 shares were available for future issuance under the ESPP.
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 three months ended March 31, 2023 is as follows:
16

 
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, 20233,673,208 $32.04 6.28$18,686 
Granted1,091,455 $23.25 
Exercises(55,158)$22.16 
Forfeitures and cancellations(424,238)$27.87 
Outstanding at March 31, 20234,285,267 $30.34 7.42$5,390 
Exercisable at March 31, 20232,000,802 $36.07 5.42$4,553 
Total cash received from the exercise of stock options was approximately $1.3 million during the three months ended March 31, 2023.
Time-based Restricted Stock Units
Each Restricted Stock Unit (“RSU”) represents one equivalent share of our common stock to be issued after satisfying the applicable continued service-based vesting criteria over a specified period. The fair value of these RSUs is based on the closing price of our common stock on the date of the grant. We measure compensation expense over the expected vesting period on a straight-line basis. The RSUs do not entitle the participants to the rights of holders of common stock, such as voting rights, until the shares are issued.
Number of Restricted Stock UnitsWeighted-Average Grant Date Fair Value
Weighted-Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic
Value (in
thousands)
Outstanding at January 1, 20231,028,843 $26.14 1.17$31,884 
Granted394,825 $23.24 
Released(39,300)$24.10 
Forfeitures and cancellations(16,845)$23.50 
Outstanding at March 31, 20231,367,523 $25.39 1.31$29,757 
RSU expected to vest at March 31, 20231,367,523 $25.39 1.31$29,757 
Stock-Based Compensation Expense
We recognize stock-based compensation expense for awards issued to employees and non-employees over the requisite service period based on the estimated grant-date fair value of such awards. We record the expense for stock-based compensation awards subject to performance-based milestone vesting over the requisite service period when management determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions at each reporting date. The
17

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:
Three Months Ended
March 31,
20232022
Risk-free interest rate3.7%2.0%
Expected volatility86.5%88.5%
Expected dividend yield % %
Expected term (in years)5.656.18
Weighted-average grant date fair value per share$