What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-06 · 73 added, 40 removed, 138 unchanged (45% of the section changed)

15 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 $15.3 million for the three months ended March 31, 2025, compared to $23.2 million for the three months ended March 31, 2024.

As of March 31, 2025, we had an accumulated deficit of $501.4 million.

Our net loss was $18.7 million and $34.0 million for the three and six months ended June 30, 2025, respectively, compared to $21.1 million and $44.3 million for the three and six months ended June 30, 2024, respectively.

As of June 30, 2025, we had an accumulated deficit of $520.1 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.

1 unchanged sentence

We expect our expenses, and the potential for losses, to be variable as we focus development efforts on selected assets and indications.

We expect research and development expenses to decrease in the near term as we complete enrollment and treatment of patients in certain of our trials.

We expect research and development expenses to decrease in the near term as we complete our Phase 2 trials for certain indications.

We have recently implemented certain initiatives to lower cost and extend our cash runway, including a restructuring in March 2025 that included a 30% workforce reduction, and a reduction in our lease footprint by almost half in June 2025.

Over the long-term, we expect our expenses to increase substantially in connection with the development of our clinical programs beyond our existing Phase 1 and Phase 2 clinical trials and through the commercialization of our product candidates.

3 unchanged sentences

We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

As of March 31, 2025, our cash and cash equivalents totaled approximately $32.4 million.

As of June 30, 2025, our cash and cash equivalents totaled approximately $18.2 million.

Accordingly, based on our current operating plan, and along with our history of operating losses, our current cash and cash equivalents may not to be sufficient to fund our ongoing operations for a period of at least twelve months from the date the financial statements included in this report are issued, and these circumstances raise substantial doubt about our ability to continue as a going concern.

3 unchanged sentences

In September 2024, the Company licensed BA3362, a Nectin-4 x CD3 T cell engaging bispecific antibody, to Context Therapeutics (“Context”).

We did not recognize any revenue during the three months ended March 31, 2025 and 2024, related to the licensing agreement with Context.

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 during the three months ended March 31, 2025 and 2024.

We did not recognize any revenue during the three and six months ended June 30, 2025 and 2024, related to the licensing agreement with Context.

Operating Expenses

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

We expect our research and development expenses to decrease in the near term as we complete enrollment and treatment in certain of our clinical trials and focus development on selected high potential indications.

We expect our research and development expenses to decrease in the near term as we complete certain of our Phase 2 clinical trials and focus development on selected high potential indications.

However, research and development could increase upon initiation of new clinical trials, including registrational trials for our lead product candidates.

10 unchanged sentences

Interest income consists primarily of interest earned on our cash and cash equivalent balances.

Gain on warrant liability

Gain on warrant liability relates to the changes in the fair value of our liability-classified warrants to purchase common stock.

Gain (loss) on warrant liability

Gain (loss) on warrant liability relates to the changes in the fair value of our liability-classified warrants to purchase common stock.

Results of Operations

Comparison of the Three Months Ended March 31, 2025 and 2024

Comparison of the Three Months Ended June 30, 2025 and 2024

Three Months Ended

5 unchanged sentences

Loss from operations

Other income (loss):

Interest income

Loss on warrant liability

Total other income (loss)

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:

Three Months Ended

(in thousands)

External expenses:

Mecbotamab vedotin, BA3011 (CAB AXL-ADC)

Ozuriftamab vedotin, BA3021 (CAB ROR2-ADC)

Evalstotug, BA3071 (CAB CTLA-4)

BA3182 (CAB EpCAM x CAB CD3)

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 $13.7 million and $16.2 million for the three months ended June 30, 2025 and 2024, respectively.

The decrease of approximately $2.5 million was primarily driven by a $0.9 million decrease in development costs for our pre-clinical programs primarily for BA3142, our CAB B7H3 x CD3 bispecific program, and BA3361, our CAB Nectin-4 ADC program due to previous prioritization of our programs, a $1.2 decrease in headcount related expenses due to the reduction in force announced in March 2025, and a $0.6 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan.

This was offset by a $0.3 million increase in development costs for our clinical stage programs, primarily driven by higher enrollment in our EpCAM Phase 1 trial.

General and Administrative Expense

General and administrative expenses were $5.0 million and $5.8 million for the three months ended June 30, 2025 and 2024, respectively.

The decrease of approximately $0.8 million was primarily driven by a $0.5 million decrease in stock-based compensation

related to awards issued under our 2020 Equity Incentive Plan and a $0.3 million decrease headcount related costs related to our reduction in force announced in March 2025.

Interest Income

Interest income was $0.2 million and $0.9 million for the three months ended June 30, 2025 and 2024, respectively.

The decrease of $0.7 million was due to lower cash and cash equivalents and lower interest rates during same period in 2024.

