What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-08-12 compared with 2021-05-13 · 58 added, 45 removed, 150 unchanged (41% of the section changed)

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

The following discussion and analysis of our financial condition as of March 31, 2021 and results of operations for the three months ended March 31, 2021 and 2020 should be read in conjunction with our condensed financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and in our other SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 31, 2021.

The following discussion and analysis of our financial condition as of June 30, 2021 and results of operations for the three and six months ended June 30, 2021 and 2020 should be read in conjunction with our condensed financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and in our other SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 31, 2021.

Except as otherwise indicated herein or as the context otherwise requires, references in this Quarterly Report on Form 10-Q to “Bolt” “the Company,” “we,” “us” and “our” refer to Bolt Biotherapeutics, Inc.

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We initiated a Phase 1/2 trial of BDC-1001 in the first quarter of 2020 for the treatment of patients with HER2-expressing solid tumors.

We are currently in the dose escalation portion of the trial and expect to move into Phase 2 dose expansions in key solid tumor indications with unmet medical need in 2021.

We are currently in the dose-escalation portion of the trial and expect to move into Phase 2 dose-expansion cohorts in 2021 in key solid tumor indications with unmet medical need.

We believe that our preliminary Phase 1/2 data provide us with clinical proof of concept for our HER2 Boltbody ISAC approach.

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We expect to designate our next clinical candidate in the second half of 2021.

Since our inception in January 2015, we have focused primarily on organizing and staffing our company, business planning, licensing and developing intellectual property, raising capital, developing our product candidates and conducting preclinical studies and early clinical trials.

Since our inception in January 2015, we have focused primarily on organizing and staffing our company, business planning, licensing, developing intellectual property, raising capital, developing our product candidates and conducting preclinical studies and early clinical trials.

We have not recorded any revenue from product sales.

Our only revenue has been derived from our collaboration with Toray.

To date, our only revenue has been derived from our collaboration with Toray.

In March 2019, we entered into the Toray Development Agreement, to jointly develop and commercialize a Boltbody ISAC utilizing Toray’s proprietary antibody.

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Including the option exercise, the aggregate net proceeds to us from the offering was approximately $242.0 million, net of underwriting discounts, commissions and other offering expenses.

In May 2021, we entered into an oncology research and development collaboration with Genmab to evaluate Genmab antibodies and bispecific antibody engineering technologies in combination with Bolt’s proprietary Boltbody ISAC technology platform, with the goal of discovering and developing next-generation bispecific ISACs for the treatment of cancer.

The research collaboration will evaluate multiple bispecific ISAC product candidate concepts with the potential to identify up to three clinical candidates for development.

Genmab will fund the research, along with the preclinical and clinical development of these candidates through initial clinical proof of concept.

Under the Genmab Agreement, we received an upfront payment of $10.0 million, and under a separate SPA, Genmab invested $15.0 million in our common stock.

We have incurred operating losses since our inception.

Our net losses were $24.5 million, $60.7 million and $30.5 million for the three months ended March 31, 2021 and the years ended December 31, 2020 and 2019, respectively.

As of March 31, 2021, we had an accumulated deficit of $132.9 million.

Our net losses were $48.0 million, $60.7 million and $30.5 million for the six months ended June 30, 2021 and the years ended December 31, 2020 and 2019, respectively.

As of June 30, 2021, we had an accumulated deficit of $156.4 million.

Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

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operate as a public company.

Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending in particular on the timing of our planned clinical trials and preclinical studies, and our expenditures on other research and development activities.

Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our planned clinical trials and preclinical studies, and our expenditures on other research and development activities.

Components of Results of Operations

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We are collaborating with Toray to develop a Boltbody ISAC that incorporates a proprietary Toray antibody against a novel tumor antigen target.

We are jointly responsible for early-stage development and for providing technical and regulatory support, and Toray will pay for all of the program expenses through the end of Phase 1 development.

We are jointly responsible for early-stage development and for providing technical and regulatory support, and Toray will pay for the program expenses through the end of Phase 1 development.

In conjunction with the collaboration, Toray purchased 717,514 shares of our Series T convertible preferred stock for $10.0 million.

We evaluated the collaboration together with Toray’s purchase of Series T convertible preferred stock and allocated $1.5 million from the stock purchase proceeds to deferred revenue, which we recognize, together with payments received from Toray for reimbursement based on agreed-upon full-time equivalent rates and out of pocket costs, as collaboration revenue over time as we fulfill our performance obligation to Toray.

We expect that any collaboration revenue we generate from our current collaboration, and from any future collaboration partners, will fluctuate in the future as a result of the timing and results of development activities and the timing and amount of payments, including upfront and milestone payments, and other factors.

The research collaboration will evaluate multiple bispecific ISAC concepts to identify up to three clinical candidates for development.

Genmab will fund the research, along with the preclinical and clinical development of these candidates through initial clinical proof of concept.

In conjunction with the collaboration, Genmab purchased 821,045 shares of our common stock for $15.0 million.

We evaluated the collaboration together with Genmab’s purchase of our common stock and allocated $1.4 million from the stock purchase proceeds to deferred revenue, which we will recognize, together with payments received from Genmab for reimbursement based on agreed-upon full-time equivalent rates and out of pocket costs, as collaboration revenue over time as we fulfill our performance obligation to Genmab.

We expect that any collaboration revenue we generate from our current collaborations, and from any future collaboration partners, will fluctuate in the future as a result of the timing and results of development activities and the timing and amount paid, including upfront and milestone payments, and other factors.

We have not generated any revenue from product sales, and we do not expect to generate any revenue from product sales unless and until we obtain regulatory approval of and commercialize one of our product candidates.

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Research and development expenses include:

external research and development expenses, including lab materials and supplies and payments to contract research organizations (“CROs”), investigative sites and consultants to conduct our clinical trials and preclinical and non-clinical studies;

salaries, payroll taxes, employee benefits and stock-based compensation charges for those individuals involved in research and development efforts;

costs related to manufacturing our product candidates for clinical trials and preclinical studies, including fees paid to third-party manufacturers;

salaries, payroll taxes, employee benefits and stock-based compensation charges for those individuals involved in research and development efforts;

facilities and other allocated expenses which include direct and allocated expenses for rent, insurance and other supplies.

Our direct research and development expenses consist principally of external costs, such as fees paid to CROs and consultants in connection with our preclinical and toxicology studies and costs related to manufacturing materials for our preclinical studies.

Since our inception and through March 31, 2021, the vast majority of our third-party expenses related to the research and development of BDC-1001.

With the exception of our collaboration with Toray, we do not allocate employee costs and costs associated with our discovery efforts, laboratory supplies and facilities, including other indirect costs, to specific product candidates because these costs are deployed across multiple programs and, as such, are not separately classified.

Since our inception and through June 30, 2021, the vast majority of our third-party expenses related to the research and development of BDC-1001.

With the exception of our collaboration with Toray, we do not allocate employee costs and costs associated with our

discovery efforts, laboratory supplies and facilities, including other indirect costs, to specific product candidates because these costs are associated with 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.

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These increased costs will likely include higher expenses related to audit, legal, regulatory and tax-related services associated with maintaining compliance with Nasdaq and SEC requirements, director and officer insurance premiums and investor relations costs associated with operating as a public company.

Other Income (Expense), Net

Interest Income, Net

Interest income consists of interest on our cash, cash equivalents and marketable securities.

Change in Fair Value of Preferred Stock Purchase Right Liability

In connection with the issuance of our Series C-1 convertible preferred stock in June 2020, the investors agreed to buy, and we agreed to sell, additional shares of such preferred convertible stock at the original issue price upon the achievement of pre-defined milestones.

These contractual obligations were required to be accounted for as liabilities and remeasured to fair value at each reporting date, with any change in the fair value reported as a component of other income (expense).

These contractual obligations were required to be accounted for as liabilities and remeasured to fair value at each reporting

date, with any change in the fair value reported as a component of other income (expense).

In January 2021, with the completion of the Series C-2 convertible preferred stock, this contractual obligation was settled , and the preferred stock purchase right liability was remeasured to fair value on the purchase date and reclassified to permanent equity.

Results of Operations

Comparison of the Three Months Ended March 31, 2021 and 2020

Three Months Ended March 31,

Comparison of the Three and Six Months Ended June 30, 2021 and 2020

Three Months Ended June 30,

Six Months Ended June 30,

(Unaudited, in thousands)

Collaboration revenue

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Collaboration Revenue

Revenue was nil and $0.2 million for the three months ended March 31, 2021 and 2020, respectively.

Revenue was nil for the three and six months ended June 30, 2021, and $67,000 and $0.2 million for the three and six months ended June 30, 2020, respectively.

Revenue in 2020 was generated from the execution of the Toray Development Agreement in March 2019 and the recognition of revenue over time as we fulfill our performance obligations to Toray.

We did not perform any services towards satisfying the performance obligation as defined in the Toray Development Agreement during the first quarter of 2021.

We expect to perform services to further the collaboration in the remainder of 2021.

We did not perform any services towards satisfying the performance obligation as defined in the Toray Development Agreement or Genmab Agreement during the first half of 2021.

We expect to perform services to further our collaborations with Toray and Genmab in the remainder of 2021.

Research and Development Expenses

Research and development expenses were $14.1 million and $6.8 million for the three months ended March 31, 2021 and 2020, respectively.

The increase of $7.3 million was primarily due to a $3.8 million increase in manufacturing expenses related to BDC-1001 and BDC-2034, a $2.5 million increase in personnel-related expenses due to increase in headcount, a $0.7 million increase in facility-related expenses, and a $0.3 million increase in outside services.

Research and development expenses were $19.7 million and $33.8 million for the three and six months ended June 30, 2021, respectively, and $9.2 million and $16.0 million for three and six months ended June 30, 2020, respectively.

The increase of $10.5 million between the comparable three months periods was primarily due to a $5.8 million increase in manufacturing expenses related to BDC-1001 and BDC-2034, a $2.3 million increase in personnel-related expenses due to an increase in headcount, a $1.3 million increase in facility-related expenses, and a $1.1 million increase in clinical trial expenses.

The increase of $17.9 million between the comparable six-month periods was primarily due to a $9.6 million increase in manufacturing expenses related to BDC-1001 and BDC-2034, a $4.9 million increase in personnel-related expenses due to increase in headcount, a $2.2 million increase in facility-related expenses, and a $0.7 million increase in clinical trial expenses.

General and Administrative Expenses

General and administrative expenses were $4.3 million and $2.1 million in the three months ended March 31, 2021 and 2020, respectively.

The increase of $2.2 million was primarily due to a $1.5 million increase in personnel-related expenses due to increase in headcount, $0.9 million increase in professional services expenses related to accounting services, legal fees and other professional services, offset by $0.2 million decrease in office-related expenses due to employees working remotely due to COVID-19.

Other Income, Net

General and administrative expenses were $4.1 million and $8.4 million for the three and six months ended June 30, 2021, respectively, and $2.0 million and $4.1 million for three and six months ended June 30, 2020, respectively.

The increase of $2.1 million between the comparable three months periods was primarily due to a $1.7 million increase in personnel-related expenses due to increase in and headcount and increase in professional services expenses related to consulting services, legal fees and other professional services.

The increase of $4.2 million between the comparable six-month periods was primarily due to a $3.0 million increase in personnel-related expenses due to an increase in headcount and increase in professional services expenses related to accounting services, legal fees and other professional services.

Other Income, Net

Interest income was $0.1 million for each of the three months ended March 31, 2021 and 2020.

The other income, net was primarily comprised of interest income from marketable securities.

Interest Income, Net

Interest income was $0.2 million for each of the three and six months ended June 30, 2021, and $51,000 and $0.2 million for the three and six months ended June 30, 2020, respectively.

The interest income, net was primarily comprised of interest income from marketable securities.

Change in Fair Value of Convertible Preferred Stock Purchase Right Liability

The change in fair value of convertible preferred stock purchase right liability was $6.0 million and nil for the three months ended March 31, 2021 and 2020, respectively.

The change in fair value of convertible preferred stock purchase right liability was nil and $6.0 million for the three and six months ended June 30, 2021, and nil for each of the three and six months ended June 30, 2020.

The balance in 2021 derived from the outstanding Series C-2 preferred stock purchase right liability from the Series C Agreement completed in June 2020.

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

As of March 31, 2021, we had cash and cash equivalents, and marketable securities of $302.9 million and an accumulated deficit of $132.9 million.

Our net losses were $24.5 million, $60.7 million, and $30.5 million for the three months ended March 31, 2021 and years ended December 31, 2020 and 2019, respectively, and we expect to incur additional losses in the future.

We evaluated our current cash position, historical results, forecasted cash flows and plans in regards to liquidity.

As of June 30, 2021, we had cash and cash equivalents, and marketable securities of $310.9 million and an accumulated deficit of $156.4 million.

Our net losses were $48.0 million, $60.7 million, and $30.5 million for the six months ended June 30, 2021 and years ended December 31, 2020 and 2019, respectively, and we expect to incur additional losses in the future.

The following table sets forth a summary of our cash flows for each of the periods indicated:

Three Months Ended March 31,

Six Months Ended June 30,

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Operating Activities

Net cash used in operating activities was $16.6 million and $9.6 million for the three months ended March 31, 2021 and 2020, respectively.

Net cash used in operating activities for the three months ended March 31, 2021 was primarily due to our net loss of $24.5 million, adjusted for $9.3 million of non-cash charges and a $1.4 million change in operating assets and liabilities.

Net cash used in operating activities was $20.5 million and $21.9 million for the six months ended June 30, 2021 and 2020, respectively.

Net cash used in operating activities for the six months ended June 30, 2021 was primarily due to our net loss of $48.0 million, adjusted for $12.9 million of non-cash charges and a $14.6 million change in operating assets and liabilities.

The non-cash charges were primarily comprised of $6.1 million related to the change in fair value of Series C convertible preferred stock purchase right liabilities, $4.1 million for stock-based compensation, $1.2 million of non-cash lease-related expense, $0.5 million for depreciation and amortization expense, and $1.0 million for accretion of discount on marketable securities.

The change in net operating assets was primarily due to increases in our prepaid expense and other current assets related to an increase in prepaid insurance.

The change in net operating assets was primarily due to a $11.4 million increase in deferred revenue related to Genmab Agreement and an increase in accounts payable and accrued expenses, offset by an increase in our prepaid expense and other current assets and a decrease in operating lease liabilities.

Net cash used in operating activities for the same period in 2020 was primarily due to our net loss of $19.7 million, adjusted for $1.5 million of non-cash charges and a $3.7 million change in operating assets and liabilities.

The non-cash charges were primarily comprised of $0.9 million of non-cash lease related expense, $0.4 million for stock-based compensation, and $0.2 million for depreciation and amortization expense.

The change in net operating assets was primarily due to an increase in our operating lease liabilities and increases in our accounts payable and accrued expenses related to an increase in research and development expenses and the timing of vendor payments.

The change in net operating assets was primarily due to decreases in our operating lease liabilities and accounts payable and accrued expenses, as well as an increase in prepaid expenses and other assets.

Investing Activities

Net cash used in investing activities was $190.5 million and $3.6 million for three months ended March 31, 2021 and 2020, respectively.

The net cash used in investing activities for the three months ended March 31, 2021 was primarily due to $198.1 million purchases of marketable securities offset by $7.6 million in maturity of marketable securities.

The net cash used in investment activities for the same period in 2020 was due to $3.2 million in purchases of marketable securities and $0.4 million in purchases of property and equipment.

Net cash used in investing activities was $237.1 million and $9.2 million for six months ended June 30, 2021 and 2020, respectively.

The net cash used in investing activities for the six months ended June 30, 2021 was primarily due to $247.8 million purchases of marketable securities and $0.8 million in purchases of property and equipment, offset by $11.4 million in maturity of marketable securities.

The net cash used in investment activities for the same period in 2020 was due to $13.2 million in purchases of

marketable securities and $ 1.2 million in purchases of property and equipment , offset by $5.2 million in maturities of marketable securities .

Financing Activities

Net cash provided by financing activities was $297.0 million and $34,000 for the three months period ended March 31, 2021 and 2020, respectively.

The net cash provided by financing activities for the three months ended March 31, 2021 was primarily due to net proceeds of $245.0 million in connection with our IPO that was completed in February 2021, a $51.9 million net proceeds from the issuance of 5,611,059 shares of Series C-2 preferred stock in January 2021 , and a $0.1 million net proceeds from the issuance of common stock from the exercise of stock options.

Net cash provided by financing activities for the same period in 2020 was due to net proceeds from the issuance of common stock from the exercise of stock options.

Net cash provided by financing activities was $310.4 million and $41.6 million for the six months ended June 30, 2021 and 2020, respectively.

The net cash provided by financing activities for the six months ended June 30, 2021 was primarily due to net proceeds of $244.3 million in connection with our IPO that was completed in February 2021, $51.9 million of net proceeds from the issuance of 5,611,059 shares of Series C-2 preferred stock in January 2021 , $13.6 million of net proceeds from issuance of common stock related to Genmab SPA, and $0.6 million of net proceeds from the issuance of common stock from the 2021 ESPP and exercise of stock options.

Net cash provided by financing activities for the same period in 2020 was primarily due to a $41.5 million net proceeds from the issuance of 5,162,173 shares of Series C-1 preferred stock in June 2020 and net proceeds from the issuance of common stock from the exercise of stock options.

Funding Requirements

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If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our product candidates, future revenue streams or research programs or may have to grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock.

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product

development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

Contractual Obligations and Commitments

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis