What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2024-03-11 compared with 2023-03-09 · 195 added, 141 removed, 530 unchanged (39% of the section changed)

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Description of the Matter

As discussed in Note 2 in the consolidated financial statements, the Company enters into contracts with clinical research organizations (CROs) to conduct clinical services on their behalf.

As discussed in Note 2 in the consolidated financial statements, the Company enters into contracts with contract research organizations (CROs) to conduct clinical services on their behalf.

Judgments and estimates are required to determine the amounts accrued for estimated ongoing research and development costs.

The Company analyzes the progress of the studies or clinical trials, including the phase or completion of activities, invoices received and contracted costs.

The Company analyzes the progress of the studies or clinical trials, including the phase or

completion of activities, invoices received and contracted costs.

Auditing the Company’s accrual for clinical trial costs is complex since the information necessary to estimate the accruals is accumulated from the CROs and the Company's assessment of that information is subject to variability and uncertainty.

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How We Addressed the Matter in Our Audit

To test the clinical trial accrual, our audit procedures included, among others, reading a sample of the Company’s agreement contracts with the CROs to understand key financial and contractual terms and testing the accuracy and completeness of the underlying data used in the accrual computations.

To test the clinical trial accrual, our audit procedures included, among others, reading a sample of the Company’s contracts with the CROs to understand key financial and contractual terms and testing the accuracy and completeness of the underlying data used in the accrual computations.

We also evaluated management’s estimates of the vendor’s progress for a sample of clinical trials by inquiring of the Company’s operations personnel overseeing the clinical trials and obtaining information directly from third party vendors regarding their estimate of costs that have been incurred through December 31, 2023.

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Total current assets

Property and equipment, net

Operating lease right-of-use assets

Other assets and long-term deposits

Liabilities and stockholders’ equity

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Additional paid-in capital

Accumulated other comprehensive loss

Accumulated other comprehensive gain (loss)

Accumulated deficit

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Other comprehensive loss:

Net unrealized loss on marketable securities

Net unrealized gain (loss) on marketable securities

Total comprehensive loss

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Balances at December 31, 2021

Stock-based compensation expense

Employee stock purchase plan expense

Issuance of shares under employee stock purchase plan

Exercise of stock options

Vesting of early exercised stock options

Vesting of restricted stock awards

Exercise of stock options

Issuance of shares under the ESPP plan

Stock-based compensation expense

Net unrealized loss on marketable securities

Balances at December 31, 2022

Issuance of shares under equity private placement, net of issuance costs of $ 264

Stock-based compensation expense

Exercise of stock options

Issuance of shares under employee stock purchase plan

Employee stock purchase plan expense

Vesting of early exercised stock options

Vesting of restricted stock awards

Exercise of stock options

Issuance of shares under the ESPP plan

Stock-based compensation expense

Net unrealized loss on marketable securities

Vesting of performance-based restricted stock unit awards

Net unrealized gain on marketable securities

Balances at December 31, 2023

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Depreciation and amortization expense

Loss on sale of equipment

Non-cash lease expense

Premium amortization and discount accretion on marketable securities, net

Stock-based compensation expense, including ESPP expense

Non-cash interest income on marketable securities

Stock-based compensation expense, including employee stock purchase plan expense

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Other assets and long-term deposits

Accounts payable

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Purchases of marketable securities

Net cash provided by (used in) investing activities

Disposal of fixed assets

Net cash (used in) provided by investing activities

Cash flows from financing activities:

Proceeds from equity private placement, net of issuance costs of $ 264

Proceeds from exercise of stock options

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Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental disclosure of non-cash investing and financing activities:

Reclassification of prepaid expenses and other current liabilities into other assets

Vesting of early exercised stock options

See accompanying notes to the consolidated financial statements.

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(“Olema” or the “Company”) is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of next-generation targeted therapies for women’s cancers.

The Company is initially focused on developing therapies for the treatment of breast cancer.

The Company’s wholly owned, lead product candidate, OP-1250, is a novel oral therapy with combined activity as both a complete estrogen receptor (“ER”) antagonist (“CERAN”) and a selective ER degrader (“SERD”).

It is currently being evaluated as a single agent in an ongoing Phase 1/2 clinical study, and in Phase 1b/2 combination with palbociclib, ribociclib, and alpelisib, in patients with recurrent, locally advanced or metastatic estrogen receptor-positive (“ER+”), human epidermal growth factor receptor 2-negative (“HER2-“) breast cancer.

The Company is advancing a pipeline of novel therapies by leveraging its deep understanding of endocrine-driven cancers, nuclear receptors, and mechanisms of acquired resistance.

The Company's wholly-owned, lead product candidate, palazestrant (OP-1250), is a novel, orally-available small molecule with dual activity as both a complete estrogen receptor ("ER") antagonist ("CERAN") and selective ER degrader ("SERD").

In addition to its lead product candidate, Olema is developing a potent KAT6 inhibitor (OP-3136).

The Company is located in San Francisco, California and was incorporated in Delaware on August 7, 2006, under the legal name of CombiThera, Inc.

and on March 25, 2009, was renamed Olema Pharmaceuticals, Inc.

The Company’s principal operations are based in San Francisco, California, and has operations in Cambridge, Massachusetts.

Olema Oncology Australia Pty Ltd was incorporated on January 6, 2021 and is a wholly-owned subsidiary of the Company (collectively with Olema Pharmaceuticals, Inc.

referred to as “Olema” or the “Company” herein).

The Company’s principal operations are based in San Francisco, California, and it has operations in Cambridge, Massachusetts.

Olema Oncology Australia Pty Ltd was incorporated on January 6, 2021, and is a wholly-owned subsidiary of the Company (collectively with Olema Pharmaceuticals, Inc., referred to as “Olema” or the “Company” herein).

It operates in one business segment and therefore has only one reportable segment.

The Company is subject to risks and uncertainties common to early-stage companies in the biopharmaceutical industry, including, but not limited to, successful discovery and development of its product candidates, development by competitors of new technological innovations, dependence on key personnel, the ability to attract and retain qualified employees, protection of proprietary technology, compliance with governmental regulations, the impact of COVID-19 and other geopolitical and macroeconomic events, such as the COVID-19 pandemic and the ongoing conflict between Ukraine and Russia and related sanctions, the ability to secure additional capital to fund operations and commercial success of its product candidates.

OP-1250 and any future product candidates the Company may develop will require extensive nonclinical and clinical testing and regulatory approval prior to commercialization.

The Company is subject to risks and uncertainties common to early-stage companies in the biopharmaceutical industry, including, but not limited to, successful discovery and development of its product candidates, development by competitors of new technological innovations, dependence on key personnel, the ability to attract and retain qualified employees, protection of proprietary technology, compliance with governmental regulations, the impact of geopolitical and macroeconomic events discussed in further detail below, the ability to secure additional capital to fund operations and commercial success of its product candidates.

Palazestrant, OP-3136 and any future product candidates the Company may develop will require extensive nonclinical and clinical testing and regulatory approval prior to commercialization.

These efforts require significant amounts of additional capital, adequate personnel, and infrastructure and extensive compliance-reporting capabilities.

Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

The Company had $ 204.4 million of cash, cash equivalents and marketable securities at December 31, 2022, which management believes is sufficient to fund its operating expenses and capital expenditure requirements into 2025.

Impact of COVID-19 and Other Geopolitical and Macroeconomic Events

The extent of the impact of the COVID-19 pandemic on the Company’s business, operations and development timelines and plans remains uncertain, and will depend on certain developments, including the duration of the outbreak and its impact on the Company’s development activities, planned clinical trial enrollment, future trial sites, contract research organizations (“CROs”), third-party manufacturers, and other third parties with whom the Company does business, as well as its impact on regulatory authorities and the Company’s key scientific and management personnel.

During 2021 and 2022, although the Company modified its operations and practices due to the COVID-19 pandemic and to comply with federal, state and local requirements, its business, operations and development timelines were not material adversely affected.

In October 2021, the Company re-opened its offices to administrative employees, however due to the resurgence of cases relating to the spread of the Delta and Omicron variants, the Company continued to limit access to its offices.

In March 2022, the Company fully re-opened its offices to all employees and continues to comply with protocols implemented by

respective health authorities.

As a result of the COVID-19 pandemic, we experienced some delays in setting up our current Phase 1/2 clinical study and in clinical site initiation, including delays in recruiting clinical site investigators and clinical site staff.

We also experienced subject enrollment timeline delays in a Phase 1b clinical study of OP-1250 in combination with another CDK4/6 inhibitor and with a PI3K a inhibitor.

We may experience these or other continuing impacts of the COVID-19 pandemic in the future.

The Company continues to monitor developments related to COVID-19 and may close its offices again in the future.

The extent to which the COVID-19 pandemic may affect the Company’s business, operations and development timelines and plans in the future, including the resulting impact on its expenditures and capital needs, remains uncertain.

In addition to the ongoing COVID-19 pandemic, global economic and business activities continue to face widespread macroeconomic uncertainties, including labor shortages, inflation and monetary supply shifts, recession risks and potential disruptions from the Russia-Ukraine conflict, which has resulted in volatility in the U.S.

and global financial markets and which has led to, and may continue to lead to, additional disruptions to trade, commerce, pricing stability, credit availability and supply chain continuity globally.

Private Placement

On September 5, 2023, the Company entered into a securities purchase agreement with institutional and accredited investors for the private placement of 13,211,381 shares of the Company’s common stock (the “Private Placement”) at a price of $ 9.84 per share, resulting in gross proceeds of approximately $ 130.0 million.

After deducting offering expenses related to the Private Placement of approximately $ 0.3 million, the net proceeds to the Company from the Private Placement were approximately $ 129.7 million.

The Private Placement closed on September 12, 2023.

The Company had $ 261.8 million of cash, cash equivalents and marketable securities at December 31, 2023 , in addition to an available balance of $ 25.0 million under the Loan and Security Agreement (the “Loan Agreement”), by and between the Company, as borrower, and Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (the “Bank”).

Management believes that the Company’s cash, cash equivalents, marketable securities, and the amounts available under the Loan Agreement will be sufficient to fund the Company’s current operating plan for at least the next 12 months from the filing date of these consolidated financial statements.

On January 5, 2024, the Company entered into a sales agreement (the "Sales Agreement"), with Cowen and Company, LLC ("TD Cowen"), as sales agent, pursuant to which the Company may offer and sell, from time to time, shares of its common stock, having an aggregate offering price of up to $ 150.0 million (the "ATM Shares").

The sales, if any, of the ATM Shares will be made by any method permitted that is deemed to be an “at-the-market” ("ATM") equity offering as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, including sales made directly on or through the Nasdaq Global Select Market.

The Company has agreed to pay TD Cowen a commission of up to 3.0 % of the aggregate gross proceeds from any ATM Shares sold by TD Cowen.

Impact of Geopolitical and Macroeconomic Events

Global economic and business activities continue to face widespread geopolitical and macroeconomic uncertainties, including labor shortages, inflation rates and the responses by central banking authorities to control such inflation, monetary supply shifts and related financial market risks and instability, recession risks, as well as potential disruptions from the Russia-Ukraine conflict and armed conflict between Israel and groups based in surrounding regions, all of which have resulted in volatility in the U.S.

and global financial markets and which have led to, and may continue to lead to, additional disruptions to trade, commerce, pricing stability, credit availability and supply chain continuity globally.

The extent of the impact of these factors on the Company’s operational and financial performance, including its ability to execute its business strategies and initiatives in the expected time frame, will depend on future developments, which are uncertain and cannot be predicted.

Any continued or renewed disruption resulting from these factors could negatively impact the Company’s business.

The Company continues to monitor the impact of these macroeconomic factors on its results of operations, financial condition and cash flows.

The Company continues to monitor the impact of these geopolitical and macroeconomic factors on its results of operations, financial condition and cash flows.

Summary of Significant Accounting Policies

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Cash and Cash Equivalents

Cash and cash equivalents are defined as short-term, highly liquid investments with original maturities of 90 days or less at the date of purchase.

Cash and cash equivalents are defined as short-term, highly liquid investments with original maturities of 90 days or fewer at the date of purchase.

Cash deposits are all in reputable financial institutions in the United States as of December 31, 2023 and 2022 .

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All marketable securities have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities.

Management determines the appropriate classification of its investments at the time of purchase and reevaluates such designation as of each balance sheet date.

Management determines the appropriate classification of its investments at the time of purchase and reevaluates such designation as of

each balance sheet date.

Unrealized gains and losses are excluded from net loss and are reported as a component of comprehensive loss.

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The Company’s future results of operations involve a number of other risks and uncertainties.

Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s current and potential future product candidates, uncertainty of market acceptance of the Company’s product candidates, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals or sole-source suppliers.

Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s current and potential future product candidates, uncertainty of market acceptance of the Company’s product candidates, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships, dependence on key individuals or sole-source suppliers, and geopolitical and macroeconomic factors.

The Company’s product candidates require approvals from the U.S.

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If the Company were denied approval, approval was delayed or the Company was unable to maintain approval for any product candidate, it could have a materially adverse impact on the Company.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued new lease accounting guidance in Accounting Standard Update (“ASU”) 2016-02, Leases , and in July 2018 issued ASU 2018-10, Codification Improvements to Topic 842, Leases , and ASU 2018-11, Leases (Topic 842):

Targeted Improvements (the foregoing ASUs collectively referred to as “Topic 842”).

Under the new guidance, lessees are required to recognize for all leases (with the exception of short-term leases) at the commencement date:

The Company adopted Accounting Standard Update (“ASU”) 2016-12, Leases , Topic 842, (“Topic 842”) as of January 1, 2021.

Under Topic 842, lessees are required to recognize for all leases (with the exception of short-term leases) at the commencement date:

(1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis;

and (2) a right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

and (2) a right-of-use (“ROU”) asset, which is

an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the consolidated statements of operations and comprehensive loss.

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The Company elected to not apply the recognition requirements of Topic 842 to short-term leases with terms of 12 months or less.

Additional information and disclosures required by Topic 842 are contained in Note 11 “Lease”.

Additional information and disclosures required by Topic 842 are contained in Note 11 “Lease” in the Annual Report.

Research and Development Costs

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Research and development expenses consist of costs incurred to discover, research and develop product candidates.

These costs are recorded within research and development expenses in the consolidated statements of operations and include personnel expenses, stock-based compensation expenses, allocated general and administrative expenses, and external costs including fees paid to consultants and CROs and contract manufacturing organizations (“CMOs”), in connection with nonclinical studies and clinical trials, and other related clinical trial fees, such as for investigator fees, patient screening, laboratory work, clinical trial database management, clinical trial material management and statistical compilation and analysis.

Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses and other current

These costs are recorded within research and development expenses in the consolidated statements of operations and include personnel expenses, stock-based compensation expenses, allocated general and administrative expenses, and external costs including fees paid to consultants and contract research organizations (“CROs”) and contract manufacturing organizations (“CMOs”), in connection with nonclinical studies and clinical trials, and other related clinical trial fees, such as for investigator fees, patient screening, laboratory work, clinical trial database management, clinical trial material management and statistical compilation and analysis.

Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses and other current assets.

Such amounts are recognized as an expense as the goods are delivered or the related services are performed.

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Reimbursements of certain costs associated with research activities performed under the agreement with Novartis Institutes for BioMedical Research, Inc.

(“Novartis”) are recorded as a reduction of research and development expenses, as described in Note 12, Commitments and Contingencies – Clinical Collaboration and Supply Agreement .

(“Novartis”) are recorded as a reduction of research and development expenses and as a receivable due from Novartis, which is recorded under prepaid expenses and

other current assets in the accompanying consolidated financial statements, as described in Note 12, Commitments and Contingencies – Clinical Collaboration and Supply Agreement.

Research Contract Costs and Accruals

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Costs of repairs and maintenance are expensed as incurred.

Property and Equipment, net of accumulated depreciation are included in "Other assets and long-term deposits" in the accompanying consolidated balance sheets.

Income taxes are computed using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s consolidated financial statements.

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Net Loss Per Common Share

Basic net loss per common share is computed by dividing the net loss per common share by the weighted average number of common shares outstanding for the period without consideration of common stock

Basic net loss per common share is computed by dividing the net loss per common share by the weighted average number of common shares outstanding for the period without consideration of common stock equivalents.

Diluted net loss per common share is computed by adjusting net loss to reallocate undistributed earnings based on the potential impact of dilutive securities, and by dividing the diluted net loss by the weighted average number of common shares outstanding for the period, including potential dilutive common shares.

For purpose of this calculation, outstanding stock options, including unvested early exercised options, unvested restricted stock awards, unvested performance-based restricted stock unit awards, contingently issuable common stock related to the 2020 Employee Stock Purchase Plan (the “ESPP”) are considered potential dilutive common shares.

For purpose of this calculation, outstanding stock options, including unvested early exercised options, unvested restricted stock awards, unvested performance-based restricted stock unit awards and contingently issuable common stock related to the 2020 Employee Stock Purchase Plan (the “ESPP”) are considered potential dilutive common shares.

Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods as the inclusion of all potential common shares outstanding would have been anti-dilutive.

Recent Accounting Pronouncements

There were no new accounting pronouncements that were relevant to the Company as of and for the year ended December 31, 2022.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued a new income tax-related accounting guidance in Accounting Standard Update ("ASU") 2023-09, Improvements to Income Tax Disclosures.

The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

For public business entities, the new requirements will be effective for annual periods beginning after December 15, 2024.

The guidance will be applied on a prospective basis with the option to apply the standard retrospectively.

Early adoption is permitted.

The Company did not early adopt this guidance as of December 31, 2023 .

The Company does not expect the adoption of ASU 2023-09 to have a material impact on its consolidated financial statements.

Fair Value Measurement

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Commercial paper

Corporate bonds

government treasury bills

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Long-term marketable securities (>12 months to maturity)

December 31, 2022

(in thousands)

Financial Assets

Money market funds

Commercial paper

government treasury bills

Government-sponsored enterprise securities

December 31, 2022

(in thousands)

Financial Assets

Cash and cash equivalents

Short-term marketable securities (<12 months to maturity)

Long-term marketable securities (>12 months to maturity)

The Company considers its marketable securities with maturities beyond one year as current assets, based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations.

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For debt securities, the Company also considers whether (i) it is more likely than not that the Company will be required to sell the debt securities before recovery of their amortized cost basis, and (ii) the amortized cost basis cannot be recovered as a result of credit losses.

There were five marketable securities that have been in a consecutive loss position for more than 12 months as of December 31, 2022.

They had $ 0.3 million unrealized loss with a fair value of $ 12.7 million as of December 31, 2022.

The Company does not believe that the total unrealized losses of $ 1.8 million as of December 31, 2022 are credit related but are rather a reflection of current market yields and/or current marketplace bid/ask spreads.

During the years ended December 31, 2022 and 2021, respectively, the Company did not recognize any other-than-temporary impairment loss.

There were no marketable securities that have been in a consecutive loss position for more than 12 months as of December 31, 2023.

During the year ended December 31, 2023, the Company did not recognize any other-than-temporary impairment loss.

As of December 31, 2023 , there was no allowance for losses on available-for-sale debt securities attributable to credit risk.

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dollars and Australian dollars.

Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):

Lab equipment

Computer equipment

Property and equipment, gross

Accumulated depreciation

Property and equipment, net

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

Prepaid insurance

Reimbursable research and development costs from a collaboration partner

Prepaid clinical trial costs

Prepaid subscriptions and licenses

Prepaid insurance

Prepaid clinical development costs

Interest receivable

Prepaid research contracts

Prepaid subscriptions and licenses

Other Assets and Long-Term Deposits

Other assets and long-term deposits consisted of the following (in thousands):

Clinical development project deposits

Property and equipment, net

Security deposits

Other Current Liabilities

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Accrued payroll related costs

Early exercise of unvested stock options

Accrued taxes

Early exercise of unvested stock options

As of each of the balance sheet dates below, the Company had reserved shares of common stock for issuance in connection with the following:

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(1) Balance as of December 31, 2022 includes 18,640 unvested early exercised stock options (see Note 8, “Stock-Based Compensation”).

(2) Balance as of December 31, 2021 includes 46,598 unvested early exercised stock options (see Note 8, “Stock-Based Compensation”).

Stock-Based Compensation

In 2014, the Company’s Board of Directors and stockholders approved and adopted the 2014 Stock Plan (the “2014 Plan”).

In 2014, the Company’s Board of Directors (the “Board”) and stockholders approved and adopted the Company’s 2014 Stock Plan (the “2014 Plan”).

The 2014 Plan permitted the grant of options and restricted stock awards (including restricted stock purchase rights and restricted stock bonus awards).

The 2014 Plan was terminated on the date the 2020 Equity Incentive Plan (the “2020 Plan”), which is described below, became effective, and no additional awards will be made pursuant to the 2014 Plan.

The 2014 Plan was terminated on the date the Company’s 2020 Equity Incentive Plan (the “2020 Plan”), which is described below, became effective, and since that date, no additional awards have been or will be made pursuant to the 2014 Plan.

However, any outstanding awards granted under the 2014 Plan will remain outstanding, subject to the terms of the 2014 Plan award agreements, until such outstanding options are exercised or until any awards terminate or expire by their terms.

In 2020, the Company’s Board of Directors and stockholders approved and adopted the 2020 Equity Incentive Plan (the “2020 Plan”).

In 2020, the Board and the Company’s stockholders approved and adopted the 2020 Plan.

The 2020 Plan permits the grant of options, restricted stock awards, stock appreciation rights, restricted stock unit awards, performance awards, and other awards.

The maximum number of shares of common stock that may be issued under the 2020 Plan will not exceed 6,494,510 shares of the Company’s common stock, which is the sum of (i) 2,152,080 new shares, plus (ii) an additional number of shares not to exceed 4,342,430 shares, consisting of any shares of the Company’s common stock subject to outstanding stock options or other stock awards granted under the Company’s 2014 Plan that, on or after the 2020 Plan becomes effective, terminate or expire prior to exercise or settlement;

are not issued because the award is settled in cash;

are forfeited because of the failure to vest;

or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price.

In addition, the number of shares of the Company’s common stock reserved for issuance under the 2020 Plan automatically increases on January 1 of each year for a period of ten years , beginning on January 1, 2021 and continuing through January 1, 2030, in an amount equal to the lesser of (1) 5 % of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year, or (2) a lesser number of shares determined by the Company’s board of directors no later than December 31 of the immediately preceding year.

In 2022, the Company’s Board of Directors approved and adopted the 2022 Inducement Plan (the “2022 Inducement Plan”).

The maximum number of shares of common stock that initially issuable under the 2020 Plan was a number not to exceed 6,494,510 shares of the Company’s common stock, which is the sum of (i) 2,152,080 new shares, plus (ii) an additional number of shares not to exceed 4,342,430 shares, consisting of any shares of the Company’s common stock subject to outstanding stock options or other stock awards granted under the 2014 Plan that, on or after the date on which the 2020 Plan became effective, terminated or expired prior to exercise or settlement;

were not issued because the award was settled in cash;

were forfeited because of the failure to vest;

or were reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price.

In addition, the number of shares of the Company’s common stock reserved for issuance under the 2020 Plan automatically increases on January 1 of each year for a period of ten years , beginning on January 1, 2021 and continuing through January 1, 2030, in an amount equal to the lesser of (1) 5 % of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year, or (2) a lesser number of shares determined by the Board no later than December 31 of the immediately preceding year.

In 2022, the Board approved and adopted the Company’s 2022 Inducement Plan (the “2022 Inducement Plan”).

Under the 2022 Inducement Plan, initially 2,000,000 shares of common stock were reserved for issuance.

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Specific vesting for stock options and stock appreciation rights is service related and determined in each award agreement, where stock options and stock appreciation rights are fully vested at the grant date or follow a graded vesting schedule.

Stock options and stock appreciation rights granted under the Plan generally expire ten years after the date of grant.

Stock options and stock appreciation rights granted under the plans generally expire ten years after the date of grant.

Stock Option Valuation

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The following table summarizes the stock option activity under the 2014 Plan, the 2020 Plan and the 2022 Inducement Plan:

Intrinsic Value

(in thousands)

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Options expected to vest as of December 31, 2023

(1) Exercised amount includes vesting of early exercised options.

(2) Balance as of December 31, 2022 includes 18,640 unvested early exercised stock options.

(1) Exercised amount includes vesting of early-exercised options and shares returned for taxes withheld for exercise and net transactions.

The weighted-average grant-date fair value per share of options granted during the years ended December 31, 2023 and 2022 was $ 4.37 and $ 3.83 , respectively.

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Early Exercise of Stock Options

In September 2020, one employee and one non-employee paid $ 0.6 million to early exercise 135,525 options with exercise prices ranging from $ 4.406 per share to $ 4.824 per share.

As of December 31, 2022, 116,885 of such shares had vested with the remaining shares vesting over their respective terms.

The terms of the 2014 Plan permit certain option holders to exercise options before their options are vested, subject to certain limitations.

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Shares issued as a result of early exercise that have not vested are subject to repurchase by the Company upon termination of the purchaser’s employment, at the price paid by the purchaser.

are not deemed to be outstanding for accounting purposes until they vest and are therefore excluded from shares outstanding and from basic and diluted net loss per share until the repurchase right lapses and the shares are no longer subject to the repurchase feature.

Such shares are not deemed to be outstanding for accounting purposes until they vest and are therefore excluded from shares outstanding and from basic and diluted net loss per share until the repurchase right lapses and the shares are no longer subject to the repurchase feature.

A liability is recognized related to the cash proceeds of the unvested options and is reclassified into common stock and additional paid-in capital as the shares vest and the repurchase right lapses.

Accordingly, the Company has recorded the unvested portion of the exercise proceeds of $ 0.1 million in other current liabilities as of December 31, 2022.

All early exercised options are vested as of December 31, 2023.

Restricted Stock Awards

In June 2020, the Company granted to certain employees 789,095 shares of restricted common stock (the “RSAs”) under the 2014 Plan as consideration for services with a deemed value of $ 2.40 per share, or $ 1.9 million.

The following table summarizes the restricted stock activity under the 2014 Plan during the year ended December 31, 2023:

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Pursuant to the terms of the PSUs, 65 % of each PSU vests upon certification by the Compensation Committee of the Company of achieving a pre-determined performance goal by June 30, 2024, and 35 % of each PSU vests upon certification by the Compensation Committee of the Company of achieving a pre-determined performance goal by June 30, 2024.

Expense recognition for PSUs commences when it is determined that attainment of the performance goal is probable or met.

As of December 31, 2022, it was determined that the performance goals were not yet met, and therefore, the Company recorded zero stock-based compensation expense related to the PSUs for the year ended December 31, 2022.

Expense recognition for PSUs commences when it is determined that attainment of the performance goal is met.

As of December 31, 2023 , one of the performance goals was met related to the 35

% of each PSU vesting, and therefore, the Company recorded $ 0.7 million stock-based compensation expense related to the PSUs for the year ended December 31, 2023.

The following table summarizes the performance-based restricted stock activity under the 2020 plan during the year ended December 31, 2023:

Number of Shares

Grant Date Fair Value

Unvested performance-based restricted stock as of December 31, 2022

Unvested performance-based restricted stock as of December 31, 2023

2020 Employee Stock Purchase Plan (“2020 ESPP”)

In 2020, the Company’s board of directors and stockholders approved and adopted the 2020 ESPP.

In 2020, the Board and the Company’s stockholders approved and adopted the ESPP.

The ESPP permits eligible employees who elect to participate in an offering under the ESPP to have up to 15 % of their eligible earnings withheld, subject to certain limitations, to purchase shares of common stock pursuant to the ESPP.

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or (ii) 85 % of the fair market value of a share of the Company’s common stock on the date of purchase.

Each offering period is not to exceed 27 months and will include one or more purchase periods (each a “Purchase Period”) as approved by the Company’s board of directors in the offering.

The current offering period will consist of two (2) six-month purchase periods (each a “Purchase Period”) during which payroll deductions of the participants are accumulated under the 2020 ESPP.

The last business day of each Purchase Period is referred to as the “Purchase Date.” A total of 430,416 shares of common stock were initially reserved for issuance pursuant to the 2020 ESPP.

Each offering period is not to exceed 27 months and will include one or more purchase periods (each a “Purchase Period”) as approved by the Board in the offering.

A total of 430,416 shares of common stock were initially reserved for issuance pursuant to the ESPP.

Subsequently, the number of shares of the Company’s common stock reserved for issuance under the ESPP automatically increases on January 1 of each year for a period of up to ten years , commencing on January 1, 2021 and continuing through January 1, 2030, in amount equal to the lesser of (i) 1 % of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, (ii) 860,832 shares of common stock, or (iii) a lesser number of shares determined by the Board no later than December 31 of the preceding calendar year.

The ESPP is a compensatory plan as defined by the authoritative guidance for stock-based compensation.

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Stock-Based Compensation Expense

Stock-based compensation expense related to awards granted under the 2014 Plan, including the RSAs, the 2020 Plan, the 2022 Inducement Plan, and the 2020 ESPP was classified in the consolidated statements of operations and comprehensive loss as follows (in thousands):

Stock-based compensation expense related to awards granted under the 2014 Plan, the 2020 Plan, the ESPP and the 2022 Inducement Plan was classified in the consolidated statements of operations and comprehensive loss as follows (in thousands):

Years Ended December 31,

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State income taxes, net of federal tax benefit

Foreign research and development tax credit

Permanent differences in non-tax-deductible executive compensation

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Permanent differences others

Foreign research and development tax credit

Other deferred items

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income tax purposes, NOLs generated in tax years beginning before January 1, 2018 can still be carried forward for up to 20 years , but net operating losses generated for tax years beginning after December 31, 2017 carryforward indefinitely and can be used to offset taxable income, but the deductibility of such Federal NOLs may be limited to 80 % of current year taxable income for tax years beginning on or after December 31, 2023.

Of the total Federal net operating loss of $ 115.0 million, $ 3.3 million will begin to expire in 2032 and $ 111.7 million will not expire.

Of the total Federal net operating loss of $ 150.8 million,

$ 3.3 million will begin to expire in 2032 and $ 147.5 million will not expire.

The state NOL carryover of $ 187.0 million will begin to expire in 2032.

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Employee stock purchase plan contingently issuable

Included in the potentially dilutive options to purchase common stock are 18,640 unvested stock options that were early exercised by an employee and a non-employee in September 2020 (see Note 8, “Stock-Based Compensation”).

The Company determined the early exercises to be non-substantive as the shares were subject to repurchase rights.

Accordingly, the Company has excluded these shares from the calculation of basic and diluted net loss per share for the years ended December 31, 2022 and 2021.

The Company leases certain of its facilities under non-cancellable operating leases expiring at various dates through 2026.

On June 1, 2013, the Company entered into a management services agreement with MandalMed, Inc.

(“MandalMed”) (the “MandalMed Services Agreement”) to have access to and use a portion of approximately 5,762 square feet of space for the use of laboratory benches, lab equipment, office space, and administrative and facilities services.

(the “MandalMed Services Agreement”) to have access to and use a portion of approximately 5,762 square feet of space for the use of laboratory benches, lab equipment, office space, and administrative and facilities services.

The Company subsequently entered into six amendments to extend the agreement term to November 2023.

As part of the sixth amendment, the Company gained access to use additional space of approximately 2,130 square feet (the “Additional Space”) for a three year period commencing on December 1, 2020 and ending on November 30, 2023.

According to the terms of the MandalMed Services Agreement, the Company paid a security deposit of less than $ 0.1 million and is required to pay monthly rent and common area charges.

As part of the sixth amendment, the Company gained access to use additional space of approximately 2,130 square feet for a three year period commencing on December 1, 2020 and ending on November 30, 2023.

This lease was terminated during the fourth quarter of 2023.

According to the terms of the MandalMed Services Agreement, the Company had previously paid a security deposit of less than $ 0.1 million and was required to pay monthly rent and common area charges.

As of December 31, 2023, this security deposit had been returned to the Company.

On August 27, 2020, the Company entered into a lease agreement with 512 2nd Street LLC to lease approximately 3,500 square feet of office space in San Francisco, California (the “Office Space Lease Agreement”).

The Office Space Lease Agreement is for a period of two years commencing on September 1, 2020 and ending August 31, 2022.

In April 2022, the Company extended the Office Space Lease Agreement up to August 31, 2023 and has one year renewal option to extend the term up to August 31, 2024.

According to the terms of the Office Space Lease Agreement, the Company paid a $ 0.1 million security deposit and is required to pay monthly rent and common area charges.

The extension of the lease term was accounted for as a modification under Topic 842 and the Company recorded additional ROU asset and lease liability of $ 0.3 million and $ 0.3 million, respectively, in the consolidated financial statements.

On December 15, 2020, the Company entered into a lease agreement with Tennieh LLC to lease approximately 9,800 square feet of office space in San Francisco, California (the “Laboratory Lease Agreement”).

The Office Space Lease Agreement was for a period of two years commencing on September 1, 2020 and ending August 31, 2022.

In April 2022, the Company extended the Office Space Lease Agreement up to August 31, 2023 and had one year renewal option to extend the term up to August 31, 2024 .

The Company decided not to exercise the one-year renewal option at the end of the lease term (i.e., August 31, 2023).

According to the terms of the Office Space Lease Agreement, the Company had previously paid a $ 0.1 million security deposit and was required to pay monthly rent and common area charges.

As of December 31, 2023, this security deposit had been returned to the Company.

On December 15, 2020, the Company entered into a lease agreement with Tennieh LLC to lease approximately 9,800 square feet of office and lab space in San Francisco, California (the “Laboratory Lease Agreement”).

The Laboratory Lease Agreement is for a period of five years commencing approximately February 1, 2021 and ending January 31, 2026.

According to the terms of the Laboratory Lease Agreement, the Company paid a $ 0.4 million security deposit and is required to pay monthly rent and common area charges.

On August 17, 2023, the Company entered into a sublease agreement with Dropbox, Inc.

to sublease approximately 6,713 square feet of office space in San Francisco, California (the “Dropbox Sublease Agreement”).

The Dropbox Sublease Agreement is for a period of two years commencing on September 5, 2023 and ending December 31, 2025.

According to the terms of the Dropbox Sublease Agreement, the Company paid a $ 0.1 million security deposit and is required to pay monthly rent and common area charges.

The sublease was accounted for under Topic 842 and the Company recorded ROU asset and lease liability of $ 0.2 million and $ 0.2 million, respectively, in the accompanying consolidated financial statements.

On August 23, 2023, the Company entered into a lease agreement with The Cambridge Redevelopment Authority to lease approximately 4,020 square feet of office space in Cambridge, Massachusetts (the “Cambridge Lease Agreement”).

The Cambridge Lease Agreement is for a period of three years commencing on September 15, 2023 and ending September 14, 2026.

According to the terms of the Cambridge Lease Agreement, the Company paid a less than $ 0.1 million security deposit and is required to pay monthly rent and common area charges.

The lease was accounted for under Topic 842 and the Company recorded ROU asset and lease liability of $ 0.7 million and $ 0.7 million, respectively, in the accompanying consolidated financial statements.

The following table summarizes total lease expense during the years ended December 31, 2023 and 2022 (in thousands):

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Straight-line operating lease expense

Variable lease expense

Short-term lease expense

Variable lease expense

Total operating lease expense

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Operating cash flows from operating leases

ROU asset obtained in exchange for a new operating lease liability

Supplemental noncash information on lease liability arising from obtaining a right-use-asset

The following table summarizes the Company’s future minimum lease payments and reconciliation of lease liabilities as of December 31, 2023 (in thousands):

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Commitments and Contingencies

Loan Agreement

On September 5, 2023, the Company entered into the Loan Agreement by and between the Company and the Bank.

The Loan Agreement provides for a four-year senior secured credit facility in an aggregate principal amount of up to $ 50.0 million (the “Credit Facility”), of which $ 25.0 million became available upon the closing of the Private Placement, and the remaining $ 25.0 million may be made available upon approval of the Bank in its discretion.

The Credit Facility will mature on August 1, 2027 (the “Maturity Date”).

As of December 31, 2023, the Company had not drawn down from the Credit Facility.

The obligations under the Loan Agreement are secured by substantially all of the assets of the Company, subject to limited exceptions.

During the term of the Credit Facility, interest will accrue on any outstanding balance due under the Credit Facility at a floating rate per annum equal to the higher of (i) 8.0 % and (ii) the prime rate.

During an event of default, any outstanding amount under the Credit Facility will bear interest at a rate of 3.0 % in excess of the otherwise applicable rate of interest.

The Company will pay certain fees with respect to the Credit Facility, including a prepayment fee on any amount advanced under the Credit Facility to the extent paid prior to the Maturity Date, a final payment fee on the amount advanced under the Credit Facility, and an unused commitment fee of 1.5 % on the portion of Credit Facility that remains undrawn as of June 30, 2024, as well as certain other fees and expenses of the Bank.

The Loan Agreement contains customary events of default, including, but not limited to, nonpayment of principal, interest, fees or other amounts;

material inaccuracy of a representation or warranty;

failure to perform or observe covenants;

cross-defaults with certain other indebtedness;

bankruptcy and insolvency events;

material monetary judgment defaults;

material adverse change occurs;

and a material impairment in the Bank’s security interest.

Upon the occurrence of an event of default (subject, in certain cases, to notice and grace periods), obligations under the Loan Agreement may be accelerated.

The Loan Agreement also contains a number of customary representations, warranties and covenants that, among other things, limit the ability of the Company to (subject to certain qualifications and exceptions):

create liens and encumbrances;

incur additional indebtedness;

merge, dissolve, liquidate or consolidate;

make acquisitions, investments, advances or loans;

dispose of or transfer assets;

pay dividends or make other payments in respect of its capital stock;

amend certain material documents;

redeem or repurchase certain debt;

make payments on subordinated debt;

and engage in certain transactions with affiliates.

Clinical Collaboration and Supply Agreement

On July 22, 2020, the Company entered into a non-exclusive clinical collaboration and supply agreement with Novartis Institutes for BioMedical Research, Inc.

(“Novartis”) (the “Novartis Agreement”).

The collaboration is focused on the evaluation of the safety, tolerability and efficacy of OP-1250 in combination with Novartis’ proprietary CDK4/6 inhibitor Kisqali® (ribociclib) and/or Novartis’ proprietary PI3K a inhibitor Piqray® (alpelisib) (collectively the “Novartis Study Drugs”) as part of the Company’s planned Phase 1b clinical study of OP-1250 in patients with metastatic estrogen receptor-positive breast cancer.

(“Novartis”).

On January 13, 2022, the Company entered into an amended and restated clinical collaboration and supply agreement with Novartis, and on October 9, 2023, the Company and Novartis entered into the amendment no.

1 (the “Novartis Amendment”) to the amended and restated clinical collaboration and supply agreement (as amended, the “Novartis Agreement”).

The collaboration is focused on the evaluation of the safety, tolerability and efficacy of palazestrant in combination with Novartis’ proprietary CDK4/6 inhibitor Kisqali® (ribociclib) and/or Novartis’ proprietary phosphatidylinositol 3-kinase (“PI3K a ”) Inhibitor Piqray® (alpelisib) (collectively the “Novartis Study Drugs”) as part of the Company’s Phase 1b/2 clinical study of palazestrant in patients with metastatic estrogen receptor-positive breast cancer.

The Novartis Amendment, among other things, expanded the Company's clinical collaboration with Novartis , increasing the size of the ongoing Phase 1/2 clinical study testing palazestrant in combination with ribociclib to approximately 60 patients.

The Company will be responsible for the conduct of the clinical trials for the combined therapies in accordance with a mutually agreed development plan.

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All inventions and data developed in the performance of the clinical trials for the combined therapies (other than those specific to each component study drug), will be jointly owned by the parties.

The Company is responsible for manufacturing, packaging and labeling OP-1250, and for packaging and labeling all drugs used in the clinical trials for the combined therapies (other than the Novartis Study Drugs).

The Company is responsible for manufacturing, packaging and labeling palazestrant, and for packaging and labeling all drugs used in the clinical trials for the combined therapies (other than the Novartis Study Drugs).

Novartis is responsible for manufacturing and delivering to the Company the Novartis Study Drugs in such quantities as reasonably needed for the clinical trials for the combined therapies.

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The Novartis Agreement will terminate upon completion of all activities outlined in the development plan and the relevant protocols.

Either party may terminate the Novartis Agreement for the uncured material breach or insolvency of the other party, if it reasonably deems it necessary in order to protect the safety, health or welfare of subjects enrolled in the clinical trials for the combined therapies due to the existence of a material safety issue, or in certain circumstances for an unresolved clinical hold with respect to either the Novartis Study Drugs or OP-1250.

of subjects enrolled in the clinical trials for the combined therapies due to the existence of a material safety issue, or in certain circumstances for an unresolved clinical hold with respect to either the Novartis Study Drugs or palazestrant.

In addition, Novartis may terminate the Novartis Agreement if certain disputes between the parties are not resolved after following the applicable dispute resolution procedures, and the Company may terminate the Novartis Agreement in the event the Company terminates all clinical trials of the combined therapies other than due to a material safety issue or upon a clinical hold.

Costs associated with research activities performed under the agreement are included in research and development expenses in the accompanying consolidated financial statements, with any reimbursable costs from Novartis reflected as a reduction of such expenses.

For the year ended December 31, 2022, costs reimbursable from Novartis were $ 1.4 million.

As of December 31, 2022, the receivable due from Novartis was $ 1.4 million, which is recorded under prepaid expenses and other current assets in the accompanying consolidated financial statements.

There was no such cost incurred as of and for the year ended December 31, 2021.

For the years ended December 31, 2023 and 2022, costs reimbursable from Novartis were $ 2.0 million and $ 1.4 million, respectively.

As of December 31, 2023 , the Company had incurred the full agreed-upon reimbursement amount.

The receivable due from Novartis was $ 1.5 million, which is recorded under prepaid expenses and other current assets in the accompanying consolidated balance sheets.

Clinical Trial Agreement

In November 2020, the Company entered into a non-exclusive clinical trial agreement with Pfizer Inc.

(“Pfizer”) (the “Pfizer Agreement”), to evaluate the safety and tolerability of OP-1250 in combination with Pfizer’s proprietary CDK4/6 inhibitor IBRANCE® (palbociclib) in patients with recurrent, locally advanced or metastatic ER+, HER2- breast cancer in a clinical trial.

(“Pfizer”) (the “Pfizer Agreement”), to evaluate the safety and tolerability of palazestrant in combination with Pfizer’s proprietary CDK4/6 inhibitor IBRANCE® (palbociclib) in patients with recurrent, locally advanced or metastatic ER+, HER2 breast cancer in a clinical trial.

Under the terms of the non-exclusive agreement, the Company will be responsible for conducting the clinical trial for the combined therapies and Pfizer is responsible for supplying IBRANCE® to the Company at no cost to the Company.

As part of the collaboration, the parties granted to each other a non-exclusive, royalty- free license under certain of the parties’ respective patent rights in the combination of IBRANCE® and OP-1250 to use the parties’ respective study drugs in research and development, solely to the extent reasonably needed for the other party’s activities in the collaboration.

As part of the collaboration, the parties granted to each other a non-exclusive, royalty-free license under certain of the parties’ respective patent rights in the combination of IBRANCE® and palazestrant to use the parties’ respective study drugs in research and development, solely to the extent reasonably needed for the other party’s activities in the collaboration.

All inventions and data developed in the performance of the clinical trials for the combined therapies (other than those specific to each component study drug), will be jointly owned by the parties.

Pfizer is responsible for manufacturing and delivering to us IBRANCE® (palbociclib) in such quantities as reasonably needed for the clinical trials for the combined therapies.

Pfizer is responsible for manufacturing and delivering to us IBRANCE® in such quantities as reasonably needed for the clinical trials for the combined therapies.

The Pfizer Agreement will terminate upon completion of all activities outlined in the study plan and the relevant protocols.

Either party may terminate the Pfizer Agreement for the uncured material breach or insolvency of the other party, if it reasonably deems it necessary in order to protect the safety, health or welfare of subjects enrolled in the clinical trials for the combined therapies due to the existence of a material safety issue, or in certain circumstances for an unresolved clinical hold with respect to either the IBRANCE® (palbociclib) or OP-1250.

In addition, either party may terminate the Pfizer Agreement if certain disputes between the parties are not resolved after following the applicable dispute resolution procedures or if either party determines to discontinue clinical development for medical, scientific, legal or other reasons.

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Financial terms of the Aurigene Agreement include a $ 8.0 million upfront payment for rights to a pre-existing Aurigene program and potential future milestone payments of up to $ 60.0 million in clinical development and regulatory milestones, and up to $ 370.0 million in commercial milestones.

Aurigene is also eligible to receive mid-single digits to the low double digits royalties on product sales, if any.

Aurigene is also eligible to receive mid-single digits to the low double digits royalties as percentages of product sales, if any.

During the research term, the Company will contribute funding to Aurigene to facilitate Aurigene’s ongoing discovery efforts.

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The term of the Aurigene Agreement will continue until the expiration of the last-to-expire of all payment obligations with respect to all licensed products thereunder, unless terminated earlier in accordance with the terms of the Aurigene Agreement.

The Aurigene Agreement may be terminated (a) by the Company for

convenience, in its sole discretion, upon prior written notice to Aurigene, (b) by either the Company or Aurigene in connection with the other party’s uncured material breach or (c) by either the Company or Aurigene in connection with the insolvency of the other party.

The Aurigene Agreement may be terminated (a) by the Company for convenience, in its sole discretion, upon prior written notice to Aurigene, (b) by either the Company or Aurigene in connection with the other party’s uncured material breach or (c) by either the Company or Aurigene in connection with the insolvency of the other party.

The $ 8.0 million upfront payment was incurred in June 2022 and recorded as research and development expense in the accompanying consolidated statements of operations and comprehensive loss.

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Payments due to Aurigene upon or subsequent to regulatory approval will be accrued as a provision to cost of sales in the period when achievement of respective milestone target is probable.

As of December 31, 2022, it was determined that it is not probable to achieve any of the milestone target, and therefore, the Company recorded zero expense related to the milestone for the year ended December 31, 2022.

As of December 31, 2023 , it was determined that it is not probable to achieve any of the milestone targets, and therefore, the Company recorded zero expense related to the milestone for the year ended December 31, 2023.

Management Services Agreements

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In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties.

In addition, the Company has entered into indemnification agreements with members of its Board of Directors and executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers.

In addition, the Company has entered into indemnification agreements with members of its Board and executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers.

The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited.

As of December 31, 2022 and 2021, respectively, the Company had not incurred any material costs as a result of such indemnifications.

Subsequent Event

On March 9, 2023, the Company announced a corporate restructuring and portfolio prioritization to focus its resources on the late-stage clinical development of OP-1250 for the treatment of ER+ / HER2- metastatic breast cancer.

As part of this restructuring, the Company’s workforce will be reduced by approximately 25 %, affecting employees across research, early development, and general and administrative functions in the Company.

This workforce reduction is expected to be completed by the end of the first quarter of 2023.

Affected employees will be eligible to receive severance and other benefits, contingent upon such employee’s execution and the

effectiveness of a separation agreement, which includes a general release of claims against the Company.

The Company estimates that these severance and other costs will result in a one-time accounting charge of approximately $ 2.8 million in the first quarter of 2023, $ 2.7 million of which is attributable to cash expenditures expected to be paid in the same quarter.

The charges that the Company expects to incur in connection with the restructuring are subject to a number of assumptions, and actual results may differ materially.

The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the restructuring.

As of December 31, 2023 and 2022 , the Company had not incurred any material costs as a result of such indemnifications.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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 7A. Quantitative and Qualitative Disclosures About Market Risk