What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-05 · 188 added, 106 removed, 451 unchanged (39% of the section changed)

21 unchanged sentences

200,000,000 shares authorized at

March 31, 2022 and December 31, 2021;

June 30, 2022 and December 31, 2021;

0 shares issued and outstanding at

March 31, 2022 and December 31, 2021

June 30, 2022 and December 31, 2021

Common stock, $ 0.0001 par value;

350,000,000 shares authorized at

March 31, 2022 and December 31, 2021;

June 30, 2022 and December 31, 2021;

35,993,458 shares and 35,799,233

shares issued and outstanding at March 31, 2022 and December 31, 2021

shares issued and outstanding at June 30, 2022 and December 31, 2021

Class B common stock, $ 0.0001 par value;

15,368,569 shares authorized at

March 31, 2022 and December 31, 2021;

June 30, 2022 and December 31, 2021;

1,492,059 shares issued and outstanding

at March 31, 2022 and December 31, 2021

at June 30, 2022 and December 31, 2021

Additional paid-in capital

6 unchanged sentences

(in thousands, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Collaboration and other revenue

Operating expenses:

14 unchanged sentences

(in thousands, except share amounts)

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Stockholders’

Balance at December 31, 2021

Balance at March 31, 2022

Stock-based compensation expense

Issuance of common stock under equity incentive plans

Issuance of common stock for Employee Stock Purchase Plan

Taxes related to net share settlement of equity awards

Balance at June 30, 2022

Three Months Ended June 30, 2021

Stockholders’

Balance at March 31, 2021

Three Months Ended March 31, 2021

Stock-based compensation expense

Issuance of common stock under equity incentive plans

Issuance of common stock for Employee Stock Purchase Plan

Balance at June 30, 2021

See accompanying notes.

BioAtla, Inc.

Unaudited Condensed Consolidated Statements of Stockholders’

(in thousands, except share amounts)

Six Months Ended June 30, 2022

Stockholders’

1 unchanged sentence

Stock-based compensation expense

Balance at March 31, 2021

Issuance of common stock under equity incentive plans

Issuance of common stock for Employee Stock Purchase Plan

Taxes related to net share settlement of equity awards

Balance at June 30, 2022

Six Months Ended June 30, 2021

Stockholders’

Balance at December 31, 2020

Stock-based compensation expense

Issuance of common stock under equity incentive plans

Issuance of common stock for Employee Stock Purchase Plan

Balance at June 30, 2021

See accompanying notes.

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

1 unchanged sentence

Depreciation and amortization

Loss on disposal of property and equipment

Stock-based compensation

7 unchanged sentences

Purchases of property and equipment

Proceeds from sale of property and equipment

Net cash used in investing activities

1 unchanged sentence

Payment of initial public offering costs

Proceeds from issuance of common stock under Employee Stock Purchase Plan

Payments for taxes related to net settlement of equity awards

24 unchanged sentences

became a single legal entity with no consolidated variable interest entities ("VIEs") or subsidiaries.

The unaudited condensed consolidated financial statements as of March 31, 2022, and for the three months ended March 31, 2022 and 2021, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial statements.

The unaudited condensed consolidated financial statements as of June 30, 2022, and for the three and six months ended June 30, 2022 and 2021, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial statements.

These unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, consisting of only normal recurring accruals, which in the opinion of management are necessary to present fairly the Company’s financial position as of the interim date and results of operations for the interim periods presented.

3 unchanged sentences

The Company has incurred cumulative operating losses and negative cash flows from operations since its inception and expects to continue to incur significant expenses and operating losses for the foreseeable future as it continues the development of its product candidates.

As of March 31, 2022, the Company had an accumulated deficit of $ 210.6 million .

As of June 30, 2022, the Company had an accumulated deficit of $ 239.5 million .

The Company plans to continue to fund its losses from operations and capital funding needs through public or private equity or debt financings or other sources.

43 unchanged sentences

Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive are as follows (in common stock equivalents):

Six Months Ended

Common stock warrants

2 unchanged sentences

Recent Accounting Pronouncements

There were no new accounting standards that had a material impact on the Company’s consolidated financial statements during the three months ended March 31, 2022, and there were no other new accounting standards or pronouncements that were issued but not yet effective as of March 31, 2022 that the Company expects to have a material impact on its consolidated financial statements.

There were no new accounting standards that had a material impact on the Company’s consolidated financial statements during the three or six months ended June 30, 2022, and there were no other new accounting standards or pronouncements that were issued but not yet effective as of June 30, 2022 that the Company expects to have a material impact on its consolidated financial statements.

Balance Sheet Details

15 unchanged sentences

The carrying amounts of the Company’s current financial assets and current financial liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments.

As of March 31, 2022 and December 31, 2021 , the Company had no financial assets or liabilities measured at fair value on a recurring basis.

As of June 30, 2022 and December 31, 2021 , the Company had no financial assets or liabilities measured at fair value on a recurring basis.

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis.

6 unchanged sentences

Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The Company did no t have any outstanding debt as of March 31, 2022 or December 31, 2021.

As of March 31, 2021, the Company had $ 0.7 million outstanding under a promissory note issued pursuant to the Paycheck Protection Program (“PPP”) of the CARES Act.

The Company did no t have any outstanding debt as of June 30, 2022 or December 31, 2021.

As of June 30, 2021, the Company had $ 0.7 million outstanding under a promissory note issued pursuant to the Paycheck Protection Program (“PPP”) of the CARES Act.

The loan was subsequently forgiven in July 2021 and recognized as other income on the Company's Statement of Operations.

For the three months ended March 31, 2022 and 2021, the Company recognized interest expense related to its outstanding debt of $ 0 and $ 2,000 , respectively.

For the three and six months ended June 30, 2021 , the Company recognized interest expense related to its outstanding debt of $ 1,000 and $ 3,000 , respectively.

The Company has a single operating lease for its corporate headquarters and laboratory space in San Diego, California.

2 unchanged sentences

The components of lease expense included in the Company’s condensed consolidated statements of operations include (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Operating lease expense

2 unchanged sentences

Variable lease costs are primarily related to payments made to lessors for common area maintenance, property taxes, insurance, and other operating expenses.

The Company did not have any short-term leases or finance leases for the three months ended March 31, 2022 or 2021, respectively.

The weighted average remaining lease term and weighted average discount rate for operating leases as of March 31, 2022 and 2021 were as follows:

Three Months Ended March 31,

The Company did not have any short-term leases or finance leases for the three and six months ended June 30, 2022 and 2021, respectively.

The weighted average remaining lease term and weighted average discount rate for operating leases were as follows:

As of June 30,

Weighted average remaining lease term (in years)

1 unchanged sentence

Supplemental cash flow information related to leases under which the Company is the lessee was as follows (amounts in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cash paid for amounts included in the measurement of operating leases

As of March 31, 2022, future minimum payments under the Company's non-cancelable operating lease under ASC 842 were as follows (in thousands):

Nine months ending December 31, 2022

As of June 30, 2022, future minimum payments under the Company's non-cancelable operating lease under ASC 842 were as follows (in thousands):

Six months ending December 31, 2022

Total future lease payments

7 unchanged sentences

The Company may grant awards of common stock under the 2020 Equity Incentive Plan (the "2020 Plan") to the Company’s employees, consultants and non-employee directors pursuant to option awards, stock appreciation rights awards, restricted stock awards, restricted stock unit awards, performance stock awards, performance stock unit awards and other stock-based awards.

As of March 31, 2022 and December 31, 2021 , the total number of common shares authorized for issuance under the 2020 Plan was 7,658,509 and 6,226,540 , respective ly.

As of June 30, 2022 and December 31, 2021 , the total number of common shares authorized for issuance under the 2020 Plan was 7,658,509 and 6,226,540 , respective ly.

On January 1st of each year, commencing with the first January 1st following the effective date of the 2020 Plan, the shares authorized for issuance under the 2020 Plan shall be increased by a number of shares equal to the lesser of 4% of the total number of shares outstanding on the immediately preceding December 31st and such lesser number of shares determined by the Company’s board of directors.

1 unchanged sentence

Awards under the 2020 Plan generally vest at 25 % one year from the vesting commencement date and ratably each month thereafter for a period of 36 months , subject to continuous service.

Stock-based compensation expense for the three months ended March 31, 2022 and 2021 has been reported in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):

Stock-based compensation expense for the three and six months ended June 30, 2022 and 2021 has been reported in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):

Three Months Ended

Six Months Ended

Research and development

1 unchanged sentence

Restricted Stock Units

The following table summarizes RSU activity under the 2020 Plan for the three months ended March 31, 2022:

The following table summarizes RSU activity under the 2020 Plan for the six months ended June 30, 2022:

Weighted - Average

Outstanding at December 31, 2021

Outstanding at March 31, 2022

As of March 31, 2022, total unrecognized stock-based compensation expense for RSUs was $ 15.5 million, which is expected to be recognized over a remaining weighted-average period of approximately 2.0 years .

During the three months ended March 31, 2021, the Company modified 138,461 RSU's under the Transition Agreement (See Note 9).

Outstanding at June 30, 2022

As of June 30, 2022, total unrecognized stock-based compensation expense for RSUs was $ 13.3 million, which is expected to be recognized over a remaining weighted-average period of approximately 1.8 years .

During the six months ended June 30, 2021, the Company modified 138,461 RSU's under the Transition Agreement (See Note 9).

Stock Options

The following table summarizes stock option activity under the 2020 Plan for the three months ended March 31, 2022:

The following table summarizes stock option activity under the 2020 Plan for the six months ended June 30, 2022:

Weighted - Average

1 unchanged sentence

Balance at December 31, 2021

Balance at March 31, 2022

Vested and expected to vest at March 31, 2022

Exercisable at March 31, 2022

As of March 31, 2022 , total unrecognized stock-based compensation cost for unvested common stock options was $ 19.6 million, which is expected to be recognized over a remaining weighted-average period of approximately 3.5 years.

The weighted- average grant date fair value of stock options granted during the three months ended March 31, 2022 was $ 4.42 per share .

The total fair value of options vested during the three months ended March 31, 2022 was $ 0.9 million.

During the three months ended March 31, 2021 the Company modified 7,747 stock options under the Transition Agreement (See Note 9).

Balance at June 30, 2022

Vested and expected to vest at June 30, 2022

Exercisable at June 30, 2022

As of June 30, 2022 , total unrecognized stock-based compensation cost for unvested common stock options was $ 18.1 million, which is expected to be recognized over a remaining weighted-average period of approximately 3.3 years.

The weighted- average grant date fair value of stock options granted during the six months ended June 30, 2022 was $ 4.07 per share .

The total fair value of options vested during the six months ended June 30, 2022 was $ 3.8 million.

During the six months ended June 30, 2021 the Company modified 7,747 stock options under the Transition Agreement (See Note 9).

The assumptions used in the Black-Scholes option pricing model to determine the fair value of stock option grants were as follows:

Three Months Ended

Six Months Ended

Expected volatility

18 unchanged sentences

Employee Stock Purchase Plan (the “ESPP”) permits participants to purchase common stock through payroll deductions of up to 15 % of their eligible compensation.

As of March 31, 2022 and December 31, 2021, a total of 1,229,148 shares and 833,993 shares, respectively, of common stock were authorized for issuance under the ESPP.

The number of shares of common stock authorized for issuance will automatically increase on January 1 of each calendar year, from January 1, 2021 through January 1, 2030

by the least of (i) 1.0 % of the total number of common shares of our common stock outstanding on December 31 of the preceding calendar year (calculated on a fully diluted basis), (ii) 929,658 common shares or (iii) a number determined by the Company’s board of directors that is less than (i) and (ii).

As of June 30, 2022 and December 31, 2021, a total of 1,229,148 shares and 833,993 shares, respectively, of common stock were authorized for issuance under the ESPP.

The number of shares of common stock

authorized for issuance will automatically increase on January 1 of each calendar year, from January 1, 2021 through January 1, 2030 by the least of (i) 1.0 % of the total number of common shares of our common stock outstanding on December 31 of the preceding calendar year (calculated on a fully diluted basis), (ii) 929,658 common shares or (iii) a number determined by the Company’s board of directors that is less than (i) and (ii).

In February 2021, employees began to enroll in the ESPP and the Company’s first offering period commenced.

The Company did not issue any shares under the ESPP during the three months ended March 31, 2022 or March 31, 2021.

As of March 31, 2022 , 1,217,966 shares of common stock remained available for issuance under the ESPP.

Stock-based compensation expense related to the ESPP for the three months ended March 31, 2022 and 2021 was immaterial.

The Company issued 9,482 common shares under the ESPP during the six months ended June 30, 2022 .

Comparatively, the Company issued 5,280 common shares under the ESPP during the six months ended June 30, 2021.

As of June 30, 2022 , 1,208,484 shares of common stock remained available for issuance under the ESPP.

Stock-based compensation expense related to the ESPP for the three and six months ended June 30, 2022 and 2021 was immaterial.

Common Stock Warrants

5 unchanged sentences

The remaining 151,088 warrants with an exercise period of 450 days after the Company's IPO expired unexercised in March 2022.

Accordingly, there were no remaining common stock warrants outstanding and exercisable as of March 31, 2022.

Accordingly, there are no remaining common stock warrants outstanding and exercisable as of June 30, 2022.

