Item 2.02. Results of Operations
and Financial Condition.
On January 4, 2022, Y-mAbs Therapeutics, Inc. (the
“Company”) announced a strategic restructuring plan designed to extend its cash runway and prioritize resources on the commercialization
and potential label extension of DANYELZA and development of the SADA technology platform. The restructuring plan includes an estimated
28% reduction in annual operating expenses for 2023 compared to previously announced guidance of estimated annual operating expenses of
$162-$167 million for 2022. In addition, the Company announced certain preliminary unaudited results for fiscal year ended December 31,
2022. In particular, the Company expects its cash and cash equivalents as of December 31, 2022 to be approximately $106.0 million and
DANYELZA net product revenues for 2022 to be approximately $47-48 million.
The full text of the Company’s
press release issued in connection with the announcement is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The above information relating to 2022 operating expenses is subject
to revision in connection with the Company’s financial closing procedures and finalization and audit of the Company’s financial
statements for the fiscal year ended December 31, 2022. Actual operating expenses for the fiscal year ended 2022 may differ from the above
information. In addition, the preliminary financial results pertaining to expected 2022 cash and cash equivalents and DAYELZA net product
revenues set forth above are unaudited and based on management’s initial review of the Company’s results as of and for the
year ended December 31, 2022, and are subject to revision based upon the Company’s year-end closing procedures and the completion
of the audit by the Company’s external auditors of the Company’s December 31, 2022 financial statements. Actual results may
differ materially from these preliminary results as a result of the completion of year-end closing procedures, final adjustments, and
other developments arising between now and the time that the Company’s financial results are finalized. In addition, these preliminary
results are not a comprehensive statement of the Company’s financial results as of and for the year ended December 31, 2022, should
not be viewed as a substitute for complete financial statements prepared in accordance with U.S. generally accepted accounting principles,
and are not necessarily indicative of the Company’s results for any future period.
The information in this Item 2.02 of this Current Report on Form 8-K
is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of
the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to liability under that section, nor shall it
be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as expressly
set forth by specific reference in such a filing.
ITEM 2.05. COSTS ASSOCIATED
WITH EXIT OR DISPOSAL ACTIVITIES.
On January 3, 2023, the Company’s Board of
Directors approved updates to the Company’s plan with respect to its development activities and a restructuring of its development
and commercial organization, including a reduction of workforce, designed to focus resources on the commercialization of DANYELZA and
the development of its SADA (Self-Assembly DisAssembly) technology and reduce operating expenses, which is expected to preserve financial
resources and extend the Company’s cash runway into the first quarter of 2026 based on the revised business plan as currently contemplated.
Beginning on January 4, 2023, the Company intends
to commence executing this restructuring and revised business plan, which includes reducing its development activities by deprioritizing
other pipeline programs, including activities relating to development of omburtamab, a GD2-GD3 Vaccine and CD33 bispecific antibody constructs.
This restructuring and revised business plan was initiated largely in response to the complete response letter issued by the U.S. Food
and Drug Administration (“FDA”) on November 30, 2022, for the Biologics License Application for the investigational medicine
131I-omburtamab for the treatment of central nervous system /leptomeningeal metastasis from neuroblastoma. Going forward, the
Company plans to focus its sales and marketing efforts on increasing commercialization of DANYELZA® (naxitamab-gqgk), and its development
activities on its SADA program.
The Company currently expects a reduction in its
current workforce by approximately 35%, with such reduction anticipated to be completed by the end of May 2023. Affected employees are
expected to be offered separation benefits, including severance payments and outplacement services along with temporary healthcare coverage
assistance. The Company expects to record charges for these separation benefits in the first quarter of 2023. As a result of the reduction
in workforce and revised business plan, the Company expects to incur restructuring expenses of approximately $5.0 million, consisting
predominantly of cash related notice and severance payments of approximately $3.0 million and acceleration of stock-based compensation
of approximately $2.0 million. The Company anticipates that the majority of such restructuring expenses will be recognized and paid in
the first quarter of 2023. The charges that the Company expects to incur are subject to a number of assumptions, and actual expenses may
differ materially from the estimates disclosed above.
Cautionary Statement Regarding Forward-Looking Statements
Statements in this Current Report on Form 8-K about
future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, may constitute
“forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. Such statements include,
but are not limited to, statements about our business model, including financial outlook for 2023, including expectations with respect
to estimated charges and restructuring expenses, including the amounts and timing thereof, estimated operating expenses, total cash burn
and DANYELZA product revenue and sufficiency of cash resouces, in addition to expected revenues, operating expenses and cash position
for 2022, the restructuring, including the reduction in workforce and revised business plan, and the expected impacts, expenses and benefits
thereof, including potential cost-savings from the reduction in force, expected reduction of operating expenses and any expectations with
respect to cost savings to be derived therefrom; implied and express statements regarding the future of the Company’s business;
the Company’s plans and strategies, development, commercialization and product distribution plans; expectations with respect to
omburtamab, including the anticipated Type A meeting with the FDA; expectations with respect to our products and product candidates, including
potential territory and label expansion of DANYELZA and the potential market opportunity related thereto and potential benefits thereof,
and the potential of the SADA Technology, including the development of the first tumor binding dataset and potential benefits thereof
and potential partnership relating thereto; expectations relating to key anticipated development milestones, including potential expansion
of international commercialization efforts with respect to DANYELZA and the SADA Technology, including anticipated collection of data
in in GD2-SADA multicenter trial against small-cell lung cancer, sarcoma, and malignant melanoma and anticipated IND relating to the CD38-SADA
construct against non-hodgkin’s lymphoma, and the timing thereof; expectations that DANYELZA and the SADA technology represent potential
key near and long-term growth drivers; current and future clinical and pre-clinical studies and our research and development programs;
expectations related to the timing of the initiation and completion of regulatory submissions; regulatory, marketing and reimbursement
approvals; including satisfaction of conditions to approvals; additional product candidates and technologies; collaborations or strategic
partnerships and the potential benefits thereof; expectations related to the use of our cash and cash equivalents, and the need for, timing
and amount of any future financing transaction; our financial performance, including our estimates regarding revenues, expenses, capital
expenditure requirements, cash burn; and other statements that are not historical facts. Words such as ‘‘anticipate,’’
‘‘believe,’’ “contemplate,” ‘‘continue,’’ ‘‘could,’’
‘‘estimate,’’ ‘‘expect,’’ “hope,” ‘‘intend,’’ ‘‘may,’’
‘‘might,’’ ‘‘plan,’’ ‘‘potential,’’ ‘‘predict,’’
‘‘project,’’ ‘‘should,’’ ‘‘target,’’ “will”, ‘‘would’’
and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these
identifying words. Our product candidates and related technologies are novel approaches to cancer treatment that present significant challenges.
Actual results may differ materially from those indicated by such forward-looking statements as a result of various factors, including
but not limited to: risks associated with our financial condition and need for additional capital; the risks that actual results of the
restructuring plan and revised business plan will not be as expected; risks associated with our development work; cost and success of
our product development activities and clinical trials; the risks of delay in the timing of our regulatory submissions or failure to receive
approval of our drug candidates; the risks related to commercializing any approved pharmaceutical product including the rate and degree
of market acceptance of our product candidates; development of our sales and marketing capabilities and risks associated with failure
to obtain sufficient reimbursement for our products; the risks related to our dependence on third parties including for conduct of clinical
testing and product manufacture; our inability to enter into partnerships; the risks related to government regulation; risks related to
market approval, risks associated with protection of our intellectual property rights; risks related to employee matters and managing
growth; risks related to our common stock, risks associated with the COVID-19 pandemic; risks associated with the conflict between Russia
and Ukraine and sanctions related thereto; including inflation and uncertain global credit and capital markets; and other risks and uncertainties
affecting the Company including those described in the “Risk Factors” section included in our Annual Report on Form 10-K for
the year ended December 31, 2021, our Quarterly Reports on Firm 10-Q for the quarters ending March 31, 2022, June 30, 2022 and September
30, 2022, and in our other SEC filings. Any forward-looking statements contained in this press release speak only as of the date hereof,
and the Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events
or otherwise.