What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-03-18 compared with 2024-03-11 · 169 added, 102 removed, 623 unchanged (30% of the section changed)

98 unchanged sentences

Additional paid-in capital

Accumulated other comprehensive gain (loss)

Accumulated other comprehensive income

Accumulated deficit

13 unchanged sentences

Interest income

Other expense

Other income (expense):

Total other income

3 unchanged sentences

Other comprehensive loss:

Net unrealized gain (loss) on marketable securities

Net unrealized (loss) gain on marketable securities

Total comprehensive loss

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Balances at December 31, 2022

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

Stock-based compensation expense

Employee stock purchase plan expense

Issuance of shares under employee stock purchase plan

Exercise of stock options

Issuance of shares under employee stock purchase plan

Employee stock purchase plan expense

Vesting of early exercised stock options

Vesting of performance-based restricted stock unit awards

Vesting of restricted stock awards

Net unrealized loss on marketable securities

Net unrealized gain on marketable securities

Balances at December 31, 2023

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

Issuance of shares and pre-funded warrants under equity private placement, net of issuance costs of $ 12,998

Issuance of shares under at-the-market offering, net of issuance costs of $ 166

Exchange of common stock shares for pre-funded warrants

Stock-based compensation expense

2 unchanged sentences

Employee stock purchase plan expense

Vesting of early exercised stock options

Vesting of restricted stock awards

Vesting of performance-based restricted stock unit awards

Net unrealized gain on marketable securities

Vesting of restricted stock awards

Net unrealized loss on marketable securities

Balances at December 31, 2024

7 unchanged sentences

Depreciation and amortization expense

Loss on sale of equipment

Loss on disposal of equipment

Non-cash lease expense

9 unchanged sentences

Cash flows from investing activities:

Purchase of equipment

Maturities of marketable securities

Purchases of marketable securities

Purchase of equipment

Disposal of fixed assets

Net cash (used in) provided by investing activities

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from equity private placement, net of issuance costs of $ 6,498

Proceeds from at-the-market offering, net of issuance costs of $ 166

Proceeds from exercise of stock options

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Cash and cash equivalents at end of period

Supplemental disclosure of non-cash investing and financing activities:

Issuance costs for equity private placement not paid in cash by the end of period

Exchange common stock shares for pre-funded warrants

Research and development project deposit applied against final study invoices

System implementation cost included in other current liabilities

See accompanying notes to the consolidated financial statements.

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

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

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

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

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

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

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

The Company had $ 434.1 million of cash, cash equivalents and marketable securities at December 31, 2024 , in addition to an available balance of $ 25.0 million under the Loan and Security Agreement dated as of September 5, 2023 (the “Original Loan Agreement”), by and between the Company, as borrower, and Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (the “Bank”), as amended by the First Amendment to Loan and Security Agreement, dated June 28, 2024, by and between the Company and the Bank (the "Amendment," and the Original Loan Agreement as amended by the Amendment, the "Loan Agreement").

See Footnote 12.

Commitments and Contingencies for details.

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

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.

On November 29, 2024, the Company entered into a securities purchase agreement for a private placement of (i) 19,928,875 shares of the Company’s common stock at a price of $ 9.08 per share and (ii) pre-funded warrants to purchase up to an aggregate of 7,604,163 shares of the Company's common stock at a price of $ 9.0799 per pre-funded warrant, which represents the per share purchase price of the Company's common stock sold in the private placement less the $ 0.0001 per share exercise price for each pre-funded warrant to selected institutional and accredited investors (the “2024 Private Placement”).

The aggregate gross proceeds for the 2024 Private Placement were approximately $ 250.0 million.

After deducting offering expenses related to the

2024 Private Placement of approximately $ 6.5 million (the remaining $ 6.5 million was included in Other current liabilities in the consolidated balance sheets) , the net proceeds to the Company from the 2024 Private Placement were approximately $ 243.5 million.

On September 5, 2023, the Company 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 (the "2023 Private Placement"), resulting in gross proceeds of approximately $ 130.0 million.

After deducting offering expenses related to the 2023 Private Placement of approximately $ 0.3 million, the net proceeds to the Company from the 2023 Private Placement were approximately $ 129.7 million.

The Private Placement closed on September 12, 2023.

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

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

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

At-The-Market Offering

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

The sales of the 2024 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 agreed to pay Cowen and Company a commission of up to 3.0 % of the aggregate gross proceeds from any 2024 ATM Shares sold by Cowen and Company.

During the year ended December 31, 2024, the Company issued 1,772,278 shares of the Company's common stock under the 2024 Sales Agreement at a weighted-average price of $ 13.19 for net proceeds of $ 22.8 million after deducting related issuance costs.

As of December 31, 2024, approximately $ 126.6 million remained available for issuance under the 2024 Sales Agreement.

On January 6, 2025, the Company entered into a sales agreement (the "2025 Sales Agreement") with TD Securities (USA) LLC, ("TD Cowen") as sales agent, pursuant to which the Company may offer and sell, from time to time, shares of the Company's common stock, having an aggregate offering price of up to $ 150.0 million (the “2025 ATM Shares”).

The 2025 Sales Agreement replaces the prior 2024 Sales Agreement.

The sales of the 2025 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, 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 2025 ATM Shares sold by TD Cowen.

Impact of Geopolitical and Macroeconomic Events

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

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

Global economic and business activities continue to face widespread uncertainty related to the geopolitical and macroeconomic environment, generally, including economic uncertainty, market volatility, labor shortages, tariffs and trade tensions, the ongoing conflicts between Ukraine and Russia and in the Middle East, as well as any related political or economic responses and counter-responses or otherwise by various global actors, inflation rates and the responses by central banking authorities to control such inflation, monetary supply shifts and related financial instability.

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

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The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding financial reporting, and the instructions to Form 10-K and Article 10 of Regulation S-X.

These consolidated financial statements include the accounts of Olema Pharmaceuticals, Inc.

These consolidated financial statements include the accounts of Olema

Pharmaceuticals, Inc.

and its wholly owned subsidiary, Olema Oncology Australia Pty Ltd.

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

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

each balance sheet date.

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

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

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Financial instruments that potentially subject the Company to concentration of credit risk consist of cash, cash equivalents, and marketable securities.

The Company invests in a variety of financial instruments and, by its policy, limits these financial instruments to high credit quality securities issued by the U.S.

The Company invests in a variety of financial instruments and, by its

policy, limits these financial instruments to high credit quality securities issued by the U.S.

government, U.S.

9 unchanged sentences

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

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

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

Under Accounting Standards Update ("ASU") 2026-12, Leases, Topic 842, ("Topic 842"), lessees are required to recognize for all leases (with the exception of short-term leases) at the commencement date:

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

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

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

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

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

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

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

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

Research and Development Costs

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

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

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

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

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

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

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

(“Novartis”) are recorded as a reduction of research and development expenses and as a receivable due from Novartis, which is recorded under prepaid expenses and other current assets in the accompanying consolidated financial statements, as described in Note 12, Commitments and Contingencies – Clinical Collaboration and Supply Agreement.

Research Contract Costs and Accruals

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

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation.

Depreciation is computed using the straight-line method over the estimated useful lives.

The useful lives of equipment are as follows:

Estimated Useful Lives

Lab equipment

Computer equipment

When assets are sold or retired, the cost and related accumulated depreciation are removed from the balance sheets, with any resulting gain or loss recorded in operating expenses in the statements of operations and comprehensive loss.

Costs of repairs and maintenance are expensed as incurred.

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

Internal-Use Software

The Company capitalizes certain costs incurred for the development and implementation of computer software for internal-use.

These costs generally relate to the implementation of the third-party developed software for the Company's regulatory and quality purposes.

The Company capitalizes these costs when it is determined that it is probable that the project will be completed and the software will be used to perform the function intended, and the preliminary project stage is completed.

Capitalized internal-use software development and implementation costs are included in Other assets and long-term deposits within the consolidated balance sheets.

Capitalized implementation costs are amortized on a straight-line basis over the estimated useful lives of five years .

Costs related to the preliminary project stage, post-implementation, training and maintenance are expensed as incurred.

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

8 unchanged sentences

Comprehensive Loss

Comprehensive loss includes net loss and other comprehensive loss for each period presented.

Other comprehensive loss represents net unrealized loss on marketable securities.

Comprehensive loss includes net loss and other comprehensive (loss) gain for each period presented.

Other comprehensive (loss) gain represents net unrealized (loss) gain on marketable securities.

Stock-Based Compensation

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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.

Equity instruments issued to non-employees 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.

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Income and expense elements are remeasured to U.S.

dollars using the average exchange rates in effect during the period.

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.

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

Pre-funded Warrants

The Company issued pre-funded warrants in connection with the Purchase Agreement.

The Company accounts for the pre-funded warrants as a freestanding equity-linked financial instrument that met the criteria for equity classification pursuant to Accounting Standards Codification 480, Distinguishing Liabilities from Equity ("ASC 480"), and ASC 815, Derivatives and Hedging ("ASC 815").

Accordingly, the Company recorded the pre-funded warrants as a component of stockholders' equity within additional paid-in capital.

The Company valued the pre-funded warrants at issuance, concluding that their sales price approximated their fair value.

See Note 7 for further disclosure.

Net Loss Per Common Share

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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.

Basic shares outstanding includes the weighted average effect of the Company's outstanding pre-funded warrants, the exercise of which requires little or no consideration for the delivery of shares of common stock.

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

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

Segment Reporting

The Company's chief operating decision maker (“CODM”), the Chief Executive Officer , manages its business activities as a single operating and reportable segment at the consolidated level.

Accordingly, the Company's CODM uses consolidated net loss to measure segment loss, allocate resources and assess performance.

Further, the CODM reviews and utilizes functional expenses (research and development, and general and administrative) at the consolidated level to manage the Company’s operations.

Other segment items included in consolidated net loss is interest income, which is reflected in the consolidated statements of operations and comprehensive loss.

Recent Accounting Pronouncements Adopted

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) , which simplifies the accounting for convertible instruments and equity-linked financial instruments in addition to amending the earnings per share ("EPS") guidance in ASC 260 to improve the consistency of the diluted EPS calculation.

The standard addresses issues identified as a result of the complexity associated with applying U.S.

GAAP for certain financial instruments with characteristics of liabilities and equity.

The standard eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.

The standard is effective for public companies, excluding entities eligible to be smaller reporting companies, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

For all other entities, the standard is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

The Company adopted ASU 2020-06 as of January 1, 2024 .

The adoption did not make an impact on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”) , which requires all public entities, including public entities with a single reportable segment, to provide in interim and annual periods one or more measures of segment profit or loss used by the chief operating decision maker to allocate resources and assess performance.

Additionally, the standard requires disclosures of significant segment expenses and other segment items as well as incremental qualitative disclosures.

The Company adopted ASU 2023-07 effective January 1, 2024 , on a retrospective basis.

The adoption of 2023-07 did not change the way that the Company identifies its reportable segments and, as a result, did not have a material impact on the Company’s segment-related disclosures.

Refer to the Segment Reporting section in Note 2 "Summary of Significant Accounting Policies".

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued a new income tax-related accounting guidance in ASU 2023-09, Improvements to Income Tax Disclosures.

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

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Commercial paper

Corporate bonds

government treasury bills

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

Reimbursable research and development costs from a collaboration partner

Prepaid insurance

Prepaid clinical development costs

Interest receivable

Prepaid insurance

Prepaid subscriptions and licenses

Prepaid clinical development costs

Reimbursable research and development costs from a collaboration partner

Other Assets and Long-Term Deposits

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Property and equipment, net

System implementation costs

Security deposits

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Accrued research and development related costs

Accrued employee bonuses

Accrued professional fees

Accrued employee bonuses

Accrued payroll related costs

Accrued taxes

Early exercise of unvested stock options

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

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Shares available for future grant under the 2020 Equity Incentive Plan and the 2022 Inducement Plan

Available for the 2020 Employee Stock Purchase Plan

Shares available for the 2020 Employee Stock Purchase Plan

Unvested performance-based restricted stock unit awards outstanding under the 2020 Equity Incentive Plan

Unvested restricted stock awards outstanding under the 2014 Stock Plan

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

Shares available for issuance related to pre-funded warrants

Pre-Funded Warrants

In December 2024, the Company issued pre-funded warrants to purchase up to 7,604,163 shares of the Company's common stock in the 2024 Private Placement at $ 9.07998 per share of the common stock, less the $ 0.0001 per share exercise price of each warrant.

Also, in December 2024, the Company issued pre-funded warrants to purchase up to 3,420,000 shares of the Company's common stock in exchange of 3,420,000 shares of the Company's common stock previously held by investors.

The warrants were recorded as a component of stockholders’ equity within additional paid-in capital and have no expiration date.

Stock-Based Compensation

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

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

In 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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For options with service-based vesting conditions, the expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options.

The expected term of stock options granted to nonemployees is equal to the contractual term of the option award.

The expected term of stock options granted to non-employees is equal to the contractual term of the option award.

The risk-free interest rate is determined by reference to the U.S.

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Outstanding as of December 31, 2023

Exercised (1)

Outstanding as of December 31, 2024

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Options expected to vest as of December 31, 2024

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

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

The weighted-average grant-date fair value per share of options granted during the years ended December 31, 2024 and 2023 was $ 10.40 and $ 4.37 , respectively.

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As of December 31, 2024 , the total unrecognized compensation expense related to unvested options was $ 34.5 million, which the Company expects to recognize over an estimated weighted average period of 2.61 years.

Early Exercise of Stock Options

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

The early exercised options are subject to the same vesting provisions in the original stock option awards.

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.

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 December 31, 2023.

Restricted Stock Awards

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

The following table summarizes the restricted stock awards (the RSAs) activity under the 2014 Plan during the year ended December 31, 2024:

Number of Shares

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The total grant date fair value of the RSAs vested during the year ended December 31, 2024, was $ 0.2 million.

As of December 31, 2023 , the total unrecognized compensation expense related to unvested RSAs was $ 0.2 million, which the Company expects to recognize over an estimated weighted average period of 0.5 years.

As of December 31, 2024, the was no unrecognized compensation expense related to the RSAs.

The Company recorded s tock-based compensation expense of $ 0.2 million related to the vested shares of restricted stock awards for the year ended December 31, 2024.

Performance-Based Restricted Stock Unit Awards

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

The performance goal related to the 35 % tranche of the PSUs was met and related stock-based compensation expense was recorded in 2023.

In June 2024, pursuant to the terms of the PSUs, the Compensation Committee of the Company approved an extension of the achievement of the performance goal related to the 65 % tranche of the PSUs from June 30, 2024 to December 31, 2024.

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

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

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

As of December 31, 2024, the performance goal related to the 65 % tranche of the PSUs was met and related stock-based compensation expense of $ 1.4 million was recorded.

As of December 31, 2023, the performance goal related to the 35 % tranche of the PSUs was met and related stock-based compensation expense of $ 0.7 million was recorded.

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

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Equity compensation

Lease Liability

Total deferred tax assets

Deferred tax liabilities:

Right-of-use assets

Total deferred tax liabilities

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In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

The ultimate realization of deferred tax

assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

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As a result of the Tax Act, as modified by the CARES Act, for U.S.

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

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

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

income tax purposes, NOLs generated in tax years beginning before January 1, 2018 can still be carried forward for up to 20 years , but net operating losses generated for tax years beginning after December 31, 2017 are carryforward indefinitely and can be used to offset taxable income, but the deductibility of such Federal NOLs may be limited to 80 % of current year taxable income for tax years beginning on or after December 31, 2024.

Of the total Federal NOLs of $ 190.2 million, $ 3.3 million will begin to expire in 2032 and $ 186.9 million will not expire.

The state NOL carryover of $ 296.7 million will begin to expire in 2032.

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Net loss per share, basic and diluted

* reflects the weighted average effect of the pre-funded warrants issued on December 4, 2024 for basic and diluted net loss per share.

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:

Years Ended December 31,

Unvested restricted common stock

Unvested performance-based restricted stock units

Options to purchase common stock

Unvested performance-based restricted stock units

Unvested restricted common stock

Employee stock purchase plan contingently issuable

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

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

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

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

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

This lease was terminated during the fourth quarter of 2023.

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

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

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

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

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

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

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

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

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

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

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

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

common area charges.

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

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Commitments and Contingencies

Clinical Trial Collaboration and Supply Agreement with Novartis

On November 29, 2024, the Company entered into a Clinical Trial Collaboration and Supply Agreement (the Novartis Pharma Agreement) with Novartis Pharma AG (Novartis).

Pursuant to the Agreement, Novartis will provide the Company with ribociclib drug supply for the Company’s planned Phase 3 OPERA-02 trial of palazestrant in combination with ribociclib in ER+/HER2- frontline advanced or metastatic breast cancer (the "OPERA-02 trial").

Under the Agreement, the Company will supply (including manufacturing, packaging and labeling) palazestrant and letrozole for the OPERA-02 trial.

Novartis will manufacture and supply (including primary packaging) the Company with a specified amount of ribociclib, which amount is expected to be sufficient for the OPERA-02 trial.

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

Any inventions developed in the performance of the clinical studies for the combined therapies (other than those specific to each component study drug) are jointly owned by the parties.

Except as otherwise specified below, the Novartis Pharma Agreement does not grant any right of first negotiation to participate in future clinical trials, and each party retains all rights and ability to evaluate their respective compounds in any studies or clinical trials, either as a monotherapy or in combination with any other product or compound, in any therapeutic area.

The parties retain their independent rights to commercialize their respective therapies both alone and with third parties.

The Company granted Novartis a right of first negotiation with respect to (a) the grant to any person or entity any right, license or sublicense to exploit palazestrant, in any field or territory, other than to third party service providers, or (b) the sale or other transfer to any person or entity of palazestrant and any related assets (each referred to herein as an Olema Compound Transaction).

If the Company desires to or does, at any time, (a) solicit or entertain any third party proposal or indication of interest with respect to an Olema Compound Transaction, or (b) negotiate (including in response to any proposal or indication of interest received by the Company), enter into or perform under, in each case, any written definitive agreement with a third party with respect to or that contemplates an Olema Compound Transaction, then the Company must provide written notice to Novartis regarding such Olema Compound Transaction, along with certain other specified information.

Novartis will have 30 days after receipt of such notice to elect to enter into exclusive good faith negotiations with respect to such Olema Compound Transaction for a period of up to 120 days .

If the Company’s board of directors (or a duly authorized board committee) determines that the Company should pursue or explore a change of control of the Company or sale of all or substantially all of its assets (an Olema Change of Control), other than in response to an unsolicited bona fide acquisition proposal (a Proposed Sale), the Company must promptly notify Novartis of such determination.

In the event Novartis elects to engage in negotiations with the Company in respect of such Proposed Sale, then from the date such notice is given until 45 days after the later of (a) the date on which the foregoing notice is given to Novartis, (b) the date on which Novartis is given notice that a data room has been populated as required by the Novartis Pharma Agreement, and (c) entry by the Company and Novartis into a customary nondisclosure agreement, Novartis will have the exclusive right (but no obligation) to conduct due diligence on the Company and its business and negotiate with the Company and its representatives the definitive terms and conditions of the Proposed Sale.

If the Company or its affiliates receive an unsolicited bona fide acquisition proposal from a third party, the Company must promptly notify its board of directors (or a duly authorized board committee) of the receipt thereof and request that they consider the merits of such acquisition proposal.

If, after such consideration, the Company’s board of directors (or authorized committee) authorizes the Company to engage in negotiations with regard to such acquisition proposal, then the Company must notify Novartis in writing within 24 hours of receipt of such authorization.

To the extent possible in light of any confidentiality obligations, such notice must include a summary of the key structural, non-financial terms of such acquisition proposal.

In the event of an Olema Compound Transaction or Olema Change of Control involving a third party other than Novartis (the first to occur, a Repayment Trigger Event), the Company must promptly pay, or procure the payment of, the Repayment Amount (as defined below) to Novartis.

Notwithstanding the foregoing, if the Novartis Pharma Agreement is terminated as a result of certain patient safety issues, lack of product efficacy, regulatory issues or clinical hold issues prior to the consummation of the Olema Compound Transaction or Olema Change of Control, then the Company shall not be obligated to pay the Repayment Amount unless (a) the Olema Change of Control or Olema Compound Transaction occurs after such termination and (b) prior to the fifth anniversary of such Olema Change of Control or Olema Compound Transaction (as applicable), the Company or its affiliates (or the applicable acquirer, successor, licensee or optionholder of the Company or its affiliates) enrolls a subject in any clinical study involving the combination of palazestrant and ribociclib (the

Olema Combination) or submits any filing with any regulatory authority relating to the Olema Combination.

The “Repayment Amount” is the proportion of approximately $ 275 million that is represented by the number of units of ribociclib actually supplied to the Company under the Supply Agreement as of immediately prior to the Repayment Trigger Event as compared to the total number of units that could be supplied under the Novartis Pharma Agreement.

The foregoing rights of first negotiation, first offer and notice and repayment obligations remain in effect until the first to occur of:

(a) the date that is 120 days after filing of the New Drug Application for the Olema Combination, (b) one year after any expiration or termination of the Novartis Pharma Agreement, and (c) such time as the Novartis Pharma Agreement is terminated by the Company due to Novartis’ material breach.

However, in the event the Novartis Pharma Agreement is terminated due to certain patient safety issues, lack of product efficacy, regulatory issues or clinical hold issues prior to the consummation of an Olema Change of Control or Olema Compound Transaction, then the Repayment Obligation shall survive until the fifth anniversary of such Olema Change of Control or Olema Compound Transaction (as applicable) or, if payment of the Repayment Amount is required, until the next business day after the Repayment Amount has been received by Novartis.

The Novartis Pharma Agreement will terminate on the fifth anniversary of the date on which the first dose of palazestrant is administered to the first study subject.

Either party may terminate the Novartis Pharma Agreement for the uncured material breach or insolvency of the other party, for failure to comply with certain anti-corruption obligations, in the event of a change of control of the other party, if it reasonably deems it necessary in order to protect the safety, health or welfare of subjects enrolled in the clinical studies for the combined therapies due to the existence of a material safety issue, if the parties jointly decide that the Olema Combination is not achieving sufficiently superior levels of efficacy, if any regulatory authority action prevents a party (or the Letrozole supplier) from supplying its product, in the event of an unresolved force majeure event, or in certain circumstances for an unresolved clinical hold with respect to ribociclib, palazestrant or letrozole (or the combination of ribociclib and palazestrant or ribociclib and letrozole).

In addition, Novartis may terminate the Novartis Pharma Agreement if the Company has failed to commence the OPERA-02 trial on or prior to March 31, 2026 or if the Company consummates an Olema Compound Transaction, and the Company may terminate the Novartis Pharma Agreement if the Company terminates the OPERA-02 trial other than due to a material safety issue, efficacy issue, regulatory action or upon a clinical hold.

Loan Agreement

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

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

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

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

The Original Loan Agreement provided for a four-year senior secured credit facility in an aggregate principal amount of up to $ 50.0 million (the Original Credit Facility), of which $ 25.0 million became available upon the closing of the 2023 Private Placement, and the remaining $ 25.0 million could have been made available upon approval of the Bank in its discretion.

The Original Credit Facility was to mature on August 1, 2027 (the Original Maturity Date).

On June 28, 2024, the Company entered into a First Amendment to Loan and Security Agreement (the Amendment), by and between the Company and the Bank, which amends the terms of the Original Loan Agreement (the Original Loan Agreement, as amended, the "Loan Agreement"), in order to, among other things, (i) increase the aggregate principal amount of the Original Credit Facility from up to $ 50 million to up to $ 100 million, of which $ 25 million is currently available, an additional $ 25 million will become available upon the Company achieving certain milestones related to execution of a first line pivotal Phase 3 clinical trial of palazestrant in combination with ribociclib, and an additional $ 50 million which may be made available upon approval of the Bank (the Original Credit Facility, as amended, the Credit Facility), and (ii) extend the Original Maturity Date to July 1, 2028 .

As of December 31, 2024, the Company had not drawn down from the Credit Facility.

23 unchanged sentences

and engage in certain transactions with affiliates.

Clinical Collaboration and Supply Agreement

Clinical Collaboration and Supply Agreement with Novartis

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

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

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

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

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

For the years ended December 31, 2024 and 2023, costs reimbursable from Novartis were zero and $ 2.0 million, respectively.

As of December 31, 2023, the receivable due from Novartis was $ 1.5 million, which is recorded under prepaid expenses and other current assets in the accompanying consolidated balance sheets.

This balance was fully collected in cash during the year ended December 31, 2024.

Clinical Trial Agreement

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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.

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

The Company and Aurigene jointly own collaboration compounds and rights to any inventions made during the research term.

1 unchanged sentence

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

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

The $ 8.0 million upfront payment was incurred in June 2022.

Costs incurred and milestones payments due to Aurigene prior to regulatory approval are recognized as research and development expenses in the period incurred.

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

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

The $ 5.0 million milestone payment related to initiation of the first IND-enabling safety study was incurred and recorded as research and development expenses in 2024.

There was no other milestone met for the year ended December 31, 2024.

Management Services Agreements

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

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk