Lyell Immunopharma, Inc 10-K for FY2021

Lyell Immunopharma, Inc. (LYEL)

10-K 2022-03-29 For: 2021-12-31

Added on April 12, 2026

About this 10-K

Lyell Immunopharma, Inc filed this 10-K on March 29, 2022, covering the fiscal year ended December 31, 2021 (FY2021).

Headline figures

Fiscal year ended December 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $10.65M; up 37.3% from $7.76M a year earlier
Net loss: $250.22M; compared with a net loss of $204.47M a year earlier
Diluted EPS: -$1.84; compared with -$15.69 a year earlier

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


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	o
		Emerging growth company	x


	PART I	Page
Item 1.	Business	4
Item 1A.	Risk Factors	40
Item 1B.	Unresolved Staff Comments	75
Item 2.	Properties	75
Item 3.	Legal Proceedings	75
Item 4.	Mine Safety Disclosures	76
	PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	77
Item 6.	[Reserved ]	77
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	78
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	87
Item 8.	Financial Statements and Supplementary Data	89
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	118
Item 9A.	Controls and Procedures	118
Item 9B.	Other Information	118
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	118
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	119
Item 11.	Executive Compensation	119
Item 12.	Security Ownership of Certain Beneficial Owner s and Management and Related Stockholder Matters	119
Item 13.	Certain Relationships and Related Transactions, and Director Independence	119
Item 14.	Principal Account ant Fees and Services	119
	PART IV
Item 15.	Exhibit and Financial Statement Schedules	120
Item 16.	Form 10-K Summary	122

SIGNATURES		123


	Year Ended December 31,						Change
	2021		2020		2019		2021 vs 2020		2020 vs 2019
Revenue	$	10,650	$	7,756	$	657	$	2,894	$	7,099
Operating expenses (income):
Research and development	138,693		182,243		63,595		(43,550)		118,648
General and administrative	89,057		46,881		39,151		42,176		7,730
Other operating income, net	(2,324)		(9,431)		—		7,107		(9,431)
Total operating expenses	225,426		219,693		102,746		5,733		116,947
Loss from operations	(214,776)		(211,937)		(102,089)		(2,839)		(109,848)
Interest income, net	1,165		5,939		8,121		(4,774)		(2,182)
Other (expense) income, net	(161)		1,526		(35,409)		(1,687)		36,935
Impairment of other investments	(36,447)		—		—		(36,447)		—
Total other (loss) income, net	(35,443)		7,465		(27,288)		(42,908)		34,753
Net loss	(250,219)		(204,472)		(129,377)		(45,747)		(75,095)
Deemed dividends upon issuance or repurchase of convertible preferred stock	—		(3,582)		(1,144)		3,582		(2,438)
Net loss attributed to common stockholders	$	(250,219)	$	(208,054)	$	(130,521)	$	(42,165)	$	(77,533)


	Year Ended December 31,						Change
	2021		2020		2019		2021 vs 2020		2020 vs 2019
Personnel	$	60,499	$	54,112	$	31,634	$	6,387	$	22,478
Facilities and technology	39,092		24,560		11,378		14,532		13,182
Collaborations, research activities and outside services	35,389		98,234		20,147		(62,845)		78,087
Success payments	3,713		5,337		436		(1,624)		4,901
Total research and development expenses	$	138,693	$	182,243	$	63,595	$	(43,550)	$	118,648


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


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


Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)			90
Audited Consolidated Financial Statements:
Consolidated Balance Sheets			91
Consolidated Statements of Operations and Comprehensive Loss			92
Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)			93
Consolidated Statements of Cash Flows			94
Notes to Consolidated Financial Statements			95


	As of December 31,
	2021		2020
ASSETS
Current assets:
Cash and cash equivalents	$	293,828	$	140,406
Marketable securities	320,966		472,213
Prepaid expenses and other current assets	11,492		4,928
Total current assets	626,286		617,547
Restricted cash	466		466
Marketable securities, non-current	283,531		79,995
Other investments	47,001		83,448
Property and equipment, net	120,098		77,045
Operating lease right-of-use assets	46,541		47,010
Other non-current assets	3,483		2,769
Total assets	$	1,127,406	$	908,280
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	3,207	$	9,396
Accrued liabilities and other current liabilities	29,057		28,021
Success payment liabilities	9,486		5,773
Deferred revenue	4,988		6,095
Total current liabilities	46,738		49,285
Operating lease liabilities, non-current	66,650		50,957
Deferred revenue, non-current	79,665		89,066
Other non-current liabilities	4,566		532
Total liabilities	197,619		189,840
Commitments and contingencies (Note 16)
Convertible preferred stock, $0.0001 par value; zero and 195,021 shares authorized at December 31, 2021 and 2020, respectively; zero and 194,474 shares issued and outstanding at December 31, 2021 and 2020, respectively	—		1,010,968
Stockholders’ equity (deficit):
Preferred stock, $0.0001 par value; 10,000 and zero shares authorized at December 31, 2021 and 2020, respectively; zero shares issued and outstanding at December 31, 2021 and 2020	—		—
Common stock, $0.0001 par value; 500,000 and 264,905 shares authorized at December 31, 2021 and 2020, respectively; 242,738 and 15,570 shares issued and outstanding at December 31, 2021 and 2020, respectively	24		2
Additional paid-in capital	1,515,748		41,357
Accumulated other comprehensive (loss) income	(1,623)		256
Accumulated deficit	(584,362)		(334,143)
Total stockholders’ equity (deficit)	929,787		(292,528)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	1,127,406	$	908,280


	Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive (Loss) Income		Retained Earnings (Accumulated Deficit)		Total Stockholders’ Equity (Deficit)
	Shares	Amount		Shares	Amount
Balance as of December 31, 2018	74,406	$	120,296	1,092	$	—	$	826	$	—	$	24	$	850
Issuance of Series A convertible preferred stock, net of $29 in issuance costs	23,527	89,380		—	—		—		—		—		—
Issuance of Series B convertible preferred stock, net of $133 in issuance costs	23,930	162,018		—	—		—		—		—		—
Issuance of Series AA convertible preferred stock, net of $101 in issuance costs	30,253	146,325		—	—		—		—		—		—
Deemed dividends on issuance of Series A convertible preferred stock	—	1,144		—	—		(826)		—		(318)		(1,144)
Issuance of common stock to strategic partners	—	—		910	—		2,562		—		—		2,562
Repurchase of common stock	—	—		—	—		(185)		—		—		(185)
Stock-based compensation	—	—		9,179	1		15,731		—		—		15,732
Other comprehensive income	—	—		—	—		—		454		—		454
Net loss	—	—		—	—		—		—		(129,377)		(129,377)
Balance as of December 31, 2019	152,116	$	519,163	11,181	$	1	$	18,108	$	454	$	(129,671)	$	(111,108)
Issuance of Series C convertible preferred stock, net of $533 in issuance costs	42,905	492,467		—	—		—		—		—		—
Issuance of common stock to strategic partners	—	—		275	—		1,004		—		—		1,004
Issuance of common stock for asset acquisition	—	—		688	—		4,000		—		—		4,000
Issuance of common stock upon exercise of stock options	—	—		113	—		373		—		—		373
Stock-based compensation	—	—		5,345	1		33,260		—		—		33,261
Repurchase of convertible preferred stock	(547)	(662)		—	—		(3,582)		—		—		(3,582)
Repurchase of common stock	—	—		(2,032)	—		(11,806)		—		—		(11,806)
Other comprehensive loss	—	—		—	—		—		(198)		—		(198)
Net loss	—	—		—	—		—		—		(204,472)		(204,472)
Balance as of December 31, 2020	194,474	$	1,010,968	15,570	$	2	$	41,357	$	256	$	(334,143)	$	(292,528)
Proceeds from initial public offering, net of $33,198 in issuance costs	—	—		25,000	2		391,800		—		—		391,802
Conversion of convertible preferred stock to common stock	(194,474)	(1,010,968)		194,474	20		1,010,948		—		—		1,010,968
Issuance of common stock upon exercise of stock options	—	—		2,750	—		9,442		—		—		9,442
Stock-based compensation	—	—		4,944	—		62,201		—		—		62,201
Other comprehensive loss	—	—		—	—		—		(1,879)		—		(1,879)
Net loss	—	—		—	—		—		—		(250,219)		(250,219)
Balance as of December 31, 2021	—	$	—	242,738	$	24	$	1,515,748	$	(1,623)	$	(584,362)	$	929,787


Multiple of initial equity value at issuance	10x		20x		30x		40x		50x
Per share common stock price required for payment	$	18.29	$	36.58	$	54.86	$	73.15	$	91.44
Aggregate success payment(s) (in millions)	$	10	$	40	$	90	$	140	$	200


Deferred revenue balance at December 31, 2020	$	95,161
Revenue recognized during the period previously recorded in deferred revenue	(10,508)
Deferred revenue balance at December 31, 2021	$	84,653


	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Money market funds	$	206,245	$	—	$	—	$	206,245
U.S. Treasury securities	290,909		2		(1,205)		289,706
U.S. government agency securities	93,864		2		(240)		93,626
Corporate debt securities	285,338		—		(182)		285,156
Total cash equivalents and marketable securities	$	876,356	$	4	$	(1,627)	$	874,733


Classified as:	Fair Value
Cash equivalents	$	270,236
Marketable securities	320,966
Marketable securities, non-current	283,531
Total cash equivalents and marketable securities	$	874,733


	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Money market funds	$	50,513	$	—	$	—	$	50,513
U.S. Treasury securities	202,674		27		—		202,701
U.S. government agency securities	205,558		207		(1)		205,764
Corporate debt securities	211,086		34		(11)		211,109
Total cash equivalents and marketable securities	$	669,831	$	268	$	(12)	$	670,087


	Year Ended December 31,
	2021		2020		2019
Net cash provided by (used in):
Operating activities	$	(126,249)	$	(160,874)	$	39,474
Investing activities	(121,573)		(273,516)		(422,433)
Financing activities	401,244		476,790		351,156
Net increase (decrease) in cash, cash equivalents and restricted cash	$	153,422	$	42,400	$	(31,803)


	December 31,
	2021			2020
Fair value of common stock (Series A convertible preferred stock)	$	7.74		$	9.07
Risk-free interest rate	0.19% - 1.88%			0.10% - 1.52%
Expected volatility	75		%	80		%
Expected term (in years)	0.46 - 5.97			1.00 - 6.97


	December 31,
	2021			2020
Fair value of common stock (Series A convertible preferred stock)	$	7.74		$	9.07
Risk-free interest rate	0.19% - 1.88%			0.10% - 1.53%
Expected volatility	75		%	80		%
Expected term (in years)	0.46 - 7.75			1.00 - 8.75


	December 31,
	2021		2020
Leasehold improvements	$	95,001	$	8,452
Laboratory equipment	27,039		17,083
Computer equipment and software	1,610		724
Furniture and fixtures	384		178
Construction in progress	10,577		55,712
Property and equipment, at cost	134,611		82,149
Less: Accumulated depreciation and amortization	(14,513)		(5,104)
Total property and equipment, net	$	120,098	$	77,045


	December 31, 2021
	Level 1		Level 2		Level 3		Total
Financial assets:
Money market funds	$	206,245	$	—	$	—	$	206,245
U.S. Treasury securities	—		289,706		—		289,706
U.S. government agency securities	—		93,626		—		93,626
Corporate debt securities	—		285,156		—		285,156
Equity warrant investment	—		—		1,067		1,067
Total financial assets	$	206,245	$	668,488	$	1,067	$	875,800
Financial liabilities:
Success payment liabilities	$	—	$	—	$	9,486	$	9,486
Total financial liabilities	$	—	$	—	$	9,486	$	9,486


	Equity Warrant Investment		Success Payment Liabilities
Balance at December 31, 2019	$	—	$	436
Additions	1,380		—
Change in fair value (1)	(57)		5,337
Balance at December 31, 2020	1,323		5,773

Change in fair value (1)	(256)		3,713
Balance at December 31, 2021	$	1,067	$	9,486


Year Ending December 31:
2022	$	9,807
2023	11,018
2024	11,347
2025	11,859
2026	12,209
Thereafter	48,094
Total undiscounted lease payments	104,334
Less: imputed interest	(31,754)
Less: tenant improvement allowances	(4,761)
Total operating lease liabilities	$	67,819

Reported as of December 31, 2021:
Short-term portion of lease liabilities (included in accrued liabilities and other current liabilities)	$	1,169
Operating lease liabilities, non-current	66,650
Total	$	67,819


			Year Ended December 31,				Future
	Total		2021		2020		Expense
2021 Equity Modifications:
Former CEO - Options	$	21,948	$	4,105	$	—	$	17,843
Other - Options	1,019		1,019		—		—
Former CEO - RSA	10,908		3,237		—		7,671
2020 Equity Modifications:
Former CEO - Options	15,052		6,044		2,755		6,253
Other - Options	4,717		1,153		2,954		610
Former CEO - RSA	20,799		10,168		4,701		5,930
Other - RSA	9,029		1,975		7,054		—
Total	$	83,472	$	27,701	$	17,464	$	38,307


	Number of Shares	Weighted-Average Value at Grant Date Per Share



Unvested shares as of December 31, 2020	7,562,503	$	0.0001
Vested	(4,943,751)	$	0.0001
Forfeited	(18,750)	$	0.0001
Unvested shares as of December 31, 2021	2,600,002	$	0.0001


	Number of Stock Options	Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in thousands)




Options outstanding as of December 31, 2020	34,413,889	$	3.33	8.67	$	100,223
Granted	12,947,501	$	9.09
Exercised	(2,750,380)	$	3.43
Canceled or forfeited	(2,835,831)	$	4.19
Options outstanding as of December 31, 2021	41,775,179	$	5.05	7.84	$	142,076
Options exercisable as of December 31, 2021	23,716,000	$	3.39	7.08	$	110,520


Other assets	$	487
In-process research and development (IPR&D)	7,528
Total assets acquired	$	8,015


		Incorporation by Reference
Exhibit Number	Exhibit Description	Form	File Number	Exhibit/ Appendix Reference	Filing Date	Filed Herewith
3.1	Amended and Restated Certificate of Incorporation.	S-8	333-257249	4.1	6/21/2021
3.2	Amended and Restated Bylaws.	S-8	333-257249	4.2	6/21/2021
4.1	Form of Common Stock Certificate.	S-1/A	333-256470	4.1	6/9/2021
4.2	Amended and Restated Investors’ Rights Agreement, by and among the Registrant and certain of its stockholders, dated March 5, 2020.	S-1	333-256470	4.2	5/25/2021
10.1	Lyell Immunopharma, Inc. 2018 Equity Incentive Plan, as amended.	S-1	333-256470	10.1	5/25/2021
10.2	Forms of Stock Option Grant Notice, Stock Option Agreement and Notice of Exercise and Restricted Stock Award Agreement under the Lyell Immunopharma, Inc. 2018 Equity Incentive Plan.	S-1	333-256470	10.2	5/25/2021
10.3	Lyell Immunopharma, Inc. 2021 Equity Incentive Plan.	S-1/A	333-256470	10.3	6/09/2021
10.4	Forms of Stock Option Grant Notice, Stock Option Agreement and Notice of Exercise under the Lyell Immunopharma, Inc. 2021 Equity Incentive Plan.	S-1/A	333-256470	10.4	6/9/2021
10.5	Forms of Restricted Stock Unit Grant Notice and Award Agreement under the Lyell Immunopharma, Inc. 2021 Equity Incentive Plan.	S-1/A	333-256470	10.5	6/9/2021
10.6	Lyell Immunopharma, Inc. 2021 Employee Stock Purchase Plan.	S-1/A	333-256470	10.6	6/9/2021
10.7	Lyell Immunopharma, Inc. 2021 Non-Employee Director Compensation Policy.	S-1/A	333-256470	10.7	6/9/2021
10.8	Lyell Immunopharma, Inc. Officer Severance Plan.					X


LYELL IMMUNOPHARMA, INC.

By:						/s/ ELIZABETH HOMANS
Name:						Elizabeth Homans
Title:						Chief Executive Officer



Plan Name:						Lyell Immunopharma, Inc. Officer Severance Plan
Plan Sponsor:						Lyell Immunopharma, Inc. 201 Haskins Way South San Francisco, California 94080 (650) 695-0677
Identification Numbers:						EIN: 83-1300510
Plan Year:						Company’s Fiscal Year ending December 31
Plan Administrator:						Lyell Immunopharma, Inc. 201 Haskins Way South San Francisco, California 94080 (650) 695-0677
Agent for Service of
Legal Process:						Lyell Immunopharma, Inc. General Counsel 201 Haskins Way South San Francisco, California 94080 (650) 695-0677
						Service of process may also be made upon the Plan Administrator.

Type of Plan:						Severance Plan/Employee Welfare Benefit Plan
Plan Costs:						The cost of the Plan is paid by the Employer.


Eligible Employee Tier Level	Severance Pay	Severance Period*
Tier I	12 months base salary and a pro-rated annual bonus for the year in which the termination of employment occurs (paid at target in proportion to the percentage of that year in which employed by the Company)	12 months
Tier II	9 months base salary	9 months
Tier III	6 months base salary	6 months


Date:	March 29, 2022	By:	/s/ ELIZABETH HOMANS
			Elizabeth Homans
			Chief Executive Officer (Principal Executive Officer)


Date:	March 29, 2022	By:	/s/ CHARLES NEWTON
			Charles Newton
			Chief Financial Officer (Principal Financial and Accounting Officer)