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What changed in BioXcel Therapeutics, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of BioXcel Therapeutics, Inc.'s 2024 and 2025 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 2025 report.

+607 added−625 removedSource: 10-K (2026-03-27) vs 10-K (2025-03-28)

Top changes in BioXcel Therapeutics, Inc.'s 2025 10-K

607 paragraphs added · 625 removed · 426 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

151 edited+62 added−113 removed305 unchanged
Biggest changeSee further discussion in “Additional Neuroscience Opportunities” 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. ​ 8 Table of Contents Nasdaq Notice On September 16, 2024, the Company received a letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) that it was not in compliance with Nasdaq Listing Rule 5550(a)(2) because its common stock failed to maintain a minimum closing bid price of $1.00 per share for 30 consecutive business days. ​ On February 6, 2025, the Company announced that it would effect a 1-for-16 reverse stock split of its common stock.
Biggest changeSee further discussion in “Our Neuroscience Clinical Programs” below. ​ As described further below, we have deprioritized the development of BXCL501 for certain other proposed indications. ​ 8 Table of Contents Our most advanced immuno-oncology candidate, BXCL701, is an investigational oral innate immune activator from OnkosXcel Therapeutics as a potential therapy for the treatment of aggressive forms of prostate cancer, pancreatic cancer, and other solid and liquid tumors.
Although the primary efficacy endpoint as a group mean change in PEC score from baseline at 2 hours was not statistically significant at the primary endpoint at 2 hours (p=0.077), BXCL501 statistically separated from placebo at 4 hours (p=0.049).
Although the primary efficacy endpoint as a group mean change in PEC score from baseline at 2 hours was not statistically significant at the primary endpoint at 2 hours (p=0.077), BXCL501 separated from placebo at 4 hours (p=0.049).
More recently, in March 2021, Congress enacted the American Rescue Plan Act of 2021, which, among other things, eliminated the statutory Medicaid drug rebate cap, effective January 1, 2024. The rebate was previously capped at a drugs average manufacturer price. Most significantly, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law.
More recently, in March 2021, Congress enacted the American Rescue Plan Act of 2021, which, among other things, eliminated the statutory Medicaid drug rebate cap, effective January 1, 2024. The rebate was previously capped at 100% of a drugs average manufacturer price. Most significantly, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law.
The original 160-patient, three-site, four-arm study is a randomized, double-blind, double-dummy inpatient study comparing BXCL501 (180 mcg and 240 mcg BID), lofexidine (as a positive control), and placebo. The study’s goal is to evaluate the safety and efficacy of BXCL501 relative to lofexidine and placebo in subjects with OUD.
The original 160-patient, three-site, four-arm study is a randomized, double-blind, double-dummy inpatient study comparing BXCL501 (180 mcg and 240 mcg BID), lofexidine (as a positive control), and placebo. The study’s goal was to evaluate the safety and efficacy of BXCL501 relative to lofexidine and placebo in subjects with OUD.
These costs consisted of severance and benefit costs, all of which were paid during the three month period ended June 30, 2024. ​ In September, 2024, the Company approved a plan for an additional reduction its workforce by 15 employees, or approximately 28% of the Company’s headcount (the “Clinical Prioritization”), in order to extend its cash runway and prioritize investment on the clinical development of its lead neuroscience asset, BXCL501.
These costs consisted of severance and benefit costs, all of which were paid during the three month period ended June 30, 2024. ​ In September, 2024, the Company approved a plan for an additional reduction its workforce by 15 employees, or approximately 28% of the Company’s headcount (the “Clinical Reprioritization”), in order to extend its cash runway and prioritize investment on the clinical development of its lead neuroscience asset, BXCL501.
It is also used in the intensive care setting for sedation of non-intubated patients prior to and/or during surgical and other invasive procedures. Dex, launched in the U.S. as Precedex ™ in 1999, is a selective α2a adrenergic receptor agonist that has a strong safety record and has been studied in over 130 clinical trials to date.
It is also used in the intensive care setting for sedation of non-intubated patients prior to and/or during surgical and other invasive procedures. Dexmedetomidine, launched in the U.S. as Precedex ™ in 1999, is a selective α2a adrenergic receptor agonist that has a strong safety record and has been studied in over 130 clinical trials to date.
It has also been sold in the European Union (“EU”) and other countries under the trade name Dexdor ® as a sedative for intensive care patients. Dex was approved by the European Commission for sedation of adult ICU patients requiring a sedation level no deeper than arousal in response to verbal stimulation (corresponding to Richmond Agitation-Sedation Scale 0 to -3).
It has also been sold in the European Union (“EU”) and other countries under the trade name Dexdor ® as a sedative for intensive care patients. Dexmedetomidine was approved by the European Commission for sedation of adult ICU patients requiring a sedation level no deeper than arousal in response to verbal stimulation (corresponding to Richmond Agitation-Sedation Scale 0 to -3).
Also, although we announced in November 2023 that we were planning to conduct a Phase 3 trial in the at-home setting, with safety as the primary objective (TRANQUILITY At Home), given the priority to expand the database to generate additional efficacy and safety data in care facilities, and subject to funding, we are re-evaluating the timing for initiating TRANQUILITY At Home. ​ On September 5, 2024, we submitted to the FDA the proposed protocol for our TRANQUILITY In-Care Phase 3 trial designed to evaluate the efficacy and safety of a 60 mcg dose of BXCL501 for agitation associated with Alzheimer’s dementia.
Also, although we announced in November 2023 that we were planning to conduct a Phase 3 trial in the at-home setting, with safety as the primary objective (TRANQUILITY At Home), given the priority to expand the database to generate additional efficacy and safety data in care facilities, and subject to funding, we are re-evaluating the timing for initiating TRANQUILITY At Home. ​ On September 5, 2024, we submitted to the FDA the proposed protocol for our TRANQUILITY In-Care Phase 3 trial designed to evaluate the efficacy and safety of a 60 mcg dose of BXCL501 for agitation associated with 19 Table of Contents Alzheimer’s dementia.
The parties were 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 34 Table of Contents payments did not exceed $10 million in the aggregate and were not to be payable prior to proof of concept in humans and (ii) commercialization milestone payments were to be based on reaching annual net sales levels, were to be limited to 3% of the applicable net sales level, and were not exceed $30 million in the aggregate.
The parties were 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 did not exceed $10 million in the aggregate and were not to be payable prior to proof of concept in humans and (ii) commercialization milestone payments were to be based on reaching annual net sales levels, were to be limited to 3% of the applicable net sales level, and were not exceed $30 million in the aggregate.
In addition, certain state and non-U.S. laws, such as the California Consumer Privacy Act (“CCPA”), the California Privacy Rights Act (“CPRA”), and the EU General Data Protection Regulation (“GDPR”), govern the privacy and security of personal 50 Table of Contents information, including health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
In addition, certain state and non-U.S. laws, such as the California Consumer Privacy Act (“CCPA”), the California Privacy Rights Act (“CPRA”), and the EU General Data Protection Regulation (“GDPR”), govern the privacy and security of personal information, including health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
The centralized procedure is compulsory for 44 Table of Contents certain types of medicinal products such as (i) medicinal products derived from biotechnology processes, such as genetic engineering, (ii) medicinal products containing a new active substance indicated for the treatment of certain diseases, such as HIV or AIDS, cancer, diabetes, neurodegenerative diseases, autoimmune and other immune dysfunctions and viral diseases, (iii) designated orphan medicinal products, and (iv) advanced therapy medicinal products (“ATMPs”) such as gene therapy, somatic cell therapy or tissue-engineered medicines.
The centralized procedure is compulsory for certain types of medicinal products such as (i) medicinal products derived from biotechnology processes, such as genetic engineering, (ii) medicinal products containing a new active substance indicated for the treatment of certain diseases, such as HIV or AIDS, cancer, diabetes, neurodegenerative diseases, autoimmune and other immune dysfunctions and viral diseases, (iii) designated orphan medicinal products, and (iv) advanced therapy medicinal products (“ATMPs”) such as gene therapy, somatic cell therapy or tissue-engineered medicines.
Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances. Non-clinical (pharmaco-toxicological) studies must be conducted in compliance with the principles of good laboratory practice (“GLP”) as set forth in EU Directive 2004/10/EC (unless otherwise justified for certain particular 43 Table of Contents medicinal products, e.g., radio-pharmaceutical precursors for radio-labeling purposes).
Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances. Non-clinical (pharmaco-toxicological) studies must be conducted in compliance with the principles of good laboratory practice (“GLP”) as set forth in EU Directive 2004/10/EC (unless otherwise justified for certain particular medicinal products, e.g., radio-pharmaceutical precursors for radio-labeling purposes).
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 41 Table of Contents 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.
We have one granted European patent and applications pending in the U.S. and Japan directed to methods of treating insomnia using sublingual Dex. We expect that patents issued from these applications, will expire no earlier than 2035.
We have one granted European patent and applications pending in the U.S. and Japan directed to methods of treating insomnia using sublingual dexmedetomidine. We expect that patents issued from these applications, will expire no earlier than 2035.
BXCL701 is an investigational, oral innate immune activator which demonstrated a 25% composite response rate in a Phase 2a clinical trial to treat patients with small cell neuroendocrine carcinoma (“SCNC”) phenotype metastatic castration-resistant prostate cancer (“mCRPC”).
BXCL701, an investigational, oral innate immune activator, demonstrated a 25% composite response rate in a Phase 2a clinical trial to treat patients with small cell neuroendocrine carcinoma (“SCNC”) phenotype metastatic castration-resistant prostate cancer (“mCRPC”).
The reference to our website address does not constitute incorporation by reference of the information contained on or available through our website, and you should not consider such information to be a part of this Annual Report on Form 10-K. ​ 52 Table of Contents
The reference to our website address does not constitute incorporation by reference of the information contained on or available through our website, and you should not consider such information to be a part of this Annual Report on Form 10-K. ​ 47 Table of Contents
The 120 mcg dose has already demonstrated efficacy based on the approval of IGALMI ® (when administered under the supervision of a healthcare provider, for a single agitation episode), so we sought further feedback from the FDA regarding the proposed design of this study amendment in a request for a follow-up meeting with the FDA, which was held on March 6, 2024.
The 120-mcg dose has already demonstrated efficacy based on the approval of IGALMI ® (when administered under the supervision of a healthcare provider, for a single agitation episode), so we 14 Table of Contents sought further feedback from the FDA regarding the proposed design of this study amendment in a request for a follow-up meeting with the FDA, which was held on March 6, 2024.
Among other cost containment measures, the ACA established: ● an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents; ● a Medicare Part D coverage gap discount program, in which pharmaceutical manufacturers who wish to have their drugs covered under Part D must offer discounts to eligible beneficiaries during their coverage gap period, or the “donut hole”; and 48 Table of Contents ● a new formula that increases the rebates a manufacturer must pay under the Medicaid Drug Rebate Program.
Among other cost containment measures, the ACA established: ● an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents; ● a Medicare Part D coverage gap discount program, in which pharmaceutical manufacturers who wish to have their drugs covered under Part D must offer discounts to eligible beneficiaries during their coverage gap period, or the “donut hole”; and ● a new formula that increases the rebates a manufacturer must pay under the Medicaid Drug Rebate Program.
Violations of any of these laws or any other governmental laws and regulations that may apply include, without limitation, significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products from government funded health care programs, such as Medicare and Medicaid, disgorgement, contractual damages, reputational harm, diminished profits, and the curtailment or restructuring of our operations.
Violations of any of these laws or any other governmental laws and regulations that may apply include, without limitation, significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products 45 Table of Contents from government funded health care programs, such as Medicare and Medicaid, disgorgement, contractual damages, reputational harm, diminished profits, and the curtailment or restructuring of our operations.
In addition, PMAs for certain devices must generally include the results from extensive 42 Table of Contents preclinical and adequate and well-controlled clinical trials to establish the safety and effectiveness of the device for each indication for which FDA approval is sought. In particular, for a diagnostic, a PMA application typically requires data regarding analytical and clinical validation studies.
In addition, PMAs for certain devices must generally include the results from extensive preclinical and adequate and well-controlled clinical trials to establish the safety and effectiveness of the device for each indication for which FDA approval is sought. In particular, for a diagnostic, a PMA application typically requires data regarding analytical and clinical validation studies.
Third-party payors may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the 47 Table of Contents FDA-approved drugs for a particular indication. Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.
Third-party payors may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the FDA-approved drugs for a particular indication. Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.
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. On March 3, 2025 we announced that the U.S.
Based on these steps to date, we believe that 18 Table of Contents 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. On March 3, 2025 we announced that the U.S.
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. 31 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 key competitive factors affecting the success of our product candidates, if approved, are likely to be their efficacy, safety, convenience, price, the effectiveness of companion diagnostics in guiding the use of related therapeutics, if any, the level of generic competition, and the availability of reimbursement from government and other third-party payors.
The key competitive factors affecting the success of our product candidates, if approved, are likely to be their efficacy, safety, convenience, price, the effectiveness of companion diagnostics in guiding the use of related 22 Table of Contents therapeutics, if any, the level of generic competition, and the availability of reimbursement from government and other third-party payors.
We also rely on trademarks, trade secrets, 20 Table of Contents and know-how relating to our proprietary technologies and product candidates, continuing innovation, and in-licensing technology and products. This reliance is expected to develop, maintain, and strengthen our proprietary position for novel therapeutics and novel formulations of existing therapeutics across multiple therapeutic areas.
We also rely on trademarks, trade secrets, and know-how relating to our proprietary technologies and product candidates, continuing innovation, and in-licensing technology and products. This reliance is expected to develop, maintain, and strengthen our proprietary position for novel therapeutics and novel formulations of existing therapeutics across multiple therapeutic areas.
The 35 Table of Contents IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product; chemistry, manufacturing, and controls information; and any available human data or literature to support the use of the investigational product. An IND must become effective before human clinical trials may begin.
The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product; chemistry, manufacturing, and controls information; and any available human data or literature to support the use of the investigational product. An IND must become effective before human clinical trials may begin.
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. 34 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.
These so-called Phase 4 studies may be conducted after initial marketing approval and may be used to gain additional experience from the treatment of patients in the intended 36 Table of Contents therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA.
These so-called Phase 4 studies may be conducted after initial marketing approval and may be used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA.
In vitro diagnostic medical devices had to comply with the requirements provided for in the Directive, and with further requirements implemented at national level (as the case may be). The regulation of companion diagnostics is subject to further requirements since in-vitro medical diagnostic devices Regulation (No 2017/746) (“IVDR”) became applicable on May 26, 2022.
In vitro diagnostic medical devices had to comply with the requirements provided for in the Directive, and with further requirements implemented at national level (as the case may be). 41 Table of Contents The regulation of companion diagnostics is subject to further requirements since in-vitro medical diagnostic devices Regulation (No 2017/746) (“IVDR”) became applicable on May 26, 2022.
DPP8/9 inhibition has been shown to be cytotoxic to THP-1 cells, monocytic cancer cells cultured from a patient with AML, but not other cell lines, suggesting a specific vulnerability of AML to these inhibitors which we believe can be exploited for therapeutic benefit.
Relapsed or Refractory AML DPP8/9 inhibition has been shown to be cytotoxic to THP-1 cells, monocytic cancer cells cultured from a patient with AML, but not other cell lines, suggesting a specific vulnerability of AML to these inhibitors which we believe can be exploited for therapeutic benefit.
As a condition of accelerated approval, the FDA will generally require the sponsor to perform adequate and well-controlled confirmatory clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit, and may require that such confirmatory studies be underway prior to granting accelerated approval.
As a condition of accelerated approval, 33 Table of Contents the FDA will generally require the sponsor to perform adequate and well-controlled confirmatory clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit, and may require that such confirmatory studies be underway prior to granting accelerated approval.
HHS has issued and will continue to issue guidance implementing the IRA, although the Medicare drug price negotiation program is currently subject to legal challenges. While the impact of the IRA on the pharmaceutical industry and our business cannot yet be fully determined, it is likely to be significant.
HHS has issued and will continue to issue guidance implementing the IRA, although the Medicare drug price negotiation program is currently subject to legal challenges. While the 43 Table of Contents impact of the IRA on the pharmaceutical industry and our business cannot yet be fully determined, it is likely to be significant.
Post-approval Requirements Drug products manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse 39 Table of Contents events, periodic reporting, product sampling and distribution, and advertising and promotion of the product.
Post-approval Requirements Drug products manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse events, periodic reporting, product sampling and distribution, and advertising and promotion of the product.
The total amount of PTA is calculated by adding the types A, B, and C delays, and then subtracting any delay that is overlapped among three types or that is attributable to the applicant. ​ 21 Table of Contents The term of a patent can also be shortened by a terminal disclaimer.
The total amount of PTA is calculated by adding the types A, B, and C delays, and then subtracting any delay that is overlapped among three types or that is attributable to the applicant. ​ The term of a patent can also be shortened by a terminal disclaimer.
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 32 Table of Contents risk minimization tools.
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 36 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.
We believe BXCL701 is the only innate immune system activator in clinical development specifically addressing the cold tumor problem in immuno-oncology. We face substantial competition from multiple sources, including large and specialty pharmaceutical, biopharmaceutical and biotechnology companies, academic research institutions and governmental agencies, and public 32 Table of Contents and private research institutions.
We believe BXCL701 is the only innate immune system activator in clinical development specifically addressing the cold tumor problem in immuno-oncology. We face substantial competition from multiple sources, including large and specialty pharmaceutical, biopharmaceutical and biotechnology companies, academic research institutions and governmental agencies, and public and private research institutions.
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 As of March 21, 2025, BioXcel LLC holds an ownership interest of approximately 8.8% 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 As of March 26, 2026, BioXcel LLC holds an ownership interest of approximately 1.8% in the Company and our pipeline compounds were identified by applying our internal AI capabilities, along with BioXcel LLC’s EvolverAI, a proprietary pharmaceutical discovery and development engine, for drug re-innovation.
Thirteen U.S. utility patents, directed to our proprietary sublingual film formulation of Dex and methods of treating agitation, are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (commonly known as the “Orange Book”) for IGALMI ® with expiration dates between 2037 and 2043.
Fourteen U.S. utility patents, directed to our proprietary sublingual film formulation of dexmedetomidine and methods of treating agitation, are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (commonly known as the “Orange Book”) for IGALMI ® with expiration dates between 2037 and 2043.
The U.S. portion of this program remains active following the Reprioritization. ​ 17 Table of Contents In October 2024, we submitted a request to the FDA for an extension and plan to submit an updated trial protocol to complete enrollment requirements for pediatric patients with schizophrenia or schizoaffective disorder.
The U.S. portion of this program remains active following the Clinical Reprioritization. ​ In October 2024, we submitted a request to the FDA for an extension and plan to submit an updated trial protocol to complete enrollment requirements for pediatric patients with schizophrenia or schizoaffective disorder.
No consistent policy regarding the scope of claims allowable in patents in the field of method of use patents or reformulation patents has emerged in the U.S. patent laws and their interpretation outside of the U.S. are also uncertain.
No consistent policy regarding the scope of claims allowable in patents in the field of method of use patents or 24 Table of Contents reformulation patents has emerged in the U.S. patent laws and their interpretation outside of the U.S. are also uncertain.
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 40 Table of Contents MA, or accept an application to extend a MA, for the same indication, in respect of a similar medicinal product.
It has been used to prevent or treat hyperactive delirium resulting from anesthesia in 13 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.
It has been used to prevent or treat hyperactive delirium resulting from anesthesia in the ICU. Given these uses of the IV formulation of dexmedetomidine, we believe dexmedetomidine 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.
An NDA is eligible for priority review if the product candidate is designed to treat a serious or life-threatening disease or condition, and if approved, would provide a 38 Table of Contents significant improvement in safety or effectiveness compared to available alternatives for such disease or condition.
An NDA is eligible for priority review if the product candidate is designed to treat a serious or life-threatening disease or condition, and if approved, would provide a significant improvement in safety or effectiveness compared to available alternatives for such disease or condition.
As of February 20, 2025, we have multiple patent families filed to protect our immuno-oncology program, including our core patent family directed to methods of using BXCL701 with immune checkpoint inhibitors, which is granted in the U.S., Japan, Australia, Canada, Russia, China, India, Taiwan, South Africa, Mexico, New Zealand, Europe and United Arab Emirates.
As of March 1, 2026, we have multiple patent families filed to protect our immuno-oncology program, including our core patent family directed to methods of using BXCL701 with immune checkpoint inhibitors, which is granted in the U.S., Japan, Australia, Canada, Russia, China, India, Taiwan, South Africa, Mexico, New Zealand, Europe and United Arab Emirates.
The study achieved its objective and demonstrated no evidence of tachyphylaxis, tolerance, or withdrawal, and IGALMI ® was generally well tolerated during the study. ​ Additional Neuroscience Opportunities BXCL501 Pipeline Opportunities for Franchise Expansion Given the differentiated design of BXCL501 and its selective mechanism of action, we believe BXCL501 has the potential for broad applicability across several indications where agitation is a symptom of a condition or underlying disease.
The study achieved its objective and demonstrated no evidence of tachyphylaxis, tolerance, or withdrawal, and IGALMI ® was generally well tolerated during the study. ​ Additional Neuroscience Opportunities BXCL501 Pipeline Opportunities for Franchise Expansion Based on its potential mechanism of action, we believe BXCL501 has the potential for broad applicability across several indications where agitation is a symptom of a condition or underlying disease.
A CRL usually describes the specific deficiencies in the NDA identified by the FDA 37 Table of Contents and may require additional clinical data, including additional clinical trials, or other significant and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing.
A CRL usually describes the specific deficiencies in the NDA identified by the FDA and may require additional clinical data, including additional clinical trials, or other significant and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing.
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 37 Table of Contents months or years while the trials are conducted and then the data submitted in an amendment to the PMA.
Clinical and regulatory responsibilities are led by clinical researchers and regulatory staff at the Veterans Affairs Connecticut Healthcare System, Yale University Medical School, RTI International, Columbia University New York State Psychiatric Institute, and NIDA. ​ Opioid Use Disorder Program ​ As previously announced, NIDA awarded a grant to Columbia University to fund clinical testing of BXCL501 as a potential treatment for opioid withdrawal in patients diagnosed with OUD.
Clinical and regulatory responsibilities are led by clinical researchers and regulatory staff at the Veterans Affairs Connecticut Healthcare System, Yale University Medical School, RTI International, Columbia University New York State Psychiatric Institute, and University of North Carolina at Chapel Hill. ​ Opioid Use Disorder Program ​ As the Company previously announced, NIDA awarded a grant to Columbia University to fund clinical testing of BXCL501 as a potential treatment for mitigation of opioid withdrawal symptoms in patients diagnosed with OUD.
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 38 Table of Contents applicable on January 31, 2022.
A person or entity does not need to have actual knowledge of this statute 49 Table of Contents or specific intent to violate it in order to have committed a violation.
A person or entity does not need to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation.
Our AI-based discovery and development process is the foundation of our drug re-innovation model for identifying the next wave of potential medicines. Our therapeutic area experts have substantial experience across the drug discovery and development value chain.
Our AI-based discovery and development process was the foundation of our drug re-innovation model for identifying the next wave of potential medicines. Our therapeutic area experts had substantial experience across the drug discovery and development value chain.
As part of the Reprioritization announced on August 14, 2023, we paused our plan to develop a Phase 2 human proof-of-concept trial design to investigate BXCL501 as a potential adjunctive treatment and its potential accelerant effect in combination with first-line selective serotonin reuptake inhibitors or serotonin-norepinephrine reuptake inhibitors.
As part of the Clinical Reprioritization we paused our plan to develop a Phase 2 human proof-of-concept trial design to investigate BXCL501 as a potential adjunctive treatment and its potential accelerant effect in combination with first-line selective serotonin reuptake inhibitors or serotonin-norepinephrine reuptake inhibitors.
Instead, generic applicants must scientifically demonstrate that their product is bioequivalent to, or performs in the same manner as, the innovator drug through in vitro, in vivo, or other testing.
Instead, generic applicants must scientifically demonstrate that their product is 35 Table of Contents bioequivalent to, or performs in the same manner as, the innovator drug through in vitro, in vivo, or other testing.
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.
We also plan to rely on data exclusivity, market exclusivity, and patent term extensions when available. 23 Table of Contents We have multiple patent families filed to protect our Neuroscience program, including BXCL501.
We will also seek to rely on regulatory protection afforded through 33 Table of Contents inclusion in expedited development and review, data exclusivity, market exclusivity, and patent term extensions where available.
We will also seek to rely on regulatory protection afforded through inclusion in expedited development and review, data exclusivity, market exclusivity, and patent term extensions where available.
The term of individual patents depends upon the legal term for patents in the countries in which they are obtained. In most countries, including the U.S., the patent term is 20 years from the earliest filing date of a non-provisional patent application.
The ’247 Patent is listed in the Orange Book for IGALMI ® . The term of individual patents depends upon the legal term for patents in the countries in which they are obtained. In most countries, including the U.S., the patent term is 20 years from the earliest filing date of a non-provisional patent application.
For example, BioDelivery Sciences International, Inc., a commercial-stage specialty pharmaceutical company, has developed a buccal film formulation of buprenorphine for chronic pain management and buprenorphine and naloxone for opioid dependence. We developed BXCL501 as a differentiated sublingual film dosage form of Dex, which we believe may offer benefits such as ease of use and quick absorption for rapid therapeutic effects.
For example, Collegium Pharmaceutical, a commercial-stage specialty pharmaceutical company, has developed a buccal film formulation of buprenorphine for chronic pain management and buprenorphine and naloxone for opioid dependence. We developed BXCL501 as a differentiated sublingual film dosage form of dexmedetomidine, which we believe may offer benefits such as ease of use and quick absorption for rapid therapeutic effects.
We currently rely on strategic manufacturing partners, in particular ARx, LLC (“ARx”), and expect to continue to rely on third parties for the manufacture of our product candidates for clinical research and our products for commercialization efforts.
Neuroscience Manufacturing We do not have manufacturing facilities. We currently rely on strategic manufacturing partners, in particular ARx, LLC (“ARx”), and expect to continue to rely on third parties for the manufacture of our product candidates for clinical research and our products for commercialization efforts.
BXCL501 Development In indications other than those approved by the FDA as IGALMI ® , BXCL501 remains an investigational, proprietary, orally dissolving film formulation of Dex, a selective alpha-2 receptor agonist, targeting symptoms from stress-related behaviors such as agitation.
In indications other than those approved by the FDA as IGALMI ® , BXCL501 is an investigational, proprietary, orally dissolving sublingual film formulation of dexmedetomidine, a selective alpha-2 receptor agonist, targeting symptoms from stress-related behaviors such as agitation.
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.
We developed 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.
The trial is then expected to enroll approximately 39 patients in its efficacy phase in a Simon 2-stage single-arm, open-label design (19 patients in stage 1 and 20 patients in stage 2). Patients will be monitored radiographically and by tumor markers for response assessment.
The trial was expected to enroll approximately 39 patients in its efficacy phase in a Simon 2-stage single-arm, open-label design (19 patients in stage 1 and 20 patients in stage 2). Patients were monitored radiographically and by tumor markers for response assessment.
We believe the results from these studies suggest that BXCL501 has the potential to generate a calming effect without producing excessive sedation. We believe that BXCL501 is highly differentiated from antipsychotics currently used as a standard of care for the treatment of agitation that often produce unwanted side effects such as excessive sedation and extra-pyramidal motor effects.
We believe the results from these studies suggest that BXCL501 has the potential to generate a calming effect without producing excessive sedation. We also believe BXCL501 is highly differentiated from antipsychotics and benzodiazepines, which are currently used as first-line standard-of-care treatment for agitation despite often producing unwanted side effects such as excessive sedation or extra pyramidal motor effects.
Based on these preclinical observations, Georgetown Lombardi has initiated a Phase 2 IST to assess the safety of BXCL701 when administered in combination with pembrolizumab (safety lead-in), as well as to estimate the 18-week progression-free survival rate (primary objective of the efficacy phase) in previously treated metastatic pancreatic ductal adenocarcinoma. This trial started in the third quarter of 2023.
Based on these preclinical observations, Georgetown Lombardi Cancer Center initiated a Phase 2 IST to assess the safety of BXCL701 when administered in combination with pembrolizumab (safety lead-in), as well as to estimate the 18-week progression-free survival rate (primary objective of the efficacy phase) in previously treated metastatic pancreatic ductal adenocarcinoma.
While we believe that our technology, development experience, and scientific knowledge provide competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical, and biotechnology companies, academic institutions, governmental agencies, and public and private research institutions.
The neuroscience and rare disease segments of the industry are highly competitive. While we believe that our technology, development experience, and scientific knowledge provide competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical, and biotechnology companies, academic institutions, governmental agencies, and public and private research institutions.
On February 12, 2024, the Company announced that the FDA has designated as a Fast Track development program the investigation of BXCL701 in combination with a checkpoint inhibitor for the treatment of patients with metastatic SCNC with progression on chemotherapy and no evidence of microsatellite instability.
On February 12, 2024, the Company received Fast Track development designation from the FDA for the investigation of BXCL701 in combination with a checkpoint inhibitor for the treatment of patients with metastatic SCNC with progression on chemotherapy and no evidence of microsatellite instability.
Side effects of these medications include movement disorders, including akathisia and extrapyramidal symptoms. One of the serious limitations of these drugs is that they can sedate the patient and do not permit verbal interaction with the hospital staff to continue.
Side effects of these medications include movement disorders, including akathisia and extrapyramidal symptoms. One of the serious 12 Table of Contents limitations of these drugs when used in institutional setting is that they can sedate the patient and do not permit verbal interaction with the hospital staff to continue evaluation and treatment.
We intend to supply BXCL501 for the trial. BXCL502 Development We identified a second neuropsychiatric drug candidate, BXCL502 − Latrepirdine (Dimebon) − through our AI-based platform. We plan to evaluate BXCL502 initially as a monotherapy and possibly in combination with BXCL501 for the chronic treatment of agitation in patients with dementia and acute stress disorder.
BXCL502 Development We identified a second neuropsychiatric drug candidate, BXCL502 − Latrepirdine (Dimebon) − through our AI-based platform. We plan to evaluate BXCL502 initially as a monotherapy and possibly in combination with BXCL501 for the chronic treatment of agitation in patients with dementia and acute stress disorder. The active pharmaceutical ingredient (“API”) underlying BXCL502 affects serotonergic signaling in the brain.
In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before any clinical trials can begin. Submission of an IND may or may not result in FDA allowance to begin a clinical trial.
In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before any clinical trials can begin.
As of December 31, 2024 and 2023, respectively, we had 37 and 74 full-time employees.
As of December 31, 2025 and 2024, respectively, we had 29 and 37 full-time employees.
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.
We believe this differentiated approach has proven its potential to reduce the expense and time associated with drug development in diseases with substantial unmet medical needs. ​ Our Business ​ Our most advanced neuroscience candidate is BXCL501. In indications other than those approved by the U.S.
The new outpatient study has received funding approval from the Pharmacotherapies for Alcohol and Substance Use Disorders Alliance (funded through a Cooperative Agreement between the U.S. Department of Defense Congressionally Directed Medical Research Program and RTI International). Patient screening and enrollment began in the fourth quarter of 2024.
The outpatient study has received funding approval from the Pharmacotherapies for Alcohol and Substance Use Disorders Alliance (funded through a Cooperative Agreement between the U.S. Department of Defense Congressionally Directed Medical Research Program and RTI International). Patient screening and enrollment has begun, with the first patient expected to be dosed in the first half of 2026.
Based on the FDA’s feedback in advance of and during the March 6, 2024 meeting, we moved forward evaluating the use of the 120 mcg dose of BXCL501 in the at-home setting, and amended Part 2 of the SERENITY III study.
Based on the FDA’s feedback in advance of and during the March 6, 2024 meeting, we moved forward evaluating the use of the 120 mcg dose of BXCL501 in the at-home setting and amended Part 2 of the SERENITY III study, the SERENITY At-Home trial, with safety as the primary objective and efficacy measures as exploratory endpoints to support use in the at-home setting.
Marketed drugs may not be exclusively effective in the indication for which they are approved but relevant to other indications, including rare diseases, and thus represent an untapped potential for addressing unmet medical needs and recouping research and development costs.
The pharmacological universe spans more than 27,000 active pharmaceutical agents, of which only approximately 4,000 are approved and marketed. Marketed drugs may not be exclusively effective in the indication for which they are approved but relevant to other indications, including rare diseases, and thus represent an untapped potential for addressing unmet medical needs and recouping research and development costs.
We estimate that in the United States, there are approximately 1.9 million patients diagnosed with Alzheimer’s disease-related dementia (“AAD”) and that those patients experience agitation at a rate of about six episodes per month, on average.
Agitation can occur suddenly or slowly and vary in length, lasting for a few minutes or for an extended period. We estimate that in the United States, there are approximately 1.9 million patients diagnosed with Alzheimer’s disease-related dementia (“AAD”) and that those patients experience agitation at a rate of about six episodes per month, on average.
As a selective adrenergic agent with a sublingual or buccal route of administration, BXCL501 is designed to be easily administered and, compared to medications that may take days or weeks, has shown a relatively rapid onset of action in multiple clinical trials, including those studying patients with bipolar disorders, schizophrenia, and Alzheimer’s disease.
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 relatively rapid onset of action in multiple clinical trials, including clinical trials studying patients with schizophrenia, bipolar disorders, and dementia associated with Alzheimer’s disease.
Upon receiving an 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.
Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCPs, which include among other things, the requirement that all research subjects provide their informed consent for their participation in any clinical study.
Submission of an IND may or may not result in FDA allowance to begin a clinical trial. 30 Table of Contents Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCPs, which include among other things, the requirement that all research subjects provide their informed consent for their participation in any clinical study.
We understand Yale is currently seeking approval from its Institutional Review Board (“IRB”) and allowance from the FDA to proceed with a trial 18 Table of Contents evaluating the effects of up to 80 mcg BID of BXCL501 per day for 28 days on alcohol consumption, PTSD symptoms, cognitive function, memory, sleep, and mood in patients diagnosed with mild, moderate, or severe AUD and who meet Criterion A for comorbid PTSD.
The Company provided BXCL501 for the inpatient Alcohol Interaction Study, which has been completed. ​ Yale has received approval from the Institutional Review Board (“IRB”) and allowance from the FDA to proceed with a trial to evaluate the effects of up to 80 mcg BID of BXCL501 per day for 28 days on alcohol consumption, PTSD symptoms, cognitive function, memory, sleep, and mood in patients diagnosed with mild, moderate, or severe AUD and who meet Criterion A for comorbid PTSD.
Additionally, our use of AI and machine learning may be subject to laws and evolving regulations regarding the use of AI or machine learning, controlling for data bias, and anti-discrimination. Human Capital Our Employees In August 2023, our Board of Directors approved the Reprioritization.
Additionally, our use of AI and machine learning may be subject to laws and evolving regulations regarding the use of AI or machine learning, controlling for data bias, and anti-discrimination. Human Capital Our Employees In August 2023, our Board of Directors approved the Clinical Reprioritization. Following a comprehensive review of the business, we determined to focus on high-potential agitation-market opportunities.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

194 edited+80 added−41 removed683 unchanged
Biggest changeFor additional cost-saving and other strategic initiatives we may be compelled to pursue, see the risk factor entitled, “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.” ​ We could be delisted from The Nasdaq Capital Market, which could seriously harm the liquidity of our stock and our ability to raise capital or complete a strategic transaction. ​ As previously reported, on September 20, 2024, we received a letter from Nasdaq Staff notifying us that for the 30 consecutive business days prior to the date of the letter, the Company’s market value of listed securities closed below the minimum $35 million requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(2).
Biggest changeFor additional cost-saving and other strategic initiatives we may be compelled to pursue, see the risk factor entitled, “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.” ​ We have a limited operating history and have not generated substantial product revenues to date, which may make it difficult to evaluate the success of our business and to assess our future viability.
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.
Similar to the federal Anti- Kickback Statute, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them to have committed a violation; 77 Table of Contents ● federal civil monetary penalties laws, which impose civil fines for, among other things, the offering or transfer of remuneration to a Medicare or state health care program beneficiary if the person knows, or should know, it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies; ● federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; ● the federal physician sunshine requirements under the Patient Protection and Affordable Care Act (“ACA”), which requires certain manufacturers of drugs, devices, biologics, and medical supplies to report annually to the Centers for Medicare & Medicaid Services (“CMS”) information related to payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants, and certified nurse midwives), and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members; ● state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to health care providers and other potential referral sources; and state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other health care providers or marketing expenditures and pricing information; and ● European and other foreign law equivalents of each of the laws, including reporting requirements detailing interactions with and payments to health care providers.
Similar to the federal Anti- Kickback Statute, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them to have committed a violation; ● federal civil monetary penalties laws, which impose civil fines for, among other things, the offering or transfer of remuneration to a Medicare or state health care program beneficiary if the person knows, or should know, it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies; ● federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; ● the federal physician sunshine requirements under the Patient Protection and Affordable Care Act, (“ACA”), which requires certain manufacturers of drugs, devices, biologics, and medical supplies to report annually to the Centers for Medicare & Medicaid Services (“CMS”) information related to payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants, and certified nurse midwives), and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members; ● state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to health care providers and other potential referral sources; and state laws that 73 Table of Contents require drug manufacturers to report information related to payments and other transfers of value to physicians and other health care providers or marketing expenditures and pricing information; and ● European and other foreign law equivalents of each of the laws, including reporting requirements detailing interactions with and payments to health care providers.
However, we have limited experience in drug development and commercialization, and our prospects are substantially dependent on our ability, or that of any future collaborator, to develop, obtain marketing approval for and successfully commercialize product candidates in one or more additional disease indications. 62 Table of Contents The success of IGALMI ® , and of BXCL501, BXCL701, BXCL502 and our other product candidates will depend on several factors, including the following: ● acceptance of an investigational new drug application (“IND”) by the FDA or acceptance of comparable applications by foreign regulatory authorities allowing us to conduct clinical trials of our product candidates in the U.S. or in foreign jurisdictions; ● initiation, progress, timing, costs and results of clinical trials of our product candidates and potential product candidates, including any delays caused by the developments relating to the TRANQUILITY program, and any additional trials we may need to conduct prior to seeking approvals for BXCL501 in at-home and/or care facilities; ● demonstration of safety and efficacy of our product candidates to the satisfaction of the FDA, or any comparable foreign regulatory authority, and sufficient for marketing approval; ● the timing and performance of our current and future collaborators; ● the nature of any required post-marketing clinical trials or other commitments to applicable regulatory authorities; ● establishment of supply arrangements with third-party raw materials suppliers and manufacturers; ● establishment of arrangements with third-party manufacturers to obtain finished drug product that is appropriately packaged for sale; ● adequate ongoing availability of raw materials and drug product for clinical development and any commercial sales; ● obtaining and maintaining patent, trade secret protection and regulatory exclusivity, both in the U.S. and internationally; ● protection of our rights in our intellectual property portfolio; ● successful launch of commercial sales following any marketing approval; ● a continued acceptable safety profile following any marketing approval; ● commercial acceptance by patients, the medical community and third-party payors; and ● our ability to compete with other therapies.
However, we have limited experience in drug development and commercialization, and our prospects are substantially dependent on our ability, or that of any future collaborator, to develop, obtain marketing approval for and successfully commercialize product candidates in one or more additional disease indications. 57 Table of Contents The success of IGALMI ® , and of BXCL501, BXCL701, BXCL502 and our other product candidates will depend on several factors, including the following: ● acceptance of an investigational new drug application (“IND”) by the FDA or acceptance of comparable applications by foreign regulatory authorities allowing us to conduct clinical trials of our product candidates in the U.S. or in foreign jurisdictions; ● initiation, progress, timing, costs and results of clinical trials of our product candidates and potential product candidates, including any delays caused by the developments relating to the TRANQUILITY program, and any additional trials we may need to conduct prior to seeking approvals for BXCL501 in at-home and/or care facilities; ● demonstration of safety and efficacy of our product candidates to the satisfaction of the FDA, or any comparable foreign regulatory authority, and sufficient for marketing approval; ● the timing and performance of our current and future collaborators; ● the nature of any required post-marketing clinical trials or other commitments to applicable regulatory authorities; ● establishment of supply arrangements with third-party raw materials suppliers and manufacturers; ● establishment of arrangements with third-party manufacturers to obtain finished drug product that is appropriately packaged for sale; ● adequate ongoing availability of raw materials and drug product for clinical development and any commercial sales; ● obtaining and maintaining patent, trade secret protection and regulatory exclusivity, both in the U.S. and internationally; ● protection of our rights in our intellectual property portfolio; ● successful launch of commercial sales following any marketing approval; ● a continued acceptable safety profile following any marketing approval; ● commercial acceptance by patients, the medical community and third-party payors; and ● our ability to compete with other therapies.
Clinical trials can be delayed for a variety of reasons, including delays related to: ● the FDA, or comparable foreign regulatory authorities, disagreeing as to the design or implementation of our clinical studies; ● obtaining regulatory allowances or authorizations to commence a trial or consensus with regulatory authorities on trial designs; ● reaching agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● obtaining institutional review board approval at each site, or independent ethics committee approval at any sites outside the U.S.; ● dependence on the needs and timing of third-party collaborators; ● changes to clinical trial protocols; ● recruiting suitable patients to participate in a trial in a timely manner and in sufficient numbers; ● clinical sites deviating from trial protocol or dropping out of a trial; ● addressing patient safety concerns that arise during the course of a trial; ● having patients complete a trial or return for post-treatment follow-up; ● imposition of a clinical hold by regulatory authorities, including as a result of unforeseen safety issues or side effects or failure of trial sites to adhere to regulatory requirements; 66 Table of Contents ● the occurrence of SAEs in trials of the same class of agents conducted by other companies or institutions; ● subjects choosing an alternative treatment for the indications for which we are developing our product candidates, or participating in competing trials; ● adding a sufficient number of clinical trial sites; ● manufacturing sufficient quantities of a product candidate for use in clinical trials; ● lack of adequate funding to continue the clinical trial; ● selection of clinical end points that require prolonged periods of clinical observation or analysis of the resulting data; ● a facility manufacturing our product candidates or any of their components being ordered by the FDA, or comparable foreign regulatory authorities, to temporarily or permanently shut down due to violations of current good manufacturing practice (“cGMP”) regulations or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process; ● any changes to our manufacturing process that may be necessary or desired; ● third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCPs or other regulatory requirements; or ● third-party contractors not performing data collection or analysis in a timely or accurate manner; third-party contractors not complying with training and trial protocol; or third-party contractors becoming debarred or suspended or otherwise penalized by the FDA, such as in the case of the recent events relating to the TRANQUILITY II clinical trial, or other government or regulatory authorities, for violations of regulatory requirements, in which case, we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications.
Clinical trials can be delayed for a variety of reasons, including delays related to: ● the FDA, or comparable foreign regulatory authorities, disagreeing as to the design or implementation of our clinical studies; ● obtaining regulatory allowances or authorizations to commence a trial or consensus with regulatory authorities on trial designs; ● reaching agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● obtaining institutional review board approval at each site, or independent ethics committee approval at any sites outside the U.S.; ● dependence on the needs and timing of third-party collaborators; ● changes to clinical trial protocols; ● recruiting suitable patients to participate in a trial in a timely manner and in sufficient numbers; ● clinical sites deviating from trial protocol or dropping out of a trial; ● addressing patient safety concerns that arise during the course of a trial; ● having patients complete a trial or return for post-treatment follow-up; 61 Table of Contents ● imposition of a clinical hold by regulatory authorities, including as a result of unforeseen safety issues or side effects or failure of trial sites to adhere to regulatory requirements; ● the occurrence of SAEs in trials of the same class of agents conducted by other companies or institutions; ● subjects choosing an alternative treatment for the indications for which we are developing our product candidates, or participating in competing trials; ● adding a sufficient number of clinical trial sites; ● manufacturing sufficient quantities of a product candidate for use in clinical trials; ● lack of adequate funding to initiate or continue clinical trials; ● selection of clinical end points that require prolonged periods of clinical observation or analysis of the resulting data; ● a facility manufacturing our product candidates or any of their components being ordered by the FDA, or comparable foreign regulatory authorities, to temporarily or permanently shut down due to violations of current good manufacturing practice (“cGMP”) regulations or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process; ● any changes to our manufacturing process that may be necessary or desired; ● third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCPs or other regulatory requirements; or ● third-party contractors not performing data collection or analysis in a timely or accurate manner; third-party contractors not complying with training and trial protocol; or third-party contractors becoming debarred or suspended or otherwise penalized by the FDA, such as in the case of the recent events relating to the TRANQUILITY II clinical trial, or other government or regulatory authorities, for violations of regulatory requirements, in which case, we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications.
For example: ● others may be able to independently develop, make and commercialize compounds that are similar to, or are alternatives or duplicates of any of our product candidates, but that are not covered by the claims of our patents or are not infringing, misappropriating, or otherwise violating our other intellectual property rights; ● we might not have been the first to make the inventions covered by our issued patents or pending patent applications that we license or may own in the future; ● we, or our future collaborators, might not have been the first to file patent applications covering certain of our or their inventions; 100 Table of Contents ● our pending patent applications or those that we may own in the future may not result in issued patents; ● the claims of our issued patents or patent applications when issued may not cover our products or product candidates; ● any patents that we obtain may not provide us with any competitive advantages; ● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop, manufacture and commercialize competitive products or product candidates for sale in our major commercial markets; ● we may not develop additional proprietary technologies that are patentable; ● we may choose not to seek patent protection for some of our proprietary technology or product candidates to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such trade secrets or know-how; ● any granted patents may be held invalid or unenforceable as a result of legal challenges by third parties; and ● the patents of others may have an adverse effect on our business.
For example: ● others may be able to independently develop, make and commercialize compounds that are similar to, or are alternatives or duplicates of any of our product candidates, but that are not covered by the claims of our patents or are not infringing, misappropriating, or otherwise violating our other intellectual property rights; ● we might not have been the first to make the inventions covered by our issued patents or pending patent applications that we license or may own in the future; ● we, or our future collaborators, might not have been the first to file patent applications covering certain of our or their inventions; ● our pending patent applications or those that we may own in the future may not result in issued patents; ● the claims of our issued patents or patent applications when issued may not cover our products or product candidates; ● any patents that we obtain may not provide us with any competitive advantages; ● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop, manufacture and commercialize competitive products or product candidates for sale in our major commercial markets; ● we may not develop additional proprietary technologies that are patentable; 96 Table of Contents ● we may choose not to seek patent protection for some of our proprietary technology or product candidates to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such trade secrets or know-how; ● any granted patents may be held invalid or unenforceable as a result of legal challenges by third parties; and ● the patents of others may have an adverse effect on our business.
If we are unable to commercialize IGALMI ® in a different setting or unable to develop, receive marketing approval for and successfully commercialize BXCL501, BXCL701 and any of 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 materially and substantially harmed. ​ In addition, because we have limited financial and managerial resources, under our Reprioritization, we intend to focus on specific product candidates, indications and development programs.
If we are unable to commercialize IGALMI ® in a different setting or unable to develop, receive marketing approval for and successfully commercialize BXCL501, BXCL701 and any of 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 materially and substantially harmed. ​ In addition, because we have limited financial and managerial resources, under our Clinical Reprioritization, we intend to focus on specific product candidates, indications and development programs.
A number of factors may affect the market acceptance of our products or any other products or product candidates we develop or acquire, including, among others: ● the price of our products relative to other products for the same or similar treatments; ● the perception by patients, physicians and other members of the health care community of the effectiveness, utility and safety of our products for their indicated applications and treatments; ● our ability to fund our sales and marketing efforts; and ● the effectiveness of our sales and marketing efforts, including our strategic refocus to hospital/IDNs as part of the Reprioritization.
A number of factors may affect the market acceptance of our products or any other products or product candidates we develop or acquire, including, among others: ● the price of our products relative to other products for the same or similar treatments; ● the perception by patients, physicians and other members of the health care community of the effectiveness, utility and safety of our products for their indicated applications and treatments; ● our ability to fund our sales and marketing efforts; and ● the effectiveness of our sales and marketing efforts, including our strategic refocus to hospital/IDNs as part of the Clinical Reprioritization.
Our current product candidates, or any that may be developed in the future, could fail to receive regulatory approval for many reasons, including the following: ● the FDA, or comparable foreign regulatory authorities, may disagree with the design or implementation of our clinical trials; ● we may be unable to demonstrate to the satisfaction of the FDA, or comparable foreign regulatory authorities, that a product candidate is safe and effective for its proposed indication; ● the results of clinical trials may not meet the level of statistical significance required by the FDA, or comparable foreign regulatory authorities, for approval; 64 Table of Contents ● the FDA, or comparable foreign regulatory authorities, may disagree with our interpretation of data from preclinical studies or clinical trials; ● the data collected from clinical trials of our product candidates may not be sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the U.S. or elsewhere; ● the FDA, or comparable foreign regulatory authorities, may disagree that our changes to branded reference drugs meet the criteria for the 505(b)(2) regulatory pathway or comparable foreign regulatory pathways; ● the FDA, or comparable foreign regulatory authorities, may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and ● the approval policies or regulations of the FDA, or comparable foreign regulatory authorities, may significantly change in a manner rendering our clinical data insufficient for approval.
Our current product candidates, or any that may be developed in the future, could fail to receive regulatory approval for many reasons, including the following: ● the FDA, or comparable foreign regulatory authorities, may disagree with the design or implementation of our clinical trials; ● we may be unable to demonstrate to the satisfaction of the FDA, or comparable foreign regulatory authorities, that a product candidate is safe and effective for its proposed indication; ● the results of clinical trials may not meet the level of statistical significance required by the FDA, or comparable foreign regulatory authorities, for approval; 59 Table of Contents ● the FDA, or comparable foreign regulatory authorities, may disagree with our interpretation of data from preclinical studies or clinical trials; ● the data collected from clinical trials of our product candidates may not be sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the U.S. or elsewhere; ● the FDA, or comparable foreign regulatory authorities, may disagree that our changes to branded reference drugs meet the criteria for the 505(b)(2) regulatory pathway or comparable foreign regulatory pathways; ● the FDA, or comparable foreign regulatory authorities, may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and ● the approval policies or regulations of the FDA, or comparable foreign regulatory authorities, may significantly change in a manner rendering our clinical data insufficient for approval.
Significant technological change could render BioXcel LLC’s EvolverAI or other AI platforms that we utilize obsolete. BioXcel LLC’s and our continued success will depend on the ability to adapt to changing technologies, manage and process ever-increasing amounts of data and information and improve the performance, features and reliability of these services in response to changing client and industry demands.
Significant technological change could render BioXcel LLC’s EvolverAI or other AI platforms that we may utilize obsolete. BioXcel LLC’s and our continued success will depend on the ability to adapt to changing technologies, manage and process ever-increasing amounts of data and information and improve the performance, features and reliability of these services in response to changing client and industry demands.
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 70 Table of Contents ● 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; 65 Table of Contents ● 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.
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; 94 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.
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; 90 Table of Contents ● 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.
In August 2023, we announced our intention to pursue the Reprioritization, including among other things, a shift in focus to primarily develop BXCL501 for use in expanded settings, including the at-home setting and care facilities, for the acute treatment of agitation in patients with dementia due to probable Alzheimer’s disease and the acute treatment of agitation in schizophrenia and bipolar patients in the at-home setting.
In August 2023, we announced our intention to pursue the Clinical Reprioritization, including among other things, a shift in focus to primarily develop BXCL501 for use in expanded settings, including the at-home setting and care facilities, for the acute treatment of agitation in patients with dementia due to probable Alzheimer’s disease and the acute treatment of agitation in schizophrenia and bipolar patients in the at-home setting.
The maintenance and expansion of our direct sales force or establishment of a contract sales force, or a combination thereof, as applicable, to market our products is expensive and time-consuming and could delay any product launch. In addition, reputational harm from the Reprioritization may adversely impact our efforts to hire personnel skilled in marketing and sales.
The maintenance and expansion of our direct sales force or establishment of a contract sales force, or a combination thereof, as applicable, to market our products is expensive and time-consuming and could delay any product launch. In addition, reputational harm from the Clinical Reprioritization may adversely impact our efforts to hire personnel skilled in marketing and sales.
Our future funding requirements, both short-term and long-term, will depend on many factors, including: ● the scope, progress, timing, costs, and results of clinical trials of our product candidates, including any delays that have occurred or may occur due to the recent developments with the TRANQUILITY program; ● our ability to enter into and the terms and timing of any collaborations, licensing agreements or other arrangements; ● the costs, timing and outcome of seeking regulatory approvals; ● the costs of commercialization activities for IGALMI ® and for any of our product candidates that receive marketing approval, to the extent such costs are not the responsibility of any future collaborators, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities; ● revenue received from commercial sales of IGALMI ® and our current and future product candidates; ● the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights and defending against intellectual property related claims; 56 Table of Contents ● the number of future product candidates that we pursue and their development requirements; ● changes in regulatory policies or laws that may affect our operations; ● changes in physician acceptance or medical society recommendations that may affect commercial efforts; ● the costs of acquiring potential new product candidates or technology; ● the costs of operating as a public company; ● the extent to which our operations continue; ● the costs of legal proceedings and investigations; and ● costs associated with any adverse market conditions or other macroeconomic factors.
Our future funding requirements, both short-term and long-term, will depend on many factors, including: ● the scope, progress, timing, costs, and results of clinical trials of our product candidates, including any delays that have occurred or may occur due to the recent developments with the TRANQUILITY program; ● our ability to enter into and the terms and timing of any collaborations, licensing agreements or other arrangements; ● the costs, timing and outcome of seeking regulatory approvals; ● the costs of commercialization activities for IGALMI ® and for any of our product candidates that receive marketing approval, to the extent such costs are not the responsibility of any future collaborators, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities; ● revenue received from commercial sales of IGALMI ® and our current and future product candidates; ● the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights and defending against intellectual property related claims; ● the number of future product candidates that we pursue and their development requirements; ● changes in regulatory policies or laws that may affect our operations; ● changes in physician acceptance or medical society recommendations that may affect commercial efforts; ● the costs of acquiring potential new product candidates or technology; ● the costs of operating as a public company; ● the extent to which our operations continue; ● the costs of legal proceedings and investigations; and ● costs associated with any adverse market conditions or other macroeconomic factors.
We might not be successful in maintaining our unique culture and continuing to attract and retain qualified personnel. We have, from time to time, had difficulty hiring and retaining highly skilled personnel with appropriate qualifications, including as a result of the Reprioritization and related consequences for our reputation.
We might not be successful in maintaining our unique culture and continuing to attract and retain qualified personnel. We have, from time to time, had difficulty hiring and retaining highly skilled personnel with appropriate qualifications, including as a result of the Clinical Reprioritization and related consequences for our reputation.
As part of the Company’s Reprioritization, the IGALMI ® commercial team shifted focus to a hospital/Integrated Delivery Network (“IDN”) contracting strategy with a Corporate Account Director (CAD) team. The goal of the realigned CAD team is to work with large IDNs and drive sales utilizing a top-down approach.
As part of the Company’s Clinical Reprioritization, the IGALMI ® commercial team shifted focus to a hospital/Integrated Delivery Network (“IDN”) contracting strategy with a Corporate Account Director (CAD) team. The goal of the realigned CAD team is to work with large IDNs and drive sales utilizing a top-down approach.
In addition, future acquisitions may entail numerous operational and financial risks, including: ● exposure to unknown liabilities; ● disruption of our business and diversion of our management’s and technical personnel’s time and attention to develop acquired products or technologies; 98 Table of Contents ● incurrence of substantial debt or dilutive issuances of securities to pay for acquisitions; ● higher than expected acquisition and integration costs; ● increased amortization expenses; ● difficulty and cost in combining the operations and personnel of any acquired businesses with our operations and personnel; ● impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership; and ● inability to retain key employees of any acquired businesses.
In addition, future acquisitions may entail numerous operational and financial risks, including: ● exposure to unknown liabilities; ● disruption of our business and diversion of our management’s and technical personnel’s time and attention to develop acquired products or technologies; ● incurrence of substantial debt or dilutive issuances of securities to pay for acquisitions; ● higher than expected acquisition and integration costs; ● increased amortization expenses; ● difficulty and cost in combining the operations and personnel of any acquired businesses with our operations and personnel; ● impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership; and 94 Table of Contents ● inability to retain key employees of any acquired businesses.
Following our Reprioritization, we may need to rebuild a commercial sales and marketing team if we seek to modify our commercial strategy for IGALMI ® or initiate commercial sales for any product candidate in the future, which will likely require significant cost.
Following our Clinical Reprioritization, we may need to rebuild a commercial sales and marketing team if we seek to modify our commercial strategy for IGALMI ® or initiate commercial sales for any product candidate in the future, which will likely require significant cost.
Based on current FDA feedback, we have amended the Part 2 of the SERENITY III protocol to evaluate the safety and efficacy of the 120 mg dose in the at-home setting, and now refer to this revised trial as the SERENITY At-Home trial.
Based on current FDA feedback, we amended the Part 2 of the SERENITY III protocol to evaluate the safety and efficacy of the 120 mg dose in the at-home setting, and now refer to this revised trial as the SERENITY At-Home trial.
In connection with the Reprioritization, we have significantly reduced the resources devoted to commercialization of IGALMI ® and it is possible that will have adverse consequences on the revenue that we are able to generate from IGALMI ® in the near term.
In connection with the Clinical Reprioritization, we have significantly reduced the resources devoted to commercialization of IGALMI ® and it is possible that will have adverse consequences on the revenue that we are able to generate from IGALMI ® in the near term.
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 84 Table of Contents 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 ® and any other drug products for which we may obtain 80 Table of Contents 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.
As a result of the Reprioritization, including our strategic refocus, we may not generate material revenues from IGALMI ® in the near term because our commercial force will be significantly reduced.
As a result of the Clinical Reprioritization, including our strategic refocus, we may not generate material revenues from IGALMI ® in the near term because our commercial force will be significantly reduced.
The degree of market acceptance of IGALMI ® and any drugs we develop depends on a number of factors, including: ● our demonstration of the clinical efficacy and safety of our products and product candidates; ● timing of market approval and commercial launch of our products and product candidates; ● the clinical indication(s) for which our products and product candidates are approved; ● product label and package insert requirements; ● advantages and disadvantages of our products and product candidates compared to existing therapies; ● continued interest in and growth of the market for anti-cancer or anti-agitation drugs; 82 Table of Contents ● strength of sales, marketing, and distribution support; ● product pricing in absolute terms and relative to alternative treatments; ● future changes in health care laws, regulations, and medical policies; and ● availability of coverage and reimbursement in select jurisdictions, and future changes to coverage and reimbursement policies of government and third-party payors.
The degree of market acceptance of IGALMI ® and any drugs we develop depends on a number of factors, including: ● our demonstration of the clinical efficacy and safety of our products and product candidates; ● timing of market approval and commercial launch of our products and product candidates; ● the clinical indication(s) for which our products and product candidates are approved; ● product label and package insert requirements; ● advantages and disadvantages of our products and product candidates compared to existing therapies; ● continued interest in and growth of the market for anti-cancer or anti-agitation drugs; ● strength of sales, marketing, and distribution support; ● product pricing in absolute terms and relative to alternative treatments; ● future changes in health care laws, regulations, and medical policies; and ● availability of coverage and reimbursement in select jurisdictions, and future changes to coverage and reimbursement policies of government and third-party payors.
If we fail to provide information timely or are found to have knowingly submitted false information to the government, we may be subject to civil monetary penalties and other sanctions, including termination from the MDRP, which would result in payment not being available for our covered outpatient drugs under Medicaid or, 85 Table of Contents if applicable, Medicare Part B.
If we fail to provide information timely or are found to have knowingly submitted false information to the government, we may be subject to civil monetary penalties and other sanctions, including termination from the MDRP, which would result in payment not being available for our covered outpatient drugs under Medicaid or, 81 Table of Contents if applicable, Medicare Part B.
For example, developments with respect to our TRANQUILITY program evaluating BXCL501 in patients with dementia due to probable Alzheimer’s disease may increase the likelihood that we experience such costs or delays, as discussed in the risk factor below entitled: “ Developments relating to our TRANQUILITY II Phase 3 trial may impact the timing of our development plans for, and prospects for seeking or obtaining regulatory approval of, BXCL501 for the acute treatment of agitation (non-daily) associated with dementia in patients with probable Alzheimer’s disease .” Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.
For example, developments with respect to our TRANQUILITY program evaluating BXCL501 in patients with dementia due to probable Alzheimer’s disease may increase the likelihood that we 49 Table of Contents experience such costs or delays, as discussed in the risk factor below entitled: “ Developments relating to our TRANQUILITY II Phase 3 trial may impact the timing of our development plans for, and prospects for seeking or obtaining regulatory approval of, BXCL501 for the acute treatment of agitation (non-daily) associated with dementia in patients with probable Alzheimer’s disease .” Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.
Based on our existing cash, cash equivalents and lack of current availability under our funding facilities, we do not believe we have sufficient cash on hand to support current operations and service our debt obligations for at least one year from the date of issuance of the audited consolidated financial statements appearing in this Annual Report on Form 10-K.
Based on our existing cash, cash equivalents and lack of current availability under our funding facilities, we do not believe we have sufficient cash on hand to support current operations and service our debt obligations for at least one year from the date of issuance of the audited consolidated financial statements appearing in this Annual Report on Form 10-K (this “Annual Report”).
In the event that CMS were to terminate our Medicaid rebate agreement, pursuant to 86 Table of Contents which we participate in the MDRP, no federal payments would be available under Medicaid or Medicare for our covered outpatient drugs. We cannot assure you that price data submissions we make will not be found to be incomplete or incorrect.
In the event that CMS were to terminate our Medicaid rebate agreement, pursuant to 82 Table of Contents which we participate in the MDRP, no federal payments would be available under Medicaid or Medicare for our covered outpatient drugs. We cannot assure you that price data submissions we make will not be found to be incomplete or incorrect.
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; 110 Table of Contents ● 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; ● 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: ● 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; 106 Table of Contents ● 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; ● sales of our common stock under our existing “at-the-market” equity offering program or other future issuances; ● 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; ● 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.
If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates.
If CROs do not 87 Table of Contents successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates.
For example, our estimates of the monthly average episodes for patients diagnosed with bipolar disorder and patients diagnosed with schizophrenia and, therefore, our estimated total addressable market are based on third-party market surveys which differ from an observational study in the EU of inhaled loxapine for the treatment of agitation in patients with schizophrenia or bipolar disorder conducted which found that only 40% of enrolled patients reported agitation episodes in the six-month study period.
For example, our estimates of the monthly average episodes for patients diagnosed with bipolar disorder and patients diagnosed with schizophrenia and, therefore, our estimated total addressable market are based on third-party market 75 Table of Contents surveys which differ from an observational study in the EU of inhaled loxapine for the treatment of agitation in patients with schizophrenia or bipolar disorder conducted which found that only 40% of enrolled patients reported agitation episodes in the six-month study period.
Even after an orphan drug is approved, the FDA or foreign regulatory authorities can subsequently approve the same drug with the same active ingredient for the same condition if the FDA or foreign regulatory authorities conclude that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care or the manufacturer of the product with orphan exclusivity is unable to maintain sufficient product quantity.
Even after an orphan drug is approved, the FDA 76 Table of Contents or foreign regulatory authorities can subsequently approve the same drug with the same active ingredient for the same condition if the FDA or foreign regulatory authorities conclude that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care or the manufacturer of the product with orphan exclusivity is unable to maintain sufficient product quantity.
As our operations and business grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities. In the U.S., HIPAA imposes, among other things, certain standards relating to the privacy, security, transmission, and breach reporting of individually identifiable health information.
As our operations and business grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities. In the U.S., HIPAA imposes, 92 Table of Contents among other things, certain standards relating to the privacy, security, transmission, and breach reporting of individually identifiable health information.
If the FDA does not accept the data from our prior TRANQUILITY II Phase 3 trial, we could be required to conduct additional 61 Table of Contents clinical trials beyond those we currently contemplate, which would increase our costs and delay potential submission of an sNDA for BXCL501 which in turn would adversely affect our financial position and operations.
If the FDA does not accept the data from our prior TRANQUILITY II Phase 3 trial, we could be required to conduct additional clinical trials beyond those we currently contemplate, which would increase our costs and delay potential submission of an sNDA for BXCL501 which in turn would adversely affect our financial position and operations.
Steinhart, Robert Risinger, and Krishnan Nandabalan as Defendants, and the Company as Nominal Defendant under the caption Smith v. 113 Table of Contents Mehta et al , 1:24-cv-00041. Following the initial action, Plaintiff Janice Korff filed a stockholder derivative complaint in the District of Delaware raising similar claims as Smith (1:24-cv-130), including business torts and violations of the Exchange Act.
Steinhart, Robert Risinger, and Krishnan Nandabalan as Defendants, and the Company as Nominal Defendant under the caption Smith v. Mehta et al , 1:24-cv-00041. Following the initial action, Plaintiff Janice Korff filed a stockholder derivative complaint in the District of Delaware raising similar claims as Smith (1:24-cv-130), including business torts and violations of the Exchange Act.
However, if we were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could 112 Table of Contents make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business, financial condition and results of operations.
However, if we were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business, financial condition and results of operations.
Moreover, market volatility, credit crises, adverse macroeconomic conditions, such as high interest or inflation rates, or other factors, as well as Company-specific factors such as the progress of our development pipeline, adverse clinical events or results, regulatory investigations, or ongoing or potential legal proceedings, could also adversely impact our ability to access capital as and 55 Table of Contents when needed.
Moreover, market volatility, credit crises, adverse macroeconomic conditions, such as high interest or inflation rates, or other factors, as well as Company-specific factors such as the progress of our development pipeline, adverse clinical events or results, regulatory investigations, or ongoing or potential legal proceedings, could also adversely impact our ability to access capital as and when needed.
This condition raises substantial doubt about our ability to continue as a going concern for at least one year from the date that our financial statements for the year ended December 31, 2024 are issued.
This condition raises substantial doubt about our ability to continue as a going concern for at least one year from the date that our financial statements for the year ended December 31, 2025 are issued.
Further, any government investigation, disqualification, or debarment of, or proceeding or action against the principal investigator, or any government investigation, proceeding or action against us, could further delay development 60 Table of Contents and approval of BXCL501 for this indication, and otherwise have a material adverse effect on us, our financial condition (including triggering a potential event of default under our Credit Agreement), results of operations and prospects.
Further, any government investigation, disqualification, or debarment of, or proceeding or action against the principal investigator, or any government investigation, proceeding or action against us, could further delay development and approval of BXCL501 for this indication, and otherwise have a material adverse effect on us, our financial condition (including triggering a potential event of default under our Credit Agreement), results of operations and prospects.
As is common in the biotechnology and pharmaceutical industries, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Some of these employees, consultants and contractors may have executed proprietary rights, non-disclosure and non-competition agreements in connection with such previous employment or 108 Table of Contents engagement.
As is common in the biotechnology and pharmaceutical industries, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Some of these employees, consultants and contractors may have executed proprietary rights, non-disclosure and non-competition agreements in connection with such previous employment or engagement.
Although we have conducted several clinical trials that evaluated BXCL501 in the institutional setting, and we are conducting the SERENITY At-Home Phase 3 trial evaluating the safety of BXCL501 for the acute treatment of agitation associated with bipolar disorders or schizophrenia in the at-home setting, but we have not conducted a clinical trial evaluating the at-home use of BXCL501 in the acute treatment of agitation in patients with dementia due to probable Alzheimer’s disease.
Although we have conducted several clinical trials that evaluated BXCL501 in the institutional setting, and we have conducted the SERENITY At-Home Phase 3 trial evaluating the safety of BXCL501 for the acute treatment of agitation associated with bipolar disorders or schizophrenia in the at-home setting, we have not conducted a clinical trial evaluating the at-home use of BXCL501 in the acute treatment of agitation in patients with dementia due to probable Alzheimer’s disease.
Additionally, these fixed costs may slow our ability to reduce costs if needed, which could have a material adverse effect on our business, financial condition, and results of operations. 81 Table of Contents We operate in a highly competitive and rapidly changing industry. Biopharmaceutical product development is highly competitive and subject to rapid and significant technological advancements.
Additionally, these fixed costs may slow our ability to reduce costs if needed, which could have a material adverse effect on our business, financial condition, and results of operations. We operate in a highly competitive and rapidly changing industry. Biopharmaceutical product development is highly competitive and subject to rapid and significant technological advancements.
Any perceived conflicts of interest resulting from investors questioning the independence of our management or the integrity of corporate governance procedures may materially affect our stock price and expose us to litigation risk. 88 Table of Contents Any disputes that arise between us and BioXcel LLC with respect to our past and ongoing relationships could harm our business operations.
Any perceived conflicts of interest resulting from investors questioning the independence of our management or the integrity of corporate governance procedures may materially affect our stock price and expose us to litigation risk. Any disputes that arise between us and BioXcel LLC with respect to our past and ongoing relationships could harm our business operations.
If such an event as 95 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.
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.
We also make assumptions, estimations, calculations and conclusions as part of our analyses 63 Table of Contents of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.
We also make assumptions, estimations, calculations and conclusions as part of our analyses 58 Table of Contents of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.
While the Clinical Trials Directive required a separate clinical trial application (“CTA”), to be submitted in each member state in which the clinical trial takes place, to both the competent national health authority and an independent ethics committee, the CTR introduces a centralized process and only requires the submission of a single application for multi-center trials.
While the Clinical Trials Directive required a separate clinical trial application (“CTA”), to be submitted in each member state in which the clinical trial takes place, to both the competent national health authority and an independent ethics committee, the CTR introduces a centralized process and 60 Table of Contents only requires the submission of a single application for multi-center 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. 91 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.
Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution.
Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness or non-enablement. 99 Table of Contents Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution.
Our results of operations could be materially adversely affected by proposed health care reforms, by the Inflation Reduction Act and other drug pricing legislation in the U.S., by the possible effect of such current or future legislation on amounts that private insurers will pay and by other health care reforms that may be enacted or adopted in the future.
Our results of operations could be materially adversely affected by proposed health care 78 Table of Contents reforms, by the Inflation Reduction Act and other drug pricing legislation in the U.S., by the possible effect of such current or future legislation on amounts that private insurers will pay and by other health care reforms that may be enacted or adopted in the future.
If we, ARx, the Patheon pharma services division of Thermo Fisher Scientific Inc., or our other third-party manufacturers were to 90 Table of Contents 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.
An inability to incorporate technologies, features or other intellectual property rights that are important or essential to our products or product candidates could have a material adverse effect on our business, financial condition, results of operations, and competitive position, and may prevent us from developing, manufacturing and/or commercializing our 102 Table of Contents products or technologies.
An inability to incorporate technologies, features or other intellectual property rights that are important or essential to our products or product candidates could have a material adverse effect on our business, financial condition, results of operations, and competitive position, and may prevent us from developing, manufacturing and/or commercializing our products or technologies.
The Company is also cooperating with a formal investigation of the Company and certain of its officers and directors by the SEC, relating to the Company’s public disclosures, including about product sales and the receipt of a Form 483 by an investigator at one of the Company’s clinical trial sites in the TRANQUILITY II study, and trading in the securities of the Company.
The Company is also cooperating with a formal investigation of the Company and certain of its officers and directors by the SEC, relating to the Company’s public disclosures—including about product sales and the receipt of a Form 483 by an investigator at one of the Company’s clinical trial sites in the TRANQUILITY II study, the Company’s technology platform, and study enrollment—and trading in the securities of the Company.
This principal investigator has not participated in any other clinical trial sponsored or conducted by us. Both we and the principal investigator’s employer have reported this incident to the FDA. 59 Table of Contents Since that time, we have taken steps to further investigate and evaluate the conduct of the TRANQUILITY II trial at this clinical site.
This principal investigator has not participated in any other clinical trial sponsored or conducted by us. Both we and the principal investigator’s employer have reported this incident to the FDA. Since that time, we have taken steps to further investigate and evaluate the conduct of the TRANQUILITY II trial at this clinical site.
In such a situation, it is unlikely that we would be able to cure our breach, fulfill our obligations, make required 57 Table of Contents payments or otherwise cover our fixed costs, which would have a material adverse effect on our business, results of operations and financial condition.
In such a situation, it is unlikely that we would be able to cure our breach, fulfill our obligations, make required payments or otherwise cover our fixed costs, which would have a material adverse effect on our business, results of operations and financial condition.
We plan to continue to commercialize IGALMI ® sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder, to be self-administered by patients under the supervision of a healthcare provider, which is our only approved product to date.
We plan to continue to commercialize IGALMI ® sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder, to be self-administered by patients under the supervision of a healthcare 74 Table of Contents provider, which is our only approved product to date.
These risks include the failure of enrolled patients in foreign countries to adhere to clinical protocol due to differences in health care services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries.
These risks include the failure of enrolled patients in foreign countries to adhere to clinical protocol due to differences in health care services or cultural customs, 62 Table of Contents managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries.
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 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. 89 Table of Contents To continue to execute our business strategy, we also must attract and retain highly skilled personnel.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our product candidate could be delayed or altogether terminated.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of 91 Table of Contents confidential or proprietary information, we could incur liability and the further development and commercialization of our product candidate could be delayed or altogether terminated.
In order to mitigate the current and potential future liquidity issues, we have undertaken the Reprioritization and other restructuring actions, and may, among other things, seek to raise capital through the issuance of common stock, or by restructuring, refinancing, and/or amending the terms of the Credit Agreement (including with respect to regulatory related events of default that do not contain a cure period) or pursue other strategic alternatives.
In order to mitigate liquidity issues, we have undertaken the Clinical Reprioritization and other restructuring actions, and may, among other things, seek to raise capital through the issuance of common stock, or by restructuring, refinancing, and/or amending the terms of the Credit Agreement (including with respect to regulatory related events of default that do not contain a cure period) or pursue other strategic alternatives.
The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions, subject to certain exceptions, including specific exceptions with respect to product commercialization and development activities.
The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of 51 Table of Contents other indebtedness, and dividends and other distributions, subject to certain exceptions, including specific exceptions with respect to product commercialization and development activities.
Though we believe that this result was caused by, among other things, an imbalance in the disease severity of patients enrolled in the active arm of the clinical trial, there is no guarantee that excess mortality will not be observed in future clinical studies.
Though we believe that this result was caused by, among other things, an imbalance in 63 Table of Contents the disease severity of patients enrolled in the active arm of the clinical trial, there is no guarantee that excess mortality will not be observed in future clinical studies.
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 89 Table of Contents 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.
In addition, even where the foreign 75 Table of Contents study data are not intended to serve as the sole basis for approval, if the clinical trial was not otherwise subject to an IND, the FDA will not accept the data as support for an application for marketing approval unless the study was conducted in accordance with GCP requirements and the FDA is able to validate the data from the study through an on-site inspection if deemed necessary.
In addition, even where the foreign study data are not intended to serve as the sole basis for approval, if the clinical trial was not otherwise subject to an IND, the FDA will not accept the data as support for an application for marketing approval unless the study was conducted in accordance with GCP requirements and the FDA is able to validate the data from the study through an on-site inspection if deemed necessary.
In any event, the receipt of a Breakthrough Therapy designation for a product 71 Table of Contents candidate may not result in a faster development process, review or approval compared to drugs considered for approval under non-expedited FDA review procedures and does not assure ultimate approval by the FDA.
In any event, the receipt of a Breakthrough Therapy designation for a product candidate may not result in a faster development process, review or approval compared to drugs considered for approval under non-expedited FDA review procedures and does not assure ultimate approval by the FDA.
For example, the FDA-approved label for IGALMI ® is currently limited to the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults to be self-administrated by patients under the supervision of a health care provider.
For example, the FDA-approved label for IGALMI ® 69 Table of Contents is currently limited to the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults to be self-administrated by patients under the supervision of a health care provider.
Section 505(b)(2) permits the submission of an NDA where at least some of the information required for approval comes from studies that were not conducted by, or for, the applicant and on which the applicant has not obtained a right of reference.
Section 505(b)(2) permits the submission of an NDA where at least some of the information required for 98 Table of Contents approval comes from studies that were not conducted by, or for, the applicant and on which the applicant has not obtained a right of reference.
If another party has filed U.S. patent applications on inventions similar to ours that claim priority to any applications filed prior to the priority dates of our applications, we may have to participate in an interference proceeding declared by the USPTO to determine priority of invention in the U.S.
If another party has filed U.S. patent applications on inventions 101 Table of Contents similar to ours that claim priority to any applications filed prior to the priority dates of our applications, we may have to participate in an interference proceeding declared by the USPTO to determine priority of invention in the U.S.
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.
These rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting and changes in 111 Table of Contents corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain compliance with.
The Company also has approximately $1.5 million of state research and development credits which will begin to expire in 2040 if not utilized.
The Company also has approximately $1.6 million of state research and development credits which will begin to expire in 2040 if not utilized.
We may also be hindered or prevented from enforcing our rights with respect to a government entity or instrumentality because of the doctrine of sovereign immunity. Our ability to enforce our patent or other intellectual 103 Table of Contents property rights depends on our ability to detect infringement.
We may also be hindered or prevented from enforcing our rights with respect to a government entity or instrumentality because of the doctrine of sovereign immunity. Our ability to enforce our patent or other intellectual property rights depends on our ability to detect infringement.
In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid, we may incur 105 Table of Contents substantial monetary damages, encounter significant delays in bringing our product candidates to market and be precluded from manufacturing or selling our product candidates.
In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid, we may incur substantial monetary damages, encounter significant delays in bringing our product candidates to market and be precluded from manufacturing or selling our product candidates.
In March 2025, we issued and sold in a registered direct offering 188,383 shares of common stock, pre-funded warrants to purchase up to 3,811,617 shares of our common stock, accompanying warrants to purchase up to 4 million shares, and option warrants to purchase an additional 4 million shares and 4 million warrants.
In March 2025, we issued and sold in a registered direct offering 188,383 shares of common stock, pre-funded warrants to purchase up to 3,811,617 shares of our common stock, accompanying warrants to purchase up to 4 million shares, and option warrants to purchase an additional 4 million shares of common stock (or pre-funded warrants in lieu thereof) and 4 million warrants.
Common difficulties in biotechnology and pharmaceutical manufacturing may include: sourcing and producing raw materials, transferring technology from chemistry and development activities to production activities, validating initial production designs, scaling manufacturing techniques, improving costs and yields, establishing and maintaining quality controls and stability requirements, eliminating contaminations and operator errors, and maintaining compliance with regulatory requirements.
Common difficulties in biotechnology and pharmaceutical manufacturing may include: sourcing and producing raw materials, transferring technology from chemistry and development activities to production activities, validating initial production designs, scaling manufacturing techniques, 85 Table of Contents improving costs and yields, establishing and maintaining quality controls and stability requirements, eliminating contaminations and operator errors, and maintaining compliance with regulatory requirements.
If we fail to comply with the rules under the Sarbanes-Oxley Act related to disclosure controls and procedures in the future, or, if we discover material weaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be more difficult. 115 Table of Contents We have discovered material weaknesses in the past.
If we fail to comply with the rules under the Sarbanes-Oxley Act related to disclosure controls and procedures in the future, or, if we discover material weaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be more difficult. We have discovered material weaknesses in the past.
As part of this strategy, we reduced our workforce in 2023 by approximately 60%. ​ In May and September 2024, we initiated further workforce reductions, and we may undertake further similar cost-saving initiatives, which may include additional restructuring or workforce reductions.
As part of this strategy, we reduced our workforce in 2023 by approximately 60%. 52 Table of Contents ​ In May and September 2024, we initiated further workforce reductions, and we may undertake further similar cost-saving initiatives, which may include additional restructuring or workforce reductions.
The acceptance of study data from clinical trials conducted outside the U.S. or another jurisdiction by the FDA or comparable foreign regulatory authority may be subject to certain conditions or may not be accepted at all.
The acceptance of study data from clinical trials conducted outside the U.S. or another 70 Table of Contents jurisdiction by the FDA or comparable foreign regulatory authority may be subject to certain conditions or may not be accepted at all.
Requirements to conduct additional clinical trials evaluating BXCL501 in support of our planned sNDAs seeking approvals for BXCL501 for our targeted patient populations in at-home settings would increase our costs, and in either case, such modifications or requirements could have a material adverse effect on our prospects and results of operations.
Requirements to conduct additional clinical trials evaluating BXCL501 in support of our sNDAs submission and any future sNDAs seeking approvals for BXCL501 for our targeted patient populations in at-home settings would increase our costs, and in either case, such modifications or requirements could have a material adverse effect on our prospects and results of operations.
The utilization of such net operating loss carry-forwards and realization of tax benefits in future years depends predominantly upon having taxable income. The Company has approximately $16.0 million of federal orphan drug credits and research and development credits which will begin to expire in 2037 if not utilized.
The utilization of such net operating loss carry-forwards and realization of tax benefits in future years depends predominantly upon having taxable income. The Company has approximately $17.7 million of federal orphan drug credits and research and development credits which will begin to expire in 2037 if not utilized.
Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.
Further, changing circumstances, some of which may be beyond our control, could cause us to 50 Table of Contents consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThis does not imply that we meet any particular technical standards, specifications, or requirements, only 116 Table of Contents that we used the National Institute of Standards and Technology Cybersecurity Framework as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Biggest changeThis does not imply that we meet any particular technical standards, specifications, or requirements, only that we used the National Institute of Standards and Technology Cybersecurity Framework as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. 113 Table of Contents Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our Security Incident Management Team’s experience includes prior work experience in cybersecurity; financial management and controls, data quality assurance and liability and risk management. 117 Table of Contents Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the information technology environment. ​
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the information technology environment. ​ ​ 114 Table of Contents
The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our Security Incident Management Team’s experience includes prior work experience in cybersecurity; financial management and controls, data quality assurance and liability and risk management.
Removed
Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.

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.
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.
Removed
We believe that our existing facilities are suitable and adequate to meet our current needs. ​
Added
(i) On February 17, 2026, we agreed to extend our lease on a month-to-month basis beginning March 1, 2026, subject to termination by either party, for any or no reason, by giving the other party written notice at least one (1) full calendar month prior to the intended date of termination; and ​ (ii) said extension shall be upon all of the same terms and conditions as currently apply under the Lease, including, without limitation, continued payment of monthly Base Rent of $32,684.44 and monthly Base Electric Charge of $2,895.13. ​

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 118 ​ ​ ​ Part II. ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 118 Item 6. Reserved 119 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 120 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 139 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 115 ​ ​ ​ Part II. ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 115 Item 6. Reserved 116 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 117 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 137 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe actual number of holders of our common stock is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or held by other nominees.
Biggest changeThe actual number of holders of our common stock is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or held by other nominees. ​ 115 Table of Contents Dividend Policy We have never paid or declared any cash dividends on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future.
Unregistered Sales of Securities There were no unregistered sales of equity securities by the Company during the three months ended December 31, 2024, that was not previously disclosed on a Current Report on Form 8-K or Quarterly Report on Form 10-Q. Issuer Purchases of Equity Securities None.
Unregistered Sales of Securities There were no unregistered sales of equity securities by the Company during the three months ended December 31, 2025, that was not previously disclosed on a Current Report on Form 8-K or Quarterly Report on Form 10-Q. Issuer Purchases of Equity Securities None.
Any future determination to pay dividends will be at the discretion of our board of directors and will depend upon a number of factors, including our results of operations, 118 Table of Contents financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors that our board of directors deems relevant.
Any future determination to pay dividends will be at the discretion of our board of directors and will depend upon a number of factors, including our results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors that our board of directors deems relevant.
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, 2025, there were 13 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 26, 2026, there were 26 stockholders of record of our common stock.
Dividend Policy We have never paid or declared any cash dividends on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. We intend to retain all available funds and any future earnings to fund the development and expansion of our business.
We intend to retain all available funds and any future earnings to fund the development and expansion of our business.

Item 7. Management's Discussion & Analysis

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

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Biggest changeOn November 21, 2024, the Company entered into the Fifth Amendment to Credit Agreement and Guaranty and First Amendment to Fourth Amendment to Credit Agreement and Guaranty (the “Fifth Amendment”). ​ Pursuant to the Fifth Amendment, the Lenders agreed to, among other things, (i) waive the Credit Agreement’s covenant that the report and opinion the Company will receive from its independent registered public accounting firm with respect to the financial statements for the year ending December 31, 2024 will not contain a “going concern” or similar qualification, (ii) permanently waive the Credit Agreement’s minimum revenue covenant, and (iii) waive the Fourth Amendment’s requirement that the Company raise, after the effective date of the Fourth Amendment and on or before November 30, 2024, at least $50,000 in gross cash proceeds from the issuance of its common stock, warrants, and/or pre-funded warrants, and/or in cash and/or non-cash consideration from newly entered-into partnering transactions. ​ The Fifth Amendment included a new capital raising covenant requiring that the Company receive (A) after the effective date of the Fifth Amendment and on or prior to November 27,2024, at least $7,000 in gross cash proceeds from the issuance of the Company’s common stock, warrants and/or pre-funded warrants(“Raise 1”), (B) after the effective date of the Fifth Amendment and on or before March 15, 2025 (provided that the Company was required to use its commercially reasonable efforts to satisfy the requirement by February 15, 2025), at least $18,000 in net cash proceeds (including the proceeds of Raise 1) from (i) the issuance of the Company’s common stock, warrants and/or pre-funded warrants, (ii) non-refundable cash consideration from partnering transactions entered into after the effective date of the Fifth Amendment (so long as such partnering transactions would not require the Company or any of its subsidiaries to make any cash investments in connection with the partnering transactions and no such cash investments are made), (iii) the issuance of the Company’s subordinated debt (subject to terms set forth in the Fifth Amendment), and/or (iv) asset sales permitted pursuant to the Credit Agreement or consented to by the Lenders (such capital raise, “Raise 2”), and (C) after the effective date of the Fifth Amendment and on or prior to the earlier of (x) August 15, 2025 and (y) the date that is 30 days after the final data readout of the SERENITY At-Home Phase 3 trial, at least $29,000 in net cash proceeds (including the proceeds from Raise 1 and Raise 2) from the same permitted capital raising activities listed in the preceding clause (B). ​ 133 Table of Contents In connection with the Fifth Amendment and the required capital raises described in the preceding paragraph, the Lenders agreed to modify the Credit Agreement’s minimum liquidity covenant to require minimum cash liquidity of $7,500 (instead of $25,000) from and after the closing of Raise 1 until March 30, 2025.
Biggest changePursuant to the Ninth Amendment, the Lenders agreed to (i) waive the Credit Agreement’s covenant that the report and opinion the 129 Table of Contents Company will receive from its independent registered public accounting firm with respect to the financial statements for the year ending December 31, 2025 will not contain a “going concern” or similar qualification, and (ii) reduce the Credit Agreement’s minimum liquidity covenant to require minimum cash liquidity of $12.50 million from and after March 31, 2026 (instead of $15.0 million). ​ The Ninth Amendment’s effectiveness is subject to various customary conditions precedent, as well as conditions subsequent requiring the Company to: ​ ● on or before March 31, 2026, make a one-time prepayment of the principal amount of $2.50 million, together with accrued and unpaid interest thereon; ​ ● on April 15, 2026, either (i) pay to the Lenders an amendment fee in cash in an amount equal to approximately $2.0 million or (ii) grant new warrants to the Lenders to purchase 1,353,729 shares of common stock of the Company, at an exercise price of $0.01 per share (the “New Warrants”); and ​ ● in connection with the receipt by the Company of any gross cash proceeds from (i) the issuance of the Company’s common stock, warrants and/or pre-funded warrants, (ii) non-refundable cash consideration from partnering transactions entered into after the effective date of the fifth amendment to the Credit Agreement, (iii) the issuance of the Company’s subordinated debt and/or (iv) sales by the Company of its assets, in each case ((i) through (iv)), in transactions permitted under the Credit Agreement, make a prepayment of the loans under the Credit Agreement in an aggregate principal amount equal to 50% of such gross cash proceeds, together with accrued interest thereon and any fees or premia (including prepayment premium) payable in connection therewith; provided, that the foregoing requirement will not apply (A) with respect to the first $2.50 million in the aggregate of proceeds raised from Capital Raise Activities (as defined in the Credit Agreement) and (B) once the aggregate principal amount of the Loans prepaid pursuant to one or more Capital Raise Prepayments equals $2.50 million. ​ On the date of issuance of the New Warrants, if applicable, the Company agreed to amend and restate its Third Amended and Restated Registration Rights Agreement with the Lenders, dated November 25, 2024.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2024, was $36,660 and was primarily attributable to net proceeds of $39,214 from the sale of common stock under public offerings and the Sale Agreement with Jefferies, less a debt principal payment of $2,500.
Net cash provided by financing activities for the year ended December 31, 2024, was $36,660 and was primarily attributable to net proceeds of $39,214 from the sale of common stock under public offerings and the Sale Agreement with Jefferies, less a debt principal payment of $2,500.
In addition, the Second Amendment replaced the Credit Agreement’s existing “Tranche B” and “Tranche C” term loan opportunities with three new tranches aggregating up to $100,000 in potential funding: ● A $20,000 “Tranche B” term loan available upon satisfaction of the following conditions on or before December 31, 2024: (i) us raising an aggregate of at least $40,000 after the date of the First Amendment from (a) equity proceeds or (b) a bona fide contract with a governmental authority to use BXCL501 for opioid withdrawal, (ii) initiation of a new clinical trial in the TRANQUILITY program based on our meeting with the FDA held on October 11, 2023, and (iii) the total pro forma indebtedness outstanding under the Credit Agreement as a percentage of our trailing 30-day market capitalization being less than 30%; 131 Table of Contents ● A $30,000 “Tranche C” term loan available upon satisfaction of the following conditions on or before December 31, 2025: (i) either (a) receipt of approval from the FDA of an sNDA in respect of the use of BXCL501 for the acute treatment of agitation associated with dementia or (b) the receipt of approval from the FDA of an sNDA in respect of the use of BXCL501 for (x) the acute treatment of agitation associated with schizophrenia in adults and (y) the acute treatment of agitation associated with bipolar I or II disorder in adults, in each case, in the community/at home setting without the requirement for administration under the supervision of a healthcare provider, and (ii) the total pro forma indebtedness outstanding under the Credit Agreement as a percentage of our trailing 30-day market capitalization being less than 30%; and ● A $50,000 “Tranche D” term loan available upon satisfaction of the following conditions on or before December 31, 2025: (i) the conditions precedent to the borrowing of Tranche C (as described in the preceding bullet point) have been satisfied, and (ii) our total net revenue attributable to sales of BXCL501 (for the avoidance of doubt, including any revenues attributable to use of BXCL501 for opioid withdrawal) for the trailing twelve consecutive month period exceeding a specified amount.
In addition, the Second Amendment replaced the Credit Agreement’s existing “Tranche B” and “Tranche C” term loan opportunities with three new tranches aggregating up to $100,000 in potential funding: ● A $20,000 “Tranche B” term loan available upon satisfaction of the following conditions on or before December 31, 2024: (i) us raising an aggregate of at least $40,000 after the date of the First Amendment from (a) equity proceeds or (b) a bona fide contract with a governmental authority to use BXCL501 for opioid withdrawal, (ii) initiation of a new clinical trial in the TRANQUILITY program based on our meeting with the FDA held on October 11, 2023, and (iii) the total pro forma indebtedness outstanding under the Credit Agreement as a percentage of our trailing 30-day market capitalization being less than 30%; 126 Table of Contents ● A $30,000 “Tranche C” term loan available upon satisfaction of the following conditions on or before December 31, 2025: (i) either (a) receipt of approval from the FDA of an sNDA in respect of the use of BXCL501 for the acute treatment of agitation associated with dementia or (b) the receipt of approval from the FDA of an sNDA in respect of the use of BXCL501 for (x) the acute treatment of agitation associated with schizophrenia in adults and (y) the acute treatment of agitation associated with bipolar I or II disorder in adults, in each case, in the community/at home setting without the requirement for administration under the supervision of a healthcare provider, and (ii) the total pro forma indebtedness outstanding under the Credit Agreement as a percentage of our trailing 30-day market capitalization being less than 30%; and ● A $50,000 “Tranche D” term loan available upon satisfaction of the following conditions on or before December 31, 2025: (i) the conditions precedent to the borrowing of Tranche C (as described in the preceding bullet point) have been satisfied, and (ii) our total net revenue attributable to sales of BXCL501 (for the avoidance of doubt, including any revenues attributable to use of BXCL501 for opioid withdrawal) for the trailing twelve consecutive month period exceeding a specified amount.
The Fourth Amendment included covenants that we receive, (i) after the effective date of the Fourth Amendment and on or before April 15, 2024, at least $25,000 in gross proceeds from the issuance of our common stock, warrants and/or pre-funded warrants, and/or in non-refundable cash consideration from partnering transactions entered into after the effective date of the Fourth Amendment (so long as such partnering transactions would not require us or any of our 132 Table of Contents subsidiaries to make any cash investments in connection with the partnering transactions and no such cash investments are made), and (ii) after the effective date of the Fourth Amendment and on or before November 30, 2024, at least $50,000 (for the avoidance of doubt, inclusive of amounts previously counted toward the preceding clause (i)) in gross proceeds from the issuance of our common stock, warrants and/or pre-funded warrants, and/or in cash and/or non-cash consideration (measured at fair market value, as determined by the Administrative Agent (as defined in the Credit Agreement) in its sole discretion ) from partnering transactions entered into after the effective date of the Fourth Amendment.
The Fourth Amendment included covenants that we receive, (i) after the effective date of the Fourth Amendment and on or before April 15, 2024, at least $25,000 in gross proceeds from the issuance of our common stock, warrants 127 Table of Contents and/or pre-funded warrants, and/or in non-refundable cash consideration from partnering transactions entered into after the effective date of the Fourth Amendment (so long as such partnering transactions would not require us or any of our subsidiaries to make any cash investments in connection with the partnering transactions and no such cash investments are made), and (ii) after the effective date of the Fourth Amendment and on or before November 30, 2024, at least $50,000 (for the avoidance of doubt, inclusive of amounts previously counted toward the preceding clause (i)) in gross proceeds from the issuance of our common stock, warrants and/or pre-funded warrants, and/or in cash and/or non-cash consideration (measured at fair market value, as determined by the Administrative Agent (as defined in the Credit Agreement) in its sole discretion ) from partnering transactions entered into after the effective date of the Fourth Amendment.
For a discussion of inflationary risks to our future revenues under the Inflation Reduction Act, see “ Health care reform measures could hinder or prevent our product candidates ’ commercial success.” in Part I, Item 1A., “Risk Factors” elsewhere in this Annual Report on Form 10-K. 129 Table of Contents Reverse Stock Split On February 10, 2025, the Company effected a 1-for-16 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”).
For a discussion of inflationary risks to our future revenues under the Inflation Reduction Act, see “ Health care reform measures could hinder or prevent our product candidates ’ commercial success.” in Part I, Item 1A., “Risk Factors” elsewhere in this Annual Report on Form 10-K. 124 Table of Contents Reverse Stock Split On February 10, 2025, the Company effected a 1-for-16 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”).
We may also incur increased costs to comply with corporate governance, internal controls, investor relations and disclosures and similar requirements applicable to public companies. 125 Table of Contents As a result of our restructuring activities completed during 2024, we expect that our selling, general and administrative expenses will decline due to IGALMI ® ’s restructured commercialization plan and reduced personnel costs.
We may also incur increased costs to comply with corporate governance, internal controls, investor relations and disclosures and similar requirements applicable to public companies. 120 Table of Contents As a result of our restructuring activities completed during 2024, we expect that our selling, general and administrative expenses will decline due to IGALMI ® ’s restructured commercialization plan and reduced personnel costs.
See “Risks Related to Financial Position and 130 Table of Contents 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.
See “Risks Related to Financial Position and 125 Table of Contents 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.
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 focused on BXCL501 while pursuing development of additional product candidates for BXCL502, BXCL701 and BXCL702.
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 focused on BXCL501 while pursuing development of additional product candidates for BXCL701.
In addition, the Company agreed to, substantially concurrently with the closing of Raise 1, amend and restate all warrants to purchase stock of the Company issued to the Lenders prior to the effective date of the Fifth Amendment, to revise the exercise price thereunder to an exercise price equal to the lower of (i) the price per share of the common stock of the Company issued in Raise 1 and (ii) arithmetic average of the volume-weighted average price of the Company’s common stock on the Nasdaq Capital Market during the 30 trading days preceding Raise 1 (such existing warrants, as amended and restated, the “Original Warrants”).
In addition, the Company agreed to, substantially concurrently with the closing of Raise 1, amend and restate all warrants to purchase stock of the Company issued to the Lenders prior to the effective date of the Fifth Amendment, to revise the exercise price thereunder to an exercise price equal to the lower of (i) the price per share of the common stock of the Company issued in Raise 1 and (ii) arithmetic average of the volume-weighted average price of the Company’s 130 Table of Contents common stock on the Nasdaq Capital Market during the 30 trading days preceding Raise 1 (such existing warrants, as amended and restated, the “Original Warrants”).
Interest expense may increase in the future if we meet required milestones, and we are able to draw down additional funds under the Credit Agreement. 126 Table of Contents 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.
Interest expense may increase in the future if we meet required milestones, and we are able to draw down additional funds under the Credit Agreement. 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.
The Company bases its expenses related to clinical studies on management’s estimates of the services received and efforts expended pursuant to contracts with multiple CROs that conduct and manage clinical trial studies on our behalf. The financial terms of these agreements are subject to an initial negotiation, vary from contract to contract and may result in uneven payment flows.
The Company bases its expenses related to clinical studies on management’s estimates of the services received and efforts expended pursuant to contracts with multiple CROs that conduct and manage clinical trial studies on our behalf. 136 Table of Contents The financial terms of these agreements are subject to an initial negotiation, vary from contract to contract and may result in uneven payment flows.
Credit Agreement Amendments Fifth Amendment to Credit Agreement ​ On November 21, 2024, we entered into the Fifth Amendment to our Credit Agreement (the “Fifth Amendment”), pursuant to which the Lenders agreed to, among other things, (i) waive the Credit Agreement’s covenant that the report and opinion the Company will receive from its independent registered public accounting firm with respect to the financial statements for the year ending December 31, 2024 will not contain a “going concern” or similar qualification, (ii) permanently waive the Credit Agreement’s minimum revenue covenant, and (iii) waive the Fourth Amendment’s requirement that the Company raise, after the effective date of the Fourth Amendment and on or before November 30, 2024, at least $50,000 in gross cash proceeds from the issuance of its common stock, warrants, and/or pre-funded warrants, and/or in cash and/or non-cash consideration from newly entered-into partnering transactions. ​ The Fifth Amendment included a new capital raising covenant requiring that the Company receive (A) after the effective date of the Fifth Amendment and on or prior to November 27, 2024, at least $7,000 in gross cash proceeds from the issuance of the Company’s common stock, warrants and/or pre-funded warrants(“Raise 1”), (B) after the effective date of the Fifth Amendment and on or before March 15, 2025 (provided that the Company will use its commercially reasonable efforts to satisfy the requirement by February 15, 2025), at least $18,000 in net cash proceeds (including the proceeds of Raise 1) from (i) the issuance of the Company’s common stock, warrants and/or pre-funded warrants, (ii) non-refundable cash consideration from partnering transactions entered into after the effective date of the Fifth Amendment (so long as such partnering transactions would not require the Company or any of its subsidiaries to make any cash investments in connection with the partnering transactions and no such cash investments are made), (iii) the issuance of the Company’s 122 Table of Contents subordinated debt (subject to terms set forth in the Fifth Amendment), and/or (iv) asset sales permitted pursuant to the Credit Agreement or consented to by the Lenders (such capital raise, “Raise 2”), and (C) after the effective date of the Fifth Amendment and on or prior to the earlier of (x) August 15, 2025 and (y) the date that is 30 days after the final data readout of the SERENITY At-Home Phase 3 trial, at least $29,000 in net cash proceeds (including the proceeds from Raise 1 and Raise 2) from the same permitted capital raising activities listed in the preceding clause (B).
On November 21, 2024, the Company entered into the Fifth Amendment to Credit Agreement and Guaranty and First Amendment to Fourth Amendment to Credit Agreement and Guaranty (the “Fifth Amendment”). ​ Pursuant to the Fifth Amendment, the Lenders agreed to, among other things, (i) waive the Credit Agreement’s covenant that the report and opinion the Company will receive from its independent registered public accounting firm with respect to the financial statements for the year ending December 31, 2024 will not contain a “going concern” or similar qualification, (ii) permanently waive the Credit Agreement’s minimum revenue covenant, and (iii) waive the Fourth Amendment’s requirement that the Company raise, after the effective date of the Fourth Amendment and on or before November 30, 2024, at least $50,000 in gross cash proceeds from the issuance of its common stock, warrants, and/or pre-funded warrants, and/or in cash and/or non-cash consideration from newly entered-into partnering transactions. ​ The Fifth Amendment included a new capital raising covenant requiring that the Company receive (A) after the effective date of the Fifth Amendment and on or prior to November 27,2024, at least $7,000 in gross cash proceeds from the issuance of the Company’s common stock, warrants and/or pre-funded warrants(“Raise 1”), (B) after the effective date of the Fifth Amendment and on or before March 15, 2025 (provided that the Company was required to use its commercially reasonable efforts to satisfy the requirement by February 15, 2025), at least $18,000 in net cash proceeds (including the proceeds of Raise 1) from (i) the issuance of the Company’s common stock, warrants and/or pre-funded warrants, (ii) non-refundable cash consideration from partnering transactions entered into after the effective date of the Fifth Amendment (so long as such partnering transactions would not require the Company or any of its subsidiaries to make any cash investments in connection with the partnering transactions and no such cash investments are made), (iii) the issuance of the Company’s subordinated debt (subject to terms set forth in the Fifth Amendment), and/or (iv) asset sales permitted pursuant to the Credit Agreement or consented to by the Lenders (such capital raise, “Raise 2”), and (C) after the effective date of the Fifth Amendment and on or prior to the earlier of (x) August 15, 2025 and (y) the date that is 30 days after the final data readout of the SERENITY At-Home Phase 3 trial, at least $29,000 in net cash proceeds (including the proceeds 128 Table of Contents from Raise 1 and Raise 2) from the same permitted capital raising activities listed in the preceding clause (B) (“Raise 3”).
The majority of the Company’s service providers invoice 138 Table of Contents 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 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 Company’s consolidated financial statements based on facts and circumstances known to management at that time.
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 ® (dexmedetomidine) sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults.
Our most advanced immuno-oncology asset, BXCL701, is an investigational oral innate immune activator from 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 ® (dexmedetomidine) sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults.
On August 14, 2023, the Company announced it had implemented a shift in commercial strategy for IGALMI ® in the institutional setting, a reduction of in-hospital commercialization expenses, a suspension of programs no longer deemed core to the Company’s business, and a shift to focus on the development of BXCL501 for use in the at-home and care facilities in the treatment of acute agitation in schizophrenia and bipolar disorders, and in the treatment of acute agitation (non-daily) associated with dementia due to probable Alzheimer’s disease (collectively, the “Reprioritization”). ​ ​ 121 Table of Contents Following the Reprioritization, a small Corporate Account Director (“CAD”) team supported current customers and targeted Integrated Delivery Networks (“IDNs”) with educational support and contracting opportunities, while our trade operation supported customers with drug supply.
On August 14, 2023, the Company announced it had implemented a shift in commercial strategy for IGALMI ® in the institutional setting, a reduction of in-hospital commercialization expenses, a suspension of programs no longer deemed core to the Company’s business, and a shift to focus on the development of BXCL501 for use in the at-home and care facilities in the treatment of acute agitation in schizophrenia and bipolar disorders, and in the treatment of acute agitation (non-daily) associated with dementia due to probable Alzheimer’s disease (collectively, the “ Clinical Reprioritization”). ​ Following the Clinical Reprioritization, a small Corporate Account Director (“CAD”) team supported current customers and targeted Integrated Delivery Networks (“IDNs”) with educational support and contracting opportunities, while our trade operation supported customers with drug supply.
Also, in connection with the closing of the Fifth Amendment, the Company agreed to, substantially concurrently with the closing of Raise 1, grant new warrants to the 134 Table of Contents Lenders to purchase an aggregate of 313 shares of common stock, at an exercise price of $0.16 per share (the “New Warrants”).
Also, in connection with the closing of the Fifth Amendment, the Company agreed to, substantially concurrently with the closing of Raise 1, grant new warrants to the Lenders to purchase an aggregate of 313 shares of common stock, at an exercise price of $0.16 per share (the “New Warrants”).
The goal of this approach was to help maintain current business and potentially broaden IGALMI ® utilization through volume contracting. ​ As part of the Clinical Prioritization in September 2024, further workforce reductions were made, including 9 additional marketing and sales employees. The Clinical Prioritization staff reductions may have future impacts on net revenue.
The goal of this approach was to help maintain current business and potentially broaden IGALMI ® utilization through volume contracting. ​ As part of the Clinical Reprioritization in September 2024, further workforce reductions were made, including 9 additional marketing and sales employees. The Clinical Reprioritization staff reductions may have had impacts on net revenue.
Basis of Presentation The Company’s consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). 124 Table of Contents Components of Our Results of Operations Product Revenue, Net Revenue relates to sales of IGALMI ® and reflect limited market access since commercial launch in July 2022.
Basis of Presentation The Company’s consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). 119 Table of Contents Components of Our Results of Operations Product Revenue, Net Revenue relates to sales of IGALMI ® and reflects limited market access since commercial launch in July 2022.
However, we may also experience increased selling, general and administrative expenses due to higher fees for outside consultants, attorneys, and accountants. Restructuring Costs 2023 Strategic Reprioritization ​ On August 8, 2023, our Board of Directors approved a broad-based strategic reprioritization (the “Reprioritization”).
However, we may also experience increased selling, general and administrative expenses due to higher fees for outside consultants, attorneys, and accountants. Restructuring Costs 2023 Clinical Reprioritization ​ On August 8, 2023, our Board of Directors approved a broad-based strategic reprioritization (the “Clinical Reprioritization”).
As of December 31, 2024, we were in compliance with all restrictive and financial covenants under the Credit Agreement.
As of December 31, 2025, we were in compliance with all restrictive and financial covenants under the Credit Agreement.
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 labor costs and clinical trial costs.
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 and the Company’s registered direct equity offerings. Inflation Inflation generally affects us by increasing our labor costs and clinical trial costs.
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 decreased to $2,602 for the year ended December 31, 2024 compared to $5,649 for the year ended December 31, 2023, due to lower average cash balances during the year.
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 decreased to $1,066 for the year ended December 31, 2025 compared to $2,602 for the year ended December 31, 2024, due to lower average cash balances during the year.
Cost of Goods Sold Cost of goods sold for the years ended December 31, 2024 and 2023 were $2,143 and $1,260, respectively, which primarily related to the costs to produce, package and deliver IGALMI ® to customers, as well as costs related to excess or obsolete inventory.
Cost of Goods Sold Cost of goods sold for the years ended December 31, 2025 and 2024 were $164 and $2,143, respectively, which primarily related to the costs to produce, package and deliver IGALMI ® to customers, as well as costs related to excess or obsolete inventory.
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.
We developed 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.
These actions included a shift in commercial strategy for IGALMI ® in the institutional setting as described, a reduction of in-hospital commercialization expenses, a de-prioritization of programs no longer determined to be core to ongoing operations, and a prioritization on at-home treatment setting opportunities for BXCL501, all as described in Part I, Item 1, “Business”.
These actions included a shift in commercial strategy for IGALMI ® in the institutional setting as described, a reduction of in-hospital commercialization expenses, a de-prioritization of programs no longer determined to be core to ongoing operations, and a prioritization on at-home treatment setting opportunities for BXCL501, all as described in Part I, Item 1, “Business”. ​ As part of this strategy, the Company’s Board of Directors approved a reduction of approximately 60% of the Company’s workforce.
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.
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. 135 Table of Contents Critical Accounting Policies and Estimates The preparation of our consolidated financial statements in conformity with U.S.
Restructuring Costs Restructuring costs were $2,441 and $4,163 for the years ended December 31, 2024 and 2023, respectively. See “Components of Our Results of Operations - Restructuring Costs” above for a discussion of the Company’s Reprioritization and restructuring activities.
Restructuring Costs Restructuring costs were $194 and $2,441 for the years ended December 31, 2025 and 2024, respectively. See “Components of Our Results of Operations - Restructuring Costs” above for a discussion of the Company’s Clinical Reprioritization and restructuring activities.
We incurred losses of approximately $59,599 and $179,053 for the years ended December 31, 2024 and 2023, respectively. We will need to generate significant product revenues to achieve profitability.
We incurred losses of approximately $69,897 and $59,599 for the years ended December 31, 2025 and 2024, respectively. We will need to generate significant product revenues to achieve profitability.
The Black-Scholes pricing model incorporates the volatility of the price of BTI’s stock, the risk-free interest rate, the estimated life of the award, the closing market price of the Company’s stock and the exercise price of the award.
The Black-Scholes pricing model incorporates the volatility of the price of BTI’s stock, the risk-free interest rate, the estimated life of the award, the closing market price of the Company’s stock and the exercise price of the award. Management bases the Company’s estimates of stock price volatility on the historical volatility of the Company’s common stock.
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 $456 of payments remaining under 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 $65 of payments remaining under the HQ Lease.
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.
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.
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 stock options, profit units and warrants, the value of each grant is estimated on the date of grant using a Black-Scholes option-pricing model.
The Second Amendment also modified the interest rate of the loans provided under the Credit Agreement to be a floating rate per annum equal to the secured overnight financing rate (“SOFR”) (subject to a SOFR floor of 2.5% and a cap of 5.5%) plus 7.5%.
As of December 31, 2025, there are no remaining unfunded commitments under the Credit Agreement. The Second Amendment also modified the interest rate of the loans provided under the Credit Agreement to be a floating rate per annum equal to the secured overnight financing rate (“SOFR”) (subject to a SOFR floor of 2.5% and a cap of 5.5%) plus 7.5%.
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.
We believe this differentiated approach has proven its 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. In indications other than those approved by the U.S.
For purposes of the calculation, management assumed that no dividends would be paid during the life of the stock awards. The estimates utilized in the Black-Scholes calculation involve inherent uncertainties and the application of management judgment.
However, these estimates are neither predictive nor indicative of the future performance of the Company’s stock. For purposes of the calculation, management assumed that no dividends would be paid during the life of the stock awards. The estimates utilized in the Black-Scholes calculation involve inherent uncertainties and the application of management judgment.
Remaining costs were paid during the first quarter of 2024. ​ 2024 Clinical Prioritization ​ As discussed in Note 4, Restructuring , on May 8, 2024 the Company took additional actions as part of its continued efforts to preserve cash and prioritize investment in its core clinical programs.
The Clinical Reprioritization was substantially complete as of December 31, 2023, and the remaining restructuring costs were paid during the first quarter of 2024. 2024 Clinical Reprioritization ​ On May 8, 2024, the Company took actions as part of its continued efforts to preserve cash and prioritize investment in its core clinical programs.
We terminated the Sales Agreement with Jefferies on March 26, 2025. ​ 135 Table of Contents Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2024 2023 Cash (used in) provided by: ​ ​ ​ ​ ​ ​ Operating activities ​ $ (72,027) ​ $ (155,006) Investing activities ​ $ — ​ $ (20) Financing activities ​ $ 36,660 ​ $ 26,522 ​ Operating Activities Net cash used in operating activities for the year ended December 31, 2024 was $72,027 and was primarily attributable to our net loss of $59,599, a $20,180 increase in the change in fair value of our derivative liability, a $4,327 decrease in accounts payable, accrued expenses, due to related parties, and other current liabilities, and a $1,872 increase in prepaid expenses, other current assets and other assets, offset by $6,543 in payable in kind interest on our credit agreement and $6,156 in non-cash stock-based compensation.
Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Cash (used in) provided by: ​ ​ ​ ​ ​ ​ Operating activities ​ $ (57,615) ​ $ (72,027) Investing activities ​ $ — ​ $ — Financing activities ​ $ 56,518 ​ $ 36,660 ​ Operating Activities Net cash used in operating activities for the year ended December 31, 2025 was $57,615 and was primarily attributable to our net loss of $69,897 and an increase of $8,156 in prepaid expenses, other current assets and other assets, offset by a $6,973 increase in accounts payable, accrued expenses, due to related parties, and other current liabilities, $5,434 in payable in kind interest on our credit agreement, a $3,505 decrease in the change in fair value of our derivative liability, and $2,767 in non-cash stock-based compensation, 133 Table of Contents Net cash used in operating activities for the year ended December 31, 2024 was $72,027 and was primarily attributable to our net loss of $59,599, a $20,180 increase in the change in fair value of our derivative liability, a $4,327 decrease in accounts payable, accrued expenses, due to related parties, and other current liabilities, and a $1,872 increase in prepaid expenses, other current assets and other assets, offset by $6,543 in payable in kind interest on our credit agreement and $6,156 in non-cash stock-based compensation.
The Company met the requirements of Raise 2, discussed in Note 20, Subsequent Events . ​ In connection with the Fifth Amendment and the required capital raises described in the preceding paragraph, the Lenders agreed to modify the Credit Agreement’s minimum liquidity covenant to require minimum cash liquidity of $7,500 (instead of $25,000) from and after the closing of Raise 1 until March 30, 2025.
The Company has raised sufficient net proceeds to date to satisfy this requirement. ​ In connection with the Fifth Amendment and the required capital raises described in the preceding paragraph, the Lenders agreed to modify the Credit Agreement’s minimum liquidity covenant to require minimum cash liquidity of $7,500 (instead of $25,000) from and after the closing of Raise 1 until March 30, 2025.
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).
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 Equity Distribution Agreement with Canaccord Genuity LLC (“Canaccord”), and borrowings under our Credit Agreement (as described below).
Our research and development costs by program for the years ended December 31, 2024 and 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, ​ ​ 2024 ​ 2023 Direct external costs ​ ​ ​ ​ ​ ​ BXCL501 ​ $ 13,397 ​ $ 46,661 BXCL701 ​ 2,058 ​ ​ 7,050 Other research and development programs ​ 771 ​ ​ 4,142 Total direct external costs ​ $ 16,226 ​ $ 57,853 Internal personnel costs ​ ​ 12,047 ​ ​ 22,675 Sub-total direct costs ​ $ 28,273 ​ $ 80,528 Indirect costs and overhead ​ ​ 2,162 ​ ​ 3,798 Total research and development expenses ​ $ 30,435 ​ $ 84,326 ​ 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, 2025 and 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, ​ ​ 2025 ​ 2024 Direct external costs ​ ​ ​ ​ ​ ​ BXCL501 ​ $ 20,803 ​ $ 13,397 BXCL701 ​ 64 ​ ​ 2,058 Other research and development programs ​ 299 ​ ​ 771 Total direct external costs ​ $ 21,166 ​ $ 16,226 Internal personnel costs ​ ​ 7,622 ​ ​ 12,047 Sub-total direct costs ​ $ 28,788 ​ $ 28,273 Indirect costs and overhead ​ ​ 1,463 ​ ​ 2,162 Total research and development expenses ​ $ 30,251 ​ $ 30,435 ​ 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.
Investing Activities Net cash used in investing activities for the years ended December 31, 2024 and 2023, respectively was $0 and $20 and was primarily attributable to leasehold improvements in 2023.
Investing Activities Net cash used in investing activities for the years ended December 31, 2025 and 2024, respectively was $0 and $0.
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; 136 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 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 ® 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; ● 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 ® and any product candidates for which we may obtain regulatory approval; and ● continue to operate as a public company. 134 Table of Contents We believe that our existing cash, cash equivalents and restricted cash as of December 31, 2025 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.
The distribution agreement can also be terminated by us without cause, subject to payment of agreed termination fees. 137 Table of Contents 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 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. BTI leases office space for its corporate headquarters at 555 Long Wharf Drive, New Haven, Connecticut (the “HQ Lease”).
(“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.
(Nasdaq: BTAI, “the Company”) is a biopharmaceutical company built on artificial intelligence (“AI”) to develop transformative medicines in neuroscience. Our wholly owned subsidiary, OnkosXcel Therapeutics, is focused on the development of medicines in immuno-oncology. We have utilized cutting-edge technology and innovative research to develop high-value therapeutics aimed at transforming patients’ lives.
We are currently seeking potential commercial partners. Our continued commercialization efforts for IGALMI ® are designed to build the foundation to launch additional potential follow-on indications, if any.
IGALMI ® product sales decreased to $642 for the year ended December 31, 2025 from $2,266 for the year ended December 31, 2024. ​ We are currently seeking potential commercial partners. Our continued commercialization efforts for IGALMI ® are designed to build the foundation to launch additional potential follow-on indications, if any.
Other (Income) Expense Interest expense increased to $15,129 for the year ended December 31, 2024 compared to $13,314 for the year ended December 31, 2023, due to an increase in interest rates compared to the prior year and higher average debt balances during the year due to borrowings under the Credit Agreement.
Other (Income) Expense Interest expense increased to $16,984 for the year ended December 31, 2025 compared to $15,129 for the year ended December 31, 2024, primarily due to higher debt balances and interest rates under the Credit Agreement.
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.
Food and Drug Administration (FDA) as IGALMI ® , BXCL501 is an investigational, proprietary, orally dissolving sublingual film formulation of dexmedetomidine in development for the treatment of agitation associated with psychiatric and neurological disorders.
Liquidity and Capital Resources As of December 31, 2024, we had cash and cash equivalents of $29,854, working capital of $15,161 and stockholders’ deficit of $93,101. Net cash used in operating activities was $72,027 and $155,006 for the years ended December 31, 2024 and 2023, respectively.
Liquidity and Capital Resources As of December 31, 2025, we had cash, cash equivalents and restricted cash of $28,757, negative working capital of $9,241 and stockholders’ deficit of $95,463. Net cash used in operating activities was $57,615 and $72,027 for the years ended December 31, 2025 and 2024, respectively.
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.
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 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.
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.
The remaining minimum commitments for years 4 and 5 (2025 and 2026) is $2,000 each year. 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 Company has met the minimum requirements for the first 4 years ending in 2025. The remaining minimum commitments for year 5 (2026) is $2,000. In February 2022, we signed a distribution agreement with a third party to distribute product related to BXCL501 in the U.S.
In addition, we plan to discuss the details of the requirement for long-term safety data at a future meeting with the FDA. ​ On September 5, 2024, we submitted to the FDA the proposed protocol for our TRANQUILITY In-Care Phase 3 trial designed to evaluate the efficacy and safety of a 60 mcg dose of BXCL501 for agitation associated with Alzheimer’s dementia.
We have had several FDA meetings to discuss the development program, and the FDA has commented on the proposed protocol for our TRANQUILITY In-Care Phase 3 trial, which is designed to evaluate the efficacy and safety of a 60 mcg dose of BXCL501 for agitation associated with Alzheimer’s dementia.
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.
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.
On July 6, 2022, we announced that IGALMI ® was commercially available in doses of 120 and 180 micrograms. ​ 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.
On July 6, 2022, we announced that IGALMI ® was commercially available in doses of 120 and 180 micrograms (“mcg”). ​ On August 27, 2025 we announced that the SERENITY At-Home Pivotal Phase 3 trial evaluating the safety of BXCL501, as an acute treatment for agitation associated with bipolar disorders or schizophrenia in the at-home setting, met its primary objective.
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.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2025, was $56,518 and was primarily attributable to net proceeds of $12,957 received from the March 2025 registered direct offering, net proceeds from the sale of common stock under the Equity Distribution Agreement with Canaccord of $33,670, and net proceeds from the exercise of warrants of $9,660.
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. ​ 128 Table of Contents Selling, General and Administrative Expense Selling, general and administrative expenses for the years ended December 31, 2024 and 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2024 2023 Change % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel and related costs ​ $ 7,856 ​ $ 27,171 ​ $ (19,315) ​ ​ (71) % Non-cash stock-based compensation ​ 3,904 ​ ​ 12,290 ​ (8,386) ​ ​ (68) % Professional fees ​ 16,137 ​ ​ 22,310 ​ (6,173) ​ ​ (28) % Commercial and marketing ​ ​ 1,389 ​ ​ 12,485 ​ ​ (11,096) ​ ​ (89) % Insurance ​ ​ 1,671 ​ ​ 1,743 ​ ​ (72) ​ ​ (4) % Other expenses ​ 3,535 ​ ​ 7,414 ​ (3,879) ​ ​ (52) % Total selling, general and administrative expenses ​ $ 34,492 ​ $ 83,413 ​ $ (48,921) ​ ​ (59) % ​ The decrease of $48,921 for the year ended December 31, 2024, relative to the year ended December 31, 2023 is primarily attributable to: ● A decrease in personnel costs due to the Clinical Prioritization, reducing 9 full-time employees. ● Decreased professional fees, primarily related to lower legal costs in 2024 compared to 2023 for the investigation of our TRANQUILITY II study, and reductions in consulting and recruiting fees in 2024. ● Decreased other expenses as a result of lower headcount. ● Decreased non-cash stock-based compensation costs due to increased award forfeitures in 2024 and lower headcount. ● Decreased commercial and marketing research costs.
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. ​ ​ 123 Table of Contents Selling, General and Administrative Expense Selling, general and administrative expenses for the years ended December 31, 2025 and 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Change % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel and related costs ​ $ 3,916 ​ $ 7,856 ​ $ (3,940) ​ ​ (50) % Non-cash stock-based compensation ​ 2,341 ​ ​ 3,904 ​ (1,563) ​ ​ (40) % Professional fees ​ 10,308 ​ ​ 16,137 ​ (5,829) ​ ​ (36) % Commercial and marketing ​ ​ 407 ​ ​ 1,389 ​ ​ (982) ​ ​ (71) % Insurance ​ ​ 1,444 ​ ​ 1,671 ​ ​ (227) ​ ​ (14) % Other expenses ​ 2,078 ​ ​ 3,535 ​ (1,457) ​ ​ (41) % Total selling, general and administrative expenses ​ $ 20,494 ​ $ 34,492 ​ $ (13,998) ​ ​ (41) % ​ The decrease of $13,998 for the year ended December 31, 2025, relative to the year ended December 31, 2024 is primarily attributable to: ● Decreased personnel costs due to the Clinical Reprioritization in May 2024 and September 2024. ● Decreased professional fees, primarily related to lower legal costs in 2025 compared to 2024 and reductions in consulting for the year ended December 31, 2025. ● Decreased non-cash stock-based compensation costs as a result of lower headcount. ● Decreased other expenses, primarily travel expenses, as a result of lower headcount. ● Decreased commercial and marketing research costs.
To date, we have continued research and development activities while managing our cash position. However, we can provide no assurance that will be successful in obtaining additional necessary resources and, if we are unable to fund our operations, including our clinical trials, we may need to focus on advancing fewer of our product candidates or otherwise consider strategic alternatives.
However, we can provide no assurance that will be successful in obtaining additional necessary resources and, if we are unable to fund our operations, including our clinical trials, we may need to focus on advancing fewer of our product candidates or otherwise consider strategic alternatives. ​ Contractual Obligations and Commitments In July 2024, the Company signed an amendment to its commercial supply agreement that requires minimum annual payments for the first five years of the agreement ending in 2026 that in aggregate total $10,000.
The increase in Cost of goods sold for the year ended December 31, 2024 is primarily the result of increased sales and a $474 increase in the reserve for excess and obsolete inventory, compared to the prior year.
The decrease in Cost of goods sold for the year ended December 31, 2025 is primarily the result of lower charges for reserves for excess or obsolete inventory compared to the same period in 2024. Charges for reserves for excess or obsolete inventory were $108 and $1,980 for the year ended December 31, 2025 and 2024, respectively.
See further discussion in “Additional Neuroscience Opportunities” . ​ IGALMI ® Commercialization Strategy ​ We continue to support IGALMI ® in the hospital setting with minimal commercial support.
Development of our BXCK701 programs continues to be deprioritized. ​ IGALMI ® Commercialization Strategy ​ We continue to support IGALMI ® in the hospital setting with minimal commercial support.
Finally, pursuant to the Fifth Amendment, the Company is restricted from paying cash bonuses its employees or executives during the fiscal years 2024 and 2025 without OFA’s consent or increasing the cash compensation for fiscal year 2025for certain senior officers of the Company from their compensation for fiscal year 2024. ​ As of December 31, 2024, we had aggregate principal indebtedness of $106,722 outstanding under the Credit Agreement. ​ Company Warrants and Registration Rights Agreement ​ Prior to the Fifth Amendment, pursuant to the Credit Agreement, the Lenders had the right to purchase shares of our common stock, so long as borrowings under the Credit Agreement are outstanding, for a purchase price of $5,000 at a price per share equal to a 10% premium to the volume-weighted average price of the common stock over the 30 trading days prior to the Lenders’ election to proceed with such equity investment (the “Equity Investment Right”).
On March 31, 2026, the Company is required to make (i) the required payment of $9,252, representing an amortization payment of 5.0% of the principal amount of funded loans, together with accrued and unpaid interest and a portion of the prepayment fee and (ii) one-time prepayment of the principal amount of $2,500 in connection with the Ninth Amendment. ​ Company Warrants and Registration Rights Agreement ​ Prior to the Fifth Amendment, pursuant to the Credit Agreement, the Lenders had the right to purchase shares of our common stock, so long as borrowings under the Credit Agreement are outstanding, for a purchase price of $5,000 at a price per share equal to a 10% premium to the volume-weighted average price of the common stock over the 30 trading days prior to the Lenders’ election to proceed with such equity investment (the “Equity Investment Right”).
In particular, we believe that our cash and cash equivalents of $29,854 as of December 31, 2024 plus the approximately of $14,000 gross proceeds from our financing in March 2025 will allow us to fund our operations and meet our liquidity requirements into the third quarter of 2025, assuming we are able to comply with the covenants under our Credit Agreement.
In particular, we believe that our cash, cash equivalents and restricted cash of $28,757 as of December 31, 2025 plus the additional capital raised subsequent to December 31, 2025 will allow us to fund our operations and meet our liquidity requirements into the second quarter of 2026.
These estimates are subject to an inherent degree of uncertainty. Our critical accounting policies are noted below. ​ 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.
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. The fair value of restricted stock units is estimated on the date of grant and is equal to the closing market price per share of our common stock on that date.
Finally, pursuant to the Fifth Amendment, the Company is restricted from paying cash bonuses to its employees or executives during the fiscal years 2024 and 2025 without OFA’s consent or increasing the cash compensation for fiscal year 2025 for certain senior officers of the Company from their compensation for fiscal year 2024. ​ Company Warrants and Registration Rights Agreement ​ In connection with the closing of the Fifth Amendment, the Company agreed to, substantially concurrently with the closing of Raise 1, grant new warrants to the Lenders to purchase an aggregate of 313 shares of common stock on the 123 Table of Contents closing date of the Fifth Amendment, at an exercise price of $0.16 per share (the “New Warrants”).
Finally, pursuant to the Fifth Amendment, the Company is restricted from paying cash bonuses its employees or executives during the fiscal years 2024 and 2025 without OFA’s consent or increasing the cash compensation for fiscal year 2025for certain senior officers of the Company from their compensation for fiscal year 2024. ​ On March 4, 2025, the Company entered into the Sixth Amendment to our Credit Agreement, which extended the deadline to engage an investment banker.
These costs consisted of severance and benefit costs, all of which were paid during the three month period ended June 30, 2024. ​ On September 17, 2024, the Company approved a plan for an additional reduction in its workforce by 15 employees (including all but one marketing and sales employee), or approximately 28% of the Company’s headcount (the “Clinical Prioritization”), in order to extend its cash runway and prioritize investment on the clinical development of its lead neuroscience asset, BXCL501.
The Company reduced its workforce by approximately 15% and notified impacted employees on May 8, 2024. All related restructuring costs were paid in the second quarter of 2024. ​ On September 17, 2024, the Company reduced its workforce by an additional 28% to extend its cash runway and prioritize clinical development of BXCL501.
The Original Warrants provide the Lenders with the right to purchase a total of 28 shares of common stock of the Company. ​ Sixth Amendment to Credit Agreement ​ On March 4, 2025, we entered into the Sixth Amendment to our Credit Agreement (the “Sixth Amendment”), pursuant to which the Lenders agreed to, among other things, delay the date on which we are required to engage an investment banker (which date has been subsequently extended to April 30, 2025). ​ Our Neuroscience 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.
We paid the Placement Agent a cash fee of 6.0% of the gross proceeds paid for the warrant amendment. ​ Our Neuroscience 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.
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.
For the year ended December 31, 2025, 2,300 of the March 2025 Accompanying Warrants were exercised and the same number of common stock were issued in exchange for $9,660 of proceeds. ​ ATM Program - Canaccord In April 2025, we entered into an Equity Distribution Agreement with Canaccord to sell shares of the Company’s common stock, with aggregate gross sales proceeds of up to $8,135, from time to time, through an “at the market” equity offering program under which Canaccord will act as sales agent.
Research and Development Expense Research and development expenses for the years ended December 31, 2024 and 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2024 2023 Change % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel and related costs ​ $ 9,796 ​ $ 16,351 ​ $ (6,555) ​ ​ (40) % Non-cash stock-based compensation ​ 2,251 ​ 6,324 ​ (4,073) ​ ​ (64) % Professional fees ​ 5,067 ​ 14,590 ​ (9,523) ​ ​ (65) % Clinical trials expense ​ 9,384 ​ 35,094 ​ (25,710) ​ ​ (73) % Chemical, manufacturing and controls cost ​ 1,927 ​ 8,687 ​ (6,760) ​ ​ (78) % Other expenses ​ 2,010 ​ 3,280 ​ (1,270) ​ ​ (39) % Total research and development expenses ​ $ 30,435 ​ $ 84,326 ​ $ (53,891) ​ ​ (64) % ​ The decrease of $53,891 for the year ended December 31, 2024, compared to the year ended December 31, 2023 is primarily attributable to the following: ● A decrease in clinical trials expense was 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.
Research and Development Expense Research and development expenses for the years ended December 31, 2025 and 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Change % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel and related costs ​ $ 7,196 ​ $ 9,796 ​ $ (2,600) ​ ​ (27) % Non-cash stock-based compensation ​ 426 ​ 2,251 ​ (1,825) ​ ​ (81) % Professional fees ​ 4,004 ​ 5,067 ​ (1,063) ​ ​ (21) % Clinical trials expense ​ 15,433 ​ 9,384 ​ 6,049 ​ ​ 64 % Chemical, manufacturing and controls cost ​ 1,807 ​ 1,927 ​ (120) ​ ​ (6) % Other expenses ​ 1,385 ​ 2,010 ​ (625) ​ ​ (31) % Total research and development expenses ​ $ 30,251 ​ $ 30,435 ​ $ (184) ​ ​ (1) % ​ ​ 122 Table of Contents The decrease of $184 for the year ended December 31, 2025, compared to the year ended December 31, 2024 is primarily attributable to the following: ● Decreased personnel and related costs related to the Clinical Reprioritization. ● Decreased non-cash stock compensation costs as a result of lower headcount coupled with reversals in accelerated stock compensation expense for employees terminated in the first quarter of 2025 resulting in a net $514 decrease. ● Decreased professional fees due to lower pharmacology costs, research and discovery costs, toxicology, and consulting costs. ● Increased clinical trials expense due to the execution of the SERENITY At-Home pivotal Phase 3 safety trial intended to support a supplemental new drug application to potentially expand the label of IGALMI ® into the outpatient or at-home setting.
These achievements demonstrate the Company’s operational capability and commitment to be focused on limited objectives in the near term. ​ Other (Income) Expense 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.
The Company completed the Clinical Reprioritization in October 2024, paid $475 of the related costs during the first quarter of 2025, and paid the remaining $128 during the second quarter of 2025. ​ Management believes that, after giving effect to the Clinical Reprioritization and additional restructuring activities completed, the Company’s cash, cash equivalents and restricted cash of $28,757 as of December 31, 2025 and proceeds subsequently raised pursuant to the ATM Program and pursuant to its Registered Direct Offering in March 2026, will allow the Company to fund its operations and meet its liquidity requirements into the second quarter of 2026. ​ Other (Income) Expense 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.
As part of the Company’s Reprioritization in August 2023, the IGALMI ® commercial team shifted focus to a hospital/contracting strategy with a corporate account director team to work with large Integrated Delivery Networks and drive sales utilizing a top-down approach. As part of the Clinical Prioritization in September 2024, further workforce reductions were made.
Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 Product Revenue, Net 121 Table of Contents Commercial sales of IGALMI ® launched in July 2022. As part of the Company’s Reprioritization, the IGALMI ® commercial team shifted focus to a hospital/contracting strategy with a Corporate Account Director (“CAD”) team.
Removed
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.” ​ In our SERENITY program, we are evaluating BXCL501 for use in the at-home setting for agitation associated with bipolar disorders or schizophrenia.
Added
The data from this successful study will form the basis of the sNDA submission for a label expansion of IGALMI ® into the at-home setting.
Removed
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.
Added
The sNDA was filed with the FDA on January 14, 2026. ​ On September 10, 2025 we further announced positive topline exploratory efficacy data from the SERENITY At-Home Pivotal Phase 3 safety trial, which demonstrated BXCL501 had continued effects and consistent benefit with repeat dosing. ​ On October 10, 2025 we announced positive results from the correlation study related to exploratory efficacy outcomes from the SERENITY At-Home trial.
Removed
Based on the feedback received from the FDA to date, we are moving 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.
Added
The results demonstrated a strong correlation between the clinician assessments and the patient or caregiver (informant) assessments.
Removed
We also plan to initiate a clinical study designed to enroll approximately 30 patient-informant dyads to evaluate the correlation between patient-and informant-reported efficacy measurement and the PEC scale, conducted by trained clinician raters as previously recommended by the FDA. ​ 120 Table of Contents On September 5, 2024, we announced the initiation of patient enrollment in our SERENITY At-Home trial.
Added
The results, along with the data from the SERENITY At-Home trial, have been included in the sNDA filed with the FDA on January 14, 2026. ​ Our TRANQUILITY program is designed to evaluate BXCL501 as a potential treatment option for agitation associated with Alzheimer’s dementia in the outpatient or at-home setting and in-care facilities.
Removed
The pivotal Phase 3 trial is designed to evaluate the safety of BXCL501 in the at home setting. On March 27, 2025, we announced that 24 clinical trial sites had been opened and 127 patients had been enrolled, representing 63% of the total required enrollment.
Added
The Company is advancing plans for initiation of the trial upon funding. 117 Table of Contents ​ We have deprioritized the development of BXCL501 for certain other proposed indications. ​ Our most advanced immuno-oncology candidate, BXCL701, is an investigational oral innate immune activator from OnkosXcel Therapeutics as a potential therapy for the treatment of aggressive forms of prostate cancer, pancreatic cancer, and other solid and liquid tumors.
Removed
Topline data results, which are expected in the second half of 2025, are intended to support a supplemental new drug application (sNDA) submission to potentially expand the label of IGALMI® (dexmedetomidine) sublingual film.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risk Foreign Exchange Risk As of December 31, 2024, we had $29,854 of cash and cash equivalents. Our cash and cash equivalents are primarily held in U.S. Government money market funds.
Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risk Foreign Exchange Risk As of December 31, 2025 and March 26, 2026, we had $28,757 and $28,862 of cash, cash equivalents and restricted cash, respectively. Our cash and cash equivalents are primarily held in U.S. Government money market funds.
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, 2024 and 2023, 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, 2025 and 2024, respectively.

Other BTAI 10-K year-over-year comparisons