SEC Filing - ArriVent Biopharma

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2024

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

For The Transition Period FromTo

Commission file number: 001-41929

ARRIVENT BIOPHARMA, INC.

(Exact name of registrant as specified in its charter)



Delaware	86-3336099
(State of Other Jurisdiction of incorporation or Organization)	(I.R.S. Employer Identification No.)

18 Campus Boulevard Suite 100, Newtown Square, PA	19073
(Address of principal executive offices)	(Zip Code)

(628) 277-4836

(Registrant’s telephone number, including area code)

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


		Name Of Each Exchange
Title of Each Class	Trading Symbol(s)	On Which Registered
Common Stock, $0.0001 Par Value per Share	AVBP	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 (§232.0405 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 ☒

The number of outstanding shares of the registrant’s common stock as of August 12, 2024 was 33,585,893.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (Quarterly Report) contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, plans for our product candidates, planned preclinical studies and clinical trials, results of clinical trials, future research and development costs, regulatory approvals, 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 words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

●

the timing, progress and results of preclinical studies and clinical trials for firmonertinib (rINN; also known as furmonertinib) or any of our other current or future product candidates, including our product development plans and strategies;

●

estimates of our addressable market, market growth, future revenue, key performance indicators, expenses, capital requirements and our needs for additional financing;

●

our ability to obtain funding for our operations;

●

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

●

our ability to advance product candidates into, and successfully complete, clinical trials;

●

the timing or likelihood of regulatory filing and approvals;

●

the commercialization of our product candidates, if approved;

●

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

●

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

●

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

●

developments relating to our competitors and our industry;

●

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

●

our ability to source sufficient clinical product for our clinical trials and, if our product candidates are approved and commercialized, commercial product;

●

the impact of any health epidemics and outbreaks, including the novel coronavirus (COVID-19), on our business; and

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●

our financial performance.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the “Risk Factors” section and elsewhere in this Quarterly Report. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject and are based on information available to us as of the date of this Quarterly Report. Although we believe such information forms a reasonable basis for the expectations reflected in the forward-looking statements, such information may be limited or incomplete, and we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report to conform these statements to new information, actual results or to changes in our expectations, except as required by law.

You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed with the Securities and Exchange Commission (the SEC) as exhibits to this Quarterly Report with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.

This Quarterly Report includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Such data involves a number of assumptions and limitations and contains projections and estimates of the future performance of the markets in which we operate and intend to operate that are subject to a high degree of uncertainty. We caution you not to give undue weight to such projections, assumptions and estimates.

This Quarterly Report contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Quarterly Report, including logos, artwork and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

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		Page

PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited):	5
	Balance Sheets	5
	Statements of Operations	6
	Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)	7
	Statements of Cash Flows	9
	Notes to Interim Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
	Signatures	31

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ARRIVENT BIOPHARMA, INC.

BALANCE SHEETS

(in thousands, except share and per share data)

(Unaudited)


	June 30,		December 31,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	298,669	$	150,389
Prepaid expenses and other current assets		9,842		9,579
Total current assets		308,511		159,968
Right of use assets – operating leases		219		291
Deferred offering costs		—		2,732
Other assets		125		107
Total assets	$	308,855	$	163,098

Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	3,812	$	4,532
Accrued expenses		8,134		6,952
Operating lease liabilities		152		140
Total current liabilities		12,098		11,624
Operating lease liabilities, net of current amount		98		177
Total liabilities		12,196		11,801

Commitments and contingencies (Note 7)

Series A convertible preferred stock $0.0001 par value, 150,000,000 shares authorized; 150,000,000 shares issued and outstanding at December 31, 2023		—		149,865
Series B convertible preferred stock $0.0001 par value, 147,619,034 shares authorized; 147,619,034 shares issued and outstanding at December 31, 2023		—		154,625

Stockholders’ equity (deficit):
Preferred stock $0.0001 par value, 10,000,000 shares authorized; no shares issued and outstanding		—		—
Common stock $0.0001 par value, 200,000,000 shares authorized; 33,509,090 and 2,745,480 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		3		—
Additional paid-in capital		493,792		4,652
Accumulated deficit		(197,136)		(157,845)
Total stockholders’ equity (deficit)		296,659		(153,193)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	308,855	$	163,098

See accompanying notes to unaudited interim financial statements.

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ARRIVENT BIOPHARMA, INC.

STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(Unaudited)


	Three Months Ended					Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Operating expenses:
Research and development	$	21,778	$	20,358	$	38,753	$	30,594
General and administrative		3,919		2,226		7,618		4,162
Total operating expenses		25,697		22,584		46,371		34,756
Operating loss		(25,697)		(22,584)		(46,371)		(34,756)
Interest income		3,823		1,017		7,080		1,017
Net loss	$	(21,874)	$	(21,567)	$	(39,291)	$	(33,739)

Share information:
Net loss per share attributable to common stockholders, basic and diluted	$	(0.65)	$	(10.79)	$	(1.34)	$	(20.60)
Weighted-average shares of common stock outstanding, basic and diluted		33,502,347		1,999,705		29,274,441		1,637,623

See accompanying notes to unaudited interim financial statements.

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ARRIVENT BIOPHARMA, INC.

STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share and per share data)

(Unaudited)


	Series A			Series B						Additional
	convertible preferred stock			convertible preferred stock			Common stock			paid-in		Accumulated
	Shares	Amount		Shares	Amount		Shares	Amount		capital		deficit		Total
Balance January 1, 2023	150,000,000	$	149,865	104,761,894	$	109,706	2,597,738	$	—	$	3,403	$	(88,512)	$	(85,109)
Issuance of Series B convertible preferred stock at $1.05 per share, net of issuance costs of $57	—		—	42,857,140		44,943	—		—		—		—		—
Exercise of stock options	—		—	—		—	11,417		—		26		—		26
Stock-based compensation expense	—		—	—		—	—		—		166		—		166
Net loss	—		—	—		—	—		—		—		(12,172)		(12,172)
Balance, March 31, 2023	150,000,000		149,865	147,619,034		154,649	2,609,155		—		3,595		(100,684)		(97,089)
Issuance costs of Series B convertible preferred stock	—		—	—		(24)	—		—		—		—		—
Repurchase of common stock	—		—	—		—	(7,387)		—		—		—		—
Exercise of stock options	—		—	—		—	1,647		4		—		—		4
Stock-based compensation expense	—		—	—		—	—		—		193		—		193
Net loss	—		—	—		—	—		—		—		(21,567)		(21,567)
Balance, June 30, 2023	150,000,000	$	149,865	147,619,034	$	154,625	2,603,415	$	4	$	3,788	$	(122,251)	$	(118,459)

See accompanying notes to unaudited interim financial statements.

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ARRIVENT BIOPHARMA, INC.

STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share and per share data)

(Unaudited)


	Series A			Series B						Additional
	convertible preferred stock			convertible preferred stock			Common stock			paid-in		Accumulated
	Shares	Amount		Shares	Amount		Shares	Amount		capital		deficit		Total
Balance January 1, 2024	150,000,000	$	149,865	147,619,034	$	154,625	2,745,480	$	—	$	4,652	$	(157,845)	$	(153,193)
Issuance of common stock in initial public offering, net of issuance costs of $18,032	—		—	—		—	11,180,555		1		183,216		—		183,217
Conversion of convertible preferred stock into common stock	(150,000,000)		(149,865)	(147,619,034)		(154,625)	19,567,306		2		304,488		—		304,490
Exercise of stock options	—		—	—		—	409		—		1		—		1
Stock-based compensation expense	—		—	—		—	—		—		625		—		625
Net loss	—		—	—		—	—		—		—		(17,417)		(17,417)
Balance, March 31, 2024	—		—	—		—	33,493,750		3		492,982		(175,262)		317,723
Exercise of stock options	—		—	—		—	15,340		—		44		—		44
Stock-based compensation expense	—		—	—		—	—		—		766		—		766
Net loss	—		—	—		—	—		—		—		(21,874)		(21,874)
Balance, June 30, 2024	—	$	—	—	$	—	33,509,090	$	3	$	493,792	$	(197,136)	$	296,659

See accompanying notes to unaudited interim financial statements.

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ARRIVENT BIOPHARMA, INC.

STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Six Months Ended
	June 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(39,291)	$	(33,739)
Adjustment to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		1,390		359
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(262)		3,447
Other assets		(19)		(10)
Accounts payable		(720)		3,314
Accrued expenses		1,181		1,142
Operating lease liabilities		6		—
Net cash used in operating activities		(37,715)		(25,487)
Cash flows from investing activities:
Purchase of short-term investments		—		(25,000)
Net cash used in investing activities		—		(25,000)
Cash flows from financing activities:
Proceeds from issuance of common stock in an initial public offering, net of issuance costs		185,950		—
Proceeds from the exercise of stock options		45		30
Proceeds from the sale of Series B convertible preferred stock, net of issuance costs		—		44,919
Net cash provided by financing activities		185,995		44,949

Net increase in cash and cash equivalents		148,280		(5,538)
Cash and cash equivalents at beginning of the period		150,389		163,372
Cash and cash equivalents at end of the period	$	298,669	$	157,834

Supplemental disclosures of non-cash financing and investing activities
Deferred offering costs in accounts payable	$	—	$	50
Deferred offering costs transferred to additional paid in capital		2,733		—

See accompanying notes to unaudited interim financial statements.

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ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(1)	Background

ArriVent BioPharma, Inc., a Delaware Corporation (the “Company”), founded on April 14, 2021, is a clinical-stage biopharmaceutical company focused on identifying, licensing and globalizing top biopharma innovations from around the world to deliver important medicines to patients. In June 2021, the Company entered into a license agreement with Shanghai Allist Pharmaceuticals Co. Ltd. (“Allist”) which granted the Company an exclusive license under certain intellectual property owned or controlled by Allist to develop, manufacture and commercialize any product containing firmonertinib or any of its derivatives as an active ingredient, for all uses, in all countries and territories other than greater China, which includes mainland China, Hong Kong, Macau and Taiwan (See Note 9). The Company’s lead development candidate, firmonertinib, is a third-generation tyrosine kinase inhibitor currently being evaluated in multiple clinical trials across a range of epidermal growth factor receptor (EGFR) mutations in non-small cell lung cancer (NSCLC), many for which there are limited treatment options.

On January 30, 2024, the Company completed the closing of its initial public offering of 9,722,222 shares of common stock at a price of $18.00 per share. Additionally, the underwriters exercised their option to purchase an additional 1,458,333 shares of common stock at a price of $18.00 per share. The shares of common stock began trading on the Nasdaq Global Market on January 26, 2024, under the symbol “AVBP”. The Company received net proceeds of $183.2 million, after deducting underwriting discounts and commissions and other offering expenses. In addition, as a result of the closing of the Company’s initial public offering, the Company’s Series A and Series B convertible preferred stock converted into 19,567,306 shares of common stock in January 2024.

(2)	Development-Stage Risks and Liquidity

The Company has incurred losses since inception and has an accumulated deficit of $197.1 million as of June 30, 2024. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales from its product candidates currently in development. Management believes that cash and cash equivalents of $298.7 million as of June 30, 2024 are sufficient to sustain planned operations through at least twelve months from the issuance date of these financial statements.

The Company is subject to those risks associated with any specialty biotechnology company that has substantial expenditures for research and development. There can be no assurance that the Company’s research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, the Company operates in an environment of rapid technological change and is largely dependent on the services of its employees and consultants.

(3)	Summary of Significant Accounting Policies

The summary of significant accounting policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 28, 2024 (the “Annual Report”) has not materially changed, except as set forth below.

(a)	Interim Financial Statements

The accompanying unaudited interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any references in these notes to applicable guidance are meant to refer to GAAP as found in Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”).

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ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

In the opinion of management, the accompanying interim financial statements include all the normal and recurring adjustments (which consist primarily of accruals, estimates, and assumptions that impact financial statements) considered necessary to present fairly the Company’s financial position as of June 30, 2024 and its results of operations for the three and six months ended June 30, 2024 and 2023. Certain information and disclosures normally included in the annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, have been condensed or omitted. These interim financial statements should be read in conjunction with the audited financial statements and related notes as of and for the year ended December 31, 2023, which are included in the Annual Report. The December 31, 2023 balance sheet has been derived from the audited financial statements. The results of operations for the interim periods are not necessarily indicative of the results to be expected for a full year, any other interim periods or any future year or period.

(b)	Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from such estimates. Estimates and assumptions are periodically reviewed, and the effects of revisions are reflected in the financial statements in the period they are determined to be necessary.

Significant areas that require management’s estimates include the fair value of the Company’s common stock prior to the completion of the Company’s initial public offering, stock-based compensation expense assumptions and accrued research and development expenses.

(c)	Fair Value Measurements

The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

•

Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

•

Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

•

Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

Management believes that the carrying amounts of the Company’s financial instruments, principally cash equivalents and accounts payable, approximate fair value due to the short-term nature of those instruments.

(d)	Net Loss per Share

Basic net loss per share of common stock is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during each period. Diluted net loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock and stock options, which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-

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ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

average number of shares of common stock is the same for basic net loss per share since when a net loss exists, potentially dilutive securities are not included in the calculation as their impact is anti-dilutive. The Company’s convertible preferred stock entitled the holder to participate in dividends and earnings of the Company, and, if the Company had recognized net income, it would have used the two-class method to calculate earnings per share. The two-class method was not applicable during periods with a net loss, as the holders of the convertible preferred stock had no obligation to fund losses.

The following table sets forth the computation of net loss, basic and diluted (in thousands, except share and per share data):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Numerator:
Net loss	$	(21,874)	$	(21,567)	$	(39,291)	$	(33,739)
Denominator:
Weighted-average shares of common stock outstanding		33,502,347		2,617,198		29,274,441		2,609,919
Less: Weighted-average shares of common stock subject to repurchase		—		(617,493)		—		(972,296)
Weighted-average shares of common stock outstanding, basic and diluted		33,502,347		1,999,705		29,274,441		1,637,623

Net loss per share attributable to common stockholders, basic and diluted	$	(0.65)	$	(10.79)	$	(1.34)	$	(20.60)

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2024	2023	2024	2023
Series A convertible preferred stock (as converted to common stock)	—	9,861,923	—	9,861,923
Series B convertible preferred stock (as converted to common stock)	—	9,705,383	—	9,705,383
Common stock subject to repurchase	—	1,314,914	—	1,314,914
Stock options	2,669,121	1,556,964	2,669,121	1,556,964
	2,669,121	22,439,184	2,669,121	22,439,184

(e)	Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This standard includes the requirements that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, the title and position of the chief operating decision maker, and an explanation of how the chief operating decision maker uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. It also requires that a public entity that has a single reportable segment provide all the disclosures required by the guidance and all existing segment disclosures in ASC 280, Segment Reporting. This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public entity should apply

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ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

the amendments in the guidance retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company is currently evaluating the impact that this standard may have on its financial statements.

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This standard includes the requirement that public business entities, on an annual basis, disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate). It also requires that all entities disclose, on an annual basis, the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes and the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5% of total income taxes paid (net of refunds received) and requires that all entities disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal, state, and foreign. Lastly, this standard eliminates the requirement for all entities to disclose the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months or make a statement that an estimate of the range cannot be made. This standard is effective for the Company for the annual period beginning January 1, 2026. Early adoption is permitted. This standard should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact that this standard may have on its financial statements.

(f)	Reverse Stock Split

On January 23, 2024, the Company filed an amendment to its Articles of Incorporation and effected a 15.21-for-1 reverse stock split of its issued and outstanding shares of common stock. All common stock share and per-share amounts presented in the financial statements and related notes have been retroactively adjusted to reflect the reverse stock split.

(4)	Fair Value Measurements

The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values (in thousands):


	June 30, 2024
	Level 1		Level 2		Level 3		Total
Current assets:
Cash equivalents - money market funds	$	293,669	$	—	$	—	$	293,669
Total assets measured at fair value	$	293,669	$	—	$	—	$	293,669


	December 31, 2023
	Level 1		Level 2		Level 3		Total
Current assets:
Cash equivalents - money market funds	$	124,322	$	—	$	—	$	124,322
Total assets measured at fair value	$	124,322	$	—	$	—	$	124,322

Money market accounts are highly liquid investments. The pricing information on the Company’s money market account is based on quoted prices in active markets. This approach results in a classification of these securities as Level 1 of the fair value hierarchy.

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ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(5)	Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):


	June 30,		December 31,
	2024		2023
Research and development	$	7,867	$	8,450
Professional fees		480		240
Insurance		745		128
Tax credit receivable		750		761
	$	9,842	$	9,579

(6)	Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	June 30,		December 31,
	2024		2023
Research and development	$	5,890	$	3,126
Professional fees		90		411
Compensation and related expenses		2,035		3,353
Other accrued expenses		119		62
	$	8,134	$	6,952

(7)	Commitments and Contingencies

Leases

Operating lease expense was less than $0.1 million for each of the three and six months ended June 30, 2024 and 2023. The Company’s remaining lease term and discount rate for its operating lease as of June 30, 2024 were 1.58 years and 10.0%, respectively.

Future maturities of operating lease liabilities were as follows as of June 30, 2024 (in thousands):


Fiscal year ending:
Remainder of 2024	$	84
2025		173
2026		14
Total future minimum payments		271
Less imputed interest		(21)
Present value of lease liabilities	$	250

Cash paid for rent expense recorded during the three months ended June 30, 2024 and 2023 was less than $0.1 million. Cash paid for rent expense recorded during the six months ended June 30, 2024 and 2023 was less than $0.1 million.

(8)	Stock-based Compensation

In June 2021, the Company adopted the 2021 Employee, Director and Consultant Equity Incentive Plan, as amended (the “2021 Plan”), that authorized the Company to grant up to 803,564 shares of common stock. In 2022, the Company

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ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

amended the 2021 Plan and increased the total number of shares authorized under the Plan to 2,748,818. In January 2024, the Company adopted the 2024 Employee, Director and Consultant Equity Incentive Plan (the “2024 Plan”) that authorized the Company to grant up to 3,900,000 shares of common stock plus any remaining ungranted or forfeited shares from the 2021 Plan. As of June 30, 2024, there were 3,802,245 shares available to be granted. The Company’s stock options vest based on the terms in the awards agreements and generally vest over four years. The Company recorded stock-based compensation expense in the following expense categories in its accompanying statements of operations (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Research and development	$	418	$	99	$	652	$	182
General and administrative		348		94		738		177
	$	766	$	193	$	1,390	$	359

The following is a summary of stock options activity:


					Weighted
		Weighted			average
		average			remaining	Aggregate
		exercise			contractual	Intrinsic Value
	Options	price			term (years)	(in thousands)
Outstanding as of December 31, 2023	1,683,156	$	3.38
Granted	1,023,951		9.54
Exercised	(15,749)		2.85
Forfeited/Expired	(22,237)		16.51
Outstanding as of June 30, 2024	2,669,121		5.64	$	7.06	$	33,129
Exercisable as of June 30, 2024	646,440		2.61		6.56		9,948
Vested and expected to vest at June 30, 2024	2,669,121	$	5.64	$	7.06	$	33,129

The weighted-average grant-date fair value of options granted in the first six months of 2024 and 2023 were $7.49 and $2.74 per share, respectively. The fair value was estimated using the Black-Scholes option-pricing model based on the following assumptions:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Risk-free interest rate		4.34% - 4.66%		3.50% - 3.68%		3.85% - 4.66%		3.45% - 3.68%
Expected term		6.0 - 6.1 years		6.0 - 6.1 years		5.5 - 6.1 years		6.0 years
Expected volatility		98.6%		89.3% - 89.8%		93.1% - 98.6%		87.0% - 88.0%
Expected dividend yield		—		—		—		—
Estimated fair value of the Company's common stock per share	$	15.90 - 20.15	$	3.65	$	5.85 - 16.14	$	3.65

Unrecognized compensation cost for awards not vested as of June 30, 2024 was $9.2 million and will be expensed over a weighted-average period of 2.81 years.

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ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

(9)	License and Collaborative Agreements

Allist

In June 2021, the Company entered into a Global Technology Transfer and License Agreement with Allist (the “Allist Agreement”). Pursuant to the Allist Agreement, the Company was granted an exclusive license under certain intellectual property to develop, manufacture and commercialize certain licensed products in the field in the licensed territory. Upon execution of the Allist Agreement, the Company paid Allist a non-refundable cash payment of $40.0 million and issued 1,276,250 shares of its common stock.

Upon the achievement of certain clinical, regulatory and commercial milestones using the licensed technology, the Company is obligated to make future milestone payments to Allist. During the six months ended June 30, 2024 and 2023, no clinical milestones were met or achieved. The Company is obligated to make future milestone payments of up to $105.0 million in clinical and regulatory milestones and up to $655.0 million in sales milestones. Furthermore royalties, ranging from high single digit percentages to low mid-teen percentage will be payable on net sales of licensed products in licensed territories.

In connection with the Allist Agreement, in December 2021, the parties also entered into a Joint Clinical Collaboration Agreement (“Clinical Collaboration”) to define the framework under which the parties will cooperate and share costs related to global clinical studies to be conducted jointly by the Company and Allist. During the six months ended June 30, 2024 and 2023, the Company incurred $0.3 million and $1.3 million, respectively, in cost reimbursements to Allist which have been recorded as research and development expense under the Clinical Collaboration. The Company also was entitled to cost reimbursement from Allist of $0.3 million for each of the six months ended June 30, 2024 and 2023, which has been recorded as a reduction of research and development expenses.

Alphamab

In June 2024, the Company entered into a collaboration agreement with Jiangsu Alphamab Biopharmaceuticals Co., Ltd. (“Alphamab”) to discover, develop and commercialize novel antibody drug conjugates (“ADCs”) for the treatment of cancers.

Under the agreement, both companies will leverage Alphamab’s proprietary linker-payload platform and glycan-conjugation technology to identify novel ADCs for oncology indications. The agreement gives the Company exclusive rights to develop and commercialize ADCs globally, except greater China, which includes outside of mainland China, Hong Kong, Macau and Taiwan where Alphamab retains the right to develop and commercialize the ADCs.

The terms of the agreement include combined upfront and potential milestone payments to Alphamab of up to $615.5 million in aggregate for the potential programs, based on the achievement of certain regulatory, development, and sales milestones. In addition, Alphamab is entitled to receive tiered sales royalties from the Company for each ADC product.

Aarvik

In December 2021, the Company entered into a Research Collaboration Agreement, as amended, effective June 30, 2023 (the “Aarvik Collaboration Agreement”), with Aarvik Pharmaceuticals, Inc. (“Aarvik”), under which the Company is required to pay Aarvik up to $3.1 million on statements of work (“SOWs”) and an initiation fee of $0.3 million predefined in the agreement. After the completion of the SOWs, the Company has an exclusive option to license the Aarvik intellectual property, and the option to acquire certain of Aarvik’s intellectual property, after which it is the Company’s sole responsibility to research, develop, manufacture and commercialize any applicable compound and product in the field and territory. If the Company exercises that option, it would be obligated to pay up to $18.0 million per product upon the achievement of certain clinical and regulatory milestone events and up to $80.0 million per product

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ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

in commercial milestones. Additionally, the Company would be obligated to pay Aarvik royalties in the mid-single digits based on net sales of licensed products.

The Company incurred $0.8 million and $0.6 million in research and development expenses related to the Aarvik SOWs during the three months ended June 30, 2024 and 2023, respectively. The Company incurred $1.0 million and $0.7 million in research and development expenses related to the Aarvik SOWs during the six months ended June 30, 2024 and 2023, respectively.

On August 9, 2024, the Company entered into an amendment and restatement of the Aarvik Collaboration Agreement (the “Amended and Restated Aarvik Collaboration Agreement”). Under the Amended and Restated Aarvik Collaboration Agreement, Aarvik has granted the Company an exclusive option to obtain exclusive rights to certain of Aarvik’s intellectual property for the research, development, manufacture, use, commercialization, or other exploitation of the ADCs related to (i) the two agreed targets to which the compounds being developed under the collaboration bind, which is referred to as the Target Pair, and (ii) to acquire exclusive rights to certain intellectual property generated during the collaboration. The Company has not yet selected the indication or indications that it would pursue in the collaboration and anticipates doing so in connection with the identification of a lead candidate for IND-enabling studies. Under the Amended and Restated Aarvik Collaboration Agreement, the Company is now required to pay Aarvik a collaboration initiation fee and research fees as provided in the SOWs in an aggregate of up to $4.7 million (based on estimated research fees).

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our interim financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and the audited financial information and the notes thereto included in our Annual Report on Form 10-K, which was filed with the SEC on March 28, 2024 (the Annual Report). Some of the information contained in this discussion and analysis or set forth elsewhere, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” sections of this Quarterly Report on Form 10-Q as well as our Annual Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the “Risk Factors” sections of this Quarterly Report on Form 10-Q and our Annual Report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section titled “Special Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q. Investors and others should note that we routinely use the Investor Relations section of our website to announce material information to investors and the marketplace. While not all of the information that we post on the Investor Relations section of our website is of a material nature, some information could be deemed to be material. Accordingly, we encourage investors, the media, and others interested in us to review the information that we share on the Investors section of our website, https://ir.arrivent.com/.

Overview

We are a clinical-stage biopharmaceutical company dedicated to the identification, development and commercialization of differentiated medicines to address the unmet medical needs of patients with cancers. We seek to utilize our team’s deep drug development experience to maximize the potential of our lead development candidate, firmonertinib, and advance a pipeline of novel therapeutics, such as next-generation antibody drug conjugates, through approval and commercialization in patients suffering from cancer, with an initial focus on solid tumors. Firmonertinib is currently being evaluated in multiple clinical trials across a range of epidermal growth factor receptor mutant (EGFRm) in non-small cell lung cancer (NSCLC), including a pivotal Phase 3 clinical trial in treatment naïve, or first-line, patients with locally advanced or metastatic EGFRm NSCLC with exon 20 insertion mutations. We received Breakthrough Therapy Designation for firmonertinib for this disease from the United States Food and Drug Administration (FDA) in October 2023, and Orphan Drug Designation for treatment of NSCLC with EGFRm or human epidermal growth factor receptor 2 (HER2) mutations or human epidermal growth factor receptor 4 (HER4) mutations in February 2024. A product candidate can receive Breakthrough Therapy Designation if preliminary clinical evidence indicates that the product candidate, alone or in combination with one or more other drugs, may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For drugs that have been designated as Breakthrough Therapies, interaction and communication between the FDA and the sponsor can help to identify the most efficient path for development. The receipt of a Breakthrough Therapy Designation for a product candidate may not result in a faster development process, review or approval compared to product candidates considered for approval under conventional FDA procedures and does not increase the likelihood that the product candidate will ultimately receive FDA approval for any indication.

Firmonertinib is an investigational, novel, epidermal growth factor receptor (EGFR) mutant-selective tyrosine kinase inhibitor (TKI) that we are developing for the treatment of NSCLC patients across a broader set of EGFRm than are currently served by approved EGFR TKIs. Firmonertinib is currently only approved and commercially distributed by Shanghai Allist Pharmaceuticals Co. Ltd. (Allist) in China as a first-line therapy to treat classical EGFRm NSCLC. The FDA has not approved firmonertinib for any use. We selected firmonertinib for global development against nonclassical, or uncommon, mutations based on preliminary reductions in tumor size observed in seven out of ten patients in first-line treatment with EGFR exon 20 insertion mutations in the ongoing Phase 1b clinical trial, the FAVOUR trial, conducted by Allist in China, and preclinical activity in EGFR P-loop and-alpha-c-helix compressing (PACC) mutations, each a subtype of uncommon mutation. In a subsequent interim data readout from the FAVOUR trial of firmonertinib in first-line patients with locally advanced or metastatic EGFRm NSCLC with exon 20 insertion mutations, 79% of patients (n=22 out of 28 patients) were observed to experience a reduction in tumor size of at least 30%. If the future clinical trial results of the FAVOUR trial are unfavorable, our clinical development plans for firmonertinib, which include

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conducting our global, pivotal Phase 3 FURVENT clinical trial in first-line non-squamous locally advanced or metastatic EGFRm NSCLC patients with exon 20 insertion mutations, may be adversely affected. In 2021, we licensed from Allist the right to develop and commercialize firmonertinib worldwide, with the exception of greater China, which includes mainland China, Hong Kong, Macau and Taiwan.

As one of the most prevalent cancers in the world, lung cancer imposes a significant global burden on human health, and EGFRm NSCLC represents a significant proportion of those affected. Despite progress in the therapeutic landscape for EGFRm NSCLC, many patients, particularly those with uncommon mutations, such as exon 20 insertions or PACC mutations, are underserved by existing treatments. In an interim data readout from the FAVOUR trial of firmonertinib in first-line patients with locally advanced or metastatic EGFRm NSCLC with exon 20 insertion mutations, 79% of patients (n=22 out of 28 patients) were observed to experience a reduction in tumor size of at least 30% from the baseline in a patient without evidence of progression as measured by RECIST 1.1 criteria, which measurement of reduction is the threshold in this trial for a partial response and for inclusion in determination of the overall response rate (ORR), which is the primary endpoint of this trial. In the same interim data readout, those 79% of patients were observed to experience a 15.2 month median duration of response (DOR). Interim results may not be indicative of final results; however, we believe these interim clinical results underscore firmonertinib’s potential in patients whose tumors contain an uncommon EGFRm.

We have entered into the Global Technology Transfer and License Agreement (Allist License Agreement), pursuant to which, we have, among other things, secured an exclusive, royalty bearing and sublicensable license under certain intellectual property, including patents and know-how, owned or controlled by Allist to develop and commercialize any product containing firmonertinib or any of its salts or derivatives as an active ingredient of a product, which is led by a joint collaboration committee, comprising of representatives from both Allist and us. Under the Allist License Agreement, we are obligated to pay Allist milestone payments up to an aggregate of $765.0 million upon the achievement of certain development, regulatory and sales milestone events as set forth in the Allist License Agreement. During the six months ended June 30, 2024 and 2023, no clinical milestones were met or achieved. We are also obligated under the Allist License Agreement to pay Allist tiered royalties based on net sales of Licensed Products (as defined in the Allist License Agreement). See “Business — Licenses, Partnerships and Collaborations — Allist Agreements” in our Annual Report.

Since our inception in April 2021, we have devoted substantially all of our resources to organizing and staffing our company, acquiring the rights to develop firmonertinib, clinical development of firmonertinib, business planning, raising capital, identifying potential product candidates, enhancing our intellectual property portfolio and undertaking research and clinical and preclinical studies for our development programs. We do not have any products approved for sale and have not generated any revenue from product sales or otherwise. We have funded our operations to date primarily through the private placement of convertible preferred stock and our initial public offering in January 2024.

On January 30, 2024, we completed the closing of our initial public offering of 9,722,222 shares of common stock at a price of $18.00 per share. Additionally, the underwriters exercised their option to purchase an additional 1,458,333 shares of common stock at a price of $18.00 per share. The shares of common stock began trading on the Nasdaq Global Market on January 26, 2024, under the symbol “AVBP”. We received net proceeds of $183.2 million, after deducting underwriting discounts and commissions and other offering expenses. In addition, as a result of the closing of our initial public offering, our convertible preferred stock converted into 19,567,306 shares of common stock in January 2024.

We have incurred significant operating losses since our inception and have not yet generated any revenue. Our net losses were $39.3 million and $33.7 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $197.1 million. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our preclinical studies, clinical trials and our expenditures on other research and development activities. We expect to continue to incur losses for the foreseeable future. We anticipate these losses will increase substantially as we:

●

advance our lead product candidate, firmonertinib, through clinical trials;

●

acquire or in-license additional product candidates;

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●

advance our preclinical programs to clinical trials;

●

further invest in our pipeline;

●

further support our external partners’ manufacturing capabilities;

●

seek regulatory approval for our product candidates;

●

pursue commercialization of our product candidates;

●

maintain, expand, protect and defend our intellectual property portfolio;

●

secure facilities to support continued growth in our research, development and commercialization efforts;

●

increase our headcount to support our development efforts and to expand our clinical development team; and

●

incur additional costs and headcount associated with operating as a public company.

In addition, if we obtain regulatory approval for firmonertinib or any product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution.

We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more product candidates. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through public or private equity offerings, debt financings, collaborations and licensing arrangements or other capital sources. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Key Components of Our Results of Operations

Operating Expenses

Research and Development Expenses

To date, our research and development expenses have been related primarily to the development of firmonertinib, preclinical studies and other clinical activities related to our portfolio. Research and development costs are expensed as incurred and payments made prior to the receipt of goods or services to be used in research and development are deferred and recognized when the goods or services are received.

Research and development costs include:

●

salaries, payroll taxes, employee benefits and stock-based compensation expenses for those individuals involved in research and development efforts;

●

external research and development costs incurred under agreements with contract research organizations (CROs) and consultants to conduct our clinical trials and other preclinical studies;

●

costs related to manufacturing our product candidates, including fees paid to third-party manufacturers and raw material suppliers;

●

license fees and research funding; and

●

other allocated expenses, which include direct and allocated expenses, insurance, equipment and other supplies.

Our direct research and development expenses consist principally of external costs, such as fees paid to CROs and consultants in connection with our clinical trials for firmonertinib, preclinical and toxicology studies and costs related to

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manufacturing materials for clinical and preclinical studies. Prior to our identification of potential product candidates in 2022, we did not track external costs by program. Subsequent to the identification of potential product candidates, a significant majority of our direct research and development costs have been related to firmonertinib. We deploy our personnel resources across all of our research and development activities.

We plan to substantially increase our research and development expenses for the foreseeable future as we continue the development of firmonertinib and the identification and development of new product candidates. We cannot determine with certainty the timing of initiation, the duration or the completion costs of future clinical trials and preclinical studies of product candidates due to the inherently unpredictable nature of preclinical and clinical development. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. We anticipate that we will make determinations as to which product candidates and development programs to pursue and how much funding to direct to each product candidate or program on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments and our ongoing assessments as to each product candidate’s commercial potential. In addition, we cannot forecast which product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

Our future clinical development costs may vary significantly based on factors such as:

●

per patient trial costs;

●

the number of patients needed to determine a recommended dose;

●

the number of trials required for approval;

●

the number of sites included in the trials;

●

the countries in which the trials are conducted;

●

the length of time required to enroll eligible patients;

●

the number of patients that participate in the trials;

●

the number of doses that patients receive;

●

the drop-out or discontinuation rates of patients;

●

potential additional safety monitoring requested by regulatory agencies;

●

the duration of patient participation in the trials and follow-up;

●

the phase of development of the product candidate; and

●

the efficacy and safety profile of the product candidate.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, payroll taxes, employee benefits and stock-based compensation expenses for those individuals in executive, finance and other administrative functions. Other significant costs include legal fees relating to intellectual property and corporate matters, professional fees for accounting and consulting services, and insurance costs. We anticipate that our general and administrative expenses will increase in the future to support our continued research and development activities and, if any product candidates receive marketing approval, commercialization activities. We also anticipate increased expenses related to audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums and investor relations costs associated with operating as a public company.

Interest Income

Interest income consists of interest earned on our cash equivalents.

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Results of Operations

Comparison of the Three Months Ended June 30, 2024 and 2023

The following table summarizes our results of operations for the three months ended June 30, 2024 and 2023:


	Three Months Ended June 30,
(in thousands)	2024		2023		Change
Operating expenses:
Research and development	$	21,778	$	20,358	$	1,420
General and administrative		3,919		2,226		1,693
Total operating expenses		25,697		22,584		3,113
Operating loss		(25,697)		(22,584)		(3,113)
Interest income		3,823		1,017		2,806
Net loss	$	(21,874)	$	(21,567)	$	(307)

Research and Development

We track outsourced clinical and preclinical costs and other external research and development costs associated with our lead product candidate, firmonertinib, and other discovery-stage programs. We do not track internal research and development costs by product candidate. The following table summarizes our research and development expenses for the three months ended June 30, 2024 and 2023:


	Three Months Ended June 30,
(in thousands)	2024		2023		Change
Firmonertinib:
FURTHER	$	3,909	$	5,142	$	(1,233)
FURVENT		6,996		10,567		(3,571)
FAVOUR		18		619		(601)
Other Firmonertinib costs		520		225		295
Total Firmonertinib		11,443		16,553		(5,110)
Discovery-stage programs		6,201		491		5,710
Personnel-related and other internal costs		4,134		3,314		820
Total research and development expenses	$	21,778	$	20,358	$	1,420

Research and development expenses were $21.8 million and $20.4 million for the three months ended June 30, 2024 and 2023, respectively. The increase of $1.4 million was primarily due to a decrease of $5.1 million related to our lead product candidate, firmonertinib, offset by increases of $5.7 million in preclinical discovery work and $0.8 million in personnel-related costs due to increased headcount. Costs related to firmonertinib decreased as a result of decreased costs related to our FURVENT Phase 3 clinical trial of $3.6 million, a $0.6 million decrease in costs related to our FAVOUR trial, and a $1.2 million decrease in costs related to our FURTHER Phase 1 clinical trial, partially offset by an increase in general firmonertinib costs. Discovery-stage program costs increased due to an up-front payment related to the collaboration with Jiangsu Alphamab Biopharmaceuticals Co., Ltd. (Alphamab).

General and Administrative

General and administrative expenses were $3.9 million and $2.2 million for the three months ended June 30, 2024 and 2023, respectively. The increase of $1.7 million was due primarily to increases of $1.0 million in personnel-related costs, and $0.7 million in insurance, taxes, and outside services.

Interest Income

Interest income was $3.8 million and $1.0 million for the three months ended June 30, 2024 and 2023, respectively. The increase in interest income is due to increased invested balances and increased average market yields.

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Comparison of the Six Months Ended June 30, 2024 and 2023

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023: