What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-07 compared with 2023-11-08 · 50 added, 90 removed, 154 unchanged (48% of the section changed)

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We are a biopharmaceutical company focused on the development of innovative precision medicines for the treatment of serious conditions of unmet medical need in oncology.

We seek to develop drug candidates in the precision medicine space, and our processes for selection and clinical development of drug candidates is based on scientific insights into cancer-promoting factors, as well as on our understanding of the clinical landscape and regulatory requirements.

NXP800 (Integrated Stress Response Activator)

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NXP800 is an oral, small molecule discovered in a phenotypic screen for inhibitors of the heat shock factor 1 stress response.

In a panel of human carcinoma cell lines NXP800 induced the genes associated with activation of the integrated ISR via activation of the general control non-derepressible 2 ("GCN2”) kinase.

Consistent with activation of the ISR, NXP800 increased the expression of the following downstream ISR markers/effectors:

activating transcription factor 4 (“ATF4”), ChaC glutathione specific gamma-glutamylcyclotransferase 1 (“CHAC1”) and C/EBP homologous protein (“CHOP”) both in human ovarian cells in vitro and corresponding tumor xenograft models in vivo.

NXP800 acts on cancer cells to stimulate the GCN2 kinase, which activates the ISR pathway, leading to inhibition of cap-dependent protein translation, including heat shock factor 1 (“HSF1”) regulated proteins.

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, offering potential strategies for enrichment.

In a panel of human carcinoma cell lines NXP800 induced the expression of genes associated with activation of the general control non-derepressible 2 ("GCN2”) kinase, including activating transcription factor 4 (“ATF4”), ChaC glutathione specific gamma-glutamylcyclotransferase 1 (“CHAC1”) and C/EBP homologous protein (“CHOP”) both in human ovarian cells in vitro and corresponding tumor xenograft models in vivo.

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

Based on this work, we have begun to clinically investigate NXP800 in platinum-resistant ARID1a-mutated ovarian carcinoma, a type of cancer which is primarily comprised of two histologies, ovarian clear cell carcinoma (“OCCC”) and ovarian endometrioid carcinoma (“OEC”), and to investigate the utility of ARID1a deficiency as a patient selection marker in additional tumor types.

The genetic screening for the ARID1a mutation is performed using commercially available next generation sequencing-based in vitro diagnostic test, which is routinely utilized in t he clinic for cancer patients.

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

The genetic screening for the ARID1a mutation is performed using a commercially available next generation sequencing-based in vitro diagnostic test, which is routinely utilized in t he clinic for cancer patients.

In December 2021, the Phase 1 study was initiated in the United Kingdom and is comprised of two parts:

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

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Additional studies to evaluate the safety and preliminary anti-tumor activity of NXP800 in additional tumor types are planned.

In June 2022, the Investigational New Drug Application (“IND”) for NXP800, which was previously submitted to the U.S.

Food and Drug Administration (the “FDA”), was cleared, which included the Phase 1 clinical trial protocol.

Preclinical studies were conducted, and additional preclinical studies are being conducted to identify development opportunities for NXP800 in additional solid tumor types.

In December 2022, we announced that the FDA granted Fast Track Designation status to the development program of NXP800 for the

treatment of platinum-resistant, ARID1a-mutated ovarian carcinoma.

In August 2023, we announced that NXP800 received Orphan Drug Designation for the treatment of cholangiocarcinoma.

In June 2022, the Investigational New Drug (“IND”) application for NXP800 was cleared by the U.S.

Food and Drug Administration (“FDA”), including the Phase 1 clinical trial protocol.

In December 2022, we announced that the FDA granted Fast Track Designation status to the development program of NXP800 for the treatment of platinum-resistant, ARID1a-mutated ovarian carcinoma.

In August 2023, we announced that the FDA granted Orphan Drug Designation to NXP800 for the treatment of patients with cholangiocarcinoma.

In December 2023, we announced a collaboration with Mayo Clinic to conduct an investigator-sponsored clinical trial in patients with cholangiocarcinoma.

NXP900 (SRC/YES1 Kinase Inhibitor)

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In vivo, treatment with NXP900 inhibited primary and metastatic tumor growth in xenograft models of breast, cervical, esophageal, head and neck and medulloblastoma cancers, and demonstrated on-target pharmacodynamic effects.

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 and anaplastic lymphoma kinase, commonly referred to as ALK, inhibitors.

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

A peer reviewed study published in Nature Communication (not sponsored by the Company) published in April 2022 demonstrated that NXP900 was able to re-sensitize resistant non-small cell lung cancer (“NSCLC”) cells to osimertinib (active ingredient in Tagrisso®), the leading EFGR inhibitor used for the treatment of EGFR mutation-positive NSCLC, when used in combination with osimertinib.

In May 2023, the U.S.

Food and Drug Administration (“FDA”) cleared the Company's Investigational New Drug Application (“IND”) for NXP900, which includes the Phase 1 clinical trial protocol.

These findings were reproduced and expanded by us in cell line models, demonstrating statistically significant synergies in combination with osimertinib and the ALK inhibitor alectinib, (active ingredient in Alecensa®).

In May 2023, the FDA cleared the Company's IND for NXP900, which includes the Phase 1 clinical trial protocol.

The Phase 1 study was initiated in September 2023 and is comprised of two parts:

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In the ongoing Phase 1a, the safety, tolerability and pharmacokinetic properties of NXP900 in patients with advanced solid tumors will be assessed in order to identify a dose and dosing schedule for Phase 1b.

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.

We may never be able to develop or commercialize a marketable product.

We have not yet successfully completed any pivotal clinical trials, obtained any regulatory approvals, manufactured a commercial-scale drug, or conducted sales and marketing activities.

Results of Operations

From our inception on July 27, 2020, through September 30, 2023, we did not generate any revenue.

Our main activities through September 30, 2023, have been organizational and capital raising activities, 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, preparation for the Phase 1a and Phase 1b clinical trials for NXP800, which commenced in December 2021 and April 2023, respectively, and beginning our IND-enabling studies, which commenced in late 2021, along with preparation for the Phase 1a clinical trial for NXP900.

From our inception on July 27, 2020, through March 31, 2024, we did not generate any revenue.

Our main activities through March 31, 2024, have been organizational and capital raising activities, 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, preparation for the Phase 1a and Phase 1b clinical trials for NXP800, which commenced in December 2021 and April 2023, respectively, and beginning our IND-enabling studies, which commenced in late 2021, along with preparation for the Phase 1a clinical trial for NXP900.

In May 2023, NXP900 received FDA clearance, and the Phase 1a study was initiated in September 2023.

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The successful development of our product candidates is highly uncertain.

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.

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.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and personnel-related costs, including stock-based compensation, for our personnel in executive, finance and accounting, and other administrative functions.

General and administrative expenses also include legal fees relating to patent and corporate matters;

General and administrative expenses also include

legal fees relating to patent and corporate matters;

professional fees paid for accounting, auditing, consulting, and tax services;

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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 September 30, 2023 and 2022:

(in thousands)

Three Months Ended September 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 September 30, 2023 and 2022:

(in thousands)

For the three months ended September 30

Clinical Expenses

Employee Compensation and Benefits

Manufacturing

Professional services and other

Total research and development expenses

Research and development expenses remained flat during the three months ended September 30, 2023, compared to the same period in 2022.

Research and development expense during the three months ended September 30, 2023, was primarily driven by a $1.0 million increase in manufacturing development to support the planned clinical trials for NXP800 and NXP900 and $0.6 million for the ongoing NXP800 clinical trial and initiation of the NXP900 clinical trial which was offset by a $1.4 million decrease in related license fees which was expensed in 2022 and a $0.2 million decrease in employee compensation related to bonuses awarded in 2022 which included a $0.3 million increase related to employee stock compensation.

The following table summarizes our general and administrative expenses for the three months ended September 30, 2023 and 2022:

(in thousands)

For the three months ended September 30

Professional and consulting services

Employee Compensation and Benefits

Insurance and Other

Total general and administrative expenses

General and administrative expenses increased by $0.3 million, or 18%, during the three months ended September 30, 2023, compared to the same period in 2022.

The increase in general and administrative expense during the three months ended September 30, 2023, was primarily driven by the $0.4 million increase in professional and consulting services related to public company related expenses, partially offset by a $0.2 million decrease related to employee compensation and benefits related bonuses award in 2022 and includes a $0.3 million increase in employee stock-based compensation.

As a result of the foregoing, our loss from operations for the three months ended September 30, 2023, remained consistent compared to the same period in 2022.

The following table summarizes our results of operations expenses for the nine months ended September 30, 2023 and 2022:

The following table summarizes our results of operations expenses for the three months ended March 31, 2024 and 2023:

(in thousands)

Nine Months Ended September 30

Three Months Ended March 31

OPERATING EXPENSES:

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Research and Development Expenses

The following table summarizes our research and development expenses for the nine months ended September 30, 2023 and 2022:

The following table summarizes our research and development expenses for the three months ended March 31, 2024 and 2023:

(in thousands)

For the nine months ended September 30

For the three months ended March 31

Employee compensation and benefits

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Total research and development expenses

Research and development expenses increased by $2.3 million during the nine months ended September 30, 2023 compared to the same period in 2022.

The increase in research and development expense during the nine months ended September 30, 2023 was primarily driven by a $1.9 million increase in manufacturing related costs of NXP800 for the ongoing Phase 1 study and planned Phase 1 clinical trials of NXP900, $1.6 million increase in employee compensation and benefits, including $1.2 million increase in stock based compensation, $0.3 million in clinical expenses paid out in connection with our product candidates NXP800 and NXP900, partially

offset by a $1.3 million decrease in license fees which was expensed in 2022 and a $0.2 million decrease in professional services and other expenses associated with our drug product programs.

Research and development expenses increased by $0.3 million during the three months ended March 31, 2024 compared to the same period in 2023.

The increase in research and development expenses during the three months ended March 31, 2024 was primarily driven by a $0.2 million increase in employee compensation in the form of share based compensation and benefits.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the nine months ended September 30, 2023 and 2022:

The following table summarizes our general and administrative expenses for the three months ended March 31, 2024 and 2023:

(in thousands)

For the nine months ended September 30

For the three months ended March 31

Professional and consulting services

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Total general and administrative expenses

General and administrative expenses increased by $1.3 million, during the nine months ended September 30, 2023 compared to the same period in 2022.

The increase in general and administrative expenses for the nine months ended September 30, 2023, was primarily driven by $0.4 million in employee compensation including $0.4 million increase in stock compensation expense, an increase of $0.9 million in professional and consulting fees paid to third-party providers including $0.6 million in increase stock compensation expense and $0.1 million in insurance and other due to public company expenses.

As a result of the foregoing, our loss from operations for the nine months ended September 30, 2023, increased $3.2 million, compared to the same period in 2022, which was primarily driven by employee compensation and benefits, clinical trial expenses, and manufacturing expenses.

General and administrative expenses remained consistent at $1.7 million, during the three months ended March 31, 2024 compared to the same period in 2023.

As a result of the foregoing, our loss from operations for the three months ended March 31, 2024, increased $0.1 million, compared to the same period in 2023, which was primarily driven by employee compensation and benefits, clinical trial expenses, and manufacturing expenses, partially offset by finance income of $0.2 million.

Liquidity and Capital Resources

As of September 30, 2023, we had $22.1 million of cash and cash equivalents.

For the three months ended September 30, 2023, and 2022, we had net losses of $5.9 million and $5.9 million, respectively.

For the nine months ended September 30, 2023, and 2022, we had net losses of $15.6 million and $12.4 million, respectively.

As of September 30, 2023, we had an accumulated deficit of $47.6 million.

As of March 31, 2024, we had $19.5 million of cash and cash equivalents.

For the three months ended March 31, 2024 and 2023, we had net losses of $4.2 million and $4.0 million, respectively.

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

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As part of this transaction, we issued Preferred Investment Options which became exercisable on January 23, 2023, and are exercisable through January 29, 2026, at an exercise price of $9.65 per share, subject to certain adjustments as defined in the securities purchase agreement.

For the nine months ended September 30, 2023, 1,001,091 Preferred Investment Options were exercised, and $8.9 million, net of fees, was received as of September 30, 2023.

For the three months ended March 31, 2024, zero Preferred Investment Options were exercised, and $0.0 million, net of fees, was received as of March 31, 2024.

In addition, as part of the July 2022 Private Placement, we issued warrants to the placement agent to purchase up to 115,481 shares of common stock.

The placement agent warrants are in substantially the same form as the Preferred Investment Options, except that the exercise price is $10.31.

As of September 30, 2023, 79,104 placement agent warrants were exercised, and $0.8 million, net of fees, was received.

As of March 31, 2024, 79,104 placement agent warrants were exercised, and $0.8 million, net of fees, was received.

On March 17, 2023, we filed a shelf registration statement on Form S-3 (the “Registration Statement”).

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Wainwright & Co.

(the “Sales Agent”), pursuant to which we may issue and sell shares of our common stock for an aggregate offering price of up to $40.0 million under an at-the-market offering program (the “ATM”), which is included in the $150.0 million of securities that may be offered pursuant to the Registration

Pursuant to the ATM, we will pay the Sales Agent a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of our common stock.

We are not obligated to make any sales of shares of our common stock under the ATM.

As of September 30, 2023, we have sold 266,650 shares of our common stock and received $4.2 million in net proceeds under the ATM.

As of March 31, 2024, we have sold 874,390 shares of our common stock and received $9.8 million in net proceeds under the ATM.

We believe that the proceeds from our IPO, private placement and ATM 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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We expect our expenses to increase substantially 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 increasing costs associated with operating as a public company as we continue to grow, including increased legal, accounting, investor relations, and other expenses.

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

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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 current or 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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If we raise additional funds through governmental funding, collaborations, strategic partnerships and 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.

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.

The following table provides information regarding our cash flows for the periods presented:

(in thousands)

For the nine months ended September 30

For the three months ended March 31

Net cash used in operating activities

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Operating Activities

During the nine months ended September 30, 2023, $12.1 million of cash was used in operating activities.

During the three months ended March 31, 2024, $4.4 million of cash was used in operating activities.

This was primarily attributable to our net loss of $4.2 million, partially offset by non-cash charges of $1.3 million.

The change in our operating assets and liabilities was primarily due to $0.7 million payment of employee compensation and benefits, $0.5 million payment for our director and officer insurance of deferred offering costs, and $0.5 million payments related to public company operations.

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

The change in our operating assets and liabilities was primarily due to $0.3 million payment of employee compensation and benefits, $0.3 million payment for our director and officer insurance, and $0.5 million payments related to public company operations.

During the three months ended March 31, 2023, $4.8 million of cash was used in operating activities.

This was primarily attributable to our net loss of $4.0 million, partially offset by non-cash charges of $1.4 million.

The change in our operating assets and liabilities was primarily due to an increase of $1.1 million in prepaid and other assets, which was primarily due to $1.1 million payment for our director and officer insurance, partially offset by $2.2 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 $0.7 million payment of employee compensation and benefits, $0.5 million payment for our director and officer insurance, and $0.5 million payments related to public company operations.

Financing activities

During the nine months ended September 30, 2023, net cash provided by financing activities was $14.2 million, consisting primarily of $10.7 million net proceeds from the exercise of warrants associated with our IPO and private placement along with $4.2 million net proceeds from the sale of common stock through the ATM, offset by $0.4 million of deferred offering costs paid.

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, offset by $3.9 million of commission and deferred offering costs paid.

During the three months ended March 31, 2024, net cash provided by financing activities was $4.7 million, consisting primarily of $4.7 million net proceeds from the sale of common stock through the ATM.

During the three months ended March 31, 2023, net cash provided by financing activities was $0.3 million, consisting primarily of $0.7 million proceeds from the exercise of warrants associated with our IPO and private placement, offset by $0.4 million of deferred offering costs paid.

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 September 2023, we were obligated to pay up to $22.0 million in milestone payments to the ICR related to pre-approval milestones, up to $178 million (in addition to the $22.0 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.

On March 31, 2022, the Company and ICR agreed to research and development support of an additional $0.4 million ($0.9 million total).

As of March 31, 2024, we were obligated to pay up to $22.0 million in milestone payments to the ICR related to pre-approval milestones, up to $178 million (in addition to the $22.0 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, we originally agreed to provide the ICR with up to an additional $0.5 million in research and development.

On March 31, 2022, we agreed to provide the ICR with $0.4 million of additional research and development support ($0.9 million total).

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

As of September 30, 2023, we were obligated to make up to $45.0 million in milestone payments to the UoE related to pre-approval milestones, including $0.5 million on the first anniversary of the agreement which we paid as of September 30, 2023, up to $279.6 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 our future fund raising up to a cumulative total of $3.0 million, unless development ceases.

As of March 31, 2024, we were obligated to make up to $45.0 million in milestone payments to the UoE related to pre-approval milestones, including $0.5 million on the first anniversary of the agreement which we paid as of September 30, 2023, up to

$279.6 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 our future fund raising up to a cumulative total of $3.0 million, unless development ceases.

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

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Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission.

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Critical Accounting Policies and Significant Judgments and Estimates

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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