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Item 7. Management’s Discussion and Analysis

2025-03-20 compared with 2024-03-28 · 99 added, 117 removed, 216 unchanged (50% of the section changed)

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Based on its mechanism of action as a directly immunizing agent, GPS has potential as a monotherapy or in combination with other immunotherapeutic agents to address a broad spectrum of hematologic, or blood, cancers, and solid tumor indications.

In January 2020, we commenced in the United States an open label randomized Phase 3 clinical trial, the REGAL study, for GPS monotherapy in patients with acute myeloid leukemia, or AML, in the maintenance setting after achievement of second complete remission, or CR2, following successful completion of second-line antileukemic therapy.

We have an ongoing open label randomized Phase 3 clinical trial, the REGAL study, for GPS monotherapy in patients with acute myeloid leukemia, or AML, in the maintenance setting after achievement of second complete remission, or CR2, following successful completion of second-line antileukemic therapy.

Patients are randomized to receive either GPS or best available treatment, or BAT.

We expect this study will be used as the basis for submission of a Biologics License Application, or BLA, subject to a statistically significant and clinically meaningful data outcome and agreement with the U.S.

We expect this study will be used as the basis for submission of a Biologics License Application, or BLA, subject to a statistically significant and clinically meaningful trial outcome and agreement with the U.S.

Food and Drug Administration, or the FDA.

The primary endpoint of the REGAL study is overall survival.

The primary endpoint of the REGAL study is overall survival, or OS.

We planned to enroll approximately 125 to 140 patients at approximately 95 clinical sites in North America, Europe and Asia with a planned interim safety, efficacy and futility analysis after 60 events (deaths).

In March 2024, we announced the completion of enrollment.

Under our current assumptions with respect to enrollment and the estimated survival times for both the treated and control groups in the study, we believe, after discussions with our external statisticians and experts, that the planned interim analysis after 60 events (deaths) per the protocol will occur in the first half of 2024 and the final analysis after 80 events will occur by the end of 2024.

Because these analyses are event driven, they are difficult to predict with any certainty and may occur at a different time than currently expected.

In December 2020, we entered into an exclusive license agreement, or 3D Medicines Agreement, with 3D Medicines Inc., or 3D Medicines, a China-based biopharmaceutical company developing next-generation immuno-oncology drugs, for the development and commercialization of GPS, as well as the Company’s next generation heptavalent immunotherapeutic GPS+, which is at preclinical stage, across all therapeutic and diagnostic uses in mainland China, Hong Kong, Macau and Taiwan, which we collectively refer to as Greater China, or the 3DMed Territory.

In December 2024, we announced that the pre-specified threshold of 60 events (deaths) per the protocol had been reached, triggering the interim analysis to be conducted by the Independent Data Monitoring Committee, or IDMC.

In January 2025, we announced that the IDMC had completed pre-specified interim analysis of the REGAL study and had recommended that the study continue without modifications.

The next and final analysis will be conducted once 80 events (deaths) are reached.

We anticipate that 80 events will be reached this year.

Because the final analysis is event driven, it is difficult to predict with any certainty and it may occur at a different time than currently expected.

In December 2020, we entered into an exclusive license agreement, or the 3D Medicines Agreement, with 3D Medicines Inc., or 3D Medicines, a China-based biopharmaceutical company developing next-generation immuno-oncology drugs, for the development and commercialization of GPS, as well as the Company’s next generation heptavalent immunotherapeutic GPS+, which is at preclinical stage, across all therapeutic and diagnostic uses in mainland China, Hong Kong, Macau and Taiwan, which we refer to as Greater China.

We have retained sole rights to GPS and GPS+ outside of Greater China.

In November 2022, we announced that we had agreed with 3D Medicines for 3D Medicines to participate in the REGAL study through the inclusion of approximately 20 patients from mainland China.

In December 2022, we entered into a Side Letter Agreement with 3D Medicines, or Side Letter, which together with the 3D Medicines Agreement, details the terms and conditions of 3D Medicines' participation in the REGAL study.

Although the REGAL study has completed enrollment as announced in March 2024, in accordance with the predetermined statistical analysis plan, 3D Medicines may still enroll patients in mainland China.

The timing of such participation and patient enrollment by 3D Medicines, if at all, cannot be predicted with certainty.

As of December 31, 2023, we have received an aggregate of $10.5 million in upfront and milestone payments under the 3D Medicines Agreement and a total of $191.5 million in potential future development, regulatory and sales milestones, not including future royalties, remains under the license agreement, which milestones are variable in nature and not under our control.

In December 2023, we commenced an arbitration proceeding against 3D Medicines regarding, among other things, t he trigger and payment of $13.0 million in milestone payments due to us.

As of March 15, 2025, we have received an aggregate of $10.5 million in upfront and milestone payments under our license agreement with 3D Medicines, or the 3D Medicines Agreement, and a total of $191.5 million in potential future development, regulatory and sales milestones, not including future royalties, remains under the license agreement, which milestones are variable in nature and not under our control.

In December 2023, we announced that we had commenced a binding arbitration proceeding against 3D Medicines to resolve a dispute regarding, among other things, the trigger and payment of relevant milestone payments due to us under the 3D Medicines Agreement.

Legal Proceedings .

In December 2018, pursuant to a Clinical Trial Collaboration and Supply Agreement, we initiated a Phase 1/2 multi-arm "basket" type clinical study of GPS in combination with Merck & Co., Inc.’s anti-PD-1 therapy, pembrolizumab (Keytruda®).

In 2020, we, together with Merck, determined to focus on ovarian cancer (second or third line).

In November 2022, we reported topline clinical and initial immune response data from this study, which showed that treatment with the combination of GPS and pembrolizumab compared favorably to treatment with anti-PD-1 therapy alone in a similar patient population.

In November 2023, additional immunobiological and clinical data from the study was presented at the International Gynecologic Cancer Society 2023 Annual Global Meeting which showed a correlation between immune response and PFS.

In February 2020, a Phase 1 open-label investigator-sponsored clinical trial of GPS, in combination with Bristol-Myers Squibb’s anti-PD-1 therapy, nivolumab (Opdivo®), in patients with malignant pleural mesothelioma, or MPM, who harbor relapsed or refractory disease after having received frontline standard of care multimodality therapy was commenced at MSK.

Enrollment of a target total of 10 evaluable patients was completed at the end of 2022.

We reported positive topline safety and efficacy data from this study in June 2023 and positive follow-up immune response and survival data in December 2023.

GPS was granted Orphan Drug Product Designations, or ODD, from the FDA, as well as orphan medicines designations from the European Medicines Agency, or EMA, for GPS in AML, MPM, and multiple myeloma, or MM, as well as Fast Track designation for AML, MPM, and MM from the FDA.

GPS was granted Orphan Drug Designations, or ODD, from the FDA, as well as orphan medicines designations from the European Medicines Agency, or EMA, in AML, malignant pleural mesothelioma, or MPM, and multiple myeloma, or MM, as well as Fast Track designations for AML, MPM, and MM from the FDA.

In October 2024, the FDA granted Rare Pediatric Disease, or RPD, designation to GPS for the treatment of pediatric AML.

Highly Selective Next Generation CDK9 Inhibitor

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We completed a Phase 1 dose-escalating clinical trial in the United States and China for SLS009 in mid-2023 and reported positive safety and efficacy data for both patient cohorts, that is relapsed and/or refractory AML and refractory lymphoma.

We also established in the trial a recommended Phase 2 dose, or RP2D, of 60 mg for AML and 100 mg for lymphomas.

We also established in the trial a recommended Phase 2 dose, or RP2D, of 60 mg once weekly for AML and 100 mg once weekly for lymphomas.

In the second quarter of 2023, we commenced an open label, single arm, multi-center Phase 2a clinical trial with SLS009 in combination with venetoclax and azacitidine, or aza/ven, in patients with AML who failed or did not respond to treatment with venetoclax-based therapies.

The trial is evaluating safety, tolerability, and efficacy at two dose levels of SLS009, 45 mg once weekly, and 60 mg once weekly or 30 mg twice a week, in combination with aza/ven.

In addition to safety and tolerability of SLS009 in combination with aza/ven, the primary endpoints are complete response composite rate and duration of response.

In addition to safety and tolerability of SLS009 in combination with aza/ven, the efficacy endpoints are complete response composite rate and duration of response.

Additional endpoints include event free survival, overall survival, and pharmacokinetic and pharmacodynamic assessments.

The trial includes several sites in the United States, will enroll a minimum of 20 patients and, based on initial results, may be expanded into a registrational trial.

In the fourth quarter of 2023, we completed enrollment in the 45 mg (safety) dose cohort in the Phase 2a study and reported positive initial topline data.

We also commenced enrollment in the 60 mg dose cohort with patients randomized to one of two groups, 60 mg fixed dose once weekly or 30 mg fixed twice weekly.

Each group will enroll five to 10 patients.

In March 2024, we announced positive topline data from the Phase 2a clinical trial of SLS009 in combination with aza/ven in r/r/ AML.

A total of 21 patients were enrolled in the study as of March 15, 2024:

10 in the 45 mg safety cohort and 11 in the 60 mg cohort (30 mg twice a week or 60 mg once a week).

Response rates observed in the three cohorts were 10% in the 45 mg once a week safety dose cohort (dose level below the RP2D),

20% in the 60 mg once a week dose cohort, and 50% in the 30 mg twice a week dose cohort.

Additionally, we observed strong anti-leukemic activity, which is defined as 50% or more bone marrow blast reduction in 67% of patients across all dose levels.

Median OS has not been reached in any of the cohorts and the first patient enrolled in the study who achieved a CR continues on the study and remains leukemia-free 9 months after enrollment.

At that time, we also commenced enrollment in the 60 mg dose cohort with patients randomized to one of two groups, 60 mg fixed dose once weekly or 30 mg fixed twice weekly.

Each group was planned to enroll five to 10 patients.

During the trial we identified 30 mg fixed twice weekly as our optimal dose level.

During the trial, we identified potential biomarkers currently undergoing testing as predictive markers in the most recent portion of the study.

Patients with the identified biomarkers exhibited significantly higher response rates:

100% response rate at the optimal dose level (30 mg twice a week) and 57% response rate across all dose levels.

Furthermore, we have clarified the proposed biological basis and mechanism of action for SLS009 activity in patients with these biomarkers.

The relevant biomarkers are present in multiple hematologic and solid cancer indications, with a substantial proportion of patients exhibiting them in additional indications, ranging up to ~50% of patients in some indications.

Additional topline data for the 60 mg dose cohort is expected in the second quarter of 2024.

In October 2023, we announced that our partner, GenFleet, dosed the first patient in a Phase Ib/II trial evaluating SLS009 in patients with relapsed/refractory, or r/r, peripheral T-cell lymphoma, or PTCL.

The open-label, single-arm trial will enroll up to 95 patients to evaluate safety and efficacy and, based on the results, may serve as a registrational study.

This initial PTCL study is fully funded by GenFleet and is being conducted in China.

We expect to report initial topline data from the study in the second quarter of 2024.

In March 2024, GenFleet announced that it entered into a collaboration and supply agreement with BeiGene Switzerland GmbH to initiate a combination study of SLS009 and Brukinsa (zanubrutinib), a BTK inhibitor, in r/r diffused large B-cell lypmhoma, or DLBCL, and the first patient was dosed in the trial.

The open-label, single-arm multi-center trial will be conducted in two parts.

In the Phase 1b portion, 6-18 patients will be enrolled.

In the Phase 2 portion, approximately 45 patients will be enrolled.

This study is funded by GenFleet and is being conducted in China.

In May 2024, we announced additional preliminary data from the Phase 2a trial of SLS009 in r/r AML and successful filing of a provisional patent application around the ASXL1 mutation and SLS009, including all CDK9 inhibitor drugs.

ASXL1 mutations are associated with poor prognosis in all myeloid diseases, owing to the reduced response to the current treatment options.

We observed a high rate of responses in patients with myelodysplasia-related molecular mutations (AML MR), as defined by the World Health Organization, and patients with the ASXL1 gene mutation accounted for the most responders across all dose cohorts.

We expanded the ongoing study to include two additional cohorts, one with ASXL1 mutated AML patients and one with patients with myelodysplasia-related molecular abnormalities other than ASXL1 at the optimal dose level of 30 mg fixed twice weekly.

In December 2024, we announced positive data from the first 3 cohorts in the Phase 2a trial and the trial remains ongoing with additional data expected from the expansion cohorts in the first half of 2025.

Our partner, GenFleet, is focusing on lymphoma indications with SLS009 in its Greater China market.

In March 2024, we announced that GenFleet initiated a study of SLS009 in combination with zanubrutinib (Brukinsa®), a BTK inhibitor, in r/r diffuse large B-cell lymphoma, or DLBCL, and the first patient was dosed in the trial.

The study is funded and sponsored by GenFleet and is being conducted in China only.

In February 2025, we announced positive data from the Phase 2a study evaluating SLS009 in combination with zanubrutinib.

In November 2024, we announced data from preclinical studies identifying ASXL1 mutation as key predictor of SLS009 in response to solid cancers.

SLS009 is also currently being evaluated in pediatric solid tumors and leukemia models through the NCI Pediatric Preclinical in Vivo Testing, or PIVOT, program.

Studies are supported through cooperative agreement grants from the NCI to the seven PIVOT research programs performing the PK and efficacy testing in pediatric tumors and a centralized coordinating center.

We expect to report relevant data from the program in the second half of 2024.

For SLS009, the FDA granted Orphan Drug Product designations in AML and PTCL and Fast Track designations for r/r AML and r/r PTCL.

Studies are supported through cooperative agreement grants from the NCI to the PIVOT research centers performing the testing in pediatric tumor models and a centralized coordinating center.

We expect to report relevant data from the program in the first half of 2025.

For SLS009, the FDA granted Orphan Drug Product designations in AML and peripheral T-cell lymphoma, or PTCL, and Fast Track designations for r/r AML and r/r PTCL.

The FDA granted RPD designation to SLS009 for the treatment of pediatric acute lymphoblastic leukemia, or ALL, in June 2024 and the FDA granted RPD designation to SLS009 for the treatment of pediatric AML in July 2024.

Also, the European Medicines Agency granted Orphan Drug Designation for SLS009 in AML and in PTCL in June 2024 and July 2024, respectively.

Components of Results of Operations

Licensing Revenue

Licensing revenue consists of revenue recognized pursuant to the 3D Medicines Agreement.

In the future, we may generate revenue from a combination of regulatory, development, and sales milestone payments and royalties in connection with the 3D Medicines Agreement.

Cost of Licensing Revenue

Cost of licensing revenue consists of sublicensing fees incurred under our license from MSK in connection with the 3D Medicines Agreement.

Research and Development

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Oncology product candidates in the later stages of clinical development generally have higher development costs than those in the earlier stages of clinical development, primarily due to the increased size and duration of the later-stage clinical trials.

We expect our research and development expenses to increase for the foreseeable future as we conduct and complete our ongoing early and late-stage clinical trials, initiate additional clinical trials, and expand regulatory activities associated with the preparation and submission of regulatory filings.

We expect our

research and development expenses to increase for the foreseeable future as we conduct and complete our ongoing early and late-stage clinical trials, initiate additional clinical trials, and expand regulatory activities associated with the preparation and submission of regulatory filings.

Our expenditures are subject to additional uncertainties, including the terms and timing of regulatory approvals.

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Other general and administrative expenses include facility related costs, patent filing and prosecution costs, professional fees for business development, accounting, consulting, legal and tax-related services associated with maintaining compliance with our Nasdaq listing and SEC reporting requirements, investor relations costs, and other expenses associated with being a public company.

If and when we believe that regulatory approval of a product candidate appears likely, we anticipate that an increase in general and administrative expenses will occur as a result of our preparation for commercial operations,

particularly as it relates to the sales and marketing of such product candidate.

Oncology product commercialization may take several years and millions of dollars in development costs.

Acquired In-Process Research and Development

Acquired in-process research and development consists of costs to acquire or license product candidates from third parties for development with no alternative future use as the technology and know-how acquired are not currently commercially viable.

Non-Operating Income

Non-operating income consists of changes in fair value of our warrant liability, changes in fair value of our contingent consideration, and interest income.

Non-operating income consists of changes in fair value of our warrant liability and interest income.

Interest income primarily reflects the interest earned from our cash and cash equivalents.

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2024 2023 Change

Licensing revenue $ — $ 1,000 $ (1,000)

Operating expenses:

Cost of licensing revenue — 100 (100)

Research and development $ 19,096 $ 24,007 $ (4,911)

General and administrative 12,417 13,862 (1,445)

Acquired in-process research and development — 10,000 (10,000)

Total operating expenses 31,513 37,869 (6,356)

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Further analysis of the changes and trends in our operating results are discussed below.

Licensing Revenue

There was no licensing revenue for the year ended December 31, 2023 and $1.0 million in licensing revenue for the year ended December 31, 2022 related to approval by China's National Medical Products Administration, or NMPA, of an Investigational New Drug, or IND, application filed by 3D Medicines for a small Phase 1 clinical trial investigating safety of GPS in China.

Cost of Licensing Revenue

There was no cost of licensing revenue recognized during the year ended December 31, 2023, and $0.1 million of sublicensing fees payable under our license from MSK in connection with the 3D Medicines Agreement during the year ended December 31, 2022.

Research and Development

Research and development expenses were $19.1 million for the year ended December 31, 2024 compared to $24.0 million for the year ended December 31, 2023.

As compared to the prior period, the $3.7 million increase in research and development expenses was primarily attributable to a $1.9 million increase in clinical trial expenses primarily related to our ongoing Phase 3 REGAL clinical trial of GPS in AML and our Phase 2a and Phase 1 clinical trials of SLS009, a $1.3 million increase in clinical and regulatory consulting expenses due to the advancement of our clinical programs, and a $1.1 million increase in personnel related expenses primarily due to increased headcount.

These increases were partially offset by a $0.5 million decrease in manufacturing and clinical drug supply costs due to the timing of the manufacture of drug substance and drug product batches, and a $0.1 million decrease in licensing and other research and development costs.

We anticipate that our research and development expenses will increase in the future as we continue to advance the development of GPS and SLS009, including our Phase 3 REGAL clinical trial of GPS in AML and the ongoing and planned clinical trials of SLS009.

The following table summarizes our research and development expenses for the years ended December 31, 2024 and 2023 (amounts in thousands):

For Year ended December 31,

2024 2023 Change

External clinical trial expenses $ 11,138 $ 11,702 $ (564)

Employee related expenses 2,808 3,428 (620)

Stock-based compensation 347 352 (5)

Clinical and regulatory consulting 2,495 4,673 (2,178)

Manufacturing and clinical drug supply 1,742 3,226 (1,484)

Facilities and other 566 626 (60)

Total research and development expenses $ 19,096 $ 24,007 $ (4,911)

The decrease in research and development expenses of approximately $4.9 million was primarily attributable to the following:

• $2.2 million of decreased clinical and regulatory consultant costs primarily driven by the completion of enrollment in the REGAL study in the first quarter of 2024;

• $1.5 million of decreased manufacturing costs and clinical drug supply purchases primarily driven by the completion of enrollment in the REGAL study in the first quarter of 2024;

• $0.6 million of decreased employee related expenses due to a decrease in headcount;

• $0.6 million of decreased external clinical trial expenses primarily driven by the completion of enrollment in REGAL.

We anticipate that our research and development expenses will increase in the future as we continue to advance the development of GPS and SLS009.

General and Administrative

General and administrative expenses were $12.4 million for the year ended December 31, 2024 compared to $13.9 million for the year ended December 31, 2023.

The $1.3 million increase was primarily driven by a $0.5 million increase in personnel related expenses primarily due to increased headcount, including a $0.3 million increase in non-cash stock-based compensation, a $0.6 million increase in intellectual property fees, a $0.1 million increase in outside services and public company costs, and a $0.1 million increase in other general and administrative costs.

Acquired In-Process Research and Development

There was no acquired in-process research and development expense during the year ended December 31, 2023.

During the year ended December 31, 2022, we recognized $10.0 million for the acquisition of in-process research and development related to the in-licensing of SLS009.

The $1.5 million decrease was primarily attributable to a $1.5 million decrease in employee related expenses, including a $0.5 million decrease in non-cash stock-based compensation, primarily due to a decrease in headcount, a $0.7 million decrease in outside services and public company costs, and a $0.6 million decrease in insurance premiums, which were partially offset by the initial recognition of a $1.1 million one-time severance charge during the current period and a $0.2 million increase in legal fees.

Non-Operating Income

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Change in fair value of warrant liability $ — $ 4 $ (4)

Change in fair value of contingent consideration — 296 (296)

Interest income 632 525 107

Total non-operating income $ 632 $ 529 $ 103

The decrease in our non-operating income during the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to a $0.3 million decrease in the change in fair value of contingent consideration in the prior period, partially offset by a $0.2 million increase in interest income earned from our cash and cash equivalents primarily due to higher interest rates.

The changes in fair value of warrant liability and changes in fair value of contingent consideration are all non-cash in nature.

The increase in our non-operating income during the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to a $0.1 million increase in interest income earned from our cash and cash equivalents.

Liquidity and Capital Resources

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Sources of Liquidity

On March 19, 2024, we consummated a registered direct offering, or the March 2024 Registered Direct Offering, in which we entered into a Securities Purchase Agreement with two institutional investors pursuant to which we agreed to issue and sell 11,000,000 shares of our common stock and 2,029,316 pre-funded warrants exercisable for shares of common stock.

Each share of common stock was sold together at a purchase price of $1.535 and each pre-funded warrant was sold at a purchase price of $1.5349.

The gross proceeds to us from the March 2024 Registered Direct Offering were approximately $20.0 million, before deducting the placement agent's fees and related offering expenses.

On January 29, 2025, we consummated a registered direct offering with an institutional investor priced at-the-market under Nasdaq rules, or the January 2025 Registered Direct Offering, pursuant to which we agreed to issue and sell 8,200,000 shares of common stock and 11,485,040 pre-funded warrants exercisable for shares of common stock, together with accompanying warrants to purchase up to 19,685,040 shares of common stock.

Each share of common stock and accompanying common warrant were sold together at a combined offering price of $1.27, and each pre-funded warrant and accompanying common warrant were sold together at a combined offering price of $1.2699.

The common warrants have an exercise price of $1.20 per share.

The net proceeds to us from the January 2025 Registered Direct Offering were approximately $23.1 million, after deducting the placement agents' fees and related offering expenses.

On August 1, 2024, we consummated a registered direct offering with an institutional investor priced at a premium to market, or the August 2024 Registered Direct Offering, pursuant to which we agreed to issue and sell 6,370,070 shares of common stock and 9,478,986 pre-funded warrants exercisable for shares of common stock, together with accompanying warrants to purchase 15,849,056 shares of common stock.

Each share of common stock and accompanying common warrant were sold together at a combined offering price of $1.325, and each pre-funded warrant and accompanying common warrant were sold together at a combined offering price of $1.3249.

The common warrants have an exercise price of $1.20 per share.

The net proceeds to us from the August 2024 Registered Direct Offering were approximately $19.5 million, after deducting the placement agent's fees and related offering expenses.

On March 19, 2024, we consummated a registered direct offering with two institutional investors priced at-the-market under Nasdaq rules, or the March 2024 Registered Direct Offering, pursuant to which the Company agreed to issue and sell 11,000,000 shares of its common stock and 2,029,316 pre-funded warrants exercisable for shares of common stock.

Each share of common stock was sold at a purchase price of $1.535 and each pre-funded warrant was sold at a purchase price of $1.5349.

The net proceeds to us from the March 2024 Registered Direct Offering were approximately $18.5 million, after deducting the placement agent's fees and related offering expenses.

In a concurrent private placement, we agreed to issue to the two institutional investors exercisable for up to an aggregate of 13,029,316 shares of common stock warrants at an exercise price of $1.41 per share.

Subsequent to the closing of the March 2024 Registered Direct Offering, 1,014,658 pre-funded warrants were exercised for shares of common stock.

Subsequent to the closing of the March 2024 Registered Direct Offering, all of the pre-funded warrants issued in the March 2024 Registered Direct Offering have been exercised for shares of common stock.

On January 8, 2024, we consummated a public offering on a "reasonable best efforts" basis, or the January 2024 Offering, issuing 10,130,000 shares of common stock and an aggregate of 1,870,000 pre-funded warrants exercisable for shares of common stock, together with accompanying warrants to purchase an aggregate of 12,000,000 shares of common stock.

Each share of common stock and accompanying common warrant were sold together at a combined offering price of $0.75, and each pre-funded warrant and accompanying common warrant were sold together at a combined offering price of $0.7499.

The aggregate gross proceeds to us from the January 2024 Offering were approximately $9.0 million, before deducting the placement agent's fees and related offering expenses.

On November 2, 2023, we consummated a registered direct offering, or the November 2023 Registered Direct Offering, in which we entered into a Securities Purchase Agreement with a single institutional investor pursuant to which we agreed to issue and sell 3,100,000 shares of our common stock and 552,300 pre-funded warrants exercisable for shares of common stock, together with accompanying warrants to purchase an aggregate of 3,652,300 shares of common stock.

Each share of common stock and accompanying warrant were sold together at a combined purchase price of $1.0952 and each pre-funded warrant and accompanying warrant were sold together at a combined purchase price of $1.0951.

The net proceeds to us from the November 2023 Registered Direct Offering were approximately $3.5 million, after deducting the placement agent's fees and related offering expenses.

On February 28, 2023, we consummated an underwritten public offering, or the February 2023 Offering, issuing 7,220,217 shares of common stock and accompanying common stock warrants to purchase an aggregate of 7,220,217 shares of common stock.

The shares of common stock and accompanying common stock warrants were sold at a combined price of $2.77 per share and accompanying common stock warrant.

Each common stock warrant sold with the shares of common stock represents the right to purchase one share of our common stock at an exercise price of $2.77 per share.

The common stock warrants are exercisable immediately and will expire on February 28, 2028, five years from the date of issuance.

The net proceeds from the February 2023 Offering were approximately $18.5 million, after deducting underwriting discounts and commissions and estimated offering expenses, and excluding the exercise of any warrants.

On April 16, 2021, the Company entered into a Controlled Equity Offering SM Sales Agreement, or the Sales Agreement, with Cantor Fitzgerald & Co., or the Agent.

From time to time during the term of the Sales Agreement, subject to certain restrictions, we could offer and sell shares of common stock having an aggregate offering price up to a total of $50.0 million in gross proceeds.

The Agent was entitled to collect a fee equal to 3% of the gross sales price of all shares of common stock sold.

Shares of common stock sold under the Sales Agreement were offered and sold pursuant to our registration statement on Form S-3, which was filed with the SEC on April 16, 2021 and declared effective on April 29, 2021.

During the year ended December 31, 2023, we sold a total of 92,882 shares of common stock pursuant to the Sales Agreement at an average price of $3.21 per share for aggregate net proceeds of approximately $0.3 million.

On January 2, 2024, we mutually agreed with the Agent to terminate the Sales Agreement.

The net proceeds to us from the January 2024 Offering were approximately $8.2 million, after deducting the placement agent's fees and related offering expenses.

Subsequent to the closing of the January 2024 Offering, all of the pre-funded warrants issued in the January 2024 Offering have been exercised for shares of common stock.

In December 2020, together with our wholly-owned subsidiary, SLSG Limited, LLC, we entered into the 3D Medicines Agreement pursuant to which we granted 3D Medicines a sublicensable royalty-bearing license under certain intellectual property owned or controlled by us, to develop, manufacture and have manufactured, and commercialize GPS and heptavalent GPS product candidates for all therapeutic and other diagnostic uses in the 3DMed Territory.

As of December 31, 2023, we have received an aggregate of $10.5 million in upfront payments and certain technology transfer and regulatory milestone payments under our license agreement with 3D Medicines.

A total of $191.5 million in potential future development, regulatory, and sales milestones, not including future

royalties, remains under the 3D Medicines Agreement, which milestones are all variable in nature and not under our control.

To date, we have received $10.5 million in upfront payments and certain technology transfer and regulatory milestones.

A total of $191.5 million in potential future development, regulatory, and sales milestones, not including future royalties, remains under the 3D Medicines Agreement as of December 31, 2024, which milestones are all variable in nature and not under our control.

In December 2023, we commenced a binding arbitration proceeding against 3D Medicines, which involves, among other things, the trigger and payment of certain milestone payments due to us.

See Part I, Item 3.

Legal Proceedings.

Funding Requirements

As of December 31, 2024, we had an accumulated deficit of $248.1 million, cash and cash equivalents of $13.9 million and restricted cash and cash equivalents of $0.1 million.

In addition, we had current liabilities of $13.7 million as of December 31, 2023.

We expect that our cash and cash equivalents, together with the net proceeds from the January 2024 Offering and March 2024 Registered Direct Offering, will not be sufficient to fund our current planned operations for at least the next twelve months from the date of issuance of these financial statements.

In addition, we had current liabilities of $9.5

million as of December 31, 2024.

We expect that our cash and cash equivalents will not be sufficient to fund our current planned operations for at least the next twelve months from the date of issuance of these financial statements.

These conditions give rise to a substantial doubt over our ability to continue as a going concern.

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Financing activities 46,758 22,315

Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents $ (14,595) $ (4,230)

Net Cash Flow from Operating Activities

Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents $ 11,356 $ (14,595)

Net Cash Used in Operating Activities

Net cash used in operating activities of $35.4 million during the year ended December 31, 2024 was primarily attributable to our net loss of $30.9 million and a $6.6 million change in our operating assets and liabilities, partially offset by various net non-cash charges of $2.1 million.

The net change in our operating assets and liabilities is due to a decrease in accrued expenses and other current liabilities of approximately $2.2 million, a decrease in accounts payable of approximately $2.1 million, an increase in prepaid expenses and other assets of $1.8 million, and a decrease in operating lease liabilities of approximately $0.5 million.

Net non-cash charges were driven by approximately $1.5 million in non-cash stock-based compensation expense and $0.6 million in non-cash lease expense.

Net cash used in operating activities of $31.4 million during the year ended December 31, 2023 was primarily attributable to our net loss of $37.3 million, and partially offset by a change in our operating assets and liabilities of $3.3 million and various net non-cash charges of $2.6 million.

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Net non-cash charges were driven by $2.1 million in non-cash stock compensation expense and $0.5 million in non-cash lease expense.

Net cash used in operating activities of $23.8 million during the year ended December 31, 2022 was primarily attributable to our net loss of $41.3 million, and partially offset by various net non-cash charges of $11.9 million, and a change in our operating assets and liabilities of $5.6 million.

Net non-cash charges were driven by $10.0 million in expense related to the acquired in-process research and development, $1.7 million in non-cash stock compensation expense, and $0.2 million in other net non-cash charges.

The net change in our operating assets and liabilities is due to an increase in accrued expenses and other current liabilities of $3.6 million, an increase in accounts payable of $1.2 million and a decrease in prepaid expenses and other current assets of $1.3 million, which was partially offset by a decrease in operating lease liabilities of $0.5 million.

Net Cash Used in Investing Activities

Net cash used in investing activities of $5.5 million and $4.5 million during the years ended December 31, 2023 and 2022, respectively, was related to license payments made for the acquisition of in-process research and development under the GenFleet Agreement.

There was no cash used in investing activities during the year ended December 31, 2024.

Net cash used in investing activities of $5.5 million during the year ended December 31, 2023 related to license payments made for the acquisition of in-process research and development under the GenFleet License Agreement.

Net Cash Flow from Financing Activities

We generated $22.3 million of net cash from financing activities for the year ended December 31, 2023, which was due to $21.9 million in aggregate net proceeds received from the February 2023 Offering and the November 2023 Offering, $0.3 million in aggregate net proceeds received from the issuance of common stock under the Sales Agreement, and a $0.1 million in aggregate net proceeds received from the issuance of common stock under our employee stock purchase plan.

We generated $24.1 million of net cash from financing activities for the year ended December 31, 2022, which was due to $23.0 million in aggregate net proceeds received from our underwritten public offering, which closed in April 2022, $1.0 million in aggregate net proceeds received from the issuance of common stock under the Sales Agreement, and $0.1 million in aggregate net proceeds received from the issuance of common stock under our employee stock purchase plan.

We generated $46.8 million of net cash from financing activities for the year ended December 31, 2024, which was due to $46.2 million in aggregate net proceeds received from the January 2024 Offering, the March 2024 Registered Direct Offering, and the August 2024 Registered Direct Offering, and $0.6 million in proceeds received from the exercise of warrants, $0.1 million in aggregate net proceeds received from the issuance of common stock under our employee stock purchase plan, partially offset by $0.1 million to satisfy tax withholding on vesting of restricted stock units.

We generated $22.3 million of net cash from financing activities during the year ended December 31, 2023, which was due to $21.9 million in aggregate net proceeds received from the February 2023 Offering, $0.3 million in aggregate net proceeds received from the issuance of common stock under a Controlled Equity Offering SM Sales Agreement with Cantor Fitzgerald & Co., or the Sales Agreement, and $0.1 million in aggregate net proceeds received from the issuance of common stock under our employee stock purchase plan.

In January 2024, we mutually agreed with Cantor Fitzgerald & Co.

to terminate the Sales Agreement.

Contractual Obligations and Other Commitments

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As of December 31, 2024, our contractual commitment for our lease was $1.1 million, which will be paid over the remaining term of the lease.

For additional information on our leases and

timing of future payments, please read Note 7, Leases, to the consolidated financial statements included in this Form 10-K.

For additional information on our leases and timing of future payments, please read Note 6, Leases , to the consolidated financial statements included in this Form 10-K.

Other Commitments

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Stock-Based Compensation

We account for stock-based compensation by estimating the fair value of each stock option on the date of grant using the Black-Scholes model.

We recognize stock-based compensation expense on a straight-line basis over the vesting term.

We measure stock options granted to employees and non-employee directors based on the estimated grant date fair value and recognize compensation expense on a straight-line basis over the requisite service period, which is typically the vesting period.

We recognize forfeitures as they occur.

We estimate the fair value of stock options on the date of grant using the Black-Scholes model.

The Black-Scholes model requires us to make certain assumptions regarding:

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(iii) risk-free interest rates;

and (iv) the period of time employees are expected to hold the award prior to exercise (referred to as the expected holding period).

and (iv) the period of time employees are expected to hold the award prior to exercise (referred to as the expected term).

As a result, if we revise our assumptions and estimates, our stock-based compensation expense could change.

Given our limited history as a publicly traded company following the Merger on December 29, 2017, we did not have sufficient trading data to calculate volatility based on our own common stock, and the expected volatility was calculated as of each grant date based on our own implied volatility in combination with a peer group of publicly

traded companies.

The expected term of the stock options was determined based upon the simplified approach for employees and non-employee directors, allowed under SEC Staff Accounting Bulletin No.

110, which assumes that the stock options will be exercised evenly from vesting to expiration.

As data associated with future exercises is obtained, the expected term of future grants will be adjusted accordingly.

We measure compensation for restricted stock units, or RSUs, based on the price of our shares at the grant date and we recognize the expense on a straight-line basis over the vesting period.

The expense relating to RSUs that contain both a service and a performance condition is estimated and adjusted on a quarterly basis based upon our assessment of the probability that the performance condition would be met.

Our expected volatility is based on the historical volatility of our publicly traded common stock.

The expected term of stock options is estimated using the "simplified method" for employees and non-employee directors, allowed under SEC Staff Accounting Bulletin No.

110, which assumes that stock options will be exercised evenly from vesting to expiration, as we have limited historical information from which to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.

We recognize compensation expense for restricted stock units, or RSUs, based on the price of our shares at the grant date on a straight-line basis over the vesting period.

The expense relating to RSUs that contain both a service condition and a performance condition is estimated and adjusted on a quarterly basis based upon our assessment of the probability that the performance condition would be met.

As a result, if we revise such assessment, our stock-based compensation expense could change.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis