Immunovant, Inc. (IMVT) FY 2024 MD&A

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition, results of operations, and cash flows together with the audited consolidated financial statements and the related notes thereto included elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A Risk Factors” for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Our fiscal year ends on March 31.

Overview

We are a clinical-stage immunology company pursuing a broad anti-FcRn strategy based on the potential best-in-class profile of our lead asset, IMVT-1402, and informed by the breadth of the class, in which 23 indications have been publicly announced for study by multiple companies to date. We expect to initiate programs evaluating IMVT-1402 in several therapeutic areas, including endocrinology and neurology. To address the unmet needs of people with autoantibody-driven diseases, we are committed to initiating a broad set of late-stage programs for IMVT-1402, including first-in-class indications such as Graves’ disease (“GD”), classic autoantibody indications such as myasthenia gravis (“MG”), and other indications with positive in-class data such as chronic inflammatory demyelinating polyneuropathy (“CIDP”). We expect to leverage disease state insights, clinical trial data observed to date within the anti-FcRn class, and operational experience from past and ongoing batoclimab studies and trials to inform and accelerate the development of IMVT-1402.

Our innovative product pipeline includes IMVT-1402 and batoclimab, formerly referred to as IMVT-1401, both of which are novel, fully human monoclonal antibodies that target the neonatal fragment crystallizable receptor (“FcRn”). Our product candidates are the result of a multi-step, multi-year research program conducted in collaboration with HanAll Biopharma Co., Ltd., (“HanAll”) to design highly potent anti-FcRn antibodies that may be optimized as a simple, subcutaneous injection with dosing that we believe can be tailored based on disease severity and stage.

The physiologic function of FcRn is to prevent the degradation of immunoglobulin G (“IgG”) antibodies. High levels of pathogenic IgG antibodies drive a variety of autoimmune diseases. Inhibition of FcRn, such as through the use of an anti-FcRn antibody, has been shown to reduce levels of total IgG and pathogenic IgG antibodies. We believe our completed clinical trials and other clinical trials assessing anti-FcRn antibodies in IgG-mediated autoimmune diseases have generated promising results, suggesting that FcRn is a therapeutically important and validated pharmacologic target to reduce levels of disease-causing IgG antibodies. Thus, we are developing IMVT-1402 and batoclimab in autoimmune diseases for which there is robust evidence that pathogenic IgG antibodies drive disease manifestation and for which we believe that reduction of IgG antibodies should lead to clinical benefit.

Batoclimab, our initial product candidate, is dosed subcutaneously using a small gauge needle in small volumes (e.g., 2 mL), and has generated therapeutically relevant pharmacodynamic activity. We believe these attributes will drive patient preference and market adoption. In clinical trials conducted to date, batoclimab has been observed to reduce IgG antibody levels, which has provided evidence supporting the use of an anti-FcRn antibody in disease areas associated with high levels of pathogenic IgG antibodies.

Likewise, IMVT-1402, our lead product candidate, has also been observed to reduce IgG antibody levels in a Phase 1 clinical trial conducted in healthy adults, similar to that observed in our original Phase 1 trial of batoclimab. Importantly, although FcRn also plays a role in maintaining serum albumin levels which in turn correlate inversely with low-density lipoprotein (“LDL”) cholesterol levels, no or minimal reduction in albumin and no or minimal increases in LDL cholesterol levels were observed in study participants administered either 300 mg or 600 mg of IMVT-1402 subcutaneously once weekly for four weeks. Across both dose regimens, the changes in albumin and LDL cholesterol were similar to those observed with placebo administration. This is a key attribute for IMVT-1402, which we believe could potentially allow its use as a treatment of chronic conditions requiring maintenance doses that achieve high degrees of IgG suppression.

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We believe that FcRn inhibition has broad therapeutic and commercial potential to address IgG-mediated autoimmune diseases in a number of therapeutic areas, including but not limited to, neurology, endocrinology, hematology, rheumatology, and dermatology. Based on third-party patient prevalence estimates, for the 23 indications that have been publicly announced by multiple companies for clinical development with anti-FcRn assets, we estimate the total potential opportunity for our FcRn franchise to be greater than two million patients in the U.S. and Europe. Our estimates in Europe include all European Union (“E.U.”) countries, Norway, Lichtenstein, Iceland, (together with the E.U. countries, the “EEA”), the United Kingdom (“U.K.”), and Switzerland.

Our goal is to fully optimize the IMVT-1402 clinical development program consistent with its potential best-in-class profile. Our strategic priority is to build a class-leading portfolio of indications in several therapeutic areas by leveraging data derived from studies with batoclimab and from studies with other FcRn inhibitors, both approved and in development. Following a recently completed Type B meeting with the U.S. Food and Drug Administration (“FDA”), we are on track to initiate four to five potentially registrational programs for IMVT-1402 in several therapeutic areas, including endocrinology and neurology, by March 31, 2025. Inclusive of these programs, by March 31, 2026, we plan to have initiated clinical trials of IMVT-1402 in a total of ten indications. The current development program for batoclimab remains important, in particular for accelerating and optimizing the registrational development program of IMVT-1402. In addition, we expect to achieve financial efficiencies in our IMVT-1402 development program by taking advantage of batoclimab data and by applying learning from publicly disclosed in-class competitor data and trial designs.

As a result of our rational design and current outlook on potential opportunities, we believe our product candidates, if developed and approved for commercial sale, would be differentiated from currently available treatments for advanced IgG-mediated autoimmune diseases. To date, these product candidates have demonstrated potential best-in-class IgG reduction and are being developed for delivery using a simple, self-administered subcutaneous injection.

Recent Developments in Our Clinical Programs

IMVT-1402

In the quarter ended June 30, 2023, the FDA cleared our Investigational New Drug (“IND”) application for IMVT-1402, our next generation FcRn inhibitor. Concurrently, we initiated a Phase 1 clinical trial in healthy adults in New Zealand after approval of the Clinical Trial Application (“CTA”) by the regulatory authority, MEDSAFE. In the quarter ended September 30, 2023, we announced initial data from this Phase 1 clinical trial of IMVT-1402, which is a randomized, double-blind, placebo-controlled ascending dose study to assess the safety, tolerability, pharmacokinetics, and pharmacodynamics of IMVT-1402 in healthy adults.

In the single-ascending dose portion of the study, IMVT-1402 was administered subcutaneously and demonstrated a consistent reduction in IgG with potency that was similar to that of batoclimab as observed in our original Phase 1 trial of batoclimab. No or minimal reductions in albumin and no or minimal increases in LDL cholesterol levels were observed in healthy adults administered IMVT-1402 in the single-ascending dose portion of the study; the changes in albumin and LDL were similar to those observed with placebo administration.

We also announced initial multiple-ascending dose (“MAD”) results for the 300 mg cohort. After four weekly 300 mg subcutaneous doses of IMVT-1402, we observed a statistically significant reduction of 63% from baseline in mean total IgG levels, with no or minimal reductions in albumin and no or minimal increases in LDL cholesterol levels observed; the changes in albumin and LDL were similar to those observed with placebo administration.

In the quarter ended December 31, 2023, we announced initial MAD results from the cohort of participants receiving a weekly subcutaneous dose of 600 mg IMVT-1402. After four weekly subcutaneous doses of IMVT-1402, we observed a statistically significant reduction of 74% from baseline in mean total IgG levels, similar to the 76% reduction in mean total IgG levels observed in the Phase 1 trial of batoclimab after four weekly doses of 680 mg given subcutaneously. After four weekly subcutaneous doses of 600 mg IMVT-1402, no or minimal reductions in albumin and no or minimal increases in LDL cholesterol levels were observed; the changes in albumin and LDL were similar to those observed with placebo administration.

Across all doses evaluated, treatments with IMVT-1402 were generally well tolerated, with only mild or moderate treatment-emergent adverse events observed.

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Based on the strength of its potential best-in-class profile, we plan to pursue studies with IMVT-1402 in endocrinology, neurology and other therapeutic areas, with a focus on indications representing first-in-class opportunities, classic autoantibody diseases, and diseases where IgG autoantibodies are believed to play a role. In selecting indications for development, we plan to leverage data from our batoclimab development program and also take advantage of publicly disclosed in-class competitor data, which can be used to establish proof-of-concept as well as provide insights into potentially more informative study designs.

We expect to announce an overview of our development program for IMVT-1402 in GD in the fall of calendar year 2024, supported by additional data from the batoclimab proof-of-concept study in GD that will be disclosed at the same time.

We may transition our registrational development program for CIDP from batoclimab to IMVT-1402 and the pivotal study with IMVT-1402 in CIDP may be optimized based on unblinded batoclimab CIDP data available before March 31, 2025. We may also transition our registrational development programs for MG and thyroid eye disease (“TED”) from batoclimab to IMVT-1402, with a final decision for these programs contingent on top-line data from the batoclimab studies in these indications. We expect to report top-line data from the batoclimab MG study by March 31, 2025 with potential registrational development for MG expected to transition from batoclimab to IMVT-1402 in the same timeframe. A decision regarding which asset to advance to registration in TED will be made in the first half of calendar year 2025 together with disclosing top-line data from the current batoclimab TED program.

Batoclimab

Endocrine Diseases

In the quarter ended June 30, 2023, we initiated a proof-of-concept Phase 2 clinical trial in GD in Germany and in the quarter ended December 31, 2023, we announced initial results from this trial. Consistent with studies of batoclimab in other indications, subcutaneous doses of 680 mg administered in the initial cohort demonstrated potential best-in-class IgG reduction, up to 87%, with a mean IgG reduction of 81% after 12 weeks of treatment. The 340 mg IgG reductions were lower.

Similar to changes in IgG levels, deeper reductions in anti-thyroid stimulating hormone receptor autoantibodies were also observed following treatment with subcutaneous doses of 680 mg of batoclimab as compared to subcutaneous doses of 340 mg of batoclimab. In addition, across a range of clinical parameters, numerically higher responses were observed following treatment with 680 mg of batoclimab as compared to treatment with 340 mg of batoclimab. These parameters included the percentage of patients whose antithyroid drug (“ATD”) dose was reduced and the percentage of patients whose ATD was discontinued. Batoclimab was generally well tolerated with no new safety signals observed in the initial data set. This Phase 2 clinical trial is ongoing, with additional proof-of-concept data, as well as an overview of our development program for IMVT-1402 in GD, expected to be announced in the fall of calendar year 2024.

In the quarter ended December 31, 2022, we initiated our Phase 3 clinical program to evaluate batoclimab as a treatment for TED. We expect top-line results to be available in the first half of calendar year 2025, along with a decision on whether to advance batoclimab to registration in TED or pursue IMVT-1402 in this indication.

Neurological Diseases

In the quarter ended December 31, 2022, we initiated a pivotal Phase 2b trial of batoclimab as a treatment for CIDP. To better ensure that we can optimize the level of disease activity and patient population for an IMVT-1402 clinical trial, we have decided to run the batoclimab CIDP trial approximately two quarters longer prior to unblinding period 1 of this study. We believe this will better ensure that the data from the batoclimab trial, combined with learning from the other CIDP trials, can be used to optimize the IMVT-1402 CIDP trial design in active CIDP prior to March 31, 2025.

In the quarter ended June 30, 2022, we initiated our phase 3 pivotal trial of batoclimab as a treatment for MG. We expect top-line data to be available by March 31, 2025. Further potential registrational development with IMVT-1402 is expected to begin in the same timeframe, with a final decision to be made based on results from the current batoclimab trial.

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Macroeconomic Considerations

Unfavorable conditions in the economy in the U.S., Canada and abroad may negatively affect the growth of our business and our results of operations. For example, macroeconomic events, including the post-COVID-19 environment, changes in inflation, the U.S. Federal Reserve raising interest rates, potential recession in the U.S., recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures and the Russia-Ukraine war and conflict in the Middle East, have led to economic uncertainty globally. The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed.

For additional information about risks and uncertainties related to macroeconomic events that may impact our business, financial condition and results of operations, see the section titled “Risk Factors” under Part I, Item 1A in this Annual Report.

Our Key Agreements

License Agreement with HanAll (“HanAll Agreement”)

For a description of our transactions under the HanAll Agreement, refer to Part II, Item 8. Financial Statements and Supplementary Data, Note 3 – Material Agreements.

Product Service Agreement and Master Services Agreement

For a description of our transactions under the Product Service Agreement and Master Services Agreement with Samsung Biologics Co., Ltd., refer to Part II, Item 8. Financial Statements and Supplementary Data, Note 3 – Material Agreements and Note 10 – Commitments and Contingencies.

Related Party Transactions

For a description of our transactions under agreements with related parties, refer to Part II, Item 8. Financial Statements and Supplementary Data, Note 5 – Related Party Transactions.

Financial Operations Overview

Revenue

We have not generated any revenue and have incurred significant operating losses since inception, and we do not expect to generate any revenue from the sale of any products unless or until we obtain regulatory approval of and commercialize batoclimab, IMVT-1402 or any future product candidates. Our ability to generate revenue sufficient to achieve profitability will depend completely on the successful development and eventual commercialization of batoclimab, IMVT-1402 and any future product candidates.

Research and Development Expenses

We have been primarily engaged in preparing for and conducting clinical trials. Research and development expenses include program-specific costs, as well as unallocated costs, and are net of costs reimbursable to the Company pursuant to cost-sharing arrangements with third parties.

Program-specific costs include direct third-party costs, which include expenses incurred under agreements with contract research organizations and the cost of consultants who assist with the development of our product candidates on a program-specific basis, investigator grants, sponsored research, and any other third-party expenses directly attributable to the development of the product candidates. Program-specific costs also include contract manufacturing costs in connection with producing materials for use in conducting preclinical and clinical studies, including under our agreement with Samsung, to the extent they can be allocated to a specific program.

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Unallocated costs include:

•personnel-related expenses for research and development personnel, which includes employee-related expenses such as salaries, benefits and other staff-related costs;

•stock-based compensation expenses for research and development personnel;

•costs allocated to us under our services agreements with Roivant Sciences Inc. (“RSI”) and Roivant Sciences GmbH (“RSG”) (the “Services Agreements”); and

•other expenses, which include the cost of consultants who assist with our research and development and costs related to contract manufacturing, but are not allocated to a specific program.

Research and development activities will continue to be central to our business model. We expect to incur research and development expenses as we continue our Phase 3 trial of batoclimab as a treatment for MG, our Phase 3 clinical program to evaluate batoclimab for the treatment of TED, a pivotal Phase 2b trial of batoclimab as a treatment for CIDP and a proof-of-concept Phase 2 clinical trial of batoclimab as a treatment for GD. In addition, we are continuing our Phase 1 clinical trial of IMVT-1402 in healthy adults in New Zealand. We expect our research and development expenses to increase as we seek to execute our plan to initiate four to five potentially registrational programs for IMVT-1402 by March 31, 2025 and initiate trials of IMVT-1402 in ten indications (inclusive of the four to five programs initiated in fiscal 2025) by March 31, 2026. Our research and development expenses are expected to continue to increase over the next several years as we hire personnel and our compensation costs increase, commence additional clinical trials for IMVT-1402, increase manufacturing of IMVT-1402 and batoclimab drug substance and drug product and prepare to seek regulatory approval for our product candidates. It is not possible to determine with certainty the duration and completion costs of any clinical trial we may conduct.

The duration, costs and timing of clinical trials of IMVT-1402, batoclimab, and any future product candidates will depend on a variety of factors that include, but are not limited to:

•the number of trials required for approval;

•the per patient trial costs;

•the number of patients that participate in the trials;

•the number of sites included in the trials;

•the countries in which the trial is conducted;

•the length of time required to enroll eligible patients;

•the number of doses that patients receive;

•the drop-out or discontinuation rates of patients;

•the potential additional safety monitoring or other studies requested by regulatory authorities;

•the duration of patient follow-up;

•the timing and receipt of regulatory approvals;

•the potential impact of macroeconomic events, including the post-COVID-19 environment, changes in inflation, the U.S. Federal Reserve raising interest rates, potential recession in the U.S., recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures and the Russia-Ukraine war and the conflict in the Middle East;

•the efficacy and safety profile of the product candidate; and

•the cost of manufacturing.

In addition, the probability of success for our product candidates will depend on numerous factors, including our product’s efficacy, safety, ease of use, competition, manufacturing capability and commercial viability.

Acquired In-Process Research and Development Expenses

Acquired in-process research and development expenses include payments made or due upon the achievement of certain development and regulatory milestones under the HanAll Agreement.

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General and Administrative Expenses

General and administrative expenses consist primarily of employee salaries and related benefits, stock-based compensation for general and administrative personnel, legal and accounting fees, consulting services, costs allocated under the Services Agreements and other operating costs relating to corporate matters and daily operations.

We anticipate that our general and administrative expenses will continue to support our ongoing research and development activities. These expenses will likely include patent-related costs, including legal and professional fees for filing, prosecution and maintenance of patents and patent applications claiming our product candidates, increased costs related to the hiring of additional personnel and fees to outside consultants for professional services. In addition, if either IMVT-1402 or batoclimab obtains regulatory approval, we expect that we would incur significant additional expenses associated with market research activities and building commercial teams.

Results of Operations

Comparison of the Years Ended March 31, 2024 and 2023

The following table sets forth our results of operations for the years ended March 31, 2024 and 2023 (in thousands):

Research and Development Expenses

The following table summarizes the year-over-year changes in research and development expenses for the years ended March 31, 2024 and 2023 (in thousands):

Research and development expenses increased by $52.7 million, from $160.3 million for the year ended March 31, 2023 to $212.9 million for the year ended March 31, 2024.

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Batoclimab program-specific research and development costs, including contract manufacturing costs for drug substance process performance qualification activities, decreased by $4.2 million, from $78.5 million for the year ended March 31, 2023 to $74.3 million for the year ended March 31, 2024. Program costs related to neurological diseases, which include MG and CIDP, decreased $11.0 million, primarily reflecting higher overall clinical trial costs in the prior-year period that included upfront and start-up costs for our Phase 3 and Phase 2b clinical trials. Program costs related to endocrine diseases, which include TED and GD, increased $6.8 million, primarily reflecting higher clinical trial costs, due in part to the initiation of our proof-of-concept Phase 2 clinical trial.

Research and development costs related to the development of IMVT-1402 increased by $32.8 million, from $10.3 million for the year ended March 31, 2023 to $43.1 million for the year ended March 31, 2024. This increase primarily reflected higher contract manufacturing costs and costs related to our Phase 1 clinical trial and pre-clinical study.

Unallocated research and development costs increased by $24.1 million, from $71.5 million for the year ended March 31, 2023 to $95.6 million for the year ended March 31, 2024. This increase reflected higher personnel-related expenses of $25.2 million, primarily reflecting higher headcount and enhancement of our capabilities to support our strategic objectives as we progress our clinical activities in existing and new indications. Partially offsetting this increase were lower costs related to cross-indication research and development activities supporting IMVT-1402 and batoclimab programs of $1.2 million, primarily reflecting our shift to project-related activities to advance the clinical development of batoclimab, including our clinical trials in MG, TED, CIDP and GD, and IMVT-1402.

Acquired In-Process Research and Development Expenses for the Years Ended March 31, 2024 and 2023

During the years ended March 31, 2024 and 2023, acquired in-process research and development expenses were $12.5 million and $10.0 million, respectively, related to the achievement of development and regulatory milestones for batoclimab under the terms of the HanAll Agreement.

General and Administrative Expenses

General and administrative expenses increased by $9.3 million, from $48.0 million for the year ended March 31, 2023 to $57.3 million for the year ended March 31, 2024. The increase was primarily related to higher personnel-related expenses, market research costs, legal and other professional fees and information technology costs.

Interest Income

Interest income increased by $17.4 million, from $7.6 million for the year ended March 31, 2023 to $24.9 million for the year ended March 31, 2024, primarily reflecting interest earned on higher money market fund balances as a result of proceeds from our October 2023 underwritten public offering and concurrent private placement.

Liquidity and Capital Resources

Sources of Liquidity

We had cash and cash equivalents of $635.4 million and $376.5 million as of March 31, 2024 and 2023, respectively. For the years ended March 31, 2024 and 2023, we had net losses of $259.3 million and $211.0 million, respectively. We expect to continue to incur significant expenses and increasing operating losses at least for the next several years. We have never generated any revenue and we do not expect to generate product revenue unless and until we successfully complete development and obtain regulatory approval for batoclimab, IMVT-1402 or any future product candidate.

To date, we have financed our operations primarily from equity offerings. Until such time, if ever, as we can generate substantial product revenue from sales of batoclimab, IMVT-1402 or any future product candidate, we expect to finance our cash needs through a combination of equity offerings, debt financings and potential collaboration, license or development agreements. Our ability to raise additional capital may be adversely impacted by worsening global economic conditions and the continuing disruptions to, and volatility in, the credit and financial markets in the U.S. and worldwide, including disruptions resulting from the ongoing military conflict between Russia and Ukraine and in the Middle East, the post-COVID-19 environment, changes in inflation, heightened interest rates and recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures.

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We do not currently have any committed external source of funds. Debt financing and preferred equity 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.

In October 2023, we completed an underwritten public offering of 8,475,500 shares of our common stock (including 1,526,316 shares of common stock purchased by Roivant Sciences Ltd. (“RSL”) on the same terms as other investors in the offering and the full exercise of the underwriters’ option to purchase 1,105,500 additional shares of common stock) at a price to the public of $38.00 per share. Concurrent with the public offering, RSL purchased 4,473,684 shares of our common stock in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended, at the same price per share as investors in the public offering. The net proceeds to us were approximately $466.7 million after deducting underwriting discounts and commissions, placement agent fees and offering expenses.

On November 9, 2023, we entered into a sales agreement with Leerink Partners LLC (“Leerink Partners”), as sales agent, pursuant to which we may offer and sell, from time to time, shares of our common stock (the “ATM Shares”), subject to certain conditions as specified in the sales agreement. We agreed to pay Leerink Partners up to 3% of the gross proceeds from each sale of ATM Shares sold through the sale agreement. The ATM Shares would be sold at prevailing market prices at the time of the sale and, as a result, prices may vary. The ATM Shares to be sold under the sales agreement, if any, would be issued and sold pursuant to an automatic shelf registration statement on Form S-3, which we filed with the SEC on November 9, 2023, along with a prospectus supplement relating to the offer and sale of up to $150.0 million of ATM Shares pursuant to the sales agreement. We have not issued or sold any ATM Shares pursuant to the ATM offering program.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. Adequate additional funding may not be available to us on acceptable terms, or at all. If we are unable to raise capital in sufficient amounts or on terms acceptable to us, we may be required to delay, limit, reduce or terminate our drug development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves or potentially discontinue operations.

Cash Flows

The following table sets forth a summary of our cash flows for the years ended March 31, 2024 and 2023 (in thousands):

Operating Activities

For the year ended March 31, 2024, $214.2 million of cash was used in operating activities, primarily reflecting a net loss from operations for the year of $259.3 million, partially offset by non-cash charges of $42.5 million and a net change in operating assets and liabilities of $2.6 million. The non-cash charges consisted mainly of stock-based compensation of $41.1 million, reflecting the higher headcount and incentive equity awards as compared with the prior year. The change in operating assets and liabilities reflected an increase in accounts payable and accrued expenses of $7.1 million, primarily reflecting the timing and level of payments for contract manufacturing and other research and development costs, and lower prepaid expenses and other current assets of $1.6 million, driven primarily by the timing of payments and services performed related to our ongoing clinical trials. These changes were partially offset by an increase in accounts receivable of $4.6 million, reflecting amounts owed to us under a research and development cost-sharing arrangement with a third party.

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For the year ended March 31, 2023, $188.2 million of cash was used in operating activities, primarily reflecting a net loss from operations of $211.0 million and a net change in operating assets and liabilities of $10.8 million, partially offset by non-cash charges of $33.6 million. The non-cash charges consisted mainly of stock-based compensation of $32.3 million. The change in our operating assets and liabilities was primarily due to a decrease of $17.1 million in accounts payable driven by the timing of payments related to contract manufacturing costs. The change in operating assets and liabilities also reflected $20.1 million of higher prepaid expenses and other current assets, driven by payments related to clinical research and contract manufacturing activities. These changes were partially offset by an increase in accrued expenses of $15.6 million primarily related to contract manufacturing costs, and a decrease in accounts receivable of $11.8 million reflecting the collection of amounts owed to us under research and development cost-sharing arrangements with third parties.

Investing Activities

For the years ended March 31, 2024 and 2023, cash used in investing activities was related to the purchase of computer equipment.

Financing Activities

For the year ended March 31, 2024, $472.4 million of cash provided by financing activities primarily consisted of proceeds from our October 2023 underwritten public offering and concurrent private placement of $466.7 million, combined, after deducting underwriting discounts and commissions, placement agent fees and offering expenses. Cash provided by financing activities also reflected $5.7 million of proceeds from the exercise of stock options.

For the year ended March 31, 2023, $70.9 million of cash provided by financing activities primarily consisted of proceeds from our October 2022 underwritten offering of approximately $70.2 million, after deducting underwriting discounts and commissions and offering expenses. Cash provided by financing activities also reflected $0.7 million of proceeds from the exercise of stock options.

Material Cash Requirements

Our primary uses of capital have been, and we expect will continue to be, for advancing our clinical and preclinical development programs. We have based our estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Our net losses and operating cash flows may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our planned clinical trials, timing of IMVT-1402 or batoclimab manufacturing, HanAll milestone payments and our expenditures on other research and development activities.

Because of the numerous risks and uncertainties associated with the development and commercialization of product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures necessary to complete the development of product candidates.

Our short-term and long-term material cash requirements as of March 31, 2024 primarily consisted of those related to our clinical trials and clinical development activities, which we expect to fund primarily with our existing cash balance. Our most significant cash requirements are described below:

Product Service Agreement and Master Services Agreement

During the year ended March 31, 2022, we entered into an agreement with Samsung to manufacture a certain quantity of batoclimab drug substance for, among other things, commercial sale, if approved. As of March 31, 2024, in connection with this agreement, we have a remaining minimum obligation to Samsung of approximately $46.2 million, which $3.6 million, $11.7 million, $16.9 million and $14.0 million is expected to be paid during the fiscal years ending March 31, 2025, 2026, 2027 and 2029, respectively. See Part II, Item 8. Financial Statements and Supplementary Data, Note 3 – Material Agreements for additional details.

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HanAll Agreement

Potential future payments due under the HanAll Agreement are contingent upon future events. As of March 31, 2024, the aggregate maximum amount of milestone payments we could be required to make under the HanAll Agreement is $420.0 million (after an aggregate amount of $32.5 million paid for milestone events achieved as of March 31, 2024) upon the achievement of certain regulatory and sales milestone events. During the quarter ended June 30, 2023, we achieved our third and fourth development and regulatory milestones under the HanAll Agreement and made a $12.5 million milestone payment in the quarter ended September 30, 2023 in accordance with the terms of the agreement.

Lease Agreements

In June 2020, we entered into two sublease agreements with RSI for two floors of office space in New York, which expired on February 27, 2024 and April 29, 2024, respectively. In March 2024, we entered into a short-term lease agreement with an unrelated party for office space in New York.

In March 2022, we entered into a lease agreement with an unrelated party for office space in a building in North Carolina that was scheduled to expire on March 31, 2024. In February 2024, we amended the lease agreement to extend the non-cancelable lease term through March 31, 2025. The amended lease agreement includes an option at our election to renew for one additional year.

Our future minimum lease payments as of March 31, 2024 totaled $0.6 million.

For more information on our leases, see Part II, Item 8. Financial Statements and Supplementary Data, Note 9 – Leases.

Outlook

We currently expect that our existing cash and cash equivalents as of March 31, 2024 of $635.4 million will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of the filing of this Annual Report and in the long term beyond the next 12 months.

Except as discussed above, we did not have any other ongoing material contractual obligations for which cash flows were fixed and determinable. We expect to enter into other commitments as the business further develops. In the normal course of business, we enter into agreements with CROs for clinical trials and with vendors for nonclinical studies, manufacturing and other services and products for operating purposes, which agreements are generally cancellable by us at any time, subject to payment of remaining obligations under binding purchase orders and, in certain cases, nominal early-termination fees. These commitments are not deemed significant. There are certain contracts wherein we have a minimum purchase commitment, however, most of it is due and payable within one year.

We anticipate that our short-term and long-term future capital requirements will increase substantially as we:

•fund our clinical development programs;

•launch any potential clinical trials of IMVT-1402 in additional indications;

•increase manufacturing of IMVT-1402 and batoclimab drug substance to support clinical trials;

•achieve milestones under our agreements with third parties, including the HanAll Agreement, that will require us to make substantial payments to those parties;

•integrate acquired technologies into a comprehensive regulatory and product development strategy;

•maintain, expand and protect our intellectual property portfolio;

•hire scientific, clinical, quality control and administrative personnel;

•add operational, financial and management information systems and personnel, including personnel to support our drug development efforts;

•commence the number of clinical trials required for approval;

•seek regulatory approvals for any product candidates that successfully complete clinical trials;

•seek to identify, acquire, develop and commercialize additional product candidates;

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•ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any drug candidates for which we may obtain regulatory approval; and

•incur insurance, legal and other regulatory compliance expenses to operate as a public company.

Our primary use of cash is to fund our clinical trials, clinical development and manufacturing activities. Our current funds will not be sufficient to enable us to complete all necessary development and, if approved, commercially launch IMVT-1402 or batoclimab. We anticipate that we will continue to incur net losses for the foreseeable future.

Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the balance sheet, and the reported amounts of expenses during the reporting period. In accordance with U.S. GAAP, we evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are 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.

We define our critical accounting estimates as those under U.S. GAAP that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. While our significant accounting policies are more fully described in “Note 2 — Summary of Significant Accounting Policies” to our consolidated financial statements in Part II, Item 8 of this Annual Report, we believe the following critical accounting estimate used in the preparation of our consolidated financial statements requires significant estimates and judgments. We did not make any material changes to these assumptions for the year ended March 31, 2024. We do not expect any material changes in the near term to the underlying assumptions during the year ended March 31, 2024.

Research and Development and Acquired In-Process Research and Development Expenses

Research and development costs with no alternative future use are expensed as incurred. We accrue costs for clinical trial activities based upon estimates of the services received and related expenses incurred that have yet to be invoiced by contract research organizations. In making these estimates, we consider various factors, including status and timing of services performed, the number of patients enrolled and the rate of patient enrollment. Payments for a product license prior to regulatory approval of the product and payments for milestones achieved prior to regulatory approval of the product are expensed in the period incurred as acquired in-process research and development expenses. Research and development costs are charged to expense when incurred and primarily consist of employee compensation and expenses from third parties who conduct research and development activities (including manufacturing) on our behalf.