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What changed in BioXcel Therapeutics, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of BioXcel Therapeutics, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+1015 added−733 removedSource: 10-K (2024-03-22) vs 10-K (2023-03-16)

Top changes in BioXcel Therapeutics, Inc.'s 2023 10-K

1015 paragraphs added · 733 removed · 547 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

207 edited+114 added−103 removed262 unchanged
Biggest changeOur advanced immuno-oncology asset, BXCL701, is an investigational, oral innate immune activator currently being developed as a potential therapy for the treatment of aggressive forms of prostate cancer, pancreatic cancer, and other solid and liquid tumors.
Biggest changeAs described further below, we have deprioritized the development of BXCL501 for certain other proposed indications, including development of BXCL501 as a potential adjunctive treatment for major depressive disorder (“MDD”), as well as our BXCL701 program, except as noted under “Immuno-Oncology” below. ​ Our most advanced immuno-oncology candidate, BXCL701, is an investigational oral innate immune activator being developed by OnkosXcel as a potential therapy for the treatment of aggressive forms of prostate cancer, pancreatic cancer, and other solid and liquid tumors. ​ Neuroscience Our Neuroscience Strategy Our goal is to become the leading AI-enabled neuroscience therapeutics company.
Initial focus on mCRPC with SCNC phenotype designed to provide for a more efficient clinical development pathway than current industry standards. BXCL701 as a potential treatment for mCRPC Prostate cancer is the most common malignancy and the second-leading cause of cancer-related deaths in men in the U.S.
The initial focus on mCRPC with SCNC phenotype is designed to provide for a more efficient clinical development pathway than current industry standards. BXCL701 as a Potential Treatment for mCRPC Prostate cancer is the most common malignancy and the second-leading cause of cancer-related deaths in men in the U.S.
However, an estimated 20% of these newly diagnosed cases will progress to the more aggressive metastatic disease. The five-year survival rate for men with metastatic prostate cancer drops significantly, to approximately 30%. Approximately 20% of patients with mCRPC will develop SCNC phenotype, which is characterized by poor prognosis and low survival rate with a five-year life expectancy of 14%.
However, an estimated 20% of these newly diagnosed cases will progress to the more aggressive metastatic disease. The five-year survival rate for men with metastatic prostate cancer drops significantly, to approximately 30%. Approximately 20% of patients with mCRPC will develop the SCNC phenotype, which is characterized by poor prognosis and low survival rate with a five-year life expectancy of 14%.
We are continuing to leverage our platform to identify and develop new neuroscience and immuno-oncology programs. 9 Table of Contents Our Neuroscience Programs The following is a summary of the status of our neuroscience clinical development programs as of the date of this Annual Report on Form 10-K: As a selective adrenergic agent with a sublingual or buccal route of administration, BXCL501 is designed to be easy to administer and has shown a rapid onset of action in multiple clinical trials, including clinical trials studying patients with schizophrenia, bipolar disorders, and dementia.
We are continuing to leverage our platform to identify and develop new neuroscience and immuno-oncology programs. 10 Table of Contents Our Neuroscience Programs The following is a summary of the status of our neuroscience clinical development programs as of the date of this Annual Report on Form 10-K: ​ ​ As a selective adrenergic agent with a sublingual or buccal route of administration, BXCL501 is designed to be easy to administer and has shown a rapid onset of action in multiple clinical trials, including clinical trials studying patients with schizophrenia, bipolar disorders, and dementia.
Virtually all patients who respond to ZYTIGA and XTANDI are expected to progress to even more aggressive forms of prostate cancer requiring further treatment. Patients whose disease has progressed after treatment with these second-generation targeted endocrine therapies are administered a docetaxel containing drug regimen that provides a survival benefit of only 10 months.
Virtually all patients who initially respond to ZYTIGA and XTANDI are expected to progress to even more aggressive forms of prostate cancer requiring further treatment. Patients whose disease has progressed after treatment with these second-generation targeted endocrine therapies are administered a docetaxel containing drug regimen that provides a survival benefit of only 10 months.
Moreover, because of the extensive time required for development, testing, and regulatory review of a potential product, it is possible that, before any product candidate can be commercialized, any patent protection for such product may expire or remain in force for only a short period following commercialization, thereby reducing the commercial advantage the patent provides.
Moreover, because of the extensive time required for development, testing, and regulatory review of a potential product, it is possible that, before any particular product candidate can be commercialized, any patent protection for such product may expire or remain in force for only a short period following commercialization, thereby reducing the commercial advantage the patent provides.
IGALMI and any of our other product candidates that are approved, if any, will compete with the drugs discussed below, in addition to any other drugs currently in development. Drugs used for the acute treatment of agitation related to schizophrenia and bipolar disorder are antipsychotics frequently administered via IM injection that typically requires patient restraint.
IGALMI TM and any of our other product candidates that are approved, if any, will compete with the drugs discussed below, in addition to any other drugs currently in development. Drugs used for the acute treatment of agitation related to schizophrenia and bipolar disorder are antipsychotics frequently administered via IM injection that typically requires patient restraint.
The application for orphan drug designation must be submitted before the MAA. Orphan designation entitles a party to incentives such fee reductions or fee waivers, protocol assistance, and access to the Centralized MA process. Upon grant of a MA, orphan medicinal products are entitled to 10 years of market exclusivity for the approved therapeutic indication.
The application for orphan drug designation must be submitted before the MAA. Orphan designation entitles a party to incentives such as fee reductions or fee waivers, protocol assistance, and access to the Centralized MA process. Upon grant of a MA, orphan medicinal products are entitled to 10 years of market exclusivity for the approved therapeutic indication.
In addition, a number of men, both newly diagnosed patients and men whose disease has progressed after second-generation targeted endocrine therapy, will develop an aggressive tumor that expresses very little AR and accordingly does not respond to therapeutics targeting the AR signaling pathway.
In addition, a number of men, both newly diagnosed patients and men whose disease has progressed after second-generation targeted endocrine therapy, will develop an aggressive tumor that typically expresses very little AR and accordingly does not respond to therapeutics targeting the AR signaling pathway.
If IGALMI is approved outside the U.S., we would consider launching the product through collaborations with third parties. Our continued commercialization efforts for IGALMI are designed to build the foundation to launch additional potential follow-on indications, if any, paving the way for our expanding neuroscience business.
If IGALMI TM is approved outside the U.S., we would consider launching the product through collaborations with third parties. Our continued commercialization efforts for IGALMI TM are designed to build the foundation to launch additional potential follow-on indications, if any, paving the way for our expanding neuroscience business.
In addition, we expect that federal, state and local governments in the U.S. will continue to consider legislation to limit the growth of health care costs, including the cost of prescription drugs. Future legislation could limit payments for pharmaceuticals such as IGALMI and the product candidates that we are developing.
In addition, we expect that federal, state, and local governments in the U.S. will continue to consider legislation to limit the growth of health care costs, including the cost of prescription drugs. Future legislation could limit payments for pharmaceuticals such as IGALMI TM and the product candidates that we are developing.
ARx has agreed to exclusively manufacture and supply all of our worldwide supply of film formulation of dexmedetomidine to be used for the commercial supply of IGALMI and for ongoing clinical trials of BXCL501, subject to certain alternative supply provisions. BXCL501 drug product is manufactured using commercially available components and packaging materials.
ARx has agreed to exclusively manufacture and supply all of our worldwide supply of film formulation of dexmedetomidine to be used for the commercial supply of IGALMI TM and for ongoing clinical trials of BXCL501, subject to certain alternative supply provisions. BXCL501 drug product is manufactured using commercially available components and packaging materials.
Furthermore, there has been increased interest by third party payors and governmental authorities in reference pricing systems and publication of discounts and list prices. Future legislation could limit payments for pharmaceuticals such as IGALMI and the product candidates that we are developing.
Furthermore, there has been increased interest by third-party payors and governmental authorities in reference pricing systems and publication of discounts and list prices. Future legislation could limit payments for pharmaceuticals such as IGALMI TM and the product candidates that we are developing.
The sublingual or buccal route of administration is an accepted alternative to oral administration of drug delivery to the central nervous system when rapid onset or more controlled delivery is required. Currently, there are six products approved for film administration, including our product, IGALMI.
The sublingual or buccal route of administration is an accepted alternative to oral administration of drug delivery to the central nervous system when rapid onset or more controlled delivery is required. Currently, there are six products approved for film administration, including our product, IGALMI TM .
Currently approved checkpoint inhibitors (“CPIs”) that target programmed cell death 1 (“PD-1”), or cytotoxic T-lymphocyte-associated protein 4 have failed to demonstrate meaningful single-agent activity against such difficult-to-treat tumor types, including mCRPC.
Currently approved checkpoint inhibitors (“CPIs”) that target programmed cell death 1 (“PD-1”) or cytotoxic T-lymphocyte-associated protein 4 (“CTLA-4") have failed to demonstrate meaningful single-agent activity against such difficult-to-treat tumor types, including mCRPC.
Changes in either the patent laws or their interpretation in the U.S. and other countries may diminish our ability to protect our technology or product candidates and enforce the patent rights that we license and could affect the value of such intellectual property.
Changes in either the patent laws or their interpretation in the U.S. and other countries may diminish our ability to protect our technology or product candidates and enforce the patent rights that we license, and also could affect the value of such intellectual property.
Any application for a drug submitted to the FDA for approval, including a product candidate with a Fast Track designation and/or Breakthrough Therapy designation, may be eligible for other FDA review programs intended to expedite the FDA review and approval process, such as priority review and accelerated approval.
Any application for a drug submitted to the FDA for approval, including a product candidate with a Fast Track designation and/or Breakthrough Therapy designation, may be eligible for other FDA review programs intended to expedite the FDA review and approval process, such as priority review.
The U.S. government and other governments have shown significant interest in pursuing health care reform, which has resulted in changes to these programs and impacts IGALMI and our product candidates that may be approved.
The U.S. government and other governments have shown significant interest in pursuing health care reform, which has resulted in changes to these programs and impacts IGALMI TM and our product candidates that may be approved.
For additional information regarding intellectual property regulations and risks, see above under “—Neuroscience—Neuroscience Intellectual Property” and Part I, Item 1A, “Risk Factors - Risks Related to Our Intellectual Property.” Our Relationship with BioXcel LLC BioXcel LLC currently holds an ownership interest of approximately 30% in the Company and our pipeline compounds were identified by applying our growing internal AI capabilities, along with BioXcel LLC’s EvolverAI, a proprietary pharmaceutical discovery and development engine, for drug re-innovation.
For additional information regarding intellectual property regulations and risks, see above under “—Neuroscience—Neuroscience Intellectual Property” and Part I, Item 1A, “Risk Factors - Risks Related to Our Intellectual Property.” Our Relationship with BioXcel LLC BioXcel LLC currently holds an ownership interest of approximately 29% in the Company and our pipeline compounds were identified by applying our growing internal AI capabilities, along with BioXcel LLC’s EvolverAI, a proprietary pharmaceutical discovery and development engine, for drug re-innovation.
The Physician Payment Sunshine Act (the “Sunshine Act”), which was enacted as part of the ACA, requires applicable manufacturers of drugs, devices, biologicals, or medical supplies covered under Medicare, Medicaid or the Children’s Health Insurance Program, to report annually to the Secretary of the Department of Health and Human Services payments or other transfers of value made by that entity, or by a third-party as directed by that entity, to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician providers including physician assistants and nurse practitioners, and teaching hospitals, or to third parties on behalf of such providers, as well as ownership and investment interests held by physicians and their immediate family members during the course of the preceding calendar year.
The Physician Payment Sunshine Act (the “Sunshine Act”), which was enacted as part of the ACA, requires applicable manufacturers of drugs, devices, biologicals, or medical supplies covered under Medicare, Medicaid or the Children’s Health Insurance Program, to report annually to the Secretary of the Department of Health and Human Services payments or other transfers of value made by that entity, or by a third-party as directed by that entity, to 52 Table of Contents physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors), certain non-physician providers including physician assistants and nurse practitioners, and teaching hospitals, or to third parties on behalf of such providers, as well as ownership and investment interests held by physicians and their immediate family members during the course of the preceding calendar year.
BXCL701 Innate Immune Activator BXCL701 (talabostat) is an oral small molecule inhibitor of a class of enzymes called DPPs, specifically DPP8/9 and DPP4. Inhibition of DPP8/9 initiates activation of the inflammasome and ultimately activation of the innate immune system.
BXCL701 Innate Immune Activator BXCL701 is an oral small molecule inhibitor of a class of enzymes called DPPs, specifically DPP8/9 and DPP4. Inhibition of DPP8/9 initiates activation of the inflammasome and ultimately activation of the innate immune system.
Other potential consequences include, among other things: ● restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; ● fines, warning letters, or untitled letters; ● clinical holds on clinical studies; ● refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product approvals; 42 Table of Contents ● product seizure or detention, or refusal to permit the import or export of products; ● consent decrees, corporate integrity agreements, debarment or exclusion from federal health care programs; ● mandated modification of promotional materials and labeling and the issuance of corrective information; ● the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or ● injunctions or the imposition of civil or criminal penalties.
Other potential consequences include, among other things: ● Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market, or product recalls; ● fines, warning letters, or untitled letters; ● clinical holds on clinical studies; ● refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product approvals; ● product seizure or detention, or refusal to permit the import or export of products; ● consent decrees, corporate integrity agreements, debarment or exclusion from federal health care programs; ● mandated modification of promotional materials and labeling and the issuance of corrective information; ● the issuance of safety alerts, Dear Healthcare Provider letters, press releases, and other communications containing warnings or other safety information about the product; or ● injunctions or the imposition of civil or criminal penalties.
Review and Approval Process Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, preclinical and other non-clinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling and other relevant information are submitted to the FDA as part of an NDA requesting approval to market the product.
Review and Approval Process Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, including results from preclinical and other non-clinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling and other relevant information are submitted to the FDA as part of an NDA requesting approval to market the product.
We are supporting a Phase 2 IST sponsored by the Georgetown Lombardi Comprehensive Cancer Center (“Georgetown Lombardi”), designed to evaluate the use of BXCL701 along with pembrolizumab to treat pancreatic cancer. Few therapeutic options are available for patients with this indication, which has a five-year survival rate of less than 10%, among the lowest of all cancers.
We are supporting a Phase 2 IST sponsored by Georgetown Lombardi Comprehensive Cancer Center (“Georgetown Lombardi”), designed to evaluate the use of BXCL701 along with pembrolizumab to treat pancreatic cancer. Few therapeutic options are available for patients with this disease, which has a five-year survival rate of less than 10%, among the lowest of all cancers.
Data and Marketing Exclusivity The EU also provides opportunities for market exclusivity. Upon receiving a MA, reference product generally receives eight years of data exclusivity and an additional two years of market exclusivity.
Data and Marketing Exclusivity The EU also provides opportunities for market exclusivity. Upon receiving an MA, reference product generally receives eight years of data exclusivity and an additional two years of market exclusivity.
The overall 10-year market exclusivity period can be extended to a maximum of eleven years if, during the first eight years of those 10 years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.
The overall 10-year market exclusivity period can be extended to a maximum of 11 years if, during the first eight years of those 10 years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.
Often, the terminal disclaimer is filed in cases where at least one claim of a pending application would have been obvious in light of at least one claim in an earlier-filed patent, AKA non-statutory obviousness-type double patenting rejection. The patent positions of companies such as ours are generally uncertain and involve complex legal and factual questions.
Often, the terminal disclaimer is filed in cases where at least one claim of a pending application would have been obvious in light of at least one claim in an earlier-filed patent, (or non-statutory obviousness-type double patenting rejection). The patent positions of companies such as ours are generally uncertain and involve complex legal and factual questions.
Central to our drug discovery initiatives are proprietary, AI-driven platform technologies we employ to identify novel therapeutic uses for approved therapeutics and candidates in clinical evaluation. The first and more advanced of our AI-driven discovery programs is our innate immune modulation program, which supported the pursuit of BXCL701 as a development candidate.
Central to our drug discovery initiatives are proprietary, AI-driven platform technologies we employ to identify novel therapeutic uses for approved therapeutics and candidates in clinical evaluation. The first and most advanced of our AI-driven discovery programs is our innate immune modulation program, which supported the pursuit of BXCL701 as a development candidate.
The IVDR introduces a new classification system for companion diagnostics which are now specifically defined as diagnostic tests that support the safe and effective use of a specific medicinal product, by identifying patients that are suitable or unsuitable for treatment. Companion diagnostics will have to undergo a conformity assessment by a notified body.
The IVDR introduced a new classification system for companion diagnostics, which are now specifically defined as diagnostic tests that support the safe and effective use of a specific medicinal product, by identifying patients that are suitable or unsuitable for treatment. Companion diagnostics will have to undergo a conformity assessment by a notified body.
The parties 36 Table of Contents are obligated to negotiate the collaborative services agreement in good faith and to incorporate reasonable market-based terms, including consideration for BioXcel LLC reflecting a low, single-digit royalty on net sales and reasonable development and commercialization milestone payments, provided that (i) development milestone payments shall not exceed $10 million in the aggregate and not be payable prior to proof of concept in humans and (ii) commercialization milestone payments shall be based on reaching annual net sales levels, be limited to 3% of the applicable net sales level, and not exceed $30 million in the aggregate.
The parties are obligated to negotiate the collaborative services agreement in good faith and to incorporate reasonable market-based terms, including consideration for BioXcel LLC reflecting a low, single-digit royalty on net sales and reasonable development and commercialization milestone payments, provided that (i) development milestone payments shall not exceed $10 million in the aggregate and not be payable prior to proof of concept in humans and (ii) commercialization milestone payments shall be based on reaching annual net sales levels, be limited to 3% of the applicable net sales level, and not exceed $30 million in the aggregate.
We believe the combination of AI and drug discovery and development expertise facilitates the generation of therapeutic candidates and gives us a significant competitive advantage. 8 Table of Contents Our approach is illustrated below: We continue to integrate and evolve our neuroscience and immuno-oncology AI machine learning and drug discovery and development platform.
We believe the combination of AI and drug discovery and development expertise facilitates the generation of therapeutic candidates and gives us a significant competitive advantage. ​ 9 Table of Contents Our approach is illustrated below: We continue to integrate and evolve our neuroscience and immuno-oncology AI machine learning and drug discovery and development platform.
Accordingly, we believe BXCL701 may have utility in stimulating increased activation, proliferation, and infiltration of tumor cells by immune effector cells, enabling its potential application in combination with currently approved CPIs, across a range of hematological malignancies and solid tumors, to potentially: • Convert immunological cold tumors into ones sensitive to CPIs; • Enhance hot tumors’ response rate and depth of response to CPIs; and 19 Table of Contents • Restore CPI sensitivity to tumors that were previously responsive.
Accordingly, we believe BXCL701 may have utility in stimulating increased activation, proliferation, and infiltration of tumor cells by immune effector cells, enabling its potential application in combination with currently approved CPIs, across a range of solid tumors and hematological malignancies, to potentially: ● Convert immunological cold tumors into ones sensitive to CPIs; ● Enhance hot tumors’ response rate and depth of response to CPIs; and ● Restore CPI sensitivity to tumors that were previously responsive.
Physicians may prescribe, in their independent professional medical judgment, legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances.
Physicians may prescribe, in their independent professional medical judgment, legally available products for uses that are not described in the product’s labeling and that differ from those approved by the FDA. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances.
The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products. However, companies may share truthful and not misleading information that is otherwise consistent with a product’s FDA-approved labelling.
The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturers’ communications on the subject of off-label use of their products. However, companies may share truthful and not misleading information that is otherwise consistent with a product’s FDA-approved labelling.
The Hatch-Waxman Act establishes periods of regulatory exclusivity for certain approved drug products, during which the FDA cannot approve (or in some cases accept) an ANDA or 505(b)(2) application that relies on the branded reference drug.
The Hatch-Waxman Act establishes periods of non-patent regulatory exclusivity for certain approved drug products, during which the FDA cannot approve (or in some cases accept) an ANDA or 505(b)(2) application that relies on the branded reference drug.
Orphan drug designation and exclusivity Under the Orphan Drug Act, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 individuals in the U.S., or a 41 Table of Contents patient population greater than 200,000 individuals in the U.S. and when there is no reasonable expectation that the cost of developing and making available the drug in the U.S. will be recovered from sales in the U.S. for that drug.
Orphan Drug Designation and Exclusivity Under the Orphan Drug Act, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 individuals in the U.S., or a patient population greater than 200,000 individuals in the U.S. and when there is no reasonable expectation that the cost of developing and making available the drug in the U.S. will be recovered from sales in the U.S. for that drug.
The Hatch-Waxman Act also provides three years of marketing exclusivity to the holder of an NDA (including a 505(b)(2) NDA) for a particular condition of approval, or change to a marketed product, such as a new formulation for a previously approved product, if one or more new clinical studies (other than bioavailability or bioequivalence studies) was essential to the approval of the application and was conducted or sponsored by the applicant.
The Hatch-Waxman Act also provides three years of non-patent exclusivity to the holder of an NDA (including a 505(b)(2) NDA) for a particular condition of approval, or change to a marketed product, such as a new formulation for a previously approved product, if one or more new clinical studies (other than bioavailability or bioequivalence studies) was essential to the approval of the application and was conducted or sponsored by the applicant.
The primary endpoint of the Phase 2a portion of this trial was a composite response rate, determined as either a RECIST 1.1 response (defined as a reduction in RECIST score of 30% or more), a reduction in prostate specific antigen (“PSA”) level of 50% or more, or conversion in circulating tumor cells (“CTCs”) from 5 or more CTCs/7.5 milliliter (“ml”) to less than 5 CTCs/7.5ml.
The primary endpoint of the Phase 2a portion of this trial was a composite response rate, determined as either a RECIST 1.1 response (defined as a reduction in RECIST score of 30% or more), and/or a reduction in prostate specific antigen (“PSA”) level of 50% or more, and/or a conversion in circulating tumor cells (“CTCs”) from 5 or more CTCs/7.5 milliliter (“ml”) to less than 5 CTCs/7.5 ml.
Additionally, product candidates studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated approval upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
Additionally, depending on the design of the applicable clinical studies, product candidates studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated approval upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. In addition, during the development of a drug, sponsors are given opportunities to periodically meet with or seek feedback from the FDA.
In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. 39 Table of Contents In addition, during the development of a drug, sponsors are given opportunities to periodically meet with or seek feedback from the FDA.
The implementation of cost containment 51 Table of Contents measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products. Other Health Care Laws and Compliance Requirements For approved products, we may be subject to various federal, state and foreign laws targeting fraud and abuse in the health care industry.
The implementation of cost-containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products. Other Health Care Laws and Compliance Requirements For approved products, we may be subject to various federal, state, and foreign laws targeting fraud and abuse in the health care industry.
Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance. The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance. 42 Table of Contents The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
The process required by the FDA before a drug may be marketed in the U.S. generally involves the following: ● completion of preclinical laboratory tests , animal studies and formulation studies in accordance with FDA’s Good Laboratory Practice requirements and other applicable regulations; ● submission to the FDA of an IND which must become effective before human clinical trials may begin; ● approval by an independent Institutional Review Board (“IRB”), or ethics committee at each clinical site before each clinical trial may be initiated; ● performance of adequate and well-controlled human clinical trials in accordance with good clinical practices (“GCPs”), to establish the safety and efficacy of the proposed drug for its intended use ; ● preparation of and submission to the FDA of an NDA after completion of all pivotal clinical trials; ● a determination by the FDA within 60 days of its receipt of an NDA to file the application for review ● satisfactory completion of an FDA advisory committee review, if applicable; ● satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current Good Manufacturing Practice (“cGMP”) requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity , and potential inspection of selected clinical investigation sites to assess compliance with GCPs ; and ● FDA review and approval of the NDA to permit commercial marketing of the product for specified indications for use in the U.S . 37 Table of Contents Prior to beginning the first clinical trial with a product candidate in the U.S., a sponsor must submit an IND to the FDA.
The process required by the FDA before a drug may be marketed in the U.S. generally involves the following: ● completion of preclinical laboratory tests, animal studies, and formulation studies in accordance with FDA’s Good Laboratory Practice requirements and other applicable regulations; ● submission to the FDA of an IND, which must become effective before human clinical trials may begin; ● approval by an independent Institutional Review Board (“IRB”) or ethics committee at each clinical site before each clinical trial may be initiated; ● performance of adequate and well-controlled human clinical trials in accordance with good clinical practices (“GCPs”) to establish the safety and efficacy of the proposed drug for its intended use; ● preparation of and submission to the FDA of an NDA after completion of all pivotal clinical trials; ● a determination by the FDA within 60 days of its receipt of an NDA to file the application for review; ● satisfactory completion of an FDA advisory committee review, if applicable; ● satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current Good Manufacturing Practice (“cGMP”) requirements to assure that the facilities, methods, and controls are adequate to preserve the drug’s identity, strength, quality and purity, and potential inspection of selected clinical investigation sites to assess compliance with GCPs; and ● FDA review and approval of the NDA to permit commercial marketing of the product for specified indications for use in the U.S.
Key characteristics of BXCL701 include: ● Orally bioavailable, potentially sole inhibitor of both DPP8/9 and DPP4, key regulators of the inflammasome directed innate immune response, currently in clinical development for cancer. ● Novel proposed mechanism of action may complement CPI activity, enabling therapeutic access to immunologically cold tumors as well as other difficult-to-treat cancers, including relapsed or refractory tumor types. ● Phase 2 clinical proof-of-concept achieved in treating mCRPC patients with either adenocarcinoma or SCNC phenotype.
Key characteristics of BXCL701 include: ● Orally bioavailable, potentially sole inhibitor of both DPP8/9 and DPP4, key regulators of the inflammasome directed innate immune response, currently in clinical development for cancer. 26 Table of Contents ● Novel proposed mechanism of action may complement CPIs activity, enabling therapeutic access to immunologically cold tumors as well as other difficult-to-treat cancers, including relapsed or refractory tumor types. ● Phase 2 clinical proof-of-concept achieved in treating mCRPC patients with either adenocarcinoma or SCNC phenotype.
The equipment employed for manufacture and analysis are consistent with standard pharmaceutical production. Neuroscience Commercialization We plan to retain worldwide commercialization rights for IGALMI and other approved product candidates, if any, but could consider collaboration opportunities to maximize returns or facilitate commercialization efforts in foreign jurisdictions.
The equipment employed for manufacture and analysis is consistent with standard pharmaceutical production. Neuroscience Commercialization We plan to retain worldwide commercialization rights for IGALMI TM and other approved product candidates, if any, but could consider collaboration opportunities to maximize returns or facilitate commercialization efforts in foreign jurisdictions.
We have applications pending in the U.S., Europe and Japan directed to methods of treating insomnia using sublingual Dex. We expect that patents issuing from these applications, if any, will expire no earlier than 2035. We also have applications filed in 16 regions, including the U.S., Europe, Japan, and China, directed to methods of treating agitation.
We have applications pending in the U.S., Europe and Japan directed to methods of treating insomnia using sublingual Dex. We expect that patents issued from these applications, if any, will expire no earlier than 2035. We also have applications filed in 16 regions/countries, including the U.S., Europe, Japan, and China, directed to methods of treating agitation.
Prostate cancer with this phenotype is referred to as SCNC, for which there is currently no effective treatment. The incidence of SCNC is increasing with the widespread use 23 Table of Contents of AR inhibitor therapy. Treatment protocols for patients with SCNC typically involve cytotoxic chemotherapies despite their short duration of response and considerable toxicities.
Prostate cancer with this phenotype is referred to as SCNC, for which there is currently no effective treatment. The incidence of SCNC is increasing with the widespread use of AR inhibitor therapy. Treatment protocols for patients with SCNC typically involve cytotoxic chemotherapies despite their short duration of response and considerable toxicities.
These interactions can provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice, and for the sponsor and the FDA to reach alignment on the next phase of development.
These interactions can provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice, and for the sponsor and the FDA to reach alignment on the next phase of development. U.S.
Unless an exemption applies, medical devices, including companion diagnostic tests, require marketing clearance or approval from the FDA prior to commercial distribution. 44 Table of Contents The two primary types of FDA marketing authorization applicable to a medical device are premarket notification (“510(k) clearance”) and premarket approval (“PMA”).
Unless an exemption applies, medical devices, including companion diagnostic tests, require marketing clearance or approval from the FDA prior to commercial distribution. The two primary types of FDA marketing authorization applicable to a medical device are premarket notification (“510(k) clearance”) and premarket approval (“PMA”).
We also plan to rely on data exclusivity, market exclusivity, and patent term extensions when available. We have multiple patent families filed to protect our neuroscience portfolio including the BXCL501 program.
We also plan to rely on data exclusivity, market exclusivity, and patent term extensions when available. We have multiple patent families filed to protect our Neuroscience program, including BXCL501.
Regulation of Companion Diagnostics In the EU, in vitro diagnostic medical devices are regulated by Directive 98/79/EC which regulates the placing on the market, the CE marking, the essential requirements, the conformity assessment procedures, the registration obligations for manufacturers and devices, as well as the vigilance procedure.
Regulation of Companion Diagnostics In the EU, in vitro diagnostic medical devices were regulated by Directive 98/79/EC, which regulated the placing on the market, the CE marking, the essential requirements, the conformity assessment procedures, the registration obligations for manufacturers and devices, as well as the vigilance procedure.
In the U.S. and elsewhere, sales of pharmaceutical products depend in significant part on the availability of reimbursement to the consumer from third-party payors, such as government and private insurance plans. Third-party payors are increasingly challenging the prices charged for medical products and services.
In the U.S. and elsewhere, sales of pharmaceutical products depend in significant part on the availability of reimbursement to the consumer from third-party payors, such as government payors, like Medicare and Medicaid, and private insurance plans. Third-party payors are increasingly challenging the prices charged for medical products and services.
In addition, the scope of the rights granted under any issued patents may not provide us with protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may independently develop similar technologies outside the scope of the rights granted under any issued patents that we own or exclusively in license.
In addition, the scope of the rights granted under any issued patents may not provide us with protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may independently develop similar technologies outside the scope of the rights granted under any issued 21 Table of Contents patents that we own or exclusively in license.
Immune checkpoints represent a myriad of inhibitory pathways that act to regulate the duration and intensity of antigen-induced immune responses and factor prominently in mediating immune tolerance. A number of checkpoint molecules have been identified and studied in cancer therapy in the past decades.
Immune checkpoints represent a myriad of inhibitory pathways that act to regulate the duration and intensity of antigen-induced immune responses and factor prominently in mediating immune tolerance. A number of 24 Table of Contents checkpoint molecules have been identified and studied in cancer therapy in the past decades.
These penalties could include delays or refusal to authorize the conduct of clinical trials, or to grant MA, product withdrawals and recalls, product 48 Table of Contents seizures, suspension, withdrawal or variation of the MA, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.
These penalties could include delays or refusal to authorize the conduct of clinical trials, or to grant MA, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the MA, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines, and criminal penalties.
A REMS is a safety strategy to manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries, and other risk minimization tools.
A REMS is a safety strategy to manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries, and other 40 Table of Contents risk minimization tools.
The term of a patent can also be extended by Patent Term Adjustment (“PTA”) established in 35 USC 154(b). The intention of the PTA is to accommodate for delays caused by the USPTO during the prosecution of a U.S. utility or plant patent application.
The term of a patent can also be extended by Patent Term Adjustment (“PTA”) established in 35 U.S.C. 154(b). The intention of the PTA is to accommodate for delays caused by the USPTO during the prosecution of a US utility or plant patent application.
MAs have an initial duration of five years. After these five years, the authorization may be renewed on the basis of a reevaluation of the risk-benefit balance. Once renewed, the MA is valid for an unlimited period unless the European Commission or the national competent authority decides on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal.
After these five years, the authorization may be renewed on the basis of a reevaluation of the risk-benefit balance. Once renewed, the MA is valid for an unlimited period unless the European Commission or the national competent authority decides on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal.
In addition, individual states in the United States have also become increasingly active in implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures and, in some cases, mechanisms to encourage importation from other countries and bulk purchasing.
In addition, individual U.S. states have also become increasingly active in implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures and, in some cases, mechanisms to encourage importation from other countries and bulk purchasing.
According to the guidance, if the FDA determines that a companion diagnostic device is essential to the safe and effective use of a novel therapeutic product or indication, the FDA generally will not approve the therapeutic product or new therapeutic product indication if the companion diagnostic device is not approved or cleared for that indication.
According to the guidance, if the FDA determines that a 44 Table of Contents companion diagnostic device is essential to the safe and effective use of a novel therapeutic product or indication, the FDA generally will not approve the therapeutic product or new therapeutic product indication if the companion diagnostic device is not approved or cleared for that indication.
BXCL701 is designed to promote an immune induced inflammatory response in the TME primarily via inhibition of dipeptidyl peptidases (“DPP”) 8 and 9, which we believe can provide for enhanced CPI therapeutic utility.
BXCL701 is designed to promote an immune-induced inflammatory response in the TME primarily via inhibition of dipeptidyl peptidases (“DPP”) 8 and 9, which we believe can provide enhanced CPIs therapeutic utility.
If the ANDA or 505(b)(2) NDA applicant has provided a paragraph IV certification to the FDA, the applicant 43 Table of Contents must send notice of the paragraph IV certification to the NDA and patent holders once the application has been accepted for filing by the FDA.
If the ANDA or 505(b)(2) NDA applicant has provided a paragraph IV certification to the FDA, the applicant must send notice of the paragraph IV certification to the NDA and patent holders once the application has been accepted for filing by the FDA.
During the 10-year market exclusivity period, the competent authorities cannot accept a MAA, or grant a MA, or accept an application to extend a MA, for the same indication, in respect of a similar medicinal product.
During the 10-year market exclusivity period, the competent authorities cannot accept a MAA, or grant a 48 Table of Contents MA, or accept an application to extend a MA, for the same indication, in respect of a similar medicinal product.
T lymphocytes can be further segregated into distinct cell types, with the primary types 20 Table of Contents being CD8, or cytotoxic, T cells and CD4 T cells. CTLs directly eliminate cells that are infected with viruses or other pathogens or are otherwise damaged or dysfunctional. Anti-cancer activity is primarily CD8 T cell mediated.
T lymphocytes can be further segregated into distinct cell types, with the primary types being CD8, or cytotoxic, T cells and CD4 T cells. CTLs directly eliminate cells that are infected with viruses or other pathogens or are otherwise damaged or dysfunctional. Anti-cancer activity is primarily CD8 T cell mediated.
While numerous agents designed to target the earlier stages of an immune response are in development for use in combination with CPIs, their activity is restricted to a single component of the immune response.
While numerous agents designed to target the earlier stages of an immune response are in development for use in combination with CPIs, their activity is restricted to a single 22 Table of Contents component of the immune response.
We anticipate that we will continue to face increasing competition as new therapies and combinations thereof, technologies, and data emerge within the field of immunotherapy and, furthermore, within the treatment of infectious diseases and cancers.
We anticipate that we 35 Table of Contents will continue to face increasing competition as new therapies and combinations thereof, technologies, and data emerge within the field of immunotherapy and, furthermore, within the treatment of infectious diseases and cancers.
During each 21-day treatment cycle, 200mg of pembrolizumab were administered intravenously on day one, with BXCL701 taken twice daily on days one through 14, for a minimum of two cycles.
During each 21-day treatment cycle, 200 mg of pembrolizumab were administered intravenously on day one, with BXCL701 taken twice daily on days one through 14, for a minimum of two cycles.
Before it can issue a CE certificate, the notified body must seek a scientific opinion from the EMA on the suitability of the companion diagnostic to the medicinal product concerned if the medicinal product falls exclusively within the scope of the Centralized MA process for the authorization of medicines, or the medicinal product is already authorized through the Centralized MA process, or a MAA for the medicinal product has been submitted through the Centralized MA process.
Before it can issue an EU certificate, the notified body must seek a scientific opinion from the EMA on the suitability of the companion diagnostic to the medicinal product concerned if the medicinal product falls exclusively within the scope of the centralized procedure process for the authorization of medicines, or the medicinal product is already authorized through the centralized procedure process, or an MAA for the medicinal product has been submitted through the centralized procedure process.
We employ a proprietary AI platform to reduce therapeutic development costs and potentially accelerate development timelines. Our approach leverages existing approved drugs and/or clinically evaluated product candidates together with big data and proprietary machine learning algorithms to identify new therapeutic indications.
We employ various AI platforms to reduce therapeutic development costs and potentially accelerate development timelines. Our approach leverages existing approved drugs and/or clinically evaluated product candidates together with big data and proprietary machine learning algorithms to identify new therapeutic indications.
Currently approved CPIs, which target PD-1 and CTLA-4, have not demonstrated significant single-agent therapeutic utility.
Currently approved CPIs, which target PD-1 and CTLA-4, have not demonstrated significant single-agent therapeutic activity.
For other substances, the notified body can seek the opinion from a national competent authorities or the EMA. The aforementioned EU rules are generally applicable in the EEA. 49 Table of Contents Pharmaceutical Coverage, Pricing and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of drug products for which we obtain regulatory approval.
For other substances, the notified body can seek the opinion from a national competent authority or the EMA. The aforementioned EU rules are generally applicable in the EEA. Pharmaceutical Coverage, Pricing and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of drug products for which we obtain regulatory approval.
The trial protocol has been reviewed by 14 Table of Contents the FDA, as well as by the European Medicines Agency (“EMA”), to fulfill potential commitments to study the effects of BXCL501 in pediatric patients ages 13-17 with schizophrenia and ages 10-17 with bipolar disorders.
The trial protocol has been reviewed by the FDA, as well as by the European Medicines Agency, to fulfill potential commitments to study the effects of BXCL501 in pediatric patients ages 13 to 17 with schizophrenia and ages 10 to 17 with bipolar disorders.
These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval. 38 Table of Contents In some cases, the FDA may require, or companies may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product.
These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product labeling. In some cases, the FDA may require, or companies may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product.
The FDA may also determine that additional clinical trials are necessary, in which case the PMA may be delayed for several months or years while the trials are conducted and then the data submitted in an amendment to the PMA.
The FDA may also determine that additional clinical trials are necessary, in which case the PMA may be delayed for several 45 Table of Contents months or years while the trials are conducted and then the data submitted in an amendment to the PMA.
The IVDR was fully effective May 26, 2022, but there is a tiered system extending the grace period for many devices (depending on their risk classification) before they have to be fully compliant with the regulation.
The IVDR applies since May 26, 2022, but there is a tiered system extending the grace period for many devices (depending on their risk classification) before they have to be fully compliant with the Regulation.
Finally, with respect to neuropsychiatric indications, we prioritize those compounds with structural design features that may contribute to high blood-brain barrier permeability, which may increase the likelihood of compound penetration into the brain. Lack of brain penetration is a common cause for failure of many drugs developed for neuropsychiatric indications.
Finally, with respect to neuropsychiatric indications, we prioritize those compounds with structural design features that we believe may contribute to high blood-brain barrier permeability, and therefore could increase the likelihood of compound penetration into the brain. Lack of brain penetration is a common cause for failure of many drugs developed for neuropsychiatric indications.
It has been used to prevent or treat hyperactive delirium resulting from anesthesia in the ICU. Given these uses of the IV formulation of Dex, we believe Dex formulated in a sublingual film and at much lower doses will allow for ease of administration in settings where rapid acute treatment of agitation is needed.
It has been used to prevent or treat hyperactive delirium resulting from anesthesia in 12 Table of Contents the ICU. Given these uses of the IV formulation of Dex, we believe Dex formulated in a sublingual film and at much lower doses allows for ease of administration in settings where rapid acute treatment of agitation is needed.
The FDA may also require one or more Phase 4 post- market studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization and may limit further marketing of the product based on the results of these post-marketing studies.
The FDA may also require one or more post-market studies and additional surveillance programs to further assess and monitor the product’s safety and effectiveness after commercialization and may limit further marketing of the product based on the results of these post-marketing studies.
The regulatory landscape related to clinical trials in the EU has been subject to recent changes. The EU Clinical Trials Regulation (“CTR”) which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022.
The regulatory landscape related to clinical trials in the EU has been subject to recent changes. The EU Clinical Trials Regulation (“CTR”) which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became 46 Table of Contents applicable on January 31, 2022.
Certain tumors coopt these pathways and overexpress immune checkpoint molecules on their cell surface to camouflage themselves to evade detection and destruction by the immune system.
Certain tumors co-opt these pathways and overexpress immune checkpoint molecules on their cell surface to camouflage themselves to evade detection and destruction by the immune system.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe COVID-19 pandemic and government measures taken in response have had a significant impact, both direct and indirect, on businesses and commerce. 86 Table of Contents As a result of the COVID-19 pandemic, outbreaks from variants of COVID-19, or other pandemics, epidemics or outbreaks of infectious disease, we may experience disruptions that could severely impact our business, preclinical studies and clinical trials, including: ● delays or difficulties in enrolling patients in our clinical trials; ● delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; ● diversion of health care resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; ● interruption of key clinical trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by governments, employers and others, or interruption of clinical trial subject visits and study procedures, which may impact the integrity of subject data and clinical study endpoints; ● interruption or delays in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines; ● interruption of, or delays in receiving, supplies of our product candidates from our contract manufacturing organizations due to staffing shortages, production slowdowns or stoppages and disruptions in delivery systems; ● interruptions in preclinical studies due to restricted or limited operations resulting from restrictions on our on-site activities; ● limitations on employee resources that would otherwise be focused on the conduct of our preclinical studies and clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; ● impacts from prolonged remote work arrangements, such as strains on our business continuity plans, cybersecurity risks, and inability of certain employees to perform their work remotely; and ● interruption or delays to our sourced discovery and clinical activities.
Biggest changeAs a result of outbreaks from variants of COVID-19, or other pandemics, epidemics or outbreaks of infectious disease, we may experience disruptions that could severely impact our business, preclinical studies and clinical trials, including: ● delays or difficulties in initiating, operating and completing our clinical trials; ● interruption of key clinical trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by governments, employers and others or interruption of clinical trial subject visits and study procedures, which may impact the integrity of subject data and clinical study endpoints; ● interruption or delays in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines; ● interruption of, or delays in receiving, supplies of our product candidates from our contract manufacturing organizations due to staffing shortages, production slowdowns or stoppages and disruptions in delivery systems; and 93 Table of Contents ● other interruptions or delays to our sourced discovery and clinical activities.
In addition, historically we have relied on debt and equity financings as our primary sources of liquidity. If our future cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital or seek to restructure or refinance our indebtedness.
In addition, historically we have relied on debt and equity financings as our primary sources of liquidity. If our future cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay expenditures, sell assets, seek additional capital or seek to restructure or refinance our indebtedness.
We obtained Breakthrough Therapy Designations for BXCL501 for the acute treatment of agitation associated with dementia, and we may seek additional Breakthrough Therapy designations for our product candidates if the clinical data support such a designation for one or more product candidates.
We obtained Breakthrough Therapy Designation for BXCL501 for the acute treatment of agitation associated with dementia, and we may seek additional Breakthrough Therapy designations for our product candidates if the clinical data support such a designation for one or more product candidates.
Requirements under such laws include advance notice of planned price increases, reporting price increase amounts and factors considered in taking such increases, wholesale acquisition cost information disclosure to prescribers, purchasers, and state agencies, and new product notice and reporting.
Requirements under such laws include advance notice of planned price increases, reporting price increase amounts and factors considered in taking such increases, wholesale acquisition cost information disclosure to prescribers, purchasers, and state agencies, and new product notice and reporting.
Such legislation could limit the price or payment for certain drugs, and a number of states are authorized to impose civil monetary penalties or pursue other enforcement mechanisms against manufacturers who fail to comply with drug price transparency requirements, including the untimely, inaccurate, or incomplete reporting of drug pricing information.
Such legislation could limit the price or payment for certain drugs, and a number of states are authorized to impose civil monetary penalties or pursue other enforcement mechanisms against manufacturers who fail to comply with drug price transparency requirements, including the untimely, inaccurate, or incomplete reporting of drug pricing information.
In addition, at the time of the our initial public offering (“IPO”), BioXcel LLC granted us (i) a first right to negotiate exclusive rights to any additional product candidates in the fields of neuroscience and immuno-oncology that BioXcel LLC may identify on its own and not in connection with BioXcel LLC’s provision of services to us under the Services Agreement and (ii) an exclusivity agreement in the neuroscience and immuno-oncology fields whereby BioXcel LLC agreed not develop drugs, or engage in preclinical discovery for the purpose of developing drugs, in the neuroscience and immuno-oncology fields for or on behalf of a third party, utilizing EvolverAI or otherwise.
In addition, at the time of our initial public offering (“IPO”), BioXcel LLC granted us (i) a first right to negotiate exclusive rights to any additional product candidates in the fields of neuroscience and immuno-oncology that BioXcel LLC may identify on its own and not in connection with BioXcel LLC’s provision of services to us under the Services Agreement and (ii) an exclusivity agreement in the neuroscience and immuno-oncology fields whereby BioXcel LLC agreed not develop drugs, or engage in preclinical discovery for the purpose of developing drugs, in the neuroscience and immuno-oncology fields for or on behalf of a third party, utilizing EvolverAI or otherwise.
Therefore, our development of our products could be stopped or delayed, and our commercialization of any future product could be stopped or delayed or made less profitable if third-party manufacturers fail to obtain approval of the FDA or comparable regulatory authorities or fail to provide us with drug product in sufficient quantities or at acceptable prices.
Therefore, our development of our products could be stopped or delayed, and our commercialization of any future product could be stopped, delayed or made less profitable if third-party manufacturers fail to obtain approval of the FDA or comparable regulatory authorities or fail to provide us with drug product in sufficient quantities or at acceptable prices.
We are the owner of record of patents and patent applications pending in the U.S. and in certain foreign jurisdictions. Patents issued from non-provisional applications, which are typically filed from provisional patent applications or from PCT applications that enter the national phase. Neither provisional patent applications nor PCT applications issue directly as patents.
We are the owner of record of certain patents and patent applications pending in the U.S. and in certain foreign jurisdictions. Patents issued from non-provisional applications, which are typically filed from provisional patent applications or from PCT applications that enter the national phase. Neither provisional patent applications nor PCT applications issue directly as patents.
The continuing efforts of governments, insurance companies, managed care organizations and other payors of health care services to contain or reduce costs of health care may adversely affect the demand for IGALMI and any other drug products for which we may obtain regulatory approval, our ability to set a price that we believe is fair for our products, our ability to obtain adequate coverage and reimbursement approval for a product, our ability to generate revenues and achieve or maintain profitability, and the level of taxes that we are required to pay.
The continuing efforts of governments, insurance companies, managed care organizations and other payors of health care services to contain or reduce costs of health care may adversely affect the demand for IGALMI TM and any other drug products for which we may obtain regulatory approval, our ability to set a price that we believe is fair for our products, our ability to obtain adequate coverage and reimbursement approval for a product, our ability to generate revenues and achieve or maintain profitability, and the level of taxes that we are required to pay.
In addition, the manufacturing processes, labeling, packaging, distribution, AE reporting, storage, advertising, promotion, import, export and recordkeeping for IGALMI are and will remain subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, and on-going compliance with cGMPs and GCPs for any clinical trials that we conduct post-approval.
In addition, the manufacturing processes, labeling, packaging, distribution, AE reporting, storage, advertising, promotion, import, export and recordkeeping for IGALMI TM are and will remain subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, and on-going compliance with cGMPs, and GCPs for any clinical trials that we conduct post-approval.
We have only one product candidate approved for marketing in the U.S., none in any other jurisdiction, and may never receive approval beyond the one product approved to date. It could be several years, if ever, before we have a commercialized product that generates significant revenues through sales of IGALMI or our product candidates, if approved.
We have only one product candidate approved for marketing in the U.S., none in any other jurisdiction, and may never receive approval beyond the one product approved to date. It could be several years, if ever, before we have a commercialized product that generates significant revenues through sales of IGALMI TM or our product candidates, if approved.
Any regulatory approvals that we may receive for IGALMI or any of our product candidates will require the submission of reports to regulatory authorities and surveillance to monitor the safety and efficacy of the product, may contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, and may include burdensome post-approval study or risk management requirements.
Any regulatory approvals that we may receive for IGALMI TM or any of our product candidates will require the submission of reports to regulatory authorities and surveillance to monitor the safety and efficacy of the product, may contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, and may include burdensome post-approval study or risk management requirements.
We have supplemented our clinical trial coverage with product liability coverage in connection with the commercial launch of IGALMI, and expect that we would similarly supplement our coverage for any of our other product candidates that may receive regulatory approval, but we may be unable to obtain such increased coverage on acceptable terms or at all.
We have supplemented our clinical trial coverage with product liability coverage in connection with the commercial launch of IGALMI TM and expect that we would similarly supplement our coverage for any of our other product candidates that may receive regulatory approval, but we may be unable to obtain such increased coverage on acceptable terms or at all.
If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
If a prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
In addition to regulations in the U.S., should we or our collaborators pursue marketing approvals for IGALMI, and for BXCL501, BXCL502, BXCL701, BXCL702 and our other product candidates internationally, we and our collaborators will be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales and distribution of our products.
In addition to regulations in the U.S., should we or our collaborators pursue marketing approvals for IGALMI TM , and for BXCL501, BXCL502, BXCL701, BXCL702 and our other product candidates internationally, we and our collaborators will be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales and distribution of our products.
We entered into a commercial supply agreement with ARx, LLC (“ARx”) pursuant to which ARx has agreed to exclusively manufacture and supply us with all of our worldwide demand of film formulation of Dex to be used for the commercial supply of IGALMI and for ongoing clinical trials of our product candidate BXCL501, subject to certain alternative supply provisions.
We entered into a commercial supply agreement with ARx, LLC (“ARx”) pursuant to which ARx has agreed to exclusively manufacture and supply us with all of our worldwide demand of film formulation of Dex to be used for the commercial supply of IGALMI TM and for ongoing clinical trials of our product candidate BXCL501, subject to certain alternative supply provisions.
This will require us to be successful in a range of challenging activities, including completing clinical trials of our product candidates, developing commercial scale manufacturing processes, obtaining marketing approval, manufacturing, marketing, and selling IGALMI and any current and future product candidates for which we may obtain marketing approval, and satisfying any post-marketing requirements.
This will require us to be successful in a range of challenging activities, including completing clinical trials of our product candidates, developing commercial scale manufacturing processes, obtaining marketing approval, manufacturing, marketing, and selling IGALMI TM and any current and future product candidates for which we may obtain marketing approval, and satisfying any post-marketing requirements.
Third-party collaborators may assist us in: ● funding research, preclinical development, clinical trials and manufacturing; ● seeking and obtaining regulatory approvals; and ● successfully commercializing IGALMI or product candidates. If we are not able to establish collaboration agreements, we may be required to undertake product development and commercialization at our own expense.
Third-party collaborators may assist us in: ● funding research, preclinical development, clinical trials and manufacturing; ● seeking and obtaining regulatory approvals; and ● successfully commercializing IGALMI TM or product candidates. If we are not able to establish collaboration agreements, we may be required to undertake product development and commercialization at our own expense.
Likewise, we will rely on third parties, including ARx, to manufacture IGALMI and our product candidates and to conduct clinical trials, and similar events as those described in the prior paragraph relating to their business systems, equipment and facilities could also have a material adverse effect on our business.
Likewise, we will rely on third parties, including ARx, to manufacture IGALMI TM and our product candidates and to conduct clinical trials, and similar events as those described in the prior paragraph relating to their business systems, equipment and facilities could also have a material adverse effect on our business.
If we are unable to complete the clinical development of or obtain marketing approval for our product candidates or successfully commercialize IGALMI and our other product candidates, either alone or with a collaborator, or if we experience significant delays in doing so, our business could be substantially harmed.
If we are unable to complete the clinical development of or obtain marketing approval for our product candidates or successfully commercialize IGALMI TM and our other product candidates, either alone or with a collaborator, or if we experience significant delays in doing so, our business could be substantially harmed.
If we are unable to commercialize IGALMI or develop, receive marketing approval for and successfully commercialize BXCL501, BXCL701 and our other product candidates, on our own or with any future collaborator, or experience delays because of any of these factors or otherwise, our business could be substantially harmed.
If we are unable to commercialize IGALMI TM or develop, receive marketing approval for and successfully commercialize BXCL501, BXCL701 and our other product candidates, on our own or with any future collaborator, or experience delays because of any of these factors or otherwise, our business could be substantially harmed.
For example, other formulations of Dex, the active ingredient in IGALMI, have been approved for uses beyond those authorized in IGALMI approved labeling, such as for use in sedation of surgical patients, and we are continuing to develop BXCL501 for potential use in patients with dementia, MDD, Alzheimer’s disease and other indications.
For example, other formulations of Dex, the active ingredient in IGALMI TM , have been approved for uses beyond those authorized in IGALMI TM approved labeling, such as for use in sedation of surgical patients, and we are continuing to develop BXCL501 for potential use in patients with dementia, MDD, Alzheimer’s disease and other indications.
We expect to pursue marketing approvals for IGALMI, and may pursue marketing approvals for BXCL501, BXCL502, BXCL701, BXCL702 and our other product candidates in Europe and other jurisdictions outside the U.S. with collaborative partners. The time and process required to obtain regulatory approvals and reimbursement in Europe and other jurisdictions may be different from those in the U.S.
We expect to pursue marketing approvals for IGALMI TM , and may pursue marketing approvals for BXCL501, BXCL502, BXCL701, BXCL702 and our other product candidates in Europe and other jurisdictions outside the U.S. with collaborative partners. The time and process required to obtain regulatory approvals and reimbursement in Europe and other jurisdictions may be different from those in the U.S.
Medicaid drug rebates are based on pricing data that we must report on a monthly and quarterly basis to CMS. For the MDRP, this data includes the average manufacturer price (“AMP”) for each drug and, in the case of an innovator product, like IGALMI, the best price.
Medicaid drug rebates are based on pricing data that we must report on a monthly and quarterly basis to CMS. For the MDRP, this data includes the average manufacturer price (“AMP”) for each drug and, in the case of an innovator product, like IGALMI TM , the best price.
The replacement of one or more of our executive officers or other key employees would likely involve significant time and costs and may significantly delay or prevent the achievement of our business objectives. To continue to execute our growth strategy, we also must attract and retain highly skilled personnel.
The replacement of one or more of our executive officers or other key employees would likely involve significant time and costs and may significantly delay or prevent the achievement of our business objectives. To continue to execute our business strategy, we also must attract and retain highly skilled personnel.
The 340B program ceiling price is calculated using a statutory formula, which is based on the AMP and rebate amount for the covered outpatient drug as calculated under the MDRP. In general, products subject to Medicaid price reporting and rebate liability are also subject to the 340B program ceiling price calculation and discount requirement.
The 340B ceiling price is calculated using a statutory formula, which is based on the AMP and rebate amount for the covered outpatient drug as calculated under the MDRP. In general, products subject to Medicaid price reporting and rebate liability are also subject to the 340B ceiling price calculation and discount requirement.
While the regulation entered into force in January 2022, it will only begin to apply from January 2025 onwards, with preparatory and implementation-related steps to take place in the interim. Once the regulation becomes applicable, it will have a phased implementation depending on the concerned products.
While the regulation entered into force in January 2022, it will only begin to apply from January 2025 onwards, with preparatory and implementation-related steps to take place in the interim. Once applicable, it will have a phased implementation depending on the concerned products.
BioXcel LLC may experience difficulties that could delay or prevent the successful design, development, testing, and introduction of advanced versions of EvolverAI, limiting our ability to identify new product candidates. New services, or enhancements to existing EvolverAI services, may not adequately meet our requirements.
BioXcel LLC or we may experience difficulties that could delay or prevent the successful design, development, testing, and introduction of advanced versions of EvolverAI, limiting our ability to identify new product candidates. New services, or enhancements to existing EvolverAI services, may not adequately meet our requirements.
Although the FDA has approved IGALMI for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder, we will still face extensive and ongoing regulatory requirements and obligations for IGALMI and for any product candidates for which we obtain approval.
Although the FDA has approved IGALMI TM for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder, we will still face extensive and ongoing regulatory requirements and obligations for IGALMI TM and for any product candidates for which we obtain approval.
There can be no assurance that IGALMI, or BXCL501, BXCL502, BXCL701, BXCL702 and our other product candidates or any other product candidate successfully developed by us, independently or with partners, if approved, will be accepted by physicians, hospitals, and other health care facilities.
There can be no assurance that IGALMI TM , or BXCL501, BXCL502, BXCL701, BXCL702 and our other product candidates or any other product candidate successfully developed by us, independently or with partners, if approved, will be accepted by physicians, hospitals and other health care facilities.
Although we obtained FDA approval for IGALMI, because our approach is novel, the cost and time needed to develop our product candidates is difficult to predict, and our efforts may not result in the discovery and development of commercially viable medicines.
Although we obtained FDA approval for IGALMI TM , because our approach is novel, the cost and time needed to develop our product candidates is difficult to predict, and our efforts may not result in the discovery and development of commercially viable medicines.
Under the Services Agreement, we have an option, exercisable until December 31, 2024, to enter into a collaborative services agreement with BioXcel LLC pursuant to which BioXcel LLC shall perform product identification and related services for us utilizing its EvolverAI.
Under the Services Agreement, we have an option, exercisable until December 31, 2024, to enter into a separate collaborative services agreement with BioXcel LLC pursuant to which BioXcel LLC shall perform product identification and related services for us utilizing its EvolverAI.
If we are subject to or affected by HIPAA, the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
If we are subject to or affected by HIPAA, the CCPA, or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
Our estimate as to how long we expect our existing cash to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.
Furthermore, our estimate as to how long we expect our existing cash to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.
IGALMI and any other products for which we receive regulatory approval may not be considered cost-effective, and coverage and reimbursement may not be available or sufficient to allow us to sell our proposed products on a profitable basis.
IGALMI TM and any other products for which we receive regulatory approval may not be considered cost-effective, and coverage and reimbursement may not be available or sufficient to allow us to sell our proposed products on a profitable basis.
HRSA has also finalized an administrative dispute resolution process through which 340B program covered entities may pursue claims against participating manufacturers for overcharges, and through which manufacturers may pursue claims against 340B program covered entities for engaging in unlawful diversion or duplicate discounting of 340B program drugs.
HRSA has also finalized an administrative dispute resolution process through which 340B covered entities may pursue claims against participating manufacturers for overcharges, and through which manufacturers may pursue claims against 340B covered entities for engaging in unlawful diversion or duplicate discounting of 340B drugs.
Our success depends largely upon the continued services of our key executive officers, Vimal Mehta, our Chief Executive Officer, President and a member of our Board, as well as the other principal members of our management, scientific, clinical teams and commercial readiness teams.
Our success depends largely upon the continued services of our key executive officers, including Vimal Mehta, our Chief Executive Officer, President and a member of our Board, as well as the other principal members of our management, scientific, clinical teams and commercial readiness teams.
Some factors that may cause the market price of our common stock to fluctuate, in addition to the other risks mentioned in this "Risk Factors" section, are: ● sale of our common stock by our stockholders, executives, and directors; ● volatility and limitations in trading volumes of our shares of common stock; ● speculative trading in and short sales of our stock, as well as trading phenomena such as the “short squeeze” and “short and distort” schemes; ● our ability to obtain financings to conduct and complete research and development activities including, but not limited to, our clinical trials, and other business activities; ● possible delays in the expected recognition of revenue due to lengthy and sometimes unpredictable sales timelines; ● the timing and success of introductions of new applications and services by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic partners; ● network outages or security breaches; ● our ability to attract new customers; ● customer renewal rates and the timing and terms of customer renewals; ● our ability to secure resources and the necessary personnel to conduct clinical trials on our desired schedule; ● commencement, enrollment or results of our clinical trials for our product candidates or any future clinical trials we may conduct; ● changes in the development status of our product candidates; ● any delays or adverse developments or perceived adverse developments with respect to the FDA’s review of our planned preclinical and clinical trials; ● any delay in our submission for studies or product approvals or adverse regulatory decisions, including failure to receive regulatory approval for our product candidates; ● unanticipated safety concerns related to the use of our product candidates; ● failures to meet external expectations or management guidance; ● changes in our capital structure or dividend policy, future issuances of securities, sales of large blocks of common stock by our stockholders; ● our cash position; 100 Table of Contents ● announcements and events surrounding financing efforts, including debt and equity securities; ● our inability to enter into new markets or develop new products; ● reputational issues; ● competition from existing technologies and products or new technologies and products that may emerge; ● announcements of acquisitions, partnerships, collaborations, joint ventures, new products, capital commitments, or other events by us or our competitors; ● changes in general economic, political and market conditions in or any of the regions in which we conduct our business; ● changes in industry conditions or perceptions; ● changes in valuations of similar companies or groups of companies; ● analyst research reports, recommendation and changes in recommendations, price targets, and withdrawals of coverage; ● departures and additions of key personnel; ● disputes and litigations related to intellectual properties, proprietary rights, and contractual obligations; ● changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and ● other events or factors, many of which may be out of our control.
Some factors that may cause the market price of our common stock to fluctuate, in addition to the other risks mentioned in this “Risk Factors” section, are: 111 Table of Contents ● sale of our common stock by our stockholders, executives, and directors; ● volatility and limitations in trading volumes of our shares of common stock; ● speculative trading in and short sales of our stock, as well as trading phenomena such as the “short squeeze” and “short and distort” schemes; ● our ability to obtain financings to conduct and complete research and development activities including, but not limited to, our clinical trials, and other business activities; ● possible delays in the expected recognition of revenue due to lengthy and sometimes unpredictable sales timelines; ● the timing and success of introductions of new applications and services by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic partners; ● network outages or security breaches; ● our ability to attract new customers; ● customer renewal rates and the timing and terms of customer renewals; ● our ability to secure resources and the necessary personnel to conduct clinical trials on our desired schedule; ● commencement, enrollment or results of our clinical trials for our product candidates or any future clinical trials we may conduct; ● changes in the development status of our product candidates; ● any delays or adverse developments or perceived adverse developments with respect to the FDA’s review of our preclinical and clinical trials; ● any delay in our submission for studies or product approvals or adverse regulatory decisions, including failure to receive regulatory approval for our product candidates; ● unanticipated safety concerns related to the use of our product candidates; ● failures to meet external expectations or management guidance; ● changes in our capital structure or dividend policy, future issuances of securities, sales of large blocks of common stock by our stockholders; ● our cash position; ● announcements and events surrounding financing efforts, including debt and equity securities; ● our inability to enter into new markets or develop new products; ● reputational issues; ● competition from existing technologies and products or new technologies and products that may emerge; ● announcements of acquisitions, partnerships, collaborations, joint ventures, new products, capital commitments, or other events by us or our competitors; 112 Table of Contents ● changes in general economic, political and market conditions in or any of the regions in which we conduct our business; ● changes in industry conditions or perceptions; ● changes in valuations of similar companies or groups of companies; ● analyst research reports, recommendation and changes in recommendations, price targets, and withdrawals of coverage; ● departures and additions of key personnel; ● disputes and litigations related to intellectual properties, proprietary rights, and contractual obligations; ● changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and ● other events or factors, many of which may be out of our control.
Further federal, state and foreign government proposals and health care reforms are likely which could limit the prices that can be charged for IGALMI and the product candidates that we develop and may further limit our commercial opportunities.
Further federal, state and foreign government proposals and health care reforms are likely which could limit the prices that can be charged for IGALMI TM and the product candidates that we develop and may further limit our commercial opportunities.
We also may not achieve the anticipated benefits from the acquired business due to a number of factors, including: ● inability to integrate or benefit from acquired technologies or services in a profitable manner; ● unanticipated costs or liabilities associated with the acquisition; ● difficulty integrating the accounting systems, operations and personnel of the acquired business; ● difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business; ● difficulty converting the customers of the acquired business onto our platform and contract terms, including disparities in the revenue, licensing, support or professional services model of the acquired company; ● diversion of management’s attention from other business concerns; ● adverse effects to our existing business relationships with business partners and customers as a result of the acquisition; ● the potential loss of key employees; ● use of resources that are needed in other parts of our business; and ● use of substantial portions of our available cash to consummate the acquisition.
We also may not achieve the anticipated benefits from the acquired business due to a number of factors, including: ● inability to integrate or benefit from acquired technologies or services in a profitable manner; ● unanticipated costs or liabilities associated with the acquisition; 95 Table of Contents ● difficulty integrating the accounting systems, operations and personnel of the acquired business; ● difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business; ● difficulty converting the customers of the acquired business onto our platform and contract terms, including disparities in the revenue, licensing, support or professional services model of the acquired company; ● diversion of management’s attention from other business concerns; ● adverse effects to our existing business relationships with business partners and customers as a result of the acquisition; ● the potential loss of key employees; ● use of resources that are needed in other parts of our business; and ● use of substantial portions of our available cash to consummate the acquisition.
If we cannot successfully manage the promotion of IGALMI or our product candidates, if approved, we could become subject to significant liability, which would materially adversely affect our business and financial condition.
If we cannot successfully manage the promotion of IGALMI TM or our product candidates, if approved, we could become subject to significant liability, which would materially adversely affect our business and financial condition.
The delay or inability to meet planned patient enrollment may result in increased costs and delay or termination of our trials, which could have a harmful effect on our ability to develop products. 64 Table of Contents Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval.
The delay or inability to meet planned patient enrollment may result in increased costs and delay or termination of our trials, which could have a harmful effect on our ability to develop products. 69 Table of Contents Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval.
If the markets for patients that we are targeting for IGALMI or our other product candidates are not as significant as we estimate, we may not generate significant revenues from sales of IGALMI or such other product candidates, if approved.
If the markets for patients that we are targeting for IGALMI TM or our other product candidates are not as significant as we estimate, we may not generate significant revenues from sales of IGALMI TM or such other product candidates, if approved.
IGALMI competes, and BXCL501, BXCL502, BXCL701, BXCL702 and any future product candidates we develop will compete, with a number of products manufactured and marketed by major pharmaceutical and biotechnology companies.
IGALMI TM competes, and BXCL501, BXCL502, BXCL701, BXCL702 and any future product candidates we develop will compete, with a number of products manufactured and marketed by major pharmaceutical and biotechnology companies.
In addition, disputes may arise regarding intellectual property subject to a license agreement, including: ● the scope of rights granted under the license agreement and other interpretation-related issues; ● the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; ● our diligence obligations under the license agreement and what activities satisfy those obligations; 95 Table of Contents ● if a third-party expresses interest in an area under a license that we are not pursuing, under the terms of certain of our license agreements, we may be required to sublicense rights in that area to a third-party, and that sublicense could harm our business; and ● the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us.
In addition, disputes may arise regarding intellectual property subject to a license agreement, including: ● the scope of rights granted under the license agreement and other interpretation-related issues; ● the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; ● our diligence obligations under the license agreement and what activities satisfy those obligations; ● if a third-party expresses interest in an area under a license that we are not pursuing, under the terms of certain of our license agreements, we may be required to sublicense rights in that area to a third-party, and that sublicense could harm our business; and ● the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us.
In addition, discovery of previously unknown AEs or other problems with our products, manufacturers or manufacturing processes or failure to comply with regulatory requirements, may yield various results, including: ● restrictions on manufacturing such products; ● restrictions on the labeling or marketing of products; ● restrictions on product manufacturing, distribution or use; ● requirements to conduct post-marketing studies or clinical trials; ● warning letters or untitled letters; ● withdrawal of the products from the market; ● refusal to approve pending applications or supplements to approved applications that we submit; ● recall of products; ● fines, restitution or disgorgement of profits or revenues; ● suspension or withdrawal of marketing approvals; ● refusal to permit the import or export of our products; ● product seizure; or 69 Table of Contents ● injunctions or the imposition of civil or criminal penalties.
In addition, discovery of previously unknown AEs or other problems with our products, manufacturers or manufacturing processes or failure to comply with regulatory requirements, may yield various results, including: ● restrictions on manufacturing such products; ● restrictions on the labeling or marketing of products; ● restrictions on product manufacturing, distribution or use; ● requirements to conduct post-marketing studies or clinical trials; ● warning letters or untitled letters; ● withdrawal of the products from the market; ● refusal to approve pending applications or supplements to approved applications that we submit; ● recall of products; ● fines, restitution or disgorgement of profits or revenues; ● suspension or withdrawal of marketing approvals; ● refusal to permit the import or export of our products; ● product seizure; or ● injunctions or the imposition of civil or criminal penalties.
Because the agreement merely sets forth a framework in many respects and will require complex additional bilateral negotiations between the UK and the EU as both parties continue to work on the rules for implementation, significant political and economic uncertainty remains about how the precise terms of the relationship between the parties will differ from the terms before withdrawal.
Because the agreement merely sets forth a framework in many respects and requires complex additional bilateral negotiations between the UK and the EU as both parties continue to work on the rules for implementation, significant political and economic uncertainty remains about how the precise terms of the relationship between the parties will differ from the terms before withdrawal.
We currently have only one product that has received regulatory approval and may never be able to develop additional marketable product candidates. We are continuing to invest a significant portion of our efforts and financial resources in the commercialization of IGALMI and development of BXCL501, BXCL502, BXCL701 and BXCL702, as well as our other product candidates.
We currently have only one product that has received regulatory approval and may never be able to develop additional marketable product candidates. We are continuing to invest a significant portion of our efforts and financial resources in the commercialization of IGALMI TM and development of our four product candidates, BXCL501, BXCL502, BXCL701 and BXCL702, as well as other product candidates.
If we are unable to identify suitable additional compounds for preclinical and clinical development, our ability to develop product candidates and obtain product revenues in future periods could be compromised, which could result in significant harm to our financial position and adversely impact our stock price; ● compounds found through BioXcel LLC’s EvolverAI may not demonstrate efficacy, safety or tolerability; ● potential product candidates may, on further study, be shown to have harmful side effects, or other characteristics that indicate that they are unlikely to receive marketing approval and achieve market acceptance; ● competitors may develop alternative therapies that render our potential product candidates non-competitive or less attractive; or ● a potential product candidate may not be capable of being produced at an acceptable cost.
If we are unable to identify suitable additional compounds for preclinical and clinical development, our ability to develop product candidates and obtain product revenues in future periods could be compromised, which could result in significant harm to our financial position and adversely impact our stock price; ● compounds found through the Company’s AI platform and BioXcel LLC’s EvolverAI may not demonstrate efficacy, safety or tolerability; ● potential product candidates may, on further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to receive marketing approval and achieve market acceptance; ● competitors may develop alternative therapies that render our potential product candidates non-competitive or less attractive; or ● a potential product candidate may not be capable of being produced at an acceptable cost.
Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an “investment company” for purposes of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (2) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.
Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an “investment company” for purposes of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (2) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash 113 Table of Contents items) on an unconsolidated basis.
If BioXcel LLC, we, ARx, the Patheon pharma services division of Thermo Fisher Scientific Inc., or our other third-party manufacturers were to encounter any of the above difficulties, or otherwise fail to comply with contractual obligations, our ability to provide any product for clinical trial or commercial purposes would be jeopardized.
If we, ARx, the Patheon pharma services division of Thermo Fisher Scientific Inc., or our other third-party manufacturers were to encounter any of the above difficulties, or otherwise fail to comply with contractual obligations, our ability to provide any product for clinical trial or commercial purposes would be jeopardized.
For example, the FDA-approved label for IGALMI includes certain warnings and precautions regarding hypotension, orthostatic hypotension, bradycardia, somnolence, and QT interval prolongation.
For example, the FDA-approved label for IGALMI TM includes certain warnings and precautions regarding hypotension, orthostatic hypotension, bradycardia, somnolence, and QT interval prolongation.
It is not uncommon for companies in the biopharmaceutical industry to suffer significant 60 Table of Contents setbacks in advanced clinical trials due to nonclinical findings made while clinical studies are underway and safety or efficacy observations made in clinical studies, including previously unreported adverse events.
It is not uncommon for companies in the biopharmaceutical industry to suffer significant 65 Table of Contents setbacks in advanced clinical trials due to nonclinical findings made while clinical studies are underway and safety or efficacy observations made in clinical studies, including previously unreported adverse events.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted. Clinical trials are expensive, time-consuming, and difficult to design and implement, and involve an uncertain outcome.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted. Clinical trials are expensive, time-consuming, difficult to design, difficult to conduct, and involve an uncertain outcome.
The application for orphan designation must be submitted before the MAA. In the U.S., orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.
The application for orphan designation must be submitted before the application for MA. In the U.S., orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.
No assurance can be given that any stockholder of BioXcel LLC or the Company will not claim in a lawsuit that such terms in fact are not in the best interests of BioXcel LLC or the Company and its applicable equity holders, that the directors and officers of BioXcel LLC or the Company breached their fiduciary duties in connection with such agreements and that any disclosures by the Company to its stockholders regarding these agreements and the relationship between BioXcel LLC and us did not satisfy applicable requirements.
No assurance can be given that any equity or debt holder of BioXcel LLC or the Company will not claim in a lawsuit that such terms in fact are not in the best interests of BioXcel LLC or the Company and its applicable equity holders, that the directors and officers of BioXcel LLC or the Company breached their fiduciary duties in connection with such agreements and that any disclosures by the Company to its stockholders regarding these agreements and the relationship between BioXcel LLC and us did not satisfy applicable requirements.
Similarly, our failure or perceived failure to adequately pursue or fulfill any ESG goals and objectives or to satisfy various reporting standards, if any, could expose us to additional regulatory, social or other scrutiny, the imposition of 92 Table of Contents unexpected costs, or damage to our reputation, which in turn could have a material adverse effect on our business and could cause the market value of our common stock to decline.
Similarly, our failure or perceived failure to adequately pursue or fulfill any ESG goals and objectives or to satisfy various reporting standards, if any, could expose us to additional regulatory, social or other scrutiny, the imposition of unexpected costs, or damage to our reputation, which in turn could have a material adverse effect on our business and could cause the market value of our common stock to decline.
The 340B program is administered by the Health Resources and Services Administration (“HRSA”) and requires us to charge statutorily defined covered entities no more than the 340B program “ceiling price” for its covered outpatient drugs used in an outpatient setting.
The 340B program is administered by the Health Resources and Services Administration (“HRSA”) and requires us to charge statutorily defined covered entities no more than the 340B “ceiling price” for our covered outpatient drugs used in an outpatient setting.
Although we maintain insurance for our business, the coverage under our policies may not be adequate to compensate us for all losses that may occur. Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards, and other requirements could adversely affect our business, results of operations, and financial condition.
Although we maintain insurance for our business, the coverage under our policies may not be adequate to compensate us for all losses that may occur. 97 Table of Contents Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition.
While we believe that applying BioXcel LLC’s EvolverAI to create medicines for defined patient populations may potentially enable drug research and clinical development that is more efficient than conventional drug research and development, our approach is novel.
While we believe that applying our AI platform and BioXcel LLC’s EvolverAI to create medicines for defined patient populations may potentially enable drug research and clinical development that is more efficient than conventional drug research and development, our approach is novel.
As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the SCCs cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming, expensive and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.
The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, expensive and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.
Additionally, if we or others later identify undesirable side effects caused by IGALMI, or any other product candidate that receives marketing approval, a number of potentially significant negative consequences could result, including: ● regulatory authorities may withdraw approvals of such products; ● we may be required to recall a product or change the way such a product is administered to patients; ● additional restrictions may be imposed on the marketing or distribution of the particular product or the manufacturing processes for the product or any component thereof; ● regulatory authorities may require additional warnings on the label, such as a “black box” warning or contraindication; ● we may be required to implement REMS or create a medication guide outlining the risks of such side effects for distribution to patients, or similar risk management measures; ● we could be sued and held liable for harm caused to patients; ● our product may become less competitive; and ● our reputation may suffer.
Additionally, if we or others later identify undesirable side effects caused by IGALMI TM or any other product candidate that receives marketing approval, a number of potentially significant negative consequences could result, including: ● regulatory authorities may withdraw approvals of such products; ● we may be required to recall a product or change the way such a product is administered to patients; ● additional restrictions may be imposed on the marketing or distribution of the particular product or the manufacturing processes for the product or any component thereof; ● regulatory authorities may require additional warnings on the label, such as a “black box” warning or contraindication; ● we may be required to implement Risk Evaluation and Mitigation Strategies (“REMS”) or create a medication guide outlining the risks of such side effects for distribution to patients, or similar risk management measures; ● we could be sued and held liable for harm caused to patients; ● our product may become less competitive; and ● our reputation may suffer.
If such an event as described above were to occur in the future, it may cause interruptions in our operations, delay research and development programs, clinical trials, regulatory activities, manufacturing and quality assurance activities, sales and marketing activities, hiring, training of employees and persons within associated third parties, and other business activities.
If such an event as 96 Table of Contents described above were to occur in the future, it may cause interruptions in our operations, delay research and development programs, clinical trials, regulatory activities, manufacturing and quality assurance activities, sales and marketing activities, hiring, training of employees and persons within associated third parties, and other business activities.
The FDA may also reject our future 505(b)(2) submissions and require us to file such 96 Table of Contents submissions under Section 505(b)(1) of the FDCA, which would require us to provide extensive data to establish safety and effectiveness of the drug product for the proposed use and could cause delay and be considerably more expensive and time consuming.
The FDA may also reject our future 505(b)(2) submissions and require us to file such submissions under Section 505(b)(1) of the FDCA, which would require us to provide extensive data to establish safety and effectiveness of the drug product for the proposed use and could cause delay and be considerably more expensive and time consuming.
A failure to pay our debt, fixed costs and other obligations or a breach of our contractual obligations could result in a variety of adverse consequences, including the acceleration of our obligations or the exercise of remedies by our creditors and lessors.
A failure to pay our debt, fixed costs and other obligations or a breach of our contractual obligations or other event of default could result in a variety of adverse consequences, including the acceleration of our obligations or the exercise of remedies by our creditors and lessors.
The decision by our collaborators to pursue alternative technologies, or the failure of our collaborators to develop or commercialize successfully any product candidate to which they have obtained rights from us, could materially harm our business, financial condition and results of operations. 85 Table of Contents We rely on third parties to conduct our preclinical and clinical trials.
The decision by our collaborators to pursue alternative technologies or the failure of our collaborators to develop or commercialize successfully any product candidate to which they have obtained rights from us could materially harm our business, financial condition and results of operations. We rely on third parties to conduct our preclinical and clinical trials.
These changes include the Budget Control Act of 2011, which resulted in aggregate reductions of Medicare payments to providers, which went into effect on April 1, 2013, and, due to subsequent legislative amendments to the statute, will remain in effect through 2032, unless additional Congressional action is taken.
These changes include the Budget Control Act of 2011, which resulted in aggregate reductions of Medicare payments to providers, which went into effect on April 1, 2013, and, due to subsequent legislative amendments to the statute, will 84 Table of Contents remain in effect through 2032, unless additional Congressional action is taken.
Brexit also materially impacted the regulatory regime with respect to the approval of our product candidates. Great Britain is no longer covered by the EU’s procedures for the grant of MAs (Northern Ireland is covered by the centralized authorization procedure and can be covered under the decentralized or mutual recognition procedures).
Brexit also materially impacted the 77 Table of Contents regulatory regime with respect to the approval of our product candidates. Great Britain is no longer covered by the EU’s procedures for the grant of MAs (Northern Ireland is covered by the centralized authorization procedure and can be covered under the decentralized or mutual recognition procedures).
While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
While an inadvertent lapse can in many cases be cured by payment 102 Table of Contents of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
If we or a regulatory authority discover previously unknown problems with a product, such as AEs of unanticipated severity or frequency, or problems with the facilities where the product is manufactured, a regulatory authority may impose restrictions on that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.
If we or a regulatory authority discover previously unknown problems with a product, such as AEs of unanticipated severity or frequency, or problems with the facilities where the product is manufactured, a regulatory 74 Table of Contents authority may impose restrictions on that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.
The regulation will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.
It will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the highest potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.
Comprehensive tax reform bills could adversely affect our business and financial condition. In 2017, the U.S. government enacted comprehensive federal income tax legislation that includes significant changes to the taxation of business entities. These changes include, among others, a permanent reduction to the corporate 104 Table of Contents income tax rate.
Comprehensive tax reform bills could adversely affect our business and financial condition. In 2017, the U.S. government enacted comprehensive federal income tax legislation that includes significant changes to the taxation of business entities. These changes include, among others, a permanent reduction to the corporate income tax rate.
The FDA may also require us to perform one or more additional clinical studies or measurements to support the change from the branded reference drug, which could be time consuming and could substantially delay our achievement of regulatory approvals for such product candidates.
The FDA may also require us to perform one or more additional clinical studies or measurements to support the change from the branded reference drug, which could be time consuming and could substantially delay our achievement of regulatory approvals 104 Table of Contents for such product candidates.
Disputes may arise between BioXcel LLC and us in a number of areas relating to our past and ongoing relationships, including: ● intellectual property, technology and business matters, including failure to make required technology transfers and failure to comply with non-compete provisions applicable to BioXcel LLC and us; ● labor, tax, employee benefit, indemnification and other matters arising from the separation of BTI from BioXcel LLC; ● distribution and supply obligations; ● employee retention and recruiting; ● business combinations involving us; ● sales or distributions by BioXcel LLC of all or any portion of its ownership interest in us; ● the nature, quality and pricing of services BioXcel LLC has agreed to provide us; and ● business opportunities that may be attractive to both BioXcel LLC and us.
Disputes may arise between BioXcel LLC and us in a number of areas relating to our past and ongoing relationships, including: ● intellectual property, technology and business matters, including failure to make required technology transfers and failure to comply with contractual provisions applicable to BioXcel LLC and us; ● labor, tax, employee benefit, indemnification and other matters arising from the separation of BTI from BioXcel LLC; ● distribution and supply obligations; ● employee retention and recruiting; ● business combinations involving us; ● sales or distributions by BioXcel LLC of all or any portion of its ownership interest in us; 89 Table of Contents ● the nature, quality and pricing of services BioXcel LLC has agreed to provide us; and ● business opportunities that may be attractive to both BioXcel LLC and us.
We, or our manufacturers, may be unable to successfully increase the manufacturing capacity for any of our approved products or product candidates in a timely or cost-effective manner, or at all. In addition, quality issues may arise during scale-up activities.
We, or our manufacturers, may be unable to successfully increase the manufacturing capacity for any of our approved products or product candidates in a timely or cost-effective manner, or 91 Table of Contents at all. In addition, quality issues may arise during scale-up activities.
A security compromise of our information technology systems or business operations, or those of third parties on which we rely, could occur through a variety of methods such as from cyber-attacks and cyber-intrusions over the Internet, malware, computer viruses, email spoofing, attachments to e-mails, persons inside or outside our organization or persons with access to systems inside our organization.
A security compromise of our information technology systems or business operations, or those of third parties on which we rely, could occur through a variety of methods such as from cyber-attacks and cyber-intrusions over the Internet, misconfigurations, “bugs” or other vulnerabilities, malware, computer viruses, email spoofing, attachments to e-mails, persons inside or outside our organization or persons with access to systems inside our organization.
Supreme Court has recently modified some tests used by the USPTO in granting patents over the past 20 years, which may decrease the likelihood that we will be able to obtain patents and increase the likelihood of challenge to any patents we obtain or license.
In addition, the U.S. Supreme Court has recently modified some tests used by the USPTO in granting patents over the past 20 years, which may decrease the likelihood that we will be able to obtain patents and increase the likelihood of challenge to any patents we obtain or license.
These rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor and 103 Table of Contents maintain compliance with.
These rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain compliance with.
This regulation intends to boost cooperation among EU member states in assessing health technologies, including new medicinal products as well as certain high-risk medical devices, and providing the basis for cooperation at the EU level for joint clinical assessments in these areas.
The regulation intends to boost cooperation among EU member states in assessing health technologies, including new medicinal products as well as certain high-risk medical devices, and provide the basis for cooperation at the EU level for joint clinical assessments in these areas.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters are located at 555 Long Wharf Drive in New Haven, Connecticut. The Company occupies 18,285 square feet of space. The leases for this space expire in February 2026 and we have a renewal option for one additional five-year term. We believe that our existing facilities are suitable and adequate to meet our current needs.
Biggest changeItem 2. Properties Our corporate headquarters are located at 555 Long Wharf Drive in New Haven, Connecticut. The Company occupies 18,285 square feet of space. The leases for this space expire in February 2026 and we have a renewal option for one additional five-year term.
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We intend to add new facilities or expand existing facilities as we add employees, and we believe that suitable additional or substitute space will be available as needed to accommodate any such expansion of our operations.
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We believe that our existing facilities are suitable and adequate to meet our current needs. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we may be subject to litigation and claims arising in the ordinary course of business.
Biggest changeItem 3. Legal Proceedings From time to time, we may be subject to litigation and claims arising in the ordinary course of business. For information about our legal proceedings, see Note 18 to our audited financial statements included elsewhere in this Annual Report on Form 10-K which is information is incorporation herein by reference.
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We are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating results, cash flows or financial condition. Item 4. Mine Safety Disclosures Not applicable. ​ 105 Table of Contents Part II
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In addition, on February 12, 2024, we became aware that the SEC has initiated an investigation involving the Company and is seeking the production of certain documents. We are fully cooperating with the SEC’s investigation.
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We cannot predict or determine whether any proceeding may be instituted by the SEC in connection with its investigation or the outcome of any proceeding that may be instituted, or the effects any such proceeding could have on the Company’s business or financing efforts. Item 4. Mine Safety Disclosures Not applicable. Part II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 105 ​ ​ ​ Part II. ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 106 Item 6. Reserved 106 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 107 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 118 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 119 ​ ​ ​ Part II. ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 119 Item 6. Reserved 120 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 121 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 136 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeEquity Compensation Plans The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 11. of Part III of this Annual Report on Form 10-K. Unregistered Sales of Securities None. Issuer Purchases of Equity Securities None.
Biggest changeEquity Compensation Plans The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 11. of Part III of this Annual Report on Form 10-K.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on The Nasdaq Capital Market ® under the symbol “BTAI.” Stockholders As of March 13, 2023, there were 11 stockholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on The Nasdaq Capital Market ® under the symbol “BTAI.” Stockholders As of March 21, 2024, there were 12 stockholders of record of our common stock.
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Unregistered Sales of Securities There were no unregistered sales of equity securities by the Company during the three months ended December 31, 2023 except as reported in the Company’s Current Report on Form 8-K filed on December 6, 2023. 119 Table of Contents Issuer Purchases of Equity Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResearch and Development Expense Research and development expenses for the years ended December 31, 2022 and 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2022 2021 Change % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel and related costs ​ $ 18,272 ​ $ 14,624 ​ $ 3,648 ​ ​ 25 % Non-cash stock-based compensation ​ 4,558 ​ 6,658 ​ (2,100) ​ ​ (32) % Professional fees ​ 14,342 ​ 11,932 ​ 2,410 ​ ​ 20 % Clinical trials expense ​ 40,630 ​ 14,226 ​ 26,404 ​ ​ 186 % Chemical, manufacturing and controls cost ​ 10,144 ​ 3,506 ​ 6,638 ​ ​ 189 % Travel and other costs ​ 3,460 ​ 2,124 ​ 1,336 ​ ​ 63 % Research and development tax credit ​ ​ (167) ​ ​ (362) ​ ​ 195 ​ ​ 54 % Total research and development expenses ​ $ 91,239 ​ $ 52,708 ​ $ 38,531 ​ ​ 73 % ​ 111 Table of Contents The increase of $38,531 for the year ended December 31, 2022, relative to the same period in 2021 is primarily attributable to: ● An increase in personnel costs related to our efforts to grow our clinical team as we expanded our clinical trials, particularly evaluating BXCL501 for treatment of agitation in patients with Alzheimer’s disease, as well as BXCL701 for treatment of prostate cancer. ● Increased professional fees due to required toxicology testing for IGALMI. ● An increase in clinical trials expenses due to the on-going TRANQUILITY II study of BXCL501 for the potential treatment of agitation in patients with Alzheimer’s disease. ● Increased chemical, manufacturing and controls (“CMC”) costs associated with producing materials related to testing required for IGALMI, as well as our clinical trials of BXCL501 for the treatment of agitation associated with Alzheimer’s disease and BXCL701 for the treatment of prostate cancer. ● An increase in travel and other costs as we added personnel and increased site visits to pre-COVID-19 levels.
Biggest changeThe increase in Cost of goods sold for the year ended December 31, 2023 is primarily the result of increased sales and the increase in the reserve for excess and obsolete inventory. 126 Table of Contents Research and Development Expense Research and development expenses for the years ended December 31, 2023 and 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2023 2022 Change % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel and related costs ​ $ 16,351 ​ $ 18,272 ​ $ (1,921) ​ ​ (11) % Non-cash stock-based compensation ​ 6,324 ​ 4,558 ​ 1,766 ​ ​ 39 % Professional fees ​ 14,590 ​ 14,342 ​ 248 ​ ​ 2 % Clinical trials expense ​ 35,094 ​ 40,630 ​ (5,536) ​ ​ (14) % Chemical, manufacturing and controls cost ​ 8,687 ​ 10,144 ​ (1,457) ​ ​ (14) % Travel and other costs ​ 3,280 ​ 3,293 ​ (13) ​ ​ (0) % Total research and development expenses ​ $ 84,326 ​ $ 91,239 ​ $ (6,913) ​ ​ (8) % ​ The decrease of $6,913 for the year ended December 31, 2023, compared to the year ended December 31, 2022 is primarily attributable to the following: ● A decrease in clinical trials expense as a result of reduced costs associated with the wind down of the SERENITY III study to evaluate BXCL501 for at home use for the acute treatment of agitation related to schizophrenia and bipolar disorders, as well as the TRANQUILITY II study of BXCL501 for the potential treatment of agitation in patients with Alzheimer’s disease. ● A decrease in personnel and related costs during the fourth quarter of 2023 as a result of the Company’s Reprioritization. ● A decrease in Chemical, manufacturing and controls (“CMC”) costs due to lower CMC costs related to decreased clinical trial activities. ● An increase in non-cash stock-based compensation due to higher award forfeitures in 2022.
Research and Development Expenses As part of the process of preparing the Company’s consolidated financial statements, BTI’s management is required to estimate prepaid and accrued expenses.
Research and Development Expenses As part of the process of preparing the Company’s consolidated financial statements, BTI’s management is required to estimate prepaid and accrued expenses, including research and development expenses.
We believe that our existing cash and cash equivalents as of December 31, 2022, will be sufficient to enable us to fund operating expenses and capital expenditure requirements for at least the next 12 months from the date of the issuance of the consolidated financial statements included in this Annual Report on Form 10-K, including funding our ongoing research and development and commercialization efforts.
We believe that our existing cash and cash equivalents as of December 31, 2023 will not be sufficient to enable us to fund operating expenses and capital expenditure requirements for at least the next 12 months from the date of the issuance of the consolidated financial statements included in this Annual Report on Form 10-K, including funding our ongoing research and development and commercialization efforts.
In May 2021, we entered into the Sale Agreement with Jefferies pursuant to which we can offer and sell shares of our common stock, having an aggregate offering price of up to $100,000, from time to time, through an “at the market offering” program under which Jefferies will act as sale agent.
ATM Program In May 2021, we entered into the Sale Agreement with Jefferies pursuant to which we could offer and sell shares of our common stock, having an aggregate offering price of up to $100,000, from time to time, through an “at the market offering” program under which Jefferies will act as sale agent.
Operating Capital and Capital Expenditure Requirements We expect to continue to incur significant and increasing operating losses at least for the next several years as we commercialize IGALMI and as we expand our clinical trials of and seek marketing approval for BXCL501, BXCL502, BXCL701 and BXCL702, while pursuing development of additional product candidates.
Operating Capital and Capital Expenditure Requirements We expect to continue to incur significant and increasing operating losses at least for the next several years as we commercialize IGALMI TM and as we expand our clinical trials of and seek marketing approval focused on BXCL501 while pursuing development of additional product candidates for BXCL502, BXCL701 and BXCL702.
There may be instances in which payments made to vendors exceed the level of services 117 Table of Contents provided and result in a prepayment of the clinical expense. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones.
There may be instances in which payments made to vendors exceed the level of services provided and result in a prepayment of the clinical expense. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones.
Research and development expenses primarily consist of salary, benefits and non-cash stock-based compensation for our research and development personnel, costs incurred under agreements with contract research organizations and sites that conduct our non-clinical studies and clinical trials, costs of outside consultants engaged in research and development activities, including their fees, non-cash stock-based compensation and travel expenses, the cost of acquiring, developing and manufacturing preclinical and clinical trial materials and lab supplies, and depreciation and other expenses.
Expenditures primarily consist of salary, benefits and non-cash stock-based compensation for our research and development personnel, costs incurred under agreements with contract research organizations and sites that conduct our non-clinical studies and clinical trials, costs of outside consultants engaged in research and development activities, travel expenses, the cost of acquiring, developing and manufacturing preclinical and clinical trial materials and lab supplies, and depreciation and other expenses.
We anticipate that our expenses will increase substantially as we: ● continue our clinical development of our product candidates; ● conduct additional research and development with our product candidates; 115 Table of Contents ● seek to identify, acquire, license, develop and commercialize product candidates; ● integrate acquired technologies into a comprehensive regulatory and product development strategy; ● maintain, expand and protect our intellectual property portfolio; ● hire scientific, clinical, quality control and administrative personnel; ● add operational, financial and management information systems and personnel, including personnel to support our drug development and commercial efforts; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; ● fully develop a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize IGALMI and any product candidates for which we may obtain regulatory approval; and ● continue to operate as a public company.
We anticipate that our expenses will increase substantially as we: ● continue our clinical development of our product candidates; 133 Table of Contents ● conduct additional research and development with our product candidates; ● seek to identify, acquire, license, develop and commercialize product candidates; ● integrate acquired technologies into a comprehensive regulatory and product development strategy; ● maintain, expand and protect our intellectual property portfolio; ● hire scientific, clinical, quality control and administrative personnel and utilize professional services, including consultants, lawyers, and accountants; ● add operational, financial and management information systems and personnel, including personnel to support our drug development and commercial efforts; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; ● fully develop a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize IGALMI TM and any product candidates for which we may obtain regulatory approval; and ● continue to operate as a public company.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2022, was $96,237 and was primarily attributable to $98,600 of proceeds received from the OFA Facilities, net of $2,646 of debt issuance costs.
Net cash provided by financing activities for the year ended December 31, 2022, was $96,237 and was primarily attributable to $98,600 of proceeds received from the OFA Facilities, net of $2,646 of debt issuance costs and proceeds of $283 from the exercise of stock options.
Contractual Obligations and Commitments In April 2022, the Company signed a commercial supply agreement that requires minimum annual payments for the first three years of the agreement that in aggregate total $10,000 for the three-year period and the minimum commitment for 2023 is $3,000.
Contractual Obligations and Commitments In April 2022, the Company signed a commercial supply agreement that requires minimum annual payments for the first three years of the agreement that in aggregate total $10,000 for the three-year period and the minimum commitment for 2024 is $5,000.
Following IGALMI’s approval by the FDA, we capitalize costs related to commercial production of IGALMI as inventory and expense those CMC costs related to clinical trials.
Following IGALMI TM ’s approval by the FDA, we capitalize costs related to commercial production of IGALMI TM as inventory and expense those CMC costs related to clinical trials.
The majority of the Company’s service providers invoice BTI monthly for services performed or when contractual milestones are met. BTI management makes estimates of prepaid and/or accrued expenses as of each reporting date in the Company’s consolidated financial statements based on facts and circumstances known to management at that time.
The majority of the Company’s service providers invoice BTI monthly for services performed or when contractual milestones are met. BTI management makes estimates of prepaid and/or accrued expenses, including research and development expenses, as of each reporting date in the 135 Table of Contents Company’s consolidated financial statements based on facts and circumstances known to management at that time.
Other Expense (Income) Other expense (income) primarily consists of interest costs associated with the strategic financing facility the Company entered into in April 2022, changes in fair value of derivative financial instruments, and interest income earned on cash and cash equivalents that were comprised primarily of money market funds.
Other Expense (Income) Other (income) expense primarily consists of interest costs associated with the Credit Agreement the Company entered into in April 2022, changes in fair value of derivative financial instruments, and interest income earned on cash and cash equivalents that were comprised primarily of money market funds.
Pursuant to the Credit Agreement, the Lenders agreed to loan us up to $135,000 in senior secured term loans. On April 28, 2022, we borrowed the first tranche of $70,000 of loans.
Pursuant to the Credit Agreement, the Lenders originally agreed to provide us up to $135,000 in senior secured term loans to us. On April 28, 2022, we borrowed the first $70,000 tranche of loans under the Credit Agreement.
See Note 8, Debt and Credit Facilities in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information relating to the Credit Agreement and RIFA, including applicable interest rates, payment obligations and certain restrictive and financial covenants thereunder.
See Note 9, Debt and Credit Facilities and Note 19, Subsequent Events in the notes to consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information relating to the Credit Agreement and RIFA, including applicable interest rates, payment obligations and certain restrictive and financial covenants thereunder.
For additional details, see Note 12, Leases in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information relating to the Company’s leases. In addition, we are obligated to make quarterly interest and royalty payments under our Credit Agreement and RIFA, respectively.
For additional details, see Note 13, Leases in the notes to consolidated financial statements included in this Annual Report on Form 10-K for additional information relating to the Company’s leases. In addition, we are obligated to make quarterly interest payments under our Credit Agreement.
During the fourth quarter of 2022, we began contracting directly with intermediaries such as GPOs. Operating Costs and Expenses Cost of Goods Sold Cost of goods sold primarily relates to the costs of producing, packaging and delivering our product to customers.
During the fourth quarter of 2022, we began contracting directly with intermediaries such as GPOs. Operating Costs and Expenses Cost of Goods Sold Cost of goods sold primarily relates to the costs of producing, packaging, and delivering our product to customers as well as costs related to excess or obsolete inventory.
In February 2022, we signed a distribution agreement with a third-party to distribute product related to BXCL501 in the U.S. The distributor will be paid defined fees for its services under the agreement, which can be terminated by either party for cause. The distribution agreement can also be terminated by us without cause, subject to payment of agreed termination fees.
In February 2022, we signed a distribution agreement with a third party to distribute product related to BXCL501 in the U.S. The distributor will be paid defined fees for its services under the agreement, which can be terminated by either party for cause.
There are no assurances that we will be successful in obtaining an adequate level of financing as and when needed to finance our operations on terms acceptable to us or at all, particularly during when there is market uncertainty or an economic downturn.
There are no assurances that we will be successful in obtaining an adequate level of financing as and when needed to finance our operations on terms acceptable to us or at all, particularly when there is market uncertainty or an economic downturn or if other events make investment in our securities less appealing.
Since our inception, our operations have been financed primarily from proceeds from the sale of equity securities, including our initial public offering, private placements of our common stock, registered offerings of our common stock, an Open Market Sale Agreement (the “Sale Agreement”) with Jefferies LLC (“Jefferies”), and borrowings under strategic financing arrangements (as described below).
Since our inception, our operations have been financed primarily from proceeds from the sale of equity securities, including our initial public offering, private placements of our common stock, registered offerings of our common stock, an Open Market Sale Agreement (as amended, supplemented and/or restated from time to time, the “Sale Agreement”) with Jefferies LLC (“Jefferies”), and borrowings under our Credit Agreement (as described below).
Investing Activities Cash used in investing activities for the year ended December 31, 2022, was $139 and was primarily attributable to the purchase of equipment and leasehold improvements. Cash used in investing activities was $445 for the year ended December 31, 2021, and was attributable to the purchase of furniture and leasehold improvements.
Investing Activities Net cash used in investing activities for the year ended December 31, 2023, was $20 and was primarily attributable to leasehold improvements. Net cash used in investing activities was $139 for the year ended December 31, 2022, and was primarily attributable to the purchase of equipment and leasehold improvements.
For additional details, see Note 8, Debt and Credit Facilities in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information relating to the Company’s debt payment obligations. 116 Table of Contents Critical Accounting Policies and Estimates The preparation of our consolidated financial statements in conformity with U.S.
For additional details, see Note 9, Debt and Credit Facilities in the notes to consolidated financial statements included in this Annual Report on Form 10-K for additional information relating to the Company’s debt payment obligations. Critical Accounting Policies and Estimates The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to exercise its judgment.
GAAP requires management to exercise its judgment. We exercise considerable judgment with respect to establishing sound accounting policies and in making estimates and assumptions that affect the reported amounts of our assets and liabilities, our recognition of revenues and expenses, and disclosure of commitments and contingencies at the date of the consolidated financial statements.
We exercise considerable judgment with respect to establishing sound accounting policies and in making estimates and assumptions that affect the reported amounts of our assets and liabilities, our recognition of revenues and expenses, and disclosure of commitments and contingencies at the date of the consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments.
In connection with the Credit Agreement, we granted to the Lenders certain warrants to purchase up to 278 shares of our common stock, rights to purchase up to $5,000 of our common stock and warrants to purchase up to 175 individual ownership units (i.e., not in thousands) in OnkosXcel.
In connection with the Credit Agreement, we granted to the Lenders (i) warrants to purchase up to 278 shares of our common stock (the “Original Warrants”), (ii) rights to purchase up to 129 Table of Contents $5,000 of our common stock and (iii) warrants to purchase up to 175 individual ownership units (i.e., not in thousands) in OnkosXcel (the “OnkosXcel Warrants”).
See “ Risks Related to Financial Position and Need for Additional Capital; We will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts. ” in Part I. Item 1A., “Risk Factors” elsewhere in this Annual Report on Form 10-K.
See “Risks Related to Financial Position and Need for Additional Capital — We will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts or otherwise seek strategic alternatives. ” in Part I.
Our research and development costs by program for the years ended December 31, 2022 and 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ Year ended ​ December 31, ​ 2022 ​ 2021 Direct external costs ​ ​ ​ ​ ​ BXCL501 $ 52,044 ​ $ 16,046 BXCL701 9,631 ​ ​ 11,092 Other research and development programs 2,687 ​ ​ 1,587 Total direct external costs $ 64,362 ​ $ 28,725 Internal personnel costs ​ 22,831 ​ ​ 21,282 Sub-total direct costs $ 87,193 ​ $ 50,007 Indirect costs and overhead ​ 4,213 ​ ​ 3,063 Research and development tax credit ​ (167) ​ ​ (362) Total research and development expenses $ 91,239 ​ $ 52,708 ​ Selling, General and Administrative Selling, general and administrative expenses primarily consist of salaries, benefits and non-cash stock-based compensation for our sales, executive and administrative personnel.
Our research and development costs by program for the years ended December 31, 2023 and 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, ​ ​ 2023 ​ 2022 Direct external costs ​ ​ ​ ​ ​ ​ BXCL501 ​ $ 46,661 ​ $ 52,044 BXCL701 ​ 7,050 ​ ​ 9,631 Other research and development programs ​ 4,142 ​ ​ 2,687 Total direct external costs ​ $ 57,853 ​ $ 64,362 Internal personnel costs ​ ​ 22,675 ​ ​ 22,831 Sub-total direct costs ​ $ 80,528 ​ $ 87,193 Indirect costs and overhead ​ ​ 3,798 ​ ​ 4,046 Total research and development expenses ​ $ 84,326 ​ $ 91,239 ​ Selling, General and Administrative Selling, general and administrative expenses primarily consist of salaries, benefits and non-cash stock-based compensation for our sales, executive and administrative personnel.
(“BTI” or the “Company”) is a biopharmaceutical company utilizing artificial intelligence (“AI”) approaches to develop transformative medicines in neuroscience and immuno-oncology. We are focused on utilizing cutting-edge technology and innovative research to develop high-value therapeutics aimed at transforming patients’ lives. We employ a proprietary AI platform to reduce therapeutic development costs and potentially accelerate development timelines.
(“BTI” or the “Company”) is a biopharmaceutical company utilizing artificial intelligence (“AI”) to develop transformative medicines in neuroscience and, through the Company’s wholly owned subsidiary, OnkosXcel Therapeutics LLC (“OnkosXcel”), immuno-oncology. We are focused on utilizing cutting-edge technology and innovative research to develop high-value therapeutics aimed at transforming patients’ lives.
We sold 124 shares under the Sale Agreement in June 2021 for proceeds of $4,056, net of issuance costs of $500. We did not sell any shares, and no proceeds were received under the Sale Agreement during the year ended December 31, 2022.
During the year ended December 31, 2023, we sold 1,408 shares under the Sale Agreement for net proceeds of $26,221. We did not sell any shares, and no proceeds were received under the Sale Agreement during the year ended December 31, 2022.
Generally Accepted Accounting Principles (“GAAP”). Components of Our Results of Operations Product Revenues, Net Revenues relate to sales of IGALMI from early product trials and reflects limited market access since commercial launch in July 2022. The revenues are net of rebates, chargebacks, discounts and other adjustments.
Basis of Presentation The Company’s consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Components of Our Results of Operations Product Revenue, Net Revenue relates to sales of IGALMI TM and reflect limited market access since commercial launch in July 2022. The revenues are net of rebates, chargebacks, discounts, and other adjustments.
We have not 113 Table of Contents yet established an ongoing source of revenue sufficient to cover our operating costs and will need to do so in future periods.
We have not yet established an ongoing source of revenue sufficient to cover our operating costs and will need to do so in future periods. Financing Agreements On April 19, 2022, we entered into two financing agreements: the Credit Agreement and the RIFA.
Since the determination of these estimates requires the exercise of judgment, actual results could differ from such estimates. We define critical accounting policies as those that are reflective of significant judgments and uncertainty and which may potentially result in materially different results under different assumptions and conditions.
We define critical accounting policies as those that are reflective of significant judgments and uncertainty and which may potentially result in materially different results under different assumptions and conditions. In applying these critical accounting policies, our management uses its judgment to determine the appropriate assumptions to be used in making certain estimates.
On an ongoing basis, we evaluate our estimates and judgments. We base our estimates and judgments on a variety of factors including our historical experience, knowledge of our business and industry, current and expected economic conditions, the attributes of our products and the regulatory environment.
We base our estimates and judgments on a variety of factors including our historical experience, knowledge of our business and industry, current and expected economic conditions, the attributes of our products and the regulatory environment. We periodically re-evaluate our estimates and assumptions with respect to these judgments and modify our approach when circumstances indicate that modifications are necessary.
As of March 15, 2023, the Company sold 756 shares under the Sale Agreement with Jefferies in the first quarter of 2023 for net proceeds of $23,917, net of issuance costs of $740. 114 Table of Contents Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2022 2021 Cash (used in) provided by: ​ ​ ​ ​ ​ ​ Operating activities ​ $ (135,341) ​ $ (82,153) Investing activities ​ $ (139) ​ $ (445) Financing activities ​ $ 96,237 ​ $ 102,447 ​ Operating Activities Net cash used in operating activities for the year ended December 31, 2022 was $135,341 and was primarily attributable to our net loss of $165,757, a $1,985 increase in inventory of IGALMI and a $3,905 increase in prepaid expenses, other current assets and other assets, partially offset by $17,337 in non-cash stock-based compensation, a $4,611 increase in accrued and payment in kind interest, and $13,030 increase in accounts payable, accrued expenses and other current liabilities.
Net cash used in operating activities was $135,341 for the year ended December 31, 2022, and was primarily attributable to our $165,757 net loss, a $1,985 increase in inventory of IGALMI TM and a $3,905 increase in prepaid expenses, other current assets and other assets, partially offset by $17,337 in non-cash stock-based compensation, a $4,611 increase in accrued and payment in kind interest, and $13,030 increase in accounts payable, accrued expenses, due to related parties and other current liabilities.
Other expense, net is primarily associated with changes in fair value of derivative financial instruments for the period. Inflation Inflation generally affects us by increasing our cost of labor and clinical trial costs. We do not believe that inflation has had a material effect on our results of operations during the periods presented.
Other (income) expense, net is primarily associated with changes in fair value of derivative financial instruments for the period, which relate to instruments associated with the Credit Agreement. Inflation Inflation generally affects us by increasing our cost of labor and clinical trial costs.
The foregoing additional amounts were not eligible to be borrowed as of December 31, 2022. Pursuant to the RIFA, the Purchasers agreed to provide us with up to $120,000 in financing for our near-term commercial activities of IGALMI, development and commercialization of BXCL501 and other general corporate purposes.
Pursuant to the RIFA, the Purchasers agreed to provide us with up to $120,000 in financing for our near-term commercial activities of IGALMI TM , development and commercialization of BXCL501 and other general corporate purposes. On July 8, 2022, we drew down the first tranche of $30,000 under the RIFA.
Liquidity and Capital Resources As of December 31, 2022, we had cash and cash equivalents of $193,725, working capital of $169,970 and stockholders’ equity of $76,775. Net cash used in operating activities was $135,341 and $82,153 for the years ended December 31, 2022 and 2021, respectively.
Liquidity and Capital Resources As of December 31, 2023, we had cash and cash equivalents of $65,221, working capital of $44,876 and stockholders’ deficit of $56,508. Net cash used in operating activities was $155,006 and $135,341 for the years ended December 31, 2023 and 2022, respectively.
Cost of Goods Sold Cost of goods sold for the year ended December 31, 2022, were $20, which primarily related to the costs to produce, package and deliver IGALMI to customers. There were no cost of goods sold in 2021.
Cost of Goods Sold Cost of goods sold for the years ended December 31, 2023 and 2022, were $1,260 and $20, respectively, which primarily related to the costs to produce, package and deliver IGALMI TM to customers, as well as costs related to excess or obsolete inventory.
Cash provided by financing activities was $102,447 for the year ended December 31, 2021, and was attributable to $96,937 in net proceeds from the issuance of common stock in our June 2021 public offering, $4,056 in net proceeds from the sale of common stock under the Sale Agreement with Jefferies and proceeds of $1,454 from the exercise of stock options.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2023, was $26,522 and was primarily attributable to net proceeds of $26,221 from the sale of common stock under the Sale Agreement with Jefferies and net proceeds of $508 from the exercise of stock options.
In April 2022, we entered into two strategic financing agreements; a Credit Agreement and Guaranty (the “Credit Agreement”) by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto (the “Lenders”), and Oaktree Fund Administration LLC (“OFA”) as administrative agent, and a Revenue Interest Financing Agreement (the “RIFA”; and together with the Credit Agreement, the “OFA Facilities”) by and among the Company, the purchasers party thereto (the “Purchasers”) and OFA as administrative agent.
December 2023 Refinancing ​ On December 5, 2023 (the “Second Amendment Effective Date”), we entered into the Second Amendment to Credit Agreement and Guaranty and Termination of Revenue Interest Financing Agreement (the “Second Amendment”), which amended the Credit Agreement and Guaranty, dated April 19, 2022, by and among us, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto (the “Lenders”), and Oaktree Fund Administration LLC (“OFA”) as administrative agent (as amended, the “Credit Agreement”).
Research and Development Our research and development expenses reflect costs incurred for the research and development of our clinical and preclinical product candidates, which includes payments to BioXcel LLC.
Research and Development Our research and development expenses reflect costs associated with the identification of our preclinical and clinical product candidates.
Our advanced immuno-oncology asset, BXCL701, is an investigational, oral innate immune activator currently being developed as a potential therapy for the treatment of aggressive forms of prostate cancer, pancreatic cancer and other solid and liquid tumors. On April 19, 2022, we announced the formation of a wholly-owned subsidiary, OnkosXcel Therapeutics, LLC (“OnkosXcel”), to develop potentially transformative medicines in immuno-oncology.
Our most advanced immuno-oncology asset, BXCL701, is an investigational oral innate immune activator being developed by OnkosXcel Therapeutics as a potential therapy for the treatment of aggressive forms of prostate cancer, pancreatic cancer, and other solid and liquid tumors. ​ On April 6, 2022, we announced that the FDA approved IGALMI TM (dexmedetomidine) sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults.
Our approach leverages existing approved drugs and/or clinically evaluated product candidates together with big data and proprietary machine learning algorithms to identify new therapeutic indications. We believe this differentiated approach has the potential to reduce the expense and time associated with drug development in diseases with substantial unmet medical needs.
We employ various AI platforms to reduce therapeutic development costs and potentially accelerate development timelines. Our approach leverages existing approved drugs and/or clinically evaluated product candidates together with big data and proprietary machine learning algorithms to identify new therapeutic indications.
Recently Issued Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is set forth in Note 3 to the consolidated financial statements included in this Annual Report on Form 10-K.
Recently Issued Accounting Pronouncements A description of recently issued accounting pronouncements is set forth in Note 3, Summary of Significant Accounting Policies to the consolidated financial statements included in this Annual Report on Form 10-K. Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 Product Revenue, Net Commercial sales of IGALMI TM launched in July 2022.
Stock Compensation The Company has granted stock options, restricted stock units and profit units to employees, directors, and consultants, as well as warrants to other third parties. For employee, director and consultant awards, the value of each grant is estimated on the date of grant using a Black-Scholes option-pricing model.
For employee, director and consultant awards, the value of each grant is estimated on the date of grant using a Black-Scholes option-pricing model.
We periodically re-evaluate our estimates and assumptions with respect to these judgments and modify our approach when circumstances indicate that modifications are necessary. While we believe that the factors we evaluate provide us with a meaningful basis for establishing and applying sound accounting policies, we cannot guarantee that the results will always be accurate.
While we believe that the factors we evaluate provide us with a meaningful basis for establishing and applying sound accounting policies, we cannot guarantee that the results will always be accurate. Since the determination of these estimates requires the exercise of judgment, actual results could differ from such estimates.
Other Expense (Income) Interest expense increased for 2022 relative to 2021 primarily due to borrowings under the OFA Facilities (defined subsequently herein) the Company entered into in April 2022. The expense was partially offset by interest income earned on cash and cash equivalents that were held primarily in short-term money market funds.
The expense was partially offset by interest income earned on cash and cash equivalents that were held primarily in short-term money market funds. Interest income increased to $5,649 for the year ended December 31, 2023 compared to $2,528 for the year ended December 31, 2022, due to higher average cash balances during the year.
We incurred losses of approximately $165,757 and $106,931 for the years ended December 31, 2022 and 2021, respectively. We have generated limited revenues to date, and we have not yet achieved profitability.
We incurred losses of approximately $179,053 and $165,757 for the years ended December 31, 2023 and 2022, respectively. We will need to generate significant product revenues to achieve profitability.
BTI leases office space for its corporate headquarters at 555 Long Wharf Drive, New Haven, Connecticut (the “HQ Lease”). The HQ Lease expires in February 2026. The Company has an option to renew the HQ Lease for one additional five-year term. Payments under the HQ Lease are fixed. The Company has approximately $1,209 of payments remaining under the HQ Lease.
The Company has an option to renew the HQ Lease for one additional five-year term. Payments under the HQ Lease are fixed. The Company has approximately $837 of payments remaining under the HQ Lease.
In addition, we may also experience increased fees for outside consultants, attorneys, and accountants. We may also incur increased costs to comply with corporate governance, internal controls, investor relations and disclosures and similar requirements applicable to public companies.
Selling, general and administrative expenses also include legal expenses to pursue patent protection of our intellectual property and other corporate matters, professional fees for audit and tax services and insurance charges. We may also incur increased costs to comply with corporate governance, internal controls, investor relations and disclosures and similar requirements applicable to public companies.
Selling, General and Administrative Expense Selling, general and administrative expenses for the years ended December 31, 2022 and 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2022 2021 Change % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel and related costs ​ $ 20,690 ​ $ 9,576 ​ $ 11,114 ​ ​ 116 % Non-cash stock-based compensation ​ 12,779 ​ ​ 12,798 ​ (19) ​ ​ (0) % Professional fees ​ 14,313 ​ ​ 10,646 ​ 3,667 ​ ​ 34 % Commercial and marketing ​ ​ 13,006 ​ ​ 16,070 ​ ​ (3,064) ​ ​ (19) % Insurance ​ ​ 2,370 ​ ​ 2,136 ​ ​ 234 ​ ​ 11 % Travel and other costs ​ 5,603 ​ ​ 3,001 ​ 2,602 ​ ​ 87 % Total selling, general and administrative expenses ​ $ 68,761 ​ $ 54,227 ​ $ 14,534 ​ ​ 27 % ​ The increase of $14,534 for the year ended December 31, 2022, relative to the same period in 2021 is primarily attributable to: ● An increase in personnel and related costs due to our efforts to expand our functional teams, particularly in sales, for the commercial launch of IGALMI in the U.S. ● Increased professional fees, mainly for corporate legal fees, accounting and recruiting costs, primarily relating to the commercial launch of IGALMI in the U.S., formation of OnkosXcel, and higher operating support levels. ● An increase in travel and other costs as the Company resumed a more traditional travel schedule after restrictions relating to the COVID-19 pandemic were eased, and as a result of the commercial launch of 112 Table of Contents IGALMI.
Selling, General and Administrative Expense Selling, general and administrative expenses for the years ended December 31, 2023 and 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2023 2022 Change % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel and related costs ​ $ 27,171 ​ $ 20,690 ​ $ 6,481 ​ ​ 31 % Non-cash stock-based compensation ​ 12,290 ​ ​ 12,779 ​ (489) ​ ​ (4) % Professional fees ​ 22,310 ​ ​ 14,313 ​ 7,997 ​ ​ 56 % Commercial and marketing ​ ​ 12,485 ​ ​ 13,006 ​ ​ (521) ​ ​ (4) % Insurance ​ ​ 1,743 ​ ​ 2,370 ​ ​ (627) ​ ​ (26) % Travel and other costs ​ 7,414 ​ ​ 5,603 ​ 1,811 ​ ​ 32 % Total selling, general and administrative expenses ​ $ 83,413 ​ $ 68,761 ​ $ 14,652 ​ ​ 21 % ​ 127 Table of Contents The increase of $14,652 for the year ended December 31, 2023, relative to the year ended December 31, 2022 is primarily attributable to: ● Increased professional fees, primarily related to higher legal costs for the investigation of our TRANQUILITY II study, the write-off of previously deferred costs related to the initial public offering of OnkosXcel, and higher corporate operating support levels partially offset by reductions in consulting and recruiting fees. ● An increase in personnel costs due to our efforts to expand our functional teams, particularly in sales, to support commercialization of IGALMI TM in the U.S., prior to the Reprioritization. ● An increase in travel and other costs as a result of the commercial launch of IGALMI TM . ● Decreased non-cash stock-based compensation costs due to increased award forfeitures in 2023 resulting from the Reprioritization and decreased insurance costs as a result of completed clinical activities. ● Decreased commercial and marketing costs due to higher spend levels in 2022 resulting from the commercial launch of IGALMI TM .
We will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts.
We will need substantial additional funding, and if we are unable to raise capital when needed, we could be compelled to pursue alternative options, including, without limitation, implementing further workforce reductions, reducing or ceasing product development programs and advancement of our clinical trials and product candidates, selling our assets or seeking other strategic alternatives.
We expect that interest expense will increase in the future, as we meet additional milestones and draw down additional funds under the strategic financing facility.
Interest expense may increase in the future as our loans provided under the Credit Agreement are subject to floating interest rates following our December 2023 amendment to the Credit Agreement and, if we meet required milestones, we may draw down additional funds under the Credit Agreement.
Our continued commercialization efforts for IGALMI are designed to build the foundation to launch additional potential follow-on indications, if any, paving the way for our expanding neuroscience therapeutics business. 108 Table of Contents Our Clinical Programs The following is a summary of the status of our major clinical development programs as of the date of this Annual Report on Form 10-K: For additional information regarding our pipeline candidates, see Part I, Item 1, “Business” in this Annual Report on Form 10-K. ​ ​ 109 Table of Contents Basis of Presentation The Company’s consolidated financial statements are prepared in accordance with U.S.
The Fourth Amendment also includes a number of other changes to the Credit Agreement, as described below under “— Liquidity and Capital Resources—Sources of Liquidity—Financing Agreements.” ​ ​ 123 Table of Contents Our Clinical Programs ​ The following is a summary of the status of our major clinical development programs as of the date of this Annual Report on Form 10-K: For additional information regarding our pipeline candidates, see Part I, Item 1, “Business” in this Annual Report on Form 10-K.
On April 6, 2022, we announced that the United States (“U.S.”) Food and Drug Administration (“FDA”) approved IGALMI (dexmedetomidine or “Dex”) sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults. IGALMI is approved to be self-administrated by patients under the supervision of a health care provider.
In indications other than those approved by the United States (“U.S.”) Food and Drug Administration (“FDA”) as IGALMI™, BXCL501 is an investigational, proprietary, orally dissolving film formulation of dexmedetomidine (or “Dex”) in development for the treatment of agitation associated with psychiatric and neurological disorders.
Net cash used in operating activities was $82,153 for the year ended December 31, 2021, and was primarily attributable to our $106,931 net loss and a $103 decrease in prepaid expense and other assets, partially offset by $19,455 in stock-based compensation and a $4,850 increase in accounts payable and accrued expenses.
From January 1, 2024 through March 19, 2024, we sold 647 shares under the Sale Agreement for gross proceeds of $1,743 and received proceeds of $1,691, net of issuance costs of $52. ​ 132 Table of Contents Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2023 2022 Cash (used in) provided by: ​ ​ ​ ​ ​ ​ Operating activities ​ $ (155,006) ​ $ (135,341) Investing activities ​ $ (20) ​ $ (139) Financing activities ​ $ 26,522 ​ $ 96,237 ​ Operating Activities Net cash used in operating activities for the year ended December 31, 2023 was $155,006 and was primarily attributable to our net loss of $179,053 and a $3,219 decrease in accounts payable, accrued expenses, due to related parties, and other current liabilities, partially offset by a $2,888 decrease in prepaid expenses, other current assets and other assets, $18,614 in non-cash stock-based compensation, and a $4,369 increase in accrued and payable in kind interest.
Sources of Liquidity We have focused our efforts on raising capital and building the products in our pipeline, and only recently on launching sales for our first FDA approved product IGALMI.
Item 1A., “Risk Factors” elsewhere in this Annual Report on Form 10-K. Sources of Liquidity We have primarily focused our efforts on raising capital and building the products in our pipeline, and, although we generate revenue from sales of IGALMI TM , we do not expect to generate positive cash flows from operations in the near term.
Removed
We deployed the first phase of our sales team for high priority targets in May 2022. Furthermore, on July 6, 2022, we announced that IGALMI was commercially available in doses of 120 and 180 microgram (“mcg”) through the Company’s third-party logistics provider and was available for order through wholesalers.
Added
We believe this differentiated approach has the potential to reduce the expense and time associated with drug development in diseases with substantial unmet medical needs. Our most advanced neuroscience candidate is BXCL501.
Removed
Our most advanced clinical development program is BXCL501, an investigational proprietary, orally dissolving film formulation of Dex for the treatment of agitation associated with psychiatric and neurological disorders. We are conducting clinical trials for the at-home use of BXCL501 for agitation associated with bipolar disorders and schizophrenia.
Added
IGALMI TM is approved to be self-administrated by patients under the supervision of a health care provider.
Removed
We also continue to conduct clinical trials evaluating BXCL501 for the acute treatment of agitation in Alzheimer’s disease patients in residential care facilities and nursing homes and for adjunctive treatment of patients with Major Depressive Disorder (“MDD”).
Added
On July 6, 2022, we announced that IGALMI TM was commercially available in doses of 120 and 180 microgram (“mcg). ​ We are continuing to develop BXCL501 for the acute treatment of agitation associated with bipolar disorders or schizophrenia in the at-home setting and for the acute treatment of agitation (non-daily) associated with dementia due to probable Alzheimer’s disease in the at-home setting and in care facilities.
Removed
OnkosXcel is focused on the sustained expansion and optimization of our immuno-oncology franchise, while providing maximum strategic and financial flexibility. OnkosXcel plans to progress the development of BXCL701 and BXCL702. To support their development, we may pursue third-party investments in, or other strategic options for, OnkosXcel.
Added
As described further below, we have recently deprioritized the development of BXCL501 for certain indications, including development of BXCL501 as a potential adjunctive treatment for major depressive disorder (“MDD”), as well as our BXCL701 program except as noted in Part, Item 1, “Business” under the heading “Immuno-Oncology.” ​ For our TRANQUILITY program, we have conducted clinical studies evaluating BXCL501 for the acute treatment of agitation associated with mild to moderate dementia in patients with probable Alzheimer’s disease, who reside in assisted living facilities (“ALFs”) and residential care settings and who required minimal assistance with activities of daily living.
Removed
We continue to work closely with our clinical sites to monitor the potential impact of the evolving COVID-19 pandemic and the spread of its variants. To date, we have not experienced any significant delays in any of our ongoing or planned clinical trials, except for occasional COVID-19 related disruptions to our TRANQUILITY II and PLACIDITY trials.
Added
On June 29, 2023, we announced positive topline data from our TRANQUILITY II trial, as well as information regarding certain investigator misconduct and noncompliance at a clinical trial site. Since that time, we have taken steps to further investigate and evaluate the conduct of the TRANQUILITY II trial at this clinical site.
Removed
However, this could change rapidly. IGALMI Commercial Progress Since the commercial launch of IGALMI in July 2022, our commercial progress has yielded more than 65 formulary wins. Additionally, more than 600 hospital pharmacy and therapeutics (“P&T”) committees are scheduled to review and 107 Table of Contents vote on IGALMI inclusion in their formularies over the next several months.
Added
Based on these steps to date, we believe that there have been no further instances of misconduct or fraud or other findings that adversely impact the data integrity or reliability of the eligibility, safety, and efficacy data obtained at the clinical trial site in question. ​ We had previously been conducting the TRANQUILITY III clinical trial, which was designed to evaluate the potential for BXCL501 to treat acute agitation in patients with moderate to severe dementia associated with probable Alzheimer’s disease living in nursing homes and who require moderate to full assistance with activities of daily living. 121 Table of Contents We paused enrollment in TRANQUILITY III due to the much higher-than-expected background frequency of episodes of agitation experienced by the first several patients enrolled in the study. ​ We held Type B/Breakthrough Therapy Designation meetings with the FDA on October 11, 2023 and on February 20, 2024 to obtain additional feedback on our plans for further development of BXCL501 for the treatment of agitation associated with dementia in patients with probable Alzheimer’s disease.
Removed
In addition, nearly 50% of target beds are now under group purchasing organization (“GPO”) contracts as of February 28, 2023. We are in active discussions with other leading GPOs. This has been primarily accomplished with our initial 26-person institutional sales force since our trade launch in July 2022.
Added
We are currently planning to generate additional Phase 3 efficacy and safety data, in a variety of relevant care-facility settings and across severity of dementia using the Positive and Negative Syndrome Scale-Excitatory Component (“PEC”) as the primary efficacy measure.
Removed
We expanded our institutional sales force to 70 representatives in December 2022 to cover over 1,700 target hospitals as of February 28, 2023. During the fourth quarter of 2022, our Corporate Account Director team was focused on 59 high-volume, high-control integrated delivery network (“IDN”) accounts.
Added
In addition, we plan to discuss the details of the requirement for long-term safety data at a future meeting with the FDA. ​ In our SERENITY program, we are evaluating BXCL501 for use in the at-home setting for agitation associated with bipolar disorders or schizophrenia.
Removed
Formulary voting is currently scheduled for approximately 70,000 (25%) of our target IDN beds, with approximately 7,000 (2%) now approved. We believe the value proposition for IGALMI will continue to evolve as we learn from market response.
Added
We completed Part 1 of the SERENITY III trial and announced topline results on May 25, 2023. ​ We reviewed our SERENITY III program with the FDA in Type C meetings on November 8, 2023 and March 6, 2024.
Removed
Staff shortages in the emergency departments (“EDs”) of hospitals, complicated by the potential for staff injuries due to agitated patients, are becoming increasingly concerning to hospital administration. Due to limited agitation treatment options in the ED, intramuscular injection is often used. This approach can be both confrontational and coercive to agitated patients, often making their symptoms worse.
Added
Based on the feedback received from the FDA to date, we plan to move forward to evaluate at-home use of the 120 mcg dose of BXCL501, with safety as the primary objective and efficacy measures as exploratory endpoints to support continued efficacy in the at-home setting as recommended by the FDA in the November 8, 2023 meeting, for the acute treatment of agitation in bipolar disorders or schizophrenia.
Removed
Moreover, these patients may occupy ED beds for extended periods due to unresponsive sedation, reducing throughput and increasing costs. These conditions continue to reinforce the need for a drug with IGALMI’s profile. Our marketing efforts continue to drive awareness through an extensive convention presence, peer influence programs, and digital marketing campaigns.
Added
We also plan to conduct a clinical study designed to enroll approximately 30 patients to evaluate the correlation between patient-reported or informant-reported efficacy with trained rater-reported efficacy using PEC measurements, which the FDA had previously recommended. ​ Strategic Reprioritization ​ On August 8, 2023, our Board of Directors approved a broad-based strategic reprioritization (the “Reprioritization”).
Removed
As of December 31, 2022, our peer-led IGALMI speaker programs have educated over 1,000 health care providers, while we have had over 350,000 web sessions on our branded health care provider website and additional touchpoints through other digital marketing efforts.
Added
We determined to take actions to reduce certain operational and workforce expenses no longer deemed core to ongoing operations to extend its cash runway and drive innovation and growth in high-potential clinical development and value-creating opportunities.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+2 added−1 removed2 unchanged
Biggest changeCapital Market Risk We currently do not have substantial product revenues and depend on funds raised through other sources. One source of funding includes future debt or equity offerings. Our ability to raise funds in this manner depends upon, among other things, capital market forces affecting our stock price, and on the state of the capital markets generally .
Biggest changeOur ability to raise funds in this manner depends upon, among other things, capital market forces affecting our stock price, and on the state of the capital markets generally .
We do not participate in any foreign currency hedging activities and have limited exposure to other derivative financial instruments, primarily resulting from the terms and conditions of the OFA Facilities. We did not recognize any significant exchange rate losses during the years ended December 31, 2022 and 2021, respectively.
We do not participate in any foreign currency hedging activities and have limited exposure to other derivative financial instruments, primarily resulting from the terms and conditions of the Credit Agreement. We did not recognize any significant exchange rate losses during the years ended December 31, 2023 and 2022, respectively.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Foreign Exchange Risk As of December 31, 2022, we had $193,725 of cash and cash equivalents. Our cash and cash equivalents are primarily held in U.S. Government money market funds.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Foreign Exchange Risk As of December 31, 2023, we had $65,221 of cash and cash equivalents. Our cash and cash equivalents are primarily held in U.S. Government money market funds.
Removed
Interest Rate Risk The loans under the Credit Agreement bear interest at a fixed annual rate of 10.25%, payable quarterly, and the RIFA is repaid based on a multiple of invested capital. Consequently, we do not have material interest rate exposure due to our indebtedness.
Added
Interest Rate Risk The loans under the Credit Agreement bear interest at a variable annual rate of the Secured Overnight Financing Rate (“Term SOFR”) (but not less than 2.5% or more than 5.5%) plus 7.5% payable quarterly.
Added
Consequently, we have material interest rate exposure due to our indebtedness, however this risk is hedged in part by the floor and ceiling on TERM SOFR rates. Capital Market Risk We currently do not have substantial product revenues and depend on funds raised through other sources. One source of funding includes future debt or equity offerings.

Other BTAI 10-K year-over-year comparisons