What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-03-05 compared with 2023-03-08 · 38 added, 25 removed, 115 unchanged (35% of the section changed)

3 unchanged sentences

As a result of many factors, including those factors set forth in the “Risk Factors” section of this report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

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.

We are a clinical stage 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.

11 unchanged sentences

From our inception on July 27, 2020, through December 31, 2023, we did not generate any revenue.

Our main activities through December 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, regulatory filings with the MHRA and FDA, preparation and execution for the Phase 1a clinical trial for NXP800, which commenced in December 2021, and IND enabling research for NXP900.

Our main activities through December 31, 2023 have been organizational and capital raising activities and the completion of the in-license agreements for our two drug candidates, NXP800 and NXP900, regulatory filings with the MHRA and FDA, preparation and execution for the Phase 1a and Phase 1b clinical trial for NXP800, which commenced in December 2021 and May 2023, respectively, and Phase 1a clinical trial for NXP900, which commenced in September 2023.

For the year ended December 31, 2023, research and development expenses were approximately $15.4 million, compared to approximately $13.2 million for the year ended December 31, 2022, an increase of $2.2 million.

The current period research and development expenses primarily consisted of $4.6 million related to employee compensation including $0.9 million related to non-cash stock compensation, $3.7 million related to clinical trial expenses for our product candidates including $1.2 million in one-time IND enabling studies for NXP900, $2.3 million in one-time license fee payments, and $2.2 million related to the manufacturing costs of our product candidates.

For the year ended December 31, 2021, research and development expenses primarily related to the one-time upfront payments totaling $7.1 million paid out in connection with the exclusive license agreements for our product candidates, NXP800 and NXP900, and $0.9 million of non-cash equity-based expenses.

The current period research and development expenses primarily consisted of $6.3 million related to employee compensation including $2.6 million related to non-cash stock compensation, $4.3 million related to clinical trial expenses for our product candidates, $1.0 million in one-time license fee payments, and $3.5 million related to the manufacturing costs of our product candidates.

For the year ended December 31, 2022, research and development expenses primarily consisted of $4.6 million related to employee compensation including $0.9 million related to non-cash stock compensation, $3.7 million related to clinical trial expenses for our product candidates including $1.2 million in one-time IND enabling studies for NXP900, $2.3 million in one-time license fee payments, and $2.2 million related to the manufacturing costs of our product candidates.

For the year ended December 31, 2023, general and administrative expenses were approximately $7.5 million, compared to approximately $6.0 million for the year ended December 31, 2022, an increase of $1.5 million.

The current period general and administrative expenses primarily consisted of $2.4 million paid to certain professional and consulting

services, $1.8 million in employee compensation including non-cash stock compensation expense of $0.8 million, and $1.2 million related to director and officer insurance.

For the year ended December 31, 2021, our general and administrative expenses were $3.3 million, primarily attributable to $1.0 million of non-cash equity-based expenses and $2.0 paid to certain third-party service providers and consultants.

The current period

general and administrative expenses primarily consisted of $3.5 million paid to certain professional and consulting services, $2.3 million in employee compensation including non-cash stock compensation expense of $1.0 million, and $0.8 million related to director and officer insurance.

For the year ended December 31, 2022, general and administrative expenses primarily consisted of $2.4 million paid to certain professional and consulting services, $1.8 million in employee compensation including non-cash stock compensation expense of $0.8 million, and $1.2 million related to director and officer insurance.

As a result of the foregoing, our loss from operations for the year ended December 31, 2023 was $22.9 million, compared to a loss from operations of $19.2 million for the year ended December 31, 2022.

We expect our research and development and general and administrative expenses to increase gradually 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.

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

Liquidity and Capital Resources

6 unchanged sentences

Upon closing of the IPO, we issued 128,000 representative warrants, with an exercise price of $6.25, to purchase common stock to the underwriter, equaling 4% of the total shares sold in the IPO.

We also granted the underwriter a 30-day option to purchase up to 480,000 additional shares of common stock to cover any over-allotments (the “Over-Allotment Option"), and the right to receive, upon exercise of the Over-allotment Option, a number of additional warrants to purchase common stock totaling 4% of the shares sold in the IPO (including the 128,000 previously issued), on the same terms and conditions for the purpose of covering any over-allotments in connection with the IPO.

No overallotment shares were purchased by the underwriter and no Over-Allotment Options were granted to the underwriter.

2 unchanged sentences

On July 29, 2022, we announced the completion of private placement of common stock in which we received gross proceeds of $15.9 million before deducting fees and expenses (for net proceeds of $14.3 million).

We also granted the placement agent 115,481 preferred investment options to purchase common stock As part of the UoE license agreement, we owe UoE $0.4 million associated with this fund raising.

We will pay UoE 2.5% of the gross amount of each of our future fund raisings up to a cumulative total of $3.0 million, including the $0.8 million related to the IPO and subsequent private placement.

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.

We also granted the placement agent 115,481 preferred investment options to purchase common stock.

As part of the UoE license agreement, we owe UoE $0.4 million associated with this fund raising.

During the year ended December 31, 2023, we sold a total of 371,743 shares of common stock under the At-the-Market (“ATM”) offering program for aggregate total gross proceeds of approximately $5.3 million at an average selling price of $14.23 per share, resulting in net proceeds of approximately $5.1 million after deducting commissions and other transaction costs.

We will pay UoE 2.5% of the gross amount of each of our future orderly capital raising transactions up to a cumulative total of $3.0 million, including the $0.8 million related to the IPO and subsequent private placement.

We believe that the proceeds from our IPO, private placement and shelf registration 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.

Our future viability in the long term is dependent on our ability to raise additional capital to finance our operations.

We expect our expenses to increase gradually in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials of our current or future product candidates, including payments of milestones and sponsored research commitments associated with our license agreements for NXP800 and NXP900.

In addition, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor

relations and other expenses that we did not incur as a private company.

In addition, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses that we did not incur as a private company.

The timing and amount of our operating expenditures will depend largely on our ability to:

39 unchanged sentences

Additionally, we will provide the ICR with up to an additional $0.9 million in research and development support.

During the year ended December 31, 2022, we paid the ICR $1.0 million in milestone payments and $0.2 million in additional research and development support payments.

During the year ended

December 31, 2023, we paid the ICR and $0.4 million in additional research and development support payments.

As of December 31, 2023, we recorded a liability of $0.2 million associated with additional research and development support payments.

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

As of December 31, 2022, we were obligated to make up to $45.5 million in milestone payments to the UoE related to pre-approval milestones, up to $279.5 million in regulatory and commercial sales milestones, mid-

single digit to 8% royalties on a tiered basis based on net sales and 2.5% of the gross amount of each of our fund raisings up to a cumulative total of $3.0 million.

As of December 31, 2023, we were obligated to make up to $45.5 million in milestone payments to the UoE related to pre-approval milestones, up to $279.5 million in regulatory and commercial sales milestones, mid-single digit to 8% royalties on a tiered basis based on net sales and 2.5% of the gross amount of each of our fund raisings up to a cumulative total of $3.0 million.

Additionally, we will provide UoE with up to an additional £580,000 in research and development support.

During the year ended December 31, 2022, we paid the UoE $0.5 million on the first anniversary of the agreement and $0.4 million in additional fundraising payments.

As of December 31, 2022, we recorded a liability of $0.4 million associated with the IPO.

During the year ended December 31, 2023, we paid the UoE $1.0 million in milestone payments and $0.4 million in additional fundraising payments.

We do not currently have any long-term leases.

6 unchanged sentences

Our actual results may differ from these estimates under different assumptions or conditions.

Stock-based compensation

Accrued Research and Development Expense

We record accruals for estimated costs of research, preclinical, clinical and manufacturing development within accrued expenses which are significant components of research and development expenses.

A substantial portion of our ongoing research and development activities is conducted by third-party service providers such as contract research organizations in connection with our clinical studies, contract manufacturing organizations, trial sites in connection with our clinical studies and vendors associated with licenses/milestones.

We accrue the costs incurred under agreements with these third parties based on estimates of actual work completed in accordance with the respective agreements.

We determine the estimated costs through the reviewing of open contracts, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost.

The majority of our service providers invoice us monthly for services performed or when contractual milestones are met.

Payments made to third parties under these arrangements in advance of the performance of the related services are recorded as prepaid expenses until the services are rendered.

If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust accrued expenses or prepaid expenses accordingly, which impacts research and development expenses.

Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.

Share-based compensation

We maintain an equity incentive plan as a long-term incentive for employees, consultants and members of our board of directors.

The plan allows for the issuance of non-statutory options, or NSOs, and incentive stock options to employees and NSOs to nonemployees.

The plan allows for the issuance of non-statutory options, or NSOs, and incentive stock options to employees and NSOs to non-employees.

Stock-based compensation is measured using estimated grant date fair value and recognized as compensation expense over the service period in which the awards are expected to vest.

We estimate the grant date fair value, and the resulting stock-based compensation, using the Black-Scholes option-pricing model, and we use the accelerated method based on the multiple-option award approach for expense attribution.

The fair-value-based measurements of options granted to nonemployees are remeasured at each period end until the options vest and are amortized to expense as earned.

We estimate the grant date fair value, and the resulting stock-

based compensation, using the Black-Scholes option-pricing model, and we use the accelerated method based on the multiple-option award approach for expense attribution.

The fair-value-based measurements of options granted to non-employees are remeasured at each period end until the options vest and are amortized to expense as earned.

The valuation model used for calculating the estimated fair value of stock awards is the Black-Scholes option-pricing model.

17 unchanged sentences

The Jumpstart Our Business Startups Act of 2012 permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies.

We have elected to not “opt out” of this provision and, as a result, we will adopt new or revised accounting standards at the time private companies adopt the new or revised accounting standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company.

We have elected to not “opt out” of this provision and, as a

result, we will adopt new or revised accounting standards at the time private companies adopt the new or revised accounting standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company.

We are also a “smaller reporting company” meaning that the market value of our stock held by non-affiliates plus the proposed aggregate amount of gross proceeds to us as a result of our initial public offering is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year.

8 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-K

Item 7. Management’s Discussion and Analysis