What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-06 compared with 2024-03-12 · 59 added, 58 removed, 211 unchanged (36% of the section changed)

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Please also see the section entitled “Special Note Regarding Forward-Looking Statements.”

We are a clinical-stage oncology company focused on the development of MasterKey therapies to treat patients with genetically defined tumors.

We are a clinical-stage oncology company developing MasterKey therapies that target families of oncogenic mutations in patients with cancer.

The foundation of our company is built upon a deep understanding of cancer genetics, onco-protein structure and function, and medicinal chemistry.

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Our compounds target families of oncogenic mutations in clinically validated pathways.

We are advancing two clinical-stage programs:

BDTX-1535, a brain-penetrant, fourth-generation EGFR MasterKey inhibitor, targeting epidermal growth factor receptor mutant (EGFRm) non-small cell lung cancer (NSCLC) and glioblastoma (GBM), and BDTX-4933, a brain-penetrant, RAF MasterKey inhibitor targeting KRAS, NRAS and BRAF alterations in solid tumors.

We believe that our lead product candidate, BDTX-1535, has the potential to treat patients with EGFR mutated (EGFRm) NSCLC in both early-line and later-line settings based upon BDTX-1535’s ability to address approximately 50 oncogenic mutations with greater potency than other EGFR TKI’s, as well as uniquely target the C797S resistance mutation which can be acquired after treatment with osimertinib.

In our Phase 1 trial in patients with advanced/metastatic EGFR mutant NSCLC, BDTX-1535 was shown to be well tolerated and achieve durable clinical responses in patients whose tumors expressed a range of mutation subtypes, including the acquired C797S resistance mutation and a spectrum of non-classical mutations.

We are currently evaluating BDTX-1535 in a Phase 2 clinical trial in patients with EGFRm NSCLC in the second- and third-line settings with non-classical driver mutations and acquired C797S resistance mutation, and in the first-line setting in patients with EGFRm NSCLC harboring non-classical EGFR mutations.

We expect to announce results from the second- and third-line cohorts in the third quarter of 2024 and results from the first-line cohort in 2025.

We are also assessing the potential development of BDTX-1535 for patients with EGFRm NSCLC following adjuvant treatment with osimertinib, where the broad mutation coverage of BDTX-1535 of C797S and non-classical mutations may be of benefit.

We released top-line GBM results from the BDTX-1535 Phase 1 dose escalation study in the fourth quarter of 2023, showing clinical activity in heavily pretreated patients with GBM.

BDTX-1535 was shown to be generally well tolerated and no new safety signals were observed.

In the fourth quarter of 2023, enrollment began in a “window of opportunity” Phase 0/1 trial of BDTX-1535 in patients with recurrent high-grade glioma.

We expect to present Phase 1 data and “window of opportunity” results in the second quarter of 2024, which will inform potential next steps in the development of BDTX-1535 in GBM.

Our second product candidate, BDTX-4933, is designed to be a potent and selective, reversible oral inhibitor that targets broad families of oncogenic BRAF, KRAS and NRAS alterations.

Our lead clinical-stage program, BDTX-1535, is a brain-penetrant, fourth-generation epidermal growth factor receptor (EGFR) MasterKey inhibitor targeting epidermal growth factor receptor mutant (EGFRm) non-small cell lung cancer (NSCLC) and glioblastoma (GBM).

In October 2024, we announced a corporate restructuring plan to prioritize our resources on advancing BDTX-1535 into pivotal development.

We are actively evaluating partnership opportunities for a second clinical-stage program, BDTX-4933, a brain-penetrant, RAF MasterKey inhibitor targeting KRAS, NRAS and BRAF alterations in solid tumors.

We believe that our clinical-stage lead product candidate, BDTX-1535, has the potential to treat newly diagnosed patients with EGFRm NSCLC, as well as those with recurrent disease, based upon BDTX-1535’s ability to address greater than 50 classical and non-classical oncogenic driver mutations with greater potency than other EGFR tyrosine kinase inhibitors (TKIs), as well as uniquely target the C797S resistance mutation which can be acquired after treatment with osimertinib.

BDTX-1535 was shown to be well tolerated and achieve durable clinical responses in our Phase 1 trial in patients with recurrent EGFRm NSCLC whose tumors expressed a range of mutation subtypes, including the acquired C797S resistance mutation and a broad spectrum of non-classical mutations.

We are currently evaluating BDTX-1535 in a Phase 2 clinical trial in the first-line setting in patients with EGFRm NSCLC harboring non-classical EGFR mutations.

Initial results from the first-line cohort are anticipated in the second quarter of 2025.

We recently completed enrollment of BDTX-1535 in a Phase 2 clinical trial of 83 patients with EGFRm NSCLC in the second- and third-line settings.

In September 2024, we announced initial Phase 2 data from this trial demonstrating encouraging clinical responses and durability of BDTX-1535.

The 200 mg daily dose of BDTX-1535 was selected for pivotal development, showing robust EGFRm target coverage and a favorable tolerability profile with no new safety signals observed.

Based on an August 2024 data cutoff, a preliminary overall response rate (ORR) of 42% was seen in 19 patients with known osimertinib resistance EGFR mutations (PACC “P-loop αC-helix compressing” and C797S mutations).

Acquisition of C797S was frequently observed in patients who progressed following treatment with osimertinib.

PACC mutations represent a structure-function group of non-classical oncogenic driver mutations which may accumulate or be acquired following treatment with osimertinib.

Encouraging durability was noted with a duration of response (DOR) of approximately eight months or more in the first three patients who achieved a partial response (PR), while 14 of the 19 patients remained on treatment.

We expect to present updated results from this trial in the second half of 2025 and are exploring potential combination opportunities for BDTX-1535 in the recurrent setting.

In June 2024, at the American Society of Clinical Oncology (ASCO) Annual Meeting, we presented preliminary data from the Phase 1 trial of BDTX-1535 in patients with relapsed/recurrent GBM, demonstrating encouraging duration of treatment and clinical activity, and a tolerability profile consistent with the initial safety data from the dose escalation portion of the Phase 1 trial presented in 2023.

At the June 2024 ASCO meeting, our collaborators at the Ivy Brain Tumor Center also presented initial intratumoral pharmacokinetic data from a “window of opportunity” study in patients with recurrent high-grade glioma (HGG) with EGFR alterations and/or fusions at initial diagnosis.

This study, also known as a Phase 0/1 “Trigger” trial, is sponsored by the Ivy Brain Tumor Center.

Initial results from this trial demonstrated that BDTX-1535 exceeded the pre-specified threshold for drug concentration in the brain tumor tissue and was generally well tolerated with expected EGFR-mediated side effects.

Additional promising results from this trial were presented by the Ivy Brain Tumor Center at the European Association of Neuro-Oncology (EANO) meeting in October 2024 and at the Society of Neuro-Oncology (SNO) Annual Meeting in November 2024.

The data demonstrated that BDTX-1535 penetrates rarely accessible regions of glioblastoma and suppresses EGFR signaling in patient tumors.

In the first quarter of 2025, the program is expected to expand into a Phase 0/2 “window of opportunity” trial in newly diagnosed glioblastoma patients with EGFR aberrations.

Our second clinical-stage asset, BDTX-4933, is designed to be a potent and selective, reversible oral inhibitor that targets broad families of oncogenic BRAF, KRAS and NRAS alterations.

BDTX-4933 selectively targets constitutively active RAF dimers resulting from either BRAF mutations or other upstream oncogenic MAPK pathway alterations, such as KRAS and NRAS alterations.

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We initiated a Phase 1 clinical trial for BDTX-4933 in the second quarter of 2023 in patients with BRAF and select KRAS and NRAS mutation-positive cancers, with an emphasis on patients with non-G12C KRAS mutant NSCLC.

The trial is currently in dose escalation with data expected in the fourth quarter of 2024.

In October 2024, we announced we are actively seeking partnerships for this asset as we deprioritize the BDTX-4933 program in RAF/RAS-mutant solid tumors and focus resources on our lead program BDTX-1535.

Since our inception in 2014, we have devoted substantially all of our efforts and financial resources to organizing and staffing our company, business planning, raising capital, discovering product candidates and securing related intellectual property rights while conducting research and development activities for our programs.

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We may never be able to develop or commercialize a marketable product.

We have not yet successfully completed any pivotal clinical trials, obtained any regulatory approvals, manufactured a commercial-scale drug, or conducted sales and marketing activities.

We have not yet successfully completed any pivotal clinical trials, obtained any regulatory marketing approvals, manufactured a commercial-scale drug, or conducted sales and marketing activities.

To date, we have funded our operations with proceeds from the sale of common stock and preferred stock.

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As of December 31, 2024, we had an accumulated deficit of $487.1 million.

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

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

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

• advance clinical trials for BDTX-1535 and BDTX-4933;

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

• advance clinical development of BDTX-1535;

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

• attract and retain key clinical, scientific, management and commercial personnel;

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While we believe such factors have had no significant impact on our business or financial results during the periods presented, future developments and potential impacts on our business are uncertain and cannot be predicted with confidence.

As of December 31, 2023, we had cash, cash equivalents and investments of $131.4 million, which we believe will enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2025.

As of December 31, 2024, we had cash, cash equivalents and investments of $98.6 million, which we believe will enable us to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2026.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

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• expenses incurred to conduct the necessary preclinical studies and clinical trials required to obtain regulatory approval;

• expenses incurred under agreements with contract research organizations, or CROs, that are primarily engaged in the oversight and conduct of our drug discovery efforts, preclinical studies, and clinical trials as well as under agreements with contract manufacturing organizations, or CMOs, that are primarily engaged to provide preclinical and clinical drug substance and product for our research and development programs;

• other costs related to the conduct of preclinical studies, clinical trials, and our drug discovery efforts, including acquiring and manufacturing materials, manufacturing validation batches, fees to investigative sites and consultants that conduct our clinical trials, preclinical studies and other scientific development support services;

• expenses incurred under agreements with contract research organizations (CROs) that are primarily engaged in the oversight and conduct of our drug discovery efforts, preclinical studies, and clinical trials as well as under agreements with contract manufacturing organizations (CMOs) that are primarily engaged to provide preclinical and clinical drug substance and product for our research and development programs;

• other costs related to the conduct of preclinical studies, and clinical trials, including acquiring and manufacturing materials, manufacturing validation batches, fees to investigative sites and consultants that conduct our clinical trials, preclinical studies and other scientific development support services;

• payments made in cash or equity securities under third-party licensing, acquisition and option agreements;

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Our direct research and development expenses also include fees incurred under license, acquisition and option agreements.

We do not allocate employee costs, costs associated with our discovery efforts, laboratory supplies, and facilities, including depreciation or other indirect costs, to specific programs because these costs are deployed across multiple programs and, as such, are not separately classified.

We use internal resources primarily to conduct our research and discovery as well as for managing our preclinical development, process development, manufacturing and clinical development activities.

We do not allocate employee costs, costs associated with our development efforts, and facilities, including depreciation or other indirect costs, to specific programs because these costs are deployed across multiple programs and, as such, are not separately classified.

We use internal resources primarily to conduct our research as well as for managing our preclinical development, process development, manufacturing and clinical development activities.

These employees work across multiple programs and, therefore, we do not track their costs by program.

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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.

As a result, we expect that our research and development expenses will increase substantially over the next several years as we continue our clinical trials for BDTX-1535 and BDTX-4933.

As a result, we expect that our research and development expenses will increase substantially over the next several years as we continue our clinical development of BDTX-1535.

In addition, we may incur additional expenses related to milestone and royalty payments payable to third parties with whom we may enter into license, acquisition and option agreements to acquire the rights to future product candidates.

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• successful patient enrollment in and the initiation and completion of clinical trials;

• the timing, receipt and terms of any marketing approvals from applicable regulatory authorities including the U.S.

Food and Drug Administration (FDA) and non-U.S.

• the timing, receipt and terms of any marketing approvals from applicable regulatory authorities including the FDA and non-U.S.

• the extent of any required post-marketing approval commitments to applicable regulatory authorities;

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• launching commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others;

• maintaining a continued acceptable safety profile of our product candidates following approval, if any, of our product candidates.

• maintaining a continued acceptable tolerability profile of our product candidates following approval, if any, of our product candidates.

Any changes in the outcome of any of these variables with respect to the development of our product candidates could mean a significant change in the costs and timing associated with the development of these product candidates.

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General and administrative expenses also include direct and allocated facility-related costs as well as insurance costs and professional fees for legal, patent, consulting, investor and public relations, accounting and audit services.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support continued development of our product candidates and prepare for potential commercialization activities.

We anticipate that our general and administrative expenses will increase in the future as we support continued development of our product candidates and prepare for potential commercialization activities.

Additionally, if and when we believe a regulatory approval of a product candidate appears likely, we anticipate an increase in payroll and other employee-related expenses as a result of our preparation for commercial operations, especially as it relates to the sales and marketing of that product candidate.

Other income (expense)

Other income (expense) consists primarily of interest income earned on our cash equivalents and investment balances, sublease income, realized and unrealized foreign currency transaction gains and losses, and gain (loss) on sale of IP related to equity method investment.

Equity in (losses) of unconsolidated entity

Equity in (losses) of unconsolidated entity consists of our share of equity method investee losses on the basis of our equity ownership percentage and IPR&D charges resulting from basis differences.

Other income (expense) consists primarily of interest income earned on our cash equivalents and investment balances, sublease income, and realized and unrealized foreign currency transaction gains and losses.

Results of operations

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Other income (expense) 6,923 2,094 4,829

Gain on sale of IP — 2,232 (2,232)

Total other income (expense), net 9,105 4,018 5,087

Equity in (losses) of unconsolidated entity — (2,250) 2,250

Net loss $ (69,676) $ (82,442) $ 12,766

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BDTX-4933 research and development expenses 4,613 6,342 (1,729)

BDTX-189 research and development expenses — 7,082 (7,082)

Other research programs and platform development expenses 7,916 13,466 (5,550)

Other research and development expenses 2,515 7,916 (5,401)

Personnel expenses 15,331 18,408 (3,077)

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$ 51,312 $ 59,350 $ (8,038)

The decrease of $5.1 million was primarily due to an increase of $12.7 million related to the progression of our clinical trial for BDTX-1535, offset by decreased spend relating to other research programs and platform development of $5.6 million due to reduced spending on early discovery projects as we deepen our focus on our clinical-stage assets.

In addition, BDTX-189 expenses decreased $7.1 million due to the discontinuation of the development of BDTX-189 to focus on the development of BDTX-1535 and BDTX-4933.

Personnel expenses decreased $4.5 million as a result of the realignment of our workforce in April 2022 to focus on upcoming milestones for our clinical trials.

The decrease of $8.0 million was primarily due to an increase of $3.2 million related to the progression of our clinical trial for BDTX-1535, offset by decreased spend relating to BDTX-4933 of $1.7 million as clinical startup and non-clinical activities completed as well as a decrease in other research and development of $5.4 million due to reduced spending on early discovery projects as we deepened our focus on our clinical-stage assets, compared to the year ended December 31, 2023.

In addition, personnel expenses decreased by $3.1 million as we continue to capitalize on workforce efficiencies to focus on advancing and optimizing development plans for BDTX-1535.

General and administrative

General and administrative expenses were $27.5 million for the year ended December 31, 2024, compared to $27.1 million for the year ended December 31, 2023.

The decrease of $1.3 million was primarily due to a decrease in legal and other professional fees.

The increase of $0.4 million was primarily related to one-time restructuring costs.

Other income (expense)

Other income was $9.1 million for the year ended December 31, 2024, compared to $4.0 million for the year ended December 31, 2023.

Although the increase of $0.1 million is low year over year, the composition changed in 2023 to primarily sublease income and accretion on investments, compared to 2022 when it was primarily the gain on sale of IP related to the equity method investment in Launchpad.

Equity in (losses) of unconsolidated entity

There was no equity in (losses) of unconsolidated entity for the year ended December 31, 2023, compared to $2.3 million for the year ended December 31, 2022.

The increase was attributable to no equity method investments in 2023 compared to 2022 when we reported our share of equity method investee losses on the basis of our equity ownership percentage as well as IPR&D charges resulting from basis differences.

The increase of $5.1 million was primarily attributable to accretion on investments increasing at a higher rate in 2024 compared to 2023 as well as an increase in sublease income due to signing an additional sublease in 2024.

Liquidity and capital resources

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We have not yet commercialized any of our product candidates, and we do not expect to generate revenue from sales of any product candidates for several years, if at all.

We have funded our operations to date primarily with proceeds from the sale of common and preferred stock.

On February 3, 2020, we completed an IPO of 12,174,263 shares of our common stock, including the exercise in full by the underwriters of their option to purchase up to 1,587,947 additional shares of common stock, for aggregate gross proceeds of $231.3 million.

We have funded our operations to date primarily with proceeds from the sale of our common and preferred stock.

On February 3, 2020, we completed an IPO of 12,174,263 shares of our common stock, including the exercise in full by the underwriters of their option to purchase up to 1,587,947 additional shares of our common stock, for aggregate gross proceeds of $231.3 million.

We received $212.1 million in net proceeds after deducting underwriting discounts and commissions and other estimated offering expenses payable by us.

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We or Jefferies may suspend or terminate the offering of Shares upon notice to the other party and subject to other conditions.

As of December 31, 2023, no sales have been made pursuant to the ATM Program.

As of December 31, 2024, we sold 4,490,853 shares of our common stock pursuant to the ATM Program, resulting in gross proceeds to us of approximately $25.0 million ($24.5 million net of offering costs).

On July 5, 2023, we completed an underwritten public offering (the Follow-on Offering) of 15,000,000 shares of our common stock at a price to the public of $5.00 per share.

The aggregate net proceeds from the Follow-on Offering totaled approximately $71.6 million after deducting underwriting discounts and commissions, as well as other offering expenses.

The underwriters did not exercise any portion of their 30-day overallotment option to purchase up to an additional 2,250,000 shares of the Company’s common stock at the public offering price, which expired on July 29, 2023, and therefore no additional proceeds from the Follow-on Offering were received.

The underwriters did not exercise any portion of their 30-day overallotment option to purchase up to an additional 2,250,000 shares of our common stock at the public offering price, which expired on July 29, 2023, and therefore no additional proceeds from the Follow-on Offering were received.

The following table summarizes our sources and uses of cash for each of the periods presented (in thousands):

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Operating activities

During the year ended December 31, 2024, we used cash in operating activities of $62.3 million, primarily resulting from our net loss of $69.7 million, partially offset by the non-cash charge related to stock compensation expense of $10.6 million, an increase in accretion on investments, and an increase in accounts payable.

During the year ended December 31, 2023, we used cash in operating activities of $66.7 million, primarily resulting from our net loss of $82.4 million, partially offset by the non-cash charge related to stock compensation expense of $9.6 million, a decrease in prepaid expenses and other current assets as development services were performed, and an increase in accounts payable, accrued expenses and other current liabilities.

During the year ended December 31, 2022, we used cash in operating activities of $85.1 million, primarily resulting from our net loss of $91.2 million, partially offset by the non-cash charge related to stock compensation expense of $12.2 million, and a decrease in accounts payable, accrued expenses and other current liabilities.

Changes in accounts payable and accrued expenses in all periods were generally due to growth in our business, the advancement of our product candidates, and the timing of vendor invoicing and payments.

Changes in accounts payable and accrued expenses in all periods were generally due to ongoing development of our product candidates and the timing of vendor invoicing and payments.

Investing activities

During the year ended December 31, 2023, we had cash provided by investing activities of $16.3 million primarily from the sales and maturities of investments.

During the year ended December 31, 2024, we had cash provided by investing activities of $17.0 million primarily from the sales and maturities of investments, netted against our purchase of investments.

During the year ended December 31, 2023, we had cash provided by investing activities of $16.3 million primarily from the sales and maturities of investments.

Financing activities

During the year ended December 31, 2024, we had cash provided by financing activities of $25.5 million, consisting of proceeds from the sale of shares of our common stock pursuant to the ATM Program as well as exercises of stock options and participation in the employee stock purchase plan.

During the year ended December 31, 2023, we had cash provided by financing activities of $71.9 million, consisting of proceeds from the Follow-on Offering in July 2023 as well as participation in the employee stock purchase plan.

During the year ended December 31, 2022, we had cash provided by financing activities of $0.2 million, consisting of proceeds from the exercise of stock options.

Funding requirements

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance clinical trials of our product candidates.

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance clinical trials of BDTX-1535.

In addition, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses.

The timing and amount of our operating expenditures will depend largely on our ability to:

• advance BDTX-1535 and BDTX-4933 through clinical trials;

• advance BDTX-1535 through clinical trials;

• manufacture, or have manufactured on our behalf, our drug material and develop processes for late stage and commercial manufacturing;

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• establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any product candidates for which we may obtain marketing approval and intend to commercialize on our own;

• hire additional clinical, quality control and scientific personnel;

• obtain, maintain, expand and protect our intellectual property portfolio.

As of December 31, 2023, we had cash, cash equivalents and investments of $131.4 million, which we believe will fund our operating expenses and capital expenditure requirements into the second quarter of 2025.

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

As of December 31, 2024, we had cash, cash equivalents and investments of $98.6 million, which we believe will fund our operating expenses and capital expenditure requirements into the fourth quarter of 2026.

We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

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• the ability to receive additional non-dilutive funding;

• the revenue, if any, received from commercial sale of our products, should any of our product candidates receive marketing approval;

• the revenue, if any, received from commercial sale of our product candidates, should any of our product candidates receive marketing approval;

• the costs of preparing, filing and prosecuting patent applications, obtaining, maintaining, expanding and enforcing our intellectual property rights and defending intellectual property-related claims;

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If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.

Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Effective as of December 31, 2025, the fifth anniversary of the closing of our IPO, we will no longer qualify as an “emerging growth company.” As a result, commencing with our Annual Report on Form 10-K for the fiscal year ending December 31, 2025, we will no longer be eligible to take advantage of certain exemptions from various reporting requirements that are applicable to emerging growth companies.

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 7. Management’s Discussion and Analysis