BioAtla Inc

Previous wording

We have incurred significant losses to date. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current and future product candidates. Our net loss was $21.1 million and $44.3 million for the three and six months ended June 30, 2024, respectively, compared to $35.8 million and $63.2 million for the three and six months ended June 30, 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $460.6 million. These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations. We do not expect to generate meaningful revenue from product sales for the foreseeable future, and we expect to continue to incur significant operating expenses for the foreseeable future due to the cost of research and development, including conducting clinical trials and the regulatory approval process for our product candidates, as well as identifying and designing product candidates and conducting preclinical studies. We expect our expenses, and the potential for losses, to be variable as we focus development efforts on selected assets and indications. We expect research and development expenses to vary as we continue to advance clinical trials of our lead product candidates, and are expected to decrease in the near term as we complete enrollment and treatment of patients in certain trials.

Current wording

We have incurred significant losses to date. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current and future product candidates. Our net loss was $10.6 million and $54.9 million for the three and nine months ended September 30, 2024, respectively, compared to $33.3 million and $96.5 million for the three and nine months ended September 30, 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $471.2 million. These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations. We do not expect to generate meaningful revenue from product sales for the foreseeable future, and we expect to continue to incur significant operating expenses for the foreseeable future due to the cost of research and development, including conducting clinical trials and the regulatory approval process for our product candidates, as well as identifying and designing product candidates and conducting preclinical studies. We expect our expenses, and the potential for losses, to be variable as we focus development efforts on selected assets and indications. We expect research and development expenses to decrease in the near term as we complete enrollment and treatment of patients in certain of our trials, but may generally increase in the future as we progress our lead product candidates through the regulatory approval process.

Previous wording

As of June 30, 2024, our cash and cash equivalents totaled approximately $61.7 million. Based on our current operating plan, our current cash and cash equivalents are expected to be sufficient to fund our ongoing operations for a period of at least twelve months from the date of issuance of the financial statements included in this report. Our current operating plan prioritizes and focuses clinical development of selected assets and indications, and includes completion of certain of our clinical trials and delaying development of certain pre-clinical programs. Our estimate as to how long we expect our existing cash and cash equivalents to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

Current wording

As of September 30, 2024, our cash and cash equivalents totaled approximately $56.5 million. Based on our current operating plan, our current cash and cash equivalents are expected to be sufficient to fund our ongoing operations for a period of at least twelve months from the date of issuance of the financial statements included in this report. Our current operating plan focuses on the clinical development of selected assets and indications, and includes completion of certain of our clinical trials. Our estimate as to how long we expect our existing cash and cash equivalents to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

Previous wording

The Company has entered into collaborations and licensing agreements with various third parties that, in some cases, may provide for potential future milestone and royalty payments to us (see Note 7 to our financial statements). Prior to developing our own programs, we received revenue from services performed under fixed price service contracts that, in some cases, provided for potential milestone and royalty payments to us. We did not recognize any revenue from collaborations, licenses, or our legacy service contracts during the three and six months ended June 30, 2024 and 2023, respectively.

Current wording

Prior to developing our own programs, we received revenue from services performed under fixed price service contracts that, in some cases, provided for potential milestone and royalty payments to us. We did not recognize any revenue from our legacy service contracts during the three and nine months ended September 30, 2023 and 2024, respectively.

Previous wording

Research and development expenses were $16.2 million and $31.0 million for the three months ended June 30, 2024 and 2023, respectively. The decrease of approximately $14.8 million was primarily driven by a $6.1 million decrease in pre-clinical development costs primarily for BA3142, our CAB B7H3 x CD3 bispecific program, and BA3361, our CAB Nectin-4 ADC program, a $4.3 million decrease in manufacturing costs primarily related to evalstotug, a $4.1 million decrease in clinical development costs for our clinical stage programs primarily due to completing Phase 2 enrollment for our ongoing ADC trials for mecbotamab vedotin and ozuriftamab vedotin, a $0.4 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, and a $0.2 million decrease in facility related costs, offset by a $0.3 million increase in personnel related costs.

Current wording

Research and development expenses were $16.4 million and $28.4 million for the three months ended September 30, 2024 and 2023, respectively. The decrease of approximately $12.0 million was primarily driven by a $5.4 million decrease in development costs for our pre-clinical programs primarily for BA3142, our CAB B7H3 x CD3 bispecific program, and BA3361, our CAB Nectin-4 ADC program, a $4.8 million decrease development costs for our clinical stage programs primarily due to completing Phase 2 enrollment for our ongoing ADC trials for mecbotamab vedotin and ozuriftamab vedotin, a $3.0 million decrease in manufacturing costs for evalstotug, a $0.3 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, and a $0.2 million decrease in facility related costs. This was offset by $1.8 million in related party expense incurred in connection with the licensing agreement with Context Therapeutics in September 2024, which is further discussed in Note 7 and Note 8 to our financial statements.

Previous wording

Interest income was $0.9 million and $1.5 million for the three months ended June 30, 2024 and 2023, respectively. The decrease of $0.6 million was due to lower cash and cash equivalents compared to the same period in 2023.

Current wording

Interest income was $0.7 million and $1.7 million for the three months ended September 30, 2024 and 2023, respectively. The decrease of $1.0 million was due to lower cash and cash equivalents compared to the same period in 2023.

Previous wording

Research and development expenses were $35.1 million and $52.7 million for the six months ended June 30, 2024 and 2023, respectively. The decrease of approximately $17.6 million was primarily driven by a $9.8 million decrease in pre-clinical development costs primarily for BA3142, our CAB B7H3 x CD3 bispecific program, and BA3361, our CAB Nectin-4 ADC program, a $4.9 million decrease in manufacturing costs primarily for evalstotug, a $2.7 million decrease in clinical development costs for our clinical stage programs primarily due to completing Phase 2 enrollment for our ongoing ADC trials for mecbotamab vedotin and ozuriftamab vedotin, and a $0.8 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, offset by a $0.6 million increase in personnel related costs.

Current wording

Research and development expenses were $51.4 million and $81.1 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease of approximately $29.6 million was primarily driven by a $15.2 million decrease in development costs for our pre-clinical programs primarily BA3142, our CAB B7H3 x CD3 bispecific program, and BA3361, our CAB Nectin-4 ADC program, a $7.8 million decrease in manufacturing costs for evalstotug, a $7.6 million decrease in development costs for our clinical stage programs primarily due to completing Phase 2 enrollment for our ongoing ADC trials for mecbotamab vedotin and ozuriftamab vedotin, a $1.0 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, and a $0.3 million decrease in travel and other expenses. This was offset by $1.8 million in related party expense incurred in connection with the licensing agreement with Context Therapeutics in September 2024, which is further discussed in Note 7 and Note 8 to our financial statements, and by a $0.6 million increase in personnel related costs.

Previous wording

Interest income was $2.1 million and $2.9 million for the six months ended June 30, 2024 and 2023, respectively. The decrease of $0.8 million was due to lower cash and cash equivalents compared to the same period in 2023.

Current wording

Interest income was $2.8 million and $4.7 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease of $1.9 million was due to lower cash and cash equivalents compared to the same period in 2023.

Previous wording

We have incurred aggregate net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. Since July 2020, we have funded our operations primarily through the issuance of equity. As of June 30, 2024, we had cash and cash equivalents of $61.7 million.

Current wording

We have incurred aggregate net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. Since July 2020, we have funded our operations primarily through the issuance of equity and via collaborations and licenses. As of September 30, 2024, we had cash and cash equivalents of $56.5 million.

Previous wording

We will require additional funding in order to complete development of our product candidates and commercialize our products, if approved. We may seek to raise any necessary additional capital through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. We cannot assure you that, in the event we require additional financing, such financing will be available at acceptable terms to us, if at all. Failure to generate sufficient cash flows from operations, raise additional capital, and reduce discretionary spending should additional capital not become available could have a material adverse effect on our ability to achieve our intended business objectives. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated preclinical studies and clinical trials. To the extent that we raise additional capital through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates. We may also have to forego future revenue streams of research programs at an earlier stage of development or on less favorable terms than we would otherwise choose, or have to grant licenses on terms that may not be favorable to us. Our ability to raise additional funds will depend on financial, economic and other factors, many of which are beyond our control. For example, market volatility resulting from a variety of causes, including supply chain disruptions, and geopolitical disruptions, including the recent conflict between Russia and Ukraine and the conflict between Israel and Hamas, could adversely impact our ability to access capital as and when needed. We may choose to raise additional capital through the issuance of equity or convertible debt securities due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent we issue additional shares of common stock or other equity or convertible debt securities in the future, there will be further dilution to our investors and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, acquiring other businesses, products or technology, or declaring dividends. If we are unable to obtain additional funding from these or other sources, it may be necessary to significantly reduce our rate of spending through reductions in staff and delay, scale back or stop cert…

Excerpt shortened here; the source contains the full paragraph.

Current wording

We will require additional funding in order to complete development of our product candidates and commercialize our products, if approved. We may seek to raise any necessary additional capital through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. We cannot assure you that, in the event we require additional financing, such financing will be available at acceptable terms to us, if at all. Failure to generate sufficient cash flows from operations, raise additional capital, and reduce discretionary spending should additional capital not become available could have a material adverse effect on our ability to achieve our intended business objectives. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated preclinical studies and clinical trials. To the extent that we raise additional capital through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates. We may also have to forego future revenue streams of research programs at an earlier stage of development or on less favorable terms than we would otherwise choose, or have to grant licenses on terms that may not be favorable to us. Our ability to raise additional funds will depend on financial, economic and other factors, many of which are beyond our control. For example, market volatility resulting from a variety of causes, including supply chain disruptions, and geopolitical disruptions, including the recent conflict between Russia and Ukraine and the wars between Israel and the terrorist groups Hamas and Hezbollah, could adversely impact our ability to access capital as and when needed. We may choose to raise additional capital through the issuance of equity or convertible debt securities due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent we issue additional shares of common stock or other equity or convertible debt securities in the future, there will be further dilution to our investors and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, acquiring other businesses, products or technology, or declaring dividends. If we are unable to obtain additional funding from these or other sources, it may be necessary to significantly reduce our rate of spending through reductions in staff and…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2024 was $50.0 million, which consisted of a net loss of $44.3 million, a net change of $11.0 million in our operating assets and liabilities and $5.3 million of non-cash transactions. The net change in our operating assets and liabilities was primarily due to a decrease in accounts payable and accrued expenses of $10.9 million and a net decrease in operating lease right-of-use assets and lease liabilities of $0.3 million, partially offset by a decrease in prepaid expenses and other assets of $0.3 million. The non-cash transactions primarily consisted of $4.8 million of stock-based compensation and non-cash charges of $0.5 million related to depreciation and amortization.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2024 was $55.2 million, which consisted of a net loss of $54.9 million, a net change of $7.9 million in our operating assets and liabilities and $7.7 million of non-cash transactions. The net change in our operating assets and liabilities was primarily due to a decrease in accounts payable and accrued expenses of $8.5 million and a net decrease in operating lease right-of-use assets and lease liabilities of $0.5 million, partially offset by an increase in prepaid expenses and other assets of $1.0 million. The non-cash transactions primarily consisted of $7.0 million of stock-based compensation and non-cash charges of $0.7 million related to depreciation and amortization.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2023 was $46.7 million, which consisted of a net loss of $63.2 million, a net change of $8.6 million in our operating assets and liabilities and $7.9 million of non-cash transactions. The net change in our operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $10.6 million, partially offset by an increase in prepaid expenses and other assets of $1.7 million and a net decrease in operating lease right-of-use assets and lease liabilities of $0.3 million. The non-cash transactions primarily consisted of $7.3 million of stock-based compensation and non-cash charges of $0.6 million related to depreciation and amortization.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2023 was $74.1 million, which consisted of a net loss of $96.5 million, a net change of $10.8 million in our operating assets and liabilities and $11.7 million of non-cash transactions. The net change in our operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $12.5 million, partially offset by an increase in prepaid expenses and other assets of $1.3 million and a net decrease in operating lease right-of-use assets and lease liabilities of $0.4 million. The non-cash transactions primarily consisted of $10.8 million of stock-based compensation and non-cash charges of $0.9 million related to depreciation and amortization.

Previous wording

Cash used in investing activities was $0 for the six months ended June 30, 2024. Cash used in investing activities for the six months ended June 30, 2023 was $65,000, related to the purchase of property and equipment.

Current wording

Cash used in investing activities was $0 for the nine months ended September 30, 2024. Cash used in investing activities for the nine months ended September 30, 2023 was $90,000, related to the purchase of property and equipment.

Previous wording

Net cash provided by financing activities was $0.2 million for the six months ended June 30, 2024, consisting primarily of the proceeds from the issuance of common stock under the ESPP and the 2020 Plan, partially offset by the payment of taxes related to the net settlement of restricted stock units.

Current wording

Net cash provided by financing activities was $0.2 million for the nine months ended September 30, 2024, consisting primarily of the proceeds from the issuance of common stock under the ESPP and the 2020 Plan, partially offset by the payment of taxes related to the net settlement of restricted stock units.

Previous wording

Net cash used in financing activities was immaterial for the six months ended June 30, 2023, consisting primarily of the proceeds from the issuance of common stock under the ESPP and the 2020 Plan, offset by payment of taxes related to the net settlement of restricted stock units.

Current wording

Net cash used in financing activities was immaterial for the nine months ended September 30, 2023, consisting primarily of the proceeds from the issuance of common stock under the ESPP and the 2020 Plan, offset by payment of taxes related to the net settlement of restricted stock units.

Previous wording

Our critical accounting policies are those accounting principles generally accepted in the United States that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. For a description of our critical accounting policies, see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” contained in our Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

Our critical accounting policies are those accounting principles generally accepted in the United States that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. For a description of our critical accounting policies, see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” contained in our Annual Report on Form 10-K for the year ended December 31, 2023. There have not been any material changes to the critical accounting policies discussed therein during the nine months ended September 30, 2024.