What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-09 · 136 added, 81 removed, 377 unchanged (37% of the section changed)

21 unchanged sentences

Preferred stock, $ 0.0001 par value;

10,000,000 shares authorized as of March 31, 2022 and December 31, 2021;

no shares issued and outstanding as of March 31, 2022 and December 31, 2021.

10,000,000 shares authorized as of June 30, 2022 and December 31, 2021;

no shares issued and outstanding as of June 30, 2022 and December 31, 2021.

Common stock, $ 0.0001 par value;

490,000,000 shares authorized as of March 31, 2022 and December 31, 2021;

40,352,801 and 40,337,046 shares issued as of March 31, 2022 and December 31, 2021, respectively;

39,869,325 and 39,797,263 shares outstanding as of March 31, 2022 and December 31, 2021, respectively.

490,000,000 shares authorized as of June 30, 2022 and December 31, 2021;

40,401,626 and 40,337,046 shares issued as of June 30, 2022 and December 31, 2021, respectively;

39,974,459 and 39,797,263 shares outstanding as of June 30, 2022 and December 31, 2021, respectively.

Additional paid-in capital

7 unchanged sentences

(Amounts in thousands, except per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Operating expenses:

3 unchanged sentences

Loss from operations

Other income:

Other income (expense):

Interest income

Other income:

Other income (expense):

Total other income

Net loss attributable to common stockholders

Net loss per share attributable to common stockholders, basic and diluted

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

Three Months Ended March 31,

Net loss per share, basic and diluted

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

Three Months Ended June 30,

Six Months Ended June 30,

Other comprehensive loss:

7 unchanged sentences

Stockholders'

Balances at March 31, 2022

Vesting of early exercised stock options

Vesting of restricted stock awards

Exercise of stock options

Issuance of shares under the employee stock purchase plan

Stock-based compensation expense

Employee stock purchase plan expense

Net unrealized loss on marketable securities

Balances at June 30, 2022

Comprehensive

Stockholders'

Balances at December 31, 2021

2 unchanged sentences

Exercise of stock options

Issuance of shares under the employee stock purchase plan

Stock-based compensation expense

1 unchanged sentence

Net unrealized loss on marketable securities

Balances at June 30, 2022

Comprehensive

Stockholders'

Balances at March 31, 2021

Vesting of early exercised stock options

Vesting of restricted stock awards

Exercise of stock options

Issuance of shares under the employee stock purchase plan

Stock-based compensation expense

Employee stock purchase plan expense

Net unrealized loss on marketable securities

Balances at June 30, 2021

Comprehensive

3 unchanged sentences

Vesting of restricted stock awards

Exercise of stock options

Issuance of shares under the employee stock purchase plan

Stock-based compensation expense

1 unchanged sentence

Net unrealized loss on marketable securities

Balances at March 31, 2021

Balances at June 30, 2021

See accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

17 unchanged sentences

Proceeds from exercise of stock options

Proceeds from issuance of common stock under employee stock purchase plan

Net cash provided by financing activities

4 unchanged sentences

Reclassification of prepaid expenses and other current liabilities into other assets

Purchases of property and equipment included in accounts payable or other current liabilities

Vesting of early exercised stock options

Purchases of property and equipment included in accounts payable and accrued liabilities

See accompanying notes to the condensed consolidated financial statements.

9 unchanged sentences

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

The Company’s principal operations are based in San Francisco, California, and it operates in one business segment and therefore has only one reportable segment.

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

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

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

2 unchanged sentences

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 $ 267.9 million of cash, cash equivalents and marketable securities at March 31, 2022, which management believes is sufficient to fund its operating expenses and capital expenditure requirements into 2024.

The Company had $ 240.7 million of cash, cash equivalents and marketable securities at June 30, 2022, which management believes is sufficient to fund its operating expenses and capital expenditure requirements into the second half of 2024.

Impact of COVID-19

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

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

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

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

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

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Unaudited Interim Financial Information

The interim condensed consolidated balance sheet as of March 31, 2022, and the statements of operations, comprehensive loss, and cash flows for the three months ended March 31, 2022 and 2021 are unaudited.

The interim condensed consolidated balance sheet as of June 30, 2022, the statements of operations and comprehensive loss, and stockholders’ equity for the three and six months ended June 30, 2022 and 2021, and the statements of cash flows for the six months ended June 30, 2022 and 2021 are unaudited.

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

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

The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other future annual or interim period.

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

The results of operations for the six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other future annual or interim period.

The condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date.

2 unchanged sentences

The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

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

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

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

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

On an ongoing basis, the Company evaluates its estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that management believes to be reasonable under the circumstances.

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

Cash deposits are all in reputable financial institutions in the United States and as of March 31, 2022 and December 31, 2021, cash and cash equivalents consisted of cash on deposit with U.S.

Cash deposits are all in reputable financial institutions in the United States and as of June 30, 2022 and December 31, 2021.

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

banks, including the Company’s bank account for its Australia subsidiary, denominated in U.S.

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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.

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

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.

Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest income.

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

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

Improvements to Topic 842, Leases , and ASU 2018-11, Leases (Topic 842):

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

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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 condensed 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 clinical research organizations (“CROs”) and contract manufacturing organizations (“CMOs”), in connection with nonclinical studies and clinical trials, and other related clinical trial fees, such as for investigator fees, patient screening, laboratory work, clinical trial database management, clinical trial material management and statistical compilation and analysis.

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

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

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

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

Costs incurred in obtaining technology licenses are charged immediately to research and development expense if the technology licensed has not reached technological feasibility and has no alternative future uses.

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

(“Novartis”) are recorded as a reduction of research and development expenses, as described in Note 10, 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.

Foreign Currency Transactions

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

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

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

Income and expense elements are remeasured to U.S.

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

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

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

dollar, predominantly the Australian dollar and the Euro.

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

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

Net Loss Per Common Share

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

March 31, 2022

June 30, 2022

(in thousands)

4 unchanged sentences

Government-sponsored enterprise securities

March 31, 2022

June 30, 2022

(in thousands)

6 unchanged sentences

The Company does not believe that the unrealized losses are credit related but are rather a reflection of current market yields and/or current marketplace bid/ask spreads.

The Company has not recognized an allowance for credit losses as of March 31, 2022.

In addition, no marketable securities had been in a consecutive loss position for more than 12 months as of March 31, 2022.

As of March 31, 2022, all of the Company’s cash and cash equivalents consisted of cash on deposit with U.S.

The Company has not recognized an allowance for credit losses as of June 30, 2022.

In addition, no marketable securities had been in a consecutive loss position for more than 12 months as of June 30, 2022.

As of June 30, 2022, all of the Company’s cash and cash equivalents consisted of cash on deposit with U.S.

banks denominated in U.

13 unchanged sentences

Prepaid clinical trial costs

Reimbursable research and development costs from a collaboration partner

Other Current Liabilities

1 unchanged sentence

Accrued R&D related costs

Accrued professional fees

Accrued employee bonuses

Accrued professional fees

Accrued payroll related costs

3 unchanged sentences

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

The 2014 Plan was intended to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Company and by motivating such persons to contribute to the growth and profitability of the Company.

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

The maximum aggregate number of shares that may be subject to awards and sold under the 2014 Plan as of December 31, 2019 was 717,360 shares, which was subsequently increased to 4,842,180 in September 2020.The 2014 Plan was terminated on the date the 2020 Equity Incentive Plan (the “2020 Plan”), which is described below, became effective, and no additional awards will be made pursuant to the 2014 Plan.

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

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

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

The 2020 Plan is intended to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Company and by motivating such persons to contribute to the growth and profitability of the Company.

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

1 unchanged sentence

are forfeited because of the failure to vest;

or are reacquired or withheld (or not issued) to satisfy a tax withholding

obligation or the purchase or exercise price.

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

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

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The exercise price for each option and stock appreciation right shall be established at the discretion of the Board, provided that the exercise price of a stock option will not be less than 100 % of the fair market value of the Company’s common stock on the date of grant.

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

Specific vesting for stock options and stock appreciation rights is service related and determined in each award agreement, where stock options and stock appreciation

rights are fully vested at the grant date or follow a graded vesting schedule.

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

9 unchanged sentences

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

Six Months Ended June 30,

Risk-free interest rate

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Outstanding as of December 31, 2021

Outstanding as of March 31, 2022(2)

Options vested and exercisable as of March 31, 2022

Options expected to vest as of March 31, 2022

Outstanding as of June 30, 2022(2)

Options vested and exercisable as of June 30, 2022

Options expected to vest as of June 30, 2022

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

(2) Balance as of March 31, 2022 includes 39,609 unvested early exercised stock options.

(2) Balance as of June 30, 2022 includes 32,619 unvested early exercised stock options.

Early Exercise of Stock Options

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

As of March 31, 2022, 95,916 of such shares had vested with the remaining shares vesting over their respective terms.

As of June 30, 2022, 102,906 of such shares had vested with the remaining shares vesting over their respective terms.

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

3 unchanged sentences

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

Accordingly, the Company has recorded the unvested portion of the exercise proceeds of $ 0.2 million in other current liabilities as of March 31, 2022.

Accordingly, the Company has recorded the unvested portion of the exercise proceeds of $ 0.1 million in other current liabilities as of June 30, 2022.

Restricted Stock Awards

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

The following table summarizes the restricted stock activity under the Plan during the three months ended March 31, 2022:

The following table summarizes the restricted stock activity under the Plan during the six months ended June 30, 2022:

Number of Shares

1 unchanged sentence

Unvested restricted stock as of December 31, 2021

Unvested restricted stock as of March 31, 2022

Unvested restricted stock as of June 30, 2022

2020 Employee Stock Purchase Plan

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

The ESPP became effective immediately prior to the date of the underwriting agreement related to the IPO.

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

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

The last business day of each Purchase Period is referred to as the “Purchase Date.” The first Purchase Period commenced on November 18, 2020 with a purchase date of May 15, 2021.

The second Purchase Period commenced on May 16, 2021 and had a purchase date of November 15, 2021.

The third Purchase Period commenced on November 16, 2021 and has a purchase date of May 16, 2022.

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

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

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

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

Stock-based compensation expense related to the ESPP was $ 0.1 million and less than $ 0.1 million for the three months ended March 31, 2022 and 2021, respectively.

Stock-based compensation expense related to the ESPP was $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2022, respectively.

Stock-Based Compensation Expense

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Research and development

3 unchanged sentences

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

Three Months Ended March 31,

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

Net loss per share attributable to common stockholders, basic and diluted

Three Months Ended June 30,

Six Months Ended June 30,

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

Net loss per share, basic and diluted

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:

Three Months Ended March 31,

Unvested restricted common stock

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The Company determined the purchase of the stock to be non-substantive, and as such, the shares subject to the promissory notes will not be deemed outstanding until such time as the promissory notes have been repaid.

As of December 31, 2020, all outstanding principal and accrued interest relating to the Non-Recourse Notes were settled in full by the two noteholders, and as a result, the Company issued 211,621 shares of common stock to the noteholders and included these shares in the basic and diluted net loss per share for three months ended March 31, 2021.

Also included in the potentially dilutive options to purchase common stock are 32,619 unvested stock options that were early exercised by an employee and a non-employee in September 2020 (see Note 7, “Stock-Based Compensation”).

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

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

Accordingly, the Company has excluded these shares from the calculation of basic and diluted net loss per share for the three and six months ended June 30, 2022 and 2021.

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

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

As part of the sixth amendment, the Company leased additional space of approximately 2,130 square feet (the “Additional Space”) for a three year period commencing on December 1, 2020 and ending on

November 30, 2023.

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

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

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

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

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

The following table summarizes total lease expense during the three months ended March 31, 2022 (in thousands):

Three Months Ended March 31

The following table summarizes total lease expense during the three and six months ended June 30, 2022 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Straight-line operating lease expense

2 unchanged sentences

Total operating lease expense

The following table summarizes supplemental cash flow information during the three months ended March 31, 2022 (in thousands):

Three Months Ended March 31

The following table summarizes supplemental cash flow information during the three and six months ended June 30, 2022 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Cash paid for amounts included measurement of lease liabilities:

Operating cash flows from operating leases

The following table summarizes the Company’s future minimum lease payments and reconciliation of lease liabilities as of March 31, 2022 (in thousands):

Years Ended December 31,

2022 (from April 2022)

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

The following table summarizes the Company’s future minimum lease payments and reconciliation of lease liabilities as of June 30, 2022 (in thousands):

Years Ending December 31,

2022 (from July 2022)

Total future minimum lease payments

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Lease liabilities, non-current

The following table summarizes lease term and discount rate as of March 31, 2022:

Three Months Ended March 31

The following table summarizes lease term and discount rate as of June 30, 2022:

Weighted-average remaining lease term (years)

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

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

For the three months ended March 31, 2022, costs incurred reimbursable by Novartis were not material to the condensed consolidated financial statements.

the Novartis Agreement in the event the Company terminates all clinical trials of the combined therapies other than due to a material safety issue or upon a clinical hold.

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

For the three and six months ended June 30, 2022, costs reimbursable from Novartis were $ 0.5 million and $ 0.5 million, respectively.

As of June 30, 2020, the receivable due from Novartis was $ 0.5 million, which is recorded under prepaid expenses and other current assets in the accompanying condensed consolidated financial statements.

Clinical Trial Agreement

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

Costs incurred in connection to the Pfizer Agreement are included in the Research and Development expense in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 and 2021.

Costs incurred in connection to the Pfizer Agreement are included in the research and development expense in the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2022 and 2021.

License Agreement

In June 2022, the Company entered into an exclusive global license agreement with Aurigene Discovery Technologies Limited (“Aurigene”) to research, develop and commercialize novel small molecule inhibitors of an undisclosed oncology target (“the Aurigene Agreement”).

Under the terms of the Aurigene Agreement, Aurigene will provide to the Company an exclusive license to its portfolio of novel small molecule inhibitors of the target.

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

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

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

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

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

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

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.

Management Services Agreements

2 unchanged sentences

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

As of March 31, 2022, the Company did not have material contractual commitments with respect to these arrangements.

As of June 30, 2022, the Company did not have material contractual commitments with respect to these arrangements.

Contingencies

6 unchanged sentences

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

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

As of June 30, 2022 and December 31, 2021, the Company had not incurred any material costs as a result of such indemnifications.

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

What changed 10-Q

Item 1. Financial Statements