What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-11 compared with 2025-05-13 · 111 added, 73 removed, 198 unchanged (48% of the section changed)

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

We aspire to transform the treatment paradigm for metastatic breast cancer (MBC).

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

In non-clinical models, palazestrant binds and completely blocks ER-driven transcriptional activity in both wild-type and mutant forms of metastatic ER+ breast cancer.

In non-clinical models, palazestrant binds and completely blocks ER-driven transcriptional activity in both wild-type and mutant forms of ER+ MBC.

In clinical studies across more than 400 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.

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.

Our pivotal Phase 3 clinical trial of palazestrant as a monotherapy in second/third-line ER+/HER2- metastatic breast cancer, OPERA-01, is ongoing, and we anticipate top-line results in 2026.

In combination, we are investigating palazestrant in multiple Phase 1/2 studies with CDK4/6 inhibitors (palbociclib or ribociclib), a phosphatidylinositol-3-kinase alpha (PI3Ka) inhibitor (alpelisib), and with an mTOR inhibitor (everolimus).

In March 2024, we increased the size of the ongoing Phase 1/2 clinical study of palazestrant in combination with ribociclib by an additional 15 patients to explore 90 mg of palazestrant in combination with 600 mg of ribociclib.

We also initiated our Phase 1b/2 clinical study of palazestrant in

combination with everolimus in the third quarter of 2024.

Further, in October 2024, we presented new non-clinical data at the EORTC-NCI-AACR Symposium on Molecular Targets and Cancer Therapeutics (ENA) showing that the combination of palazestrant with both everolimus and capivasertib may be synergistic and have the potential to result in significant tumor regression.

We also presented updated results from the ongoing Phase 1b/2 clinical trial of palazestrant in combination with ribociclib in patients with ER+/HER2- advanced or metastatic breast cancer at the San Antonio Breast Cancer Symposium in December 2024.

Our pivotal Phase 3 clinical trial of palazestrant as a monotherapy in second/third-line ER+/HER2- MBC, OPERA-01, is ongoing.

In the second quarter of 2025, 90mg of once-daily palazestrant was selected as the dose for Part 2 of OPERA-01.

We anticipate top-line results for this trial in the second half of 2026, expect to

submit the New Drug Application in 2027, and anticipate U.S.

Food and Drug Administration (FDA) approval and commercial launch in late 2027.

In combination, we are currently investigating palazestrant in multiple Phase 1/2 studies with CDK4/6 inhibitors (palbociclib or ribociclib), a phosphatidylinositol-3-kinase alpha (PI3Ka) inhibitor (alpelisib), with an mTOR inhibitor (everolimus).

We presented updated results from the ongoing Phase 1b/2 study of palazestrant in combination with ribociclib in patients with ER+/HER2- advanced or metastatic breast cancer at the San Antonio Breast Cancer Symposium (SABCS) in December 2024.

In March 2025, we disclosed updated median progression-free survival (mPFS) from this study at the TD Cowen 45th Annual Health Care Conference.

As of a data cutoff date of February 18, 2025, the mPFS was 13.8 months in 56 patients treated with 120 mg of palazestrant and 600 mg of ribociclib daily.

40 of the 56 patients had received prior treatment of a CDK4/6i plus an ET;

40 of the 56 patients had received prior treatment of a CDK4/6i plus an endocrine therapy;

the mPFS in this population was 13.1 months.

We believe these data further support our thesis that palazestrant possesses key characteristics to make it a potential backbone endocrine therapy of preference for ER+/HER2- breast cancer, while also providing the potential basis for a new pivotal Phase 3 clinical trial of palazestrant in combination with ribociclib in front-line ER+/HER2- metastatic breast cancer, called OPERA-02.

The execution of OPERA-02 will be supported by our new clinical trial collaboration and supply agreement with Novartis Pharma AG (collectively, with affiliated entities, Novartis), which was announced in November 2024 (Novartis Pharma Agreement).

Under the terms of the Novartis Pharma Agreement, Novartis will provide Olema with ribociclib drug supply for OPERA-02, which we expect to initiate in 2025.

We expect to present mature data from this trial at the European Society for Medical Oncology (ESMO) Congress in October 2025.

We believe these data will further support our thesis that palazestrant possesses key characteristics to make it a potential backbone endocrine therapy of preference for ER+/HER2- breast cancer, while also potentially providing a basis for the pivotal Phase 3 clinical trial of palazestrant in combination with ribociclib in front-line ER+/HER2- MBC, called OPERA-02.

The execution of OPERA-02 will be supported by our clinical trial collaboration and supply agreement with Novartis Pharma AG (collectively, with affiliated entities, Novartis), entered into in November 2024 (Novartis Pharma Agreement).

Under the terms of the Novartis Pharma Agreement, Novartis will provide Olema with ribociclib drug supply for OPERA-02.

In the second quarter of 2025, 90mg of once-daily palazestrant was selected as the dose for OPERA-02.

We expect to initiate OPERA-02 in the third quarter of 2025, anticipate top-line data in 2028, and anticipate potential approval and commercial launch in the frontline MBC setting in the U.S.

Our second product candidate in clinical development, called OP-3136, is a novel, orally-available small molecule that potently and selectively inhibits KAT6, an epigenetic target that is dysregulated in breast and other cancers.

In October 2024, we presented new preclinical data at ENA demonstrating OP-3136's robust anti-tumor activity as a single agent, as well as potential synergy and enhanced anti-tumor activity in combination with palazestrant.

The IND application for OP-3136 was cleared by the U.S.

Food and Drug Administration (FDA) in late 2024 and the Phase 1 clinical trial is now enrolling patients.

The IND application for OP-3136 was cleared by the FDA in late 2024 and the Phase 1 study is now enrolling patients.

In April 2025, we presented new preclinical data at the AACR Annual Meeting demonstrating the anti-tumor activity of OP-3136 in prostate, ovarian, and non-small cell lung cancer models.

We expect initial clinical results from the OP-3136 Phase 1 study in 2026, potential additional data readout in 2027, and potential initiation of a Phase 3 clinical trial in 2028.

Based on our internal estimates, we believe that the current global market potential for OP-3136 in the second/third-line ER+/HER2- metastatic breast cancer market is approximately $5 billion.

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 non-clinical studies and clinical trials and providing general and administrative support for these operations.

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

Our net losses were $30.4 million and $31.0 million for the three months ended March 31, 2025 and 2024, respectively.

Our net losses were $43.8 million and $30.4 million for the three months ended June 30, 2025 and 2024, respectively, and $74.2 million and $61.4 million for the six months ended June 30, 2025 and 2024, 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 March 31, 2025, we had an accumulated deficit of $465.5 million.

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

As of June 30, 2025, we had an accumulated deficit of $509.3 million.

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

Cash used to fund operating

expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and other current liabilities.

Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and other current liabilities.

We expect to continue to incur net operating losses for at least the next several years, and we expect our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase.

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• continue our ongoing and planned research and development of our lead product candidate, palazestrant, for the treatment of ER+/HER2- breast cancer;

• enroll patients in the Phase 1 clinical trial for OP-3136 and any additional product candidates that we may pursue in the future;

• continue to enroll patients in the Phase 1 study 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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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 volatility in, the credit and financial markets in the United States and worldwide resulting from geopolitical and macroeconomic conditions.

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.

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.

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

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External expenses include:

• expenses incurred in connection with the discovery and non-clinical development of our product candidates, including under agreements with third parties, such as consultants and contract research organizations (CROs);

• expenses incurred in connection with the discovery efforts and non-clinical and clinical development of our product candidates, including under agreements with third parties, such as consultants and contract research organizations (CROs);

• costs of manufacturing products for use in our non-clinical studies and clinical trials, including payments to contract manufacturing organizations (CMOs), and consultants;

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Total other income

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

Total other income consists of interest income and other income (expense).

Interest income primarily consists of interests earned from our cash equivalents and marketable securities.

Other income (expense) 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 March 31, 2025 and 2024

The following table summarizes our results of operations for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

Comparison of the three months ended June 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024:

Three Months Ended June 30,

(in thousands)

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Total other income

¹ The amount for the three months ended June 30, 2025 include a one-time milestone payment to Aurigene of $10 million.

Research and development expenses

The following table summarizes our research and development expenses by functional area for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

The following table summarizes our research and development expenses by functional area for the three months ended June 30, 2025 and 2024:

Three Months Ended June 30,

(in thousands)

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

Milestone payment to Aurigene

Compensation and related benefits

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Stock-based compensation

Milestone payment owed to Aurigene

Total research and development expenses

Research and development expenses for the three months ended March 31, 2025 were $30.6 million, compared to $29.9 million for the three months ended March 31, 2024.

The increase of $0.7 million was primarily due to (i) increased spending on clinical operations and development-related activities as we continue to advance palazestrant through late-stage clinical trials, (ii) clinical operations and development activities associated with the advancement of OP-3136, and (iii) increased personnel-related costs, partially offset by one-time $5 million milestone payment incurred to Aurigene and a decrease in non-cash stock-based compensation expense of $0.1 million.

Research and development expenses for the three months ended June 30, 2025 were $43.9 million, compared to $29.1 million for the three months ended June 30, 2024.

The increase of $14.8 million was primarily related to (i) a one-time $10.0 million milestone payment to Aurigene, (ii) increased spending on clinical development-related activities as we continue to advance palazestrant through late-stage clinical trials, (iii) increased spending related to the advancement of OP-3136, and (iv) increased personnel-related costs due to higher headcount, partially offset by a decrease in non-cash stock-based compensation expense of $0.5million.

General and administrative expenses

General and administrative expenses for the three months ended March 31, 2025 were $4.2 million compared to $4.5 million for the three months ended March 31, 2024.

The decrease of $0.2 million was primarily due to a decrease in non-cash stock-based compensation expense of $0.4 million, offset by increased spending on corporate-related costs.

Other income for the three months ended March 31, 2025 was $4.5 million, compared to $3.4 million for the three months ended March 31, 2024.

The increase of $1.2 million was primarily due to an increase in interest income from our marketable securities.

General and administrative expenses for the three months ended June 30, 2025 were $4.0 million compared to $4.4 million for the three months ended June 30, 2024.

The decrease of $0.4 million was primarily due to a decrease in non-cash stock-based compensation expense.

Other income for the three months ended June 30, 2025 was $4.1 million, compared to $3.1 million for the three months ended June 30, 2024.

The increase of $1.0 million was primarily due to an increase in interest income from our investments in interest-bearing money market funds and marketable securities.

Comparison of the six months ended June 30, 2025 and 2024

The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

(in thousands)

Operating expenses:

Research and development¹

General and administrative

Total operating expenses

Loss from operations

Other income:

Interest income

Other income (expense)

Total other income

¹ The amounts for the six months ended June 30, 2025 and 2024 include one-time milestone payments to Aurigene of $10 million and $5M, respectively.

Research and development expenses

The following table summarizes our research and development expenses by functional area for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

(in thousands)

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

Compensation and related benefits

Other research and development expenses

Milestone payment made to Aurigene

Stock-based compensation

Total research and development expenses

Research and development expenses for the six months ended June 30, 2025 were $74.5 million, compared to $59.0 million for the six months ended June 30, 2024.

The increase of $15.5 million was primarily related to (i) increased spending on clinical development-related activities as we continue to advance palazestrant through late-stage clinical trials, (ii) increased spending related to the advancement of OP-3136, (iii) increased personnel-related costs due to higher headcount, and (iv) $5.0 million higher milestone payment to Aurigene, partially offset by a decrease in non-cash stock-based compensation expense of $0.6 million.

General and administrative expenses

General and administrative expenses for the six months ended June 30, 2025 were $8.2 million compared to $8.9 million for the six months ended June 30, 2024.

The decrease of $0.7 million was primarily related to a decrease in non-cash stock-based compensation expense of $0.9 million, partially offset by increased spending on corporate-related costs.

Other income for the six months ended June 30, 2025 was $8.6 million, compared to $6.5 million for the six months ended June 30, 2024.

The increase of $2.1 million was primarily due to an increase in interest income from our investments in interest-bearing money market funds and 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.

Our net losses were $30.4 million and $31.0 million for the three months ended March 31, 2025 and 2024, respectively.

Through March 31, 2025, we had received aggregate gross proceeds of $789.2 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, 2025, we had $392.7 million in cash, cash equivalents and marketable securities and accumulated deficit of $465.5 million.

We had no debt outstanding as of March 31, 2025.

On June 28, 2024, we entered into the First Amendment to Loan and Security Agreement (the Amendment, and the Original Loan Agreement as amended by the Amendment, the Loan Agreement), with the Bank.

The Amendment amends the Original Loan Agreement in order to, among other things, (i) increase the aggregate principal amount of the Original Credit Facility from up to $50.0 million to up to $100.0 million (the Credit Facility) of which $25.0 million is currently available, an additional $25.0 million will become available upon achieving certain milestones related to execution of a first-line pivotal Phase 3 clinical trial of palazestrant in combination with ribociclib, and an additional $50.0 million which may be made available upon approval of the Bank in its discretion, and (ii) extend the maturity date to July 1, 2028.

As of March 31, 2025, we had not drawn down from the Credit Facility.

Through June 30, 2025, we had received aggregate gross proceeds of $790.1 million from sales of our common stock, convertible preferred stock and issuance of convertible promissory notes, stock option exercises, sale of stock through the Company’s 2020 Employee Stock Purchase Plan (ESPP).

As of June 30, 2025, we had $361.9 million in cash, cash equivalents and marketable securities and accumulated deficit of $509.3 million.

We had an outstanding liability under our Credit Facility, as defined below, of $3.0 million as of June 30, 2025.

On September 5, 2023, we entered into a loan and security agreement (the Original Loan Agreement) with Silicon Valley Bank, a division of First Citizens Bank & Trust Company (the Bank), which provided us with an aggregate principal amount of up to $50.0 million (the Original Credit Facility), of which $25.0 million became available in September 2023 (Term Loan A) upon the closing of a private placement and issuance of our common stock to selected institutional and accredited investors pursuant to a securities purchase agreement, 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.

On June 28, 2024, we entered into the First Amendment to Loan and Security Agreement (the First Amendment) with the Bank, which, among other things, (i) increased the aggregate principal amount of the Original Credit Facility from up to $50.0 million to up to $100.0 million of which the Term Loan A of $25.0 million was immediately available, an additional $25.0 million will become available upon achieving certain milestones related to execution of a first-line pivotal Phase 3 clinical trial of palazestrant in combination with ribociclib, and an additional $50.0 million which may be made available upon approval of the Bank in its discretion, and (ii) extended the maturity date to July 1, 2028 (Maturity Date).

On June 27, 2025, we entered into a Second Amendment to Loan and Security Agreement (the Second Amendment, and the Original Loan Agreement, as amended by the First Amendment, the Credit Facility) with the Bank, which, among other things, (i) decreased the interest rate to a floating rate equal to the greater of 6.0% or the prime rate, and (ii) extended the draw period of Term Loan A to January 15, 2026.

As of June 30, 2025, we had drawn down $3.0 million from the Credit Facility.

On November 29, 2024, we entered into a securities purchase agreement for a private placement of (i) 19,928,875 shares of our 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 our common stock at a price of $9.0799 per pre-funded warrant, which represents the per share purchase price of the 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).

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Thereafter, on January 10, 2025, we entered into exchange agreements with certain investors pursuant to which we issued pre-funded warrants to purchase up to 6,070,000 shares of our common stock at an exercise price of $0.0001 per share, in exchange for 6,070,000 shares of our common stock previously outstanding and held by such investors.

Certain holders of pre-funded warrants (together with such holder’s affiliates and other attribution parties) may not exercise pre-funded warrants held by them to the extent that immediately prior to or after giving effect to such exercise such holder would own more than 9.99% of our outstanding common stock immediately after exercise, which percentage may be changed at the holder’s election to a lower or higher percentage not in excess of 19.99% upon 61 days’ notice to us, subject to the terms of the pre-funded warrants.

Certain holders of pre-funded warrants (together with

such holder’s affiliates and other attribution parties) may not exercise pre-funded warrants held by them to the extent that immediately prior to or after giving effect to such exercise such holder would own more than 9.99% of our outstanding common stock immediately after exercise, which percentage may be changed at the holder’s election to a lower or higher percentage not in excess of 19.99% upon 61 days’ notice to us, subject to the terms of the pre-funded warrants.

Refer to Note 12 of our notes to the condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q for further information regarding the exchange transactions.

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We 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, we issued 1,772,278 shares of our common stock under

the Sales Agreement at a weighted-average price of $13.19 for net proceeds of $22.8 million after deducting related issuance costs.

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

On January 6, 2025, we 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 our 2024 Sales Agreement, and no further sales may be made pursuant to the 2024 Sales Agreement.

The 2025 Sales Agreement replaced our 2024 Sales Agreement, and no further sales may be made pursuant to the 2024 Sales Agreement.

The sales of the 2025 ATM Shares will be made by any method permitted that is deemed to be an 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 2025 ATM Shares sold by TD Cowen.

There were no sales under the 2025 Sales Agreement during the three months ended March 31, 2025 and as of March 31, 2025, approximately $150.0 million remained available for issuance under the 2025 Sales Agreement.

There were no sales under the 2025 Sales Agreement during the six months ended June 30, 2025 and as of June 30, 2025, $150.0 million remained available for issuance under the 2025 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 non-clinical studies.

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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.

Furthermore, we have incurred and expect to continue to incur additional costs associated with operating as a public company.

Furthermore, we have incurred and expect to continue to incur additional costs associated with

operating as a public company.

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 March 31, 2025, 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, 2025 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.

We expect our cash, cash equivalents, and marketable securities as of June 30, 2025, 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 Notes 9, 10 and 11 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 and six months ended June 30, 2025 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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To the extent that we raise additional capital through the sale of equity or convertible debt securities, existing stockholders’ ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of existing stockholders.

Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

Debt financing,

if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.

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

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

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Net cash used in investing activities

Net cash provided by financing activities

Net cash provided by (used in) financing activities

Net decrease in cash and cash equivalents

Operating activities

Net cash used in operating activities during the three months ended March 31, 2025 consisted primarily of our net loss of $30.4 million, non-cash interest income on our marketable securities of $2.1 million and net decrease in operating assets and liabilities of $16.0 million, offset by non-cash charges of $4.5 million.

Net cash used in operating activities during the six months ended June 30, 2025 consisted primarily of our net loss of $74.2 million, non-cash interest income on our marketable securities of $3.8 million and net decrease in operating assets and liabilities of $5.2 million, offset by non-cash charges of $9.3 million.

The net loss consisted primarily of $74.5 million in research and development expenses and $8.2 million in general and administrative expenses.

The non-cash charges consisted primarily of stock-based compensation expense of $9.1 million, depreciation and amortization expenses of $0.3 million, and non-cash lease expense of less than $0.1 million, net of cash payments of $0.6 million.

The net decrease in operating assets and liabilities was primarily due to (i) a decrease of $11.2 million in accrued and other current liabilities, (ii) a decrease of $4.3 million in accounts payable, which is primarily related to timing of invoicing by vendors and related payments, and (iii) an increase of other assets and long-term deposits of $1.0 million.

The changes are partially offset by an increase in prepaid expenses and other current assets of $0.5 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 decrease in operating assets and liabilities was primarily due to (i) a decrease of $3.6 million in accounts payable, which is primarily related to timing of invoicing by vendors and related payments, (ii) an increase of other assets and long-term deposits of $1.7 million due to project deposits paid to CROs as we advance OP-3136 and prepare initiation activities for OPERA-02, and (iii) an increase in prepaid expenses and other current assets of $1.3 million.

The changes are partially offset by an increase of $1.5 million in accrued and other current liabilities.

Net cash used in operating activities during the six months ended June 30, 2024 consisted primarily of our net loss of $61.4 million and non-cash interest income on our marketable securities of $4.5 million, offset by a net increase in operating assets and liabilities of $4.0 million and non-cash charges of $10.8 million.

The net loss consisted primarily of $59.0 million in research and development expenses and $8.9 million in general and administrative expenses.

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.

The non-cash charges consisted primarily of stock-based compensation expense of $10.6 million, depreciation and amortization expenses of $0.2 million, and non-cash lease expense of less than $0.1 million, net of cash payments of $0.6 million.

The net increase in operating assets and liabilities was primarily due to (i) an increase of $3.2 million in accrued and other current liabilities, (ii) an increase of $1.7 million in accounts payable, and (iii) 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 an increase of $2.4 million in other assets and long-term deposits.

Investing Activities

Net cash used in investing activities during the three months ended March 31, 2025 was predominantly due to purchases of marketable securities which were partially offset by maturities of marketable securities.

Net cash provided by 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 used in investing activities during the six months ended June 30, 2025 was predominantly due to purchases of marketable securities which were partially offset by maturities of marketable securities.

Net cash used in investing activities during the six months ended June 30, 2024 was predominantly due to purchases of marketable securities which were partially offset by maturities of marketable securities.

Financing activities

Net cash provided by financing activities during the three months ended March 31, 2025 was predominately due to $0.2 million from the exercise of stock options.

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 2024 ATM Shares and $0.9 million from the exercise of stock options.

Net cash used in financing activities during the six months ended June 30, 2025 was predominately due to the $6.5 million payment of issuance costs related to the 2024 Private Placement, partially offset by $3.0 million draw down under our Credit Facility, $0.7 million from the sale of our common stock under the ESPP, and $0.5 million from the exercise of stock options.

Net cash provided by financing activities during the six months ended June 30, 2024 consists of $22.8 million in net proceeds from the sale of 2024 ATM Shares, $1.0 million from the exercise of stock options, and $0.7 million from the sale of our common stock under the ESPP.

Critical accounting policies and significant judgments and estimates

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

During the three months ended March 31, 2025, 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 June 30, 2025, 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 three months ended March 31, 2025, there were no material changes to our market risk disclosures reported in our Annual Report on Form 10-K.

During the three months ended June 30, 2025, 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