What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-09 compared with 2021-08-12 · 59 added, 53 removed, 155 unchanged (42% 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 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.

The following discussion and analysis of our financial condition as of September 30, 2021 and results of operations for the three and nine months ended September 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 Bio” “the Company,” “we,” “us” and “our” refer to Bolt Biotherapeutics, Inc.

We are a clinical-stage biotechnology company pioneering a new class of immuno-oncology agents that combine the targeting precision of antibodies with the power of both the innate and adaptive immune systems.

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We believe that this process leads to the development of systemic immunological memory with epitope spreading to neoantigens that is critical to achieving a long-term anti-tumor response.

Our lead product candidate BDC-1001 is a HER2 Boltbody ISAC comprised of a HER2-targeting biosimilar of trastuzumab conjugated to one of our proprietary TLR7/8 agonists for the treatment of patients with HER2-expressing solid tumors, including those with HER2-low tumors.

Our lead product candidate BDC-1001 is a HER2 Boltbody ISAC comprising a HER2-targeting biosimilar of trastuzumab conjugated to one of our proprietary TLR7/8 agonists for the treatment of patients with HER2-expressing solid tumors, including those with HER2-low tumors.

We have demonstrated robust single-agent, anti-tumor activity in multiple preclinical models, including elimination of large tumors (~500 mm3), as well as tumors that are refractory to trastuzumab or ado-trastuzumab emtansine.

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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-expansion cohorts in 2021 in key solid tumor indications with unmet medical need.

We are currently in the monotherapy dose-escalation portion of the trial and expect to initiate the nivolumab combination dose-escalation portion of the trial in the fourth quarter of 2021.

We expect to present an update on the monotherapy dose escalation in the fourth quarter of 2021 and move into Phase 2 dose-expansion cohorts in 2022 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 anticipate advancing our CEA Boltbody ISAC BDC-2034 into the clinic in 2022.

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, 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.

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.

To date, our only revenue has been derived from our collaborations with Toray and Genmab.

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

Prior to the completion of our initial public offering in February 2021, we funded our operations primarily through private placements of our convertible preferred stock for gross proceeds of $173.7 million, including Toray’s purchase of 717,514 shares of Series T convertible preferred stock for gross proceeds of $10.0 million and the January 2021 issuance and sale of 5,611,059 shares of Series C-2 preferred stock for net proceeds of $51.9 million.

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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.

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 our 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.

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

In August 2021, we entered into an oncology research and development collaboration with Innovent to leverage Innovent’s proprietary therapeutic antibody portfolio and antibody discovery capability against undisclosed oncology targets in combination with our advanced ISAC technology and myeloid biology expertise to create up to three new candidates for cancer treatments with the potential to provide significant benefit to patients.

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

Under the Innovent Agreement, we will receive an upfront payment of $5.0 million, and under the separate Innovent SPA, we may receive up to an additional $10.0 million from Innovent’s investment in our common stock.

In September 2021, we entered into a clinical collaboration and supply agreement BMS to study BDC-1001 in combination with BMS’s nivolumab , a leading PD-1 checkpoint inhibitor, for the treatment of HER2-expressing solid tumors.

Under the BMS Agreement, BMS will be providing nivolumab at no cost to us and we will sponsor, fund and conduct the clinical trial in accordance with an agreed-upon protocol .

We have incurred operating losses since our inception.

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.

Our net losses were $ 71.

4 million, $60.7 million and $30.5 million for the nine months ended September 30, 2021 and the years ended December 31, 2020 and 2019 , respectively .

As of September 30, 2021 , we had an accumulated deficit of $ 1 79.

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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Components of Results of Operations

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

To date our only revenue has been collaboration revenue derived from our collaborations with Toray and Genmab.

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

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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 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 compensation 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.

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 our 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 concepts to identify up to three clinical candidates for development.

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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 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 recognize, together with payments received from Genmab for compensation 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.

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

Under the Innovent Agreement, the Company will receive an upfront payment of $5.0 million and a potential equity investment in our common stock of up to $10.0 million.

These contracts have been evaluated together and no consideration from the Innovent SPA has been included in the total consideration for collaboration revenue.

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.

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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 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.

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

With the exception of cost incurred to satisfy our performance obligations under our collaboration agreements, 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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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 and Six Months Ended June 30, 2021 and 2020

Three Months Ended June 30,

Six Months Ended June 30,

Comparison of the Three and Nine Months Ended September 30, 2021 and 2020

Three Months Ended September 30,

Nine Months Ended September 30,

(Unaudited, in thousands)

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Collaboration Revenue

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 was $0.8 million for the three and nine months ended September 30, 2021, and nil and $0.2 million for the three and nine months ended September 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 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.

Revenue in 2021 was generated from the services performed under the Genmab Agreement as we fulfill our performance obligations to Genmab.

We expect to continue to provide services to further our collaborations with our partners.

Research and Development Expenses

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.

Research and development expenses were $19.3 million and $53.2 million for the three and nine months ended September 30, 2021, respectively, and $9.5 million and $25.5 million for three and nine months ended September 30, 2020, respectively.

The increase of $9.8 million between the comparable three months periods was primarily due to a $3.1 million increase in manufacturing expenses related to BDC-1001 and BDC-2034, a $2.9 million increase in personnel-related expenses due to an increase in headcount, a $1.9 million increase in facility-related expenses, and a $1.7 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.

The increase of $27.7 million between the comparable nine-month periods was primarily due to a $12.4 million increase in manufacturing expenses related to BDC-1001 and BDC-2034, a $7.7 million increase in personnel-related expenses due to increase in headcount, a $4.4 million increase in facility-related expenses, and a $2.5 million increase in clinical trial expenses.

General and Administrative Expenses

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.

General and administrative expenses were $4.9 million and $13.3 million for the three and nine months ended September 30, 2021, respectively, and $2.9 million and $7.0 million for three and nine months ended September 30, 2020, respectively.

The increase of $2.0 million between the comparable three months periods was primarily due to a $1.5 million increase in personnel-related expenses relating to an increase in headcount and increase in professional services expenses related to consulting and other professional services.

The increase of $6.3 million between the comparable nine-month periods was primarily due to a $4.8 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, 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.

Interest income was $0.1 million and $0.4 million for the three and nine months ended September 30, 2021, and $24,000 and $0.2 million for the three and nine months ended September 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 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.

The change in fair value of convertible preferred stock purchase right liability was nil and $6.1 million for the three and nine months ended September 30, 2021, and $2.4 for each of the three and nine months ended September 30, 2020.

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

Upon the exercise of the preferred stock purchase right with the completion of the Series C-2 Closing in January 2021, we remeasured the Series C-2 preferred stock purchase right liability to fair value and reclassified to permanent equity on the balance sheets.

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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 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.

As of September 30, 2021, we had cash and cash equivalents, and marketable securities of $290.5 million and an accumulated deficit of $179.8 million.

Our net losses were $71.4 million, $60.7 million, and $30.5 million for the nine months ended September 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:

Six Months Ended June 30,

Nine Months Ended September 30,

(Unaudited, in thousands)

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Operating Activities

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 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 decreases in our operating lease liabilities and accounts payable and accrued expenses, as well as an increase in prepaid expenses and other assets.

Net cash used in operating activities was $39.3 million and $34.4 million for the nine months ended September 30, 2021 and 2020, respectively.

Net cash used in operating activities for the nine months ended September 30, 2021 was primarily due to our net loss of $71.4 million, adjusted for $17.0 million of non-cash charges and a $15.1 million change in operating assets and liabilities.

The non-cash charges were primarily comprised of $6.4 million for stock-based compensation, $6.1 million related to the change in fair value of Series C convertible preferred stock purchase right liabilities, $1.9 million of non-cash lease-related expense, $1.9 million for accretion of discount on marketable securities, and $0.8 million for depreciation and amortization expense.

The change in net operating assets was primarily due to a $15.9 million increase in deferred revenue related to Genmab Agreement and Innovent Agreement, offset by increases in our prepaid expense and other current assets and accounts payable and accrued expenses, and a decrease in operating lease liabilities.

Net cash used in operating activities for the nine months ended September 30, 2020 was primarily due to our net loss of $29.7 million, adjusted for $0.2 million of non-cash charges and a $4.9 million change in operating assets and liabilities.

The non-cash items were primarily comprised of $2.4 million for the change in fair value of the C-2 convertible preferred stock purchase right liability, partially offset by charges of $1.4 million of non-cash lease related expense, $0.9 million for stock-based compensation and $0.4 million for depreciation and amortization expense.

The change in net operating assets was primarily due to decreases in our operating lease liabilities related to payments made for leasehold improvements, increases in our prepaid expenses and other assets and increases in accounts payable and accrued expenses related to the timing of vendor payments.

Investing Activities

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 .

Net cash used in investing activities was $253.2 million and $22.3 million for nine months ended September 30, 2021 and 2020, respectively.

The net cash used in investing activities for the nine months ended September 30, 2021 was primarily due to $283.7 million purchases of marketable securities and $1.8 million in purchases of property and equipment, offset by $32.2 million in maturity of marketable securities.

The net cash used in investment activities for the same period in 2020 was due to $33.2 million in net purchases of marketable securities and $2.4 million in purchases of property and equipment, offset by $13.3 million in maturities of marketable securities.

Financing Activities

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.

Net cash provided by financing activities was $310.6 million and $40.7 million for the nine months ended September 30, 2021 and 2020, respectively.

The net cash provided by financing activities for the nine months ended September 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 $0.8 million of net proceeds primarily 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 $41.3 million net proceeds from the issuance of 5,162,173 shares of Series C-1 preferred stock in June 2020, partially offset by payments of deferred offering costs .

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