What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-08-10 compared with 2022-05-12 · 91 added, 52 removed, 131 unchanged (52% of the section changed)

8 unchanged sentences

As used below, the words “we,” “us” and “our” may refer to Nuvectis Pharma, Inc.

We are a biopharmaceutical company focused on the development of novel targeted small molecule therapeutics for the treatment of cancer in genetically defined patient populations.

Our precision medicine approach translates key scientific insights relating to the oncogenic drivers and pathway addiction of cancer into potent and highly selective anticancer drugs.

In addition, we will investigate the relevance of specific mutations and other DNA alterations as a potential patient selection marker and to identify synthetic lethality targets.

This work could support our use of a tumor agnostic development strategy wherein we enroll patients based on the cancer’s genetic and molecular features without regard to the type or location of the cancer.

We are a biopharmaceutical company focused on the development of novel targeted therapies for the treatment of cancer.

Our approach translates key scientific insights relating to oncogenic drivers and cancer addiction pathways into a clinical development strategy of potent and selective anticancer drug candidates.

NXP800 (HSF1-Pathway Inhibitor)

We have licensed exclusive world-wide commercial rights to NXP800, a novel Heat Shock Factor 1 (“HSF1”) pathway inhibitor, which was developed at the Institute for Cancer Research (“ICR”) in London, England.

We have licensed exclusive world-wide commercial rights to NXP800, a novel Heat Shock Factor 1 (“HSF1”) pathway inhibitor, which was discovered at the Institute of Cancer Research (“ICR”) in London, England.

Cancer cells actively exploit HSF1 to overcome diverse stresses and promote biological activities crucial for their survival, progression, immune evasion, and metastasis.

In preclinical studies, treatment with NXP800 inhibited tumor growth in xenografts models of human ovarian cancer.

In addition, a genetic mutation in the AT-rich interactive domain-containing protein 1A (“ARID1a”) gene has been identified as a potential biomarker for treatment sensitivity and patient selection.

In addition, a genetic mutation in the AT-rich interactive domain-containing protein 1A (“ARID1a”) gene has been identified as a potential biomarker for treatment sensitivity.

Based on this work, we plan to clinically investigate NXP800 in Ovarian Clear Cell Carcinoma (“OCCC”) and endometrioid ovarian carcinoma, and to investigate the utility of ARID1a deficiency as a patient selection marker.

The genetic screening for the ARID1a mutation is a standard part of the commercially available screening panels being utilized in the clinic for cancer patients.

The Phase 1 study is comprised of two parts:

dose-escalation Phase 1a, initiated in December 2021, to be followed by an expansion Phase 1b.

The Phase 1 study was initiated in December 2021 and is comprised of two parts:

dose-escalation (Phase 1a) to be followed by an expansion phase (Phase 1b).

In the Phase 1a, the safety and tolerability of NXP800 will be evaluated in patients with advanced solid tumors to identify a dose and dosing schedule for the Phase 1b.

In the Phase 1b, the safety and preliminary anti-tumor activity of NXP800 will be evaluated, initially in patients with OCCC and endometrioid carcinoma and possibly in patients with other types of solid tumors.

Additional preclinical studies will be conducted to identify development opportunities for NXP800 in additional solid tumor types.

In June 2022, the U.S.

Food and Drug Administration (the “FDA”) cleared the Company's Investigational New Drug Application (“IND”) for NXP800, which includes the Phase 1 clinical trial protocol.

Additional preclinical studies are being conducted to identify development opportunities for NXP800 in additional solid tumor types.

NXP900 (SRC/YES1 Kinase Inhibitor)

NXP900 is a preclinical-stage drug candidate designed to preferentially inhibit the Proto-oncogene c-Src (“SRC”) and YES1 kinases.

NXP900 was discovered at the University of Edinburgh.

NXP900 was discovered at the University of Edinburgh, Scotland.

SRC is aberrantly activated in many cancer types, including solid tumors such as breast, colon, prostate, pancreatic and ovarian, while remaining predominantly inactive in non-cancerous cells.

1 unchanged sentence

YES1 gene amplification has been reported to be implicated in several tumors including lung, head and neck, bladder and esophageal cancers.

Furthermore, it has been found that YES1 gene amplification is a key mechanism of resistance to Epidermal Growth Factor Receptor (“EGFR”) or (Human Epidermal Growth Factor Receptor 2 (“HER2”) inhibitors.

A recent, peer reviewed study published in Nature Communication which was not sponsored by the Company, has shown positive affects of using NXP900 in combination with the leading EFGR inhibitorl, Tagrisso, to overcome Tagrisso’s resistance in Tagrisso-resistant cell lines.

Preclinically, NXP900 has been shown to inhibit SRC and YES1 kinases and substantially inhibit growth of primary tumors and bone metastases in several triple negative breast cancer (“TNBC”) animal models.

A recent, peer reviewed study published in Nature Communication (not sponsored by the Company) demonstrated that NXP900 is able to re-sensitize resistant non-small cell lung cancer (“NSCLC”) cells to osimertinib (Tagrisso®), the leading EFGR inhibitor used for the treatment of EGFR mutation-positive NSCLC.

Preclinically, NXP900 demonstrated potent inhibition of SRC and YES1 kinases and substantial growth inhibition of primary tumors and bone metastases in triple negative breast cancer (“TNBC”), and group IV Medulloblastoma animal models.

Of note, in the animal models tested tumor growth inhibition was associated with substantial improvement of median survival.

We plan to initially develop NXP900 in solid tumors where SRC and/or YES1 are implicated.

We anticipate submitting an IND or an equivalent submission with a foreign agency in early 2023.

Since our inception in 2020, we have devoted all of our efforts and financial resources to organizing and staffing our company, business planning, raising capital, acquiring, discovering product candidates and securing related intellectual property rights and conducting research and development activities for our programs.

Since our inception in 2020, we have devoted all of our efforts and financial resources to organizing and staffing our company, business planning, raising capital, acquiring product candidates and securing related intellectual property rights and conducting research and development activities.

We do not have any products approved for sale and have not generated any revenue from product sales.

2 unchanged sentences

Results of Operations

The following table summarizes our results of operations expenses for the three months ended March 31, 2022:

(in thousands)

Three Months Ended March 31

OPERATING EXPENSES:

RESEARCH AND DEVELOPMENT

GENERAL AND ADMINISTRATIVE

OPERATING LOSS

FINANCE INCOME

From our inception on July 27, 2020, through March 31, 2022, we did not generate any revenue.

Our main activities through March 31, 2022 have been organizational and capital raising activities and the completion of the in-license agreements for our two drug candidates, NXP800 and NXP900, our Clinical Trial Application by the Medicines and Healthcare Regulatory Agency, and preparation for the Phase 1a clinical trial for NXP800, which commenced in December 2021, and beginning our IND-enabling studies for NXP900, which commenced in late 2021.

From our inception on July 27, 2020, through June 30, 2022, we did not generate any revenue.

Our main activities through June 30, 2022 have been organizational and capital raising activities and the completion of the in-license agreements for our two drug candidates, NXP800 and NXP900, our Clinical Trial Application by the Medicines and Healthcare Regulatory Agency, and preparation for the Phase 1a clinical trial for NXP800, which commenced in December 2021, and beginning our IND-enabling studies for NXP900, which commenced in late 2021.

Additionally, we completed our initial public offering in February 2022.

Research and Development Expenses

Research and development expenses include costs directly attributable to the conduct of research and development programs, including licensing fees, cost of salaries, share-based compensation expenses, payroll taxes, and other employee benefits, subcontractors, and materials used for research and development activities, including clinical trials, manufacturing costs, and professional services.

Research and development expenses include costs directly attributable to the conduct of research and development programs, including licensing fees, cost of salaries, share-based compensation expenses, payroll taxes, and other employee benefits, subcontractors, and materials and service used for research and development activities, including clinical trials, manufacturing costs, and professional services.

All costs associated with research and development are expensed as incurred.

3 unchanged sentences

At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of any of our product candidates and we may never succeed in obtaining regulatory approval for any of our product candidates.

The following table summarizes our research and development expenses for the three months ended March 31, 2022:

(in thousands)

For the three months ended March 31

Employee Compensation and Benefits

Clinical Expense

Manufacturing

Professional services and other

Total research and development expenses

For the three months ended March 31, 2022, we incurred research and development expenses of $1.8 million, primarily related to $0.5 million in employee expenses, including $0.1 million in non-cash equity expenses, clinical expenses totaling $0.4 million paid out in connection with our product candidates, NXP800 and NXP900, $0.4 million in licensing fee payments associated with our IPO and the UoE license agreement and $0.3 million of manufacturing expenses mainly associated with NXP800.

During the three months ended March 31, 2021, we did not incur any material research and development expenses.

General and Administrative Expenses

6 unchanged sentences

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research and development activities.

The following table summarizes our general and administrative expenses for the three months ended March 31, 2022:

The following table summarizes our results of operations expenses for the three months ended June 30, 2022:

(in thousands)

For the three months ended March 31

Three Months Ended June 30

OPERATING EXPENSES:

RESEARCH AND DEVELOPMENT

GENERAL AND ADMINISTRATIVE

OPERATING LOSS

FINANCE INCOME

Research and Development Expenses

The following table summarizes our research and development expenses for the three months ended June 30, 2022:

(in thousands)

For the three months ended June 30

Clinical Expense

Employee Compensation and Benefits

Manufacturing

Professional services and other

Total research and development expenses

Research and development expenses decreased by $1.7 million or 41% during the three months ended June 30, 2022 compared to the same period in 2021.

The decrease in research and development expense during the three months ended June 30, 2022 was primarily driven by $3.5 million in one-time licensing fees expense and paid during the period in 2021 for compound NXP800 partially offset by $1.1 million in increased clinical expenses, $0.4 in manufacturing expenses mostly related to the NXP800 program and $0.2 million of additional employee expenses including $0.3 million in employee stock compensation.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the three months ended June 30, 2022:

(in thousands)

For the three months ended June 30

Professional and consulting services

2 unchanged sentences

Total general and administrative expenses

For the three months ended March 31, 2022, our general and administrative expenses were $1.1 million, primarily attributable to $0.7 million of expenses to certain third party service providers, $0.2 million paid to employees during the period, and $0.2 million mainly due to insurance associated with the IPO.

During the three months ended March 31, 2021, we did not incur any material general and administrative expenses.

As a result of the foregoing, our loss from operations for the three months ended March 31, 2022, was $2.9 million, compared to a loss from operations of $23,000 for the three months ended March 31, 2021.

We expect our research and development and general and administrative expenses to increase substantially in the future as we begin the execution of our business plan for our two pipeline product candidates, NXP800 and NXP900, and continue to build-out our infrastructure to support such research and development activities.

General and administrative expenses decreased by $0.6 million or 37% during the three months ended June 30, 2022 compared to the same period in 2021.

The decrease in general and administrative expense during the three months ended June 30, 2022 was primarily driven by the $0.9 million decrease in professional and consulting services related to the private funding round in 2021 which could not be netted against the proceeds, partially offset by a $0.3 million increase in insurance and other expenses associated with the IPO.

As a result of the foregoing, our loss from operations for the three months ended June 30, 2022, decreased $2.4 million or 40%, compared to the same period in 2021.

The following table summarizes our results of operations expenses for the six months ended June 30, 2022:

(in thousands)

Six Months Ended June 30

OPERATING EXPENSES:

RESEARCH AND DEVELOPMENT

GENERAL AND ADMINISTRATIVE

OPERATING LOSS

FINANCE INCOME

Research and Development Expenses

The following table summarizes our research and development expenses for the six months ended June 30, 2022:

(in thousands)

For the six months ended June 30

Clinical Expense

Employee Compensation and Benefits

Manufacturing

Professional services and other

Total research and development expenses

Research and development expenses increased by $0.1 million, or 2%, during the six months ended June 30, 2022 compared to the same period in 2021.

The increase in research and development expense during the six months ended June 30, 2022 was primarily driven by, $1.6 million increase in clinical expenses paid out in connection with our product candidates NXP800 and NXP900, $0.6 million in employee compensation and benefits including $0.4 million in stock based compensation and $0.7 million in manufacturing expenses mostly associated with our product NXP800 and $0.2 million in professional services and other expenses associated with the company’s drug product programs, partially offset by a $3.1 million decrease in license fees paid during 2021 to CRT for NXP800 net of fees owed to the UoE associated with the company’s 2022 IPO and the UoE License agreement.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the six months ended June 30, 2022:

(in thousands)

For the six months ended June 30

Professional and consulting services

Employee Compensation and Benefits

Insurance and Other

Total general and administrative expenses

General and administrative expenses increased by $0.5 million, or 29%, during the six months ended June 30, 2022 compared to the same period in 2021.

The increase in general and administrative expenses for the six months ended June 30, 2022, was primarily driven by $0.5 million increase in insurance due to insurance associated with the IPO, $0.2 million in employee compensation including $0.3 million in stock compensation expense offset by a decrease of $0.3 million in professional and consulting fees paid to third-party providers.

As a result of the foregoing, our loss from operations for the six months ended June 30, 2022, increased $0.6 million or 9%, compared to the same period in 2021.

Liquidity and Capital Resources

As of March 31, 2022, we had $16.7 million of cash and cash equivalents.

For the three months ended March 31, 2022, and 2021, we had net losses of $2.9 million and $23,000, respectively.

As of March 31, 2022, we had an accumulated deficit of $15.8 million.

As of June 30, 2022, we had $13.6 million of cash and cash equivalents.

For the three months ended June 30, 2022, and 2021, we had net losses of $3.3 million and $5.9 million, respectively.

For the six months ended June 30, 2022, and 2021, we had net losses of $6.3 million and $6.0 million, respectively.

As of June 30, 2022, we had an accumulated deficit of $19.4 million.

On February 4, 2022, we entered into an underwriting agreement with H.C.

5 unchanged sentences

The IPO closed on February 8, 2022, with gross proceeds of $16.0 million, before deducting underwriting discounts and expenses (for net proceeds of $12.6 million).

We believe that the proceeds from our IPO will enable us to fund our operating expenses and capital expenditures through at least the next 12 months from the issuance of our financial statements.

In addition, on July 29, 2022, we completed a private placement in which we received gross proceeds of $15.9 million before deducting fees and expenses (for net proceeds of $14.2 million).

We believe that the proceeds from our IPO and private placement will enable us to fund our operating expenses and capital expenditures through at least the next 12 months from the issuance of our financial statements.

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.

34 unchanged sentences

(in thousands)

For the three months ended March 31

For the six months ended June 30

Net cash used in operating activities

2 unchanged sentences

Operating Activities

During the three months ended March 31, 2022, $3.0 million of cash was used in operating activities.

During the six months ended June 30, 2022, $5.6 million of cash was used in operating activities.

This was primarily attributable to our net loss of $6.5 million, partially offset by non-cash charges of $0.7 million.

The change in our operating assets and liabilities was primarily due to an increase of $0.8 million in prepaid and other assets, which was primarily due to $1.1 million payment for our director

and officer insurance, partially offset by $0.5 million increase in accounts payable and accrued expense, due to growth in our business, the advancement of our research programs, and the timing of vendor invoicing and payments.

The change in our operating assets and liabilities was primarily due to an increase of $0.6 million in prepaid and other assets, which was primarily due to $1.1 million payment for our director and officer insurance, partially offset by $0.8 million increase in accounts payable and accrued expense, due to growth in our business, the advancement of our research programs, and the timing of vendor invoicing and payments.

During the six months ended June 30, 2021, $4.0 million of cash was used in operating activities.

This was primarily attributable to our net loss of $6.0 million, partially offset by non-cash charges of $1.6 million.

The change in our operating assets and liabilities was primarily due to an increase of $0.4 million in accounts payable and accrued expense, due to growth in our business, the advancement of our research programs, and the timing of vendor invoicing and payments.

Financing activities

During the three months ended March 31, 2022, net cash provided by financing activities was $14.0 million, consisting primarily of proceeds from the sale of our common stock, offset by $2.0 million of commission and deferred offering costs paid.

During the six months ended June 30, 2022, net cash provided by financing activities was $13.4 million, consisting primarily of proceeds from the sale of our common stock, offset by $2.6 million of commission and deferred offering costs paid.

During the six months ended June 30, 2021, net cash provided by financing activities was $11.2 million, consisting of proceeds from the sale of our redeemable convertible preferred shares.

Contractual Obligations and Other Commitments

6 unchanged sentences

Pursuant to the NXP800 License Agreement, we are required to make payments to the ICR for certain development and regulatory milestones.

As of March 31, 2022, we were obligated to pay up to $23.0 million in milestone payments to the ICR related to pre-approval milestones, up to $178 million (in addition to the $23.0 million) in regulatory and commercial sales milestones, and mid-single digit to 10% royalties on a tiered basis on net sales.

As of June 30, 2022, we were obligated to pay up to $23.0 million in milestone payments to the ICR related to pre-approval milestones, up to $178 million (in addition to the $23.0 million) in regulatory and commercial sales milestones, and mid-single digit to 10% royalties on a tiered basis on net sales.

Additionally, the Company originally agreed to provide the ICR with up to an additional $0.5 million in research and development.

1 unchanged sentence

Pursuant to the NXP900 License Agreement, we are required to make payments to the UoE for certain development and regulatory milestones.

As of March 31, 2022, we were obligated to make up to $46.0 million in milestone payments to the UoE related to pre-approval milestones, including $0.5 million on the first anniversary of the agreement, up to $279.5 million in regulatory and commercial sales milestones, mid-single digit to 8% royalties on a tiered basis on net sales and 2.5% of the gross amount of each of the Company’s future fund raising up to a cumulative total of $3.0 million.

As of June 30, 2022, we were obligated to make up to $46.0 million in milestone payments to the UoE related to pre-approval milestones, including $0.5 million on the first anniversary of the agreement, up to $279.50 million in regulatory and commercial sales milestones, mid-single digit to 8% royalties on a tiered basis on net sales and 2.5% of the gross amount of each of the Company’s future

fund raising up to a cumulative total of $3.0 million.

Additionally, the Company will provide UoE with up to an additional $754,000 in research and development support.

23 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis