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OFFON

Y-MABS THERAPEUTICS, INC.

(YMAB)
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Y-MABS THERAPEUTICS, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

11/04/2021 | 02:17pm EST

You should read the following discussion and analysis of our financial condition and results of operations together with our accompanying financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2020 on file with the SEC. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve substantial risks and uncertainties. As a result of many factors, including those factors set forth in the "Risk Factors" section of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. For convenience of presentation some of the numbers have been rounded in the text below.

Overview

We are a commercial-stage biopharmaceutical company focused on the development and commercialization of novel, antibody based therapeutic products for the treatment of cancer. We are leveraging our proprietary antibody platforms and deep expertise in the field of antibodies to develop a broad portfolio of innovative medicines.

On November 25, 2020, DANYELZA® (naxitamab-gqgk) was approved by the United States Food and Drug Administration, or the FDA, for the treatment, in combination with Granulocyte-Macrophage Colony-Stimulating Factor, or GM-CSF, of pediatric patients one year of age and older and adult patients with relapsed or refractory, or R/R, high-risk neuroblastoma, or NB, in the bone or bone marrow who have demonstrated a partial response, minor response, or stable disease to prior therapy. DANYELZA is currently being investigated in three Phase 2 clinical studies for the treatment of patients with first-line NB, third-line NB, and in relapsed osteosarcoma. We are commercializing DANYELZA in the United States. In addition, we have an ongoing Phase 2 clinical trial at Memorial Sloan Kettering Cancer Center, or MSK, with our GD2-GD3 Vaccine for the treatment of Stage 4 high-risk NB. We believe the GD2-GD3 Vaccine can potentially serve as an add-on treatment to DANYELZA.

We submitted a Biologics License Application, or BLA, to the FDA in August 2020 for radiolabeled 131I-omburtamab for central nervous system, or CNS, leptomeningeal metastases, or LM, from NB, and received a Refusal to File letter from the FDA in October 2020. We held a Type B meeting with the FDA in September 2021, and have requested a pre-BLA meeting with the FDA. Subject to timing of and positive feedback at such pre-BLA meeting, we aim to initiate resubmission of the omburtamab BLA shortly thereafter, and to complete the submission during the course of the first quarter 2022. We plan to commercialize omburtamab as soon as possible after obtaining FDA approval, if such approval occurs.

In April 2021, we submitted a European Marketing Authorization Application, or MAA, for omburtamab. Additionally, we are conducting clinical studies with omburtamab in diffuse intrinsic pontine glioma, or DIPG, and desmoplastic small round cell tumor, or DSRCT. We also have an omburtamab follow-on product candidate, 177Lu-omburtamab-DTPA, in Phase 1 for the treatment of medulloblastoma, and in Phase 1 for treatment targeting B7-H3 positive CNS/LM tumors in adults.

We are advancing a new generation of T cell engaging bispecific antibodies, or BsAbs, that may destroy tumor cells by recruitment of host T cells. Our Y-BiClone format contains two binding arms for the tumor target and two binding arms for T cells. This format was designed to have the minimal binding affinity necessary to recruit T cells. We have a Phase 2 clinical trial ongoing with nivatrotamab, our GD2 BsAb product candidate, in Small Cell Lung Cancer, or SCLC. In addition, a Phase 1/2 clinical trial with nivatrotamab, for the treatment of refractory GD2 positive adult and pediatric solid tumors is ongoing. Our nivatrotamab program thus addresses large patient populations. We are also advancing a CD33 BsAb for the treatment of hematological cancers expressing CD33, a transmembrane receptor expressed on cells of myeloid lineage, for which we have filed an IND, and expect to enter clinical testing in the next six months. We are advancing a pipeline of other novel BsAbs through late pre-clinical development. We believe our BsAbs have the potential to result in improved tumor binding, longer serum half-life and significantly greater T cell mediated killing of tumor cells without the need for continuous infusion.


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We are using the SADA technology, our proprietary radioimmunotherapy platform to advance a series of antibody constructs, where bispecific antibody fragments bind to the tumor before a radioactive payload is injected in a two-step approach. We also refer to the SADA technology as Liquid RadiationTM. We have designated GD2-SADA for potential use in GD2 positive solid tumors, and expect to file an IND for GD2-SADA by the end of 2021. We have additional SADA constructs under development, for potential use in prostate cancer, colon cancer, breast cancer and a number of additional indications. We believe the SADA technology could potentially improve the efficacy of radiolabeled therapeutics in tumors that have not historically demonstrated meaningful responses to radiolabeled agents.

Our mission is to become the world leader in developing better and safer antibody-based pediatric oncology products addressing clear unmet medical needs and, as such, have a transformational impact on the lives of patients. We intend to continue to advance and expand our product pipeline into certain adult cancer indications either independently or in collaboration with potential partners.

Since our inception on April 30, 2015, we have devoted substantially all of our resources to organizing and staffing our company, business planning, identifying potential product candidates, conducting pre-clinical studies of our product candidates and clinical trials of our lead product candidates, commercializing our approved product, raising capital, and acquiring and developing our technology platform among other matters. We have not generated substantial revenues from sales of DANYELZA which is currently our only approved product.

To date, we have financed our operations primarily through private placements of our securities, proceeds from our initial public offering and proceeds from our two subsequent public offerings, and our product and license revenue from DANYELZA.

On February 22, 2021, we completed our most recent follow-on public offering of our common stock pursuant to which we issued and sold 2,804,878 shares of our common stock at a price to the public of $41.00 per share, which included the exercise in full of the underwriters' option to purchase additional shares. We received aggregate gross proceeds from this offering of $115.0 million, with aggregate net proceeds of approximately $107.7 million after deducting underwriting discounts and commissions and offering expenses.