Loss on warrant liability

Loss on warrant liability was $0.3 million and $0 for the three months ended June 30, 2025 and 2024, respectively.

The $0.3 million loss was due to the change in fair value of the warrants we issued in December 2024.

Comparison of the Six Months Ended June 30, 2025 and 2024

Six Months Ended

(in thousands)

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income:

5 unchanged sentences

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

Three Months Ended

Six Months Ended

(in thousands)

10 unchanged sentences

Total research and development expenses

Research and development expenses were $12.4 million and $18.9 million for the three months ended March 31, 2025 and 2024, respectively.

The decrease of approximately $6.5 million was primarily driven by a decrease of $6.1 million in program development costs for our clinical programs due to lower enrollment and lower overall expense as we complete Phase 2 trials for mecbotamab vedotin, ozuriftamab vedotin, and evalstotug, a $0.5 million decrease in personnel-related expense due to lower headcount, a $0.3 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, and a $0.2 million decrease in facilities and other allocated expense.

This was offset by a $0.5 million severance charge in R&D related to our workforce reduction announced in March 2025.

Research and development expenses were $26.0 million and $35.1 million for the six months ended June 30, 2025 and 2024, respectively.

The decrease of approximately $9.0 million was primarily driven by a $5.3 million decrease in program development costs for our clinical programs due to lower enrollment and lower overall expense as we complete Phase 2 trials for mecbotamab vedotin, ozuriftamab vedotin, and evalstotug, a $1.5 million decrease in development costs for our pre-clinical programs primarily for BA3142, our CAB B7H3 x CD3 bispecific program, and BA3361, our CAB Nectin-4 ADC program due to previous prioritization of our programs, a $1.2 million decrease in personnel-related expense due to lower headcount including the impact of the reduction in force announced in March 2025, and a $0.9 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan.

General and Administrative Expense

General and administrative expenses were $5.3 million and $5.6 million for the three months ended March 31, 2025 and 2024, respectively.

The decrease of approximately $0.3 million was primarily driven by a $0.3 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, a $0.1 million decrease in insurance primarily due to lower D&O insurance premiums, offset by a $0.1 million severance charge in general and administrative expense related to our workforce reduction announced in March 2025.

General and administrative expenses were $10.2 million and $11.4 million for the six months ended June 30, 2025 and 2024, respectively.

The decrease of approximately $1.2 million was primarily driven by a $0.9 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, a $0.2 million decrease in insurance primarily due to lower D&O insurance premiums, and a $0.2 million decrease in headcount related to the reduction in force announced in March 2025.

Interest Income

Interest income was $0.4 million and $1.2 million for the three months ended March 31, 2025 and 2024, respectively.

Interest income was $0.6 million and $2.1 million for the six months ended June 30, 2025 and 2024, respectively.

The decrease of $1.5 million was due to lower cash and cash equivalents and lower interest rates during same period in 2024.

Gain on warrant liability

Gain on warrant liability was $1.9 million and $0 for the three months ended March 31, 2025 and 2024, respectively.

The increase of $1.9 million was due to the change in fair value of the warrants we issued in December 2024.

Gain on warrant liability was $1.6 million and $0 million for the six months ended June 30, 2025 and 2024, respectively.

The $1.6 million gain was due to the change in fair value of the warrants we issued in December 2024.

Liquidity and Capital Resources

1 unchanged sentence

Since July 2020, we have funded our operations primarily through the issuance of equity.

As of March 31, 2025, we had cash and cash equivalents of $32.4 million.

In January 2023, the Company entered into an Open Market Sale Agreement (the “Sales Agreement”) with Jefferies LLC (“Jefferies”) acting as sales agent pursuant to which the Company may, from time to time at its sole discretion, sell shares of the Company’s common stock, with aggregate gross sales proceeds of up to $100.0 million, pursuant to the Company’s then-effective shelf registration statement on Form S-3 (File No.

333-262528) which expired in February 2025.

The Company will pay Jefferies a commission of 3.0% of the aggregate gross proceeds the Company receives from all sales of the Company’s common stock under the Sales Agreement.

We have not sold any shares of our common stock under the Sales Agreement as of March 31, 2025.

As of June 30, 2025, we had cash and cash equivalents of $18.2 million.

In December 2024, the Company closed on an offering (the “December 2024 Offering”) of 9,679,158 shares of common stock at a price of $0.9520 per share with accompanying warrants to purchase up to 9,679,158 shares of common stock, which have an exercise price of $1.19 per share (the “Warrants”).

The gross proceeds from the December 2024 Offering were approximately $9.2 million, before deducting $0.7 million of placement agent fees and other offering expenses payable by the Company.

The accompanying Warrants become exercisable beginning six months from issuance and will expire five years from the date of initial exercisability.

Accordingly, there were 9,679,158 Warrants outstanding but not yet exercisable at March 31, 2025.

The accompanying Warrants became exercisable on June 20, 2025 and will expire five years from the date of initial exercisability.

There were 9,679,158 Warrants outstanding and exercisable at June 30, 2025.

Future Funding Requirements

23 unchanged sentences

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 tariffs and trade disputes with other countries, inflation, high interest rates, growing recession risks, supply chain disruptions, and geopolitical tensions and disruptions, including the ongoing conflict between Russia and Ukraine and the wars between Israel and the terrorist groups Hamas and Hezbollah, could adversely impact our ability to access capital as and when needed.

For example, market volatility resulting from a variety of causes, including tariffs and trade disputes with other countries, inflation, high interest rates, growing recession risks, supply chain disruptions, and geopolitical tensions and disruptions, including the ongoing conflict between Russia and Ukraine, the wars between Israel and the terrorist groups Hamas and Hezbollah and escalating conflict and tensions with Iran, 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.

3 unchanged sentences

The following summarizes our cash flows for the periods indicated:

Three Months Ended

Six Months Ended

(in thousands)

1 unchanged sentence

Operating activities

Investing activities

Financing activities

1 unchanged sentence

Cash Used in Operating Activities

Net cash used in operating activities for the three months ended March 31, 2025 was $16.3 million, which consisted of a net loss of $15.3 million, a net change of $0.9 million in our operating assets and liabilities and $0.1 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 $2.1 million, offset by an increase in prepaid expenses and other assets of $3.0 million.

The non-cash transactions primarily consisted of

$1.6 million of stock-based compensation and non-cash charges of $0.2 million related to depreciation and amortization, offset by $1.9 million related to the change in fair value of the warrant liability.

Net cash used in operating activities for the three months ended March 31, 2024 was $30.8 million, which consisted of a net loss of $23.2 million, a net change of $10.1 million in our operating assets and liabilities and $2.5 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 $9.0 million, a net decrease in operating lease right-of-use assets and lease liabilities of $0.3 million, and an increase in prepaid expenses and other assets of $0.9 million.

Net cash used in operating activities for the six months ended June 30, 2025 was $30.4 million, which consisted of a net loss of $34.0 million, a net change of $1.9 million in our operating assets and liabilities and $1.7 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 $2.5 million, offset by an increase in prepaid expenses and other assets of $0.4 million and a net decrease in operating lease right-of-use assets and lease liabilities of $0.3 million.

The non-cash transactions primarily consisted of $3.0 million of stock-based compensation and non-cash charges of $0.3 million related to depreciation and amortization, offset by $1.6 million related to the change in fair value of the warrant liability.

Net cash used in operating activities for the six months ended June 30, 2024 was $50 million, which consisted of a net loss of $44.3 million, a net change of $11.0 million in our operating assets and liabilities and $5.3 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 $10.9 million, a net decrease in operating lease right-of-use assets and lease liabilities of $0.3 million, partially offset by a decrease in prepaid expenses and other assets of $0.3 million.

The non-cash transactions primarily consisted of $4.8 million of stock-based compensation and non-cash charges of $0.5 million related to depreciation and amortization.

Cash Used in Financing Activities

Net cash used in financing activities was $0.4 million for the three months ended March 31, 2025, consisting primarily of the payment of financing costs in connection with the December 2024 offering and the payment of taxes related to the net settlement of restricted stock units.

Net cash used in financing activities was immaterial for the three months ended March 31, 2024, consisting primarily of the payment of taxes related to the net settlement of restricted stock units.

Cash Provided by (Used in) Financing Activities

Net cash used in financing activities was $0.4 million for the six months ended June 30, 2025, consisting primarily of the payment of financing costs in connection with the December 2024 offering and the payment of taxes related to the net settlement of restricted stock units, partially offset by the proceeds from the issuance of common stock under the ESPP and the 2020 Plan.

Net cash provided by financing activities was $0.2 million for the six months ended June 30, 2024, consisting primarily of the proceeds from the issuance of common stock under the ESPP and the 2020 Plan, partially offset by the payment of taxes related to the net settlement of restricted stock units.

Critical Accounting Policies and Estimates

5 unchanged sentences

For a description of our critical accounting policies, see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” contained in our Annual Report on Form 10-K for the year ended December 31, 2024.

There have not been any material changes to the critical accounting policies discussed therein during the three months ended March 31, 2025.

There have not been any material changes to the critical accounting policies discussed therein during the six months ended June 30, 2025.

Off-Balance Sheet Arrangements

3 unchanged sentences

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 2. Management’s Discussion and Analysis