lyel-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

__________________________

FORM 10-Q

__________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40502

__________________________

Lyell Immunopharma, Inc.

(Exact Name of Registrant as Specified in its Charter)

__________________________


Delaware			83-1300510
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
201 Haskins Way South San Francisco, California			94080
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (650) 695-0677

__________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

LYEL

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 2, 2024, the registrant had 254,939,222 shares of common stock, $0.0001 par value per share, outstanding.

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Lyell Immunopharma, Inc.

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		Page
Special Note Regarding Forward-Looking Statements		1
	PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss	4
	Condensed Consolidated Statements of Stockholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68
Item 3.	Defaults Upon Senior Securities	68
Item 4.	Mine Safety Disclosures	68
Item 5.	Other Information	68
Item 6.	Exhibits	69
Signature		70

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy, product candidates, planned nonclinical studies and clinical trials, results of nonclinical studies and clinical trials, research and development costs, planned regulatory submissions, regulatory approvals and the timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that are in some cases beyond our control and may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “believe,” “estimate,” “predict,” “potential” or “continue,” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•the sufficiency of our existing cash to fund our future operating expenses and capital expenditure requirements;

•the accuracy and timing of our estimates regarding expenses, revenue opportunities, capital requirements and needs for additional financing;

•the scope, progress, results and costs of developing LYL797, LYL845, LYL119 or any other product candidates we may develop, and conducting nonclinical studies and clinical trials, including for LYL797, LYL845 and LYL119;

•the timing and costs involved in obtaining and maintaining regulatory approvals of LYL797, LYL845, LYL119 or any other product candidates we may develop, and the timing or likelihood of regulatory filings and approvals, including any expectations regarding seeking special designations for our product candidates for various diseases;

•our plans relating to the commercialization of LYL797, LYL845, LYL119 or any other product candidates we may develop, if approved, including the geographic areas of focus and our ability to grow a sales force;

•the size of the market opportunities for LYL797, LYL845, LYL119 or any other product candidates we may develop in each of the diseases we may target;

•our reliance on third parties to conduct research activities for LYL797, LYL845, LYL119 or any other product candidates we may develop;

•the characteristics, safety, efficacy and therapeutic effects of LYL797, LYL845, LYL119 or any other product candidates we may develop;

•our estimates of the number of patients in the United States who suffer from the diseases we target and the number of subjects that may enroll in our clinical trials;

•the benefits associated with the U.S. Food and Drug Administration’s (FDA) Orphan Drug designation (ODD), including potential tax credits for qualified clinical trials, prescription drug user-fee exemptions and potential seven-year marketing exclusivity upon FDA approval and comparable benefits associated with foreign ODDs in other countries, if we receive ODD outside the United States;

•the progress and focus of our current and planned clinical trials of our product candidates, and the reporting of data from those trials, including the timing thereof;

•the ability of our clinical trials to sufficiently demonstrate the safety and efficacy of LYL797, LYL845, LYL119 or any other product candidates we may develop, and other clinical trial results;

•the success of competing therapies that are, or may become, available;

•developments relating to our competitors and our industry, including any existing or future competing product candidates or therapies;

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•our plans relating to the further development and manufacturing of LYL797, LYL845, LYL119 or any other product candidates we may develop, including additional indications that we may pursue;

•existing regulations and regulatory developments in the United States and other jurisdictions;

•our potential and ability to successfully manufacture and supply or our ability to contract with third parties to manufacture and supply LYL797, LYL845, LYL119 or any other product candidates we may develop for clinical trials and for commercial use, if approved;

•the rate and degree of market acceptance, as well as the pricing and reimbursement, of LYL797, LYL845, LYL119 or any other product candidates we may develop, if approved;

•our continued reliance on third parties to assist us in conducting additional clinical trials of LYL797, LYL845, LYL119 or any other product candidates we may develop;

•the scope of protection we are able to establish and maintain for intellectual property rights, including covering our product candidates and technology platforms;

•our ability to retain the continued service of our key personnel and to identify, hire and then retain additional qualified personnel;

•our expectations regarding the impact of inflation, macroeconomic conditions and geopolitical conflicts on our business and operations, including on our manufacturing suppliers, collaborators, contract research organizations (CROs) and employees; and

•our anticipated use of our existing cash, cash equivalents and marketable securities.

We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described under “Risk Factors” in Part II, Item 1A, and elsewhere in this Quarterly Report on Form 10-Q. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in these forward-looking statements. Except as required by applicable law, we undertake no obligation to update or supplement any forward-looking statements publicly, or to update or supplement the reasons that actual results could differ materially from those projected in these forward-looking statements, even if new information becomes available in the future.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.

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PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements.

Lyell Immunopharma, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except per share amounts)

(unaudited)


	March 31, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	125,650	$	145,647
Marketable securities	400,650		400,576
Prepaid expenses and other current assets	7,865		8,463
Total current assets	534,165		554,686
Restricted cash	286		284
Marketable securities, non-current	—		16,506
Other investments	19,000		32,001
Property and equipment, net	97,836		102,654
Operating lease right-of-use assets	38,695		39,663
Other non-current assets	4,238		4,235
Total assets	$	694,220	$	750,029

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,895	$	4,817
Accrued liabilities and other current liabilities	24,914		28,126
Success payment liabilities	2,544		1,576
Total current liabilities	32,353		34,519
Operating lease liabilities, non-current	55,159		56,894
Other non-current liabilities	3,551		3,664
Total liabilities	91,063		95,077
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 10,000 shares authorized at March 31, 2024 and December 31, 2023; no shares issued and outstanding at March 31, 2024 and December 31, 2023	—		—
Common stock, $0.0001 par value; 500,000 shares authorized at March 31, 2024 and December 31, 2023; 254,927 and 253,958 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively	25		25
Additional paid-in capital	1,666,315		1,657,133
Accumulated other comprehensive loss	(404)		(94)
Accumulated deficit	(1,062,779)		(1,002,112)
Total stockholders’ equity	603,157		654,952
Total liabilities and stockholders’ equity	$	694,220	$	750,029

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

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Lyell Immunopharma, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except per share amounts)

(unaudited)


	Three Months Ended March 31,
	2024		2023
Revenue	$	3	$	65
Operating expenses:
Research and development	43,174		44,630
General and administrative	13,494		19,279
Other operating income, net	(1,090)		(1,288)
Total operating expenses	55,578		62,621
Loss from operations	(55,575)		(62,556)
Interest income, net	6,819		4,497
Other income, net	1,090		1,100
Impairment of other investments	(13,001)		(10,000)
Total other loss, net	(5,092)		(4,403)
Net loss	(60,667)		(66,959)
Other comprehensive loss:
Net unrealized (loss) gain on marketable securities	(310)		3,720
Comprehensive loss	$	(60,977)	$	(63,239)

Net loss per common share, basic and diluted	$	(0.24)	$	(0.27)
Weighted-average shares used to compute net loss per common share, basic and diluted	254,252		249,591

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

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Lyell Immunopharma, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands)

(unaudited)


		Three Months Ended March 31, 2024

	Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
		Shares			Amount
Balance as of December 31, 2023		253,958	$	25		$	1,657,133	$	(94)	$	(1,002,112)	$	654,952
Issuance of common stock upon exercise of stock options		869	—			103		—		—		103
Issuance of common stock in connection with restricted stock units, net of tax		100	—			(76)		—		—		(76)
Stock-based compensation		—	—			9,155		—		—		9,155
Other comprehensive income		—	—			—		(310)		—		(310)
Net loss		—	—			—		—		(60,667)		(60,667)
Balance as of March 31, 2024		254,927	$	25		$	1,666,315	$	(404)	$	(1,062,779)	$	603,157


	Three Months Ended March 31, 2023

	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2022	249,567	$	25	$	1,608,306	$	(7,599)	$	(767,480)	$	833,252
Issuance of common stock in connection with restricted stock units, net of tax	42	—		(69)		—		—		(69)
Stock-based compensation	—	—		13,882		—		—		13,882
Other comprehensive loss	—	—		—		3,720		—		3,720
Net loss	—	—		—		—		(66,959)		(66,959)
Balance as of March 31, 2023	249,609	$	25	$	1,622,119	$	(3,879)	$	(834,439)	$	783,826

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

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Lyell Immunopharma, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(60,667)	$	(66,959)
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment of other investments	13,001		10,000
Stock-based compensation expense	9,155		13,882
Depreciation and amortization expense	5,024		5,027
Net amortization and accretion on marketable securities	(4,367)		(1,850)
Gain on marketable equity securities	(1,535)		—
Change in fair value of success payment liabilities	968		(1,708)
Non-cash lease income	(373)		(293)
Loss on property and equipment disposals, net	15		—
Changes in operating assets and liabilities:
Prepaid expenses, other current assets and other assets	595		(408)
Accounts payable	(113)		2,069
Accrued liabilities and other current liabilities	(3,606)		(5,860)
Other non-current liabilities	(113)		(112)
Net cash used in operating activities	(42,016)		(46,212)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	(30)		(1,533)
Purchases of marketable securities	(108,011)		(108,560)
Maturities of marketable securities	130,035		142,247
Net cash provided by investing activities	21,994		32,154
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options	103		—
Taxes paid related to net share settlement of equity awards	(76)		(69)
Net cash provided by (used in) financing activities	27		(69)
Net decrease in cash, cash equivalents and restricted cash	(19,995)		(14,127)
Cash, cash equivalents and restricted cash at beginning of period	145,931		123,834
Cash, cash equivalents and restricted cash at end of period	$	125,936	$	109,707
Represented by:
Cash and cash equivalents	$	125,650	$	109,426
Restricted cash	286		281
Total	$	125,936	$	109,707
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for amounts included in the measurement of lease liabilities	$	2,659	$	2,406
Non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued liabilities	$	220	$	395

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

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Lyell Immunopharma, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Organization

Lyell Immunopharma, Inc. (the “Company”) was incorporated in Delaware in June 2018. The Company is a clinical-stage cell therapy company advancing a pipeline of product candidates for patients with solid tumors utilizing its proprietary ex vivo genetic and epigenetic T‑cell reprogramming technologies. The Company’s primary activities since incorporation have been to develop T‑cell therapies, conduct research and development, acquire technology, enter into strategic collaboration and license arrangements, enable and execute manufacturing activities in support of its product candidate development efforts, organize and staff the Company, conduct business planning, establish its intellectual property portfolio, submit regulatory submissions, execute clinical trials, raise capital and provide general and administrative support for these activities.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany transactions and balances have been eliminated in consolidation.

The Condensed Consolidated Balance Sheet as of December 31, 2023 included herein was derived from the audited consolidated financial statements as of that date. Certain information and footnote disclosures typically included in the Company’s audited consolidated financial statements have been condensed or omitted. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of the Company’s financial position, results of operations and cash flows for the periods presented, but are not necessarily indicative of results to be expected for any future annual or interim period.

These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Liquidity and Management’s Plan

The Company discovers and develops product candidates that involve experimental technologies. The product candidates may require several years and substantial

SEC Form 10-Q filed by Lyell Immunopharma Inc.