As of September 30, 2021, we had an accumulated deficit of $303.6 million. Our net loss was $28.9 million for the three months ended September 30, 2021 and $32.8 million for the three months ended September 30, 2020. Our net loss was $18.4 million for the nine months ended September 30, 2021 and $99.4 million for the nine months ended September 30, 2020. We have incurred significant net operating losses in every year since our inception and expect to continue to incur net operating losses and significant expenses for the foreseeable future. Our net losses may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase significantly as we:

? continue to advance our lead product candidates through the regulatory approval

process both in the U.S. and internationally;

? continue to advance our other product candidates through pre-clinical and

clinical development;

? continue to identify additional research programs and additional product

candidates, as well as additional indications for existing product candidates;

? initiate pre-clinical studies and clinical trials for any additional product

candidates we identify;

? develop, maintain, expand and protect our intellectual property portfolio;

? hire additional research, sales force, commercialization, clinical and

scientific personnel; and

? incur additional costs associated with operating as a public company, including

expanding our operational, finance and management teams.


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In conjunction with the approval by the FDA of DANYELZA in November 2020 we received a Priority Review Voucher, or PRV, which we subsequently sold to United Therapeutics Corporation. We were obligated to pay, and paid 40% of the net proceeds from the sale of the PRV to MSK as required under the terms of the MSK license. We intend to use the remaining proceeds to fund further research and development and other operational programs. The transaction closed in January 2021 upon the resolution of the substantive closing conditions, and was recognized as part of "Other Income, Net" in the Consolidated Statements of Net Loss and Comprehensive Loss for the nine months ended September 30, 2021. Upon the potential FDA approval of omburtamab, we expect to receive another PRV, and upon monetization thereof we will be obligated to pay 33% of the net proceeds from such sale to MSK.

In August 2015, we entered into a license agreement, or the MSK License, with MSK pursuant to which we have obtained exclusive rights to MSK's rights in our current antibody product candidates. Under the MSK License, we have committed to funding scientific research at MSK as well as conducting certain clinical trial activities at MSK. As these product candidates progress through clinical development, regulatory approval and commercialization, certain milestone payments will come due to MSK either as a result of the milestones having been met or the passage of time even if the milestones have not been met. Also, we owe MSK customary royalties on commercial sales of our approved products. In addition, we have committed to obtain certain personnel and laboratory services at MSK under our Master Data Services Agreement, or MDSA, and two separate Core Facility Service Agreements, or CFSAs. Also, under our Investigator-Sponsored Master Clinical Trial Agreement, or MCTA, with MSK, we will provide drug product and funding for certain clinical trials at MSK.

On April 15, 2020, we entered into a license agreement, or the SADA License Agreement, with MSK and Massachusetts Institute of Technology, or MIT, that grants us an exclusive, worldwide, sublicensable license to certain patent and intellectual property rights developed by MSK and MIT to develop, manufacture, and commercialize licensed products and to perform services for all therapeutic and diagnostic uses in the field of cancer diagnostics and cancer treatments using SADA-BiDE (2-step Self-Assembly and DisAssembly-Bispecific DOTA-Engaging antibody system) Pre-targeted Radioimmunotherapy Platform, or the SADA Technology, a concept we also refer to as Liquid RadiationTM. The patents and patent applications covered by the SADA License Agreement are directed, in part, to the SADA Technology, as well as a number of SADA constructs developed by MSK. Upon entering into the SADA License Agreement in April 2020 and in exchange for the licenses, we paid MSK and MIT a cash upfront payment and issued an aggregate of 42,900 shares of our common stock to them. During the nine months ended September 30, 2021, we paid a payment in the amount of $1.0 million to MSK and MIT under the agreement.

As required under the SADA License Agreement, in October 2020, we entered into a Sponsored Research Agreement with MSK to fund at least $1,500,000 in scientific research at MSK over the next three years.

Further, the SADA License Agreement requires us to pay to MSK and MIT mid to high single-digit royalties based on annual net sales of licensed products or the performance of licensed services by us and our affiliates and sublicensees. We are obligated to pay minimum annual royalties of $40,000, which shall increase to $60,000 once a patent has been issued, over the royalty term, commencing on the tenth anniversary of the license agreement. These amounts are non-refundable but are creditable against royalty payments otherwise due under the SADA License Agreement. As of September 30, 2021, we have determined that payment of the minimum royalties is not probable, and accordingly have not accrued for them at September 30, 2021.

Under the SADA License Agreement, we are also obligated to pay MSK and MIT certain clinical, regulatory and sales-based milestone payments. Certain of the clinical and regulatory milestone payments become due at the earlier of either the completion of the related milestone activity or the date indicated in the SADA License Agreement. Total clinical and regulatory milestones potentially due under the SADA License Agreement are $4,730,000 and $18,125,000, respectively. Sales-based milestones payments, totaling $23,750,000, become due should the Company achieve certain amounts of sales. In addition, for each of the SADA constructs generated by MSK and sold on behalf of the Company by a sublicensee, the Company may make sales-based milestone payments in the total amount up to $60,000,000 based on the achievement of various cumulative net sales made by the sub-licensee. Finally, under the terms of the SADA License, MSK is entitled to receive 25% of any income generated from the sale of any PRV or the sale of other comparable incentives provided by any non-U.S. jurisdiction.


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These MSK agreements are important to our business. For a more detailed discussion of the terms and conditions of certain of these agreements, see Note 8 - License Agreements and Commitments.

For DANYELZA, and for any other product candidates for which we obtain regulatory approval, we expect to incur significant milestone costs, as well as commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, we may continue to fund our operations through public or private equity or debt financings or other sources, including strategic collaborations. We may, however, be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop our current product candidates, or any additional product candidates. Because of the numerous risks and uncertainties associated with the development of our existing product candidates and any future product candidates, our platform and technology and because the extent to which we may enter into collaborations with third parties for development of any of our product candidates is uncertain, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates. If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, product candidates or grant licenses on terms that may not be favorable to us and could have a negative impact on our financial condition.

Recent Developments

Since it was first reported to have emerged in December 2019, a novel strain of coronavirus, which causes COVID-19, has spread around the world, including the New York metropolitan area and Copenhagen, Denmark, where our primary office and laboratory spaces are located. The coronavirus pandemic is evolving, and to date has led to the implementation of various responses, including government-imposed quarantines, travel restrictions and other public health safety measures. The extent to which the coronavirus impacts our operations or those of our third-party partners, including our preclinical studies, clinical trials, manufacturing operations and commercialization efforts, will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information that will emerge concerning the severity of the coronavirus, the emergence of new variants of the virus such as the Delta variant and the actions to contain the coronavirus or treat its impact, among others. We have taken precautionary measures intended to help minimize the risk of the virus to our employees which could negatively affect our business. We cannot presently predict the scope and severity of the planned and potential shutdowns or disruptions of businesses and government agencies, such as the Securities and Exchange Commission, or SEC, the FDA or other domestic and international regulatory authorities.

Components of Our Results of Operations

Product Revenue

Product revenue consists of sales of DANYELZA.

License Revenue

License revenue consists of payments received for the licensing rights of DANYELZA and omburtamab in Latin America.

Operating Costs and Expenses

Cost of goods sold

Cost of goods sold includes direct and indirect costs related to the manufacturing and distribution of DANYELZA, including materials, third-party manufacturing costs, packaging services, freight, labor costs for personnel involved in the manufacturing process, indirect overhead costs and third-party royalties payable on our net product revenues.

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Licensing Royalties

The Company has incurred certain third-party royalty expenses related to third-party licensing revenues, which are included in Licensing Royalties.

Research and Development Expenses

Research and development expenses consist of expenses incurred in connection with the discovery and development of our product candidates. We expense research and development costs as incurred. These expenses include, but are not limited to:

sponsored research, laboratory facility services, clinical trial and data

? service at MSK under the Sponsored Research Agreements, or the SRAs, the two

CFSAs, the MCTA, and the MDSA, with MSK;

expenses incurred under agreements with CROs, as well as investigative sites

? and consultants that conduct our non-clinical and pre-clinical studies and

clinical trials;

expenses incurred under agreements with CMOs, including manufacturing scale-up

? expenses and the cost of acquiring and manufacturing pre-clinical studies and

clinical trial materials, including manufacturing validation batches;

? upfront, milestone and other non-revenue related payments due under our

third-party licensing agreements;

? employee-related expenses, which include salaries, benefits, travel and

stock-based compensation;

? expenses related to regulatory activities, including filing fees paid to

regulatory agencies;

? outsourced professional scientific development services; and

? allocated expenses for utilities and other facility-related costs, including

rent, insurance, supplies and maintenance expenses, and other operating costs.

The successful development and regulatory approval of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of DANYELZA and omburtamab or any future product candidates we may develop. This uncertainty is due to the numerous risks and uncertainties associated with the duration and cost of clinical trials, which vary significantly over the life of a project as a result of many factors, including, but not limited to:

? the number of clinical sites included in the trials;

? the availability and length of time required to enroll a sufficient number of

suitable patients in our clinical trials;

the actual probability of success for our product candidates, including the

? safety and efficacy, early clinical data, competition, manufacturing capability

and commercial viability;

? significant and changing government regulation and regulatory guidance;

? the performance of our existing and any future collaborators;

? the number of doses patients receive;

? the duration of patient follow-up;


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? the results of our clinical trials and pre-clinical studies;

? the establishment of commercial manufacturing capabilities;

? adequate ongoing availability of raw materials and drug substance for clinical

development and any commercial sales;

? the terms and timing of regulatory approvals, including the timing of our BLA

submissions and their acceptance;

the receipt of marketing approvals, including a safety, tolerability and

? efficacy profile that is satisfactory to the FDA or any non-U.S. regulatory

authority;

? any requirement by the FDA or any non-US regulatory authority to conduct post

market surveillance or safety studies;

? the expense of filing, prosecuting, defending and enforcing any patent claims

and other intellectual property rights; and

? the success of commercialization of approved products.

A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development. We may also never succeed in achieving regulatory approval for omburtamab or any other product candidates we may develop.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development expenses to increase significantly over the next several years as we increase personnel costs, including stock-based compensation, conduct clinical trials and potentially prepare regulatory submissions for our pipeline candidates, including supplementary regulatory submissions for DANYELZA.

Selling, General, and Administrative Expenses

Selling, general and administrative expenses consist primarily of employee related expenses, including salaries, bonus, benefits, and stock-based compensation expenses for personnel in executive, commercial, finance and administrative functions. Other significant costs include facility costs not otherwise included in research and development expenses or cost of goods sold, legal fees relating to corporate matters, and fees for patent, accounting, tax, and consulting services.

We anticipate that our general and administrative expenses will increase in the future to support continued research and development activities, potential commercialization of additional product candidates and costs associated with operating as a public company, including expenses related to services associated with maintaining compliance with exchange listing and the SEC requirements, director and officer insurance costs and investor and public relations costs. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, lawyers and accountants, among other expenses.

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Other Income, Net

On December 28, 2020, the Company announced that it entered into a definitive agreement to sell its DANYELZA PRV to United Therapeutics Corporation for $105.0 million. The PRV was granted in conjunction with the approval by the FDA of DANYELZA®, for the treatment of refractory/relapsed high-risk NB. Under the terms of the MSK License, Y-mAbs retained 60% of the net proceeds received from the sale, and the remaining 40% was paid to MSK. The net proceeds of this sale to the company was $62.0 million. The transaction closed on January 21, 2021 when the substantive closing conditions included within the agreement were resolved.

Critical Accounting Policies and Significant Judgments and Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with U.S. generally accepted accounting principles, or GAAP. We believe that several accounting policies are significant to understanding our historical and future performance. We refer to these policies as critical because these specific areas generally require us to make judgments and estimates about matters that are uncertain at the time we make the estimate, and different estimates-which also would have been reasonable-could have been used. On an ongoing basis, we evaluate our estimates and judgments, including those described in greater detail below. We base our estimates on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in the notes to our financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, we believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, net product revenues, the accrual for research and development expenses, the accrual of milestone and royalty payments, and the valuation of stock options. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including expenses, 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 it or treat COVID-19, as well as the economic impact on local, regional, national and international markets.

Revenue Recognition - Product revenue

We recognize revenue from sales of DANYELZA at a point in time when our customer is deemed to have obtained control of the product, which generally occurs upon receipt at the end-user hospital.

The amount of revenue we recognize from sales of DANYELZA varies due to rebates, chargebacks and discounts provided under governmental and other programs, distribution related fees and other sales-related deductions. In order to determine those deductions, we estimate, utilizing the expected value method, the amount of revenue that we will ultimately be entitled to. This estimate is based upon contracts with customers and government agencies, statutorily-defined discounts applicable to government-funded programs, estimated payor mix, and other relevant factors. Calculating these amounts involves estimates and judgments.

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Research and Development Expenses

Research and development costs are charged to operations when incurred and are included in operating expenses. Research and development costs consist principally of compensation cost for our employees and consultants that perform our research activities, the costs to obtain and maintain our licenses, the payments to third parties for CMOs and CROs and additional product development, and consumables and other materials used in research and development. We record accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, we analyze progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Actual results could differ from our estimates. We are obligated to make certain milestone and royalty payments in accordance with the contractual terms of the MSK License, CD33 License, MabVax Sublicense, and SADA License Agreement based upon the resolution of certain contingencies. Certain of these milestone payments are due and payable with the passage of time whether or not the milestones have actually been met. We record the milestone and royalty payment when the achievement of the milestone (including the passage of time) or payment of the milestone or royalty is probable and the amount of the payment is reasonably estimable.

Fair Value Measurements

Certain assets and liabilities are carried at fair value under GAAP. 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 at the measurement date (i.e. an exit price). The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows:

• Level 1 - Unadjusted quoted prices for identical assets or liabilities in active markets;

• Level 2 - Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and

• Level 3 - Unobservable inputs for the asset or liability, which include management's own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk.

The Company's cash equivalents are carried at fair value, determined according to the fair value hierarchy described above.

Income Taxes

We account for income taxes under the asset and liability approach for the financial accounting and reporting of income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to net operating loss carry forwards and temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. A valuation allowance is established when management determines that it is more likely than not that some portion or all of the deferred tax assets will not be realized.

We prepare and file tax returns based on its interpretation of tax laws and regulations. In the normal course of business, our tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing authorities. In determining our tax provision for financial reporting purposes, we establish a reserve for uncertain tax positions unless such positions are determined to be more likely than not of being sustained upon examination based on their technical merits. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. Accordingly, we will report a liability for unrecognized tax benefits resulting from any uncertain tax positions taken or expected to be taken on a tax return.


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Our policy is to recognize, when applicable, interest and penalties on uncertain tax positions as part of income tax expense.

Stock-Based Compensation

We measure stock options granted to employees, directors, and consultants based on the fair value on the date of the grant and recognize compensation expense of those awards, over the requisite service period, which is the vesting period of the respective award for employees and directors. Forfeitures are accounted for as they occur. We issue stock options to employees and directors with only service-based vesting conditions and record the expense for these awards using the straight-line method over the requisite service period.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. Historically, we have been a private company and lack company-specific historical and implied volatility information for our shares. Therefore, we estimate our expected share price volatility based on the historical volatility of a group of publicly-traded peer companies and we expect to continue to do so until such time as we have adequate historical data regarding the volatility of our own traded share price. The expected term of our stock options has been determined utilizing the "simplified" method for awards as we have limited historical data to support the expected term assumption. The risk-free interest rate is determined by reference to the U.S.Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield is based on the fact that we have never paid cash dividends on shares of our common stock and do not expect to pay any cash dividends in the foreseeable future.

Fair Value of Stock Options

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The assumptions used to determine the fair value of the granted stock options were as follows:

Risk-free interest rate: The risk-free interest rate assumption is based on the

? U.S.Treasury instruments whose terms were consistent with the expected option

term of our stock options.

Expected Dividend Yield: The expected dividend yield assumption is based on the

? fact that we have never paid cash dividends and have no present intention to

pay cash dividends. Consequently, we used an expected dividend of zero.

Expected Volatility: The expected stock price volatility is estimated by taking

? the average historic price volatility of industry peers and adjusting for

differences in our life cycle and financing leverage. Our industry peers

consist of several public companies in the biopharmaceutical industry.

Expected Term: We determine the average expected life of stock options based on

the simplified method in accordance with SEC Staff Accounting Bulletin Nos. 107

? and 110. We expect to continue to use the simplified method until we have

sufficient historical exercise data to provide a reasonable basis upon which to

estimate the expected term.


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Results of Operations

Comparison of the Three Months Ended September 30, 2021 and 2020

The following table summarizes our results of operations for the three months ended September 30, 2021 and 2020:


                                           Three Months Ended
                                             September 30,
                                           2021          2020       Change

                                             (in thousands)
Revenue:
Product revenue, net                    $    8,965    $        -    $ 8,965
Total revenues                               8,965             -      8,965
Operating costs and expenses:
Cost of goods sold                             550             -        550
Research and development                    23,131        21,005      2,126
Selling, general, and administrative        13,988        11,636      2,352
Total operating costs and expenses          37,669        32,641      5,028
Loss from operations                      (28,704)      (32,641)      3,937
Other income, net
Interest and other loss                      (154)         (191)         37
Net loss                                $ (28,858)$ (32,832)$ 3,974




Revenue

The Company launched DANYELZA in February 2021, and recorded $9.0 million in net product revenues for the three months ended September 30, 2021. Please refer to Note 3-Summary of Significant Accounting Policies Revenue Recognition - Product Revenue.

The Company had no product revenues as we did not have an approved product and no license revenue as we did not enter into any out-licensing agreements during the three months ended September 30, 2020.

Cost Of Goods Sold

The Company began capitalizing inventory costs once DANYELZA was approved by the FDA in November 2020. Cost of goods sold was $550,000 for the three months ended September 30, 2021. The company's cost of goods sold includes amounts related to materials, third-party contract manufacturing, third-party packaging services, freight, labor costs for personnel involved in the manufacturing process, third party royalties, and indirect overhead costs. In periods prior to receiving FDA approval for DANYELZA, we recognized inventory and related costs associated with the manufacture of DANYELZA as research and development expenses. This resulted in inventory being sold during the quarter ended September 30, 2021 for which a portion of the costs had been expensed prior to FDA approval. We expect this to continue to impact cost of goods sold through 2022 as such inventory amounts are sold to our customers.

In addition, the Company expensed $1.2 million of minimum royalties related to DANYELZA sales prior to commercial launch which are fully creditable against earned royalties in future periods. If we had not sold previously expensed inventory nor previously expensed minimum royalties, our cost of goods sold would have been approximately $1,256,000.

The Company had no cost of goods sold for the three months ended September 30, 2020.



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Research and Development Expenses

We do not record our research and development expenses on a program-by-program or on a product-by-product basis as they primarily relate to personnel, research, manufacturing, license fees and consumable costs, which are simultaneously deployed across multiple projects under development. These costs are included in the table below.


                                      Three Months Ended
                                        September 30,
                                       2021         2020

                                        (in thousands)
Outsourced manufacturing            $    7,915$  9,331
Clinical trials                          3,837       1,892

Outsourced research and supplies 2,636 3,595 Personnel costs

                          4,092       3,482
Professional and consulting fees           775         834
Stock-based compensation                 1,890         734
Other                                    1,986       1,137
                                    $   23,131$ 21,005

Research and development expenses increased by $2.1 million, from $21.0 million for the three months ended September 30, 2020 to $23.1 million for the three months ended September 30, 2021. This was primarily due to $1.9 million increase in clinical trials and $1.8 million increase in employee-related costs, including salary, benefits and non-cash stock-based compensation for personnel related to our expanding workforce. These increases were partially offset by a decrease $1.4 million outsourced manufacturing costs.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased by $2.4 million, from $11.6 million for the three months ended September 30, 2020 to $14.0 million for the three months ended September 30, 2021. The increase in selling, general and administrative expenses was primarily attributable to a $2.1 million increase in employee related costs, including salary, benefits and non-cash stock-based compensation for personnel related to our business activities mainly due to the growth of the commercialization team.

Other Income, Net

Interest and other loss for the three months ended September 30, 2021 was a loss of $154,000 as compared to a loss of $191,000 for the three months ended September 30, 2020. The loss decreased by $37,000 due to decreased foreign currency exchange losses incurred in the current period.



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Comparison of the Nine Months Ended September 30, 2021 and 2020

The following table summarizes our results of operations for the nine months ended September 30, 2021 and 2020:


                                                Nine Months Ended
                                                  September 30,
                                                2021          2020        Change

                                                  (in thousands)
Revenue:
Product revenue, net                         $   23,299    $        -    $  23,299
License revenue                                   2,000             -        2,000
Total revenues                                   25,299             -       25,299
Operating costs and expenses:
Cost of goods sold                                  843             -          843
Royalties                                           210             -          210
Research and development                         64,488        69,686      (5,198)
Selling, general, and administrative             39,433        30,155        9,278
Total operating costs and expenses              104,974        99,841        5,133
Loss from operations                           (79,675)      (99,841)       20,166
Other income, net
Gain from sale of priority review voucher        62,010             -       62,010
Interest and other income / (loss)                (717)           437      (1,154)
Net loss                                     $ (18,382)$ (99,404)$  81,022




Revenue

The Company launched DANYELZA in February 2021 and recorded $23.3 million in net revenues for the nine months ended September 30, 2021. Please refer to Note 3-Summary of Significant Accounting Policies Revenue Recognition - Product Revenue. The Company had no product revenues during the nine months ended September 30, 2020 as no products had been approved at the time.

In addition, the Company recorded $2.0 million in license revenues for the nine months ended September 30, 2021. This $2.0 million was attributable to the revenues earned from outlicensing DANYELZA and omburtamab in Latin America. As part of this agreement, we received a nonrefundable up-front fee of $2.0 million for the transfer of the license and know-how related to the constructs. We recognized the revenue as we determined the license to be distinct from other promises within the arrangement.

The company had no revenues during the nine months ended September 30, 2020.

Cost Of Goods Sold

The Company began capitalizing inventory costs once DANYELZA was approved by the FDA in November 2020. Cost of goods sold was $843,000 for the nine months ended September 30, 2021. The company's cost of goods sold includes amounts related to materials, third-party contract manufacturing, third-party packaging services, freight, labor costs for personnel involved in the manufacturing process, third party royalties, and indirect overhead costs. In periods prior to receiving FDA approval for DANYELZA, we recognized inventory and related costs associated with the manufacture of DANYELZA as research and development expenses. This resulted in inventory being sold during the nine months ended September 30, 2021 for which a portion of the costs had been expensed prior to FDA approval. We expect this to continue to impact the cost of goods sold through 2022 as such inventory amounts are sold to our customers.

In addition, the Company expensed $1.2 million of minimum royalties related to DANYELZA sales prior to commercial launch which are fully creditable against earned royalties in future periods. If we had not sold previously


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expensed inventory nor previously expensed minimum royalties, our cost of goods sold would have been approximately $2,763,000.

The Company had no cost of goods sold for the nine months ended September 30, 2020.




Licensing Royalties

For the nine months ended September 30, 2021, the Company incurred royalty expenses of $210,000 related to licensing revenues which is included in Licensing Royalties on the Consolidated Statements of Net Loss and Comprehensive Loss.

Research and Development Expenses

We do not record our research and development expenses on a program-by-program or on a product-by-product basis as they primarily relate to personnel, research, manufacturing, license fees and consumable costs, which are simultaneously deployed across multiple projects under development. These costs are included in the table below.




                                              Nine Months Ended
                                               September 30,
                                              2021         2020

                                               (in thousands)
Outsourced manufacturing                    $  22,767$ 22,837
Clinical trials                                 7,016       4,555
Outsourced research and supplies                8,960      13,371
Milestones and license acquisition costs           10      13,307
Personnel costs                                13,052       9,396
Professional and consulting fees                1,832       1,758
Stock-based compensation                        5,465       1,825
Other                                           5,386       2,637
                                            $  64,488$ 69,686

Research and development expenses decreased by $5.2 million, from $69.7 million for the nine months ended September 30, 2020 to $64.5 million for the nine months ended September 30, 2021. This decrease was primarily due to a $13.3 million decrease in milestones and license acquisition costs. The nine months ended September 30, 2020 includes $13.3 million related to the SADA agreement entered into in April 2020. In addition, outsourced research and supplies expenses decreased by $4.4 million as a result of decreased regulatory affairs costs.

These decreases were partially offset by a $7.3 million increase in employee-related costs, including salary, benefits and non-cash stock-based compensation for personnel related to our expanding workforce, a $2.5 million increase in clinical trials, a $1.4 million increase in expenses primarily related to our manufacturing and supply agreement with SpectronRX which commenced in August 2020, and a $1.0 million increase related to external consulting and software expenses.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased by $9.2 million, from $30.2 million for the nine months ended September 30, 2020 to $39.4 million for the nine months ended September 30, 2021. The increase in selling, general and administrative expenses was primarily attributable to a $8.5 million increase in employee related costs,


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including salary, benefits and non-cash stock-based compensation for new hires mainly due to the growth of the commercialization team.

Other Income, Net

On December 28, 2020, the Company announced that it entered into a definitive agreement to sell its DANYELZA PRV to United Therapeutics Corporation for $105.0 million. The PRV was granted in conjunction with the approval by the FDA of DANYELZA, for the treatment of refractory/relapsed high-risk NB. Under the terms of the MSK License, Y-mAbs retained 60% of the net proceeds received from the sale of the PRV, and the remaining 40% was paid to MSK. The transaction closed on January 21, 2021 and the Company recognized a net gain of $62.0 million during the nine months ended September 30, 2021 related to the sale of the PRV.

Interest and other income/loss for the nine months ended September 30, 2021 was a loss of $0.7 million as compared to a gain of $0.4 million for the nine months ended September 30, 2020. Our interest and other income decreased by $1.1 million due to a decrease in interest rates and increased foreign currency exchange losses incurred in the current period.

Liquidity and Capital Resources

Overview

Except for the three months ended March 31, 2021, the Company has incurred quarterly losses since inception, and expects to continue to incur increasing net operating losses and significant expenses for the foreseeable future. Our net losses may fluctuate significantly from quarter to quarter and year to year. We currently have one approved product, DANYELZA, and have started generating revenue from this product's sales in 2021. As of September 30, 2021 and December 31, 2020, we had cash and cash equivalents of $215.7 million and $114.6 million, respectively. We might need additional capital to continue funding our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements, or other sources.

In conjunction with the approval by the FDA of DANYELZA in November 2020 we received a PRV, which we sold to United Therapeutics Corporation for $105.0 million in a transaction that closed in January 2021. We were obligated to pay 40% of the net proceeds from the sale of the PRV to MSK. We intend to use the remaining proceeds to fund further research and development and other operational programs.

Cash Flows

The following table provides information regarding our cash flows for the nine months ended September 30, 2021 and 2020:


                                                             Nine Months Ended
                                                               September 30,
                                                             2021          2020

Cash used in operating activities                         $ (68,693)$ (73,536)
Cash provided by / (used in) investing activities             61,498       (2,741)
Cash provided by financing activities                        108,214           585
Effect of exchange rates on cash and cash equivalents             77         (177)

Net increase / (decrease) in cash and cash equivalents $ 101,096$ (75,869)




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Net Cash Used in Operating Activities

The use of cash in all periods resulted primarily from our net losses adjusted for non-cash charges and changes in components of working capital.

Net cash used in operating activities was $68.7 million for the nine month period ended September 30, 2021, as compared to net cash used in operating activities of $73.5 million for the nine month period ended September 30, 2020. The $4.8 million decrease in cash usage was primarily due to a $20.2 million reduction in the loss from operations, primarily resulting from $23.2 million of product revenue related to the launch of DANYELZA and $2.0 million of license revenue in the nine month period ended September 30, 2021, partially offset by an increase in operating expenses of $5.1 million during the nine months ended September 30, 2021.

This net increase to operating cash was partially offset by an increase in accounts receivable and inventory of $12.1 million resulting from the launch of DANYELZA in 2021; and a decrease $2.1 million of non-cash stock-based compensation to employees and non-employees due to a $8.7 million equity issuance to MSK and MIT and two inventors in connection with SADA agreement, partially offset by an increase of $6.6 million for non-cash stock-based costs for employees.

Net Cash Provided by /(Used in) Investing Activities

Net cash provided by investing activities was $61.5 million for the nine months ended September 30, 2021, as compared to net cash used in investing activities of $2.7 million for the nine months ended September 30, 2020. The change of $64.2 million was primarily caused by $62.0 million in net proceeds received from the sale of our priority review voucher received from the FDA upon the approval of DANYELZA, partially offset by $0.5 million of investment in property and equipment during the nine months ended September 30, 2021. Net cash used in the nine months ended September 30, 2020 included loans to inventors of $2.6 million. There were no similar loans made by the Company during the nine months ended September 30, 2021.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was $108.2 million for the nine months ended September 30, 2021, as compared to $0.6 million for the nine months ended September 30, 2020. The increase of $107.6 million was primarily due to the net proceeds of $107.7 million received from the public offering in February 2021.

Funding Requirements

We expect our expenses to increase in connection with our ongoing activities, particularly as we commercialize DANYELZA, continue the development of omburtamab, and advance our BLA resubmission for omburtamab. In addition, we plan to advance the development of other pipeline programs, initiate new research and pre-clinical development efforts and seek marketing approval for any additional product candidates that we successfully develop. If we obtain approval for any additional product candidates, we expect to incur commercialization expenses, which may be significant, related to establishing sales, marketing, manufacturing capabilities, distribution and other commercial infrastructure to commercialize such products. Accordingly, we might need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs and/or future commercialization efforts.

In conjunction with the approval by the FDA of DANYELZA in November 2020 we received a PRV, which we subsequently sold to United Therapeutics Corporation for $105.0 million. We were obligated to pay 40% of the net proceeds to MSK. We intend to use the remaining proceeds to fund further research and development and other operational programs.

On February 22, 2021, we completed a public offering of our common stock pursuant to which we issued and sold 2,804,878 shares of our common stock at a price to the public of $41.00 per share which included the exercise in


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full of the underwriters' option to purchase additional shares. We received aggregate gross proceeds from our third public offering of $115.0 million, with aggregate net proceeds of approximately $107.7 million after deducting underwriting discounts and commissions and offering expenses.

We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with the development and commercialization of naxitamab and omburtamab, and the research, development and commercialization of other potential product candidates, we are unable to estimate the exact amount of our operating capital requirements. Our future capital requirements will depend on many factors, including:

the scope, progress, timing, costs and results of clinical trials for

? developing our lead product candidates, naxitamab and omburtamab, and

conducting pre-clinical studies and clinical trials for our other product

candidates;

? research and pre-clinical development efforts for any future product candidates

that we may develop;

? our ability to enter into and the terms and timing of any collaborations,

licensing agreements, distribution agreements or other arrangements;

? the achievement of milestones or occurrence of other developments that trigger

payments under any collaboration or other agreements;

? the number of future product candidates that we pursue and their development

requirements;

? the outcome, timing and costs of seeking regulatory approvals;

the costs of commercialization activities for any of our product candidates

that receive marketing approval to the extent such costs are not the

? responsibility of any future collaborators, including the costs and timing of

establishing product sales, marketing, distribution and manufacturing

capabilities;

? the amount and timing of future revenue, if any, received from commercial sales

of our current and future product candidates upon any marketing approvals;

? proceeds received, if any, from monetization of any future PRVs;

? our headcount growth and associated costs as we expand our research and

development and establish a commercial infrastructure;

the costs of preparing, filing and prosecuting patent applications, maintaining

? and protecting our intellectual property rights and defending against

intellectual property related claims; and

? the costs of operating as a public company.

Identifying potential product candidates and conducting pre-clinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities,


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existing ownership interest in our company may be materially diluted, and the terms of these securities may include liquidation or other preferences that adversely affect common stockholders' rights. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise funds through additional collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have any off-balance sheet arrangements, as defined under the applicable regulations of the SEC.

Contractual Obligations and Commitments

A summary of our minimum contractual obligations related to our material outstanding contractual commitments is included in Note 8 of our enclosed financial statements.

We enter into contracts in the normal course of business with CROs, CMOs, clinical sites and other third parties for clinical trials, preclinical research studies and testing, professional consultants for expert advice and other vendors for clinical supply, manufacturing and other services. These contracts are not considered contractual obligations, as they provide for termination upon prior notice, and, therefore, are cancelable contracts and do not include any minimum purchase commitments. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including noncancellable obligations of our service providers, up to the date of cancellation. These payments are not included in the table of contractual obligations and commitments above.

As further described below, under various licensing and related agreements with third parties, we have agreed to make milestone and royalty payments to third parties. We have not included the contingent payment of certain milestones in the table above, where timing is uncertain. In addition, we have other contingent payment obligations, such as royalties or other third party milestones, which are not included in the table above as the amount, timing and likelihood of such payments are not known.

We have entered into three license agreements and certain other agreements with MSK. The license agreements are further described below as the MSK License, the MSK CD33 License, and the SADA License. Additionally, through the SAAA we have established a direct license with MSK relating to the GD2-GD3 Vaccine.

Under the MSK License and MSK CD33 License we are obligated to (i) make certain payments to MSK, which become due based upon the achievement of the related milestone activities or the passage of time in the event such milestone activities are not achieved, as well as certain sales related milestones, (ii) pay mid to high single digit royalties to MSK, on a product by product and country by country basis, based on net sales of products licensed under the applicable agreement and (iii) pay to MSK a percentage of any sublicense fees received by us. Under the MSK License, we are also obligated to pay annual minimum royalties of $80,000 over the royalty term, which started in 2020. Under the MSK CD33 License, we are obligated to pay annual minimum royalties of $40,000 over the royalty term beginning in 2027, increasing to $60,000 once a patent within the licensed rights is issued. These amounts are nonrefundable but are creditable against royalty payments otherwise due under the respective agreements. The total expensed minimum royalty payments in 2016 under the MSK License were $1,200,000, upon determination that the payment of such minimum royalties was probable and the amount was estimable in 2016. We are also obligated to pay MSK certain clinical, regulatory and sales based milestone payments under the MSK License and MSK CD33 License. Certain of the clinical and regulatory milestone payments become due at the earlier of completion of the related milestone activity or the date indicated in the MSK License. Total clinical, regulatory and sales based milestones potentially due under the


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MSK License are $2,450,000, $9,000,000 and $20,000,000, respectively. In addition, under the MSK CD33 License, we are obligated to make potential payments of $550,000, $500,000 and $7,500,000 for clinical, regulatory and sales based milestones, respectively. We record milestones in the period in which the contingent liability is probable and the amount is reasonably estimable.

On April 15, 2020, we entered the SADA License Agreement, which requires us to pay to MSK and MIT mid to high single-digit royalties based on annual net sales of licensed products or the performance of licensed services by us and our affiliates and sublicensees. We are obligated to pay annual minimum royalties of $40,000, increasing to $60,000 once a patent has been issued, over the royalty term, commencing on the tenth anniversary of the license agreement. These amounts are nonrefundable but are creditable against royalty payments otherwise due under the SADA License Agreement. Under the SADA License Agreement, we are also obligated to pay MSK and MIT certain clinical, regulatory and sales based milestone payments. Certain of the clinical and regulatory milestone payments become due at the earlier of completion of the related milestone activity or the date indicated in the SADA License Agreement. Total clinical and regulatory milestones potentially due under the SADA License Agreement are $4,730,000 and $18,125,000, respectively. There are also sales based milestones, totaling $23,750,000, that become due should the Company achieve certain amounts of sales of licensed products. In addition, for each SADA construct generated by MSK and sold for the Company by a sublicensee, the Company may pay sales milestones in the total amount of $60,000,000 based on the achievement of various levels of cumulative net sales by the sublicensee. Further, under the SADA License Agreement, we have committed to funding scientific research at MSK for up to $1,500,000 over the next three years, which we will expense as incurred.

On December 2, 2019, we entered into the Settlement and Assumption and Assignment, or SAAA, of MSK License and Y-mAbs Sublicense Agreement, or the MabVax/Y-mAbs Sublicense, between us and MabVax dated June 27, 2018, with MabVax Therapeutics Holdings, Inc. and MabVax Therapeutics, Inc., or together, MabVax, and MSK, which became effective on December 13, 2019. Pursuant to the MabVax/Y-mAbs Sublicense, MabVax sublicensed to us certain patent rights and know-how for development and commercialization of products for the prevention or treatment of NB by means of administering a bi-valent ganglioside vaccine granted to MabVax, pursuant to an exclusive license agreement dated June 20, 2008 between MabVax and MSK, as amended, or the MabVax/MSK License Agreement. We remain responsible for any potential downstream payment obligations by MabVax to MSK related to the GD2-GD3 Vaccine that were specified in the MabVax/MSK License Agreement. This includes the obligation to pay development milestones totaling $1,400,000, annual minimum royalties of $10,000, increasing to $25,000 from approval of the first NDA/BLA for a licensed product, over the royalty term, commencing on the second anniversary of the MabVax/Y-mAbs Sublicense and mid single-digit royalty payments to MSK on sales. Minimum royalties are non-refundable but creditable against royalty payments otherwise due from us to MSK pursuant to the MabVax/MSK License Agreement. In addition, if we obtain FDA approval for the GD2-GD3 Vaccine, then we are obligated to file with the FDA for a PRV. The SAAA stipulates that, if we are granted a PRV from the FDA covering a licensed product under the MabVax/Y-mAbs Sublicense and the PRV is subsequently sold, we will pay directly to MabVax and to MSK, respectively, a percentage of the proceeds from the sale thereof in order that MabVax and MSK each receive the same amount therefrom as envisaged under the MabVax/MSK License Agreement. The MabVax/MSK License Agreement will expire with effect for us, on a country by country basis, on the later of the expiration of (i) 10 years from the first commercial sale of the licensed product in such country or (ii) the last to expire valid claim covering such licensed product rights at the time of and in the country of sale.

Research and development is inherently uncertain and, should such research and development fail, the MSK License, the MSK CD33 License, and SADA License are cancelable at our option. We have also considered the development risk and each party's termination rights under the three license agreements when considering whether any contingent payments, certain of which also contain time based payment requirements, were probable. In addition, to the extent we enter into sublicense arrangements, we are obligated to pay to MSK a percentage of certain payments that we receive from sublicensees of the rights licensed to us by MSK, which percentage will be based upon the achievement of certain clinical milestones. To date, we have not entered into any sublicenses related to the MSK CD33 License, the SADA License or the MabVax License. We have entered sublicenses with SciClone, Takeda and Adium as allowed under the MSK License in 2020. Our failure to meet certain conditions under such arrangements could cause the related license to such licensed product to be canceled and could result in termination of the entire respective arrangement with


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MSK. In addition, we may terminate the MSK License, the MSK CD33 License, or the SADA License with prior written notice to MSK.

Recent Accounting Pronouncements

Refer to Note 3 "Summary of Significant Accounting Policies," in the accompanying notes to the consolidated financial statements for a discussion of recent accounting pronouncements.

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Financials (USD)
Sales 2021 66,7 M - -
Net income 2021 -49,0 M - -
Net cash 2021 85,0 M - -
P/E ratio 2021 -9,31x
Yield 2021 -
Capitalization 446 M 446 M -
EV / Sales 2021 5,42x
EV / Sales 2022 1,00x
Nbr of Employees 125
Free-Float -
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Claus Juan M°ller-San Pedro Director, Chief Executive & Commercial Officer
Thomas Gad Chairman, President & Head-Business Development
Bo Kruse CFO, Secretary. Treasurer & Executive VP
Torben Lund-Hansen Chief Technology Officer & Senior Vice President
Steen Lisby Chief Scientific Officer & Senior Vice President
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