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Item 1. Business

2026-03-27 compared with 2025-03-28 · 319 added, 371 removed, 763 unchanged (47% of the section changed)

BioXcel Therapeutics, Inc.

(“BTI,” the “Company,” “we,” “us” or “our”) is a biopharmaceutical company utilizing artificial intelligence (“AI”) to develop transformative medicines in neuroscience and, through the Company’s wholly owned subsidiary, OnkosXcel Therapeutics LLC (“OnkosXcel”), immuno-oncology.

We are focused on utilizing cutting-edge technology and innovative research to develop high-value therapeutics aimed at transforming patients’ lives.

We employ various AI platforms to reduce therapeutic development costs and potentially accelerate development timelines.

BTAI, “the Company”) is a biopharmaceutical company built on artificial intelligence (“AI”) to develop transformative medicines in neuroscience.

Our wholly owned subsidiary, OnkosXcel Therapeutics, is focused on the development of medicines in immuno-oncology.

We have utilized cutting-edge technology and innovative research to develop high-value therapeutics aimed at transforming patients’ lives.

We developed a proprietary AI platform to reduce therapeutic development costs and potentially accelerate development timelines.

Our approach leverages existing approved drugs and/or clinically evaluated product candidates together with big data and proprietary machine learning algorithms to identify new therapeutic indications.

We believe this differentiated approach has the potential to reduce the expense and time associated with drug development in diseases with substantial unmet medical needs.

We believe this differentiated approach has proven its potential to reduce the expense and time associated with drug development in diseases with substantial unmet medical needs.

Our most advanced neuroscience candidate is BXCL501.

In indications other than those approved by the United States (“U.S.”) Food and Drug Administration (“FDA”) as IGALMI ® , BXCL501 is an investigational, proprietary, orally dissolving film formulation of dexmedetomidine (or “Dex”) in development for the treatment of agitation associated with psychiatric and neurological disorders.

On April 6, 2022, we announced that the FDA approved IGALMI ® sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults.

In indications other than those approved by the U.S.

Food and Drug Administration (FDA) as IGALMI ® , BXCL501 is an investigational, proprietary, orally dissolving sublingual film formulation of dexmedetomidine in development for the treatment of agitation associated with psychiatric and neurological disorders.

Our most advanced immuno-oncology asset, BXCL701, is an investigational oral innate immune activator from OnkosXcel Therapeutics as a potential therapy for the treatment of aggressive forms of prostate cancer, pancreatic cancer, and other solid and liquid tumors.

On April 6, 2022, we announced that the FDA approved IGALMI ® (dexmedetomidine) sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults.

IGALMI ® is approved to be self-administrated by patients under the supervision of a health care provider.

On July 6, 2022, we announced that IGALMI ® was commercially available in doses of 120 and 180 micrograms.

On September 5, 2024, we announced the initiation of our SERENITY At-Home trial, a double-blind, placebo-controlled study to evaluate the safety of a 120 mcg dose of BXCL501 in 200 patients for acute treatment of agitation associated with bipolar disorders or schizophrenia in the at-home setting.

On November 12, 2024, we announced that the first patient had been randomized in the trial, and on March 27, 2025, that 24 clinical trial sites had been opened and 127 patients had been enrolled.

Topline data results, which are expected in the second half of 2025, are intended to support a supplemental new drug application (“sNDA”) submission to potentially expand the label of IGALMI® (dexmedetomidine) sublingual film in the at-home setting.

We are continuing to develop BXCL501 for the potential acute treatment of agitation associated with bipolar disorders or schizophrenia in the at-home setting and for the potential acute treatment of agitation (non-daily) associated with dementia due to probable Alzheimer’s disease in the at-home setting and in care facilities.

As described further below, we have deprioritized the development of BXCL501 for certain other proposed indications, as a potential adjunctive treatment for major depressive disorder (“MDD”), as well as our BXCL701 program, except as noted under “Immuno-Oncology” below.

On September 5, 2024, we submitted to the FDA the proposed protocol for our TRANQUILITY In-Care Phase 3 trial designed to evaluate the efficacy and safety of a 60 mcg dose of BXCL501 for agitation associated with Alzheimer’s dementia.

On July 6, 2022, we announced that IGALMI ® was commercially available in doses of 120 and 180 micrograms (“mcg”).

On August 27, 2025 we announced that the SERENITY At-Home Pivotal Phase 3 trial evaluating the safety of BXCL501, as an acute treatment for agitation associated with bipolar disorders or schizophrenia in the at-home setting met its primary objective.

The data from this successful study formed the basis of the sNDA submission for a label expansion of IGALMI ® into the at-home setting.

The sNDA was submitted to the FDA on January 14, 2026.

On September 10, 2025 we further announced positive topline exploratory efficacy data from the SERENITY At-Home Pivotal Phase 3 safety trial, which demonstrated BXCL501 had continued effects and consistent benefit with repeat dosing.

On October 10, 2025 we announced positive results from a correlation study related to exploratory efficacy outcomes from the SERENITY At-Home trial.

The results demonstrated a strong correlation between the clinician assessments and the patient or caregiver (informant) assessments.

The results, along with the data from the SERENITY At-Home trial, have been included in the sNDA submission that was filed with the FDA on January 14, 2026.

Our TRANQUILITY program is designed to evaluate BXCL501 as a potential treatment option for agitation associated with Alzheimer’s dementia in the outpatient or at-home setting and in-care facilities.

We have completed one Phase 3 in care trial in this program (see below under late-stage clinical trials).

We have had several FDA meetings to discuss the development program, and the FDA has commented on the proposed protocol for our second TRANQUILITY In-Care Phase 3 trial, which is designed to evaluate the efficacy and safety of a 60-mcg dose of BXCL501 for agitation associated with Alzheimer’s dementia.

The Company is advancing plans for initiation of the trial upon funding.

See further discussion in “Our Neuroscience Clinical Programs” below.

On October 15, 2024, we announced a U.S.

Department of Defense grant to the University of North Carolina to fund a study of BXCL501 (sublingual dexmedetomidine) for treating Acute Stress Disorder (ASD).

See further discussion in “Additional Neuroscience Opportunities” below.

Our most advanced immuno-oncology candidate, BXCL701, is an investigational oral innate immune activator being developed by OnkosXcel as a potential therapy for the treatment of aggressive forms of prostate cancer, pancreatic cancer, and other solid and liquid tumors.

Nasdaq Notice

On September 16, 2024, the Company received a letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) that it was not in compliance with Nasdaq Listing Rule 5550(a)(2) because its common stock failed to maintain a minimum closing bid price of $1.00 per share for 30 consecutive business days.

On February 6, 2025, the Company announced that it would effect a 1-for-16 reverse stock split of its common stock.

The reverse stock split became effective at 5:00 p.m.

on February 7, 2025, and the company’s common stock began trading on a split-adjusted basis (above $1 per share) at the opening of the market on Monday, February 10, 2025.

To regain compliance, the Company was required to maintain a minimum closing bid price of $1.00 per share for at least 12 consecutive trading days.

This requirement was met on February 26, 2025.

As previously reported, on September 20, 2024, we received a letter from the Nasdaq Staff notifying us that for the 30 consecutive business days prior to the date of the letter, the Company’s market value of listed securities (“MVLS”) closed below the minimum $35 million requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(2) (the “MVLS Requirement”).

In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company was granted a period of 180 calendar days, or until March 19, 2025, to regain compliance.

As anticipated, on March 20, 2025, the Company received another letter from the Staff stating that, as a result of the Company’s continued non-compliance with the MVLS Requirement, its securities would be delisted from Nasdaq unless the Company appealed the Staff’s delisting determination by requesting a hearing before the Nasdaq Hearings Panel (the “Panel”).

The Company made timely request for a hearing before the Panel to appeal the Staff’s determination.

The Company’s common stock will remain listed and eligible for trading on Nasdaq at least pending the ultimate conclusion of the hearing process;

however, there can be no assurance that the Company will ultimately regain compliance and remain listed on Nasdaq.

2024 Clinical Prioritization

As discussed in Note 4, Restructuring in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K, on May 8, 2024 the Company took additional actions as part of its continued efforts to preserve cash and prioritize investment in its core clinical programs.

As part of these actions, the Company initiated a reduction of approximately 15% of the Company’s workforce.

O n September 17, 2024, the Company approved a plan for an additional reduction in its workforce by 15 employees (including all but one sales and marketing employee), or approximately 28% of the Company’s headcount (the “Clinical Prioritization”), in order to extend its cash runway and prioritize investment on the clinical development of its lead neuroscience asset, BXCL501.

As described further below, we have deprioritized the development of BXCL501 for certain other proposed indications.

Our most advanced immuno-oncology candidate, BXCL701, is an investigational oral innate immune activator from OnkosXcel Therapeutics as a potential therapy for the treatment of aggressive forms of prostate cancer, pancreatic cancer, and other solid and liquid tumors.

Development of our BXCL701 programs continues to be deprioritized, except as noted under “Immuno-Oncology” below.

2024 Clinical Reprioritization

As discussed in Note 4, Restructuring in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K, on May 8, 2024 the Company took actions as part of its continued efforts to preserve cash and prioritize investment in its core clinical programs.

These actions are collectively named the (“Clinical Reprioritization”).

The Company reduced its workforce by approximately 15% and notified impacted employees on May 8, 2024.

All related restructuring costs were paid in the second quarter of 2024.

On September 17, 2024, the Company reduced its workforce an additional 28% to extend its cash runway and prioritize the clinical development of BXCL501.

The Company completed the Clinical Reprioritization in October 2024, paid $475 of the related costs during the first quarter of 2025, and paid the remaining $128 during the second quarter of 2025

Throughout 2024 and 2025 the Company has taken multiple steps to reduce spending and prioritize clinical development activities.

In the third quarter of 2025, we also reduced our investment in and utilization of our proprietary AI platform until additional funding is available.

IGALMI ® Commercialization Strategy

We are continuing to supply IGALMI ® through existing distribution channels.

At the same time, while seeking potential commercial partners, we are maintaining IGALMI’s market presence with minimal commercial resources following our Clinical Reprioritization.

Our commercialization efforts are designed to build the foundation to launch additional potential follow-on indications.

If IGALMI ® would be approved outside the U.S., we would consider launching the product through collaborations with third parties.

However, no foreign applications have been made at this time.

On January 12, 2026, we announced the appointment of an Interim Chief Commercial Officer to support the potential launch of IGALMI in the at-home setting.

Our Neuroscience Strategy

Our goal is to become the leading AI-enabled neuroscience therapeutics company.

We continue to evaluate all strategic options for our neuroscience assets, which could include licensing, partnering, and co-commercialization.

Our Novel Drug Re-Innovation Approach

We aim to deploy and implement, throughout the drug development process, an AI ecosystem designed to rapidly identify medications related to our key focus areas of neuroscience and immuno-oncology.

Our in-house, uniquely integrated AI-to-drug-development capability is complemented by the services and technology of BioXcel LLC, our former parent company.

Prior to our Clinical Reprioritization, we had aimed to deploy and implement, throughout the drug development process, an AI ecosystem designed to rapidly identify medications related to our key focus areas of neuroscience and immuno-oncology.

Our in-house, uniquely integrated AI-to-drug-development capability was complemented by the services and technology of BioXcel LLC, our former parent company.

It includes a labeled properties graph (also referred to as a “knowledge graph”) that visually relates collected big data in the form of entities and their properties that include neuropsychiatric symptoms, brain circuits, drug targets, and existing drugs.

We believe that understanding the relation between entities relevant to drug development may lead to novel potential uses for existing drugs.

Predictive algorithms or queries of the knowledge

graph may uncover not only single drugs but potentially identify new combinations of drugs that we believe may be more effective in treating disorders than single agents.

Predictive algorithms or queries of the knowledge graph may uncover not only single drugs but potentially identify new combinations of drugs that we believe may be more effective in treating disorders than single agents.

New combinations of drugs may lower tolerable doses of drugs and provide the basis for stronger intellectual property positions.

Our AI team prioritizes the most valuable external opportunities in a data-driven manner.

These opportunities may be found in new potential uses for launched drugs, in drugs that are part of pharmaceutical company pipelines no longer being pursued, or within academic efforts to develop new drug candidates.

These opportunities may be found in new potential uses for launched drugs, in drugs that are part of pharmaceutical company pipelines no longer being

pursued, or within academic efforts to develop new drug candidates.

However, due to our Clinical Reprioritization we have deemphasized our drug re-innovation capabilities.

Traditional drug development is marred by low success rates, long drug development cycles, and exorbitant development costs that are increasing year over year.

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Unfortunately, such discoveries have been severely limited in scope due to the lack of a genuinely integrated approach to mining big data and advanced analytics.

Our AI-based discovery and development process is the foundation of our drug re-innovation model for identifying the next wave of potential medicines.

Our therapeutic area experts have substantial experience across the drug discovery and development value chain.

Our AI-based discovery and development process was the foundation of our drug re-innovation model for identifying the next wave of potential medicines.

Our therapeutic area experts had substantial experience across the drug discovery and development value chain.

We believe that our method of finding potential product candidates gives us a higher probability of success because it combines AI expertise and intuition of human experience in drug development.

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Our approach is illustrated below:

We continue to integrate and evolve our neuroscience and immuno-oncology AI machine learning and drug discovery and development platform.

Our platform led to the identification of Dex, the rapid development of BXCL501, and its approval by the FDA as IGALMI ® , as well as the advancement of BXCL501 for other potential indications.

We are continuing to leverage our platform to identify and develop new neuroscience and immuno-oncology programs.

Our Neuroscience Clinical Programs

The following is a summary of the status of our neuroscience clinical development programs as of the date of this Annual Report on Form 10-K:

As a selective adrenergic agent with a sublingual or buccal route of administration, BXCL501 is designed to be easy to administer and has shown a rapid onset of action in multiple clinical trials, including clinical trials studying patients with schizophrenia, bipolar disorders, and dementia.

Our drug identification platform led to the identification of dexmedetomidine, the rapid development of BXCL501, and its approval by the FDA as IGALMI ® , as well as the advancement of BXCL501 for other potential indications.

Our Neuroscience Clinical Programs and Investigator-Sponsored Trials

The following is a summary of the status of our major neuroscience clinical development programs as of the date of this Annual Report on Form 10-K:

About BXCL501

BXCL501 is our most advanced neuroscience clinical candidate.

In indications other than those approved by the FDA as IGALMI ® , BXCL501 is an investigational, proprietary, orally dissolving sublingual film formulation of dexmedetomidine, a selective alpha-2 receptor agonist, targeting symptoms from stress-related behaviors such as agitation.

As a selective adrenergic agent with a sublingual or buccal route of administration, BXCL501 is designed to be easy to administer and has shown a relatively rapid onset of action in multiple clinical trials, including clinical trials studying patients with schizophrenia, bipolar disorders, and dementia associated with Alzheimer’s disease.

We believe the results from these studies suggest that BXCL501 has the potential to generate a calming effect without producing excessive sedation.

We believe that BXCL501 is highly differentiated from antipsychotics currently used as a standard of care for the treatment of agitation that often produce unwanted side effects such as excessive sedation and extra-pyramidal motor effects.

We also believe BXCL501 is highly differentiated from antipsychotics and benzodiazepines, which are currently used as first-line standard-of-care treatment for agitation despite often producing unwanted side effects such as excessive sedation or extra pyramidal motor effects.

Managing patient agitation in neuropsychiatric and neurodegenerative disorders represents a significant challenge for physicians and caregivers.

We believe that BXCL501 has the potential to address these challenges while providing an efficient treatment regimen for patients.

We believe BXCL501 has the potential to address these challenges and, if approved for the respective indications, has the potential to become the standard of care for the acute treatment of agitation associated with these disorders.

In addition, based on its mechanism of action, we believe BXCL501 has the potential to address some behavioral symptoms of several additional diseases or conditions, including opioid use disorder (“OUD”), acute stress disorder (“ASD”) and post-traumatic stress disorder (“PTSD”).

BXCL501 is currently being evaluated for treatment of patients with those conditions in clinical trials sponsored by leading academic research institutions.

See Government-Supported Investigator-Sponsored Trials (“ISTs”) below.

Agitation Overview and Market Opportunity

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Agitation is characterized by feelings of unease, excessive talking, and/or unintentional and purposeless motions, such as wringing of the hands or pacing.

People experiencing agitation may also express excitement, hostility, poor impulse control, tension, uncooperativeness, and occasional disruptive behavior, which may lead to aggression and violence.

People experiencing agitation may also express excitement, hostility, poor impulse control, tension, uncooperativeness, and occasional disruptive behavior, which may lead to aggression, violence and self-injurious behavior.

In many cases, people develop agitation when treatment for their underlying disorder is not working well.

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Agitation can occur suddenly or slowly and vary in length, lasting for a few minutes or for an extended period.

With the agitation issues associated with schizophrenia and bipolar disease coupled with a fast-growing elderly population that is potentially likely to experience agitation associated with Alzheimer’s disease, the difficulties and expenses of acute treatment of agitation are expected to grow significantly.

We estimate that in the United States, there are approximately 1.9 million patients diagnosed with Alzheimer’s disease-related dementia (“AAD”) and that those patients experience agitation at a rate of about six episodes per month, on average.

In addition, we estimate that there are approximately 1.6 million Americans diagnosed with schizophrenia or bipolar disorders and that those patients experience agitation at a rate of about three episodes per month, on average.

We, therefore, believe there is significant

potential market opportunity for BXCL501 if approved for use in these patient populations in the at-home setting.

In addition, we estimate that there are approximately 2.3 million Americans diagnosed with schizophrenia or bipolar disorders who experience agitation at home, of whom 1.8 million may be eligible for treatment with BXCL501.

Based on our recently completed Serenity At Home Trial we believe that those patients experience agitation at a rate of about three – four episodes per month, on average.

We, therefore, believe there is significant potential market opportunity for BXCL501 if approved for use in these patient populations in the at-home setting.

The foregoing estimates of the incidence of each patient population and the number of agitation episodes experienced and potential market opportunity are based on management’s estimates and third-party data, which may be materially different from actual agitation episodes and actual treatable patients.

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Side effects of these medications include movement disorders, including akathisia and extrapyramidal symptoms.

One of the serious limitations of these drugs is that they can sedate the patient and do not permit verbal interaction with the hospital staff to continue.

One of the serious

limitations of these drugs when used in institutional setting is that they can sedate the patient and do not permit verbal interaction with the hospital staff to continue evaluation and treatment.

Intramuscular (“IM”)-delivered antipsychotics, such as haloperidol and olanzapine, are used extensively in this setting but are invasive and often require patient restraint.

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Currently, there are six products approved for film administration, including our product, IGALMI ® .

For example, BioDelivery Sciences International, Inc., a commercial-stage specialty pharmaceutical company, has developed a buccal film formulation of buprenorphine for chronic pain management and buprenorphine and naloxone for opioid dependence.

We developed BXCL501 as a differentiated sublingual film dosage form of Dex, which we believe may offer benefits such as ease of use and quick absorption for rapid therapeutic effects.

Mechanism of Action:

α2a Adrenergic Receptor and NE Role in Acute Agitation

BXCL501 is a sublingual formulation of Dex that is designed to be easily administered and have a rapid onset of action.

Dex is approved in the U.S.

For example, Collegium Pharmaceutical, a commercial-stage specialty pharmaceutical company, has developed a buccal film formulation of buprenorphine for chronic pain management and buprenorphine and naloxone for opioid dependence.

We developed BXCL501 as a differentiated sublingual film dosage form of dexmedetomidine, which we believe may offer benefits such as ease of use and quick absorption for rapid therapeutic effects.

Clinical Use of Dexmedetomidine

IGALMI ® dexmedetomidine sublingual film was approved on March 6, 2022 for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults.

Dexmedetomidine is also approved in the U.S.

for the sedation of initially intubated and mechanically ventilated patients during treatment in the intensive care unit (“ICU”).

It is also used in the intensive care setting for sedation of non-intubated patients prior to and/or during surgical and other invasive procedures.

Dex, launched in the U.S.

Dexmedetomidine, launched in the U.S.

as Precedex ™ in 1999, is a selective α2a adrenergic receptor agonist that has a strong safety record and has been studied in over 130 clinical trials to date.

It has also been sold in the European Union (“EU”) and other countries under the trade name Dexdor ® as a sedative for intensive care patients.

Dex was approved by the European Commission for sedation of adult ICU patients requiring a sedation level no deeper than arousal in response to verbal stimulation (corresponding to Richmond Agitation-Sedation Scale 0 to -3).

It has been used to prevent or treat hyperactive delirium resulting from anesthesia in

Given these uses of the IV formulation of Dex, we believe Dex formulated in a sublingual film and at much lower doses allows for ease of administration in settings where rapid acute treatment of agitation is needed.

Dexmedetomidine was approved by the European Commission for sedation of adult ICU patients requiring a sedation level no deeper than arousal in response to verbal stimulation (corresponding to Richmond Agitation-Sedation Scale 0 to -3).

It has been used to prevent or treat hyperactive delirium resulting from anesthesia in the ICU.

Given these uses of the IV formulation of dexmedetomidine, we believe dexmedetomidine formulated in a sublingual film and at much lower doses allows for ease of administration in settings where rapid acute treatment of agitation is needed.

IGALMI ® Commercial Strategy

We continue to support IGALMI ® in the hospital setting through limited and focused commercial activity.

In the third quarter of 2023, we revised our commercial strategy for IGALMI ® in the institutional setting, reducing in-hospital commercialization expenses, suspending programs no longer deemed core to our business, and shifting focus to the development of BXCL501 for use in the at-home and care facilities in the treatment of acute agitation in schizophrenia and bipolar disorders, and in the treatment of acute agitation (non-daily) associated with dementia due to probable Alzheimer’s disease (collectively, the “Reprioritization”).

Following the Reprioritization, a small Corporate Account Director team supported existing customers and targeted Integrated Delivery Networks (“IDNs”) with educational assistance and contracting opportunities, while our trade operation supported customers with drug supply.

The goal of this approach was to help maintain current business and potentially broaden IGALMI ® utilization through volume contracting.

As part of the Clinical Prioritization announced on September 19, 2024, we made further workforce reductions including sales and marketing employees, as the Company announced it would maintain IGALMI™ in the market with minimal commercial support.

The Clinical Prioritization staff reductions may have future impacts on net revenue.

Following our Clinical Reprioritization, a small Corporate Account Director team continues to support existing customers and targeted Integrated Delivery Networks (“IDNs”) with educational assistance and contracting opportunities, while our trade operation supports customers with drug supply.

The goal of this approach is to help maintain current business and potentially broaden IGALMI ® utilization through volume contracting.

The Clinical Reprioritization staff reductions have had future impacts on net revenue.

Net revenues from IGALMI ® product sales for the years ended December 31, 2025 and 2024 were $0.6 million and $2.3 million, respectively.

We are currently seeking potential commercial partners.

Our continued commercialization efforts for IGALMI ® are designed to build the foundation to launch additional potential follow-on indications.

We also are currently seeking potential commercial partners.

If IGALMI ® would be approved outside the U.S., we would consider launching the product through collaborations with third parties.

BXCL501 Development

In indications other than those approved by the FDA as IGALMI ® , BXCL501 remains an investigational, proprietary, orally dissolving film formulation of Dex, a selective alpha-2 receptor agonist, targeting symptoms from stress-related behaviors such as agitation.

BXCL501 is our most advanced neuroscience clinical program, being evaluated for the acute treatment of agitation associated with bipolar disorders or schizophrenia in the at-home setting and for the acute treatment of agitation (non-daily) in patients with dementia due to probable Alzheimer’s disease in care facilities and at-home settings.

As a selective adrenergic agent with a sublingual or buccal route of administration, BXCL501 is designed to be easily administered and, compared to medications that may take days or weeks, has shown a relatively rapid onset of action in multiple clinical trials, including those studying patients with bipolar disorders, schizophrenia, and Alzheimer’s disease.

As a selective alpha-2 receptor agonist with a sublingual or buccal route of administration, BXCL501 is designed to be easily administered and, compared to medications that may take days or weeks to show their full effect, has shown a relatively rapid onset of action in multiple clinical trials, including those studying patients with bipolar disorders, schizophrenia, and Alzheimer’s disease.

We believe results from these studies suggest that BXCL501 has the potential to reduce agitation without producing excessive sedation.

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We also believe that BXCL501, if approved for the respective indications, has the potential to become the standard of care for the acute treatment of agitation arising from diseases such as schizophrenia, bipolar disorder and Alzheimer’s disease.

In addition, given the differentiated design of BXCL501 and its mechanism of action, we believe BXCL501 has the potential to address several diseases or conditions for which agitation is a symptom of the condition or underlying disease, including opioid withdrawal and post-traumatic stress disorder (“PTSD”), which are being evaluated in investigator-sponsored trials run by several leading academic research institutions.

BXCL501 Clinical Trials

In addition, given the differentiated design of BXCL501 and its mechanism of action, we believe BXCL501 has the potential to address agitation which is a symptom of the condition or underlying disease, including opioid withdrawal and post-traumatic stress disorder (“PTSD”), which are being evaluated in investigator-sponsored trials run by several leading academic research institutions.

BXCL501 Late-Stage Clinical Trials

SERENITY Program:

Agitation Associated with Bipolar Disorders I and II or Schizophrenia (at-home setting)

We initiated the clinical study of BXCL501 in patients with agitation associated with bipolar disorders or schizophrenia in SERENITY III, which consisted of two parts.

Acute Treatment of Agitation Associated with Bipolar Disorders I and II or Schizophrenia

Under our SERENITY program, we are focused on the continued development of BXCL501 (currently marketed and commercialized as IGALMI ® ) as a potential treatment option for agitation associated with bipolar I or II disorder or schizophrenia in the outpatient or at-home setting.

We completed the clinical study of BXCL501 in patients with agitation associated with bipolar disorders or schizophrenia in SERENITY III, which consisted of two parts.

The first part was comparable to our pivotal SERENITY I and II studies.

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Furthermore, this population responder rate was consistent and dose-proportionate to the same response rates observed in the larger SERENITY I and II trials.

Although the primary efficacy endpoint as a group mean change in PEC score from baseline at 2 hours was not statistically significant at the primary endpoint at 2 hours (p=0.077), BXCL501 statistically separated from placebo at 4 hours (p=0.049).

Part II of the SERENITY III study was designed to evaluate the same dose tested in Part I, 60 mcg (with an optional additional 60 mcg dose), but in the at-home setting and focusing on safety only.

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We held a Type C meeting with the FDA on November 8, 2023 to discuss changes to Part II of our SERENITY III study.

We proposed the evaluation of an 80 mcg dose based on previous clinical experience with this dose during our Phase 1b trial in schizophrenia patients with agitation, and pharmacokinetic and pharmacodynamic modeling suggesting that use of an 80 mcg dose of BXCL501 could provide an optimal balance between safety and efficacy for at-home use.

Based on feedback from the FDA during the meeting, we made the decision to evaluate a 120-mcg dose in the at-home setting.

The 120 mcg dose has already demonstrated efficacy based on the approval of IGALMI ® (when administered under the supervision of a healthcare provider, for a single agitation episode), so we sought further feedback from the FDA regarding the proposed design of this study amendment in a request for a follow-up meeting with the FDA, which was held on March 6, 2024.

Based on the FDA’s feedback in advance of and during the March 6, 2024 meeting, we moved forward evaluating the use of the 120 mcg dose of BXCL501 in the at-home setting, and amended Part 2 of the SERENITY III study.

We now refer to this study as the SERENITY At-Home trial, with safety as the primary objective and efficacy measures as exploratory endpoints to support use in the at-home setting.

The 120-mcg dose has already demonstrated efficacy based on the approval of IGALMI ® (when administered under the supervision of a healthcare provider, for a single agitation episode), so we

sought further feedback from the FDA regarding the proposed design of this study amendment in a request for a follow-up meeting with the FDA, which was held on March 6, 2024.

Based on the FDA’s feedback in advance of and during the March 6, 2024 meeting, we moved forward evaluating the use of the 120 mcg dose of BXCL501 in the at-home setting and amended Part 2 of the SERENITY III study, the SERENITY At-Home trial, with safety as the primary objective and efficacy measures as exploratory endpoints to support use in the at-home setting.

This was the FDA’s recommendation in the November 8, 2023 FDA meeting, for the acute treatment of agitation in bipolar disorders or schizophrenia.

We also plan to initiate a clinical study designed to enroll approximately 30 patient-informant dyads to evaluate the correlation between patient-and informant-reported efficacy measurement and the PEC scale, conducted by trained clinician raters as previously recommended by the FDA.

We also conducted a clinical study that enrolled 33 patients in an open label trial to evaluate the correlation between patient-and informant-reported efficacy measurement and the PEC scale, conducted by trained clinician raters as previously recommended by the FDA.

IGALMI ® is already approved at the 120-mcg dose based on efficacy data that we previously generated in treating a single episode of agitation.

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During our March 6, 2024 Type C meeting with the FDA, we discussed, among other things, whether evaluating the at-home use of BXCL501 120 mcg, with safety as the primary objective and efficacy measures as exploratory endpoints, if successful, could support the submission of an sNDA seeking expansion of the current label for IGALMI ® 120 mcg to allow at-home use and labeling without the current LOU.

Based on FDA feedback, we believe that our ability to seek labeling without the current LOU will depend, in part, on the number of agitation episodes we observe during our planned study period.

On April 22, 2024, we announced our plans, subject to funding, to advance the SERENITY At-Home trial.

On September 5, 2024, we announced the initiation of our SERENITY At-Home trial.

The pivotal Phase 3 trial is designed to evaluate the safety of BXCL501 in the at home setting.

On November 12, 2024, we announced that

the first patient had been randomized in the trial.

On March 27, 2025, 24 clinical trial sites had been opened and 127 patients have been enrolled, representing 63% of the total required enrollment in the trial.

Based on FDA feedback, we believe that our ability to seek labeling without the current LOU will depend, in part, on the number of agitation episodes we observed during our planned study period.

On August 18, 2025 we announced that the Company had received positive pre-sNDA meeting responses from the FDA.

The primary purpose of the planned meeting was to gain alignment with the FDA regarding the content and format of the Company’s planned sNDA submission for the at-home (outpatient) use of BXCL501, including the clinical, nonclinical, and chemistry and manufacturing and controls (CMC) requirements.

The Company concluded that the objectives of the pre-sNDA meeting had been accomplished based on the FDA’s written responses and determined that the meeting, originally scheduled for August 20, 2025, was no longer required.

The pre-sNDA preliminary meeting comments received from FDA on August 14, 2025, will serve as the official record.

Acceptance of the sNDA will be subject to the FDA’s review of the complete filing.

On August 27, 2025 we announced that the SERENITY At-Home Pivotal Phase 3 trial evaluating the safety of BXCL501, the Company’s proprietary, sublingual film formulation of dexmedetomidine, as an acute treatment for agitation associated with bipolar disorders or schizophrenia in the at-home setting, met its primary objective.

The data from this successful study formed the basis of the sNDA submission for label expansion of IGALMI ® in the at-home setting.

SERENITY At-Home Topline Summary

● Summary of agitation episodes:

● A total of 246 patients randomized

● Data collected 2,628 agitation episodes in 215 patients

● Treated 2,437 episodes in 208 patients

● 168 patients (81%) completed the full 12-week trial

● Average of 11.7 agitation episodes recorded per treated patient

● All patients were able to successfully self-administer the film

● Distribution of enrolled patients was 45% bipolar disorders and 55% schizophrenia

SERENITY AT-Home Primary Objective Data

The 120 mcg dose of BXCL501 was well-tolerated in patients with episodes of agitation in the outpatient setting and met the primary objective.

This tolerability outcome was observed across repeat dosing and through the duration of the trial.

● No discontinuations due to tolerability in the BXCL501 arm

● Adverse event profile consistent with approved IGALMI ® label and multiple clinical trials in the institutional setting

● No drug-related serious adverse events (SAEs), syncopes or falls reported

● No new or unexpected treatment emergent adverse events (TEAEs)

● No severe TEAEs associated with BXCL501 treatment and most TEAEs were mild

● No trend of more frequent AEs over time or with repeat dosing

● Tolerability remained consistent throughout the repeat dosing in the trial

BXCL501 120 mcg Tolerability Profile Consistent with IGALMI ® Label

Treatment-Emergent Adverse Events 2

Serenity I & II

(IGALMI® Label 1 )

Serenity At-Home

Adverse Event by Dose (Episode) 1

All Doses (2437 episodes)

BXCL501 N=102

Oral Paresthesia/Hypoesthesia

1 SERENITY I and II evaluated a single agitation episode in patient in clinic.

SERENITY AT-Home evaluated 2437 episodes in 208 patients.

Adverse events are presented on an episode basis as each episode was evaluated as an independent event.

O nly AEs observed in Serenity At-Home Pivotal Phase 3 trial are listed

2 AEs within 24 hours following dosing

3 Includes fatigue

BXCL501 Tolerability Profile Consistent with Repeat Dosing 1

Doses 4 to 12

Doses 13 and beyond

Treatment-Emergent Adverse Event 2

Oral Paresthesia/Hypoesthesia

1 Adverse events are presented on an episode basis

2 AEs within 24 hours following dosing

3 Includes fatigue

BXCL501 Tolerability Profile Consistent over the Trial Duration

Weeks 9 to 12

Treatment-Emergent Adverse Event 2

Oral Paresthesia/Hypoesthesia

1 Adverse events are presented for agitation episodes in the weeks indicated

2 AEs within 24 hours following dosing

3 Includes fatigue

On September 10, 2025, we announced positive topline exploratory efficacy data from the SERENITY At-Home Pivotal Phase 3 safety trial, which demonstrated BXCL501 had continued effects and consistent benefit with repeat dosing.

While this trial was not powered for efficacy assessments, continued effects and consistent benefits with repeat dosing seen in the trial further support the potential of BXCL501 for use in the outpatient setting.

Effect Across Total Number of Agitation Episodes

Across 2,433 treated episodes in the trial, BXCL501 demonstrated a significant mean reduction in the modified Clinical Global Impression–Severity (mCGI-S) score from baseline compared to placebo at 2 hours (p<.05).

Effect Across Severity of Agitation Episodes

Patients experienced a complete resolution of agitation symptoms measured by mCGI-S at significantly higher rates with BXCL501 compared to placebo across severity of agitation episodes, with an overall resolution of 50% in the BXCL501 arm, compared to 33% on placebo (p <.0001).

Severe agitation episodes fully resolved (no agitation) in 61% of episodes in the BXCL501 arm, compared to 18% on placebo (p <.0001).

Moderate agitation episodes fully resolved in 43% of cases for patients in the BXCL501 arm, compared to 34% on placebo (p <.0005).

Mild agitation episodes fully resolved in 60% of cases for patients in the BXCL501, compared to 40% on placebo (p <.0001).

In sum, complete resolution of agitation was significantly higher with BXCL501 compared to placebo regardless of agitation episode severity.

Effect Across Number of Treated Agitation Episodes

The mean reduction in agitation symptoms experienced by patients following administration of BXCL501 was maintained throughout repeated dosing in the trial.

There was a mean reduction in mCGI-S score of 1.2 following the first 12 doses and a mean reduction of 1.4 following 13 or more doses of BXCL501.

This underscores the potential of BXCL501 to continue to provide benefit across repeated dosing.

Efficacy Across Duration of the Trial

The reduction in agitation symptoms experienced by patients following administration of BXCL501 was also maintained throughout the trial’s duration.

Evaluating the 12-week trial period on a time-based scale, agitation episodes treated with BXCL501 during weeks 1-4, 5-8 and 9-12 all had a mean reduction in mCGI-S score of 1.3.

This underscores the potential of BXCL501 to maintain a sustained benefit across longer treatment durations.

The standard method for measuring acute agitation associated with schizophrenia and bipolar disorder is the Positive and Negative Syndrome Scale – Excited Component (PEC) administered by a trained clinician, which was used in the Serenity I & II Pivotal Trials.

In order to evaluate BXCL501 for continued clinical effect with repeat dosing in the at-home setting using an exploratory efficacy measurement, the Company, in consultation with FDA, developed the modified CGI-S (mCGI-S) scale, which can be scored by patients and/or caregivers.

The study assessed the correlation between PEC and mCGI-S in this prospective, open label, in-clinic trial in 33 patients.

On October 14, 2025, we announced that results from the 33 patient open label trial demonstrated a strong correlation between the clinician assessments and the patient or caregiver (informant) rated outcomes, providing support for using mCGI-S to assess efficacy in the outpatient setting.

A statistically significant and strong correlation between the PEC and mCGI-S with a correlation of ρ=0.89;

p<0.0001 for patients and ρ=0.88;

p<0.0001 for informants was observed.

There were no serious adverse events reported and the safety profile remains consistent with the IGALMI ® label.

An sNDA was submitted on January 14, 2026 for the acute treatment of agitation in schizophrenia and bipolar disorders in the unsupervised (at-home) setting.

TRANQUILITY Program:

Acute Agitation Associated with Dementia due to Probable Alzheimer’s Disease (AAD)

Under our TRANQUILITY program, we are evaluating BXCL501 as a potential treatment option for the acute treatment of agitation associated with Alzheimer’s dementia (“AAD”).

On June 29, 2023, we announced positive topline results from TRANQUILITY II, a randomized, double-blind, placebo-controlled, parallel group trial that evaluated the safety and efficacy of BXCL501 for the acute treatment of Alzheimer’s-related agitation in adults 65 years and older with mild to moderate dementia in assisted living facilities (“ALFs”) and residential care settings who required minimal assistance with activities of daily living.

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Since that time, we have taken steps to further investigate and evaluate the conduct of the TRANQUILITY II trial at this clinical site.

Based on these steps to date, we believe that there have been no further instances of misconduct or fraud or other findings that adversely impact the data integrity or reliability of the eligibility, safety, and efficacy data obtained at the clinical trial site in question.

Based on these steps to date, we believe that

there have been no further instances of misconduct or fraud or other findings that adversely impact the data integrity or reliability of the eligibility, safety, and efficacy data obtained at the clinical trial site in question.

On March 3, 2025 we announced that the U.S.

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Also, although we announced in November 2023 that we were planning to conduct a Phase 3 trial in the at-home setting, with safety as the primary objective (TRANQUILITY At Home), given the priority to expand the database to generate additional efficacy and safety data in care facilities, and subject to funding, we are re-evaluating the timing for initiating TRANQUILITY At Home.

Alzheimer’s dementia.

On November 12, 2024, we announced that we had received FDA feedback on the proposed protocol .

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The initial clinical study in this program was a double-blind, placebo-controlled, multiple ascending dose (“MAD”) trial to evaluate the safety and tolerability of daily doses of BXCL501 in healthy volunteers.

As part of the Reprioritization announced on August 14, 2023, we paused our plan to develop a Phase 2 human proof-of-concept trial design to investigate BXCL501 as a potential adjunctive treatment and its potential accelerant effect in combination with first-line selective serotonin reuptake inhibitors or serotonin-norepinephrine reuptake inhibitors.

As part of the Clinical Reprioritization we paused our plan to develop a Phase 2 human proof-of-concept trial design to investigate BXCL501 as a potential adjunctive treatment and its potential accelerant effect in combination with first-line selective serotonin reuptake inhibitors or serotonin-norepinephrine reuptake inhibitors.

Pediatric Study

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Similar to our registration trials in schizophrenia and bipolar disorder (SERENITY I and II), the primary endpoint is the change from baseline PEC total score at two hours.

portion of this program remains active following the Reprioritization.

portion of this program remains active following the Clinical Reprioritization.

In October 2024, we submitted a request to the FDA for an extension and plan to submit an updated trial protocol to complete enrollment requirements for pediatric patients with schizophrenia or schizoaffective disorder.

The FDA granted a 3-year extension to complete the pediatric study.

To support pediatrics in the at-home setting, FDA has requested an at-home/ outpatient study in pediatric patients following the inpatient study.

The design of this study will be discussed and agreed with FDA prior to initiating it.

IGALMI ® Post-Marketing Requirement Study

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BXCL501 Pipeline Opportunities for Franchise Expansion

Given the differentiated design of BXCL501 and its selective mechanism of action, we believe BXCL501 has the potential for broad applicability across several indications where agitation is a symptom of a condition or underlying disease.

Based on its potential mechanism of action, we believe BXCL501 has the potential for broad applicability across several indications where agitation is a symptom of a condition or underlying disease.

Research published in the journal Frontiers in Pharmacology showed that BXCL501 caused a significant reduction in behaviors induced by stress in translatable behavioral models related to psychiatric disorders, providing further support for the drug’s mechanism of action and potential suitability for broadly addressing stress-related disorders in addition to agitation.

Government-Supported Investigator-Sponsored Trial Programs

The Company has been awarded key opportunities for the development of BXCL501 in post-traumatic stress disorder (“PTSD”), alcohol use disorder (“AUD”), and opioid use disorder (“OUD”).

These are being funded through Cooperative Agreements with the U.S.

Our research partners have been awarded grants for the development of BXCL501 in alcohol use disorder (“AUD”) with comorbid post-traumatic stress disorder (“PTSD”), opioid use disorder (“OUD”), and acute stress disorder (“ASD”).

The Company is providing, or has provided, regulatory and operational support and investigational product for these development opportunities, which are being funded through Cooperative Agreements with the U.S.

Department of Defense Congressionally Directed Medical Research Program and National Institute on Drug Abuse (“NIDA”).

Clinical and regulatory responsibilities are led by clinical researchers and regulatory staff at the Veterans Affairs Connecticut Healthcare System, Yale University Medical School, RTI International, Columbia University New York State Psychiatric Institute, and NIDA.

Opioid Use Disorder Program

As previously announced, NIDA awarded a grant to Columbia University to fund clinical testing of BXCL501 as a potential treatment for opioid withdrawal in patients diagnosed with OUD.

As the Company previously announced, NIDA awarded a grant to Columbia University to fund clinical testing of BXCL501 as a potential treatment for mitigation of opioid withdrawal symptoms in patients diagnosed with OUD.

The original 160-patient, three-site, four-arm study is a randomized, double-blind, double-dummy inpatient study comparing BXCL501 (180 mcg and 240 mcg BID), lofexidine (as a positive control), and placebo.

The study’s goal is to evaluate the safety and efficacy of BXCL501 relative to lofexidine and placebo in subjects with OUD.

A majority of OUD patients participating in the study are anticipated to be exposed to fentanyl adulterated or associated with xylazine .

To date, a ll three initial sites have recruited, enrolled, and dosed patients diagnosed with OUD who are physically dependent on opioids, including prescription opioids.

The Company is supplying BXCL501 for the conduct of this study, which is sponsored by Columbia University .

We expect that the results from current study will be used to select a recommended dose of BXCL501 to compare to placebo in a later outpatient Phase 3 study sponsored by NIDA.

On November 6, 2023, we announced that NIDA requested Columbia University, the trial coordinator, to add a fourth site to expedite trial completion.

The patient screening and enrollment process for the fourth site commenced in March 2024, a potential mid-study readout anticipated in the first half of 2025.

Subject to favorable results and available funding, we plan to seek FDA feedback on potential registrational paths.

The study’s goal was to evaluate the safety and efficacy of BXCL501 relative to lofexidine and placebo in subjects with OUD.

A majority of OUD patients participating in the study were anticipated to be exposed to fentanyl adulterated or associated with xylazine.

To date, four different sites have recruited, enrolled, and dosed patients diagnosed with OUD who are physically dependent on opioids, including prescription opioids.

The Company supplied BXCL501 for the study, which was sponsored by Columbia University.

The study was subsequently stopped at 80 patients, or approximately one-half the original total.

On March 5, 2026, the Company announced positive topline results from the Columbia Phase 2 investigator-sponsored trial evaluating BXCL501 for the treatment of opioid withdrawal symptoms in adults with opioid use disorder undergoing a methadone taper.

In the study, BXCL501 240 µg BID reduced opioid withdrawal symptoms compared to placebo during a seven-day methadone taper, as measured by the Short Opiate Withdrawal Scale-Gossop (SOWS-Gossop).

After receiving BXCL501 240 µg, patients experienced a greater than 30% reduction in SOWS-Gossop scores, with peak symptom improvement observed on days 3 and 4.

The reduction in withdrawal symptoms with BXCL501 numerically exceeded that observed with lofexidine 0.54 mg administered four times daily.

BXCL501 demonstrated a favorable tolerability profile, with rates of key adverse events (including dizziness, orthostatic hypotension, bradycardia and insomnia) comparable to or lower than those reported for lofexidine in the Lucemyra ® (lofexidine) FDA label.

This study was planned as a 4-arm trial:

BXCL501 180 µg BID or 240 µg BID, placebo, and lofexidine 0.54 mg QID as a positive control.

It enrolled participants who were predominantly exposed to fentanyl and included a high proportion of participants exposed to fentanyl adulterated or associated with xylazine (FAAX), which has been designated as an emerging threat by the White House Office of National Drug Control Policy.

Alcohol Use Disorder with Comorbid Post-traumatic Stress Disorder Program

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The Company provided BXCL501 for the inpatient Alcohol Interaction Study, which has been completed.

We understand Yale is currently seeking approval from its Institutional Review Board (“IRB”) and allowance from the FDA to proceed with a trial

evaluating the effects of up to 80 mcg BID of BXCL501 per day for 28 days on alcohol consumption, PTSD symptoms, cognitive function, memory, sleep, and mood in patients diagnosed with mild, moderate, or severe AUD and who meet Criterion A for comorbid PTSD.

The new outpatient study has received funding approval from the Pharmacotherapies for Alcohol and Substance Use Disorders Alliance (funded through a Cooperative Agreement between the U.S.

Yale has received approval from the Institutional Review Board (“IRB”) and allowance from the FDA to proceed with a trial to evaluate the effects of up to 80 mcg BID of BXCL501 per day for 28 days on alcohol consumption, PTSD symptoms, cognitive function, memory, sleep, and mood in patients diagnosed with mild, moderate, or severe AUD and who meet Criterion A for comorbid PTSD.

The outpatient study has received funding approval from the Pharmacotherapies for Alcohol and Substance Use Disorders Alliance (funded through a Cooperative Agreement between the U.S.

Department of Defense Congressionally Directed Medical Research Program and RTI International).

Patient screening and enrollment began in the fourth quarter of 2024.

We believe the results from this study may be used to inform a Phase 3 study intended to commence with support by the alliance.

Patient screening and enrollment has begun, with the first patient expected to be dosed in the first half of 2026.

results may be used to inform a Phase 3 study in patients diagnosed with PTSD intended to commence with support by the Department of Defense Congressionally Directed Medical Research Program.

Acute Stress Disorder (ASD) Program

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The double-blind, placebo-controlled trial is expected to enroll 100 patients experiencing ASD resulting from motor vehicle collisions, beginning in the first half of 2025.

Patient screening and enrollment has begun, with the first patient expected to be dosed in the first half of 2026.

We intend to supply BXCL501 for the trial.

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In previously published third-party clinical trial data, daily administration of the API of BXCL502 demonstrated improvement in behaviors using a well-established, clinically validated symptom scale.

Formulation and further clinical development planning for BXCL502 was paused as part of the Reprioritization.

Formulation and further clinical development planning for BXCL502 was paused as part of the Clinical Reprioritization.

Other Product Candidates Leveraging the AI Platform

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For example, our pipeline concepts BXCL503 and BXCL504 putatively have the potential to address apathy and aggression in dementia, respectively.

These programs were also paused as part of the Reprioritization.

These programs were also paused as part of the Clinical Reprioritization.

Neuroscience Competition

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Mergers and acquisitions in the pharmaceutical, biotechnology, and diagnostic industries may result in even more resources being concentrated among a smaller number of our competitors.

These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and in establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies

complementary to or necessary for our programs.

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

The key competitive factors affecting the success of our product candidates, if approved, are likely to be their efficacy, safety, convenience, price, the effectiveness of companion diagnostics in guiding the use of related therapeutics, if any, the level of generic competition, and the availability of reimbursement from government and other third-party payors.

therapeutics, if any, the level of generic competition, and the availability of reimbursement from government and other third-party payors.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize medicines that are safer, more effective, more convenient, less expensive, or have fewer or less severe side effects than any medicines we may develop.

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The typical antipsychotic Adasuve ® (loxapine) from Alexza is delivered via inhalation.

There are currently no treatments approved for treatment of agitation associated with schizophrenia or bipolar disease in an unsupervised (home) environment.

Neuroscience Manufacturing

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and other jurisdictions related to our proprietary technology, inventions, improvements, and product candidates.

We also rely on trademarks, trade secrets,

and know-how relating to our proprietary technologies and product candidates, continuing innovation, and in-licensing technology and products.

We also rely on trademarks, trade secrets, and know-how relating to our proprietary technologies and product candidates, continuing innovation, and in-licensing technology and products.

This reliance is expected to develop, maintain, and strengthen our proprietary position for novel therapeutics and novel formulations of existing therapeutics across multiple therapeutic areas.

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We have multiple patent families filed to protect our Neuroscience program, including BXCL501.

As of February 20, 2025, our neuroscience patent portfolio included five Patent Cooperation Treaty (“PCT”) applications not yet in national phase, 13 U.S.

As of March 1, 2026, our neuroscience patent portfolio included one Patent Cooperation Treaty (“PCT”) application not yet in the national phase, 12 U.S.

utility applications, 17 issued U.S.

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utility applications, 26 allowed or granted non-U.S.

patents (including four in Japan), one pending U.S.

design patent application, and 39 allowed or registered design patents (including two in Japan).

Thirteen U.S.

utility patents, directed to our proprietary sublingual film formulation of Dex and methods of treating agitation, are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (commonly known as the “Orange Book”) for IGALMI ® with expiration dates between 2037 and 2043.

patents (including five in Japan), one pending U.S.

design patent application, and 2 registered design patents in Japan.

Fourteen U.S.

utility patents, directed to our proprietary sublingual film formulation of dexmedetomidine and methods of treating agitation, are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (commonly known as the “Orange Book”) for IGALMI ® with expiration dates between 2037 and 2043.

In the formulation family, we have granted or allowed patents in China, Europe, Eurasia, Japan, Mexico, and the U.S., and pending applications in the U.S., China, and other major markets.

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We have one granted European patent and applications pending in the U.S.

and Japan directed to methods of treating insomnia using sublingual Dex.

and Japan directed to methods of treating insomnia using sublingual dexmedetomidine.

We expect that patents issued from these applications, will expire no earlier than 2035.

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We expect that patents issued from these applications, will expire between 2039 and 2043.

We also have four PCT applications directed to treating mania, depression, stress and agitation.

If patents are issued from those cases, we expect them to expire in 2043 or 2044.

In August 2024, the Company received a Notice of Allowance from the U.S.

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The patent positions of companies such as ours are generally uncertain and involve complex legal and factual questions.

No consistent policy regarding the scope of claims allowable in patents in the field of method of use patents or reformulation patents has emerged in the U.S.

No consistent policy regarding the scope of claims allowable in patents in the field of method of use patents or

reformulation patents has emerged in the U.S.

patent laws and their interpretation outside of the U.S.

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On April 19, 2022, we announced the formation of a wholly owned subsidiary, OnkosXcel to develop potentially transformative medicines in oncology.

OnkosXcel uses proprietary AI capabilities to drive the capital-efficient development of innovative anti-cancer therapeutics.

On March 14, 2023, we announced that OnkosXcel had confidentially submitted a draft registration statement on Form S-1 with the SEC relating to the proposed initial public offering of its common stock following its conversion into a corporation.

The Company is continuing to evaluate strategic options for OnkosXcel.

With the Company’s Reprioritization announcement on August 14, 2023, further work on the immuno-oncology programs described below has generally been paused, except as noted below.

Our approach to drug discovery leverages the application and methodology of our proprietary AI-based research and development platform, complemented by EvolverAI, utilized in the successful development of IGALMI ® with the aim of efficiently identifying and developing immuno-oncology product candidates.

We believe that BXCL701 reflects the potential of this discovery approach in immuno-oncology.

BXCL701 is an investigational, oral innate immune activator which demonstrated a 25% composite response rate in a Phase 2a clinical trial to treat patients with small cell neuroendocrine carcinoma (“SCNC”) phenotype metastatic castration-resistant prostate cancer (“mCRPC”).

On February 12, 2024, the Company announced that the FDA has designated as a Fast Track development program the investigation of BXCL701 in combination with a checkpoint inhibitor for the treatment of patients with metastatic SCNC with progression on chemotherapy and no evidence of microsatellite instability.

We have finalized a potential

registrational trial design in mCRPC patients with SCNC phenotype, however in light of our Clinical Prioritization, we have not met with the FDA to discuss this, nor plan at the current time to initiate this trial.

mCRPC is often characterized as a “cold” tumor, which is a tumor with an immunosuppressive tumor microenvironment (“TME”) and poor immune cell infiltration.

Currently approved checkpoint inhibitors (“CPIs”) that target programmed cell death 1 (“PD-1”) or cytotoxic T-lymphocyte-associated protein 4 (“CTLA-4") have failed to demonstrate meaningful single-agent activity against such difficult-to-treat tumor types, including mCRPC.

BXCL701 is designed to promote an immune-induced inflammatory response in the TME primarily via inhibition of dipeptidyl peptidases (“DPP”) 8 and 9, which we believe can provide enhanced CPIs therapeutic utility.

We believe BXCL701 can potentially provide significant benefits for the approximately 20% of the estimated 299,010 men who will be diagnosed with prostate cancer in the U.S.

in 2024 and are expected to progress to the more aggressive mCRPC form of the disease, including approximately 20%, or 11,960, of those patients who will develop the SCNC phenotype, for which there are currently limited treatment options.

Immune checkpoints represent a myriad of inhibitory pathways that act to regulate the duration and intensity of an antigen-induced immune response and factor prominently in mediating immune tolerance.

They function as critical gatekeepers that prevent the indiscriminate attack of normal host cells by components of the immune system.

Certain cancers co-opt these pathways and overexpress immune checkpoint molecules to camouflage themselves to avoid detection and destruction.

CPIs, designed to harness the intrinsic power resident in the immune system, work by disabling the suppressive function of immune checkpoints, allowing the immune system to bypass such cancers’ shield of immune tolerance.

CPIs are expected to generate sales of more than $50 billion worldwide by 2025, up from sales of approximately $29 billion in 2020.

While CPIs have proven to be a significant advancement in cancer therapy, those currently approved by the FDA do not produce meaningful results in a majority of patients, as the clinical benefit is generally viewed to be limited to between 13% and 30% of cancer patients, and the duration of response is relatively short.

We believe the limited efficacy of approved CPIs results primarily from their intervention at later stages of the immune response.

As a result, other targets and pathways can be exploited by the tumor to create a TME that can evade the enhanced immunological response enabled by approved CPIs.

While numerous agents designed to target the earlier stages of an immune response are in development for use in combination with CPIs, their activity is restricted to a single component of the immune response.

In contrast, we have developed BXCL701 to simultaneously address multiple components of the immune response, including:

● Cancer antigen presentation by dendritic cells :

stimulation of dendritic cell trafficking to tumor draining lymph nodes.

● Priming and activation of T cells :

acceleration of tumor-induced priming of T cells and the formation of potent cytotoxic T lymphocytes (“CTLs”).

● Infiltration of immune cells into the tumor :

stimulation of release of chemokines that attract effector T cells but block regulatory T cells, and also induce NK cell and neutrophil migration.

● Killing of tumor cells :

induction of formation of CTLs and NK cells expressing tumor-killing perforins and granzymes, as well as the formation of memory T cells that can selectively kill returning tumor cells.

Accordingly, we believe BXCL701 may have utility in stimulating increased activation, proliferation, and infiltration of tumor cells by immune effector cells, enabling its potential application in combination with currently approved CPIs, across a range of solid tumors and hematological malignancies, to potentially:

● Convert immunological cold tumors into ones sensitive to CPIs;

● Enhance hot tumors’ response rate and depth of response to CPIs;

● Restore CPI sensitivity to tumors that were previously responsive.

Central to our drug discovery initiatives are proprietary, AI-driven platform technologies we employ to identify novel therapeutic uses for approved therapeutics and candidates in clinical evaluation.

The first and most advanced of

our AI-driven discovery programs is our innate immune modulation program, which supported the pursuit of BXCL701 as a development candidate.

We believe the application of this program provides us actionable insights into the inflammasome, a component of the innate immune system responsible for activation of the inflammatory response.

OnkosXcel used proprietary AI capabilities to drive the capital-efficient development of innovative anti-cancer therapeutics.

With the Company’s Clinical Reprioritization announcement on August 14, 2023, further work on the immuno-oncology programs was paused, except as noted below.

BXCL701, an investigational, oral innate immune activator, demonstrated a 25% composite response rate in a Phase 2a clinical trial to treat patients with small cell neuroendocrine carcinoma (“SCNC”) phenotype metastatic castration-resistant prostate cancer (“mCRPC”).

On February 12, 2024, the Company received Fast Track development designation from the FDA for the investigation of BXCL701 in combination with a checkpoint inhibitor for the treatment of patients with metastatic SCNC with progression on chemotherapy and no evidence of microsatellite instability.

A potential registrational trial design in mCRPC patients with SCNC phenotype was finalized, however in light of our Clinical Reprioritization, we have not met with the FDA to discuss this, nor plan to initiate this trial at the current time.

Our Immuno-Oncology Programs

Below is a summary of the status of our immuno-oncology clinical development programs as of the date of this Annual Report on Form 10-K.

We believe our product candidates, if successfully developed and approved, have the potential to become compelling treatment options for their respective indications.

With our Reprioritization announced on August 14, 2023, further work on our immuno-oncology program has been paused, other than as noted below.

Immuno-Oncology Clinical Trials

Leveraging the insights enabled by the application and methodology of our proprietary AI-based platform complemented by EvolverAI, which was used to identify novel therapeutic uses for our approved therapeutics and product candidates in clinical evaluation, and our industry expertise, we are pursuing two proprietary discovery programs to advance our goal of developing anti-cancer therapeutics.

The first program, which encompasses BXCL701 across a range of indications, is based on the application of innate immune modulation technology.

This program has been constructed to embrace key distinguishing characteristics of the innate immune system and we believe it is supported by our development efforts.

This approach has driven the development of BXCL701, which we are currently evaluating in a Phase 1b/2a clinical proof-of-concept trial as a potential treatment for mCRPC with either SCNC or adenocarcinoma phenotype.

Fundamental to the innate immune modulation program is BXCL701’s potential to:

● Convert cold tumors into ones sensitive to CPIs;

● Enhance hot tumors’ response rate and depth of response to CPIs;

● Restore CPI sensitivity to tumors which had previously been responsive.

BXCL701 as a Potential Treatment for mCRPC

Prostate cancer is the most common malignancy and the second-leading cause of cancer-related deaths in men in the U.S.

According to the American Cancer Society, approximately 299,010 men will be diagnosed with, and 35,250 men will die of, prostate cancer in 2024.

The majority of these cases are classified as adenocarcinomas and involve low risk, localized or regional disease for which the five-year survival rate ranges from 60% to 99%.

However, an estimated 20%

of these newly diagnosed cases will progress to the more aggressive metastatic disease.

The five-year survival rate for men with metastatic prostate cancer drops significantly, to approximately 30%.

Approximately 20% of patients with mCRPC will develop the SCNC phenotype, which is characterized by poor prognosis and low survival rate with a five-year life expectancy of 14%.

Prostate function requires the presence of various androgens, such as testosterone.

Early cancerous prostate cells typically also require androgens to proliferate.

Accordingly, aggressive forms of prostate cancer can initially be treated using androgen deprivation therapy (“ADT”).

While ADT offers temporary therapeutic benefit, in almost all patients the treatment eventually loses efficacy, referred to as “castration resistance.” Cases of castration-resistant prostate cancer (“CRPC”) are generally treated with a second-generation androgen receptor (“AR”) inhibitor, such as XTANDI â (enzalutamide), or an androgen synthesis inhibitor, such as ZYTIGA â (abiraterone), which targets the enzyme CYP17 to block the production of testosterone.

These therapeutics have widely become the standard of care, though only ZYTIGA has been approved to treat mCRPC, as well as metastatic high-risk castration-sensitive prostate cancer.

XTANDI has been approved to treat CRPC and metastatic castration-sensitive prostate cancer.

Virtually all patients who initially respond to ZYTIGA and XTANDI are expected to progress to even more aggressive forms of prostate cancer requiring further treatment.

Patients whose disease has progressed after treatment with these second-generation targeted endocrine therapies are administered a docetaxel containing drug regimen that provides a survival benefit of only 10 months.

The poly-ADP ribose polymerase (“PARP”) inhibitors LYNPARZA â (olaparib) and RUBRACA â (rucaparib) are approved for the treatment of mCRPC in patients whose disease has progressed after receiving XTANDI or ZYTIGA, but their approval is limited to instances of mCRPC linked to a BRCA gene mutation.

As such, an unmet medical need remains for patients with mCRPC who are not eligible for PARP inhibitor treatment after treatment with the targeted endocrine therapy and docetaxel.

In addition, a number of men, both newly diagnosed patients and men whose disease has progressed after second-generation targeted endocrine therapy, will develop an aggressive tumor that typically expresses very little AR and accordingly does not respond to therapeutics targeting the AR signaling pathway.

Prostate cancer with this phenotype is referred to as SCNC, for which there is currently no effective treatment.

The incidence of SCNC is increasing with the widespread use of AR inhibitor therapy.

Treatment protocols for patients with SCNC typically involve cytotoxic chemotherapies despite their short duration of response and considerable toxicities.

These patients represent an additional unmet medical need among men with prostate cancer.

We believe BXCL701 may prove efficacious in addressing the unmet needs of both adenocarcinoma and SCNC prostate cancer phenotypes.

mCRPC is often characterized as a cold tumor, or a tumor with an immunosuppressive TME and poor immune cell infiltration.

Currently approved CPIs, which target PD-1 and CTLA-4, have not demonstrated significant single-agent therapeutic activity.

For instance, a Phase 2 investigator sponsored trial (“IST”) to assess the efficacy of the PD-L1 inhibitor avelumab, marketed by EMD Serono and Pfizer as BAVENCIO â , to treat mCRPC with SCNC phenotype, as well as aggressive variant prostate cancer with adenocarcinoma histology, generated an ORR of 6.7% (representing 1 of 15 patients who was known to be microsatellite instability-high, an established marker of response to CPIs).

We believe the limited efficacy of CPIs results primarily from their intervention at later stages of the immune response.

As a result, other targets and pathways can be exploited by the tumor to create a TME that can evade the enhanced immunological response enabled by approved CPIs.

BXCL701 is designed to act on multiple components of immune system functioning, including:

● Cancer antigen presentation by dendritic cells :

stimulation of dendritic cell trafficking to tumor draining lymph nodes.

● Priming and activation of T cells :

acceleration of tumor-induced priming of T cells and the formation of potent CTLs.

● Infiltration of immune cells into the tumor :

stimulation of release of chemokines that attract effector T cells but block regulatory T cells and also induce NK cell and neutrophil migration.

● Killing of tumor cells :

induction of formation of CTLs and NK cells expressing tumor-killing perforins and granzymes as well as the formation of memory T cells that can selectively kill returning tumor cells.

We believe BXCL701 may have utility in stimulating increased activation, proliferation, and infiltration of tumor cells by immune effector cells, enabling its potential use in combination with currently approved CPIs to treat cold tumors, such as mCRPC.

We elected to pursue mCRPC as an indication for BXCL701 due to its enrichment for DPP mutations, which are especially prevalent in tumors with SCNC phenotype.

BXCL701 has been evaluated in a Phase 1b/2a clinical proof-of-concept trial that we sponsored to investigate its potential efficacy when used in combination with pembrolizumab.

Enrollment in this trial is complete, and the data are described below.

We received initial comments from the FDA on our proposed clinical development plan and received feedback regarding dose-optimization for use in future studies.

However, the start of any such additional trial is paused following the Company’s Reprioritization.

The Phase 1b portion of our Phase 1b/2 clinical trial was a dose escalation safety lead-in which employed a standard 3 x 3 trial design to determine the recommended Phase 2 dose (“RP2D”).

During each 21-day treatment cycle, 200 mg of pembrolizumab were administered intravenously on day one, with BXCL701 taken twice daily on days one through 14, for a minimum of two cycles.

The results of this Phase 1b trial, which were presented at The Society for Immunotherapy of Cancer’s 35th Anniversary Annual Meeting, allowed us to identify 0.3 mg, taken twice daily, as the RP2D.

The Phase 2a portion of the trial was segregated into two 28-patient trial cohorts, one cohort consisting of mCRPC patients with SCNC phenotype and a second cohort consisting of mCRPC patients with adenocarcinoma phenotype.

Initially, we focused on mCRPC with SCNC phenotype as the primary patient population for BXCL701, since DPP9 is amplified in approximately 17% of treatment-emergent mCRPC with SCNC phenotype, compared to 5% or less in the broader prostate cancer population.

However, we also observed responses in mCRPC patients with adenocarcinoma phenotype who were microsatellite stable in the Phase 1b portion of the trial.

On this basis, we widened our Phase 2a trial to include relapsed mCRPC patients with either SCNC or adenocarcinoma phenotype.

Both cohorts employed a Simon two-stage trial design of 15 trial participants followed by 13 additional patients.

The primary endpoint of the Phase 2a portion of this trial was a composite response rate, determined as either a RECIST 1.1 response (defined as a

reduction in RECIST score of 30% or more), and/or a reduction in prostate specific antigen (“PSA”) level of 50% or more, and/or a conversion in circulating tumor cells (“CTCs”) from 5 or more CTCs/7.5 milliliter (“ml”) to less than 5 CTCs/7.5 ml.

Secondary endpoints included duration of response, progression-free survival, overall survival, changes in circulating cytokines, and certain disease-specific biomarkers.

We believe the results observed in the Phase 2a trial of BXCL701 administered in combination with pembrolizumab support further development.

We were particularly encouraged by the results observed in the cohort consisting of mCRPC patients with SCNC phenotype.

Updated Phase 2a results for the SCNC cohort were presented at the 30 th Annual Prostate Cancer Foundation Scientific Retreat (PCF 2023).

BXCL701 in combination with pembrolizumab demonstrated a 25% (seven out of 28 evaluable patients) composite response rate in mCRPC patients with SCNC phenotype, for whom there is no standard of care.

As of a data cutoff of September 6, 2023, five of these responders were RECIST 1.1 responders (four confirmed responses and one unconfirmed response) with decreases in tumor size ranging from -45% to -67% and a median duration of response of 7.6 months.

AEs consistent with cytokine activation, including fever, nausea, chills, fatigue, headache, and dizziness were observed during the trial and were generally mild to moderate.

SAEs experienced by six trial participants - one patient hospitalized with Grade 1 orthostatic hypotension, one patient hospitalized with Grade 3 hypotension and acute kidney injury (“AKI”), which resolved, one patient with Grade 3 hypothyroidism which resolved, one patient with Grade 3 colitis, one patient with Grade 3 generalized oedema, and one patient hospitalized with Grade 4/5 tumor lysis syndrome/AKI, which resulted in fatality after the patient voluntarily discontinued dialysis - were reported as related or possibly related to BXCL701 or pembrolizumab, though there was no evidence that BXCL701 potentiated immune-related AEs associated with CPIs.

The table below summarizes treatment-related AEs observed in the SCNC cohort as of December 19, 2022.

On October 10, 2023, we reported positive overall survival (OS) results from the Phase 2a portion of the trial in SCNC patients.

BXCL701 in combination with pembrolizumab demonstrated a compelling median OS and 12-month survival rate.

As of a data cutoff of September 6, 2023, evaluable patients with SCNC (n = 28) showed a median OS of 13.6 months (95% CI 10.9–NR), and a 12-month survival rate of 56.5%.

On February 12, 2024 the Company announced that the FDA designated as a Fast Track development program the investigation of BXCL701 in combination with a checkpoint inhibitor for treatment of patients with metastatic SCNC with progression on chemotherapy and no evidence of microsatellite instability.

The Phase 2a trial has also been completed for the adenocarcinoma cohort.

Updated results for this trial cohort were also presented at PCF 2023.

BXCL701 in combination with pembrolizumab demonstrated a 21% (six out of 29 evaluable patients) composite response rate in mCRPC patients with adenocarcinoma phenotype, for whom there are limited treatment options.

As of a cutoff date of September 6, 2023, five of these composite responders were RECIST 1.1 responders (four confirmed responses and one unconfirmed response) with decreases in tumor size ranging from -30% to -99% and a median duration of response to 19 months.

As of the cutoff date of December 19, 2022, the majority of AEs experienced by patients in the adenocarcinoma cohort were low grade.

AEs consistent with cytokine activation were observed, including fever, myalgia, nausea, chills, fatigue, dyspnea, headache and dizziness.

SAEs experienced by five patients (12%) were reported as possibly related to BXCL701 or pembrolizumab:

two reports of hypotension;

one report of dizziness;

one report of peripheral edema;

one report of pyrexia;

one report of Myasthenia Gravis;

and one report of Cytokine Release Syndrome.

Two patients (5%) discontinued therapy due to AEs.

There was no evidence that BXCL701 potentiated immune-related AEs related to CPIs.

The table below summarizes treatment-related AEs observed in the adenocarcinoma cohort.

On November 8, 2023, we reported positive OS results from the Phase 2a portion of the trial in patients with adenocarcinoma.

As of a data cutoff of September 6, 2023, among evaluable patients with adenocarcinoma (n = 29) BXCL701 in combination with pembrolizumab demonstrated a median OS of 15.5 months (95% CI 9.6–NR), and a 12-month survival rate of 59.3%.

BXCL701 as a Potential Treatment for Small Cell Lung Cancer (“SCLC”)

The American Cancer Society estimates that in 2024, about 35,187 cases of SCLC will be diagnosed in the U.S.

Approximately 60-70% of these patients present with extensive disease, and first-line therapy for a majority of these patients involves the combination of a CPI with platinum-based chemotherapy or etoposide.

We are encouraged by the therapeutic potential of BXCL701 for SCLC given the activity it has demonstrated in the ongoing SCNC clinical trial.

We are preparing the protocol for a Phase 1b/2 trial design to be a dose-escalation safety lead-in to establish a RP2D.

However, the start of any such trial is paused following the Reprioritization.

With our Clinical Reprioritization, further work on our immuno-oncology program has been paused, other than as noted below.

BXCL701 as a Potential Treatment for Other Cancers

In addition to its potential use in combination with CPIs to treat mCRPC, an immunologically cold tumor, we are developing BXCL701 as a therapeutic for pancreatic cancer, and other solid tumors with greater, or “non-cold,” immunological activity that are nonetheless regarded as difficult-to-treat, and hematological malignancies.

In addition to its potential use in combination with CPIs to treat mCRPC, an immunologically cold tumor, we have been developing BXCL701 as a therapeutic for pancreatic cancer, and other solid tumors with greater, or “non-cold,” immunological activity that are nonetheless regarded as difficult-to-treat, and hematological malignancies.

We believe the synergistic potential of BXCL701 and CPIs, when administered in combination, could increase cancer cell susceptibility to an enhanced immune response, potentially increasing the clinical benefit of CPIs, whose single-agent efficacy in treating these tumor types is generally viewed to be limited to between 13% and 30% of cancer patients and the duration of response to treatment is often short.

As such, we envision the potential therapeutic benefit of BXCL701 increasing the sensitivity of cold tumors to CPI therapy, enabling the potential treatment of a range of cancers including pancreatic cancer, breast cancer, colorectal cancer, and ovarian cancer, as well as enhancing the depth of response to CPIs in other cancers.

In addition, based on the preclinical observation that BXCL701 showed direct cytotoxic activity

against certain leukemic cells, we have initiated clinical development targeting relapsed or refractory acute myeloid leukemia (“AML”).

In addition, based on the preclinical observation that BXCL701 showed direct cytotoxic activity against certain leukemic cells, we have initiated clinical development targeting relapsed or refractory acute myeloid leukemia (“AML”).

Pancreatic Cancer

The American Cancer Society estimated that in 2024, approximately 66,440 cases of pancreatic cancer were expected to be diagnosed in the U.S.

We are supporting a Phase 2 investigator-sponsored trial (“IST”) sponsored by Georgetown Lombardi Comprehensive Cancer Center (“Georgetown Lombardi”), designed to evaluate the use of BXCL701 along with pembrolizumab to treat pancreatic cancer.

Few therapeutic options are available for patients with this disease, which has a five-year survival rate of less than 10%, among the lowest of all cancers.

Pancreatic cancer has among the highest levels of overexpression and amplification of DPPs.

Preclinical models demonstrated synergy between DPP inhibition with BXCL701 and anti-PD-1 antibody in the pancreatic cancer tumor microenvironment.

Based on these preclinical observations, Georgetown Lombardi has initiated a Phase 2 IST to assess the safety of BXCL701 when administered in combination with pembrolizumab (safety lead-in), as well as to estimate the 18-week progression-free survival rate (primary objective of the efficacy phase) in previously treated metastatic pancreatic ductal adenocarcinoma.

This trial started in the third quarter of 2023.

On February 6, 2024, we announced the completion of patient enrollment in the safety lead-in portion of the trial.

As part of the trial’s safety lead-in, the first six patients have been enrolled and will be observed for a six-week safety window period.

The trial is then expected to enroll approximately 39 patients in its efficacy phase in a Simon 2-stage single-arm, open-label design (19 patients in stage 1 and 20 patients in stage 2).

Patients will be monitored radiographically and by tumor markers for response assessment.

Tumor biopsies and blood samples will also be collected over the course of treatment to better understand the potential mechanism of action for the combination.

Based on these preclinical observations, Georgetown Lombardi Cancer Center initiated a Phase 2 IST to assess the safety of BXCL701 when administered in combination with pembrolizumab (safety lead-in), as well as to estimate the 18-week progression-free survival rate (primary objective of the efficacy phase) in previously treated metastatic pancreatic ductal adenocarcinoma.

The trial was expected to enroll approximately 39 patients in its efficacy phase in a Simon 2-stage single-arm, open-label design (19 patients in stage 1 and 20 patients in stage 2).

Patients were monitored radiographically and by tumor markers for response assessment.

Tumor biopsies and blood samples were collected over the course of treatment to better understand the potential mechanism of action for the combination.

The human proof of concept portion of the trial started in the first half of 2024.

On April 24, 2024, we announced that an abstract entitled “Phase II trial of BXCL701 and pembrolizumab in patients with metastatic pancreatic ductal adenocarcinoma (EXPEL-PANC):

Preliminary findings,” was selected for presentation at the poster session at the 2024 American Society of Clinical Oncology (ASCO) Annual Meeting that took place in Chicago, Illinois from May 31 to June 4, 2024.

Investigators reported that, as of the applicable cutoff date, one patient was progression-free at 18 weeks, three patients showed substantial reductions in serum CA19-9, a tumor marker that may correlate with increased T-cell infiltration, and one patient showed a best response of partial responses, out of six patients that had been treated with the combination.

Twenty-one patients were enrolled.

Four out of 18 evaluable patients (22%) were alive and progression-free at 18 weeks.

Three had partial responses (17%), and 4 had stable disease (22%), for a disease control rate of 39%.

One responder had MSI-H PDAC (Microsatellite Instability High Pancreatic Ductal Adenocarcinoma), while the other 2 had MSS PDAC (Microsatellite Stable Pancreatic Ductal Adenocarcinoma).

Median PFS (Progression Free Survival) was 2.3 months (95% CI 1.58 – 5.29), and median overall survival was not reached (NR, 95% CI 4.54 - NR).

No new safety signals were identified.

BXCL701 plus pembrolizumab in second-line advanced PDAC did not reach the preliminary efficacy endpoint to trigger the second stage.

However, there were encouraging signs:

this combination induced objective responses in 2 MSS pts, and the PFS exceeded 6 months in 3 pts (14%).

Ongoing correlative studies should help to examine the

characteristics of responders vs.

non-responders and elucidate predictive markers of efficacy and resistance to this novel immunotherapy combination.

Relapsed or Refractory AML

The American Cancer Society estimated that in 2024, approximately 20,800 new cases of AML were expected to be diagnosed in the U.S.

We are supporting a Phase 1b IST sponsored by the Dana-Farber Cancer Institute (“Dana-Farber”) designed to evaluate the use of BXCL701, along with the current standard of care to treat relapsed or refractory AML.

We believe that pyroptosis triggered by BXCL701 may provide potent single agent cytotoxicity directed towards AML.

We also believe that DPP9 copy number may provide an actionable biomarker, as high copy number has been observed to correlate with BXCL701 toxicity in human AML cell lines.

DPP8/9 inhibition has been shown to be cytotoxic to THP-1 cells, monocytic cancer cells cultured from a patient with AML, but not other cell lines, suggesting a specific vulnerability of AML to these inhibitors which we believe can be exploited for therapeutic benefit.

Based on these preclinical observations, Dana-Farber has initiated a Phase 1b trial to assess the safety of BXCL701 and to determine the maximum tolerated dose or the RP2D of BXCL701 as a single agent.

Based on these preclinical observations, Dana-Farber initiated a Phase 1b trial to assess the safety of BXCL701 and to determine the maximum tolerated dose (MTD) and RP2D of BXCL701 as a single agent administered on days 1-3, 8-10, 15-17 and 22-24 in a 4-week (28 days) cycle schedule.

This trial started in the first quarter of 2023.

Subject to successful completion of this Phase 1b trial, we anticipate that Dana-Farber will conduct further studies to determine BXCL701's objective response rate in AML in combination with the standard of care.

Other Potential Anti-cancer Programs

We collaborated with the University of Texas MD Anderson Cancer Center in a Phase 2a IST to evaluate the potential efficacy of BXCL701 administered in combination with pembrolizumab in patients with advanced solid cancer.

The design of this open label trial included two cohorts and incorporated a two-stage configuration, which allowed for an expansion of patient enrollment to a total of 17 patients in each cohort if a RECIST 1.1 complete response or partial response was observed in at least one of the initial nine patients.

The first cohort enrolled patients who previously had not received CPI therapy, with a second cohort consisting of patients that were either refractory to CPI therapy or had relapsed while on CPI therapy, meaning that no further response to CPI treatment is anticipated among patients in the second cohort.

Trial participants received 200 mg of pembrolizumab on day 1 of a 21-day cycle, with 0.2 mg of

BXCL701 administered twice-daily (“BID”) on days 1 through 7 during the first cycle, the dose increasing to 0.3 mg BID on Days 8 through 14 during the first and the subsequent cycles.

Evaluable trial participants were required to receive a minimum of two treatment cycles.

A preliminary assessment of BXCL701 dosed in combination with a CPI, as of completion of the first stage, noted responses in one patient in each of the CPI naïve and CPI refractory/relapsed cohorts, including a partial response in CPI-naïve, microsatellite stable endometrial carcinoma, PD-L1 negative (CPS <1) and a partial response in CPI-refractory uveal melanoma.

These preliminary results were presented at the 2021 American Society of Clinical Oncology annual meeting (ASCO 2021).

Patient enrollment in this trial was completed in the third quarter of 2022.

We believe BXCL701 may have potential application in breast cancer, as its use in combination with monoclonal antibody therapy generated encouraging in vivo data in a preclinical disease model where enhanced antibody-dependent cellular cytotoxicity was observed.

The FDA has granted BXCL701 orphan drug designation for the treatment of AML, stage IIb to IV melanoma, pancreatic cancer, and soft tissue sarcoma.

As we consider BXCL701’s therapeutic potential for additional indications that represent unmet medical needs, we intend to apply for additional orphan drug designations for BXCL701.

Biomarker Development Initiatives Intended to Complement BXCL701 Administration

We are also actively engaged in the identification and development of predictive biomarkers that we believe could be used in conjunction with BXCL701 to predict the likelihood of patient response to therapy across the range of targeted indications.

Based on preliminary data from AML patients, we believe DPP9 copy number could correlate to BXCL701 response rate, with a greater likelihood of BXCL701 cytotoxicity in patients with increased DPP9 copy number.

We are pursuing its use in our biomarker discovery activities as a potential companion diagnostic.

At the Society for Immunotherapy of Cancer’s 38 th Annual Meeting (SITC 2023), we presented data from the Phase 2a trial in SCNC patients, which indicated DPP9 overexpression is a potential response-predictive biomarker of BXCL701 and pembrolizumab combination treatment in mCRPC patients with SCNC phenotype.

A total of 8 patients were treated on days 1-3, 8-10, 15-17 and 22-24 in a 4-week (28 days) cycle schedule across three cohorts as shown below:

0.4 mg (BXCL701 0.2 mg BID);

0.6 mg (BXCL701 0.3 mg BID);

● Final Cohort:

0.8 mg (BXCL701 0.4 mg BID) daily

No DLTs were observed and the study was closed due to poor enrollment on 31 Aug 2025 with an incomplete final cohort.

Pharmacokinetic analysis is underway to determine PK parameters associated with single agent dosing in AML patients using this novel dosing regimen.

Immuno-Oncology Manufacturing

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We believe BXCL701 is the only innate immune system activator in clinical development specifically addressing the cold tumor problem in immuno-oncology.

We face substantial competition from multiple sources, including large and specialty pharmaceutical, biopharmaceutical and biotechnology companies, academic research institutions and governmental agencies, and public

and private research institutions.

Our competitors compete with us on the level of the technologies employed, or on the level of development of product candidates.

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We seek to protect and enhance proprietary technology, inventions, and improvements that are commercially important to the development of our business by seeking, maintaining, enforcing, and defending patent and other intellectual property rights, whether developed internally or licensed from third parties.

We will also seek to rely on regulatory protection afforded through

inclusion in expedited development and review, data exclusivity, market exclusivity, and patent term extensions where available.

As of February 20, 2025, we have multiple patent families filed to protect our immuno-oncology program, including our core patent family directed to methods of using BXCL701 with immune checkpoint inhibitors, which is granted in the U.S., Japan, Australia, Canada, Russia, China, India, Taiwan, South Africa, Mexico, New Zealand, Europe and United Arab Emirates.

We will also seek to rely on regulatory protection afforded through inclusion in expedited development and review, data exclusivity, market exclusivity, and patent term extensions where available.

As of March 1, 2026, we have multiple patent families filed to protect our immuno-oncology program, including our core patent family directed to methods of using BXCL701 with immune checkpoint inhibitors, which is granted in the U.S., Japan, Australia, Canada, Russia, China, India, Taiwan, South Africa, Mexico, New Zealand, Europe and United Arab Emirates.

Additional applications in this family are pending in major markets.

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Additional applications are directed to administering BXCL701 in combination with various other molecules, biomarkers, and dosing regimens.

We also have three PCT applications directed to novel formulations of BXCL701, various dosing regimens, methods of use, combination therapies, and to methods of treating small cell lung cancer.

We have zero pending PCT applications directed to novel formulations of BXCL701, various dosing regimens, methods of use, combination therapies, and to methods of treating small cell lung cancer.

We expect that any patents issuing from the PCT and provisional applications will expire no earlier than 2043 to 2044.

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Our Relationship with BioXcel LLC

As of March 21, 2025, BioXcel LLC holds an ownership interest of approximately 8.8% in the Company and our pipeline compounds were identified by applying our growing internal AI capabilities, along with BioXcel LLC’s EvolverAI, a proprietary pharmaceutical discovery and development engine, for drug re-innovation.

As of March 26, 2026, BioXcel LLC holds an ownership interest of approximately 1.8% in the Company and our pipeline compounds were identified by applying our internal AI capabilities, along with BioXcel LLC’s EvolverAI, a proprietary pharmaceutical discovery and development engine, for drug re-innovation.

We entered into the Amended and Restated Asset Contribution Agreement (the “Contribution Agreement”), pursuant to which BioXcel LLC, agreed to contribute BioXcel LLC’s rights, title and interest in BXCL501, BXCL701, BXCL502 and BXCL702, and all of the assets and liabilities associated in consideration for (i) 592,500 shares of our common stock, (ii) $1 million upon completion of an initial public offering, (iii) $500,000 upon the later of the 12-month anniversary of an initial public offering and the first dosing of a patient in the bridging bioavailability/bioequivalence study for the BXCL501 program, (iv) $500,000 upon the later of the 12 month anniversary of an initial public offering and the first dosing of a patient in the Phase 2 proof of concept open-label monotherapy or combination trial with Keytruda for the BXCL701 program and (v) a one-time payment of $5 million within 60 days after the achievement of $50 million in cumulative net sales of any product or combination of products resulting from the development and commercialization of any one of the contributed product candidates or a product derived therefrom.

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However, BioXcel LLC continues to perform certain administrative services under the terms of the expired contract.

payments did not exceed $10 million in the aggregate and were not to be payable prior to proof of concept in humans and (ii) commercialization milestone payments were to be based on reaching annual net sales levels, were to be limited to 3% of the applicable net sales level, and were not exceed $30 million in the aggregate.

The parties were obligated to negotiate the collaborative services agreement in good faith and to incorporate reasonable market-based terms, including consideration for BioXcel LLC reflecting a low, single-digit royalty on net sales and reasonable development and commercialization milestone payments, provided that (i) development milestone payments did not exceed $10 million in the aggregate and were not to be payable prior to proof of concept in humans and (ii) commercialization milestone payments were to be based on reaching annual net sales levels, were to be limited to 3% of the applicable net sales level, and were not exceed $30 million in the aggregate.

However, subsequent to December 31, 2024 no development activity has been carried out by BioXcel LLC and none is contemplated.

Service charges recorded under the Services Agreement were $1.3 million for each of the years ended December 31, 2024 and 2023.

Service charges recorded under the Services Agreement were $0.6 million and $1.3 million for the years ended December 31, 2025 and 2024.

Government Regulation

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The central focus of an IND submission is on the general investigational plan and the protocol(s) for clinical studies.

IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product;

The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product;

chemistry, manufacturing, and controls information;

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In some cases, the FDA may require, or companies may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product.

These so-called Phase 4 studies may be conducted after initial marketing approval and may be used to gain additional experience from the treatment of patients in the intended

therapeutic indication.

These so-called Phase 4 studies may be conducted after initial marketing approval and may be used to gain additional experience from the treatment of patients in the intended therapeutic indication.

In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA.

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An approval letter authorizes commercial marketing and sale of the product with specific prescribing information for specific indications.

A CRL usually describes the specific deficiencies in the NDA identified by the FDA

and may require additional clinical data, including additional clinical trials, or other significant and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing.

A CRL usually describes the specific deficiencies in the NDA identified by the FDA and may require additional clinical data, including additional clinical trials, or other significant and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing.

If a CRL is issued, the sponsor must resubmit the NDA or, address all of the deficiencies identified in the letter, or withdraw the application.

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For example, the FDA may approve the NDA with a Risk Evaluation and Mitigation Strategy (“REMS”) to ensure the benefits of the product outweigh its risks.

A REMS is a safety strategy to manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries, and other risk minimization tools.

risk minimization tools.

The FDA also may condition approval on, among other things, changes to proposed labeling or the development of adequate controls and specifications.

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Any application for a drug submitted to the FDA for approval, including a product candidate with a Fast Track designation and/or Breakthrough Therapy designation, may be eligible for other FDA review programs intended to expedite the FDA review and approval process, such as priority review.

An NDA is eligible for priority review if the product candidate is designed to treat a serious or life-threatening disease or condition, and if approved, would provide a

significant improvement in safety or effectiveness compared to available alternatives for such disease or condition.

An NDA is eligible for priority review if the product candidate is designed to treat a serious or life-threatening disease or condition, and if approved, would provide a significant improvement in safety or effectiveness compared to available alternatives for such disease or condition.

For new-molecular-entity NDAs, priority review designation means the FDA’s goal is to take action on the application within six months of the 60-day filing date, or with respect to non-new-molecular-entity NDAs, within six months of the NDA receipt date.

Additionally, depending on the design of the applicable clinical studies, product candidates studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated approval upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.

As a condition of accelerated approval, the FDA will generally require the sponsor to perform adequate and well-controlled confirmatory clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit, and may require that such confirmatory studies be underway prior to granting accelerated approval.

As a condition of accelerated approval,

the FDA will generally require the sponsor to perform adequate and well-controlled confirmatory clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit, and may require that such confirmatory studies be underway prior to granting accelerated approval.

Products receiving accelerated approval may be subject to expedited withdrawal procedures if the sponsor fails to conduct the required confirmatory studies or if such studies fail to verify the predicted clinical benefit.

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Post-approval Requirements

events, periodic reporting, product sampling and distribution, and advertising and promotion of the product.

Drug products manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse events, periodic reporting, product sampling and distribution, and advertising and promotion of the product.

After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval.

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ANDAs are termed "abbreviated" because they are generally not required to include preclinical (animal) and clinical (human) data to establish safety and efficacy.

Instead, generic applicants must scientifically demonstrate that their product is bioequivalent to, or performs in the same manner as, the innovator drug through in vitro, in vivo, or other testing.

Instead, generic applicants must scientifically demonstrate that their product is

bioequivalent to, or performs in the same manner as, the innovator drug through in vitro, in vivo, or other testing.

The generic version must deliver the same amount of active ingredients into a subject's bloodstream in the same amount of time as the innovator drug and can often be substituted by pharmacists under prescriptions written for the reference listed drug.

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However, an ANDA or 505(b)(2) NDA may be submitted after four years if it contains a certification of patent invalidity or non-infringement.

The Hatch-Waxman Act also provides three years of non-patent exclusivity to the holder of an NDA (including a 505(b)(2) NDA) for a

particular condition of approval, or change to a marketed product, such as a new formulation for a previously approved product, if one or more new clinical studies (other than bioavailability or bioequivalence studies) was essential to the approval of the application and was conducted or sponsored by the applicant.

The Hatch-Waxman Act also provides three years of non-patent exclusivity to the holder of an NDA (including a 505(b)(2) NDA) for a particular condition of approval, or change to a marketed product, such as a new formulation for a previously approved product, if one or more new clinical studies (other than bioavailability or bioequivalence studies) was essential to the approval of the application and was conducted or sponsored by the applicant.

This three-year exclusivity period protects against FDA approval of ANDAs and 505(b)(2) NDAs for the condition of the new drug's approval.

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In August 2014, the FDA issued final guidance clarifying the requirements that apply to approval of therapeutic products and in vitro companion diagnostics.

According to the guidance, if the FDA determines that a companion diagnostic device is essential to the safe and effective use of a novel therapeutic product or indication, the FDA generally will not approve the therapeutic product or new therapeutic product indication if the companion diagnostic device is not approved or cleared for that indication.

According to the guidance, if the FDA determines that a

companion diagnostic device is essential to the safe and effective use of a novel therapeutic product or indication, the FDA generally will not approve the therapeutic product or new therapeutic product indication if the companion diagnostic device is not approved or cleared for that indication.

Approval or clearance of the companion diagnostic device will ensure that the device has been adequately evaluated and has adequate performance characteristics in the intended population.

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PMA applications are subject to an application fee.

In addition, PMAs for certain devices must generally include the results from extensive

preclinical and adequate and well-controlled clinical trials to establish the safety and effectiveness of the device for each indication for which FDA approval is sought.

In addition, PMAs for certain devices must generally include the results from extensive preclinical and adequate and well-controlled clinical trials to establish the safety and effectiveness of the device for each indication for which FDA approval is sought.

In particular, for a diagnostic, a PMA application typically requires data regarding analytical and clinical validation studies.

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A not approvable letter will outline the deficiencies in the application and, where practical, will identify what is necessary to make the PMA approvable.

The FDA may also determine that additional clinical trials are necessary, in which case the PMA may be delayed for several months or years while the trials are conducted and then the data submitted in an amendment to the PMA.

The FDA may also determine that additional clinical trials are necessary, in which case the PMA may be delayed for several

months or years while the trials are conducted and then the data submitted in an amendment to the PMA.

If the FDA concludes that the applicable criteria have been met, the FDA will issue a PMA for the approved indications, which can be more limited than those originally sought by the applicant.

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Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances.

Non-clinical (pharmaco-toxicological) studies must be conducted in compliance with the principles of good laboratory practice (“GLP”) as set forth in EU Directive 2004/10/EC (unless otherwise justified for certain particular

medicinal products, e.g., radio-pharmaceutical precursors for radio-labeling purposes).

In particular, non-clinical studies, both in vitro and in vivo, must be planned, performed, monitored, recorded, reported and archived in accordance with the GLP principles, which define a set of rules and criteria for a quality system for the organizational process and the conditions for non-clinical studies.

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The regulatory landscape related to clinical trials in the EU has been subject to recent changes.

The EU Clinical Trials Regulation (“CTR”) which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022.

The EU Clinical Trials Regulation (“CTR”) which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became

applicable on January 31, 2022.

Unlike directives, the CTR is directly applicable in all EU member states without the need for member states to further implement it into national law.

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are issued by the European Commission through the centralized procedure based on the opinion of the EMA’s CHMP and are valid throughout the EU.

The centralized procedure is compulsory for

certain types of medicinal products such as (i) medicinal products derived from biotechnology processes, such as genetic engineering, (ii) medicinal products containing a new active substance indicated for the treatment of certain diseases, such as HIV or AIDS, cancer, diabetes, neurodegenerative diseases, autoimmune and other immune dysfunctions and viral diseases, (iii) designated orphan medicinal products, and (iv) advanced therapy medicinal products (“ATMPs”) such as gene therapy, somatic cell therapy or tissue-engineered medicines.

The centralized procedure is compulsory for certain types of medicinal products such as (i) medicinal products derived from biotechnology processes, such as genetic engineering, (ii) medicinal products containing a new active substance indicated for the treatment of certain diseases, such as HIV or AIDS, cancer, diabetes, neurodegenerative diseases, autoimmune and other immune dysfunctions and viral diseases, (iii) designated orphan medicinal products, and (iv) advanced therapy medicinal products (“ATMPs”) such as gene therapy, somatic cell therapy or tissue-engineered medicines.

The centralized procedure is optional for product candidates containing a new active substance not yet authorized in the EU, or for product candidates that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU.

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If the product has not received a national MA in any member state at the time of application, it can be approved simultaneously in various member states through the decentralized procedure.

Under the decentralized procedure, an identical dossier is submitted to the competent authorities of each of the member states in which the MA is sought, one of which is selected by the applicant as the reference member state.

Under the decentralized procedure, an identical

dossier is submitted to the competent authorities of each of the member states in which the MA is sought, one of which is selected by the applicant as the reference member state.

Under the centralized procedure, the maximum timeframe for the evaluation of a MAA by the EMA is 210 days.

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Upon grant of a MA, orphan medicinal products are entitled to 10 years of market exclusivity for the approved therapeutic indication.

During the 10-year market exclusivity period, the competent authorities cannot accept a MAA, or grant a MA, or accept an application to extend a MA, for the same indication, in respect of a similar medicinal product.

During the 10-year market exclusivity period, the competent authorities cannot accept a MAA, or grant a

MA, or accept an application to extend a MA, for the same indication, in respect of a similar medicinal product.

The period of market exclusivity is extended by two years for orphan medicinal products that have also complied with an agreed pediatric investigation plan (“PIP”).

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The process for determining whether a payor will provide coverage for a drug product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the drug product.

Third-party payors may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the

FDA-approved drugs for a particular indication.

Third-party payors may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the FDA-approved drugs for a particular indication.

Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.

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Coverage policies and third-party reimbursement rates may change at any time.

Recently, the U.S.

government has increased its focus on drug pricing in the US, including through “most favored nation” pricing initiatives.

Even if favorable coverage and reimbursement status is secured for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

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More recently, in March 2021, Congress enacted the American Rescue Plan Act of 2021, which, among other things, eliminated the statutory Medicaid drug rebate cap, effective January 1, 2024.

The rebate was previously capped at a drugs average manufacturer price.

The rebate was previously capped at 100% of a drugs average manufacturer price.

Most significantly, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law.

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HHS has issued and will continue to issue guidance implementing the IRA, although the Medicare drug price negotiation program is currently subject to legal challenges.

While the impact of the IRA on the pharmaceutical industry and our business cannot yet be fully determined, it is likely to be significant.

impact of the IRA on the pharmaceutical industry and our business cannot yet be fully determined, it is likely to be significant.

On April 15, 2025, the Trump administration published Executive Order 14273, “Lowering Drug Prices by Once Again Putting Americans First,” which generally directs the federal government to take measures to reduce drug prices, including eliminating the so-called “pill penalty” under the Inflation Reduction Act that creates a distinction between small molecule and large molecule products for purposes of determining when a drug may be eligible for drug price negotiation.

On May 12, 2025, the Trump administration published Executive Order 14297, “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients,” which generally, among other things, directs the federal government to establish and communicate most-favored-nation (MFN) price targets to pharmaceutical manufacturers to bring prices for American patients in line with comparably developed nations.

Further, the Executive Order directs the federal government to support regulatory paths to allow direct-to-patient sales for companies that meet these targets.

It also states that the Administration will take additional aggressive action (for example, examining whether marketing approvals should be modified or rescinded or opening the door for individual drug importation waivers) should manufacturers fail to offer American consumers the MFN lowest price.

It also directs the Secretary of Commerce and the U.S.

Trade Representative to “take all necessary and appropriate action to ensure foreign countries are not engaged in any act, policy, or practice that may be unreasonable or discriminatory or that may impair United States national security .

including by suppressing the price of pharmaceutical products below fair market value in foreign countries.” Notably, a similar “Most Favored Nation” pricing rule enacted under the first Trump administration was subject to an injunction resulting from judicial challenges to the rule, which was formally rescinded by the former Biden Administration in August 2021.

The One Big Beautiful Bill Act (the OBBBA), which was enacted in July 2025, imposes significant reductions in the funding of the Medicaid program.

Such reductions are expected to decrease the number of persons enrolled in Medicaid and reduce the services covered by Medicaid, which could adversely affect the sales of any drug candidate that we commercialize and negatively impact the pharmaceutical industry in general.

On December 19, 2025, CMS released two proposed rules that would incorporate MFN pricing principles into federal reimbursement for prescription drugs.

The first proposal, the Global Benchmark for Efficient Drug Pricing Model (GLOBE) for Medicare Part B, would require manufacturers of specified single source drugs and sole source biologics to pay incremental rebates based on international benchmark prices, with participation triggered for products meeting CMS’s spending and eligibility criteria.

The second proposal, the Guarding U.S.

Medicare Against Rising Drug Costs (GUARD) model for Medicare Part D, would similarly mandate manufacturer rebates for qualifying sole source drugs where the Medicare net price exceeds an MFN benchmark derived from international reference pricing methodologies.

As proposed, GLOBE would begin a five year performance period on October 1, 2026 and GUARD would begin its performance period in 2027.

These proposals will likely be subject to legal challenges that could delay their implementation or modify their impact on manufacturer pricing and revenue.

Additionally, in November 2025, CMS introduced the Generating cost Reductions for U.S.

Medicaid (GENEROUS) Model, a voluntary MFN framework for manufacturers participating in the Medicaid Drug Rebate Program.

Although it is voluntary, the GENEROUS Model could also impact the drug pricing landscape for manufacturers.

In addition, individual U.S.

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The implementation of cost-containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products.

In addition, it is possible that there will be further legislation or regulation that could harm our business, financial condition, and results of operations.

Other Health Care Laws and Compliance Requirements

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The federal Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce either the referral of an individual, or the furnishing, recommending, or arranging for a good or service, for which payment may be made under a federal health care program, such as the Medicare and Medicaid programs.

A person or entity does not need to have actual knowledge of this statute

or specific intent to violate it in order to have committed a violation.

A person or entity does not need to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation.

Many states have adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for health care items or services reimbursed by any source, not only the Medicare and Medicaid programs.

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and restrict marketing practices or require disclosure of marketing expenditures and pricing information.

Violations of any of these laws or any other governmental laws and regulations that may apply include, without limitation, significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products from government funded health care programs, such as Medicare and Medicaid, disgorgement, contractual damages, reputational harm, diminished profits, and the curtailment or restructuring of our operations.

from government funded health care programs, such as Medicare and Medicaid, disgorgement, contractual damages, reputational harm, diminished profits, and the curtailment or restructuring of our operations.

Data Privacy & Security

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In addition, certain state and non-U.S.

information, including health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

laws, such as the California Consumer Privacy Act (“CCPA”), the California Privacy Rights Act (“CPRA”), and the EU General Data Protection Regulation (“GDPR”), govern the privacy and security of personal information, including health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation.

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Our Employees

In August 2023, our Board of Directors approved the Reprioritization.

Following a comprehensive review of the business, we determined to focus on high-potential agitation-market opportunities using our innovative, AI-based clinical drug development platforms.

Our goal was to reduce more than 50% of our cash burn, as compared to our cash burn levels during the second quarter of 2023, to approximately $80 million on a go-forward annualized basis.

As part of the Reprioritization, our Board of Directors approved a reduction of approximately 60% of our workforce, from approximately 190 to 80 employees.

In August 2023, our Board of Directors approved the Clinical Reprioritization.

Following a comprehensive review of the business, we determined to focus on high-potential agitation-market opportunities.

These actions also included a shift in commercial strategy for IGALMI ® in the institutional setting, a reduction of in-hospital commercialization expenses, a suspension of programs no longer deemed core to our business, and a shift in focus to develop BXCL501 for use in the at-home setting in the treatment of agitation in schizophrenia, bipolar disorders, and in patients with mild to moderate dementia due to probable Alzheimer’s disease.

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These costs consisted of severance and benefit costs, all of which were paid during the three month period ended June 30, 2024.

In September, 2024, the Company approved a plan for an additional reduction its workforce by 15 employees, or approximately 28% of the Company’s headcount (the “Clinical Prioritization”), in order to extend its cash runway and prioritize investment on the clinical development of its lead neuroscience asset, BXCL501.

In September, 2024, the Company approved a plan for an additional reduction its workforce by 15 employees, or approximately 28% of the Company’s headcount (the “Clinical Reprioritization”), in order to extend its cash runway and prioritize investment on the clinical development of its lead neuroscience asset, BXCL501.

The Company recorded total restructuring costs of $1.6 million for the three months ended September 30, 2024.

These costs also consisted of severance and benefit costs.

The Company completed the Clinical Prioritization in October 2024, and commenced payments which are expected to be completed in the first quarter of 2025.

We recorded restructuring costs of $2.4 million and $4.2 million in the years ended December 31, 2024 and 2023, respectively, including severance and benefit costs of $4.1 million and contract termination costs of $0.1 million, substantially all of which were paid in 2023.

The Company completed the Clinical Reprioritization in October 2024 and paid $1.0 million of related costs during the fourth quarter of 2024, $0.5 million during the first quarter of 2025, and paid the remaining $0.1 million during the second quarter of 2025.

We recorded restructuring costs of $0.2 million and $2.4 million in the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025 and 2024, respectively, we had 29 and 37 full-time employees.

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We follow health and safety guidelines to protect the well-being of our employees and visitors.

Diversity & Inclusion

Much of our success is rooted in the diversity of our teams and our commitment to inclusion.

We value diversity at all levels and continue to focus on extending our diversity and inclusion initiatives across our entire workforce.

We believe that our business benefits from the different perspectives a diverse workforce brings, and we pride ourselves on having a strong, inclusive and positive culture based on our shared mission and values.

Our Corporate Information

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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-K

Item 1. Business