What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-08 compared with 2022-08-10 · 48 added, 48 removed, 174 unchanged (36% of the section changed)

13 unchanged sentences

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.

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.

In preclinical studies, treatment with NXP800 inhibited tumor growth in xenografts models of human ovarian and gastric cancers, in which, a genetic mutation in the AT-rich interactive domain-containing protein 1A (“ARID1a”) gene was present, potentially rendering ARID1a a biomarker for treatment sensitivity.

Based on this work, we plan to clinically investigate NXP800 in Ovarian Clear Cell Carcinoma (“OCCC”) and endometrioid 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.

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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.

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

In June 2022, the U.S.

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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”) and A1k inhibitors.

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.

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Results of Operations

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.

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

Our main activities through September 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 and a private placement offering in July 2022.

Research and Development Expenses

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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 results of operations expenses for the three months ended June 30, 2022:

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

(in thousands)

Three Months Ended June 30

Three Months Ended September 30

OPERATING EXPENSES:

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Research and Development Expenses

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

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

(in thousands)

For the three months ended June 30

For the three months ended September 30

Clinical Expense

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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.

Research and development expenses increased by $0.4 million or 9% during the three months ended September 30, 2022 compared to the same period in 2021.

The increase in research and development expense was primarily driven by $1.4 million in employee compensation which included a one-time bonus to the three founders totaling $0.6 million which became payable on July 29, 2022 and $0.3 million in non-cash employee stock compensation, $0.4 million increase in clinical trial expenses, $0.2 million in manufacturing expenses associated with the NXP800 and NXP900 programs partially offset by $1.7 million decrease in licensing expenses associated with the one-time payment to UoE in 2021 for NXP900.

General and Administrative Expenses

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

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

(in thousands)

For the three months ended June 30

For the three months ended September 30

Professional and consulting services

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Total general and administrative expenses

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:

General and administrative expenses increased by $0.9 million or 177% during the three months ended September 30, 2022 compared to the same period in 2021.

This increase was primarily driven by the $0.5 million increase in employee compensation which included a one-time bonus to the three founders totaling $0.2 million which became payable on July 29, 2022, $0.2 in employee stock compensation, $0.4 million increase in D&O insurance and other expenses associated with the IPO.

As a result of the foregoing, our loss from operations for the three months ended September 30, 2022 increased $1.2 million or 26%, compared to the same period in 2021, primarily driven by one-time clinical trial expenses, milestone and license fee payments.

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

(in thousands)

Six Months Ended June 30

Nine Months Ended September 30

OPERATING EXPENSES:

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Research and Development Expenses

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

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

(in thousands)

For the six months ended June 30

For the nine months ended September 30

Clinical Expense

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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.

Research and development expenses increased by $0.4 million, or 5%, during the nine months ended September 30, 2022 compared to the same period in 2021.

The increase in research and development expense during the nine months ended September 30, 2022 was primarily driven by, $2.0 million increase in clinical expenses paid out in connection with our product candidates NXP800 and NXP900, $2.0 million in employee compensation and benefits including $0.6 million in stock based compensation, $0.9 million in manufacturing expenses mostly associated with our product NXP800 and $0.3 million in professional services and other expenses associated with the company’s drug product programs, partially offset by a $4.8 million decrease in license fees paid during 2021 to CRT for NXP800 and UoE for NXP900 net of fees owed to the UoE associated with the company’s 2022 IPO, 2022 private placement, and the UoE License agreement and payments to CRT for patient enrollment milestones.

General and Administrative Expenses

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

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

(in thousands)

For the six months ended June 30

For the nine months ended September 30

Professional and consulting services

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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.

General and administrative expenses increased by $1.4 million, or 63%, during the nine months ended September 30, 2022 compared to the same period in 2021.

The increase in general and administrative expenses for the nine months ended September 30, 2022, was primarily driven by $1.0 million increase in D&O insurance associated with the IPO, $0.7 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 nine months ended September 30, 2022, increased $1.8 million or 17%, compared to the same period in 2021 primarily driven by one time clinical trial expenses, milestone and license fee payments.

Liquidity and Capital Resources

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.

As of September 30, 2022, we had $23.6 million of cash and cash equivalents.

For the three months ended September 30, 2022, and 2021, we had net losses of $5.9 million and $4.7 million, respectively.

For the nine months ended September 30, 2022, and 2021, we had net losses of $12.4 million and $10.6 million, respectively.

As of September 30, 2022, we had an accumulated deficit of $25.3 million.

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

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On February 4, 2022, we announced the pricing of our IPO of 3,200,000 shares of common stock for a price of $5.00 per share, less certain underwriting discounts and commissions.

As part of the UoE license agreement, the Company owes UoE $0.4 million associated with this fundraising.

We will pay UoE 2.5% of the gross amount of each of the Company’s future fund raisings up to a cumulative total of $3.0 million, including this $0.4 million.

As part of the UoE license agreement, we are required to pay UoE 2.5% of the gross amount of each of the Company’s future fund raisings up to a cumulative total of $3.0 million.

Pursuant to the IPO, the Company paid UoE $0.4 million associated with this fundraising.

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).

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).

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) excluding payments required by the Company’s license agreements.

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.

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➢ advance development of our clinical and preclinical programs;

➢ acquire additional product candidates;

manufacture, or procure the manufacturing of, our preclinical and clinical drug material and develop processes for late stage and commercial manufacturing;

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➢ obtain, maintain, expand and protect our intellectual property portfolio;

➢ acquire additional product candidates.

We anticipate that we will require additional capital as we seek regulatory approval of our product candidates and if we choose to pursue in-licenses or acquisitions of other product candidates.

If we receive regulatory approval for our other future product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize.

If we receive regulatory approval for our other future product candidates, we

expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize.

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

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(in thousands)

For the six months ended June 30

For the nine months ended September 30

Net cash used in operating activities

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Operating Activities

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

During the nine months ended September 30, 2022, $10.0 million of cash was used in operating activities.

This was primarily attributable to our net loss of $12.4 million, partially offset by non-cash charges of $1.2 million.

The change in our operating assets and liabilities was primarily due to an increase of $1.0 million in prepaid and other assets, which was primarily due to $1.1 million payment for our director and officer insurance, partially offset by $2.3 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.

During the nine months ended September 30, 2021, $8.4 million of cash was used in operating activities.

This was primarily attributable to our net loss of $10.6 million, partially offset by non-cash charges of $1.7 million.

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Financing activities

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.

During the nine months ended September 30, 2022, net cash provided by financing activities was $27.9 million, consisting primarily of proceeds from the sale of our common stock and private placement, offset by $2.6 million of commission and deferred offering costs paid and $1.4 million in private placement costs.

During the nine months ended September 30, 2021, net cash provided by financing activities was $15.2 million, consisting of proceeds from the sale of our redeemable convertible preferred shares.

Contractual Obligations and Other Commitments

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

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.

As of September 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, unless development ceases.

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

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

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.

As of September 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 which the Company accrued for as of September 30, 2022, 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, unless

development ceases.

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis