What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2024-11-12 · 142 added, 256 removed, 321 unchanged (55% of the section changed)

4 unchanged sentences

(In thousands, except par value)

September 30,

2025 (unaudited)

7 unchanged sentences

Operating lease, right-of-use ("ROU") asset

Restricted cash

Liabilities and Stockholders' Equity

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300,000 shares authorized;

137,589 and 127,668 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

138,282 and 137,820 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in-capital

9 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Licensing revenue

Operating expenses:

3 unchanged sentences

Loss from operations

Loss before income tax expense

Income tax expense

Net loss per share - basic and diluted

1 unchanged sentence

Other comprehensive loss:

Unrealized gain (loss) on marketable securities

Unrealized loss on marketable securities

Comprehensive loss

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and Subsidiaries

Compass Therapeutics, Inc.

and Subsidiaries

Condensed Consolidated Statements of Stockholders ’ Equity (Unaudited)

4 unchanged sentences

Balance at December 31, 2024

Common shares issued, net of issuance costs of $ 0.5 million

Share-based awards, net of tax remittance

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Balance at March 31, 2025

Stock-based compensation

Unrealized loss on marketable securities

Balance at June 30, 2024

Stock-based compensation

Unrealized gain on marketable securities

Balance at September 30, 2024

Balance at December 31, 2023

Vesting of share-based awards

Stock-based compensation

Common stock issued upon exercise of options

Unrealized gain on marketable securities

Balance at March 31, 2023

Common shares issued, net of issuance costs of $ 0.5 million

Vesting of share-based awards

Share-based awards, net of tax remittance

Stock-based compensation

Unrealized loss on marketable securities

Balance at June 30, 2023

Vesting of share-based awards

Stock-based compensation

Exercise of common stock options

Unrealized gain on marketable securities

Balance at September 30, 2023

Balance at March 31, 2024

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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(In thousands)

For the Nine Months

Ended September 30,

For the Three Months

Ended March 31,

Cash flows from operating activities:

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Cash flows from investing activities:

Purchase of property and equipment

Purchases of marketable securities

Proceeds from sale or maturities of marketable securities

Purchases of property and equipment

Net cash provided by investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

2 unchanged sentences

Taxes paid related to net shares settlement of RSUs

Proceeds from exercise of stock options

Net cash provided by financing activities

Net change in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

Net cash provided by (used in) financing activities

Net change in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of period

Cash and cash equivalents and restricted cash at end of period

Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents and restricted cash

Supplemental disclosure of cash flow information

Unrealized loss (gain) on marketable securities

Unrealized loss on marketable securities

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

18 unchanged sentences

In addition, the Company is dependent upon the services of its employees and consultants.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial statements) considered necessary to present fairly the Company’s consolidated financial position as of September 30, 2024 and its consolidated results of operations, comprehensive loss and changes in stockholders’ equity for the three and nine months ended September 30, 2024 and 2023 and cash flows for the nine months ended September 30, 2024 and 2023.

Operating results for the nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial statements) considered necessary to present fairly the Company’s consolidated financial position as of March 31, 2025 and its consolidated results of operations, comprehensive loss, changes in stockholders’ equity and cash flows for the three months ended March 31, 2025 and 2024.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

The unaudited condensed consolidated financial statements include the accounts of Compass Therapeutics, Inc.

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We have funded our operations with proceeds from the sale of our equity securities and borrowing from debt arrangements.

Through September 30, 2024, we have received $ 430 million in gross proceeds from the sale of equity securities.

As of September 30, 2024, we had cash and marketable securities of $ 135 million.

Through March 31, 2025, we have received $ 430 million in gross proceeds from the sale of equity securities.

As of March 31, 2025, we had cash, cash equivalents and marketable securities of $ 113 million.

Based on our research and development plans, we expect that such cash resources will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2027.

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The following tables represent the Company’s financial assets that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):

Fair Value Measurements as of September 30, 2024 (000's):

Fair Value Measurements as of March 31, 2025 (000's):

Quoted Prices in

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Asset-backed securities

Money market funds (cash equivalents)

Fair Value Measurements as of December 31, 2024 (000's):

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The Company has not realized any net losses from its investments.

Unrealized gains and losses on investments that are available for sale are recognized in accumulated other comprehensive loss, unless an unrealized loss is considered to be other than temporary, in which case the unrealized loss is charged to operations.

Unrealized gains and losses on investments that are available for sale are recognized in accumulated other comprehensive (loss) income, unless an unrealized loss is considered to be other than temporary, in which case the unrealized loss is charged to operations.

The Company periodically reviews its investments for other than temporary declines in fair value below cost basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

3 unchanged sentences

The following tables summarize marketable securities held (in thousands):

Fair Value Measurements as of September 30, 2024 Using:

Fair Value Measurements as of March 31, 2025 Using:

Amortized Cost

15 unchanged sentences

Asset-backed securities

September 30, 2024

March 31, 2025

December 31, 2024

3 unchanged sentences

Property and equipment consist of the following (in thousands):

September 30,

Leasehold improvements

3 unchanged sentences

Property and equipment, net

Depreciation and amortization expense for the nine months ended September 30, 2024 and 2023 was $ 0.5 million.

Depreciation and amortization expense for each of the three months ended March 31, 2025 and 2024 was $ 0.1 million and $ 0.2 million respectively.

Accrued Expenses

Accrued expenses consist of the following (in thousands):

September 30,

Project expenses

1 unchanged sentence

Total accrued expenses

Project expenses includes $ 10.4 million of accrued manufacturing expenses and $ 1.0 million of accrued clinical expenses primarily related to tovecimig.

Commitments and Contingencies

11 unchanged sentences

The classification and incremental borrowing rate for the lease did not change as a result of this lease modification.

Right-of-use assets obtained in exchange for new operating lease liabilities due to the lease modification were $ 6.1 million for a total right-of-use assets as of September 30, 2024 of $ 7.0 million.

The remaining lease term of the Facility lease is 6.7 years as of September 30, 2024.

Right-of-use assets obtained in exchange for new operating lease liabilities due to the lease modification were $ 6.1 million for a total right-of-use assets as of March 31, 2025 of $ 6.5 million.

The remaining lease term of the Facility lease is 5.6 years as of March 31, 2025.

The Company has $ 568 thousand of restricted cash associated with an irrevocable letter of credit required by the landlord to enter into this lease.

Lease costs related to the Facility were $ 0.3 million for the three months ending September 30, 2024 and 2023 and $ 1.0 million for the nine months ending September 30, 2024 and 2023.

Cash payments related to the Facility were $ 0.3 million for the three months ending September 30, 2024 and 2023 and $ 1.0 million for the nine months ending September 30, 2024 and 2023.

Lease costs related to the Facility were $ 0.3 million for the three months ending March 31, 2025 and 2024.

Cash payments related to the Facility were $ 0.3 million for the three months ending March 31, 2025 and 2024.

The table below presents the undiscounted cash flows for the lease term.

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Remainder of 2025

Years ending December 31,

Total minimum lease payments

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Eligible employees may make pre-tax or post-tax (Roth) contributions to the 401(k) Plan up to statutory limits.

Since January 1, 2020, the Company has been matching employee contributions to the plan up to 4 % of salary.

On July 1, 2023, the Company increased the employee matching contribution from 4 % to 6 %.

The Company made matching contributions of $ 0.1 million and $ 0.1 million for the three months ended September 30, 2024 and 2023, respectively.

The Company made matching contributions of $ 0.3 million and $ 0.2 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company matches employee contributions to the plan up to 6 % of salary.

The Company made matching contributions of $ 0.1 million for each of the three months ended March 31, 2025 and 2024.

Stock-Based Compensation

Stock-based compensation expense for the three and nine months ended September 30, 2024 and 2023 was classified in the condensed consolidated statement of operations as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Stock-based compensation expense for the three months ended March 31, 2025 and 2024 was classified in the condensed consolidated statement of operations as follows (in thousands):

Three Months Ended March 31,

Research and development

General and administrative

As of September 30, 2024, remaining unrecognized stock-based compensation cost from all plans to be recognized in future periods totaled $ 19.2 million.

As of March 31, 2025, the remaining unrecognized stock-based compensation cost from all plans to be recognized in future periods totaled $ 27.6 million.

In June 2020, the Company’s board of directors adopted the 2020 Stock Option and Incentive Plan (the “2020 Plan”) and reserved 2.9 million shares of common stock for issuance under this plan.

1 unchanged sentence

The increase on January 1, 2025 was 5.5 million shares.

As of September 30, 2024, 2.2 million shares remain available for grant.

As of March 31, 2025, 1.9 million shares remain available for grant.

The 2020 Plan authorizes the board of directors or a committee of the board to grant incentive stock options, nonqualified stock options, restricted stock awards and restricted stock units ("RSUs") to eligible officers, employees, consultants and directors of the Company.

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Forfeited/canceled

Outstanding at September 30, 2024

Vested at September 30, 2024

For the nine months ended September 30, 2024, the weighted average grant date fair value for options granted was $ 1.13 .

The outstanding options had an intrinsic value as of September 30, 2024 of $ 1.8 million.

As of September 30, 2024, the total unrecognized compensation cost related to outstanding options was $ 12.0 million, to be recognized over a weighted average period of 1.5 years.

For the nine months ended September 30, 2023, the weighted average grant date fair value for options granted was $ 2.82 .

The intrinsic value for options vested as of September 30, 2023, was $ 34 thousand.

As of September 30, 2023, the total unrecognized compensation cost related to outstanding options was $ 10.4 million, to be recognized over a weighted average period of 2.8 years.

The weighted average assumptions used in the Black-Scholes pricing model to determine the fair value of stock options granted during the nine months ended September 30, 2024 and 2023 were as follows:

Nine Months Ended September 30,

Outstanding at March 31, 2025

Vested at March 31, 2025

For the three months ended March 31, 2025, the weighted average grant date fair value for options granted was $ 2.68 .

The intrinsic value for options vested as of March 31, 2025, was $ 0.4 million.

As of March 31, 2025, the total unrecognized compensation cost related to outstanding options was $ 21.5 million, to be recognized over a weighted average period of 1.6 years.

For the three months ended March 31, 2024, the weighted average grant date fair value for options granted was $ 1.30 .

The intrinsic value for options vested as of March 31, 2024 was $ 0.6 million.

The weighted average assumptions used in the Black-Scholes pricing model to determine the fair value of stock options granted during the three months ended March 31, 2025 and 2024 were as follows:

Three Months Ended March 31,

Expected term (in years)

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Expected dividend yield

As of January 2024, the Company used the historical price of only its own stock to determine the expected volatility.

Prior to this, a group of industry peers, including the Company’s stock price, was used.

The following table summarizes the RSU activity for the 2020 Plan:

3 unchanged sentences

Forfeited or canceled

Unvested, September 30, 2024

Unvested, March 31, 2025

The weighted average price per share is the weighted grant price based on the closing market price of each of the stock grants.

The weighted average fair value is the weighted average share price times the number of shares.

As of September 30, 2024, remaining unrecognized compensation cost related to RSUs to be recognized in future periods totaled $ 7.2 million, which is expected to be recognized over a weighted average period of 1.5 years.

As of March 31, 2025, the remaining unrecognized compensation cost related to RSUs to be recognized in future periods totaled $ 6.2 million, which is expected to be recognized over a weighted average period of 1.7 years.

Related Parties and Related-Party Transactions

There were no material related party transactions during the nine months ended September 30, 2024 and 2023.

Other income consists exclusively of interest income of $ 1.8 million and $ 2.0 million for the three months ended September 30, 2024 and 2023, respectively.

Interest income was $ 5.7 million and $ 5.9 million for the nine months ended September 30, 2024 and 2023, respectively

There were no material related party transactions during the three months ended March 31, 2025 and 2024.

Other income consists exclusively of interest income of $ 1.3 million and $ 2.0 million for the three months ended March 31, 2025 and 2024, respectively.

License, Research and Collaboration Agreements

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ABL Bio Corporation ("ABL Bio") Agreement

In November 2018, the Company and ABL Bio, a South Korean biotechnology company, entered into an exclusive global (excluding South Korea) license agreement which granted the Company a license to CTX-009 (ABL001), ABL Bio’s bispecific antibody targeting DLL4 and VEGF-A.

Under the terms of the agreement, the two companies would jointly develop CTX-009, with ABL Bio responsible for development of CTX-009 throughout the end of Phase 1 clinical trials and the Company responsible for the development of CTX-009 from Phase 2 and onward.

In November 2018, the Company and ABL Bio, a South Korean biotechnology company, entered into an exclusive global (excluding South Korea) license agreement which granted the Company a license to tovecimig (ABL001), ABL Bio’s bispecific antibody targeting DLL4 and VEGF-A.

Under the terms of the agreement, the two companies would jointly develop tovecimig, with ABL Bio responsible for development of tovecimig throughout the end of Phase 1 clinical trials and the Company responsible for the development of tovecimig from Phase 2 and onward.

ABL Bio received a $ 5 million upfront payment and $ 6 million development milestone payment.

In addition, ABL Bio is eligible to receive up to $ 96 million of development and regulatory milestone payments, and up to $ 303 million of commercial milestone payments and tiered single-digit royalties on net sales of CTX-009 in oncology.

ABL Bio is also eligible to receive up to $ 75 million in development and regulatory milestones and up to $ 110 million in commercial milestone payments and tiered, single-digit royalties on net sales of CTX-009 in ophthalmology.

In May 2021, the Company and ABL Bio terminated license agreements to several preclinical assets.

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The agreement includes provisions for payment of royalties at rates ranging in the single digits as a percentage of future net sales within a specified term from the first commercial sale for certain antibodies, including our product candidate, CTX-471.

There were no milestone payments made during the first nine months of 2024.

As of September 30, 2024, future potential milestone payments in connection with this agreement amounted to $ 2.0 million.

Elpiscience Agreement

The Company entered into a license agreement with Elpiscience Biopharmaceuticals Co., Limited (“Elpiscience”) on January 16, 2021.

Under the agreement, the Company granted certain rights, including to develop, manufacture and commercialize CTX-009, to Elpiscience for the territory of Mainland China, Hong Kong, Taiwan and Macau in exchange for royalties and milestones.

In April 2024, Elpiscience completed its phase 1 clinical trial which required a $ 1 million milestone payment due to the Company.

Per the ABL Bio Agreement noted in this footnote, sub-licensing revenue is subject to a 15 % royalty.

License revenue reflects the $ 1 million, net of the ABL Bio royalty.

License revenue is shown net of this royalty.

Stockholders ’ Equity

In the quarter ended March 31, 2024, the Company sold through its at-the-market (“ATM”) agreement with Jefferies LLC, 9,790,577 shares of common stock at an average price of $ 1.85 for total proceeds of $ 18.1 million and net proceeds of $ 17.6 million.

The Company did not sell shares through the ATM in the quarter ended September 30, 2024.

There were no milestone payments made during the first quarter of 2025.

As of March 31, 2025, future potential milestone payments in connection with this agreement amounted to $ 2.0 million.

Segment Information

Segment reporting is prepared on the same basis that our chief executive officer, who is our CODM, manages the business, makes operating decisions and assesses performance.

The Company operates in one segment.

The Company’s business is research and development of drug candidates.

Costs, including supplies, outsourced development, and other research and development costs are tracked by major program.

While internal personnel costs are tracked by program for overall program spending, it is not broken out for management review.

Facility and equipment costs are not allocated to programs.

Research and development expenses are summarized by program in the table below:

Three-Months Ended March 31,

Research and development

Stock-based compensation

General and administrative

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

The following discussion of the financial condition and results of operations of Compass Therapeutics, Inc.

should be read in conjunction with the financial statements and the notes to those statements included in this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2024.

should be read in conjunction with the financial statements and the notes to those statements included in this Quarterly Report on Form 10-Q for the three months ended March 31, 2025.

Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risk, uncertainties and assumptions.

You should read the “ Risk Factors ” section of this Quarterly Report on Form 10-Q and the “ Risk Factors ” section included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 , for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We are a clinical-stage, oncology-focused biopharmaceutical company developing proprietary antibody-based therapeutics to treat multiple human diseases.

We are a clinical-stage, oncology-focused biopharmaceutical company developing proprietary antibody-based therapeutics.

Our scientific focus is on the relationship between angiogenesis, the immune system, and tumor growth.

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We plan to advance our product candidates through clinical development as both standalone therapies and in combination with proprietary pipeline antibodies based on supportive clinical and nonclinical data.

In September 2024, we signed a new lease on its existing facility extending the term six years to May 2031.

In addition to our pre-clinical antibody candidates, we currently have three product candidates in the clinical stage of development:

CTX-009, CTX-471 and CTX-8371.

A summary of these product candidates is presented below.

Our pipeline comprises three clinical product candidates and one candidate in investigational new drug application (“IND”) enabling studies.

Our lead product candidate, tovecimig (formerly known as CTX-009), is a bispecific antibody targeting Delta-like ligand 4 (“DLL4”), a ligand of Notch-1, and vascular endothelial growth factor A (“VEGF-A”).

Simultaneous blockade of the VEGF-A and the Notch pathways is known to turn productive angiogenesis into non-productive angiogenesis, which leads to tumor shrinkage and apoptosis.

CTX-471, is an agonistic antibody targeting a member of the tumor necrosis factor receptor superfamily member 9 (TNFRSF9), also known as CD-137, a co-stimulatory receptor which is mostly expressed on activated, but not on resting, T-cells and NK cells.

CTX-8371, is a bispecific antibody targeting the programmed cell death protein-1 (“PD-1”), an inhibitory immune checkpoint receptor and its ligand PD-L1, two validated immune-oncology targets.

In addition, we are in the process of IND enabling studies with CTX-10726, a bispecific antibody targeting PD-1 and VEFG-A.

For a more detailed description, see our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 .

CTX-009 (a.k.a.

ABL001) - anti-DLL4 x VEGF-A bispecific antibody

CTX-009 is an investigational bispecific antibody that is designed to simultaneously block DLL4 and VEGF-A signaling pathways, which are critical to angiogenesis and tumor vascularization.

Preclinical and early clinical data of CTX-009 as a monotherapy and in combination with chemotherapy suggest that blockade of both pathways provides robust anti-tumor activity across several solid tumors, including colorectal, gastric, cholangiocarcinoma, pancreatic and non-small cell lung cancer.

CTX-009 is currently undergoing clinical studies as a monotherapy and in combination with chemotherapy in the United States.

We currently have two ongoing U.S.

clinical trials with CTX-009:

a Phase 2 trial of CTX-009 as monotherapy in patients with metastatic colorectal cancer (“CRC”) who received two or three prior treatment regimens (this trial, as discussed further below, is in the process of being discontinued) and a randomized Phase 2/3 trial of CTX-009 in combination with paclitaxel in patients with biliary tract cancer (“BTC”) who received one prior treatment regimen.

We licensed the exclusive global rights to CTX-009, outside of South Korea, from ABL Bio, Inc.

(“ABL Bio”), a South Korea-based clinical-stage company focused on developing antibody therapeutics.

South Korean rights are held by Handok Pharmaceuticals, Inc.

(“Handok”) and China rights were out-licensed from the Company to Elpiscience Biopharmaceuticals Co., Limited (“Elpiscience”).

Our strategy is to develop CTX-009 in all of the indications in which patients have a need for effective and novel therapeutic agents and data supports the potential therapeutic benefit of CTX-009.

We chose BTC and CRC as our lead indications based on a number of factors, including CTX-009 activity observed in the Phase 1, 1b and 2 clinical trials, lack of effective therapies for these patient populations in the targeted lines of therapy and the potential for a straight-forward regulatory route to approval.

We have completed the first stage of a Simon Two-Stage adaptive Phase 2 monotherapy clinical trial of CTX-009 in patients with metastatic colorectal cancer who have received two or three prior systemic therapies irrespective of their KRAS mutation status.

We are not, however, advancing to the second stage because the first stage did not achieve the pre-determined response criteria for advancement.

The trial is designed to assess the safety and efficacy of CTX-009 as a monotherapy in patients with colorectal cancer treated in the third and fourth-line settings.

The trial can be found on www.clinicaltrials.gov (identifier NCT 05513742).

The first stage of the trial enrolled 41 patients in the United States, of which 26 (63%) were treated in the fourth line.

As of August 2024, preliminary data associated with the first stage of this trial are as follows:

overall response rate (“ORR”) of 5% (2 out of 41), the disease control rate (“DCR”) of 71% (29 out of 41), median progression free survival (“PFS”) of 3.9 months and median overall survival (“OS”) is currently 10.2 months.

The safety profile was consistent with the prior clinical trials with hypertension as the most common adverse event.

Based on the data from the first stage, we are discontinuing the current Phase 2 monotherapy trial and planning to initiate a new second-line trial in patients with metastatic colorectal cancer combined with chemotherapy whose tumors express DLL4 in mid-2025.

We are also conducting a randomized Phase 2/3 trial for CTX-009 in combination with paclitaxel in adult patients with unresectable, advanced, metastatic or recurrent biliary tract cancers (“BTC” or “cholangiocarcinoma”) who have received one prior systemic chemotherapy regimen.

The trial is designed to assess the safety and efficacy of the combination of CTX-009 and paclitaxel versus paclitaxel alone in patients treated in the second-line settings.

The trial is designed to enroll 150 patients, who will be randomized in a 2:1 ratio to receive CTX-009 plus paclitaxel (n=100) or paclitaxel alone (n=50).

The primary endpoint of the trial is overall response rate (“ORR”) and the secondary endpoints include PFS, DCR, duration of response (“DOR”) and OS.

This trial was fully enrolled in August 2024 and top line data from this study is expected at the end of the first quarter of 2025.

The trial can be found on www.clinicaltrials.gov (Identifier NCT 05506943).

In April 2024, the U.S.

Food and Drug Administration (FDA) granted Fast Track Designation to CTX-009 in combination with paclitaxel for the treatment of patients with metastatic or locally advanced BTC that have been previously treated.

We also recently approved the initiation of an Investigator Sponsored Trial (“IST”) for the study of CTX-009 in the first-line setting in patients with BTC to be conducted at the University of Texas MD Anderson Cancer Center.

This study is expected to be open in the fourth quarter of 2024.

The trial can be found on www.clinicaltrials.gov (Identifier NCT 06548412).

We intend to explore the potential of CTX-009 in additional indications based on data from pre-clinical models, potential biomarkers such as DLL4, and clinical data from CTX-009 trials providing signs of potential activity of CTX-009.

Additional indications may include ovarian cancer, liver cancer, gastric cancer, pancreatic cancer, renal cell cancer, neuroendocrine cancer and others.

In addition, we are developing a plan to study the combination of CTX-009 with bispecific checkpoint blockers, including our CTX-8371, as well as combining with our novel CD137 agonistic antibody, CTX-471, which is currently in a Phase 1b clinical trial in patients with advanced solid tumors.

CTX-471 - a monoclonal antibody agonist of CD137 (4-1BB)

CTX-471, our monoclonal antibody product candidate, is a fully human, IgG4 monoclonal antibody that is an agonist of CD137, a key co-stimulatory receptor on immune cells.

Binding of CTX-471 to CD137 has been observed to lead to ligand-stimulated activation of T-cells and NK cells.

In treated mice, dosing with CTX-471 led to extensive reprogramming of the tumor microenvironment, including increased recruitment of immune cells, reversion of exhausted cytotoxic CD8+ T-cells, reductions in immunosuppressive regulatory T-cells and reductions in immunosuppressive tumor-associated macrophages.

Long after the completion of the treatment with CTX-471, a period described as eight half-lives of the antibody, treated mice exhibited immune memory that prevented re-establishment of the same tumor.

In the Phase 1b monotherapy study, CTX-471 was evaluated in patients with solid tumors that had progressed after at least three months on an approved PD-1 or PD-L1 inhibitor.

Initial results reported from the study included five clinical responses, including a durable partial response (“PR”) in a patient with small-cell lung cancer that converted to a complete response (as confirmed by PET scan) and four additional PRs (one unconfirmed) in patients with melanoma and mesothelioma.

The ORR in the subset of patients with advanced melanoma was 27% (3 of 11).

Data were presented at the American Society of Clinical Oncology (ASCO) Annual Meeting in June 2024.

In the fourth quarter of 2022, we initiated a clinical trial in collaboration with Merck & Co.

(“Merck”, known as MSD outside the United States and Canada) to evaluate CTX-471 in combination with KEYTRUDA® (pembrolizumab).

Compass is the study sponsor and Merck provides the clinical supply of KEYTRUDA®.

Prior to completing enrollment of this trial, we observed an unexpected suppression of proinflammatory cytokines that was not observed with CTX-471 as a monotherapy.

In the second quarter of 2024, we reported that the combination study will be discontinued.

In November 2024, we presented novel biomarker data for CTX-471 at the 39th Society for Immunotherapy of Cancer (SITC) Annual Meeting.

Our research showed a correlation between the levels of neural cell adhesion molecule (NCAM or CD56) in baseline tumor cell biopsies and disease control in patients treated with CTX-471.

To measure pharmacodynamic effects, comparisons were made between pre- and post-CTX-471 treatment.

To survey response biomarkers, values from baseline samples obtained from patients with tumors showing complete or partial responses as well as stable disease were compared with tumors showing progressive disease.

We hypothesize that NCAM facilitates responses to CTX-471 by enriching for activated NK cells expressing the CTX-471 target, CD137.

The dataset shows these effects to be specific for NCAM expressing lymphocytes such as NK cells and is not observed in other lymphocyte subsets such as CD8 T cells.

These findings are novel in a clinical setting and support potential use of NCAM as a selection marker.

The company is currently evaluating the design for its next study of CTX-471 using NCAM as a biomarker, which it expects to initiate in mid-2025.

CTX-8371 - a bispecific antibody that simultaneously targets both PD-1 and PD-L1

CTX-8371 is a bispecific antibody that binds to both PD-1 and PD-L1, the targets of well-known and widely used checkpoint inhibitor antibodies and in addition acts via differentiated mechanism-of-action that involves cleavage of cell surface PD-1.

Preclinical studies demonstrate that CTX-8371 has the ability to outperform PD-1, PD-L1, and combinations of the two to activate T-cells in in vitro assays.

In mouse xenografts, treatment with CTX-8371 led to significantly greater tumor growth control and longer survival than treatment with a PD-1 inhibitor alone, a PD-L1 inhibitor alone or the combination of PD-1 and PD-L1 inhibitors.

An IND was accepted and cleared by the FDA in October 2023 and the first patient was dosed in April 2024.

As of October 2024, the second cohort of this trial was completed with no dose limiting toxicities observed.

We plan to initiate the third cohort by the end of 2024.

Recent Developments

Tovecimig Meets Primary Endpoint in Phase 2/3 Study in the Second Line Setting for Patients with BTC

On April 1, 2025, we announced that tovecimig in combination with paclitaxel achieved a 17.1% overall response rate (“ORR”), including one complete response, compared to a 5.3% ORR for paclitaxel alone, in patients with biliary tract cancer (“BTC”) treated in the second-line setting.

The difference in ORR between the two treatment arms, the primary endpoint of the study, was statistically significant (p=0.031), and all responses were assessed by blinded independent central radiology (BICR) review.

The study also showed differences between treatment arms for other efficacy measures, including progressive disease (“PD”) rates of 16.2% in patients on tovecimig in combination with paclitaxel versus 42.1% in patients on paclitaxel alone.

We also announced that the safety profile of tovecimig in this study to date was consistent with prior studies of tovecimig.

An independent Data Monitoring Committee (DMC) reviewed safety data at four separate (pre-specified) DMC meetings and, after each meeting, recommended continuation of the study without modification.

The pre-specified number of events required to trigger the analyses of the secondary endpoints, including progression free survival (“PFS”), overall survival (“OS”) and duration of response (“DoR”), have not yet been met and we expect to report these endpoints in the fourth quarter of 2025.

First Patient Dosed in IST of Tovecimig in the First-Line Setting for Patients with BTC

On April 21, 2025, we announced that the first patient had been dosed in an Investigator Sponsored Trial (“IST”) to evaluate tovecimig for the first time in the front-line setting for patients with BTC.

The IST is being conducted at The University of Texas MD Anderson Cancer Center.

Tovecimig is being added to a standard first-line regimen of gemcitabine, cisplatin, and durvalumab in an estimated 50 patients with unresectable or metastatic BTC.

The study will have a standard safety run-in phase in 12 patients followed by an expansion phase in which 38 additional patients will be treated.

The primary objectives in the study are to assess 6-month progression-free survival, to assess the tolerability and safety of this combination, and to determine the maximum tolerated dose of tovecimig in this combination.

Secondary objectives include ORR, DoR, PFS and OS.

For more information on the IST, please see study identifier:

NCT06548412 on www.clinicaltrials.gov.

OPERATING ACTIVITIES

We have funded our operations primarily with proceeds from the sale of our equity securities.

Through September 30, 2024, we have received $430 million in gross proceeds from the sale of equity securities.

Through March 31, 2025, we have received $430 million in gross proceeds from the sale of equity securities.

We have incurred significant operating losses since inception and have not generated any revenue from the sale of products and we do not expect to generate any revenue from the sale of products in the near future, if at all.

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

Our net losses were $10.5 million and $10.0 million for the three months ended September 30, 2024 and 2023, respectively.

Our net losses were $34.3 million and $29.1 million for the nine months ended September 30, 2024 and 2023, respectively.

We had an accumulated deficit of $350 million on September 30, 2024.

We expect to continue to incur significant expenses for at least the next couple of years as we advance through clinical development, develop additional product candidates and seek regulatory approval of any product candidates that complete clinical development.

Our net losses were $16.6 million and $10.8 million for the three months ended March 31, 2025 and 2024, respectively.

We had an accumulated deficit of $381.3 million on March 31, 2025.

We expect to continue to incur significant expenses for at least the next several years as we advance through clinical development, develop additional product candidates and seek regulatory approval of any product candidates that complete clinical development.

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

We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy.

Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through equity and debt financings, or other capital sources, which may include collaborations with other companies or other strategic transactions.

As of September 30, 2024, we had $135 million in cash and marketable securities.

As of March 31, 2025, we had $113 million in cash, cash equivalents and marketable securities.

We expect that such cash resources will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2027.

We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all.

If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, reduce or eliminate the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.

Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability.

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Components of Results of Operations

Licensing Revenue

Licensing revenue consists of a milestone payment received from a license agreement with Elpiscience Biopharmaceuticals Co., Limited (“Elpiscience”) for CTX-009 in China.

The revenue is shown net of a royalty due on the licensing revenue as it is not material to the statement of operations.

See note 11 of the condensed consolidated financial statements in this Quarterly Report on Form 10-Q for further information on the license agreement.

Research and Development

Research and development expenses consist primarily of costs incurred in connection with the development of our product candidates, CTX-471, CTX-8371 and CTX-009.

Research and development expenses consist primarily of costs incurred in connection with the development of our product candidates, tovecimig, CTX-471, CTX-8371 and CTX-10726.

We expense research and development costs as incurred.

These expenses include:

clinical expenses including Contract Research Organizations (“CRO”), consultants that conduct our clinical trials, as well as investigative sites;

manufacturing expenses including Contract Manufacturing Organizations (“CMO”), consultants that are primarily engaged to develop and manufacture drug substance and product for our clinical trials, as well as the cost of acquiring and manufacturing clinical trial materials, including manufacturing registration and validation batches;

employee-related expenses including salaries, related benefits and equity-based compensation expense for employees engaged in research and development functions;

expenses incurred under agreements with organizations that support our platform program development;

Contract Manufacturing Organizations (“CMO”) that are primarily engaged to provide drug substance and product for our clinical trials, research and development programs, as well as investigative sites and consultants that conduct our clinical trials, nonclinical studies and other scientific development services;

the cost of acquiring and manufacturing nonclinical and clinical trial materials, including manufacturing registration and validation batches;

other research and development expenses including pre-clinical study costs and expenses incurred under agreements with organizations that support our platform program development;

costs related to compliance with quality and regulatory requirements;

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General and administrative expenses consist primarily of salaries and related costs for personnel in executive, finance, business development and administrative functions.

General and administrative expenses also include legal fees relating to patent and corporate matters, professional fees for accounting, auditing, tax, insurance, administrative travel expenses, facilities related to administrative personnel and other operating costs.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our business operations.

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Results of Operations

Comparison of the Three Months Ended September 30, 2024 and 2023

The following table summarizes our results of operations for the three months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended September 30,

Licensing Revenue

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Research and Development Expenses

Research and development expenses decreased by $0.2 million, or 2%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

We track outsourced development, personnel costs and other research and development costs of specific programs.

Research and development expenses are summarized by program in the table below (in thousands):

Three Months Ended September 30,

Unallocated research and development expenses

Total research and development expenses

General and Administrative Expenses

General and administrative expenses increased $0.5 million, or 17% for the three months ended September 30, 2024 as compared to the same period in 2023.

This increase primarily came from an additional $0.5 million of stock compensation costs as compared to 2023.

For the three months ended September 30, 2024 and 2023, other income consisted of interest income.

Comparison of the Nine Months Ended September 30, 2024 and 2023

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023 (in thousands):

Nine Months Ended September 30,

Licensing Revenue

Comparison of the Three months ended March 31, 2025 and 2024

The following table summarizes our results of operations for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended March 31,

Operating expenses:

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Loss from operations

Licensing Revenue

Licensing revenue was $850 thousand for the nine months ended September 30, 2024.

There was no licensing revenue for the nine months ended September 30, 2023.

The licensing revenue consisted of a $1 million milestone payment from Elpiscience for completing a Phase 1 trial in China.

This license revenue is reported net of a 15% sublicense royalty due ABL Bio (see note 11 of the condensed consolidated financial statements in this Quarterly Report on Form 10-Q for further information on this sublicense agreement).

Loss before income tax expense

Income tax expense

Research and Development Expenses

Research and development expenses increased by $3.6 million, or 14%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.

This increase was primarily attributable to a $5.3 million increase in clinical costs, primarily related to the COMPANION-002 trial (CTX-009 – BTC), partially offset by $3.8 million less in manufacturing expense, primarily related to CTX-009.

In addition, there was an additional $1.2 million of stock compensation expense for the nine months ended September 30, 2024.

Research and development expenses increased by $3.5 million, or 37%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

The increase primarily came from $2.0 million more in manufacturing expenses related to tovecimig and $1.3 million related to our new program CTX-10726.

We track outsourced development, personnel costs and other research and development costs of specific programs.

Research and development expenses are summarized by program in the table below (in thousands):

Nine Months Ended September 30,

Three Months Ended March 31,

Unallocated research and development expenses

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General and Administrative Expenses

General and administrative expenses increased $2.3 million, or 25% for the nine months ended September 30, 2024 as compared to the same period in 2023.

This increase primarily came from personnel costs including expenses associated with our previously announced CEO transition and additional stock compensation expense.

For the nine months ended September 30, 2024 and 2023, other income consisted primarily of interest income.

General and administrative expenses increased by $1.7 million or 51% for the three months ended March 31, 2025 as compared to the same period in 2024.

The increase was primarily from $1.0 more of stock compensation expense and higher bonus expense.

Other income decreased by $0.7 million or 33% for the three months ended March 31, 2025 as compared to the same period in 2024.

Other income consisted exclusively of interest income.

Income Tax Expense

During the three months ended March 31, 2025 and 2024, we recognized no income tax expense.

Liquidity and Capital Resources

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We have funded our operations primarily with proceeds from the sale of our equity securities.

Through September 30, 2024, we have received $430 million in gross proceeds from the sale of equity securities.

As of September 30, 2024, we had cash and marketable securities of $135 million.

For the first nine months of 2024, we sold through our at-the-market (“ATM”) agreement with Jefferies LLC, 9,790,577 shares of common stock at an average price of $1.85 for total proceeds of $18.1 million and net proceeds of $17.6 million.

Funding Requirements

Our primary use of cash is to fund operating expenses, primarily research and development expenditures.

Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements.

Our future funding requirements will depend on many factors, including, but not limited to:

the scope, timing, progress and results of discovery, preclinical development, laboratory testing and clinical trials for our product candidates;

the costs of manufacturing our product candidates for clinical trials and in preparation for marketing approval and commercialization;

the extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our product candidates;

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

the costs and fees associated with the discovery, acquisition or in-license of additional product candidates or technologies;

our ability to establish additional collaborations on favorable terms, if at all;

the costs required to scale up our clinical, regulatory and manufacturing capabilities;

the costs of future commercialization activities, if any, including establishing sales, marketing, manufacturing and distribution capabilities, for any of our product candidates for which we receive marketing approval;

revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval.

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

To the extent that we raise additional capital through the sale of equity or convertible debt securities, current stockholders’ interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect rights of common stockholders.

Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us.

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

Through March 31, 2025, we have received $430 million in gross proceeds from the sale of equity securities.

As of March 31, 2025, we had cash, cash equivalents and marketable securities of $113 million.

The following table shows a summary of our cash flows for the periods indicated (in thousands):

Nine Months Ended September 30,

Three Months Ended March 31,

Cash used in operating activities

Cash provided by investing activities

Cash provided by financing activities

Net change in cash, cash equivalents and restricted cash

Cash provided by (used in) investing activities

Cash provided by (used in) financing activities

Net change in cash and cash equivalents

Operating Activities

During the nine months ended September 30, 2024, we used $35.7 million of cash in operating activities, resulting from our net loss of $34.3 million minus the change in operating assets and liabilities of $7.7 million, partially offset by non-cash charges of $6.3 million (primarily from share-based compensation expense of $6.3 million).

During the nine months ended September 30, 2023, we used $28.3 million of cash in operating activities, resulting from our net loss of $29.1 million plus the change in operating assets and liabilities of $2.7 million, partially offset by non-cash charges of $3.5 million).

During the three months ended March 31, 2025, we used $13.2 million of cash in operating activities, resulting from our net loss of $16.6 million partially offset by the change in operating assets and liabilities of $0.5 million and non-cash charges of $2.9 million (primarily from share-based compensation expense of $2.5 million).

During the three months ended March 31, 2024, we used $13.9 million of cash in operating activities, resulting from our net loss of $10.8 million plus the change in operating assets and liabilities of $5.2 million, partially offset by non-cash charges of $2.1 million (primarily from share-based compensation expense of $2.0 million).

Investing Activities

During the nine months ended September 30, 2024, $31.4 million of cash was provided by investing activities, related to the net sale of marketable securities.

During the nine months ended September 30, 2023, $20.7 million of cash was provided by investing activities which primarily related to the net sale of marketable securities.

During the three months ended March 31, 2025, $11.6 million of cash was provided by investing activities related to the net sale of marketable securities.

During the three months ended March 31, 2024, $4.1 million of cash was used in investing activities related to the net sale of marketable securities.

Financing Activities

During the nine months ended September 30, 2024, $17.4 million of cash was provided by financing activities.

This primarily included $17.6 million of net cash from sale of common stock under an ATM Agreement, after issuance costs.

During the nine months ended September 30, 2023, $3.1 million of cash was provided by financing activities.

During the three months ended March 31, 2025, $0.8 million of cash was used in financing activities due to taxes paid by the company for settlement of RSU shares.

During the three months ended March 31, 2024, $17.4 million of cash was provided by financing activities.

This primarily included $17.6 million of net cash from sale of common stock under an ATM Agreement, after issuance costs.

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the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval and that we determine to commercialize.

We believe that our existing cash, cash equivalents and marketable securities as of filing of this Quarterly Report on Form 10-Q will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2027 based on our current plans, which may change based on clinical or pre-clinical results.

These plans include:

A Phase 2/3 and two Phase 2 clinical trials of CTX-009, a Phase 2 trial for CTX-471 and a Phase 1a trial of CTX-8371.

We expect that we will require additional funding to complete the clinical development of these three programs and commercialize our product candidates, if we receive regulatory approval.

If we receive regulatory approval for CTX-009, CTX-471 or CTX-8371 or other product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on if and how we choose to commercialize these product candidates ourselves.

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

Our current plans, which may change based on clinical or pre-clinical results, include studies for tovecimig, CTX-471, and CTX-8371 and IND enabling studies for CTX-10726.

We expect that we will require additional funding to complete the clinical development of these programs including the payment of developmental milestones, commercializing our product candidates, if we receive regulatory approval, and pursuing in-licenses or acquisitions of other product candidates.

If we receive regulatory approval for tovecimig, CTX-471, CTX-8371, CTX-10726 or other product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize these product candidates ourselves.

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

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

What changed 10-Q

Item 1. Financial Statements