What changed in this filing

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Item 1. Financial Statements

2024-05-08 compared with 2023-11-07 · 151 added, 156 removed, 413 unchanged (43% of the section changed)

3 unchanged sentences

(Amounts in thousands, except for share amounts)

September 30,

Current assets:

3 unchanged sentences

Total current assets

Property and equipment, net

Operating lease right-of-use assets

4 unchanged sentences

Operating lease liabilities, current

Accrued and other current liabilities

Other current liabilities

Total current liabilities

4 unchanged sentences

Preferred stock, $ 0.0001 par value;

10,000,000 shares authorized as of September 30, 2023 and December 31, 2022;

no shares issued and outstanding as of September 30, 2023 and December 31, 2022.

10,000,000 shares authorized as of March 31, 2024 and December 31, 2023;

no shares issued and outstanding as of March 31, 2024 and December 31, 2023.

Common stock, $ 0.0001 par value;

490,000,000 shares authorized as of September 30, 2023 and December 31, 2022;

54,749,472 and 40,601,648 shares issued as of September 30, 2023 and December 31, 2022, respectively;

54,601,516 and 40,287,097 shares outstanding as of September 30, 2023 and December 31, 2022, respectively.

490,000,000 shares authorized as of March 31, 2024 and December 31, 2023;

55,932,127 and 55,097,118 shares issued as of March 31, 2024 and December 31, 2023, respectively;

55,867,863 and 54,992,784 shares outstanding as of March 31, 2024 and December 31, 2023, respectively.

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated other comprehensive (loss) income

Accumulated deficit

5 unchanged sentences

(Amounts in thousands, except for share and per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Operating expenses:

3 unchanged sentences

Loss from operations

Other income (expense):

Other income:

Interest income

Other expense

Total other income

1 unchanged sentence

Weighted average shares used to compute net loss per share, basic and diluted

Three Months Ended September 30,

Nine Months Ended September 30,

Other comprehensive loss:

Net unrealized gain (loss) on marketable securities

Three Months Ended March 31,

Other comprehensive (loss) income:

Net unrealized (loss) gain on marketable securities

Total comprehensive loss

5 unchanged sentences

Stockholders'

Balances at June 30, 2023

Vesting of early exercised stock options

Vesting of restricted stock awards

Exercise of stock options

Issuance of shares under equity private placement, net of issuance costs of $ 240

Stock-based compensation expense

Employee stock purchase plan expense

Net unrealized gain on marketable securities

Balances at September 30, 2023

Comprehensive

Stockholders'

(Loss) Income

Balances at December 31, 2023

Vesting of early exercised stock options

Vesting of restricted stock awards

Exercise of stock options

Issuance of shares under employee stock purchase plan

Issuance of shares under equity private placement, net of issuance costs of $ 240

Issuance of shares under at-the-market offering, net of issuance costs of $ 167

Stock-based compensation expense

Employee stock purchase plan expense

Net unrealized gain on marketable securities

Balances at September 30, 2023

Comprehensive

Stockholders'

Balances at June 30, 2022

Vesting of early exercised stock options

Vesting of restricted stock awards

Exercise of stock options

Stock-based compensation expense

Employee stock purchase plan expense

Vesting of restricted stock awards

Net unrealized loss on marketable securities

Balances at September 30, 2022

Balances at March 31, 2024

Comprehensive

Stockholders'

(Loss) Income

Balances at December 31, 2022

2 unchanged sentences

Exercise of stock options

Issuance of shares under employee stock purchase plan

Stock-based compensation expense

Employee stock purchase plan expense

Net unrealized loss on marketable securities

Balances at September 30, 2022

Net unrealized gain on marketable securities

Balances at March 31, 2023

See accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

1 unchanged sentence

Depreciation and amortization expense

Loss on sale of equipment

Non-cash lease expense

5 unchanged sentences

Accounts payable

Accrued and other current liabilities

Other current liabilities

Operating lease liabilities

4 unchanged sentences

Purchases of marketable securities

Disposal of fixed assets

Net cash provided by investing activities

Net cash (used in) provided by investing activities

Cash flows from financing activities:

Issuance of shares under at-the-market offering, net of issuance costs of $ 167

Proceeds from exercise of stock options

Proceeds from issuance of common stock under employee stock purchase plan

Proceeds from equity private placement, net of issuance costs of $ 240

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

6 unchanged sentences

(“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, palazestrant (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”).

We expect to enroll the first patient in our proposed Phase 3 monotherapy clinical trial for the treatment of advanced or metastatic breast cancer (OPERA-01) in the fourth quarter of 2023.

Palazestrant is also currently being evaluated in Phase 1b/2 clinical studies in 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.

Furthermore, we announced new preclinical data regarding the discovery of novel compounds targeting KAT6, an epigenetic target that is dysregulated in breast and other cancers.

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.

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

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.

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 $ 0.2 million, the net proceeds to the Company from the Private Placement were approximately $ 129.8 million.

The Private Placement closed on September 12, 2023 .

The Company had $ 276.9 million of cash, cash equivalents and marketable securities at September 30, 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 into 2027.

The Company had $ 249.0 million of cash, cash equivalents and marketable securities at March 31, 2024 , 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 condensed consolidated financial statements.

At-The-Market Offering

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 our common stock, having an aggregate offering price of up to $ 150.0 million (the “ATM Shares”).

The sales of the ATM Shares will be made by any method permitted that is deemed to be an "at-the-market" equity offering as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended ("Securities Act"), 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.

During the three months ended March 31, 2024 , the Company issued 546,326 shares of its common stock under the Sales Agreement at a weighted-average price of $ 15.00 per share for net proceeds of $ 7.9 million

after deducting related issuance costs.

As of March 31, 2024 , approximately $ 141.8 million remained available for issuance under the Sales Agreement.

Impact of Geopolitical and Macroeconomic Events

government shutdown, 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.

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.

10 unchanged sentences

Unaudited Interim Financial Information

The interim condensed consolidated balance sheet as of September 30, 2023, and the statements of operations and comprehensive loss, and stockholders’ equity for the three and nine months ended September 30, 2023 and 2022, and the statements of cash flows for the nine months ended September 30, 2023 and 2022 are unaudited.

The interim condensed consolidated balance sheet as of March 31, 2024, and the statements of operations and comprehensive loss, stockholders’ equity and cash flows for the three months ended March 31, 2024 and 2023 are unaudited.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of the Company’s condensed consolidated financial statements included in this report.

The financial data and the other information disclosed in these notes to the condensed consolidated financial statements related to the three- and nine-month periods are also unaudited.

The financial data and the other information disclosed in these notes to the condensed consolidated financial statements related to the three-month periods are also unaudited.

The results of operations presented in these unaudited condensed consolidated financial statements are not necessarily indicative of the results to be expected for the year ending December 31, 2024, or for any other future annual or interim period.

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The accompanying condensed consolidated financial statements are prepared in accordance with GAAP.

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management

to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of expenses during the reporting period.

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of expenses during the reporting period.

Significant areas that require management’s estimates include accruals of research and development expenses, including accrual of research contract costs, stock-based compensation assumptions, including the fair value of common stock.

3 unchanged sentences

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 September 30, 2023, and December 31, 2022.

Cash deposits are all in reputable financial institutions in the United States as of March 31, 2024 , and December 31, 2023.

Cash and cash equivalents consisted of cash on deposit with U.S.

23 unchanged sentences

The Company’s cash, cash equivalents, and marketable securities are held by financial institutions in the United States that management believes are of high credit quality.

Amounts on deposit with individual banking

institutions may at times exceed the limits insured by the Federal Deposit Insurance Corporation (“FDIC”);

Amounts on deposit with individual banking institutions may at times exceed the limits insured by the Federal Deposit Insurance Corporation (“FDIC”);

however, the Company has not experienced any losses on such deposits.

43 unchanged sentences

The Company’s historical accrual estimates have not been materially different from the actual costs.

Stock-Based Compensation

Stock-based compensation cost, including grants of stock options and restricted stock awards issued under the Company’s equity incentive plans and ESPP, is measured at the grant date based on the estimated fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is generally the vesting period.

Stock-based compensation cost for performance-based restricted stock unit awards issued under the Company’s equity incentive plan is measured at the grant date based on the estimated fair value of the award, which is based on the closing stock price on the grant date, and is recognized as an expense when the Company determines that it is probable that the performance goals will be achieved, which the Company assess on a quarterly basis.

The Company recognizes stock compensation in accordance with ASC 718, Compensation — Stock Compensation (“ASC 718”).

The Company’s determination of the fair value of stock options with time-based vesting on the date of grant utilizes the Black-Scholes option-pricing model.

The Company estimates volatility using stock prices of peer companies and its historical data, risk-free rates using the implied yield currently available on U.S.

Treasury zero-coupon issues with a remaining term equal to the expected term, and dividend yield using the Company’s expectations and historical data.

The Company uses the simplified method to calculate the expected term of employee stock option grants.

Under the simplified method, the expected term is estimated to be the mid-point between the vesting date and the contractual term of the option.

For awards with graded vesting, in which specified tranches of the options vest on different dates, the Company uses a single weighted average expected life to value the entire award, which is equal to the average of the weighted average vesting period of the award and the contractual term of the award.

Equity instruments issued to nonemployees are recorded at their fair value on the grant date and without subsequent remeasurement.

The amount of stock-based compensation expense recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest, including awards with graded vesting.

As part of the requirements of ASC 718, the Company has elected to account for forfeitures of stock option grants as they occur.

Foreign Currency Transactions

The functional currency of Olema Oncology Australia Pty Ltd, the Company’s wholly-owned subsidiary, is the U.S.

Accordingly, all monetary assets and liabilities of the subsidiary are remeasured into U.S.

dollars at the current period-end exchange rates and non-monetary assets are remeasured using historical exchange rates.

Income and expense elements are remeasured to U.S.

dollars using the average exchange rates in effect

during the period.

Remeasurement gains and losses are recorded as other income (expense) on the consolidated statements of operations.

The Company is subject to foreign currency risk with respect to its clinical and manufacturing contracts denominated in currencies other than the U.S.

dollar, predominantly the Australian dollar and the Euro.

Payments on contracts denominated in foreign currencies are made at the spot rate on the day of payment.

Changes in the exchange rate between billing dates and payment dates are recorded within other income (expense) on the condensed consolidated statements of operations.

Net Loss Per Common Share

2 unchanged sentences

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.

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 nine months ended September 30, 2023.

There were no new accounting pronouncements that were relevant to the Company as of and for the three months ended March 31, 2024 .

Fair Value Measurement

6 unchanged sentences

• Level 3 — Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

September 30, 2023

March 31, 2024

(in thousands)

5 unchanged sentences

Government-sponsored enterprise securities

September 30, 2023

December 31, 2023

(in thousands)

Financial Assets

Money market funds

Commercial paper

Corporate bonds

government treasury bills

Government-sponsored enterprise securities

March 31, 2024

(in thousands)

Financial Assets

Cash and cash equivalents

1 unchanged sentence

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

December 31, 2023

(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.

3 unchanged sentences

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 seven marketable securities that have been in a consecutive loss position for more than 12 months as of September 30, 2023.

These marketable securities had $ 0.1 million unrealized losses with a fair value of $ 19.4 million as of September 30, 2023.

The Company does not believe that the total unrealized losses of $ 0.3 million as of September 30, 2023 are credit-related but are rather a reflection of current market yields and/or current marketplace bid/ask spreads.

During the three and nine months ended September 30, 2023, the Company did not recognize any other-than-temporary impairment loss.

As of September 30, 2023, there was no allowance for losses on available-for-sale debt securities attributable to credit risk.

As of September 30, 2023, all of the Company’s cash and cash equivalents consisted of cash on deposit with U.S.

There were no marketable securities that had been in a consecutive loss position for more than 12 months as of March 31, 2024.

During the three months ended March 31, 2024, the Company did not recognize any other-than-temporary impairment loss.

As of March 31, 2024 , there was no allowance for losses on available-for-sale debt securities attributable to credit risk.

As of March 31, 2024 , all of the Company’s cash and cash equivalents consisted of cash on deposit with U.S.

banks denominated in U.

dollars and Australian dollars.

Property and Equipment, net

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

September 30,

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):

September 30,

Reimbursable research and development costs from a collaboration partner

Prepaid clinical development costs

Prepaid insurance

Prepaid clinical development costs

Interest receivable

Research and development tax incentive credit receivable

Prepaid subscriptions and licenses

Reimbursable research and development costs from a collaboration partner

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

Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following (in thousands):

September 30,

Accrued research and development related costs

3 unchanged sentences

Accrued taxes

Early exercise of unvested stock options

Stock-Based Compensation

5 unchanged sentences

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 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;

The maximum number of shares of common stock that were 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;

1 unchanged sentence

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 Company’s Board of Directors no later than December 31 of the immediately preceding year.

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”).

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The assumptions that the Company used to determine the estimated grant-date fair value of stock options granted to employees and directors under the 2020 Plan and the 2022 Inducement Plan were as follows, presented as a weighted average:

Nine Months Ended September 30,

Risk-free interest rate

4 unchanged sentences

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

Intrinsic Value

(in thousands)

Outstanding as of December 31, 2023

( 1,064,318 )

Outstanding as of September 30, 2023

Options vested and exercisable as of September 30, 2023

Options expected to vest as of September 30, 2023

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

Exercised (1)

Outstanding as of March 31, 2024

Options vested and exercisable as of March 31, 2024

Options expected to vest as of March 31, 2024

(1) Exercised amount includes shares returned for taxes withheld for exercise and net transactions.

Early Exercise of Stock Options

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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.

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.

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.

All early exercised options are vested as of September 30, 2023.

All early exercised options were vested as of March 31, 2024.

Restricted Stock Awards

The following table summarizes the restricted stock activity under the 2014 Plan during the nine months ended September 30, 2023:

The following table summarizes the restricted stock activity under the 2014 Plan during the three months ended March 31, 2024:

Number of Shares

1 unchanged sentence

Unvested restricted stock as of December 31, 2023

Unvested restricted stock as of September 30, 2023

Unvested restricted stock as of March 31, 2024

Performance-Based Restricted Stock Unit Awards

2 unchanged sentences

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

As of September 30, 2023, the performance goals were not yet met, and therefore, the Company recorded zero stock-based compensation expense related to the PSUs for the three and nine months ended September 30, 2023.

During the three months ended March 31, 2024 , no performance goal was met, and therefore, no related stock-based compensation expense was recorded.

The following table summarizes the performance-based restricted stock activity under the 2020 plan during the three months ended March 31, 2024:

Number of Shares

Grant Date Fair Value

Outstanding as of December 31, 2023

Outstanding as of March 31, 2024

2020 Employee Stock Purchase Plan

5 unchanged sentences

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 Company’s Board of Directors no later than December 31 of the preceding calendar year.

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.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock offered under the ESPP.

Stock-based compensation expense related to the ESPP was $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2023, respectively.

Stock-based compensation expense related to the ESPP was $ 0.2 million and $ 0.1 million for the three months ended March 31, 2024 and 2023, respectively.

Stock-Based Compensation Expense

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 condensed consolidated statements of operations and comprehensive loss as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Research and development

General and administrative

Net Loss Per Share

Basic and diluted net loss per share was calculated as follows (in thousands, except share and per share amounts):

Three Months Ended September 30,

Nine Months Ended September 30,

Net Loss Per Common Share

Basic and diluted net loss per common share was calculated as follows (in thousands, except share and per share amounts):

Three Months Ended March 31,

Weighted average shares used to compute net loss per share, basic and diluted

1 unchanged sentence

The potentially dilutive shares that were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented are as follows:

September 30,

Unvested restricted stock awards outstanding

Unvested performance-based restricted stock unit awards outstanding

Three Months Ended March 31,

Unvested restricted stock awards

Unvested performance-based restricted stock unit awards

Options to purchase common stock

5 unchanged sentences

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.

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.

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 March 31, 2024, 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”).

2 unchanged sentences

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 paid a $ 0.1 million security deposit and is required to pay monthly rent and common area charges.

As of September 30, 2023, this security deposit is recorded as prepaid expenses and other current assets in the accompanying condensed consolidated financial statements due to expiration of the lease on August 31, 2023 and expected return of the deposit within 12 months.

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”).

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 March 31, 2024, 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.

9 unchanged sentences

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 condensed consolidated financial statements.

The following table summarizes total lease expense during the three and nine months ended September 30, 2023 (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

The following table summarizes total lease expense during the three months ended March 31, 2024 (in thousands):

Three Months Ended March 31,

Straight-line operating lease expense

2 unchanged sentences

Total operating lease expense

The following table summarizes supplemental cash flow information during the three and nine months ended September 30, 2023 (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

The following table summarizes supplemental cash flow information during the three months ended March 31, 2024 (in thousands):

Three Months Ended March 31,

Cash paid for amounts included measurement of lease liabilities:

Operating cash flows from operating leases

Supplemental noncash information on lease liabilities arising from obtaining right-use-assets

The following table summarizes the Company’s future minimum lease payments and reconciliation of lease liabilities as of September 30, 2023 (in thousands):

Years Ending December 31,

2023 (from October 2023)

The following table summarizes the Company’s future minimum lease payments and reconciliation of lease liabilities as of March 31, 2024 (in thousands):

Years Ended December 31,

2024 (from April 2024)

Total future minimum lease payments

2 unchanged sentences

Lease liabilities, non-current

The following table summarizes lease term and discount rate as of September 30, 2023:

September 30,

The following table summarizes lease term and discount rate as of March 31, 2024:

Three Months Ended March 31,

Weighted-average remaining lease term (years)

5 unchanged sentences

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

As of September 30, 2023, the Company had not drawn down from the Credit Facility.

As of March 31, 2024, 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.

26 unchanged sentences

On January 13, 2022, the Company entered into the 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 1”) to amended and restated clinical collaboration and supply agreement, and on March 22, 2024, the Company and Novartis entered into the amendment no.

2 (the “Novartis Amendment 2”) to 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 our 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 Novartis Amendment 1, among other things, expanded our 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 and Novartis Amendment 2 increased the size of the ongoing Phase 1/2 clinical study testing palazestrant in combination with ribociclib by an additional 15 patients exploring 90 mg of palazestrant in combination with 600 mg of ribociclib.

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

8 unchanged sentences

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

For the three and nine months ended September 30, 2023, costs reimbursable from Novartis were $ 0.6 million and $ 2.0 million, respectively.

As of September 30, 2023, the Company had incurred the full agreed-upon reimbursement amount.

The receivable due from Novartis was $ 2.5 million, which is recorded under prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets.

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

As of March 31, 2024 , there was no outstanding balance from the receivable due from Novartis.

Clinical Trial Agreement

10 unchanged sentences

The Pfizer Agreement does not grant any right of first negotiation to participate in future clinical trials, and each of the parties retains all rights and ability to evaluate their respective compounds.

Costs incurred in connection to the Pfizer Agreement are included in the research and development expense in the accompanying condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2023, and 2022.

License Agreement

2 unchanged sentences

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.

During the research term, the Company will contribute funding to Aurigene to facilitate

Aurigene’s ongoing discovery efforts.

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.

The Company and Aurigene will jointly direct further preclinical work and, if successful, the Company will lead clinical development as well as regulatory and commercial activities.

5 unchanged sentences

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 September 30, 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 three and nine months ended September 30, 2023.

As of March 31, 2024 , the $ 5.0 million milestone related to initiation of the first IND-enabling safety study was met and was recorded as research and development expenses in the condensed consolidated financial statements for the three months ended March 31, 2024.

Management Services Agreements

2 unchanged sentences

In addition, these agreements may, from time to time, be subjected to amendments as a result of any change orders executed by the parties.

As of September 30, 2023, the Company did not have material contractual commitments with respect to these arrangements.

As of March 31, 2024, the Company did not have material contractual commitments with respect to these arrangements.

Contingencies

6 unchanged sentences

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 September 30, 2023, and December 31, 2022, the Company had not incurred any material costs as a result of such indemnifications.

As of March 31, 2024 , the Company had not incurred any material costs as a result of such indemnifications.

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 1. Financial Statements