Ikena Oncology | SEC Filing

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10-Q

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 June 30, 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: 001-40287

IKENA ONCOLOGY, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware		81-1697316
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
645 Summer Street, Suite 101 Boston, MA		02210
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (857) 273-8343

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, par value $0.001 per share

    IKNA

    The Nasdaq Global 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, 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.

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 August 1, 2024, the registrant had 48,258,111 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION	1
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Stockholders' Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20
PART II.	OTHER INFORMATION	21
Item 1.	Legal Proceedings	21
Item 1A.	Risk Factors	21
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
Signatures		70

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains express or implied forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements involve risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•

the timing, progress, results, and cost of our current research and development programs and clinical trials, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available, and our research and development programs;

•

our ability to identify, implement and realize the anticipated benefits from any strategic transaction;

•

our ability and the potential to successfully manufacture our drug substances and product candidates for preclinical use, for clinical trials, and on a larger scale, for commercial use, if approved;

•

the ability and willingness of our third-party strategic collaborators to continue research and development activities relating to our development candidates and product candidates;

•

our ability to obtain funding for our operations necessary to complete further development and commercialization of our product candidates;

•

our ability to obtain and maintain regulatory approval of our product candidates;

•

our ability to commercialize our products, if approved;

•

the pricing and reimbursement of our product candidates, if approved;

•

the implementation of our business model, and strategic plans for our business and product candidates;

•

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

•

estimates of our future expenses, revenue, capital requirements, and our needs for additional financing;

•

the potential benefits of strategic collaboration agreements, our ability to enter into strategic collaborations or arrangements, and our ability to attract collaborators with development, regulatory and commercialization expertise;

•

future agreements with third parties in connection with the commercialization of product candidates and any other approved product;

•

the size and growth potential of the markets for our product candidates, and our ability to serve those markets;

•

our financial performance;

•

the rate and degree of market acceptance of our product candidates;

•

regulatory developments in the United States and relevant foreign countries;

•

our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

•

our ability to produce our products or product candidates with advantages in turnaround times or manufacturing cost;

•

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

•

our ability to attract and retain key scientific or management personnel as necessary;

•

the impact of laws and regulations;

•

our use of proceeds from our offerings;

•

the effects of our workforce reductions, including costs related thereto and our ability to retain key personnel;

•

our ability to obtain and negotiate favorable terms of any collaboration, licensing or other arrangement that may be necessary or desirable to develop our product candidates;

•

developments relating to our competitors and our industry;

•

the effect of pandemics, epidemics or any outbreak of an infectious disease, including mitigation efforts and economic effects, on any of the foregoing or other aspects of our business operations, including but not limited to our preclinical studies and clinical trials and any future studies or trials;

•

the impact of global economic and political developments on our business, including rising inflation and capital market disruptions, economic sanctions, bank failures, regional conflicts around the world, and economic slowdowns or recessions that may result from such developments which could harm our research and development efforts as well as the value of our common stock and our ability to access capital markets; and

•

other risks and uncertainties, including those under the caption “Risk Factors.”

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” section, that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments that we may make or into which we may enter.

You should read this Quarterly Report on Form 10-Q and the documents that we reference herein and have filed or incorporated by reference as exhibits hereto completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

iii

Summary of the Material and Other Risks Associated with Our Business

Our business is subject to numerous material and other risks and uncertainties that you should be aware of in evaluating our business. These risks include, but are not limited to, the following:

•

We may not be successful in identifying and implementing any strategic transaction, and any strategic transactions that we may consummate in the future could have negative consequences.

•

Even if we successfully consummate any transaction from our strategic review process, we may fail to realize all of the anticipated benefits of the transaction, those benefits may take longer to realize than expected, or we may encounter integration difficulties.

•

If we are successful in completing a strategic transaction, we may be exposed to other operational and financial risks.

•

If a strategic transaction is not consummated, our board of directors may decide to pursue a dissolution and liquidation. In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

•

Our ability to consummate a strategic transaction depends on our ability to retain our employees required to consummate such transaction.

•

We are a targeted oncology company with a limited operating history.

•

We have incurred significant net losses since our inception and anticipate that we will continue to incur losses for the foreseeable future.

•

We have no products approved for commercial sale and have not generated any revenue from product sales.

•

We may require additional capital to finance our operations, which may not be available on acceptable terms, or at all. If we are unable to raise capital when needed or on terms acceptable to us, we would be forced to delay, reduce or eliminate some of our product development or commercialization efforts.

•

Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.

•

We may not be able to successfully complete clinical trials for our ongoing targeted oncology program or our current product candidate.

•

Our ongoing program is focused on the development of oncology therapeutics for patients with genetically defined or biomarker-driven cancers, which is a rapidly evolving area of science, and the approach we are taking to discover and develop drugs is novel and may never lead to approved or marketable products.

•

Clinical product development involves a lengthy and expensive process, with an uncertain outcome.

•

If the market opportunities for our programs and product candidates are smaller than we estimate or if any regulatory approval that we obtain is based on a narrower definition of the patient population, our revenue and ability to achieve profitability will be adversely affected, possibly materially.

•

We rely, and expect to continue to rely, on third parties to conduct our clinical trials as well as investigator-sponsored clinical trials of our product candidates. If these third parties do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed.

•

If we are unable to obtain and maintain patent and other intellectual property protection for our technology and product candidates or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and drugs similar or identical to ours, and our ability to successfully commercialize our technology and drugs may be impaired.

•

Our future success depends on our ability to retain key executives and experienced scientists and to attract, retain and motivate qualified personnel.

•

The dual class structure of our common stock may limit our stockholders’ ability to influence corporate matters and may limit visibility with respect to certain transactions.

The material and other risks summarized above should be read together with the text of the full risk factors in the “Risk Factors” section and with the other information set forth in this Quarterly Report, including our consolidated financial statements and the related notes, as well as with other documents that we file with the United States Securities and Exchange Commission. If any such

material and other risks and uncertainties actually occur, our business, prospects, financial condition and results of operations could be materially and adversely affected. The risks summarized above or described in full in the “Risk Factors” section, are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial may also materially adversely affect our business, prospects, financial condition and results of operations.

PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (unaudited)

IKENA ONCOLOGY, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(Unaudited)


	June 30, 2024			December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	44,268		$	119,894
Marketable securities		101,151			55,571
Prepaid expenses and other current assets		3,902			3,197
Total current assets		149,321			178,662
Property and equipment, net		772			2,335
Right-of-use asset		4,779			5,686
Deposits and other assets		2,613			5,409
Total assets	$	157,485		$	192,092
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,408		$	2,066
Accrued expenses and other current liabilities		3,093			8,581
Operating lease liability		3,695			3,558
Total current liabilities		8,196			14,205
Long-term portion of operating lease liability		5,397			7,180
Other long-term liabilities		1,033			950
Total liabilities		14,626			22,335
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized at June 30, 2024 and December 31, 2023; No shares issued and outstanding at June 30, 2024 or December 31, 2023		—			—
Common stock, $0.001 par value, 150,000,000 shares authorized and 48,258,111 shares issued and outstanding at June 30, 2024 and December 31, 2023		48			48
Additional paid-in capital		455,422			452,142
Accumulated other comprehensive loss		(350	)		(48	)
Accumulated deficit		(312,261	)		(282,385	)
Total stockholders’ equity		142,859			169,757
Total liabilities and stockholders’ equity	$	157,485		$	192,092

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

IKENA ONCOLOGY, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Collaboration revenue	$	—		$	2,004		$	—		$	7,316
Operating expenses:
Research and development		9,832			15,172			19,477			30,723
General and administrative		5,308			5,322			11,307			10,598
Restructuring and other charges		683			—			3,265			—
Total operating expenses		15,823			20,494			34,049			41,321
Loss from operations		(15,823	)		(18,490	)		(34,049	)		(34,005	)
Other income (expense):
Investment income		1,920			1,381			4,034			2,677
Other income (expense)		235			(6	)		228			(6	)
Total other income, net		2,155			1,375			4,262			2,671
Loss before income taxes		(13,668	)		(17,115	)		(29,787	)		(31,334	)
Income tax expense		(62	)		—			(89	)		—
Net loss	$	(13,730	)	$	(17,115	)	$	(29,876	)	$	(31,334	)

Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities		(37	)		35			(302	)		307
Total comprehensive loss	$	(13,767	)	$	(17,080	)	$	(30,178	)	$	(31,027	)

Net loss per share:
Net loss per share, basic and diluted	$	(0.28	)	$	(0.44	)	$	(0.62	)	$	(0.83	)
Weighted-average common shares outstanding, basic and diluted		48,258,111			39,292,710			48,258,111			37,783,486

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

IKENA ONCOLOGY, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share amounts)

(Unaudited)


							Accumulated
					Additional		Other						Total
	Common Stock				Paid-in		Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity
Balance as of December 31, 2023		48,258,111	$	48	$	452,142	$	(48	)	$	(282,385	)	$	169,757
Stock-based compensation		—		—		2,001		—			—			2,001
Other comprehensive loss		—		—		—		(265	)		—			(265	)
Net loss		—		—		—		—			(16,146	)		(16,146	)
Balance as of March 31, 2024		48,258,111		48		454,143		(313	)		(298,531	)		155,347
Stock-based compensation		—		—		1,279		—			—			1,279
Other comprehensive loss		—		—		—		(37	)		—			(37	)
Net loss		—		—		—		—			(13,730	)		(13,730	)
Balance as of June 30, 2024		48,258,111	$	48	$	455,422	$	(350	)	$	(312,261	)	$	142,859


									Accumulated
						Additional			Other						Total
	Common Stock					Paid-in			Comprehensive			Accumulated			Stockholders’
	Shares			Amount		Capital			Loss			Deficit			Equity
Balance as of December 31, 2022		36,257,493		$	36	$	361,915		$	(763	)	$	(214,219	)	$	146,969
Stock-based compensation		—			—		2,000			—			—			2,000
Other comprehensive income		—			—		—			272			—			272
Net loss		—			—		—			—			(14,219	)		(14,219	)
Balance as of March 31, 2023		36,257,493			36		363,915			(491	)		(228,438	)		135,022
Issuance of common stock for underwritten registered offering, net of offering costs of $2,605		6,110,000			6		37,415			—			—			37,421
Repurchase of common stock		(97,500	)		—		(663	)		—			—			(663	)
Stock-based compensation		—			—		1,879			—			—			1,879
Exercise of stock options		29,485			—		121			—			—			121
Other comprehensive income		—			—		—			35			—			35
Net loss		—			—		—			—			(17,115	)		(17,115	)
Balance as of June 30, 2023		42,299,478		$	42	$	402,667		$	(456	)	$	(245,553	)	$	156,700

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

IKENA ONCOLOGY, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)


	Six Months Ended June 30,
	2024			2023
Cash flows from operating activities:
Net loss	$	(29,876	)	$	(31,334	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		311			473
Net accretion of discounts on marketable securities		(817	)		(1,132	)
Stock-based compensation		3,280			3,879
Non-cash operating lease expense		907			681
Loss on disposal of property and equipment		99			5
Impairment of assets held for sale		742			—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(539	)		339
Deposits and other assets		2,796			(489	)
Accounts payable		(658	)		(321	)
Accrued expenses and other current liabilities		(5,488	)		(2,011	)
Operating lease liabilities		(1,646	)		(701	)
Deferred revenue		—			(7,316	)
Other long-term liabilities		83			—
Net cash used in operating activities		(30,806	)		(37,927	)
Cash flows from investing activities:
Purchases of property and equipment		—			(152	)
Proceeds from sale of property and equipment		245			4
Purchases of marketable securities		(72,265	)		(47,050	)
Proceeds from maturities of marketable securities		27,200			59,072
Net cash provided by (used in) investing activities		(44,820	)		11,874
Cash flows from financing activities:
Proceeds from issuance of common stock for underwritten registered offering, net of offering costs		—			37,544
Repurchase of common stock		—			(663	)
Proceeds from exercise of stock options		—			121
Net cash provided by financing activities		—			37,002
Net increase (decrease) in cash, cash equivalents and restricted cash		(75,626	)		10,949
Cash, cash equivalents and restricted cash, beginning of period		121,172			60,791
Cash, cash equivalents and restricted cash, end of period	$	45,546		$	71,740
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets:
Cash and cash equivalents	$	44,268		$	70,868
Restricted cash included in other assets		1,278			872
Cash, cash equivalents and restricted cash, end of period	$	45,546		$	71,740

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

IKENA ONCOLOGY, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Nature of Business and Basis of Presentation

Ikena Oncology, Inc. (the “Company”) is a clinical stage targeted oncology company, focused on developing differentiated therapies for patients in need that target nodes of cancer growth, spread, and therapeutic resistance. The Company’s approach has been to target both cancer-driving targets and mechanisms of resistance to other therapies.

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial reporting. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

The accompanying condensed consolidated financial statements and footnotes to the financial statements have been prepared on the same basis as the most recently audited annual financial statements and, in the opinion of management, reflect all normal recurring adjustments necessary for the fair presentation of the Company’s financial position for the reported periods. The results of operations for any interim periods are not necessarily indicative of results to be expected for the year ending December 31, 2024, any other interim periods, or any future year or period. These condensed consolidated financial statements should be read in conjunction with, the Company’s audited consolidated financial statements for the year ended December 31, 2023, which were included in its Annual Report on Form 10-K that was filed with the Securities and Exchange Commission (“SEC”) on March 12, 2024.

2. Summary of Significant Accounting Policies

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such a time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company no longer is an emerging growth company or affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the Company’s financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates and judgments are based on historical information and other market-specific or various relevant assumptions, including in certain circumstances, future projections, that management believes to be reasonable under the circumstances. Actual results could differ materially from estimates. Significant estimates and assumptions reflected in these condensed consolidated financial statements include but are not limited to the accruals for research and development expenses and collaboration revenue.

Concentration of Credit Risk and of Significant Suppliers

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, and marketable securities. Cash and cash equivalents are deposited with federally insured financial institutions in the United States and may, at times, exceed federally insured limits. The Company places marketable securities with a highly rated financial institution. As of June 30, 2024, the Company has not experienced any credit related losses on its cash, cash equivalents or marketable securities.

The Company is dependent on third-party manufacturers to supply products for its research and development activities. In particular, the Company relies and expects to continue to rely on a small number of manufacturers to supply it with its requirements for the active pharmaceutical ingredients and formulated drugs related to the Company’s programs. These programs could be adversely affected if a third-party manufacturer is unable to successfully carry out their contractual obligations or meet expected deadlines. If a third-party manufacturer needs to be replaced, the Company may not be able to complete its program development on its anticipated timelines and may incur additional expenses as a result.

Restricted Cash

As of each of June 30, 2024 and December 31, 2023, the Company maintained restricted cash totaling $1.3 million, held in the form of a money market account as collateral for the Company’s facility lease obligations. This balance is included within deposits and other assets on the condensed consolidated balance sheets.

Net Income (Loss) Per Share

Basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding for the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of outstanding stock options. For periods in which the Company reported a net loss, diluted net loss per common share is the same as basic net loss per common share, since dilutive common shares are not assumed to have been issued if their affect is anti-dilutive.

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect:


	June 30,
	2024		2023
Options to purchase common stock		8,253,917		7,558,670
Total		8,253,917		7,558,670

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial statements and disclosures.

3. Fair Value Measurements

The following tables present information about the Company’s financial assets measured or disclosed at fair value by level within the fair value hierarchy (in thousands):


	June 30, 2024		Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	28,605	$	28,605	$	—	$	—
Marketable securities:
U.S. treasury securities		44,370		—		44,370		—
Corporate debt securities		56,781		—		56,781		—
Total assets	$	129,756	$	28,605	$	101,151	$	—


	December 31, 2023		Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	53,613	$	53,613	$	—	$	—
Marketable securities:
Corporate debt securities		55,571		—		55,571		—
Total assets	$	109,184	$	53,613	$	55,571	$	—

During the three and six months ended June 30, 2024 and 2023, there were no transfers into or out of Level 3.

4. Marketable Securities

The following tables summarize the Company's marketable securities (in thousands):


	June 30, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. treasury securities	$	44,556	$	—	$	(186	)	$	44,370
Corporate debt securities		56,945		1		(165	)		56,781
Total	$	101,501	$	1	$	(351	)	$	101,151


	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Corporate debt securities	$	55,624	$	27	$	(80	)	$	55,571
Total	$	55,624	$	27	$	(80	)	$	55,571

In accordance with the Company's investment policy, it places investments in investment grade securities with high credit quality issuers, and generally limits the amount of credit exposure to any one issuer. The Company evaluates securities for impairment at the end of each reporting period. Factors considered include whether a decline in fair value below the amortized cost basis is due to credit-related factors or non-credit-related factors, the financial condition and near-term prospects of the issuer, and the Company’s intent and ability to hold the investment to allow for an anticipated recovery in fair value. As of June 30, 2024 and December 31, 2023, there were no allowances for credit losses recorded.

The Company classifies its investments in marketable securities as available-for-sale and as current assets as they represent the investment of funds available for current operations. The following table summarizes the fair value of the Company’s available-for-sale securities by contractual maturity (in thousands):


	June 30, 2024
Due in one year or less	$	72,852
Due after one year through three years		28,299
Total	$	101,151

5. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	June 30, 2024		December 31, 2023
Employee compensation	$	1,398	$	3,311
Research and development expenses		843		3,964
Professional fees		783		1,221
Other		69		85
Total	$	3,093	$	8,581

6. Collaboration Agreement and Stock Purchase Agreement with Bristol-Myers Squibb

The Company has a 2019 collaboration agreement and associated stock purchase agreement (collectively the “Agreements”) with Celgene Corporation (acquired by Bristol-Myers Squibb), whereby the Company carried out initial research and development activities with the goal of identifying and developing drug candidates for certain cancer types. Bristol-Myers Squibb paid the Company a total of $95.0 million in aggregate upfront consideration related to the collaboration and stock purchase under the Agreements, of which $78.7 million was allocated to the collaboration. The Company was eligible to receive $50.0 million, in case of an exercise of an option with respect to IK-175, and $40.0 million, in case of an exercise of an option with respect to IK-412. Upon the exercise of the delivery of each license, the Company would have been eligible to receive up to $450 million in milestone payments, as well as a tiered royalty on worldwide sales from the high single to low teen digits.

On January 17, 2024, Bristol-Myers Squibb notified the Company of its decision not to opt-in on the IK-175 program. In addition, Bristol-Myers Squibb did not provide an opt-in exercise for the IK-412 program. As a result, the Company has regained full global rights to the IK-175 and IK-412 programs. Deferred revenue related to the collaboration had been fully recognized prior to December 31, 2023, as all obligations under the Agreements had been completed. As of June 30, 2024, all activities under the collaboration agreement have been concluded and there are no further amounts to be paid by Bristol-Myers Squibb under such agreement.

7. Stock-Based Compensation

The Company has outstanding awards under its 2016 Stock Incentive Plan, as amended (the “2016 Plan”), but is no longer granting awards under this plan. The Company’s 2021 Stock Incentive Plan (the “2021 Plan” and, together with the 2016 Plan, the “Plans”) allows the Company to make equity-based and cash-based incentive awards to officers, employees, directors and consultants. The number of shares initially reserved under the 2021 Plan was 3,119,514 shares of the Company’s common stock. Additionally, shares of the Company’s common stock subject to outstanding awards under the 2016 Plan that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right will be added back to the shares of common stock available for issuance under the 2021 Plan. The 2021 Plan contains an “evergreen” provision, which allows for an annual increase in the number of shares of common stock available for issuance under the 2021 Plan on the first day of each fiscal year during the period beginning in fiscal year 2022. The annual increase in the number of shares shall be equal to 4% of the number of shares of common stock outstanding on the immediately preceding December 31; or such lesser number of shares as determined by the Administrator as provided in the 2021 Plan. On January 1, 2024, the number of shares of common stock available for issuance under the 2021 Plan increased by 1,930,324 shares as a result of the automatic increase provision of the 2021 Plan. As of June 30, 2024, 4,177,923 shares of common stock remain available for future issuance under the 2021 Plan.

The vesting periods for equity awards, which generally are four years, are determined by the Company’s board of directors. The contractual term for stock option awards is ten years.

The Company recorded stock-based compensation expense in the following expense categories of its condensed consolidated statements of operations and comprehensive loss (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Research and development	$	400	$	984	$	1,177	$	2,056
General and administrative		879		895		1,840		1,823
Restructuring and other charges		—		—		263		—
Total	$	1,279	$	1,879	$	3,280	$	3,879

As of June 30, 2024, the total unrecognized stock-based compensation balance for outstanding awards was $7.1 million, which is expected to be recognized over a weighted average period of 2.6 years.

The following table summarizes stock option activity for the six months ended June 30, 2024:


	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (thousands)
Outstanding as of December 31, 2023		7,088,261		$	6.35		6.92	$	94
Granted		1,977,173			1.43
Exercised		—			—
Cancelled or forfeited		(811,517	)		6.03
Outstanding as of June 30, 2024		8,253,917		$	5.20		7.13	$	476
Vested or expected to vest as of June 30, 2024		8,253,917		$	5.20		7.13	$	476
Options exercisable as of June 30, 2024		4,654,637		$	6.41		5.80	$	58

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. No options were exercised during the six months ended June 30, 2024. The aggregate intrinsic value of options exercised during the six months ended June 30, 2023 was $0.1 million.

The weighted-average grant date fair value of the stock options granted during the six months ended June 30, 2024 and 2023 was $1.10 per share and $2.23 per share, respectively. The fair value of each option award granted is estimated on the date of grant using the Black-Scholes option pricing model and assumptions input into the model. The following table presents, on a weighted average basis, the assumptions used in the model to determine the grant-date fair value of stock options granted:


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Risk-free interest rate		4.43	%		3.89	%		4.19	%		3.91	%
Expected dividend yield		0	%		0	%		0	%		0	%
Expected option term (in years)	5.58			5.71			6.01			6.03
Expected stock price volatility		94.04	%		87.23	%		91.32	%		86.55	%

8. Commitments and Contingencies

Leases

The Company’s commitments under its leases are described in Note 15 Lease Obligations, to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to the Company’s leases during the three and six months ended June 30, 2024.

In April 2024, the Company entered into three sublease agreements with third parties for the use of office and laboratory space in San Francisco, California that the Company assumed in connection with its acquisition of Pionyr Immunotherapeutics, Inc. (“Pionyr”). Total fixed payments to be received by the Company through April 2027 under the three sublease agreements amount to $2.5 million. For the three and six months ended June 30, 2024, the Company recorded other income of $0.2 million related to its subleases.

License Agreements

UT Austin

The Company had an exclusive patent license agreement (the “UT Austin License”) entered into in 2015, to license certain technologies and intellectual property rights from the University of Texas at Austin (the “University”), an entity affiliated with a director of the Company at the time of the agreement. The Company was required to pay License Maintenance fees annually of $40 thousand. Additionally, the Company would have been required to make additional milestone payments to the University upon meeting certain development milestones in the aggregate of $4.7 million during the term of the UT Austin License, and to pay the University royalties as defined in the UT Austin License on any commercialized product sales related to the licensed technology in a percentage in the low single digits. The Company was also responsible for reimbursing the University for certain patent-related costs incurred on its behalf. A Notice of Termination was sent by the Company in March 2024 and the UT Austin License was terminated as of June 27, 2024, at which time all assets were returned to the University and no further costs will be incurred by the Company in connection with the UT Austin License.

Arrys

The Company acquired in-process research and development in 2018 on an Arrys Therapeutics, Inc.’s (“Arrys”) immune-oncology candidate based on the intellectual property associated with Arrys’ AskAt License as part of the Company’s acquisition of Arrys. The AskAt License was intended to be used by the Company in its future development of therapeutic drug candidates for eventual clinical development and commercialization. The Company would have been obligated to make milestone payments to AskAt upon meeting certain development and sales milestones during the term of the AskAt License as well as royalties on any commercialized product sales related to the licensed technology. The AskAt Agreement was terminated as of March 20, 2024 and all assets were returned to AskAt. No further costs will be incurred by the Company in connection with the AskAt License.

Other Agreements

The Company is also party to various agreements, principally relating to licensed technology, that require future payments relating to milestones not met as of June 30, 2024 or royalties on future sales of specified products that have not yet occurred as of June 30, 2024.

Contingent Value Rights

In connection with the acquisition of Pionyr on August 4, 2023, the Company issued one contractual contingent value right (“CVR”) to the former Pionyr stockholders for each share of Pionyr stock held at closing. The CVR entitles the holder to receive 50% of net proceeds, outside of royalties, for any potential monetization of Pionyr legacy programs within two years. The Company accounts for the CVRs as contingent liabilities. As of June 30, 2024 and December 31, 2023, the contingent consideration cannot be reasonably estimated, and the contingency was not resolved.

9. Restructuring and Other Charges

On January 17, 2024, the board of directors of the Company approved a plan to reduce the Company’s workforce by approximately 35% and discontinue discovery efforts. The workforce reduction was designed to align the Company’s workforce with its strategy to focus on its clinical stage, targeted oncology programs, IK-930 and IK-595. The workforce reduction and discontinuation of discovery efforts are referred to as the “January Restructuring” and were completed by March 31, 2024. In connection with the workforce reduction, the Company terminated approximately 20 employees. During the three months ended March 31, 2024, the Company recorded severance charges in connection with the workforce reduction, consisting of cash expenditures for employee separation costs of $1.6 million, which were paid by June 30, 2024, and non-cash charges of $0.3 million for the modification of certain equity awards. In March 2024, the Company committed to a plan to sell laboratory equipment related to its discovery efforts and therefore classified the net amount of assets held for sale of $0.4 million in prepaid expenses and other current assets on the condensed consolidated balance sheet as of March 31, 2024. The assets held for sale were carried at the lower of the carrying amount or fair value, less costs to sell, and were sold in the three months ended June 30, 2024.

On May 23, 2024, the board of directors of the Company approved a plan to discontinue the clinical development of IK-930, continue clinical development of IK-595 and reduce its current workforce by approximately 53% (the “May Restructuring” and together with the January Restructuring, the “Restructurings”). The board of directors also approved a process to explore, review and evaluate a range of potential strategic options for the Company. The May Restructuring will result in the termination of approximately 18 employees and is expected to be completed by September 30, 2024.

In June 2024, the board of directors of the Company approved up to $1.3 million of retention payments to employees, subject to remaining actively employed with the Company through specified dates. The retention payments will be expensed as services are performed.

During the three and six months ended June 30, 2024, the Company recorded severance expense in connection with the May Restructuring, of $0.7 million, most of which are expected to be paid by December 31, 2024. The Company’s Restructuring and other charges and balance of its Restructuring liability, which was included in accrued employee compensation, consisted of the following for the three and six months ended June 30, 2024 (in thousands):


	Three Months Ended June 30, 2024
	Employee
	Related			Non-cash		Asset
	Payments			Compensation		Impairments		Total
Accrued balance at March 31, 2024	$	648		$	—	$	—	$	648
Expense		683			—		—		683
Payments		(993	)		—		—		(993	)
Accrued balance at June 30, 2024	$	338		$	—	$	—	$	338


	Six Months Ended June 30, 2024
	Employee
	Related			Non-cash			Asset
	Payments			Compensation			Impairments			Total
Accrued balance at December 31, 2023	$	—		$	—		$	—		$	—
Expense		2,260			263			742			3,265
Payments		(1,922	)		—			—			(1,922	)
Non-cash		—			(263	)		(742	)		(1,005	)
Accrued balance at June 30, 2024	$	338		$	—		$	—		$	338