Common Stock Reserved for Future Issuance

6 unchanged sentences

Collaboration, License and Option Agreements

Global Co-Development and Collaboration Agreement with BeiGene

In April 2019, the Company entered into a Global Co-Development and Collaboration agreement (the “BeiGene Collaboration”) with BeiGene, Ltd.

8 unchanged sentences

Under Amendment No.

3, the Amended BeiGene Collaboration was terminated, subject to survival of certain provisions, and BeiGene handed back rights to know-how and materials received under the Amended BeiGene Collaboration.

As a result, the Company assumed responsibility for the global development and commercialization of BA3071.

3, the Amended BeiGene Collaboration was terminated, subject to survival of certain provisions, and the Company regained the rights to know-how and materials under the Amended BeiGene Collaboration and assumed responsibility for the global development and commercialization of BA3071.

As consideration for Amendment No.3, the Company agreed to pay BeiGene mid-single digit royalties on sales worldwide and on a limited basis will share in any upfront and milestone payments received through a sublicense of BA3071.

1 unchanged sentence

In the event the license is terminated, the liability will be extinguished with no further payment to BeiGene.

For the three months ended March 31, 2022 and 2021 , the Company did no t recognize any revenue related to the collaboration agreement with BeiGene.

As of March 31, 2022 and 2021 , the Company had a $ 19.8 million Liability to Licensor, and $ 19.8 million of deferred revenue which was classified as current, respectively.

For the three and six months ended June 30, 2022 and 2021 , the Company did no t recognize any revenue related to the collaboration agreement with BeiGene.

As of June 30, 2022 and December 31, 2021 , the Company had a $ 19.8 million Liability to Licensor, and $ 19.8 million of deferred revenue which was classified as current, respectively.

Service Contracts

Prior to developing its own programs, the Company entered into various fixed price research services contracts.

In connection with those service contracts, the Company may receive future milestone payments if certain clinical, regulatory and commercialization milestones are achieved.

The Company is also eligible to receive royalties based on certain product sales.

The Company recognized revenue of $ 0.3 million, included in “Collaboration and Other Revenue”, for the three and six months ended June 30, 2021 related to the achievement of a clinical milestone on a fixed price service contract.

The Company did no t recognize any revenue related to its legacy service contracts during the three or six months ended June 30, 2022.

BMS Collaboration

5 unchanged sentences

Subject to earlier termination, the BMS Collaboration shall remain in effect until completion and delivery of final study documents for each of the Combined Therapy Study to both parties.

Himalaya Therapeutics

Exclusive Rights Agreement

On January 1, 2020, the Company entered into an Amended and Restated Exclusive Rights Agreement (the “Amended Rights Agreement”) with Himalaya Therapeutics SEZC.

Under the terms of the Amended Rights Agreement, Himalaya Therapeutics SEZC acquired the rights to 10 CAB-antibodies for the territory of China, Macao, Hong Kong and Taiwan with future rights to 2 or more CAB-antibodies, global rights to a CAB-HER2-bispecific-antibody and global co-development rights with us to an IL-22 non-CAB-antibody.

Payments to the Company may include upfront payments, milestone payments and double-digit royalties, which represent a variable interest held by the Company, but no payments have been made to the Company to date.

Himalaya Therapeutics SEZC is a related party.

Related Party Transactions

10 unchanged sentences

The modification of these equity awards resulted in an incremental fair value of $ 7.0 million which was recognized on a straight-line basis over the transition service period which ended on the separation date.

For the three months ended March 31, 2021, the Company recognized $ 0.2 million related to the lump sum salary payment and target bonus, and a $ 1.0 million non-cash charge related to the modified equity awards.

No unrecognized stock-based compensation remained as of March 31, 2022 .

For the three and six months ended June 30, 2021 , the Company recognized $ 0.8 million and $ 1.0 million, respectively, related to the lump sum salary payment and target bonus.

The Company also recognized non-cash stock-based compensation charges of $ 8.4 million and $ 9.4 million related to the modified equity awards for the three and six months ended June 30, 2021, respectively.

No unrecognized stock-based compensation remained as of June 30, 2021.

Himalaya Therapeutics

Clinical Trial Agreement

In April 2022, the Company entered into a Clinical Trial Agreement with Himalaya Therapeutics SEZC.

Under the agreement, Himalaya Therapeutics SEZC agreed to provide services related to the initiation of clinical trials for BA3021 in the People’s Republic of China.

For the first year following effectiveness of the agreement, the Company has agreed to pay Himalaya Therapeutics SEZC for the full-time use of two of its personnel.

Payments are due and payable by BioAtla to Himalaya Therapeutics SEZC on a quarterly calendar basis and are non-refundable.

For the three and six months ended June 30, 2022, the Company recognized $ 0.1 million in research and development expense related to the Clinical Trial Agreement.

The Company did not have any amounts due from or due to Himalaya Therapeutics SEZC as of June 30, 2022.

The Company maintains a defined contribution 401(k) plan available to eligible employees.

1 unchanged sentence

The Company, at its discretion, may make certain matching contributions to the 401(k) plan.

As of March 31, 2022 and December 31, 2021 , the Company had no t made any matching contributions.

As of June 30, 2022 and December 31, 2021 , the Company had no t made any matching contributions.

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

17 unchanged sentences

Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current and future product candidates.

Our net loss was $24.3 million and $18.7 million for the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022, we had an accumulated deficit of $210.6 million.

Our net losses were $28.9 million and $53.2 million for the three and six months ended June 30, 2022, respectively, compared to $30.4 million and $49.1 million for three and six months ended June 30, 2021, respectively.

As of June 30, 2022, we had an accumulated deficit of $239.5 million.

These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations.

We do not expect to generate meaningful revenue from product sales for the foreseeable future, and we expect to continue to incur significant operating expenses for the foreseeable future due to the cost of research and development, including identifying and designing product candidates and conducting preclinical studies and clinical trials, and the regulatory approval process for our product candidates.

We expect our expenses, and the potential for losses, to increase substantially as we conduct clinical trials of our lead product candidates and seek to expand our pipeline.

We expect our expenses, and the potential for losses, to increase as we conduct clinical trials of our lead product candidates and seek to expand our pipeline.

We expect our expenses and capital requirements will increase substantially in connection with our ongoing activities as we:

18 unchanged sentences

If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to raise capital, maintain our research and development efforts, expand our business or continue our operations at planned levels, and as a result we may be forced to substantially reduce or terminate our operations.

In December 2020, we completed our IPO in which we sold 12,075,000 shares of our common stock at the IPO price to the public of $18.00 per share, which included the exercise in full of the underwriters’

option to purchase additional shares, for aggregate cash proceeds of $217.4 million.

We incurred $19.0 million of issuance costs in connection with our IPO.

Upon the closing of our IPO, all outstanding shares of our convertible preferred stock converted into 13,876,510 shares of our common stock and 1,492,059 shares of our Class B common stock.

In September 2021, we received $71.0 million, net of issuance costs, from a private investment in public equity, or PIPE, financing.

As of March 31, 2022, our cash and cash equivalents totaled approximately $219.4 million.

As of June 30, 2022, our cash and cash equivalents totaled approximately $202.3 million.

Based on our current operating plan, our current cash and cash equivalents are expected to be sufficient to fund our ongoing operations into the second half of 2024.

4 unchanged sentences

To date, we have experienced modest business disruptions, including with respect to clinical trials we are conducting, and non-material impairments as a result of the pandemic.

Our mecbotamab vedotin Phase 2 sarcoma trial remains on schedule and the Phase 2 interim analysis for mecbotamab vedotin NSCLC and ozuriftamab vedotin studies have experienced some modest delays in patient initiations due to COVID-19, however, overall timelines for study completion essentially have not changed at this time.

Our mecbotamab vedotin Phase 2 sarcoma trial remains on schedule and the Phase 2 interim analysis for mecbotamab vedotin NSCLC and ozuriftamab vedotin studies have experienced some modest delays.

We are following, and plan to continue to follow, recommendations from federal, state and local governments regarding workplace policies, practices and procedures.

In March 2020, we implemented a remote working policy for many of our employees and began restricting non-essential travel.

During 2022 we modified our hybrid work policy to allow for more flexibility based on department needs and travel requirements.

We are complying with all applicable guidelines for our clinical trials, including remote clinical monitoring.

4 unchanged sentences

To date, we have not generated any revenue from the sale of products and do not expect to generate meaningful revenue in the near future.

In April 2019, we entered into a Global Co-Development and Collaboration Agreement with BeiGene, Ltd.

which was amended in December 2019, October 2020, and was terminated by amendment in November 2021.

In 2019, we received from BeiGene an upfront non-refundable payment of $20.0 million and $5.0 million for reimbursement of manufacturing costs.

After the November 2021 amendment, we assumed responsibility for developing BA3071, including global regulatory filings and commercialization, and are responsible for all costs of development, manufacturing and commercialization globally.

Pursuant to the terms of the November 2021 amendment, we agreed to pay single digit royalties to BeiGene and agreed to share on a limited basis in any upfront and

milestone payments received through a sublicense of BA3071.

In 2019 we entered into a collaboration agreement with BeiGene, Ltd.

The agreement was amended several times and was terminated in November 2021, which resulted in the Company assuming responsibility for development of BA3071.

We received a total of $25 million in non-refundable payments from BeiGene from this collaboration.

Pursuant to the terms of the November 2021 amendment, we agreed to pay single digit royalties to BeiGene and agreed to share on a limited basis in any upfront and milestone payments, if received, through a sublicense of BA3071.

In addition, we may in the future seek third-party collaborators or joint venture partners for development and commercialization of additional CAB product candidates.

We did not recognize any revenue for the three months ended March 31, 2022 and 2021, respectively.

We did not recognize any collaboration revenue for the three or six months ended June 30, 2022 and 2021.

Prior to developing our own programs, we received revenue from services performed under fixed price service contracts that, in some cases, provided for potential milestone and royalty payments to us.

We did not recognize any revenue from our legacy service contracts for the three months ended March 31, 2022 and 2021, respectively.

We did not recognize any revenue from our legacy service

contracts for the three and six months ended June 30, 2022.

We recognized $0.3 million in revenues from our legacy service contracts for the three and six months ended June 30, 2021, respectively.

Operating Expenses

2 unchanged sentences

External expenses consist of:

Fees paid to third parties such as contractors, clinical research organizations (CROs) and consultants, including through our relationship with BioDuro-Sundia, and other costs related to preclinical and clinical trials;

Fees paid to third parties such as contractors, clinical research organizations (CROs) and consultants, and other costs related to preclinical and clinical trials;

Fees paid to third parties such as contract manufacturing organizations (CMOs) and other vendors for manufacturing research and clinical trial materials;

2 unchanged sentences

Personnel-related expenses, including salaries, benefits and equity-based compensation expenses, for personnel in our research and development functions;

Related equipment and facilities depreciation expenses.

Related equipment and facilities depreciation expense.

We expense research and development costs in the periods in which they are incurred.

1 unchanged sentence

The capitalized amounts are then expensed as the related goods are delivered and services are performed.

We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities to advance our product candidates and our clinical programs and expand our product candidate pipeline.

We expect our research and development expenses to generally increase for the foreseeable future as we continue to invest in research and development activities to advance our product candidates and our clinical programs and expand our product candidate pipeline.

The process of conducting the necessary preclinical and clinical research to obtain regulatory approval is costly and time-consuming.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

Successful product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

Accordingly, to the extent that our product candidates continue to advance into clinical trials, including larger and later-stage clinical trials, our expenses will increase substantially and may become more variable.

3 unchanged sentences

General and Administrative

Our general and administrative expenses consist primarily of personnel-related expenses for personnel in our executive, finance, corporate and other administrative functions, intellectual property and patent costs, facilities and other allocated expenses, other expenses for outside professional services, including legal, human resources, audit and accounting services and insurance costs.

Our general and administrative expenses include personnel-related expenses for personnel in our executive, finance, corporate and other administrative functions, intellectual property and patent costs, facilities and other allocated expenses, other expenses for outside professional services, including legal, human resources, investor relations, audit and accounting services and insurance costs.

Personnel-related expenses consist of salaries, benefits and equity-based compensation.

Our general and administrative expenses have increased as a result of operating as a public company, including additional costs (i) to comply with the rules and regulations of the SEC and those of The Nasdaq Global Market, (ii) for legal and auditing services, (iii) for additional insurance, (iv) for investor relations activities and (v) for other administrative and professional services.

We also expect our intellectual property expenses to increase as we expand our intellectual property portfolio.

Our general and administrative expenses have increased as a result of operating as a public company and after losing our emerging growth status.

We also expect our general and administrative expenses to increase in the future as we increase our personnel headcount to support our research and development activities to advance our product candidates and clinical stage programs.

Interest Income

2 unchanged sentences

Results of Operations

Comparison of the Three Months Ended March 31, 2022 and 2021

Comparison of the Three Months Ended June 30, 2022 and 2021

Three Months Ended

(in thousands)

Collaboration and other revenue

Operating expenses:

21 unchanged sentences

Total research and development expenses

Research and development expenses were $16.9 million and $10.4 million for the three months ended March 31, 2022 and 2021, respectively.

The increase of $6.5 million was primarily driven by a $4.8 million increase in external expenses, including a $2.6 million increase in pre-clinical development including manufacturing and IND enabling studies for pipeline CAB programs, a $1.6 million increase related to clinical development for CTLA-4, and a $0.6 million increase in external costs due to manufacturing and clinical development for mecbotamab vedotin (BA3011) and ozuriftamab vedotin (BA3021).

In addition, personnel related costs increased $1.2 million due to an increase in headcount to support ongoing development activities for our programs and stock-based compensation increased $0.3 million due to awards issued in connection with our 2020 Equity Incentive Plan.

Research and development expenses were $20.7 million and $14.9 million for the three months ended June 30, 2022 and 2021, respectively.

The increase of approximately $5.9 million was primarily driven by a $3.7 million increase in clinical development for our clinical programs, a $0.8 million increase in pre-clinical development and manufacturing costs for various programs, a $1.1 million increase in personnel related costs due to an increase in headcount to support ongoing development activities for our programs, and a $0.2 million increase in stock-based compensation due to awards issued in connection with our 2020 Equity Incentive Plan.

General and Administrative Expense

General and administrative expenses were $7.4 million and $8.4 million for the three months ended March 31, 2022 and 2021, respectively.

The decrease of $1.0 million was primarily driven by a $1.4 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, offset by an increase of $0.3 million in audit and legal services, and a $0.1 million increase in personnel related expenses.

General and administrative expenses were $8.3 million and $15.9 million for the three months ended June 30, 2022 and 2021, respectively.

The decrease of approximately $7.5 million was primarily driven by a $8.7 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, including new awards issued under the plan and the modification of awards issued to one of our co-founders in Q2 2021, and a $0.6 million decrease in personnel related expenses, offset by a $1.6 million increase in audit and legal expense.

Interest Income

Interest income was $85,000 and $98,000 for the three months ended March 31, 2022 and 2021, respectively.

The decrease of $13,000 was due to lower average cash and cash equivalent balances.

Interest income was $146,000 and $80,000 for the three months ended June 30, 2022 and 2021, respectively.

The increase of $66,000 was due to higher yields earned during Q2 2022 compared to the same period in 2021.

Comparison of the Six Months Ended June 30, 2022 and 2021

Six Months Ended

(in thousands)

Collaboration revenue

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Interest income

Interest expense

Total other income

Consolidated net loss and comprehensive loss

Research and Development Expense

The following table summarizes our research and development expenses allocated by CAB program for the periods indicated:

Six Months Ended

(in thousands)

External expenses:

BA3011 (AXL-ADC)

BA3021 (ROR2-ADC)

Other CAB Programs

Total external expenses

Personnel and related

Equity-based compensation

Facilities and other

Total research and development expenses

Research and development expenses were $37.6 million and $25.3 million for the six months ended June 30, 2022 and 2021, respectively.

The increase of $12.4 million was primarily driven by a $8.2 million increase in clinical development for our clinical programs, a $1.1 million increase in pre-clinical development and manufacturing costs for various programs, a $2.3 million increase in personnel related costs due to an increase in headcount to support ongoing development activities for our programs, and a $0.6 million increase in stock-based compensation due to awards issued in connection with our 2020 Equity Incentive Plan.

General and Administrative Expense

General and administrative expenses were $15.8 million and $24.2 million for the six months ended June 30, 2022 and 2021, respectively.

The decrease of $8.5 million was primarily driven by a $10.0 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, including new awards granted under the plan and the modification of awards issued to one of our co-founders in 2021, and a $0.5 million decrease in personnel related expenses, offset by an increase of $1.9 million in audit and legal services, including a $1.0 million legal settlement.

Interest Income

Interest income was $231,000 and $178,000 for the six months ended June 30, 2022 and 2021, respectively.

The increase of $53,000 was due to higher yields earned compared to the same period in 2021.

Liquidity and Capital Resources

We have incurred aggregate net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future.

As of March 31, 2022, we had cash and cash equivalents of $219.4 million.

As of June 30, 2022, we had cash and cash equivalents of $202.3 million.

On April 22, 2020, we received proceeds from a loan pursuant to the Paycheck Protection Program of the CARES Act, "the PPP Loan", in the amount of $0.7 million from City National Bank, as lender.

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Failure to generate sufficient cash flows from operations, raise additional capital, and reduce discretionary spending should additional capital not become available could have a material adverse effect on our ability to achieve our intended business objectives.

Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our

current and anticipated preclinical studies and clinical trials.

To the extent that we raise additional capital through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates.

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Our ability to raise additional funds will depend on financial, economic and other factors, many of which are beyond our control.

For example, market volatility resulting from a variety of causes, including the COVID-19 pandemic, supply chain disruptions and the recent conflict between Russia and Ukraine, could adversely impact our ability to access capital as and when needed.

For example, market volatility resulting from a variety of causes, including the COVID-19 pandemic, supply chain disruptions, and geopolitical disruptions, including the recent conflict between Russia and Ukraine, could adversely impact our ability to access capital as and when needed.

We may choose to raise additional capital through the issuance of equity or convertible debt securities due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

To the extent we issue additional shares of common stock or other equity or convertible debt securities in the future, there will be further dilution to our investors and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’

If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, acquiring other businesses, products or technology, or declaring dividends.

we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, acquiring other businesses, products or technology, or declaring dividends.

If we are unable to obtain additional funding from these or other sources, it may be necessary to significantly reduce our rate of spending through reductions in staff and delay, scale back or stop certain research and development programs.

The following summarizes our cash flows for the periods indicated:

Three Months Ended

Six Months Ended

(in thousands)

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Financing activities

Net increase in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash Used in Operating Activities

Net cash used in operating activities totaled $25.1 million for the three months ended March 31, 2022, which consisted of a consolidated net loss of $24.3 million, a net change of $4.8 million in our operating assets and liabilities and $3.9 million of non-cash transactions.

The net change in our operating assets and liabilities was primarily due to a decrease in accounts payable and accrued expenses of $2.4 million, offset by an increase in prepaid expenses and other assets of $2.3 million.

Net cash used in operating activities totaled $42.1 million for the six months ended June 30, 2022, which consisted of a consolidated net loss of $53.2 million, a net change of $3.0 million in our operating assets and liabilities and $8.1 million of non-cash transactions.

The net change in our operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $5.8 million, offset by an increase in prepaid expenses and other assets of $2.6 million.

The non-cash transactions primarily consisted of $7.5 million of stock-based compensation and non-cash charges of $0.6 million related to depreciation and amortization.

Net cash used in operating activities for the three months ended March 31, 2021 was $15 million, which consisted of a consolidated net loss of $18.7 million, a net change of $1.2 million in our operating assets and liabilities and $4.8 million of non-cash transactions.

The net change in our operating assets and liabilities was primarily due to an increase in prepaid expenses and other assets of $1.3 million.

The non-cash transactions primarily consisted of $4.6 million of stock-based compensation related to the issuance of RSUs and stock options in the fourth quarter of 2020 and non-cash charges of $0.3 million related to depreciation and amortization.

Net cash used in operating activities for the six months ended June 30, 2021 was $28.5 million, which consisted of a consolidated net loss of $49.1 million, a net change of $3.0 million in our operating assets and liabilities and $17.6 million of non-cash transactions.

The net change in our operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $5.7 million, offset by an increase in prepaid expenses and other assets of $2.6 million.

The non-cash transactions

primarily consisted of $16.9 million of stock-based compensation and non-cash charges of $0.6 million related to depreciation and amortization.

Cash Used in Investing Activities

Cash used in investing activities was immaterial for the three months ended March 31, 2022 and $0.5 million for the three months ended March 31, 2021, respectively, related to the purchase of property and equipment.

Cash Provided by Financing Activities

Net cash used in financing activities was $0.4 million for the three months ended March 31, 2022, which consisted primarily of the payment of taxes related to the net settlement of restricted stock units.

Net cash provided by financing activities was $1.9 million for the three months ended March 31, 2021, which consisted primarily of our payment of offering costs related to our 2020 IPO.

Cash used in investing activities was $0.2 million for the six months ended June 30, 2022 and $0.7 million for the six months ended June 30, 2021, respectively, related to the purchase of property and equipment.

Cash Used in Financing Activities

Net cash used in financing activities was $0.5 million for the six months ended June 30, 2022, which consisted primarily of the payment of taxes related to the net settlement of restricted stock units.

Net cash used in financing activities was $1.7 million for the six months ended June 30, 2021, which consisted primarily of our payment of initial public offering costs of $1.9 million, partially offset by the proceeds from the issuance of common stock under our Employee Stock Purchase Plan of $0.2 million.

Critical Accounting Policies and Estimates

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contained in our Annual Report on Form 10-K for the year ended December 31, 2021.

There have not been any material changes to the critical accounting policies discussed therein during the three months ended March 31, 2022.

There have not been any material changes to the critical accounting policies discussed therein during the six months ended June 30, 2022.

Off-Balance Sheet Arrangements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements