What changed in this filing

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Item 1A. Risk Factors

2024-03-12 compared with 2023-03-09 · 123 added, 78 removed, 1488 unchanged (12% of the section changed)

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We are very early in our development efforts.

We are currently evaluating BDTX-1535 in a Phase 1 clinical trial, and anticipate initiating a Phase 1 clinical trial for BDTX-4933 in the first-half of 2023.

We are currently evaluating BDTX-1535 in a Phase 2 clinical trial in patients with EGFRm NSCLC, and in a Phase 1 clinical trial and investigator sponsored Phase 0/1 trial in patients with GBM, and we are evaluating BDTX-4933 in Phase 1 clinical trial.

Our other product candidates are still in preclinical development and have never been tested in human subjects.

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• maintaining a continued acceptable safety profile of our products following approval;

• factors we may not be able to control, such as current or potential pandemics that may limit patients, principal investigators or staff or clinical site availability (e.g.

the ongoing COVID-19 pandemic).

There is no guarantee that the results obtained in current preclinical studies, our ongoing clinical trial of BDTX-1535, or our planned clinical trial of BDTX-4933 will be sufficient to obtain regulatory approval or marketing authorization for such product candidates.

• factors we may not be able to control, such as current or potential pandemics that may limit patients, principal investigators or staff or clinical site availability.

There is no guarantee that the results obtained in current preclinical studies or our ongoing clinical trials of BDTX-1535 and BDTX-4933 will be sufficient to obtain regulatory approval or marketing authorization for such product candidates.

Negative results in the development of our lead product candidates may also impact our ability to obtain regulatory approval for our other product candidates, either at all or within anticipated timeframes because, although other product candidates may target different indications, the underlying technology platform, manufacturing process and development process is the same for all of our product candidates.

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Difficulty in enrolling patients could delay or prevent clinical trials of our product candidates.

We may find it difficult to enroll patients in our Phase 1 clinical trial for BDTX-1535 or our planned Phase 1 clinical trial for BDTX-4933 with the genetic mutations these product candidates are designed to target.

We may find it difficult to enroll patients in our Phase 2 clinical trial for BDTX-1535 or our Phase 1 clinical trial for BDTX-4933 with the genetic mutations these product candidates are designed to target.

Identifying and qualifying patients to participate in clinical studies of our product candidates is critical to our success.

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• our ability to obtain and maintain patient consents;

• impacts of the ongoing COVID-19 pandemic on clinical trial site activation and patient enrollment;

• impacts of any pandemic or epidemic on clinical trial site activation and patient enrollment;

• reporting of the preliminary results of any of our clinical trials;

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The approval of a companion diagnostic as part of the product label will also limit the use of the product candidate to only those patients who express the specific genetic alteration it was developed to detect.

Companion diagnostics are subject to regulation by the FDA and comparable foreign regulatory authorities as medical devices and require separate clearance or approval prior to their commercialization.

To date, the FDA has required premarket approval for nearly all companion diagnostics for cancer therapies.

We and our third-party collaborators may encounter difficulties in developing and obtaining approval for these companion diagnostics.

Companion diagnostics are subject to regulation by the FDA and comparable foreign regulatory authorities as medical devices and require separate marketing authorization prior to their commercialization.

We and our third-party collaborators may encounter difficulties in developing and obtaining marketing authorization for our companion diagnostics.

Any delay or failure by us or third- party collaborators to develop or obtain regulatory approval of a companion diagnostic could delay or prevent approval of our related product candidates.

Since the number of patients that we plan to dose in our Phase 1 clinical trial of BDTX-1535 and our planned Phase 1 clinical trial of BDTX-4933 is smaller than the number of patients that would be enrolled in a registration trial, the results from such clinical trials, once completed, may be less reliable than results achieved in larger clinical trials, which may hinder our efforts to obtain regulatory approval for our product candidates.

Since the number of patients that we plan to dose in our Phase 2 clinical trial of BDTX-1535 and our Phase 1 clinical trial of BDTX-4933 is smaller than the number of patients that would be enrolled in a registration trial, the results from such clinical trials, once completed, may be less reliable than results achieved in larger clinical trials, which may hinder our efforts to obtain regulatory approval for our product candidates.

The number of patients that we plan to dose in our initial clinical trials is small.

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In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge.

Given that our Phase 1 clinical trial of BDTX-1535 and planned Phase 1 clinical trial of BDTX-4933 include an open-label dosing design, the results from these clinical trials may not be predictive of future clinical trial results with these or other product candidates for which we conduct an open-label clinical trial when studied in a controlled environment with a placebo or active control.

Given that our Phase 2 clinical trial of BDTX-1535 in patients with EGFRm NSCLC and Phase 1 clinical trial of BDTX-4933 include an open-label dosing design, the results from these clinical trials may not be predictive of future clinical trial results with these or other product candidates for which we conduct an open-label clinical trial when studied in a controlled environment with a placebo or active control.

We may experience delays in obtaining the FDA’s authorization to initiate clinical trials under future INDs, completing ongoing preclinical studies of our other product candidates, and initiating our planned preclinical studies and clinical trials.

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Risks related to our approach

Our discovery and preclinical development is focused on the development of precision medicines for patients with genetically defined cancers, which is a rapidly evolving area of science, and the approach we are taking to discover and develop drugs is novel and may never lead to marketable products.

We are focused on the development of precision medicines for patients with genetically defined cancers, which is a rapidly evolving area of science, and the approach we have taken to discover, and are taking to develop drugs is novel and may never lead to marketable products.

The discovery and development of precision medicines for patients with genetically defined cancers is an emerging field, and the scientific discoveries that form the basis for our efforts to discover and develop product candidates are relatively new.

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Therefore, we do not know if our approach of treating patients with genetically defined cancers will be successful, and if our approach is unsuccessful, our business will suffer.

Our approach to the discovery and development of product candidates is unproven, and we may not be successful in our efforts to use and expand our MAP drug discovery engine to build a pipeline of product candidates with commercial value.

A key element of our strategy is to use and expand our MAP drug discovery engine to build a pipeline of product candidates and progress these product candidates through clinical development for the treatment of various cancers.

Our approach to the development of product candidates is unproven, and we may not be successful in our efforts to develop product candidates with commercial value.

A key element of our strategy has been to use our MAP drug discovery engine to build a pipeline of product candidates and progress these product candidates through clinical development for the treatment of various cancers.

Although our research and development efforts to date have resulted in our discovery and development of BDTX-1535 and BDTX-4933, these clinical-stage candidates may not be safe or effective as cancer treatments, and we may not be able to develop any other product candidates.

Our MAP drug discovery engine is evolving and may not in the future support the continued expansion of our pipeline of product candidates.

For example, we may not be successful in identifying additional genetic mutations which are oncogenic and which can be “basketed” into a group that is large enough to present a sufficient commercial opportunity or that is druggable with one chemical compound.

Even if we are successful in building our pipeline of product candidates, the potential product candidates that we identify may not be suitable for clinical development or generate acceptable clinical data, including as a result of being shown to have unacceptable toxicity or other characteristics that indicate that they are unlikely to be products that will receive marketing approval from the FDA or other regulatory authorities or achieve market acceptance.

Our MAP drug discovery engine may not in the future support the continued expansion of our pipeline of product candidates.

Our pipeline of product candidates and potential future product candidates may not be suitable for further clinical development or generate acceptable clinical data, including as a result of being shown to have unacceptable toxicity or other characteristics that indicate that they are unlikely to be products that will receive marketing approval from the FDA or other regulatory authorities or achieve market acceptance.

If we do not successfully develop and commercialize product candidates, we will not be able to generate product revenue in the future, which likely would result in significant harm to our financial position and adversely affect our stock price.

The market opportunities for our product candidates may be relatively small as it will be limited to those patients who are ineligible for or have failed prior treatments and our estimates of the prevalence of our target patient populations may be inaccurate.

The market opportunities for our product candidates may be relatively small and limited to those patients who are ineligible for or have failed prior treatments and our estimates of the prevalence of our target patient populations may be inaccurate.

Cancer therapies are sometimes characterized as first line, second line, or third line, and the FDA often approves new therapies initially only for a particular line of use.

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Consequently, even if our product candidates are approved for a second or third line of therapy, the number of patients that may be eligible for treatment with our product candidates may turn out to be much lower than expected.

In addition, we have not yet conducted market research to determine how treating physicians would expect to prescribe a product that is approved for multiple tumor types if there are different lines of approved therapies for each such tumor type.

Risks related to global events

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Broad-based business, economic or geopolitical disruptions or global health concerns could adversely affect our ongoing or planned research and development activities.

Any such disruptions or concerns may impact a broad range of stakeholders, including our target patient populations, the hospitals and clinical sites in which we conduct any of our clinical trials, third parties with whom we engage, including our CROs, suppliers and regulators, and our lab-based employees.

Such impacts could materially negatively affect our ability to conduct our business in the manner or on the timelines presently planned by causing delays in the enrollment of our clinical trials, the manufacture and supply of our product candidates, the conduct of experiments and studies and other interruptions and potential limitations on the quality, completeness and interpretability of data we are able to collect.

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Any negative impact to patient enrollment or treatment or the timing and execution of our preclinical studies or clinical trials could cause costly delays to our development programs, which could adversely affect our ability to obtain regulatory approval for and to commercialize our product candidates, increase our operating expenses and have a material adverse effect on our business and financial results.

Due to the COVID-19 pandemic, our lab-based employees continue to work from our labs with enhanced safety measures, and we continue to support hybrid work arrangements for our office-based employees;

however, the extent to which future COVID-19 developments may impact our business, results of operations and financial condition are uncertain and cannot be predicted with confidence.

Uncertainties include the duration of the outbreak, new information that may emerge concerning the severity of COVID-19, new strains of the virus, including the existing variants and any future variants that may emerge, which may impact rates of infection and vaccination efforts, developments or perceptions regarding the safety of vaccines, or the extent and effectiveness of any additional preventative and protective actions taken to contain the pandemic or treat its impact, among others.

In addition, recurrences or additional waves of COVID-19 cases could cause other widespread, severe impacts depending on where infection rates are highest.

COVID-19 has also caused, and may continue to cause for an extended period, volatility in the global financial markets and a slowdown in the global economy, which would reduce our ability to access capital and could negatively affect our liquidity.

We or third parties upon whom we depend may be adversely affected by natural disasters and/or global health pandemics, and our business, financial condition and results of operations could be adversely affected.

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The process of manufacturing of our product candidates is complex and highly regulated.

We do not currently own any facility that may be used as our clinical scale manufacturing facility and expect to rely on outside vendors to manufacture supplies of our product candidates.

We do not currently own any facility that may be used as our clinical scale manufacturing facility and rely on outside vendors to manufacture supplies of our product candidates.

We will need to negotiate and maintain contractual arrangements with these outside vendors for the supply of our product candidates and we may not be able to do so on favorable terms.

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Our contract manufacturers may incorporate their own proprietary processes into our product candidate manufacturing processes.

We have limited control and oversight of a thirdparty’s contract manufacturer’s proprietary process, and a third-party contract manufacturer may elect to modify its process without our consent or knowledge.

We have limited control and oversight of a third party contract manufacturer’s proprietary process, and a third-party contract manufacturer may elect to modify its process without our consent or knowledge.

These modifications could negatively impact our manufacturing, including product loss or failure that requires additional manufacturing runs or a change in manufacturer, both of which could significantly increase the cost of and significantly delay the manufacture of our product candidates.

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Product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.

Specifically for BDTX-1535, we expect competition primarily in the EGFR NSCLC and GBM patient populations, including:

GILOTRIF and TAGRISSO, which are marketed by Boehringer Ingelheim Pharmaceuticals, Inc.

and AstraZeneca, respectively;

combination of amivantamab, or Rybrevant, and lazertinib, which is under development for NSCLC and EGFR acquired resistance mutations by Janssen Biotech, Inc.;

patritumab deruxtecan, which is being developed by Daiichi Sankyo Co.;

BLU-701 and BLU-945, which are under development by BluePrint Medicines Corporation;

Specifically for BDTX-1535, we expect competition primarily in the EGFRm NSCLC and GBM patient populations, including:

combination of amivantamab, or Rybrevant®, and lazertinib, the former of which is marketed by and the latter of which is being developed by Janssen Biotech, Inc.;

patritumab deruxtecan, which is being developed by Merck & Co., Inc.

and Daiichi Sankyo Co.;

datopotamab deruxtecan, which is developed by AstraZeneca plc and Daiichi Sankyo Co.;

BBT-207, which is being developed by Bridge Biotherapeutics, Inc.;

neratinib, which is marketed by Puma Biotechnology, Inc.

under the trade name Nerlynx, which is currently approved for HER2+ breast cancer, but also under development for NSCLC EGFR intrinsic resistance mutations;

ERAS-801, which is under development by Erasca, Inc.;

JIN-A02, which is under development by J Ints Bio, afatinib, or Gilotrif® (Boehringer Ingelheim International GmbH) and approved as first-line treatment of NSCLC patients with S768I, L861Q, and/or G719X mutations;

osimertinib, or Tagrisso® (AstraZeneca plc) which may be prescribed off-label for NSCLC patients with exon 18 mutations;

furmonertinib, which is under development by Arrivent Biopharma and Shanghai Allist Pharmaceuticals, ERAS-801, which is under development by Erasca, Inc.;

WSD-0922-FU, which is under development by Wayshine Biopharm International Ltd.;

CM93, which is under development by Crimson Biopharm Inc.;

RO7428731, which is under development by Hoffman Roche;

TAS2940, which is under development by Taiho Oncology;

and epitinib, which is under development by Hutchison MediPharma Ltd.

and TAS-2940, which is under development by Taiho Oncology, Inc.

For BDTX-4933 we expect competition primarily in BRAF Class II/III mutations and other RAS mutations patient populations, including:

Day One Biopharmaceuticals, Inc.;

Jazz Pharmaceuticals plc;

Erasca, Inc.;

Mirati Therapeutics, Inc.;

Jiangsu Hengrui;

Revolution Medicines, Inc.;

Fore Biotherapeutics Inc.;

Incyte Corporation, and Astellas Pharmaceuticals.

If our drug candidates, including BDTX-1535 and BDTX-4933, are approved for the indications for which we are currently planning clinical trials, they will likely compete with the competitor drugs mentioned above and with other drugs that are currently in development.

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We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we continue to incur significant research and development and other expenses related to our ongoing operations.

We have financed our operations primarily through private placements of our preferred stock.

We have incurred significant net losses in each period since we commenced operations in December 2014.

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We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase substantially if and as we:

• continue our research and development efforts and submit INDs for our product candidates;

• conduct preclinical studies and clinical trials for our current and future product candidates based on our Mutation—Allostery—Pharmacology, or MAP, drug discovery engine;

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• obtain, expand, maintain, enforce and protect our intellectual property portfolio;

• hire additional clinical, regulatory and scientific personnel;

• hire additional clinical, regulatory and other scientific personnel;

• operate as a public company.

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Our most advanced product candidate, BDTX-1535, is currently only in a Phase 2 clinical trial.

Our other product candidates are in various stages of preclinical development.

We face significant translational risk as our product candidates in preclinical development advance to the clinical stage, as promising results in preclinical studies may not be replicated in subsequent clinical trials and testing on animals may not accurately predict human experience.

Our ability to generate revenue depends on a number of factors, including, but not limited to:

• timely completion of our preclinical studies and clinical trials, which may be significantly slower or cost more than we currently anticipate and will depend substantially upon the performance of third-party contractors;

• our ability to complete IND-enabling studies and successfully submit INDs or comparable applications;

• whether we are required by the FDA or similar foreign regulatory authorities to conduct additional clinical trials or other studies beyond those planned to support the approval and commercialization of our product candidates or any future product candidates;

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If we are unable to raise capital when needed, we would be compelled to delay, reduce or eliminate our product development programs or commercialization efforts.

We expect our expenses to increase in parallel with our ongoing activities, particularly as we continue our clinical, discovery and preclinical development activities to identify new product candidates and initiate clinical trials of, and seek marketing approval for, our product candidates.

We expect our expenses to increase in parallel with our ongoing activities, particularly as we continue our clinical development activities and seek marketing approval for, our product candidates.

In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.

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Additionally, changing circumstances may cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control.

We cannot be certain that additional funding will be available on acceptable terms, or at all.

For instance, the trading prices for our common stock and for other biopharmaceutical companies have been highly volatile.

As a result, we may face difficulties raising capital through sales of our equity or debt securities or such sales may be on unfavorable terms.

Similarly, adverse market or macroeconomic conditions or market volatility resulting from global economic developments, political unrest, high inflation, rising interest rates, the post-COVID environment, future public health epidemics or other factors, could materially and adversely affect our ability to consummate an equity or debt financing on favorable terms, or at all.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of public or private equity offerings, debt financings, governmental funding, collaborations, strategic partnerships and alliances or marketing, distribution or licensing arrangements with third parties.

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We had cash, cash equivalents and investments of $131.4 million as of December 31, 2023.

Our net proceeds from our initial public offering were $212.1 million, based the initial public offering price of $19.00 per share, after deducting underwriting discounts and commissions and offering expenses payable by us.

We believe that, based upon our current operating plan, our existing capital resources, including net proceeds from our initial public offering will be sufficient to fund our anticipated operations into the third quarter of 2024, including the Phase 1 trial of BDTX-1535, the initiation of a Phase 1 trial for BDTX-4933, with additional resources for continued development of our early research programs and the MAP drug discovery engine.

We believe that, based upon our current operating plan, our existing capital resources will be sufficient to fund our anticipated operations into the second quarter of 2025.

Our future capital requirements will depend on many factors, including:

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We are very early in our development efforts.

Most of our product candidates are still in early clinical or preclinical development.

Most of our product candidates are still in early clinical development.

If we are unable to advance our product candidates through clinical development, obtain regulatory approval and ultimately commercialize our product candidates or experience significant delays in doing so, our business will be materially harmed.

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Before we can commercialize any of our product candidates, we must obtain marketing approval.

Our most advanced product candidate, BDTX-1535, is currently only in Phase 1 clinical studies and we plan to initiate a Phase 1 clinical trial for BDTX-4933 in the first half of 2023.

Our most advanced product candidate, BDTX-1535, is currently only in a Phase 2 clinical trial in patients with EGFRm NSCLC and BDTX-4933 is currently being evaluated in a Phase 1 clinical trial.

Whether the results from our current and future clinical trials will suffice to obtain approval will be a review issue and the FDA may not grant approval and may require that we conduct one or more controlled, randomized Phase 3 clinical trials to obtain approval.

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Our product candidates could be delayed in receiving, or fail to receive, regulatory approval for many reasons, including the following:

• the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials, including our Phase 1 clinical trial design for BDTX-1535 and our planned Phase 1 clinical trial design for BDTX-4933;

• the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;

• the FDA or comparable foreign regulatory authorities may disagree with our clinical development strategy;

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If a drug is intended for the treatment of a serious or life-threatening condition and the drug demonstrates the potential to address unmet medical needs for this condition, the drug sponsor may apply for FDA Fast Track designation for a particular indication.

We may seek Fast Track designation for BDTX-1535, BDTX-4933 or certain of our future product candidates, but there is no assurance that the FDA will grant this status to any of our other proposed product candidates.

BDTX-1535 received Fast Track Designation from the FDA for the treatment of patients with metastatic EGFRm C797S-positive NSCLC, without T790M mutation, whose disease has progressed on/after treatment with a third-generation EGFR TKI.

We may seek Fast Track designation for BDTX-1535 for additional indications, BDTX-4933 or certain of our future product candidates, but there is no assurance that the FDA will grant this status to any of our other proposed product candidates.

Marketing applications filed by sponsors of products in Fast Track development may qualify for priority review under the policies and procedures offered by the FDA, but the Fast Track designation does not assure any such qualification or ultimate marketing approval by the FDA.

The FDA has broad discretion whether or not to grant Fast Track designation, so even if we believe a particular product candidate is eligible for this designation, there can be no assurance that the FDA would decide to grant it.

Even if we do receive Fast Track designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures, and receiving a Fast Track designation does not provide assurance of ultimate FDA approval.

Even where we have received Fast Track designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures, and receiving a Fast Track designation does not provide assurance of ultimate FDA approval.

In addition, the FDA may withdraw Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program.

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Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

Since March 2020, when foreign and domestic inspections were largely placed on hold, the FDA has been working to resume pre-pandemic levels of inspection activities, including routine surveillance, bioresearch monitoring and pre-approval inspections.

Should the FDA determine that an inspection is necessary for approval and an inspection cannot be completed during the review cycle due to restrictions on travel, and the FDA does not determine a remote interactive evaluation to be adequate, the FDA has stated that it generally intends to issue, depending on the circumstances, a complete response letter or defer action on the application until an inspection can be completed.

During the ongoing COVID-19 pandemic, a number of companies announced receipt of complete response letters due to the FDA’s inability to complete required inspections for their applications.

Should the FDA determine that an inspection is necessary for approval and an inspection cannot be completed during the review cycle due to restrictions on travel, such as due to a pandemic or epidemic, and the FDA does not determine a remote interactive evaluation to be adequate, the FDA may issue, depending on the circumstances, a complete response letter or defer action on the application until an inspection can be completed.

Regulatory authorities outside the U.S.

may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and may experience delays in their regulatory activities.

may adopt similar restrictions or other policy measures in response to any pandemic or epidemic and may experience delays in their regulatory activities.

Our employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

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• our contract manufacturers and critical reagent suppliers may be subject to inclement weather, as well as natural or man-made disasters;

• our contract manufacturers may be impacted by economic or geopolitical disruptions or global health concerns;

• our contract manufacturers may have unacceptable or inconsistent product quality success rates and yields, and we have no direct control over our contract manufacturers’ ability to maintain adequate quality control, quality assurance and qualified personnel.

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In addition, the loss of the services of any of our executive officers, other key employees and other scientific and medical advisors, and an inability to find suitable replacements could result in delays in product development and harm our business.

We conduct our operations at our facilities in Cambridge, MA and New York, NY.

Our principal office is located in Cambridge, MA.

The Massachusetts region is headquarters to many other biopharmaceutical companies and many academic and research institutions.

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As of December 31, 2023, we had 52 full-time employees.

We intend to hire new employees to conduct our research and development activities in the future.

We intend to hire new employees to conduct our development activities in the future.

Any delay in hiring such new employees could result in delays in our research and development activities and would harm our business.

As our development and commercialization plans and strategies develop, and as we transition into operating as a public company, we expect to need additional managerial, operational, sales, marketing, financial and other personnel, as well as additional facilities to expand our operations.

As our development and commercialization plans and strategies develop, we expect to need additional managerial, operational, sales, marketing, financial and other personnel to expand our operations.

Future growth would impose significant added responsibilities on members of management, including:

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There can be no assurance that we will be able to manage our existing consultants or find other competent outside contractors and consultants on economically reasonable terms, or at all.

If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, or we are not able to effectively build out new facilities to accommodate this expansion, we may not be able to successfully implement the tasks necessary to further develop and commercialize our product candidates and, accordingly, may not achieve our research, development and commercialization goals.

If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, we may not be able to successfully implement the tasks necessary to further develop and commercialize our product candidates and, accordingly, may not achieve our research, development and commercialization goals.

Our internal computer systems, or those used by our third-party CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of the development programs of our product candidates.

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As a result of our most recent private placements and other transactions that have occurred over the past three years, we may have experienced, and may experience, an “ownership change.” We may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership.

As of December 31, 2022, we had U.S.

federal and state net operating loss carryforwards of $241 million and U.S.

As of December 31, 2023, we had gross U.S.

federal net operating loss carryforwards of $275 million, state net operating loss carryforwards of $182 million and U.S.

federal research and development tax credit carryforwards of $10 million, each of which will begin to expire at various dates through 2043 and which could be limited if we experience an “ownership change.”

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There can be no assurance that further deterioration in credit and financial markets and in global economic and political conditions will not occur.

We believe that the state of global economic conditions are particularly volatile and uncertain, not only in light of the ongoing COVID-19 pandemic and the potential global recession resulting therefrom, but also due to recent and expected shifts in political, legislative and regulatory conditions concerning, among other matters, international trade and taxation, and that an uneven recovery or a renewed global downturn may negatively impact our ability to conduct clinical trials on the scale and timelines anticipated.

Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

We believe that the state of global economic conditions are particularly volatile and uncertain, not only in light of the post-COVID environment and the potential global recession resulting therefrom, but also due to recent and expected shifts in political, legislative and regulatory conditions concerning, among other matters, international trade and taxation, and that an uneven recovery or a renewed global downturn may negatively impact our ability to conduct clinical trials on the scale and timelines anticipated.

Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening these risks.

Our general business strategy may be adversely affected by any such economic downturn, volatile business or political environment or continued unpredictable and unstable market conditions.

For instance, the current military conflict between Russia and Ukraine could disrupt or otherwise adversely impact our operations and those of third parties upon which we rely or may rely in the future.

For instance, the ongoing Ukraine-Russia and Israel-Hamas conflicts could disrupt or otherwise adversely impact our operations and those of third parties upon which we rely or may rely in the future.

Related sanctions, export controls or other actions may be initiated by nations including the U.S., the European Union or Russia (e.g., potential cyberattacks, disruption of energy flows, etc.), which could adversely affect our business and/or our supply chain, our CROs, CMOs and other third parties with which we conduct or in the future may conduct business.

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If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.

Increased attention to, and evolving expectations for, environmental, climate change, social, and governance (ESG) initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business.

Companies across industries are facing increasing scrutiny from a variety of stakeholders related to their ESG and sustainability practices, including practices associated with climate change.

Expectations regarding voluntary ESG initiatives and disclosures may result in increased costs (including but not limited to increased costs related to compliance, stakeholder engagement, contracting and insurance), enhanced compliance or disclosure obligations, or other adverse impacts to our business, financial condition, or results of operations.

While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) to improve the ESG profile of the Company, such initiatives may be costly and may not have the desired effect.

Moreover, we may not be able to successfully complete such initiatives due to factors that are within or outside of our control.

Even if this is not the case, our actions may subsequently be determined to be insufficient by various stakeholders, and we may be subject to investor or regulator engagement on our ESG efforts, even if such initiatives are currently voluntary.

Certain market participants, including major institutional investors and capital providers, use third-party benchmarks and scores to assess companies’ ESG profiles in making investment or voting decisions.

Unfavorable ESG ratings could lead to increased negative investor sentiment towards us, which could negatively impact our share price as well as our access to and cost of capital.

To the extent ESG matters negatively impact our reputation, it may also impede our ability to compete as effectively to attract and retain employees, which may adversely impact our operations.

In addition, we expect there will likely be increasing levels of regulation, disclosure-related and otherwise, with respect to ESG matters.

For example, the SEC has published proposed rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting, which may require us to incur significant additional costs to comply, including the implementation of significant additional internal controls processes and procedures regarding matters that have not been subject to such controls in the past, and impose increased oversight obligations on our management and board of directors.

These and other changes in stakeholder expectations will likely lead to increased costs as well as scrutiny that could heighten all of the risks identified in this risk factor.

Additionally, our business partners may be subject to similar expectations, which may augment or create additional risks, including risks that may not be known to us.

Risks related to our charter and bylaws

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The collection, use, storage, disclosure, transfer, or other processing of personal data regarding individuals in the EEA, including personal health data, is subject to the GDPR, which became effective on May 25, 2018.

The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.

The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to having a legal basis for processing personal data, stricter requirements relating to the processing of sensitive data (such as health data), where required by GDPR obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, requiring data protection impact assessments for high risk processing and taking certain measures when engaging third-party processors.

The GDPR permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater.

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We are subject to evolving and strict rules on the transfer of personal data out of the EEA to third countries such as the United States.

Unless the destination country is an adequate country (as recognized by the European Commission), we will be required to incorporate a GDPR transfer mechanism (such as the European Commission approved standard contractual clauses ("SCCs”)) into our agreements with third parties to govern transfers of personal data outside the EEA.

The new SCCs may also impact our business as companies based in the EEA may be reluctant to utilize the new clauses to legitimize transfers of personal data to third countries given the burdensome requirements of transfer impact assessments and the substantial obligations that the new SCCs impose upon exporters.

In addition, further to the UK’s exit from the EU on January 31, 2020, the UK’s European Union (Withdrawal) Act 2018 incorporated the GDPR into UK law, referred to as the UK GDPR.

Unless the destination country is an adequate country (as recognized by the European Commission), we may be required to incorporate a GDPR transfer mechanism (such as the European Commission approved standard contractual clauses ("SCCs”)) into our agreements with third parties to govern transfers of personal data outside the EEA.

The SCCs may also impact our business as companies based in the EEA may be reluctant to utilize the new clauses to legitimize transfers of personal data to third countries given the burdensome requirements of transfer impact assessments and the substantial obligations that the new SCCs impose upon exporters.

Further, the EU and United States have adopted its adequacy decision for the EU-U.S.

Data Privacy Framework ("Framework"), which entered into force on July 11, 2023.

This Framework provides that the protection of personal data transferred between the EU and the United States is comparable to that offered in the EU.

This provides a further avenue to ensuring transfers to the United States are carried out in line with GDPR.

The Framework could be challenged like its predecessor frameworks.

This complexity and the additional contractual burden increases our overall risk exposure.

In addition, further to the UK’s exit from the EU, the UK’s European Union (Withdrawal) Act 2018 incorporated the GDPR into UK law, referred to as the UK GDPR.

The UK GDPR and the UK Data Protection Act 2018 set out the UK’s data protection regime, which is independent from but currently still aligned to the EU’s data protection regime.

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The transfer of personal data outside of the UK is not subject to the new forms of SCCs but the UK has issued its own transfer mechanism – the UK international data transfer agreement – which, like the SCCs, requires exporters to carry out a transfer impact assessment.

In addition, there has been an extension to the Framework to cover UK transfers to the United States.

The UK government has confirmed that personal data transfers from the UK to the EEA remain free flowing.

The UK Government has also now introduced a Data Protection and Digital Information Bill (or the UK Bill) into the UK legislative process with the intention for this bill to reform the UK’s data protection regime following Brexit.

If passed, the final version of the UK Bill may have the effect of further altering the similarities between the UK and EU data protection regime and threaten the UK Adequacy Decision from the EU Commission.

If passed, the final version of the UK Bill may have the effect of further altering the similarities between the UK and EU data protection regime.

This may lead to additional compliance costs and could increase our overall risk.

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Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent privacy legislation in the United States, which could increase our potential liability and adversely affect our business.

Further, a new California privacy law, the California Privacy Rights Act (CPRA), was passed by California voters on November 3, 2020 and entered into force on January 1, 2023.

The CPRA, which amended the CCPA, creates additional obligations with respect to processing and storing personal information.

Similar laws have been passed in Connecticut, Colorado, Utah and Virginia and a number of other states have proposed new privacy laws, some of which are similar to the above discussed recently passed laws.

In addition, the California Privacy Rights Act, or CPRA, which became effective January 1, 2023 has imposed additional obligations on companies covered by the legislation.

The CPRA significantly modified the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal information.

The CPRA also created a new state agency that was vested with authority to implement and enforce the CCPA.

Many aspects of the CCPA, as amended by the CPRA, and its interpretation remain unclear.

As such, its full impact on our business and operations remains uncertain.

Similar laws have been passed in numerous other states.

Although many of the existing state privacy laws exempt clinical trial information and health information governed by HIPAA, future privacy and data protection laws may be broader in scope.

Additionally, other states have proposed similar new privacy laws.

Such proposed legislation, if enacted, may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment of resources in compliance programs, impact strategies and the availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies.

The existence of comprehensive privacy laws in different states in the country would make our compliance obligations more complex and costly and may increase the likelihood that we may be subject to enforcement actions or otherwise incur liability for noncompliance.

In China, there have also been recent significant developments concerning privacy and data security.

In addition to these comprehensive consumer privacy laws and proposals, a number of other states have passed or proposed more limited privacy laws that focus on specific privacy issues such as biometric data and the privacy of health and medical information, such as Washington state’s My Health My Data Act, which has a private right of action that further increases the relevant compliance risk.

Connecticut and Nevada have also passed similar laws regulating consumer health data.

At the federal level, the FTC has used its authority over “unfair or deceptive acts or practices” to impose stringent requirements on the collection and disclosure of sensitive categories of personal information, including health information.

Moreover, the FTC’s expanded interpretation of a “breach” under its Health Breach Notification Rule could impose new disclosure obligations that would apply in the event of a qualifying breach.

These various privacy and security laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products.

State laws are changing rapidly and there is discussion in the U.S.

Congress of a new comprehensive federal data privacy law to which we may likely become subject, if enacted.

In China, there have also been significant developments concerning privacy and data security.

On June 10, 2021, the Standing Committee of the PRC National People’s Congress published the Data Security Law of the People’s Republic of China (the Data Security Law), which took effect on September 1, 2021.

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We urge investors to consult with their legal and tax advisers regarding the implications of potential changes in tax laws on an investment in our common stock.

Conditions in the banking system and financial markets, including the failure of banks and financial institutions, could have an adverse effect on our operations and financial results.

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.

We are unable to predict the extent or nature of the impacts of evolving circumstances in the financial services industry at this time.

If, for example, certain banks and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our existing cash, cash equivalents and investments may be threatened.

While it is not possible at this time to predict the extent of the impact that high market volatility and instability of the banking sector could have on economic activity and our business in particular, the failure of other banks and financial institutions and the measures taken by governments, businesses and other organizations in response to these events could adversely impact our business, financial condition and results of operations.

A decline in the federal budget, changes in spending or budgetary priorities of the U.S.

government, a prolonged U.S.

government shutdown or delays in contract awards may significantly and adversely affect our future revenues, cash flow and financial results.

In recent years, U.S.

government appropriations have been affected by larger U.S.

government budgetary issues and related legislation.

As a result, the Department of Defense funding levels have fluctuated and have been difficult to predict.

Future spending levels are subject to a wide range of factors, including Congressional action.

In addition, in recent years, the U.S.

government has been unable to complete its budget process before the end of its fiscal year, resulting in both a government shutdown and continuing resolutions to extend sufficient funds only for U.S.

government agencies to continue operating.

Additionally, the national debt has recently threatened to reach the statutory debt ceiling in 2023, and such an event in future years could result in the U.S.

government defaulting on its debts.

As a result, government spending levels are difficult to predict beyond the near term due to numerous factors, including the external threat environment, future government priorities and the state of government finances.

Significant changes in government spending or changes in U.S.

government priorities, policies and requirements could have a material adverse effect on our results of operations, financial condition or liquidity.

Risks related to cybersecurity

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We rely on information technology systems that we or our third-party providers operate to process, transmit and store electronic information in our day-to-day operations.

In connection with our MAP drug discovery engine and product discovery efforts, we may collect and use a variety of personal data, such as name, mailing address, email addresses, phone number and clinical trial information.

In connection with our product development efforts, we may collect and use a variety of personal data, such as name, mailing address, email addresses, phone number and clinical trial information.

A successful cyberattack could result in the theft or destruction of intellectual property, data, or other misappropriation of assets, or otherwise compromise our confidential or proprietary information and disrupt our operations.

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If we are unable to prevent or mitigate the impact of such security or data privacy breaches, we could be exposed to litigation and governmental investigations, which could lead to a potential disruption to our business.

Unresolved Staff Comments

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-K

Item 1A. Risk Factors