What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-05-08 compared with 2023-11-07 · 98 added, 115 removed, 164 unchanged (56% of the section changed)

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We are a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of next generation targeted therapies for women’s cancers.

Our team has spent the past decade characterizing the structure and function of the estrogen receptor, or ER, a key driver of breast cancer in approximately 75% of patients, in order to develop more potent, oral therapies that completely inactivate this signaling pathway.

Our lead product candidate, palazestrant (OP-1250), is a novel oral therapy with combined activity as both a complete ER antagonist, or CERAN, and a selective ER degrader, or SERD, which we believe will drive deeper, more durable responses than existing therapies.

Palazestrant, both as a monotherapy and in combination with inhibitors of cyclin-dependent kinase 4 and 6, or CDK4/6, demonstrated robust anti-tumor activity in a range of preclinical xenograft models of breast cancer, including in ESR1 and PIK3C a mutations and central nervous system, or CNS, metastasis.

In August 2020, we initiated an ongoing Phase 1/2 monotherapy dose escalation and expansion study evaluating palazestrant for the treatment of recurrent, locally advanced or metastatic ER-positive, or ER+, human epidermal growth factor receptor 2-negative, or HER2-, breast cancer.

We reported initial data from the Phase 1a dose escalation portion of this study in November 2021, which provided proof-of-concept for palazestrant as a monotherapy treatment for ER+/HER2- breast cancer.

We reported additional monotherapy data from the Phase 1b dose expansion portion of this study in October 2022.

In October 2023 at the European Society for Medical Oncology, or ESMO, Congress 2023, we presented Phase 2 clinical data for palazestrant as a monotherapy which highlighted that:

● Across 86 heavily pretreated patients, where 42% of patients were fourth-line or later at study entry, 120 mg once-daily, monotherapy palazestrant was well tolerated and achieved a median progression-

free survival, or PFS, of 4.6 months and clinical benefit rate, or CBR, of 40%, and a median PFS of 5.6 months and CBR of 52% in patients with ESR1 mutations at baseline.

● In a subset analysis of 49 second- or third-line patients with or without prior chemotherapy, the median PFS was 7.2 months and CBR was 48% across all patients, and the median PFS was 7.3 months and CBR was 59% in ESR1-mutant patients.

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.

In 2022, we also initiated Phase 1b/2 dose escalation and expansion studies evaluating palazestrant in combination with CDK4/6 inhibitors palbociclib and ribociclib and phosphatidylinositol 3 kinase alpha, or PI3K a, inhibitor, alpelisib.

In December 2022, we reported initial data from the Phase 1a dose escalation portion of the study in combination with palbociclib which demonstrated combinability including no drug-drug interaction, or DDI, between the two agents.

In May 2023, we presented additional interim data from the combination study which continued to demonstrate combinability, with no DDI between palbociclib and palazestrant.

Exposure of palbociclib and palazestrant in combination with each other was consistent with observed monotherapy exposure levels.

We anticipate presenting updated results from the Phase 2 expansion portion of the palazestrant-palbociclib combination clinical study and from the Phase 1b dose escalation portion of the palazestrant-ribociclib combination clinical study at the 2023 San Antonio Breast Cancer Symposium in December 2023.

We are advancing our pipeline of novel therapies by leveraging our deep understanding of endocrine-driven cancers, nuclear receptors, and mechanisms of acquired resistance.

Our lead product candidate, palazestrant (OP-1250), is a novel, orally-available small molecule with dual activity as both a complete estrogen receptor, or ER, antagonist, or CERAN, and selective ER degrader, or SERD, currently being investigated in patients with recurrent, locally advanced or metastatic ER-positive, or ER+, human epidermal growth factor receptor 2-negative, or HER2-, breast cancer.

In preclinical models, palazestrant binds and completely blocks ER-driven transcriptional activity in both wild-type and mutant forms of metastatic ER+ breast cancer including activity in central nervous system, or CNS, metastases models.

In clinical studies across more than 250 patients, palazestrant has demonstrated strong anti-tumor activity, attractive pharmacokinetics and prolonged drug exposure, favorable tolerability, and combinability with CDK4/6 inhibitors with no significant drug-drug interaction.

Palazestrant is being evaluated both as a single agent in an ongoing Phase 3 clinical trial, OPERA-01, in Phase 2 combination studies with a CDK4/6 inhibitor (palbociclib or ribociclib) and a phosphatidylinositol 3 kinase alpha, or PI3Ka, inhibitor (alpelisib) and an anticipated Phase 1b/2 combination study with an mTOR inhibitor (everolimus).

We reported positive Phase 2 clinical results for palazestrant as a monotherapy in October 2023 at the European Society for Medical Oncology, or ESMO, Congress 2023, which demonstrated compelling progression-free survival, or PFS, a favorable tolerability profile and attractive pharmacokinetics in a heavily pretreated patient population.

These results validated the potential opportunity for palazestrant as a monotherapy agent in later lines of treatment for metastatic breast cancer, and in November 2023 we initiated

OPERA-01, our pivotal Phase 3 second-, third-line monotherapy clinical trial.

We anticipate the top-line results from the OPERA-01 trial in 2026.

We are investigating palazestrant in combination with CDK4/6 inhibitors, palbociclib and ribociclib, and a PI3Ka inhibitor, alpelisib.

We reported interim results of our ongoing Phase 2 dose expansion clinical studies of palazestrant in combination with each of palbociclib and ribociclib at the 2023 San Antonio Breast Cancer Symposium in December 2023.

Across both studies, the interim results demonstrated no significant drug-drug interaction, no dose-limiting toxicities, and a tolerability profile consistent with the FDA-approved labels of ribociclib or palbociclib plus an endocrine therapy.

Both studies are being conducted at the palazestrant recommended Phase 2 dose, or RP2D, of 120 mg combined with the full FDA-approved label doses of palbociclib 125 mg, or ribociclib 600 mg.

In October 2023, we announced the expansion of our clinical collaboration with Novartis Institutes for BioMedical Research, Inc., or Novartis, increasing the size of the ongoing Phase 1/2 clinical study testing palazestrant in combination with ribociclib to approximately 60 patients, and in March 2024, we further 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.

We will be presenting results from the Phase 2 portion of the palazestrant-ribociclib combination clinical study at the ESMO Breast Cancer Annual Congress 2024 in May 2024 in Berlin.

Furthermore, we expect the data from the Phase 2 palazestrant-ribociclib combination clinical study will enable us to prepare to initiate a pivotal Phase 3 first-line clinical trial of palazestrant in combination with ribociclib.

We also plan to initiate evaluation of palazestrant in combination with an mTOR inhibitor, everolimus, in a Phase 1b/2 clinical study, anticipated in the third quarter of 2024.

In July 2022, we were granted Fast Track designation from the U.S.

Food and Drug Administration, or the FDA, for palazestrant for patients with ER+/HER2- metastatic breast cancer that has progressed following one or more lines of endocrine therapy with at least one line given in combination with a CDK4/6 inhibitor.

Based on the clinical results we have achieved to date, we are advancing palazestrant through late-stage clinical development both as a monotherapy and in combination with other targeted agents.

We own worldwide development and commercialization rights to palazestrant.

We believe palazestrant’s oral formulation and dual mechanism of action directly address the limitations of current endocrine therapies, such as fulvestrant and tamoxifen, and position palazestrant as a potential endocrine therapy of choice for the treatment of ER+ breast cancers.

Our goal is to transform the standard of care for women living with cancers by developing more effective therapies that apply our deep understanding and collective expertise in endocrine-driven cancers, nuclear receptor activities and mechanisms of acquired resistance.

In October 2023, we announced a new pipeline asset, reporting new preclinical data regarding the discovery of novel compounds targeting KAT6, an epigenetic target that is dysregulated in breast and other cancers, demonstrating potent anti-tumor activity.

We are developing this asset in collaboration with Aurigene Discovery Technologies Limited, or Aurigene.

We expect to file an Investigational New Drug, or IND, application with the FDA in 2024 .

In March 2023, we announced a corporate restructuring and portfolio prioritization to focus our resources on the late-stage clinical development of palazestrant for the treatment of ER+/HER2- metastatic breast cancer.

In September 2023, we entered into a stock purchase agreement for a private placement of 13,211,381 shares of our common stock, at a price of $9.84 per share, to selected institutional and accredited investors resulting in gross proceeds of approximately $130.0 million, or the Private Placement.

We also entered into the Loan and Security Agreement, or the Loan Agreement, with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, or the Bank, providing us with up to $50.0 million of borrowing capacity, or the Credit Facility, of which $25.0 million became available upon the closing of the Private Placement on September 12, 2023, and the remaining $25.0 million may be made available upon approval of the Bank in its discretion.

In addition, in October 2023 we presented new preclinical data regarding the discovery of novel compounds targeting KAT6, an epigenetic target that is dysregulated in breast and other cancers.

In January 2024, we nominated a development candidate for this program, OP-3136, and we expect to file an Investigational New Drug, or IND, application with the FDA in late 2024 and advance into clinical development.

In a non-clinical xenograft model, OP-3136 caused dose-dependent tumor growth inhibition and tumor regression comparable to or better than a positive-control patented KAT6 inhibitor and demonstrated synergy in combination with CDK4/6 inhibitors or palazestrant.

We are advancing the development of this program in collaboration with Aurigene Oncology, or Aurigene.

Since our inception, we have devoted substantially all of our resources to organizing and staffing our company, research and development activities, business planning, raising capital, establishing and maintaining our intellectual property portfolio, conducting nonclinical studies and clinical trials and providing general and administrative support for these operations.

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We believe that this strategy allows us to maintain a more efficient infrastructure by eliminating the need for us to invest in our own manufacturing facilities, equipment and personnel while also enabling us to focus our expertise and resources on the development of our product candidates.

As of September 30, 2023, we had cash, cash equivalents, and marketable securities of $276.9 million.

We believe that our cash, cash equivalents, and marketable securities as of September 30, 2023, as well as the available balance under the Credit Facility, will be sufficient to fund our current operating plan into 2027.

We have incurred significant operating losses since the commencement of our operations.

Our net losses were $21.5 million and $22.7 million for the three months ended September 30, 2023 and 2022, respectively, and $69.9 million and $78.6 million for the nine months ended September 30, 2023 and 2022, respectively.

We expect to incur significant and increasing losses for the foreseeable future as we continue to advance our product candidate, make potential milestone payments to our licensors, and as we continue to operate as a public company.

Our net losses were $31.0 million and $28.3 million for the three months ended March 31, 2024 and 2023, respectively.

We expect to incur significant and increasing losses for the foreseeable future as we continue to advance our product candidates, make potential milestone payments to our licensors, and as we continue to operate as a public company.

Our net losses may fluctuate significantly from period to period, depending on the timing of expenditures on our research and development activities.

As of September 30, 2023, we had an accumulated deficit of $278.9 million.

As of March 31, 2024, we had an accumulated deficit

of $336.6 million.

Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures and general and administrative expenditures.

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• continue our ongoing and planned research and development of our lead product candidate, palazestrant, for the treatment of ER+ positive breast cancer;

● initiate nonclinical studies and clinical trials for any additional product candidates that we may pursue in the future;

• initiate nonclinical studies and clinical trials for OP-3136 and any additional product candidates that we may pursue in the future;

• seek to discover and develop additional product candidates and further expand our clinical product pipeline;

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Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials, potential milestone payments to our licensors, and our expenditures on other research and development activities.

We will require substantial additional funding to develop our product candidate and support our continuing operations beyond our current operating plans.

We will require substantial additional funding to develop our product candidates and support our continuing operations beyond our current operating plans.

Until such time that we can generate significant revenue from product sales or other sources, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, which could include income from collaborations, strategic partnerships or marketing, distribution, licensing or other strategic arrangements with third parties, or from grants.

We may be unable to raise additional funds or to enter into such agreements or arrangements on favorable terms, or at all.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from geopolitical and macroeconomic conditions.

Our failure to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on our business, results of operations or financial condition, including requiring us to have to delay, reduce or eliminate our product development or future commercialization efforts.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and volatility in, the credit and financial markets in the United States and worldwide resulting from geopolitical and macroeconomic conditions.

Our failure to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on our business, results of operations or financial condition,

including requiring us to have to delay, reduce or eliminate our product development or future commercialization efforts.

Insufficient liquidity may also require us to relinquish rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose.

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We cannot provide assurance that we will ever be profitable or generate positive cash flow from operating activities.

government shutdown, 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 disruptions to trade, commerce, pricing stability, credit availability and supply chain continuity globally.

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Research and development expenses account for a significant portion of our operating expenses and consist primarily of external and internal expenses incurred in connection with the discovery and development of our product candidates.

To date, our research and development expenses have related primarily to discovery efforts and nonclinical and clinical development of our product candidate, palazestrant.

To date, our research and development expenses have related primarily to discovery efforts and nonclinical and clinical development of our lead product candidate, palazestrant, as well as OP-3136.

Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.

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We track outsourced development costs by product candidate or nonclinical program, but we do not allocate personnel costs, other internal costs or external consultant costs to specific product candidates or nonclinical programs.

Research and development expenses to advance the development of our lead product candidate and nonclinical program were $19.5 million and $17.6 million for the three months ended September 30, 2023 and 2022, respectively, and $60.3 million and $60.7 million for the nine months ended September 30, 2023 and 2022, respectively.

While our research and development expenses may fluctuate from period to period, we generally expect our research and development expenses to increase substantially in absolute dollars for the foreseeable future as we advance palazestrant or any other future product candidates we may develop into and through nonclinical studies and clinical trials and pursue regulatory approval of our product candidates.

While our research and development expenses may fluctuate from period to period, we generally expect our research and development expenses to increase substantially in absolute dollars for the foreseeable future as we advance palazestrant, OP-3136 or any other future product candidates we may develop into and through nonclinical studies and clinical trials and pursue regulatory approval of our product candidates.

The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming.

The actual probability of success for palazestrant or any other future product candidates we may develop may be affected by a variety of factors including but not limited to:

The actual probability of success for palazestrant, OP-3136 or any other future product candidates we may develop may be affected by a variety of factors including but not limited to:

the safety and efficacy of our product candidates, early clinical data, investment in our clinical program, the ability of collaborators to successfully develop our licensed product candidates, competition, manufacturing capability and commercial viability.

We may never succeed in achieving regulatory approval for our product candidates.

As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of palazestrant or any other future product candidates we may develop.

As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of palazestrant, OP-3136 or any other future product candidates we may develop.

Clinical and nonclinical development timelines, the probability of success and development costs can differ materially from expectations.

We anticipate that we will make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future nonclinical studies and clinical trials, regulatory developments and our ongoing assessments as to each product candidate’s commercial potential.

In addition, we cannot forecast whether palazestrant or any other future product candidates we may develop may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

In addition, we cannot forecast whether palazestrant, OP-3136 or any other future product candidates we may develop may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

We are also unable to predict when, if ever, we will generate revenue from our product candidates to offset these expenses.

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• development and timely delivery of commercial-grade product formulations that can be used in our planned clinical trials and for commercial launch;

● commercializing the product candidate, if approved, whether alone or in collaboration with others;

• commercializing the product candidates, if approved, whether alone or in collaboration with others;

• obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;

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Total other income

Total other income consists of interest income and other expense.

Total other income consists of interest income and other income.

Interest income primarily consists of interest income on our cash equivalents and marketable securities.

Other expense primarily consists of unrealized foreign currency remeasurement gain (loss), loss on disposal of equipment and miscellaneous income (expense) not related to operating activities.

Other income primarily consists of unrealized foreign currency remeasurement gain (loss) and miscellaneous income (expense) not related to operating activities.

Results of operations

Comparison of the three months ended September 30, 2023 and 2022

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

Three Months Ended September 30,

Comparison of the three months ended March 31, 2024 and 2023

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

Three Months Ended March 31,

(in thousands)

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Loss from operations

Other income (expense):

Other income:

Interest income

Other expense

Total other income

Research and development expenses

Research and development expenses for the three months ended September 30, 2023 were $19.5 million, compared to $17.6 million for the three months ended September 30, 2022.

The increase of $1.8 million was primarily due to increased spending on clinical operations and development-related activities as we continue to advance palazestrant into late-stage clinical trials.

The increase was partially offset by decreased spending on (i) clinical pharmacology-related costs, and (ii) personnel-related expenses, which primarily related to lower headcount as a result of the restructuring and portfolio prioritization during the first quarter of 2023 .

General and administrative expenses

General and administrative expenses for the three months ended September 30, 2023 were $3.9 million compared to $5.6 million for the three months ended September 30, 2022.

The decrease of $1.7 million was primarily due to decreased spending on (i) corporate- and legal-related costs, and (ii) personnel-related expenses, primarily due to lower headcount as a result of the restructuring and portfolio prioritization, and a decrease of approximately $0.2 million in non-cash stock-based compensation expense .

Other income for the three months ended September 30, 2023 was $1.8 million, which primarily consisted of interest income from our marketable securities of $1.9 million, partially offset by losses from the sale of the fixed assets.

Comparison of the nine months ended September 30, 2023 and 2022

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

Nine Months Ended September 30,

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

Three Months Ended March 31,

(in thousands)

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Interest income

Other expense

Total other income

Research and development expenses

Research and development expenses for the nine months ended September 30, 2023 were $60.3 million, compared to $60.7 million for the nine months ended September 30, 2022.

The decrease of $0.4 million was primarily due to decreased spending on preclinical research programs, including the $8.0 million upfront payment in connection with the exclusive global license agreement entered into in June 2022 between the Company and Aurigene, or the Aurigene Agreement, incurred and paid in June 2022, and (ii) personnel-related expenses, which primarily related to lower headcount as a result of the restructuring and portfolio prioritization, and a decrease of approximately $0.2 million in non-cash stock-based compensation expense.

Total decreases were primarily offset by increased spending on clinical operations-related activities as we continue to advance palazestrant into late-stage clinical trials .

CROs, CMOs and other clinical development related third-party vendor expenses

Compensation and related benefits

Milestone payment owed to Aurigene

Other research and development expenses

Stock-based compensation

Total research and development expenses

Research and development expenses for the three months ended March 31, 2024 were $29.9 million, compared to $22.8 million for the three months ended March 31, 2023.

The increase of $7.1 million was primarily due to (i) a $5.0 million milestone payment owed to Aurigene in connection with the exclusive global license agreement entered into in June 2022 between the Company and Aurigene, or the Aurigene Agreement, (ii) increased spending on clinical operations and development-related activities as we continue to advance palazestrant into late-stage clinical trials, and (iii) an increase in non-cash stock-based compensation expense.

The increase was offset by (i) decreased spending on clinical pharmacology studies and nonclinical research programs and (ii) $1.8 million one-time restructuring charge recorded in the first quarter of 2023.

General and administrative expenses

General and administrative expenses for the nine months ended September 30, 2023 were $14.3 million compared to $19.1 million for the nine months ended September 30, 2022.

The decrease of $4.8 million was primarily due to decreased spending on (i) corporate and legal-related costs, and (ii) personnel-related expenses, which primarily related to lower headcount as a result of the restructuring and portfolio prioritization, and a decrease of approximately $0.8 million in non-cash stock-based compensation expense .

Other income for the nine months ended September 30, 2023 was $4.7 million, which primarily consisted of interest income from our marketable securities of $4.8 million, partially offset by losses from the sale of the disposed assets.

General and administrative expenses for the three months ended March 31, 2024 were $4.5 million compared to $6.8 million for the three months ended March 31, 2023.

The decrease of $2.3 million was primarily due to (i) decreased spending on corporate- and legal-related costs, and (ii) personnel-related expenses, including a $1.0 million one-time restructuring charge recorded in the first quarter of 2023.

Other income for the three months ended March 31, 2024 was $3.4 million, compared to $1.3 million for the three months ended March 31, 2023.

The increase of $2.1 million was primarily due to an increase in interest income from our marketable securities..

Liquidity and capital resources

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Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations.

Through September 30, 2023, we had received aggregate gross proceeds of $526.1 million from sales of our common stock, convertible

preferred stock and issuance of convertible promissory notes, stock option exercises, and sale of stock through the Company’s 2020 Employee Stock Purchase Plan, or ESPP.

As of September 30, 2023, we had $276.9 million in cash, cash equivalents and marketable securities and accumulated deficit of $278.9 million.

We had no debt outstanding as of September 30, 2023.

In September 2023, we completed the Private Placement 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 from the Private Placement were approximately $129.8 million .

Also on September 5, 2023, we entered into the Loan Agreement which provides for the Credit Facility in an aggregate principal amount of up to $50.0 million, 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.

Our net losses were $31.0 million and $28.3 million for the three months ended March 31, 2024 and 2023, respectively.

Through March 31, 2024, we had received aggregate gross proceeds of $535.8 million from sales of our common stock, convertible preferred stock and issuance of convertible promissory notes, stock option exercises, and sale of stock through the Company’s 2020 Employee Stock Purchase Plan, or ESPP.

As of March 31, 2024, we had $249.0 million in cash, cash equivalents and marketable securities and accumulated deficit of $336.6 million.

We had no debt outstanding as of March 31, 2024.

In September 2023, we entered into a stock purchase agreement for a private placement of 13,211,381 shares of our common stock, at a price of $9.84 per share, to selected institutional and accredited investors, or the Private Placement, 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 us from the Private Placement were approximately $129.7 million.

On September 5, 2023, we entered into a loan and security agreement, or the Loan Agreement, with Silicon Valley Bank, a division of First Citizens Bank & Trust Company, or the Bank, which provides us with an aggregate principal amount of up to $50.0 million, or 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.

As of September 30, 2023, we had not drawn down from the Credit Facility, and had no other debt outstanding.

We expect to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of palazestrant and nonclinical studies.

As of March 31, 2024, we had not drawn down from the Credit Facility, and had no other debt outstanding.

On January 5, 2024, we entered into a sales agreement, or the Sales Agreement, with Cowen and Company, LLC, or TD Cowen, as sales agent, pursuant to which we may offer and sell, from time to time, shares of our common stock, having an aggregate offering price of up to $150.0 million, or 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”, or ATM, equity offering as defined in Rule 415(a)(4) promulgated under the Securities Act, including sales made directly on or through the Nasdaq Global Select Market.

We have 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, we issued 546,326 shares of our common stock under the ATM program 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.

We expect to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of palazestrant, OP-3136 and nonclinical studies.

We expect that our research and development and general and administrative costs will increase in connection with conducting additional nonclinical studies and clinical trials for our current and future research programs and product candidates, contracting with CMOs to support nonclinical studies and clinical trials, expanding our intellectual property portfolio, and providing general and administrative support for our operations.

As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources.

Our primary uses of cash are to fund our research and development activities, including with respect to palazestrant and other nonclinical programs, business planning, establishing and maintaining our intellectual property portfolio, hiring personnel, raising capital and providing general and administrative support for these operations.

Our primary uses of cash are to fund our research and development activities, including with respect to palazestrant, OP-3136 and other nonclinical programs, business planning, establishing and maintaining our intellectual property portfolio, hiring personnel, raising capital and providing general and administrative support for these operations.

Other than as noted above, we currently have no financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years.

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We do not expect to generate any meaningful revenue unless and until we obtain regulatory approval of and commercialize any of our product candidates, and we do not know when, or if at all, that will occur.

We expect our expenses to increase in connection with our ongoing activities, particularly as we initiate and conduct clinical trials of, and seek marketing approval for, palazestrant.

We expect our expenses to increase in connection with our ongoing activities, particularly as we initiate and conduct clinical trials of, and seek marketing approval for, palazestrant or OP-3136.

In addition, if we obtain marketing approval for our product candidates, we expect to incur significant commercialization expenses related to program sales, marketing, manufacturing and distribution to the extent that such sales, marketing and distribution are not the responsibility of potential collaborators.

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The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our development efforts.

We expect our cash, cash equivalents, and marketable securities as of September 30, 2023, as well as the available balance under the Credit Facility, will enable us to fund our current operating plan into 2027.

We anticipate our cash, cash equivalents, and marketable securities balance to range between $250.0 to $255.0 million on December 31, 2023.

We expect our cash, cash equivalents, and marketable securities as of March 31, 2024, as well as the available balance under the Credit Facility, will enable us to fund our current operating plan for at least the next 12 months from the filing date of these condensed consolidated financial statements.

Refer to Note 10 of our notes to the condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q for further information regarding our material cash requirements;

other than as set forth therein, there have been no material changes outside the ordinary course of business during the three months ended March 31, 2024 to our commitments and contingencies disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K.

If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

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• the scope, prioritization and number of our research and development programs;

● the costs, timing and outcome of regulatory review of our product candidate;

• the costs, timing and outcome of regulatory review of our product candidates;

• our ability to establish and maintain collaborations on favorable terms, if at all;

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Identifying potential product candidates and conducting nonclinical studies and clinical trials is a time- consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales.

In addition, our product candidate, if approved, may not achieve commercial success.

Our commercial revenues, if any, will be derived from sales of a product candidate that we do not expect to be commercially available for many years, if at all.

In addition, our product candidates, if approved, may not achieve commercial success.

Our commercial revenues, if any, will be derived from sales of one or more product candidates that we do not expect to be commercially available

for many years, if at all.

Accordingly, we will need to continue to rely on additional financing to achieve our business objectives.

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The following table shows a summary of our cash flows for each of the periods presented:

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

Net cash used in operating activities

Net cash provided by investing activities

Net cash (used in) provided by investing activities

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Operating activities

Net cash used in operating activities in the nine months ended September 30, 2023 consisted primarily of our net loss of $69.9 million and a net increase in operating assets and liabilities of $5.4 million, partially offset by non-cash charges of $10.1 million.

Net cash used in operating activities during the three months ended March 31, 2024 consisted primarily of our net loss of $31.0 million and non-cash interest income on our marketable securities of $2.4 million, offset by a net increase in operating assets and liabilities of $4.8 million and non-cash charges of $5.0 million.

The net loss consisted primarily of $29.9 million in research and development expenses and $4.5 million in general and administrative expenses.

The non-cash charges consisted primarily of stock-based compensation expense of $12.9 million and depreciation and amortization expenses of $0.3 million , primarily offset by non-cash interest income on our marketable securities of $3.3 million .

The net increase in operating assets and liabilities was primarily due to (i) an increase of $5.3 million in other assets and long-term deposits, and (ii) a decrease of $2.2 million in accrued and other current liabilities and.

The changes were partially offset by (i) an increase of $1.8 million in accounts payable, which is primarily a result of timing of invoice payment, and (ii) a decrease of $0.3 million in prepaid expenses and other current assets.

Net cash used in operating activities in the nine months ended September 30, 2022 consisted primarily of our net loss of $78.6 million, partially offset by non-cash charges of $14.0 million and a net decrease in operating assets and liabilities of $2.2 million.

The non-cash charges consisted primarily of stock-based compensation expense of $4.9 million and depreciation and amortization expenses of $0.1 million, and non-cash lease expense of less than $0.1 million, net of cash payments of $0.3 million.

The net increase in operating assets and liabilities was primarily due to (i) an increase of $5.0 million in accounts payable, which is primarily due to the timing of a milestone payment to Aurigene, and (ii) a decrease of $1.6 million in prepaid expenses and other current assets, which is primarily due to the reimbursable research and development costs received from a collaboration partner.

The changes were partially offset by (i) an increase of $1.3 million in other assets and long-term deposits, and (ii) a decrease of $0.4 million in accrued and other current liabilities.

Net cash used in operating activities during the three months ended March 31, 2023 consisted primarily of our net loss of $28.3 million, offset by non-cash charges of $3.9 million and a net increase in net operating assets and liabilities of $4.0 million.

The net loss consisted primarily of $22.8 million in research and development expenses and $6.8 million in general and administrative expenses.

The non-cash charges consisted primarily of stock-based compensation expense of $14.0 million and depreciation and amortization expenses of less than $0.1 million, including premium amortization on our marketable securities, and non-cash lease expense of less than $0.1 million, net of cash payments of $1.0 million.

The net decrease in operating assets and liabilities was primarily due to (i) an increase of $3.3 million in other current liabilities and (ii) a decrease of $0.1 million in prepaid expenses and other current assets.

The changes are partially offset by (i) a net increase of $1.1 million in other assets and (ii) an increase of less than $0.1 million in accounts payable, which is primarily a result of timing of invoice payment.

The non-cash charges consisted primarily of stock-based compensation of $4.6 million and depreciation and amortization expenses of $0.1 million, and non-cash lease expense of less than $0.1 million, net of cash payments of $0.3 million.

These non-cash expenses were primarily offset by non-cash interest income on our marketable securities of $0.9 million.

The net increase in operating assets and liabilities was primarily due to (i) a net increase of $2.7 million in other current liabilities, (ii) a net increase of $1.0 million in prepaid expenses and other current assets and (iii) a net increase of $0.3 million in accounts payable, which is primarily a result of timing of invoice payment.

Investing Activities

Net cash provided by investing activities in the nine months ended September 30, 2023 was predominately due to maturities of marketable securities which was partially offset by purchase of marketable securities.

Net cash provided by investing activities in the nine months ended September 30, 2022 was predominately due to maturities of marketable securities which was partially offset by purchase of marketable securities.

Net cash used in investing activities during the three months ended March 31, 2024 was predominantly due to purchases of marketable securities which were offset by maturities of marketable securities.

Net cash provided by investing activities during the three months ended March 31, 2023 was predominantly due to maturities of marketable securities which were offset by the purchases of marketable securities.

Financing activities

Net cash provided by financing activities during the nine months ended September 30, 2023 consists of $129.8 million in net proceeds from the Private Placement, $2.4 million from the exercise of stock options, and $0.7 million from the sale of our common stock under the 2020 ESPP.

Net cash provided by financing activities during the nine months ended September 30, 2022 consists of $0.1 million and $0.1 million in net proceeds from the sale of our common stock under the 2020 ESPP and the exercise of stock options, respectively.

Contractual obligations and commitments

Refer to Note 10 of our notes to the condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q for further information;

other than as set forth therein, there have been no material changes outside the ordinary course of business during the nine months ended September 30, 2023 to our commitments and contingencies disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K.

Net cash provided by financing activities during the three months ended March 31, 2024 consists of $7.9 million in net proceeds from the sale of ATM Shares and $0.9 million from the exercise of stock options.

Net cash provided by financing activities during the three months ended March 31, 2023 represents $0.2 million in net proceeds from the exercise of stock options.

Critical accounting policies and significant judgements and estimates

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

During the nine months ended September 30, 2023, there were no material changes to our critical accounting policies and estimates as reported in our Annual Report on Form 10-K.

During the three months ended March 31, 2024, there were no material changes to our critical accounting policies and estimates as reported in our Annual Report on Form 10-K.

Quantitative and Qualitative Disclosures About Market Risk.

During the nine months ended September 30, 2023, there were no material changes to our market risk disclosures reported in our Annual Report on Form 10-K.

During the three months ended March 31, 2024, there were no material changes to our market risk disclosures reported in our Annual Report on Form 10-K.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis