Item 2.05 Costs Associated with Exit or Disposal Activities.
On January 30, 2023, the Board of Directors (the "Board") of Instil Bio, Inc.
(the "Company") approved an expansion of its previously announced realignment
plan implementing a strategic prioritization of the Company's preclinical and
clinical development programs. In connection with the expanded realignment plan
(the "Plan"), the Company will extend its previously announced U.S. reduction in
force, resulting in a team of approximately 15 in the United States to lead
global business operations. The reduction is expected to be substantially
completed in April 2023. The Plan is designed to reduce operating expenses,
which is expected to preserve financial resources and extend the Company's cash
runway beyond 2026 based on the Plan as currently contemplated. In connection
with the Plan, the Company expects to transition clinical manufacturing and
trial operations of ITIL-306 to its operations in the United Kingdom. In
addition, the Company is evaluating opportunities for a potential sale/sublease
of its Tarzana, California manufacturing site, as well as other facilities
currently under lease.
In connection with the Plan, the Company estimates that it will incur aggregate
restructuring costs of up to $3.0 million, excluding any charges or costs
associated with any potential sale of its facilities. At the time of the filing
of this Current Report on Form 8-K, the Company is unable in good faith to make
a determination of an estimate of the total amount or range of amounts expected
to be incurred by the Company in connection with each major type of cost
associated with the Plan or the amount or range of amounts of the charge that
will result in future cash expenditures. The charges that the Company expects to
incur in connection with the Plan are subject to a number of assumptions, and
actual results may differ materially. The Company may also incur additional
costs not currently contemplated due to events that may occur as a result of, or
that are associated with, the Plan.
The Company issued a press release announcing the Plan on January 31, 2023,
which is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Cautionary Note Regarding Forward-Looking Statements
This Current Report contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995, including statements
regarding the scope and the timing of the restructuring and the expected costs
related to the restructuring, which are based on management's current
expectations of future events and are subject to a number of risks and
uncertainties that could cause actual results to differ materially and adversely
from those set forth in or implied by such forward-looking statements, estimates
regarding the Company's cash runway and expectations regarding, and the impact
of, the transition of the Company's ITIL-306 clinical manufacturing and trial
operations to the United Kingdom, and plans concerning the Company's facilities.
Forward-looking statements are based on management's current expectations and
are subject to various risks and uncertainties that could cause actual results
to differ materially and adversely from those expressed or implied by such
forward-looking statements, including risks and uncertainties associated with
the costly and time-consuming cell therapy product development process and the
uncertainty of clinical success, including risks related to failures or delays
in successfully initiating, enrolling, reporting data from or completing
clinical studies, including as a result of our transition of our ITIL-306
clinical trial to the United Kingdom, as well as the risks that results obtained
in clinical trials to date may not be indicative of results obtained in ongoing
or future trials and that our product candidates may otherwise not be effective
treatments for their planned indications; the risk that the implementation of
additional quality safeguards to our manufacturing processes may not be
effective; the ongoing COVID-19 pandemic, which could materially and adversely
affect our business and operations, including our ability to timely initiate,
enroll and complete our ongoing and future clinical trials; the time-consuming
and uncertain regulatory approval process; risks inherent in manufacturing and
testing of cell therapy products; the sufficiency of our cash resources; our
ability to achieve the expected benefits of our corporate reorganization; the
risk that we may be unable to successfully transition our manufacturing and
clinical trial operations to our UK facility and execute on any additional
facility restructuring in a timely manner; and other risks and uncertainties
affecting Instil and its development programs, including those discussed in the
section titled "Risk Factors" in our Quarterly Report on Form 10-Q for the
quarter ended September 30, 2022 available on the SEC's website at www.sec.gov.
Additional information will be made available in other filings that we make from
time to time with the SEC. Such risks may be amplified by the impacts of the
COVID-19 pandemic. Accordingly, these forward-looking statements do not
constitute guarantees of future performance, and you are cautioned not to place
undue reliance on these forward-looking statements. These forward-looking
statements speak only as of the date hereof, and we disclaim any obligation to
update these statements except as may be required by law.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
99.1 Press release, dated January 31, 2023.
104 The cover page of this report has been formatted in Inline XBRL.
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