Olema Pharmaceuticals, Inc. 10-Q

Item 1. Financial Statements. Olema Pharmaceuticals, Inc. Condensed Consolidated Balance Sheets (Unaudited) (Amounts in thousands, except for share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ ​ December 31, ​ ​ 2022 ​ 2021 Assets ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents $ 26,804 $ 13,812 Marketable securities ​ ​ 195,796 ​ ​ 273,438 Prepaid expenses and other current assets ​ 2,458 ​ 3,435 Total current assets ​ 225,058 ​ 290,685 Property and equipment, net ​ 1,404 ​ 1,474 Operating lease right-of-use assets ​ ​ 2,764 ​ ​ 3,246 Other assets ​ 2,771 ​ 540 Total assets ​ $ 231,997 ​ $ 295,945 ​ ​ ​ ​ ​ ​ ​ Liabilities and stockholders ’ equity ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 14 ​ $ 23 Operating lease liabilities, current ​ ​ 1,084 ​ ​ 931 Other current liabilities ​ ​ 11,454 ​ 8,065 Total current liabilities ​ ​ 12,552 ​ 9,019 Operating lease liabilities, net of current portion ​ ​ 1,746 ​ ​ 2,358 Total liabilities ​ ​ 14,298 ​ 11,377 Commitments and contingencies (Note 10) ​ ​ ​ ​ ​ ​ Stockholders ’ equity: ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.0001 par value; 10,000,000 shares authorized as of September 30, 2022 and December 31, 2021; no shares issued and outstanding as of September 30, 2022 and December 31, 2021. ​ ​ — ​ ​ — Common stock, $ 0.0001 par value; 490,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 40,455,427 and 40,337,046 shares issued as of September 30, 2022 and December 31, 2021, respectively; 40,084,568 and 39,797,263 shares outstanding as of September 30, 2022 and December 31, 2021, respectively. ​ ​ 3 ​ 3 Additional paid-in capital ​ ​ 403,168 ​ 388,904 Accumulated other comprehensive loss ​ ​ ( 2,674 ) ​ ​ ( 149 ) Accumulated deficit ​ ​ ( 182,798 ) ​ ( 104,190 ) Total stockholders ’ equity ​ ​ 217,699 ​ 284,568 Total liabilities and stockholders ’ equity ​ $ 231,997 ​ $ 295,945 ​ See accompanying notes to the condensed consolidated financial statements. ​ 3 Table of Contents Olema Pharmaceuticals, Inc. Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Amounts in thousands, except for share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ ​ 2022 ​ 2021 ​ ​ 2022 ​ 2021 Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development $ 17,627 $ 12,523 $ 60,690 $ 35,125 General and administrative ​ 5,595 ​ ​ 5,239 ​ 19,079 ​ 14,609 Total operating expenses ​ 23,222 ​ ​ 17,762 ​ 79,769 ​ 49,734 Loss from operations ​ ( 23,222 ) ​ ​ ( 17,762 ) ​ ( 79,769 ) ​ ( 49,734 ) Other income (expense): ​ ​ ​ ​ ​ ​ ​ Interest income ​ 622 ​ ​ 105 ​ 1,255 ​ 333 Other income (expense): ​ ​ ( 120 ) ​ ​ ( 56 ) ​ ​ ( 94 ) ​ ​ ( 57 ) Total other income ​ 502 ​ ​ 49 ​ 1,161 ​ 276 Net loss ​ $ ( 22,720 ) ​ $ ( 17,713 ) ​ $ ( 78,608 ) ​ $ ( 49,458 ) Net loss per share, basic and diluted ​ $ ( 0.57 ) ​ $ ( 0.45 ) ​ $ ( 1.97 ) ​ $ ( 1.25 ) Weighted average shares used to compute net loss per share, basic and diluted ​ 40,036,201 ​ ​ 39,607,745 ​ 39,930,418 ​ 39,450,655 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ ​ 2022 ​ 2021 ​ ​ 2022 ​ 2021 Net loss ​ $ ( 22,720 ) ​ $ ( 17,713 ) ​ $ ( 78,608 ) ​ $ ( 49,458 ) Other comprehensive (loss) gain: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net unrealized (loss) gain on marketable securities ​ ​ ( 276 ) ​ ​ 29 ​ ​ ( 2,525 ) ​ ​ 15 Total comprehensive loss ​ $ ( 22,996 ) ​ $ ( 17,684 ) ​ $ ( 81,133 ) ​ $ ( 49,443 ) ​ See accompanying notes to the condensed consolidated financial statements. ​ 4 Table of Contents Olema Pharmaceuticals, Inc. Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) (Amounts in thousands, except for share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ ​ Comprehensive ​ Accumulated ​ Stockholders' ​ Shares Amount Capital ​ Loss ​ Deficit Equity Balances at June 30, 2022 ​ 39,974,459 $ 3 $ 398,756 $ ( 2,398 ) ​ $ ( 160,078 ) ​ $ 236,283 Vesting of early exercised stock options 6,990 ​ — ​ 31 ​ — ​ ​ — ​ 31 Vesting of restricted stock awards 49,318 ​ — ​ — ​ — ​ ​ — ​ — Exercise of stock options ​ 53,801 ​ ​ — ​ ​ 106 ​ ​ — ​ ​ — ​ ​ 106 Stock-based compensation expense — ​ — ​ 4,207 ​ — ​ ​ — ​ 4,207 Employee stock purchase plan expense — ​ — ​ 68 ​ — ​ ​ — ​ 68 Net unrealized loss on marketable securities ​ — ​ ​ — ​ ​ — ​ ​ ( 276 ) ​ ​ — ​ ​ ( 276 ) Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 22,720 ) ​ ​ ( 22,720 ) Balances at September 30, 2022 40,084,568 $ 3 $ 403,168 $ ( 2,674 ) ​ $ ( 182,798 ) $ 217,699 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ ​ Comprehensive ​ Accumulated ​ Stockholders' ​ Shares Amount Capital ​ Loss ​ Deficit Equity Balances at December 31, 2021 ​ 39,797,263 ​ $ 3 ​ $ 388,904 ​ $ ( 149 ) ​ $ ( 104,190 ) ​ $ 284,568 Vesting of early exercised stock options 20,969 ​ — ​ 93 ​ — ​ ​ — ​ 93 Vesting of restricted stock awards 147,955 ​ — ​ — ​ — ​ ​ — ​ — Exercise of stock options ​ 87,490 ​ ​ — ​ ​ 146 ​ ​ — ​ ​ — ​ ​ 146 Issuance of shares under the employee stock purchase plan ​ 30,891 ​ ​ — ​ ​ 57 ​ ​ — ​ ​ — ​ ​ 57 Stock-based compensation expense — ​ — ​ 13,704 ​ — ​ ​ — ​ 13,704 Employee stock purchase plan expense — ​ — ​ 264 ​ — ​ ​ — ​ 264 Net unrealized loss on marketable securities ​ — ​ ​ — ​ ​ — ​ ​ ( 2,525 ) ​ ​ — ​ ​ ( 2,525 ) Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 78,608 ) ​ ​ ( 78,608 ) Balances at September 30, 2022 40,084,568 $ 3 $ 403,168 $ ( 2,674 ) ​ $ ( 182,798 ) $ 217,699 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ ​ Comprehensive ​ Accumulated ​ Stockholders' ​ Shares Amount Capital ​ Income (Loss) ​ Deficit Equity Balances at June 30, 2021 ​ 39,552,588 ​ $ 3 ​ $ 378,934 ​ $ ( 14 ) ​ $ ( 64,839 ) ​ $ 314,084 Vesting of early exercised stock options ​ 58,639 ​ ​ — ​ ​ 280 ​ ​ — ​ ​ — ​ ​ 280 Vesting of restricted stock awards ​ 49,318 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Exercise of stock options ​ 20,753 ​ ​ — ​ ​ 57 ​ ​ — ​ ​ — ​ ​ 57 Stock-based compensation expense ​ — ​ ​ — ​ ​ 4,125 ​ ​ — ​ ​ — ​ ​ 4,125 Employee stock purchase plan expense ​ — ​ ​ — ​ ​ 32 ​ ​ — ​ ​ — ​ ​ 32 Net unrealized gain on marketable securities ​ — ​ ​ — ​ ​ — ​ ​ 29 ​ ​ — ​ ​ 29 Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 17,713 ) ​ ​ ( 17,713 ) Balances at September 30, 2021 ​ 39,681,298 ​ $ 3 ​ $ 383,428 ​ $ 15 ​ $ ( 82,552 ) ​ $ 300,894 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ ​ Comprehensive ​ Accumulated ​ Stockholders' ​ Shares Amount Capital ​ Income ​ Deficit Equity Balances at December 31, 2020 ​ 39,308,238 ​ $ 3 ​ $ 371,228 ​ $ — ​ $ ( 33,094 ) ​ $ 338,137 Vesting of early exercised stock options ​ 72,618 ​ ​ — ​ ​ 341 ​ ​ — ​ ​ — ​ ​ 341 Vesting of restricted stock awards ​ 192,790 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Exercise of stock options ​ 83,767 ​ ​ — ​ ​ 187 ​ ​ — ​ ​ — ​ ​ 187 Issuance of shares under the employee stock purchase plan ​ 23,885 ​ ​ — ​ ​ 386 ​ ​ — ​ ​ — ​ ​ 386 Stock-based compensation expense ​ — ​ ​ — ​ ​ 11,140 ​ ​ — ​ ​ — ​ ​ 11,140 Employee stock purchase plan expense ​ — ​ ​ — ​ ​ 146 ​ ​ — ​ ​ — ​ ​ 146 Net unrealized gain on marketable securities ​ — ​ ​ — ​ ​ — ​ ​ 15 ​ ​ — ​ ​ 15 Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 49,458 ) ​ ​ ( 49,458 ) Balances at September 30, 2021 ​ 39,681,298 ​ $ 3 ​ $ 383,428 ​ $ 15 ​ $ ( 82,552 ) ​ $ 300,894 See accompanying notes to the condensed consolidated financial statements. ​ 5 Table of Contents Olema Pharmaceuticals, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) (Amounts in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ 2022 2021 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 78,608 ) ​ $ ( 49,458 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ Depreciation and amortization expense ​ 260 ​ 90 Non-cash lease expense ​ 975 ​ — Premium amortization and discount accretion on marketable securities, net ​ ​ ( 216 ) ​ ​ 220 Stock-based compensation expense, including employee stock purchase plan expense ​ 13,968 ​ 11,286 Changes in operating assets and liabilities: ​ ​ ​ ​ Prepaid expenses and other current assets ​ 61 ​ 1,232 Other assets ​ ​ ( 1,114 ) ​ ​ — Accounts payable ​ ​ ( 9 ) ​ ​ ( 527 ) Other current liabilities ​ ​ 3,281 ​ ​ 5,070 Operating lease liabilities ​ ( 952 ) ​ — Net cash used in operating activities ​ ( 62,354 ) ​ ( 32,087 ) Cash flows from investing activities: ​ ​ ​ ​ Purchase of equipment ​ ( 190 ) ​ ( 876 ) Maturities of marketable securities ​ ​ 244,500 ​ ​ 186,449 Purchases of marketable securities ​ ​ ( 169,167 ) ​ ​ ( 467,011 ) Net cash provided by (used in) investing activities ​ 75,143 ​ ( 281,438 ) Cash flows from financing activities: ​ ​ ​ ​ Proceeds from exercise of stock options ​ ​ 146 ​ ​ 187 Proceeds from issuance of common stock under employee stock purchase plan ​ ​ 57 ​ ​ 386 Net cash provided by financing activities ​ 203 ​ 573 Net increase (decrease) in cash and cash equivalents ​ 12,992 ​ ( 312,952 ) Cash and cash equivalents at beginning of period ​ 13,812 ​ 338,549 Cash and cash equivalents at end of period $ 26,804 ​ $ 25,597 Supplemental disclosure of non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ Reclassification of prepaid expenses and other current liabilities into other assets ​ $ 1,117 ​ $ — Vesting of early exercised stock options ​ $ 93 ​ $ 341 Purchases of property and equipment included in accounts payable ​ $ — ​ $ 114 ​ See accompanying notes to the condensed consolidated financial statements. ​ 6 Table of Contents Olema Pharmaceuticals, Inc. Notes to condensed consolidated financial statements (Unaudited) 1. Nature of the Business and Basis of Presentation Olema Pharmaceuticals, Inc. (“Olema” or the “Company”) is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of next-generation targeted therapies for women’s cancers. The Company is initially focused on developing therapies for the treatment of breast cancer. The Company’s wholly owned, lead product candidate, OP-1250, is a novel oral therapy with combined activity as both a complete estrogen receptor (“ER”) antagonist (“CERAN”) and a selective ER degrader (“SERD”). It is currently being evaluated as a single agent in an ongoing Phase 1/2 clinical trial, and in Phase 1b combination with palbociclib, in patients with recurrent, locally advanced or metastatic estrogen receptor-positive (“ER+”), human epidermal growth factor receptor 2-negative (“HER2-“) breast cancer. The Company is located in San Francisco, California and was incorporated in Delaware on August 7, 2006 under the legal name of CombiThera, Inc. and on March 25, 2009 was renamed Olema Pharmaceuticals, Inc. The Company’s principal operations are based in San Francisco, California, and has operations in Cambridge, Massachusetts. Olema Oncology Australia Pty Ltd was incorporated on January 6, 2021 and is a wholly-owned subsidiary of the Company (collectively with Olema Pharmaceuticals, Inc. referred to as “Olema” or the “Company” herein). 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 and other geopolitical and macroeconomic events, the ability to secure additional capital to fund operations and commercial success of its product candidates. OP-1250 and any future product candidates the Company may develop will require extensive nonclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. Liquidity The Company had $ 222.6 million of cash, cash equivalents and marketable securities at September 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 and Other Geopolitical and Macroeconomic Events 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. In March 2022, the Company fully re-opened its offices to all employees and continues to comply with protocols implemented by respective health authorities. The Company continues to monitor developments related to COVID-19 and may 7 Table of Contents close its offices again in the future. The extent to which the COVID-19 pandemic may affect the Company’s business, operations and development timelines and plans in the future, including the resulting impact on its expenditures and capital needs, remains uncertain. In addition to the ongoing COVID-19 pandemic, global economic and business activities continue to face widespread macroeconomic uncertainties, including labor shortages, inflation and monetary supply shifts, recession risks and potential disruptions from the Russia-Ukraine conflict, which has resulted in volatility in the U.S. and global financial markets and which has led to, and may continue to lead to, additional disruptions to trade, commerce, pricing stability, credit availability and supply chain continuity globally. 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. Any continued or renewed disruption resulting from these factors could negatively impact the Company’s business. The Company continues to monitor the impact of these macroeconomic factors on its results of operations, financial condition and cash flows. 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting, and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. These condensed consolidated financial statements include the accounts of Olema Pharmaceuticals, Inc. and its wholly-owned subsidiary, Olema Oncology Australia Pty Ltd. All intercompany balances and transactions have been eliminated upon consolidation. Unaudited Interim Financial Information The interim condensed consolidated balance sheet as of September 30, 2022, the statements of operations and comprehensive loss, and stockholders’ equity for the three and nine months ended September 30, 2022 and 2021, and the statements of cash flows for the nine months ended September 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- and nine-month periods are also unaudited. The results of operations for the nine months ended September 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. These interim condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements included in the Company’s Form 10-K as filed with the SEC on February 28, 2022. Use of Estimates The accompanying condensed consolidated financial statements are prepared in accordance with US GAAP. 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 8 Table of Contents 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. Actual results could differ from those estimates. Cash and Cash Equivalents 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 September 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. dollars and Australian dollars and investments in interest bearing money market funds. Marketable Securities 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 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. The cost of securities sold is based on the specific-identification method. Interest earned on marketable securities is included in interest income. The Company periodically assesses its available-for-sale marketable securities for other-than-temporary impairment. For debt securities in an unrealized loss position, the Company first considers its intent to sell, or whether it is more likely than not that the Company will be required to sell the debt securities before recovery of their amortized cost basis. If either of these criteria are met, the amortized cost basis of such debt securities is written down to fair value through other expense. For debt securities in an unrealized loss position that do not meet the aforementioned criteria, the Company assesses whether the decline in the fair value of such debt securities has resulted from credit losses or other factors. The Company considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and any adverse conditions specifically related to the securities, among other factors. If this assessment indicates that a credit loss may exist, the Company then compares the present value of cash flows expected to be collected from such securities to their amortized cost basis. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded through other expense, limited by the amount that the fair value is less than the amortized cost basis. Any additional impairment not recorded through an allowance for credit losses is recognized in other comprehensive loss. The Company has not recorded any impairments for its marketable securities. Concentration of Credit Risk and Other Risks and Uncertainties 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. government, U.S. government-sponsored agencies and highly rated banks and corporations, subject to certain concentration limits. The Company’s cash, cash equivalents, and marketable securities are held by financial institutions in the United States that management believes are of high credit quality. Amounts on deposit with individual banking institutions may at times exceed the limits insured by the Federal Deposit Insurance Corporation (“FDIC”); however, the Company has not experienced any losses on such deposits. The Company’s future results of operations involve a number of other risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations 9 Table of Contents include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s current and potential future product candidates, uncertainty of market acceptance of the Company’s product candidates, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals or sole-source suppliers. The Company’s product candidates require approvals from the U.S. Food and Drug Administration (“FDA”) and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any product candidates will receive the necessary approvals. 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. Leases 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”). Under the new guidance, 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. 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. At the inception of an arrangement, the Company determines if an arrangement is, or contains, a lease based on the facts and circumstances present in that arrangement. Lease classification, recognition, and measurement are then determined at the lease commencement date. For arrangements that contain a lease, the Company (i) identifies lease and non-lease components, (ii) determines the consideration in the contract, (iii) determines whether the lease is an operating or finance lease; and (iv) recognizes lease ROU assets and liabilities. Lease liabilities and their corresponding ROU assets are recorded based on the present value of future lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable and as such, the Company uses the incremental borrowing rate based on the information available at the lease commencement date, which represents an internally developed rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment. Most leases include options to renew and, or terminate the lease, which can impact the lease term. The exercise of these options is at the Company’s discretion. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. For any lease modification, the Company reassesses the lease classification, remeasures the related lease liability using an updated discount rate that reflects the modified lease term, and adjusts the related ROU asset under the lease modification guidance under Topic 842. The Company has operating leases for its research and development and office facilities. Fixed lease payments on operating leases are recognized over the expected term of the lease on a straight-line basis. Variable lease expenses that are not considered fixed are recognized as incurred. Fixed and variable lease expense on operating leases is recognized within operating expenses within our condensed consolidated statements of operations and comprehensive loss. 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 13 “Lease” in the Company’s Form 10-K as filed with the SEC on February 28, 2022. 10 Table of Contents Research and Development Costs Research and development costs are expensed as incurred. 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 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 assets. 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 The Company has from time to time entered into various research and development and other agreements with commercial firms, researchers, universities and others for provisions of goods and services. These agreements are generally cancelable, and the related costs are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research and development costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the projects, studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ materially from the Company’s estimates. 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. dollar. 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. 11 Table of Contents Net Loss Per Common Share Basic net loss per common share is computed by dividing the net loss per common share by the weighted average number of common shares outstanding for the period without consideration of common stock equivalents. Diluted net loss per common share is computed by adjusting net loss to reallocate undistributed earnings based on the potential impact of dilutive securities, and by dividing the diluted net loss by the weighted average number of common shares outstanding for the period, including potential dilutive common shares. For purpose of this calculation, outstanding stock options, including unvested early exercised options, unvested restricted stock awards, and contingently issuable common stock related to the 2020 Employee Stock Purchase Plan (the “ESPP”) are considered potential dilutive common shares. Since the Company was in a loss position for both periods presented, basic net loss per share is the same as diluted net loss per share for both periods as the inclusion of all potential common shares outstanding would have been anti-dilutive. Recent Accounting Pronouncements The Company lost its status as an emerging growth company on December 31, 2021, when it qualified as a large accelerated filer based on its market capitalization as of June 30, 2021, according to Rule 12b-2 of the Securities Exchange Act of 1934, as amended. As a result, the Company adopted all accounting pronouncements formerly deferred under the extended transition period available for emerging growth companies according to public company standards at December 31, 2021. ​ 3. Fair Value Measurement The Company assesses the fair value of financial instruments based on the provisions of ASC 820, Fair Value Measurements . ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: ● Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. ● Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 — Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2022 (in thousands) Level 1 ​ Level 2 ​ Level 3 ​ Total Financial Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash ​ $ 15,381 ​ $ — ​ $ — ​ $ 15,381 Money market funds ​ ​ 11,444 ​ ​ — ​ ​ — ​ ​ 11,444 Commercial paper ​ — ​ ​ 49,968 ​ ​ — ​ ​ 49,968 U.S. government treasury bills ​ ​ 98,531 ​ ​ — ​ ​ — ​ ​ 98,531 Government-sponsored enterprise securities ​ — ​ ​ 47,297 ​ ​ — ​ ​ 47,297 Total ​ $ 125,356 ​ $ 97,265 ​ $ — ​ $ 222,621 ​ 12 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2022 ​ ​ ​ Gross Gross ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Estimated (in thousands) Cost ​ Gains ​ Losses ​ Fair Value Financial Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 26,825 ​ $ — ​ $ — ​ $ 26,825 Short-term marketable securities (<12 months to maturity) ​ ​ 178,995 ​ ​ — ​ ​ ( 2,008 ) ​ ​ 176,987 Long-term marketable securities (>12 months to maturity) ​ 19,475 ​ — ​ ( 666 ) ​ ​ 18,809 Total ​ $ 225,295 ​ $ — ​ $ ( 2,674 ) ​ $ 222,621 ​ The Company considers its marketable securities with maturities beyond one year as current assets, based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. The Company considers its investment portfolio of marketable securities to be available-for-sale. The Company periodically reviews its available-for-sale marketable securities for other-than-temporary impairment. The Company considers factors such as the duration, severity and the reason for the decline in value, the potential recovery period and its intent to sell. For debt securities, the Company also considers whether (i) it is more likely than not that the Company will be required to sell the debt securities before recovery of their amortized cost basis, and (ii) the amortized cost basis cannot be recovered as a result of credit losses. There was one marketable security that has been in a consecutive loss position for more than 12 months as of September 30, 2022. It had $ 0.1 million unrealized loss with a fair value of $ 6.9 million as of September 30, 2022. The Company does not believe that the total unrealized losses of $ 2.7 million as of September 30, 2022 are credit related but are rather a reflection of current market yields and/or current marketplace bid/ask spreads. During the three and nine months ended September 30, 2022, the Company did not recognize any other-than-temporary impairment loss. As of September 30, 2022, there was no allowance for losses on available-for-sale debt securities attributable to credit risk. As of September 30, 2022, all of the Company’s cash and cash equivalents consisted of cash on deposit with U.S. banks denominated in U. S. dollars and Australian dollars. 4. Property and Equipment, net Property and equipment, net consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2022 ​ 2021 Lab equipment $ 1,829 $ 1,639 Computer equipment ​ ​ 59 ​ ​ 59 Property and equipment, gross ​ ​ 1,888 ​ ​ 1,698 Less: Accumulated depreciation ( 484 ) ​ ​ ( 224 ) Property and equipment, net $ 1,404 ​ $ 1,474 ​ ​ 13 Table of Contents 5. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2022 ​ 2021 Reimbursable research and development costs from a collaboration partner ​ $ 1,082 ​ $ — Interest receivable on marketable securities ​ ​ 457 ​ ​ 130 Prepaid subscriptions and licenses ​ 440 ​ 291 Prepaid insurance ​ ​ 387 ​ ​ 1,766 Prepaid research contracts ​ ​ 14 ​ ​ 239 Prepaid clinical trial costs ​ ​ — ​ ​ 916 Other 78 ​ ​ 93 Total $ 2,458 ​ $ 3,435 ​ ​ 6. Other Current Liabilities Other current liabilities consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ ​ 2022 ​ 2021 Accrued R&D related costs ​ $ 6,286 ​ $ 2,645 Accrued employee bonuses ​ ​ 2,933 ​ ​ 3,752 Accrued professional fees ​ ​ 1,569 ​ ​ 1,011 Accrued payroll related costs ​ ​ 406 ​ ​ 191 Early exercise of unvested stock options ​ ​ 113 ​ ​ 206 Accrued taxes ​ ​ 53 ​ ​ 88 Other 94 ​ ​ 172 Total $ 11,454 ​ $ 8,065 ​ ​ ​ 7. Stock-Based Compensation ​ In 2014, the Company’s Board of Directors and stockholders approved and adopted the 2014 Stock Plan (the “2014 Plan”). The 2014 Plan permitted the grant of options and restricted stock awards (including restricted stock purchase rights and restricted stock bonus awards). 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 permits the grant of options, restricted stock awards, stock appreciation rights, restricted stock unit awards, performance awards, and other awards. The maximum number of shares of common stock that 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; are not issued because the award is settled in cash; 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. 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 14 Table of Contents immediately preceding year, or (2) a lesser number of shares determined by the Company’s board of directors no later than December 31 of the immediately preceding year. In 2022, the Company’s Board of Directors approved and adopted the 2022 Inducement Plan (the “2022 Inducement Plan”). Under the 2022 Inducement Plan, initially 2,000,000 shares of common stock were reserved for issuance. The 2022 Inducement Plan permits the grant of options, restricted stock awards, stock appreciation rights, restricted stock unit awards, performance awards, and other awards. 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. Stock options and stock appreciation rights granted under the Plan generally expire ten years after the date of grant. Stock Option Valuation The fair value of stock option grants is estimated using the Black-Scholes option-pricing model. The Company lacks company-specific historical and implied volatility information. Therefore, it estimated its expected stock volatility based on the historical volatility of a publicly traded set of peer companies in addition to its own historical volatility. 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 risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is 0 % since the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The assumptions that the Company used to determine the estimated grant-date fair value of stock options granted to employees and directors under the 2020 Plan and the 2022 Inducement Plan were as follows, presented as a weighted average: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ ​ 2022 ​ 2021 Risk-free interest rate ​ 1.89 % ​ 0.63 % Expected term (in years) ​ ​ 6.03 ​ ​ 5.98 Expected volatility ​ ​ 79.55 % ​ ​ 77.07 % Expected dividend yield — ​ ​ — ​ 15 Table of Contents Stock Option Activity The following table summarizes the stock option activity under the 2014 Plan, the 2020 Plan and the 2022 Inducement Plan: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ Weighted ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ Remaining ​ ​ ​ ​ ​ Number of ​ Exercise ​ Contractual ​ Aggregate ​ ​ Shares ​ Price ​ Term ​ Intrinsic Value ​ ​ ​ ​ ​ ​ (in years) ​ (in thousands) Outstanding as of December 31, 2021 5,768,028 $ 15.99 8.82 $ 11,365 Granted ​ 3,132,140 ​ ​ 6.57 ​ — ​ ​ — Exercised(1) ​ ( 108,459 ) ​ ​ 2.71 ​ — ​ ​ — Forfeited ​ ( 461,761 ) ​ ​ 22.32 ​ — ​ ​ — Outstanding as of September 30, 2022(2) ​ 8,329,948 ​ $ 12.23 ​ 8.48 ​ $ 353 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options vested and exercisable as of September 30, 2022 ​ 2,913,655 ​ $ 14.20 ​ 7.86 ​ $ 271 Options expected to vest as of September 30, 2022 ​ 5,416,293 ​ $ 11.17 ​ 8.81 ​ $ 82 ​ (1) Exercised amount includes vesting of early exercised options. (2) Balance as of September 30, 2022 includes 25,629 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 September 30, 2022, 109,896 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. 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. Accordingly, the Company has recorded the unvested portion of the exercise proceeds of $ 0.1 million in other current liabilities as of September 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 nine months ended September 30, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Shares ​ Grant Date Fair Value Unvested restricted stock as of December 31, 2021 ​ 493,185 $ 2.40 Granted ​ ​ — ​ ​ — Vested ​ ​ ( 147,955 ) ​ ​ 2.40 Forfeited ​ ​ — ​ ​ — Unvested restricted stock as of September 30, 2022 ​ 345,230 ​ $ 2.40 16 Table of Contents ​ 2020 Employee Stock Purchase Plan In 2020, the Company’s board of directors and stockholders approved and adopted the 2020 ESPP. 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. The price of the common stock purchased under the ESPP is equal to the lesser of (i) 85 % of the fair market value of a share of the Company’s common stock on the first day of an offering; or (ii) 85 % of the fair market value of a share of the Company’s common stock on the date of purchase. Each offering period is not to exceed 27 months and will include one or more purchase periods (each a “Purchase Period”) as approved by the Company’s board of directors in the offering. 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.” 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 $ 0.3 million for the three and nine months ended September 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 September 30, ​ Nine Months Ended September 30, ​ ​ 2022 ​ 2021 ​ 2022 ​ 2021 Research and development $ 2,812 $ 2,405 $ 9,088 $ 6,427 General and administrative 1,463 ​ ​ 1,752 4,880 ​ ​ 4,859 Total $ 4,275 ​ $ 4,157 $ 13,968 ​ $ 11,286 ​ ​ 8. Net Loss Per Share Net Loss Per Share Basic and diluted net loss per share was calculated as follows (in thousands, except share and per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2022 2021 2022 2021 Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 22,720 ) ​ $ ( 17,713 ) ​ $ ( 78,608 ) ​ $ ( 49,458 ) Denominator: ​ ​ ​ ​ Weighted average shares used to compute net loss per share, basic and diluted ​ 40,036,201 ​ 39,607,745 ​ 39,930,418 ​ 39,450,655 Net loss per share, basic and diluted ​ $ ( 0.57 ) ​ $ ( 0.45 ) ​ $ ( 1.97 ) ​ $ ( 1.25 ) ​ 17 Table of Contents The potentially dilutive shares that were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ ​ ​ 2022 ​ ​ 2021 Unvested restricted common stock ​ 345,230 ​ 542,504 Options to purchase common stock ​ 8,329,948 ​ 5,564,588 Employee stock purchase plan contingently issuable ​ ​ 182,139 ​ ​ 16,979 ​ ​ ​ 8,857,317 ​ 6,124,071 ​ Included in the potentially dilutive options to purchase common stock noted above are 211,621 shares issued upon exercise of options under non-recourse notes receivable during 2015 (see Note 7, “Stock-Based Compensation” in the Company’s Form 10-K as filed with the SEC on February 28, 2022). 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 and nine months ended September 30, 2021. Also included in the potentially dilutive options to purchase common stock are 25,629 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 and nine months ended September 30, 2022 and 2021. 9. Leases 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. (“MandalMed”) (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 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. 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 is 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 has one year renewal option to extend the term up to August 31, 2024. 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”). The Laboratory Lease Agreement is for a period of five years commencing approximately February 1, 2021 and ending January 31, 2026. 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. 18 Table of Contents The following table summarizes total lease expense during the three and nine months ended September 30, 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ ​ Nine Months Ended September 30, ​ ​ ​ 2022 ​ ​ 2022 Straight-line operating lease expense ​ $ 327 $ 974 Short-term lease expense ​ 64 184 Variable lease expense ​ 20 40 Total operating lease expense ​ $ 411 $ 1,198 ​ The following table summarizes supplemental cash flow information during the three and nine months ended September 30, 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ ​ Nine Months Ended September 30, ​ ​ ​ 2022 ​ ​ 2022 Cash paid for amounts included measurement of lease liabilities: ​ ​ ​ ​ ​ ​ Operating cash flows from operating leases ​ $ 319 ​ $ 951 Supplemental noncash information on lease liability arising from obtaining a right-of-use asset ​ $ — $ 297 ​ The following table summarizes the Company’s future minimum lease payments and reconciliation of lease liabilities as of September 30, 2022 (in thousands): ​ ​ ​ ​ ​ Years Ending December 31, ​ ​ ​ 2022 (from October 2022) $ 321 2023 1,186 2024 799 2025 ​ ​ 822 2026 69 Thereafter — Total future minimum lease payments ​ 3,197 Less: Interest ​ ​ ( 367 ) Total lease liabilities at present value ​ ​ 2,830 Lease liabilities, current ​ ​ 1,084 Lease liabilities, non-current ​ $ 1,746 ​ The following table summarizes lease term and discount rate as of September 30, 2022: ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ ​ ​ 2022 Weighted-average remaining lease term (years) ​ 2.91 Weighted-average discount rate ​ 8.70 % ​ ​ 10. Commitments and Contingencies Clinical Collaboration and Supply Agreement On July 22, 2020, the Company entered into a non-exclusive clinical collaboration and supply agreement with Novartis Institutes for BioMedical Research, Inc. (“Novartis”) (the “Novartis Agreement”). The collaboration is focused on the evaluation of the safety, tolerability and efficacy of OP-1250 in combination with Novartis’ proprietary CDK4/6 inhibitor Kisqali® (ribociclib) and/or Novartis’ proprietary phosphatidylinositol 3-kinase inhibitor Piqray® (alpelisib) (collectively the “Novartis Study Drugs”) as part of the Company’s planned Phase 1b clinical trial of OP-1250 in patients with metastatic estrogen receptor-positive breast cancer. The Company 19 Table of Contents will be responsible for the conduct of the clinical trials for the combined therapies in accordance with a mutually agreed development plan. As part of the collaboration, 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. All inventions and data developed in the performance of the clinical trials for the combined therapies (other than those specific to each component study drug), will be jointly owned by the parties. The Company is responsible for manufacturing, packaging and labeling OP-1250, and for packaging and labeling all drugs used in the clinical trials for the combined therapies (other than the Novartis Study Drugs). Novartis is responsible for manufacturing and delivering to the Company the Novartis Study Drugs in such quantities as reasonably needed for the clinical trials for the combined therapies. In accordance with an agreed budget, subject to certain thresholds, Novartis will reimburse the Company for a majority of the direct outside costs that the Company incurs related to conducting the activities under the agreed development plan in conducting the clinical trials for the combined therapies. The Novartis Agreement will terminate upon completion of all activities outlined in the development plan and the relevant protocols. 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. Costs associated with research activities performed under the agreement are included in research and development expenses in the accompanying condensed consolidated financial statements, with any reimbursable costs from Novartis reflected as a reduction of such expenses. For the three and nine months ended September 30, 2022, costs reimbursable from Novartis were $ 0.5 million and $ 1.1 million, respectively. As of September 30, 2020, the receivable due from Novartis was $ 1.1 million, which is recorded under prepaid expenses and other current assets in the accompanying condensed consolidated financial statements. Clinical Trial Agreement In November 2020, the Company entered into a non-exclusive clinical trial agreement with Pfizer Inc. (“Pfizer”) (the “Pfizer Agreement”), to evaluate the safety and tolerability of OP-1250 in combination with Pfizer’s proprietary CDK4/6 inhibitor IBRANCE® (palbociclib) in patients with recurrent, locally advanced or metastatic ER+, HER2- breast cancer in a clinical trial. Under the terms of the non-exclusive agreement, the Company will be responsible for conducting the clinical trial for the combined therapies and Pfizer is responsible for supplying IBRANCE® to the Company at no cost to the Company. The Company is responsible for manufacturing, packaging and labeling OP-1250, and for packaging and labeling all drugs used in the clinical trials for the combined therapies (other than IBRANCE® (palbociclib)). Pfizer is responsible for manufacturing and delivering to us IBRANCE® (palbociclib) in such quantities as reasonably needed for the clinical trials for the combined therapies. The Pfizer Agreement will terminate upon completion of all activities outlined in the study plan and the relevant protocols. Either party may terminate the Pfizer 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 IBRANCE® (palbociclib) or OP-1250. In addition, either party may terminate the Pfizer Agreement if certain disputes between the parties 20 Table of Contents are not resolved after following the applicable dispute resolution procedures or if either party determines to discontinue clinical development for medical, scientific, legal or other reasons. 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 and nine months ended September 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 The Company conducts research and development programs internally and through third parties that include, among others, arrangements with vendors, consultants, CMOs, and CROs. The Company has contractual arrangements in the normal course of business with these parties, however, the contracts with these parties are cancelable generally on reasonable notice within one year and the Company’s obligations under these contracts are primarily based on services performed through termination dates plus certain cancelation charges, if any, as defined in each of the respective agreements. In addition, these agreements may, from time to time, be subjected to amendments as a result of any change orders executed by the parties. As of September 30, 2022, the Company did not have material contractual commitments with respect to these arrangements. Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business. The Company accrues a liability for such matters when it is probable that future expenditures will be 21 Table of Contents made, and such expenditures can be reasonably estimated. For all periods presented, the Company was not a party to any pending material litigation or other material legal proceedings. Indemnification Agreements In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its Board of Directors and executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. As of September 30, 2022 and December 31, 2021, the Company had not incurred any material costs as a result of such indemnifications. ​ 22 Table of Contents