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What changed in BioXcel Therapeutics, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of BioXcel Therapeutics, Inc.'s 2023 and 2024 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 2024 report.

+645 added−619 removedSource: 10-K (2025-03-28) vs 10-K (2024-03-22)

Top changes in BioXcel Therapeutics, Inc.'s 2024 10-K

645 paragraphs added · 619 removed · 477 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

171 edited+46 added−60 removed352 unchanged
Biggest changeAs part of the Reprioritization announced on August 14, 2023, we have 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. 16 Table of Contents Pediatric Study In June 2021, we initiated a global clinical trial designed to evaluate the safety and efficacy of BXCL501 in the acute treatment of agitation associated with pediatric schizophrenia and bipolar disorders, in part to fulfill pediatric study requirements agreed to with the FDA in connection with the approval of IGALMI TM .
Biggest changeAs 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.
We also believe that BXCL501, if approved for the respective indications, has the potential to become the standard of care for the acute treatment of agitation arising from diseases such as schizophrenia and bipolar disorder and Alzheimer’s disease.
We also believe that BXCL501, if approved for the respective indications, has the potential to become the standard of care for the acute treatment of agitation arising from diseases such as schizophrenia, bipolar disorder and Alzheimer’s disease.
The first part was comparable to our pivotal SERENITY I and II studies. Using similar inclusion and exclusion criterion under a well-controlled in-patient setting, acutely agitated patients with schizophrenia or bipolar disorders were randomized to self-administer either 60 mcg of BXCL501 or placebo in a double-blind placebo-controlled trial.
The first part was comparable to our pivotal SERENITY I and II studies. Using similar inclusion and exclusion criterion under a well-controlled in-patient setting, acutely agitated patients with bipolar disorders or schizophrenia were randomized to self-administer either 60 mcg of BXCL501 or placebo in a double-blind placebo-controlled trial.
However, because the trial did not meet its primary efficacy endpoint using this 60 mcg dose in Part I, we paused continuation of Part II of the study pending feedback from the FDA. We held a Type C meeting on November 8, 2023 with the FDA to discuss changes to Part II of our SERENITY III study.
However, because the trial did not meet its primary efficacy endpoint using this 60 mcg dose in Part I, we paused continuation of Part II of the study pending feedback from the FDA. We held a Type C meeting with the FDA on November 8, 2023 to discuss changes to Part II of our SERENITY III study.
We believe BXCL701 can potentially provide significant benefits for the approximately 20% of the estimated 299,010 men who will be diagnosed with prostate cancer in the U.S. in 2024 and are expected to progress to the more aggressive mCRPC form of the disease, including approximately 20%, or 11,960, of those patients who develop the SCNC phenotype, for which there are currently limited treatment options.
We believe BXCL701 can potentially provide significant benefits for the approximately 20% of the estimated 299,010 men who will be diagnosed with prostate cancer in the U.S. in 2024 and are expected to progress to the more aggressive mCRPC form of the disease, including approximately 20%, or 11,960, of those patients who will develop the SCNC phenotype, for which there are currently limited treatment options.
We are continuing to leverage our platform to identify and develop new neuroscience and immuno-oncology programs. 10 Table of Contents Our Neuroscience Programs The following is a summary of the status of our neuroscience clinical development programs as of the date of this Annual Report on Form 10-K: ​ ​ As a selective adrenergic agent with a sublingual or buccal route of administration, BXCL501 is designed to be easy to administer and has shown a rapid onset of action in multiple clinical trials, including clinical trials studying patients with schizophrenia, bipolar disorders, and dementia.
We are continuing to leverage our platform to identify and develop new neuroscience and immuno-oncology programs. 11 Table of Contents Our Neuroscience Clinical Programs The following is a summary of the status of our neuroscience clinical development programs as of the date of this Annual Report on Form 10-K: ​ ​ As a selective adrenergic agent with a sublingual or buccal route of administration, BXCL501 is designed to be easy to administer and has shown a rapid onset of action in multiple clinical trials, including clinical trials studying patients with schizophrenia, bipolar disorders, and dementia.
In its preliminary responses, the FDA reiterated its prior comments that we generate additional efficacy data, including repeat-dose efficacy data, to support an sNDA submission, as the FDA indicated that our proposed efficacy database, which currently includes the 70 patients who have been treated with 60 mcg of BXCL501 in TRANQUILITY I and TRANQUILITY II, would not contain substantial evidence of effectiveness absent additional data.
In its preliminary responses, the FDA reiterated its prior comments that we need to generate additional efficacy data, including repeat-dose efficacy data, to support an sNDA submission, as the FDA indicated that our proposed efficacy database, which currently includes the 70 patients who have been treated with 60 mcg of BXCL501 in TRANQUILITY I and TRANQUILITY II, would not contain substantial evidence of effectiveness absent additional data.
During our March 6, 2024 Type C meeting with the FDA, we discussed, among other things, whether evaluating the at-home use of BXCL501 120 mcg, with safety as the primary objective and efficacy measures as exploratory endpoints, if successful, could support the submission of an sNDA seeking expansion of the current label for IGALMI TM 120 mcg to allow at-home use and labeling without the current LOU.
During our March 6, 2024 Type C meeting with the FDA, we discussed, among other things, whether evaluating the at-home use of BXCL501 120 mcg, with safety as the primary objective and efficacy measures as exploratory endpoints, if successful, could support the submission of an sNDA seeking expansion of the current label for IGALMI ® 120 mcg to allow at-home use and labeling without the current LOU.
Although the trial did not meet its primary efficacy endpoint, we believe the efficacy results, observed with the 60 mcg dose, representing half of the lowest approved dose of IGALMI TM for in-patient use (120 mcg), were promising. Specifically, greater than 50% of individuals were responders, defined as those patients who achieved a 40% or greater reduction in PEC score.
Although the trial did not meet its primary efficacy endpoint, we believe the efficacy results, observed with the 60 mcg dose, representing half of the lowest approved dose of IGALMI ® for in-patient use (120 mcg), were promising. Specifically, greater than 50% of individuals were responders, defined as those patients who achieved a 40% or greater reduction in PEC score.
IGALMI TM is already approved at the 120 mcg dose based on efficacy data that we previously generated in treating a single episode of agitation. Consistent with the data generated to date, the label for IGALMI TM currently includes a limitation on use (“LOU”), noting the lack of efficacy or safety data beyond 24 hours following the first dose.
IGALMI ® is already approved at the 120 mcg dose based on efficacy data that we previously generated in treating a single episode of agitation. Consistent with the data generated to date, the label for IGALMI ® currently includes a limitation on use (“LOU”), noting the lack of efficacy or safety data beyond 24 hours following the first dose.
IGALMI TM and any of our other product candidates that are approved, if any, will compete with the drugs discussed below, in addition to any other drugs currently in development. Drugs used for the acute treatment of agitation related to schizophrenia and bipolar disorder are antipsychotics frequently administered via IM injection that typically requires patient restraint.
IGALMI ® and any of our other product candidates that are approved, if any, will compete with the drugs discussed below, in addition to any other drugs currently in development. Drugs used for the acute treatment of agitation related to schizophrenia and bipolar disorder are antipsychotics frequently administered via IM injection that typically requires patient restraint.
Our approach to drug discovery leverages the application and methodology of our proprietary AI-based research and development platform, complemented by EvolverAI, utilized in the successful development of IGALMI TM with the aim of efficiently identifying and developing immuno-oncology product candidates. We believe that BXCL701 reflects the potential of this discovery approach in immuno-oncology.
Our approach to drug discovery leverages the application and methodology of our proprietary AI-based research and development platform, complemented by EvolverAI, utilized in the successful development of IGALMI ® with the aim of efficiently identifying and developing immuno-oncology product candidates. We believe that BXCL701 reflects the potential of this discovery approach in immuno-oncology.
In addition, we expect that federal, state, and local governments in the U.S. will continue to consider legislation to limit the growth of health care costs, including the cost of prescription drugs. Future legislation could limit payments for pharmaceuticals such as IGALMI TM and the product candidates that we are developing.
In addition, we expect that federal, state, and local governments in the U.S. will continue to consider legislation to limit the growth of health care costs, including the cost of prescription drugs. Future legislation could limit payments for pharmaceuticals such as IGALMI ® and the product candidates that we are developing.
Furthermore, there has been increased interest by third-party payors and governmental authorities in reference pricing systems and publication of discounts and list prices. Future legislation could limit payments for pharmaceuticals such as IGALMI TM and the product candidates that we are developing.
Furthermore, there has been increased interest by third-party payors and governmental authorities in reference pricing systems and publication of discounts and list prices. Future legislation could limit payments for pharmaceuticals such as IGALMI ® and the product candidates that we are developing.
BXCL501 Development In indications other than those approved by the FDA as IGALMI TM , 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.
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.
The sublingual or buccal route of administration is an accepted alternative to oral administration of drug delivery to the central nervous system when rapid onset or more controlled delivery is required. Currently, there are six products approved for film administration, including our product, IGALMI TM .
The sublingual or buccal route of administration is an accepted alternative to oral administration of drug delivery to the central nervous system when rapid onset or more controlled delivery is required. Currently, there are six products approved for film administration, including our product, IGALMI ® .
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 (“SCNC”)-phenotype metastatic castration-resistant prostate cancer (“mCRPC”).
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”).
We entered into the Amended and Restated Asset Contribution Agreement (the “Contribution Agreement”), pursuant to which BioXcel LLC, agreed to contribute BioXcel LLC’s rights, title and interest in BXCL501, BXCL701, BXCL502 and BXCL702, and all of the assets and liabilities associated in consideration for (i) 9,480,000 shares of our common stock, (ii) $1 million upon completion of an initial public offering, (iii) $500,000 upon the later of the 12-month anniversary of an initial public offering and the first dosing of a patient in the bridging bioavailability/bioequivalence study for the BXCL501 program, (iv) $500,000 upon the later of the 12 month anniversary of an initial public offering and the first dosing of a patient in the Phase 2 proof of concept open-label monotherapy or combination trial with Keytruda for the BXCL701 program and (v) a one-time payment of $5 million within 60 days after the achievement of $50 million in cumulative net sales of any product or combination of products resulting from the development and commercialization of any one of the contributed product candidates or a product derived therefrom.
We entered into the Amended and Restated Asset Contribution Agreement (the “Contribution Agreement”), pursuant to which BioXcel LLC, agreed to contribute BioXcel LLC’s rights, title and interest in BXCL501, BXCL701, BXCL502 and BXCL702, and all of the assets and liabilities associated in consideration for (i) 592,500 shares of our common stock, (ii) $1 million upon completion of an initial public offering, (iii) $500,000 upon the later of the 12-month anniversary of an initial public offering and the first dosing of a patient in the bridging bioavailability/bioequivalence study for the BXCL501 program, (iv) $500,000 upon the later of the 12 month anniversary of an initial public offering and the first dosing of a patient in the Phase 2 proof of concept open-label monotherapy or combination trial with Keytruda for the BXCL701 program and (v) a one-time payment of $5 million within 60 days after the achievement of $50 million in cumulative net sales of any product or combination of products resulting from the development and commercialization of any one of the contributed product candidates or a product derived therefrom.
The U.S. government and other governments have shown significant interest in pursuing health care reform, which has resulted in changes to these programs and impacts IGALMI TM and our product candidates that may be approved.
The U.S. government and other governments have shown significant interest in pursuing health care reform, which has resulted in changes to these programs and impacts IGALMI ® and our product candidates that may be approved.
If we have overestimated the number of episodes or the size of our total addressable market for our current and potential future products or product candidates, or if any approval that we obtain is based on a narrower definition of the patient population, our revenue and ability to achieve profitability may be harmed.” Treatments for Agitation Antipsychotics, the current standard of care for acute treatment of agitation in schizophrenia and bipolar disorder, are also used off-label to treat agitation in dementia and other conditions.
If we have overestimated the number of episodes or the size of our total addressable market for our current and potential future products or product candidates, or if any approval that we obtain is based on a narrower definition of the patient population, our revenue and ability to achieve profitability may be harmed.” Treatments for Agitation Antipsychotics, the current standard of care for acute treatment of agitation associated with schizophrenia and bipolar disorder, are also used off-label to treat agitation in dementia and other conditions.
The Physician Payment Sunshine Act (the “Sunshine Act”), which was enacted as part of the ACA, requires applicable manufacturers of drugs, devices, biologicals, or medical supplies covered under Medicare, Medicaid or the Children’s Health Insurance Program, to report annually to the Secretary of the Department of Health and Human Services payments or other transfers of value made by that entity, or by a third-party as directed by that entity, to 52 Table of Contents physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors), certain non-physician providers including physician assistants and nurse practitioners, and teaching hospitals, or to third parties on behalf of such providers, as well as ownership and investment interests held by physicians and their immediate family members during the course of the preceding calendar year.
The Physician Payment Sunshine Act (the “Sunshine Act”), which was enacted as part of the ACA, requires applicable manufacturers of drugs, devices, biologicals, or medical supplies covered under Medicare, Medicaid or the Children’s Health Insurance Program, to report annually to the Secretary of the Department of Health and Human Services payments or other transfers of value made by that entity, or by a third-party as directed by that entity, to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors), certain non-physician providers including physician assistants and nurse practitioners, and teaching hospitals, or to third parties on behalf of such providers, as well as ownership and investment interests held by physicians and their immediate family members during the course of the preceding calendar year.
Government-Supported Investigator-Initiated Trial Programs ​ The Company has been awarded key opportunities for the development of BXCL501 in post-traumatic stress disorder (“PTSD”), alcohol use disorder (“AUD”), and opioid use disorder (“OUD”). These are being funded through Cooperative Agreements with the U.S. Department of Defense Congressionally Directed Medical Research Program and National Institute on Drug Abuse (“NIDA”).
Government-Supported Investigator-Sponsored Trial Programs ​ The Company has been awarded key opportunities for the development of BXCL501 in post-traumatic stress disorder (“PTSD”), alcohol use disorder (“AUD”), and opioid use disorder (“OUD”). These are being funded through Cooperative Agreements with the U.S. Department of Defense Congressionally Directed Medical Research Program and National Institute on Drug Abuse (“NIDA”).
As of a cutoff date of September 6, 2023, five of these composite responders were RECIST 1.1 responders (four confirmed responses and one unconfirmed response) with decreases in tumor size ranging from -30% to -99% and a median duration of response to 19 months. 31 Table of Contents As of the cutoff date of December 19, 2022, the majority of AEs experienced by patients in the adenocarcinoma cohort were low grade.
As of a cutoff date of September 6, 2023, five of these composite responders were RECIST 1.1 responders (four confirmed responses and one unconfirmed response) with decreases in tumor size ranging from -30% to -99% and a median duration of response to 19 months. 28 Table of Contents As of the cutoff date of December 19, 2022, the majority of AEs experienced by patients in the adenocarcinoma cohort were low grade.
Our platform led to the identification of Dex, the rapid development of BXCL501, and its approval by the FDA as IGALMI TM , as well as the advancement of BXCL501 for other potential indications.
Our platform led to the identification of Dex, the rapid development of BXCL501, and its approval by the FDA as IGALMI ® , as well as the advancement of BXCL501 for other potential indications.
It has been used to prevent or treat hyperactive delirium resulting from anesthesia in 12 Table of Contents the ICU. Given these uses of the IV formulation of Dex, we believe Dex formulated in a sublingual film and at much lower doses allows for ease of administration in settings where rapid acute treatment of agitation is needed.
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.
We believe that understanding the relation between entities relevant to drug development may lead to novel potential uses for existing drugs. Predictive algorithms or queries of the knowledge graph may uncover not only single drugs but potentially identify new combinations of drugs that we believe may be 8 Table of Contents more effective in treating disorders than single agents.
We believe that understanding the relation between entities relevant to drug development may lead to novel potential uses for existing drugs. Predictive algorithms or queries of the knowledge 9 Table of Contents graph may uncover not only single drugs but potentially identify new combinations of drugs that we believe may be more effective in treating disorders than single agents.
The table below summarizes treatment-related AEs observed in the SCNC cohort as of December 19, 2022. ​ 30 Table of Contents ​ On October 10, 2023, we reported positive overall survival (OS) results from the Phase 2a portion of the trial in SCNC patients. BXCL701 in combination with pembrolizumab demonstrated a compelling median OS and 12-month survival rate.
The table below summarizes treatment-related AEs observed in the SCNC cohort as of December 19, 2022. ​ 27 Table of Contents ​ On October 10, 2023, we reported positive overall survival (OS) results from the Phase 2a portion of the trial in SCNC patients. BXCL701 in combination with pembrolizumab demonstrated a compelling median OS and 12-month survival rate.
These services include certain intellectual property prosecution and management and research and development activities. The Company has an option, exercisable until December 31, 2024, to enter into a collaborative services agreement with BioXcel LLC pursuant to which BioXcel LLC shall perform product identification and related services for us utilizing EvolverAI, its proprietary pharmaceutical discovery and development engine.
These services include certain intellectual property prosecution and management and research and development activities. The Company had an option, exercisable until December 31, 2024, to enter into a collaborative services agreement with BioXcel LLC pursuant to which BioXcel LLC shall perform product identification and related services for us utilizing EvolverAI, its proprietary pharmaceutical discovery and development engine.
BXCL701 is designed to act on multiple components of immune system functioning, including: ● Cancer antigen presentation by dendritic cells : stimulation of dendritic cell trafficking to tumor draining lymph nodes. ● Priming and activation of T cells : acceleration of tumor-induced priming of T cells and the formation of potent CTLs. ● Infiltration of immune cells into the tumor : stimulation of release of chemokines that attract effector T cells but block regulatory T cells and also induce NK cell and neutrophil migration. ● Killing of tumor cells : induction of formation of CTLs and NK cells expressing tumor-killing perforins and granzymes as well as the formation of memory T cells that can selectively kill returning tumor cells.
BXCL701 is designed to act on multiple components of immune system functioning, including: ● Cancer antigen presentation by dendritic cells : stimulation of dendritic cell trafficking to tumor draining lymph nodes. ● Priming and activation of T cells : acceleration of tumor-induced priming of T cells and the formation of potent CTLs. ● Infiltration of immune cells into the tumor : stimulation of release of chemokines that attract effector T cells but block regulatory T cells and also induce NK cell and neutrophil migration. 25 Table of Contents ● Killing of tumor cells : induction of formation of CTLs and NK cells expressing tumor-killing perforins and granzymes as well as the formation of memory T cells that can selectively kill returning tumor cells.
There was no evidence that BXCL701 potentiated immune-related AEs related to CPIs. The table below summarizes treatment-related AEs observed in the adenocarcinoma cohort. ​ ​ 32 Table of Contents ​ On November 8, 2023, we reported positive OS results from the Phase 2a portion of the trial in patients with adenocarcinoma.
There was no evidence that BXCL701 potentiated immune-related AEs related to CPIs. The table below summarizes treatment-related AEs observed in the adenocarcinoma cohort. ​ 29 Table of Contents ​ On November 8, 2023, we reported positive OS results from the Phase 2a portion of the trial in patients with adenocarcinoma.
We believe the combination of AI and drug discovery and development expertise facilitates the generation of therapeutic candidates and gives us a significant competitive advantage. ​ 9 Table of Contents Our approach is illustrated below: We continue to integrate and evolve our neuroscience and immuno-oncology AI machine learning and drug discovery and development platform.
We believe the combination of AI and drug discovery and development expertise facilitates the generation of therapeutic candidates and gives us a significant competitive advantage. ​ 10 Table of Contents Our approach is illustrated below: We continue to integrate and evolve our neuroscience and immuno-oncology AI machine learning and drug discovery and development platform.
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.
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.
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.
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.
As of a data cutoff of September 6, 2023, five of these responders were RECIST 1.1 responders (four confirmed responses and one unconfirmed response) with decreases in tumor size ranging from -45% to -67% and a median duration of response of 7.6 months. ​ 29 Table of Contents ​ AEs consistent with cytokine activation, including fever, nausea, chills, fatigue, headache, and dizziness were observed during the trial and were generally mild to moderate.
As of a data cutoff of September 6, 2023, five of these responders were RECIST 1.1 responders (four confirmed responses and one unconfirmed response) with decreases in tumor size ranging from -45% to -67% and a median duration of response of 7.6 months. ​ ​ AEs consistent with cytokine activation, including fever, nausea, chills, fatigue, headache, and dizziness were observed during the trial and were generally mild to moderate.
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).
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).
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and in 18 Table of Contents establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to or necessary for our programs.
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and in establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies 19 Table of Contents complementary to or necessary for our programs.
In a Type B/Breakthrough Therapy designation meeting with the FDA on October 11, 2023, we reviewed our 14 Table of Contents TRANQUILITY clinical trial program and discussed the data package required to support submission of an sNDA for the potential approval of BXCL501 for the acute treatment of agitation in patients with mild to moderate dementia due to probable Alzheimer’s disease in the ALF and at-home settings.
In a Type B/Breakthrough Therapy designation meeting with the FDA on October 11, 2023, we reviewed our TRANQUILITY clinical trial program and discussed the data package required to support submission of an sNDA for the potential approval of BXCL501 for the acute treatment of agitation in patients with mild to moderate dementia due to probable Alzheimer’s disease in the ALF and at-home settings.
Clinical data, the size of the development programs, the size of the target market, the required commercial infrastructure, and manufacturing needs may all influence global commercialization strategies. ​ Neuroscience Intellectual Property Our policy is to protect and enhance the proprietary technologies, inventions, and improvements that are commercially important to our business by filing patent applications in the U.S. and other jurisdictions related to our 19 Table of Contents proprietary technology, inventions, improvements, and product candidates.
Clinical data, the size of the development programs, the size of the target market, the required commercial infrastructure, and manufacturing needs may all influence global commercialization strategies. ​ Neuroscience Intellectual Property Our policy is to protect and enhance the proprietary technologies, inventions, and improvements that are commercially important to our business by filing patent applications in the U.S. and other jurisdictions related to our proprietary technology, inventions, improvements, and product candidates.
The Hatch-Waxman Act also provides three years of non-patent exclusivity to the holder of an NDA (including a 505(b)(2) NDA) for a particular condition of approval, or change to a marketed product, such as a new formulation for a previously approved product, if one or more new clinical studies (other than bioavailability or bioequivalence studies) was essential to the approval of the application and was conducted or sponsored by the applicant.
The 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 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. ​ 54 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. ​ 52 Table of Contents
The primary endpoint of the Phase 2a portion of this trial was a composite response rate, determined as either a RECIST 1.1 response (defined as a reduction in RECIST score of 30% or more), and/or a reduction in prostate specific antigen (“PSA”) level of 50% or more, and/or a conversion in circulating tumor cells (“CTCs”) from 5 or more CTCs/7.5 milliliter (“ml”) to less than 5 CTCs/7.5 ml.
The primary endpoint of the Phase 2a portion of this trial was a composite response rate, determined as either a RECIST 1.1 response (defined as a 26 Table of Contents reduction in RECIST score of 30% or more), and/or a reduction in prostate specific antigen (“PSA”) level of 50% or more, and/or a conversion in circulating tumor cells (“CTCs”) from 5 or more CTCs/7.5 milliliter (“ml”) to less than 5 CTCs/7.5 ml.
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.
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.
The Company is continuing to evaluate strategic options for OnkosXcel. With the Company’s Reprioritization announcement on August 14, 2023, further work on the immuno-oncology programs described below have generally been paused, except as noted below.
The Company is continuing to evaluate strategic options for OnkosXcel. With the Company’s Reprioritization announcement on August 14, 2023, further work on the immuno-oncology programs described below has generally been paused, except as noted below.
Following a comprehensive review of the business, we determined to focus on high-potential agitation-market opportunities using our innovative, AI-based clinical drug development platforms. We intend to reduce more than 50% of our cash burn, as compared to our cash burn levels during the second quarter of 2023, to approximately $80 million on a go-forward annualized basis.
Following a comprehensive review of the business, we determined to focus on high-potential agitation-market opportunities using our innovative, AI-based clinical drug development platforms. Our goal was to reduce more than 50% of our cash burn, as compared to our cash burn levels during the second quarter of 2023, to approximately $80 million on a go-forward annualized basis.
We believe results from these studies suggest that BXCL501 has the potential to reduce agitation without producing excessive sedation. We also believe BXCL501 is highly differentiated from antipsychotics, which are 13 Table of Contents currently used as first-line standard-of-care treatments despite often producing unwanted side effects such as excessive sedation or extra pyramidal motor effects.
We believe results from these studies suggest that BXCL501 has the potential to reduce agitation without producing excessive sedation. We also believe BXCL501 is highly differentiated from antipsychotics, which are currently used as first-line standard-of-care treatments despite often producing unwanted side effects such as excessive sedation or extra pyramidal motor effects.
Central to our drug discovery initiatives are proprietary, AI-driven platform technologies we employ to identify novel therapeutic uses for approved therapeutics and candidates in clinical evaluation. The first and most advanced of our AI-driven discovery programs is our innate immune modulation program, which supported the pursuit of BXCL701 as a development candidate.
Central to our drug discovery initiatives are proprietary, AI-driven platform technologies we employ to identify novel therapeutic uses for approved therapeutics and candidates in clinical evaluation. The first and most advanced of 23 Table of Contents our AI-driven discovery programs is our innate immune modulation program, which supported the pursuit of BXCL701 as a development candidate.
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.
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.
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.
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.
In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. 39 Table of Contents In addition, during the development of a drug, sponsors are given opportunities to periodically meet with or seek feedback from the FDA.
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.
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.
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.
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.
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.
Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance. 42 Table of Contents The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
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.
The equipment employed for manufacture and analysis is consistent with standard pharmaceutical production. Neuroscience Commercialization We plan to retain worldwide commercialization rights for IGALMI TM and other approved product candidates, if any, but could consider collaboration opportunities to maximize returns or facilitate commercialization efforts in foreign jurisdictions.
The equipment employed for manufacturing and analysis is consistent with standard pharmaceutical production. Neuroscience Commercialization We plan to retain worldwide commercialization rights for IGALMI ® and other approved product candidates, if any, but could consider collaboration opportunities to maximize returns or facilitate commercialization efforts in foreign jurisdictions.
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.
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.
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). 49 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.
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.
As a condition of accelerated approval, 41 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.
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.
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 51 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.
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.
BXCL501 is our most advanced neuroscience clinical program, being evaluated for the at-home acute treatment of agitation related to bipolar disorders or schizophrenia and for the acute treatment of agitation (non-daily) in patients with dementia due to probable Alzheimer’s disease in care facilities and at-home settings.
BXCL501 is our most advanced neuroscience clinical program, being evaluated 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) in patients with dementia due to probable Alzheimer’s disease in care facilities and at-home settings.
ARx has agreed to exclusively manufacture and supply all of our worldwide supply of film formulation of dexmedetomidine to be used for the commercial supply of IGALMI TM and for ongoing clinical trials of BXCL501, subject to certain alternative supply provisions. BXCL501 drug product is manufactured using commercially available components and packaging materials.
ARx has agreed to exclusively manufacture and supply our supply of film formulation of dexmedetomidine to be used for the commercial supply of IGALMI ® and for ongoing clinical trials of BXCL501, subject to certain alternative supply provisions. BXCL501 drug product is manufactured using commercially available components and packaging materials.
Trial participants received 200 mg of pembrolizumab on day 1 of a 21-day cycle, with 0.2 mg of BXCL701 administered twice-daily (“BID”) on days 1 through 7 during the first cycle, the dose increasing to 0.3 mg BID on Days 8 through 14 during the first and the subsequent cycles.
Trial participants received 200 mg of pembrolizumab on day 1 of a 21-day cycle, with 0.2 mg of 31 Table of Contents BXCL701 administered twice-daily (“BID”) on days 1 through 7 during the first cycle, the dose increasing to 0.3 mg BID on Days 8 through 14 during the first and the subsequent cycles.
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.
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.
We are supporting a Phase 2 IST sponsored by Georgetown Lombardi Comprehensive Cancer Center (“Georgetown Lombardi”), designed to evaluate the use of BXCL701 along with pembrolizumab to treat pancreatic cancer. Few therapeutic options are available for patients with this disease, which has a five-year survival rate of less than 10%, among the lowest of all cancers.
We are supporting a Phase 2 investigator-sponsored trial (“IST”) sponsored by Georgetown Lombardi Comprehensive Cancer Center (“Georgetown Lombardi”), designed to evaluate the use of BXCL701 along with pembrolizumab to treat pancreatic cancer. Few therapeutic options are available for patients with this disease, which has a five-year survival rate of less than 10%, among the lowest of all cancers.
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.
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.
In addition, the scope of the rights granted under any issued patents may not provide us with protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may independently develop similar technologies outside the scope of the rights granted under any issued 21 Table of Contents patents that we own or exclusively in license.
In addition, the scope of the rights granted under any issued patents may not provide us with protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may independently develop similar technologies outside the scope of the rights granted under any issued patents that we own or exclusively in license.
A REMS is a safety strategy to manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries, and other 40 Table of Contents risk minimization tools.
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.
Department of Defense’s Congressionally Directed Medical Research Program with the 17 Table of Contents overall objective to evaluate BXCL501 in patients who suffer from AUD with comorbid PTSD. The Company provided BXCL501 for the inpatient Alcohol Interaction Study, which has been completed.
Department of Defense’s Congressionally Directed Medical Research Program with the overall objective to evaluate BXCL501 in patients who suffer from AUD with comorbid PTSD. The Company provided BXCL501 for the inpatient Alcohol Interaction Study, which has been completed.
The 11 Table of Contents foregoing estimates of the incidence of each patient population and the number of agitation episodes experienced and potential market opportunity are based on management’s estimates and third-party data, which may be materially different from actual agitation episodes and actual treatable patients.
The foregoing estimates of the incidence of each patient population and the number of agitation episodes experienced and potential market opportunity are based on management’s estimates and third-party data, which may be materially different from actual agitation episodes and actual treatable patients.
According to the guidance, if the FDA determines that a 44 Table of Contents companion diagnostic device is essential to the safe and effective use of a novel therapeutic product or indication, the FDA generally will not approve the therapeutic product or new therapeutic product indication if the companion diagnostic device is not approved or cleared for that indication.
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.
We expect that the results from current study will be used to select a recommended dose of BXCL501 to compare to placebo in a later outpatient Phase 3 study sponsored by NIDA. ​ On November 6, 2023, we announced that NIDA has requested Columbia University, the trial coordinator, to add a fourth site to target trial completion in 2024.
We expect that the results from current study will be used to select a recommended dose of BXCL501 to compare to placebo in a later outpatient Phase 3 study sponsored by NIDA. ​ On November 6, 2023, we announced that NIDA requested Columbia University, the trial coordinator, to add a fourth site to expedite trial completion.
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.
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.
The results of this Phase 1b trial, which were presented at The Society for Immunotherapy of Cancer’s 35 th Anniversary Annual Meeting, allowed us to identify 0.3 mg, taken twice daily, as the RP2D. ​ 28 Table of Contents ​ The Phase 2a portion of the trial was segregated into two 28-patient trial cohorts, one cohort consisting of mCRPC patients with SCNC phenotype and a second cohort consisting of mCRPC patients with adenocarcinoma phenotype.
The results of this Phase 1b trial, which were presented at The Society for Immunotherapy of Cancer’s 35th Anniversary Annual Meeting, allowed us to identify 0.3 mg, taken twice daily, as the RP2D. ​ The Phase 2a portion of the trial was segregated into two 28-patient trial cohorts, one cohort consisting of mCRPC patients with SCNC phenotype and a second cohort consisting of mCRPC patients with adenocarcinoma phenotype.
During the 10-year market exclusivity period, the competent authorities cannot accept a MAA, or grant a 48 Table of Contents MA, or accept an application to extend a MA, for the same indication, in respect of a similar medicinal product.
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.
The 120 mcg dose has already demonstrated efficacy based on the approved conditions of use for IGALMI TM (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 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.
While numerous agents designed to target the earlier stages of an immune response are in development for use in combination with CPIs, their activity is restricted to a single 22 Table of Contents component of the immune response.
While numerous agents designed to target the earlier stages of an immune response are in development for use in combination with CPIs, their activity is restricted to a single component of the immune response.
We anticipate that we 35 Table of Contents will continue to face increasing competition as new therapies and combinations thereof, technologies, and data emerge within the field of immunotherapy and, furthermore, within the treatment of infectious diseases and cancers.
We anticipate that we will continue to face increasing competition as new therapies and combinations thereof, technologies, and data emerge within the field of immunotherapy and, furthermore, within the treatment of infectious diseases and cancers.
Enrollment of patients with schizophrenia, schizoaffective disorder, bipolar I, and bipolar II disorder is ongoing in this multisite, double-blind, placebo-controlled parallel group trial. Approximately 54% of the 150 total subjects have been enrolled in the U.S. and 81 of such subjects have completed the clinical trial.
Enrollment of patients with schizophrenia, schizoaffective disorder, bipolar I, and bipolar II disorder is ongoing in this multisite, double-blind, placebo-controlled parallel group trial. Approximately 63% of the 150 total subjects have been enrolled in the U.S. and 95 of such subjects have completed the clinical trial.
Employee and Visitor Safety Protocols We follow health and safety guidelines to protect the well-being of our employees and visitors. Diversity & Inclusion Much of our success is rooted in the diversity of our teams and our commitment to inclusion.
Employee and Visitor Safety Protocols We follow health and safety guidelines to protect the well-being of our employees and visitors. 51 Table of Contents Diversity & Inclusion Much of our success is rooted in the diversity of our teams and our commitment to inclusion.
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.
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.
For additional information regarding intellectual property regulations and risks, see above under “—Neuroscience—Neuroscience Intellectual Property” and Part I, Item 1A, “Risk Factors - Risks Related to Our Intellectual Property.” Our Relationship with BioXcel LLC BioXcel LLC currently holds an ownership interest of approximately 29% in the Company and our pipeline compounds were identified by applying our growing internal AI capabilities, along with BioXcel LLC’s EvolverAI, a proprietary pharmaceutical discovery and development engine, for drug re-innovation.
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.
The parties are obligated to negotiate the collaborative services agreement in good faith and to incorporate reasonable market-based terms, including consideration for BioXcel LLC reflecting a low, single-digit royalty on net sales and reasonable development and commercialization milestone payments, provided that (i) development milestone payments shall not exceed $10 million in the aggregate and not be payable prior to proof of concept in humans and (ii) commercialization milestone payments shall be based on reaching annual net sales levels, be limited to 3% of the applicable net sales level, and not exceed $30 million in the aggregate.
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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe Fourth Amendment to our Credit Agreement includes covenants that we will receive, (i) after March 20, 2024, which is the effective date of the Fourth Amendment, and on or before April 15, 2024, at least $25.0 million 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 March 20, 2024 (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 March 20, 2024 and on or before November 30, 2024, at least $50.0 million (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 March 20, 2024.
Biggest changeThe Fifth Amendment to our Credit Agreement 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 $7.0 million 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 $18.0 million 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 $29.0 million in net cash proceeds (“Raise 3”) (including the proceeds from Raise 1 and Raise 2) from the same permitted capital raising activities listed in the preceding clause (B).The Company has met the requirements of Raise 1 and Raise 2, but has not met the requirements of Raise 3.
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; ● 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; 78 Table of Contents ● 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; 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.
Additionally, if we or others later identify undesirable side effects caused by IGALMI TM or any other product candidate that receives marketing approval, a number of potentially significant negative consequences could result, including: ● regulatory authorities may withdraw approvals of such products; ● we may be required to recall a product or change the way such a product is administered to patients; ● additional restrictions may be imposed on the marketing or distribution of the particular product or the manufacturing processes for the product or any component thereof; ● regulatory authorities may require additional warnings on the label, such as a “black box” warning or contraindication; ● we may be required to implement Risk Evaluation and Mitigation Strategies (“REMS”) or create a medication guide outlining the risks of such side effects for distribution to patients, or similar risk management measures; ● we could be sued and held liable for harm caused to patients; ● our product may become less competitive; and ● our reputation may suffer.
Additionally, if we or others later identify undesirable side effects caused by IGALMI ® or any other product candidate that receives marketing approval, a number of potentially significant negative consequences could result, including: ● regulatory authorities may withdraw approvals of such products; ● we may be required to recall a product or change the way such a product is administered to patients; ● additional restrictions may be imposed on the marketing or distribution of the particular product or the manufacturing processes for the product or any component thereof; ● regulatory authorities may require additional warnings on the label, such as a “black box” warning or contraindication; ● we may be required to implement Risk Evaluation and Mitigation Strategies (“REMS”) or create a medication guide outlining the risks of such side effects for distribution to patients, or similar risk management measures; ● we could be sued and held liable for harm caused to patients; ● our product may become less competitive; and ● our reputation may suffer.
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; 67 Table of Contents ● 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; ● 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 68 Table of Contents 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; ● 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.
Some factors that may cause the market price of our common stock to fluctuate, in addition to the other risks mentioned in this “Risk Factors” section, are: 111 Table of Contents ● sale of our common stock by our stockholders, executives, and directors; ● volatility and limitations in trading volumes of our shares of common stock; ● speculative trading in and short sales of our stock, as well as trading phenomena such as the “short squeeze” and “short and distort” schemes; ● our ability to obtain financings to conduct and complete research and development activities including, but not limited to, our clinical trials, and other business activities; ● possible delays in the expected recognition of revenue due to lengthy and sometimes unpredictable sales timelines; ● the timing and success of introductions of new applications and services by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic partners; ● network outages or security breaches; ● our ability to attract new customers; ● customer renewal rates and the timing and terms of customer renewals; ● our ability to secure resources and the necessary personnel to conduct clinical trials on our desired schedule; ● commencement, enrollment or results of our clinical trials for our product candidates or any future clinical trials we may conduct; ● changes in the development status of our product candidates; ● any delays or adverse developments or perceived adverse developments with respect to the FDA’s review of our preclinical and clinical trials; ● any delay in our submission for studies or product approvals or adverse regulatory decisions, including failure to receive regulatory approval for our product candidates; ● unanticipated safety concerns related to the use of our product candidates; ● failures to meet external expectations or management guidance; ● changes in our capital structure or dividend policy, future issuances of securities, sales of large blocks of common stock by our stockholders; ● our cash position; ● announcements and events surrounding financing efforts, including debt and equity securities; ● our inability to enter into new markets or develop new products; ● reputational issues; ● competition from existing technologies and products or new technologies and products that may emerge; ● announcements of acquisitions, partnerships, collaborations, joint ventures, new products, capital commitments, or other events by us or our competitors; 112 Table of Contents ● changes in general economic, political and market conditions in or any of the regions in which we conduct our business; ● changes in industry conditions or perceptions; ● changes in valuations of similar companies or groups of companies; ● analyst research reports, recommendation and changes in recommendations, price targets, and withdrawals of coverage; ● departures and additions of key personnel; ● disputes and litigations related to intellectual properties, proprietary rights, and contractual obligations; ● changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and ● other events or factors, many of which may be out of our control.
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.
In addition, if we experience a significant increase in demand, additional supplies of raw materials or additional manufacturing capacity may not be available when required on terms that are acceptable to us, or at all, or suppliers or our third-party manufacturers may not be able to allocate sufficient capacity in order to meet our increased requirements, which could have an adverse effect on our ability to meet customer demand for IGALMI TM and our results of operations.
In addition, if we experience a significant increase in demand, additional supplies of raw materials or additional manufacturing capacity may not be available when required on terms that are acceptable to us, or at all, or suppliers or our third-party manufacturers may not be able to allocate sufficient capacity in order to meet our increased requirements, which could have an adverse effect on our ability to meet customer demand for IGALMI ® and our results of operations.
With respect to our SERENITY program, we also held a Type C Meeting with the FDA on March 6, 2024 to obtain further feedback on our proposed changes to the design of SERENITY III Part 2, including with respect to the trial endpoints, and to discuss the content and format of a potential sNDA submission to expand the label of IGALMI TM 120 micrograms to the acute treatment of agitation associated with schizophrenia and bipolar disorders in the outpatient setting.
With respect to our SERENITY program, we also held a Type C Meeting with the FDA on March 6, 2024 to obtain further feedback on our proposed changes to the design of SERENITY III Part 2, including with respect to the trial endpoints, and to discuss the content and format of a potential sNDA submission to expand the label of IGALMI ® 120 micrograms to the acute treatment of agitation associated with schizophrenia and bipolar disorders in the outpatient setting.
In order to mitigate the current and potential future liquidity issues, we have undertaken the Reprioritization 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 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.
During our March 6, 2024 Type C meeting with the FDA, we discussed, among other things, whether evaluating the at-home use of BXCL501 120 mcg, with safety as the primary objective and efficacy measures as exploratory endpoints, if successful, could support the submission of an sNDA seeking expansion of the current label for IGALMI TM 120 mcg to allow at-home use and labeling without the current LOU.
During our March 6, 2024 Type C meeting with the FDA, we discussed, among other things, whether evaluating the at-home use of BXCL501 120 mcg, with safety as the primary objective and efficacy measures as exploratory endpoints, if successful, could support the submission of an sNDA seeking expansion of the current label for IGALMI ® 120 mcg to allow at-home use and labeling without the current LOU.
We have only one product candidate approved for marketing in the U.S., none in any other jurisdiction, and may never receive approval beyond the one product approved to date. It could be several years, if ever, before we have a commercialized product that generates significant revenues through sales of IGALMI TM or our product candidates, if approved.
We have only one product candidate approved for marketing in the U.S., none in any other jurisdiction, and may never receive approval beyond the one product approved to date. It could be several years, if ever, before we have a commercialized product that generates significant revenues through sales of IGALMI ® or our product candidates, if approved.
Any regulatory approvals that we may receive for IGALMI TM or any of our product candidates will require the submission of reports to regulatory authorities and surveillance to monitor the safety and efficacy of the product, may contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, and may include burdensome post-approval study or risk management requirements.
Any regulatory approvals that we may receive for IGALMI ® or any of our product candidates will require the submission of reports to regulatory authorities and surveillance to monitor the safety and efficacy of the product, may contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, and may include burdensome post-approval study or risk management requirements.
Our ability to accurately forecast demand for IGALMI TM could be negatively affected by many factors, including our failure to accurately manage our expansion strategy, product introductions by competitors, an increase or decrease in customer demand for IGALMI TM or for products of our competitors, our failure to accurately forecast customer acceptance of new products, unanticipated changes in general market conditions or regulatory matters, and weakening of economic conditions or consumer confidence in future economic conditions.
Our ability to accurately forecast demand for IGALMI ® could be negatively affected by many factors, including our failure to accurately manage our expansion strategy, product introductions by competitors, an increase or decrease in customer demand for IGALMI ® or for products of our competitors, our failure to accurately forecast customer acceptance of new products, unanticipated changes in general market conditions or regulatory matters, and weakening of economic conditions or consumer confidence in future economic conditions.
We also may not achieve the anticipated benefits from the acquired business due to a number of factors, including: ● inability to integrate or benefit from acquired technologies or services in a profitable manner; ● unanticipated costs or liabilities associated with the acquisition; 95 Table of Contents ● difficulty integrating the accounting systems, operations and personnel of the acquired business; ● difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business; ● difficulty converting the customers of the acquired business onto our platform and contract terms, including disparities in the revenue, licensing, support or professional services model of the acquired company; ● diversion of management’s attention from other business concerns; ● adverse effects to our existing business relationships with business partners and customers as a result of the acquisition; ● the potential loss of key employees; ● use of resources that are needed in other parts of our business; and ● use of substantial portions of our available cash to consummate the acquisition.
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.
Our ability to make scheduled payments or payments to maintain compliance with covenants or to restructure or refinance these and other outstanding debt obligations depends on our financial and operating performance, including growth in revenue from IGALMI TM and BXCL501, which will be affected by prevailing economic, industry and competitive conditions and by financial, business and other factors beyond our control.
Our ability to make scheduled payments or payments to maintain compliance with covenants or to restructure or refinance these and other outstanding debt obligations depends on our financial and operating performance, including growth in revenue from IGALMI ® and BXCL501, which will be affected by prevailing economic, industry and competitive conditions and by financial, business and other factors beyond our control.
We currently have only one product that has received regulatory approval and may never be able to develop additional marketable product candidates. We are continuing to invest a significant portion of our efforts and financial resources in the commercialization of IGALMI TM and development of our four product candidates, BXCL501, BXCL502, BXCL701 and BXCL702, as well as other product candidates.
We currently have only one product that has received regulatory approval and may never be able to develop additional marketable product candidates. We are continuing to invest a significant portion of our efforts and financial resources in the commercialization of IGALMI ® and development of our four product candidates, BXCL501, BXCL502, BXCL701 and BXCL702, as well as other product candidates.
IGALMI TM is already approved at the 120 mcg dose based on efficacy data that we previously generated in treating a single episode of agitation. Consistent with the data generated to date, the label for IGALMI TM currently includes a limitation on use (“LOU”), noting the lack of efficacy or safety data beyond 24 hours following the first dose.
IGALMI ® is already approved at the 120 mcg dose based on efficacy data that we previously generated in treating a single episode of agitation. Consistent with the data generated to date, the label for IGALMI ® currently includes a limitation on use (“LOU”), noting the lack of efficacy or safety data beyond 24 hours following the first dose.
We have supplemented our clinical trial coverage with product liability coverage in connection with the commercial launch of IGALMI TM and expect that we would similarly supplement our coverage for any of our other product candidates that may receive regulatory approval, but we may be unable to obtain such increased coverage on acceptable terms or at all.
We have supplemented our clinical trial coverage with product liability coverage in connection with the commercial launch of IGALMI ® and expect that we would similarly supplement our coverage for any of our other product candidates that may receive regulatory approval, but we may be unable to obtain such increased coverage on acceptable terms or at all.
We have not entered into arrangements for the sale and marketing of IGALMI TM , BXCL501, BXCL502, BXCL701, BXCL702 or any other product candidate. Typically, pharmaceutical companies would employ groups of sales representatives and associated sales and marketing staff numbering in the hundreds to thousands of individuals to call on the large number of physicians and hospitals.
We have not entered into arrangements for the sale and marketing of IGALMI ® , BXCL501, BXCL502, BXCL701, BXCL702 or any other product candidate. Typically, pharmaceutical companies would employ groups of sales representatives and associated sales and marketing staff numbering in the hundreds to thousands of individuals to call on the large number of physicians and hospitals.
In addition to regulations in the U.S., should we or our collaborators pursue marketing approvals for IGALMI TM , and for BXCL501, BXCL502, BXCL701, BXCL702 and our other product candidates internationally, we and our collaborators will be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales and distribution of our products.
In addition to regulations in the U.S., should we or our collaborators pursue marketing approvals for IGALMI ® , and for BXCL501, BXCL502, BXCL701, BXCL702 and our other product candidates internationally, we and our collaborators will be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales and distribution of our products.
We entered into a commercial supply agreement with ARx, LLC (“ARx”) pursuant to which ARx has agreed to exclusively manufacture and supply us with all of our worldwide demand of film formulation of Dex to be used for the commercial supply of IGALMI TM and for ongoing clinical trials of our product candidate BXCL501, subject to certain alternative supply provisions.
We entered into a commercial supply agreement with ARx, LLC (“ARx”) pursuant to which ARx has agreed to exclusively manufacture and supply us with all of our worldwide demand of film formulation of Dex to be used for the commercial supply of IGALMI ® and for ongoing clinical trials of our product candidate BXCL501, subject to certain alternative supply provisions.
This will require us to be successful in a range of challenging activities, including completing clinical trials of our product candidates, developing commercial scale manufacturing processes, obtaining marketing approval, manufacturing, marketing, and selling IGALMI TM and any current and future product candidates for which we may obtain marketing approval, and satisfying any post-marketing requirements.
This will require us to be successful in a range of challenging activities, including completing clinical trials of our product candidates, developing commercial scale manufacturing processes, obtaining marketing approval, manufacturing, marketing, and selling IGALMI ® and any current and future product candidates for which we may obtain marketing approval, and satisfying any post-marketing requirements.
If we are unable to enroll patients in our clinical trials, our research and development efforts could be adversely affected. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion.
If we are unable to enroll patients in our clinical trials, our research and development efforts could be adversely affected. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll and evaluate a sufficient number of patients who remain in the study until its conclusion.
Third-party collaborators may assist us in: ● funding research, preclinical development, clinical trials and manufacturing; ● seeking and obtaining regulatory approvals; and ● successfully commercializing IGALMI TM or product candidates. If we are not able to establish collaboration agreements, we may be required to undertake product development and commercialization at our own expense.
Third-party collaborators may assist us in: ● funding research, preclinical development, clinical trials and manufacturing; ● seeking and obtaining regulatory approvals; and ● successfully commercializing IGALMI ® or product candidates. If we are not able to establish collaboration agreements, we may be required to undertake product development and commercialization at our own expense.
We rely on our trademarks, trade names and brand names, such as “IGALMI TM ” and our logo, to distinguish our company and our products from our competitors and the products of our competitors, and have registered or applied to register many of these trademarks in the United States and certain countries outside the United States, however, we have not yet registered all of our trademarks in all of our current and potential markets.
We rely on our trademarks, trade names and brand names, such as “IGALMI ® ” and our logo, to distinguish our company and our products from our competitors and the products of our competitors, and have registered or applied to register many of these trademarks in the United States and certain countries outside the United States, however, we have not yet registered all of our trademarks in all of our current and potential markets.
Likewise, we will rely on third parties, including ARx, to manufacture IGALMI TM and our product candidates and to conduct clinical trials, and similar events as those described in the prior paragraph relating to their business systems, equipment and facilities could also have a material adverse effect on our business.
Likewise, we will rely on third parties, including ARx, to manufacture IGALMI ® and our product candidates and to conduct clinical trials, and similar events as those described in the prior paragraph relating to their business systems, equipment and facilities could also have a material adverse effect on our business.
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; ● 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; 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.
If we are unable to complete the clinical development of or obtain marketing approval for our product candidates or successfully commercialize IGALMI TM and our other product candidates, either alone or with a collaborator, or if we experience significant delays in doing so, our business could be substantially harmed.
If we are unable to complete the clinical development of or obtain marketing approval for our product candidates or successfully commercialize IGALMI ® and our other product candidates, either alone or with a collaborator, or if we experience significant delays in doing so, our business could be substantially harmed.
If we are unable to commercialize IGALMI TM or develop, receive marketing approval for and successfully commercialize BXCL501, BXCL701 and our other product candidates, on our own or with any future collaborator, or experience delays because of any of these factors or otherwise, our business could be substantially harmed.
If we are unable to commercialize IGALMI ® or develop, receive marketing approval for and successfully commercialize BXCL501, BXCL701 and our other product candidates, on our own or with any future collaborator, or experience delays because of any of these factors or otherwise, our business could be substantially harmed.
For example, other formulations of Dex, the active ingredient in IGALMI TM , have been approved for uses beyond those authorized in IGALMI TM approved labeling, such as for use in sedation of surgical patients, and we are continuing to develop BXCL501 for potential use in patients with dementia, MDD, Alzheimer’s disease and other indications.
For example, other formulations of Dex, the active ingredient in IGALMI ® , have been approved for uses beyond those authorized in IGALMI ® approved labeling, such as for use in sedation of surgical patients, and we are continuing to develop BXCL501 for potential use in patients with dementia, MDD, Alzheimer’s disease and other indications.
We plan to continue to commercialize IGALMI TM 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 provider, which is our only approved product to date.
If our intellectual property related to IGALMI TM BXCL501, BXCL502, BXCL701, BXCL702 or any future product candidates is not adequate or if we are not able to successfully enforce our intellectual property rights, the commercial value of our products or product candidates may be adversely affected and we may not be able to compete effectively in our market.
If our intellectual property related to IGALMI ® BXCL501, BXCL502, BXCL701, BXCL702 or any future product candidates is not adequate or if we are not able to successfully enforce our intellectual property rights, the commercial value of our products or product candidates may be adversely affected and we may not be able to compete effectively in our market.
As part of the Company’s Reprioritization, the IGALMI TM 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 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.
We expect to pursue marketing approvals for IGALMI TM , and may pursue marketing approvals for BXCL501, BXCL502, BXCL701, BXCL702 and our other product candidates in Europe and other jurisdictions outside the U.S. with collaborative partners. The time and process required to obtain regulatory approvals and reimbursement in Europe and other jurisdictions may be different from those in the U.S.
We expect to pursue marketing approvals for IGALMI ® , and may pursue marketing approvals for BXCL501, BXCL502, BXCL701, BXCL702 and our other product candidates in Europe and other jurisdictions outside the U.S. with collaborative partners. The time and process required to obtain regulatory approvals and reimbursement in Europe and other jurisdictions may be different from those in the U.S.
Any government-adopted reform measures could adversely impact the pricing of health care products and services in the U.S. or internationally and the amount of reimbursement available from governmental agencies or other third-party payors for IGALMI TM and the product candidates that we develop.
Any government-adopted reform measures could adversely impact the pricing of health care products and services in the U.S. or internationally and the amount of reimbursement available from governmental agencies or other third-party payors for IGALMI ® and the product candidates that we develop.
For example, the FDA-approved label for IGALMI TM 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 ® 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.
Our results of operations could be materially harmed if we are unable to successfully commercialize IGALMI TM for any currently or additionally approved indications or any future product candidates that we may have approved. Our results of operations could be materially harmed if we are unable to accurately forecast customer demand for IGALMI TM and manage our inventory.
Our results of operations could be materially harmed if we are unable to successfully commercialize IGALMI ® for any currently or additionally approved indications or any future product candidates that we may have approved. Our results of operations could be materially harmed if we are unable to accurately forecast customer demand for IGALMI ® and manage our inventory.
Although the FDA has approved IGALMI TM for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder, we will still face extensive and ongoing regulatory requirements and obligations for IGALMI TM and for any product candidates for which we obtain approval.
Although the FDA has approved IGALMI ® for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder, we will still face extensive and ongoing regulatory requirements and obligations for IGALMI ® and for any product candidates for which we obtain approval.
There can be no assurance that IGALMI TM , or BXCL501, BXCL502, BXCL701, BXCL702 and our other product candidates or any other product candidate successfully developed by us, independently or with partners, if approved, will be accepted by physicians, hospitals and other health care facilities.
There can be no assurance that IGALMI ® , or BXCL501, BXCL502, BXCL701, BXCL702 and our other product candidates or any other product candidate successfully developed by us, independently or with partners, if approved, will be accepted by physicians, hospitals and other health care facilities.
Although we obtained FDA approval for IGALMI TM , because our approach is novel, the cost and time needed to develop our product candidates is difficult to predict, and our efforts may not result in the discovery and development of commercially viable medicines.
Although we obtained FDA approval for IGALMI ® , because our approach is novel, the cost and time needed to develop our product candidates is difficult to predict, and our efforts may not result in the discovery and development of commercially viable medicines.
Following our Reprioritization, we may need to rebuild a commercial sales and marketing team if we seek to modify our commercial strategy for IGALMI TM or initiate commercial sales for any product candidate in the future, which will likely require significant cost.
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.
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; ● 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; 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.
The global economy, including credit and financial markets, has recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
In addition, the global economy, including credit and financial markets, has recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
If we are unable to develop satisfactory sales and marketing capabilities, we may not succeed in commercializing IGALMI TM or any product candidate for which we may obtain regulatory approval. We have limited experience in marketing and selling drug products.
If we are unable to develop satisfactory sales and marketing capabilities, we may not succeed in commercializing IGALMI ® or any product candidate for which we may obtain regulatory approval. We have limited experience in marketing and selling drug products.
IGALMI TM and any other products for which we receive regulatory approval may not be considered cost-effective, and coverage and reimbursement may not be available or sufficient to allow us to sell our proposed products on a profitable basis.
IGALMI ® and any other products for which we receive regulatory approval may not be considered cost-effective, and coverage and reimbursement may not be available or sufficient to allow us to sell our proposed products on a profitable basis.
In connection with the Reprioritization, we have significantly reduced the resources devoted to commercialization of IGALMI TM and it is possible that will have adverse consequences on the revenue that we are able to generate from IGALMI TM in the near term.
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.
Further federal, state and foreign government proposals and health care reforms are likely which could limit the prices that can be charged for IGALMI TM and the product candidates that we develop and may further limit our commercial opportunities.
Further federal, state and foreign government proposals and health care reforms are likely which could limit the prices that can be charged for IGALMI ® and the product candidates that we develop and may further limit our commercial opportunities.
If we are unable to identify suitable additional compounds for preclinical and clinical development, our ability to develop product candidates and obtain product revenues in future periods could be compromised, which could result in significant harm to our financial position and adversely impact our stock price; ● compounds found through the Company’s AI platform and BioXcel LLC’s EvolverAI may not demonstrate efficacy, safety or tolerability; ● potential product candidates may, on further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to receive marketing approval and achieve market acceptance; ● competitors may develop alternative therapies that render our potential product candidates non-competitive or less attractive; or ● a potential product candidate may not be capable of being produced at an acceptable cost.
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.
Conversely, if we underestimate customer demand for IGALMI TM , our third-party contract manufacturer may not be able to deliver products to meet our requirements, and this could result in damage to our reputation and customer relationships.
Conversely, if we underestimate customer demand for IGALMI ® , our third-party contract manufacturer may not be able to deliver products to meet our requirements, and this could result in damage to our reputation and customer relationships.
Risks Related to Our Reliance on Third Parties We are substantially dependent on third parties for the manufacture of our clinical supplies of our product candidates and our commercial supplies of IGALMI TM , and we intend to rely on third parties to produce commercial supplies of any other approved product candidate.
Risks Related to Our Reliance on Third Parties We are substantially dependent on third parties for the manufacture of our clinical supplies of our product candidates and our commercial supplies of IGALMI ® , and we intend to rely on third parties to produce commercial supplies of any other approved product candidate.
If we cannot successfully manage the promotion of IGALMI TM or our product candidates, if approved, we could become subject to significant liability, which would materially adversely affect our business and financial condition.
If we cannot successfully manage the promotion of IGALMI ® or our product candidates, if approved, we could become subject to significant liability, which would materially adversely affect our business and financial condition.
Although we obtained FDA approval for IGALMI TM , our products and product candidates may not be accepted by physicians or the medical community in general, and there may be insufficient insurance coverage and reimbursement.
Although we obtained FDA approval for IGALMI ® , our products and product candidates may not be accepted by physicians or the medical community in general, and there may be insufficient insurance coverage and reimbursement.
As a result of the Reprioritization, including our strategic refocus, we may not generate material revenues from IGALMI TM in the near term because our commercial force will be significantly reduced.
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.
If we are not able to recruit and retain qualified personnel, we may be unable to successfully implement the tasks necessary to further develop and commercialize our product candidate and, accordingly, may not achieve our research, development and commercialization goals. 94 Table of Contents We depend on our senior management team, and the loss of one or more of our executive officers or key employees or an inability to attract and retain highly skilled employees could adversely affect our business.
If we are not able to recruit and retain qualified personnel, we may be unable to successfully implement the tasks necessary to further develop and commercialize our product candidate and, accordingly, may not achieve our research, development and commercialization goals. 93 Table of Contents We depend on our senior management team, and the loss of one or more of our executive officers or key employees or an inability to attract and retain highly skilled employees could adversely affect our business.
If the markets for patients that we are targeting for IGALMI TM or our other product candidates are not as significant as we estimate, we may not generate significant revenues from sales of IGALMI TM or such other product candidates, if approved.
If the markets for patients that we are targeting for IGALMI ® or our other product candidates are not as significant as we estimate, we may not generate significant revenues from sales of IGALMI ® or such other product candidates, if approved.
IGALMI TM competes, and BXCL501, BXCL502, BXCL701, BXCL702 and any future product candidates we develop will compete, with a number of products manufactured and marketed by major pharmaceutical and biotechnology companies.
IGALMI ® competes, and BXCL501, BXCL502, BXCL701, BXCL702 and any future product candidates we develop will compete, with a number of products manufactured and marketed by major pharmaceutical and biotechnology companies.
We anticipate that our expenses may increase in the long term as we: • evaluate the development of our product candidates; • conduct preclinical studies and clinical trials for our current product candidates and any future product candidates that we may pursue; • continue to develop, maintain, expand and protect our intellectual property portfolio; • pursue regulatory approvals for our current and future product candidates that successfully complete clinical trials; • develop an appropriate sales, marketing, and distribution infrastructure to commercialize IGALMI TM and any other product candidates for which we may obtain marketing approval; • potentially hire additional clinical, commercial, regulatory, scientific and finance personnel; and • incur additional legal, accounting and other expenses in operating as a public company. 55 Table of Contents To become and remain profitable, we must develop and commercialize more products or product candidates with significant market potential.
We anticipate that our expenses may increase in the long term as we: ● evaluate the development of our product candidates; ● conduct preclinical studies and clinical trials for our current product candidates and any future product candidates that we may pursue; ● continue to develop, maintain, expand and protect our intellectual property portfolio; ● pursue regulatory approvals for our current and future product candidates that successfully complete clinical trials; ● develop an appropriate sales, marketing, and distribution infrastructure to commercialize IGALMI ® and any other product candidates for which we may obtain marketing approval; ● potentially hire additional clinical, commercial, regulatory, scientific and finance personnel; and ● incur additional legal, accounting and other expenses in operating as a public company. 53 Table of Contents To become and remain profitable, we must develop and commercialize more products or product candidates with significant market potential.
Disputes may arise between BioXcel LLC and us in a number of areas relating to our past and ongoing relationships, including: ● intellectual property, technology and business matters, including failure to make required technology transfers and failure to comply with contractual provisions applicable to BioXcel LLC and us; ● labor, tax, employee benefit, indemnification and other matters arising from the separation of BTI from BioXcel LLC; ● distribution and supply obligations; ● employee retention and recruiting; ● business combinations involving us; ● sales or distributions by BioXcel LLC of all or any portion of its ownership interest in us; 89 Table of Contents ● the nature, quality and pricing of services BioXcel LLC has agreed to provide us; and ● business opportunities that may be attractive to both BioXcel LLC and us.
Disputes may arise between BioXcel LLC and us in a number of areas relating to our past and ongoing relationships, including: ● intellectual property, technology and business matters, including failure to make required technology transfers and failure to comply with contractual provisions applicable to BioXcel LLC and us; ● labor, tax, employee benefit, indemnification and other matters arising from the separation of BTI from BioXcel LLC; ● distribution and supply obligations; ● employee retention and recruiting; ● business combinations involving us; ● sales or distributions by BioXcel LLC of all or any portion of its ownership interest in us; ● the nature, quality and pricing of services BioXcel LLC has agreed to provide us; and ● business opportunities that may be attractive to both BioXcel LLC and us.
Although we maintain insurance for our business, the coverage under our policies may not be adequate to compensate us for all losses that may occur. 97 Table of Contents Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition.
Although we maintain insurance for our business, the coverage under our policies may not be adequate to compensate us for all losses that may occur. 96 Table of Contents Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition.
To ensure adequate inventory supply, we must forecast inventory needs and place orders with our suppliers based on our estimates of future demand for IGALMI TM .
To ensure adequate inventory supply, we must forecast inventory needs and place orders with our suppliers based on our estimates of future demand for IGALMI ® .
If such an event as 96 Table of Contents described above were to occur in the future, it may cause interruptions in our operations, delay research and development programs, clinical trials, regulatory activities, manufacturing and quality assurance activities, sales and marketing activities, hiring, training of employees and persons within associated third parties, and other business activities.
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.
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 ● 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; 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.
Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an “investment company” for purposes of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (2) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash 113 Table of Contents items) on an unconsolidated basis.
Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an “investment company” for purposes of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (2) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.
We agreed to negotiate any such collaborative services agreement in good faith and to incorporate reasonable market-based terms, including consideration for BioXcel LLC reflecting a low, single-digit royalty on net sales and reasonable development and commercialization milestone payments, provided that (i) development milestone payments shall not exceed $10 million in the aggregate and not be payable prior to proof of concept in humans and (ii) commercialization milestone payments shall be based on reaching annual net sales levels, be limited to 3% of the applicable net sales level, and not exceed $30 million in the aggregate.
We agreed to negotiate any such collaborative services agreement in good faith and to incorporate reasonable market-based terms, including consideration for BioXcel LLC reflecting a low, single-digit royalty on net sales and reasonable development and commercialization milestone payments, provided that (i) development milestone payments shall not exceed $10 million in the aggregate and not be 87 Table of Contents payable prior to proof of concept in humans and (ii) commercialization milestone payments shall be based on reaching annual net sales levels, be limited to 3% of the applicable net sales level, and not exceed $30 million in the aggregate.
For example, the FDA-approved label for IGALMI TM includes certain warnings and precautions regarding hypotension, orthostatic hypotension, bradycardia, somnolence, and QT interval prolongation.
For example, the FDA-approved label for IGALMI ® includes certain warnings and precautions regarding hypotension, orthostatic hypotension, bradycardia, somnolence, and QT interval prolongation.
For example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act (collectively, the “CCPA”), requires covered businesses that process the personal information of California residents to, 98 Table of Contents among other things: provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information; receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information, and enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf.
For example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act (collectively, the “CCPA”), requires covered businesses that process the personal information of California residents to, among other things: provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information; receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information, and enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf.
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; 79 Table of Contents ● 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 Reprioritization.
In its preliminary responses, the FDA reiterated its prior comments that we generate additional efficacy data, including repeat- 61 Table of Contents dose efficacy data, to support an sNDA submission, as the FDA indicated that our proposed efficacy database, which currently includes the 70 patients who have been treated with 60 mcg of BXCL501 in TRANQUILITY I and TRANQUILITY II, would not contain substantial evidence of effectiveness absent additional data.
In its preliminary responses, the FDA reiterated its prior comments that we generate additional efficacy data, including repeat-dose efficacy data, to support an sNDA submission, as the FDA indicated that our proposed efficacy database, which currently includes the 70 patients who have been treated with 60 mcg of BXCL501 in TRANQUILITY I and TRANQUILITY II, would not contain substantial evidence of effectiveness absent additional data.
Under the Services Agreement, we have an option, exercisable until December 31, 2024, to enter into a separate collaborative services agreement with BioXcel LLC pursuant to which BioXcel LLC shall perform product identification and related services for us utilizing its EvolverAI.
Under the Services Agreement, we had an option, exercisable until December 31, 2024, to enter into a separate collaborative services agreement with BioXcel LLC pursuant to which BioXcel LLC shall perform product identification and related services for us utilizing its EvolverAI.
Following the initial action, Plaintiffs Maria Vomvolakis (3:24-cv-3) and Kelly Fowler (3:24-cv-203) each filed separate stockholder derivative complaints in the District of Connecticut raising similar claims as Panancherry and Bastress, including business torts and violations of the Securities Exchange Act of 1934. The cases have been consolidated under the caption In re BioXcel Therapeutics, Inc. Stockholder Derivative Litigation, 3:23-cv-1554 (D.
Following the initial action, Plaintiffs Maria Vomvolakis (3:24-cv-3) and Kelly Fowler (3:24-cv-203) each filed separate stockholder derivative complaints in the District of Connecticut raising similar claims as Panancherry and Bastress, including business torts and violations of the Exchange Act. The cases have been consolidated under the caption In re BioXcel Therapeutics, Inc. Stockholder Derivative Litigation , 3:23-cv-1554 (D. Conn.).
In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates. We depend on enrollment of patients in our clinical trials to continue development of our product candidates.
In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates. We depend on enrollment and evaluation of patients in our clinical trials to continue development of our product candidates.
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.
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.
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.
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.
The ACA also included changes to the Public Health Service’s 340B drug pricing program (the “340B program”) including expansion of the list of eligible covered entities that may purchase drugs under the program. Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S.
The ACA also included changes to the Public Health Service’s 340B drug pricing program (the “340B program”) including expansion of the list of eligible covered entities that may purchase drugs under the program. 83 Table of Contents Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S.
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, 2023 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, 2024 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 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 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.
This first right to negotiate and exclusivity period expired on March 12, 2023, and there is no assurance that we will extend the terms of the agreement. We are continuing to assess our ongoing business needs. 88 Table of Contents On September 19, 2023, the Company, Krishnan Nandabalan, Ph.D., InveniAI LLC (“Inveni”) and Invea Therapeutics, Inc.
This first right to negotiate and exclusivity period expired on March 12, 2023, and there is no assurance that we will extend the terms of the agreement. We are continuing to assess our ongoing business needs. On September 19, 2023, the Company, Krishnan Nandabalan, Ph.D., InveniAI LLC (“Inveni”) and Invea Therapeutics, Inc.
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.
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.
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.
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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur 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. 117 Table of Contents Our cybersecurity risk management program includes: ● risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise information technology environment; ● a management team responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; ● the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; ● cybersecurity awareness training of our employees, incident response personnel, and senior management; ● a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and ● a third-party risk management process for service providers, suppliers, and vendors.
Biggest changeOur cybersecurity risk management program includes: ● risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise information technology environment; ● a management team responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; ● the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; ● cybersecurity awareness training of our employees, incident response personnel, and senior management; ● a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and ● a third-party risk management process for service providers, suppliers, and vendors.
This 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.
This 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.
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. ​ 118 Table of Contents
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. ​
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.
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.
Added
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 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn addition, on February 12, 2024, we became aware that the SEC has initiated an investigation involving the Company and is seeking the production of certain documents. We are fully cooperating with the SEC’s investigation.
Biggest changeIn addition, in February 2024, we became aware that the SEC had initiated a formal investigation involving the Company and certain of its directors and officers.
Item 3. Legal Proceedings From time to time, we may be subject to litigation and claims arising in the ordinary course of business. For information about our legal proceedings, see Note 18 to our audited financial statements included elsewhere in this Annual Report on Form 10-K which is information is incorporation herein by reference.
Item 3. Legal Proceedings From time to time, we may be subject to litigation and claims arising in the ordinary course of business. For information about our legal proceedings, see Note 18 to our audited financial statements included elsewhere in this Annual Report on Form 10-K which information is incorporated herein by reference.
Added
This formal investigation relates 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.
Added
We are cooperating fully with the investigation including producing documents, and current and former officers and employees of the Company have testified before the SEC.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUnregistered Sales of Securities There were no unregistered sales of equity securities by the Company during the three months ended December 31, 2023 except as reported in the Company’s Current Report on Form 8-K filed on December 6, 2023. 119 Table of Contents Issuer Purchases of Equity Securities None.
Biggest changeUnregistered 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.
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.
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.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on The Nasdaq Capital Market ® under the symbol “BTAI.” Stockholders As of March 21, 2024, there were 12 stockholders of record of our common stock.
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 7. Management's Discussion & Analysis

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

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Biggest changeSelling, General and Administrative Expense Selling, general and administrative expenses for the years ended December 31, 2023 and 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2023 2022 Change % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel and related costs ​ $ 27,171 ​ $ 20,690 ​ $ 6,481 ​ ​ 31 % Non-cash stock-based compensation ​ 12,290 ​ ​ 12,779 ​ (489) ​ ​ (4) % Professional fees ​ 22,310 ​ ​ 14,313 ​ 7,997 ​ ​ 56 % Commercial and marketing ​ ​ 12,485 ​ ​ 13,006 ​ ​ (521) ​ ​ (4) % Insurance ​ ​ 1,743 ​ ​ 2,370 ​ ​ (627) ​ ​ (26) % Travel and other costs ​ 7,414 ​ ​ 5,603 ​ 1,811 ​ ​ 32 % Total selling, general and administrative expenses ​ $ 83,413 ​ $ 68,761 ​ $ 14,652 ​ ​ 21 % ​ 127 Table of Contents The increase of $14,652 for the year ended December 31, 2023, relative to the year ended December 31, 2022 is primarily attributable to: ● Increased professional fees, primarily related to higher legal costs for the investigation of our TRANQUILITY II study, the write-off of previously deferred costs related to the initial public offering of OnkosXcel, and higher corporate operating support levels partially offset by reductions in consulting and recruiting fees. ● An increase in personnel costs due to our efforts to expand our functional teams, particularly in sales, to support commercialization of IGALMI TM in the U.S., prior to the Reprioritization. ● An increase in travel and other costs as a result of the commercial launch of IGALMI TM . ● Decreased non-cash stock-based compensation costs due to increased award forfeitures in 2023 resulting from the Reprioritization and decreased insurance costs as a result of completed clinical activities. ● Decreased commercial and marketing costs due to higher spend levels in 2022 resulting from the commercial launch of IGALMI TM .
Biggest changeFollowing 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.
Pursuant to the Credit Agreement, the Lenders originally agreed to provide us up to $135,000 in senior secured term loans to us. On April 28, 2022, we borrowed the first $70,000 tranche of loans under the Credit Agreement.
Pursuant to the Credit Agreement, the Lenders originally agreed to provide up to $135,000 in senior secured term loans to us. On April 28, 2022, we borrowed the first $70,000 tranche of loans under the Credit Agreement.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2023, was $26,522 and was primarily attributable to net proceeds of $26,221 from the sale of common stock under the Sale Agreement with Jefferies and net proceeds of $508 from the exercise of stock options.
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.
Our most advanced immuno-oncology asset, BXCL701, is an investigational oral innate immune activator being developed by OnkosXcel Therapeutics as a potential therapy for the treatment of aggressive forms of prostate cancer, pancreatic cancer, and other solid and liquid tumors. ​ On April 6, 2022, we announced that the FDA approved IGALMI TM (dexmedetomidine) sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults.
Our 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.
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%; ● 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%; 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.
Item 1A., “Risk Factors” elsewhere in this Annual Report on Form 10-K. Sources of Liquidity We have primarily focused our efforts on raising capital and building the products in our pipeline, and, although we generate revenue from sales of IGALMI TM , we do not expect to generate positive cash flows from operations in the near term.
Item 1A., “Risk Factors” elsewhere in this Annual Report on Form 10-K. Sources of Liquidity We have primarily focused our efforts on raising capital and building the products in our pipeline, and, although we generate revenue from sales of IGALMI ® , we do not expect to generate positive cash flows from operations in the near term.
We entered into a commercial supply agreement with ARx, LLC (“ARx”) pursuant to which ARx has agreed to exclusively manufacture and supply us with all of our worldwide demand of film formulation of Dex to be used for the commercial supply of IGALMI TM and for ongoing clinical trials of our product candidate BXCL501, subject to certain alternative supply provisions.
We entered into a commercial supply agreement with ARx, LLC (“ARx”) pursuant to which ARx has agreed to exclusively manufacture and supply us with all of our worldwide demand of film formulation of Dex to be used for the commercial supply of IGALMI ® and for ongoing clinical trials of our product candidate BXCL501, subject to certain alternative supply provisions.
Operating Capital and Capital Expenditure Requirements We expect to continue to incur significant and increasing operating losses at least for the next several years as we commercialize IGALMI TM and as we expand our clinical trials of and seek marketing approval focused on BXCL501 while pursuing development of additional product candidates for BXCL502, BXCL701 and BXCL702.
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.
Pursuant to the RIFA, the Purchasers agreed to provide us with up to $120,000 in financing for our near-term commercial activities of IGALMI TM , development and commercialization of BXCL501 and other general corporate purposes. On July 8, 2022, we drew down the first tranche of $30,000 under the RIFA.
Pursuant to the RIFA, the Purchasers agreed to provide us with up to $120,000 in financing for our near-term commercial activities of IGALMI ® , development and commercialization of BXCL501 and other general corporate purposes. On July 8, 2022, we drew down the first tranche of $30,000 under the RIFA.
Other (income) expense, net is primarily associated with changes in fair value of derivative financial instruments for the period, which relate to instruments associated with the Credit Agreement. Inflation Inflation generally affects us by increasing our cost of labor and clinical trial costs.
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.
We anticipate that our expenses will increase substantially as we: ● continue our clinical development of our product candidates; 133 Table of Contents ● conduct additional research and development with our product candidates; ● seek to identify, acquire, license, develop and commercialize product candidates; ● integrate acquired technologies into a comprehensive regulatory and product development strategy; ● maintain, expand and protect our intellectual property portfolio; ● hire scientific, clinical, quality control and administrative personnel and utilize professional services, including consultants, lawyers, and accountants; ● add operational, financial and management information systems and personnel, including personnel to support our drug development and commercial efforts; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; ● fully develop a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize IGALMI TM and any product candidates for which we may obtain regulatory approval; and ● continue to operate as a public company.
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 believe that our existing cash and cash equivalents as of December 31, 2023 will not be sufficient to enable us to fund operating expenses and capital expenditure requirements for at least the next 12 months from the date of the issuance of the consolidated financial statements included in this Annual Report on Form 10-K, including funding our ongoing research and development and commercialization efforts.
We believe that our existing cash and cash equivalents as of December 31, 2024 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.
On November 13, 2023, we, the Lenders and OFA entered into a Waiver and First Amendment to Credit Agreement and Guaranty (the “First Amendment”) that provided for, among other things, a waiver and a modification to the covenant in the Credit Agreement regarding investments in OnkosXcel, pursuant to which we are permitted to invest up to a maximum of $30,000 at any time outstanding in OnkosXcel, increased from the $25,000 at any time outstanding.
On November 13, 2023, we, the Lenders and OFA entered into a Waiver and First Amendment to Credit Agreement and Guaranty (the “First Amendment”) that provided for, among other things, a waiver and a modification to the covenant in the Credit Agreement regarding investments in OnkosXcel, pursuant to which we were permitted to invest up to a maximum of $30,000 at any time outstanding in OnkosXcel, increased from the $25,000 at any time outstanding.
The majority of the Company’s service providers invoice BTI monthly for services performed or when contractual milestones are met. BTI management makes estimates of prepaid and/or accrued expenses, including research and development expenses, as of each reporting date in the 135 Table of Contents Company’s consolidated financial statements based on facts and circumstances known to management at that time.
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 distribution agreement can also be terminated by us without cause, subject to payment of agreed termination fees. 134 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 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.
In addition, the Fourth Amendment provides that if we have not, after the Effective Date and on or before September 30, 2024, received at least $40,000 in gross proceeds from the issuance of our common stock, warrants and/or pre-funded warrants, and/or cash and/or non-cash consideration (measured at fair market value, as determined by the Administrative Agent in its sole discretion) from partnering transactions entered into after the Effective Date, the “Minimum Liquidity Amount” (as defined in the Credit Agreement) that we are required to maintain at all times will increase to $25,000 from $15,000, unless and until we have received, after the Effective Date and on or before November 30, 2024, at least $50,000 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 in its sole discretion) from partnering transactions entered into after the Effective Date.
In addition, the Fourth Amendment provided that if we had not, after the Effective Date and on or before September 30, 2024, received at least $40,000 in gross proceeds from the issuance of our common stock, warrants and/or pre-funded warrants, and/or cash and/or non-cash consideration (measured at fair market value, as determined by the Administrative Agent in its sole discretion) from partnering transactions entered into after the effective date of the Fourth Amendment, the “Minimum Liquidity Amount” (as defined in the Credit Agreement) that we are required to maintain at all times will increase to $25,000 from $15,000, unless and until we had received, after the effective date of the Fourth Amendment and on or before November 30, 2024, at least $50,000 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 in its sole discretion) from partnering transactions entered into after the effective date of the Fourth Amendment.
IGALMI TM is approved to be self-administrated by patients under the supervision of a health care provider.
IGALMI ® is approved to be self-administrated by patients under the supervision of a health care provider.
The Fourth Amendment includes covenants that we will receive, (i) after the Effective Date 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 (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 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.
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.
As part of this strategy, our Board of Directors approved a reduction of approximately 60% of our workforce. Annualized operating expenses are expected to be reduced by approximately $80,000. As of December 31, 2023, the Reprioritization was substantially completed. ​ As a result of the Reprioritization, the Company recorded restructuring costs of $4,163 in the year ended December 31, 2023.
As part of this strategy, our Board of Directors approved a reduction of approximately 60% of our workforce. Annualized operating expenses were expected to be reduced by approximately $80,000. The Reprioritization was substantially completed by the end of 2023. ​ As a result of the Reprioritization, the Company recorded restructuring costs of $4,163 in the year ended December 31, 2023.
Payments to BioXcel LLC are also included in research and 124 Table of Contents development expenses. Costs associated with third parties that provide non-clinical services such as toxicology, pharmacology, research and discovery, biomarker studies and similar services are included in the professional fees category of research and development expenses. We expense research and development costs as incurred.
Payments to BioXcel LLC are also included in research and development expenses. Costs associated with third parties that provide non-clinical services such as toxicology, pharmacology, research and discovery, biomarker studies and similar services are included in the professional fees category of research and development expenses. We expense research and development costs as incurred.
Based on the feedback received from the FDA to date, we plan to move forward to evaluate at-home use of the 120 mcg dose of BXCL501, with safety as the primary objective and efficacy measures as exploratory endpoints to support continued efficacy in the at-home setting as recommended by the FDA in the November 8, 2023 meeting, for the acute treatment of agitation in bipolar disorders or schizophrenia.
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.
On July 6, 2022, we announced that IGALMI TM was commercially available in doses of 120 and 180 microgram (“mcg). ​ We are continuing to develop BXCL501 for the acute treatment of agitation associated with bipolar disorders or schizophrenia in the at-home setting and for the acute treatment of agitation (non-daily) associated with dementia due to probable Alzheimer’s disease in the at-home setting and in care facilities.
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.
The Company has an option to renew the HQ Lease for one additional five-year term. Payments under the HQ Lease are fixed. The Company has approximately $837 of payments remaining under the HQ Lease.
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.
See “Risks Related to Financial Position and Need for Additional Capital — We will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts or otherwise seek strategic alternatives. ” in Part I.
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.
Following the Second Amendment, we must also comply with certain covenants under the Credit Agreement, including a financial covenant that requires we maintain a minimum cash liquidity amount of $15,000 (or higher upon certain events) and a modified minimum revenue requirement measured on a quarterly basis based on the revenue attributable to BXCL501 for the six consecutive month period ending on the last day of the relevant quarter (the “Revenue Covenant”), subject to cure payments of not less than $1,000 if we fail to meet the minimum revenue requirement.
Following the Second Amendment, we were required to comply with certain covenants under the Credit Agreement, including a financial covenant that requires we maintain a minimum cash liquidity amount of $15,000 (or higher upon certain events) and a modified minimum revenue requirement measured on a quarterly basis based on the revenue attributable to BXCL501 for the six consecutive month period ending on the last day of the relevant quarter (the “Revenue Covenant”), subject to cure payments of not less than $1,000 if we failed to meet the minimum revenue requirement.
In connection with the Fourth Amendment, on the Effective Date, we granted new warrants to the Lenders to purchase up to 100 shares of our common stock (the “2024 Warrant Shares”) at an exercise price of $3.0723 per share (the “2024 Warrants”), which represents a 10% premium over the arithmetic average of the volume-weighted average 131 Table of Contents price of our common stock on the Nasdaq Capital Market during the 30 trading days preceding the Effective Date.
In connection with the Fourth Amendment, on the effective date of the Fourth Amendment, we granted new warrants to the Lenders to purchase up to 6 shares of our common stock (the “2024 Warrant Shares”) at an exercise price of $49.1568 per share (the “2024 Warrants”), which represents a 10% premium over the arithmetic average of the volume-weighted average price of our common stock on the Nasdaq Capital Market during the 30 trading days preceding the Effective Date.
Cost of Goods Sold Cost of goods sold for the years ended December 31, 2023 and 2022, were $1,260 and $20, respectively, which primarily related to the costs to produce, package and deliver IGALMI TM to customers, as well as costs related to excess or obsolete inventory.
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.
The expense was partially offset by interest income earned on cash and cash equivalents that were held primarily in short-term money market funds. Interest income increased to $5,649 for the year ended December 31, 2023 compared to $2,528 for the year ended December 31, 2022, due to higher average cash balances during the year.
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.
In connection with the Credit Agreement, we granted to the Lenders (i) warrants to purchase up to 278 shares of our common stock (the “Original Warrants”), (ii) rights to purchase up to 129 Table of Contents $5,000 of our common stock and (iii) warrants to purchase up to 175 individual ownership units (i.e., not in thousands) in OnkosXcel (the “OnkosXcel Warrants”).
In connection with the Credit Agreement, we granted to the Lenders (i) warrants to purchase up to 17 shares of our common stock (the “Closing Date Warrants”), (ii) rights to purchase up to $5,000 of our common stock and (iii) warrants to purchase up to 175 individual ownership units (i.e., not in thousands) in OnkosXcel (the “OnkosXcel Warrants”).
We incurred losses of approximately $179,053 and $165,757 for the years ended December 31, 2023 and 2022, respectively. We will need to generate significant product revenues to achieve profitability.
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.
Basis of Presentation The Company’s consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Components of Our Results of Operations Product Revenue, Net Revenue relates to sales of IGALMI TM and reflect limited market access since commercial launch in July 2022. The revenues are net of rebates, chargebacks, discounts, and other adjustments.
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.
Our history of significant losses, negative cash flows from operations, potential near-term increased covenant-driven amortization payments or full repayment obligations under our Credit Agreement, the regulatory event of default triggers under the Credit Agreement, other funding requirement covenants under the Credit Agreement, limited liquidity resources currently on hand, and dependence on our ability to obtain additional financing to fund our operations after the current resources are exhausted, about which there can be no certainty, have resulted in management’s assessment that there is substantial doubt about our ability to continue as a going concern for a period of at least 12 months from the issuance date of the financial statements included in this Annual Report on Form 10-K. 128 Table of Contents Successful completion of the Company’s development programs and, ultimately, the attainment of profitable operations are dependent upon future events, including obtaining adequate financing to support the Company’s cost structure and operating plan.
Our history of significant losses, negative cash flows from operations, potential near-term increased covenant-driven amortization payments or full repayment obligations under our Credit Agreement, the regulatory event of default triggers under the Credit Agreement, other funding requirement covenants under the Credit Agreement, limited liquidity resources currently on hand, and dependence on our ability to obtain additional financing to fund our operations after the current resources are exhausted, about which there can be no certainty, have resulted in management’s assessment that there is substantial doubt about our ability to continue as a going concern for a period of at least 12 months from the issuance date of the financial statements included in this Annual Report on Form 10-K.
Pursuant to the amendment and restatement of the Original Warrants, dated December 5, 2023 (the “Amended and Restated Original Warrants”), the exercise price of the Original Warrants has been reduced to $3.6452 per share, which represents the 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 the Second Amendment Effective Date.
Pursuant to the amendment and restatement of the Closing Date Warrants, dated December 5, 2023 (the “Amended and Restated Closing Date Warrants”), the exercise price of the Closing Date Warrants was reduced to $58.3232 per share, which represented the 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 the Second Amendment Effective Date.
On the “Effective Date, we entered into the Fourth Amendment to the Credit Agreement (“the Fourth Amendment”), pursuant to which the Lenders waived the covenant that we not receive a report and opinion from our independent registered public accounting firm that contains a “going concern” or similar qualification with respect to our financial statements for the year ended December 31, 2023.
On March 20, 2024, we entered into the Fourth Amendment to the Credit Agreement (“the Fourth Amendment”), pursuant to which the Lenders waived the Credit Agreement’s covenant that the report and opinion the Company received from its independent registered public accounting firm with respect to the financial statements for the year ending December 31, 2023 not contain a “going concern” or similar qualification.
Restructuring Costs Restructuring costs were $4,163 for the year ended December 31, 2023. See “Components of Our Results of Operations - Restructuring Costs” above for a discussion of the Company’s Reprioritization and restructuring activities. There were no restructuring costs for the year ended December 31, 2022.
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.
Other Expense (Income) Other (income) expense primarily consists of interest costs associated with the Credit Agreement the Company entered into in April 2022, changes in fair value of derivative financial instruments, and interest income earned on cash and cash equivalents that were comprised primarily of money market funds.
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.
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 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.
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.
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”).
Our research and development costs by program for the years ended December 31, 2023 and 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, ​ ​ 2023 ​ 2022 Direct external costs ​ ​ ​ ​ ​ ​ BXCL501 ​ $ 46,661 ​ $ 52,044 BXCL701 ​ 7,050 ​ ​ 9,631 Other research and development programs ​ 4,142 ​ ​ 2,687 Total direct external costs ​ $ 57,853 ​ $ 64,362 Internal personnel costs ​ ​ 22,675 ​ ​ 22,831 Sub-total direct costs ​ $ 80,528 ​ $ 87,193 Indirect costs and overhead ​ ​ 3,798 ​ ​ 4,046 Total research and development expenses ​ $ 84,326 ​ $ 91,239 ​ Selling, General and Administrative Selling, general and administrative expenses primarily consist of salaries, benefits and non-cash stock-based compensation for our sales, executive and administrative personnel.
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.
Investing Activities Net cash used in investing activities for the year ended December 31, 2023, was $20 and was primarily attributable to leasehold improvements. Net cash used in investing activities was $139 for the year ended December 31, 2022, and was primarily attributable to the purchase of equipment and leasehold improvements.
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.
See Note 9, Debt and Credit Facilities and Note 19, Subsequent Events in the notes to consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information relating to the Credit Agreement and RIFA, including applicable interest rates, payment obligations and certain restrictive and financial covenants thereunder.
The OnkosXcel Warrants are transferable with approval from BTI, which cannot be unreasonably withheld, expire on April 19, 2029, and may be net exercised at the holder’s election. ​ See Note 9, Debt and Credit Facilities and Note 20, Subsequent Events in the notes to consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information relating to the Credit Agreement and RIFA, including applicable interest rates, payment obligations and certain restrictive and financial covenants thereunder.
Other (Income) Expense Interest expense increased to $13,314 for the year ended December 31, 2023 compared to $8,213 for the year ended December 31, 2022, due to higher average debt balances during the year due to borrowings under the Credit Agreement and, prior to its termination, the RIFA that the Company put in place in April 2022.
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.
Liquidity and Capital Resources As of December 31, 2023, we had cash and cash equivalents of $65,221, working capital of $44,876 and stockholders’ deficit of $56,508. Net cash used in operating activities was $155,006 and $135,341 for the years ended December 31, 2023 and 2022, respectively.
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.
Net cash used in operating activities was $135,341 for the year ended December 31, 2022, and was primarily attributable to our $165,757 net loss, a $1,985 increase in inventory of IGALMI TM and a $3,905 increase in prepaid expenses, other current assets and other assets, partially offset by $17,337 in non-cash stock-based compensation, a $4,611 increase in accrued and payment in kind interest, and $13,030 increase in accounts payable, accrued expenses, due to related parties and other current liabilities.
Net cash used in operating activities for the year ended December 31, 2023 was $155,006 and was primarily attributable to our net loss of $179,053 and a $3,219 decrease in accounts payable, accrued expenses, due to related parties, and other current liabilities, partially offset by a $2,888 decrease in prepaid expenses, other current assets and other assets, $18,614 in non-cash stock-based compensation, and a $4,369 increase in accrued and payable in kind interest.
Selling, general and administrative expenses also include legal expenses to pursue patent protection of our intellectual property and other corporate matters, professional fees for audit and tax services and insurance charges. We may also incur increased costs to comply with corporate governance, internal controls, investor relations and disclosures and similar requirements applicable to public companies.
Selling, general and administrative expenses also include legal expenses to pursue patent protection of our intellectual property and other corporate matters, professional fees for audit and tax services and insurance charges.
In particular, after giving effect to the Reprioritization, we believe that our cash and cash equivalents of $65.2 million as of December 31, 2023 will allow us to fund our operations and meet our liquidity requirements into mid-2024, assuming we are able to comply with the covenants under our Credit Agreement.
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.
As of December 31, 2023, we had aggregate principal indebtedness of $102,680 outstanding under the Credit Agreement. In connection with the closing of the Second Amendment, we amended and restated the Original Warrants granted to the Lenders on April 19, 2022 to purchase up to 278 shares of the Company’s common stock at an exercise price of $20.04 per share.
In connection with the closing of the Second Amendment, we amended and restated the Closing Date Warrants granted to the Lenders on April 19, 2022 to purchase up to 17 shares of the Company’s common stock at an exercise price of $320.64 per share.
During the fourth quarter of 2022, we began contracting directly with intermediaries such as GPOs. Operating Costs and Expenses Cost of Goods Sold Cost of goods sold primarily relates to the costs of producing, packaging, and delivering our product to customers as well as costs related to excess or obsolete inventory.
Operating Costs and Expenses Cost of Goods Sold Cost of goods sold primarily relates to the costs of producing, packaging, and delivering our product to customers as well as costs related to excess or obsolete inventory. Research and Development Our research and development expenses reflect costs associated with the identification of our preclinical and clinical product candidates.
As of December 31, 2023, we were in compliance with all restrictive and financial covenants under the Credit Agreement, other than the “going concern” covenant described above as to which the Lenders have waived compliance.
As of December 31, 2024, we were in compliance with all restrictive and financial covenants under the Credit Agreement.
As described further below, we have recently deprioritized the development of BXCL501 for certain indications, including development of BXCL501 as a potential adjunctive treatment for major depressive disorder (“MDD”), as well as our BXCL701 program except as noted in Part, Item 1, “Business” under the heading “Immuno-Oncology.” ​ For our TRANQUILITY program, we have conducted clinical studies evaluating BXCL501 for the acute treatment of agitation associated with mild to moderate dementia in patients with probable Alzheimer’s disease, who reside in assisted living facilities (“ALFs”) and residential care settings and who required minimal assistance with activities of daily living.
See further discussion in “Our Neuroscience Clinical Programs” . ​ For our TRANQUILITY program, we have conducted clinical studies evaluating BXCL501 for the acute treatment of agitation associated with mild to moderate dementia in patients with probable Alzheimer’s disease, who reside in assisted living facilities (“ALFs”) and residential care settings and who required minimal assistance with activities of daily living.
In addition, the Company granted new warrants to the Lenders to purchase up to 70 shares of the Company’s common stock (the “2023 Warrant Shares”) at an exercise price of $3.6452 per share (the “2023 Warrants”). The Original Warrants and the 2023 Warrants will expire on April 19, 2029 and may be net exercised at the holder’s election.
In addition, the Company granted new warrants to the Lenders to purchase up to 4 shares of the Company’s common stock (the “2023 Warrant Shares”) at an exercise price of $58.3232 per share (the “2023 Warrants”).
Contractual Obligations and Commitments In April 2022, the Company signed a commercial supply agreement that requires minimum annual payments for the first three years of the agreement that in aggregate total $10,000 for the three-year period and the minimum commitment for 2024 is $5,000.
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 Company has met the minimum requirements for the first 3 years ending in 2024.
During the year ended December 31, 2023, we sold 1,408 shares under the Sale Agreement for net proceeds of $26,221. We did not sell any shares, and no proceeds were received under the Sale Agreement during the year ended December 31, 2022.
During the year ended December 31, 2024, we sold 240 shares under the Sale Agreement for net proceeds of $7,451. During the year ended December 31, 2023, we sold 88 shares under the Sale Agreement for net proceeds of $26,221.
Pursuant to the Second Amended and Restated Registration Rights Agreement, we agreed to register the 2024 Warrant Shares for resale. As part of entering into the Credit Agreement, OnkosXcel, a wholly owned subsidiary of BTI, granted the OnkosXcel Warrants to the Lenders to purchase 175 individual limited liability company units.
The maximum shares of our common stock issuable under the Original Warrants and the New Warrants is 366. ​ As part of entering into the Credit Agreement, OnkosXcel, a wholly owned subsidiary of BTI, granted the OnkosXcel Warrants to the Lenders to purchase 175 individual limited liability company units.
We entered into a registration rights agreement with the Lenders (as amended and restated in connection with the Second Amendment, the “Amended and Restated Registration Rights Agreement”) and filed registration statements on Form S-3 to register the shares issuable upon exercise of the Original Warrants, 2023 Warrants and, if issued, the shares related to the Equity Investment Right, for resale.
Pursuant to the Amended and Restated Registration Rights Agreement, we have filed registration statements on Form S-3 to register the shares issuable upon exercise of the Original Warrants and the New Warrants for resale.
From January 1, 2024 through March 19, 2024, we sold 647 shares under the Sale Agreement for gross proceeds of $1,743 and received proceeds of $1,691, net of issuance costs of $52. ​ 132 Table of Contents Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2023 2022 Cash (used in) provided by: ​ ​ ​ ​ ​ ​ Operating activities ​ $ (155,006) ​ $ (135,341) Investing activities ​ $ (20) ​ $ (139) Financing activities ​ $ 26,522 ​ $ 96,237 ​ Operating Activities Net cash used in operating activities for the year ended December 31, 2023 was $155,006 and was primarily attributable to our net loss of $179,053 and a $3,219 decrease in accounts payable, accrued expenses, due to related parties, and other current liabilities, partially offset by a $2,888 decrease in prepaid expenses, other current assets and other assets, $18,614 in non-cash stock-based compensation, and a $4,369 increase in accrued and payable in kind interest.
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.
The increase in Cost of goods sold for the year ended December 31, 2023 is primarily the result of increased sales and the increase in the reserve for excess and obsolete inventory. 126 Table of Contents Research and Development Expense Research and development expenses for the years ended December 31, 2023 and 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2023 2022 Change % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel and related costs ​ $ 16,351 ​ $ 18,272 ​ $ (1,921) ​ ​ (11) % Non-cash stock-based compensation ​ 6,324 ​ 4,558 ​ 1,766 ​ ​ 39 % Professional fees ​ 14,590 ​ 14,342 ​ 248 ​ ​ 2 % Clinical trials expense ​ 35,094 ​ 40,630 ​ (5,536) ​ ​ (14) % Chemical, manufacturing and controls cost ​ 8,687 ​ 10,144 ​ (1,457) ​ ​ (14) % Travel and other costs ​ 3,280 ​ 3,293 ​ (13) ​ ​ (0) % Total research and development expenses ​ $ 84,326 ​ $ 91,239 ​ $ (6,913) ​ ​ (8) % ​ The decrease of $6,913 for the year ended December 31, 2023, compared to the year ended December 31, 2022 is primarily attributable to the following: ● A decrease in clinical trials expense as a result of reduced costs associated with the wind down of the SERENITY III study to evaluate BXCL501 for at home use for the acute treatment of agitation related to schizophrenia and bipolar disorders, as well as the TRANQUILITY II study of BXCL501 for the potential treatment of agitation in patients with Alzheimer’s disease. ● A decrease in personnel and related costs during the fourth quarter of 2023 as a result of the Company’s Reprioritization. ● A decrease in Chemical, manufacturing and controls (“CMC”) costs due to lower CMC costs related to decreased clinical trial activities. ● An increase in non-cash stock-based compensation due to higher award forfeitures in 2022.
Research and Development 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.
Based on these steps to date, we believe that there have been no further instances of misconduct or fraud or other findings that adversely impact the data integrity or reliability of the eligibility, safety, and efficacy data obtained at the clinical trial site in question. ​ We had previously been conducting the TRANQUILITY III clinical trial, which was designed to evaluate the potential for BXCL501 to treat acute agitation in patients with moderate to severe dementia associated with probable Alzheimer’s disease living in nursing homes and who require moderate to full assistance with activities of daily living. 121 Table of Contents We paused enrollment in TRANQUILITY III due to the much higher-than-expected background frequency of episodes of agitation experienced by the first several patients enrolled in the study. ​ We held Type B/Breakthrough Therapy Designation meetings with the FDA on October 11, 2023 and on February 20, 2024 to obtain additional feedback on our plans for further development of BXCL501 for the treatment of agitation associated with dementia in patients with probable Alzheimer’s disease.
We paused enrollment in TRANQUILITY III due to the much higher-than-expected background frequency of episodes of agitation experienced by the first several patients enrolled in the study. ​ We held Type B/Breakthrough Therapy Designation meetings with the FDA on October 11, 2023 and on February 20, 2024 to obtain additional feedback on our plans for further development of BXCL501 for the treatment of agitation associated with dementia in patients with probable Alzheimer’s disease.
In addition, pursuant to the Credit Agreement, the Lenders have 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”).
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”).
With our Reprioritization substantially completed as of December 31, 2023, we expect that our selling, general and administrative expenses will decline due to the restructured commercialization plan of IGALMI TM and reduced personnel costs. However, we may also experience increased selling, general and administrative expenses due to higher fees for outside consultants, attorneys, and accountants.
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”).
The OnkosXcel Warrants are transferable with approval from BTI, which cannot be unreasonably withheld, expire on April 19, 2029, and may be net exercised at the holder’s election.
The Amended and Restated Closing Date Warrants and the 2023 Warrants will expire on April 19, 2029 and may be net exercised at the holder’s election.
For additional information, see below under “Liquidity and Capital Resources—Sources of Liquidity—Financing Agreements.” ​ March 2024 Waiver ​ On March 20, 2024 (the “Effective Date”), we entered into a Fourth Amendment (the “Fourth Amendment”) to the Credit Agreement pursuant to which the Lenders waived the covenant that we not receive a report and opinion from our independent registered public accounting firm that contains a “going concern” or similar qualification with respect to our financial statements for the year ended December 31, 2023.
On February 12, 2024 (the “Third Amendment Effective Date”), we entered into the Third Amendment to Credit Agreement and Guaranty (the “Third Amendment”), pursuant to which the Lenders agreed to waive the covenant that we shall not receive a report and opinion from our independent auditors that contains a “going concern” or like qualification or exception or emphasis of matter of going concern footnote with respect to our financial statements for the fiscal year ended December 31, 2023 and, as a result, such event shall not be an event of default.
In addition, we plan to discuss the details of the requirement for long-term safety data at a future meeting with the FDA. ​ In our SERENITY program, we are evaluating BXCL501 for use in the at-home setting for agitation associated with bipolar disorders or schizophrenia.
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.
Recently Issued Accounting Pronouncements A description of recently issued accounting pronouncements is set forth in Note 3, Summary of Significant Accounting Policies to the consolidated financial statements included in this Annual Report on Form 10-K. Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 Product Revenue, Net Commercial sales of IGALMI TM launched in July 2022.
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.
Product revenue, net for the years ended December 31, 2023 and 2022 was $1,380 and $375, respectively, comprised of sales of IGALMI TM . As part of the Company’s Reprioritization, the IGALMI TM commercial team shifted focus to a hospital/contracting strategy with a CAD team.
Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 Product Revenue, Net Commercial sales of IGALMI ® launched in July 2022. Product revenue, net for the years ended December 31, 2024 and 2023 was $2,266 and $1,380, respectively, comprised of sales of IGALMI ® reflecting an increase of 64%.
Net cash provided by financing activities for the year ended December 31, 2022, was $96,237 and was primarily attributable to $98,600 of proceeds received from the OFA Facilities, net of $2,646 of debt issuance costs and proceeds of $283 from the exercise of stock options.
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.
The Fourth Amendment also includes a number of other changes to the Credit Agreement, as described below under “— Liquidity and Capital Resources—Sources of Liquidity—Financing Agreements.” ​ ​ 123 Table of Contents Our Clinical Programs ​ The following is a summary of the status of our major clinical development programs as of the date of this Annual Report on Form 10-K: For additional information regarding our pipeline candidates, see Part I, Item 1, “Business” in this Annual Report on Form 10-K.
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.
Any remaining costs are expected to be paid during the first quarter of 2024. ​ IGALMI TM Revised Commercialization Strategy ​ As part of the Company’s Reprioritization, the IGALMI TM commercial team shifted focus to a hospital/Integrated Delivery Network (“IDN”) contracting strategy with a Corporate Account Director (“CAD”) team.
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.
As of December 31, 2023, the Reprioritization was substantially completed and any remaining costs are expected to be paid during the first quarter of 2024.
The Company completed the Clinical Prioritization in October 2024, and paid $983 of the related costs during the fourth quarter of 2024. The remaining costs of approximately $603, is included in Accrued Expenses on the Consolidated Balance at December 31, 2024, and is expected to be paid in the first quarter of 2025.
We also plan to conduct a clinical study designed to enroll approximately 30 patients to evaluate the correlation between patient-reported or informant-reported efficacy with trained rater-reported efficacy using PEC measurements, which the FDA had previously recommended. ​ Strategic Reprioritization ​ On August 8, 2023, our Board of Directors approved a broad-based strategic reprioritization (the “Reprioritization”).
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.
Removed
The goal of the realigned CAD team is to work with large IDNs and drive sales utilizing a top-down approach.
Added
As described further below, we have recently deprioritized the development of BXCL501 for certain indications, including development of BXCL501 as a potential adjunctive treatment for major depressive disorder (“MDD”), as well as our BXCL701 program except as noted in Part, Item 1, “Business” under the heading “Immuno-Oncology.” ​ In our SERENITY program, we are evaluating BXCL501 for use in the at-home setting for agitation associated with bipolar disorders or schizophrenia.
Removed
Over time, the revised commercial effort is expected to allow the Company to continue to make inroads into the institutional market in a more cost-efficient manner. ​ Commercial efforts for the IGALMI TM launch were impacted significantly in the six months ended December 31, 2023, due to the reduction in force, which included the elimination of sales, marketing, and commercial operations staff.
Added
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.
Removed
The realigned CAD team generated $376 in net revenue for the three-month period ended December 31, 2023 through legacy sales and volume-based contracts, up from $341 for the three-month period ended September 30, 2023.
Added
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.
Removed
Net revenues from IGALMI™ product sales for the years ended December 31, 2023 and 2022 were $1,380 and $375, respectively. ​ 122 Table of Contents ​ On October 30, 2023, we announced that the Centers for Medicare & Medicaid Services (“CMS”) assigned a new J-Code for IGALMI TM (J1105).
Added
Based on these steps to date, we believe that there have been no further instances of misconduct or fraud or other findings that adversely impact the data integrity or reliability of the eligibility, safety, and efficacy data obtained at the clinical trial site in question. ​ On March 3, 2025 we announced that the U.S.
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J-Codes are permanent codes used by healthcare providers, commercial insurance plans, and government payers to help standardize the reimbursement process. A J-Code can help simplify claims submission as compared to use of a miscellaneous or unlisted code, which in turn can streamline the billing and reimbursement process.
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Food and Drug Administration (FDA) concluded that the inspection of a single site in its TRANQUILITY II Phase 3 trial was closed under 21 C.F.R.20.64(d)(3) and released the Establishment Inspection Report.

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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 changeConsequently, we have material interest rate exposure due to our indebtedness, however this risk is hedged in part by the floor and ceiling on TERM SOFR rates. Capital Market Risk We currently do not have substantial product revenues and depend on funds raised through other sources. One source of funding includes future debt or equity offerings.
Biggest changeInterest Rate Risk The loans under the Credit Agreement bear interest at a fixed rate of 13% payable quarterly. Consequently, we have material interest rate exposure due to our indebtedness if market rates drop in the future. Capital Market Risk We currently do not have substantial product revenues and depend on funds raised through other sources.
We do not participate in any foreign currency hedging activities and have limited exposure to other derivative financial instruments, primarily resulting from the terms and conditions of the Credit Agreement. We did not recognize any significant exchange rate losses during the years ended December 31, 2023 and 2022, respectively.
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.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Foreign Exchange Risk As of December 31, 2023, we had $65,221 of cash and cash equivalents. Our cash and cash equivalents are primarily held in U.S. Government money market funds.
Item 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.
Our ability to raise funds in this manner depends upon, among other things, capital market forces affecting our stock price, and on the state of the capital markets generally .
One source of funding includes future debt or equity offerings. Our ability to raise funds in this manner depends upon, among other things, capital market forces affecting our stock price, and on the state of the capital markets generally .
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Interest Rate Risk The loans under the Credit Agreement bear interest at a variable annual rate of the Secured Overnight Financing Rate (“Term SOFR”) (but not less than 2.5% or more than 5.5%) plus 7.5% payable quarterly.

Other BTAI 10-K year-over-year comparisons