在2024年9月23日，我们与BioAtla, Inc.（"BioAtla"）签署了一份许可协议（“BioAtla许可协议”），根据该协议，我们获得了开发、生产和商业化两种许可抗体的独占全球许可（“BioAtla资产”），包括BA3362（公司改名为CT-202），BioAtla的Nectin-4 x CD3 TCE双特异性抗体。
CT-95是一种MSLN x CD3双特异性抗体，旨在将T细胞介导的溶解作用重新引导到表达MSLN的恶性细胞上。MSLN是一种在约30%的癌症中过表达的膜蛋白。开发MSLN靶向疗法的一个挑战是存在MSLN片段，也称为脱落的MSLN，这些片段在血液和肿瘤微环境中都有，可能充当MSLN靶向抗体的诱饵或吸收剂。CT-95是一种完全人源化的双特异性T细胞连接器，具有相对低的亲和力但对膜结合的MSLN具有较高的内部结合力，从而最小化其影响。
Comparison of the Three Months Ended September 30, 2024 and 2023
The following table sets forth our results of operations for the three months ended September 30, 2024 and 2023:
Three Months Ended September 30,
2024
2023
$ Change
% Change
Operating expenses:
Research and development
$
16,825,198
$
4,485,223
$
12,339,975
275
%
General and administrative
1,876,230
1,695,272
180,958
11
%
Loss from operations
(18,701,428)
(6,180,495)
(12,520,933)
203
%
Interest income
1,243,687
290,440
953,247
328
%
Other (expense) income
(2,152)
15,369
(17,521)
(114)
%
Net loss
$
(17,459,893)
$
(5,874,686)
$
(11,585,207)
197
%
Research and Development Expenses
Research and development expenses increased by approximately $12.3 million for the three months ended September 30, 2024 as compared to the same period in 2023. The following table summarizes our research and development expenses for the three months ended September 30, 2024 as compared to the same period in 2023:
Three Months Ended September 30,
2024
2023
$ Change
% Change
ONA-XR
$
—
$
(17,363)
$
17,363
(100)
%
CTIM-76
1,431,387
4,191,008
(2,759,621)
(66)
%
CT-95
4,008,841
—
4,008,841
*
CT-202
11,016,442
—
11,016,442
*
Personnel-related costs
349,414
295,323
54,091
18
%
Other research and development
19,114
16,255
2,859
18
%
$
16,825,198
$
4,485,223
$
12,339,975
275
%
* Percentage not meaningful
ONA-XR income of $17,363 for the three months ended September 30, 2023 was due to actual closeout costs incurred being less than the estimated close out costs recorded as of June 30, 2023, following our decision in March 2023 to discontinue the development of ONA-XR and focus on the development of CTIM-76. CTIM-76 expenditures decreased by $2.8 million, primarily due to a decrease of $3.5 million in contract manufacturing costs and preclinical costs, partially offset by an increase of $0.8 million in clinical costs as a result of initiating our Phase 1 clinical trial. CT-95 expense of $4.0 million primarily represents consideration paid of $3.75 million to acquire the asset from Link in July 2024 and approximately $0.2 million in other preclinical expenses incurred. CT-202 expense of $11.0 million primarily represents consideration paid under the BioAtla
License Agreement entered into in September 2024. Personnel-related costs, which include salaries, benefits and stock-based compensation expense, increased by approximately $0.1 million, primarily due to higher headcount over the prior year period.
General and Administrative Expenses
General and administrative expenses increased by approximately $0.2 million for the three months ended September 30, 2024 as compared to the same period in 2023. The increase was primarily driven by an increase in professional fees of $0.2 million for legal services incurred during the three months ended September 30, 2024.
Interest Income
Interest income increased by approximately $1.0 million for the three months ended September 30, 2024 as compared to the same period in 2023 primarily due to higher cash and cash equivalent balances due to the Private Placement.
Other (expense) income
Other expense was $2,152 for the three months ended September 30, 2024 as compared to other income of $15,369 for the same period in 2023, primarily due to higher foreign currency losses as a result of exchange rate fluctuations on transactions denominated in a currency other than our functional currency.
Comparison of the Nine Months Ended September 30, 2024 and 2023
The following table sets forth our results of operations for the nine months ended September 30, 2024 and 2023:
Nine Months Ended September 30,
2024
2023
$ Change
% Change
Operating expenses:
Research and development
$
20,182,960
$
12,480,836
$
7,702,124
62
%
General and administrative
5,430,518
5,658,575
(228,057)
(4)
%
Loss from operations
(25,613,478)
(18,139,411)
(7,474,067)
41
%
Interest income
2,236,188
939,256
1,296,932
138
%
Other (expense) income
(4,906)
5,830
(10,736)
(184)
%
Net loss
$
(23,382,196)
$
(17,194,325)
$
(6,187,871)
36
%
Research and Development Expenses
Research and development expenses increased by approximately $7.7 million for the nine months ended September 30, 2024 as compared to the same period in 2023. The following table summarizes our research and development expenses for the nine months ended September 30, 2024 as compared to the same period in 2023:
The decrease in ONA-XR expense of $1.9 million was due to the decision in March 2023 to discontinue the development of ONA-XR and focus on the development of CTIM-76. CTIM-76 expenditures decreased by $4.9 million, primarily due to a decrease of $6.8 million in preclinical and contract manufacturing costs, partially offset by an increase of $1.7 million in clinical and regulatory costs as a result of initiating our Phase 1 clinical trial. CT-95 expense of $4.0 million primarily represents consideration paid of $3.75 million to acquire the asset from Link in July 2024 and approximately $0.2 million in other preclinical expenses incurred. CT-202 expense of $11.0 million primarily represents consideration paid under the BioAtla License Agreement entered into in September 2024. Personnel-related costs, which include salaries, benefits and stock-based compensation expense, decreased by approximately $0.5 million, primarily due to lower average headcount over the prior year period.
General and Administrative Expenses
General and administrative expenses decreased by approximately $0.2 million for the nine months ended September 30, 2024 as compared to the same period in 2023. The decrease was primarily driven by decreases in compensation and share-based compensation costs of $0.3 million and insurance expense of $0.2 million. These decreases were partially offset by an increase in professional fees of $0.2 million in the nine months ended September 30, 2024.
Interest Income
Interest income increased by approximately $1.3 million for the nine months ended September 30, 2024 as compared to the same period in 2023 primarily due to higher cash and cash equivalent balances due to the Private Placement.
Other expense
Other expense was $4,906 for the nine months ended September 30, 2024 as compared to other income of $5,830 for the same period in 2023, primarily due to higher foreign currency losses as a result of exchange rate fluctuations on transactions denominated in a currency other than our functional currency.
Liquidity and Capital Resources
Overview
Since our inception, we have not recognized any revenue and have incurred operating losses and negative cash flows from our operations. We have not yet commercialized any product and we do not expect to generate revenue from sales of any products for several years, if at all. Since our inception through September 30, 2024, we have funded our operations through the sale of common stock, warrants, convertible debt, and convertible preferred stock. As of September 30, 2024, we had $84.8 million in cash and cash equivalents and an accumulated deficit of $91.4 million.
We expect our cash and cash equivalents at September 30, 2024 to fund the estimated duration of the dose escalation portions of our CTIM-76 and CT-95 Phase 1 trials, the estimated expenses through IND filing for CT-202, as well as our operations into 2027. We have based these estimates on assumptions that may prove to be imprecise, and we could utilize our available capital resources sooner than we expect.
Funding Requirements
Our primary use of cash is to fund operating expenses, which consist of research and development expenditures and various general and administrative expenses. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses.
Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:
•the scope, timing, progress and results of discovery, preclinical development, laboratory testing and clinical trials for our current and any future product candidates that we may pursue;
•the costs of manufacturing our current and any future product candidates for clinical trials and in preparation for regulatory approval and commercialization;
•the extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our current and any future product candidates that we may pursue;
•the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
•the costs and fees associated with the discovery, acquisition or in-license of additional product candidates or technologies;
•expenses needed to attract and retain skilled personnel;
•costs associated with being a public company;
•the costs required to scale up our clinical, regulatory and manufacturing capabilities;
•the costs of future commercialization activities, if any, including establishing sales, marketing, manufacturing and distribution capabilities, for our current and any future product candidates for which we receive regulatory approval; and
•revenue, if any, received from commercial sales of our current and any future product candidates, should any of our product candidates receive regulatory approval.
We will need additional funds to meet our operational needs and capital requirements for clinical trials, other research and development expenditures, and general and administrative expenses. We currently have no credit facility or committed sources of capital.
Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic transactions and/or marketing, distribution or licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic transactions or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
The following table shows a summary of our cash flows for the periods indicated:
Nine Months Ended September 30,
2024
2023
Cash used in operating activities
$
(9,649,702)
$
(13,820,446)
Cash used in investing activities
(14,757,316)
—
Cash provided by financing activities
94,758,747
—
Net increase (decrease) in cash and cash equivalents
$
70,351,729
$
(13,820,446)
Comparison of the Nine Months Ended September 30, 2024 and 2023
Operating Activities
During the nine months ended September 30, 2024, we used $9.6 million of cash in operating activities. Cash used in operating activities reflected our net loss of $23.4 million and a change in our operating assets and liabilities of $1.7 million, partially offset by in-process research and development charges of $14.8 million and non-cash share-based compensation expense of $0.6 million. The primary uses of cash were to fund our operations related to the development of our product candidates.
During the nine months ended September 30, 2023, we used $13.8 million of cash in operating activities. Cash used in operating activities reflected our net loss of $17.2 million, partially offset by a change in our operating assets and liabilities of $2.5 million and non-cash share-based compensation expense of $0.8 million. The primary uses of cash were to fund our operations related to the development of our product candidates.
Investing Activities
During the nine months ended September 30, 2024, cash used in investing activities was primarily attributable to a one-time payment of $3.75 million made to Link to acquire the assets associated with CT-95 and a payment of $11.0 million under the BioAtla License Agreement for the development of CT-202. In addition, we used $7,000 of cash to purchase property and equipment.
We did not have cash flows from investing activities during the nine months ended September 30, 2023.
Financing Activities
During the nine months ended September 30, 2024, financing activities provided $94.8 million, consisting of net proceeds from the sale of common stock and Pre-Funded Warrants in the Private Placement.
We did not have cash flows from financing activities during the nine months ended September 30, 2023.
Off-Balance Sheet Arrangements
During the periods presented, we did not have, nor do we currently have, any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. We do not engage in off-balance sheet financing arrangements. In addition, we do not engage in trading activities involving non-exchange traded contracts. We therefore believe that we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.
During the three and nine months ended September 30, 2024, there were no material changes to our critical accounting policies and estimates from those described in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 21, 2024.
Recent Accounting Pronouncements
See Note 3 to our unaudited condensed consolidated financial statements found elsewhere in this Quarterly Report for a description of recent accounting pronouncements applicable to our unaudited condensed consolidated financial statements.
Emerging Growth Company and Smaller Reporting Company Status
In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption from complying with new or revised accounting standards and, therefore, will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Other exemptions and reduced reporting requirements under the JOBS Act include, without limitation, the requirements for providing an auditor’s attestation report on our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation, and less extensive disclosure about our executive compensation arrangements. We will remain an emerging growth company until the earlier to occur of (a) the last day of the fiscal year (i) following October 19, 2026, (ii) in which we have total annual gross revenues of at least $1.235 billion or (iii) in which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means that we have been required to file annual and quarterly reports under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), for a period of at least 12 months and have filed at least one annual report pursuant to the Exchange Act and (b) either (i) the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, or (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates is less than $700.0 million and our annual revenue was less than $100.0 million during the most recently completed fiscal year. We will continue to be a smaller reporting company while either (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item 3.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Based on the evaluation of our disclosure controls and procedures as of September 30, 2024, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures as of such date were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We
are not presently a party to any material legal proceedings.
Item 1A. Risk Factors
Investing in our common stock involves a high degree of risk. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors described under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 21, 2024. There have been no material changes to the risk factors described in that report. The occurrence of any of the events or developments described in our Risk Factors could adversely affect our business, financial condition, results of operations and growth prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the third quarter of 2024, the Company granted inducement stock options outside of the 2021 Long-Term Performance Incentive Plan covering 317,407 shares of the Company’s common stock to new employees (the "Inducement Grants") with a weighted average exercise price of $2.25 per share. Each respective Inducement Grants will vest as to 25% of the shares on the first anniversary of the date of grant and in successive equal monthly installments over the subsequent three years, subject to continued employment with the Company and the terms and conditions in the stock option agreement. The options were granted pursuant to the exemption contained in Section 4(a)(2) of the Securities Act of 1933.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the three months ended September 30, 2024, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any non-Rule 10b5-1 trading arrangement (as defined in the SEC’s rules).
The following financial statements from Context Therapeutics Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2024, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Changes in Stockholders’ Equity; (iv) Condensed Consolidated Statements of Cash Flows; (v) Notes to the Condensed Consolidated Financial Statements; and (vi) the information under Part II, Item 5, "Other Information."
104*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101 hereto)
* Filed herewith
† Executive Compensation Plan or Agreement
# Certain information has been excluded from the exhibit because it both (i) is not material and (ii) is the type that the registrant treats as private or confidential.
+ This certification is being furnished pursuant to 18 U.S.C. Section 1350 and is not being filed for purposes of Section 18 of the Exchange Act, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.